051004 EDAOFFICIAL FILE COPY ---
CITY OF NEW HOPE
EDA MEETING
City Hall, 4401 Xylon Avenue North
May 10, 2004
President Don Collier
Commissioner Doug Andersen
Commissioner Sharon Cassen
Commissioner Mary Gwin-Lenth
Commissioner Steve Sommer
2.
3.
4.
Call to order
Roll call
Approval of regular meeting minutes of April 26, 2004
Resolution modifying the restated redevelopment plan for redevelopment plan no. 1
and the tax increment financing plans for tax increment financing districts nos. 80-2,
81-1,82-1, 85-1,85-2, 86-1,02-1, 03-1 (special law) and 04-1 (special law)
(improvement project no. 724)
Discussion regarding 7615 Bass Lake Road (New Hope Alano) gap request and
motion directing staff to proceed with preliminary loan terms (improvement project no.
723)
Resolution authorizing approval of a term sheet between the New Hope Economic
Development Authority and Project for Pride in Living, Inc. for the redevelopment of
5501 Boone Avenue North (improvement project no. 749)
Resolution approving exclusive representation agreement (retail site development
services/sale of Electronic Industries site property (improvement project no. 665)
Resolution approving purchase agreement and relocation benefits 5434 Winnetka
Avenue North (improvement project no. 714)
9. Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
EDA Minutes
Regular Meeting
April 26, 2004
City Hall
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
IMP. PROJECT 733
Item 4
EDA RESOLUTION
04-15
Item 4
EDA Meeting
Page 1
President Collier called the meeting of the Economic Development Authority to
order at 8:34 p.m.
Present:
Don Collier, President
Doug Andersen, Commissioner
Sharon Cassen, Commissioner
Mary Gwin-Lenth, Commissioner
Steve Sommer, Commissioner
Motion was made by Commissioner Gwin-Lenth, seconded by Cormmssioner
Sommer, to approve the Regular Meeting Minutes of March 22, 2004. All
present voted in favor. Motion carried.
President Collier introduced for discussion Item 4, Resolution modifying the
restated redevelopment plan and tax increment financing plans for redevelopment
project no. 1 and tax increment financing districts nos. 80-2, 81-1, 82-I, 85-1, 85-2,
86-1, 02-1, and 03-1 (special law); creating tax increment financing district no. 04-1
(special law) and adopting a tax increment financing plan relating thereto
(improvement project no. 733).
Mr. Kirk McDonald, director of community development, stated staff and
consultants are recommending that the EDA adopt the resolution to modify the
redevelopment plan and create tax increment financing district 04-1 for the 5620
Winnetka Avenue property. He stated EDA item 5 relates to the private
redevelopment of this site by Armory Development II, LLC. Mr. McDonald noted
that the project will generate additional revenue for the city through increased
property taxes.
Mr. Jim Casserly, Krass Monroe, was recognized. Mr. Casserly explained the
resolution before the EDA. He noted the project is straight forward because it
involves only one property and the developer has site control. The proposed
development by Armory Development II, LLC includes the construction of 44
townhomes in 2004 and 2005 with an average selling price of $225,000 each. Upon
completion of the project it is anticipated that the project will increase the city's tax
base by approximately $9 million. Due to extensive land acquisition costs, site
improvement and preparation costs, sidewalk and street improvements and -the
installation of utilities, the redeveloper is requesting tax increment financing
assistance. Without such assistance, the project would not be economically feasible.
He stated the EDA is recommending that the city council establish TIF district 04-1.
He clarified that the public hearing is being held by the city council rather than the
EDA body.
Commissioner Sommer introduced the following resolution and moved its adoption
"RESOLUTION MODIFYING THE RESTATED REDEVELOPMENT
PLAN AND TAX INCREMENT FINANCING PLANS FOR
REDEVELOPMENT PROJECT NO. 1 AND TAX INCREMENT
FINANCING DISTRICTS NOS. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1, 02-1, AND
.April 26, 2004
IMP PROJECT 733
Item 5
EDA RESOLUTION
04-16
Item 5
ADJOURNMENT
03-1 (SPECIAL LAW); CREATING TAX INCREMENT FINANCING
DISTRICT NO. 04-1 (SPECIAL LAW) AND ADOPTING A TAX
INCREMENT FINANCING PLAN RELATING THERETO
(IMPROVEMENT PROJECT NO. 733)." The motion for the adoption of the
foregoing resolution was seconded by Commissioner Andersen, and upon vote
being taken thereon, the following voted in favor thereof: Collier, Andersen,
Cassen, Gwin-Lenth, Sommer, and the following voted against the same: None;
Abstained: None; Absent: None; whereupon the resolution was declared duly
passed and adopted, signed by the president which was attested to by the executive
director.
The EDA meeting was suspended at 8:44 p.m. to conclude city council Item 7.2.
The EDA meeting reconvened at 8:48 p.m.
President Collier introduced for discussion Item 5, Resolution authorizing execution
and delivery of a contract for private redevelopment by and between the New Hope
Economic Development Authority and Armory Development II, LLC for the
redevelopment of the former Frank's Nursery property, 5620 Winnetka
(improvement project no. 733).
Mr. Jim Casserly introduced Gay Greiter and stated she is the attorney at Krass
Monroe who was instrumental in drafting the development agreement. The EDA
thanked Mr. Casserly and Ms. Greiter for their assistance.
Commissioner Sommer introduced the following resolution and moved its adoption
"RESOLUTION AUTHORIZING EXECUTION AND DELIVERY OF A
CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN
THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND
ARMORY DEVELOPMENT II, LLC FOR THE REDEVELOPMENT OF
THE FORMER FRANK'S NURSERY PROPERTY (IMPROVEMENT
PROJECT NO. 733)." The motion for the adoption of the foregoing resolution
was seconded by Commissioner Gwin-Lenth, and upon vote being taken thereon,
the following voted in favor thereof: Collier, Andersen, Cassen, Gwin~Lenth,
Sommer, and the following voted against the same: None; Abstained: None;
Absent: None; whereupon the resolution was declared duly passed and adopted,
signed by the president which was attested to by the executive director.
Motion was made by Commissioner Gwin-Lenth, seconded by Commissioner
Andersen, to adjourn the meeting. All present voted in favor. Motion carried. The
New Hope EDA adjourned at 8:50 p.m.
Re~ectfully submitted,
Valerie Leone
City Clerk
EDA Meeting
Page 2
April 26, 2004
EDA
j. . REQUEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
Community Development ~ 5-10-04 EDA
~?i//, ~' Item No.
By: Kirk McDonald, Director of CD By: ~
Amy Baldwin, CD Assistant[~'~/ 4
A RESOLUTION MODIFYING THE RESTATED REDEVELOPMENT PLAN FOR REDEVELOPMENT
PROJECT NO. 1 AND THE TAX INCREMENT FINANCING PLANS FOR TAX INCREMENT FINANCING
DISTRICTS NOS. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1, 02-1, 03-1 (SPECIAL LAW) AND 04-1 (SPECIAL LAW).
(IMPROVEMENT PROJECT NO. 724)
REQUESTED ACTION
Staff and consultants are recommending that the New Hope Economic Development Authority approve the
attached: Resolution Modifying the Restated Redevelopment Plan for Redevelopment Project No. 1 and Tax
Increment Financing Plans for Tax Increment Financing Districts Nos. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1, 02-1,
03-1 (Special Law) and 04-1 (Special Law). The resolution was prepared by Krass Monroe, the city's
redevelopment financial consultant, and Jim Casserly will be in attendance at the meeting to answer any
questions on this matter. This step modifies the East Winnetka Tax Increment Financing District to include
5519 Sumter Avenue North. The EDA needs to approve this resolution making recommendations to the City
Council prior to the City Council public hearing.
POLICY/PAST PRACTICE
The EDA and City Council have created and modified tax increment financing districts in the past to facilitate
redevelopment projects.
BACKGROUND
Extensive background information is provided on this matter under the City Council public hearing request and
it is not the intention to duplicate all of that information in this request. Staff is recommending that the EDA
approve the resolution and then conduct the public hearing at the City Council level.
The resolution states, in part, that:
· It has been proposed that the EDA approve and adopt the proposed modifications to the Restated
Redevelopment Plan for Redevelopment Project No. 1 (the "Project Area") reflecting increased project
costs and increased bonding authority within the Project Area, pursuant to and in accordance with
Minnesota Statutes, Sections 469.001 to 469.047, 469.124 to 469.134 and 469.090 to 469.108, inclusive,
as amended and supplemented from time to time.
MOTION BY , ~,~/~,'~ SECOND BY
I:RFA\PLANNING\Livable Communities\Q-eda-TIF resolution.doc
Request for Action
Page 2 5-10-04
· It has been further proposed that the EDA approve and adopt the proposed modifications to the Tax
Increment Financing Plans for Tax Increment Financing Districts Nos. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1,
02-1 and 04-1(Special Law) (the "TIF Districts") reflecting increased project costs and increased bonding
authority within the Project Area, pursuant to and in accordance with Minnesota Statutes, Sections 469.174
to 469.1799 and 469.090 to 469.108, and Laws of Minnesota 2003, Chapter 21, Article 10, Section 10,
inclusive, as amended and supplemented from time to time.
· It has been further proposed that the EDA approve and adopt the proposed modifications to the Tax
Increment Financing Plan for Tax Increment Financing District No. 03-1 (Special Law) (the "District")
reflecting increased project costs, increased bonding authority and increased geographic area within the
District, pursuant to and in accordance with Minnesota Statutes, Sections 469.174 to 469.1799 and
469.090 to 469.108, and Laws of Minnesota 2003, Chapter 21, Article 10, Section 10, inclusive, as
amended and supplemented from time to time.
The EDA has caused to be prepared and has investigated the facts with respect thereto a modified
Restated Redevelopment Plan for the Project Area, modified Tax Increment Financing Plans for the TIF
Districts reflecting increased project costs and increased bonding authority within the Project Area and a
modified Tax Increment Financing Plan for the District reflecting increased project costs, increased
bonding authority and increased geographic area within the District.
The EDA has performed all actions required by law to be performed prior to the approval and adoption of
the modifications to the Restated Redevelopment Plan for the Project Area and the Tax Increment
Financing Plans for the TIF Districts and the District (collectively the "Plans").
· The EDA hereby determines that it is necessary and in the best interests of the City and the EDA at this
time to apprOve and adopt the modifications to the Plans.
The 'resolution states the following findings:
· The EDA hereby finds that the assistance to be provided through the adoption and implementation of the
Plans is necessary to assure the development and redevelopment of the Project Area.
· The EDA hereby finds that the Plans conform to the general plan for the development and redevelopment
of the City as a whole.
The EDA hereby finds that the Plans afford maximum opportunity consistent with the sound needs of the
City as a whole for the development and redevelopment of the Project Area by private enterprise and it is
contemplated that the development and redevelopment thereof will be carried out pursuant to
redevelopment contracts with private developers.
The resolution states the following approvals and adoptions:
· The modifications to the Restated Redevelopment Plan reflecting increased project costs and increased
bonding authority within the Project Area are hereby approved and adopted by the Commissioners of the
EDA and are forwarded to the New Hope City Council for public hearing, review and approval.
The modifications to the Tax Increment Financing Plans reflecting increased project costs and increased
bonding authority within the Project Area are hereby approved and adopted by the Commissioners of the
EDA and are forwarded to the New Hope City Council for public hearing, review and approval.
The modifications to the Tax Increment Financing Plan reflecting increased project costs, increased
bonding authority and increased geographic area within the District are hereby approved and adopted by
the Commissioners of the EDA and are forwarded to the New Hope City Council for public hearing, review
and approval.
Request for Action Page 3 5-10-04
Lastly, the resolution states that:
Upon approval and adoption of the Plans, the EDA shall cause said Plans to be filed with the Minnesota
Department of Revenue.
Staff recommends approval of the resolution and forwarding the matter to the City Council for consideration at
the public hearing.
ATTACHMENTS
· Resolution
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
COUNTY OF HENNEPIN
STATE OF MINNESOTA
RESOLUTION NO.
A RESOLUTION MODIFYING THE RESTATED REDEVELOPMENT PLAN FOR
REDEVELOPMENT PROJECT NO. 1 AND THE TAX INCREMENT FINANCING
PLANS FOR TAX INCREMENT FINANCING DISTRICTS NOS. 80-2, 81-1, 82-1,
85-1, 85-2, 86-1, 02-1, 03-1 (SPECIAL LAW) AND 04-1 (SPECIAL LAW)
BE IT RESOLVED by the Board of Commissioners (the "Commissioners") of
the New Hope Economic Development Authority (the "EDA"), as follows:
Section 1. Recitals.
1.01. It has been proposed that the EDA approve and adopt the proposed
modifications to the Restated Redevelopment Plan for Redevelopment Project No. 1
(the "Project Area") reflecting increased project costs and increased bonding
authority within the Project Area, pursuant to and in accordance with Minnesota
Statutes, Sections 469.001 to 469.047, 469.124 to 469.134 and 469.090 to 469.108,
inclusive, as amended and supplemented from time to time.
1.02. It has been further proposed that the EDA approve and adopt the
proposed modifications to the Tax Increment Financing Plans for Tax Increment
Financing Districts Nos. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1, 02-1 and 04-1(Special
Law) (the "TIF Districts") reflecting increased project costs and increased bonding
authority within the Project Area, pursuant to and in accordance with Minnesota
Statutes, Sections 469.174 to 469.1799 and 469.090 to 469.108, and Laws of
Minnesota 2003, Chapter 21, Article 10, Section 10, inclusive, as amended and
supplemented from time to time.
1.03. It has been further proposed that the EDA approve and adopt the
proposed modifications to the Tax Increment Financing Plan for Tax Increment
Financing District No. 03-1(Special Law) (the "District") reflecting increased project
costs, increased bonding authority and increased geographic area within the District,
pursuant to and in accordance with Minnesota Statutes, Sections 469.174 to
469.1799 and 469.090 to 469.108, and Laws of Minnesota 2003, Chapter 21, Article
10, Section 10, inclusive, as amended and supplemented from time to time.
1.04. The EDA has caused to be prepared and has investigated the facts
with respect thereto a modified Restated Redevelopment Plan for the Project Area,
modified Tax Increment Financing Plans for the TIF Districts reflecting increased
project costs and increased bonding authority within the Project Area and a modified
Tax Increment Financing Plan for the District reflecting increased project costs,
increased bonding authority and increased geographic area within the District.
1.05. The EDA has performed all actions required by law to be performed
prior to the approval and adoption of the modifications to the Restated
Redevelopment Plan for the Project Area and the Tax Increment Financing Plans for
the TIF Districts and the District (collectively the "Plans").
1.06. The EDA hereby determines that it is necessary and in the best
interests of the City and the EDA at this time to approve and adopt the modifications
to the Plans.
Section 2. Findinqs.
2.01. The EDA hereby finds that the assistance to be provided through the
adoption and implementation of the Plans is necessary to assure the development
and redevelopment of the Project Area.
2.02. The EDA hereby finds that the Plans conform to the general plan for the
development and redevelopment of the City as a whole.
2.03. The EDA hereby finds that the Plans afford maximum opportunity
consistent with the sound needs of the City as a whole for the development and
redevelopment of the Project Area by private enterprise and it is contemplated that
the development and redevelopment thereof will be carried out pursuant to
redevelopment contracts with private developers.
Section 3. Approvals and Adoptions.
3.01. The modifications to the Restated Redevelopment Plan reflecting
increased project costs and increased bonding authority within the Project Area are
hereby approved and adopted by the Commissioners of the EDA and are forwarded
to the New Hope City Council for public hearing, review and approval.
3.02. The modifications to the Tax Increment Financing Plans reflecting
increased project costs and increased bonding authority within the Project Area are
hereby approved and adopted by the Commissioners of the EDA and are forwarded
to the New Hope City Council for public hearing, review and approval.
3.03. The modifications to the Tax Increment Financing Plan reflecting
increased project costs, increased bonding authority and increased geographic area
within the District are hereby approved and adopted by the Commissioners of the
EDA and are forwarded to the New Hope City Council for public hearing, review and
approval.
2
Section 4. Filing of Plans.
4.01. Upon approval and adoption of the Plans, the EDA shall cause said
Plans to be filed with the Minnesota Department of Revenue.
Adopted by the Commissioners of the EDA this day of ., 2004.
YES:
NO:
ABSENT:
ATTEST:
President
Executive Director
CERTIFICATION
I, , Executive Director of the New Hope
Economic Development Authority, County of Hennepin, State of Minnesota, do
hereby certify that the foregoing is a true and correct copy of Resolution
No. adopted by the EDA on the day of ,
2004.
Executive Director
G:\'vVPDATA~XI~IEW HOPEL24\T1F~EDA RESOLUTION. DOC
EDA
REQUEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
Community Development /'~ 5-10-04 EDA
By: Kirk McDonald, Director of CD !'A~ Item No.
& Ken Doresk¥, CD Specialist By':,~,) 5
DISCUSSION REGARDING 7615 BASS LAKE ROAD (NEW HOPE ALANO) GAP REQUEST AND MOTION
DIRECTING STAFF TO PROCEED WITH PRELIMINARY LOAN TERMS (IMPROVEMENT PROJECT 723)
REQUESTED ACTION
Staff requests EDA discussion regarding the attached 7615 Bass Lake Road (New Hope Alano) gap financing
request and approval of a motion directing staff to proceed with preliminary loan terms. Per the attached
correspondence, Alano has come to a verbal agreement with AC Carlson to purchase the building located at
7550 Bass Lake Road, but additional financing is required for acquisition and remodeling.
POLICY/PAST PRACTICE
City goal #2 is to emphasize the maintenance and redevelopment of commercial and residential properties
within the city. The City Council has been addressing the residential portion of this goal through the city's
many housing activities, including acquiring property in areas designated for redevelopment in the
Comprehensive Plan.
In the past, the city has made loans to businesses such as Universal Color Lab through the city's business
subsidy loan program. If so directed, staff will investigate the possibility of utilizing this program for Alano.
BACKGROUND
On March 22, 2004, the Council considered Alano's initial gap financing request and directed staff to continue
coordinating with Alano on the potential acquisition of and relocation to the AC Carlson building located at
7550 Bass Lake Road. The Council agreed to share the cost of an appraisal of the AC Carlson building with
Alano and AC Carlson. AC Carlson declined the opportunity to share in the cost, therefore an appraisal was
not completed. Staff recommended that Alano negotiate directly with AC Carlson. Per the attached
correspondence from Alano dated May 4, 2003, a preliminary agreement has been reached with AC Carlson,
but gap assistance in the form of a Iow interest loan is required.
For over a year and a half, staff has been coordinating with the New Hope Alano Group to discuss acquisition
of their property and relocation options. On January 26, 2004, the Council approved a purchase agreement
with Alano for the appraised value of $465,000 (7-02) and relocation estimate of $35,000. At the meeting,
Alano expressed concern about relocating to an affordable property. At that time, the Council directed staff to
coordinate with Alano for submittal of a ~lap financin~l request.
/ / · ~
I:\RFA\PLANNING\Housin~\7615\Q- 7615 Bass Lake Road Gap Financin~ Rec~uest 2.doc
Request for Action Page 2 5-10-04
Alano is very interested in the AC Carlson building because it is close to their current location, the 6,000
square foot building size meets their needs, and it is anticipated that a shared parking agreement could be
coordinated with the adjacent office building property. The AC Carlson building would be available around
September 1. The city anticipates letting Alano remain in their current building until August 1 and Alano
understands that they would need to find a temporary location in the interim.
RECOMMENDATION
Staff recommends that the EDA direct staff to coordinate with Alano on a detailed cost itemization, investigate
as to whether the city's business subsidy loan program is appropriate for this application and draft preliminary
loan terms. Staff would bring back a loan agreement to the EDA for consideration at a later date.
FUNDING
Funding for gap financing loans is taken from the EDA fund.
A'I-rACHMENTS
· Alano Correspondence, 5-4-04
· City of New Hope Policy for Business Subsidies
EDA Minutes, 3-22-04
· Location Map
Provided in 3-22-04 EDA Packet
· Alano Gap Financing Request, 3-11-04
· Hennepin County Parcel Data, Taxes Payable 2004
· EDA Minutes, 1-26-04
Provided in 1-26-04 EDA Packet
· City Attorney Correspondence, 1-6-04
Hennepin County Tax Assessor Correspondence, 10-31-02
· Evergreen Land Services Correspondence, 1-21-03
· New Hope Alano Group Correspondence and Concept Plans, 1-14-04
Staff Memorandum, 12-4-03
· Location Map/City Ownership Map
· Council Minutes, 7-22-02
Provided in 7-22-02 Council Packet:
· Correspondence from Property Owner (5-6-02)
· Location Map
· Topographic Map
· Appraisal
· Hennepin County Parcel Data
· Hennepin County Exempt Value Information
· Planning District 6 - City Ownership Map
· Comprehensive Plan References - Planning District 6
New Hope Aiano Group, Inc.
