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IP #707Holmes & Associates, Ltd. Memorandum To: Lud Blackburn, Department of HUD Dean Carlson, Housing Development Coordinator, MPHA I,Ken Doresky, City of New Hope, Community Development Bill Flaig, Project Manager, PPt Cassandra Headrick, Dorsey & Whitney LLP From: Mary Jaworsky Paralegal to Timothy R. Velner Counsel to MPHA Re: Bass Lake Apartments/New Hope, Minnesota Mixed -Finance Development Date: June 16, 2003 Enclosed for your files is the final transcript for the above -referenced mixed finance project. If you have any questions, please feel free to contact me. cc Steve Gronewold c'�_ dp atn�ula �OGtaaC Two Carlson Parkway, Suite 155, Minneapolis, Minnesota 55447 763-249-D888, Fax 763-249-0777 Direct Dial: 763-249-2900, Email: mjaworskyaholmesltd.com �.L� W 707. 0 THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS MIXED -FINANCE DEVELOPMENT (Bass Lake Apartments/New Hope, Minnesota) CIosing: May 1.3, 2003 Participants MPHA Minneapolis Public Housing Authority in and for the City of Minneapolis MPHA's Counsel Timothy R Velner, Holmes & Associates, Ltd. HUD United States Department of Housing and Urban Development HUD's Counsel Steve Gronewold, Esq. City City of New Hope, Minnesota EDA Economic Development Authority in and for the City of New Hope, Minnesota City & HRA's Counsel Steve Sondrall, Jensen Sondrall PA Owner Bass Lake Apartments LLC Owner's Counsel Jeff Benson, Dorsey & Whitney LLP Managing Agent Project for Pride in Living, Inc. County HRA Hennepin County Housing and Redevelopment Authority County County of Hennepin Bank Franklin National Bank Title Old Republic National Title Insurance Company 1. Development Grant Project Number: MN46P00209195F for a Mixed Finance Amendment as Amendment No. 180 to Consolidated Annual Contributions Contract executed by MPHA and HUD 2. Development Grant Project Number: MN46P00207295A for a Mixed Finance Amendment as Amendment No. 179 to Consolidated Annual Contributions Contract executed by WHA and HUD 3. Resolutions and General Certification of WHA General Certificate of Local Authority Resolution No. 02-39 regarding Cooperation Agreement Resolution No. 97-325 regarding Transaction Documents 4. Proceedings and Resolution of City F:IMNN12510351DOC S10OCLOSGLST.DOC 5. Proceedings and Resolutions of EDA 6. Resolution of Owner Certificate of Good Standing Organizational Documents 7. Cooperation Agreement between MPHR, EDA and City 8. Declaration of Restrictive Covenants executed by the Owner Exhibit A Legal Description 9. Initial Agreement between MPHA and EDA Exhibit A Waiting List Certification 10. Housing Development Agreement between MPHA, EDA and Owner Exhibit A Legal Description Exhibit B Declaration of Restrictive Covenants Exhibit C Certificate of Completion Exhibit D Title Insurance Commitment Exhibit E Davis -Bacon Wage Rate 11. Regulatory and Operating Agreement between MPHR, EDA and Owner Exhibit A Development Site Exhibit B Dispute Resolution Procedures Exhibit C Development Operating Subsidy Cap Worksheet 12. Property Management Agreement between Owner and Managing Agent with Consent of EDA and MPHA Exhibit A Legal Description Exhibit B Management Plan Exhibit C Lease 13. Title Policy 14. Performance and Completion Guaranty 15. Opinion of MPHA's Counsel 16. Opinion of Owner's Counsel Schedule 1 A. Authority Documents B. Other Documents 17. Master Subordination Agreement and Estoppel Certificate among Owner, Bank, County, County HRA, EDA and MPHA 18. Master Disbursement Agreement among Owner, Bank, County, County HRA, EDA., MPHA and Title F:1MNN125103500CSIOOCLOSGLST.DOC 2 19. Proposal (without exhibits) 20. HUD Approval of Proposal 21. Request for Authorization of Replacement Housing in Concentrated Area dated February 13, 2003 executed by various parties F:%dNN12510351DOCS100CL OSGLST.DOC MPARTICIPANTS F:1MNN 12510351DOCSIl9PROPOSAL.DOC PROPOSAL NAME AND ADDRESS TELEPHONE FAX EMAIL MPIFIA Cora McCorvey, Executive Director 612-342-1439 612-371-0421 Dean Carlson, Housing Development 612-342-1490 612-335-4401 dcarlson@mplspha.org Coordinator's 612-342-1400 Minneapolis Public Housing Authority 1001 Washington Avenue North Minneapolis, MN 55401-1043 MPHA's James S. Holmes* 763-249-2900 763-249-0777 jholmes@holmesltd.com Counsel Timothy R. Velner 763-249-2908 763-249-0777 tvelner@holmesltd.com Mary Jaworsky, Paralegal 763-249-2906 763-249-2907 mjaworsky@holmesltd.com