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052316 EDA Meeting Packet CITY OF NEW HOPE EDA MEETING City Hall, 4401 Xylon Avenue North May 23, 2016 EDA Meeting will commence upon adjournment of the City Council Meeting President Kathi Hemken Commissioner John Elder Commissioner Andy Hoffe Commissioner Eric Lammle Commissioner Jonathan London 1. Call to order – EDA Meeting of May 23, 2016 2. Roll call 3. Approval of Minutes:  May 9, 2016 4. Resolution authorizing the execution of a first amendment to contract for private redevelopment with Industrial Equities, New Hope, LLC (improvement project no. 971) 5. Resolution approving purchase and redevelopment agreement with Regal Homes LLC, for the sale of 4415 and 4417 Nevada Avenue North (improvement project no. 965) 6. Resolution approving purchase and redevelopment agreement with Novak‐Fleck Incorporated for the sale of 4511 Boone Avenue North (improvement project no. 975) 7. Resolution approving purchase agreement for the acquisition of 5400 Yukon Avenue North (improvement project no. 986) 8. Adjournment EDA Meeting Page 1 May 9, 2016 CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 EDA Minutes May 9, 2016 Regular Meeting City Hall CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to order at 8:06 p.m. ROLL CALL Present: Kathi Hemken, President John Elder, Commissioner Andy Hoffe, Commissioner Jonathan London, Commissioner Absent: Eric Lammle, Commissioner Staff Present: Kirk McDonald, City Manager Aaron Chirpich, Community Development Specialist Tim Fournier, Director of Police Valerie Leone, City Clerk Chris Long, City Engineer Jeff Sargent, Director of Community Development Stacy Woods, Assistant City Attorney APPROVAL OF MINUTES Item 3 Motion was made by Commissioner Hoffe, seconded by Commissioner London, to approve the minutes of April 11, 2016. All present voted in favor. Motion carried. Center for Energy and Environment Agreement Item 4 President Hemken introduced for discussion EDA Item 4, Resolution approving loan origination agreement between Center for Energy and Environment and EDA. Mr. Jeff Sargent, director of community development, recommended the EDA renew an agreement with the Center for Energy and Environment (CEE) to continue administration of three housing programs (Revolving Loan Program, Interest Subsidy Program, and Emergency Deferred Loan Program) effective through December 31, 2018. Mr. Sargent explained based on CEE’s recommendation, the maximum loan amount for the Revolving Fund Program and the Interest Subsidy Grant has been increased from $5,000 to $10,000 to attract more persons to the programs. Mr. Sargent stated staff intends to expand advertising the availability of the housing programs. He stated the program costs are funded in the EDA budget. RESOLUTION 2016‐09 Item 4 Commissioner London introduced the following resolution and moved its adoption “RESOLUTION APPROVING LOAN ORIGINATION AGREEMENT BETWEEN CENTER FOR ENERGY AND ENVIRONMENT EDA Meeting Page 2 May 9, 2016 AND EDA”. The motion for the adoption of the foregoing resolution was seconded by Commissioner Hoffe, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Elder, Hoffe, London; and the following voted against the same: None; Abstained: None; Absent: Lammle; whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. IMP. PROJECT 965 Item 5 President Hemken introduced for discussion EDA Item 5, Review proposals and select a preferred builder for the redevelopment of the two EDA owned scattered site lots located on Nevada Avenue North (improvement project no. 965). Mr. Aaron Chirpich, community development specialist, indicated Request for Proposals were sent to 19 builders marketing the city‐owned lots at 4415 and 4417 Nevada Avenue North for $55,000. He reported the city received proposals from Regal Homes, Novak‐Fleck, and Tollberg Homes. Mr. Chirpich highlighted the key elements of each proposal. Mr. Chirpich recommended the Council select Regal Homes as the preferred builder based on the two‐story home design and anticipated sales price range of $315,000 to $325,000. He also asked Council to consider reimbursing the builder up to $5,000 for curb cut costs. Mr. Chirpich stated following selection of the preferred builder, staff will prepare a purchase and development agreement. He stated Regal Homes has built similar designed homes in Golden Valley, Plymouth, and Columbia Heights. The builder is aware of comparable sales in New Hope. Commissioner Elder encouraged staff to obtain feedback from Golden Valley staff regarding their experience with Regal Homes. Commissioner London pointed out 15 lots in the Parkview Development have sold in the $300,000 to $400,000 range. He noted the need for higher valued homes in the city, and thanked city staff for their efforts. IMP. PROJECT 965 Item 5 Motion was made by Commissioner Elder, seconded by Commissioner Hoffe, selecting