76i5 BASS LAKE ROAD · NEW HOPE, MINN. 55428
PHONE: 537-3546
4 May 2004
Mr. Ken Doresky
Commtmity Development Specialist
Ci.ty of New Hope
440 i Xyion Avenue North
New Hope IvlN 55428
Re: New Hope Alano Group, Inc. - oossible purchase of land and bu/ld/n.~ at
7550 Bass Lake Road (AC Cari~on property) -
Dear Mr. Doresky:
On 14 Ap}il 2004, New Hope Alano Group, Inc., exoressed its interest in the above referenced
property as a potent/ally v/able soiut/on to our relocation difficult/es. We have recently heard
from the property_ owner and understand we may be able to reach a workable solut/on.
Althou~ we are excited at the possibility ofbeine able to relocate so close to home. we have
lost sigl~t of the sign/fican~ bur&es we must clear~efore we can conclude such a transaction, not
One of our foremost concerns, as We have previously apprised the Ci~, is the significant gap
between the proceeds ava/lable from the sale of our present fac/lity and the purchase price for a
comparable new "home". To that end, we are wr/ting this letter to request some financial
ass/stance from the City; specifically in the form of a Iow-interest loan of $150,000. We do not
believe we can reach an agreement w/th AC Carlson absent such help.
Enclosed for your review, please find a copy of our most recent pro-forma, supporting both the
need for the loan to close our funding gap and demonsWathag our organ/zation's abiIity to serv/ce
the debt
Please let us know if you require further information or would like to meet w/th us to address anY
spe.cilic questions you m/ght have.
Very~l~Y°U~, ~
ng uomm~ttee
New Hope Alano Group, Inc.
Where .there is New Hope through Sobriety
EXHIBIT A
CITY OF NEW HOPE
POLICY FOR BUSINESS SUBSIDIES
Purpose: The purpose of this policy is to set guidelines that would enable the City of New Hope
to comply with Minnesota Statutes 116J.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.
Defini~ons:
A. Business Subsidy. A business subsidy means a state or local government agency
grant, contribution of personal property, real property, infrastructure, the principal amount
of a loan at rates below those commercially available to the recipient, any reduction or
deferral of any tax or fee, any guarantee of any payment under any loan, lease, or other
obligation, or any preferemial use of government facilities given to a business.
Be
Comprehensive Health Insurance is defined as:
· Employer 100% premium payment for
individual coverage or
80%
premium payment for family coverage;
Employer minimum payment of 80% for office visits, emergency care,
surgery and prescriptions;
A maximum yearly deduction of $1,000; and
Maternity coverage.
C. Living Wage will be defmed as 125 % of the federal poverty level for a family of
four. Businesses that provide employer-paid comprehensive health insurance may pay a
living wage as defined at 110% of the federal poverty level for a family of four.
D. Responsible Labor Relations are defined as neutrality on 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 represents 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 $25,000. In the
event a subsidy is in excess of $100,000, the determination shall be preceded bv 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 requirements.
Minimum Requirements: A recipient of a business subsidy must meet the followino, minimum
requirements. Any deviation from these minimum requirements shall be documented ~n a written
resolution setting forth the reasons for the deviation. A certified copy of said resolution shall be
attached to the next DTED 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:
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 loss is specific and demonstrable.
Proposals for direct loans must be unable to obtain full private financing before applying
for city funding.
Loan guarantees must have participation by a private lender to assume at least 50% of the
risk.
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.
A business must set goals to be achieved within two years for the number of jobs that they
will create (or retain when job loss is specific and demonstrable) and the wages that these
jobs will pay. 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.
A business must have a goal for the pementage of
new
jobs
that
will
residents.
be
held
by
City
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.
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.
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 Criteria: Consistent with Minnesota Statutes 116J.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:
1. 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 or defined group of
businesses at the time the improvements are made;,
4. Redevelopment property polluted by contaminants as defined in Minnesota Statutes,
Section 116J.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 is 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 for pollution control or abatement, including a hazardous substance tax
increment financing subdistrict as defined in Minn. Stat. § 469.174(23);
9. Assistance for energy conservation;
10. Tax reductions resulting from conformity with federal tax law;
11. Worker's compensation and unemployment compensation;
12. Benefits derived from regulation;
Indirect benefits derived from assistance to educational institutions; _
14: Funds 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 def'med 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 pement 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 technical nature;
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 authorit3';
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 clef'reed by law as not constituting a business
subsidy under Minnesota Statutes, Section 116J.993, Subdivision 3.
Preferences: All other things being equal and to the extent legally possible, preference will be
given to applicants meeting the following criteria:
2.
3.
4.
Businesses that contribute to employee child care and retirement accounts;
Businesses that are locally owned;
Businesses that engage in responsible labor relations;
Businesses that have a goal that 25% or more of the new jobs will be held by City
residents;
Businesses that have traditionally paid living wages.
P:~Attorney~Cnh Resolutions~Re~o Est [~mm~ Subsidy crum't*. EDA.wpd
-6-
MOTION/PROCEED
Item 5
IMP. PROJECT 723
Item 6
MOTION
Item 6
IMP. PROJECTS
761,748, 768
Item 7
EDA RESOLUTION
04-13
Item 7
EDA Meeting
Page 4
at least two of the six structures be one-level housing.
President Enck asked that NCRC document who is responsible for maintenance of
the property. Ms. Madsen acknowledged that this issue has been pan of their
discussions.
Mr. McDonald indicated the next step would be preparation of a purchase
agreement and development proposal for review by the EDA. He stated the NCRC
would be required to participate in the planning apphcation process for rezomng and
platting, and NCRC would pay all associated fees (building permit, park dedication
fees, etc).
Motion was made by Commissioner Collier, seconded by Commissioner Gwin-
Lenth, directing staff to proceed with preparation of a purchase agreement and
development proposal. All present voted in favor. Motion carried.
President Enck introduced for discussion Item 6, Discussion regarding 7615 Bass
Lake Road (New Hope Alano), gap request and appraisal proposal (/mprovement
project no. 723).
Mr. Kirk McDonald, Director of Community Development, stated staff is seeking
direction regarding a gap financing request (7615 Bass Lake Road) and appraisal for
the property at 7550 Bass Lake Road. He stated it is proposed that the cost of the
appraisal (estimated at $3,000) be shared equally among the city, Alano, and AC
Carlson. Previously the city directed staff to coordinate with Alano regarding their
relocation needs. He explained that one of the buildings that would meet their
needs is the AC Carlson site at 7550 Bass Lake Road. AC Carlson is planning to
relocate to the comer of Science Center Drive and tntemational Parkway. One of
the reasons for the gap request is due to the $695,000 asking price. An appraisal
could determine if the asking price is accurate.
President Enck thanked Alano for being a good community neighbor. He noted his
desire to fred a suitable site for Alano's relocation.
Motion was made by Commissioner Gwin-Lenth, seconded by Commissioner
Cassen, authorizing the expenditure of $1,000 towards an appraisal of 7550
Bass Lake Road. All present voted in favor. Motion carried.
President Enck introduced for discussion Item 7, Resolution approving purchase
agreements and relocation benefits for acquisition of three properties in the
Winnetka East housing redevelopment area (5446 Wirmetka, 5512 Winnetka, and
5519 Sumter (improvement project nos. 761,748, and 768).
Mr. Ken Doresky, Community Development Specialist, stated staff is continuing to
coordinate the purchase of the remaining properties in the east Winnetka
redevelopment area. The resolution will approve purchase agreements for three
additional properties. He stated staff is negotiating the purchase of five remaining
properties.
Coamdssioner Sommer introduced the following resolution and moved its adoption
"RESOLUTION APPROVING PURCHASE AGREEMENTS AND
RELOCATION BENEFITS FOR ACQUISITION OF THREE PROPERTIES
IN THE WINNETKA EAST HOUSING REDEVELOPMENT AREA (5446
WINNETKA, 5512 WINNETKA, AND 5519 SUMTER (IMPROVEMENT
PROJECT NOS. 761, 748, AND 768)." The motion for the adoption of the
foregoing resolution was seconded by Commissioner Collier, and upon vote being
taken thereon, the following voted in favor thereof: Enck, Cassen, Collier, Gwin-
Lenth, Sommer, and the following voted against the same: None; Abstained: None;
Absent: None; whereupon the resolution was declared duly passed and adopted,
March 22, 2004
5736 57,I2
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~ 5422 '.~23 ST RAPHAEL
EDA
REQUEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
Community Development ('~'\ 5-10-04 EDA
Item No.
By: Kirk McDonald, Director of CD
& Ken Doresk¥, CD Specialist By: .; 6
A RESOLUTION AUTHORIZING APPROVAL OF A TERM SHEET BETWEEN THE NEW HOPE ECONOMIC
DEVELOPMENT AUTHORITY AND PROJECT .FOR PRIDE IN LIVING, INC. FOR THE REDEVELOPMENT
OF 5501 BOONE AVENUE (IMPROVEMENT PROJECT NO. 749)
ACTION REQUESTED
Staff is requesting EDA consideration of the attached resolution prepared by Krass Monroe, the city's financial
consultant approving a term sheet between the EDA and Project for Pride In Living, Inc. (PPL) for the
development of the city-owned property located at 5501 Boone Avenue North. The development proposal is
for 2 separate residential buildings on the site, one 41-unit condominium building and one 35-unit affordable
rental apartment building. Jim Casserly of Krass Monroe will be in attendance to discuss the term sheet and
representatives from PPL will also be present.
The Council was scheduled to discuss the project at the May 6, Council Work Session.
POLICY/PAST PRACTICE
City goal #2 is to emphasize the maintenance and redevelopment of commercial and residential properties
within the city. The EDA has been addressing the residential portion of this goal through the city's many
housing activities, including coordinating with potential developers on the sale and development of city-owned
property.
BACKGROUND
On March 22, 2004, the majority of the EDA directed staff to proceed with preliminary terms of agreement for
the potential Project for Pride in Living, Inc. project proposed for the city-owned property located at 5501
Boone Avenue North. On October 27, 2003, the EDA expressed support for the proposed project and directed
staff to coordinate with PPL and Krass Monroe, the city's financial consultant to complete a tax 'increment
financing analysis for the project.
For additiOnal background, please see the October 27, 2003 and March 22, 2004 EDA Request for Action
reports and the May 6, 2004 Work Session packet.
Staff recommends that the EDA consider this resolution for the following reasons:
'
I:\RFA\PLANNING\Housin~i\5501 Boone\Q - Term Sheet.doc
Request for Action Page 2 5-10-04
The base value upon the creation of the district will be approximately $342,760:
o City share of taxes over 25 years = $46,468.
o School district share of taxes over 25 years - $32,396.
o County share of taxes over 25 years = $44,75.
o Other taxing jurisdictions share of taxes over 25 years - $7,081.
25 year term:
o TIF available for bond repayment of $1.3 million + interest "- $2,376,410.
o City administration fees = $442,989.
o Land repayment to city + interest - $685,222.
o School District market referendum = $554,476.
o Remaining tax increment - $925,268 (can be used for other TIF eligible housing projects, put
back into the project for building upgrades, additional site improvements or early repayment).
· Fee generation:
o Rental building, building permit fees = $44,708.
o Ownership building, building permit fees = $49,737.
o Park dedication fee = $20,000.
· Original EDA site cost of $276,764 will be reimbursed through the
proposed $14.5 million development.
increment generated from the
· The PPL proposal is a CGBG eligible use and Hennepin County would allow the city to utilize the
$100,000 in CBG funds from the original land acquisition.
· Per the EDA's request, the ownership portion of the proposal was increased 6 units for a total of forty-
one ownership units, providing additional needed life-cycle housing options per the city's Life Cycle
Housing Study prepared in 1997.
· The thirty-five affordable rental units will assist in the replacement of existing affordable units that may
eventually be displaced as a result of other redevelopment activities in the city.
· Estimated city taxes of $50,000 per year will be generated by this development based on 2004 tax
rates. Currently, the property is tax exempt.
· Per past EDA comments, the site will be fully utilized.
· The proposed use is compatible with the zoning of the property to the east and rezoning of the property
would be justifiable.
· This is a viable development project with a proven developer.
FUNDING
Total acquisition cost was $376,764. The city used $100,000
acquisition. The original EDA investment was $276,764.
in CDBG funds towards a portion of the
ATTACHMENTS
· Resolution
· Preliminary Term Sheet
· Krass Monroe Memorandum, 4-22-04
Provided in 5-6-04 Council Work Session Request for Action
· Maps/Site Plan
· Krass Monroe Memo
· Preliminary Term Sheet
· City Fees
· Soils Correction Memo
· Appraisal Letter
· PPL Memo, Rents, Proforma, Management Plan, Funding Status
· City Plan
· Comprehensive Plan Excerpts
· Life Cycle Housing Study
Request for Action
Page 3
5-10-04
· Housing Performance Score Information
Provided in 3-22-04 EDA Request for Action
· Krass Monroe Memorandum, 3-2-04
· PPL Proposal, 3-22-04
· Appraisal Cover Letter, 3-15-04
· Bonestroo Memorandum, 3-12-04
Provided in 10-27-03 EDA Request for Action:
· PPL Narrative & Proforma
· Maps - Location, Zoning, Plat and Storm Water Improvements
· Northwest Associated Consultants Memorandum, 9-4-03
· Maxfield Research Market Study - Executive Summary, 7-22-03 (Complete copy available for review in the
Department of Community Development)
· Site & Building Plans- Condominium Building
· Site & Building Plans- Apartment Building
· Land Disposition Agreement
· Hennepin County Correspondence, 6-18-03
· Appraisal (Complete copy available for review in the Department of Community Development)
· EDA Minutes, 6-23-03
· City Council Minutes, 6-10-02
· Business Journal Article, 8-1-03
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
COUNTY OF HENNEPIN
STATE OF MINNESOTA
RESOLUTION NO.
A RESOLUTION AUTHORIZING APPROVAL OF A TERM SHEET
BETWEEN THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
AND PROJECT FOR PRIDE IN LIVING, INC. FOR THE
REDEVELOPMENT OF 5501 BOONE AVENUE NORTH
BE IT RESOLVED by the New Hope Economic Development Authority (the "EDA")
as follows:
Section 1. Recitals.
1.01 Project for Pride in Living, Inc. ("PPL") has presented a proposal to the City to
redevelop the City-owned property at 5501 Boone Avenue North (the "Site").
1.02 The Site is located within Redevelopment Project No. 1.
1.03 The EDA and PPL have worked to refine the Site plan and determine the
economic feasibility of the redevelopment project.
1.04 The EDA has presented a term sheet (the "Term Sheet") to PPL, attached as
Schedule A, which outlines the project and the terms and conditions under which the EDA
is willing to convey the Site to PPL for redevelopment and provide financial assistance.
PPL has indicated its willingness to undertake the project in accordance with the Term
Sheet.
1.05 It has been proposed
Redevelopment (the "Contract") with
consistent with the Term Sheet.
that the EDA enter into a Contract for Private
PPL if mutually agreeable terms can be reached
Section 2. Findings.
2.01 The EDA hereby finds that the redevelopment project promotes the
objectives as outlined in its Restated Redevelopment Plan for Redevelopment Project No.
1 established pursuant to Minnesota Statutes, Section 469.001 et seq.
2.02 The EDA hereby finds that the Site is located in an area which the EDA
intends to include in a new tax increment financing district pursuant to Minnesota Statutes,
Sections 469.174 et seq., as amended and supplemented from time to time.
Section 3. Authorizations.
3.01 The President and the Executive Director (the "Officers"), along with
necessary staff, attorneys and consultants for the EDA, are hereby authorized to negotiate
a Contract for Private Redevelopment with PPL relating to the Site, which Contract shall be
presented to the EDA for its approval.
Adopted by the EDA this
day of ,2004.
Don Collier, President
ATTEST:
Daniel J. Donahue, Executive Director
G:\WPDATA\N\NEW HOPEL?.I\DOCkEDA RESOL AUTHG TERM SHEET.DOC
2
TERM SHEET
Schedule A
TERM SHEET
City of New Hope/Project for Pride in Living
5501 Boone Avenue North
DRAFT 4/22/04
Redeveloper:
Authority:
City:
Redevelopment Property:
Purchase Price:
Title; "As Is" Condition:
Survey:
Creation of TIF District:
Minimum Improvements:
Project for Pride in Living, Inc. The Redeveloper's obligation to
construct the Projects may be assigned to separate single-asset
entities.
New Hope Economic Development Authority
City of New Hope, Minnesota
The City-owned property of approximately four acres at 5501
Boone Avenue North, New Hope, Minnesota, PIN# 06-118-21-34-
0021.
The Redevelopment Property will be conveyed to the Redeveloper
for $1.00.
Title will be conveyed by quitclaim deed in "as is" condition. The
Redeveloper will pay for the title commitment.
The City will provide the Redeveloper with any surveys of the
Redevelopment Property in its possession.
The Authority will create one or more housing tax increment
financing district(s) of 25 years' duration for the Redevelopment
Property (the "TIF District") assuming the statutory tests for
establishment are met. The Authority will properly consider and
make all necessary findings.
The Redeveloper will construct or cause to be constructed the
following minimum improvements to the Redevelopment Property:
Phase I:
One building with 35 apartment units of 2, 3 and 4
bedrooms with underground and surface parking (the
"Rental Project"). The Rental Project will be a 100%
low-income housing tax credit development with at
least 75% of the units rented to households with
incomes of no more than 60% of area median income.
Phase II: One building with 41 market rate, for-sale
condominium units of 1, 2 and 3 bedrooms, with
Housing Qualification:
Assistance and Tax
Increment Financing:
Post-Completion Review
of Need for Assistance:
underground and surface parking
Project").
(the "Condo
The Redeveloper intends to perform grading and ponding for both
Projects at the same time, but may install pilings for each Project
separately.
The Redeveloper will comply with all federal and state
requirements as to sale of the for-sale housing and rental housing
to low and moderate income families and will comply with
reporting requirements imposed by the TIF Act.
The Authority will provide the following assistance to the
Redeveloper:
ao
Rental Project - the Authority will irrevocably commit to
provide a grant of up to $550,000 when the Redeveloper begins
Site Improvements.
b. Condo Prqiect - the Authority will irrevocably commit to
provide a grant of up to $650,000 as follows:
(i)
Up to $150,000 for grading and ponding at the time the
Redeveloper begins those activities for both Projects,
provided that the Redeveloper advances $50,000 for the
Condo Project grading and ponding.
(ii) The balance when:
(A) when the Redeveloper begins Site Improvements (if
pilings constructed in two phases) or
(B) when foundation construction begins (if pilings
done all at one time)
In no event shall more than $350,000 of Authority assistance be
used for ponding and grading both Projects.
The parties intend for the tax increment assistance to be furnished
by the Authority for each Project to not exceed the amount
necessary to cover Project costs not defrayed by sales proceeds (in
the case of the Condo Project), grant proceeds and other revenue
sources, including CDBG. Following completion of each Project:
2
Allocation of TIF
Assistance:
Development Costs:
Platting:
Public Improvements:
Rental Project - Any excess funds received by the Redeveloper
above the actual total costs of utility construction, site
preparation and construction will be invested in the Project in
the form of construction upgrades or additional amenities. The
Redeveloper's development fee shall not exceed $550,000.
Condo Proiect - Following the sale and closing on all Condo
units, the Redeveloper will provide to the Authority an
accounting of grants received, gross sales revenue and the total
actual costs of utilities, site preparation, construction and sales
expenses. Any excess of grants and sales revenues over costs
will be reimbursed to the Authority. The Redeveloper's
development fee shall not exceed $450,000.
Each Project will be treated on a stand-alone basis for purposes of
the maximum amount of assistance to be furnished by the
Authority and for the assistance review described above; i.e.,
surplus revenue on one project will be refunded to the Authority as
excess revenue and will not be applied to any shortfall with respect
to the other Project.
If a portion of the soil corrections, grading, ponding or other costs
that must be incurred to construct Phase I are more properly
attributable to Phase 1I, such costs will nonetheless be attributed
solely to Phase I if Phase II is not completed (and will not result in
an increase in the amount of assistance provided by the Authority
for Phase I). If both Phases are completed, such costs will be
allocated appropriately between the Projects for purposes of the
assistance review described above.
The Redeveloper will pay for all environmental remediation,
piling, site preparation, public improvement, plat, plat amendment,
PUD and other development costs. The Redeveloper and
Authority will diligently pursue any eligible programs for
reimbursement of costs of environmental remediation and soils
correction.