Holmes & Associates, Ltd. Two Carlson Parkway, Suite 155 Minnea alis, MN 55447 _ stephenj._gronewold@hud.gov HUD- Steve Gronewold* 612-370-3000 612-370-3090 Minnesota x2210 Office Debbie Kravik* 612-370-3135 612-370-3003 deborah_kravik@hud.gov x2225 AI Chandler 612-370-3000 612-370-3090 alien_chandler@hud.gov US Department of HUD x2212 920 Second Avenue South, Suite 1300 Minneapolis, MN 55402 HUD - Vickie S. Longosz 202-708-0470 202-401-2115 Washington , Attorney Advisor x5266 D.C. Office of Assisted Housing and Development Ogee General Counsel Department of HUD 451 Seventh Street Southwest Room 8166 Washington, D.C. 20410 Luci Blackburn* 202-708-0614 202-401-2370 luci_ann_blackburn@hud.gov Department of HUD x4190 451 Seventh Street Southwest Room 4130 Washington, D.C. 20410 City & EDA Ken Doresky 763-531-5137 763-531-5136 kdoresky@ci.new-hope.mn.us Community Development Specialist City of New Hope Daniel Donahue* 763-531-5100 Executive Director New Hope EDA Both Offices at: 4401 Xylon Ave N New Hope, MN 55428-4898 EDA's Counsel Steve Sondrall 763-424-8811 763493-5193 sas@jensen-sondrall.com Jensen Sondrall PA 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 Owner Bass Lake Apartments LLC c/o Project for Pride in Living, Inc. Barbara McCormick, Vice President 612-874-3301 1925 Chicago Avenue South Minneapolis, MN 55404 F:1MNN 12510351DOCSIl9PROPOSAL.DOC PROPOSAL FAMNN 125W355DOCS119PROPOSAL.DOC PROPOSAL NAME AND ADDRESS TELEPHONE FAX EMAIL aka Rill Flaig, Project Manager 612-874-3335 612-872-8995 bill.flaig@ppl-inc.org Developer Project for Pride in Living, Inc. 1925 Chicago Avenue South Minneapolis, MN 55404 Owner's & Cassandra Headrick 612-752-7316 612-340-2644 headrick.cassandra@dorseylaw.com Developer's Dorsey & Whitney LLP Counsel 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402 PPL Morris Manning, PMD Manager 612-874-8512 612-872-8995 aka Managing Project for Pride in Living, Inc. Agent 1925 Chicago Avenue South Minneapolis, MN 55404 County HRA Carol Stinar 612-348-2670 612-348-2920 carol.stinar@co.hennepin.mn.us Principal Planning Analyst Hennepin County HRA 417 North 5`h Street, Suite 320 Minneapolis, MN 55401 Franklin Richard Esquivel, Vice President 612-874-4316 612-874-7978 Franklin National Bank 525 Washington Avenue North Minneapolis, MN 5501 County Tonja West-Hafner 612-348-2599 612-348-9710 tunja.west-hafner@co.hennepin.mn.us Hennepin County A-2300 Government Center Minnea olis, MN 55487-0240 4tect John Klockeman, AIA 763-561-5757. 763-561-2914 Blumentals Architecture, Inc. 6235 Earle Brown Drive, D -Barn Brooklyn Center, MN 55430-2105 Contractor Mark Welch, Project Manager 651-225-1105. 651-225-1100 Flannery Construction 351 East Kellogg Boulevard St. Paul, MN 55101 Title Rick Zilka 612-371-1111 612-371-1179 rzilka@oldrepnatl.com Old Republic National Title Insurance Company 400 Second Avenue South Minneapolis, MN 55401 Metropolitan Cecile Bedor 651-602-1345 651-602-1313 cecile.bedor@metc.state.mn.us Council Metropolitan Council Mears Park Centre 230 East Fifth Street St. Paul, MN 55101-1626 Relocation Edith Vargas 651-645-6892 Consultant to 1737 Ashland Avenue I PPL St. Paul, MN 55104 FAMNN 125W355DOCS119PROPOSAL.DOC PROPOSAL MIXED -FINANCE AMENDMENT TO CONSOLIDATED ANNUAL CONTRIBUTIONS CONTRACT Seeban 1. This Mixed -Finance Amendment to Consolidated Annual Contributions Contract ("Mixed -Finance ACC Amendment") is entered into between the United States Department of Housing and Urban Development (HUD) andinne nn lic J?uhlir H011 , Authority j -n and for the 0111 nf Minneapolis a (the "Authority") and covers the public housing units. and related appurtenances (the "Project" or the "Project Units" as further defined in Section 5(K)), which is part of a larger development known as BassLake Apartmenfig (me "Development," as further defined in Section 5(K)). Section 2. Funding derived from the following Capital Fund Project Number, the Development Grant Project Number and/or HOPE VI Grant Agreement Number is dedicated for use in developing the Project and/or the Project Units in accordance with this Mixed -Finance ACC .Amendment: (A) Capital Fund Project Number: ; or (B) Development Grant Project Number; ; or (C) HOPE VI Grant Agreement No. S.ection3. This Mixed -Finance ACC Amendment is an amendment to'Consolidated Annual Contributions Contract (ACC) (Form HUD -53012A and Form HUD -53012B) Number C-953 , dated _09/26/01 ; as Amendment Number 