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IP #733-2
EDA A REQUEST FOR ACTION Originating Department Approved for Agenda Agenda Section Community Development 1-26-04 EDA Item No. By: Kirk McDonald By: 9 A RESOLUTION AUTHORIZING APPROVAL OF A TERM SHEET BETWEEN THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND ARMORY DEVELOPMENT II, LLC FOR THE REDEVELOPMENT OF THE FORMER FRANK'S NURSERY PROPERTY (IMPROVEMENT PROJECT NO. 733) REQUESTED ACTION Staff requests to discuss with the EDA the proposed townhome redevelopment project with Armory Development at the Frank's Nursery site, 5620 Winnetka Avenue. A tax increment financing analysis has been completed and staff/consultants have been negotiating with the developer over the past month on proposed terms of agreement with the city to assist with financing. The city's financial redevelopment consultant from Krass Monroe will be present to explain the proposed terms to the EDA. Staff is supportive of moving forward on the project if an agreement can be reached on terms. If the EDA is supportive of the project and the city assistance, staff recommends approval of the attached resolution approving the term sheet. The next steps would include initiating the creation of a TIF district, approval of a development agreement and starting the planning approval process. POLICY/PAST PRACTICE The City Council and EDA consider development proposals and requests for development assistance on a routine basis. A special emphasis has been placed on the development of new life cycle housing types in the Winnetka/Bass Lake Road Livable Communities area. BACKGROUND The city has been discussing a potential redevelopment at this site with this developer for over one year. The proposal is that the developer would acquire the Frank's Nursery site and construct approximately 45 market - rate townhomes. In November 2003, the developer informed the EDA that they had executed a purchase agreement for the acquisition of the property at 5620 Winnetka Avenue North. The developer submitted the appropriate fees to the city and the EDA approved a motion authorizing a tax increment financing analysis at the November 10, 2003, EDA meeting. Frank's Nursery is in the process of relocating to the vacant Lyndale Garden site on Bass Lake Road. The developer's townhome proposal was reviewed and supported by the Livable Communities Task Force. Also, staff submitted a pre -development in -fill housing grant to the Metropolitan Council for this project, primarily to assist with developer costs, and was notified that funding has been approved in the amount of $26,000. MOTION BY SECOND BY 0 y TO: nC— I RFA lannin liv comm. -5620 Wtka site 1-26-04 Request for Action Page 2 1-26-04 Krass Monroe has prepared the attached tax increment analysis and term sheet and will be present at the meeting to review it in detail with the EDA. At this point, there are still some negotiations taking place. In short, the developer is requesting $800,000 in TIF assistance, which Krass Monroe feels can be justified for extraordinary site acquisition, relocation and site improvement costs. The development will generate twice this amount in increment and the proceeds could be pooled and utilized for other development projects in the Livable Communities area. ATTACHMENTS • Resolution Term Sheet • TIF Analysis Extraordinary Costs Map • Preliminary Site Plan Elevation NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY COUNTY OF HENNEPIN STATE OF MINNESOTA RESOLUTION NO. 2004-06 A RESOLUTION AUTHORIZING APPROVAL OF A TERM SHEET BETWEEN THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND ARMORY DEVELOPMENT II, LLC FOR THE REDEVELOPMENT OF THE FORMER FRANK'S NURSERY PROPERTY BE IT RESOLVED by the New Hope Economic Development Authority (the "EDA") as follows: Section 1. Recitals. 1.01 Armory Development II, LLC (the "Redeveloper") has presented a proposal to the City to redevelop the Frank's Nursery site at 5620 Winnetka Avenue North (the "Site"). 1.02 The Site is located within Redevelopment Project No. 1. 1.03 The EDA has presented a term sheet (the `Term Sheet") to the Redeveloper, attached as Schedule A, outlining the terms and conditions under which the EDA is willing to enter into a Contract for Private Redevelopment with the Redeveloper. The Redeveloper has indicated its willingness to undertake the project in accordance with the Term Sheet. 1.04 It has been proposed that the EDA enter into a Contract for Private Redevelopment (the "Contract") with the Redeveloper if mutually agreeable terms can be reached consistent with the Term Sheet. 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 through 469.1799, and, as applicable, Laws of Minnesota 2003, 1s{ Special Session, Chapter 21, Article 10, Section 10, all as amended and supplemented from time to time. Section 3. Authorizations. 3.01 The President and the Executive Director (the "Officers"), along with necessarystaff, attorneys and consultants for the EDA, are hereby authorized to negotiate a Contract for Private Redevelopment with the Redeveloper relating to the Site, which Contract shall be presented to the EDA for its approval. Adopted by the EDA this 26th day of January , 2004. W. Peter Enck, President ATTEST t aniel J. Donahue, Executive Director G:IWPDATAININEW HOPE%131DOC1EDA RESOL AUTHG TERM SHEET.DOC 2 Schedule A TERM SHEET 1123104 TERM SHEET New Hope: Frank's Nursery 10048-13 Redeveloper: Armory Development II, LLC Authority: New Hope Economic Development Authority City: City of New Hope, Minnesota Redevelopment Property: The former Frank's Nursery & Crafts site, 5620 Winnetka Avenue North, New Hope, Minnesota, PIN# 05-118-21-32-0007. The Redeveloper has the site under option and will purchase it. Creation of TIF District: The Authority shall create a redevelopment tax increment financing district 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, including the "but for" finding on need for public assistance. City Assistance and Tax Increment Financing: The Authority will provide the following forms of assistance to the Redeveloper: a. The Authority will reimburse the Redeveloper in cash for $400,000 of eligible costs upon the issuance of certificates of occupancy for the first 22 townhomes. b. The Authority will issue a pay-as-you-go Tax Increment Revenue Note to reimburse the Redeveloper for up to $400,000 of additional eligible costs, payable from tax increment generated by the Redevelopment Project. Tax Increment Revenue Note: The following terms shall be applicable to the Tax Increment Revenue Note: a. Principal: shall not exceed $400,000 b. Term: 26 years c. Interest rate: 6.75% d. Pledge: 35% of available tax increment will be pledged for payment of the Tax Increment Revenue Note. e. Date of Issuance: Upon completion of the Minimum Improvements and submission to the Authority of documentation of unreimbursed eligible expenses for at least the principal amount. For this purpose, "completion" shall mean that certificates of occupancy have been issued for the first 22 townhomes and the buildings for the remaining 22 townhomes may be locked and secured. Developer's Fee: The developer's fee shall be limited to 5% of the total of land acquisition and construction costs (not soft costs). Profit Sharing: The amount of assistance provided by the Authority is intended to yield a projected profit (sources less uses) of 15%, with the developer's fee not counted as profit for purposes of this calculation. Upon completion of the project, if actual profit exceeds 15%, the principal amount of the Revenue Note shall be decreased by 50% of the difference between actual profit and the amount representing a 15% profit. The amount of any Met Council grant shall be counted as a source for purposes of this calculation. The Redeveloper shall provide acceptable documentation to establish projected project costs before execution of the redevelopment agreement. Grants: The City will apply for a Met Council grant upon receipt of the proper documentation from the Redeveloper to reimburse the Redeveloper for eligible expenses of approximately $21,000. Development Costs: The Redeveloper shall pay for environmental remediation, site preparation, public improvements, platting, plat amendment, PUD and other development costs. If environmental remediation is required, the Authority will diligently pursue any eligible programs for reimbursement of such costs. Platting: The Redeveloper shall re -plat the Redeveloper's Property and the Authority Property into the lots shown on the Site Plan. Permits/Fees: The Redeveloper shall 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 shall be responsible for obtaining all building, plumbing, electrical and mechanical permits prior to construction. Fa Site Improvements: The Redeveloper shall construct all site improvements, including: Building demolition • Site clearance • Sanitary sewer • Water mains and stubs • Storm sewers and storm water system elements, including ponding, both on and off site • Private streets, including curb and gutter • Landscaping and irrigation according to City -approved landscape plans • Pedestrian improvements pursuant to City -approved site plans • Grading and import/export of soil in accordance with City - approved grading plans • Retaining walls and fences Minimum Improvements: The Redeveloper shall construct the following Minimum Improvements to the Redevelopment Property: 44 townhomes with an average sales price of approximately $222,000 per unit. Zoning and Land Use Approvals/Easements: Normal and customary site and building plan review requirements will be followed. The Redeveloper shall 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 shall be responsible for obtaining all land use and zoning approvals. Internal Drives: The Redeveloper will, in accordance with Authority specifications, construct any internal drives on the Redevelopment Property. The Redeveloper and subsequent owners of the Redevelopment Property shall be responsible for maintaining all internal drives. Timing: Begin on or about July 1, 2004 Complete on or about June 30, 2007 Business Subsidy Act: The Redeveloper shall set wage and job goals in connection with the Business Subsidy Act, if applicable. If such goals are not required by the Act, the Redeveloper agrees to comply with any of the Act's reporting requirements that may nonetheless be applicable to the redevelopment project. 3 CITY OF NEW HOPE Franks Nursery Site SOURCES AND USES SOURCES ;'Grants _ Sales Revenue from units; 9,791,960 100.0% NOTAL SOURCES 9,791,960 100.0% � r USES'' i ,Land Costs _ Land and Building Acquisition J ! 1,115,000 i Y Acquisition 615,000 Lease Buyouts 500,000 i �Q;+— 0-- f r. I I n,5z ^40 1I ivAac. A acroAnLAW AA Geo Technical 7,050 !Grading I 143,505 — I Engineering 20,000 !Survey 14,130 i Demolition 51,233 Site Preparation - Environmental 7,050 iI ITesting -.Phase 2 1 7,050 Public Improvements (Installation of Public Utilitli 438,888 Water, sanitary sewer Staking and Layout 17,626 _ Irrigation 54,053 I Landscaping 88,130 Lighting 61,691 Site Utilities 182,136 Fencing 35,252 Streets and Sidewalks 161,983 Paving 1 73,853 Sidewalk Improvements 88,130 TOTAL Land Costs 1,958,839 1,958,839 20.0% Construction 5,142,460 52.5% Soft Costs Soft Costs Taxes 906,408 26,500 Finance Fees Developer Fee 410,601 365,000 Co. tingency 150,000 Total Soft Costs 1,858,509 1,858,509 8,959,808 19.0% 91.5% Less TIF Assistance (800,000)) -8.2% - - - -------------- Net Development Costs Profit :•-inli c• h<Ir irConr q;+= (fah vlc i7 n 8,159,808 1,632,152 83.3% 16.7% w !a rinnn U CITY OF NEW HOPE Franks Nursery Site ASSUMPTIONS Phase 1 Estimated Market Value Estimated Tax Capacity Estimated Taxes Estimated Tax Increment Phase 2 (combined) Estimated Market Value Estimated Tax Capacity Estimated Taxes Estimated Tax Increment Phase 3 (combined) Estimated Market Value Estimated Tax Capacity Estimated Taxes Estimated Tax Increment Local Tax Rate - Pay 2003 State Tax Rate - Pay 2003 Combined Tax Rate - C/I Property Only 700,000 * Final rates for Pay 2004 Area of Parcel 1/212002 Market Value (Pay 2003) Original Market Values (Acres) (Sq. Feet) YEAR Land Building Total Franks Nursery & Crafts 05-118-21=32-0007 3.19 138,761 $4,551,920 $ 578,000 $ 122,000 _ $ 700,000 Totals 3.19 138,761 $ 578,000 $ 122,000 $ 700,000 2005 20 $ 4.17 per sq. ft. for Land 3,126 Original Tax Capacity 62,526 Class Rate' 7,000 Commercial /Retail 2,636 @ 2.00% 0 84.3% of total taxes Rental 44 @ 1.25% 0 per unit = Owner Occupied 700,000 @ 1.00% - 7,000 Phase 1 Estimated Market Value Estimated Tax Capacity Estimated Taxes Estimated Tax Increment Phase 2 (combined) Estimated Market Value Estimated Tax Capacity Estimated Taxes Estimated Tax Increment Phase 3 (combined) Estimated Market Value Estimated Tax Capacity Estimated Taxes Estimated Tax Increment Local Tax Rate - Pay 2003 State Tax Rate - Pay 2003 Combined Tax Rate - C/I Property Only 700,000 * Final rates for Pay 2004 Admin Fees 0.00% State Auditor Fee 0.36% Inflation (after 2 yrs of full value in each tract) 2.50% PV Rate - Rev. Note 6/1/2005 6.75% PV Rate - City 6/1/2005 5.00% YEAR 20 Units @ 227,596 per unit = $4,551,920 45,519 2005 20 Units @ 3,126 per unit = 62,526 2006 20 Units @ 2,636 per unit = 52,720 84.3% of total taxes 44 Units @ 222,545 per unit = 9,791,960 97,920 2006 44 Units @ 3,057 per unit = 134,504 2007 44 Units @ 2,828 per unit 124,439 92.5% of total taxes 44 Units @ 222,545 per unit = 9,791,960 14.0 times MV increase 97,920 2007 44 Units @ 3,057 per unit = 134,504 2008 44 Units @ 2,828 per unit = 1124,439 92.5% of total taxes Cove- �! 1.37362 1.4% 0.54447 (CII only) I Eff Tax Rate 1.91809 ' used for tax increment calculations Admin Fees 0.00% State Auditor Fee 0.36% Inflation (after 2 yrs of full value in each tract) 2.50% PV Rate - Rev. Note 6/1/2005 6.75% PV Rate - City 6/1/2005 5.00% Total Estimated Tax Capacity Commercial/Retail Tech Flex Office /warehouse Office Retail - service Restaurant / entertainment Other Rental Moderate Income Market Rate Owner Occupied A Row Building - A B Row Building - B C Other Building -A D Other Building - B 20 units 0 soy, ft 500,000 > 500,000 <= 500,000 > 500,000 <= 500,000 a 500,000 500,000 > 500,000 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 1,25% 1.25% 1,00% 9,544 1.25% 0 1.00% 18,509 1.25% 0 1.00% CITY OF NEW HOPE/ 1.25% 0 1.00% 7,519 1.25% 0 Franks Nursery Site 0 Office 1 warehouse 0 sq. ft. @ 0.00 ASSUMPTIONS 0 Office 0 sq. ft. @ 0.00 /sq. ft. = PHASE 1 Retail - service 0 sq. ft. @ 0.00 Total Estimated Market Valve 0 Restaurant/ entertainment 0 sq. ft. @ 0.00 Isq_ ft. = Commercial / Retail Other 0 sq. ft. @ 0.00 /sq. ft. = p Tech Flex 0 sq. ft. @ 70 /sq. ft. = 0 Moderate Income Office /warehouse units @ 0 sq. ft. @ 70 /sq. ft. = 0 0 Office 0 0 sq. ft. @ 90 /sq. ft. - 0 Retail - service 0 sq. ft. @ 90 /sq. ft. = 0 3,277 Restaurant / entertainment 13,109 0 sq. ft. @ 90 /sq. ft. - 0 /unit = Other C Other Building - A 0 sq. ft. @ 90 /sq. ft. 0 13,664 Rental 4 units @ 2,582 /unit = 10,329 0 Moderate Income 0.0% 0 units @ /unit= 0 2005 Market Rate 0.0% 0 units @ /unit = 0 Owner Occupied 4,551,920 A Row Building -A 100.0% 4 units @ 238,590 /unit = 954,360 B Row Building - B 100.0% 8 units @ 231,360 /unit= 1,650,880 C Other Building -A 25.0% 4 units @ 248,690 /unit = 994,760 D Other Building - B 25.0% 4 units @ 187,980 /unit = 751,920 Total Estimated Tax Capacity Commercial/Retail Tech Flex Office /warehouse Office Retail - service Restaurant / entertainment Other Rental Moderate Income Market Rate Owner Occupied A Row Building - A B Row Building - B C Other Building -A D Other Building - B 20 units 0 soy, ft 500,000 > 500,000 <= 500,000 > 500,000 <= 500,000 a 500,000 500,000 > 500,000 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 1,25% 1.25% 1,00% 9,544 1.25% 0 1.00% 18,509 1.25% 0 1.00% 9,948 1.25% 0 1.00% 7,519 1.25% 0 0 0 0 0 0 0 0 0 0 0 45,519 9,544 18,509 9,948 7,519 Total Estimated Taxes Commercial/ Retail 0 Tech Flex 0 sq. ft. @ 0.00 /sq. ft. = 0 Office 1 warehouse 0 sq. ft. @ 0.00 /sq. ft. = 0 Office 0 sq. ft. @ 0.00 /sq. ft. = 0 Retail - service 0 sq. ft. @ 0.00 /sq. ft. = 0 Restaurant/ entertainment 0 sq. ft. @ 0.00 Isq_ ft. = 0 Other 0 sq. ft. @ 0.00 /sq. ft. = 0 Rental 0 Moderate Income 0 units @ 0 /unit = 0 Market Rate 0 units @ 0 /unit = 0 Owner Occupied 62,526 A Row Building -A 4 units @ 3,277 /unit = 13,109 B Row Building - B 8 units @ 3,178 /unit = 25,424 C Other Building - A 4 units @ 3,416 /unit = 13,664 D Other Building - B 4 units @ 2,582 /unit = 10,329 Construction 2004 100.00% Full Valuation 2005 Taxes Payable 2006 Fr7+ L-, n ncc, i - _ CITY OF NEW HOPE;' Franks Nursery Site ASSUMPTIONS 9,544 > 500,000 1.25% PHASES 1 & 2 <= 500,000 _ 1.00% Total Estimated Market Value n 500,000 1.25% 0 <= 500,000 Commercial/ Retail 1.00% 39,790 > 500,000 0 Tech Flex ., 500,000 0 sq. ft. @ 70 /sq. ft. = 0 Office 1 warehouse 1.25% 0 sq. ft. @ 70 /sq. ft. = 0 Office 0 0 sq. ft. @ 90 /sq. ft. = 0 Retail - service 0.00 0 sq. ft. @ 90 /sq. ft. = 0 Restaurant! entertainment 0 0 sq. ft. @ 90 /sq. ft. = 0 Other 0.00 0 sq. ft. @ 90 /sq. ft. = 0 Rental 0 units @ 0 /unit = 0 Moderate Income 0.0% 0 units @ 0 /unit = 0 Market Rate 0.0% 0 units @ 60,000 /unit = 0 Owner Occupied 2,582 /unit = 2005 100.00% 9,791, 960 A Row Building - A 100.0% 4 units @ 238,590 /unit = 954,360 B Row Building - B 100.0% 8 units @ 231,360 /unit = 1,850,880 C Other Building -A 100.0% 16 units @ 248,690 /unit = 3,979,040 D Other Building - B 100.0% 16 units @ 187,980 /unit = 3,007,680 Total Estimated Tax Capacity Commercial/ Retail Tech Flex Office / warehouse Office Retail - service Restaurant / entertainment Other Rental Moderate Income Market Rate Owner Occupied A Row Building - A B Row Building - B C Other Building -A D Other Building - B Total Estimated Taxes Commercial /Retail Tech Flex Office / warehouse Office Retail - service Restaurant 1 entertainment Other Rental Moderate Income Market Rate Owner Occupied A Row Building -A B Row Building - B C Other Building -A D Other Building - B Construction Full Valuation Taxes Payable 44 units 0 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 1.25% 1.25% 500,000 1.00% 9,544 > 500,000 1.25% 0 <= 500,000 1.00% 18,509 n 500,000 1.25% 0 <= 500,000 1.00% 39,790 > 500,000 1.25% 0 ., 500,000 1.00% 30,077 500,000 1.25% 0 0 sq, ft. @ 0.00 Isq. ft. = 0 sq. ft. @ 0.00 /sq. ft. = 0 sq. ft. @ 0.00 /sq. ft. = 0 sq. ft. @ 0.00 /sq. ft. = 0 sq. ft. @ 0.00 /sq. ft. = 0 sq. ft. @ 0.00 /sq. ft. = 0 units @ 0 /unit= 0 units @ 0 /unit = 4 units @ 3,277 /unit = 8 units @ 3,178 /unit= 16 units @ 3,416 /unit = 16 units @ 2,582 /unit = 2005 100.00% 2006 2007 0 0 0 0 0 0 0 0 9,544 F11 97,920 18,509 39,790 30,077 0 0 0 0 0 0 0 0 0 13,109 25,424 54,657 41,314 IXI 134,504 CITY OF NEW HOPE Franks Nursery Site CASH FLOW AND PRESENT VALUE ANALYSIS Lc Nr, •cr..r• Ci+� ncz�, „T, U (a) Date <---------- ANNUAL (b) (c) Original Estimated Tax Tax Capacity Capacity (see assumptions) 2.5% Inflation -- (d) Captured Tax Capacity (c) - (b) (prEV. year) <------------------------- (e) Est. T.I. (d) x 1.37362 - 5t. Aud. Fee 0.360% ---- SEMI - ANNUAL -------- (f) (g) (h) Less: Available Cumulative Admin Tax Avail. Tax Fees Increment Increment (e) x (e) - (f) Total of (g) 0.00% 06/01/03 7,000 7,000 0 0 0 0 12/01/03 7,000 7,000 0 0 0 0 06/01/04 7,000 7,000 0 0 0 0 0 12/01/04 7,000 7,000 0 0 0 0 0 06/01/05 7,000 45,519 0 0 0 0 0 12/01/05 7,000 45,519 0 0 0 0 0 1 06/01/06 7,000 97,920 38,519 26,360 0 26,360 26,360 12/01/06 7,000 97,920 38,519 26,360 0 26,36D 52,720 2 06/01/07 7,000 97,920 90,920 62,220 0 62,220 114,940 12/01/07 7,000 97,920 90,920 62,220 0 62,220 177,160 3 06/01/08 7,000 100,368 90,920 62,220 0 62,220 239,379 12/01/08 7,000 100,368 90,920 62,220 0 62,220 301,599 4 06/01/09 7,000 102,877 93,368 63,895 0 63,895 365,494 12/01/09 7,000 102,877 93,368 63,895 0 63,895 429,389 5 06/01/10 7,000 105,449 95,877 65,612 0 65,612 495,001 12/01/10 7,000 105,449 95,877 65,612 0 65,612 560,613 6 06/01/11 7,000 108,085 98,449 67,372 0 67,372 627,985 12/01/11 7,000 108,085 98,449 67,372 0 67,372 695,357 7 06/01/12 7,000 110,787 101,085 69,176 0 69,176 764,534 12/01/12 7,000 110,787 101,085 69,176 0 69,176 833,710 8 06/01/13 7,000 113,557 903,787 71,025 0 71,025 904,735 12/01/13 7,000 113,557 103,787 71,025 0 71,025 975,760 9 06/01/14 7,000 116,396 106,557 72,921 0 72,921 1,048,681 12/01/14 7,000 116,396 106,557 72,921 0 72,921 1,121,602 10 06/01/15 7,000 119,306 109,396 74,864 0 74,864 1,196,465 12/01/15 7,000 119,306 109,396 74,864 0 74,864 1,271,329 11 06/01/16 7,000 122,288 112,306 76,855 0 76,855 1,348,184 12/01/16 7,000 122,288 112,306 76,855 0 76,855 1,425,039 12 06/01/17 7,000 125,345 115,288 78,896 0 78,896 1,503,935 12/01/17 7,000 125,345 115,288 78,896 0 78,896 1,582,831 13 06/01/18 7,000 128,479 118,345 80,988 0 80,988 1,663,819 12/01/18 7,000 128,479 118,345 80,988 0 80,988 1,744,807 14 06/01/19 7,000 131,691 121,479 83,133 0 83,133 1,827,940 12/01/19 7,000 131,691 121,479 83,133 0 83,133 1,911,072 15 06/01/20 7,000 134,983 124,691 85,331 0 85,331 1,996,403 12/01/20 7,000 134,983 124,691 85,331 0 85,331 2,081,734 16 06/01/21 7,000 138,358 127,983 87,584 0 87,584 2,169,318 12/01/21 7,000 138,358 127,983 87,584 0 87,584 2,256,901 17 06/01/22 7,000 141,817 131,358 89,893 0 89,893 2,346,794- 12/01/22 7,000 141,817 131,358 89,893 0 89,893 2,436,687 18 06/01/23 7,000 145,362 134,817 92,260 0 92,260 2,528,948 12/41/23 7,000 145,362 134,817 92,260 0 92,260 2,621,208 19 06/01/24 7,000 148,996 138,362 94,686 0 94,686 2,715,894 12/01/24 7,000 148,996 138,362 94,686 0 94,686 2,810,581 20 06/01/25 7,000 152,721 141,996 97,173 0 97,173 2,907,754 12/01/25 7,000 152,721 141,996 97,173 0 97,173 3,004,927 21 06101@6 7,000 156,539 145,721 99,722 0 99,722 3,104,650 12/01/26 7,000 156,539 145,721 99,722 0 99,722 3,204,372 22 06/01/27 7,000 160,453 149,539 102,335 0 102,335 3,306,708 12/01/27 7,000 160,453 149,539 102,335 0 102,335 3,409,043 23 06/01/28 7,000 164,464 153,453 105,013 0 105,073 3,514,056 12/01/28 7,000 164,464 153,453 105,013 0 105,013 3,619,070 24 06/01/29 7,000 168,576 157,464 107,759 0 107,759 3,726,828 12/01/29 7,000 168,576 157,464 107,759 0 107,759 3,834,587 25 06/01/30 7,000 172,790 161,576 110,572 0 110,572 3,945,159 12/01/30 7,000 172,790 161,576 110,572 0 110,572 4,055,731 4,055,731 0 4,055,731 4,055,731 Lc Nr, •cr..r• Ci+� ncz�, „T, U CITY OF NEW HOPE Franks Nursery Site 6 PRESENT VALUE ANALYSIS FOR CITY AND REVENUE NOTE (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Available Tax Increment Available for P. V. Rate P. V, Rate Total Total (from Cash revenue Semiannual Cumulative Available for Semiannual Cumulative Semiannual Cumu)ativ Date Flow Analysis)_ Note Balance Balance Authority Balance Balance Balance Balance 2-50% (b) x P.V. of (c) Total of (d) (b) - (c) P.V. of (f) Total of (g) (d) + (g) (e) + (h) Inflation 60.00% 6.75% 06/01/05 40.00% 5.00% 06/01/05 06/01/03 0 0 0 0 0 0 0 0 0 12/01/03 0 0 0 0 0 0 0 0 0 06/01/04 0 0 0 0 0 0 0 0 0 12/01/04 0 0 0 0 0 0 0 0 0 06/01/05 0 0 0 0 0 0 0 0 0 12/01/05 0 0 0 0 0 0 0 0 0 1 06/01/06 26,360 15,816 14,800 14,800 10,544 10,036 10,036 24,836 24,836 12/01/06 26,360 15,816 14,317 29,117 10,544 9,791 19,827 24,108 48,944 2 06/01/07 62,220 37,332 32,690 61,807 24,888 22,547 42,374 55,237 104,182 12/01/07 62,220 37,332 31,623 93,430 24,888 21,997 64,372 53,620 157,802 3 06/01/08 62,220 37,332 30,590 124,021 24,888 21,461 85,832 52,051 209,853 12/01/08 62,220 37,332 29,592 153,612 24,888 20,937 106,770 50,529 260,382 4 06/01/09 63,895 38,337 29,396 183,009 25,558 20,977 127,746 50,373 310,755 12/01/09 63,895 38,337 28,437 211,445 25,558 20,465 148,211 48,902 359,657 5 06/01/10 65,612 39,367 28,247 239,693 26,245 20,502 168,714 48,750 408,407 12/01/10 65,612 39,367 27,325 267,018 26,245 20,002 188,716 47,328 455,734 6 06/01/11 67,372 40,423 27,142 294,160 26,949 20,038 208,754 47,180 502,914 12/01/11 67,372 40,423 26,256 320,416 26,949 19,549 228,303 45,805 548,720 7 06/01/12 69,176 41,506 26,079 346,495 27,670 19,583 247,886 45,662 594,382 12/01/12 69,176 41,506 25,228 371,723 27,670 19,106 266,992 44,333 638,715 8 06/01/13 71,025 42,615 25,056 396,779 28,410 19,138 286,130 44,194 682,909 12/01/13 71,025 42,615 24,238 421,017 28,410 18,671 304,801 42,909 725,818 9 06/01/14 72,921 43,752 24,073 445,090 29,168 18,702 323,502 42,774 768,593 12/01/14 72,921 43,752 23,287 468,377 29,168 18,246 341,748 41,532 810,125 10 06/01/15 74,864 44,918 23,127 491,503 29,945 18,275 360,023 41,401 851,526 12/01/15 74,864 44,918 22,372 513,875 29,945 17,829 377,852 40,201 891,727. 11 06/01/16 76,855 46,113 22,217 536,092 30,742 17,857 395,709 40,074 931,800 12/01/16 76,855 46,113 21,491 557,583 30,742 17,421 413,130 38,913 970,713 12 06/01/17 78,896 47,338 21,342 578,925 31,558 17,448 430,578 38,790 1,009,503 12/01/17 78,896 47,338 20,645 599,570 31,558 17,022 447,600 37,667 1,047,171 13 06/01/18 80,988 48,593 20,501 620,071 32,395 17,048 464,648 1 37,548 1,084,719 12/01/18 80,988 48,593 19,831 639,902 32,395 16,632 481,280 36,463 1,121,182 14 06/01/19 83,133 49,880 19,692 659,594 33,253 16,656 497,935 36,348 1,157,530 12/01/19 83,133 49,880 19,049 678,643 33,253 16,249 514,185 35,298 1,192,828 15 06/01/20 85,331 51,198 18,914 697,558 34,132 16,272 530,457 35,187 1,228,015 12/01/20 85,331 51,198 18,297 715,854 34,132 15,875 546,333 34,172 1,262,187 16 06/01/21 87,584 52,550 18,167 734,021 35,033 15,897 562,230 34,064 1,296,251 12/01/21 87,584 52,550 17,574 751,595 35,033 15,509 577,739 33,083 1,329,334 17 06/01/22 89,893 53,936 17,448 769,043 35,957 15,530 593,269 32,978 1,362,312 12/01/22 89,893 53,936 16,879 785,922 35,957 15,151 608,421 32,030 1,394,342 18 06/01/23 92,260 46,507 14,078 800,000 45,754 18,809 627,230 32,887 1,427,230 12/01/23 92,260 0 800,000 92,260 37,003 664,232 37,003 1,464,232 19 06/01/24 94,686 0 800,000 94,686 37,049 701,282 37,049 1,501,282 12/01/24 94,686 0 800,000 94,686 36,146 737,427 36,146 1,537,427 20 06/01/25 97,173 0 800,000 97,173 36,190 773,618 36,190 1,573,618 12/01/25 97,173 0 800,000 97,173 35,308 808,925 35,308 1,608,925 21 06/01/26 99,722 0 800,000 99,722 35,350 844,275 35,350 1,644,275 12/01/26 99,722- 0 800,000 99,722 34,488 878,763 34,488 1,678,763 22 06/01/27 102,335 0 800,000 102,335 34,528 913,292 34,528 1,713,292 12/01/27 102,335 0 800,000 102,335 33,686 946,978 33,686 1,746,978 23 06/01/28 105,013 0 800,000 105,013 33,725 980,702 33,725 1,780,702 12/01/28 105,013 0 800,000 105,013 32,902 1,013,604 32,902 1,813,604 24 06/01/29 107,759 0 800,000 107,759 32,939 1,046,543 32,939 1,846,543 12/01/29 107,759 0 800,000 107,759 32,135 1,078,678 32,135 1,878,678 25 06/01/30 110,572 0 800,000 110,572 32,170 1,110,848 32,170 1,910,848 12/01130 -„� 110,572 _ ry 0 _ 800,000 110,572 31,385 1,142,234 31,385 1,942,234 4055,731 1,508 519 800,000 800,000 L2,547,212 1,142,234 1,142 234 -1,942,234 1,942,234 Frank, I��iircen., Gi+a nRh vir Grr_= +c ! 4,., w..,,.- nn n n „r CITY OF NEW HOPE t Franks Nursery Site TAX INCREMENT REVENUE NOTE Principal Amount 800,000 Interest Rate 6.75% Number of Payments 48 semi-annual payments Payment Amount 60.0% of Available Tax Increment Interest Stan`. Date 06/01/05 Term of Note 25.5 years Capitalized Date Interest Payment Interest Principal Balance 1 06/01/05 800,000 12/01/05 27,000 0 0 827,000 2 06/01/06 27,911 15,816 15,816 839,095 12/01/06 28,319 15,816 15,816 851,599 3 06/01/07 0 37,332 28,741 8,590 843,008 12/01/07 0 37,332 28,452 8,880 834,128 4 06/01/08 0 37,332 28,152 9,180 824,948 12/01/08 0 37,332 27,842 9,490 815,458 5 06/01/09 0 38,337 27,522 10,815 804,643 12/01/09 0 38,337 27,157 11,180 793,463 6 06/01/10 0 39,367 26,779 12,588 780,875 12/01/10 0 39,367 26,355 13,013 767,862 7 06/01/11 0 40,423 25,915 14,508 753,354 12/01/11 0 40,423 25,426 14,998 738,356 8 06/01/12 0 41,506 24,920 16,586 721,770 12/01/12 0 41,506 24,360 17,146 704,624 9 06/01/13 0 42,615 23,781 18,834 685,790 12/01/13 0 42,615 23,145 19,470 666,320 10 06/01/14 0 43,752 22,488 21,264 645,056 12/01/14 0 43,752 21,771 21,982 623,074 11 06/01/15 0 44,918 21,029 23,889 599,185 12/01/15 0 44,918 20,222 24,696 574,489 12 06/01/16 0 46,113 19,389 26,724 547,765 12/01/16 0 46,113 18,487 27,626 520,140 13 06/01/17 0 47,338 17,555 29,783 490,357 12/01/17 0 47,338 16,550 30,788 459,569 14 06/01/18 0 48,593 15,510 33,082 426,486 12/01/18 0 48,593 14,394 34,199 392,287 15 06/01/19 0 49,880 13,240 35,640 355,647 12/01/19 0 49,880 12,003 37,876 317,771 16 06/01/20 0 51,198 10,725 40,474 277,297 12/01/20 0 51,198 9,359 41,840 235,458 17 06/01/21 0 52,550 7,947 44,604 190,854 12/01/21 0 52,550 6,441 46,109 144,745 18 06/01/22 0 53,936 4,885 49,051 95,694 12/01/22 0 53,936 3,230 50,706 44,988 19 06/01/23 0 46,507 1,518 44,988 0 12/01/23 0 0 0 0 0 20 06/01/24 0 0 0 0 0 12/01/24 0 0 0 0 0 21 06/01/25 0 0 0 0 0 12/01/25 0 0 0 0 0 22 06/01/26 0 0 0 0 0 12/01/26 0 0 0 0 0 23 06/01/27 0 0 0 D 0 12/01/27 0 0 0 0 0 24 06101/28 0 0 0 0 0 12/01/28 0 0 0 0 0 25 06/01/29 0 0 0 0 0 12/01/29 0 0 0 0 0 26 06/01/30 0 0 0 0 0 12/01/30 0 0 0 0 0 83,231 1,508,519 625,288 883,231 City of New Hope Town Home Project — Frank's Nursery Site Extra -ordinary Cost Comparison Option I Greenfield Development in NW Suburb Land Costs Site Improvements TOTAL COST 2.50 Acres 72,000 108,900 SF 3.36 Option 2 Redevelopment Site in New Hope Land Costs 3.19 Site Improvements 138,956 Relocation Costs TOTAL COST COST DIFFERENCE 192,790 6.06 $180,000 $466,892 $395,904 $615,000 $843,000 $500,000 $1,958,000 $1,562,096 ST. THERESE NURSING HOME 008 8000 7_ 7910 -35 5437 , 5436 5437 30 5841 � W 5540 5430 5431 26 5427 3524 5426 5427 20 5421 Z 5420 542, 16 5417 Q 5416 5417 5437 � �••• 5429 St in 9lf1 N0 I 5605 5423 5420 5601 5417 7706500PARK 3827 55TH AVE N 5813$ 5811 �����■��r■iiia ■ 5736 5732 = 5720 5716 _ L ur 5700 5704 I 0 Z z -35 5437 , 5436 5437 30 5431 5701 ; 5540 5430 5431 26 5427 3524 5426 5427 20 5421 Z 5420 542, 16 5417 Q 5416 5417 5437 � �••• 5429 St in 9lf1 5600 F: r�7 -w ■ H ■ in ■ cn W O 7800 �_ awr-stla—' 4 561? 7600 7550 - 7610 I t75i 5550 , 5705 d 5701 ; 5540 It 55.32 5531 3524 5310 5516 5509 5512 5521 r i 5506 r 5443 � 5437 � 5440 5429 5434 j I 5605 5423 5420 5601 7800 �_ awr-stla—' 4 561? 7600 7550 - 7610 I t75i 5550 5559 d 55387301 5540 5537 55.32 5531 3524 5310 5516 5509 5512 5301 5506 5m 5443 5446 5437 � 5440 5429 5434 j 5427 a 5422 5423 5420 5417 �il�■� ' `58TH AVE NIP 5546 d 55387301 'mm 7621ELM tion,761 GROV 7706500PARK 55TH AVE N 8444 5437 10 IO 58TH A i F4, l +49 73t T 73E ST. RAPHAE CATHOLIC CHURCH 5436 5437 ��m z 5434 3433 5428 5429W 5 0 5429 5430 � 6426 5427 Q 7608 "M 5426 ST RAPHAEL DR. 5420 5425 3420 5419 Z 541$ 5361 F53 F t New Hope Town home Redevelopment Franks Nursery & Craft Site The Franks Nursery & Craft site being redeveloped by Armory Development II LLC is currently being designed to support 44 units of homeownership housing. With a combination of Row homes, End unit town homes, and three story town homes with shared walls. Armory Development and its design and construction team has been working closely with the city staff to review the design, access, and green space including the removal of 12 units of housing from the initial plan. The housing units will be divided into six buildings, which allows for flexibility in the construction process and more green space around each unit. Two of the buildings will front Winnetka Avenue and be comprised of twelve row town homes approximately 1,300 —1,600 SF each, with main entries on Winnetka and parking at the rear of each unit. These units are expected to be priced between $215,000 and $225,000.00. Four of the buildings will be set in the center of the site and will be phased in during the sales cycle. These units will consist of two-story end units at approximately 1,700 — 1,900 SF and three story middle units at approximately 1,100 —1,500 SF. The price points for these units will range from $180,000.00 $240,000.00 The exterior of the units will be a mixture of brick or stone material, cedar trim, clad windows, and hardi-plank or comparable material siding. There will be professionally designed, installed, and maintained landscaping through out the site. The interior of the units will be professionally designed interiors with upgraded standard finishes. Some of the finishes include: • Pre- engineered hardwood material • Design selected lighting package • Professional paint pallet • European custom designed wood cabinets • Energy efficient stainless steel appliances • Natural hardwood millwork Armory Development and its team are excited about bringing this high quality development to the city of New Hope. W -M I ............... I ............. ......................... ------------------------------------ I 0 0 C\2 co CQ Li 1 January 27, 2004 Mr. Doug Hoskin Armory Development II 2104 Fourth Avenue South Minneapolis, MN 55404 Subject: Potential Redevelopment of the Former Frank's Nursery Property at 5620 Winnetka Avenue Dear Mr. Hoskin: At the January 27 New Hope Economic Development Authority meeting, the EDA approved the terms of agreement for your proposed townhome project at 5620 Winnetka Avenue. Please contact Amy Baldwin, community development intern, at your earliest convenience to schedule a meeting regarding the planning application process, development agreement, and Metropolitan Council grant issues. Amy can be reached at 763-531-5196. S` rely, Kirk McDonald Director of Community Development Cc: Daniel J. Donahue, City Manager Steve Sondrall, City Attorney Jim Casserly, Krass Monroe Vince Vander Top, Assistant City Engineer Alan Brixius, Planning Consultant RogerAxel, Building Oficial Amy Baldwin, Community Department Intern Valerie Leone, City Clerk CITY OF NEW HOPE 4401 Xylon Avenue North • New Hope, Minnesota 55428-4898 • www. ci.new-hope.mrims City Hall: 763-531-5100 • Police (nonemergency): 763-531-5170 0 Public Works: 763-592-6777 • TDD: 763-531-5109 City Hall Fax: 763-531-5136 • Police Fax: 763-531-5174 • Public Works Fax: 763-592-6776 COUNCIL yt REQUEST FOR ACTION Originating Department Approved for Agenda Agenda Section Community Development 02-09-04 Development & Planning Item No. By: Kirk McDonald, Director of CD Amy Baldwin, CD Intern By: ?, 8.1 A RESOLUTION CALLING FOR A PUBLIC HEARING ON THE MODIFICATION OF THE RESTATED REDEVELOPMENT PLAN AND THE 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, 66-1, 02-1 AND 03-1 (SPECIAL LAW); CREATION OF TAX INCREMENT FINANCING DISTRICT NO. 04-1 (SPECIAL LAW) AND ADOPTION OF A TAX INCREMENT FINANCING PLAN RELATING THERETO. (IMPROVEMENT PROJECT NO. REQUESTED ACTION Staff requests Council approval of the attached resolution, prepared by Krass Monroe, the City's redevelopment financial consultant calling for a public Dearing on modification to the Restated Redevelopment Plan and existing Tax Increment Plan, to the creation of Tax Increment District 04-1 (Special Law) and to the adoption of a Tax Increment Plan. The public hearing will be held on April 12, 2004. POLICY/PAST PRACTICE City goal #2 is to pursue the maintenance and redevelopment of commercial and residential properties within the city. In the past, the Council has approved similar resolutions relating to tax increment financing districts. BACKGROUND As the City Council is aware, in 2003, the city requested that special legislation be approved by the Minnesota State Legislature to assist with redevelopment activities in the Livable Communities area. On September 22, 2003, the Council approved special legislation enacted by the Minnesota State Legislature on June 8, 2003, governing the use of tax increment financing by the city within a designated area of the city. This was the first step in the process of creating a new tax increment district in the Livable Communities redevelopment areas. Tonight's action is the initial step in creating the second tax increment financing district in the Livable Communities redevelopment area for the former Frank's Nursery site at 5620 Winnetka Avenue. The first district created was the East Winnetka/Ryland district. The resolution states in part: "This Council shall meet on Monday April 12, 2004, commencing at 7:00 o'clock p.m. at City Hall, 4401 Xylon Avenue North, New Hope, Minnesota, to hold a public hearing on the following matters: (1) modification of the Restated Redevelopment Plan for Redevelopment Project No. 1 (the "Project Area") to reflect increased project costs MOTIOIVT BY1i7�� SECOND BY TO: ,2,' 41 I:RFAIPLANNINGILivable Communities\Q — Schedule PH for Franks TIF.doc Request for Action Page 2 02-09-04 and increased bonding authority; (2) mocutication of 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 03-1 (Special Law) to reflect increased project costs and increased bonding authority within the Project Area; (3) creation of Tax Increment Financing District No. 04-1 (Special Law); and, (4) adoption of a Tax Increment Financing Plan relating thereto, all pursuant to Minnesota Statutes, Sections 469.001 to 469.047, 469.124 to 469.134, 469.090 to 469.108 and 469.174 to 469.1791, inclusive." At the January 26 EDA meeting, the New Hope Economic Development Authority approved preliminary terms of agreement for a 44 -unit townhome development at 5620 Winnetka Avenue and directed staff to proceed with the creation of a tax increment district, which will assist both this and other development in the area. The action tonight schedules a date for the public hearing. Staff recommends approval of the resolution. ATTACHMENTS • Resolution • Implementation Schedule/Chronology • Location Map — 5620 Winnetka Avenue North b. Location Map — Area The motion for the adoption of the foregoing resolution was duly seconded by Council Member sorrmer , and upon vote being taken thereon the following voted in favor thereof: Enck, Cassen, Collier, Gain-Lenth, Sommer and the following voted against the same: Whereupon said resolution was declared duly passed and adopted, and was signed by the Mayor and attested to by the City Clerk. Adopted by the Council of the City this 9th day of February _ , 2004. ATTEST: City Clerk GMI'DATAWNEW HOPE1131TIFAESOLUTION CALLING FOR A PUBLIC HEARING -DOC CITY OF NEW HOPE PROPOSED CHRONOLOGY CREATION OF TIF DISTRICT NO. 04-1 (SPECIAL LAW) (FRANK'S NURSERY) MONDAY, FEBRUARY 9, 2004 THURSDAY, FEBRUARY 26, 2004 THURSDAY, MARCH 11, 2004 THURSDAY, MARCH 25, 2004 WEDNESDAY, MARCH 31, 2004 MONDAY, APRIL 12, 2004 G:\WPDATA\N\NEW H0PE\13\T1F\CHR0N0L0GY.D0C CITY COUNCIL MEETING (i) call for public hearing; (ii) approve authorization to publish notice of public hearing TIF PLAN PROVIDED TO COUNTY COMMISSIONER (not less than 30 days prior to publication of the notice of public hearing) TIF PLAN PROVIDED TO SCHOOL DISTRICT NO. 281 AND HENNEPIN COUNTY (not less than 30 days prior to public hearing) NOTICE OF PUBLIC HEARING PROVIDED TO NEWSPAPER PUBLICATION OF NOTICE OF PUBLIC HEARING (not less than 10 days nor more than 30 days prior to public hearing) EDA MEETING (i) review and approve modifications to Redevelopment Plan and existing TIF Plans; (ii) create TIF District No. 04-1; (iii) adopt TIF Plan; and (iv) authorize execution of Redevelopment Contract COUNCIL MEETING - PUBLIC HEARING (i) review and approve modifications to Redevelopment Plan and existing TIF Plans; (ii) create TIF District No. 04-1; (iii) adopt TIF Plan � COURSE I 8130 )OL H AVE N BEGIN 4653 PARK ST. THERESE NURSING HOME 8006 6000 8100 5620 Winnetka Redevelopment Frank's Nursery Site 8001 8011 8009 8007 7901 5539 7940 Z 1645 5437 1641 5436 5437 543b z $635 5431 -1 Ljj 1629 Q $62' 5420 5421 z i619 Ld Q 5416 (f) L 5416 Q F 5410 L 54,06 j 15400 Z 5610 5410 O $615 (.) 5407 V? TO 5400 $605 5401 5400 5600 )OL H AVE N BEGIN 4653 PARK ST. THERESE NURSING HOME 8006 6000 8100 5620 Winnetka Redevelopment Frank's Nursery Site 8001 8011 8009 8007 7901 5539 7940 Z 5436 5437 ? 5436 5437 543b 5437 5431 5430 5431 5430 5426 5431 5430 5427 5426 6426 5427 5427 342' 5417 5411 5420 5421 54205421 z 5420 Ld Q 5416 5417 L 5416 Q F 5410 L 54,06 j 15400 5417 ¢ 5416 5410 5411 5411 = 5410 6407 5406 5406 5407 5407 5401 5400 5401 5401 5400 5738 5732 5720 5716 5700 5704 f 5620 INI w Q W 5600 7800 F - - i 5550 5559 5546 O p M rn 5540 5537 5538 m ^� n 5532 5531 5530 5524 5519 5520 7621 5518 5509 5510 0 u 3512 7708 C N co n cc 5501 5506 55TH 5500 544.3 5444 5437 5446 5437 Z 5438 5433 z 5440 5429 j 5428 5429 W 5434 5427 ¢ 5426 5427 Q 5422 5423 ST RAP H 5420 5417 5420 5425 5412 5410 5413 W 5414 5413 Q 5406 5409 .2 5406 5409 5400 $401 U) 5400 5401 5340 5325 5330 5.337 5319 5324 5331 ' m � N 5313 W 0 5318 5325 �. �l. 0 RISK NEW HOPE, MINNESOTA M Pow om" U31 wm KV -1 - move HOPE MLLAGE IL F-4 NK M13 LNMLE COMMUMU TrUDY ALFA WP Ph."s II OEM— MIME I wull I. Ma co j zm 3� < rn A Cc - > I VIS AVE N z > C) 03 cc 1-n ROONE AWN go Z RISK NEW HOPE, MINNESOTA M Pow om" U31 wm KV -1 - move HOPE MLLAGE IL F-4 NK M13 LNMLE COMMUMU TrUDY ALFA WP Ph."s II OEM— MIME I wull I. Ma co 3� < rn A Cc - > I VIS AVE N z > C) 03 cc 1-n go Z VIR AVE N i > RISK NEW HOPE, MINNESOTA M Pow om" U31 wm KV -1 - move HOPE MLLAGE IL F-4 NK M13 LNMLE COMMUMU TrUDY ALFA WP Ph."s II OEM— MIME I wull I. Ma -A SEH February 9, 2004 Mr. Ken Doresky Community Development Specialist City of New Hope 4401 Xylon Ave. N. New Hope, MN 55428 Dear Mr. Doresky: 733 RE: City of New Hope East Winnetka Area TIF Assessment SEH No. A-NEWHP0201.01 #10 The intent of this letter is to review with you the additional Tax Increment Financing (TIF) assessment services requested for the above referenced project. The assessment will include one parcel previously evaluated for the East Winnetka Area TIF District (2003) as well as one new residential building. The scope of work is to determine whether the qualification tests (MN Statute 469.174) for tax increment eligibility can be met within each proposed area. The qualification findings will be completed for the new parcel and will be re -confirmed for the previously evaluated parcel. The cost for conducting the assessments is estimated to be $2,000.00. Compensation shall be on an hourly basis to the established maximum fee, not including ordinary reimbursable expenses (mileage, courier, reproductions, etc.). We will not exceed this cost without prior written approval from you. We hope you find this proposal for additional assessment services within your expectations. To indicate your approval, please sign and return one copy of this letter to this office. Please contact me at 612.758.6788 if you have any questions. Sincerely, Jason P. Zemke, AIA Project Architect w:lnlnewhp10201001i-genFd-kda001.doc Approved by - Approved for: Date: Z/ t 2. f o q Short Elliott Hendrickson Inc., Butler Square Building, Suite 710C, 100 North 6th Street, Minneapolis, MN 55403-1515 SEH is an equal opportunity employer I www.sehinc.com 1 612.758.6700 1 866.830.3388 1 612758.6701 fax COUNCIL 1ARFAWLANNINMUvable Communites\Q-met council grant accept.doc �s REQUEST FOR ACTION Originating Department Approved for Agenda Agenda Section Community Development 02-23-04 CONSENT Item No. By: Amy Baldwin, Community Development Intern B �.$ RESOLUTION APPROVING METROPOLITAN COUNCIL PREDEVELOPMENT GRANT (IMPROVEMENT PROJECT NO. 733) REQUESTED ACTION Staff requests that the City Council approve the enclosed Resolution Approving Metropolitan Council Predevelopment Grant (Improvement Project No. 733) POLICTYIPAST PRACTIVE The City Council has approved similar grant agreements with the Metropolitan Council in the past for planning studies and housing improvement projects. BACKGROUND At the September 8, 2003, Council meeting, the City Council approved a resolution authorizing city staff to make application to the Metropolitan Council for a Predevelopment Grant to cover soft costs associated with the redevelopment of the property located at 5620 Winnetka Avenue North (former Frank's Nursery location). On November 12, 2003, the Metropolitan Council approved the application for funding in the amount of $26,000. The Metropolitan Council has forwarded the enclosed grant agreement to the city for approval and execution. The grant will be used to cover environmental phase I and II studies, surveys, appraisals, architectural fees and partial coverage of purchase agreement costs. It is staff's intent that the funds would be utilized by both the city and developer to help "write down" some of the up front development costs on this project. The Frank's Nursery site was an area targeted for redevelopment by the Livable Communities Task Force. The current proposal indicates 44 owner -occupied townhomes, which is a specific type of housing needed in the city, according to both the Comprehensive Plan and the Life Cycle Housing Study. The agreement stipulates that the grant activities be completed by December 31, 2005. MOTION BY 0"Jo SECOND BY TO: 1ARFAWLANNINMUvable Communites\Q-met council grant accept.doc Request for Action Page 2 02-23-04 FUNDING The funding requirements outlined in the grant agreement are as follows: Recommended Grant: $26,000 Staff recommends approva[ of the resolution. ATTACHMENTS • Resolution Metropolitan Council Correspondence Grant Agreement CITY OF NEW HOPE RESOLUTION NO. 04-41 RESOLUTION APPROVING METROPOLITAN COUNCIL PREDEVELOPMENT GRANT (IMPROVEMENT PROJECT NO. 733) WHEREAS, the city of New Hope has been notified by the Metropolitan Council that its application for a Predevelopment Grant has been approved for funding in the amount of $26,000; and, WHEREAS, a Metropolitan Council Opportunity Grant Agreement (Grant No. SG -2003-140) has been submitted to the city for execution by the appropriate city officials; and, WHEREAS, the City Council desires to enter into said Agreement with the Metropolitan Council to cant' out the activities specified in the Agreement. NOW, THEREFORE, BE IT RESOLVED, that the mayor and city manager are hereby authorized to execute the grant agreement on behalf of the city of New Hope. Adopted by the City Council of the city of New Hope, Hennepin County, Minnesota, this 23rd day of February, 2004. n Mayor Attest: City Clerk Page 1 of 1 Baldwin Amy From: McDonald Kirk Sent: Friday, October 31, 2003 10:17 AM To: Baldwin Amy; Doresky Ken Subject: FW: Northeast Winnetka Townhomes -- Predevelopment GrantApplication Again, FYI, and please print out a copy for me. Thank you -----Original Message ----- From: Jim Uttley[mailto:jim.uttley@metc.state.mn.us] Sent: Thursday, October 30, 2003 5:40 PM To: McDonald Kirk Cc: Donahue Dan Subject: Northeast Winnetka Townhomes Predevelopment GrantApplication Kirk -- Congratulations! I am happy to confirm that your project is one of those recommended for funding. Attached is a copy of the predevelopment grant staff report going to the Council's Community Development Committee for action on November 3. We would encourage you or one of your colleagues to attend the committee meeting to answer any questions should they arise. The meeting will begin at 4 p.m. and will be held in Conference Room 1A at the Council's offices at Mears Park Centre, 230 East Fifth Street, St. Paul. Final action on the grant is expected to occur at the Metropolitan Council meeting on November 12. One of the attachments outlines the evaluation of the project that you submitted. it will give you an idea where the application was strong and where it fell short. As you will see from the staff report, there were many applications for not enough dollars to fund them all --the applications were highly competitive. If you have questions about the review process or something in the staff report, please contact the project leader, Robin Caufman (651-602-1457, robin.caufmannmetc.state.mn.us). We appreciate your taking the time to respond to the Council's call for applications for this one-time grant program. We hope that the project will be able to move forward rapidly with Metropolitan Council financial support. Best regards, James P. Uttley, AICP, Planning Analyst Staff Sector Rep for Council Districts 5, 6, 7 and 8 Planning and Growth Management Dept. Metropolitan Council 230 East Fifth Street St. Paul, MN 55101-1626 651-602-1361 FAX 651-602-1674 j i m. uttley@ mete. state. m n. us 2/18/2004 C1, Community Development Committee 2003os ' Meeting date: November 3, 2003 ADVISORY INFORMATION Date October 28, 2003 Subject Predevelopment Grant Funding Recommendations Districts, Members All Prepared by Robin Caufman, Senior Planner (651-602-1457) j Melissa Manderschied, Planner (651-602-1126) Debra Detrick, Senior Planner (651-602-1327) Elizabeth Ryan, Director of Housing & Livable Communities (651-602-1615) Ann Beckman, Acting Director, Community Development (651-602-1669) Caren Dewar, Deputy Regional Administrator (651-602-1306) Division/Department Community Development, Housing & Livable Communities and Planning and Growth Management REQUEST SUMMARY The Family Housing Fund and Minneapolis Foundation provided $300,000 to the Metropolitan Council in 2002 to assist reinvestment activities that support housing production in metropolitan communities. The Metropolitan Council used this foundation money to create a one-time predevelopment grant fund to assist communities with reinvestment activities that support housing production in cases where plans are complete but necessary support to implement the plans is not available. This initiative builds on the regional reinvestment strategy that encourages redevelopment, infill, and adaptive reuse. In response, the Council received 15 applications for the Predevelopment Grant program, totaling $887,650. This request recommends seven projects for funding. PROPOSED ACTION Staff recommends that the Metropolitan Council award Predevelopment grants totaling $300,000 as follows: City 1 New Brighton 2 Columbia Heights 3 Eagan 4 Minneapolis 5 Minneapolis 6 Ramsey 7 New Hope Project Request Recommendation NW Quadrant Redevelopment $50,000 $50,000 Industrial Area Redevelopment $50,000 $50,000 Cedar Grove Redevelopment $50,000 $50,000 Lowell School Site $50,000 $50,000 Nicollet Hotel Block Project $50,000 $49,000 Central Rural Reserve CCRA Study $33,000 $33,000 NE Winnetka Townhomes $49,500 $26,000 TOTAL $300,000 ATTACHMENTS Appendix 1 - Project Summary Appendix 2 - Project Evaluation Summary Sheet Appendix 3 - Review Process I REGIONAL BENEFITS Reinvestment at the local level has benefits throughout the entire region. The addition of housing units and total redeveloped, infill, or adaptively reused acres are two measurements of regional benefits. If all the proposed units are built by the seven projects funded with Predevelopment Grant dollars, approximately 4269 units would be added, including many affordable units. The seven recommended projects represent 1,075 acres of redeveloped, infill, or adaptively reused land. SELECTION PROCESS The Council received 15 Predevelopment Grant funding proposals on September 15, 2003, requesting a total of $887,650. First, a technical review team, comprised of Planning and Technical Assistance, Environment, Transportation and Livable Communities staff, provided technical comments and evaluated all 15 grant proposals against the selection criteria, focusing on land use and infrastructure. Second, the predevelopment review team evaluated the proposals against the selection criteria, focusing on the project's plans to provide housing and project readiness. Seven projects are recommended for funding, based on the combination of the technical reviewers' comments and the predevelopment review team evaluation. Third, the predevelopment review team reviewed the seven projects recommended for funding and evaluated the eligibility of each funding item requested. The predevelopment team recommends that five of the projects receive the full funding amount requested and two receive partial funding. See Appendix 1 for a description of each proposal and Appendix 2 for evaluations and comments. 