The Redeveloper will re-plat the Redevelopment Property into the
lots shown on the Site Plan.
If necessary and at the City's expense, the City will construct the
following Public Improvements in accordance with City
specifications:
· Sanitary sewer mains to the edge of the Redevelopment
Property
3
Site Improvements:
Permits/Fees:
Zoning and Land Use
Approvals/Easements:
Assessment Agreements:
Timing:
Water mains and laterals to the edge of the Redevelopment
Property
The Redeveloper will construct all site improvements, including:
Piling and other soils correction and environmental
remediation
· Grading and import/export of soil in accordance with City-
approved grading plans
· Sanitary sewer from City mains
· Water mains and stubs on the site
· Storm sewers and storm water system elements (ponds, pipes,
infiltration system) both on and off site according to the
approved site plan, including extension of the storm water main
into the existing pond
· Landscaping according to City-approved landscape plans
· Pedestrian improvements pursuant to City-approved site plans
· Retaining walls and fences
· Underground parking with ~ stalls under the Rental building
and ~ stalls under the Condo building
The Redeveloper will comply with all applicable City building
codes and construction requirements. The Redeveloper will pay
normal permit, plan review, utility access and park dedication fees
and will be responsible for obtaining all building, plumbing,
electrical and mechanical permits prior to construction.
Normal and customary site and building plan review requirements
will be followed. The Redeveloper will pay for rezoning,
subdivision, platting, plat amendment, PUD and preparation of
restrictive covenants, easements, reciprocal easements, and any
other documentation necessary for the construction and sale of the
Minimum Improvements. The Redeveloper will be responsible for
obtaining all land use and zoning approvals.
The Authority will not require the Redeveloper to execute
assessment agreements.
Phase I (Rental Project):
· Begin Site Improvements on or about September 15, 2004
· Complete by December 31, 2005
Phase II (Condo Project):
4
Special Assessments:
Dirt Storage on Site:
Prohibition on Tax
Exemption:
Pond Maintenance and
Playground:
Remedy Upon Redevel-
oper's Default:
Effect of Term Sheet:
· Begin construction of building on or about April 15, 2005
(Site Improvements may have begun earlier or at same time
as Phase I Site Improvements)
· Complete by December 31, 2006
No special assessments will be levied against the Redevelopment
Property in connection with the construction of either Project.
The Authority will ensure that dirt storage on the site relating to
the construction of Woodbridge Cooperative will not interfere with
the timing set forth above.
Once acquired by the Redeveloper, the Redevelopment Property
and Minimum Improvements will not become exempt from ad
valorem property taxes until termination of the TIF District. This
covenant will be contained in a declaration of restrictive covenants
to be signed by the Redeveloper and recorded against the
Redevelopment Property.
The Redeveloper and Condo association shall enter into
appropriate maintenance and easement agreements relating to
playground use and pond maintenance.
The conveyances transferring the Redevelopment Property to the
Redeveloper will contain a right of reverter which will be superior
to the rights of any liens except for that of the construction lender.
The right of reverter will be released upon issuance of the
certificate of completion for each Phase.
This Term Sheet outlines the terms under which the parties are
willing to enter into a contract for private redevelopment, but does
not constitute an offer or acceptance on either party's part. All
rights and obligations with respect to the Redevelopment Property
will only be as provided for in a Contract for Private
Redevelopment approved by the Authority's Board of
Commissioners.
G:\WPDATAkNkNEW HOPE~IkDOC\TERM SHEET V2.DOC
04/22/2004 13:31 y,~,.[ 9528855§6g ~Q~&SS MO~OE P.A.
II
KRASS MONROE, P.A.
ATTORNEYS AT LAW
THE INFORMATION CONTAINED IN THIS FACSIMILE MESSAGE AND IN THE ACCOMPANYING DOCUMENTS IS CONFK)ENTtN. AND
PRIVILEGED AS ATTORNEY-CUENT COMMUNICATION. IT IS INTENDED ONLY FOR THE USE OF THE RECIPIENT NAMED BELOW. tF
YOU ARE NOT THE INTENDEO RECIPIENT, OR THE ENPLOVEE OR AGENT RESPONSIBLE TO DE]JVER THIS MESSAGE TO THE
IHTENOED REClPJF-_NT, YOU ARE HEREBY NOTIFIED THAT ANY DISCLOSURE, COl:WING, OR DISTRIBUTION OF THE CONTENTS OF
THIS TRANSMISSION IS $TRJCTI.Y PROHIBITED. IF YOU HAVE RECEIVED THIS FAX IN ERROR, PLEASE NOTIFY US IMMEDIATELY
BY TELEPHONE TO ARRANGE FOR RETURN OF THE ORIGINAL DOCUMENTS TO US.
FACSIMILE TRANSMITTAL SHEET
COMPANY:
TO: FAX NUMBER:
~ McDonald City of New Hope (763) 531-5138
Daryl Sulander City of New Hope (763) 531-5138
Daniel Donahue City of New Hope ('/63) 531-5136
DATE:
FROM: TOTAL NO, OF PAGES INCLUDING COVER:
Greg D. Johnson, CPA 4
RE: SENDER'S REFERENCE NUMBER:
10048-21
PPL - Tax Dist~bulbn
rlURGENT [] FOR REVIEW
[]PLEASE COMMENT/REPLY
NOTES/COMMENTS:
This is our first draft ora memo showing the distribution of taxes for the PPL project. Please
review. This should be helpful.
Ores/Jim
Please call Greg Johnson at (952) 885-5999 if you have any trouble receiving this transmission.
Norms, Canter O~e · Suite 1000· IIINNEAPOUS, MINNESOTA 55437.11/8
TELEPHONE 952/885.$99cJ. FACSIMILE 952/885.5969
04/22/2004 13:31 FA.,![ 9528855969 ]~ASS MONRO; P.A. ~uu~,uu~
KRASS MONROE, P.A.
ATTORNEYS AT LAW
· Grog D, Johnson, CPA
Emall: .foh~roe. cem
Voice Marl (952) U5.~94
MEMORANDUM
City of New Hope
Attn: Kirk McDonald, Comm. Dev. Dir.
· Daryl Sulander, Finance Director
Daniel Donahue, City Manager.
From: Greg D. Johnson, CPA
James R. Casserly, Esq.
Date: April 22, 2004
Re:
PPL / Boone
Our File No. 10048-21
The PPL project will generate over $5.1 million in property taxes dudng the 25 years of the
proposed tax increment disbicL Assuming the development requires $1.2 million in
assistance, PPL would require about 46.5% of the total taxes paid for its project expenses.
The remaining 53.5% of the taxes would be paid to the EDA, City, School District, County
and other taxing jurisdictions.
The EDA and City's share of the total would be 41.1% or about $2.1 million. This comes
from the C'.~y's share of the Base Taxes (.9%), EDA/City TIF admin fees (8.7%),
reimbursement for land (13.4%) and the remaining tax increment (18.1%), which could be
used for other allowable expenses. At its option, if the city did not use the additional tax
increment, it could decertify the TIF district earlier and have the full taxes be distributed
accordingly,
Please review and let us know if you have any questions on this analysis.
G.'~W PDAT~ HOPE~t~:~ SULANDER DONAHUE ~3,DOC
NORMAN CENTER DRIVE, SUITE 1000 · MINNEAPOLIS, MINNE;OTA 554,17-1t7~
TELEPHONE 952/88~, FACSIMILE IE2tSaS. SgS~
04/22/2004 13:3! Fi~ 9528855§89 liI~ASS MOI~0£ P.A. 1~003/004
... _ ..... CITY OF NEVi' HOPE
- , ....... PPL - 5501 Boone Ave (Rental & Condo Project) ...... ~
.. Di-~i~iBUTI'bN OF TAXES ."
(a) (b) (c)" ' (d) (e) I 'if) (g) "" (h)' (i) ..... (j) ..... (k) (I) (m)
C~,~;nal ?~--~T-~%--~ Aval!-_-~;e Aw-;;~b!e Remaining A,~ount
TG:~-; i. I I ...... ~-_~at Adminl for;;Gject for 'Tax'" AvaE!=-~.'
P;'G~y T~ ~;o; c~n~i~;~ by ~ Dlatrlct General Value Pro~a~ I;~_;--an;;-- City Incr~n~nt as a % of
Tax Bill ' - ~ ' ' " '
I Tax on C/I Referendum ~ Tax ~ :-~-~ _ TOte;
Date $~,:;,ool County ~city J ' Other State ~chool ~Cl~y.,) Increment ('CI"~--) ~City ) Taxes
12/01122 115,838 648 895 929 14~- 0 12,585 10_,064 50,498 14,561 25,516 4:~.6%
18 '06/01/23 118,734 648 895 9-~9 142 0 12,900 10;3_P_~ 50.498 14,~,"~' 27,839 42.5%
12/01/23 118,734 648 "' 895 929 142 0 ' 1,~,900 10,-~ 50,498 · 14,56~' 27,839 42.5%
19 06/01/24 121,702 648 895 929 142 0 13.~23 10,587 50,498 'i4.561 30,220 41.5%
12/01/24 121,702 648 895 929 142 0 i3~;~3 10~567 '50,498 -'14,561 3;r~,?.20 41.5%
20 06/01/25 124,],45 648 895 .q:m 142 0 13.553 10,858 50,498 14,561 32.661 40.,~%
~?-A)1/25 124,745 646 695 '-~ 142 0 13,553 i0,6~8 50,496 14,561 32,661 40.5'-/.'
21 06/01/26 127,863 648 .... 895 _~ ... 142 ..... 0 13,_R9_~ 11,136 50,496 1 !,561 35,'163 39.5~.~
17J01126 127,863 648 895 929 ~" 142 0 13,892 11,136 50,498 ~4,561 - '-35,163 -39.5%
22 ,..06/01127 131,060 648 895 -~-~ 142 0 14,239 11,421 56,498 14,56i 37,727 38.5%
12/01/27 131,060 646 895 ' 9~ 147 - 0 14,239 11,421 50,498 1~,561 37,727 36.5%
23 ~.06/01/28 134,336 648 "'~95 929 142~ 0 14,595 11,~13 50,496 14.561 ~ ,~0,356 37.6~.
12J01/28 134,336 648 895 929 142 0 14,595 11,713 50,498 "' 14,561 -' 40,35------~' 37.6~{
~24 06/01/29 137,,~ 648 uu~ 929 142 0 14,960 12,012 56,498 ~ ,~3,050 36.7%
12J0t/29 137,~'~ 646 895 ~9 142 0 14,960 12,012 50,498 ~ 14,561" 43,050 36.7%
25 06/01130 141,137 648 895 929 142 ...... 0 15,334j 1:;~319 50,498 14,561 45,811 35.8%
t?./01,130 141,13_._..~7 648 895 929 142 0 "' ~ 12,3.___19 ~__ 14,561 4.~,811 35.8%
. ~ 5,115,063 32,396 ~ _ ~ ~ -- -
~. .... o.5% o.9% \~o.9% ~ o.1%__ ~ lO.8% ~ ~~)'~__~~e'~%~ __
'-------- =--==' Tot,, T,xo,- =-=== ==--= ==--'-- --'----
S~\-_-~; DlaV.~ 586,87211.5% "' Local State Market
Co_uniy I - 4,~'52 0.9% 'Market ciasa Tax-- Tax Rate Tax Rate ValUe Raf.
/.~ City{OfioBaaeMxes&Admln 2,099.94~ ~1.1% Property -' Value ~---~;~- Ca.~.;~f 1.3626'3 0.54109 ' 0.16366% '--TOTAL
_ :)therTaxJng Ju¢,~i~n1 7,061 ' 0.1~- Apmtments - PhaSe I 1,750,0~J0 1.25%: 21,675 30,233 3,214 "33,447
_ su,t... I 00.0% Apa,ms,t~. Ph-_, 2 1.750.000 1.25%2~.67~ 30_..233..... L_~.,---~i~- "33A47
~ ,P~,~iect Expenses 2,3~6,4~0 46.5% COndos. Phase 3 .... ~,199,500 1.00% 61,995 85,683 11,386 97,069
EDA
REQUEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
Community Development 5-10-04 EDA
Item No.
By: Kirk McDonald, Director of CD
& Ken Doresk¥, CD Specialist By: 7
RESOLUTION APPROVING EXCLUSIVE REPRESENTATION AGREEMENT (Retail Site Development
Services/sale of El property) (IMPROVEMENT PROJECT NO. 665)
ACTION REQUESTED
Staff is requesting EDA consideration of the attached resolution prepared by the city attorney approving the
attached Exclusive Representation Agreement with Retail Site Development Services for marketing of the
Electronic Industries site.
On November 24, 2003, the EDA held a public hearing and approved purchase agreements for the sale of=
City-oWned property located at 7500-7528 42"d Avenue North. The agreements were as follows:
1. Culver's Restaurant $380,000
2. Office Condominiums (8 units) $130,000
Total Purchase Price $510,000
In January, the city was notified by the Culver's Restaurant developer that that approval of the New Hope
location was rescinded due to a franchisee complaint concerning proximity to their restaurant in Brooklyn
Center. The city was informed that the corporate franchise proximity rules were changed based upon this
complaint. Throughout the late winter and spring, staff continued to work with the developer to exhaust all
options with Culver's corporate office and an additional restaurant possibility for the site. A letter was sent to
Culver's by the Mayor on January 27 and is attached. Per the attached correspondence from JCS
Development, Inc. dated April 21, 2004, the developer has exhausted all their resources to locate a restaurant
on the site and is requesting that the purchase agreement be canceled and their $1,000 escrow deposit be
returned. The city attorney will prepare a cancellation agreement. The office condominium developer is still on
board and is willing to cooperate with the city until a use for the vacant portion of the site is secured.'
The attached marketing agreement was submitted for consideration from Dexter Marston, Retail Site
Development Services, the same broker that previously represented Culver's Restaurant and is currently still
representing the office condominium developer. The agreement was revised by the city attorney. It is
essentially the same arrangement as previous, the city will net $380,000, less estimated closing costs and
recording fees of $1,000 - $2,000 and provide the broker with at least $20,000. Culver's would have paid the
broker $20,000 is the ori~linal arran~lement. Please see the followin~l summary:
-~9'~.J~ ~/ SECOND BY
!
I:\RFA\PLANNING\Electronic Industries\Q - Marketin~l & Purchase A~lreement Release.doc
Request for Action Page 2 5-10-04
· Listing Price - $460,000.
· Minimum offer that will be accepted by the city - $415,000. This includes a 7.7% brokerage fee of
$32,000. Any participating broker would be entitled to 3% of $415,000 ($12,450) and the city's broker
would receive $19,550). The city would receive $383,000 less closing costs and recording fees.
· Any accepted offer over $415,000. The city would pay 3% of the additional proceeds to the city's
broker and 3% to the participating broker. The remainder of the proceeds over $415,000 would be
retained by the city.
· Any accepted offer under $415,000. The broker would have to negotiate his fee and any participating
broker fee so that the city still would obtain $380,000, the original asking price.
Due to the number of redevelopment activities managed by the Department of Community Development, staff
recommends that marketing of the property by undertaken by a professional broker. With this agreement, the
city will have the right to accept and reject potential buyers in its sole discretion. The broker is aware of the
city's desire to obtain a quality restaurant at the site.
POLICY/PAST PRACTICE
City goal #2 is to pursue the maintenance and redevelopment of commercial and residential properties within
the City. The EDA has been addressing the commercial portion of this goal through the city's many
development activities, including selling city-owned property for redevelopment.
BACKGROUND
As the EDA knows, the city has been working for many years to initiate the environmental cleanup process
and subsequent commercial redevelopment of this site. On November 24, 2003, the EDA held a public
hearing and approved purchase agreements for the sale of City-owned property located at 7500-7528 42nd
Avenue North.
The following three items were approved on November 11, 2003:
Purchase Agreements: Purchase agreements were approved from both Culver's Restaurant and Frey
Development (Office Condominiums). The city planned to close on the property after planning and
zoning approvals, the same procedure that was followed for the sale of 9200 49th Avenue North to the
Plymouth Heights Pet Hospital.
Restrictive Covenant: The Covenant, prepared by the City Attorney and approved by the Minnesota
Pollution Control Agency (MPCA), restricts use of the property and imposes maintenance and reporting
requirements. Any buyer would be required to adhere to the Restrictive Covenant. The MPCA
continues to exercise control over this property. Therefore, the MPCA required the City to record a
Declaration of Covenants against this property prior to its sale for redevelopment purposes.
Environmental Monitoring Proposal: Diversified Environmental, the city's environmental 'consultant
submitted a proposal to oversee the final environmental responsibilities prior to project completion.
Many activities are required by the MPCA and are outlined within the Restrictive Covenant to ensure
proper redevelopment of the site. Diversified Environmental has been assisting the city with this site
since the contamination was originally discovered in 1984.
On June 23, 2003, the EDA reviewed the joint development proposal, was supportive of the developer's offer
of a combined $510,000 for the site, or $4.62 sq. ft. and directed staff to prepare a purchase agreement for
the property. In addition to the purchase price, the developers agreed to contribute $47,100 for regional storm
water improvements based on the estimate prepared by the City Engineer. The storm water fee was separate
from the purchase price and will be included in a future development agreement. Also, on June 23, the Council
approved Ordinance 03-13, An Ordinance Establishing A Park Dedication Requirement and/or Cash Payment
in Lieu of Land Dedication. At the time the Ordinance was adopted, staff recommended and the Council
agreed that the newly created fee would not be applicable to developments currently in process, including this
project and Woodbridge Senior Cooperative, Plymouth Heights Pet Hospital and St. Joseph Catholic Church.
Request for Action Page 3 5-10-04
In order to sell each developer a portion of the property, during the fall staff coordinated a plat and survey of
the property. A preliminary and final plat will be approved as part of the required planning process.
Also during the fall of 2004, the City Attorney prepared the final version of the Restrictive Covenant that has
been recorded against the property. As stated previously, due to the property's polluted state, the MPCA
exercises control over the property. Therefore, the MPCA required the city to record a Declaration of
Covenants against this property prior to any sale for redevelopment purposes. The covenant restricts use of
the property and imposes maintenance and reporting requirements.
Environmental cleanup and oversight has continued to take place at the site. Diversified Environmental, the
city's environmental consultant is overseeing site cleanup activities and performing various site responsibilities
as needed. Final cleanup activities are underway and staff expects that the activities will be completed by July
2004. Diversified Environmental submitted a proposal to oversee the final environmental responsibilities prior
to project completion that was approved by the EDA on November 24. Many activities are required by the
MPCA and are outlined within the Restrictive Covenant to ensure proper redevelopment of the site. Diversified
Environmental will prepare the State VIC (Voluntary Investigation Cleanup) application for "No Association"
letters for the developers, as well as the related and required contingency plan for testing and handling of any
contaminants disturbed during redevelopment construction activities. Diversified Environmental has been
assisting the city with this site since the contamination was originally discovered in 1984.
See 11-24-03 EDA Request for Action additional background.
FUNDING
The City purchased the three properties including the contaminated property entirely with
Acquisition and demolition costs for all three properties equaled $1,091,709.
TIF funds.
The DTED Contamination Cleanup Grant can pay up to 75% of the cost of cleaning up the contamination.
Electronic Industries has agreed to provide the 25% match. The total estimated cost to implement the RAP is
$324,218. Clay investigation costs incurred by Electronic Industries have been included in the overall project
cost at the request of Electronic Industries in the amount of $7,762, increasing the total cost to $331,980.
Electronic Industries is responsible for providing $82,995 in matching funds. DTED has approved $217,860 in
cleanup funding. Additional funding in the amount of $31,125 has been approved by Hennepin County. The
City is not responsible for contributing funds for site cleanup. Costs incurred by the City's environmental
consultant will be paid with TIF.
ATTACHMENTS
· Resolution
· Exclusive Representation Agreement
· JCS Development, Inc. Correspondence, 4-21-04
· Mayor Correspondence, 1-27-03
· Location Map
· Site Plan
Provided in 11-24-03 EDA Request for Action
· Public Hearing Notice
· Resolution
· Purchase Agreements
· City Attorney Correspondence, 11-18-03 & 11-3-03
· Location Map & Proposed Site Plan
· City Engineer Memorandum, 4-28-03
· EDA Minutes, 6-23-03
RESOLUTION NO. 04-
RESOLUTION APPROVING EXCLUSIVE
REPRESENTATION AGREEMENT
(Retail Site Development Services/sale of EI Property)
BE IT RESOLVED by the City Council of the City of New Hope as follows:
WHEREAS, Retail Site Development Services, Dexter Marsden broker (hereafter Broker),
has extensive experience with the proposed sale and Development of the City's property at 7500-
7528 42nd Avenue North commonly referred to as the EI site, and
WHEREAS, it is in the best interests of the City to market this property for sale using the
services of Broker, and
WHEREAS, the Exclusive Representation Agreement attached hereto as Exhibit A sets
forth reasonable terms between Broker and the City to market this property and it is in the best
interests of the City to enter into this agreement with Broker.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of New Hope as
'follows:
approved.