1,90 Sectiou 4. The ACC is amended to provide grant assistance for the Project identified in Section 2 and/or to add the Project Units to the ACC. This Mixed -Finance ACC Amendment is part of the ACC and incorporates Exhibits A -G, which are attached hereto. S.eWoil5. The following provisions are applicable to the Project: (A) Date of Capital Fond Project grant reservation: (B) Date of Development Grant Project reservation: 03128195 and 05102195_ (C) Date of HOPE VI Grant Agreement obligation: (D) Number of Project Units to be developed: (E) Housing Type: —Rehabilitation - Conventional May 21, 2002 (F)(1) For projects to be developed using Capital Funds, the total amount of Capital Funds authorized to be used for the Project (the Capital Fund Grant Authority) is: . (2) For projects to be developed using Development Grant Funds, the total amount of Development Grant Funds authorized to be used for the Project (the Development Grant Authority) is: $ $505,000-00 (3) For projects to be developed using HOPE VI Grant Funds, the total amount of HOPE VI Grant Funds authorized to be used for the Project is: (G) The Project Units will be (check one): [designated units_]; [undesignated units X_.] in the mixed -finance development. (H) The Project Units are (check one): [eligible X _]; [ineligible ] to receive public housing Operating Fund assistance ("Operating Fund assistance") under section 9(e) of the United States Housing Act of 1937 (42 U.S.C. 1437, et. seq.) ("the Act"). If some or all of the Project Units are eligible to. receive Operating Fund assistance, specify the number of eligible units (including the number of bedrooms per unit) that will be eligible to receive such assistance: _units; containing--2—bedrooms each. (1) The Project Units shall be ineligible to receive Capital Fund assistance unless the Authority executes .a project -specific ACC Capital Fund amendment. in connection with the Projects Units. (7) The definitions set forth in 24 CFR part 941, `subpart F, are applicable to this Mixed - Finance ACC Amendment. (K) As used in this Mixed -Finance ACC Amendment, the term "Development" shall refer to the entire housing facility, containing _ I 1 dwelling units, being developed using a mixed - finance strategx, and the term "Project," as used herein and as used in the ACC with respect to Project Number AI N46P00209195F , shall refer only to the'4 units of the Development (containing — S bedrooms) which shall be developed and continuously set aside, operated, and maintained as public housing units (the "Project Units"). Nothing contained herein shall be construed as requiring that any dwelling units included in the Development shall at any time be maintained and operated in accordance with the ACC, or constitute part of a "project" as defined in the ACC, other than the units contained therein constituting from time to time the Project Units. (A) By executing this Mixed -Finance ACC Amendment, the Authority certifies to HUD and, as applicable, agrees that: 2 May 21, 2002 (1) it has executed with HUD a 1995 version of the ACC to facilitate the execution of this Mixed -Finance ACC Amendment; (2) any Project Units to be newly constructed at the Development with Capital Funds under section 9(d) of the Act, or with Operating Funds under section 9(g)(2) of the Act (applicable to small Authorities, only), are eligible to receive formula funding in accordance with the requirements set forth in section 9(g)(3) of the Act; (3) any Project Units to be added to this Mixed -Finance ACC Amendment constitute public housing replacement units in accordance with 24 CFR § 941.102(c); (4) the Project will be developed in accordance with the HUD -approved budget and sources and uses set forth in Exhibit F of this Mixed -Finance ACC Amendment, and in accordance with the HUD -determined total development cost (IDC) limits for the Project; (5) it has the legal authority under State and local law to develop public housing units through the establishment or selection of an owner entity (the "Owner Entity"), .and to enter into all agreements and provide all assurances required under 24 CFR part 941 (subpart F), the HUD - approved proposal submitted by the Authority under 24 CFR part 941, subpart F ("the, Proposal"), and this Mixed -Finance ACC Amendment. The Authority also warrants that it has the legal authority under State and local law to enter into any proposed partnership and to fulfill its