2 APPENDIX 1 - PROJECTS SUMMARY RECOMMENDED FOR FUNDING New Brighton, NW Quadrant Redevelopment Northwest Quadrant Redevelopment Area is located on the west side of Old Highway 8, just north of I-694 and west of I - 35W. The redevelopment plan calls for a mixed-use development encompassing over 90 acres, taking advantage of the adjacent 225 -acre regional park along Long Lake as well as the access afforded by two major freeways. Forty-five acres of the redevelopment site is planned for approximately 730 units of housing, with some combination of townhomes, apartments, and condominiums. The City completed a limited Phase I environmental assessment for the entire project and additional studies in conjunction with property acquisitions. The City also completed master plans and completed and approved an Alternative Urban Areawide Review (AUAR) for the project area. Developers are prepared for construction to begin in spring 2005. The City requested $50,000 for further financial analysis, design, appraisals, surveys, and environmental testing, in order to keep this project on track. Staff recommends the project be awarded $50,000. Columbia Heights, Industrial Area Redevelopment The Industrial Area Redevelopment site is located just north of Minneapolis adjacent to University Avenue (Hwy 47), a few blocks west of Central Avenue (Hwy 65). The City recently completed a planning process that identifies approximately 29 acres of current dilapidated, blighted and under -producing industrial land for redevelopment. The redevelopment plans includes residential development, incorporates an existing 30 -acre park (Huset) and proposes a parkway with trails, park connections, park amenities and stormwater features. The plan identifies 16.6 acres for development of life -cycle and market rate housing of varying densities and 8.5 acres adjacent to University Avenue for redevelopment of either a new industrial use or additional housing. The City recently completed the Phase II environmental testing with a plan to apply for TBRA Met Council/DEED funds in fall 2003 to remediate environmental contamination. A recent housing study by Maxfield Research indicated that the City market area could absorb up to 1,285 housing units, with a potential of 350 + units for this site. The City requested $50,000 for infrastructure feasibility analysis, engineering and appraisals. Staff recommends the project be awarded $50,000. Eagan, Cedar Grove Redevelopment The Cedar Grove Redevelopment Area is located at the intersection of Cedar Avenue and County Road 13. The project proposes redevelopment of underutilized retail into mixed uses, including up to 350 units of attached housing and a limited amount of commercial and office development. The City completed the Cedar/13 Study, an AUAR for the project area, and the corresponding Comprehensive Guide Plan Amendment. The area is defined as Special Area 5 in the Comprehensive Plan that was amended to include the small area plan and supporting text that calls for transit and a mixture of office/retail/mid and high density residential. The City created a unique Zoning District for the area. The Cedar Grove District requires specific architectural guidelines and bulk standards that bring buildings to the street, requires architectural relief/interest for all buildings and requires uniform signage throughout the district. Maxfield Research completed a market analysis that clearly shows the largest present market for the area is attached housing, followed by retail commercial. The City requested $50,000 for phase I and II environmental testing and appraisals that will facilitate acquisition. Staff recommends the project be awarded $50,000. Minneapolis, Lowell School Site The Lowell School Site redevelopment project creates a planned unit residential development on a vacant 2 acre site in the Jordan neighborhood that is currently owned by the School District. The project includes the construction of 14 for sale single-family homes, as urban "pocket park" and related infrastructure improvements. Project for Pride in Living, the developer along with Habitat for Humanity, is also building single family homes on 10 nearby infill lots, currently under construction. The City anticipates construction to start on the Lowell School Site in September 2004. The City requested $50,000 for engineering infrastructure, road and sidewalk improvements, soil testing, soil remediation, survey of the site and replatting the site into individual lots. Staff recommends the project be awarded $50,000. Minneapolis, NicoIlet Hotel Block Project The Nicollet Hotel Block is located in downtown Minneapolis, adjacent to the new Minneapolis Central Library that is currently under construction, and fronts on two key city streets - the Nicollet Mall (City's primary retail street) and Hennepin Avenue. The City purchased the 1.7 -acre site using Federal Transit Administration (FTA) funds. In May of 2003, the City issued a formal Request for Proposals (deadline Oct. 10, 2003) inviting private developers to submit proposals for a mixed use, transit -oriented development (TOD) that could include up to 300 units of housing, structured parking for residents, convenience retail, and an underground transit terminal. The transit component of the development allows Metro Transit to remove and consolidate buses from a variety of downtown "on street" layover locations, and eventually serve as a terminal for the Downtown Circulator bus system, scheduled to begin operation in 2004. The City secured the capital funds for the terminal portion of the project through an existing FTA grant, a TEA -21 AHED grant, Metro Transit agreements, a FY03 Congressional earmark, and future revenue from the sale of the land/air rights. The City requested $50,000 for costs associated with the preparation and disposition of the Nicollet Hotel Block for development. Staff recommends the project be awarded $41,000 for appraisals, financial analysis, title work and transaction costs, architectural and engineering costs, project management, environmental testing and surveys. The application states that the project "could include up to 300 units of housing". Before funds are disbursed, the applicant will need to confirm that the project includes housing as part of the redevelopment project. Ramsey, Central Rural Reserve CCRA Study The City identified the Central Rural Reserve Area (CRRA) for future redevelopment of a 970 acre area which was subdivided into rural residential lots (1 and 2.5 acre) for single-family homes on septic. The CRRA contains 970 acres that includes Ramsey Central Park and 570 single-family homes. The site is just north of the City's new Town Center development that is served by regional infrastructure. The grant request focuses on developing implementation tools to facilitate redevelopment that optimizes land use, promotes infill and redevelopment opportunities, increases housing choices for area residents, and increases housing inventory. The City identifies the boundaries of the redevelopment area as part of the comprehensive planning process and completed master planning process for the adjacent Town Center area. The results and tools of the study will focus on how the transition from rural to more urban growth will work in Ramsey and will provide for a framework for other municipalities. To preserve the area, the City restricts additional development of this area to 4 in 40 density until the City completes the study to determine how to redevelop the CRRA at urban densities that builds on the Town Center. The City requested $33,000 to complete the CRRA study including inventory of existing land uses and natural features; infrastructure, identification of development scenarios, determination and design of infrastructure, financial analysis and implementation of land use and regulatory tools. Staff recommends the project be awarded $33,000. New Hope, Northeast Winnetka Townhomes The Northeast Winnetka Townhomes redevelopment site is located at the intersection of Bass Lake Road and Winnetka Avenue. The plans are to redevelop the Frank's Nursery site into 45-56 new owner occupied townhomes ranging in price from $160,000 to $200,000. The developer is in the process of acquiring the property from the existing owner, with closing schedule in January 2004. The City requested $50,000 for environmental studies Phase I and II, financial analysis, architecture fees, survey, appraisal, and other costs associated with site acquisition. Staff recommends the project be partially funded $26,000 for environmental phase I and 11 studies, surveys, appraisals, architectural fees and partial coverage of purchase agreement. METROPOLITAN COUNCIL PREDEVELOPMENT GRANT PROGRAM GRANTEE: City of New Hope GRANT AMOUNT: $26,000.00 GRANT NO. SG2003-140 COUNCIL ACTION: November 12, 2003 END DATE: December 31, 2005 GRANT AGREEMENT THIS GRANT AGREEMENT ("Agreement") is made and entered into by the Metropolitan Council ("Council") and the city, county, or township within the seven -county metropolitan area identified above as "Grantee." WHEREAS, Minnesota Statutes section 473.129, subdivision 4 authorizes the Council to accept gifts for any Metropolitan Council purpose and to dispose of such moneys or property in accordance with the terms of the gift; and WHEREAS, the sources of funding for the Council's Predevelopment Grant Program are financial donations from The Minneapolis Foundation and the Family Housing Fund; and WHEREAS, the purposes of the Predevelopment Grant Program are to assist reinvestment activities that support housing production in cases where plans are completed but necessary support to implement the plans is not available, and to build on a regional reinvestment strategy that encourages redevelopment, infill, and adaptive reuse as outlined in a 2002 Council publication, Reinvesting in the Region's Future; and WHEREAS, the Grantee submitted an application for Predevelopment Grant Program funds in response to the Council's request for applications; and WHEREAS, the Council awarded Predevelopment Grant Program funds to the Grantee, subject to any terms, conditions and clarifications stated in its "Council Action." NOW THEREFORE, in reliance on the above representations and statements and in consideration of the mutual promises and covenants contained in this Agreement, the Grantee and the Council agree as follows: I. GRANT FUNDS 2.01 Total Grant Amount. The Council will grant to the Grantee the "Grant Amount" identified at Page 1 of this Agreement that shall be funds from the Predevelopment Grant Program. Notwith- standing any other provision of this Agreement, the Grantee understands and agrees that any reduction or termination of these grant funds made available to the Council through foundation support may result in a like reduction in the Grant Amount made available to the Grantee. Predevelopment Grant Program Page 1 of 8 Pages i; 2.02 Authorized Use of Grant Funds. The Grant Amount made available to the Grantee under this Agreement shall be used only for the purposes and activities described in the Grantee's application for Predevelopment Grant Program funds. A summary of the project described in the Grantee's application is attached to and incorporated into this Agreement as Attachment A. Ineligible uses include: activities prior to award of grant; construction costs; master and comprehensive planning activities and related design workshops or other public involvement techniques, which should be complete or nearly complete; local permits, licenses or other fees such as park dedication; and operating expenses, salary costs and developers fees. Funded elements must directly contribute to implementation of an eligible reinvestment project. If consistent with the Grantee's application, the Grantee may use the grant funds for soft costs and professional services such as legal, title, financial analysis; architectural and engineering design; project management; modeling and mapping; tax credit fees; marketing and advertising; survey fees; inspections, appraisals, and environmental testing; and costs associated with securing other funding sources and preparing other grant proposals, except grant proposals for Metropolitan Council programs. The Council shall bear no responsibility for cost overruns that may be incurred by the Grantee or others in the implementation or performance of the project activities described in Attachment A. The Grantee agrees to remit to the Council in a prompt manner any unspent grant funds; any grant funds which are not used for the authorized purposes specified in this paragraph; or not used for the purposes of implementing the project activities described in Attachment A. The Grantee must complete all major components of the grant project as proposed and for which the Council made its grant award, or the Grantee must return to the Council the entire Grant Amount. The Grantee agrees to comply with any "business subsidy" requirements of Minnesota Statutes sections 1163.993 to 1163.995 that apply to the Grantee's expenditures or uses of the grant funds. 2.03 Disbursement Schedule. The Council will disburse grant funds in response to written disbursement requests submitted by the Grantee and reviewed and approved by the Council. Written disbursement requests shall indicate the project activity funded by this Agreement, the contractor(s)/vendor(s) to be paid, and the time period within which the project activity was or will be performed. Disbursements prior to the performance of a project activity will be subject to terms and conditions mutually agreed to by the Council and the Grantee. Individual disbursement requests should specify the project or activity to be funded and identify dollar amounts by project or activity. Subject to verification of a written disbursement request and approval for consistency with this Agreement, the Council will disburse a requested amount to the Grantee within twenty (20) business days after receipt of a written disbursement request. 2.04 Effect of Grant. Issuance of this grant neither implies any Council responsibility for contamination, if any, at the project site nor imposes any obligation on the Council to participate in any pollution cleanup of the project site if such cleanup is undertaken or required. 2.05 Resale Limitations. If appropriate for the project, the Grantee must impose resale limitations regarding the disposition of any equity realized by the purchasers of "affordable" units if grant funds received from the Council under this Agreement are used for gap financing in the project described in Attachment A. The intent of this resale limitation is to protect the public and foundation investment in the project and ensure that a proportion of the affordability gap provided by the public and foundation investment in the form of grant funds is recaptured and does not become a windfall for any purchaser who might sell the home within a predetermined and agreed upon time period of ownership. An equitable proportion of the affordability gap filled by grant funds received from the Predevelopment Grant Program Page 2 of 8 Pages Council under this Agreement must be returned to the Council if a purchaser sells the "affordable" home within a certain time frame. 1f appropriate for the project, the length of the ownership time period and the proportion of the affordability gap to be recovered will be agreed upon by the Grantee and the Council. Il. ACCOUNTING, AUDIT AND REPORT REQUIREMENTS 3.01 Accounting and Records. The Grantee agrees to establish and maintain accurate and complete accounts and records relating to the receipt and expenditure of all grant funds received from the Council. Notwithstanding the expiration and termination provisions of Paragraphs 4.01 and 4.02, such accounts and records shall be kept and maintained by the Grantee for a period of six (6) years following the completion of the project activities described in Attachment A or six (6) years following the expenditure of the grant funds, whichever occurs earlier. For all expenditures of grant funds received pursuant to this Agreement, the Grantee will keep proper financial records including invoices, contracts, receipts, vouchers and other appropriate documents sufficient to evidence in proper detail the nature and propriety of the expenditure. Accounting methods shall be in accordance with generally accepted accounting principles. 3.02 Audits. The above accounts and records of the Grantee shall be audited in the same manner as all other accounts and records of the Grantee are audited and may be audited or inspected on the Grantee's premises or otherwise by individuals or organizations designated and authorized by the Council at any time, following reasonable notification to the Grantee, for a period of six (6) years following the completion of the project activities described in Attachment A or six (6) years following the expenditure of the grant funds, whichever occurs earlier. Pursuant to Minnesota Statutes section 16C.05, subdivision 5, the books, records, documents and accounting procedures and practices of the Grantee, that are relevant to this Agreement, are subject to examination by the Council and either the Legislative Auditor or the Sate Auditor, as appropriate, for a minimum of six (6) years. 3.03 Report Requirements. The Grantee will provide to the Council written reports which report on the status of the project activities described in Attachment A and the expenditures of the grant funds. (a) Interim Report. One (1) year after the Grantee initially receives grant funds, the Grantee shall submit to the Council a written report that shall contain at least the following elements: (1) a summary of grant funds received and expended to date, including a description of the purposes or uses for which the grant funds were expended; (2) a statement of expected grant fund expenditures within the next twelve (12) months; and (3) answers to all applicable questions found on the Minnesota Common Report Form (Attachment B). This interim report is not required if a final report will be submitted within this same one (1) year period after the Grantee initially receives grant funds. (b) Final Report. The Grantee's final written report shall be submitted to the Council within two (2) months following the expenditure of all grant funds by the Grantee and shall contain a certification by the Grantee's chief financial officer that all grant funds have been expended in accordance with this Agreement. This final report shall answer all applicable questions found on the Minnesota Common Report Form (Attachment B). Predevelopment Grant Program Page 3 of 8 Pages 3.04 Environmental Site Assessment. The Grantee represents that a Phase I Environmental Site Assessment or other environmental review has been or will be carried out, if such environmental assessment or review is appropriate for the scope and nature of the project activities funded by this Agreement, and that any environmental issues have been or will be adequately addressed. IIIW.TH9DI*3 1 WNWID190I 4.01 Term and End Date. This Agreement is effective upon execution of the Agreement by the Council. Unless terminated pursuant to Paragraph 4.02, this Agreement terminates on the "End Date" identified at Page 1 of this Agreement. 4.02 Termination. This Agreement may be terminated by the Council for cause at any time upon fourteen (14) calendar days' written notice to the Grantee. Cause shall mean a material breach of this Agreement and any amendments of this Agreement. If this Agreement is terminated, the Grantee shall receive payment on a pro rata basis for eligible project activities described in Attachment A that have been completed. Termination of this Agreement does not alter the Council's authority to recover grant funds on the basis of a later audit or other review, and does not alter the Grantee's obligation to return any grant funds due to the Council as a result of later audits or corrections. If the Council determines the Grantee failed to comply with the terms and conditions of this Agreement and all applicable provisions, the Council may take any action to protect the Council's interests, may refuse to disburse additional grant funds, and may require the Grantee to return all or part of the grant funds already disbursed to the extent such grant funds were not used in accordance with this Agreement. 4.03 Amendments. The Council and the Grantee may amend this Agreement by mutual agreement. Amendments, changes or modifications of this Agreement shall be effective only on the execution of written amendments signed by authorized representatives of the Council and the Grantee. IV. GENERAL PROVISIONS 5.01 Equal Opportunity. The Grantee agrees it will not discriminate against any employee or applicant for employment because of race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, membership or activity in a local civil rights commission, disability, sexual orientation or age and take affirmative action to insure applicants and employees are treated equally with respect to all aspects of employment, rates of pay and other forms of compensation, and selection for training. 5.02 Conflict of Interest. The members, officers and employees of the Grantee shall comply with all applicable state statutory and regulatory conflict of interest laws and provisions. 5.03 Liability. To the fullest extent permitted by law, the Grantee shall defend, indemnify and hold harmless the Council and its members, employees and agents from and against all claims, damages, losses and expenses, including but not limited to attorneys' fees, arising out of or resulting from the conduct or implementation of the project activities funded by this Agreement. Claims included in this indemnification include, without limitation, any claims asserted pursuant to the Minnesota Environmental Response and Liability Act (MERLA), Minnesota Statutes Chapter 115B, the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 Predevelopment Grant Program Page 4 of 8 Pages (CERCLA) as amended, 42 U.S.C. sections 9601 et seq., and the federal Resource Conservation and Recovery Act of 1976 (RCRA) as amended, 42 U.S.C. sections 6901 et seq. This obligation shall not be construed to negate, abridge or otherwise reduce any other right or obligation of indemnity which otherwise would exist between the Council and the Grantee. The provisions of this paragraph shall survive the termination of this Agreement. This indemnification shall not be construed as a waiver on the part of either the Grantee or the Council of any immunities or limits on liability provided by Minnesota Statutes Chapter 466, or other applicable state or federal law. 5.04 Acknowledgments. The Grantee shall acknowledge the financial assistance provided by the Council, the Family Housing Fund, and The Minneapolis Foundation in promotional materials, press releases, reports and publications relating to the project activities described in Attachment A that are funded in whole or in part with the grant funds. The acknowledgment should contain the following language: Financing for this project was provided by the Metropolitan Council through the generous support of the Family Housing Fund and The Minneapolis Foundation Until the project activities funded by this Agreement are completed, the Grantee shall ensure the above acknowledgment language, or alternative language approved by the Council, is included on all signs located at project or construction sites that identify project sponsors or entities providing financial support for the project. 5.05 Permits, Bonds and Approvals. The Council assumes no responsibility for obtaining any applicable local, state or federal licenses, permits, bonds, authorizations or approvals necessary to perform or complete the project activities described in Attachment A. 5.06 Contractors and Subcontractors. The Grantee shall include in any contract or subcontract for project activities appropriate contract provisions to ensure contractor and subcontractor compliance with all applicable state and federal laws. Along with such provisions, the Grantee shall require that contractors and subcontractors performing work covered by this Agreement comply with all applicable state and federal Occupational Safety and Health Act regulations. 5.07 Stormwater Discharge Requirements. If any grant funds are used for urban site redevelopment, the Grantee shall at such redevelopment site meet or require to be met: (a) All requirements of federal and state law relating to stormwater discharges including, without limitation, any applicable requirements of title 40, Code of Federal Regulations, parts 122 and 123; and (b) Any additional requirements of the Council's Interim Strategy to Reduce Nonpoint Source Pollution to All Metropolitan Water Bodies (1992) including, without limitation: (1) the requirement to utilize the Minnesota Pollution Control Agency's urban best management practices entitled Protecting Water Quality in Urban Areas; and (2) the requirement that all stormwater must be pretreated by facilities designed to provide pollutant removal efficiencies equal to or greater than those observed in wet -detention basin facilities designed in accordance with the National Urban Runoff Program (NURP) design criteria. Predeveloprnent Grant Program Page 5 of 8 Pages tt11 5.08 Submissions to Council. The written disbursement requests and reports submitted to the Council pursuant to this Agreement shall be submitted to the Council at the following address: Metropolitan Council Attn: Predevelopment Grant Program Administration Mears Park Centre 230 East Fifth Street Saint Paul, Minnesota 55101-1634 5.09 Attachments. A summary of the project activity and budget provisions of the Grantee's application for Predevelopment Grant Program funds is attached to this Agreement as Attachment A and is incorporated into and made a part of this Agreement. A copy of the Minnesota Common Report Form (available online at http://www.mcf-orglmcflgrantICommonReport.doc) is attached to this Agreement as Attachment B and is incorporated into and made a part of this Agreement. 5.10 Warranty of Legal Capacity. The individual signing this Agreement on behalf of the Grantee represents and warrants on the Grantee's behalf that the individual is duly authorized to execute this Agreement on the Grantee's behalf and that this Agreement constitutes the Grantee's valid, binding and enforceable agreements. IN WITNESS WHEREOF, the Grantee and the Council have caused this Agreement to be executed by their duly authorized representatives. This Agreement is effective on the date of final execution by the Council. EKE V"A-15 Title MdGfOY Date By 11 ZL Title (9/k I-NAl -der Date - 3 `4 SG2003M Predevelopment Grant Program METROP ITAN COUNCIL By JO,- , Thomas H. Weaver Regional Administrator Date -:? "-1 —a T Page 6 of 8 Pages ATTACHMENT A Predevelopment Grant Program Project Summary This attachment comprises this page and the succeeding page(s) which contain(s) a summary of the project identified in the Grantee's grant application that was submitted in response to the Council's request for applications for Predevelopment Grant Program funds. The summary reflects the project for which the Grantee was awarded grant funds by the Council Action, and may reflect changes in the project that occurred subsequent to application submission. The Grantee's grant application is incorporated into this Agreement by reference and is made a part of this Agreement except as follows. If the Grantee's grant application or any provision of the application conflicts with or is inconsistent with the Council Action, other provisions of this Agreement, or the project summary contained on the succeeding page(s), the terms, conditions, descriptions, clarifications and dollar amounts reflected in the Council Action or- contained in this Agreement and the project summary shall prevail. For the purposes of resolving conflicts or inconsistencies, the order of precedence is: (1) the Council Action; (2) this Agreement; (3) the project summary; and (4) the Grantee's grant application. Predevelopment Grant Program Page 7 of 8 Pages s f New Hope, Northeast Winnetka Townhomes The Northeast Winnetka Townhomes redevelopment site is located at the intersection of Bass Lake Road and Winne Avenue. The plans are to redevelop the Frank's Nursery site into 45-56 new owner occupied townhomes ranging in Vice from $160,000 to $200,000. The developer is in the process of acquiring the property from the existing owner, with closing schedule in January 2004. The City requested $50,000 for environmental studies Phase I and II, financial analysis, architecture fees, survey, appraisal, and other costs associated with site acquisition. Staff recommends the project be partially funded $26,000 for environmental phase I and H studies, surveys, appraisals, architectural fees and partial coverage of purchase agreemenit• Date of Report: Report Submitted to: Name of organim don ATTACHMENT B Minnesota Common Report Form Cover Sheet [ mfiou in£or flon Legal name, if different Address Employer Identification Number (EIN) City, State, Zip Phone Fax Web site Contact person Phone E-mail Grant ID, if applicable: Amount and support type: 2.3 sentence description of grant: Check one: Interim Report Predevelopment Grant Program Date grant issued: Final Report Page 8 of 8 Pages Or Minnesota Common Report Form Please use the following format for a report to grantmakers that have agreed to use the Minnesota Common Report Form. Your report should only be 1-2 pages, but don't forget to check each individual fender's guidelines for reporting. A 1. Please briefly outline your original goals and objectives, as stated in your proposal. 2. What progress have you made toward your original goals and objectives? What activities led to meeting these goals and objectives? 3. If applicable, describe the population served or community reached during the grant period. Use numbers and demographics such as race/ethnicity, gender or geographic location. 4. Were there any unanticipated results, either positive or negative? What did you learn because of this grant? S. Will you make any changes based on these results? b. (for programlproject grants only) What are your future plans for sustaining this program or project? 7. Are there any other important outcomes as a result of this grant? 8. Do you have any plans to share your results or findings? How? Please attach an income and expense statement for this grant period. Also, include your original budget. 2. If this is an interim report, please attach a statement including income and expenses for grant period to date. If this is a final report, please attach a statement including actual income and expenses. 3. Please feel free to include a narrative for any of your expenses and income, if necessary. 4. (for programlproject grants only) Please include a list of additional funders, including amounts received for this project or program. Be sure to check each individual funder's guidelines for other reporting regtairements. Redevelopment Eligibility Assessment Proposed City of New Hope East Winnetka Area TIF District 5620 Winnetka Avenue North New Hope, MN March 3, 2004 Prepared by: Short Elliott Hendrickson, Inc. (SEH) Butler Square Building, Suite 7100 100 North Oh Street Minneapolis, MN 55403 SEH No. A-NEWHP0201.01 City of New Hope City of New Hope East Winnetka Area TIF District March 3, 2004 PURPOSE Short Elliott Hendrickson, Inc. (SEH) was hired by the City of New Hope, Minnesota, to survey and evaluate 5620 Winnetka Avenue North. The purpose of our work was to independently ascertain whether the qualification tests for tax increment eligibility, as required under Minnesota Statute, could be met. The findings and conclusions drawn herein are solely for the purpose of tax increment eligibility and are not intended to be used outside the scope of this assessment. SCOPE OF WORK The subject parcel is comprised of the following types of improvements: 1 commercial structure. The parcel also contains several accessory structures -- for the purposes of this assessment, these are considered `outbuildings' and are not included in the Condition of Buildings Test. FINDINGS An interior and exterior inspection was completed for the subject building. FINDINGS Coverage Test — The subject property met the coverage test with a 100% area coverage. This exceeds the 70% area coverage requirement. Condition of Buildings Test —100 percent of the buildings — 1 of 1 - were found to be "structurally substandard" when considering code deficiencies and other deficiencies of sufficient total significance to justify substantial renovation or clearance (see definition of "structurally substandard" as follows). This exceeds the Condition of Buildings Test whereby over 50% of buildings, not including outbuildings, must be found "structurally substandard." CONCLUSION Our surveying and evaluating of the subject property render results that in our professional opinion qualify the parcel eligible under the statutory criteria and formulas for a Redevelopment Tax Increment Financing District (State Statute 469.174 Subd. 10). SUPPORTING DOCUMENTS ATTACHED Site Occupied/Building Substandard Determination table TIF Assessment maps: Building Assessment, Occupied Surfaces, Percent Occupied Report on Building Condition Individual Building Summary Report 2 PROCEDURAL REQUIREMENTS The subject property was surveyed and evaluated in accordance with the following requirements under Minnesota Statute Section 469.174, Subdivision 10, clause (c) which states: Interior Inspection — "The municipality may not make such determination [that the building is structurally substandard] without an interior inspection of the property..." Exterior Inspection and Other Means — "An interior inspection of the property is not required, if the municipality finds that (1) the municipality or authority is unable to gain access to the property; and after using its best efforts to obtain permission from the party that owns or controls the property; and (2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard." Documentation — "Written documentation of the building findings and reasons why an interior inspection was not conducted must be made and retained under section 469.175, subdivision 3, clause (1)." Because an interior inspection was conducted, documentation for these purposes is not required. PROCEDURES FOLLOWED TO MEET REQUIREMENTS SEH conducted and exterior and interior inspection and evaluation of the building on February 26, 2004. New Hope Building Official, Roger Axel, accompanied and assisted SEH with the building inspection. For the subject building, the City of New Hope provided a record of all available building permits on file for review by SEH. These permits provide a basic description of type of work completed for each permit (Building, Electrical, or Plumbing, scope of work) and, in some cases, approximate value of work to be completed. Some buildings had no permit records. Additional building data was collected from public taxpayer information available from Hennepin County. Building data from these public records was combined with and reviewed against information gathered in the field. QUALIFICATION REQUIREMENTS The property was surveyed and evaluated to ascertain whether the qualification tests for tax increment eligibility for a redevelopment district, required under the following Minnesota Statutes, could be met. Minnesota Statute Section 469.174, Subdivision 10, clause (a) (1) requires two tests for occupied parcels: 1. Coverage Test — "parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, paved or gravel parking lots or similar structures ..." Note: The coverage required by the parcel to be considered occupied is defined under Minnesota Statute Section 469.174, Subdivision 10, clause (e) which states: "For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures unless 15% of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots or other similar structures." 2. Condition of Buildings Test — " ... and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance;" The term `structurally substandard', as used in the preceding paragraph, is defined by a two-step test: Conditions Test: Under the tax increment law, specifically, Minnesota Statutes, Section 469.174, Subdivision 10, clause (b), a building is structurally substandard if it contains "defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance." Code Test: Notwithstanding the foregoing, the tax increment law, specifically, Minnesota Statutes, Section 469.174, Subdivision 10, clause (c) also provides that a building may not be considered structurally substandard if it: "... is in compliance with building code applicable to new buildings or could be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site." Based on the above requirements, the substandard determination of a particular building is a two-step process; therefore, the findings of each step are independent of each other and both steps must be satisfied in order for a building to be found structurally substandard. It is not sufficient to conclude that a building is structurally substandard solely because the Code Test is satisfied. It is theoretically possible for a building to require extensive renovation in order to meet current building codes but still not meet the main test of the Conditions Test. Furthermore, deficiencies included in the Conditions Test may or may not include specific code deficiencies as listed in the Code Test. In many cases, specific building code deficiencies may well contribute to the data which supports satisfying the Conditions Test; conversely, it is certainly possible that identified hazards or other deficiencies which could be included in the Conditions Test do not necessarily constitute current building code deficiencies. By definition, the nature of the two steps is slightly different. The Conditions Test is more subjective, whereas the Code Test is an objective test. Conditions Test deficiencies are less technical and not necessarily measurable to the same extent of the code deficiencies in the Code Test. To the end that technical, measurable building code deficiencies support the satisfaction of the less technical Conditions Test, the following code requirements are defined in terms that go beyond the technical requirements of the code and demonstrate their relevance in terms of " ... deficiencies in essential utilities and facilities, light and ventilation, etc..." International Building Code (IBC : The purpose of the IBC is to provide minimum standards to safeguard public health, safety and general welfare through structural strength, means of egress facilities, stability, sanitation, adequate light and ventilation, energy conservation, and safety to life and property from fire and other hazards attributed to the built environment (IBC I01.3). A deficiency in the building code (insufficient number of building exits, insufficient door landing area, etc.) adversely affects one or more of the above standards to safeguard `public health ...and safety to life'; therefore, a deficiency in the building code is considered a deficiency in one or more "essential utilities and facilities, light and ventilation, etc.". Minnesota Accessibility Code Chapter 1341: This chapter sets the requirements for accessibility all building occupancies. The Minnesota Accessibility Code closely follows the Americans with Disabilities Act Accessibility Guidelines (ADAAG), which sets the guidelines for accessibility to places of public accommodations and commercial facilities as required by the Americans with Disabilities Act (ADA) of 1990. The ADA is a federal anti -discrimination statute designed to remove barriers that prevent qualified individuals with disabilities from enjoying the same opportunities that are available to persons without disabilities (ADA Handbook). Essentially, a deficiency in the accessibility code (lack of handrail extension at stairs or ramp, lack of clearance at a toilet fixture, etc.) results in a discrimination against disabled individuals; therefore, a deficiency in the accessibility code is considered a deficiency in "essential utilities and facilities". Minnesota Food Code Chapter 4626: This chapter is enforced by the Minnesota Department of Health and is similar to the IBC in that it provides minimum standards to safeguard public health in areas of public/commercial food preparation. A deficiency in the food code (lack of non-absorbent wall or ceiling finishes, lack of hand sink,. etc.) causes a condition for potential contamination of food; therefore, a deficiency in the food code is considered a deficiency in "essential utilities and facilities". National Electric Code (NEC): The purpose of the NEC is the practical safeguarding of persons and property from hazards arising from the use of electricity. The NEC contains provisions that are considered necessary for safety (NEC 90-1 (a) and (b)). A deficiency in the electric code (insufficient electrical service capacity, improper wiring, etc.) causes a hazard from the use of electricity; therefore, a deficiency in the electric code is considered a deficiency in "essential utilities and facilities" W International Mechanical Code (IMC): The purpose of the IMC is to provide minimum standards to safeguard life or limb, health, property and public welfare by regulating and controlling the design, construction, installation, quality of materials, location, operation, and maintenance or use of mechanical systems (IMC 101.3). The IMC sets specific requirements for building ventilation, exhaust, intake and relief. These requirements translate into a specified number of complete clean air exchanges for a building based on its occupancy type and occupant load. A deficiency in the mechanical code. adversely affects the `health _ .. and public welfare' of a building's occupants; therefore, a deficiency in the mechanical code is considered a deficiency in "light and ventilation". Note: The above list represents some of the more common potential code deficiencies considered in the assessment of the buildings in the proposed district. This list does not necessarily include every factor included in the data used to satisfy the conditions test for a particular building. Refer to individual building reports for specific findings. Finally, the tax increment law provides that the municipality may find that a building is not disqualified as structurally substandard under the Code Test on the basis of "reasonably available evidence, such as the size, type, and age of the building, the average cost of plumbing, electrical, or structural repairs, or other similar reliable evidence. Items of evidence that support such a conclusion [that the building is structurally substandard] include recent fire or police inspections, on-site property appraisals or housing inspections, exterior evidence of deterioration, or other similar reliable evidence." MEASUREMENTS AGAINST TECHNICAL TEST REQUIREMENTS Coverage Test SEH obtained information in a GIS (Geographic Information Systems) database format from Hennepin County to obtain IS parcel information. The GIS database contained graphic information (parcel shapes) and other related parcel information. This information was used by SEH for the purposes of this assessment. The total square foot area of each property parcel was calculated from the GIS parcel information and general site verification. The total extent of site improvements on each property parcel was digitized from recent aerial photography (Spring, 2000). The total square footage of site improvements was then digitally measured and confirmed by general site verification. The total percentage of coverage of each property parcel was computed to determine if the 15% requirement was met. Refer to attached maps: Occupied Surfaces map and Percent Occupied. The total area of all qualifying parcels was compared to the total area of all parcels, in this case one parcel, to determine if the 70% requirement was met. Condition of Building Test Replacement Cost — the cost of constructing a new structure of the same size and type on site: R. S. Means Square Foot Costs (2004) was used as the industry standard for base cost calculations. R. S. Means is a nationally published reference tool for construction cost data. The book is updated yearly and establishes a "national average" for materials and labor prices for all types of building construction. The base costs derived from R. S. Means were reviewed, and modified if applicable, against our professional judgment and experience. A base cost was calculated by first establishing building type, building construction type, and construction quality level (residential construction) to obtain the appropriate Means cost per square foot. This cost was multiplied times the building square footage to obtain the total replacement cost for an individual building. Additionally, to account for regional/local pricing, a cost factor was added to the total cost according to R.S. Means tables. Using R. S. Means, consideration is made for building occupancy, building size, and construction type; therefore, the cost per square foot used to construct a new structure will vary accordingly. Building Deficiencies: Conditions Test Condition Deficiencies — determining the combination of defects or deficiencies of sufficient total significance to justify substantial renovation or clearance. On -Site evaluations - Evaluation of each building was made by reviewing available information from city records and making interior and/or exterior evaluations, as noted, sometimes limited to public spaces. Deficiencies in structural elements, essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, were noted by the evaluator. Condition Deficiencies may or may not include Code Deficiencies as defined below. Energy code compliance was not considered for the purposes of determining Condition Deficiencies. Deficiencies were combined and summarized for each building in order to determine their total significance. Building Deficiencies: Code Test Code_ Deficiencies) — determining technical conditions that are not in compliance with current building code applicable to new buildings and the cost to correct the deficiencies: On -Site evaluations - Evaluation of each building was made by reviewing available information from city records and making interior and/or exterior evaluations, as noted, sometimes limited to public spaces. On-site evaluations were completed using a standard checklist format. The standard checklist was 7 derived from several standard building code plan review checklists and was intended to address the most common, easily identifiable code deficiencies. Mechanical Engineers, Electrical Engineers, and Building Code Officials were also consulted in the development of the checklist. Deficiencies were generally grouped into the following categories (category names are followed by its applicable building code): • Building accessibility — Minnesota Accessibility Code • Building egress, building construction — International Building Code Fire protection systems — International Building Code • Food service — Minnesota Food Code • HVAC (heating, ventilating, and air conditioning) — International Mechanical Code • Electrical systems — National Electric Code and Minnesota Energy Code • Energy code compliance — Minnesota Energy Code For the purposes of determining the Code Test (Code Deficiencies), Energy code compliance is relevant because its criteria affect the design of integral parts of a majority of a building's systems. The intent of these criteria is to provide a means for assuring building durability, and permitting energy efficient operation (7676.0100). The energy code addresses general building construction (all forms of energy transmission in an exterior building envelope -- walls, roofs, doors and windows, etc.) and energy usage by lighting and mechanical systems. A deficiency in the energy code (inadequate insulation, non -insulated window systems, improper air infiltration protection, etc.) reduces energy efficient - operation and adversely affects building system durability; therefore, a deficiency in the energy code is considered applicable to the Code test. Office evaluations -- Following the on-site evaluation, each building was then reviewed, based on on-site data, age of construction, building usage and occupancy, square footage, and known improvements (from building permit data), and an assessment was made regarding compliance with current mechanical, electrical, and energy codes. A basic code review was also completed regarding the potential need for additional egress (basement stairways, for example), sprinkler systems, or elevators. Deficiency Cost — Costs to correct identified deficiencies were determined by using R S. Means Cost Data and our professional judgment and experience. In general, where several items of varying quality were available for selection to correct a deficiency, an item of average cost was used, as appropriate for typical commercial or residential applications. Actual construction costs are affected by many factors (bidding climate, size of project, etc.). Due to the nature of this assessment, we were only able to generalize the scope of work for each correction; that is to say that detailed plans, quantities, and qualities of materials were not possible to be known. Our approach to this matter was to determine a 8 preliminary cost projection suitable to the level of detail that is known_ This process was similar to our typical approach for a cost projection that may be given to an owner during a schematic design stage of a project. Costs to correct deficiencies were computed for each building and compared to the building replacement cost to determine if the 15% requirement was met. The total number of buildings determined to be "structurally substandard" by satisfying both the Conditions Test and the Code Test in this manner was compared to the total number of buildings in the proposed district, in this case one building, to determine if the 50% requirement was met. Reports on Building Conditions and Individual Building Summary Reports are available for review at the offices of SEH and the City of New Hope. Technical Conditions Resources — the following list represents the current building codes applicable to new buildings used in the Building Deficiency review: 2003 Minnesota State Building Code 2000 International Building Code 2000 International Housing Code MN 1341 — Minnesota Accessibility Code, Chapter 1341 (1999) 2000 Minnesota Energy Code, Chapters 7672, 7674, or 7676 1999 National Electric Code 2000 International Mechanical Code PROJECT TEAM: Jason P. Zemke, AIA, Project Architect Nancy G. Schultz, AIA, Principal q� eLuI 0 0 LU LU© k M « LU ■ � w o§ I �0 ic a � � M 0 J _ 2 3 z L �� w a W a _ a < /w kg Z I o IL [w a � k IL 0 2 2 2 § ,§\_ § § . 