That the Exclusive Representation Agreement attached hereto as Exhibit A is
2. That the mayor and City Manager are hereby authorized and directed to sign the
Exclusive Representation Agreement on behalf of the City.
Dated the 10th day of May, 2004.
Don Collier, Mayor
Attest:
Valerie Leone, City Clerk
~.TTORNEY~CNH RESOLUTIONS~NH99-11293-RESOLUTION APPROVING LISTING AGREEMENT D. MARSDEN.DOC
-1-
EXCLUSIVE REPRESENTATION AGREEMENT
This Agreement ("Agreement") is made this day of May, 2004, between the City
of New Hope ("Owner"), and Retail Site Development Services (hereinafter referred to
as "Broker").
1. Agency. In consideration of its efforts and expenditures, and its agreement to list the
real property hereinafter described and to provide the services referred to herein, Owner
hereby appoints Broker as Owner's exclusive real estate agent during the term of the
Agreement and grants Broker the exclusive right to sell the real property described as
follows:
Address: Approximately the west 135 feet of 7500-7528 42nd Avenue North.
Size: Approximately 1 acre plus parking and access easements across adjacent property
to the east.
Asking Price: $460,000.00
2. Broker's Fee and Commission. The Broker's fee shall be established as follows:
a)
The minimum purchase price Owner will accept for the property is $415,000.00.
In the event the property is sold for this minimum price, the Broker will be paid a
commission equaling $32,000.00 (base commission). If Broker submits an offer
accepted by Owner for less than this minimum purchase price, Broker's base
commission will be reduced by an amount equal to guarantee Owner will net
$380,000.00 less seller's typical closing costs on the sale of the property. Broker
acknowledges and agrees an offer to purchase the property is not legitimate unless
Owner nets $380,000.00 after payment of the Broker's commission. Broker
further agrees any participating Broker entitled to a commission or fee on the sale
of this property will be paid from Broker's base and additional commission
resulting in a reduction of Broker's commission. Broker agrees to assume all
obligations for the payment of any fee or commission to a participating Broker
and Owner will have no obligation for the payment of any fee or commission
owed to a participating Broker resulting from the sale of the property.
b)
In the event the property is sold for a price exceeding $415,000.00, Broker shall
be entitled to an additional commission equaling 6% of the purchase price
exceeding $415,000.00. In this event, Broker also agrees any fee owed a
participating Broker will be paid from Broker's base commission and additional
commission calculated on the amount of the purchase price exceeding
$415,000.00 for the property per this section.
c)
Broker agrees he will be responsible for the payment of any brokerage fee or
commission owed to a participating Broker in this transaction. Broker further
agrees to indemnify and hold harmless the Owner for any claims or liability
alleged by a participating Broker for any commission or fee on the sale of the
property. This provision shall include Owner's costs and expenses to defend on
such a claim brought against Owner by a participating Broker including Owner's
reasonable attorney's fees.
3. Term. The term of this Agreement shall commence on May 10, 2004, and terminate
on November 10, 2004 subject to Section 4 of this Agreement.
4. Protective Period. Owner agrees that in the eVent of any Sale of the Property within
six months ("Protective Period") after expiration or termination of the Agreement
resulting from Broker's introduction to the Owner of such prospective party, Owner will
pay such agreed upon Fee. Broker shall provide Owner with a written "protective list" of
parties whom the Broker has negotiated with during the Term of this Agreement within
72 hours after expiration or termination of this Agreement. Broker shall have deemed to
have "negotiated" with a party if he (or a broker acting at the direction of the Broker) has
shown the property or if such party has prepared an offer or Letter of Intent.
5. Owner's Representations:
a) Owner agrees to permit Broker to erect a "For Sale" sign on the Property and
to remove any existing signs.
b) Owner agrees to refer to Broker all inquires regarding the Property.
c) Owner agrees to provide Broker with all material information concerning the
financial, physical, legal or environmental status of the Property.
d)
Broker agrees Owner has the sole right to refuse to enter into a purchase
agreement with any buyer brought to Owner by Broker or a participating Broker
regardless of the purchase price. Broker acknowledges and agrees Owner has
represented to Broker Owner's development objectives and goals for the property.
Broker acknowledges and agrees the sale of the property must be consistent with
these goals and objectives, that Broker understands these goals and objectives and
Owner will only accept a Buyer that will satisfy these goals and objectives in the
sole discretion of the Owner. Broker agrees no commission will be owed to
Broker or a participating Broker in the event Owner refuses to enter into a
purchase agreement brought to Owner by Broker or a participating Broker failing
to satisfy Owner's goals and objectives for the development of the property as
determined solely by Owner subject to paragraph 4 of this agreement.
6. Indemnity. Owner agrees to indemnify Broker from and against any and all liability,
loss, cost, damage and expense, including reasonable consultant and attorney's fees,
resulting from or due to claims made by any party arising out of the release or threatened
release of hazardous substances, hazardous waste, pollution or contaminants which were,
or are claimed or alleged to have been, deposited, stored, disposed of, placed or otherwise
located on the property by Owner or its agents, employees or contractors.
Owner agrees to indemnify and hold Broker harmless from any liability or damages
arising from any incorrect information supplied by Owner or any information which
Owner fails to supply.
7. Security Agreement. As security for Broker's Fee, Owner hereby grants to Broker a
security interest in the sale proceeds from any Sale of the Property.
8. Dual Agency Disclosure. If a purchaser represented by Broker is interested in the
Property, a dual agency will be created. If a dual agency should arise, Owner will need to
agree that confidential information about price, terms and motivation will still be kept
confidential unless Owner instructs Broker in writing to disclose specific information
about Owner. Broker cannot act as a dual agent unless both Owner and the purchaser
agree to it. By agreeing to a possible dual agency, Owner will be giving up the right to
exclusive representation in an in-house transaction. However, if Owner should decide
not to agree to a possible dual agency, and Owner wants Broker to represent Owner,
Owner may give up the opportunity to sell the Property to purchasers represented by
Broker.
9. Cancellation. After the first four months from the date of execution of this
Agreement, either party shall have the fight to cancel the Agreement for any reason with
30 days written notice, subject to the terms of Section 4, Protective Period, on page one.
OWNER:~ City of New Hope
BY:
BROKER:
BY:
Retail Site Development
Services
ITS: ITS:
DATE
DATE:
PAAttomey\SAS~D Marsden listing agreement-El property.doc
April21,2004
City of New Hope
Ken P. Doresky
4401 Xylon Avenue North
New Hope, MN 55428
Dear Ken:
We have really enjoyed working with everyone at the City of New Hope in regards to the
redevelopment lot on Quebec and 42nd. After further investigation with Boston's we
regretfully have to cancel our purchase agreement and ask that you remm the $1,000
deposit.
With both Culver's and Boston's declining approval of this site we have exhausted all our
resources in trying to put something together. Once again,we do appreciate all your time
and if you have any questions please feel free to call me.
JFS/ljw
Enclosures
PO Box 636
Anoka, MN 55303
Overnight Delivery
13941 Vinewood Ln
Dayton, MN 55327
Ph: (763) 421-2335
Fx: (763) 421-0549
FROM THE OFFICE OF THE MAYOR
ilZ Pe~e~' Enc/<
January 27,2004
Culver's Franchising System, Inc.
Attn: Craig Culver, CEO
540 Water Street
Prairie du Sac, WI 53578
Dear Mr. Cuiver,
Over the past year, the city of New Hope has been coordinating with John Seibert of JCS Development
Inc., Culver's Restaurant franchisee, on the development of a Culver's Restaurant on city-owned
property. As you may expect, staff and residents were excited that a Culver's franchise wished to locate
in New Hope. On November 10, 2003, the New Hope Economic Development Authority approved a
purchase agreement with JCS Development, Inc. for the property. At that time, Mr. Seibert had received
approval from your organization to build a Culver's Restaurant at the site. Since that time, the city has
been notified that approval of the New Hope location has been rescinded.
We have been advised that approval of the New Hope location was rescinded due to a franchisee
complaint concerning proximity to their restaurant in Brooklyn Center. The city was informed that the
franchise proximity rules were changed based upon this complaint. Let us remind you that approval had
been granted for the New Hope location prior to complaints from the Brooklyn Center franchisee. Also,
please be aware that there are franchises located closer to New Hope, including one in Plymouth owned
by JCS Development, Inc. Furthermore, traffic routes to the Brooklyn Center location from New Hope
are cumbersome and complicated to navigate (see attached map).
The city is very disappointed that approval of the New Hope location has been rescinded. Both the city
and JCS Development have expended a large amount of time and money based on your initial corporate
approval. A purchase agreement has been executed and planning approvals and subsequent
construction were expected during the spring of 2004. The city has publicized the proposal in city
newsletters and the city's official newspaper, the Sun Post, completed a story on the proposed
development (see attached articles). Now the city will have to explain to the community/potential
customers and the media of the unmet expectations resulting from this decision made at the corporate
level of Culver's.
Please reconsider and agree to the development of this property. The site has excellent visibility, is
located at a controlled intersection and is in an area planned for major redevelopment (see attached
redevelopment plan). Also, in 1996, a traffic count indicated 24,500 vehicles per day passed through this
intersection. The city is currently considering other opportunities for the site, but would still like to
proceed with the original Proposal. Again, the city is disappointed that you didn't follow your original site
selection guidelines. Please contact Kirk McDonald, Director of Community Development at 763-531-
5119 with any questions or comments.
4401 Xylon Avenue North New Hope, Minnesota 55428 Phone: 763-531-5100 Fax: 763-531-5136 www. ci. new-hope, rnn. us
Craig Culver
Page 2
January 27, 2004
Many of us enjoy the products of Culver's restaurants and would like to have one in our back yard.
Sincere. ly,
W. Peter Enck
Mayor
Enclosure
Cc:
Dan Donahue, City Manager
Kirk McDonald, Director of Community Development
Steve Sondrall, City Attorney
Ken Doresky, Community Development Specialist
John Seibert, JCS Development, Inc.
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RETAIL SITE
DEVELOPMENT
SERVICES
May10,2004
Kirk McDonald
Community Development Director
City of New Hope
4401 Xylon Avenue
New Hope, MN 55428
RE:
Real Estate Marketing Strategy
42nd Avenue
Dear Kirk:
Given the events of the last few months, the EDA is obviously very anxious to market
the 7528 42nd Avenue (El) property and see results from that effort. The best way to
generate positive results in our search for a buyer of this property is for the EDA and
Staff to have a common understanding of the type of retail uses that best fit the City's
Redevelopment Plan. Although we don't want our focus to be too narrow, we do need
to have some shared understanding regarding the type of uses we would like to pursue.
By defining our expectations now, the search process will be much more productive and
efficient.
To date, my discussions with the Staff have centered on finding a restaurant use for the
El property. Restaurants come in many forms, some we might find very appropriate for
this project, some not so appropriate. There is a lot of jargon in the restaurant industry
to describe the different kinds of restaUrant concepts. In simpler times, restaurants
could be broken down into two basic categories: fast food, and sit down. With the
plethora of new restaurants concepts in recent years, new terminology has been
created to describe these restaurant concepts. For example, terms like "casual dining",
"quick serve", and "quick casual" are used to describe restaurant concepts that we are
familiar with. "In line" and "freestanding" are also terms that we should be familiar with.
Although the definitions for the terms mentioned above can become somewhat blurred,
it is important to have a basis understanding of this terminology.
Classification of restaurants:
1) Fast Food: This type of restaurant often has a drive-thru. Food is ordered and
picked up at a counter. Emphasis is on delivering the food quickly and providing a
#4001
5775WAYZATA BLVD,,SUiTE7OO / MINNEAPOLIS, MN
952,525.2220 / 763.377.9OO2(FAX)
RSDSU$@AOL. COM
55416
RETAIL SITE DEVELOPMENT SERVICES
product that is consistent from one facility to another. Size of the restaurant may range
from 800 SF to 4,500 SF. Examples are: McDonald's and Subway.
2) Quick Serve: Many fast food restaurants refer to themselves as quick serve
because of the negative connotations that the term fast food has for some people and
some communities.
3) Quick Casual: This is a very broad category. There may be a drive thru or curb
side pick up. Food is typically made to order, with a greater emphasis on quality and
less emphasis on how quickly the food can be delivered. Food is ordered at a counter
and either picked up at the counter or delivered to your table. Some of these
restaurants might serve wine and beer. The size of a restaurant could vary from 1,200
SF to 4,500 SF. Examples are Panera Bread and Culver's.
4) Casual Dining: A more traditional sit down dining experience. The restaurant may
provide curb side pick up but not a drive thru. A casual dining restaurant will often have
a full bar. The sizes of these restaurants might range from 2,500 SF to 6,500 SF.
Examples are: Applebee's and Chili's.
Type of restaurant facilities:
1) Freestandinq Restaurant: A stand alone restaurant with the building being used
exclusively for one user.
2) In-line Restaurant: A restaurant located within a building that has multiple tenants.
Within the 42nd Avenue and Winnetka commercial area there are two casual dining
restaurants, the Sunshine Factory and Applebee's. Although both these restaurants do
very well, the El property is best suited for a quick casual concept. The site is slightly
over an acre and small by casual dining standards. In addition, some casual dining
restaurants may only have 5-10 units in the Twin Cities and they will probably be
looking for areas that have more retail than is currently located in the area around the El
site. Therefore, the initial marketing effort will be focused on the quick casual dining
segment. It is also possible that the site could be developed with multiple tenants.
Kirk, I'm looking forward to discussing this matter with the EDA latter this evening.
Sincerely,
Dexter J. Marston
Cc: Ken Doresky
2
EDA
REQUEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
Community Development ,(~.!: i 5-10-04 EDA
Item No.
By: Kirk McDonald, Director of CD
& Ken Doresky, CD Specialist By: 8
RESOLUTION APPROVING PURCHASE AGREEMENT AND RELOCATION BENEFITS 5434 WINNETKA
AVENUE NORTH (IMPROVEMENT PROJECT FILE 714)
REQUESTED ACTION
Staff recommends EDA approval of a resolution prepared by the city attorney approving the purchase of
property located at 5434 Winnetka Avenue North for the negotiated price of $233,745.66 ($230,000.00
purchase price & $3,745.56 closing costs for owner's new property) In addition, the city is required to pay
moving costs in the amount of $1,850.00. The purchase price was negotiated based on the owner's appraisal
of $239,000 and the city's appraised value of $198,000. Due to the small size of the property and quality'
improvements, no comparable properties were available on the market for sale at a price higher than the city's
appraised value, therefore a differential payment is not required. The owner initially requested $255,000 based
on the assumption that a second building lot was available on the site. Staff and the city attorney rejected this
request, due to the fact that it would not be legally permissible to create a second building lot on the site.
The purchase agreement is expected to be executed by the property owner by the time of tonight's meeting.
Krass Monroe, the city financial/redevelopment consultant recommends that the EDA now consider
acquisitions of this type, instead of the City Council. Please see the attached city attorney correspondence
regarding this request.
POLICY/PAST PRACTICE
City goal #2 is to emphasize the maintenance and redevelopment of commercial and residential properties
within the city. The City Council has been addressing the residential portion of this goal through the city's
many housing activities, including acquiring property in areas designated for redevelopment in the
Comprehensive Plan.
BACKGROUND
At the November 3, 2003, Council Work Session, the Council directed staff to comPlete appraisals, relocation
estimates and to present offers to residents located in the east Winnetka redevelopment area. On January 26,
2004, the EDA authorized condemnation of the remaining properties. Staff is still negotiating with the
remaining three residential property owners and one commercial property owner.
Staff recommends approval of the resolution.
I:\RFA\PLANNING\Housin~fi5434\Q - 5434 Purchase A~lreement.doc
Request for Action Page 2 5-10-04
FUNDING
The subject property is located in an area where TIF funds can be expended. TIF funds would be used for
property acquisition, relocation and associated holding costs. During the 2003 State Legislative Special
Session, the city's TIF special legislation was passed. In December 2003, the district was approved by the City
Council.
ATTACHMENTS
Resolution
· Purchase Agreement
· City Attorney Correspondence, 5-6-04, 4-14-04 and 3-16-04
· Relocation Study (full study available for review Dept. of Comm. Dev.)
· City Appraisal Excerpts (full appraisal available for review in Dept. of Comm. Dev.)
· Property Owner's Appraisal Excerpts (full appraisal available for review in Dept. of Comm. Dev.)
Provided in past Council reports relating to the east Winnetka redevelopment area:
· Location Map
· Topographic Map
· Section Map
· Comprehensive Plan References - Planning District 6
CITY OF NEW HOPE
EDA RESOLUTION NO. 04 -
RESOLUTION APPROVING PURCHASE AGREEMENT
AND RELOCATION BENEFITS
5434 Winnetka Avenue North
BE IT RESOLVED, by the Economic Development Authority in and for the City of
New Hope as follows:
WHEREAS, New Hope City staff have been in contact with Michael Charles
Tomaszcwski ("Owner"), Owner of certain real estate known as 5434 Winnetka Avenue North
(the "Property"); and
WHEREAS, appraisers hired by the New Hope EDA valued the Property at $198,000.00
as of December 8, 2003; and
WHEREAS, appraisers hired by the Owner valued the Property at $239,000.00 as of
January 19, 2004; and
WHEREAS, the Owner is willing to sell the Property to the New Hope EDA for the sum
of $233,745.66 as set forth in the Purchase Agreement attached hereto as Exhibit A and
incorporated herein by reference; and
WHEREAS, the New Hope EDA hereby approves the Purchase Agreement with the
understanding relocation assistance benefits will be paid to the Owner as required by both State
and Federal law, however said benefits will be limited to $1,850.00 in moving expenses since
Owner has previously purchased a replacement property for less than the approved purchase
amount and the purchase price of the subject property includes $3,745.66 for reimbursement of
closing costs incurred by Owner for his replacement property; and
WHEREAS, City staff have employed the service of Evergreen Land Services Company
to provide the required relocation assistance; and
WHEREAS, Evergreen Land Services Company has prepared a relocation analysis for
the Owner herein and has determined the estimated maximum relocation benefit payable'to
Owners is $1,850.00 for moving expenses and $4,500.00 for closing costs(analysis attached as
Exhibit B) based on a $198,000.00 acquisition price of the subject property and a $-0-
"differential payment" for a replacement property; and
WHEREAS, Owner has acknowledged and agrees his relocation benefits will be limited
to the $1,850.00 payment for moving expenses and no further payment will be made to the
Owner for a "differential payment" or closing costs connected with his acquisition of a
replacement property; and
WHEREAS, it is in the best interest of the New Hope EDA to purchase the Property
from the Owners for the sum of $233,745.66, with other terms and conditions as set forth in the
Purchase Agreement and to pay the required $1,850.00 moving expense relocation benefit.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in
and for the City of New Hope as follows:
1. That the above recitals are incorporated herein by reference;
e
That the purchase of the Property by the New Hope EDA from Michael Charles
Tomaszewski for the sum of $233,745.66, with other terms and conditions as set
forth in the Purchase Agreement attached hereto as Exhibit A, is approved.
ge
The $1,850.00 moving expense relocation benefit payable to the Owner is hereby
approved.
The President, Executive Director and New Hope City staff are authorized and
directed to sign all appropriate documents, and to take whatever additional actions
are necessary or desirable, to complete the purchase of the Property in accordance
with the Purchase Agreement attached hereto as Exhibit A.
Dated the l0th day of May, 2004.
Don Collier, President
Attest:
Daniel J. Donahue, Executive Director
P:X3.ttorney~Cnh Re~olutions~99.11271-001 --Reso Approv PA-5434 Winnetka Avenue,doc
MINNESOTA STANDARD RESIDENTIAL Pt~RCFL4,SE AGREE~LENT
BEFORE YOU USE OR SIGN THIS coNrIIL~CT. YOU SHOULD CONSULT WITH A LAWYER TO
DETERMINE THAT THIS CONTRACT ADEQUATELY PROTECTS YOUR LEGAL RIGHTS.
1. PARTIES. This Purchase Agreement is made on May __, 2004. by and beva'een Michael Charles
Tomaszewski, a single man, of 5434 winnetka Avenue North. New Hope. M~nnesota 55428. SELLER. and the
Economic Development AuthOrity in and for the City of New Hope. a public body corporate and pohtic under the
laws of the State of Minnesota, of 4401 Xylon Avenue North. New Hope. M:nnesota 55428. BUYER.