obligations as a partner thereunder, and that it has obtained all necessarymapprovals for this purpose; (6) it will ensure that -the Project is developed in accordance with 0 requirements applicable to the development of public housing, including, without limitation, the Act, the ACC (except that any requirement set forth in the ACC shall be superseded by a modified requirement set forth in this Mixed -Finance ACC Amendment), the Mixed -Finance ACC Amendment, the Proposal, the HUD -approved declaration of trust to be recorded against the Development (the "Declaration"), the HOPE. VI Grant Agreement and the HOPE VI Revitalization Plan (if applicable), and all other pertinent Federal statutory, executive order; and regulatory requirements, as those requirements may be amended from time to time; (7) it will ensure that the requirements for admission to, continued occupancy of, management, and modernization of the Project Units are in accordance with all requirements applicable to public housing, including the Act, HUD regulations thereunder (and, to the extent applicable, any HUD -approved waivers of regulatory requirements), the ACC, this Mixed - Finance ACC Amendment, the HOPE VI Grant Agreement and the HOPE VI Revitalization Plan for the Project (if applicable), the HUD -approved mixed -finance proposal under 24 CFR part 941 (subpart F) relating to the Project (the "Proposal"), the Authority's standard public housing admissions and occupancy policies adopted in accordance with Federal law and described in the Authority's approved Public Housing Agency Annual Plan, or any approved amendment to the May 21, 2002 Plan (the "Plan"); provided, however, that the Authority may adopt modifications of its standard public housing admissions and occupancy policies for purposes of its mixed -finance projects generally, or specifically for the Project, to the extent these modifications conform with the requirements of Federal law, including but not limited to 24 CFR parts 903, 960, and 966 (and expressly including tenants' advance notice and comment rights afforded by 24 CFR § 966.3 and § 966.52 relating to modifications of standard public housing lease and grievance procedures, respectively), and such modified admissions and occupancy policies are described in the Plan and made applicable to the Project, and all other pertinent Federal statutory, executive order, and regulatory requirements, as those requirements may be amended from time to time (the requirements set forth in subparagraphs (6) and (7) of this Section 6(A) are hereafter to be collectively referred to as the "Applicable Public Housing Requirements"); (8) there is no action, proceeding, or investigation now pending, nor any basis therefor; known or believed to exist by the Authority, which: (i) questions the validity of this Mixed - Finance ACC Amendment, or any action taken, or to be taken, under it, or; (ii) is likely to result in any materially adverse change in the authorities, properties, liabilities, or condition (financial or otherwise) of the Authority or the Proposal, or of any participating party, that would materially or substantially impair the Authority's or such participating party's ability to perform any of the obligations imposed upon it under the Proposal and this Mixed -Finance ACC Amendment; (9) it has obtained all Federal, State, and local government approvals, permits and reviews required by law, or reasonably required by HUD, to be obtained by the Authority for commencement of the activities set forth in the Proposal, and all participating parties have obtained all such approvals, permits and reviews required to be obtained by the participating parties for commencement of such activities; (10) it will develop at least the same number of public housing units as approved by HUD in the Proposal, and will do so within the TDC limits approved by HUD; (11) if the Authority will pay for more than its pro rata share of the, cost of common area improvements related to the Development, it further agrees that the common area improvements will benefit all residents of the Development; (12) to the extent the Authority's Proposal provides that public housing units within a Development will not be specifically designated as public housing units, but will be a fixed percentage of the housing units and number of bedrooms developed under the Proposal, the Authority agrees to provide additional binding assurances that the