Regal Homes as the preferred builder for Improvement Project 965. All present voted in favor. Motion carried. IMP. PROJECT 975 Item 6 President Hemken introduced for discussion EDA Item 5, Review proposals and select a preferred builder for the redevelopment of the EDA owned scattered site lot located at 4511 Boone Avenue North (improvement project no. 975). Mr. Aaron Chirpich, community development specialist, indicated Request for Proposals were sent to 19 builders marketing the city‐owned lot at 4511 Boone Avenue North for $55,000. He reported the city received proposals from Novak‐Fleck, Regal Homes, Tollberg Homes, and Great Buy Homes Inc. Mr. Chirpich highlighted the key elements of each proposal. Mr. Chirpich recommended the Council select Novak‐Fleck as the preferred builder based EDA Meeting Page 3 May 9, 2016 on the two‐story home design and the anticipated sales price of $303,000. He noted the proposed home is pre‐sold to a current New Hope resident. Mr. Chirpich stated following selection of the preferred builder, staff will prepare a purchase and development agreement. He stated Regal Homes has built similar designed homes in Golden Valley, Plymouth, and Columbia Heights. The builder is aware of comparable sales in New Hope. IMP. PROJECT 975 Item 6 Motion was made by Commissioner Elder, seconded by Commissioner Hoffe, selecting Novak‐Fleck as the preferred builder for Improvement Project 975. All present voted in favor. Motion carried. ADJOURNMENT Motion was made by Commissioner London, seconded by Commissioner Elder, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 8:37 p.m. Respectfully submitted, Valerie Leone, City Clerk I:\RFA\COMM DEV\Development\Q & R Amendment to Industrial Equities TIF Agreement 5‐23‐16 Project 971.docx Request for Action May 23, 2016 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Aaron Chirpich, CD Specialist Agenda Title Resolution authorizing the execution of a first amendment to contract for private redevelopment with Industrial Equities, New Hope, LLC (improvement project no. 971). Requested Action A request for additional TIF assistance has been made by the owner of the Industrial Equities New Hope project. Staff requests the EDA approve a resolution approving an amendment to the original redevelopment contract with Industrial Equities New Hope, LLC. The proposed amendment will authorize payment of additional TIF assistance to the project. Policy/Past Practice Over the years, the city has re‐negotiated the terms of redevelopment agreements once a project has started. When redeveloping sites that contain older buildings, it is not unusual to encounter adverse site conditions that were unknown prior to the commencement of construction activities. When such situations arise, it is common practice for the Council to amend redevelopment agreements if warranted. Background In early 2015, Industrial Equities purchased the vacant and distressed industrial building located at 9449 Science Center Drive with the intent of redeveloping the site. Shortly after acquisition, the owner approached the EDA with a request for TIF assistance to pay for demolition, abatement and soil corrections on the site. The original amount requested was $250,000. In November of 2015, the EDA agreed to support the project by providing the requested amount of assistance. Subsequently, the Industrial Equities TIF district was established and the project moved toward completion. Demolition of the building and clearing of all other site improvements began in late February of 2016. Following the demolition of the primary building, the excavating contractor discovered unexpected poor soils beneath the building and around the perimeter of the foundation. Engineers that have examined the site speculate that the building was built in a natural depression in order to limit the amount of excavation needed to accommodate the original basement. The footings of the former building extended well below the basement slab. The deeper than usual footings were built in an effort to compensate for the poor soil conditions that were not remediated at the time of construction in 1960. Because the poor soils were found beneath the building, it would have been impossible to plan for such a find. Extensive soil borings were completed by the owner on the balance of the site prior to requesting assistance from the EDA. As a result of encountering the poor soils underneath the building, the owner has requested that the EDA increase the amount of TIF assistance for the project. The estimated cost increase for the additional soil corrections is $300,000. The Industrial Equities Renewal and Renovation TIF District has a maximum duration of 16 years. Based upon current estimates, the repayment term for the original $250,000 TIF note is 10 years. The EDA can choose to extend the duration of the assistance to include the full 