2 = q� eLuI 0 0 LU LU© k M « LU ■ � w o§ I �0 ic a � � M 0 J _ 2 3 z L �� w a W a _ a < /w kg Z I o IL [w a � k IL + :..- ... '�� ` "fit"P• "'' Ts i.ar � F�.,n g f a �f� _ ..,ir. �,. «.v -. ti - - �?"' ' .'+�a'id .+''.�■ 4af;Y,M arm' aiT-.- 61 r ...- �. 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REDEVELOPED ELIGIBILITY i Pe BoonBouBary gh Parcel Boundaries ASSESSMENT = Buildings Under Study Winnetka Property Assessment o 50 lop Building Assessment eet C9 I _ 'v of ' � 1 z r eek` I _ 'v of � L is CITY OF NEW HOPE REDEVELOPED ELIGIBILITY ASSESSMENT Winnetka Property Assessment o 50 Occupied Surfaces ,� z �1 "'Peet �,YofP�s 'v of � z r eek` r j � � N y "'Peet �,YofP�s Legend _ 6 Project Boundary Q Parcel Boundaries Impervious Flag Yes No Coordinate system: Henna* County {k) Souree: Hennepin Canty. and SEH. sh SEH 'v of � z r eek` r j � � k K rix • f Sb _ Y Legend _ 6 Project Boundary Q Parcel Boundaries Impervious Flag Yes No Coordinate system: Henna* County {k) Souree: Hennepin Canty. and SEH. sh SEH Q co O C) N M O N O Q 0. m 0 in CL m 4e 5 - x f y x,F iii /lam. �t 4 � S �-'S, �• '¢y. ���;, - >♦r il';. ia i+ ' VIJ gy�pp•• 4 �' .• •! =k d d �... ,,,gee• � +� ��'. tom` 11-00 W .r M!tip�Tl r. ._ R• Y Pig �r 5e .'5•'3 It CITY OF NEW HOPE REDEVELOPED ELIGIBILITY ASSESSMENT Winnetka Property Assessment Percent Occupied 0t�p Feet Legend -=" Project Boundary QParcel Boundaries Percent Occupied 0 % Developed 1 - 15 % Developed > 15 % Developed Coordinade System: Hervtepin County (ft) Source: Hennepin County, and SEH. sn f SEH - >♦r - � _ i+ ' VIJ gy�pp•• 4 �' .• •! =k d d X CITY OF NEW HOPE REDEVELOPED ELIGIBILITY ASSESSMENT Winnetka Property Assessment Percent Occupied 0t�p Feet Legend -=" Project Boundary QParcel Boundaries Percent Occupied 0 % Developed 1 - 15 % Developed > 15 % Developed Coordinade System: Hervtepin County (ft) Source: Hennepin County, and SEH. sn f SEH Report on Building Condition Building ID/Business Name/Address: Structurally Substandard Building (Y/N): Rural Life Insurance Co 1-1 Y Step One Under the tax increment law, specifically, Minnesota Statutes, Section 469.174, Subdivision 10, a building is structurally substandard if it contains "defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance." The above building, based upon actual interior inspection and review of building permit records, meets the above -referenced definition of structurally substandard for the following reasons: Essential Utilities & Facilities Deficient in facilities for disabled: accessibility parking incorrectly signed; exterior accessible route too steep; lack of accessible hardware at interior doors; Iack of maneuvering clearance and accessible features at toilet rooms • Lack of accessible features for employees: inaccessible sink (knee clearance) • Lack of non-absorbent wall surface at toilet fixtures • Installation of drinking fountain required due to occupant load Light & Ventilation • Deficient in meeting Mechanical code: for building construction prior to 1989, mechanical systems do not provide sufficient number of air exchanges; combustion air for stock room furnace is drawn from area that a fuel -fired forklift is operated; waste pipe not capped at location of removed drinking fountain; integrity of water heater support brackets is questionable • Various miscellaneous electrical deficiencies are present throughout the store: open wiring at removed light fixtures, missing knockouts and damaged or open junction boxes Fire Protection/Egress • Building size and occupancy require installation of automatic fire sprinkler system • Deficient exterior door: door does not swing in direction of travel • Deficient interior stairs: deficient rise/run; additional handrails required • Lack of smoke detector/detection system on an individual floor and in each bedroom Similar Factors Relatively low ceiling height for modern retail store Exterior wood fascia in need of paint; roof fascia damaged in several locations • Vinyl floor tile in merchandise area in poor condition, causing potential tripping hazards in several locations; timber roof structure at store entrance is low and causes lack of adequate head clearance on an accessible route without proper guards in place; various construction defects present in mechanical rooms (lack of sealed penetrations, insufficient clearance of combustible material at vent pipes, improper construction of wall penetrations at fire dampers) Step Two Notwithstanding the foregoing, the tax increment law also provides that a building may not be considered structurally substandard if it is in compliance with the building code applicable to new buildings or could be modified to satisfy the current building code at a cost of less than 15% of the cost of constructing a new building of the same square footage and type on the same site. 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P.A A T T 0 R N Y s A T L A W ■ Gay Greiter Email ggreiter@krassmonroe.com www.krassmonroe.com Direct Dial (952) 885-4393 April 12, 2004 Douglas G. Hoskin Parking Services, Inc. 2104 Fourth Ave S Minneapolis, NIT 55404 Re: New Hope/Frank's Nursery Site Our File No. 10048-13 Dear Doug: It is my understanding that the City has received approval from the City Engineer regarding the availability of off-site ponding for your proposed redevelopment of the former Frank's Nursery site at 5620 Winnetka Avenue North, in New Hope, and that as a result Armory Development H, LLC will be able to construct 44 townhomes on the site as originally contemplated. In view of the City's efforts to accommodate this project and its convening a special meeting of the Planning Commission on April 20, the City will require that a Contract for Private Development be executed by Armory Development II, LLC and the City at the City Council meeting on the evening of April 26 in order for the City to approve this redevelopment and the associated tax increment financing district at that meeting. I am attaching for your review and comment the draft of Contract for Private Development which was circulated earlier. We will need your assistance to complete Schedule F; this is a list of products and materials to be used in the construction of the townhomes such as you would furnish to prospective buyers. Please let us know if you have any questions about or comments on the form of contract. Very truly yours, KRASS MONROE, P.A. Gay Greiter Attorney at Law cc: Kirk McDonald Daryl Sulander GAWPDATAWNEW T_iOPEWNCOMHOSKIN GGO_.DOC • 8000 Norman Center''rive • Suite 1000 ,Minneapolis, .VIN 55457-1172' y 952.885.5999 Fux: 952.885.5565 • k^r .v. Krass��ionrae.com CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made as of the 26th day of April, 2004, by and between the New Hope Economic Development Authority (the "Authority'), a public body corporate and politic (the "Authority'), having its principal offices at 4401 Xylon Avenue North, New Hope, Minnesota 55428, and Armory Development H, LLC, a Minnesota limited liability company (the "Redeveloper', having offices at 2104 Fourth Avenue South, Minneapolis, Minnesota 55404. WITNESSETH: WHEREAS, the Authority is a political subdivision of the State of 'Minnesota and is governed by a Board of Commissioners (the "Board"); WHEREAS, in furtherance of the Authority's objectives, there has been established a Restated Redevelopment Plan (the "Project Plan") for Redevelopment Project No. 1 (the "Project Area") in the City of New Hope, Minnesota (the "City") to encourage and provide maximum opportunity for private development and redevelopment of certain property in the City which is not now in its highest and best use; WHEREAS, as of the date of this Agreement the Project Plan has been prepared and approved, and the Project Area has been established, pursuant to Minnesota Statutes, Sections 469.001 through 469.047 and 469.090 through 469.108; WHEREAS, in connection with the Project Area and to assist with the financing of the redevelopment contemplated by this Agreement, the City Council of the City has created Tax Increment Financing District No. 04-1 (Special Law) (the "Tax Increment District") pursuant to Minnesota Statutes Section 469.174 et seq. (the "Tax Increment Act") which includes the Redevelopment Property; WHEREAS, in connection with the establishment of the Tax Increment District, the Council has prepared and approved a tax increment financing plan and shall forward it to the County of Hennepin for certification of the original net tax capacity; WHEREAS, the major objectives in establishing the Project Area are to: 1. Promote and secure the prompt development or redevelopment of certain property in the Project Area, which property is not now in productive use or in its highest and best use, in a manner consistent with the City's comprehensive plan and with a minimum adverse impact on the environment and thereby promote and secure the development of other land in the City. 2. Promote and secure additional employment opportunities within the Project Area and the City for residents of the City and surrounding area, thereby improving living standards, reducing unemployment and the loss of skilled and unskilled labor and other human resources in the City. 3. Secure the increased valuation of property subject to taxation by the City, County, School District and other taxing jurisdictions in order to better enable such entities to pay for governmental services and programs required to be provided by them. 4. Provide for the financing and construction of public improvements in and adjacent to the Project Area necessary for the orderly and beneficial development or redevelopment of the Project Area and adjacent areas of the City. 5. Promote the concentration of new desirable residential, commercial, office and other appropriate development or redevelopment in the Project Area so as to maintain the area in a manner compatible with its accessibility and prominence in the City. 6. Encourage local business expansion, improvement, development or redevelopment whenever possible. 7. Create a desirable and unique character within the Project Area through quality land use alternatives and design quality in new and remodeled buildings. 8. Encourage and provide maximum opportunity for private development or redevelopment of existing areas and structures which are compatible with the Plan. 9. Create viable environments which would upgrade and maintain housing stock, maintain housing health and safety quality standards, and maintain and strengthen individual neighborhoods. 10. Stimulate private activity and investment to stabilize and balance the City's housing supply. 11. Eliminate code violations and nuisance conditions that adversely affect neighborhoods. 12. Revitalize property to create a safe, attractive, comfortable, convenient and efficient area for residential use. 13. Recreate and reinforce a sense of residential place and security which creates neighborhood cohesiveness through City investment in neighborhood infrastructure and public improvements, including landscaping, park improvements, local street modifications to reduce traffic impacts, street repaving, curb and gutter replacement, and streetlight updating. 14. Encourage infill development and redevelopment that is compatible in use and scale with surrounding neighborhoods. 15. Rehabilitate the existing housing stock and preserve existing residential neighborhoods wherever possible. 2 lb. Demolish and reconstruct, where necessary, aging residential buildings to preserve neighborhoods. 17. Removal of substandard structures. WHEREAS, under the Tax Increment Act, the Authority is authorized to finance certain costs of a redevelopment project with tax increment revenues derived from a tax increment financing district established within such redevelopment project; WHEREAS, in order to achieve the objectives of the Authority and City in creating the Project Area and in adopting the Project Plan, the Authority is prepared to provide assistance in accordance with this Agreement; and WHEREAS, the Authority believes that the development and redevelopment of the Project Area pursuant to this Agreement, and fulfillment generally of the terms of this Agreement, are in the vital and best interests of the Authority and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws under which the development and redevelopment are being undertaken and assisted. NOW, THEREFORE, in consideration of the premises and the mutual obligation of the parties hereto, each of them does hereby covenant and agree with the other as follows: 3 ARTICLE I DEFINITIONS Section 1.1. Definitions. Iii this Agreement, unless a different meaning clearly appears from the context: "Act' means Minnesota Statutes, Section 469.001 et seq., as amended. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "Authority" means the New Hope Economic Development Authority. "Authority Grant" shall have the meaning given that term in Section 3.4. "Available Tax Increment" means 100% of the Tax Increment from the TIF District. "Building" means one of the structures containing one or more individualresidential units as described in the Minimum Improvements and shown on the Site Plan. "Certificate of Completion" means the certification in the form of Schedule B to be provided to the Redeveloper, or the purchaser of any part, parcel or unit of the Redevelopment Property, pursuant to Section 4.4. "City" means the City of New Hope, Minnesota. "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the building inspector of the City, and shall include at least the following for each building: (1) site plan; (2) foundation plan; (3) basement plans; (4) floor plan for each floor; (5) cross sections of each (length and width); (6) elevations (all sides, except as to a side of existing structure where no construction is to take place); (7) facade and landscape plan; and (8) such other plans or supplements to the foregoing plans as the City may reasonably request. "County" means the County of Hennepin, Minnesota. "Declaration of Restrictive Covenants and Prohibition Against Tax Exemption" means those restrictive covenants substantially in the form of Schedule CT. "Developer Fee" means the fee that the Redeveloper may earn for its performance of its development activities pursuant to this Agreement, subject to the limitations set forth in Section 3.3. "Event of Default" means an action by the Redeveloper described in Section 7.1. 4 "Minimum Improvements" means the improvements to be constructed by the Redeveloper on the Redevelopment Property, which improvements shall consist of 44 townhomes with an average sales price of approximately $222,000 per unit. "Minnesota Environmental Rights Act" means the statutes located at Minnesota Statutes, Section 116B.01 et seq., as amended. "Note" means the Limited Revenue Tax Increment Note in a principal amount not to exceed Four Hundred Thousand Dollars ($400,000), substantially in the form of Schedule C,' and to be issued by the Authority payable to the order of the Redeveloper in accordance with Article M. "Plan" means, collectively, (i) the Restated Redevelopment Plan adopted by the Authority and approved by the City for Redevelopment Project No. 1, and (ii) the Tax Increment Plan. "Pledged Tax Increment" means, in any year, 35% of the Available Tax increment generated by the Redevelopment Property. "Project" means the Redevelopment Property and Minimum Improvements. "Project Area" means Redevelopment Project No. 1 established in accordance with the Act. "Reconciliation Date" means the earlier of December 31, 2007 or 30 days following the sale of all residential units comprising the Minimum Improvements. "Redeveloper" means Armory Development II, LLC, a Minnesota limited liability company, and its permitted successors or assigns. "Redevelopment Property" means the real property upon which the Minimum Improvements are to be constructed, which real property is described in Schedule A. "Site Improvements" means acquisition of the Redevelopment Property and the improvements to be constructed thereon by the Redeveloper as described in Schedule F, and in Article M. "Site Plan" means the plan attached hereto as Schedule D showing the nature and location of the Minimum Improvements. "State" means the State of Minnesota. "Tax Increment" means that portion of the real estate taxes paid with respect to the Redevelopment Property which is remitted to the Authority as tax increment pursuant to the Tax Increment Act. "Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 to 469.1799, as amended and as it may be amended. 5 "Tax Increment District" means Tax Increment Financing District No. 04-1 (Special Law), which includes the Redevelopment Property and which was approved and adopted by the Authority and the City within Redevelopment Project No. 1 pursuant to the Tax Increment Act. "Termination Date" means the expiration date of this Agreement described in Article IX. "Unavoidable Delays" means delays which are the direct result of strikes, delays which are the direct result of unforeseeable and unavoidable casualties to the Minimum Improvements, the Redevelopment Property or the equipment used to construct the Minimum Improvements, delays which are the direct result of governmental actions, delays which are the direct result of judicial action commenced by third parties, citizen opposition or action affecting this Agreement or adverse weather conditions or acts of God. ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS Section 2.1. Representatiniis and Cnvenantq by the Authority. The Authority makes the following representations as the basis for the undertaking on its part herein contained: (a) The Authority is a public body corporate and politic and a political subdivision of the State of Minnesota and is governed by a board of commissioners. Under the provisions of the Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The Authority has created, adopted and approved the Project Area in accordance with the terms of the Act. (c) The Authority has complied with all statutory requirements the Tax Increment Act relating to the creation of the Tax Increment District. (d) The Authority proposes to assist the Redeveloper for the costs of Site Improvements in accordance with the Plan and this Agreement. (e) The Authority proposes to . make the Note payable to the Redeveloper in accordance with the provisions of this Agreement and to pledge tax increment generated by the Tax Increment District to the payment of the principal of and interest on the Note according to its terms. (f) The Authority will cooperate with the Redeveloper with respect to any litigation commenced by third parties in connection with this Agreement. Section 2.2. Rapresentations, Warranlieg and Covenants by the Redevelop . The Redeveloper represents and warrants that: P (a) The Redeveloper is a Minnesota limited liability company organized and in good standing under the laws of the State. (b) The Redeveloper will cooperate with the Authority to rezone the Redevelopment Property for construction of the Minimum Improvements. (c) The Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper or the Authority in the Project Area with respect to the Minimum Improvements may or will be in violation of any environmental law or regulation. The Redeveloper is aware of no facts with respect to the Minimum Improvements, the existence of which would cause it to be in violation of any local, state or federal environmental law, regulation or review procedure or which would give any person a valid claim under the Minnesota Environmental Rights Act. (d) The Redeveloper will use its best efforts to obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (e) The Redeveloper will construct, operate and maintain the Minimum Improvements in accordance with the terms of this Agreement, the Plan and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (f) If an Event of Default on the part of the Redeveloper occurs and if the Authority shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on the part of the Redeveloper under this Agreement, the Redeveloper agrees that it shall, within ten days of written demand by the Authority, pay to the Authority the reasonable fees of such attorneys and such other expenses so incurred by the Authority. (g) The financing arrangements which the Redeveloper has obtained or will obtain to finance construction of the Minimum Improvements will be sufficient to enable the Redeveloper to successfully complete the Minimum Improvements as contemplated in this Agreement. (h) The Redeveloper shall pay all costs for plats, replats, lot splits, preparation of restrictive covenants, easements and any other documentation necessary for the acquisition, construction and sale of the Minimum Improvements and all costs of recording. (i) The construction of the Minimum Improvements, in the opinion of the Redeveloper, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future without the assistance provided by the Authority pursuant to this Agreement. 7 0) The Redeveloper shall construct the Minimum Improvements using the products and materials described in Sehedulf, E. (k) The Redeveloper shall pay the normal and customary City fees and expenses for the approval and construction of the Project including, but not limited to, bonding requirements, building permit fees, state surcharges, sewer accessibility charges (SAC), water accessibility charges (WAC) and park dedication fees. (1) Once acquired by the Redeveloper, the Redevelopment Property shall not become exempt from the levy of ad valorem property taxes, or any statutorily authorized alternative, and any improvements of any kind constructed on the Redevelopment Property shall similarly not become exempt until after the later of the dissolution or other termination of the Tax Increment District or December 31, 2031. Notwithstanding the foregoing language, this restriction shall end upon any termination of this Agreement due to a default by the Authority that is not timely cured as allowed under this Agreement. (m) The Redeveloper agrees, notwithstanding the provisions of Article VI, that it will not assign, convey or lease any interest in the Redevelopment Property or any portion thereof, or this Agreement or any portion thereof, to any tax-exempt entity under the U.S. Internal Revenue Code of 1986, as the same may be amended from time to time, without the prior written approval of the Authority (whose approval shall be conditioned upon the Redeveloper obtaining an agreement upon terms reasonably satisfactory to the Authority from its assignee or lessee to make payments in lieu of tax). (n) The Redeveloper will pay for relocation services and benefits for all owners or tenants of the Redevelopment Property. The Redeveloper may, in lieu of funding such services and benefits, provide a written waiver by the owner or tenant. Such waiver must be in a form acceptable to the Authority. The Redeveloper shall indemnify the Authority for any relocation liabilities arising under applicable law with respect to any portion of the Redevelopment Property. ARTICLE III SITE IMPROVEMENTS; PUBLIC ASSISTANCE; UNDERTAKLNGS OF AUTHORITY AND REDEVELOPER Section 3.1. Constnirtion of Minimum Improvements and Site Improvements. The Redeveloper shall construct the Minimum Improvements and Site Improvements on the Redevelopment Property in accordance with the Construction Plans and will maintain, preserve and keep the Minimum Improvements and Site Improvements in good repair and condition. All contracts for construction of the Minimum Improvements and Site Improvements shall provide that payments for the work thereunder are the sole obligation of the Redeveloper. Neither the City nor the Authority shall have any obligation under such contracts. E. Section 3.2. Metmnolitan C:ounril Grant A.ssistanr.P. The Redeveloper shall provide all documentation required by the Authority to apply for a Metropolitan Council grant to reimburse the Redeveloper for approximately $21,000 of eligible expenses. Upon receipt of all such documentation, the Authority will apply for the grant. The Authority will provide any grant funds received to the Redeveloper on terms consistent with the provisions of the grant. The Redeveloper is responsible for any required environmental remediation; however, the Authority will make, or assist the Redeveloper in making, applications to other public agencies requesting grants or loans for reimbursement of such costs. Funds received for such purpose shall be provided to the Redeveloper to the extent the Redeveloper supplies the Authority with evidence reasonably acceptable to the Authority that Redeveloper has incurred such costs. Section 3.3. Dem er Fee. The Developer Fee shall not exceed 5% of the total of actual land and construction costs, calculated as shown on the Final Sources and Uses Schedule attached as Schedule H. Section 3.4. Reimbursement for Site Improvements. (a) The Redeveloper shall pay contractors, subcontractors and construction managers with whom the Redeveloper has entered into contracts. Upon submission to the Authority of invoices from such contractors and certifications signed by the Redeveloper's project architect or general contractor to the effect that the costs for which payment was made have been incurred in connection with the Site Improvements and upon receipt of lien waivers from such contractors, subcontractors, and construction managers, the Authority shall reimburse a portion of the cost of Site Improvements as follows: (i) Upon the issuance of certificates of occupancy for the first 20 townhomes, the Authority shall reimburse the Redeveloper for up to $400,000 of qualified tax increment - eligible costs (the "Authority Grant"); and (ii) Upon completion of construction of the final 24 townhomes such that those Buildings may be locked and secured, the Authority shall deliver the Note. (b) The Redeveloper shall reimburse the Authority for the Authority Grant if the Redeveloper fails to complete construction of the Minimum Improvements pursuant to the terms of Article IV. (a) The Redeveloper represents that it will not assign the Note to any entity other than its construction lender or another entity approved by the Authority, such approval to be evidenced by the Authority's written consent. The Redeveloper acknowledges that the Authority will not consent to any assignment of the Note to any entity that is not a financial institution or "accredited investor" as defined in the regulations promulgated under the Securities Act of 1933, as amended. 21 (b) The Redeveloper understands that the Note will not be registered or otherwise qualified for sale under the securities laws and regulations of the State or under Federal securities laws or regulations, the Note will not be listed on any stock or other securities exchange, and the Note will not carry a rating from any rating service. Section 3.6. Tax Increment Cerfification. Pursuant to the Plan, the Authority has pledged and shall appropriate the Pledged Tax Increment to the payment of the principal of and interest on the Note, with said payment to be made in accordance with the terms and provisions of the Note. Section 3.7. 1-ce of Tax Tncrement. The Authority shall be free to use the Tax Increment, other than the Pledged Tax Increment, for any purpose for which the Tax Increment may lawfully be used pursuant to applicable provisions of Minnesota law. (a) The Redeveloper shall maintain books and records relating to the financing, construction and sales of the Minimum Improvements in accordance with generally accepted accounting principles consistently applied. (b) It is the intention of the Authority and the Redeveloper that the Redeveloper's profit not exceed 15% of gross sales proceeds, calculated as shown on the Final Sources and Uses Schedule attached as Schedule H. On the Reconciliation Date, the Redeveloper shall furnish to the Authority a full and complete copy of such books and records and a completed Final Sources and Uses Schedule certified by the Redeveloper. If all of the residential units have not been sold by December 31, 2007, for purposes of completing the Final Sources and Uses Schedule the sale price of the unsold units shall be deemed to be the average of the sale price of all units sold in the six (6) months preceding December 31, 2007. (c) In the event the Redeveloper's profit exceeds 15% as calculated above, the Authority shall receive participation to reflect a reduction in necessary public assistance in the amount of one-half (1/2) of any amounts over 15%. The Authority shall receive such participation in the following order of priority: (i) The principal amount of the Note shall be reduced by means of the Authority executing and delivering Annex A to the Note to the Redeveloper; then (ii) The Redeveloper shall repay any payments of principal and interest on the Note made by the Authority prior to the Reconciliation Date together with interest at the rate of 6.75% per annum; then (iii) The Redeveloper shall repay the Authority Grant to the Authority together with interest at the rate of 6.75% per annum. ARTICLE IV 10 CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 4.1. Constniction of Minimum Tmnroyements. The Redeveloper shall perform and pay for all Site Improvements described in Schedule E. Subject to Unavoidable Delays, the Redeveloper shall begin construction of the Minimum Improvements on or about July 1, 2004. The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with this agreement and the Construction Plans to be approved by the City. Section 4.2. Constriction Plans. (a) Prior to the commencement of construction of the Minimum Improvements, the Redeveloper shall submit Preliminary Plans to the Authority consisting of typical floor plans and sketches of the typical exterior and interior of the proposed Minimum Improvements which illustrate the size and character of the proposed Buildings. The Preliminary Plans shall not be inconsistent with the Site Plan, this Agreement or any applicable state and local laws and regulations, insofar as said consistency may be determined at said preliminary stage. If approval of the Preliminary Plans is requested in writing by the Redeveloper at the time of submission thereof to the Authority, the Authority shall approve or reject (in whole or in part) such Preliminary Plans in writing within twenty (20) days after the date of receipt thereof. If no written rejection is made within said twenty (20) days, the Preliminary Plans shall be deemed approved by the Authority. Any rejection shall set forth in detail the reasons therefor. If the Authority rejects the Preliminary Plans, in whole or in part, the Redeveloper may submit new or corrected Preliminary Plans at any time after receipt by the Redeveloper of the notice of rejection. The Authority's approval of the Preliminary Plans shall not be unreasonably withheld. (b) Prior to the Redeveloper's commencement of construction of the Minimum Improvements, the Redeveloper shall submit to the Authority Construction Plans for the Minimum Improvements. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity in all material respects with this Agreement, the Preliminary Plans, and all applicable state and local laws and regulations. The Authority shall approve the Construction Plans in writing if. (i) the Construction Plans conform in all material respects to the terms and conditions of the Preliminary Plans and this Agreement; (ii) the Construction Plans conform to all applicable federal, State and local laws, ordinances, rules and regulations: (iii) the Construction Plans are adequate to provide for the construction of the Minimum Improvements; (iv) the Construction Plans do not provide for expenditures in excess of the funds available to the Redeveloper for the construction of the Minimum Improvements; and (v) no Event of Default has occurred and is continuing. No approval by the Authority shall relieve the Redeveloper of the obligation to comply with the terms of this Agreement and applicable federal, State and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority shall constitute a waiver of any Event of Default. 11 Upon the Redeveloper's submittal of the Construction Plans to the Authority, such Construction Plans shall be deemed approved unless re j ected in writing by the Authority, in whole or in part, within twenty (20) days after the date of their receipt by the Authority. Such rejection shall set forth in detail the reasons therefor. If the Authority rejects any Construction Plans in whole or in part, the Redeveloper shall submit new or corrected Construction Plans within thirty (30) days after written notification to the Redeveloper of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority. The Authority's approval shall not be unreasonably withheld. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements, if constructed in accordance with said plans) comply with the provisions of this Agreement relating thereto. The Construction Plans shall not be rejected due to any objection which could have been raised upon review of the Preliminary Plans and corrected more economically at that time. (c) If the Redeveloper desires to make any material change in the Preliminary Plans or Construction Plans after their approval by the Authority, then the Redeveloper shall submit the proposed change to the Authority for its approval. If the Preliminary Plans or Construction Plans, as modified by the proposed change, conform to the requirements of this Section with respect to such previously approved Construction Plans, the Authority shall approve the proposed change and notify the Redeveloper in writing of its approval. Such change in the Preliminary Plans or Construction Plans shall, in any event, be deemed approved by the Authority unless rejected in writing by the Authority, in whole or in part, within twenty (20) days after receipt of the notice of such change, setting forth in detail the reasons therefor. Section 4.3. Completion of Cnnstnirtion. Subject to Unavoidable Delays, the Redeveloper shall have substantially completed the construction of the Minimum Improvements by June 30, 2007. All work with respect to the Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in conformity with the Construction Plans as submitted by the Redeveloper and approved by the City. The Redeveloper agrees for itself, it successors and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such successors and assigns, shall diligently prosecute to completion the development of the Redevelopment Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be completed within the period specified in this Section. Section 4.4. C',ertificate of C'.omnletion. (a) Promptly after completion of the Minimum Improvements for each Building in accordance with the provisions of this Agreement relating to the obligations of the Redeveloper to construct such improvements (including the date for completion thereof), the Authority will furnish the Redeveloper with a Certificate of Completion for such Building. The Certificate of Completion shall be a conclusive determination and conclusive evidence of the satisfaction and termination of the agreements and covenants in this Agreement and in the Redevelopment Property Deed with respect to the obligations of the Redeveloper and its 12 successors and assigns, to construct the Minimum Improvements for each Building and the date for the completion thereof. (b) if the Authority shall refuse or fail to provide any certificate in accordance with the provisions of this Section 4.4, the Authority shall, within ten (10) days after written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of this Agreement, or is otherwise in default, and what measures or acts will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to obtain such certification. (c) The construction of the Minimum Improvements for each Building shall be deemed to be completed in accordance with the Redeveloper's obligations hereunder when the City has issued a Certificate of Occupancy for any individual residential unit of that Building. ARTICLE V INSURANCE Section 5.1. Tnsurance. (a) The Redeveloper will provide and maintain at all times during the process of constructing the -Minimum Improvements and, from time to time at the request of the Authority, furnish the Authority with proof of payment of premiums on: (i) builder's risk insurance, written on the so-called `Builder's Risk Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so-called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content reasonably satisfactory to the Authority; (ii) comprehensive general liability insurance together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $2,000,000 for each occurrence (to accomplish the above -required limits, an umbrella excess liability policy may be used); and (iii) workers' compensation insurance, with statutory coverage. (b) All insurance required by this Article V shall be taken out and maintained in responsible insurance companies selected by the Redeveloper which are authorized under the laws of the State to assume the risks covered thereby. The Redeveloper will deposit annually with the Authority policies evidencing all such insurance, or a certificate(s) or binder(s) of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V, each policy shall contain a provision that the insurer shall not cancel or modify 13 it without giving written notice to the Redeveloper and the Authority at least thirty (30) days before the cancellation or modification becomes effective. Not less than fifteen (15) days prior to the expiration of any policy, the Redeveloper shall furnish the Authority with evidence satisfactory to the Authority that the policy has been renewed or replaced by another policy conforming to the provisions of this Article V, or that there is no necessity therefor under the terms hereof. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (c) The Redeveloper shall, for time to time, provide the Authority with evidence satisfactory to the Authority that the Redeveloper's subcontractors are maintaining workers' compensation insurance with statutory coverage. ARTICLE VI PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION Section 6.1. Representation as to Redevelnnment. The Redeveloper represents and agrees that its purchase of the Redevelopment Property, and its other undertakings pursuant to this Agreement, are, and will be used, for the purpose of redevelopment of the Redevelopment Property and not for speculation in land holding. The Redeveloper further recognizes that, in view of (a) the importance of the redevelopment of the Redevelopment Property to the general welfare of the Authority; (b) the substantial financing and other public aids that have been made available by the City or the Authority for the purpose of making such redevelopment possible; and (c) the fact that any act or transaction involving or resulting in a significant change in the identity of the parties in control of the Redeveloper or the degree of their control is for practical purposes a transfer or disposition of the property then owned by the Redeveloper, the qualifications and identity of the Redeveloper are of particular concern to the Authority. The Redeveloper fin ther recognizes that it is because of such qualifications and identity that the Authority is entering into this Agreement with the Redeveloper, and, in so doing, is further willing to accept and rely on the obligations of the Redeveloper for the faithful performance of all undertakings and covenants hereby by it to be performed. Section 6.2. PrQhibitian AgainstTransferof Prom and Assignment of Agreement. The Redeveloper represents and agrees that prior to the issuance of the final Certificate of Completion for the Minimum Improvements or the Termination Date: (a) Except only by way of security for the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to the Project under this Agreement, or any other purpose authorized by this Agreement, the Redeveloper (except as so authorized) has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or any transfer in any other mode or form, of this Agreement or the Redevelopment Property or any part thereof or any interest 14 therein, or any contract or agreement to do any of the same, without prior written approval by the Authority in its sole discretion. Notwithstanding the foregoing, the Redeveloper may transfer the Redevelopment Property to any corporation, partnership, or limited liability company controlling, controlled by, or under common control with the Redeveloper. In addition, the Redeveloper may enter into purchase agreements for the sale of individual residential units in the ordinary course of the Redeveloper's business. (b) The Authority shall be entitled to require, except as otherwise provided in this Agreement, as conditions to any such approval that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the Redeveloper's obligations hereunder. (ii) Any proposed transferee, by instrument in writing satisfactory to the Authority, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority, have expressly assumed all of the obligations of the Redeveloper hereunder from which the Redeveloper seeks to be released and agrees to be subject to all of the conditions and restrictions to which the Redeveloper is subject unless the Redeveloper agrees to continue to fulfill those obligations. (iii) There shall be submitted to the Authority for review and prior written approval all instruments and other documents involved in effecting the transfer of any interest in this Agreement or the Redevelopment Property. rip - .Ii I i4-ul.OV,70T.M. (a) The Redeveloper covenants and agrees that the City, the Authority and the governing body members, officers, agents, servants and employees of either of them (collectively, the "Indemnified Parties") shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss or damage to property or any injury to or death of any person occurring at or resulting from any defect in the Minimum Improvements, due to any act, including negligence, of the Redeveloper or of others acting on the behalf or under the direction or control of the Redeveloper; provided, however, that the Redeveloper's indemnification obligations in this subparagraph (a) shall not apply to any loss resulting from negligent, willful or wanton misconduct of any of the Indemnified Parties. (b) The Redeveloper agrees to protect and defend the Indemnified -Parties, now or forever, and further agrees to hold the Indemnified Parties harmless from any claim, demand, suit, action or other proceeding by any person or entity arising or purportedly arising from this Agreement or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements, due to any act, including negligence, of the Redeveloper or of others acting on the behalf or under the direction or control of the Redeveloper; provided, however, that the Redeveloper's indemnification obligations in this subparagraph (b) shall not apply to (i) any loss resulting from any negligent or willful misrepresentation or any negligent, willful or wanton misconduct of any of the Indemnified 15 Parties or (ii) the use of eminent domain if exercised by the Authority to acquire the Private Property. (c) None of the Indemnified Parties shall be liable for any damage or injury to the person or property of the Redeveloper or its officers, agents, servants or employees or any other person who may be on or about the Redevelopment Property or Minimum Improvements due to any act or negligence of any person, other than the negligence or misconduct of an Indemnified Party. (d) None of the Indemnified Parties shall be liable to the Redeveloper or to any third party for any consequential or other damages that may arise out of delays of any kind relating to activities undertaken pursuant to this Agreement, including but not limited to delays due to environmental conditions, court challenges or elements outside the control of the Authority. (e) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the individual capacity thereof. (f) Nothing in this Section 6.3 is intended to waive any municipal liability limitations contained in Minnesota Statutes, particularly Chapter 466. ARTICLE VII EVENTS OF DEFAULT Section 7.1. Events of Default Defined. The following are Events of Default hereunder: (a) Failure of the Redeveloper to submit reasonably satisfactory Construction Plans in accordance with Section 4.2. (b) Failure by the Redeveloper to commence or complete construction of the Minimum Improvements pursuant to the terms, conditions and limitations of Article IV. (c) Failure by the Redeveloper to substantially observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed hereunder. (d) The Redeveloper shall: (i) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the United States Bankruptcy Code or under any similar federal or state law; or (ii) make an assignment for the benefit of its creditors; or 16 (iii) admit in writing its inability to pay its debts generally as they become due; or (iv) be adjudicated as bankrupt or insolvent; or if a petition or answer proposing the adjudication of the Redeveloper as a bankrupt or proposing its reorganization under any present or future federal bankruptcy act or any similar federal or State law shall be filed in any court and such petition or answer shall not be discharged or denied within ninety (90) days after the filing thereof; or a receiver, trustee or liquidator of the Redeveloper or of the Redevelopment Property, or part thereof shall be appointed in any proceeding brought against the Redeveloper and shall not be discharged within ninety (90) days after such appointment, or if the Redeveloper shall consent to or acquiesce in such appointment. (e) Any occurrence which would with the passage of time or giving of notice become an Event of Default as defined above. Section 7.2. Remedies an Default. Whenever any Event of Default referred to in Section 7.1 occurs, the Authority may take any one or more of the following actions after providing thirty (30) days' written notice to the Redeveloper of the Event of Default, but only if the Event of Default has not been cured within said thirty (30) days, or if the Event of Default is not reasonably susceptible to being cured within said thirty (30) -day period (whether due to Unavoidable Delays or otherwise), and the Redeveloper fails to provide the Authority with written assurances, deemed satisfactory in the reasonable discretion of the Authority, that the Event of Default will be cured as soon as reasonably possible: (a) Suspend its performance under this Agreement until it receives assurances from the Redeveloper, deemed adequate by the Authority, that the Redeveloper will cure its default and continue its performance under this Agreement. (b) Terminate this Agreement. (c) Withhold any Certificate of Completion. (d) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to the Authority, including any actions to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant of the Redeveloper under this Agreement. Section 7.3. NoExclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 17 Section 7.4. Nn Additional Waiver Implied by One Waiver. In the event any agreement contained herein should be breached by either party and thereafter waived by the non -breaching party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. ARTICLE VIII ADDITIONAL PROVISIONS Section 8.1. Conflict of Interest. No member, official, or employee of the Authority shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official, or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership, or association in which he or she is interested, directly or indirectly. Section 8.2. Authority Representatives Not Tndividnally Liable. No member, official, Or employee of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority or for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of this Agreement, except in the case of willful misconduct. Section 8.3. . The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements it will comply with all applicable equal employment opportunity and non-discrimination laws, ordinances and regulations. Section 8.4. Restrictions an T Tse. The Redeveloper shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, rental, use or occupancy of the Redevelopment Property or any part thereof. Section 8.5. Titles, of Articles and Sections. Any titles of the several Articles, and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 8.