percentage of public housing units, and the percentage of bedrooms, to be developed under the Proposal are maintained by the Owner Entity for the term of the low income use restrictions; (13) it will immediately notify HUD of (i) any material change in any representations, statements, certifications or other matters contained in the Authority's Proposal, this Mixed - ►,I May 21, 2002 Finance ACC Amendment, and/or the HOPE VI Revitalization Plan (if applicable), and (ii) any default of which it has notice under any agreement submitted to HUD as part of the evidentiary materials hereunder; (14) it will use its best efforts to ensure that all Authority, Owner Entity, and participating party(ies) obligations under this Mixed -Finance ACC Amendment in accordance with the timeframes established in the development schedule attached hereto as Exhibit D; (15) it will ensure that any reserves to be funded with Operating Fund assistance provided under section 9(e) of the Act (the "Project Reserves") shall, following the termination of the Mixed -Finance ACC Amendment, remain dedicated for use in operating and maintaining the: Project Units, or shall be returned to the Authority for use in connection with its other public housing projects; (15) it will ensure that the Applicable Public Housing Requirements are binding upon the Owner Entity and any partner of the Authority and, to the extent determined necessary by HUD, upon any other participating party. In addition, in the event of any noncompliance with the . requirements of the Applicable Public Housing Requirements, the Authority agrees to take all necessary enforcement action to ensure such compliance or, alternatively to pursue any legal or equitable remedies that HUD deems appropriate; (17) the representations, statements, certifications and other matters contained in the Proposal were, to .the best of the Authority's information and belief, true and complete in all material respects as of the dates of submission of the Proposal to HUD (including the dates of any separate submissions for a specific phase), and upon the execution of this Mixed -Finance ACC Amendment and will continue to be true and complete in all material respects as of the date of any amendment to this Mixed -Finance ACC Amendment, except as modified by such amendment (and any corollary modification to the Proposal that the Authority deems necessary); (18) this Mixed -Finance ACC Amendment has been executed and delivered by the Authority in such a manner and form as to comply with all applicable laws so as to make this Mixed -Finance ACC Amendment the valid and legally binding act and agreement of the Authority; (19) it will use, or ensure the use of, program income during the grant period, in accordance with 24 CFR § 85.25, only for eligible program costs or other low-income housing purposes. The Authority agrees that after the end of the award period, any gross income received by the Authority or a subgrantee that was directly generated by a grant -supported activity (or earned only as the result of funding provided under Section 3 of this Mixed -Finance ACC Amendment), including, without limitation, principal and interest on loans made with grant funds, will be utilized solely for eligible program costs or other low-income housing purposes. This covenant will survive any termination of the grant and, at HUD's direction, may be May 21, 2002 incorporated into any documentation related to the closeout of the grant; and (20) it will take all steps necessary to ensure that, in the event of a foreclosure or other adverse action brought against the Owner Entity with respect to the Development (including, but not limited to the Public Housing Units), the operation of the Public Housing Units will not be adversely affected. (B) The Authority warrants that it will include, or cause to be included: (1) in all its agreements or contracts with the partner, the Owner Entity, and/or other participating parties receiving Capital Funds under section 9(d) of the Act, Development Grant Funds under section 5 of the Act, HOPE VI Grant Funds under a HOPE VI appropriations act or section 24 of the Act, and/or Operating Funds under section 9(e) of the Act, an acknowledgement that a transfer of Capital Funds, Development Grant Funds, HOPE VI Grant Funds and/or Operating Funds by the Authority to the partner, the Owner Entity, or other participating party will not be (and shall not be deemed