16 years. Increasing the duration of the Agenda Section EDA Item Number 4 Request for Action, Page 2 district could provide the developer with an additional $120,000 to help pay for the additional soil corrections. Staff from Ehlers has assessed the request for additional assistance, and they have found that the request is reasonable. If additional assistance is provided, the projected cash‐on‐cost return to the developer would actually decrease. Therefore, providing additional funding will not unduly enrich the developer. Recommendation The Council reviewed the request for additional TIF assistance at the 4/18 work session. The majority of the Council was supportive of the request and advised staff to proceed with drafting an amendment that would authorize the additional assistance. As such, staff recommend that the EDA approves the attached resolution approving an amendment to the redevelopment contract with Industrial Equities. The key provisions and outcomes of the amendment are as follows:  The maximum amount of additional assistance (applied to the TIF note principle) is capped at $120,000.  The owner will have to certify all costs for additional soil correction work.  If the actual costs incurred by the owner for additional soil corrections are less than the estimated $300,000, the amount of additional TIF assistance provided by the City will decrease proportionally.  The duration of the TIF district will be extended to the full 16 years allowed by statute. Attachments  Resolution  Draft Amendment  Ehlers Memo  Work Session Minutes 4/18/16 NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 16-______________ RESOLUTION AUTHORIZING THE EXECUTION OF A FIRST AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT WITH INDUSTRIAL EQUITIES – NEW HOPE, LLC (IMPROVEMENT PROJECT NO. 971) BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY (the "Authority") AS FOLLOWS: WHEREAS, the Authority and the City of New Hope, Minnesota (the "City") have entered into a Contract for Private Redevelopment (the “Contract”) with Industrial Equities – New Hope, LLC (the “Redeveloper”), providing for the redevelopment of certain real property located within the City (the “Redevelopment Property”) through the construction of an office/warehouse development thereon (the “Minimum Improvements”); and WHEREAS, in the course of preparing the Redevelopment Property for the construction of the Minimum Improvements the Redeveloper discovered certain unforeseen adverse soil conditions on the Redevelopment Property that will require the expenditure of a substantial amount of additional funds to remediate; and WHEREAS, the Redeveloper has requested that the Authority consider increasing the amount of the financial assistance being provided by the Authority under the Contract to offset a portion of the cost of remediating the adverse soil conditions; and WHEREAS, the Authority has considered the Redeveloper’s request and believes that it is in its best interest to provide certain additional assistance to the Redeveloper; and WHEREAS, there has been presented to the Authority’s Board of Commissioners a proposed First Amendment to Contract For Private Redevelopment (the “Amendment”) between the Authority and the Redeveloper setting forth the terms of the Authority’s provision of additional financial assistance to the Redeveloper in connection with the remediation of the adverse soil conditions discovered on the Redevelopment Property. NOW, THEREFORE, be it hereby resolved by the Board of Commissioners of the Authority that he appropriate officers of the Authority are hereby authorized to execute the Amendment in substantially the form presented to the Board of Commissioners, subject to such non-substantive changes as may be approved by the Executive Director and the Authority’s legal counsel Adopted this 23rd day of May, 2016. _________________________________ President Attest: ________________________ I:\RFA\COMM DEV\Development\Q & R ‐ Sale of Lots at 4415 and 4417 Nevada 5‐23‐16 Project 965.docx Request for Action May 23, 2016 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Aaron Chirpich, CD Specialist Agenda Title Resolution approving purchase and redevelopment agreement with Regal Homes, LLC for the sale of 4415 and 4417 Nevada Avenue North (improvement project no. 965). Requested Action Staff requests that the EDA approve a resolution approving the purchase and redevelopment agreement for the sale of the EDA‐owned lots located at 4415 and 4417 Nevada Avenue North. Policy/Past Practice Proposals for the redevelopment of EDA‐owned scattered site lots are reviewed by the EDA prior to executing a contract with the preferred buyer/builder. Once a builder has been selected, it is a common practice for staff to seek approval of purchase and redevelopment agreements to complete the sale of EDA‐ owned lots. Background In mid‐April, RFPs were