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, transmitted by facsimile, delivered by a recognized overnight courier or delivered personally to the address of such party below, or at such other address as a party may, from time to time, designate in writing and forward to the other: 18 Redeveloper: Armory Development II, LLC 2104 Fourth Avenue South Minneapolis, MN 55404 Attn: Douglas G. Hoskin Authority: New Hope Economic Development Authority 4401 Xylon Av N New Hope, MN 55428 Attn: Daniel J. Donahue, City Manager Section 8.7. Countemarts. This agreement may be executed in any number of counterparts, which counterparts shall together constitute one and the same instrument. ARTICLE IX TERMINATION OF AGREEMENT Section 9.1.. Termination. The Authority may terminate this Agreement as provided herein, and otherwise this Agreement shall terminate upon payment of the Note in accordance with its terms and the discharge of all of the Authority's and Redeveloper's respective obligations hereunder, but no such termination shall terminate any indemnification or other rights or remedies arising hereunder due to any Event of Default which occurred prior to such termination. Section 9.2. Section -,to Survive Termination. Section 6.3 shall, in addition to the other surviving provisions referenced in Section 9.1, survive the termination of this Agreement. In addition, the terms and conditions of the Declaration of Protective Covenants and Prohibition Against Tax Exemption shall remain in effect until December 31, 2031. IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf by its duly authorized representatives, and the Redeveloper has caused this Agreement to be duly executed in its name and behalf by its duly authorized representative, on or as of the date of first above written. GAWPDATAMNEW HOPE, 300MCONTRACTV2.DOC (Signature pages follow) 19 Dated: 2004. NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY :y Its President i -x: , Its Executive Director STATE OF MINNESOTA ) )ss COUNTY OF HENNEPIN ) On this day of , 2004, before me, a notary public within and for Hennepin County, personally appeared and to me personally known who by me duly sworn, did say that they are the President and Executive Director, respectively, of the New Hope Economic Development Authority, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public Authority Signature Page - Contract for Private Redevelopment 20 Dated: 2004. ARMORY DEVELOPMENT H, LLC, a Minnesota limited liability company By Douglas G. Hoskin Its: Managing Member STATE OF MRIT ESOTA ) ss COUNTY OF ) On this day of , 2004, before me, a notary public within and for County, personally appeared Douglas G. Hoskin, to me personally Down and who by me duly sworn, did say that he is the Managing Member of Armory Development II, LLC, a Minnesota limited liability company, and acknowledged the foregoing instrument on behalf of said company. Notary Public Redeveloper Signature Page - Contract for Private Redevelopment 21 SCHEDULE A DESCRIPTION OF REDEVELOPMENT PROPERTY The former Frank's Nursery & Crafts site, 5620 Winnetka Avenue North, New Hope, Minnesota, PIN# 05-118-21-32-0007 22 SCHEDULE B CERTIFICATE OF COMPLETION WHEREAS, the New Hope Economic Development Authority, a body corporate and politic (the "Authority") and Armory Development II, LLC, a Minnesota limited liability company (the "Redeveloper"), have entered into a Contract for Private Redevelopment (the "Agreement") dated April 26, 2004, regarding certain real property located in a tax increment financing district in the City (hereinafter referred to and referred to in the Agreement as the "Redevelopment Property'); and WHEREAS, the Agreement contains certain conditions and provisions requiring the Redeveloper to construct improvements upon the Redevelopment Property (hereinafter referred to and referred to in the Agreement as the "Minimum Improvements"); and WHEREAS, Section 4.4 of the Agreement requires the Authority to provide an appropriate instrument promptly after the substantial completion (as defined in the Agreement) of the Minimum Improvements so certifying said substantial completion; NOW, THEREFORE, in compliance with said Section 4.4 of the Agreement, this is to certify that the Redeveloper has substantially completed the Minimum Improvements in accordance with the conditions and provisions of the Agreement relating solely to the obligations of the Redeveloper to construct the Minimum Improvements (including the dates for beginning and completion thereof), and this certification shall be a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement with respect to the obligations of the Redeveloper, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion thereof. 23 Dated: 2004 NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY By Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) On this day of , 2004, before me, a notary public, within and for Hennepin County, personally appeared and to me personally known who by me duly sworn, did say that they are the President and Executive Director, respectively, of the New Hope Economic Development Authority, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public 24 SCHEDULE C NOTE $400,000.00 e 200 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY LIMITED REVENUE TAX INCREMENT NOTE The New Hope Economic Development Authority (the "Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the order of Armory Development II, LLC (the "Owner"), solely from the source, to the extent and in the manner hereinafter provided, the principal amount of this Note, being Four Hundred Thousand Dollars ($400,000.00) (the "Principal Amount"), together with interest on the unpaid principal balance from the date of this Note until paid at the rate of Six and Three/Fourths Percent (6.751/o) per azanum and payable on the dates described below (the "Payment Dates') and in the amounts as hereinafter defined (the "Payments"). This Note is issued pursuant to that certain Contract for Private Redevelopment by and between the Authority and the Owner dated April 26, 2004 (as amended, modified, supplemented or restated from time to time, the "Agreement"). This Note is subject to the terms, conditions and provisions of the Agreement and the notations on Annex A attached to this Note and made a part hereof. Capitalized terms in this Note not defined herein shall have the definitions given those terms in the Agreement. The Principal Amount of this Note may be reduced by the Authority in the circumstances described in Section 3.8 of the Agreement and to the extent provided therein. The adjustment, if any, in the principal amount of this Note shall be noted on Annex A hereto and certified by the Authority. The Payment Dates shall commence on August 1 of the first year of receipt of Tax Increment from the construction of the Minimum Improvements and on each February l and August 1 thereafter until and including December 31, 2031 unless earlier paid in accordance with the terms of this Note. All Payments made by the Authority on this Note shall be applied first to accrued interest and then to principal. Any accrued interest on this Note not paid on any Payment Date shall be added on such Payment Date to the principal amount of this Note. The Principal Amount is subject to prepayment at the option of the Authority in whole or in part at any time without penalty. 25 Each Payment on this Note is payable in any coin or currency of the United States of America which on the date of such Payment is legal tender for public and private debts and shall be made by check or draft made payable to the Owner and mailed to the Owner at its postal address within the United States which shall be designated from time to time by the Owner. The Note is a special and limited obligation and not a general obligation of the Authority, which has been issued by the Authority pursuant to and in 6x11 conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Section 469.178, subdivision 4, to aid in financing a project, as therein defined, of the Authority consisting generally of defraying certain public redevelopment costs incurred and to be incurred by the Authority within and for the benefit of its Redevelopment Project No. 1. THE NOTE IS NOT A GENERAL OBLIGATION OF THE AUTHORITY OR THE STATE OF MINNESOTA {THE "STATE', AND NEITHER THE AUTHORITY, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN PLEDGED TAX INCREMENT, AS DEFINED BELOW. The Payment of this Note due on any Payment Date is payable solely from and only to the extent that the Authority shall have received as of such Payment Date Pledged Tax Increment, as defined in the Agreement. In the event that Pledged Tax Increment is not sufficient to pay when due the principal of and interest on this Note, the failure of the Authority to pay the principal of and interest on this Note then due shall not constitute a default hereunder. The Authority shall pay on each Payment Date to the Owner the Pledged Tax Increment. On December 31, 2031, the maturity date of this Note, any unpaid portion shall be deemed to have been paid in full. This Note shall not be payable from or constitute a charge upon any funds of the Authority, and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds, except the Pledged Tax Increment, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or of any other public body, and neither the Authority nor any director, commissioner, council member, board member, officer, employee or agent of the Authority, nor any person executing or registering this Note, shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. The Authority makes no representation or covenant, express or implied, that the revenues described herein will be sufficient to pay, in whole or in part, the amounts which are or may otherwise become due and payable hereunder. The Authority's payment obligations hereunder shall be further conditioned on the fact that there shall not at the time have occurred and be continuing an Event of Default under the M Agreement, and, further, if pursuant to the occurrence of an Event of Default under the Agreement the Authority elects to terminate the Agreement, the Authority shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to the provisions of the Agreement for a fuller statement of the obligations of the Redeveloper and of the rights of the Authority thereunder, and said provisions are hereby incorporated by reference into this Note to the same extent as though set out in full herein. The execution and delivery of this Note by the Authority, and the acceptance thereof by the Redeveloper, as the initial Registered Owner hereof, shall conclusively establish this Note as the "Note" (and shall conclusively constitute discharge of the Authority's obligation to issue and deliver the same to the Redeveloper) under the Agreement. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the Board of Commissioners of the New Hope Economic Development Authority, by its Commission Members, has caused this Note to be executed by the manual signatures of the President and the Executive Director of the Authority and has caused this Note to be dated 200 NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY By Its ' By Its Executive Director 27 It is hereby certified that the foregoing Note, as originally issued on the day of , 200was on said date registered in the name of the New Hope Economic Development Authority, a public body corporate and politic and that, at the request of said Registered Owner of this Note, the undersigned has this day registered this Note as to principal and interest on the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. Name of Date of Signature of Rev stered fhwner Registration Secretary Armory Development 11, LLC, -,-1200. a Minnesota limited liability company 28 The undersigned hereby certify that, as a result of the calculation set forth in Section 3.8 of the Agreement, the original principal amount of the Note is $ Dated: 20 NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY Its President By Its 29 SCHEDULE D SITE PLAN 30 SCHEDULE E SITE IMPROVEMENTS • Acquisition of Redevelopment Property • Building demolition • Site clearance • Environmental remediation, if necessary • Sanitary sewer • Water mains and stubs • Storm sewers and storm water system elements, including ponding, both on and off site • Private streets, including curb and gutter • Landscaping and irrigation according to City -approved landscape plans • Pedestrian improvements pursuant to City -approved site plans • Grading and import/export of soil in accordance with City -approved grading plans • Retaining walls and fences 31 SCHEDULE F DESCRIPTION OF PRODUCTS AND MATERIALS [Redetieloper to furnish] 32 SCHEDULE G DECLARATION OF RESTRICTIVE COVENANTS AND PROHIBITION AGAINST TAX EXEMPTION This Declaration is made and executed as of the day of 3200 _ by Armory Development H, LLC, a Minnesota limited liability company ("Declarant"). Recitals A. Declarant is fee owner of the premises located in the County of Hennepin, State of Minnesota described on Exhibit A attached hereto (the "Property"). B. The New Hope Economic Development Authority, a public body corporate and politic (the "Authority") has entered into a Contract for Private Redevelopment dated Aril 26, 2004 with the Declarant (the "Redevelopment Agreement"). The Redevelopment Agreement provides for certain assistance, financial and otherwise, to be provided by the Authority in connection with the construction of townhomes by the Declarant on the Property. NOW, THEREFORE, in consideration of the foregoing, Declarant, for itself and its successors and assigns, does hereby declare that the Property shall be owned, used, occupied, sold and conveyed subject to the following covenants and restrictions: 1. No part of the Property shall become tax exempt from the levy of ad valorem property taxes, or any statutorily authorized alternative, until December 31, 2031. 2. The covenants and restrictions herein contained shall run with the title to the Property and shall be binding upon all present and future owners and occupants of the Property; provided, however, that the covenants and restrictions herein contained shall inure only to the benefit of the Authority and may be released or waived in whole or in part at any time, and from time to time, by the sole act of the Authority, and variances may be granted to the covenants and restrictions herein contained by the sole act of the Authority. These covenants and restrictions shall be enforceable only by the Authority, and only the Authority shall have the right to sue for and obtain an injunction, prohibitive or mandatory, to prevent the breach of the covenants and restrictions herein contained, or to enforce the performance or observance thereof. 3. The covenants and restrictions herein contained shall remain in effect until December 31., 2031 and thereafter shall be null and void. 4. If any one or more of the covenants or restrictions contained in this Declaration are held to be invalid or enforceable, the same shall in no way affect any of the other provisions of this Declaration, which shall remain in full force and effect. 33 ARMORY DEVELOPMENT II, LLC, a Minnesota limited liability company By Douglas G. Hoskin Its: Managing Member STATE OF MINNESOTA } ss COUNTY OF ) On this day of , 2UU4, betore me, a notary public within and for County, personally appeared Douglas G. Hoskin, to me personally known and who by me duly sworn, did say that he is the Managing Member of Armory Development II, LLC, a Minnesota limited liability company, and acknowledged the foregoing instrument on behalf of said company. 34 [to be added] Legal Description for Declaration of Restrictive Covenants and Prohibition Against Tax Exemption 35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 SCHEDULE H FINAL SOURCES AND USES SCHEDULE REVFNUFS Gross Sales Proceeds .................................................. $ TOTAL SOURCES .................................................... EXPENSES Land Costs: Land and Building Acquisition: Acquisition................................................................. LeaseBuyout............................................................. Site Preparation: Geotechnical.............................................................. Grading...................................................................... Engineering........................................ ...................... Survey........................................................................ Demolition................................................................. Environmental Testing - Phase 2 ................................ Public Improvements: Water and Sanitary Sewer ......................................... Staking and Layout .................................................... Irrigation..................................................................... Landscaping...................................................... Lighting...................................................................... Site Utilities................................................................ Fencing...................................................................... Streets and Sidewalks: Paving........................................................................ Sidewalk Improvements ............................................. Total Land Costs ................................................. Construction Costs......................................................... Soft Costs: SoftCosts...................................................................... Taxes............................................................................. - FinanceFees ............................................................... Developer Fee (not to exceed 5% of lines 20+21) ........ TOTAL USES (lines 20+21+26) ............................... Less: Authority Grant ....................................................... Limited Tax Increment Revenue Note .................... Metropolitan Council and Other Grants .................. Net Development Costs (line 27 - line 31) ............... PROFIT (line 2 - line 32) ............................................ PROFIT % (line 33 - line 2) (may not exceed 15%) .. 36 Hennepin County Taxpayer Services Department A-600 Hennepin County Government Center Minneapolis, Minnesota 55487-0060 April 2, 2004 James Casserly Krass Monroe, P.A. 8000 Norman Center Drive Suite 1000 Minneapolis, MN 55437-1178 Re: New Hope Redevelopment TIF District 04-1 (Special Legislation) Dear Mr. Casserly: Enclosed is a report from Richard P. Johnson, Hennepin County Deputy Administrator, to the Hennepin County Board of Commissioners, concerning the proposed New Hope Redevelopment TIF District 04-1 (Special Legislation)/ Please arrange to have the report entered into the record of the public hearing of the New Hope City Council on April 12, 2004, to reflect the input of Hennepin County, as provided by Minnesota Statutes, Section 469.175, Subd. 2. If you have any questions about this information, please call me at 612-348-5076. Sincerely, Jean M. Bierbaum, Senior Administrative Assistant Administrative Services Division CC Kirk McDonald, City of New Hope, 4401 Xylon Avenue North, New Hope MN 55428 Mary E. Molzahn, Krass Monroe, P.A. RevuNewHope04-1 SpedalLeglslailon4122004JTransmlttalLetter An Equal Opportunity Employer Recycled Paper Memo DATE: April 2, 2004 TO: Board of County Commissioners FROM: Richard P. Johnson Deputy County Administrator' P tY SUBJECT: Proposed New Hope Redevelopment TIF District 041 (Special Legislation) Hearing Scheduled: Monday, April 12, 2004 at 7:00 p.m., New Hope City Hall. P*a History: New Hope obtained Special Legislation from the 2003 Legislature to assist with the development of approximately 130 acres near Bass Lake Road and Winnetka Avenue North. The Special Legislation permits New Hope to create a number of TIF Districts with provisions not available under general TIF law. For each TIF District created: 1) the five-year rule for commitment of all expenditures has been extended to nine years; 2) the 10% administrative expenses generally considered to be "outside" the TIF District will be treated as expenses from "within" the TIF District(s); 3) New Hope opted to spend an additional 15% "outside" the TIF District(s) for acquisition and public improvements for housing purposes; 4)13 parcels listed in the Special Legislation are deemed substandard for qualifying purposes; 5) New Hope can create TIF Districts under the Special Legislation only until 1213112013; 6) in order to implement the provisions of the Special Legislation, the legislation must be approved by resolution by the city, school district and Hennepin County, and New Hope must file the Certificate of Approval of Special Law with the Secretary of State prior to the beginning of the 2004 Legislative Session. New Hopp requested Special Legislation because a study of the redevelopment of four areas, funded by a Livable Communities Grant from the Metropolitan Council, showed that development would be most effective if conducted in stages. However, part of the area could not qualify as blighted and could not, therefore, be developed as a TIF District. New Hope also concluded that tax increment generated by some of the early stage development would be needed for later stage development. General TIF pooling limitations would not make enough of the tax increment available for this purpose without the assistance of Special Legislation. The Special Law pooling permits pooling of up to 40% of the tax increment, but only among other TIF Districts created under the Special Legislation. The special pooling may occur only for a period of 20 years_ The four areas for redevelopment are 1) Bass Lake Road Apartment Area; 2) Winnetka Avenue East area; 3) Winnetka Avenue West Area; and 4) Northeast Bass Lake Road/Winnetka Avenue Area. Redevelopment TIF District 04-1 (Special Law): This is the second TIF District under the Special Law and contains PID 05-118-21-32-0007 at 5620 Winnetka Avenue North. The site will be developed with 44 townhomes, to be completed in two phases. Phase I will construct 20 units in 2004 and Phase II will construct 24 units in 2005. The TIF Plan does not identify whether the housing will be market rate or whether any of the units will be available to low -moderate income residents. Fiscal Impact: Indebtedness of $2,687,500 will be incurred. The estimated captured tax capacity upon completion at January 2, 2006, will be $90,420. The Source of Funds spreadsheet estimates a total tax increment of $6,000,000 over its 26 -year tax increment generating life. Approximately 23% of the total TIF -related costs of $9,287,500, or $2,150,000 will be expended for land acquisition, site improvements and installation of public utilities and streets and sidewalks within TIF District 04-1. Continued... April 2, 2004 New Hope Redevelopment TIF District 04-1 (Special Law) Page 2 Sources of Public Funds: Uses of Funds Tax Increment $6,000,000 Land/Bldg Acquisition $1,700,000 Investment Earnings 600,000 Site improvements 150,000 Bond Proceeds 2,687,500 Installation of Public Utilities 150,000 Total Sources of Funds $9,287,500 Streets and Sidewalks 150,000 Bond Principal Payments 2,687,500 Bond Interest Payments 1,612,500 Loan/Note Interest Payments 1,612,500 Administrative Costs 600,000 Transfers Out 625.000 Total Project Costs $9,287,500 SUMMARY: TIF District 04-1 (Special Law) is being created pursuant to Laws of Minnesota 2003, Chapter 21, Article 10, Section 10, which has been approved by the School District, the City of New Hope and the Hennepin County Board of Commissioners. A copy of this report will be sent to the City of New Hope with a request that it be entered into the public record of the April 12, 2004, public hearing, to reflect the County's position on this proposal. (w:RewNewHope04-15pedaiLegislation4122004J) Hennepin Hennepin County Taxpayer Services Department A -60O Hennepin County Government Center Minneapolis, Minnesota 55487-0060 April 2, 2004 James Casserly Krass Monroe, P.A. 8000 Norman Center Drive Suite 1000 Minneapolis, MN 55437-1178 Re: New Hope Redevelopment TIF District 04-1 (Special Legislation) Dear Mr. Casserly: Enclosed is a report from Richard P. Johnson, Hennepin County Deputy Administrator, to the Hennepin County Board of Commissioners, concerning the proposed New Hope Redevelopment TIF District 04-1 (Special Legislation)/ Please arrange to have the report entered into the record of the public hearing of the New Hope City Council on April 12, 2004, to reflect the input of Hennepin County, as provided by Minnesota Statutes, Section 469.175, Subd. 2. If you have any questions about this information, please call me at 612-348-5076. Sincerely, Jean M. Bierbaum, Senior Administrative Assistant Administrative Services Division CC X -irk McDonald, City of New Hope, 4401 Xylon Avenue North, New Hope MN 55428 Mary E. Molzahn, Krass Monroe, P.A. RevuhlewHope04-1 SpecialL.egislabon4122004JTransmiUalLoWr An Equal Opportunity Employer Recycled Paper Memo DATE: April 2, 2004 TO: Board of County Commissioners FROM: Richard P. Johnson, Deputy County De u Coun Administrator SUBJECT: Proposed New Hope Redevelopment TEF District 04-1 (Special Legislation) Hearing Scheduled: Monday, April 12, 2004 at 7:00 p.m., New Hope City Hall. History: New Hope obtained Special Legislation from the 2003 Legislature to assist with the development of approximately 130 acres near Bass Lake Road and Winnetka Avenue North. The Special Legislation permits New Hope to create a number of TIF Districts with provisions not available under general TIF law. For each TIF District created: 1) the live -year rule for commitment of all expenditures has been extended to nine years; 2) the 10% administrative expenses generally considered to be "outside" the TiF District will be treated as expenses from "within" the TIF District(s); 3) New Hope opted to spend an additional 15% "outside" the TIF Districts) for acquisition and public improvements for housing purposes; 4) 13 parcels listed in the Special Legislation are deemed substandard for qualifying purposes; 5) New Hope can create TIF Districts under the Special Legislation only until 12/3112013; 6) in order to implement the provisions of the Special Legislation, the legislation must be approved by resolution by the city, school district and Hennepin County, and New Hope must file the Certificate of Approval of Special Law with the Secretary of State prior to the beginning of the 2004 Legislative Session. New Hope requested Special Legislation because a study of the redevelopment of four areas, funded by a Livable Communities Grant from the Metropolitan Council, showed that development would be most effective if conducted in stages. However, part of the area could not qualify as blighted and could not, therefore, be developed as a TIF District. New Hope also concluded that tax increment generated by some of the early stage development would be needed for later stage development. General TIF pooling limitations would not make enough of the tax increment available for this purpose without the assistance of Special Legislation. The Special Law pooling permits pooling of up to 40% of the tax increment, but only among other TIF Districts created under the Special Legislation. The special pooling may occur only for a period of 20 years. The four areas for redevelopment are 1) Bass Lake Road Apartment Area; 2) Winnetka Avenue East area; 3) Winnetka Avenue West Area; and 4) Northeast Bass Lake Road/Winnetka Avenue Area. Redevelopment TIF District 04-1 (Special Law): This is the second TIF District under the Special Law and contains PID 05-118-21-32-0007 at 5620 Winnetka Avenue North. The site will be developed with 44 townhomes, to be completed in two phases. Phase I will construct 20 units in 2004 and Phase II will construct 24 units in 2005. The TIF Plan does not identify whether the housing will be market rate or whether any of the units will be available to low -moderate income residents. Fiscal Impact: Indebtedness of $2,687,500 will be incurred. The estimated captured tax capacity upon completion at January 2, 2006, will be $90,420. The Source of Funds spreadsheet estimates a total tax increment of $6,000,000 over its 26 -year tax increment generating life. Approximately 23% of the total TIF -related costs of $9,287,500, or $2,150,000 will be expended for land acquisition, site improvements and installation of public utilities and streets and sidewalks within TIF District 04-1. Continued... April 2, ZUU4 New Hope Redevelopment TIF District 04-1 (Special Law) Page 2 Sources of Public Funds: Uses of Funds Tax Increment $6,000,000 Land/Bldg Acquisition $1,700,000 Investment Earnings 600,000 Site Improvements 150,000 Bond Proceeds 2.687.500 Installation of Public Utilities 150,000 Total Sources of Funds $9,287,500 Streets and Sidewalks 150,000 Bond Principal Payments 2,687,500 Bond Interest Payments 1,612,500 Loan/Note Interest Payments 1,612,500 Administrative Costs 600,000 Transfers Out _ 625.000 Total Project Costs $9,287,500 SUMMARY: TIF District 04-1 (Special Law) is being created pursuant to Laws of Minnesota 2003, Chapter 21, Article 10, Section 10, which has been approved by the School District, the City of New Hope and the Hennepin County Board of Commissioners. A copy of this report will be sent to the City of New Hope with a request that it be entered into the public record of the April 12, 2004, public hearing, to reflect the County's position on this proposal. (w.RevuNewHope04-15peciali..egislation4122004J) COUNCIL REQUEST FOR ACTION Originating Department Approved for Agenda Agenda Section Community Development 4-26-04 Public Hearin Item No. By: Kirk McDonald, Director of CD By:, �.. 2 Am Baldwin, CD Assistant PUBLIC HEARING: A RESOLUTION MODIFYING THE RESTATED REDEVELOPMENT PLAN AND TAX INCREMENT FINANCING PLANS FOR REDEVELOPMENT PROJECT NO. 1 AND TAX INCREMENT FINANCING DISTRICTS NOS. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1, 02-1 AND 03-1(SPECIAL LAW); CREATING TAX INCREMENT FINANCING DISTRICT NO. 04-1(SPECIAL LAW) AND ADOPTING A TAX INCREMENT FINANCING PLAN RELATING THERETO. (IMPROVEMENT PROJECT NO. 733) This is the public hearing tabled at the April 12, 2004, City Council meeting. REQUESTED ACTION Staff and consultants are recommending that the City Council approve the attached: Resolution Modifying the Restated Redevelopment Plan and Tax Increment Financing Pians for Redevelopment Project No. 1 and Tax Increment Financing Districts Nos. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1, 02-1 and 03-1 (Special Law); Creating Tax Increment Financing District No. 04-1 (Special Law) and Adopting a Tax Increment Financing Plan Relating Thereto. The resolution was prepared by Krass Monroe, the city's redevelopment financial consultant, and Jim Casserly will be in attendance at the meeting to assist with the public hearing and answer questions. This is the resolution that will create the Frank's Nursery Tax Increment Financing District. Procedurally, per correspondence from Krass Monroe, the Council should take the following steps at the beginning of the public hearing: • Call for the public hearing at the City Council meeting. • Suspend the Council meeting and call the EDA meeting to order. • EDA should adopt the resolution on the EDA agenda making findings and recommendations to the City Council. • Adjourn or suspend EDP, meeting and return to City Council public hearing. • Conduct public hearing and approve City Council resolution. POLICY/PAST PRACTICE The EDA and City Council have created tax increment financing districts in the past to facilitate redevelopment projects. MOTION BY (�lCC SECOND BY TO: C °-1C A h C NJ I:RFAIPLANNING1Livable Communities\Q-cc Public Headng Franks TIF.doc Request for Action Page 2 4-26-04 BACKGROUND This public hearing creates the second district that is a result of many steps that have been taken to create new tax increment financing districts within the Livable Communities redevelopment area in the vicinity of Bass Lake Road and Winnetka Avenue. • In February/March 2003, the city requested special legislation from the State Legislature to allow flexibility in the creation of these districts to assist with redevelopment efforts. • On June 8, 2003, the special law was signed by Governor Tim Pawlenty. • At the September 22, 2003, Council meeting, the City Council approved a resolution approving the legislation. • In October, the special legislation was approved by the Hennepin County Board of Commissioners. • At the February 9, 2004, Council meeting, the City Council approved a resolution calling for this public hearing. • After the resolution calling for the public hearing was approved, proper notifications were sent to the appropriate jurisdiction notifying them of this hearing, including Hennepin County and District 281. Attached to the resolution are a number of exhibits including a Tax Increment Financing Plan, map, cash flow analysis, the But For Analysis and sourcesluses of funds statement. These items will be explained in further detail by Jim Casserly. Also attached are excerpts from the Redevelopment Eligibility Assessment Report, as prepared by Short Elliot Hendrickson. A full copy of the report is available for review at city hall. The report states that the creation of this district meets all of the appropriate criteria. The only response the city has received regarding the public hearing to date is the enclosed report from Richard Johnson, Hennepin County deputy administrator to the Hennepin County Board of Commissioners. The county has requested that the City Council have the report entered into the record of the public hearing. Project The project to be developed is located within the TIF district and consists of the construction of approximately 44 units of owner -occupied townhome units to be constructed in 2004 and 2005. Upon completion of both phases, the city's tax base will increase by approximately $9,000,000. "But For" Analysis The Frank's Nursery site is located in an area of the city that has been documented and designated as a potential redevelopment area. The city has received a Metropolitan Council Livable Communities Grant to study four different sites or areas within the overall Bass Lake Road/Winnetka study area and this site is one that has been studied extensively. Additionally, this site is identified for redevelopment and inclusion in a tax increment financing district in the city's Comprehensive Plan. Resolution The resolution states, in part, that: • It has been proposed and approved by the New Hope Economic Development Authority (the "EDA") that the Council approve and adopt the proposed modifications to the Restated Redevelopment Plan (the "Plan") for Redevelopment Project No. 1 (the "Project Area") reflecting increased project costs and increased bonding authority within the Project Area, pursuant to and in accordance with Minnesota Statutes, Sections 469.001 to 469.047, 469.124 to 469.134 and 469.090 to 469.108, inclusive, as amended and supplemented from time to time. Request for Action Page 3 4-26-04 It has been further proposed ana approved by the EDA that trie council approve ana adopt the proposed modifications to the Tax Increment Financing Plans (the "Existing TIF Plans") for Tax Increment Financing Districts Nos. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1, 02-1 and 03-1 (Special Law) (the "Existing TIF Districts") reflecting increased project costs and increased bonding authority within the Project Area pursuant to and in accordance with Minnesota Statutes, Sections 469.174 to 469.1799 and 469.090 to 469.108, inclusive, as amended and supplemented from time to time. It has been further proposed and approved by the EDA that the Council approve the creation of proposed Tax Increment Financing District No. 04-1 (Special Legislation) (the "Proposed TIF District") within the Project Area and approve and adopt the proposed Tax Increment Financing Plan (the "Proposed TIF Plan") relating thereto pursuant to and in accordance with Minnesota Statutes, Sections 469.174 to 469.1799, and 469.090 to 469.108, and Laws of Minnesota 2003, Chapter 21, Article 10, Section 10, inclusive, as amended and supplemented from time to time. The EDA has caused to be prepared and this Council has investigated the facts with respect thereto a modified plan for the project area and modified existing TIF plans for the existing TIF districts clarifying the available sources of revenue and reflecting increased project costs and increased bonding authority within the project area, and a proposed TIF plan for the proposed TIF district defining more precisely the property to be included, the public costs to be incurred and other matters relating thereto. • The EDA and the Council have performed all actions required by law to be performed prior to the approval and adoption of the modifications to the plan and existing TIF plans and the approval and adoption of the proposed TIF plan. • The Council hereby determines that it is necessary and in the best interests of the city and the EDA at this time to approve and adopt the modifications to the plan and existing TIF plans, to create the proposed TIF district and to approve and adopt the proposed TIF plan relating thereto. The resolution states the following findings: • The Council hereby finds, determines and declares that the assistance to be provided through the adoption and implementation of the modified plan, modified existing TIF plans and proposed TIF plan is necessary to assure the development and redevelopment of the project area. • The Council hereby finds, determines and declares that the plans conform to the general plan for the development and redevelopment of the city as a whole in that they are consistent with the city's Comprehensive Plan. The Council hereby finds, determines and declares 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 Council hereby finds, determines and declares that the modification, approval and adoption of the Plans is intended and in the judgment of this Council its effect will be to promote the purposes and objectives specified in this Section 2 and otherwise promote certain public purposes and accomplish certain objectives as specified in the Plans. The Council hereby finds, determines and declares that the Proposed TIF District constitutes a "tax increment financing district" as defined in Minnesota Statutes, Section 469.174, Subdivision 9, and further constitutes a "redevelopment district" as defined in Minnesota Statutes, Section 469.174, Subdivision 10 and Laws of Minnesota 2003, Chapter 21, Article 10, Section 10. • The Council hereby finds, determines and declares that the proposed development or redevelopment in the Proposed TIF District, in the opinion of this Council, would not occur solely through private investment Request for Action Page 4 4-26-04 within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. The Council hereby finds, determines and declares that the City made the above findings stated in this Section 2 and has set forth the reasons and supporting facts for each determination in the Plans and Exhibit A of this Resolution. The resolution makes the following approvals and adoptions: The modifications to the Plan clarifying reflecting increased project costs and increased bonding authority within the Project Area are hereby approved and adopted by the Council of the City. The modifications to the Existing TIF Plans reflecting increased project costs and increased bonding authority within the Project Area are hereby approved and adopted by the Council of the City. The creation of the Proposed TIF District within the Project Area and the adoption of the Proposed TIF Plan relating thereto are hereby approved by the Council of the City. Lastly, the resolution states that upon approval and adoption of the plans, the city shall cause said plans to be tiled with the Minnesota Department of Revenue. After public comments are received, staff recommends that the Council close the public hearing and approve the resolution. ATTACHMENTS • Public Hearing Notice • Resolution and Exhibits • Tax Increment Financing hfan, Map, casn Flow Analysis, But For Analysis, Sources/Uses of Funds • Excerpts from Redevelopment Eligibility Assessment Report • Hennepin County Correspondence to be Entered into Record NOTICE OF PUBLIC HEARING CITY OF NEW HOPE COUNTY OF HENNEPIN STATE OF MINNESOTA NOTICE IS HEREBY GIVEN THAT the City Council (the "Council") of the City of New Hope, Minnesota, will hold a public hearing on Monday, April 12, 2004, at 7:00 p.m. o'clock, or shortly thereafter, at City Hall, 4401 Xylon Avenue North, New Hope, Minnesota, 55428, relating to the following matters: (1) modification of the Restated Redevelopment Plan for Redevelopment Project No. 1 (the "Project Area") reflecting increased project costs and increased bonding authority within the Project Area; (2) modification of 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 03-1(Special Law) reflecting increased project costs and increased bonding authority within the Project Area; (3) creation of Tax Increment Financing District No. 04-1(Special Law); and, (4) adoption of a Tax Increment Financing Plan relating thereto, all pursuant to Minnesota Statutes, Sections 469.001 to 469.047, 469.124 to 469.134, 469.090 to 469.108 and 469.174 to 469.1799, and Laws of Minnesota 2003, Chapter 21, Article 10, Section 10, inclusive. Copies of the documentation relating to the above proposed actions will be on file and available for public inspection in the City Clerk's office. The property proposed to be included in Tax Increment Financing District No. 04- 1 (Special Law) is described below and set forth on the attached map: PIN 05-118-21-32-0007, including adjacent streets and rights-of-way All interested persons may appear at the hearing and present their views orally or in writing. BY ORDER OF THE CITY COUNCIL Is/ Daniel J, QanahUe City Manager (attach map) G:\WPDATA\N\NEW HOPE\13\TIF\NOTICE OF PUBLICATION.DOC Council Member Grain-Lenth introduced the following resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption.- CITY doption: CITY OF NEW HOPE COUNTY OF HENNEPIN STATE OF MINNESOTA RESOLUTION NO. 2004-86 A RESOLUTION MODIFYING THE RESTATED REDEVELOPMENT PLAN AND TAX INCREMENT FINANCING PLANS FOR REDEVELOPMENT PROJECT NO. 1 AND TAX INCREMENT FINANCING DISTRICTS NOS. 80-2,81-1, 82-1, 85-1, 85-21 86-1, 02-1 AND 03-1(SPECIAL LAW); CREATING TAX INCREMENT FINANCING DISTRICT NO. 04-1(SPECIAL LAW) AND ADOPTING A TAX INCREMENT FINANCING PLAN RELATING THERETO. BE IT RESOLVED by the City Council (the "Council") of the City of New Hope, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. It has been proposed and approved by the New Hope Economic Development Authority. (the "EDA") that the Council approve and adopt the proposed modifications to the Restated Redevelopment Plan (the "Plan") for Redevelopment Project No. 1 (the "Project Area") reflecting increased project costs and increased bonding authority within the Project Area, pursuant to and in accordance with Mi.anpsnta mss, 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 and approved by the EDA that the Council approve and adopt the proposed modifications to the Tax Increment Financing Pians (the "Existing TIF Plans") for Tax Increment Financing Districts Nos. 80-2, 81-1, 82- 1, 85-1, 85-2, 86-1, 02-1 and 03-1(Special Law) (the "Existing TIF Districts") reflecting increased project costs and increased bonding authority within the Project Area pursuant to and in accordance with Minnesnts , t2ttjtPs, Sections 469.174 to 469.1799 and 469.090 to 469.108, inclusive, as amended and supplemented from time to time. 1.03. It has been further proposed and approved by the EDA that the Council approve the creation of proposed Tax Increment Financing District No. 04-1 (Special Legislation) (the "Proposed TIF District") within the Project Area and approve and adopt the proposed Tax Increment Financing Plan (the "Proposed TIF Plan") relating thereto pursuant to and in accordance with Minnesota Statutps, 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 this Council has investigated the facts with respect thereto a modified Plan for the Project Area and modified Existing TIF Plans for the Existing TIF Districts reflecting increased project costs and increased bonding authority within the Project Area, and a Proposed TIF Plan for the Proposed TIF District defining more precisely the property to be included, the public costs to be incurred and other matters relating thereto. 1.05. The EDA and the Council have performed all actions required by law to be performed prior to the approval and adoption of the modifications to the Plan and Existing TIF Plans and the approval and adoption of the Proposed TIF Plan. 1.06. The Council hereby determines that it is necessary and in the best interests of the City and the EDA at this time to approve and adopt the modifications to the Plan and Existing TIF Plans, to create the Proposed TIF District and to approve and adopt the Proposed TIF Plan relating thereto. Section 2. Findings, 2.01. The Council hereby tinds, determines and declares that the assistance to be provided through the adoption and implementation of the modified Plan, modified Existing TIF Plans and Proposed TIF Plan (collectively the "Plans") are necessary to assure the development and redevelopment of the Project Area. 2.02. The Council hereby finds, determines and declares that the Plans conform to the general plan for the development and redevelopment of the City as a whole in that they are consistent with the City's comprehensive plan. 2.03. The Council hereby finds, determines and declares 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. 2.04. The Council hereby finds, determines and declares that the K modification, approval and adoption of the Pians is intended and in the judgment of this Council its effect will be to promote the purposes and objectives specified in this Section 2 and otherwise promote certain public purposes and accomplish certain objectives as specified in the Plans. 2.05. The Council hereby finds, determines and declares that the Proposed TIF District constitutes a "tax increment financing district" as defined in MinnPsnta ,Statutes, Section 469.174, Subdivision 9, and further constitutes a "redevelopment district" as defined in Minnesota Statutes, Section 469.174, Subdivision 10 and Laws of Minnesota 2003, Chapter 21, Article 10, Section 10. 2.06. The Council hereby finds, determines and declares that the proposed development or redevelopment in the Proposed TIF District, in the opinion of this Council, would not occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. 2.07. The Council hereby finds, determines and declares that the City made the above findings stated in this Section 2 and has set forth the reasons and supporting facts for each determination in the Plans and Exhibit A of this Resolution. • 1 • • •Fro • WIN We • 3.01. The modifications to the Plan clarifying reflecting increased project costs and increased bonding authority within the Project Area are hereby approved and adopted by the Council of the City. 3.02. The modifications to the Existing TIF Plans reflecting increased project costs and increased bonding authority within the Project Area are hereby approved and adopted by the Council of the City. 3.03. The creation of the Proposed TIF District within the Project Area and the adoption of the Proposed TIF Plan relating thereto are hereby approved by the Council of the City. Section 4. Ening Qf Pians. 4.01. Upon approval and adoption of the Plans, the City shall cause said Plans to be filed with the Minnesota Department of Revenue. Adopted by the Council of the City this day of 2004. 