2. OFFER/ACCEPTANCE Buyer offers to purchase and Seller agrees to sell real propert3' legally described
as:
The North 70 feet of the South 450 feet, except the West 40 feet, Lot 38. Auditor's Subdivision No.
226;
Property Tax Identification Number or Tax Parcel Number 05-118-21-33-0014:
located at 5434 Winnetka Avenue North, City of New Hope, County of Hennepin. State of Minnesota. 55428.
3. ACCEPTANCE DEADLINE. The acceptance date of this Purchase Agreement is the date it is delivered by
the last party signing to the other party. Thi: cffer :c p~-ehaac. :tn!e:: accepted :caner. :hall be ;'ai~ a: ! ! :59 a.m.
4. PERSONAL PROPERTY AND FIXTURES INCLUDED IN SALE. The following items of personal
property and fixtures owned by Seller and currently located on the real property are included m this sale: garden
bulbs, plants, shrubs, trees, storm windows and inserts, storm doors, screens, awmngs, window shades, blinds,
curtain-traverse-drapery rods, attached lighting fixtures with bulbs, plumbing fixtures, sump pumps, water
heaters, heating systems, heating stoves, fireplace inserts, fireplace doors and screens, built-in humidifiers, built-
in air conditioning units, built-in electronic air filters, automatic garage door openers with controls, television
antennas, water softeners, built-in dishwashers, garbage disposals, built-in trash compactors, built-in ovens and
cooking stoves, hood-fans, intercoms, installed carpeting, work benches, security systems, and also the following
property: Buyer has informed Seller that he may remove permanent fixtures from the property, including kitchen
cupboards, sink, dishwasher, refrigerator, disposal, light fixtures, toilet, sink. bidet, closet doors in bedroom,
fireplace mantel and the garage building.
5. PRICE AND TERMS. The price for the real and personal property included in this sale is Two Hundred
Thirty-Three Thousand Seven Hundred Forty-Five and 66/100 Dollars ($233,745.66) which Buyer shall pay as
follows:
Earnest money of $0.00
9 Seller, to be deposited and held by Seller (and may be commingled with Seller's other funds) pending closing,
9 Seller's lawyer, to be deposited and held in the lawyer's trust account pending closing,
9 Seller's broker, to be deposited or held by broker according to the requirements of Minnesota Statutes,
9 Other
;
-*---r-~"-':-* ~-~ '"~':"~' ........ i: ~crcby aalme::'le~g:d and $233,745.66 cash, on May 2004 '
· , the Date of Closing, and
6. DEED~T~ ~LE. Upon perforate by Buyer, Seller shall execute and deliv~ a Gene~l
W~ ~d, joined m by ~use, if any, conve~ng ~kemble htle of record, subject to:
A. Building ~d ~ning laws, ordin~ces, state and fed~al radiations;
B. Res~caons ~la~g ~ use or i~rovment of ~e real pmpe~ wi~out effective forfeiture pro~sions;
C. Resection of~y ~ml fights by the State of Mi~esom;
D. Ufili~ ~d ~inage e~em~ which do not mt~e ~th existing i~ovem~ts;
E. Exceptions to htle which constitute encumbrances, restrictions, or easements which have been disclosed
to Buyer and accepted by Buyer in this Purchase Agreement: None.
7. REAL ESTATE TAXES AND SPECIAL ASSESSMEt~"I'S. Real estate taxes due and payable in and for
the year of closing shall be prorated between Seller and Buyer on a calendar year basis to the actual Date of
Closing, unless otherwise provided in this Purchase Agreement. If tax statements for such taxes are not available
on the Date of Closing, the amount to be prorated shall be % of the prior year's taxes, and such estimated
proration shall be [stri!:c ~::c] FULL AND FINAL BETWEEN SELLER AND BI'"YER. / ALMUSTED !:PON
P. ECEIPT OF TP~'~ AC?T.J.*..L T/?' STATE?~'~NT£ FOR StrCH YEAR (in ::'kich caze thc pa.":,3' cntitlzd to a
iss'.:'an:: ,£ t~: tax s~t~.'.";.~nts}. Seller represents the taxes due and payable in the year(s) 2004 will be FI~LL
PP.~.T, NO.~.' homestead classification.. "~ o ....... ~. ....... ~. ...... ~.~:n~,;~_ ,-.. ............... ~.k. :n ';'~
rc,-;~.. ~.,~r] BUYER AND SELLER SHALL PRORATE AS OF TIlE DATE OF CLOSING ~ e~'~ ~
SP-~--'-L ?AY ON DATE OF CLOSING all installments of special assessments certified for payment with the
real estate taxes due and payable in the year of closing.
re,-:~ .... 7] n~Tx,~n e~ * · I · c~*~e ~ SELLER SItALL PAY ON DATE OF CLOSING all other special
assessments levied as of the date of this Purchase Agreement.
rc,.;~. ..... ;, nlr~"n etl'~,~! *.ee·T~.~'~" / SELLER SllALL PROVIDE FOR PAYMENT OF special
assessments pending as of the date of this Purchase Agreement for improvements that have been ordered by the
City Council or other governmental assessing authorities. (Seller's provision for payment shall be by payment
into escrow of 1-1/2 times the estimated amount of the assessments.) As of the date of this Purchase Agreement,
Seller represents that Seller has not received a Notice of Hearing of a new public improvement project from any
governmental assessing authority, the costs of which project may be assessed against the real property. If a
special assessment becomes pending after the date of this Purchase Agreement and before the Date of Closing,
Buyer may, at Buyer's option:
A. Assume payment of the pending special assessment without adjustment to the purchase price of the real
property; or
B. Require Seller to pay the pending special assessment (or escrow for payment of same as provided above)
and Buyer shall pay a commensurate increase in the purchase price of the real property, which increase
shall be the same as the estimated amount of the assessment; or
C. Declare this Purchase Agreement void by notice to Seller, and earnest money shall be refunded to Buyer.
rc,.u._ :.r.,:] ,~r~,, ~J ~. ~ * ~o~/SELLER SHALL PAY ON DATE OF CLOSING any deferred read
estate taxes (including "Green Acres" taxes under Minn. Stat. 273.111 ) or special assessments payment of which
is required as a result of the closing of this sale. Buyer shall pay real estate taxes due and payable in the year
following closing and thereafter and any unpaid special assessments payable therewith and thereafter, the
payment of which is not otherwise provided herein. Seller makes no representation concerning the amount of
future real estate taxes or of future special assessments.
8. DAMAGES TO REAL PROPERTY. If the real property is substantially damaged prior to closing, this
Purchase Agreement shall terminate and the earnest money shall be refunded to Buyer. If the real property is
damaged materially but less than substantially prior to closing, Buyer may rescind this Purchase Agreement by
notice to Seller within 21 days after Seller notifies Buyer of such damage, dUnng which 2 l-day period Buyer may
inspect the real property, and in the event of such rescission, the earnest money shall be refunded to Buyer.
9. SEIJJ~.R'S BOIJNDARy LINE, ACCESS, RESTRICTIONS AND LIEN WARRANTIES. Seller
warrants that buildings, if any, are entirely within the boundary lines of the real property. Seller warrants that
there is a right of access to the real property from a public right of way. Seller warrants that there has been no
labor or material furnished to the real property for which payment has not been made. Seller warrants that there
are no present violations of any restrictions relating to the use or improvement of the real property. These
warranties shall survive the delivery of the Deed or Con~'act for Deed.
10. CONDITION OF PROPERTY.
A. Seller warrants that all appliances, fixtures, heating and air conditioning equipment, fireplaces {including
mechanisms, dampers, flues, and doors), wiring, and plumbing used and located on the real property will
2
be in working order on the Date of Closing. Seller shall remove all debris, and all personal property not
included m this sale from the real property, before possession date. Seller has no knowledge of any Dutch
elm disease, oak wilt, or other disease of any trees on the real propem.'.
Seller knows of no hazardous substances or petroleum products hax4ng been placed, stored, or released
from or on the real property by any Person in violation of any law. nor of any underground storage tanks
having been located on the real property at any time, except as follows: None.
C. Seller's warranties and representations contained in this paragraph 10 shall survive the deliver3.' of the
Deed er Cch'r::: £cr Dcc~. Any action based upon these warranues and representations must be
commenced within two years after the date on which the Buyer closed on the purchase of the real
property.
D. Buyer shall have the right to have mspections of the property conducted prior to closing. Unless reqmred
by local ordinances or lending regulations, Seller does not plan to have the property inspected.
Statutory. Disclosure. Pursuant to Minnesota Statutes sections 513.52 - 513.60 (effective January I,
2003), Seller must provide a written disclosure [see (1) below], or Buyer must have received an
inspection report [see (2) below], or Buyer and Seller may waive the wnnen &sclosure requirements [see
(3) below].
Minnesota Statutes Section 513.57, Sub& 2. LIABILITY. A seller who fails to make a disclosure as required by
sections 513.52 to 513.60 and was aware of the condition of the real property, is liable to the prospective buyer. A
person injured by a violation of this section may bring a civil action and recover damages and receive other
equitable relief as determined by the court. An action under this subdivision must be commenced within nvo years
after the date on which the prospective buyer closed the purchase or transfer of the real property.
[Select only one of these three.']
9 (1) Seller's Disclosure. Seller has provided a written disclosure to Buyer. A copy of Seller's disclosure
is attached. Seller shall correct in writing any inaccuracies in the disclosure as soon as reasonably
possible before closing.
Minnesota Statutes Section 513.55. GENERAL DISCLOSURE REQUIREMENTS.
Subdivision 1. CONTENTS.
(a) Before signing an agreement to sell or txunsfer residential real properly, the seller shall make a Wnnen
disclosure to the prospective buyer. The disclosure must include all material facts pertaining to adverse
physical conditions in the property of which the seller is aware that could adversely and significantly affect:
(1) an ordinary buyer's use and enjoyment of the properly; or,
(2) any intended use of the property of which the seller is aware.
(b) The disclosure must be made in good faith and based upon the best of the seller's knowledge at the nme of the
disclosure.
Minnesota Statutes Section 513.58. AMENDMENT TO DISCLOSURE.
Subdivision 1. NOTICE. A seller must notify the prospective buyer in venting as soon as reasonably possible, but
in any event before closing, if the seller learns that the seller's disclosure required by section 513.55 was inaccurate.
Subdivision 2. FAILURE TO NOTIFY; LIABILITY. A seller who fails to notify the prospective buyer of any
amendments to the initial disclosure required under subdivision I is liable to the prospective buyer as provided in
section 513.57.
9
(2) Inspection Report. Buyer has received an inspection report by a qualified third-party. If a copy of
the inspection report is provided to Seller, Seller shall disclose to Buyer material facts known to Seller
that contradict any information in the inspection report.
Minnesota Statutes Section 513.56 Subd. 3. INSPECTIONS.
(a) Except as provided in paragraph (b), a seller is not required to disclose information relating to the physical
condition of Ibc real property if a written report that discloses the information has been prepared by a qualified
third party and provided to the prospective buyer. For purposes of this paragraph, "qualified third party" means
a federal, state, or local governmental agency, or any person whom the seller, or prospective buyer, reasonably
believes has the expertise necessary to meet the industry standards of practice for the type of inspection or
investigation that has been cundueted by the third party in order to prepare the written report.
(b) A seller shall disclose to the prospective buyer material facts known by the seller that cootxadict any
information included in a written report under paragraph (a) if a copy of the report is provided to the seller.
: (3) Waiver of Disclosure.
Minnesota Statutes Section 513.60. W.MV-ER. The written disclosure required under sections 513.52 to 513.60
may be waived ff the seller and the prospective buyer agree in writing. Waiver of the disclosure required under
sections 513.52 to 513.60 does not waive, limit, or abridge any obligation for seller disclosure created by any other
law.
Seller and Buyer waive the written disclosure required under sections 513.52 to 513.60.
ECONOMIC DEVELOPMENT AUTHORITY EN AND
FOR THE CI'Di' OF NrEW HOPE
SELLER:
Michael Charles Tomaszewslo
BY:
Don Collier. President
BY:
Daniel J. Donahue, Executive Director
Other than the warranties and representations made in this paragraph 10, the property is being sold "AS IS" with
no express or implied representations or warranties by Seller as to physical conditions, quality of construction.
workmanship, or fimess for any particular purpose. (This paragraph is not intended to wmve or hmit an3
provisions of Minn. Stat., Chapter 327A.)
11. DISCLOSURE OF NOTICES. Seller has not received any nonce from any governmental authority as to
violation of any law, ordinance or regulation affecting the real property. If the real property is subject to
restrictive covenants, Seller has not received any notice from any person as to a breach of the covenants. Seller
has not received any notice from any governmental authority concerning any eminent domain, condemnation,
special taxing district, or rezoning proceedings.
12. TRUTH-IN-HOUSING. Buyer acknowledges receipt of the Truth-in-Housing Disclosure Report or other
inspection report if required by the municipality in which the real property is located.
13. POSSESSION. Seller shall deliver possession of the property not later than the Date of Closing, but subiect
to any access agreement entered into by the parties. Seller agrees to pay all interest, fue!
and all charges for city water, city sewer, electascity, and natural gas through and including
bevc,'een the Fare, lea aa of the Date of Closing.
*SEE ADDITIONAL TERMS
15. TITLE CORRECTIONS AND REMEDIES. Seller shall have 120 days from receipt of Buyer's written
title objections to make title marketable. Upon receipt of Buyer's title objections, Seller shall, within ten (10)
business days, notify Buyer of Seller's intention to make title marketable within the 120 day period. Liens or
encumbrances for liquidated amounts which can be released by payment or escrow from proceeds of closing shall
not delay the closing. Cure of the defects by Seller shall be reasonable, diligent, and prompt. Pending correction
of title, all payments required herein and the closing shall be postponed.
If notice is given and Seller makes title marketable, then upon presentation to Buyer and proposed lender
of documentation establishing that title has been made marketable, and if not objected to in the same time
and manner as the original title objections, the closing shall take place within ten (10) business days or on
the scheduled closing date, whichever is later.
Bo
If notice is given and Seller proceeds in good faith to make title marketable but the 120 day period expires
without title being made marketable, Buyer may declare this Purchase Agreement void by notice to
Seller, neither party shall be liable for damages hereunder to the other, and earnest money shall be
refunded to Buyer.
Co
If Seller does not give notice of intention to make title marketable, or if notice is given but the 120 day
period expires without title being made marketable due to Seller's failure to proceed in good faith, Buyer
may seek, as permitted by law, one or more of the following: '
(1) Proceed to closing withOut waiver or merger in the Deed of the objections to title and without waiver
of any remedies, and may:
(a) Seek damages, costs, and reasonable lagTer's fees from Seller as permined by law (damages
under this subParagraPh (a) shall be limited to the cost of cunng objections to title, and
consequential damages are excluded): or .
(b) Undertake proceedings to correct the objections to title:
(2) Rescission of this Purchase Agreement by notice as provided herein, in which case the Purchase
Agreement shall be null and void and all earnest money paid shall be refunded to Buyer:
(3) Damages from Seller together with costs and reasonable tax~3'er's fees. as permmed by law:
(4) Specific performance within six months after such right of action arises.
D. If title is marketable, or is made marketable as provided hereto, and Buyer defaults in an3' of thc
agreements herein, Seller may elect either of the following options, as penmned by law:
(1) Cancel this contract as provided by statute and retain all pa.vments made hereunder as liquidated
damages. The parties acknowledge their intention that any note given pursuant to this contract IS a
down payment note, and may be presented for payment notwithstanding cancellation:
(2) Seek specific performance within six months after such right of action arises, including costs and
reasonable lawyer's fees, as perrmtted by law.
E. If title is marketable, or is made marketable as provided herein, and Seller defaults in any of the
agreements herein, Buyer may, as permitted by law:
(1) Seek damages from Seller including costs and reasonable lawyer's fees:
(2) Seek specific performance within six months after such right of action arises.
16. NOTICES. All notices required herein shall be in writing and delivered personally or mailed to the address
as shown at paragraph 1 above and, if mailed, are effective as of the date of mailing.
17. e~T~)~rx~o~r~&~ 4'~" ~ /.~"~ TC+~.;~ ~ ...... ; ......... q..: .......~.a:..:~;~ ^c]~.~ ..... '~ ~y ~:]l::', e~.
18. MINNESOTA LAW. This contract shall be governed by the laws of the State of Minnesota.
19. WELL DISCLOSURE. [Check one of the followingJ
9 Seller certifies that Seller does not know of any wells on the real properS/.
: Wells on the real property arc disclosed by Seller on the attached Well Disclosure Form.
20. SEWAGE TREATMENT SYSTEM DISCLOSURE. [Check either ~4 or BI
A. : Seller certifies that sewage generated at thc property goes to a facility permitted by thc Minnesota
Pollution Control Agency (for example, a city or municipal sewer system).
B. 9 Seller certifies that sewage generated at thc properly does not go to a facility permitted by thc
Minnesota Pollution Control Agency and Seller's Disclosure of Individual Sewage Treatment System is
attached (attach form).
[Check either C or D]
C. 9 Seller does not know if there is an abandoned individual sewage system on thc property.
D. :Seller knows that there [strike one]: :re/are no abandoned individual sewage treatment systems on thc I
property. If Seller discloses the existence of an abandoned individual sewage treatment system on thc
property, then Minnesota law requires that the location of the system be disclosed to Buyer with a map.
[Attach Seller '~ Disclosure of Individual Sewage Treatment System with map completed.]
21. LEAD PAINT DISCLOSURE. [Check one of the following]
9 Seller represents that the dwelling was constructed on thc real property in 1978 or later.
: Seller represents that the dwelling was construed on the real properly, before 1978. (If such housing is
located on the real property, attached and made a part of this Purchase Agreement is "LEAD PAINT
ADDENDUM FOR HOUSING CONSTRUCTED BEFORE 1978".)
23. SELLER'S AFFIDAVIT. At closing. Seller shall supplement the warranties and representations in this
Purchase Agreement by executing and delivering a Minnesota Uniform Conveyanmng Blank [Form 116-M, I 17-
M, or 118-M] Affidavit of Seller.
24. CLOSING. Closing shall be at the ...... z. ~e ...... a;vycr. _uyer z ,:,.c :nzurcr. cr at z~mc ~,:,cr mu:ua,.y
agrccaLlc Izcation. [State other location]: New Hope City Hal/, 4401 Xvlon Avenue North, New Hope,
Minnesota 55428. At closing, Seller and Buyer shall disclose their Social Security Numbers or Federal Tax
Identification Numbers for the purposes of completing state and federal tax forms.
25. ADDITIONAL TERMS: *Buyer shall obtmn, at Buyer's expense, a Commitment for an Owner's Policy of
Title Insurance on a current ALTA form issued by an insurer licensed to write title insurance in Minnesota.
Buyer shall be responsible for payment of those costs necessary to prepare such Commitment, including but not
limited to abstracting fees, name search fees, service charges, etc. Buyer shall pay the premium for the Owner's
Policy of Title Insurance. Buyer shall have ten (10) business days after receipt of the Commitment for Title
Insurance to provide Seller with a copy of the Commitment and written objections. Buyer shall be deemed to
have waived any title objections not made within the ten (10) day period above, except that this shall not operate
as a waiver of Seller's covenant to deliver a statutory Warranty Deed, unless a Wan'anty Deed is not specified
above. If Buyer obtains title insurance, Buyer is not waiving the right to obtain a good and marketable title of
record from Seller.
26. ADDENDA. Attached are 4_ addenda which are made a part of this Purchase Agreement.
27. TIME IS OF THE ESSENCE. Time is of the essence for all provisions of this Purchase Agreement.
28. MULTIPLE ORIGINALS. Seller and Buyer have signed 3 originals of this Purchase Agreement.
II'HIS IS A LEGALLY BINDING CONTRACT. BEFORE SIGNING, CONSTULT A LAWYER
iVIinnesota law permits licensed real estate brokers and sales agents to prepare purchase agreements. No
recommendation or representation may be made by any real estate broker or sales agent as to the legal sufficiency,
the legal effect, or the tax consequences of this contract. These are questions for your lawyer.
SELLER:
I agree to sell the property for the price and terms
and conditions set forth above.
Date: May ,2004.
Michael Charles Tomaszewski
SSN:
BUYER:
I agree to purchase the property, for the price and
terms and conditions set forth above.
ECONOMIC DEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF NEW HOPE
Date: May ,2004.
By:
Don Collier, President
Date: May ..... 2004.
By:
Daniel J. Donahue, Executive Director
IT his Purchase Agreement was prepared by:
JENSEN & SONDRALL, P.A.