sent to 19 builders marketing the lots located at 4415 and 4417 Nevada Avenue. The non‐negotiable sales price was set at $55,000 per lot ($110,000 total). The EDA received three proposals from the following builders:  Regal Homes  Novak‐Fleck  Tollberg Homes The EDA reviewed all of the proposals at the 5/9/16 EDA meeting, and selected Regal Homes as the preferred builder for the property. Regal Homes is a custom home builder based out of Eden Prairie, and has recently completed projects in Golden Valley, Plymouth, Edina, Oakdale and Columbia Heights. The EDA has not worked with Regal Homes in the past. Staff did call community development staff in Columbia Heights to discuss their experience working with Regal Homes. Staff from Columbia Heights gave a very positive reference for Regal Homes and complimented their quality of work. Summary of the Home Proposed by Regal Homes The proposed homes meet all criteria set forth in the RFP guidelines and both homes will feature the following base characteristics:  Two‐story home design (same home for both lots)  Proposed homes fit nicely on the smaller 65’ wide lots  Above‐average curb appeal with a prominent front porch  High‐end trim package  Master suite Agenda Section EDA Item Number 5 Request for Action, Page 2  Optional three‐car garage  3,229 square feet (2,329 finished)  Main floor fireplace  Typical exterior finishes, vinyl siding with cultured stone accents Reimbursement for Curb Cut Related Costs When purchased by the EDA, the Nevada Avenue property was a single lot that contained a vacant foreclosed home and detached garage. Since acquiring the property, the EDA has subdivided the property into two separate lots. Because the property has been subdivided, there is the need to construct a new curb cut access for the second lot that has been created. Additionally, the existing curb cut for the home that was removed will have to be relocated. Costs related to curb cut installation and relocation were discussed during the review of the proposals at the 5/9 EDA meeting. The EDA agreed to reimburse Regal Homes for actual costs (not to exceed $5,000) for costs associated with the curb cut work. Development Agreement and Next Steps Staff has worked with the City Attorney and the buyer to draft a purchase and redevelopment agreement for the sale of the lot. The agreement ensures that the provisions set forth in the RFP will be met and sets the purchase price for both lots at $110,000. The agreement included in the attachments is considered complete by staff and the City Attorney. However, some minor revisions may be necessary once fully reviewed by the buyer. Any substantial changes to the agreement would be brought to the EDA for approval. Once the agreement is fully executed, staff anticipates that the closing of the lot sale will take place sometime in early June. Recommendation Staff recommends that the EDA approve the resolution approving the purchase and redevelopment agreement for the sale of 4415 and 4417 Nevada Avenue North to Regal Homes, LLC. Attachments  Resolution  Regal Homes Proposal  Draft EDA Minutes from 5/9/1  Draft Purchase and Redevelopment Agreement CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 16-___ RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT AGREEMENT WITH REGAL HOMES, LLC FOR THE SALE OF 4415 AND 4417 NEVADA AVENUE NORTH (IMPROVEMENT PROJECT 965) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope (“EDA”) as follows: WHEREAS, the EDA purchased that certain real property located at 4415 Nevada Avenue North, New Hope, MN, legally described as The East 130.0 feet of Lots 26 and 27, Auditor’s Subdivision No. 324, Hennepin County, Minnesota on July 29, 2015, with the intention of razing the existing house and all site improvements in preparation for the lot split and construction of two new single family homes; and WHEREAS, New Hope City staff received an offer from Regal Homes, LLC, a Minnesota limited liability company (“Regal Homes”) regarding the sale and redevelopment of the two newly created lots located at 4415 and 4417 Nevada Avenue North, New Hope, MN, and legally described as: Parcel A: The East 130 feet of Lots 26 & 27, Auditor’s Subdivision No. 324, Hennepin County, Minnesota, lying North of the South 65.00 feet of said Lot 26. Parcel B: The South 65.00 feet of the East 130 feet of Lot 26, Auditor’s Subdivision No. 324, Hennepin County, Minnesota. (collectively referred to as the “Property”). WHEREAS, the EDA arrived at an agreement with Regal Homes, LLC, a Minnesota limited liability company (“Regal Homes”) to sell the Property for the total purchase price of $110,000.00 (or $55,000 per lot) upon all of the terms set forth in the RFP; and WHEREAS, the EDA has accepted Regal Homes, LLC’s offer and has presented a draft of the Purchase and Redevelopment Agreement to Regal Homes, LLC for its review, a copy of which is attached hereto as Exhibit A (“Purchase and Redevelopment Agreement”) and incorporated herein by reference; and WHEREAS, it is in the best interest of the EDA to sell the Property to Regal Homes, LLC for the total sum of $110,000.00, in order for Regal Homes, LLC to redevelop and build two new single family homes on the Property in accordance with the City’s scattered site housing program and policy; and WHEREAS, the City staff is hereby seeking approval from the EDA of the Purchase and Redevelopment Agreement, subject to other terms relating to the closing on the sale of the Property. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. That the sale of the Property by the EDA to Regal Homes, LLC for the total purchase price of $110,000.00, with other terms and conditions as set forth in the Purchase and Redevelopment Agreement attached hereto as Exhibit A, is approved subject to the review and approval by the City Attorney of the final language and exhibits to the Redevelopment Agreement relating to the closing on the sale of the Property, it being in the best interest of the EDA to sell the Property for redevelopment and construction of two single-family homes in accordance with the City’s scattered site housing program and policy. 3. The EDA shall use due diligence for selling the Property to Regal Homes, LLC for the construction of two single-family homes, so as to return the Property to the tax rolls for the benefit of all taxing jurisdictions. 4. The President, Executive Director and New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the sale of the Property in accordance with the Purchase and Redevelopment Agreement. Dated the 23rd day of May, 2016. ____________________________________ Kathi Hemken, President Attest: __________________________ Kirk McDonald, Executive Director P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11369 - 4415 Nevada Ave. N\Resolution Approving Sale 4415 and 4417 Nevada Avenue North.docx I:\RFA\COMM DEV\Development\Q & R ‐ Sale of Lot at 4511 Boone 5‐23‐16 Project 975.docx Request for Action May 23, 2016 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Aaron Chirpich, CD Specialist Agenda Title Resolution approving purchase and redevelopment agreement with Novak‐Fleck Incorporated for the sale of 4511 Boone Avenue North (improvement project no.975). Requested Action Staff requests that the EDA approve a resolution approving the purchase and redevelopment agreement for the sale of the EDA‐owned property located at 4511 Boone Avenue North. Policy/Past Practice Proposals for the redevelopment of EDA‐owned scattered site lots are reviewed by the EDA prior to executing a contract with the preferred buyer/builder. Once a builder has been selected, it is a common practice for staff to seek approval of purchase and redevelopment agreements to complete the sale of EDA‐ owned lots. Background In mid‐April, RFPs were sent to 19 builders marketing the lot located at 4511 Boone Avenue. The non‐ negotiable sales price was set at $55,000. The EDA received four proposals from the following builders:  Novak‐Fleck  Regal Homes  Tollberg Homes  Great Buy Homes Inc. The EDA reviewed all of the proposals at the 5/9/16 EDA meeting, and selected Novak‐Fleck as the preferred builder for the property. Novak‐Fleck is based out of Brooklyn Park, and is considered by staff to be one of the more prolific scattered site builders in the area, as they complete several scattered site redevelopment projects each year. The EDA has recently sold four scattered site lots to Novak‐Fleck. Staff has been impressed with the quality of work that Novak has completed in New Hope. Summary of the Home Proposed by Novak‐Fleck The proposed home meets all criteria set forth in the RFP guidelines and will feature the following base characteristics:  Two‐story home design  Above‐average curb appeal with a prominent front porch  High‐end trim package  Master suite  Three‐car garage  2,952 square feet (1,938 finished) Agenda Section EDA Item Number 6 Request for Action, Page 2  Typical exterior finishes, vinyl siding with cultured stone accents Development Agreement and Next Steps Staff has worked with the City Attorney and the buyer to draft a purchase and redevelopment agreement for the sale of the lot. The agreement ensures that the provisions set forth in the RFP will be met and sets the purchase price of the lot at $55,000. The agreement included in the attachments is considered complete by staff and the City Attorney. However, some minor revisions may be necessary once fully reviewed by the buyer. Any substantial changes to the agreement would be brought to the EDA for approval. Once the agreement is fully executed, staff anticipates that the closing of the lot sale will take place sometime in late June. Recommendation Staff recommends that the EDA approve the resolution approving the purchase and redevelopment agreement