3 The motion for the adoption of the foregoing resolution was duly seconded by Council Member cassen , and upon vote being taken thereon the following voted in favor thereof: Andersen, Cassen, Collier, Gwin—Lenth, Sommer and the following voted against the same: None Whereupon said resolution was declared duly passed and adopted, and was signed by the Mayor and attested to by City Clerk. C--"' . Z'6� Ma ATTEST: City Clerk CERTIFICATION I, Valerie Leone , the duly qualified City Clerk of the City of New Hope, County of Hennepin, State of Minnesota, do hereby certify that the foregoing is a true and correct copy of Resolution No. 04-86 passed by the City Council on the 26th day of _April ", 2004. City Clerk 4 EXHIBIT A TO RESOLUTION NO. 2004-66 The reasons and facts supporting the findings for the TIF Plan for the TIF District pursuant to Minnesota Statutes, Section 469.175, Subdivision 3, are as follows: 1. Finding that the TIF District is a "redevelopment district" as defined in Minnesota 5tatiltes, Section 469.174, Subdivision 10 and Laws of Minnesota 2003, Chapter 21, Article 10, Section 10 (the "Special Law"). The TIF District consists of one (1) parcel of land which was previously used to house a nursery. Pursuant to Minnesota Statutes, Section 469.174, Subdivision 10 it has been determined that more than 70% of the total area is occupied by improvements, including a main structure, outbuildings and paved parking areas. In addition, the Redevelopment Eligibility Assessment prepared by Short Elliott Hendrickson, Inc. dated March 3, 2004, and which is on file at City Hall, finds and documents that more than 50% of the structures are deemed structurally substandard and require clearance, as also defined in Minnesota Statutes, Section 469.174; Subdivision 10. 2. Finding that the proposed development or redevelopment, in the opinion of the Council, would not occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. The Council has reviewed the costs associated with the proposed redevelopment including site acquisition, demolition of existing structures, site clean up and preparation, installation of sidewalk and street improvements and installation of utilities. After such review, the Council has determined that without tax increment assistance for these extensive costs, the redevelopment would not proceed, and as a result, there would be no increase in the City's market value. City staff has further determined that the increased market value that could be realized from a project receiving no tax increment assistance would be considerably less than the increased market value, less the present value of tax increment receipts, from a project utilizing tax increment assistance (see attached Schedule 1). 3. Finding that the TIF Plan conforms to the general plan for the development or redevelopment of the municipality as a whole. The EDA and Council have reviewed the TIF Plan and determined that it conforms to the comprehensive plan of the City. 9 4. Finding that the TIF Plan will afford maximum opportunity, consistent with the sound needs of the City as a whole for the development or redevelopment of the Project Area by private enterprise. The project to be developed within the TIF District consists of the construction of approximately 44 townhome units in 2004 and 2005. Upon completion of the project, it is anticipated that the City's tax base will increase by approximately $9,000,000. 9 SCHEDULE 1 TO EXHIBIT A RESOLUTION NO. 2004-86 DEVELOPMENT WITHOUT TIF ASSISTANCE: Estimated Market Value $ -0- Original Market Value $750,000 Increased Market Value $ -0- It is very unlikely that redevelopment would proceed without TIF assistance on this site. ll. DEVELOPMENT WITH TIF ASSISTANCE: Estimated Market Value $9,791,960 Original Market Value $ 750,000 Increased Market Value $9,041,960 Less: Present Value of the Tax Increment generated at 5.0% for the duration of the tax increment district (see attached Exhibit 1) Net Increased Market Value $6,848,780 The proposed project consists of approximately 44 townhomes to be constructed in 2004 and 2005. G:\WPDATA\1Y\AI H0PE\13\T1F\C0UNC1L azESOLUTION,DOc 7 ARTICLE IV TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 04-1 (SPECIAL LAW) (FRANK'S NURSERY SITE) Section 4.1 Statement of Objectives. See Article I, Section 1.4, Statement of Objectives. Section 4.2 Restated Redevelopment Plan. See Article I, Sections 1.1 through 1.11. Section 4.3 Parcels to be Included. The boundaries of Tax Increment Financing District No. 04-1 (Special Law) (the "TIF District") are described in Exhibit -iV-A and illustrated on Exhibit IV -B. Section 4.4 Parcels in Acquisition. The EDA Authority may write down or acquire and reconvey real property, or interests therein, within this TIF District or elsewhere within the Project Area at the time or times as the EDA Authority may determine to be necessary or desirable to assist or implement development or redevelopment within the Project Area or the TIF District as further described in Article 1, Section 1.11. Section 4.5 Development Activity for which Contracts have been Signed. As of the date of adoption of the TIF Plan, the EDA Authority contemplates entering into a signed contract with Armory Development II, LLC, a Minnesota limited liability company, for the activities discussed below. Section 4.6 Specific Development Expected to Occur. At this time it is anticipated that the construction of approximately 44 townhomes will be completed in two phases. Phase I, to be constructed in 2004, is proposed to include 20 units and Phase II, to be constructed in 2005, is proposed to include 24 units. Upon completion of both phases, it is expected that the City's tax base will increase by approximately $9.0 million. Section 4.7 Prior Planned Improvements, The EDA Authority shall, after due and diligent search, accompany its request to the County Auditor for the certification of or its notice of enlargement of the TIF District with a listing of all properties within the TIF District for which building permits have been issued during the eighteen (18) months immediately preceding approval of the TIF Plan by the EDA Authority. 4-1 The County Auditor shaff increase the original tax capacity of the TIF District by the tax capacity of each improvement for which a building permit was issued. If said listing does not accompany the aforementioned request or notice, the absence of such listing shall indicate to the County Auditor that no building permits were issued in the eighteen (18) months prior to the EDA Authority's approval of the TIF Plan. Section 4.8 Fiscal Disparities. The City hereby elects the method of tax increment computation set forth in Minnesota Statutes, Section 469.177, Subdivision 3, clause (a) if and when commercial/industrial development occurs within the TIF District. Section 4.9 Estimated Project Costs. The estimated costs associated with this portion of Redevelopment Project No. 1 (the "Project Area") are listed on Exhibit 1-A. Section 4.10 Estimated Amount of Indebtedness. It is anticipated that approximately $2,687,500 of indebtedness may be incurred with respect to this portion of the Project Area. Section 4.11 Sources of Revenue. The anticipated revenue sources to finance the costs associated with the Project Area are outlined in Article 1, Section 1.5. Section 4.12 Estimated Original and Captured Tax Capacity. The tax capacity of all taxable property in the TIF District, as most recently certified by the Commissioner of Revenue of the State of Minnesota on January 2, 2003, is estimated to be $7,500. The estimated captured tax capacity of the TIF District upon completion of the proposed improvements on January 2, 2006, is estimated to be $90,420. The EDA Authority intends to utilize 100% of the captured tax capacity, for the duration of the TIF District, for purposes of determining tax increment revenues. Section 4.13 Tax Capacity _Rat e. The pay 2003 tax capacity rate is 1.37362. Section 4.14 Tax Increment. Annual initial tax increment has been calculated at approximately $124,203 assuming a static tax capacity rate and a valuation increase of five percent (5.0%) compounded annually. A financial analysis is provided on Exhibit IV -C. Revenue has also been projected for the duration of the TIF District and is shown on Exhibit I -A. 4-2 Section 4.15 Type of TIF District. The TIF District is, pursuant to Minnesota Statutes, Section 469.174, Subdivision 10, a redevelopment district. Section 4.16 Duration of TIF District. The duration of the TIF District is expected to be twenty-five (25) years from receipt of the first tax increment. The date of receipt of the first tax increment is estimated to be July, 2006. Thus, it is estimated that the TIF District, including any modifications for subsequent phases or other changes, would terminate in the year 2031. Section 4.17 Estimated Impact on Taxing Jurisdictions. The estimated impact on other taxing jurisdictions assumes construction would have occurred without the creation of the TIF District. If the construction is a result of tax increment financing, the impact is $0 to other entities. - Notwithstanding the fact that the fiscal impact on the other taxing jurisdictions is $0, due to the fact that the financing would not have occurred without the assistance of the EDA Authority, Exhibit IV -E reflects the estimated impact of the TIF District if the "but for" test were not met. Section 4.18 Modification of the TF District and/or TIF Plan. As of April 12, 2004, no modifications to the TIF District or the TIF Plan have been made. G:IWPDATAV4\NEW HOPE1091TIFITIP PLAN -DOC 4-3 EXHIBIT IV -A PARCELS TO BE INCLUDED IN TAX INCREMENT FINANCING DISTRICT NO. 04-1 (SPECIAL LAW) PIN 05-118-21-32-0007, including adjacent streets and rights-of-way G:\WPDATA\N\NSW H0PE\09\TIF\TIF PLAN EXHISIT.DOC IV -A-1 EXHIBIT IV -B . r I 5m W1 � r: - - •tee _�� 3436 5437 _ j 3 F 537 j �s r 541 'Sul 1 5430 4 R� " r- 3431 •i 0 5430 '5431 5428 i 34271 .54•"73 3I27 5421 ! 1 34"20 ' 5421 !,Zi '�# Si21 5417 5416 0 3417 1 1 5414 1 3417 5411 +, 3410 54711 S4 0 3411 - SIOf ; 1340$ 3401 34W i 5401 = ' 5400 5441 } - 6444 �-..r•�., 5w 5429 5434 6427 5422 s•/23 i 5420 1 j 17 f 5412 5410 y 13 3486 + i 6401 � 1 5319 _ 70ic [730a r t +. iiri! S w�! 5M AVE N l i I }^ Z w41445lTM 5437T' ! 5434 ii 3417-y '-'�•�} LN4 1101._ r 1 ;34.33 f zl 5434 ' 5433 7 ,3412 t y` s 78115 Ll549-1 3428 I�! 34M 5429 ss3e ! ft' ST WHAEL 7301 r �.- ' I ;- � t r / ! S'1W d' 3410 ? %me f 3400{'5401 Ui r� 3100 !8441 � i-, �.. 3N its I + 5400 i 3� � 3705 r E 7701 ! --`-,��33I ,1L.1• 53{2 t ME !3530 E 533 , � 5701 � Sr. TMERESE ' NURSING5728 ' _? ma` HOME = _� r ■ 1718 5700 57N / 5821 1 ;wi 6100 + =� t_ i Zrw La � •W! _ g 110 7910 _; ■ t=!1 a • sw 2 — �� t 7: 7960 ; ? .`� r..�• 8001 X60 { 7800 3 ( 731 r 511 i i / 4�ti ~'^.� ! r :... y�y� � 1 i IPVY 750 s •'�_. .` . . r I 5m W1 � r: - - •tee _�� 3436 5437 _ j 3 F 537 j �s r 541 'Sul 1 5430 4 R� " r- 3431 •i 0 5430 '5431 5428 i 34271 .54•"73 3I27 5421 ! 1 34"20 ' 5421 !,Zi '�# Si21 5417 5416 0 3417 1 1 5414 1 3417 5411 +, 3410 54711 S4 0 3411 - SIOf ; 1340$ 3401 34W i 5401 = ' 5400 5441 } - 6444 �-..r•�., 5w 5429 5434 6427 5422 s•/23 i 5420 1 j 17 f 5412 5410 y 13 3486 + i 6401 � 1 5319 _ 70ic [730a r t +. iiri! S w�! 5M AVE N l i I }^ Z w41445lTM 5437T' ! 5434 ii 3417-y '-'�•�} r 1 ;34.33 f zl 5434 ' 5433 7 ,3412 t y` s 78115 Ll549-1 3428 I�! 34M 5429 ss3e ! ft' ST WHAEL 7301 r �.- U14 r 5413 ; � 3416: 54t3' c $4,4 � •S ;- � t r �- ! S'1W d' 3410 ? %me f 3400{'5401 Ui r� 3100 !8441 � i-, �.. 3N its I + 5400 i 3� � } RR'1A r E 7701 ! --`-,��33I ,1L.1• 53{2 t ME !3530 E 533 ssisi s32sst' 5333 5 � +moi s32 ) 4 -^--- �+....� c,.�..•—�'-! x i y 7608: ST. RAPF CATHOLIC CHURCH -- AVE N Z w41445lTM 5437T' ! 5434 ii 3417-y '-'�•�} r 1 ;34.33 f zl 5434 ' 5433 7 ,3412 Ll549-1 3428 I�! 34M 5429 � ; 51.90 _34x8 f 3427 : 7eo4 34n :5424 ST WHAEL 5420 * $425 i '• 'SM % 5419 i�.• tet- i r 3418 15161 0 r �.- U14 r 5413 ; � 3416: 54t3' c $4,4 � •S ;- � t r �- ! S'1W d' 3410 ? %me f 3400{'5401 Ui r� 3100 !8441 � i-, �.. 3N its I + 5400 i 3� � ':'+342 1i f 5330 SW i ? &US i 3329 f i � M I= --`-,��33I ,1L.1• 53{2 t ME !3530 E 533 ssisi s32sst' 5333 5 � +moi s32 ) 4 -^--- �+....� c,.�..•—�'-! x i y IV -B-1 Original Market Values Franks Nursery & Crafts Totals Original Tax Capacity Commercial/ Retail Rental Owner Occupied Phase 1 Estimated Market Value Estimated Tax Capacity Estimated Taxes - Estimated Tax Increment Phase 2 (combined) Estimated Market Value Estimated Tax Capacity Estimated Taxes Estimated Tax Increment Phase 3 (combined) Estimated Market Value Estimated Tax Capacity Estimated Taxes Estimated Tax Increment 05-118-21-32-0007 Local Tax Rate - Pay 2003 State Tax Rate - Pay 2003 Combined Tax Rate - CII Property Only Admin Fees State Auditor Fee EXHIBIT IV -C Franks Nursery Site ASSUMPTIONS Area of Parcel (Acres) (Sq. Feet) 3.19 138,761 3.19 138,761 112/2003 Market Value (Pay 2004) Land Building Total $ 578,000 $ 172.000 $ 750,000 $ 578,000 $ 172,000 $ 750,000 $ 4.17 per sq. ft. for Land Class Rate " 7,500 @ 2.00% 0 @ 1.25% - 0 750,000 @ 1.00% - 7,500 750,000 • Final rates for Pay 2004 10.00% 0.00% Inflation (after 2 yrs of full value in each tract) 5.00% PV Rate - Rev. Note 611!2005 6.75% PV Rate - City 6/1/2005 5.00% Franks Wmery Sitim npfi -TIP Plan xl� I`/_f`_i rll,_. ._,.-.,. �, Gf ram A4-- - .. YEAR 20 Units @ 227,596 per unit = $4,551,920 45,519 2005 20 Units @ 3,126 per unit= 62,526 2006 20 Units @ 2,611 per unit = 52,224 83.5% of total taxes 44 Units @ 222,545 per unit= 9,791,960 97,920 2006 44 Units @ 3,057 per unit = 134,504 2007 44 Units @ 2,823 per unit = 124,202 92.3% of total taxes 44 Units @ 222,545 per unit = 9,791,960 13.1 times MV increase 97,920 2007 44 Units @ 3,057 per unit = 134,504 2008 44 Units @ 2,823 per unit = 124,202 92.3% of total taxes units per acre Coverage 13.8 1.37362 * F 0.54447 (CII only) L Eft Tax Rate 1.91809 used for tax increment calculations 10.00% 0.00% Inflation (after 2 yrs of full value in each tract) 5.00% PV Rate - Rev. Note 611!2005 6.75% PV Rate - City 6/1/2005 5.00% Franks Wmery Sitim npfi -TIP Plan xl� I`/_f`_i rll,_. ._,.-.,. �, Gf ram A4-- - .. EXHIBIT IV -C Franks Nursery Site CASH FLOW AND PRESENT VALUE ANALYSIS < ANNUAL (a) (b) (c) > (d) .4- (e) M ---- SEM! - ANNUAL (9) (h) > (i) G) Original Estimated Captured Est. T.I. Less: Available Cumulative - Present Value -> Tax Tax Tax (d) x Admin Tax Avail_ Tax Serpi Annual Cumulative Date Capacity Capacity Capacity 1.37362 Fees Increment Increment Balance Balance (see assumptions) (c) - (b) - St. Aud. Fee (e) x (e) - {f) Total of (g) P.V. of (g) Total of (i) 5.0% Inflation (prev, year) 0.000% 10.00% 0 0 6.75% 06/01/05 06101103 7,500 7,500 0 0 0 0 0 0 12/01/03 7,500 7,500 0 0 0 0 0 0 06/01/04 7,500 7,500 0 0 0 0 0 0 0 12/01/04 7,500 7,500 0 0 0 0 0 0 0 06/01/05 7,500 45,519 0 0 0 0 0 0 0 12/01/05 7,500 45,519 0 0 0 0 0 0 0 06/01/06 7,500 97,920 38,019 26,112 2,611 23,501 23,501 21,991 21,991 12/01/06 7,500 97,920 38,019 26,112 2,611 23,501 47,002 21,273 43,265 2 06/01/07 7,500 97,920 90,420 62,101 6,210 55,891 102,893 48,942 92,206 12/01/07 7,500 97,920 90,420 62,101 6,210 55,891 158,783 47,344 139,550 3 06/01/08 7,500 902,816 90,420 62,101 6,210 55,891 214,674 45,798 185,349 12/01/08 7,500 102,816 90,420 62,101 6,210 55,891 270,565 44,303 229,652 06/01/09 7,500 107,956 95,316 65,464 6,546 58,917 329,483 45,177 274,829 12/01/09 7,500 107,956 95,316 65,464 6,546 58,917 388,400 43,702 318,531 5 06/01/10 7,500 113,354 100,456 68,994 6,899 62,095 450,495 44,556 363,086 12/01/10 7,500 113,354 100,456 68,994 6,899 62,095 512,590 43,101 406,187 6 06/01/11 7,500 119,022 105,854 72,702 7,270 65,432 578,022 43,934 450,121 12/01/11 7,500 119,022 105,854 72,702 7,270 65,432 643,453 42,500 492,621 7 06/01/12 7,500 124,973 111,522 76,594 7,659 68,935 712,388 43,313 535,934 12/01/12 7,500 124,973 111,522 76,594 7,659 68,935 781,323 41,899 577,833 8 06/01/13 7,500 131,222 117,473 80,682 8,068 72,613 853,936 42,694 620,528 12/01/13 7,500 131,222 117,473 80,682 8,068 72,613 926,550 41,300 661,828 9 06/01/14 7,500 137,783 123,722 84,973 8,497 76,476 1,003,026 42,077 703,905 12/01/14 7,500 137,783 123,722 84,973 8,497 76,476 1,079,502 40,703 744,608 10 06/01/15 7,500 144,672 130,283 89,479 8,948 80,532 1,160,033 41,462 786,071 12/01/15 7,500 144,672 130,283 89,479 8,948 80,532 1,240,565 40,109 826,180 11 06/01/16 7,500 151,905 137,172 94,211 9,421 84,790 1,325,355 40,851 867,031 12/01/16 7,500 151,905 137,172 94,211 9,421 84,790 1,410,145 39,517 906,548 12 06/01/17 7,500 159,501 144,405 99,179 9,918 89,261 1,499,406 40,243 946,791 12/01/17 7,500 159,501 144,405 99,179 9,918 89,261 1,588,667 38,929 985,720 13 06/01/18 7,500 167,476 152,001 104,396 10,440 93,956 1,682,623 39,639 1,025,359 12/01/18 7,500 167,476 152,001 104,396 10,440 93,956 1,776,579 38,345 1,063,704 14 06/01119 7,500 175,850 159,976 109,873 10,987 98,886 1,875,465 39,039 1,102,743 12/01119 7,50D 175,850 159,976 109,873 10,987 98,886 1,974,350 37,764 1,140,507 15 06/01/20 7,500 184,642 168,350 115,624 11,562 104,062 2,078,412 38,444 1,178,951 12/01/20 7,500 184,642 168,350 115,624 11,562 104,062 2,182,474 37,189 1,216,139 16 06/01121 7,500 193,874 177,142 121,663 12,166 109,497 2,291,970 37,853 1,253,993 12/01/21 7,500 193,874 177,142 121,663 12,166 109,497 2,401,467 36,617 1,290,610 17 06/01/22 7,500 203,568 186,374 128,004 12,800 115,203 2,516,670 37,268 1,327,878 12/01/22 7,500 203,568 186,374 128,004 12,800 115,203 2,631,874 36,051 1,363,930 18 06101123 7,500 213,746 196,068 134,661 13,466 121,195 2,753,069 36,688 1,400,618 12/01/23 7,500 213,746 196,068 134,661 13,466 121,195 2,874,264 35,490 1,436,108 19 06/01/24 7,500 224,434 206,246 141,652 14,165 127,487 3,001,751 36,114 1,472,222 12/01/24 7,500 224,434 206,246 141,652 14,165 127,487 3,129,237 34,935 1,507,157 20 06101/25 7,500 235,655 216,934 148,992 14,899 134,093 3,263,330 35,546 1,542,703 12/01/25 7,500 235,655 216,934 148,992 14,899 134,093 3,397,423 34,385 1,577,088 21 06/01/26 7,500 247,438 228,155 156,699 15,670 141,029 3,538,453 34,983 1,612,071 12/01126 7,500 247,438 228,155 156,699 15,670 141,029 3,679,482 33,841 1,645,91-2 22 06/01/27 7,500 259,810 239,938 164,792 16,479 148,313 3,827,795 34,427 1,680,338 12!01/27 7,500 259,810 239,938 164,792 16,479 148,313 3,976,107 33,303 1,713,641 23 06/01/28 7,500 272,800 252,310 173,289 17,329 155,960 4,132,067 33,877 1,747,518 12/01/28 7,500 272,800 252,310 173,289 17,329 155,960 4,288,027 32,771 1,780,288 24 06/01/29 7,500 286,440 265,300 182,211 18,221 163,990 4,452,017 33,333 1,813,621 12/01/29 7,500 286,440 265,300 182,211 18,221 163,990 4,616,007 32,245 1,845,865 25 06/01/30 7,500 300,762 278,940 191,579 19,158 172,421 4,788,428 32,796 1,878,661 12/01/30 7,500 300,762 278,940 191,579 19,158 172,421 4,960,849 31,725 1,910,386 26 06/01/31 7,500 315,800 293,262 201,416 20,142 181,274 5,142,123 32,265 1,942,651 12/01/31 7,500 315,800 293,262 201,416 20,142 181,274 5,323,397 31,211 1,973,862 5,914,886 591,489 5,323,397 5,323,397 1,973,862 1,973,862 C-111 AI„rc cr.� C�<<+ ll�.J T!C ❑I..._ ,,, I�/ , , EXHIBIT IV -D "BUT FOR " ANALYSIS The Frank's Nursery site is located in an area of the City that has been documented and designated as a potential redevelopment area. The City has received a Metropolitan Council Livable Communities Grant to study four different sites or areas within the overall Bass Lake Road[Winnetka study area and this site is one that has been studied extensively. Additionally, this site is identified for redevelopment and inclusion in a tax increment financing district in the City's Comprehensive Plan. The proposed development by Armory Development II, LLC includes the construction of 44 townhomes in 2004 and 2005. Upon completion of the project, it is anticipated that the project will increase the City's tax base by approximately $9.0 million. Due to extensive land acquisition costs, site improvement and preparation costs, sidewalk and street improvements and the installation of utilities, the redeveloper is requesting tax increment financing assistance. Without such assistance, the project would be not be economically feasible and would not be expected to occur solely through private investment within the reasonably foreseeable future. G:\WPDATA\N\NEW H0PE\13\TIF\TIF PLAK EXHIBIT.DOC IV -D-1 EXHIBIT III - E ESTIMATED IMPACT OF TAX INCREMENT FINANCING DISTRICT NO. 04-1 (Special Law) IMPACT ON TAX BASE ORIGINAL ESTIMATED CAPTURED DISTRICT TAX TAX TAX TAX AS % ENTITY BASE CAPACITY CAPACITY CAPACITY OF TOTAL City of New Hope 13,477,113 7,500 97,920 90,420 0.671% County of Hennepin 975,218,292 7,500 97,920 90,420 0.009% ISD # 281 68,916,707 7,500 97,920 90,420 0.131% IMPACT ON TAX RATE ENTITY TAX RATE % OF TOTAL TAX INCREMENT TAX RATE INCREASE City of New Hope 0.49819 36.27% 45,046 0.337% County of Hennepin 0.50607 36.84% 45,759 0.005% ISD # 281 0.29179 21.24% 26,384 0.038% Other 0.07757 5.65% 7,014 1.37362 100.00% 124,203 * Assumes construction would have occurred without the creation of a Tax increment Financing District. If construction is a result of Tax Increment Financing, the impact is $0. III -E-1 TIF No. 04-1 (Special Law Source of Funds Tax Increment Revenue Investment Earnings Bond Proceeds Loan Proceeds Special Assessments Sales/Lease Proceeds Loan/Advance Repayments Grants Other Transfers In Total Source of Funds Use of Funds Land/building acquisition Site Improvements/preparation costs Installation of public utilities Public Parking facilities Streets and sidewalks Public park facilities Social, recreational or conference facilities Interest reduction payments Bond principal payments Bond interest payments Loan principal payments Loan/note interest payments Administrative costs Other Transfers out Total Use of Funds $ Cumulative Modified Budget 6,000, 000 600,000 2,687,500 $ 9,287,500 $ 1,700,000 150,000 150,000 150,000 2,687,500 1,612,500 1,612,500 600,000 625,000 $ 9,287,500 0 Redevelopment Eligibility Assessment Proposed City of New Hope East Winnetka Area TIF District 5620 Winnetka Avenue North New Hope, MN March 3, 2004 Pzqxnd by. Short Elliott Hendrickson, Inc. (SEH) Butler Squarc Building, Saito 7100 100 Noah & Street MimeapoliS, NN 55403 SEH No. A-NEWHP0201.01 City of New Hope City of New Hope East Winnetka Area TIF District March 3, 2004 PURPOSE Short Elliott Hendrickson, Inc. (SEH) was hired by the City of New Hope, Minnesota, to survey and evaluate 5620 Winnetka Avenue North. The purpose of our work was to independently ascertain whether the qualification tests for tax increment eligibility. as required under Minnesota Statute, could be met. The findings and conclusions drawn herein are solely for the purpose of tax increment eligibility and are not intended to be used outside the scope of this assessment. SCOPE OF WORK The subject parcel is comprised of the following types of improvements: 1 commercial structure. The parcel also contains several accessory structures — for the purposes of this assessment, these are considered `outbuildings' and are not included in the Condition of Buildings Test. FINDINGS An interior and exterior inspection was completed for the subject building. FINDINGS Coverage Test — The subject property met the coverage test with a 100% arca coverage. This exceeds the 70% arca coverage requirement. Condition of Buildings Test _ 100 percent of the buildings "structurally substandard" wh- were found to be en considering code deficiencies and other deficiencies of sufficient total significance to justify substantial renovation or clearance (see definition of "structurally substandard" as follows). This exceeds the Condition of Buildings Test whereby over 50% of buildings, not including outbuildings, must be found "structurally substandard." CONCLUSION Our surveying and evaluating of the subject property render results that in our Professional opinion qualify the pa vei eligible under the statutory for a Redevelopment Tax Increment Financing District (State Statute 469.174 Subd. 10 SUPPORTING DOCUMENTS ATTACHED ) Site Occupied/Building Substandard Det - -71F Assessment rmination table Occupied: Building Assessment. Occupied Surfaces, bent Report on Building Condition - Individual Building Shy Report PROCEDURAL REQUIREMENTS The subject property was surveyed and evaluated in accordance with the following requirements under Minnesota Statute Section 469.174, Subdivision 10, clause (c) which states: Interior Inspection — `°The municipality may not make such determination f that the building is structurally substandard] without an interior inspection of the property..." Exterior Inspection and Other Means — "An interior inspection of the property is not required, if the municipality finds that (1) the municipality or authority is unable to gain access to the property; and after using its best efforts to obtain permission from the party that owns or controls the property; and (2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard." Documentation — "Written documentation of the building findings and reasons why an interior inspection was not conducted must be made and retained under section 469.175, subdivision 3, clause (1)." Because an interior inspection was conducted, documentation for these purposes is not required. PROCEDURES FOLLOWED TO MEET REQUIREMENTS SEH conducted and exterior and interior inspection and evaluation of the building on February 26, 2004. New Hope Building Official, Roger Axel, accompanied and assisted SEH with the building inspection. For the subject building, the City of New Hope provider( a record of all available building permits on file for review by SEH. These permits provide a basic description of work completed for each permit (Building, Electrical, or plumbing, scope of work) d, in some cases, approximate value of work to be completed. Some buildings had no Permit records. Additional building data was collected from public taxpayer information available from Hennepin County. Building data from these with and reviewed against information gathered in the field public records was combined QUALIFICATION REQUIREMENTS The p1operty was surveyed and evaluated to ascertain whether the qualification tests for tax increment eligibility for a redevelopment district, required under the Minnesota Statutes, could be met. following Minns Statute Section 469.174, Subdivision 10, clause (a) (1) requires two tests for occupied parcels: 1. Coverage Test — "Parcels consisting of 70 occupied by buildings,, Percent of the arra of the district are structures ...,, �', utilities, paved or gravel patg lots or similar Note: The coverage required by the parce Minnesota Statute Section 469.174, Subdi isi a p� cruse occupied is defned under (e) which states: .For 3 purposes of this subdivision, a parcel is not occupied by buildings, streets. utilities. paved or gravel parking lots or other similar structures unless 15% of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots or other similar structures." 2. Condition of Buildings Test — " ... and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance;" The term 'structurally substandard', as used in the preceding paragraph, is defined by a two-step test.- Conditions est: Conditions Test: Under the tax increment law, specifically, Minnesota Statutes, Section 459.174, Subdivision 10, clause (b), a building is structurally substandard if it contains "defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance." Code Test: Notwithstanding the foregoing, the tax increment law, specifically, Minnesota Statutes, Section 469.174, Subdivision 10, clause (c) also provides that a building may not be considered structurally substandard if it: " .. is in compliance with building code applicable to new buildings or could be modified to satisfy the building code at a cog of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site." Based on the above requirements, the substandard de building's a twos termination of a particular two-step process; therefore, the findings of each step are independent of each other and both steps must be satisfied in order for a building to be found structurally substandard. It is not sufficient to conclude that a building is structurally substandard solely because the Code Test is satisfied. h is theoretically possible for a building to require extensive renovation in order to meet current building codes but still not meet the main test of the Conditions Test. Fura specific pecie c code deficiencies included in the Conditions Test may or may not include spxific code dui�cierrcies as re listed in the Code Test. In man cases code deficiencies may well contribute to tate data which supports y ' speck building Conditions Test; conversely, it is certainl satisfying the deficiencies which y possible that identified hazards or other could be included in the Conditions Test do not necessarily constitute current building code deficiencies. By definition, the nature of the two SWP is sli tl The Conditions Test is more Test is an objet"ve �, Conditions Test deficiencies arse less htee} Where" the Code necessarily measurable to the same extent of the code and not To the end that technical, measurable building code deficiencies sum the Code Test. satisfaction of the less technical Conditions Test, the fonowin support the g code requirements are 4 defined in terms that go beyond the technical requirements of the code and demonstrate their relevance in terms of " ... deficiencies in essential utilities and facilities, Iight and ventilation, etc..." International Building Code (IBC : The purpose of the IBC is to provide minimum standards to safeguard public health, safety and general welfare through structural strength, means of egress facilities, stability, sanitation. adequate light and ventilation, energy conservation, and safety to life and property from fire and other hazards attributed to the built environment (IBC 101.3). A deficiency in the building code (insufficient number of building exits, insufficient door landing area, etc.) adversely affects one or more of the above standards to safeguard `public health ...and safety to life'; therefore, a deficiency in the building code is considered a deficiency in one or more "essential utilities and facilities, light and ventilation, etc. % Minnesota Aemsibility Code Cha ter 134I: This chapter sets the requirements for accessibility all building occupancies. The Minnesota Accessibility Code closely follows the Americans with Disabilities Act Accessibility Guidelines (ADAAG), which sets the guidelines for accessibility to places of public accommodations and commercial facilities as required by the Americans with Disabilities Act (ADA) of I990. The ADA is a federal anti -discrimination statute designed to remove barriers that prevent qualified individuals with disabilities from enjoying the same opportunities that are available to persons without disabilities (ADA Handbook). Essentially, a deficiency in the accessibility code (lack of handrail extension at stairs or ramp, lack of clearance at a toilet fixture, etc.) results in a discrimination against disabled individuals; therefore, a deficiency in the accessibility code is considered a deficiency in "essential utilities and facilities". Minnesota Food Code Cha ter 4626 Department : This chapter is enforced by the Minnesota of Health and is similar to the IBC in that it provides minimum standards to safeguard public health in areas of public%ommercial food preparation. A deficiency in the food code (lack of non-absorbent wall or ceiling finishes, lack of hand sink, etc.) causes a condition for potential contamination of food; therefore, a deficiency in the food code is considered a deficiency in "essential utilities and facilities". Na 'on safeguarding of persons andproperty: "k lyse of the NEC is the practical eiectrici 5'°m hazards arising from the use of h► The NEC contains provisions that are (NEC 90-1(a) and (b)). A deficient considered necessary for safety service capacity, defc the electric code (insufficient electrical ele�city; theref� ung. ems.) causes a hazard from the use of Jc,"essential utilities and facilities"y the electric code is considered a deficiency in 5 International Mechanical Code (IMC): The purpose of the IMC is to provide minimum standards to safeguard life or limb. health, property and public welfare by regulating and controlling the design, construction, installation, quality of materials, location, operation, and maintenance or use of mechanical systems (IMC 101.3). The IMC sets specific requirements for building ventilation, exhaust, intake and relief. These requirements translate into a specified number of complete clean air exchanges for a building based on its occupancy type and occupant load. A deficiency in the mechanical code adversely affects the 'health . .. and public welfare' of a building's occupants, therefore, a deficiency in the mechanical code is considered a deficiency in "light and ventilation". Note: The above list represents some of the more common potential code deficiencies considered in the assessment of the buildings in the proposed district. This list does not necessarily include every factor included in the data used to satisfy the conditions test for a particular building. Refer to individual building reports for specific findings. Finally, the tax increment law provides that the municipality may find that a building is not disqualified as structurally substandard under the Code Test on the basis of "reasonably available evidence, such as the size, type, and age of the building, the average cost of plumbing, electrical, or structural repairs, or other similar reliable evidence. Items of evidence that support such a conclusion jthat the building is structurally substandard] include rent fine or police appraisals or housingms inspections, on site property inspections, exterior evidence of deterioration, or other similar reliable evidence." MEASUREMENTS AGAINST TECHNICAL TEST REQUIREMENTS Coverage Test SEH obtained information in a GIS (Geographic Information Systems) database format from Hennepin County to obtain individual Parcel information. The GIS database contained graphic information (parcel shapes) and other related parcel information. This information was used by SEH for the purposes of this assessment. The total square foot area of each property Parcel was calculated information and general site verification. from the GIS parcel .The total extent of site moments on each aerial photography (Spm 200D). The total Propquareerty paOotagercel was digitized from recent site then digitally measured and confirmed by general site verificationImprovements was The total Percentage of age of each the 15% requirement was met, Refer to oP�Y parcel was computed to determine if Percent Occupied. ttached maps: Occupied Surfaces map and 6 The total area of all qualifying parcels was compared to the total area of all parcels, in this case one parcel, to determine if the 70% requirement was met. Condition of Building Test Replacement Cost — the cost of constructing a new structure of the same size and type on site: R. S. Means Square Foot Costs (2004) was used as the industry standard for base cost calculations. R S Mearns is a nationally published reference tool for construction cost data. The book is updated yearly and establishes a "national average" for materials and labor prices for all types of building construction. The base costs derived from R. S. Means were reviewed, and modified if applicable, against our professional judgment and experience. A base cost was calculated by first establishing building type, building construction type, and construction quality level (residential construction) to Obtain the appropriate Means cost per square foot. This cost was multiplied times the building square footage to obtain the total replacement cost for an individual building. Additionally, to account for regionalAocal pricing, a cost factor was added to the total cost according to R.S. Means tables, Using R S. Means, consideration is made for building occupancy, building size, and construction type; therefore, the cost per square foot used to construct a new structure will vary accordingly. Buildin a, Deficiencies: Conditions Test Condition Deficiencies — determining the combination of defects or deficiencies of sufficient total significance to justify substantial renovation or clearance, on -Site evaluations - Evaluation of each building was made by reviewing available information from city records and making interior and/or exterior evaluations, as noted, sometimes limited to public spaces. Deficiencies in structural elements, essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, were noted by the evaluator. Condition Deficiencies may or may not include Code Deficiencies as defined below. Energy not considered for the code compliance was Deficiencies were poses of determining Condition Deficiencies. combined and summarized for each building in order to determine their total significance. Buil din Deficiencies: Code Test Code Deficiencies — d that are not in compliance with current building code determining technical conditions cost to Cornect the deficient, g applicable to new buildings and the on -Site evaluations - Evaluation of each building was made by reviewing available information from city records and making m evaluations, as named, sometimes limited to blit tenor and/or exterior evaluations were completed using a standard checklist format. The standard site checklist was 7 derived from several standard building code plan review checklists and was intended to address the most common, easily identifiable code deficiencies. Mechanical Engineers, Electrical Engineers, and Building Code Officials were also consulted in the development of the checklist. Deficiencies were generally grouped into the following categories (category names arc followed by its applicable building code): • Building accessibility — Minnesota Accessibility Code Building egress, building construction — International Building Code • Fire protection systems — International Building Code • Food service — Minnesota Food Code • HVAC (heating, ventilating, and air conditioning) — International Mechanical Code • Electrical systems — National Electric Code and Minnesota Energy Code • Energy code compliance — Minnesota Energy Code For the purposes of determining the Code Test (Code Deficiencies), Energy code compliance is relevant because its criteria affect the design of integral parts of a majority of a building's systems. The intent of these criteria is to provide a means - for assuring building durability, and permitting energy efficient operation (7575.0100). The energy code addresses general building construction (all forms Of energy transmission in an exterior building envelope — walls, roofs, doors and windows, etc.) and energy usage by lighting and mechanical systems. A deficiency in the energy code (inadequate insulation, 110113 -insulated window systems, improper air infiltration protection, etc.) reduces energy efficient operation and adversely affects building system durability, therefore, a deficiency in the energy code is considered applicable to the Code test. Office evaluations — Following the on-site evaluaticm, each building was then reviewed, based oa on-site data, age of construction, building usage and occupancy, footage, and known improvements f and an assessmern was made re from building permit data), electrical, and ung compLance with current mechanical, energy codes. A basic code review was also completed regarding the potaentials3'sneed for additional egress (basement stairways, for example), s, or elevators. Deficiency Cost — Costs to coned identified deficiencies were de using R S. Mems Cost Data and our terminad by general, where several items of v Professional judgment and experience. In correct a here Varying quality were available for selection to may, an item of average cost was u commercial or residential applications. Actual conte appropriate for typical many factors (bidding climate, ttize of shvction costs are affected by �essment, we were only able to Wi e t etc.). Due ro the nature of this SCUPe c:oareetion; that is ro say that detailed the �a work for est � not possible to be known. Our approach to this mattergwas to def materials determine a preliminary cost projection suitable to the level of detail that is known. This process was similar to our typical approach for a cost projection that may be given to an owner during a schematic design stage of a project. Costs to correct deficiencies were computed for each building and compared to the building replacement cost to determine if the 15% requirement was met. The total number of buildings determined to be "structurally substandard" by satisfying both the Conditions Test and the Code Test in this manner was compared to the total number of buildings in the proposed district, in this case one building, to determine if the 50% requirement was met. Reports on Building Conditions and Individual Building Summary Reports are available for review at the offices of SEH and the City of New Hope. Technical Conditions Resources — the following list represents the current building codes applicable to new buildings used in the Building Deficiency review: 2003 Minnesota State Building Code 2000 International Building Code 2000 international Housing Code MN 1341— Minnesota Accessibility Code, Chapter 1341 (1999) 2000 Minnesota Energy Code, Chapters 7672, 7674, or 7676 1999 National Electric Code 2000 International Mechanical Code PROJECT TEAM: Jason P. Zemke, AIA, project Architect Nancy G. Schultz, AIA, principal Hennepin County Taxpayer Services Department A-600 Hennepin County Government Center Minneapolis, Minnesota 55487-0060 April 2, 2004 James Casserly Krass Monroe, P.A. 8000 Norman Center Drive Suite 1000 Minneapolis, MN 55437-1178 Re: New Hope Redevelopment TIF District 04-1 (Special Legislation) Dear Mr. Casserly: Enclosed is a report from Richard P. Johnson, Hennepin County Deputy Administrator, to the Hennepin County Board c f. Commissioners, concerning the proposed New Hope Redevelopment TIF District 04-1 (Special Legislation)/ Please arrange to have the report entered into the record of the public hearing of the New Hope City Council on April 12, 2004, to reflect the input of Hennepin County, as provided by Minnesota Statutes, Section 469.175, Subd. 2. If you have any questions about this information, please call me at 612-348-5076 Sincerely, *217 Jean M. Bierbaum, Senior Administrative Assistant Administrative Services Division CC iArk McDonald, City of New Hope, 4401 Xylon Avenue North, New Hope MN 55428 Mary E. Molzahn, Krass Monroe, P.A. ROWNewHoPe04-18pecialLe81sWkxg122004JTransmitW ethr An 6qualOpportunity fmplayer Recycled Paper memo Awye.araw DATE: April 2, 2004 TO: Bard of County Commissioners nn IJ FROM: Richard P. Johnson, Deputy County Administrator ' SUBJECT: Proposed New Hope Redevelopment TIF District 04-1 (Special Legislation) Hearing Scheduled: Monday, April 12, 2004 at 7:00 p.m., New Hope City Hall. History: New Hope obtained Special Legislation from the 2003 Legislature to assist with the development of approximately 130 acres near Bass Lake Road and Winnetka Avenue North. The Special Legislation permits New Hope to create a number of TIF Districts with provisions not available under general TIF law. For each TIF District created: 1) the fire -year rule for commitment of all expenditures has been extended to nine administrative expenses generally considered to be "outside" the TIF District will be treated a a expenses from "within" the TIF District(s); 3) New Hope opted to spend an additional IS%'Outside" the TIF District(s) for acquisition and public improvements for housing purposes; 4)13 parcels listed in the Special Legislation are deemed substandard for qualifying purposes; 5) New Hope can create TIF Districts under the Special Legislation only until t?/31/2013; 6) in order to implement the provisions of the Special Legislation, the legislation must be approved by resolution by the city, school district and Hennepin County, and New Hope must file the Certificate of Approval of Special Law with the Secretary of State prior to the beginning of the 2004 Legislative Session. New Hope requested Special Legislation because a study of the redevelopment of four areas, funded by a Livable Communities Grant from the Metropolitan Council, showed that development would be most effective if conducted in stages. However, part of the area could not qualify as blighted and could not, therefore, be developed as a TIF District. New Hope also concluded that tax increment generated by some of the early stage development would be needed for later stage development. General TIF pooling limitations would not make enough of the tax increment available for this purpose without the assistance of Special Legislation. The Special Law Pooling up to 40% of the tax increment, but only among other TIF Districts created under the Special Legislations gisat ons Therng of special pooling may occur only for a period of 20 years. The four areas for redevelopment are 1) Bass Lake Road Winnetka Avenue West Area; and 4) Northeast Bass Lake Road/Winnetka rAvenue Winnetka Area. venue East area; 3) Redevelopment TIF District 04.1 (Spial Law): This is the second TIF District under the Special Law and contains PID 05-118-21-32-0007 at 5620 Winnetka Avenue North. The site will be developed with 44 townhomes, to be completed in two phases. Phase I will construct 20 units in 2004 and Phase 11 will construct 24 units in 2005. The TIF Plan does not identify whether the housing will be market rate or whether any of the units will be available to lOw-moderate income residents. Fiscal Impact: Indebtedness of $2,687,500 will be incurred. The estimated captured tax rapacity at January 2, 2006, will be $90,420. The Source of Funds spreadsheet estimates a total tax increment of $6,000,000 over its 26 -year tax increment generatingfife. p �' upon completion $9,287,500, or $2,150,000 will be expended for land acquisition, Site imp ov ments a23% of the ndaiR installation o costs bli of and streets and sidewalks within TIF District 04-1. Continued... Public utilities April Z, ZUU4 New Hope Redevelopment TIF District 04-1 (Special Law) Page 2 Sources of Public Funds: Uses of Funds Tax Increment $6,000,000 Land/Bldg Acquisition S1.700,000 Investment Earnings 600,000 Site Improvements 150.000 Bond Proceeds 2.687.500 Installation of Public Utilities 150.000 Total Sources of f=unds 59,287,500 Streets and Sidewalks 150.000 Bond Principal Payments 2,687.500 Bond Interest Payments 1.612.500 Loan/Note Interest Payments 1,612.500 Administrative Costs 600,000 Transfers Out 625.000 Total Project Costs $9,287,500 SUMMARY: TIF District 04-1 (Special Law) is being created pursuant to Laws of Minnesota 2003, Chapter 21, Article 10, Section 10, which has been approved by the School District, the City of New Hope and the Hennepin County Board of Commissioners. A copy of this report will be sent to the City of New Hope with a request that it be entered into the public record of the April 12, 2004, public hearing, to reflect the County's position on this proposal. (w:RewNewHopeO4-iSpec ialLegisla6on4922004J) EDA n ' REQUEST FOR ACTION Originating Department Approved for Agenda Agenda Section Community Development 4-26-04 EDA Item No. By: Kirk McDonald, Director of CD By: Am Baldwin, CD Assistant 5 A RESOLUTION AUTHORIZING EXECUTION AND DELIVERY OF A CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND ARMORY DEVELOPMENT II, LLC FOR THE REDEVELOPMENT OF THE FORMER FRANK'S NURSERY PROPERTY. (IMPROVEMENT PROJECT NO. 733) REQUESTED ACTION Staff recommends that the EDA approve the attached resolution, which approves the attached contract for private redevelopment with Armory Development II, LLC for the former Frank's Nursery redevelopment site at 5620 Winnetka Avenue North, located in the Livable Communities study area. Jim Casserly from Krass Monroe will be in attendance at the meeting to review the details with the EDA. The term sheet related to this agreement was previously reviewed and approved at the January 26 City Council meeting. The redevelopment agreement contains the same provisions as this term sheet. POLICY/PAST PRACTICE The EDA has previously entered into contracts for private redevelopment with developers to facilitate improvements in the city. This agreement will facilitate the construction of 44 owner -occupied, market rate townhomes units in the Livable Communities area and address life cycle housing goals outlined in the Comprehensive Plan. BACKGROUND The City Council previously selected the developer as the preferred developer for this site at the conclusion of the Livable Communities study in February 2003. Details of this development have been discussed over the past year and the attached development agreement finalizes all details on the contract portion of the development. The developer began the planning process in March and presented plans to the Planning Commission last week and to the City Council this evening. Construction is scheduled to begin in summer 2004, with the first units ready for occupancy in spring 2005. ATTACHMENTS • Resolution • Development Contract MOTION BY BY /SECOND TO: 6 L 1 r ADS g 1 awYLavy,4� i:1RFAIPLAN NINGILivable CommunitieslQ-Franks da a rvl.doc NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY COUNTY OF HENNEPIN STATE OF MINNESOTA RESOLUTION NO. 04-16 A RESOLUTION AUTHORIZING EXECUTION AND DELIVERY OF A CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND ARMORY DEVELOPMENT II, LLC FOR THE REDEVELOPMENT OF THE FORMER FRANK'S NURSERY PROPERTY (IMPROVEMENT PROJECT NO. 733) BE IT RESOLVED by the New Hope Economic Development Authority (the "EDA") as follows: Section 1. Recitals. 