8525 Edinbrook Crossing, Suite 201
Brooklyn Park, MN 55443
k(763) 424-8811
Others who will assist Seller or Buyer with this transaction:
Lawyer for Buyer:
Steven A. Sondrall, #103391
8525 Edinbrook Crossing. Suite 201
Brooklyn Park. Minnesota 55428
(763) 424-8811
Listing Agent and Broker for this transaction are:
N/A
Selling Agent and Broker for this transaction are:
N/A
Buyer's Title Insurer:
Old Republic National Title Insurance Company
400 Second Avenue South
Minneapolis, Minnesota 55401
[1994; Rev. 1996; Rev. 1997: Rev. 2002]
05/06/2004 10:06 FA~ 763 493 5193 JENSEN & $0NDRALL. P.A. , CNH CH ~002
a~l~Rglg--' Form 1519Y
ADDENDUM TO PURCHASE AGREEMENT
DISCLOSURE OF INFORMATION ON LEAD-BASED
PAINT AND LEAD-BASED PAINT HAZARDS
This form approvacl Dy Ilqe Minnesota Association of
I~EALTOI~,5®, which cliaclmma any liabiliW
arising out of use or misu~ of ibis form.
~ 2000. Minnosota Association of REALTORS~. Edina. MN
Date ..........
Page
Addendum to Purchase Agreement between parties dated May , 2004 pertaining to tile purchase and
Section 1: Lean Warning ~tatement
Every purch~.ver of any inter,vt in r~videntt'al real property on which a r~idential dwelling was built prior to 1978, ~' not,lied that
such property may present exposure to lead front lead-based paint that may place young children nt r~k o] developing lead
poisoning. Lead poisoning in you~tg children may produce permanent neurological damage, including learning disabilities.
reduced intelligence quotient, behavioral problem, r, and Dnpaired memory. Lead poisonDtg al~o poses a partfculor risk to pregnant
~,omen. The z'ell~r qf arty inter~.t irt r~'idenlial real properly ia' required lo provide the buyer with uny tnformtttion on lead-b~.red
paint hazartiv from ria.]c uawea..vrnenrv or in.~ectionx in the seller's pox.v,,~sion and notif~ the buyer of an9, known lead-bna'ed patnl
hazards. ~4 rt~k a~se.c~ment or Dt~pect~'on for possible le~d-based paint hvtr. nrds ts recommended prior to purchtz~e.
Seller's Disclosure (initial)
(a) Presence of lead-baee~d paint a~d/or lead-based pai~at hazards (cl~ok one below):
[] ICuo~rn Icad-based paint and/or Icad-baaed paint ha~arda arc present in the busing (cxplatn).
[] Relier ha.s no knowledge of lead-based paint and/or lead-ha.Red paint hazards in thc housing.
(b) Records a~d re~orts available to the seller (check one below):
Seller has provided the purchaser with all available records and reports pertaUaing to lead-baaed paint and/or
lead-baaed pain: hazarcLs ia the housiag (list documents below).
[] Seller has no r61~or~s or r~cords perminlng to lead-based paint and/or lead-based paUat hazards in the housing.
PurchaserVs Acknowledgment (initial)
(c) Purchaser has received copies of all inl'ormation listed under (b) above.
(d) Purchaser has received the parrr~hlet Protect Your Family from Lead in Your Home.
(e) Purchaser has (check one below):
[] l~eceivcd a 10-day opportunity (or znutually agreed upon l)eriod) ix) conduct a risk assessment or ins4neclion for
thc presence of Icad-baaed paint and/or Icad-based paint hazards (If checked, see Section LI below): or
[] Waived thc opportaaniry to conduct a risk assessment or inspcclion for thc presence of Icad-baaed paint a~d/or
lead/baaed paiut
Real Estatc Licensee's Acknowledgment (initial)
(f) Real estate licensee has informed the seller o£the seller's obligations trader 42 LI.S.C. 4852(d) and is
ware of licensee's responsibility Lo ~n~ur¢ coxupllance.
Certification of Accuracy
The tbllowing parties have reviewed the information above and certify, to the best or' their knowledge, that the information
provided by thc signatory iv tru~ a~d accurate.
Michael Ohm'les Tomaszewski
Date
Economic l)cvclopmcnt Authority h~ mid for the City of New Ho~e
l~urchaaer Date
By: Don C~llicr. Pre/dent
Seller
Date
Economic Development Authority in and for the City of New Hope --
Purchaser Date
Ry: Daniel J. Donahuc, ~xccutiv~ Director
l~eal ~state Licensee l')ate Peal I~stnte Licensee Date
~: .~.'ffntingeacy (Initial o~y if iqr, t bOX .nd~ rurchaser's Ac~owledgmeut le~ (e) above is c~
~.con~u~ ia contingent upon a risk ~sessment or on inspection of ~e ~ for the pr~sen~ of ~cd
l~ vaint ~ds t° be conduct~ at ~e ---r ................ ~~ain$
~st~ out one9- ~ .... ~y ~. ne ~e~eQ r~, ~d thc
~= p~uh~er w~v~ I1 of the ~quiral ~tions will be made; or (~)
beh~f of
seller of the waiver or removal in writing within the t/me specified.
TLX:$AT.~ (9/00)
05/06/2004 ~0:07 FAX 763 493 5193 JENSEN & SONDRALL. P.A. , CN'H CH ~]003
Miller/Davis Co. ~ St P.ul, MN 651-~42-198/~
~J~.~" Form 1519WD (I~v. 10/03)
WELL DISCLOSURE STATEMENT
This fo~ appm~ by ~e Min~so~ ~oclaflon of
a~lng ~t of u~ ~ ~suse of ~s
~ 2003. Minn~ ~,~abon of R~TORS~. Edino, MN
1. Date __ May , ~0~ _
3. A~AC~ED HE.ETd AND MA~E A P~T HE~EOF
4. Minneso~ Statutes S~c. 1031.235 r~ouires ~t Detore sig~lng a~ agreement to s~ll or transfer real prope~,
5. must disclose information in writing to the Buyer about the status a~d Io~tion of all kno~ wells on the prope~. This
6. requirement is satisfied by ~liv~ri~Q to t~ ~uyer either ~ Statement ~y ~e ~ell~r ~at ~ ~eller Oo~s not know
7. any wells on the prope~, or a disclosure statement indicating the legal description a~0 counW, an~ a map showin~
8. the Iocatio~ of each w~ll. ID t~e ~isclosure statement the S~ll~r must i~d;cate, ~r aBc~ well, whet~er
us~, Dot i~ use or
10. Unle~ ~e Buyer a~d ~elier agree to the co~tra~, in wrying, before t~ closing of t~e sale, 8 Seller who fails to
11. disclose the existence or known status of a well at the time of sale an~ ~new or ha~ reason to know of t~e ex~stence
12. or known s~tus of th~ w~ll, is liable to the Buyer for costs r~latiDg to seali~ of t~ w~ll an~ reasonable
13. for collection of costs from the Seller, if the action is comme~d w/~in six years after toe ~te the Buyer closed the
~4. purchase of the real property wh~r~ the w~l is located.
15. ~egal requiremen~ exist ~latin~ to various aspec~ of Io~tion and s~tu8 of wells. Buyer is advised to contact the
16. local unit(s) of government, s~te agency, or qualifie~ ~rof~ssioDat which r~ulat~8 w~lls for fu~her informatio~ about
17. ~ese issues.
Instructions for oompletion of this form are on the revarae side.
PROPERTY DESCRIPTION
Street Address 5434 Winnetka Avenue North, New I~[nne .... ~;5,1~_R ~.nn~in
City ~p County
LEGAL DESCRIPTION:
18.
19.
20.
21.
22.
-
25.
26.
27. The Seller certifies that the Seller does not know of any wells on the above described real property.
28. (If this option is checkecl, then skip to the lest line and sign and date this statement.)
29. The Seller certifies that the following welts are located on the above descrit3ect property.
30. MN Unique Well Year of Well iN USE NOT IN SEALED
31. Well No. Depth Goner. Type USE
33. we,, 2 [] [] []
34. Well 3 [~ [] r--]
35. NOTE: Sea definition of terms "IN USE," "NOT IN USE," and "SE~kLED" on tines 83-g2. If a well ie not tn usa,
36. It must be eesled by a Iicertsed well contractor or a well owmer must ob~in a maintenan~e pe~it from the
37. Minnesota Depa~ment ef HeaEh and pay an annual mal~tenan~ fee. Maintenance pe~im ara not
38. t~n~erable. If a well is epe~ble an~ p~perly main~ine~, a maintenance pe~it is net required.
39. OTHER WELL INFORMATION
40. Date wall water last ~ted for ~ntaminants: Test ~esul~ a~ached~ Yes~ NO~
41. Commen~;
42. Contaminated Well: Is the~ a well on or se~ing the prope~ con~ining contaminated'~ater? Yes~ No~
43. S5LED WELL INFORMATION
44. For e~ch well designated ~s sealed a~ove, complete this section.
45. When was the well s~al~? **
4~. ~o sealed ~e well?
47. Was
48. MAP
49. Complete the a~ched MAP showing the iocaUon of ea;h well on the real prope~.
50. This disclosure is not a wa~anW of any kind by the Seller(s) or any Licensee(s) representing or assisting any
51. pa~/ies in ~is transa~ion, and is ~ot a substitute for any Inspectors or wa~anti~ the pa~/ies may wish to obtain.
52. CERTIFICATION BY SELLER
53. I ced~ that the info--etlon prodded above is accurate and =omple~ to the best of my knowledge.
04.
Ilar or ~slgna~ ~epr~en~ve) (Da~) (~eller or ~lgna~d Rep~en~be) (Date)
BUYER'S ACKNOWLEDGMENT
WELL DISCLOSURE STATEMENT
(Check the appropriate box.)
55.
56.
Do~ Collier President, Nm H~I~ E, DA
(Buyer) '
~,)._al~itpl $. DoJ~hue, ~:txec~tive Di~eaor, New Ho~ ~A
(Dam) luuy~r)
(Da~)
57. ~N-~S-~ (10/03) ORIGINAL COPY TO LI~ING BRO~R; COPIES TO SELLER, BUYEE, SELLING BROKER
05/06/2004 i0:07 FAX 763 493 5193 JENSEN & SONDRALL. P.A. , CN-H CH ~004
WELL DISCLOSURE STATEMENT
58. Page 2 of .__ Pages.
59.
INSTRUCTIONS FOR COMPLETING THE WELL DISCLOSURE STATEMENT
80. DEFINITION
61. A "well" means an excavation that is drilled, cored, bored, washed, =lrivan, dug, jettegt, or otherwise constructed if the
62. excavation is intended tor the location, diversion, artificial recharge, or accluisition of groundwater.
63. MINNESOTA UNIQUE WELL NUMBER
64. All new wells constructed AFTER January 1, 1975 should have bean assigned a Minnesota unique well number by the
65. person constructing the well. If the wall was constructed after this date you should have the unique wall number ~n your
66. pror)erty records, if you are unable to locate your unique w~ll number and the wall was constructed AFTER January 1,
87. 1975. contact your well contractor. If no unique well number is available, please indicate the depth and year of
68. construction t%r each wall.
69. WELL TYPE
70. Use orte of the following terms to describe the well type.
71. WATER WELL: A water well is any type of well used to extract groundwater for private or public use. Examples of
72. water wells ara; dome',trio wells, drive-point wells, dug wells, remedial wells, and municipal wells.
IRRIGATION WELL: An irrigation well is a well used to irrigate agricultural lands. These are typically large
diameter walls connected to a large pressure distribution system.
75. MONITORING WELL: A monitoring wall is a well used to monitor groundwater contamination. The wall is Wpicaliy
76. used to access groundwater for the extraction of samples.
77. DEWATERING WELL: A dewatering wall is a wall used to lower groundwater levels to allow for construction or
78. use of underground spaces.
73.
74.
7g. INDUSTRIAL/COMMERCIAL WELL: An industrial/com~ercial well is a nonpctable well used to extract
80. groundwater for any nonpotable use including grDundweter thermal exchange wells {heat pumps and heat loops).
81. WELL USE STATUS
82. Indicate the use status of each well. CHECK ONLY ONE (1) BOX PER WELL.
83. IN USE: A wall is "in use" if the well is operated on e dally, regular, or seasonal basis. A wall in use includes e wall
84. that operates for the purpose of irrigation, fire proration, or emergen~ pumping.
85. NOT IN USE: A well is "not in use" ~ ~e well does not meet the definition of "in use" above and has not been
86. sealed by a Ilcens~ well ~nt~or.
87.
86.
89.
90.
91.
92.
93.
94.
SEALED: A well is "sealed" if e licensed contractor has completely filled a wall by pumping grout material
throughout the entire bom hole after removal of any obstructions from the well. A well is "capped' if it has a metal
or plastic cap or cover which ia threaded, bolted, or welded into the top of the well to prevent entry into the wall. A
"capped' well is not a "sealed" wall.
If the wall has been sealed by someone other than a licensed well contractor or a licensed well sealing contractor,
check the well status as "not in use".
If you have any questions, please contact the Minnesota Department of Health, Well Management Section et (651)
215-0819 (metropolitan Minneapolis-St. Paul) or 1-800-383-9808 (greater Minnesota).
95. MN-WD$-2 (10/03) ORIGINAL COPY TO LISTING BROKER; COPIES TO SELLER, BUYER, SELLING BROKER
05/06/2004 10:07 FAX 763 493 5193 JENSEN & SONDRALL. P.A. , ChH CH ~005
Form 151~SS ~ev
PRIVATE S~ER ~YSTEM DISCLOSURE
This ~ ap;mv~ by ~e Minneso~ ~ocia~on of
R~TOR~. ~l~ ~JsQaims any ~a~lliy
a~ln~ out of use or misuse of ~
~ 2002. Minflelo~ ~on 5f RE[TOR~. Edina, M~
Date M~y ._ , 2004
Page I of . Pas.: THE REQUIRED M~ IS
A~ACHED HEnCe AND MADE A PART HEREOF
4. Property located at _~ _ SA:IA Winnet.~a Avenue ]~Torth
5. in ~e C~ of , ~ew H~e . CounW of IIenwe~in State of ~_ ~innesota .... I~aliy des~bed as follo~ or
6. a~ched sheet (~e "Pmpe~)
8. This di~closu~ Is not a wa~anW of any kind by Ihs Seller(s) or any Li~nsee(s) mpmsen~ng or assisting any Pa.(s) in this
g- ~nsa~on. and is not a substit~e ~r any inspe~ions or wa~an~es ~e Pa.(s) may wish ~ obtain.
~0_ BUYER(S) AND SELLER(S) ~Y WISH TO OBTAIN PROFESSIONAL ~VICE AND/OR INSPECTIONS
1 ~. OF THE 8EWER SYSTEM AND TO PROVIDE FOR APPROPRIATE PROVIBION~ IN A CONTACT BE~EEN
12. BUrR(S) AND SELLER(S) WffH RESPECT TO ANY ADVICE/INSPECTION/DEFECTS.
13. SELLER'S INFORMATION: The following Seller disclosure satires MN. Statutes Chapter 115.55. The Seller discloses ~
14. following Jnfo~ation wi~ the knowledge ~et even ~ough ~Js is not a waffan~, prospe~ive Buyem may rely on this infu~ation
15. in deciding ~ether and on what te~s to ~urchase the Pro~e~. The Seller(s) au~odzos any Agent(s) m~en~ng any pa~y(s)
1~. in ~is Eansaction to provide a ~py of ~is statement to any pemon or enli~ in connec~on wRh any a~ual or an~clpata~ sale ot
17 ~e Pmpe~y.
~. Unless the Buyer and Seller agree to the ~n~ in ~ltlno ~m ~ Closing of the sale. a Seller who fails to disclose the
19. existence or known status of an individual salad tree,ant system at the time of 8ale. and who knew or had reason to know of
20. ~e existence or known s~tus of the sys~m, is liable ~ ~ Buyer ~r cos~ rela~ng to bdnging the system into compliance wRh
21. individual sewage traa~enl sysam miss and for reasonable e~mey ~es ~r ~lle~lon of ~8~ ~m the Sailer. An action under
~. this subdivision must be ~mmenced within ~o years BEer the date on which the Buyer closed ~e purchase of the real prope~y
23. where ~e system is Iocate~.
24. L~al requiremen~ exist rel~ing ~ various a;p~ of location and sta~s of individual se~ge treatment systems. Buyer Is
25. a~vised ~ ~nm~ ~e Io~1 unit(s) of government, ~te agen~ or qualified Dm~amonal which r~ulates individual sewage
26. trea~e~t ;ystems for rudder info--etlon about ~eae issu~
The ~llowing are representations ~de by the Solier(s) to the extent of the Sailor(s) a~ual ~owle~ge. This Info~a~on ia a
28. disclosure and is not i~nded ~ be pa~ of any contm~ baleen the Buyer and Seller.
29. PRIVA~ 8EWER SYSTEM DISCLOSURE (CHECK THE APPROPRIATE BOX.)
30. ~ The ~eller ~Hifies ~a[ the ~eller does not know of any pHv~e sewer system on or sewing the above described real
31. prope~. (/f this opt/on is checked. ~ten s~p ~o ~0 ta~t ~/ne and a/gn and ~ate this states, ant.)
32. ~ The Seller ce~ifies that the ~llowing private sewer system is on or serving the a~ove =escribed mai pmper[y.
33. TYPE (Check appropriate box(es) and/nd/Gate/ocatlo;] on a~ached MAP)
34. ~ Sapac TanK: ~ with drain field ~ with mound system ~ seepage ~nk ~_~ with open end
35. ~. Seale~ Sys~m (~olalng tanR)
3S. j ~her (Describe): __
:37.
38.
39,
41.
43. Where is tank located? . ,
44. What ia tank size? __.
45. Where is the drain field located?
46. What is the drain field size?
Is the sewer system(s) currently in use? Yes No
NOTE: If any water uae appliance, bedroom or bathroom ha been added to the Property, the system may ne longer
comply with applicable sewage treatment laws and rules.
lB the sewer system(s) in compliance with applicable sewage treatment system laws and rules? Yes_ NO _
When was the sewer system installed? ~ Installer Name/Phone:
wash loads per week .
Yes.,, No, ~
When was fha tank last pumped?___
How often is tank pumped?
47. Describe work performed to the system since you have owned the Property;
48.
49. Date work performed/by whom: __
50. Is sawer system entirely within Property boundanj lines, including set back requirements? __
51, Is [he system shared? __ How many units on system Annual fee'7
52. Comments:
53. On this Property:__
54. Approximate number of; people using the sewer system _ showers/baths taken per week ....
55. Distance between wall and sewer system:
56_ Have you received any notices from any government agencies misting to the sewer system?
57. If "Yu", see attached notice.
MN~PSSD (S/02) ORIGINAL COPY TO LISTING BROKER; COPIES TO SELLER BUYER SELLING BROER
05/06/2004 10:08 FAX 763 493 5193 JENSEN & SONDRALL. P.A. , CN'H CH ~006
59.
60,
61.
62.
Form 151985 cRev. o/o2)
Are there any known defec~ in the sewer system?
If yes, please explain __
Yes .. No
PRIVATE SEWER SYSTEM DISCLOSURE
58. Page 2
~3. ~A~TEMENT: (To be signed at time of iisbng)
64, I / We, Seller(~)-/~'the-P..r.~l~_rt..v..a~_c_k_ nowtedge the above P~vate Sewer ~tem Di~cl~ure ~n~ MAP ~n~ ~u~o~e Listin~ Bm~ '- .'~.~ ~
65. Info~aflon ~ p~sDe~ve Buyem. -~~~~
67. BUYER'S ACKNOWLEDGMENT: (To be signed ai b~Je of pu~he~ agreement)
69. regarding the condition of ~e Pdvate Sewer System have been made. other than those made a~ve. LISTING BROKER AND
70. LICENSEES MAE NO REPRESENTATIONS ~D ARE NOT ESPONSlBLE FOR ANY CONDITIONS EXISTING IN THE
71. P~VA~ SEWER SYSTEM.
(Hu~7~h~r~d~n~ ...... {Date) (Buyer)D~i~O~Ue. ~xecu~ve Directo~ (Date)
New Ho~ gDA New Hope EDA
73. SELLER'S ACKNOWLEDGMENT: ~0 be signed at time of pumhase agr~ment)
74. AS OF THE DATE OF THE ACCE~ANCE OF THE PURCH~E AGREEMENT, I~e. t~e Seller(s) of ~e a~ve Pmpe~, agree
75. that the ~ndEion of the pflvate s~er By.om is ~e same as noted above, including c~anges Indica~d above which have been
76. initialed and dated.
77.