for the sale of 4511 Boone Avenue North to Novak‐Fleck Incorporated. Attachments  Resolution  Novak‐Fleck Proposal  Draft Purchase and Redevelopment Agreement  EDA Minutes from 5/9/16 CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 16-___ RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT AGREEMENT WITH NOVAK-FLECK INCORPORATED FOR THE SALE OF 4511 BOONE AVENUE NORTH (IMPROVEMENT PROJECT NO.975) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope (“EDA”) as follows: WHEREAS, the EDA purchased that certain real property located at 4511 Boone Avenue North, New Hope, MN, legally described as Lot 3, Block 3, Holiday Hills, Hennepin County, Minnesota (“Property”) on March 15, 2016, with the intention of razing the existing house and all site improvements in preparation for the construction of a new single family home; WHEREAS, the EDA acquired the Property through redemption from a mortgage foreclosure. Since the Property is registered Torrens property, a proceeding subsequent action is necessary now to clear the title of the mortgage foreclosure; WHEREAS, the EDA arrived at an agreement with Novak-Fleck Incorporated, a Minnesota corporation (“Novak-Fleck”) to sell the Property for the purchase price of $55,000.00 upon all of the terms set forth in the RFP; WHEREAS, the EDA has accepted Novak-Fleck’s offer and has presented a draft of the Purchase and Redevelopment Agreement to Novak-Fleck for its review, a copy of which is attached hereto as Exhibit A (“Purchase and Redevelopment Agreement”) and incorporated herein by reference; WHEREAS, it is in the best interest of the EDA to sell the Property to Novak-Fleck for the sum of $55,000.00, in order for Novak-Fleck to redevelop and build a new home on the Property in accordance with the City’s scattered site housing program and policy; and WHEREAS, the City staff is hereby seeking approval from the EDA of the Purchase and Redevelopment Agreement, subject to other terms relating to the closing on the sale of the Property. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. That the sale of the Property by the EDA to Novak-Fleck for the purchase price of $55,000.00, with other terms and conditions as set forth in the Purchase and Redevelopment Agreement attached hereto as Exhibit A, is approved subject to the review and approval by the City Attorney of the final language and exhibits to the Redevelopment Agreement relating to the closing on the sale of the Property, it being in the best interest of the EDA to sell the Property for redevelopment and construction of a single-family home in accordance with the City’s scattered site housing program and policy. 3. The EDA shall use due diligence for selling the Property to Novak-Fleck for the construction of a single-family home, so as to return the Property to the tax rolls for the benefit of all taxing jurisdictions. 4. The City Attorney shall commence and complete a proceeding subsequent action with the Hennepin County Examiner of Title’s Office to clear the title of the Property of the mortgage foreclosure. 5. The President, Executive Director and New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the sale of the Property in accordance with the Purchase and Redevelopment Agreement. Dated the 23rd day of May, 2016. ____________________________________ Kathi Hemken, President Attest: __________________________ Kirk McDonald, Executive Director Exhibit A Purchase and Redevelopment Agreement See attached P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11381 4511 Boone Ave. N\Resolution Approving Sale of 4511 Boone Avenue North.docxx I:\RFA\COMM DEV\Development\Q & R ‐ 5400 Yukon Ave Acquisition 5‐23‐16 Project 986.docx Request for Action May 23, 2016 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Aaron Chirpich, CD Specialist Agenda Title Resolution approving purchase agreement for the acquisition of 5400 Yukon Avenue North (improvement project no. 986). Requested Action Staff requests the EDA to authorize entering into a Purchase Agreement for the acquisition of 5400 Yukon Avenue North, for $105,000 (purchase price) plus any associated fees. Policy/Past Practice In the past, the EDA has successfully acquired vacant distressed properties as part of the city’s scattered site housing program. Background The EDA has directed community development staff to actively pursue the acquisition of vacant and distressed single‐family homes as part of the city’s scattered site housing program. 5400 Yukon is part of an estate and the home now sits vacant. The home is located in one of the EDA’s priority redevelopment neighborhoods just south of the Parkview subdivision. This neighborhood is one of the oldest in New Hope where most homes were constructed in the early 50’s. The typical homes in this area are very small with less than 600 square feet of living space on the main floor. 