1.01 It has been proposed that the EDA enter into a Contract for Private Redevelopment (the "Contract") with Armory Development If, LLC (the "Redeveloper") to redevelop the former Frank's Nursery site at 5620 Winnetka Avenue North. Section 2. Findings. 2.01 The EDA hereby finds that the Contract promotes the objectives as outlined in its Restated Redevelopment Plan for Redevelopment Project No. 1 established pursuant to Minnesota Statutes, Section 469.001 of seq. 2.02 The EDA hereby finds that it has approved and adopted Tax Increment Financing District No. 04-1 (Special Law) and the EDA has approved and adopted the Tax Increment Financing Plan relating thereto pursuant to Minnesota Statutes, Sections 469.174 through 469.1799, inclusive, as amended and supplemented from time to time. Section 3. Authorizations. 3.01 The President and the Executive Director (the "Officers") are hereby authorized to execute and deliver the Contract when the following condition is met: Substantial conformity to the Contract presented to the EDA as of this date with such additions and modifications as those Officers may deem desirable or necessary as evidenced by the execution thereof. Adopted by the EDA this 26 ATTEST - Daniel J. Do % Executive birector day of April . 2004. G:IWPDATA\MNEW HOPE1181DOC1EDA RESOL AUTHG EXEC OF REDEV AGR.DOC CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made as of the 26th day of April, 2004, by and between the New Hope Economic Development Authority (the "Authority', a public body corporate and politic (the "Authority"), having its principal offices at 4401 Xylon Avenue North, New Hope, Minnesota 55428, and Armory Development Ii, LLC, a Minnesota limited liability company (the "Redeveloper"), having offices at 2104 Fourth Avenue South, Minneapolis, Minnesota 55404. WITNESSETH: WHEREAS, the Authority is a political subdivision of the State of Minnesota and is governed by a Board of Commissioners (the "Board"); WHEREAS, in furtherance of the Authority's objectives, there has been established a Restated Redevelopment Plan (the "Project Plan") for Redevelopment Project No. 1 (the "Project Area") in the City of New Hope, Minnesota (the "City") to encourage and provide maximum opportunity for private development and redevelopment of certain property in the City which is not now in its highest and best use; WHEREAS, as of the date of this Agreement the Project Plan has been prepared and approved, and the Project Area has been established, pursuant to Minnesota Statutes, Sections 469.001 through 469.047 and 469.090 through 469.108; WHEREAS, in connection with the Project Area and to assist with the financing of the redevelopment contemplated by this Agreement, the City Council of the City has created Tax Increment Financing District No. 04-1 (Special Law) (the "Tax Increment District") pursuant to Minnesota Statutes Section 469.174 et seq. (the "Tax Increment Act") which includes the Redevelopment Property; WHEREAS, in connection with the establishment of the Tax Increment District, the Council has prepared and approved a tax increment financing plan and shall forward it to the County of Hennepin for certification of the original net tax capacity; WHEREAS, the major objectives in establishing the Project Area are to: 1. Promote and secure the prompt development or redevelopment of certain property in the Project Area, which property is not now in productive use or in its highest and best use, in a manner consistent with the City's comprehensive plan and with a minimum adverse impact on the environment and thereby promote and secure the development of other land in the City. 2. Promote and secure additional employment opportunities within the Project Area and the City for residents of the City and surrounding area, thereby improving living standards, reducing unemployment and the loss of skilled and unskilled labor and other human resources in the City. 3. Secure the increased valuation of property subject to taxation by the City, County, School District and other taxing jurisdictions in order to better enable such entities to pay for governmental services and programs required to be provided by them. 4. Provide for the financing and construction of public improvements in and adjacent to the Project Area necessary for the orderly and beneficial development or redevelopment of the Project Area and adjacent areas of the City. 5. Promote the concentration of new desirable residential, commercial, office and other appropriate development or redevelopment in the Project Area so as to maintain the area in a manner compatible with its accessibility and prominence in the City. 6. Encourage local business expansion, improvement, development or redevelopment whenever possible. 7. Create a desirable and unique character within the Project Area through quality land use alternatives and design quality in new and remodeled buildings. 8. Encourage and provide maximum opportunity for private development or redevelopment of existing areas and structures which are compatible with the Plan. 9. Create viable environments which would upgrade and maintain housing stock, maintain housing health and safety quality standards, and maintain and strengthen individual neighborhoods. 10. Stimulate private activity and investment to stabilize and balance the City's housing supply. 11. Eliminate code violations and nuisance conditions that adversely affect neighborhoods. 12. Revitalize property to create a safe, attractive, comfortable, convenient and efficient area for residential use. 13. Recreate and reinforce a sense of residential place and security which creates neighborhood cohesiveness through City investment in neighborhood infrastructure and public improvements, including landscaping, park improvements, local street modifications to reduce traffic impacts, street repaving, curb and gutter replacement, and streetlight updating. 14. Encourage infill development and redevelopment that is compatible in use and scale with surrounding neighborhoods. 15. Rehabilitate the existing housing stock and preserve existing residential neighborhoods wherever possible. 2 16. Demolish and reconstruct, where necessary, aging residential buildings to preserve neighborhoods. 17. Removal of substandard structures. WHEREAS, under the Tax Increment Act, the Authority is authorized to finance certain costs of a redevelopment project with tax increment revenues derived from a tax increment financing district established within such redevelopment project; WHEREAS, in order to achieve the objectives of the Authority and City in creating the Project Area and in adopting the Project Plan, the Authority is prepared to provide assistance in accordance with this Agreement; and WHEREAS, the Authority believes that the development and redevelopment of the Project Area pursuant to this Agreement, and fulfillment generally of the terms of this Agreement, are in the vital and best interests of the Authority and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws under which the development and redevelopment are being undertaken and assisted. NOW, THEREFORE, in consideration of the premises and the mutual obligation of the parties hereto, each of them does hereby covenant and agree with the other as follows: ARTICLE I DEFINUTIONS Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means Minnesota Statutes, Section 46 9. 001 et seq., as amended. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "Authority" means the New Hope Economic Development Authority. "Authority Grant" shall have the meaning given that term in Section 3.4. "Available Tax Increment" means 100% of the Tax Increment from the TIF District. "Building" means one of the structures containing one or more individual residential units as described in the Minimum Improvements and shown on the Site Plan. "Certificate of Completion" means the certification in the form of Schedule R to be provided to the Redeveloper, or the purchaser of any part, parcel or unit of the Redevelopment Property, pursuant to Section 4.4. "City" means the City of New Hope, Minnesota. "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the building inspector of the City, and shall include at least the following for each building: (1) site plan; (2) foundation plan; (3) basement plans; (4) floor plan for each floor; (5) cross sections of each (length and width); (6) elevations (all sides, except as to a side of existing structure where no construction is to take place); (7) fagade and landscape plan; and (8) such other plans or supplements to the foregoing plans as the City may reasonably request. "County" means the County of Hennepin, Minnesota. "Declaration of Restrictive Covenants and Prohibition Against Tax Exemption" means those restrictive covenants substantially in the form of Sched,ile G. "Developer Fee" means the fee that the Redeveloper may earn for its performance of its development activities pursuant to this Agreement, subject to the limitations set forth in Section 3.3. "Event of Default" means an action by the Redeveloper described in Section 7.1. 4 "Minimum Improvements" means the improvements to be constructed by the Redeveloper on the Redevelopment Property, which improvements shall consist of 44 townhomes with an average sales price of approximately $222,000 per unit. "Minnesota Environmental Rights Act" means the statutes located at Minnesota Statutes, Section 116B.01 et seq., as amended. "Note" means the Limited Revenue Tax Increment Note in a principal amount not to exceed Four Hundred Thousand Dollars ($400,000), substantially in the form of Schedule C', and to be issued by the Authority payable to the order of the Redeveloper in accordance with Article III. "Plan" means, collectively, (i) the Restated Redevelopment Plan adopted by the Authority and approved by the City for Redevelopment Project No. 1, and (ii) the Tax Increment Plan. "Pledged Tax Increment" means, in any year, 35% of the Available Tax Increment generated by the Redevelopment Property. "Project" means the Redevelopment Property and Minimum Improvements. "Project Area" means Redevelopment Project No. 1 established in accordance with the Act. "Reconciliation Date" means the earlier of December 31, 2007 or 30 days following the sale of all residential units comprising the Minimum Improvements. "Redeveloper" means Armory Development II, LLC, a Minnesota limited liability company, and its permitted successors or assigns. "Redevelopment Property" means the real property upon which the Minimum Improvements are to be constructed, which real property is described in Schedule A. "Site Improvements" means acquisition of the Redevelopment Property and the improvements to be constructed thereon by the Redeveloper as described in Schedule E and in Article III. "Site Plan" means the plan attached hereto as Schedule D showing the nature and location of the Minimum Improvements. "State" means the State of Minnesota "Tax Increment" means that portion of the real estate taxes paid with respect to the Redevelopment Property which is remitted to the Authority as tax increment pursuant to the Tax Increment Act. "Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 to 469.1799, as amended and as it may be amended. 9 "Tax Increment District" means Tax Increment Financing District No. 04-1 (Special Law), which includes the Redevelopment Property and which was approved and adopted by the Authority and the City within Redevelopment Project No. 1 pursuant to the Tax Increment Act. "Termination Date" means the expiration date of this Agreement described in Article IX. "Unavoidable Delays" means delays which are the direct result of strikes, delays which are the direct result of unforeseeable and unavoidable casualties to the Minimum Improvements, the Redevelopment Property or the equipment used to construct the Minimum Improvements, delays which are the direct result of governmental actions, delays which are the direct result of judicial action commenced by third parties, citizen opposition or action affecting this Agreement or adverse weather conditions or acts of God. ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS Section 2.1. Re=sentafions nnd rovenantg by the Autlhnr4. The Authority makes the following representations as the basis for the undertaking on its part herein contained: (a) The Authority is a public body corporate and politic and a political subdivision of the State of Minnesota and is governed by a board of commissioners. Under the provisions of the Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The Authority has created, adopted and approved the Project Area in accordance with the terms of the Act. (c) The Authority has complied with all statutory requirements the Tax Increment Act relating to the creation of the Tax Increment District. (d) The Authority proposes to assist the Redeveloper for the costs of Site Improvements in accordance with the Plan and this Agreement. (e) The Authority proposes to make the Note payable to the Redeveloper in accordance with the provisions of this Agreement and to pledge tax increment generated by the Tax Increment District to the payment of the principal of and interest on the Note according to its terms. (f) The Authority will cooperate with the Redeveloper with respect to any litigation commenced by third parties in connection with this Agreement. Section 2.2. The Redeveloper represents and warrants that: 6 (a) The Redeveloper is a Minnesota limited liability company organized and in good standing under the laws of the State. (b) The Redeveloper will cooperate with the Authority to rezone the Redevelopment Property for construction of the Minimum Improvements. (c) The Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper or the Authority in the Project Area with respect to the Minimum Improvements may or will be in violation of any environmental law or regulation. The Redeveloper is aware of no facts with respect to the Minimum Improvements, the existence of which would cause it to be in violation of any local, state or federal environmental law, regulation or review procedure or which would give any person a valid claim under the Minnesota Environmental Rights Act. (d) The Redeveloper will use its best efforts to obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (e) The Redeveloper will construct, operate and maintain the Minimum Improvements in accordance with the terms of this Agreement, the Plan and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (f) If an Event of Default on the part of the Redeveloper occurs and if the Authority shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on the part of the Redeveloper under this Agreement, the Redeveloper agrees that it shall, within ten days of written demand by the Authority, pay to the Authority the reasonable fees of such attorneys and such other expenses so incurred by the Authority. (g) The financing arrangements which the Redeveloper has obtained or will obtain to finance construction of the Minimum Improvements will be sufficient to enable the Redeveloper to successfully complete the Minimum Improvements as contemplated in this Agreement. (h) The Redeveloper shall pay all costs for plats, replats, lot splits, preparation of restrictive covenants, easements and any other documentation necessary for the acquisition, construction and sale of the Minimum Improvements and all costs of recording. (i) The construction of the Minimum Improvements, in the opinion of the Redeveloper, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future without the assistance provided by the Authority pursuant to this Agreement. 7 0) The Redeveloper shall construct the Minimum Improvements using the products and materials described in Schadi le F. (k) The Redeveloper shall pay the normal and customary City fees and expenses for the approval and construction of the Project including, but not limited to, bonding requirements, building permit fees, state surcharges, sewer accessibility charges (SAC), water accessibility charges (WAC) and park dedication fees. (1) Once acquired by the Redeveloper, the Redevelopment Property shall not become exempt from the levy of ad valorem property taxes, or any statutorily authorized alternative, and any improvements of any kind constructed on the Redevelopment Property shall similarly not become exempt until after the later of the dissolution or other termination of the Tax Increment District or December 31, 2031. Notwithstanding the foregoing language, this restriction shall end upon any termination of this Agreement due to a default by the Authority that is not timely cured as allowed under this Agreement. (m) The Redeveloper agrees, notwithstanding the provisions of Article VI, that it will not assign, convey or lease any interest in the Redevelopment Property or any portion thereof, or this Agreement or any portion thereof, to any tax-exempt entity under the U.S. Internal Revenue Code of 1986, as the same may be amended from time to time, without the prior written approval of the Authority (whose approval shall be conditioned upon the Redeveloper obtaining an agreement upon terms reasonably satisfactory to the Authority from its assignee or lessee to make payments in lieu of tax). (n) The Redeveloper will pay for relocation services and benefits for all owners or tenants of the Redevelopment Property. The Redeveloper may, in lieu of funding such services and benefits, provide a written waiver by the owner or tenant. Such waiver must be in a form acceptable to the Authority. The Redeveloper shall indemnify the Authority for any relocation liabilities arising under applicable law with respect to any portion of the Redevelopment Property. ARTICLE III SITE IMPROVEMENTS; PUBLIC ASSISTANCE; UNDERTAKINGS OF AUTHORITY AND REDEVELOPER Section 3.1. Constniction of Minimum Iml3rovements, and Site Improyements. The Redeveloper shall construct the Minimum Improvements and Site Improvements on the Redevelopment Property in accordance with the Construction Plans and will maintain, preserve and keep the Minimum Improvements and Site Improvements in good repair and condition. All contracts for construction of the Minimum Improvements and Site Improvements shall provide that payments for the work thereunder are the sole obligation of the Redeveloper. Neither the City nor the Authority shall have any obligation under such contracts. Section 3.2. MetWolitan Council Grant Assistance. The Redeveloper shall provide all documentation required by the Authority to apply for a Metropolitan Council grant to reimburse the Redeveloper for approximately $21,000 of eligible expenses. Upon receipt of all such documentation, the Authority will apply for the grant. The Authority will provide any grant funds received to the Redeveloper on terms consistent with the provisions of the grant. The Redeveloper is responsible for any required environmental remediation; however, the Authority will make, or assist the Redeveloper in making, applications to other public agencies requesting grants or loans for reimbursement of such costs. Funds received for such purpose shall be provided to the Redeveloper to the extent the Redeveloper supplies the Authority with evidence reasonably acceptable to the Authority that Redeveloper has incurred such costs. Section 3.3. Develnz er Fee. The Developer Fee shall not exceed 5% of the total of actual land and construction costs, calculated as shown on the Final Sources and Uses Schedule attached as Sebedi le H, (a) The Redeveloper shall pay contractors, subcontractors and construction managers with whom the Redeveloper has entered into contracts. Upon submission to the Authority of invoices from such contractors and certifications signed by the Redeveloper's project architect or general contractor to the effect that the costs for which payment was made have been incurred in connection with the Site Improvements and upon receipt of lien waivers from such contractors, subcontractors, and construction managers, the Authority shall reimburse a portion of the cost of Site Improvements as follows: (i) Upon the issuance of certificates of occupancy for the first 20 townhomes, the Authority shall reimburse the Redeveloper for up to $400,000 of qualified tax increment - eligible costs (the "Authority Grant"); and (ii) Upon completion of construction of the final 24 townhomes such that those Buildings may be locked and secured, the Authority shall deliver the Note. (b) The Redeveloper shall reimburse the Authority for the Authority Grant if the Redeveloper fails to complete construction of the Minimum Improvements pursuant to the terms of Article IV. (a) The Redeveloper represents that it will not assign the Note to any entity other than its construction lender or another entity approved by the Authority, such approval to be evidenced by the Authority's written consent. The Redeveloper acknowledges that the Authority will not consent to any assignment of the Note to any entity that is not a financial institution or "accredited investor" as defined in the regulations promulgated under the Securities Act of 1933, as amended. (b) The Redeveloper understands that the Note will not be registered or otherwise qualified for sale under the securities laws and regulations of the State or under Federal securities laws or regulations, the Note will not be listed on any stock or other securities exchange, and the Note will not carry a rating from any rating service. Section 3.6. Tax Increment Certification. Pursuant to the Plan, the Authority has pledged and shall appropriate the Pledged Tax Increment to the payment of the principal of and interest on the Note, with said payment to be made in accordance with the terms and provisions of the Note. Section 3.7. 1 Tse of Tax Increment. The Authority shall be free to use the Tax Increment, other than the Pledged Tax Increment, for any purpose for which the Tax Increment may lawfully be used pursuant to applicable provisions of Minnesota law. (a) The Redeveloper shall maintain books and records relating to the financing, construction and sales of the Minimum Improvements in accordance with generally accepted accounting principles consistently applied. (b) It is the intention of the Authority and the Redeveloper that the Redeveloper's profit not exceed 15% of gross sales proceeds, calculated as shown on the Final Sources and Uses Schedule attached as Schedule H. On the Reconciliation Date, the Redeveloper shall furnish to the Authority a full and complete copy of such books and records and a completed Final Sources and Uses Schedule certified by the Redeveloper. If all of the residential units have not been sold by December 31, 2007, for purposes of completing the Final Sources and Uses Schedule the sale price of the unsold units shall be deemed to be the average of the sale price of all units sold in the six (6) months preceding December 31, 2007. (c) In the event the Redeveloper's profit exceeds 15% as calculated above, the Authority shall receive participation to reflect a reduction in necessary public assistance in the amount of one-half (112) of any amounts over 15%. The Authority shall receive such participation in the following order of priority: (i) The principal amount of the Note shall be reduced by means of the Authority executing and delivering Annex A to the Note to the Redeveloper; then (ii) The Redeveloper shall repay any payments of principal and interest on the Note made by the Authority prior to the Reconciliation Date together with interest at the rate of 6.75% per annum; then (iii) The Redeveloper shall repay the Authority Grant to the Authority together with interest at the rate of 6.75% per annum. ARTICLE IV 10 CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 4.1. C'.onstniction of Minimim„Imammements, The Redeveloper shall perform and pay for all Site Improvements described in Schedule F. Subject to Unavoidable Delays, the Redeveloper shall begin construction of the Minimum Improvements on or about July 1, 2004. The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with this agreement and the Construction Plans to be approved by the City. Section 4.2. [construction Plans, (a) Prior to the commencement of construction of the Minimum Improvements, the Redeveloper shall submit Preliminary Plans to the Authority consisting of typical floor plans and sketches of the typical exterior and interior of the proposed Minimum Improvements which illustrate the size and character of the proposed Buildings. The Preliminary Plans shall not be inconsistent with the Site Plan, this Agreement or any applicable state and local laws and regulations, insofar as said consistency may be determined at said preliminary stage. If approval of the Preliminary Plans is requested in writing by the Redeveloper at the time of submission thereof to the Authority, the Authority shall approve or reject (in whole or in part) such Preliminary Plans in writing within twenty (20) days after the date of receipt thereof. If no written rejection is made within said twenty (20) days, the Preliminary Plans shall be deemed approved by the Authority. Any rejection shall set forth in detail the reasons therefor. If the Authority rejects the Preliminary Plans, in whole or in part, the Redeveloper may submit new or corrected Preliminary Plans at any time after receipt by the Redeveloper of the notice of rejection. The Authority's approval of the Preliminary Plans shall not be unreasonably withheld. (b) Prior to the Redeveloper's commencement of construction of the Minimum Improvements, the Redeveloper shall submit to the Authority Construction Plans for the Minimum Improvements. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity in all material respects with this Agreement, the Preliminary Plans, and all applicable state and local laws and regulations. The Authority shall approve the Construction Plans in writing if: (i) the Construction Plans conform in all material respects to the terms and conditions of the Preliminary Plans and this Agreement; (ii) the Construction Plans conform to all applicable federal, State and local laws, ordinances, rules and regulations: (iii) the Construction Plans are adequate to provide for the construction of the Minimum Improvements; (iv) the Construction Plans do not provide for expenditures in excess of the funds available to the Redeveloper for the construction of the Minimum Improvements; and (v) no Event of Default has occurred and is continuing. No approval by the Authority shall relieve the Redeveloper of the obligation to comply with the terms of this Agreement and applicable federal, State and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority shall constitute a waiver of any Event of Default. 11 Upon the Redeveloper's submittal of the Construction Plans to the Authority, such Construction Plans shall be deemed approved unless rejected in writing by the Authority, in whole or in part, within twenty (20) days after the date of their receipt by the Authority. Such rejection shall set forth in detail the reasons therefor. If the Authority rejects any Construction Plans in whole or in part, the Redeveloper shall submit new or corrected Construction Plans within thirty (30) days after written notification to the Redeveloper of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority. The Authority's approval shall not be unreasonably withheld. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements, if constructed in accordance with said plans) comply with the provisions of this Agreement relating thereto. The Construction Plans shall not be rejected due to any objection which could have been raised upon review of the Preliminary Plans and corrected more economically at that time. (c) If the Redeveloper desires to make any material change in the Preliminary Plans or Construction Plans after their approval by the Authority, then the Redeveloper shall submit the proposed change to the Authority for its approval. If the Preliminary Plans or Construction Plans, as modified by the proposed change, conform to the requirements of this Section with respect to such previously approved Construction Plans, the Authority shall approve the proposed change and notify the Redeveloper in writing of its approval. Such change in the Preliminary Plans or Construction Plans shall, in any event, be deemed approved by the Authority unless rejected in writing by the Authority, in whole or in part, within twenty (20) days after receipt of the notice of such change, setting forth in detail the reasons therefor. Section 4.3. Completion of C''onstniction. Subject to Unavoidable Delays, the Redeveloper shall have substantially completed the construction of the Minimum Improvements by June 30, 2007. All work with respect to the 'Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in conformity with the Construction Plans as submitted by the Redeveloper and approved by the City. The Redeveloper agrees for itself, it successors and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such successors and assigns, shall diligently prosecute to completion the development of the Redevelopment Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be completed within the period specified in this Section. Section 4.4. Certificate aM mnletion. (a) Promptly after completion of the Minimum Improvements for each Building in accordance with the provisions of this Agreement relating to the obligations of the Redeveloper to construct such improvements (including the date for completion thereof), the Authority will furnish the Redeveloper with a Certificate of Completion for such Building. The Certificate of Completion shall be a conclusive determination and conclusive evidence of the satisfaction and termination of the agreements and covenants in this Agreement and in the Redevelopment Property Deed with respect to the obligations of the Redeveloper and its 12 successors and assigns, to construct the Minimum Improvements for each Building and the date for the completion thereof. (b) If the Authority shall refuse or fail to provide any certificate in accordance with the provisions of this Section 4.4, the Authority shall, within ten (10) days after written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of this Agreement, or is otherwise in default, and what measures or acts will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to obtain such certification. (c) The construction of the Minimum Improvements for each Building shall be deemed to be completed in accordance with the Redeveloper's obligations hereunder when the City has issued a Certificate of Occupancy for any individual residential unit of that Building. ARTICLE V INSURANCE Section 5.1. insurance, (a) The Redeveloper will provide and maintain at all times during the process of constructing the Minimum Improvements and, from time to time at the request of the Authority, furnish the Authority with proof of payment of premiums on: (i) builder's risk insurance, written on the so-called `Builder's Risk Completed Value basis," m an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so-called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content reasonably satisfactory to the Authority; (ii) comprehensive general liability insurance together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $2,000,000 for each occurrence (to accomplish the above -required limits, an umbrella excess liability policy may be used); and (iii) workers' compensation insurance, with statutory coverage. (b) All insurance required by this Article V shall be taken out and maintained in responsible insurance companies selected by the Redeveloper which are authorized under the laws of the State to assume the risks covered thereby. The Redeveloper will deposit annually with the Authority policies evidencing all such insurance, or a certificate(s) or binder(s) of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V, each policy shall contain a provision that the insurer shall not cancel or modify 13 it without giving written notice to the Redeveloper and the Authority at least thirty (30) days before the cancellation or modification becomes effective. Not less than fifteen (15) days prior to the expiration of any policy, the Redeveloper shall furnish the Authority with evidence satisfactory to the Authority that the policy has been renewed or replaced by another policy conforming to the provisions of this Article V, or that there is no necessity therefor under the terms hereof. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (c) The Redeveloper shall, for time to time, provide the Authority with evidence satisfactory to the Authority that the Redeveloper's subcontractors are maintaining workers' compensation insurance with statutory coverage. ARTICLE VI PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION Section 6.1. Renrecentation as to RedeveloWment. The Redeveloper represents and agrees that its purchase of the Redevelopment Property, and its other undertakings pursuant to this Agreement, are, and will be used, for the purpose of redevelopment of the Redevelopment Property and not for speculation in land holding. The Redeveloper further recognizes that, in view of (a) the importance of the redevelopment of the Redevelopment Property to the general welfare of the Authority; (b) the substantial financing and other public aids that have been made available by the City or the Authority for the purpose of making such redevelopment possible; and (c) the fact that any act or transaction involving or resulting in a significant change in the identity of the parties in control of the Redeveloper or the degree of their control is for practical purposes a transfer or disposition of the property then owned by the Redeveloper, the qualifications and identity of the Redeveloper are of particular concern to the Authority. The Redeveloper further recognizes that it is because of such qualifications and identity that the Authority is entering into this Agreement with the Redeveloper, and, in so doing, is further willing to accept and rely on the obligations of the Redeveloper for the faithful performance of all undertakings and covenants hereby by it to be performed. Section 6.2. Prohibition Against Transfer of PmVertyanAssignment of Agreement, The Redeveloper represents and agrees that prior to the issuance of the final Certificate of Completion for the Minimum Improvements or the Termination Date: (a) Except only by way of security for the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to the Project under this Agreement, or any other purpose authorized by this Agreement, the Redeveloper (except as so authorized) has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or any transfer in any other mode or form, of this Agreement or the Redevelopment Property or any part thereof or any interest 14 therein, or any contract or agreement to do any of the same, without prior written approval by the Authority in its sole discretion. Notwithstanding the foregoing, the Redeveloper may transfer the Redevelopment Property to any corporation, partnership, or limited liability company controlling, controlled by, or under common control with the Redeveloper. In addition, the Redeveloper may enter into purchase agreements for the sale of individual residential units in the ordinary course of the Redeveloper's business. (b) The Authority shall be entitled to require, except as otherwise provided in this Agreement, as conditions to any such approval that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the Redeveloper's obligations hereunder. (ii) Any proposed transferee, by instrument in writing satisfactory to the Authority, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority, have expressly assumed all of the obligations of the Redeveloper hereunder from which the Redeveloper seeks to be released and agrees to be subject to all of the conditions and restrictions to which the Redeveloper is subject unless the Redeveloper agrees to continue to fulfill those obligations. (iii) There shall be submitted to the Authority for review and prior written approval all instruments and other documents involved in effecting the transfer of any interest in this Agreement or the Redevelopment Property. Section 6.3. Release and Tndemnifinatinn Covenants. (a) The Redeveloper covenants and agrees that the City, the Authority and the governing body members, officers, . agents, servants and employees of either of them (collectively, the "Indemnified Parties' shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss or damage to property or any injury to or death of any person occurring at or resulting from any defect in the Minimum Improvements, due to any act, including negligence, of the Redeveloper or of others acting on the behalf or under the direction or control of the Redeveloper; provided, however, that the Redeveloper's indemnification obligations in this subparagraph (a) shall not apply to any loss resulting from negligent, willful or wanton misconduct of any of the Indemnified Parties. (b) The Redeveloper agrees to protect and defend the Indemnified Parties, now or forever, and further agrees to hold the Indemnified Parties harmless from any claim, demand, suit, action or other proceeding by any person or entity arising or purportedly arising from this Agreement or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements, due to any act, including negligence, of the Redeveloper or of others acting on the behalf or under the direction or control of the Redeveloper; provided, however, that the Redeveloper's indemnification obligations in this subparagraph (b) shall not apply to (i) any loss resulting from any negligent or willful misrepresentation or any negligent, willful or wanton misconduct of any of the Indemnified 15 Parties or (ii) the use of eminent domain if exercised by the Authority to acquire the Private Property. (c) bone of the Indemnified Parties shall be liable for any damage or injury to the person or property of the Redeveloper or its officers, agents, servants or employees or any other person who may be on or about the Redevelopment Property or Minimum Improvements due to any act or negligence of any person, other than the negligence or misconduct of an Indemnified Party. (d) None of the Indemnified Parties shall be liable to the Redeveloper or to any third party for any consequential or other damages that may arise out of delays of any kind relating to activities undertaken pursuant to this Agreement, including but not limited to delays due to environmental conditions, court challenges or elements outside the control of the Authority. (e) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the individual capacity thereof. (fl Nothing in this Section 6.3 is intended to waive any municipal liability limitations contained in Minnesota Statutes, particularly Chapter 466. ARTICLE VII EVENTS OF DEFAULT Section 7.1. Fvents of Default Defined. The following are Events of Default hereunder: (a) Failure of the Redeveloper to submit reasonably satisfactory Construction Plans in accordance with Section 4.2. (b) Failure by the Redeveloper to commence or complete construction of the Minimum Improvements pursuant to the terms, conditions and limitations of Article IV. (c) Failure by the Redeveloper to substantially observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed hereunder. (d) The Redeveloper shall: (i) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the United States Bankruptcy Code or under any similar federal or state law; or (ii) make an assignment for the benefit of its creditors; or W (iii) admit in writing its inability to pay its debts generally as they become due; or (iv) be adjudicated as bankrupt or insolvent; or if a petition or answer proposing the adjudication of the Redeveloper as a bankrupt or proposing its reorganization under any present or future federal bankruptcy act or any similar federal or State law shall be filed in any court and such petition or answer shall not be discharged or denied within ninety (90) days after the filing thereof; or a receiver, trustee or liquidator of the Redeveloper or of the Redevelopment Property, or part thereof shall be appointed in any proceeding brought against the Redeveloper and shall not be discharged within ninety (90) days after such appointment, or if the Redeveloper shall consent to or acquiesce in such appointment. (e) Any occurrence which would with the passage of time or giving of notice become an Event of Default as defined above. Section 7.2. Ramedies on Default. Whenever any Event of Default referred to in Section 7.1 occurs, the Authority may take any one or more of the following actions after providing thirty (30) days' written notice to the Redeveloper of the Event of Default, but only if the Event of Default has not been cured within said thirty (30) days, or if the Event of Default is not reasonably susceptible to being cured within said thirty (30) -day period (whether due to Unavoidable Delays or otherwise), and the Redeveloper fails to provide the Authority with written assurances, deemed satisfactory in the reasonable discretion of the Authority, that the Event of Default will be cured as soon as reasonably possible: (a) Suspend its performance under this Agreement until it receives assurances from the Redeveloper, deemed adequate by the Authority, that the Redeveloper will cure its default and continue its performance under this Agreement. (b) Terminate this Agreement. (c) Withhold any Certificate of Completion. (d) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to the Authority, including any actions to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant of the Redeveloper under this Agreement. Section 7.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 17 Section 7.4. No Additional Waiver Implied by Onn Waiver, In the event any agreement contained herein should be breached by either party and thereafter waived by the non -breaching party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. ARTICLE VIII ADDITIONAL PROVISIONS Section 8.1. Conflirt of Triteregi. No member, official, or employee of the Authority shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official, or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership, or association in which he or she is interested, directly or indirectly. Section 8.2. Authority R=resentativeq Not Individually Liable. No member, official, or employee of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority or for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of this Agreement, except in the case of willful misconduct. Section 8.3. F.an F�playment�Onnnrt„nit . The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements it will comply with all applicable equal employment opportunity and non-discrimination laws, ordinances and regulations. Section 8.4. Restrictions on I Tse. The Redeveloper shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, rental, use or occupancy of the Redevelopment Property or any part thereof. Section 8.5. . Any titles of the several Articles, and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 8.6. Watices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, transmitted by facsimile, delivered by a recognized overnight courier or delivered personally to the address of such party below, or at such other address as a party may, from time to time, designate in writing and forward to the other: 18 Redeveloper: Armory Development II, LLC 2104 Fourth Avenue South Minneapolis, MN 55404 Attn: Douglas G. Hoskin Authority: New Hope Economic Development Authority 4401 Xylon Av N New Hope, MN 55428 Attn: Daniel I. Donahue, City Manager Section 8.7. Counterparts. This agreement may be executed in any number of counterparts, which counterparts shall together constitute one and the same instrument. ARTICLE IX TERMD ATION OF AGREEMENT Section 9.1. Temvnation. The Authority may terminate this Agreement as provided herein, and otherwise this Agreement shall terminate upon payment of the Note in accordance with its terms and the discharge of all of the Authority's and Redeveloper's respective obligations hereunder, but no such termination shall terminate any indemnification or other rights or remedies arising hereunder due to any Event of Default which occurred prior to such termination. Section 9.2. Sectims to Survive Termination. Section 6.3 shall, in addition to the other surviving provisions referenced in Section 9.1, survive the termination of this Agreement. In addition, the terms and conditions of the Declaration of Protective Covenants and Prohibition Against Tax Exemption shall remain in effect until December 31, 2031. IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf by its duly authorized representatives, and the Redeveloper has caused this Agreement to be duly executed in its name and behalf by its duly authorized representative, on or as of the date of first above written. GAW PDATAW W EW HOPEM 300MCONTRACT V2.DOC (Signature pagesfollow) 19 Dated: 2004. NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY By Its President Its Executive Director STATE OF MINNESOTA )ss COUNTY OF HENNEPIN ) On this day of , 2004, before me, a notary public within and for Hennepin County, personally appeared and to me personally known who by me duly sworn, did say that they are the President and Executive Director, respectively, of the New Hope Economic Development Authority, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public Authority Signature Page - Contract for Private Redevelopment 20 _l Dated: '2004. �p ARMORY DEOPMENT II, LLC, a Minnesota ' liability company By Douglas G. Hoskin Its: Managing Member STATE OF MINNESOTA ) ) ss COUNTY OF _ ) On this day of , 2004, before me, a notary public within and for County, personally appeared Douglas G. Hoskin, to me personally known and who by me duly sworn, did say that he is the Managing Member of Armory Development II, LLC, a Minnesota limited liability company, and acknowledged the foregoing instrument on behalf of said company. Redeveloper Signature Page - Contract for Private Redevelopment 21 SCHEDULE A DESCRIPTION OF REDEVELOPMENT PROPERTY The former Frank's Nursery & Crafts site, 5620 Winnetka Avenue North, New Hope, Minnesota, PIN# 05-118-21-32-0007 22 SCHEDULE B CERTIFICATE OF COMPLETION WHEREAS, the New Hope Economic Development Authority, a body corporate and politic (the "Authority') and Armory Development H, LLC, a Minnesota limited liability company (the "Redeveloper"), have entered into a Contract for Private Redevelopment (the "Agreement") dated April 25, 2004, regarding certain real property located in a tax increment financing district in the City (hereinafter referred to and referred to in the Agreement as the "Redevelopment Property); and WHEREAS, the Agreement contains certain conditions and provisions requiring the Redeveloper to construct improvements upon the Redevelopment Property (hereinafter referred to and referred to in the Agreement as the "1Vlinimum Improvements"); and WHEREAS, Section 4.4 of the Agreement requires the Authority to provide an appropriate instrument promptly after the substantial completion (as defined in the Agreement) of the Minimum Improvements so certifying said substantial completion; NOW, THEREFORE, in compliance with said Section 4.4 of the Agreement, this is to certify that the Redeveloper has substantially completed the Minimum Improvements in accordance with the conditions and provisions of the Agreement relating solely to the obligations of the Redeveloper to construct the Minimum Improvements (including the dates for beginning and completion thereof), and this certification shall be a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement with respect to the obligations of the Redeveloper, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion thereof. 23 Dated: 2004 NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY Ey Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) On this day of _ '2004, before me, a notary public, within and for Hennepin County, personally appeared and to me personally known who by me duly sworn, did say that they are the President and Executive Director, respectively, of the New Hope Economic Development Authority, and acknowledged the foregoing instrument on behalf of said. Authority. Notary Public 24 SCHEDULE C NOTE $400,000.00 , 200 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY LIMITED REVENUE TAX INCREMENT NOTE The New Hope Economic Development Authority (the "Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the order of Armory Development II, LLC (the "Owner), solely from the source, to the extent and in the manner hereinafter provided, the principal amount of this Note, being Four Hundred Thousand Dollars ($400,000.00) (the "Principal Amount"), together with interest on the unpaid principal balance from the date of this Note until paid at the rate of Six and Three/Fourths Percent (6.75%) per annum and payable on the dates described below (the "Payment Dates') and in the amounts as hereinafter defined (the "Payments"). This Note is issued pursuant to that certain Contract for Private Redevelopment by and between the Authority and the Owner dated April 26, 2004 (as amended, modified, supplemented or restated from time to time, the "Agreement!). This Note is subject to the terms, conditions and provisions of the Agreement and the notations on Annex A attached to this Note and made a part hereof. Capitalized terms in this Note not defined herein shall have the definitions given those terms in the Agreement. The Principal Amount of this Note may be reduced by the Authority in the circumstances described in Section 3.8 of the Agreement and to the extent provided therein. The adjustment, if any, in the principal amount of this Note shall be noted on Annex A hereto and certified by the Authority. The Payment Dates shall commence on August 1 of the first year of receipt of Tax Increment from the construction of the Minimum Improvements and on each February 1 and August 1 thereafter until and including December 31, 2031 unless earlier paid in accordance with the terms of this Note. All Payments made by the Authority on this Note shall be applied first to accrued interest and then to principal. Any accrued interest on this Note not paid on any Payment Date shall be added on such Payment Date to the principal amount of this Note. The Principal Amount is subject to prepayment at the option of the Authority in whole or in part at any time without penalty. 