(Seller) Michael Charles Terna~zew~ki
(Date) (Staler)
78.
ORIGINAL COPY TO LISTING BROKER; COPIES TO SELLER, BUYER, SELLING BROKER
05/06/2004 10:08 FAX 763 493 5193 JENSEN & SONDRALL. P.A. , CNH CH ~007
MIIllr/Dllvi,~ Co. ~ SI'. PaUl, MN IJ51-N,2-1~I8
~/RI~'"" Form 1~1~ MAP (Rev. 7/~)
PRIVATE SEWER SYSTEM AND/OR
WELL LOCATION MAP
R~LTOR~, whi~) disclaims any Ilabllt~
arising out of
Date May . ~004
Page I of Pages
2. Please use the space Delow ta sketch fl3e real progerty being sold and t~e location of each __
3. Inctude approximate distances fi-om fixed reference points such as streets, buildings and landmarks.
SEWER SYSTEM WELL on the Property.
(c~eck all ttnat apply)
4. Property Ioca~ at: ~l_4]~.Witl/tetJ~a Avcnu(: ~Ct't)L ~ew I-jrt.ne Minnee~?~ ~R~[~
5.
Seller end Buyer mni'~ial: Seller(s)
ATTACH ADDITIONAL SHEET8 A8 NEEDED
Buyer(s)
7. MN-PSSWM (7/g4) ORIGINAL GOPY TO LI~TING BROKER; (;;OPIE$ TO SELLER BUYER, 8ELLINQ BROKER
EXHIBIT A
ADDITIONAL TERMS RELATING TO
PURCHASE AGREEMENT FOR
5434 WINNETKA AVENUE NORTH
Buyer acknowledges that it shall be responsible for payment of the State Deed Tax due on the
sale of the above property, as well as the cost of securing a title commitment as set forth in the
Purchase Agreement. Buyer will also be responsible for all other closing costs, specifically
including all recording costs and all costs to seal the water well on the property.
Seller acknowledges that relocation assistance benefits as determined by Evergreen Land
Services Company will be paid to the Seller, as required by law. Seller further acknowledges and
agrees Seller has purchased a replacement property prior to the closing of his property at 5434
Winnetka Avenue North at a cost less than the purchase price of the 5434 Winnetka Avenue
property. As a result, Seller is not entitled to a differential payment on the purchase of the
replacement property resulting from the sale of the 5434 Winnetka Avenue property. Seller has
also elected to accept the $1,850.00 moving expense payment as determined by Evergreen Land
Services Company and Seller further acknowledges and agrees the purchase price of the 5434
Winnetka property has been increased by $3,745.66 to include a reimbursement to Seller for
closing costs on the replacement property he purchased prior to the herein closing. Therefore,
Seller agrees he will not receive any additional payment for closing cost reimbursement as a
relocation benefit resulting from the sale of 5434 Winnetka Avenue.Buyer.
SELLER:
Dated: May .. ,2004.
Michael Charles Tomaszewski
Dated: May ,2004.
Dated: May. ,2004.
PAAttomey~JLB\l-Chent Fotdersx~2NHL09.11271 ~09.11271-002-Exlfibit A to PA.doc
BUYER:
THE ECONOMIC DEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF NEW HOPE
By:
Don Collier
Its: President
By:
Daniel J. Donahue
Its: Executive Director
USE AND ACCESS AGREEMENT FOR
5434 Winnetka Avenue North
This Access Agreement (the "Agreement") is dated effective the 11 thth day of May, 2004,
and is entered into by and between Thomas C. Tomaszewski, a single person ("Seller") and the
Economic Development Authority in and for the City of New Hope, a Minnesota municipal
corporation ("EDA") contemporaneously with the closing of the sale of property located at 5434
Winnetka Avenue North, New Hope, Minnesota (the "Property") from Seller to EDA on May
11, 2004 ("Closing Date").
WHEREAS, Seller has not been able to vacate the Property or fully remove his personal
effects from the Property and has requested permission from the EDA for an additional
seventeen (17) days after the Closing Date to remain living at the Property and to remove his
personal effects from the Property; and
WHEREAS, as of the Closing Date, title to the Property transferred to the EDA, which
includes the right of possession; and
WHEREAS, EDA is willing to permit Seller access to reside at the Property following
the Closing Date for a period of seventeen (17) days and to allow Seller to remove his personal
property from the Property according to the terms and conditions contained herein.
NOW, THEREFORE, as an accommodation to Seller, the EDA is willing to grant a
limited right of access to reside at the Property at 5534 Winnetka Avenue North as specified
herein:
1. EDA agrees to allow Seller access to reside at the Property following the Closing
Date on May 11, 2004 for a period of seventeen (17) days, terminating at 11:59 p.m. on May 28,
2004, and to permit Seller's removal of personal property from the Property.
2. Seller has retained a key to the Property and is authorized to utilize the key for a
period terminating at 11:59 p.m. on May 28, 2004. Seller shall not conduct any activity on the
Property inconsistent with a residential use during the term of this Agreement. Further, ~Seller
will not allow any other person to reside at the Property who was not already a resident of the
Property as of the effective date of this agreement.
3. EDA will withhold from Seller One Thousand and 00/100ths Dollars ($1,000.00)
of the purchase price in consideration of granting permission to Seller to access the Property
according to the terms contained herein (the "Withheld Funds").
4. Any personal property remaining on the Property after 11:59 p.m. on May 28,
2004 will be considered abandoned by Seller and become the property of EDA or the City of
New Hope and any costs incurred by the EDA or the City of New Hope to remove and dispose
of the personal property will be deducted from the Withheld Funds.
5. The Withheld Funds will be returned to Seller on or before June 7, 2004, after any
costs to remove and dispose of Seller's abandoned personal property is determined by the EDA
or City and paid from the Withheld Funds.
6. This Agreement grants a limited contractual right of entry to Seller and is not to
be deemed in any way to create a leasehold estate. Seller agrees he will vacate the property as of
the time and date stated in Paragraph 1 of this agreement and Seller further acknowledges and
agrees he has waived any vacate notice requirements imposed on the EDA by any law necessary
to enfome removal of Seller by the vacate date stated in Paragraph 1 of this agreement. Seller
further acknowledges and agrees he will forfeit his $1,000.00 escrow payment and will, in
addition to the escrow 'payment forfeiture, pay any costs, including reasonable attorney fees,
incurred by the EDA to enfome the removal of the Seller from the Property after the vacate date.
7. Seller shall enter upon and use the Property with reasonable care and without
damage to the Property. Seller will not use the Property in any manner inconsistent with the
residential nature of the Property or in violation of any City or State building, fire or zoning
code.
8. EDA waives all claims for trespass arising from Seller's entry, and use on the
Property for the purposes stated herein.
9. Any use of the Property by Seller for any reason other than for the purposes stated
in this Agreement shall be deemed a violation of this agreement. Seller acknowledges and agrees
he will forfeit his entire $1,000.00 escrow payment if he violates this agreement by committing
any of the following acts during the term of this agreement in addition to any other acts causing
him to forfeit this payment as stated in this agreement:
a) Permits another person to reside at the Property who is not a resident
as of the effective date of this agreement,
b) Uses the property inconsistent with its residential character,
c) Uses the property in violation of any state or city building, fire or
zoning code,
d) Fails to vacate the property as of the time and date stated in
Paragraph 1 of this agreement.
10. EDA or the City of New Hope will not be liable to Seller, or Seller's family,
agents, invitees, contractors, employees or servants, for any damages or losses to person or
property incurred during Seller's use or entrance onto the Property under this Agreement, unless
caused by the willful misconduct of the EDA or the City of New Hope.
11. Seller agrees to waive and release the EDA and City of New Hope and its
employees, officials, agents and representatives of and from any and all right of recovery, claim,
action or causes of action, for any loss or damage that may occur to Seller's personal property,
by reason of any and all risk and/or perils, regardless of cause or origin.
2
12. Seller agrees to indemnify, defend, and hold the EDA and City. of New Hope
harmless from and against all claims, damages, losses and expenses, including but not limited to
reasonable attorney's fees for bodily injury or death or for injury to or destruction of personal
property arising out of and from any negligent act or omission of Seller, or anyone directly or
indirectly employed by or gratuitously assisting Seller in connection with Seller's use or entry, on
the Property during the term of this Agreement.
SELLER:
Michael C. Tomaszewski
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF NEW HOPE
By:
Its:
STATE OF MINNESOTA
COUNTY OF HENNEPIN
SS.
The foregoing instrument was acknowledged before me this 11 th day of May, 2004, by,
Michael C. Tomaszewski a single person.
(Notary Public Seal)
Notary Public
STATE OF MlbINESOTA
COUNTY OF HENNEPIN
SS.
The foregoing instrument was acknowledged before me this 11th day of Ma3', 2004. by
Ken Doresky, the New Hope Community Development Specialist, of the Economic
Development Authority in and for the City of New Hope, a Minnesota municipal corporation, on
behalf of said municipal corporation.
(Notary Public Seal)
Notary Public
Drafted By:
JENSEN & SONDRALL, P.A.
8525 Edinbrook Crossing, Suite 201
Brooklyn Park, MN 55443
(763) 424-8811
PAAttomey~SAS\l Client Filea~2 City of New Hope\99-11271kuse and a~¢eas agreement.doc
4
DOUGLAS J. DEBNERz
GOROON L. JENSENI
CLARISSA M. KLUG
GLEN A. NORTON
STEVEN A. SONDRALL
STACY A. WOODS
OF COUNSEL
LORENS Q. BRYNESTAD
1Real Property Law
Specialist Certified By
The Minnesota State
Bar Association
2Admitted in Iowa
JENSEN & 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~jensen-sondrall.com
May 6, 2004
Ken Doresky
Community Development Specialist
City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428
RE: Acquisition of 5434 Winnetka Avenue
Our File: 99.11271
Dear Ken:
Attached please find the following documents for consideration at the May 10, 2004 meeting
relating to the EDA's purchase of 5434 Winnetka Avenue North from Michael Tomaszewski:
1. Resolution Approving Purchase and Relocation Benefits,
2. Minnesota Standard Residential Purchase Agreement,
3. Exhibit A to Purchase Agreement (Additional Terms
Agreement),
4. Use And Access Agreement
Relating to Purchase
I will need to fax to you the Addenda for Lead Based Paint, Well Disclosure and Private Sewer
System Disclosure since they are pre-printed form documents not on our computer.
As you know, we are buying this property for $233,745.66. This amount falls within the range of
values established by the two appraisals made of the property. Also, the EDA will not be required
to make a "differential payment" on this property since a replacement property has been purchased
by the seller for an amount less than the purchase price. Our relocation benefit exposure is limited
to payment of $1,850.00 in moving expenses. As a result, it is my recommendation the EDA
accept this offer to sell in accordance with the attached purchase agreement.
Very truly yours,
Steven A. Sondrall, City Attorney,
JENSEN & SONDRALL, P.A.
sas~j ensen-sondrall.com
Enclosure(s)
cc: Valerie Leone
P:\AtmmeyXSAS\I Client Files',2 City of New Hopek99-11271\003-IC Doresky Itt approving pa. doc
DOUGLAS J. DEBNER2
GOROON L. ~NS~~
GLEN A. NORTON
STEVEN A. SONDRALL
STACY A. WOODS
0~' COU~SZL
LORENS Q. BRYNESTAD
'Real Property Law
Specialist Certified By
The Minnesota Sram
Bar Association
:Admitted in Iowa
JENSEN & SONDRALL, P.A.
Attorneys At Law
April 14, 2004
8525 EDINBROOK CROSSING, STE. 201
BROOKLYN PARK, MINNESOTA 55443-1968
TELEPHONE (763) 424-8811 · TELEFAX (763) 493-5193
e-mail law@jensen-sondrall.com
Writer's Direct Dial No.: (763) 201-0211
e-mail sas@jensen-sondrall, com
James B. Lund
Attorney at Law
8754 Logan Avenue South
Bloomington, MN 55431
Re:
Your Client: Michael Tomaszewski
Subject Property: 5434 Winnetka Avenue North, New Hope
Our File No.: 99.11271
Dear Mr. Lund:
Thank you for your April 12, 2004 letter in connection with the New Hope EDA's acquisition of
the referenced property.
I want to confirm our agreement on this matter. The New Hope EDA is willing to pay your
client $230,000.00 for the purchase of his property at 5434 Winnetka Avenue North. Also, we
will reimburse him for the closing costs of $3,745.66 he expended on the replacement property
he acquired in the City of Crystal in 2002 when he came to understand this project would be
moving forward and he would need to vacate the 5434 Winnetka Avenue property. I would
appreciate receiving some documentation from your client to establish this closing cost amount
for my file. We will also be paying him $1,850.00 in moving expenses as determined by
Evergreen Land Services Company.
We also agree he will be able to remove the items you referenced in your April 12, 2004 letter
with the exception of the "entire garage": I am not sure what you intended by that '0r how your
client would move the garage. We are not saying he can't remove the garage, however, before
we agree to that provision, we need to know the details as to how that would be accomplished. If
the City is agreeable with the moving plan, he may take the garage as well.
My Legal Assistant, Janet Burke, will be preparing a Purchase Agreement setting forth our
agreement which I hope to have to you shortly. As always, I appreciate your professional
courtesy in this matter.
April 14, 2004
Page 2
Very truly yours,
Steven A. Sondrall, City Attorney,
City of New Hope
cc:
Kirk McDonald, Community Development Director, City of New Hope (~w/enc.)
Ken Doresky, Community Development Specialist, City of New Hope (w/enc.)
Dan Donahue, City Manager, City of New Hope (w/enc.)
P:\Auomey~SAS~l Client Files\2 City of New Hope~99-11271\002-Atty Lund Ltr. doc
I._~W OFFI CF...~
JAMES B. LUND
8754 LOGAN AVENUE SOUTH
BLOOMINGTON. MINNESOTA 55431
TELEPHONE
(952) 884-5~40
RECEIVED APR 1 3 ~1)1)4
April 12, 2004
Stsven A. Sondrall, Esq.
8525 Edinbrook Crossing, Suite 201
Brooklyn Park, MN 55443
Re:
Michael Tomaszewski
5434 Winnetka Ave. No.
New Hope, MN 55428
Dear Mr. Sondrall:
Mr. Tomaszewski would appreciate removing and taking
with him the following:
Kitchen cupboards including built-in sink attached
to kitchen cupboards
Dishwasher
Refrigerator
Disposal
Light fixtures and chandeliers in living room, dining
room, kitchen and den
Bathroom lighting fixtures, toilet, sink and bidet
Closet doors in bedroom
Mantle above fireplace
Entire garage
With best wishes, I remain,
Sincerely yours,
James B. Lund
c. Mr. Tomaszewski
DOUGLAS J. DEBNER2
GORDON L. JENSENl
GLEN A. NORTON
SI'EVEN A. SONDRALL
STACY A. WOODS
OF COUNSEL
LORENS Q. BRYNESTAD
~Real Property Law
Specialist Certified By
The Minnesota State
Bar Association
:Admitted in Iowa
JENSEN & 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~jensen-sond rail.eom
Writer's Direct Dial No.: (763) 201-0211
e-mail sast~jensen-sondrall, com
March 16, 2004
James Lund, Esq.
8754 Logan Avenue South
Bloomington, MN 55431
Re: New Hope EDA v. Michael Charles Totnaszewski, et al.
Court File No.: CD-2743
Your Client: Michael Tomaszewski/5434 Winnetka Avenue North, New Hope
Our File No.: 99.11271
Dear Jim:
In follow up to our March 15, 2004 telephone conversation, please find enclosed the following
documents in connection with the hearing before Judge Crump on April 6, 2004 at 1' 15 p.m. in
Courtroom 1959, Hennepin County Government Center:
1. Notice of Hearing and Notice of Motion for Appointment for Commissioners and for
Transfer of Title and Possession under Minn. Stat. §117.042;
2. Proposed Findings of Fact, Conclusions of Law and Order Appointing Cormnissioners;
3. Proposed Findings of Fact, Conclusions of Law and Order Transferring Title and
Possession per Minn. Stat. §117.042; and
4. Petition with attachments.
As we discussed, the 'hearing is for the presentment of the Petition to District Court as required
by Minn. Stat. Chapter 117. Subsequent to the hearing, the Court will appoint three
Commissioners and two alternates to consider damages resulting from the taking of the properties
on which we are unable to negotiate a voluntarily acquisition. The hearing will also establish the
"quick take" possession date of May 24, 2004.
As we further discussed, we would still like to continue negotiations to reach a voluntary
settlement with your client. However, if we can't reach a voluntary settlement, your client needs
to understand we will require possession of his property as of the May 24, 2004 "quick take"
date.
The last time we spoke about acquisition of this property with your client, we discussed the
Meeks appraisal and the Forsythe appraisal regarding valuation. Again, the $255,000.00
valuation indicated in the Meeks appraisal is not justified due to the fact a second single-family
home site is not legally permissible on your client's property. Therefore, the $239,000.00
valuation needs to be used in connection with the Meeks appraisal. The Forsythe appraisal
obtained by the City indicated value at $198,000.00. I believe Kirk McDonald in our last
meeting indicated the City would be willing to "split the difference" between the $198,000.00
March 16, 2004
Page 2
valuation and the $239,000.00 valuation and allow your client to remove various items from the property, and more
particularly, his kitchen, if we could reach a negotiated settlement. Please let me know if you are still willing to
discuss this matter along these lines or if you client is insistent upon the higher Meeks valuation which would
necessitate a Commissioners hearing.
It was nice speaking with you and I will wait to hear from you regarding continued negotiation of the voluntary
acquisition of your client's property.
Very truly yours,
Steven A. Sondrall, City Attorney,
City of New Hope
Enclosures
CC:
x~irk McDonald, Community Development Director, City of New Hope
en Doresky, Community Development Specialist, City of New Hope
P:\Attorney~SAS\l Client Files\2 City of New Hope\99-11271\001-Arty Lurid Ltr. doc
PRICE DIFFERENTIAL PAYMENT/ANALYSIS OF COMPARABLE PROPERTIES
Subject Comparable Comparable Comparable
Property #1 Property #2 Property #3
Pdce (appraised) $198,000 $194,900 $194,900 $174,900
Address '5434 Winnetka 4756 Decatur 3335 Lee Ave 5406 Louisiana
Avenue North Avenue North Avenue North
City New Hope New Hope Golden Valley Crystal
Date of Inspection
Style Rambler Rambler Rambler Rambler
Construction Good Quality Average Average Average
Actual Age/Eft. Age 1952 1964 1949 1954
Condition EGF Remodeled Average Average Average
No. of Units 1 1 1 1
No. of Rooms 5 10 6 7
No. of Bedrooms 1 3 2 3
Bedrooms Required 1
No. of Baths 1 1 1 1
Above Ground 861 1,024 1,040 925
Finished sq fl
Below Ground 0 451 240 410
Finished sq ff
Total Finished Area 861 1,475 1,280 1,335
Basement None Full - finished Full - finished Full - Finished
Bsmt- Types of Fin. NA Family Room, Family Room Family Room
Rms. Laundry, Work
Shop, Office
Heat/Cooling Gas FA / CA Gas FA / CA Gas FA / CA Gas FA / CA
Fireplaces One None Two None
Garage 1 - detached 2 - detached 1 - attached 1 - detached
Lot Size 100x330 94x123x74x125 85xl 58 80xl 70
33,000 sq ft 10,416 sq ff 13,430 sq ft 13,600 sq ft
Neighborhood E/B Suburban Suburban Suburban Suburban
Schools NA NA NA NA
Public NA NA NA NA
Transportation
Church NA NA NA NA
..... Place of NA NA NA NA
Employment
Water 1. Type 2. 1. City 1, City 1. City 1. City
Adequate 2. Yes 2. Yes 2. Yes 2. Yes
Sewer 1. Type 2. 1. City 1. City 1. City 1. City
· Adequate 2. Yes 2. Yes 2. Yes 2. Yes
Other Comments: - $3,000 - garage - $1,975 - above - $1,600 - above
- $4,075 - above ground finished ground finished
* These amounts ground finished - $2,400 - below - $4,100 below ' '
factored in to the -$4,510- below ground finished ground finished
comparable price ground finished + $4,000 - lot size + $5,000 - lot size
+ $5,000 - lot size
+ $2,500 - fireplace
Comparable Price $194,900
Project Price - $198,000
Difference = 0
Estimated Moving Expenses + $1,850
Estimated Closing Costs + $4,500
Total Benefit = $6,350
RAN Agent Karl Klassen Date: 1/6/04
30120319
]~ro ~din~ (~MJ~ Aj~j~raJ~ for ~7~ ~enders
Client:
DATA SUMMARY
i(~1of New Hope/Ken Doresky
Xylon Avenue N.