to be) an assignment of Capital Funds, Development Grant Funds, HOPE VI Grant Funds, and/or Operating Funds, and the partner, Owner Entity, or other participating party will not succeed to any rights or benefits of the Authority under the ACC or this,Mixed-Finance ACC Amendment, or the HOPE VI Grant Agreement, if applicable, or attain any privileges, authorities, interests, or rights in or under the ACC or this Mixed Finance ACC Amendment, or the HOPE VI Grant Agreement, if applicable; and - ` (2) in all its agreements or contracts with the partner, the Owner Entity, or other participating parties, and in all contracts with any party involving the use of Capital Funds, Development Grant Funds, HOPE VI Grant Funds, and/or Operating Funds, a provision that nothing contained in the ACC or this Mixed -Finance ACC Amendment, or the HOPE VI Grant Agreement, if applicable, nor in any agreement or contract between the parties, nor any act of HUD, the Authority, or any of the parties, will be deemed or construed to create any relationship of third -party beneficiary, principal and agent, limited or general partnership, joint venture, or any association or relationship involving HUD; provided, however, that the mortgagee tinder the first mortgage or deed to secure debt and note secured thereby, as said documents are more specifically identified in Exhibit E hereto (respectively, referred to herein as the "First Mortgage" and "Note") shall be entitled to rely,upon Section I I(C) and (D) of this Mixed -Finance ACC Amendment. (C) The Authority hereby acknowledges that HUD has approved the Proposal in reliance upon the Authority's representations that the Authority, the partner(s), the Owner Entity(ies), and other participating parties will, and the Authority hereby further agrees that it will, or will cause the participating parties to: (1) carry out the activities ascribed to them in accordance with the Proposal and the approved evidentiary documents (as set forth in Exhibit E hereto) and the requirements of this 0 May 21, 2002 Mixed -Finance ACC Amendment; (2) complete those activities in accordance with the schedule set forth in Exhibit D, including the development of the Project Units; (3) have (or will have when necessary to implement their activities in accordance with the Proposal), the financial capacity to assure carrying out the activities to their completion; and (4) invest, or cause to be invested, in the activities described in the Proposal a specific amount of funds in addition to the Capital Funds, Development Grant Funds, or the HOPE VI Grant Funds, as applicable, in accordance with Exhibit R. (D) HUD has also relied upon the Authority's, the Owner Entity's, and the partner(s)'s representations that they and other participating parties, prior to the use of the Capital Funds, Development Grant Funds, or HOPE VI Grant Funds (as applicable) for the Proposal, will enter into legally binding agreements, as approved by HUD as part of the evidentiary material identified in Exhibit E to this Mixed -Finance ACC Amendment, evidencing the commitments of all parties necessary for completion of the Proposal, in compliance with the requirements of this Mixed -Finance ACC Amendment. 1. (A) lit. The Authority shall submit to HUD for review and approval the evidentiary materials specified in Exhibit E to this Mixed -Finance ACC Amendment. Such evidentiary materials must be submitted in the form of legally binding and enforceable commitments of the parties to the Proposal to undertake and complete specified activities connected with the Proposal, as set forth below: (1) Evidence of Calltrnets. Evidence of contractual commitments submitted to HUD must include all documents evidencing the contractual commitments, with anmopinion of counsel attached (see paragraph (B)(2) of this section regarding the proper form for opinions of counsel). (2) F.vidnnre of Loans. f7nieings, RnnA Sales. (i) Evidence of a loan must be submitted in the form of copies of fully executed notes, deeds, bonds, indentures, loan agreements, and other documents, which must contain sufficient evidence (satisfactory to HUD) to enable HUD to determine: that the loan has been closed and the funds are irrevocably committed and available to the borrower; the principal amount of the loan; its purposes (interim or permanent); and the authorized use of loan funds; the identity of the security for the loan; the term of the loan; the