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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 ~720 5718 -...; ...... : i 5'7O5 5621 5601 I ..... ~: ..- ~_ ~ ,_m'~.._.l 5524 ~ 5519 ~'~ 5520 : , g i7601 : ' ' ' i ~ ~ ST RAPF , 55'1']..IAVE N -" ~ ..... ~,T~ ...... '~ r' .-- F~ ~3~ .......... ' ~ 5437 : : i : ." ~Z, 5438 , 54~ ~._, 54~4 . 5433 "-~',-" .... ~ ..... ~ '-- ....... ,..;. ..-- ................. .i-. .......... ...i;;~ ' ': ? ' : 5434 ~ 5427 {~'i 5426 i 54.27 .:~11; 7606 i 5425 ~ 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. --- .......... : ; : ! ...... L--~;q ~ L_ -_re-_w:.:------ ' i :,.:.; : : ! ..-,,,, ~;; ~; ~ ,.. :. . .., .4,m ~Im~ b · ~.,',,-':-. · - ......... -- .... -:- .... . ,,,, I 1" ~°'"'""; ; ' : -- ' : · ,:,,,,o : : : .o: .--~ ! I -- ' ~ ' ~ ; '~' : 4~I? ' I I ,,, i~:;-~ ........ .~ ; , -~~ ..... I I : ~ . ~ ~ ~ ~_~[_j ; 4=1 ~ :.~ j ...... · .. ~ ;, ,,~ ?, T'~T -~---~-~ ..... '~-- ---J~~ ......... - :-- ..... ll~ ~ ; { ; 41~ ~ t ; ~ ~--~ ~ ~; : : ; , --~ , 41~, 4121, , , ; : - ~ ~.~' ~ --~ - . ~' ; ~ { ~ ;~t I~N { 4110 . i t · ~ ) . _.% [~~--~ ~ 4124 : ~ ( i ~ ' ~ ' --~ ~-- .+--.-.,-, ,, , -~z,~21 ~ ,~ ~,, ~, .:..,..'~ ':t:f~i, ~ ~ / ~-;~ J : ~1 I~~ ~(:--- ;---' -~v*~:~..:,... ~ ~~'~'i t ~ ~~ ;~_ ~ · ,.,. · ~ ~.~.. ~-- t ~ ' I ~ ....... ~ __ ~__- : ~ ~ ~~ ~~; ~._--- ~ ~ ~ ' i ~i ~ : .'----' · C .... ~ ..... t ~----.~ , ~~; ~ ..z~, .... :~,,-v ~-~ '~.,.~ A~ _~ ~., ~ ~::~. ~ ~ ~.~ ,, ~ ,.'._~, / ,' ; ~'" .:""~ ' 'x , ~---~= ..-~ ~x ¢' ~". i' ~ I , ..~: ~ .. ~ ~~-~ .. ~ s~ ~. ~. LY ~ <.~;. x~ · , , '~, '. -''- 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)