New Hope, MN 55428-4898
Borrower: NIA
Address: 5434 Winnetka Avenue North
New Hope, MN 55428
Value: $t98,000
Date: December 8, 2003
Appraiser: Gregory V. Callahan, Cert Resl Real Prop
Client
File: Tomaszewski
Forsythe
File: 30120319
APPRAISAI~S, I~C
222 EAST LITTLE CANADA ROAD, ST. PAUL, MINNESOTA 55117 (612) 486-9550 / FAX: (612) 486-9732
Prope~y Description UNIFORM RESIDENTIAL APPRAISAL REPORT ~.o. 30120319
~ ~ ~ ~ ~n~tka Avenue No~h ~ New Ho~ s~m MN ~ ~ 5~28
~ L~ Aud~ofs Su~ no 226 Lot 38 BIk N 70 ff of S 450 fl ex m~ ~ Hennepin
~A~P~. 0511821330014 TaxY~ 2003 R.E.;~$ 1,070.13 S~~n~S No~
~ N/A ~ c~t~ Toma~e~i~ Michael ~,~.:: ~ ~
~ ~ ~ ~ ~ N/A ~ Re~ D2-91 ~s
~ ~ ~ s N/A ~e of ~ N/A ~ ~ ~ ~nt of ~an ~eumn~ m ~ ~ W ~ None
~Le~nt C~ Of New Ho~/Ken Domsky ~ ~01 Xylan Avenue N., New Hope. MN 5~28~898
~ ~ Gr~o~ V. Ca.nan, C~ Resl Real Prop ~ 222 L~le Canada Road? L~le Canada. MN 55117
~~ ~1~ ~sta~ ~ j ~l~nt ~ 350 ~h 65j~ 15%~1o Not Applicable
~e~ [~3~.L.I~ t ~6ms./ LJ .... ,,? j 180 ~ 35 jVa~nt .
~ N~: ~ce a~d t~ ~cill ~ion of the ~h~ a~ not appel
~ Ne~hb~d ~undanes and ~ara~e~ti~: The ~bject's neigh~ ~unaanes are Br~klyn Park to the no~h.
t~ ~. CounW Rd. 81 to the ea~ and HiRh~y 169 to ~ ~. This is an emablis~ed area.
TaxYea' 2003 R.E, la~es$ 1,070.13 S~X~e~r~n~S None
CuwentOw.~ Tomaszews~ki~ Michael~ o~,~n:: ~ (:h.~r i~ lena~: ;i ~ vacanl
None /~
5120-0215.02
Factors that affect the marketability of the properttes in the nesghl~"hcod (~oximit~ to employment' and amenitms, employment stabih~, appeal to market, etc )
Winnetka Avenue is a busy residential street. County Rd. 10, a local traffic artery is withtn 1/4 and offers access to
centers and recreation. Property values have been increasln,q. Demand for the
~onform to the surroundinq homes. The neiqhborhood has no apparent adverse factors
ry. See attached for additional comments.
Market conditions in the subject neighborhood (including support for the above conctusmns related to the ~ of ~ vinues, demand/s~pl~, a~ mame~g brae
- - such as data on competitive properties for sale in the neighborhood, ~iescription of the prevalence of sales end financing concessions, etc.)
For the subject's MLS marketinq district ~362, MLS statistics indicate that 87.40% of all listings are sellinq with an
time of 31 days. Sellers are receivin,q 99.24% of the askinq pdce. Financinq at the present time is
available from a variety of sources, which benefits both potential buyers and sellers.
Project ~;~.',,.;;on for PUDm (If apblicabie) - - Is the deveieperlbuiider in conb'ol of the Home Owners' Assomahon (HOA)? L._J YES La NO
AIN~3x~mate total number of units in the subject ~oject N/A ~oxmmta ~tat numbor of units lot sale in the subtect protect N/A
~ and recreational facilities: Not Applicable.
~,,~,~ 70x300 Tomgra~y Slopes Gently
S~eama Apprex.. 21000 Sq. Ft. (per county) ComerLot L] Y~ X[~ No S~ Abv. Av,q/21,000 SF
Specific zoning classification and description R-1 Sin,qle Family Residential S~abo Rectanqular
! Zon~lgcornDkance [] Legal [] L~ilrm~(G=~.;;maredu~e) ~l~egal ~
Highest&bostusaasm~0mved: [~Pr-'~ntuse ~ Othoruse(e~m~J~} N/A Nozo.~ I~a~ege ....
Adequate
I Utilities Public Ot~r J Off-~e Imeroveme%- T~ Vmw Residential/Avq
PublicPm'ateL~.-.~,~--~ Typical
[],0OAMPC. Is--, ,.minou;'' ® ,,
0mew~y Su~ace Asphalt
~as ~ ~ CurUgutte~ Concrete
IWater X~ ~ Side~at~ ~oncrete ~o~'entsasements Normal Util
Isan"mrysawe~ ~ ~ sl~sat~ghts Yes I~1 FE~s~eC~lFioo~Haza~Nea
FEMA Zone "X" Map Date 3/30/01
,ISinmsav~ IXl ~ N~/ None =EMAMapNo. 27053C-0192E
I CO,~fi-~,iL~ (~F.g.~_i~.[ &~ia ia~-e.n~hi-, enc=uachments. ;p~&; &~,,,~,,~ slide areas, illegal or legal nonconforming zoning, use, etc.):
~°~e in site size and land to value
' ua.
I '2
m~~- r~-~ :~-,o INea~IFt _N/A ~f Conc []
B I j
are no adverse environmental conditions noted.
PAGE 1 OF2
v.~u..o, sectio. UNIFORM RESIDENTIAL APPRAISAL REPORT ~:,e.o. 30120319
I ESTIMATED SITE VALUE ........................... = $ 55,000 t Comments on Cost Approach (such ss. source of cost estimate
! ESTIMATED REPROOUCTION COST~EW OF IMPROVEMENTS:j site value, s~luare kmt c~lcul~hon and for HUD. VA and FmHA. the
Dweimg SqFt. O$~ = $ ... 0 f estm~tedremam~ngeconomiclffeoft~el~'ol)erty!
"Sq. Ft. ~$~ = 0 !The site value as vacant is based on market trends.
= f Total economic life of 100 yrs.
~ __Sq. Ft. 05~ = 0
Total Esamat~l Cast New ................ = $ 0
I [)el~ted Vaue of Iml:mv~.~ems ................. = S
'As-is' Value of Site Iml~'ovemehts ................. = $
IHDICATED VALUE BY COST APPROACH ........... $ N/A !
ITEM t SUBJECT COMPARABLE NO 1 j COMPARABLE NO. 2 i COMPARABLE NO. 3
5434 Winnetka Avenue North 5785 Yukon Avenue North~4301 Decatur Avenue i6009 RhoOe Island Avenue
A~vess New Hope New Hope I New Hope I New Hope
~m-~toSub~t I Approx. 114 Mile Approx. 314 Mile !Approx. 1/2 Mile
sam Pnce :$ N/A $ 198.790 $ 192.200 i s 187 250
~e/GmssUv.~ea $ 0.00 ~ ~S 188.25 [a $ 171.91 Ia S 159.23 ~
!Data sn~x Inspection MLS/County t MLS/County MLS/County
ve~:atm s~ces County Info. 21 Days on Market ~ 11 Days on Market t 8 Days on Mark t
DESCRIPTION
Sales ~ Fmancmcj N/A Convl0 Pts ' Convl0 Pts I Conv/0 Pts :
c.o.c~;~s N/A By Seller : By Seller : By Seller
Date of Saemme N/A Clsd 5/03 : Clsd 9~03 : ClSd 7/03 :
L.~;.,,, 'Suburban Similar Neigh. ; Similar Neigh ; Similar Neigh
~--~',;~-~a,~e Fee Simple 'Fee Simple I Fee Simple Fee Simple
ISle 70x300 82x115/Inf. : 5,000 82x12111nf. ; 5,000 i88x105/Inf. : 5.000
v=~ Residential Similar View ; Similar View,; I Similar View ! '
P--.~.,,aadARoeal Rambler/Good Rambler/Good : .Rambler/Good : /Rambler/Good
oua~dc, maua~ Good Quality Inf. Quality : 10,000 Inf. Quality : 10,000 ~lnf. Qualityi 10~000
A~e 51 Yrs. 44 Years ; 36 Years i 43 Years :
c~.;;~,, RemodsJsd Inf. Cond. i 10,000 Inf. Cond. i 20,000 Inf. Cond.
~., Grade ~" i ~"' e.,. , ; : 15,000
; ~"'~, ""' : ~;"",; ~,. -1,500 ~"~;"~""i
R~emCount 25 51 1: 1.00 6i 31 1.00i 6! 3! 1.50i 6!. 3:. T. 00i
GmssIJvimj~rea 861Sq. Ft. 1,056Sq. Ft. i -4,900 1,118Sq. Fr i -6,400' 1,176SqF( i -7,900
[~---,~d&,~::,~ None Full : -3,000 Full -3,000,Full ; -3,000
Rmmsae~Gra~ N/A 141 Sq Ft Fin ; -1,400 iUnfi~heG 0 Unfinished 0'
r~,~,,,a utiay~ ~ Su .ufir : -10 000 Su .Util' ~ -10 000 ~ i -10,000
~ Gas FA ClAir Gas FA C/Ai~ Gas FA C/Air Gas FA C/Air :
~ Concealed Unknown Unknown &_. Unknown ,. ~
_~ ~1 Car Garage !1 Car Garage ,"~-~ 2 Car Ga~ 1 Car Gara~
Porto, Pat~, Dace. Deck Patio 1.500 None : 2,000' None 2.000
~ ~e None : 2 500 None 2.500
Fer~e, P,~, stc. N/A N/A ~ ' NIA ""~ I F~re lace
Othe"---~ N/A NIA N/A
' N/A : NIA
~j~edSam We, Gross: 24% Cdms: 33% C~: 28.25%
of Co,waraUe Nat: 5% $ 208,490 Net: 8% $ 207,800 ~et: 5.93% S 198,350
~~ .C°m~'~'~* on Sales C~,,,,~,--L.-.~, (in~,_,d,-.'~ the subject F--~P~,~y*s compalibility to the neighlx~chood, otc. ): . Room count adiustments are included in
~~me~.are made usin $25 rs uare foot. Bath mom ad*ustments are made
112 bath. Basement area ad'ustments are made usin $10 er finished
, s uare foot. See attached information for discussion of sales corn ad.son ad'ustments.
ITEM
Dat., I~:e =~ Data I~AA Comp Sales Gdd See Comps Sales Grid l See Comp Sales-~d
Sa~e~rm~rsms IN/A N/A iN/A
~ ~ar ~al~'am I N/A I MLS/County Records MLS/County Records I MLS/County Records
:-.:.~.~.; .... ..;....;.~,;. ,- ~,,, ,~.;'. __.__.----~ _ .....
! Per local MLS listin information and coun records the sub'ect has not been listed or transferred in the ast
~onths. 36
, ,N~.C*~ VALUE aY SALES COUP^ri=ON *~w,.o^c. :
INDICAT'B)V, ALUE BY~,Aiq~A~H ff .... "D-" ~'~: i~i ~-'-' ......... :.'.: ............................ S 198,000
This ..... :--,.is . .. -'-=~, ~?~==/. '"' ~ ;.~ NIA ,~a~.xGro~R~t=_"=~, N/A =S -" n
comamsofA~mai~: '~' ".s a ".~;,,'.'nma, A ' ra~sal Re rt" N
=, · o liabiii' is assumed
Fi.al Remadiatm: I~m ar(son best reflects the a
~t co,.-~,~--.,-~ ---,: ......... ctions of the
Income a roach was ~~;~"~~~-j_~,,r. ame mererore It was not included. The
........... .eu ~.aM~ M.~iiiiH{~ marks[ ~[~.
.... . '* . ·
andimiting~ondiaofls andrrd~etvaluedefinilJon#~ims~ednthealta~KiFmddbMacF~m439~mMmFenn1004S(Re,med 6/93 ).
~pM~)EsTmATETH~M~d~ETvALuE~`~`sr)G*mE~'~THERE~Lpcm;J'¥-m~THAT~sTHEsue3EcTCx:*n4S~ ,~Sm: December 8, 2003
PMaCH ~S THE DATE C~ InSPECTiON ~j~D -mE EF~:C. Tn~ DATE O~ .r~s REPom.) TO BE S 198.000
Nam~ Gref3o~/. C~,-3han, Cert~esl Real Prop
~Da~ n..,.;.%~-.,~ Dc-comber 8, 2003 Dm r~,~,l ~ ~
state c.;-...~, # 4002346 -.
~ --- F,m m ~43 ~~tateState
Forsythe Appraisals, LLC
ADDENDUM
Bormwer~ N/A F~le No 30120319
Prt)~tef~ A~tfess: 5434 W~#l~tta Avenue Nolth Case No · ~
Cll~: New Hope State: MN Zip 5542~
Lender: City of New Hope/Ken Doms~
ADDITIONAL FEATURES:
In addition, the subject has: a detached one car garage, fireplace, central air. large deck. slate floors
and hardwood floors.
CONDITION OF THE IMPROVEMENTS:
The subject has been completely remodeled. It has an all new top quality kitchen, all new bath. all new
floorings, new windows, new walls, new ceilings, new garage and many other updates.
The subject has been inspected for physical, functional, and external inadequacies. The subject has
no apparent functional or external obsolescence.
COMMENTS ON SALES COMPARISON:
All comparables have smaller lots and are inferior in site value.
Because of the subject's slate floors and other expensive updates, all comparables are considered
inferior in quality.
Because of the subject's extensive remodeling, all oomparebles are inferior in condition. Each
comparable has a different adjustment. This reflects their updates. (i.e. comparable one has a new
kitchen, siding, furnace, central air and bath). Comparables two and three have fewer updates.
Comparable two has an additional bath and is superior in above grade room value.
Because the subject is a small one bedroom, no basement dwelling, all comparables are superior in
functional utility.
TRANSMITTAL LETTER:
The subject was inspected on December 8, 2003. The estimated market value as of December 8,
2003 (effective date), is $198,000.
The property was appraised by Gregory V. Callahan, Licence Number 4002346, Certified Residential
Real Property Appraiser. A certif~-~l residential real property appraiser may appraise residential
property or agdculturel property without regard to transaction value or complexity.
This appraisal report is a "Summary Appraisal Report". It conforms to the 1997 Uniform Standards of
Professional Appraisal Practice.
No responsibility has been assumed for matters which are legal in nature, nor has any opinion on
them been rendered, other than assuming marketable title. Liens and encumbrances, if any, have
been disregarded and the property was appraised as though free of indebtedness.
Please feel free to cell us if you have a question.
ADDITIONAL COMMENTS:
1. The purpose of the appraisal is to estimate the market value of the subject property for litigation
purposes.
2. The legal description of the subject property can be found on page I of the 1004 form.
3. The reasonable marketing period for the subject property is under 90 days.
4. According to the county and the MLS system, the subject property has not been transferred in the
5. The subject property was inspected on December 8, 2003, the report was prepared on December 8,
ADDENDUM
Borrower: N/A File No 30120319
P~oerly Address: 5434 Wmneflca Avenue North Case No
Cra/: NewHope State: MN
Lender; City of New Heee/Ken Domsky
Z~ 5542~
2003, the effective date of the appraisal is December 8, 2003
6. The subject is an existing structure. This appraisal is made "as is."
7. Personal property was not included in the appraised value.
8. We have considered all three approaches to value. The income approach was not utilized due to
lack of reliable rental data of single family homes in this neighborl3ood. The cost approach was
considered but not considered applicable, therefore it was not included.
9. The subject is a single family residential property. Revenues, expenses, and/or vacancies do not
apply.
10. Current and future employment or compensation is not 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.
11. This appraisal report was completed in conformity with the Uniform Standards of Professional
Appraisal Practice.
12. If the photos included in this appraisal are digitaltelectronic images, they have not been enlarged,
enhanced, or altered in any way.
13. If electronic/digital signatures are used, it has been ruled acceptable appraisal practice by USPAP.
14. The appraiser certified that if this appraisal included an electronic/digital signature it is maintained
and controlled by the appraiser completing the report.
GC
DIMENSION UST ADDENDUM
IBorrower: N/A
Property Address: 5434 Winnetka Avenue North
City: New Hope
Fite No.: 30120319
Case No.:
State: MN Zip: 55428
GROSS BUILDING AREA (GBA) 861
GROSS LIVING AREA (Gl.A) 861
~'ea(sl ! Area I % of GBA
Lmag [ 861 i 100.00
Level 1 861 i 100.00
Level 2 0 i 0.00
Level 3 0 I 0.00
'OmerI 0i 0.00
I BasementI, 0 j 0.00
Ga~-~ge ! 0 ~ 0.00
Area Measurements
Area Type
Measurements Factor Total LeYel I Level 2 Level 3 Othe~ i BemL Garage
42.00 x 11.50 , 1.00 = 483.00 ~
.......-'
x_ ~ __~ ~ [] []
~~ ..... [] []
X X , = ~
.... x x = __
Borrower: N/A File No.: 30120319
Address: 5434 Winnetka Avenue North Case
City: New Hope St: MN Zip: 55428 LenOer: City of New Hope/Ken Doresk¥
FRONT VIEW OF
SUBJECT PROPERTY
REAR VIEW OF
SUBJECT PROPERTY
STREET SCENE
Bo~ower: N/A File No.: 30120319
Address: 5434 Winnetka Avenue North Case No.:
CiW: New HoP® St: MN Zip: 55428 Lender: City of New Hope/Ken Doresky
COMPARABLE SALE
5785 Yukon Avenue Norm
New Hope
COMPARABLE SALE #2
4301 Decatur Avenue
New Hope
/!'
COMPARABLE SALE I/3
6009 Rhode Island Avenue
New Hope
Borrower: N/A File No.: 30120319
Address: 5434 Winnetka Avenue North Case No.:
City: New Hope , St: MN Zip: 55428 Lenaer: City of New Hope/Ken Doresk¥
Borrower: N/A File No.: 30120319
Address: 5434 Winnetka Avenue North Case No.:
City: New Hope St: MN Zip: 55428 Lender: City of New Hope/Ken Doresk¥
FLOORPLAN
Borrower: N/A File No.: 30120319
Properly Address: 5434 Winnetka Avenue North Case No,:
City: New Hope State: MN Z~p: 55428
Doresky
27.0'
> DiningBath Bedroom 7.5'
Utility ~
~ Kitchen Living Room Den
"' Laundry
42.0'
Sketch by A,oex IV Windows m
AREA CALCULATIONS SUMMARY
TOTAL LIVABLE (rounded) 861
LIVING AEEA BREAKDOWN
2 Areas Total (rounded) 861
Appraisal & Consulting, Inc.
January 19, 2004
Mr. Michael Tomaszewski
5434 Winnetka Avenue North
New Hope, MN 55428
RE:
5434 Winnetka Avenue North
New Hope, MN
Dear Mr. Tomaszewski:
We have prepared a Complete Appraisal in a Restricted Report format of the above-
referenced property as requested for the purpose of estimating the market value under two
separate scenarios: A) "As is" based on the subject's current use as a single-family home
and B) based on the property's highest and best use being subdivided into two single-family
home sites with one site containing the existing improvements and the other site being vacant
land suitable for residential development. The attached report identifies the property and
contains the conclusions regarding the opinions of value for the subject property. Based on
consideration of the factors influencing market value, it is our opinion that the estimated
market values of the subject property, as of January 7, 2004, are as follows:
$239,000
$255,000
A) Based on current use as a single-family home:
B) Based on highest and best use as one single-family
home plus one additional single-family home site:
3112 Hennepin Avenue * Suite 250 · Minneapolis, MN 55408
TEL: 612-822-7999 · FAX: 612-822-7077
Mr. Michael Tomaszewski
January 19, 2004
Page 2
We, the undersigned, do hereby certify that to the best of our knowledge and belief, the
statements of fact contained in this report upon which the analyses, opinions and conclusions
expressed herein are based, are true and correct. Also, this report sets forth all the limiting
conditions contained in this report. Further, this report has been made in conformity with and
is subject to the requirements of the Code of Ethics and Standards of Professional Conduct of
the Appraisal Institute. The final report is prepared in accordance with the Uniform Standards
of Professional Appraisal Practice and Title XI of the Financial Institution's Reform, Recovery
and Enforcement Act of 1989.
If you have any questions or comments regarding this report, feel free to contact us at 612-
822-7999.
Respectfully submitted,
Kevin T. Meeks, MSA
Certified General Appraiser
(MN Lic. #4003016)
Melody J. Devine
Registered Real Property Appraiser
(MN Lic. #20346016)