5400 Yukon is no exception to this rule. The home has not seen many upgrades since built, and does not have a garage. Staff feels that the best use of the home and site would be demolition to facilitate the construction of a new single‐family home. The lot is big enough to accommodate a variety of the new home designs that the EDA has seen in recent proposals for the sale of EDA owned lots. The home was listed for sale at a price of $109,900. Staff submitted an offer of $105,000 one day after the home hit the market. The offer was accepted the following day. The offer was made contingent upon EDA approval and environmental clearance by Hennepin County. Before submitting an offer, staff discussed strategy with the realtor representing the EDA and the City Manager. Based upon staff’s experience with similar homes in the area, staff wanted to put forth a solid first offer with the intent of avoiding a “multiple offer” scenario. Funding Funding for the acquisition and all costs associated with demolition of this home will initially come from EDA reserves. The EDA will be reimbursed with CDBG grant funds for eligible expenses at a later date. Recommendation Staff is seeking approval of the acquisition of 5400 Yukon Avenue. Staff recommends the EDA approve the attached resolution prepared by the City Attorney and terms of the attached purchase agreement. Agenda Section EDA Item Number 7 Request for Action, Page 2 Attachments  Resolution  Project Budget  County Tax Information  Location Map  Picture of Home  Sample Lot Layout  Purchase Agreement CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 16-___ RESOLUTION APPROVING PURCHASE AGREEMENT FOR THE ACQUISITION OF 5400 YUKON AVENUE NORTH (IMPROVEMENT PROJECT NO. 986) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope (“EDA”) as follows: WHEREAS, on September 22, 2014, the City Council adopted Resolution No.14-126 at the City Council meeting authorizing City community development staff to actively pursue the acquisition of distressed, functionally obsolete single family homes for potential purchase by the EDA, as part of the City’s scattered site housing program; WHEREAS, the City Council has directed City staff to negotiate for the terms most favorable to the City and EDA, and the execution of purchase agreements so as to secure purchase rights for these real properties, contingent on the review and approval of the EDA to the terms of the purchase agreements; WHEREAS, City staff have identified the opportunity to purchase certain real property located at 5400 Yukon Avenue North, New Hope, MN, P.I.D. 06-118-21-43-0012, and legally described as: Lot 9, Block 5, Begin Addition, Hennepin County, Minnesota (the “Property”) from Richard A. Markuson; WHEREAS, the Property is currently unoccupied; WHEREAS, the house located on the Property was built in 1954 and has a functionally obsolete floor plan; WHEREAS, City staff believes that the best use of the Property is demolition in order to maximize the tax base by making the lot available for the development of a new residential housing unit; WHEREAS, the Property will be acquired with EDA funds; WHEREAS, it is in the best interest of the EDA to purchase the Property from Richard A. Markuson, in order to redevelop the Property in accordance with the City’s scattered site housing program and policy; and WHEREAS, City staff is hereby seeking approval from the EDA of the Purchase Agreement, subject to the review and approval by the City Attorney of proper title evidence and other terms relating to the closing on the sale of the Property. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. It is in the best interest of the EDA to purchase the Property for redevelopment in accordance with the City’s scattered site housing program and policy. 3. That the purchase of the Property by EDA from Richard A. Markuson, for a sum not to exceed $105,000.00, with other terms and conditions as set forth in the Purchase Agreement attached hereto as Exhibit A, is approved subject to the review and approval by the City Attorney of proper title evidence and other terms relating to the closing on the sale of the Property. 4. The City and EDA shall use due diligence for correcting the Property’s blighted condition and conducting any necessary environmental cleanup of the Property to pursue this redevelopment purpose and return the Property to the tax rolls for the benefit of all taxing jurisdictions. 5. The President and Executive Director and the New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the purchase of the Property in accordance with the Purchase Agreement. Dated the _____ day of May, 2016. ____________________________________ Kathi Hemken, President Attest: _____________________________ Kirk McDonald, Executive Director P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11403 Purchase of 5400 Yukon Ave. N\Resolution Approving Purchase of 5400 Yukon Avenue.docx