25 Each Payment on this Note is payable in any coin or currency of the United States of America which on the date of such Payment is legal tender for public and private debts and shall be made by check or draft made payable to the Owner and mailed to the Owner at its postal address within the United States which shall be designated from time to time by the Owner. The Note is a special and limited obligation and not a general obligation of the Authority, which has been issued by the Authority pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Section 469.178, subdivision 4, to aid in financing a project, as therein defined, of the Authority consisting generally of defraying certain public redevelopment costs incurred and to be incurred by the Authority within and for the benefit of its Redevelopment Project No. 1. THE NOTE IS NOT A GENERAL OBLIGATION OF THE AUTHORITY OR THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE AUTHORITY, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN PLEDGED TAX INCREMENT, AS DEFINED BELOW. The Payment of this Note due on any Payment Date is payable solely from and only to the extent that the Authority shall have received as of such Payment Date Pledged Tax Increment, as defined in the Agreement. In the event that Pledged Tax Increment is not sufficient to pay when due the principal of and interest on this Note, the failure of the Authority to pay the principal of and interest on this Note then due shall not constitute a default hereunder. The Authority shall pay on each Payment Date to the Owner the Pledged Tax Increment. On December 31, 2031, the maturity date of this Note, any unpaid portion shall be deemed to have been paid in full. This Note shall not be payable from or constitute a charge upon any funds of the Authority, and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds, except the Pledged Tax Increment, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or of any other public body, and neither the Authority nor any director, commissioner, council member, board member, officer, employee or agent of the Authority, nor any person executing or registering this Note, shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. The Authority makes no representation or covenant, express or implied, that the revenues described herein will be sufficient to pay, in whole or in part, the amounts which are or may otherwise become due and payable hereunder. The Authority's payment obligations hereunder shall be further conditioned on the fact that there shall not at the time have occurred and be continuing an Event of Default under the 26 Agreement, and, further, if pursuant to the occurrence of an Event of Default under the Agreement the Authority elects to terminate the Agreement, the Authority shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to the provisions of the Agreement for a faller statement of the obligations of the Redeveloper and of the rights of the Authority thereunder, and said provisions are hereby incorporated by reference into this Note to the same extent as though set out in full herein. The execution and delivery of this Note by the Authority, and the acceptance thereof by the Redeveloper, as the initial Registered Owner hereof, shall conclusively establish this Note as the "Note" (and shall conclusively constitute discharge of the Authority's obligation to issue and deliver the same to the Redeveloper) under the Agreement. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the Board of Commissioners of the New Hope Economic Development Authority, by its Commission Members, has caused this Note to be executed by the manual signatures of the President and the Executive Director of the Authority and has caused this Note to be dated .200 NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY BV 1t president By Its Executive Director 27 It is hereby certified that the foregoing Note, as originally issued on the day of , 200___, was on said date registered in the name of the New Hope Economic Development Authority, a public body corporate and politic and that, at the request of said Registered Owner of this Note, the undersigned has this day registered this Note as to principal and interest on the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. Name of Date of Signature of Registered Own Reg strstion Secretary Armory Development 11, LLC, , 200_ a Minnesota limited liability company �:' The undersigned hereby certify that, as a result of the calculation set forth in Section 3.8 of the Agreement, the original principal amount of the Note is $ Dated: NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director 29 SCHEDULE D SITE PLAN 30 SCHEDULE E SITE ]IMPROVEMENTS + Acquisition of Redevelopment Property + Building demolition + Site clearance + Environmental remediation, if necessary + Sanitary sewer • Water mains and stubs Storm sewers and storm water system elements, including ponding, both on and off site Private streets, including curb and gutter + Landscaping and irrigation according to City -approved landscape plans + Pedestrian improvements pursuant to City -approved site plans + Grading and import/export of soil in accordance with City -approved grading plans + Retaining walls and fences 31 SCHEDULE F DESCRIPTION OF PRODUCTS AND MATERIALS [Redeveloper to furnish] 32 SCHEDULE G DECLARATION OF RESTRICTIVE COVENANTS AND PROHIBITION AGAINST TAX EXEMPTION This Declaration is made and executed as of the day of , 200. by Armory Development M LLC, a Minnesota limited liability company ("Declarant"). Recitals A. Declarant is fee owner of the premises located in the County of Hennepin, State of Minnesota described on Exhibit A attached hereto (the "Property"). B. The New Hope Economic Development Authority, a public body corporate and politic (the "Authority") has entered into a Contract for Private Redevelopment dated Aril 26, 2004 with the Declarant (the "Redevelopment Agreement'). The Redevelopment Agreement provides for certain assistance, financial and otherwise, to be provided by the Authority in connection with the construction of townhomes by the Declarant on the Property. NOW, THEREFORE, in consideration of the foregoing, Declarant, for itself and its successors and assigns, does hereby declare that the Property shall be owned, used, occupied, sold and conveyed subject to the following covenants and restrictions: 1. No part of the Property shall become tax exempt from the levy of ad valorem property taxes, or any statutorily authorized alternative, until December 31, 2031. 2. The covenants and restrictions herein contained shall run with the title to the Property and shall be binding upon all present and future owners and occupants of the Property; provided, however, that the covenants and restrictions herein contained shall inure only to the benefit of the Authority and may be released or waived in whole or in part at any time, and from time to time, by the sole act of the Authority, and variances may be granted to the covenants and restrictions herein contained by the sole act of the Authority. These covenants and restrictions shall be enforceable only by the Authority, and only the Authority shall have the right to sue for and obtain an injunction, prohibitive or mandatory, to prevent the breach of the covenants and restrictions herein contained, or to enforce the performance or observance thereof. 3. The covenants and restrictions herein contained shall remain in effect until December 31, 2031 and thereafter shall be null and void. 4. If any one or more of the covenants or restrictions contained in this Declaration are held to be invalid or enforceable, the same shall in no way affect any of the other provisions of this Declaration, which shall remain in full force and effect. 33 ARMORY DEVELOPMENT II, LLC, a Minnesota limited liability company Lo Douglas G. Hoskin Its: Managing Member STATE OF'V MINNESOTA ) ss COUNTY OF ) On this day of , 2004, before me, a notary public within and for County, personally appeared Douglas G. Hoskin, to me personally known and who by me duly sworn, did say that he is the Managing Member of Armory Development B, LLC, a Minnesota limited liability company, and acknowledged the foregoing instrument on behalf of said company. Notary Public 34 [to be added] Legal Description for Declaration of Restrictive Covenants and Prohibition Against Tax Exemption 35 SCHEDULE H MAL SOURCES AND USES SCHEDULE RF_VENIMS 1 Gross Sales Proceeds .................................................. $ 2 TOTAL SOURCES .................................................... 5 6 7 8 9 10 if 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 kh 28 29 30 31 32 33 34 FXPFNSFS Land Costs: Land and Building Acquisition: Acquisition................................................................. LeaseBuyout............................................................. Site Preparation: Geotechnical.............................................................. _ Grading...................................................................... Engineering............................................................... Survey........................................................................ Demolition.................................................................. Environmental Testing - Phase 2 ................................ Public Improvements: Water and Sanitary Sewer ......................................... Staking and Layout .................................................... Irrigation..................................................................... Landscaping.............................................................. Lighting...................................................................... Site Utilities................................................................ Fencing...................................................................... Streets and. Sidewalks: Paving....................................................................... Sidewalk Improvements ............................................. TotalLand Costs .................................................. Construction Costs ........................................................ Soft Costs: SoftCosts...................................................................... Taxes............................................................................. FinanceFees................................................................ Developer Fee (not to exceed 5% of lines 20+21) ........ TOTAL USES (lines 20+21+26) ....................... I....... Less: Authority Grant ....................................................... Limited Tax Increment Revenue Note .................... Metropolitan Council and Other Grants .................. Net Development Costs (line 27 - line 31)............... PROFIT (line 2 - line 32) ............................................ PROFIT % (line 33 _ line 2) (may not exceed 15%) .. 36 Page 1 of 1 Leone Valerie From: Baldwin Amy Sent:Wed 12/1/2004 9:22 AM To: Leone Valerie; McDonald Kirk; cmk(u-jjensen-sondrall.carn Cc: Subject: RE: outstanding contracts Attachments: Yes, the EDA/Armory Development contract was replaced with a new one with Foundation Land Development on 7126104, which has been fully executed. -----Original Message ---- From: Leone Valerie Sent: Wednesday, December 01, 2004 9:12 AM To: Johnson Guy; McDonald Kirk, cmk@jensen-sondrall.com; Baldwin Amy Subject; outstanding contracts Please review and follow up on the attached list of items that were approved by council but status is still "open" for various reasons. Thanks. Valerie https: //mail. ci.new-hope.nm.us/exchange/vleoneqnbox/RE:%2Ooutstanding%20contracts-2.E... 12/1/2004 '233 NOTICE OF PUBLIC HEARING CITY OF NEW HOPE COUNTY OF HENNEPIN STATE OF MINNESOTA NOTICE IS HEREBY GIVEN THAT the City Council (the "Council") of the City of New Hope, Minnesota, will hold a public hearing on Monday, April 12, 2004, at 7:00 p.m. o'clock, or shortly thereafter, at City Hall, 4401 Xylon Avenue North, New Hope, Minnesota, 55428, relating to the following matters: (1) modification of the Restated Redevelopment Plan for Redevelopment Project No. 1 (the "Project Area") reflecting increased project costs and increased bonding authority within the Project Area; (2) modification of 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 03-1(Special Law) reflecting increased project costs and increased bonding authority within the Project Area; (3) creation of Tax Increment Financing District No. 04-1 (Special Law); and, (4) adoption of a Tax Increment Financing Plan relating thereto, all pursuant to Minnesota Statutes, Sections 469.001 to 469.047, 469.124 to 469.134, 469.090 to 469.108 and 469.174 to 469.1799, and Laws of Minnesota 2003, Chapter 21, Article 10, Section 10, inclusive. Copies of the documentation relating to the above proposed actions will be on file and available for public inspection in the City Clerk's office. The property proposed to be included in Tax Increment Financing District No. 04- 1 (Special Law) is described below and set forth on the attached map: PIN 05-118-21-32-0007, including adjacent streets and rights-of-way All interested persons may appear at the hearing and present their views orally or in writing. BY ORDER OF THE CITY COUNCIL City Manager (attach map) G:\WPDATA\N\NEW HOPE\13\TIF\NOTICE OF PUBLICATION.DOC K--RASS MONROE, P.A. A T T 0- R N E Y S A T L A W 'V Igoe 733 May 18, 2004 Ms. Jonetta Williams Minnesota Department of Revenue Department of Revenue Building Mail Station 7100 St. Paul, MN 55146-7100 Re: City of New Hope Tax Increment Financing District No. 04-1 (Special Law) Dear Ms. Williams: Enclosed please find the following: 1 Resolution No. 2004-15 of the New Hope Economic Development Authority dated April 26, 2004 modifying the Restated Redevelopment Plan and Tax Increment Financing Districts Nos. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1, 02-1 and 03-1 (Special Law), creating Tax Increment Financing District No. 04-1 (Special Law) and adopting a Tax Increment Financing Plan relating thereto; 2. Resolution No. 2004-86 of the New Hope City Council dated April 26, 2004 modifying the Restated Redevelopment Plan and Tax Increment Financing Districts Nos. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1, 02-1 and 03-1 (Special Law), creating Tax Increment Financing District No. 04-1 (Special Law) and adopting a Tax Increment Financing Plan relating thereto; 3. Tax Increment Financing Plan for Tax Increment Financing District No. 04-1 (Special Law); 8000 Norman Center Drive, Suite 1000 Minneapolis, MN 55437-1178 Telephone 952.885.5999 Facsimile 952.885.5989 Website www.krassmonroe.com 4. Certification Request Supplement; and 5. Two (2) Certificates of Filing (please return one executed copy). Please call if you have any questions regarding these documents. Sincerely, KRASS MONROE, P -A. Mary E. Molzahn Senior Development Analyst cc:' Kirk McDonald, City of New Hope G:\WPDATA\N\NEW HOPE\ 13 \TIF\STATE TRANSMITTAT..DOC EDA 1� R REQUEST FOR ACTION Originating Department Approved for Agenda Agenda Section Community Development 07-26-04 EDA Item No. By: Kirk McDonald, Director of CD Amy Baldwin, CD Assistant By: 6 A RESOLUTION AUTHORIZING EXECUTION AND DELIVERY OF A CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND FOUNDATION LAND DEVELOPMENT, LLC FOR THE REDEVELOPMENT OF THE FORMER FRANK'S NURSERY PROPERTY, 5620 WINNETKA AVENUE NORTH (IMPROVEMENT PROJECT NO. 733). REQUESTED ACTION Staff recommends that the EDA approve the attached resolution, which approves the contract for private redevelopment with Foundation Land Development, LLC for the former Frank's Nursery redevelopment site at 5620 Winnetka Avenue North, located in the Livable Communities study area. POLICY/PAST PRACTICE, The EDA has previously entered into contracts for 'private redevelopment with developers to facilitate improvements in the city. This agreement will facilitate the construction of 44 owner -occupied, market rate townhome units in the Livable Communities area and address life cycle housing goals outlined in the Comprehensive Plan. BACKGROUND The EDA initially approved the redevelopment contract for this project with Armory Development at its April 26, 2004 meeting. As discussed at the June 21, 2004 work session, Armory Development is requesting to transfer the redevelopment contract to a new developer who will construct the same project as previously approved. The new developer is Foundation Land Development, LLC or Jim Deanovic, an experienced developer who has completed many successful development projects throughout the metropolitan area. Staff does not have any issue with the change in developers and recommends approval of the resolution. ATTACHMENT • Resolution MOTION BY SECOND BY TO: &0 A 1�J 7 7.(2� i IARFATLANNINGILivable Gommunities\Q-5620 Wtka developer than e.doc NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY COUNTY OF HENNEPIN STATE OF MINNESOTA RESOLUTION NO. 2004-27 A RESOLUTION AUTHORIZING EXECUTION AND DELIVERY OF A CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND FOUNDATION LAND DEVELOPMENT, LLC FOR THE REDEVELOPMENT OF THE FORMER FRANK'S NURSERY PROPERTY BE 1T RESOLVED by the New Hope Economic Development Authority (the "EDA") as follows: Section 1. Recitals. 1.01 It has been proposed that the EDA enter into a Contract for Private Redevelopment (the "Contract") with Foundation Land Development, LLC (the "Redeveloper") to redevelop the former Frank's Nursery site at 5620 Winnetka Avenue North. Section 2. Findings. 2.01 The EDA hereby finds that the Contract promotes the objectives as outlined in its Restated Redevelopment Pfan for Redevelopment Project No.1 established pursuant to Minnesota Statutes, Section 469.001 et seq. 2.02 The EDA hereby finds that it has approved and adopted Tax Increment Financing District No. 04-1 (Special Law) and the EDA has approved and adopted the Tax Increment Financing Plan relating thereto pursuant to Minnesota Statutes, Sections 469.174 through 469.1799, inclusive, as amended and supplemented from time to time. Section 3. Authorizations. 3.01 The President and the Executive Director (the "Officers") are hereby authorized to execute and deliver the Contract when the following condition is met: Substantia! conformity to the Contract presented to the EDA as of this date with such additions and modifications as those Officers may deem desirable or necessary as evidenced by the execution thereof. Adopted by the EDA this 25th day of July 2004. 4��—co-�� D ier, President ATTEST: Daniel J. Donahue, Executive Director GAWPDATAMNEW HOPE1131DOMEDA RESOL AUTHG EXEC OF REDEV AGR V2.000 I KRASS MONROE, P.A A T T O R N E Y S A T A W N Gay Greiter Email ggreiter@krassmonroe.coin www,krassmonrvacom Direct Dial (952) 885-4393 August 23, 2004 Kirk McDonald Community Development Director City of New Hope 4401 Xylon Av N New Hope, MN 55428 Re: New Hope/Former Frank's Nursery Site/Foundation Land Development, LLC Our File No. 10048-13 Dear Kirk: # 2-33 Enclosed is a fully -executed Agreement for Private Redevelopment dated July 26, 2004 between the Economic Development Authority and Foundation Land Development, LLC relating to the former Frank's Nursery Site. Very truly yours, KRASS MONROE, P.A. Gay eiter Attorney at Law cc (w/encl): Clarissa Klug, Esq., Jensen & Sondrall, P.A. James Dierking, Esq., Winthrop & Weinstine, P.A. James Deanovic, Foundation Land Development, LLC Melvin Moore, Pinnacle Homes, Inc. Tom Palumbo, Highland Bank G:IWPDATA\N\NEW H®PE1131C0R\N7CDONA%D GG47.DOC 8000 Norman Center Drive, Suite 1000 Minneapolis, MN 55437-1178 Telephone 952.885.5999 Facsimile 952.885.5969 Website www.krassmonroe.com DATED: JULY 26, 2004 CONTRACT FOR PRIVATE REDEVELOPMENT By and Between ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE And FOUNDATION LAND DEVELOPMENT, LLC This document was drafted by Krass Monroe, P.A. 8000 Norman Center Drive Suite 1000 Minneapolis, MN 55437 Gay Greiter, Esq. GAWPDATAMEW HOPalMOMCOVERAOC TABLE OF CONTENTS Pave ARTICLE i Definitions Section1.1. Definitions....................................................................................................4 ARTICLE II Representations, Warranties and Covenants Section 2.1. Representations and Covenants by the Authority........................................6 Section 2.2. Representations, Warranties and Covenants of the Redeveloper ................7 ARTICLE III Site Improvements; Public Assistance; Undertaken s of Authority and Redeveloper Section 3.1. Construction of Minimum Improvements and Site improvements .............8 Section 3.2. Metropolitan Council Grant Assistance.......................................................8 Section3.3. Developer Fee..............................................................................................9 Section 3.4. Reimbursement for Site Improvements.......................................................9 Section 3.5. Assignment of Note; No Registration ................ Section 3.6. Tax Increment Certification.........................................................................9 Section 3.7. Use of Tax Increment.................................................................................10 Section 3.8. Reconciliation Date; Authority Participation.............................................10 F411 ft-NfwwVTA Construction of Minimum improvements Section 4.1. Construction of Minimum Improvements.................................................10 Section 4.2. Preliminary Plans and Construction Plans ..................... Section 4.3. Completion of Construction.......................................................................12 Section 4.4. Certificate of Completion..........................................................................12 i s ARTICLE V Insurance Section5.1. Insurance....................................................................................................13 ARTICLE VI Prohibitions Against Assignment and Transfer,• Indemnification Section 6.1. Representation as to Redevelopment.........................................................14 Section 6.2. Prohibition Against Transfer of Property and Assignment of Agreement.................................................................14 Section 6.3. Release and Indemnification Covenants....................................................15 ARTICLE VII Events of Default Section 7.1. Events of Default Defined..........................................................................16 Section 7.2. Authority's Remedies on Default..............................................................17 Section 7.3. No Remedy Exclusive ............................ Section 7.4. No Additional Waiver Implied by One Waiver.........................................17 ARTICLE VIII Additional Provisions Section 8.1. Conflict of Interest.....................................................................................18 Section 8.2. Authority Representatives Not Individually Liable...................................18 Section 8.3. Equal Employment Opportunity................................................................18 Section 8.4. Restrictions on Use....................................................................................18 Section 8.5. Titles of Articles and Sections...................................................................18 Section 8.6. Notices and Demands................................................................................18 Section8.7. Counterparts...............................................................................................18 ii I ARTICLE IX Termination of Agreement Section 9.1. Termination ............... Section 9.2. Sections to Survive Termination ................................. SIGNATURES............................................................................................................ ....20 SCHEDULES Schedule A Description of Redevelopment Property ....................................................22 Schedule B Certificate of Completion..........................................................................23 ScheduleC Note............................................................................................................25 ScheduleD Site Plan.....................................................................................................30 Schedule E Site Improvements.....................................................................................31 Schedule F Description of Products and Materials.......................................................32 Schedule G Declaration of Restrictive Covenants and Prohibition Against Tax Exemption...........................................................................33 Schedule H Final Sources and Uses Schedule...............................................................36 G:IWPDATAWWEW HOPE MDOMOC.DOC iii CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made as of the 26th day of July, 2004, by and between the Economic Development Authority in and for the City of New Hope (the "Authority"), a public body corporate and politic (the "Authority"), having its principal offices at 4401 Xylon Avenue North, New Hope, Minnesota 55428, and Foundation Land Development, LLC, a Minnesota limited liability company (the "Redeveloper"), having offices at 2104 Fourth Avenue South, Minneapolis, Minnesota 55404. WITNESSETH.- WHEREAS, ITNESSETH: WHEREAS, the Authority is a political subdivision of the State of Minnesota and is governed by a Board of Commissioners (the "Board"); WHEREAS, in furtherance of the Authority's objectives, there has been established a Restated Redevelopment Plan (the "Project Plan") for Redevelopment Project No. 1 (the "Project Area") in the City of New Hope, Minnesota (the "City") to encourage and provide maximum opportunity for private development and redevelopment of certain property in the City which is not now in its highest and best use; WHEREAS, as of the date of this Agreement the Project Plan has been prepared and approved, and the Project Area has been established, pursuant to Minnesota Statutes, Sections 469.001 through 469.047 and 469.090 through 469.108; WHEREAS, in connection with the Project Area and to assist with the financing of the redevelopment contemplated by this Agreement, the City Council of the City has created Tax Increment Financing District No. 04-1 (Special Law) (the "Tax Increment District") pursuant to Minnesota Statutes Section 469.174 et seq. (the "Tax Increment Act") which includes the Redevelopment Property; WHEREAS, in connection with the establishment of the Tax Increment District, the Council has prepared and approved a tax increment financing plan and shall forward it to the County of Hennepin for certification of the original net tax capacity; WHEREAS, the major objectives in establishing the Project Area are to: 1. Promote and secure the prompt development or redevelopment of certain property in the Project Area, which property is not now in productive use or in its highest and best use, in a manner consistent with the City's comprehensive plan and with a minimum adverse impact on the environment and thereby promote and secure the development of other land in the City. 2. Promote and secure additional employment opportunities within the Project Area and the City for residents of the City and surrounding area, thereby improving living standards, reducing unemployment and the loss of skilled and unskilled labor and other human resources in the City. 3. Secure the increased valuation of property subject to taxation by the City, County, School District and other taxing jurisdictions in order to better enable such entities to pay for governmental services and programs required to be provided by them. 4. Provide for the financing and construction of public improvements in and adjacent to the Project Area necessary for the orderly and beneficial development or redevelopment of the Project Area and adjacent areas of the City. 5. Promote the concentration of new desirable residential, commercial, office and other appropriate development or redevelopment in the Project Area so as to maintain the area in a manner compatible with its accessibility and prominence in the City. 6. Encourage local business expansion, improvement, development or redevelopment whenever possible. 7. Create a desirable and unique character within the Project Area through quality land use alternatives and design quality in new and remodeled buildings. S. Encourage and provide maximum opportunity for private development or redevelopment of existing areas and structures which are compatible with the Plan. 9. Create viable environments which would upgrade and maintain housing stock, maintain housing health and safety quality standards, and maintain and strengthen individual neighborhoods. 10. Stimulate private activity and investment to stabilize and balance the City's housing supply. 11. Eliminate code violations and nuisance conditions that adversely affect neighborhoods. 12. Revitalize property to create a safe, attractive, comfortable, convenient and efficient area for residential use. 13. Recreate and reinforce a sense of residential place and security which creates neighborhood cohesiveness through City investment in neighborhood infrastructure and public improvements, including landscaping, park improvements, local street modifications to reduce traffic impacts, street repaving, curb and gutter replacement, and streetlight updating. 14. Encourage infill development and redevelopment that is compatible in use and scale with surrounding neighborhoods. 15. Rehabilitate the existing housing stock and preserve existing residential neighborhoods wherever possible. 16. Demolish and reconstruct, where necessary, aging residential buildings to preserve neighborhoods. 17. Removal of substandard structures. 2 WHEREAS, under the Tax Increment Act, the Authority is authorized to finance certain costs of a redevelopment project with tax increment revenues derived from a tax increment financing district established within such redevelopment project; WHEREAS, in order to achieve the objectives of the Authority and City in creating the Project Area and in adopting the Project Plan, the Authority is prepared to provide assistance in accordance with this Agreement; and WHEREAS, the Authority believes that the development and redevelopment of the Project Area pursuant to this Agreement, and fulfillment generally of the terms of this Agreement, are in the vital and best interests of the Authority and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws under which the development and redevelopment are being undertaken and assisted. NOW, THEREFORE, in consideration of the premises and the mutual obligation of the parties hereto, each of them does hereby covenant and agree with the other as follows: 3 ARTICLE I DEFINITIONS Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means Minnesota Statutes, Section 469.001 et seq., as amended. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "Authority" means the Economic Development Authority in and for the City of New Hope. "Authority Grant" shall have the meaning given that term in Section 3.4. "Available Tax Increment" means 100% of the Tax Increment from the TIF District. "Building" means one of the structures containing one or more individual residential units as described in the Minimum Improvements and shown on the Site Plan. "Certificate of Completion" means the certification in the form of Schedule R to be provided to the Redeveloper, or the purchaser of any part, parcel or unit of the Redevelopment Property, pursuant to Section 4.4. "City" means the City of New Hope, Minnesota. "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the building inspector of the City, and shall include at least the following for each building: (1) site plan; (2) foundation plan; (3) basement plans; (4) floor plan for each floor; (5) cross sections of each (length and width); (6) elevations (all sides, except as to a side of existing structure where no construction is to take place); (7) facade and landscape plan; and (8) such other plans or supplements to the foregoing plans as the City may reasonably request. "County" means the County of Hennepin, Minnesota. "Declaration of Restrictive Covenants and Prohibition Against Tax Exemption" means those restrictive covenants substantially in the form of Schedule Or, "Developer fee" means the fee that the Redeveloper may earn for its performance of its development activities pursuant to this Agreement, subject to the limitations set forth in Section 3.3. "Event of Default" means an action by the Redeveloper described in Section 7.1. "Minimum Improvements" means the improvements to be constructed by the Redeveloper on the Redevelopment Property, which improvements shall consist of 44 townhomes with an average sales price of approximately $222,000 per unit. 4 "Minnesota Environmental Rights Act" means the statutes located at Minnesota Statutes, Section 116B.01 et seq., as amended. "Note" means the Limited Revenue Tax Increment Note in a principal amount not to exceed Four Hundred Thousand Dollars ($400,000), substantially in the form of Schedule C and to be issued by the Authority payable to the order of the Redeveloper, or to the Redeveloper's permitted assigns, in accordance with Article III. "Plan" means, collectively, (i) the Restated Redevelopment Plan adopted by the Authority and approved by the City for Redevelopment Project No. 1, and (ii) the Tax Increment Plan. "Pledged Tax Increment" means, in any year, 35% of the Available Tax Increment generated by the Redevelopment Property. "Preliminary Plans" means the preliminary design and architectural plans for the construction work to be performed by the Redeveloper on the Redevelopment Property and submitted by the Redeveloper to the Authority. "Project" means the Redevelopment Property and Minimum Improvements. "Project Area" means Redevelopment Project No. 1 established in accordance with the Act. "Reconciliation Date" means the earlier of December 31, 2007 or 30 days following the sale of all residential units comprising the Minimum Improvements. "Redeveloper" means Foundation Land Development, LLC, a Minnesota limited liability company, and its permitted successors or assigns. "Redevelopment Property" means the real property upon which the Minimum Improvements are to be constructed, which real property is described in SnhednleA. "Site Improvements" means acquisition of the Redevelopment Property and the improvements to be constructed thereon by the Redeveloper as described in Schedule E and in Article III. "Site Plan" means the plan attached hereto as Schedule D showing the nature and location of the Minimum Improvements. "State" means the State of Minnesota. "Tax Increment" means that portion of the real estate taxes paid with respect to the Redevelopment Property which is remitted to the Authority as tax increment pursuant to the Tax Increment Act. "Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 to 469.1799, as amended and as it may be amended. 5 "Tax Increment District" means Tax Increment Financing District No. 04-1 (Special Law), which includes the Redevelopment Property and which was approved and adopted by the Authority and the City within Redevelopment Project No. 1 pursuant to the Tax Increment Act. "Termination Date" means the expiration date of this Agreement described in Article IX. "Unavoidable Delays" means delays which are the direct result of strikes, delays which are the direct result of unforeseeable and unavoidable casualties to the Minimum Improvements, the Redevelopment Property or the equipment used to construct the Minimum Improvements, delays which are the direct result of governmental actions, delays which are the direct result of judicial action commenced by third parties, citizen opposition or action affecting this Agreement or adverse weather conditions or acts of God. ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS Section 2.1, Representations and Covenantg by the Aufhnrily. The Authority makes the following representations as the basis for the undertaking on its part herein contained: (a) The Authority is a public body corporate and politic and a political subdivision of the State of Minnesota and is governed by a board of commissioners. Under the provisions of the Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The Authority has created, adopted and approved the Project Area in accordance with the terms of the Act. (c) The Authority has complied with all statutory requirements the Tax Increment Act relating to the creation of the Tax Increment District. (d) The Authority proposes to assist the Redeveloper for the costs of Site Improvements in accordance with the Plan and this Agreement. (e) The Authority proposes to make the Note payable to the Redeveloper, or its permitted assigns, in accordance with the provisions of this Agreement and to pledge tax increment generated by the Tax Increment District to the payment of the principal of and interest on the Note according to its terms. (f) The Authority will cooperate with the Redeveloper with respect to any litigation commenced by third parties in connection with this Agreement. (g) The Redevelopment Property has been rezoned for construction of the Minimum Improvements. 6 Section 2.2. Re=mcntatinns,Wamnties and Covenants by the Redevelnp The Redeveloper represents and warrants that: (a) The Redeveloper is a Minnesota limited liability company organized and in good standing under the laws of the State. (b) The Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper or the Authority in the Project Area with respect to the Minimum Improvements may or will be in violation of any environmental law or regulation. The Redeveloper is aware of no facts with respect to the Minimum Improvements, the existence of which would cause it to be in violation of any local, state or federal environmental law, regulation or review procedure or which would give any person a valid claim under the Minnesota Environmental Rights Act. (c) The Redeveloper will use its best efforts to obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state and federal Iaws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (d) The Redeveloper will construct, operate and maintain the Minimum Improvements in accordance with the terms of this Agreement, the Plan and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (e) If an Event of Default on the part of the Redeveloper occurs and if the Authority shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on the part of the Redeveloper under this Agreement, the Redeveloper agrees that it shall, within ten days of written demand by the Authority, pay to the Authority the reasonable fees of such attorneys and such other expenses so incurred by the Authority. (f) The financing arrangements which the Redeveloper has obtained or will obtain to finance construction of the Minimum Improvements will be sufficient to enable the Redeveloper to successfully complete the Minimum Improvements as contemplated in this Agreement. (g) The Redeveloper shall pay all costs for plats, replats, lot splits, preparation of restrictive covenants, easements and any other documentation necessary for the acquisition, construction and sale of the Minimum Improvements and all costs of recording. (h) The construction of the ;Minimum Improvements, in the opinion of the Redeveloper, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future without the assistance provided by the Authority pursuant to this Agreement. (i) The Redeveloper shall construct the Minimum Improvements using the products and materials described in Schedule F. 0) The Redeveloper shall pay the normal and customary City fees and expenses for the approval and construction of the Project including, but not limited to, bonding requirements, building permit fees, state surcharges, sewer accessibility charges (SAC), water accessibility charges (WAC) and park dedication fees. (k) Once acquired by the Redeveloper, the Redevelopment Property shall not become exempt from the levy of ad valorem property taxes, or any statutorily authorized alternative, and any improvements of any kind constructed on the Redevelopment Property shall similarly not become exempt until after the later of the dissolution or other termination of the Tax Increment District or December 31, 2031. Notwithstanding the foregoing language, this restriction shall end upon any termination of this Agreement due to a default by the Authority that is not timely cured as allowed under this Agreement. 0) The Redeveloper agrees, notwithstanding the provisions of Article VI, that it will not assign, convey or lease any interest in the Redevelopment Property or any portion thereof, or this Agreement or any portion thereof, to any tax-exempt entity under the U.S. Internal Revenue Code of 1986, as the same may be amended from time to time, without the prior written approval of the Authority (whose approval shall be conditioned upon the Redeveloper obtaining an agreement upon terms reasonably satisfactory to the Authority from its assignee or lessee to make payments in lieu of tax). (m) The Redeveloper will pay for relocation services and benefits for all owners or tenants of the Redevelopment Property. The Redeveloper may, in lieu of funding such services and benefits, provide a written waiver by the owner or tenant. Such waiver must be in a form acceptable to the Authority. The Redeveloper shall indemnify the Authority for any relocation liabilities arising under applicable law with respect to any portion of the Redevelopment Property. ARTICLE III SITE IMPROVEMENTS; PUBLIC ASSISTANCE; UNDERTAKINGS OF AUTHORITY AND REDEVELOPER Section 3.1. . The Redeveloper shall construct the Minimum Improvements and Site Improvements on the Redevelopment Property in accordance with the Construction Plans and will maintain, preserve and keep the Minimum Improvements and Site Improvements in good repair and condition. All contracts for construction of the Minimum Improvements and Site Improvements shall provide that payments for the work thereunder are the sole obligation of the Redeveloper. Neither the City nor the Authority shall have any obligation under such contracts. Section 3.2. The Redeveloper has provided all documentation required by the Authority to apply for a Metropolitan Council grant to reimburse the Redeveloper for approximately $21,000 of eligible expenses, and the Authority will apply for the grant. The Authority will provide any grant funds received to the Redeveloper on terms consistent with the provisions of the grant. The Redeveloper is responsible for any required environmental remediation; however, the Authority will make, or assist the Redeveloper in making, applications to other public agencies requesting grants or loans for reimbursement of such costs. Funds received for such purpose shall be provided to the Redeveloper to the extent the Redeveloper supplies the 8 Authority with evidence reasonably acceptable to the Authority that Redeveloper has incurred such costs. Section 3.3. Dcycinl er Fee. The Developer Fee shall not exceed 5% of the total of actual land and construction costs, calculated as shown on the Final Sources and Uses Schedule attached as Schedule H. Section 3.4. Reimbursement for Site l=roy-ements. (a) The Redeveloper shall pay contractors, subcontractors and construction managers with whom the Redeveloper has entered into contracts. Upon submission to the Authority of invoices from such contractors and certifications signed by the Redeveloper's project architect or general contractor to the effect that the costs for which payment was made have been incurred in connection with the Site Improvements and upon receipt of lien waivers from such contractors, subcontractors, and construction managers, the Authority shall reimburse a portion of the cost of Site Improvements as follows: (i) Upon the issuance of certificates of occupancy for the first 20 townhomes, the Authority shall reimburse the Redeveloper or its permitted assigns for up to $400,000 of qualified tax increment -eligible costs, as defined in Minnesota Statutes, Section 469.176 subd. 4j (the "Authority Grant"); and (ii) Upon completion of construction of the final 24 townhomes such that those Buildings may be locked and secured, the Authority shall deliver the Note. (b) The Redeveloper shall reimburse the Authority for the Authority Grant if the Redeveloper fails to complete construction of the Minimum Improvements pursuant to the terms of Article IV. Section 3.5. Assignment ofNotr,; No Reg n. (a) The Redeveloper represents that it will not assign the Note to any entity other than its construction lender or another entity approved by the Authority, such approval to be evidenced by the Authority's written consent. The Redeveloper acknowledges that the Authority will not consent to any assignment of the Note to any entity that is not a financial institution or "accredited investor" as defined in the regulations promulgated under the Securities Act of 1933, as amended. The Authority approves the Redeveloper's assignment of the Note, in whole but not in part, to Pinnacle Homes, Inc. or Winnetka New Hope Town Homes, LLC in connection with an assignment described in Section 6.2. (b) The Redeveloper understands that the Note will not be registered or otherwise qualified for sale under the securities laws and regulations of the State or under Federal securities laws or regulations, the Note will not be listed on any stock or other securities exchange, and the Note will not carry a rating from any rating service. Section 3.6. Tax Increment (certification. Pursuant to the Plan, the Authority has pledged and shall appropriate the Pledged Tax Increment to the payment of the principal of and interest on the Note, with said payment to be made in accordance with the terms and provisions of the Note. kJ Section 3.7. Use of Tax Irrremnnt. The Authority shall be free to use the Tax Increment, other than the Pledged Tax increment, for any purpose for which the Tax Increment may lawfully be used pursuant to applicable provisions of Minnesota law. (a) The Redeveloper shall maintain books and records relating to the financing, construction and sales of the Minimum Improvements in accordance with generally accepted accounting principles consistently applied. (b) It is the intention of the Authority and the Redeveloper that the Redeveloper's profit not exceed 15% of gross sales proceeds, calculated as shown on the Final Sources and Uses Schedule attached as RnhPdule u. On the Reconciliation Date, the Redeveloper shall furnish to the Authority a full and complete copy of such books and records and a completed Final Sources and Uses Schedule certified by the Redeveloper. If all of the residential units have not been sold by December 31, 2007, for purposes of completing the Final Sources and Uses Schedule the sale price of the unsold units shall be deemed to be the average of the sale price of all units sold in the six (6) months preceding December 31, 2007. (c) In the event the Redeveloper's profit exceeds fifteen per cent (15%) as calculated above, the Authority shall receive participation to reflect a reduction in necessary public assistance in the amount of one-half (112) of any amounts over fifteen per cent (15%). The Authority shall receive such participation in the following order of priority: (i) The principal amount of the Note shall be reduced by means of the Authority executing and delivering Annex A to the Note to the Redeveloper; then (ii) The Redeveloper shall repay any payments of principal and interest on the Note made by the Authority prior to the Reconciliation Date together with interest at the rate of 6.75% per annum; then (iii) The Redeveloper shall repay the Authority Grant to the Authority together with interest at the rate of 6.75% per annum. ARTICLE IV CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 4.1. Congtoiction of Minimum Impmvements. The Redeveloper shall perform and pay for all Site Improvements described in Schedule E. Subject to Unavoidable Delays, the Redeveloper shall begin construction of the Minimum Improvements on or about August 1, 2004. The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with this agreement and the Construction Plans to be approved by the City. 10 Section 4.2. Preliminanz Plans and C`.onstnicrion Plans, (a) Preliminary Plans, Prior to the commencement of construction of the Minimum Improvements, the Redeveloper shall submit Preliminary Plans to the Authority consisting of typical floor plans and sketches of the typical exterior and interior of the proposed Minimum Improvements which illustrate the size and character of the proposed Buildings. The Preliminary Plans shall not be inconsistent with the Site Plan, this Agreement or any applicable state and local laws and regulations, insofar as said consistency may be determined at said preliminary stage. If approval of the Preliminary Plans is requested in writing by the Redeveloper at the time of submission thereof to the Authority, the Authority shall approve or reject (in whole or in part) such Preliminary Plans in writing within twenty (20) days after the date of receipt thereof. If no written rejection is made within said twenty (20) days, the Preliminary Plans shall be deemed approved by the Authority. Any rejection shall set forth in detail the reasons therefor. If the Authority rejects the Preliminary Plans, in whole or in part, the Redeveloper may submit new or corrected Preliminary Plans at any time after receipt by the Redeveloper of the notice of rejection. The Authority's approval of the Preliminary Plans shall not be unreasonably withheld, delayed or conditioned. (b) i nstniction Plans. Prior to the Redeveloper's commencement of construction of the Minimum Improvements, the Redeveloper shall submit Construction Plans to the Authority for the Minimum Improvements. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity in all material respects with this Agreement, the Preliminary Plans, and all applicable state and local laws and regulations. The Authority shall approve the Construction Plans in writing if. (i) the Construction Plans conform in all material respects to the terms and conditions of the Preliminary Plans and this Agreement; (ii) the Construction Plans conform to all applicable federal, State and local laws, ordinances, rules and regulations: (iii) the Construction Plans are adequate to provide for the construction of the Minimum Improvements; (iv) the Construction Plans do not provide for expenditures in excess of the funds available to the Redeveloper for the construction of the Minimum Improvements; and (v) no Event of Default has occurred and is continuing. No approval by the Authority shall relieve the Redeveloper of the obligation to comply with the terms of this Agreement and applicable federal, State and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority shall constitute a waiver of any Event of Default. Upon the Redeveloper's submittal of the Construction Plans to the Authority, such Construction Plans shall be deemed approved unless rejected in writing by the Authority, in whole or in part, within twenty (20) days after the date of their receipt by the Authority. Such rejection shall set forth in detail the reasons therefor. If the Authority rejects any Construction Plans in whole or in part, the Redeveloper shall submit new or corrected Construction Plans within thirty (30) days after written notification to the Redeveloper of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority. The Authority's approval shall not be unreasonably withheld, delayed or conditioned. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements, if constructed in accordance with said plans) comply with the provisions of this Agreement relating thereto. The Construction Plans shall not be rejected due to any objection which could have been raised upon review of the Preliminary PIans and corrected more economically at that time. 11 (c) If the Redeveloper desires to make any material change in the Preliminary Plans or Construction Plans after their approval by the Authority, then the Redeveloper shall submit the proposed change to the Authority for its approval. If the Preliminary Plans or Construction Plans, as modified by the proposed change, conform to the requirements of this Section with respect to such previously approved Construction Plans, the Authority shall approve the proposed change and notify the Redeveloper in writing of its approval. Such change in the Preliminary Plans or Construction Plans shall, in any event, be deemed approved by the Authority unless rejected in writing by the Authority, in whole or in part, within twenty (20) days after receipt of the notice of such change, setting forth in detail the reasons therefor. Section 4.3. Completion of Constniction. Subject to Unavoidable Delays, the Redeveloper shall have substantially completed the construction of the Minimum Improvements by July 31, 2007. All work with respect to the Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in conformity with the Construction PIans as submitted by the Redeveloper and approved by the City. The Redeveloper agrees for itself, it successors and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such successors and assigns, shall diligently prosecute to completion the development of the Redevelopment Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be completed within the period specified in this Section. Section 4.4. Certificate of Completion. (a) Promptly after completion of the Minimum Improvements for each Building in accordance with the provisions of this Agreement relating to the obligations of the Redeveloper to construct such improvements (including the date for completion thereof), the Authority will furnish the Redeveloper with a Certificate of Completion for such Building. The Certificate of Completion shall be a conclusive determination and conclusive evidence of the satisfaction and termination of the agreements and covenants in this Agreement with respect to the obligations of the Redeveloper and its successors and assigns, to construct the Minimum Improvements for each Building and the date for the completion thereof. (b) If the Authority shall refuse or fail to provide any certificate in accordance with the provisions of this Section 4.4, the Authority shall, within ten (10) days after written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of this Agreement, or is otherwise in default, and what measures or acts will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to obtain such certification. (c) The construction of the Minimum Improvements for each Building shall be deemed to be completed in accordance with the Redeveloper's obligations hereunder when the City has issued a Certificate of Occupancy for any individual residential unit of that Building. 12 ARTICLE V LNSURANCE Section 5.1. Tnsuratir.P. (a) The Redeveloper will provide and maintain at all times during the process of constructing the Minimum Improvements and, from time to time at the request of the Authority, furnish the Authority with proof of payment of premiums on: (i) builder's risk insurance, written on the so-called `Builder's Risk Completed Value Basis," in an amount equal to one hundred percent (1001/G) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so-called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content reasonably satisfactory to the Authority; (ii) comprehensive general liability insurance together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $2,000,000 for each occurrence (to accomplish the above -required limits, an umbrella excess liability policy may be used); and (iii) workers' compensation insurance, with statutory coverage. (b) All insurance required by this Article V shall be taken out and maintained in responsible insurance companies selected by the Redeveloper which are authorized under the laws of the State to assume the risks covered thereby. The Redeveloper will deposit annually with the Authority policies evidencing all such insurance, or a certificate(s) or binder(s) of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V, each policy shall contain a provision that the insurer shall not cancel or modify it without giving written notice to the Redeveloper and the Authority at least thirty (30) days before the cancellation or modification becomes effective. Not less than fifteen (15) days prior to the expiration of any policy, the Redeveloper shall furnish the Authority with evidence satisfactory to the Authority that the policy has been renewed or replaced by another policy conforming to the provisions of this Article V, or that there is no necessity therefor under the. terms hereof. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (c) The Redeveloper shall, from time to time, provide the Authority with evidence satisfactory to the Authority that the Redeveloper's subcontractors are maintaining workers' compensation insurance with statutory coverage. 13 ARTICLE VI PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION Section 6.1. Representation as to Redevelppment. The Redeveloper represents and agrees that its purchase of the Redevelopment Property, and its other undertakings pursuant to this Agreement, are, and will be used, for the purpose of redevelopment of the Redevelopment Property and not for speculation in land holding. The Redeveloper further recognizes that, in view of (a) the importance of the redevelopment of the Redevelopment Property to the general welfare of the Authority; (b) the substantial financing and other public aids that have been made available by the City or the Authority for the purpose of making such redevelopment possible; and (c) the fact that any act or transaction involving or resulting in a significant change in the identity of the parties in control of the Redeveloper or the degree of their control is for practical purposes a transfer or disposition of the property then owned by the Redeveloper, the qualifications and identity of the Redeveloper are of particular concern to the Authority. The Redeveloper farther recognizes that it is because of such qualifications and identity that the Authority is entering into this Agreement with the Redeveloper, and, in so doing, is further willing to accept and rely on the obligations of the Redeveloper for the faithful performance of all undertakings and covenants hereby by it to be performed. Section 6.2. The Redeveloper represents and agrees that prior to the issuance of the final Certificate of Completion for the Minimum Improvements or the Termination Date: (a) Except only by way of security for the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to the Project under this Agreement, or any other purpose authorized by this Agreement, the Redeveloper (except as so authorized) has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or any transfer in any other mode or form, of this Agreement or the Redevelopment Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without prior written approval by the Authority in its sole discretion. Notwithstanding the foregoing: (i) The Redeveloper may transfer the Redevelopment Property to any corporation, partnership, or limited liability company controlling, controlled by, or under common control with the Redeveloper, (ii) The Redeveloper may transfer the Redevelopment Property to Pinnacle Homes, Inc. or Winnetka New Hope Town Homes, LLC, and in connection therewith may assign its rights and obligations under this Agreement to Pinnacle Homes, Inc. or Winnetka New Hope Town Homes, LLC, who may assume all such obligations, as between the Redeveloper and Pinnacle Homes, Inc. or Winnetka New Hope Town Homes, LLC, subject to subsection (b)(ii) below, and (iii) The Redeveloper may enter into purchase agreements for, and close with respect to, the sale of individual residential lots or units in the ordinary course of the Redeveloper's business. 14 (b) The Authority shall be entitled to require, except as otherwise provided in this Agreement, as conditions to any such approval that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the Redeveloper's obligations hereunder. (ii) Any proposed transferee, by instrument in writing satisfactory to the Authority, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority, have expressly assumed all of the obligations of the Redeveloper hereunder from which the RedeveIoper seeks to be released and agrees to be subject to all of the conditions and restrictions to which the Redeveloper is subject unless the Redeveloper agrees to continue to fulfill those obligations. In the case of a transfer of the Redevelopment Property and assignment of this Agreement to Pinnacle Homes, Inc. or Winnetka New Hope Town Homes, LLC as permitted above, the RedeveIoper shall remain liable for all of the obligations of the Redeveloper under this Agreement. (iii) There shall be submitted to the Authority for review and prior written approval all instruments and other documents involved in effecting the transfer of any interest in this Agreement or the Redevelopment Property. Section 6.3. Release and Indemnificatinn Covenantg. (a) The Redeveloper covenants and agrees that the City, the Authority and the governing body members, officers, agents, servants and employees of either of them (collectively, the "Indemnified Parties") shall not be Liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss or damage to property or any injury to or death of any person occurring at or resulting from any defect in the Minimum Improvements, due to -any act, including negligence, of the Redeveloper or of others acting on the behalf or under the direction or control of the Redeveloper; provided, however, that the Redeveloper's indemnification obligations in this subparagraph (a) shall not apply to any loss resulting from negligent, willful or wanton misconduct of any of the Indemnified Parties. (b) The Redeveloper agrees to protect and defend the Indemnified Parties, now and forever, and further agrees to hold the Indemnified Parties harmless from any claim, demand, suit, action or other proceeding by any person or entity arising or purportedly arising from this Agreement or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements, due to any act, including negligence, of the Redeveloper or of others acting on the behalf or under the direction or control of the Redeveloper; provided, however, that the Redeveloper's indemnification obligations in this subparagraph (b) shall not apply to any loss resulting from any negligent or willful misrepresentation or any negligent, willful or wanton misconduct of any of the Indemnified Parties. (c) None of the Indemnified Parties shall be liable for any damage or injury to the person or property of the RedeveIoper or its officers, agents, servants or employees or any other person who may be on or about the Redevelopment Property or Minimum Improvements due to any act or negligence of any person, other than the negligence or misconduct of an Indemnified Party. 15 (d) None of the Indemnified Parties shall be liable to the Redeveloper or to any third party for any consequential or other damages that may arise out of delays of any kind relating to activities undertaken pursuant to this Agreement, including but not limited to delays due to environmental conditions, court challenges or elements outside the control of the Authority. (e) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the individual capacity thereof. (f) Nothing in this Section 6.3 is intended to waive any municipal liability limitations contained in Minnesota Statutes, particularly Chapter 466. ARTICLE VII EVENTS OF DEFAULT Section 7.1. Fventc of Default Defined. The following are Events of Default hereunder: (a) Failure of the Redeveloper to submit reasonably satisfactory Construction Plans in accordance with Section 4.2. (b) Failure by the Redeveloper to commence or complete construction of the Minimum Improvements pursuant to the terms, conditions and limitations of Article IV. (c) Failure by the Redeveloper to substantially observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed hereunder. (d) The Redeveloper shall: (i) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the United States Bankruptcy Code or under any similar federal or state law; or (ii) make an assignment for the benefit of its creditors; or (iii) admit in writing its inability to pay its debts generally as they become due; or (iv) be adjudicated as bankrupt or insolvent; or if a petition or answer proposing the adjudication of the Redeveloper as a bankrupt or proposing its reorganization under any present or future federal bankruptcy act or any similar federal or State law shall be filed in any court and such petition or answer shall not be discharged or denied within ninety (90) days after the filing thereof; or a receiver, trustee or liquidator of the Redeveloper or of the Redevelopment Property, or part thereof shall be appointed in any proceeding brought against the Redeveloper and shall not be discharged within ninety (90) days after such appointment, or if the Redeveloper shall consent to or acquiesce in such appointment. 16 (e) Any occurrence which would with the passage of time or giving of notice become an Event of Default as defined above. Section 7.2. Authori 's Remedies on Defa_1,1t. Whenever any Event of Default by the Redeveloper referred to in Section 7.1 occurs, the Authority may take any one or more of the following actions after providing thirty (30) days' written notice to the Redeveloper of the Event of Default, but only if the Event of Default has not been cured within said thirty (30) days, or if the Event of Default is not reasonably susceptible to being cured within said thirty (30) -day period (whether due to Unavoidable Delays or otherwise), and the Redeveloper fails to provide the Authority with written assurances, deemed satisfactory in the reasonable discretion of the Authority, that the Event of Default will be cured as soon as reasonably possible: (a) Suspend its performance under this Agreement until it receives assurances from the Redeveloper, deemed adequate by the Authority, that the Redeveloper will cure its default and continue its performance under this Agreement. (b) Terminate this Agreement. (c) Withhold any Certificate of Completion. (d) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to the Authority, including any actions to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant of the Redeveloper under this Agreement. Section 7.3. No Remcdy Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as maybe deemed expedient. Section 7.4. No Additional Waiver Implied by One. Waive, In the event any agreement contained herein should be breached by either party and thereafter waived by the non -breaching party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. 17 ARTICLE VIII ADDITIONAL PROVISIONS Section 8.1. Conflict of Interest, No member, official, or employee of the Authority shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official, or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership, or association in which he or she is interested, directly or indirectly. Section 8.2. Authadly Renregentatives Not J13dimidually Liable. No member, official, or employee of the Authority shall be personally Iiable to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority or for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of this Agreement, except in the case of willful misconduct. Section 8.3. Equal Employment n orhinity, The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements it will comply with all applicable equal employment opportunity and non-discrimination laws, ordinances and regulations. Section 8.4. Restrictions on I Tse. The Redeveloper shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, rentaI, use or occupancy of the Redevelopment Property or any part thereof. Section 8.5. Titles of Articleg and Sectiong. Any titles of the several Articles, and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 8.6. . Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, transmitted by facsimile, delivered by a recognized overnight courier or delivered personally to the address of such party below, or at such other address as a party may, from time to time, designate in writing and forward to the other: Redeveloper: Foundation Land Development, LLC 9465 Amesbury Lane Eden Prairie, MN 55347 Attn: James Deanovic Authority: Economic Development Authority in and for the City of New Hope 4401 Xylon Ave N New Hope, MN 55428 Attn: Daniel J. Donahue, City Manager Section 8.7. Counterparts. This agreement may be executed in any number of counterparts, which counterparts shall together constitute one and the same instrument. 18 ARTICLE IX TERMINATION OF AGREEMENT Section 9.1. Termination. The Authority may terminate this Agreement as provided herein, and otherwise this Agreement shall terminate upon full payment of the Note in accordance with its terms and the discharge of all of the Authority's and Redeveloper's respective obligations hereunder, but no such termination shall terminate any indemnification or other rights or remedies arising hereunder due to any Event of Default which occurred prior to such termination. Section 9.2. Sections to Survive Termination. Section 6.3 shall, in addition to the other surviving provisions referenced in Section 9.1, survive the termination of this Agreement. In addition, the terms and conditions of the Declaration of Protective Covenants and Prohibition Against Tax Exemption shall remain in effect until December 31, 203 1. IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf by its duly authorized representatives, and the Redeveloper has caused this Agreement to be duly executed in its name and behalf by its duly authorized representative, on or as of the date of first above written. CADOCUMENTS AND SETTINGSUERM LOCAL SETTINGSUEMPORARY INTERNET FILEMLWCONTRACT V4 FINAL.DOC 19 Dated:hAAI 2004 ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HO#E Its P'rCssident C By aniel J. Donate e Its Executive Director STATE OF MINNESOTA ) )ss COUNTY OF HENNEPIN ) On this Ott day of-Ie4� , 2004, before me, a notary public within and for Hennepin County, personally appeared Don Collier and Daniel J. Donahue, to me personally known who by me duly sworn, did say that they are the President and Executive Director, respectively, of the Economic Development Authority in and for the City of New Hope, and acknowledged the foregoing instrument on behalf of said Authority. -���•� PAMFL,'kfl. SYiV£')'TER 1~JOMYPUBLIGMIN [4�5uTA MY Commission Expires Jan. 31, 2045 Notary Public Authority Signature Page- Contract for Private Redevelopment 20 Dated: �„� 1- ll , 2004 a STATE OF MINNESOTA ) ) ss COUNTY OF RWN)LPj6 ) �T-ION LAND DEVELOPMENT, LLC, 'limited liability company Deanovic On this 1(0% day of J4f , 2004, before me, a notary public within and for #eolayes, County, personally appeared James P. Deanovic, to me personally known and who by me duly sworn, did say that he is the Chief Manager of Foundation Land Development, LLC, a Minnesota limited liability company, and acknowledged the foregoing instrument on behalf of said company. JAMES W. DIERKING NOTARY PUBLIC -MINNESOTA Myr Coeulk*Q EOM M. Si, 2005 r a Not Public Redeveloper Signature Page - Contract for Private Redevelopment 21 SCHEDULE A DESCRIPTION OF REDEVELOPMENT PROPERTY The former Frank's Nursery & Crafts site, 5620 Winnetka Avenue North, New Hope, Minnesota, PIN# 05-118-21-32-0007, and with legal description as follows: All of Lot 36, Auditor's Subdivision No. 226, except the West 33 feet thereof, except the North 672 feet thereof, and except that portion lying South of the following described line: Beginning at a point in the West line of said Lot 36, a distance of 1025.28 feet South of the :Northwest corner of said Lot; thence East at right angles to said West line, a distance of 206.63 feet; thence North at right angles to said previously described line, a distance of 50 feet; thence East parallel with the North line of said Lot 36, a distance of 283.46 feet, more or less, to the East line of said Lot 36. 22 SCHEDULE B CERTIFICATE OF COMPLETION WHEREAS, the Economic Development Authority in and for the City of New Hope, a body corporate and politic (the "Authority") and Foundation Land Development, LLC, a Minnesota limited liability company (the "Redeveloper"), have entered into a Contract for Private Redevelopment (the "Agreement") dated as of July 26, 2004, regarding certain real property located in a tax increment financing district in the City (hereinafter referred to and referred to in the Agreement as the "Redevelopment Property"); and WHEREAS, the Agreement contains certain conditions and provisions requiring the Redeveloper to construct improvements upon the Redevelopment Property (hereinafter referred to and referred to in the Agreement as the "Minimum Improvements"); and WHEREAS, Section 4.4 of the Agreement requires the Authority to provide an appropriate instrument promptly after the substantial completion (as defined in the Agreement) of each Building comprising the Minimum Improvements so certifying said substantial completion; NOW, THEREFORE, in compliance with said Section 4.4 of the Agreement, this is to certify that the Redeveloper has substantially completed the portion of the Minimum Improvements Iocated on the portion of the Redevelopment Property described on Exhibit A attached hereto (the "Completed Improvements") in accordance with the conditions and provisions of the Agreement relating solely to the obligations of the Redeveloper to construct the Minimum Improvements (including the dates for beginning and completion thereof), and this certification shall be a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement with respect to the obligations of the Redeveloper, and its successors and assigns, to construct the Completed Improvements and the dates for the beginning and completion thereof. 23 Dated: 2004 ECONOMIC DEVELOPMENT AUTHORITY IN T AND FOR THE CITY OF NEW HOPE By Its President By Its Executive Director STATE OF MINNESOTA ) ss COUNTY OF HENNEPIN } On this day of , 2004, before me, a notary public, within and for Hennepin County, personally appeared and to me personally known who by me duly sworn, did say that they are the President and Executive Director, respectively, of the Economic Development Authority in and for the City of New Hope, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public 24 $400,000.00 SCHEDULE C NOTE UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE LIMITED REVENUE TAX INCREMENT NOTE 200 The Economic Development Authority in and for the City of New Hope (the "Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the order of (the "Owner"), solely from the source, to the extent and in the manner hereinafter provided, the principal amount of this Note, being Four Hundred Thousand Dollars ($400,000.00) (the "Principal Amount"), together with interest on the unpaid principal balance from the date of this Note until paid at the rate of Six and Three/Fourths Percent (6.75%) per annum and payable on the dates described below (the "Payment Dates") and in the amounts as hereinafter defined (the "Payments"). This Note is issued pursuant to that certain Contract for Private Redevelopment by and between the Authority and the Owner dated as of July 26, 2004 (as amended, modified, supplemented or restated from time to time, the "Agreement"). This Note is subject to the terms, conditions and provisions of the Agreement and the notations on Annex A attached to this Note and made a part hereof. Capitalized terms in this Note not defined herein shall have the definitions given those terms in the Agreement. The Principal Amount of this Note may be reduced by the Authority in the circumstances described in Section 3.8 of the Agreement and to the extent provided therein. The adjustment, if any, in the principal amount of this Note shall be noted on Annex A hereto and certified by the Authority. The Payment Dates shall commence on August 1 of the first year of receipt of Tax Increment from the construction of the Minimum Improvements and on each February 1 and August 1 thereafter until and including December 31, 2031 unless earlier paid in accordance with the terms of this Note. All Payments made by the Authority on this Note shall be applied first to accrued interest and then to principal. Any accrued interest on this Note not paid on any Payment Date shall be added on such Payment Date to the principal amount of this Note. The Principal Amount is subject to prepayment at the option of the Authority in whole or in part at any time without penalty. 25 Each Payment on this Note is payable in any coin or currency of the United States of America which on the date of such Payment is legal tender for public and private debts and shall be made by check or draft made payable to the Owner and mailed to the Owner at its postal address within the United States which shall be designated from time to time by the Owner. The Note is a special and limited obligation and not a general obligation of the Authority, which has been issued by the Authority pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Section 469.178, subdivision 4, to aid in financing a project, as therein defined, of the Authority consisting generally of defraying certain public redevelopment costs incurred and to be incurred by the Authority within and for the benefit of its Redevelopment Project No. 1. THE NOTE IS NOT A GENERAL OBLIGATION OF THE AUTHORITY OR THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE AUTHORITY, THE STATE NOR ANY POLITICAL SUBDNISION THEREOF SHALL BE LIABLE ON THE NOTE NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN PLEDGED TAX INCREMENT, AS DEFINED BELOW. The Payment of this Note due on any Payment Date is payable solely from and only to the extent that the Authority shall have received as of such Payment Date Pledged Tax Increment, as defined in the Agreement. In the event that Pledged Tax Increment is not sufficient to pay when due the principal of and interest on this Note, the failure of the Authority to pay the principal of and interest on this Note then due shall not constitute a default hereunder, but only to the extent the Pledged Tax Increment received is less than the principal and interest due on such Payment Date. The Authority shall pay on each Payment Date to the Owner the Pledged Tax Increment. On December 31, 2031, the maturity date of this Note, any unpaid portion shall be deemed to have been paid in full. This Note shall not be payable from or constitute a charge upon any funds of the Authority, and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds, except the Pledged Tax Increment, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or of any other public body, and neither the Authority nor any director, commissioner, council member, board member, officer, employee or agent of the Authority, nor any person executing or registering this Note, shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. The Authority makes no representation or covenant, express or implied, that the revenues described herein will be sufficient to pay, in whole or in part, the amounts which are or may otherwise become due and payable hereunder. The Authority's payment obligations hereunder shall be further conditioned on the fact that there shall not at the time have occurred and be continuing an Event of Default under the Agreement, and, further, if pursuant to the occurrence of an Event of Default under the Agreement the Authority elects to terminate the Agreement, the Authority shall have no further debt or obligation under this 26 Note whatsoever. Reference is hereby made to the provisions of the Agreement for a fuller statement of the obligations of the Owner, and of the rights of the Authority thereunder, and said provisions are hereby incorporated by reference into this Note to the same extent as though set out in full herein. The execution and delivery of this Note by the Authority, and the acceptance thereof by the Owner, as the initial Registered Owner hereof as shown on the attached Certificate of Registration, shall conclusively establish this Note as the "Note" (and shall conclusively constitute discharge of the Authority's obligation to issue and deliver the same to the Redeveloper) under the Agreement. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the Board of Commissioners of the Econornic Development Authority in and for the City of New Hope, by its Commission. Members, has caused this Note to be executed by the manual signatures of the President and the Executive Director of the Authority and has caused this Note to be dated , 200! ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE By Its President By Its Executive Director 27 It is hereby certified that the foregoing Note, as originally issued on the _ day of _, 200_, was on said date registered in the name of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic and that, at the request of said Registered Owner of this Note, the undersigned has this day registered this Note as to principal and interest on the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. Name of Date of Signature of Reiister-d Owner Registration Sergi a Minnesota 28 200 The undersigned hereby certify that, as a result of the calculation set forth in Section 3.8 of the Agreement, the original principal amount of the Note is $ Dated: 20 ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE Its President By Its Its: 29 SCHEDULE D SITE PLAN 'lig 0� k 0 otlqnd \ a 7ens mv,sc L01 A 3NII I V? la h�-aic� 3mN3AV 2i2-Lwns m 0 X LLL f., "M f lin I 11 WON ■ 1.0- g0l • all. > ji & ow� 1.3 So Pill 6 MORE - lin I 11 WON ■ T g0l > ji & T 1.3 So Pill 6 MORE MOSER ME 111'aiON 3nN3AV VNIANNIM T SCHEDULE E SITE IMPROVEMENTS • Acquisition of Redevelopment Property Building demolition Site clearance Environmental remediation, if necessary • Sanitary sewer + Water mains and stubs + Storm sewers and storm water system elements, including ponding, both on and off site Private streets, including curb and gutter • Landscaping and irrigation according to City -approved landscape plans Pedestrian improvements pursuant to City -approved site plans • Grading and import/export of soil in accordance with City -approved grading plans • Retaining walls and fences 31 SCHEDULE F DESCRIPTION OF PRODUCTS AND MATERIALS CONSTRUCTION ➢ Poured Concrete or Block Wall Foundations ➢ Asphalt Driveways and Concrete Walkways ➢ 2 X 6 Exterior Wall 16 ox Framing ➢ 2 X 4 Party and Garage Wall 16 o.c Framing ➢ Aluminum Soffit & Fascia A Vinyl Lap Siding & Stone ➢ Stone as Shown on Elevation ➢ 25 Year Asphalt Shingles ENERGY ➢ RI Exterior Wall Insulation ➢ 80% Efficient Furnace ➢ R44 Ceiling Insulation ➢ Air Conditioner ➢ R13 Party Sound Wall and garage Insulation. ➢ Electrical or Gas Service for Range and Dryer ➢ 40 Gallon Water Heater v Dryer Electric or Gas w/Dryer Vent EXTERIOR ➢ Landscape Plantings Per Plan ➢ Vinyl Insulated Windows w/Wood Extension Jambs ➢ Professionally Installed Sod v Steel Insulated Entry Doors ➢ Irrigation System ➢ Vinyl Siding and Stone INTERIOR ➢ Heated Floors ➢ Textured Ceilings ➢ Smoke Detectors ➢ Smooth Wall Texture iO Tile or Granite Kitchen Countertops ➢ Two Coats of Wall Paint ➢ Three Cable and Three Phone Jacks ➢ Oak, Cherry and White Cabinetry ➢ Stainless Steel Kitchen Sink 6 Panel Doors w/ Enamel or Wood Trim ➢ Wire Shelving in Closets ➢ Floating Hardwood Flooring in Kitchens ➢ Vented Bathroom Fans ➢ Tile, Granite or Cultured Marble Y Dead Bolt Lock Front Door Vanity Tops w/ Ceramic & Porcelain Sinks ➢ Quality Carpet in Select Areas ➢ Chrome Bathroom Faucets ➢ Appliances Included: Dishwasher, Microwave and Stove ➢ Polished Brass or Silver Hardware and Knobs ➢ Some Units Include Home Theater Systems OPTIONS Electrical Heating ➢ Pre -Wire for Security System :P Air Exchangers i' Recess Lights ➢ Gas Line For Outside Barbeque Grill, Etc. ➢ Pre -Wire for Computer ➢ Heated Floors ➢ Pre -Wire for Sound ➢ Heated Driveway, Etc. ➢ Light Dimmers ➢ Garbage Disposal Pleasure ➢ Garage Door Openers, etc. ➢ Four Season Porch ➢ Hot Tub Plumbing ➢ Water Softener Other ➢ Water Line To Ice Maker ➢ Central Vacuum System ➢ Jacuzzi Tub ➢ Shower Doors / Curtains r� Water Purifier System, etc. 32 SCHEDULE G DECLARATION OF RESTRICTIVE COVENANTS AND PROHIBITION AGAINST TAX EXEMPTION This Declaration is made and executed as of the 26th day of July, 2004 by Foundation Land Development, LLC, a Minnesota limited liability company ("Declarant"). Recitals A. Declarant is fee owner of the premises located in the County of Hennepin, State of Minnesota described on Exhibit_A attached hereto (the "Property"). B. The Economic Development Authority in and for the City of New Hope, a public body corporate and politic (the "Authority") has entered into a Contract for Private Redevelopment dated as of July 26, 2004 with the Declarant (the "Redevelopment Agreement"). The Redevelopment Agreement provides for certain assistance, financial and otherwise, to be provided by the Authority in connection with the construction of townhomes by the Declarant on the Property. NOW, THEREFORE, in consideration of the foregoing, Declarant, for itself and its successors and assigns, does hereby declare that the Property shall be owned, used, occupied, sold and conveyed subject to the following covenants and restrictions: 1. No part of the Property shall become tax exempt from the levy of ad valorem property taxes, or any statutorily authorized alternative, until December 31, 2031. 2. The covenants and restrictions herein contained shall run with the title to the Property and shall be binding upon all present and future owners and occupants of the Property; provided, however, that the covenants and restrictions herein contained shall inure only to the benefit of the Authority and may be released or waived in whole or in part at any time, and from time to time, by the sole act of the Authority, and variances may be granted to the covenants and restrictions herein contained by the sole act of the Authority. These covenants and restrictions shall be enforceable only by the Authority, and only the Authority shall have the right to sue for and obtain an injunction, prohibitive or mandatory, to prevent the breach of the covenants and restrictions herein contained, or to enforce the performance or observance thereof. 3. The covenants and restrictions herein contained shall remain in effect until December 31, 2031 and thereafter shall be null and void. 4. 1f any one or more of the covenants or restrictions contained in this Declaration are held to be invalid or enforceable, the same shall in no way affect any of the other provisions of this Declaration, which shall remain in full force and effect. 33 FOUNDATION LAND DEVELOPMENT, LLC, a Minnesota limited liability company By James P. Deanovic Its: Chief Manager STATE OF MIlVNESOTA ) ss COUNTY OF ) On this day of 2004, before me, a notary public within and for County, personally appeared James P. Deanovic, to me personally known and who by me duly sworn, did say that he is the Chief Manager of Foundation Land Development, LLC, a Minnesota limited liability company, and acknowledged the foregoing instrument on behalf of said company. Notary Public 34 Legal Description for Declaration of Restrictive Covenants and Prohibition Against Tax Exemption All of Lot 36, Auditor's Subdivision No. 226, except the West 33 feet thereof, except the North 672 feet thereof, and except that portion lying South of the following described line: Beginning at a point in the West line of said Lot 36, a distance of 1025.28 feet South of the Northwest corner of said Lot; thence East at right angles to said West line, a distance of 206.63 feet; thence North at right angles to said previously described line, a distance of 50 feet; thence East parallel with the North line of said Lot 36, a distance of 283.96 feet, more or less, to the East line of said Lot 36. 35 SCHEDULE H FINAL SOURCES AND USES SCHEDULE RFVFNUES 1 Gross Sales Proceeds ..................................................• $ 2 TOTAL SOURCES ..................................................... 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 FXPFNSFS Land Costs: Land and Building Acquisition: Acquisition.................................................................. LeaseBuyout............................................................. Site Preparation: Geotechnical...... ........................ ............................... Grading...................................................................... Engineering.............................................. Survey........................................................................ Demolition.................................................................. Environmental Testing - Phase 2 ................................. Public Improvements: Water and Sanitary Sewer ......................................... Staking and Layout .................................................... Irrigation..................................................................... Landscaping............................................................ Lighting...................................................................... Site Utilities................................................................ Fencing...................................................................... Streets and Sidewalks: Paving.............................. ----...................................... Sidewalk Improvements ............................................. Total Land Costs .................................................. Construction Costs......................................................... Soft Costs: SoftCosts...................................................................... Taxes...............................•.......................................... FinanceFees................................................................. Developer Fee (not to exceed 5% of lines 20+21) ........ TOTAL USES (lines 20+21+26) ................................ g Less: Authority Grant ........................................................ Limited Tax Increment Revenue Note .................... Metropolitan Council and Other Grants .................. Net Development Costs (line 27 - line 31) ............... PROFIT (line 2 - line 32) ............................................ PROFIT % (line 33 - line 2) (may not exceed 15%)... 36 r t,� Originating Department Community Development By: Kirk McDonald, Director of CD Kim Green, CD Assistant By: REQUEST FOR ACTION Approved for Agenda 08-22-05 Agenda Section Consent Item No. 6.7 RESOLUTION ACCEPTING EASEMENT'FbR DRAINAGE AND UTILTIES AT WINCREST APARTMENTS, 5700 WINNETKA AVENUE (Improvement Project # 733 ) REQUESTED ACTION Staff requests that the City Council approve the attached resolution, which accepts the permanent drainage and utilities easement on the southwest corner of Wincrest Apartments, 5700 Winnetka Avenue. POLICYIPAST PRACTICE The city often seeks easements from property owners for the construction and maintenance of the city storm sewer system. BACKGROUND To complete a portion of the storm water improvements along Winnetka Avenue, the city needs the 10 foot by 30 foot easement on the southwest corner of 5700 Winnetka Avenue (see attached map). The property contains the Wincrest Apartments and is owned by Wincrest Properties. Leon Fischer is the signing partner of Wincrest Properties. City staff has worked closely with Leon Fischer to address storm water issues on and around his property. Staff met with Mr. Fischer on July 18, 2005 to discuss the need for the easement. Mr. Fischer agreed to the easement and provided his signature on August 8, 2005. ATTACHMENT • Resolution Easement document (Exhibit A) Map Correspondence with property owner MOTION BY TO: SECOND BY and Utilities at CITY OF NEW HOPE RESOLUTION NO. 2005-107 RESOLUTION ACCEPTING EASEMENT FOR PERMANENT OPERATION AND MALN'TNANE OF DRAINAGE AND UTILTIY SYSTE1VIS Improvement Project #733 WHEREAS, the City of New Hope has required .permanent and temporary easements to complete the storm sewer along Winnetka Avenue; and WHEREAS, the project required a drainage and utility easement over the property of 5700 Winnetka Avenue North, owned by Wincrest Properties; and WHEREAS, the property owners will grant the City of New Hope permanent easement on the property (Exhibit A attached hereto); and WHEREAS, the easement contains certain duties and obligations on the part of the City; and WHEREAS, it would be in the best interest of the City and its people to accept the easement. NOW THEREFORE BE IT RESOLVED by the City Council of the City of New Hope as follows: 1. That the above recitals are incorporated by reference. 2. That the easement attached hereto as Exhibit A is hereby accepted. Adopted by the New Hope City Council this 22nd day of August, 2005. 4 Mayor Attest yk_t�_ City Clerk 08-18-2005 09:01am From -CITY OF NEW HOPE 7685315186 T-819 P_003/006 F-786 EXHIBIT A EASEMENT FAR PERNL4N]r.NT OPERATION AND MAINTENANCE OF A D1iAMACE AND UTILITY SYSTEM THLS IlVDFNI'URE, executed on the day of Af us _/_ 21705, between Wincrest Properties, a Nfinnesota partnership (herein "Landowme') and the CITY OF NEW HOPE, a Nhnnesota municipal corp=don (herein "City"). WHEREAS, Landowner is the fee owner of real property located in Hennepin County, Minnesota, legally described as (hereiTx "Property"): Lot 36, Auditors Subdivision No. 226, according to the recorded plat thereof, Hennepin County, Minnesota. The City wishes to obtain a peamanem drainage and utility easement over, under, across, and through portions of the Property, WMSMSSETH; that the Landowner in consideration of $1.00 and other good and valuable conkdemon, the receipt and sufficiency of which is hereby acknowledged, does hereby grant, bargain and, convey unto the City, its successors and assigns, forever, a =porary construction easement and a permanent drainage and utility easement, both dc=ibed herein„ includitXg full and free right rand authority to czxter upon and make such use of the permanent drainage and utility easement as is reasonably necessary and advisable for the operation and maintenance of a permanent drainage and utility system. AREA The permanent easement herein granted for operation and maintenance of the drainage and uOi y system is situated over, under, across, and through that part of the Property located in Hennepin County, Minnesota, legally described as: 08-08-2005 09:01am From -CITY OF NEW HOPE 7635315136 T-813 P.104/006 F-786 the West 30.00 feet ofthe South 10.00 feet of Lot 36, as measured along and at tisht awes to the West line and South line of Lot 36, Auditor's Subdivision. No. 226, mending to the recorded plat thereoZ Hennepin County, Minnesota. (Hereinafter "permanent Easement"). DURATION The Permax=t Easemew granted herein shall be pagetual and inure to the benefit of the parties, hews, successors, and assigns. WARRANTY OF TITLE Landowner warrants and covenants that it has the right and title to convey the easement described herein free fr= all encumbrances or qualifications. VM T PROPERTIES B its ParRar STATE OF MINNESOTA SS. COUNTY OF d—xe�� The foreomg ins t w ac�mawledged before me this day of o 2005, by 4e=agna er. a Partner of Wincrest Properties, a Minnesota partnership, on behalf of said partnership, - ffq 0 it - e__ ( Aft I IMM. ROS$ Notary Public Es Notary Public Minnesota COMdAsim E00,1M. 31, 2010 L the undersigned, being the duly qualified and acting Clerk of the City of New Hope, Minnesota, hereby certify that the Council of said City has duly accepted the foregoing easement. Dated: &.-2&5 City Clerk 2 08-08-2005 08:01am From -CITY OF NEW HOPE 7635315136 T-813 P-005/008 F-786 Drafted By: JENSEN & SONDRALL, F.A. 8525 Edinbmok Crossing, Suite 201 Brooklyn Bark, MN 55443 (763)42"S 11 Bingle Eamcne Perm Utility Dmbmp-DI Am r August 8, 2005 Mr. Leon Fischer Teddy Bear Mgnt. LLP 15113 Nowthen Blvd. Ramsey, MN 55303 Dear Mr. Fischer: Per our discussion on Monday July 18, we are sending you the attached document for a small easement on the southwest corner of your property to facilitate the construction of the city's storm sewer along Winnetka Avenue. Please sign the easement and return the signed copy to the city by mail at 4401 Xylon Ave. N. New Hope, MN 55408. Please contact Kim Green, community development assistant, at 763-531-5196 or k&1eenQci.new-ho12e.mn.us if you have any questions, or I can be reached at 763- 531-5119. Thank you for working with the city to improve our community. Sincerely, i Kirk McDonald Director of Community Development CC: Dan Donahue, City Manager Vince Vander Top, City Engineer Steve Sondrall, City Attorney Kim Green, Community Development Assistant Valerie Leone, City Clerk (Improvement Project No. 733) Enclosure CITY OF NEW DOPE 4401 Xylon Avenue North + New Hope, Minnesota 55428-4898 + www, ci.new-hope.mn.us City Hall: 763-531-5100 + Police (non -emergency): 763-531-5170 + Public Works: 763-592-6777 + TDD: 763-531-5109 City Hall Fax: 763-531-5136 + Police Fax: 763-531-5174 + Public Works Fax: 763-592-6776 08-00-2005 03.01 am From -CITY OF NEW HOPE ♦ F A i 1 7635315136 T-613 P.001/006 F-768 CITY OF NEW HOPE FACSEMnE TRANSNUSSION • t' - .. ,s�.1 •K1 ---*A tie 11 i _ lee Arena 4949 Louisiana Ave N New Hope, MN 55428 FAX 763-531-9252 Phone 763-531.5181 Other PAGES: G (INCLUDIF;G COYER SI3EBT) Police 4441 Xylou Ave N New Hope, MN 55428 FAX 753.531.5174 Phone 753-531-5170 (cher Public Warks 5500 Intl Parkway New Hope, MN 55428 FAX 753.592-6776 Phone 763-592-6777 Other { } As you requested { } Review and comment { } For your information { W/ Other: - - - - -- G:l nd13%far=\&"irrAdoc OSM3 August 24, 2005 Mr. Steve Sondrall Jensen & Sondrall P.A. Edinburgh Executive Office Plaza 8525 Edinbrook Crossing, Suite 201. Brooklyn Park, MN 55443 Dear Steve: At its meeting of August 22, 2005, the New Hope City Council accepted an easement for drainage and utilities at Wmcrest Apartments, 5700 Winnetka Avenue North. The original executed easement is enclosed. Please ensure that the easement is recorded with Hennepin County Thank you. Sincerely, Valerie Leone, CMC City Clerk Enc. cc: Kim Green, Community Development Assistant Kirk McDonald, Director of Community Development Improvement Project File No. 733 CITY OF NEW HOPE 4401 Xylon Avenue North + New Hope, Minnesota 55928-4898 • www. ci.new-hope.nmus City Hall: 763-531-5100 • Police (non -emergency): 763-531-5170 • Public Works: 763-592-6777 + TDD: 763-531-5109 City Hall Fax: 763-531-5136 4 Police Fax: 763-531-5174 + Public Works Fax: 763-592-6776