interest rate (and/or any other form of participation) 7 May 21, 2002 under the loan; the repayment provisions; the default provisions; the identity of all parties to the loan; with an opinion of the Owner Entity's (and/or any other borrower's) counsel addressed to HUD in accordance with the requirements of paragraph (B)(2) of this section. (ii) If bonds or limited partnership interests are sold to finance the Proposal, the evidence must include a statement from the trustee or depository of the proceeds certifying that the bonds or limited partnership interests have been sold and the amount of the proceeds that are available immediately for the implementation of the Proposal, and must have an opinion of the Owner Entity's (and/or any other borrower's) counsel addressed to HUD in accordance with paragraph (B)(2) of this section. In the event that any portion of the proceeds of the sale of the bonds or limited partnership interests are to be made available over an extended period, or for any other reason are not immediately available in accordance with the Proposal, evidence of "bridge financing" loan(s) in such amount (secured by pledges from the limited partners or in another manner which does not encumber the Project), or other evidence, satisfactory to HUD, must be submitted as part of the evidentiary materials, in accordance with paragraph (1) of this section. Notwithstanding the foregoing, the requirement for bridge loan financing will be waived to the extent that such proceeds are necessary only to cover the payment of developer fees (provided that the receipt of such proceeds are timed to coincide with deferred payments to the developer for its fees). (3) State and Iineal Commitments). aL_ (i) Whenever evidence is required in the form of a statement and opinion of counsel (or other party designated by HUD) that a participating party has irrevocably committed a specific amount of finances to carry out the commitment of that participating party under the Proposal, such evidence must be in the form of an opinion of counsel or such other party designated by HUD, made in accordance with paragraph (B)(2) of this section. (ii) The opinion of counsel (or other party designated by HUD) must certify that: such party has examined the availability of the participating party's financing, or other funding source; state the amount and the source of such financing or other funding committed by the participating party to the Proposal; and state that such financing or other funding has been irrevocably committed by the participating party for use in carrying out the Proposal and such commitment is in the amount required under the terms of the Proposal. (4) Evidence of Title. (i) Evidence of fee simple or leasehold title to real property must be m the form of an original ALTA (or other form acceptable to HUD) policy of owner's or mortgagee's title insurance, which must identify the real property and the ownership interests of the Authority, Owner Entity, and other participating parties (as appropriate) as the owners or lessees of record May 21., 2002 of such property. (ii) The title policy must also reflect any instruments securing any private or public financing, including any loan of Capital Funds, Development Grant Funds, or HOPE VI Grant Funds, as applicable, that have been recorded against the title, and also reflect that the Declaration, as required by Section 8 of this Mixed -Finance ACC Amendment, is the first encumbrance recorded against the Development to ensure that the Project Units are operated in accordance with the Applicable Public Housing Requirements for the period required by law and this Mixed -Finance ACC Amendment. CV I ii 1 WrIAM,l e (1) Suhmissinns. All documentary evidence submitted to HUD must be in the form of either duplicate original(s) of the fully executed document(s), or photographic copies of the fully executed original of the document(s), unless otherwise specified, with a certification attached that the document is a true and complete copy of the original. (2) Qninions of counsp-i. (i) Counsel must opine to the following for each document submitted as evidentiary material under Exhibit E to this Mixed -Finance ACC Amendment: (a) An examination of the authority of all parties to the. documents and all persons executing the documents on behalf of the parties has been made and: that the parties and said persons were authorized to enter into and execute the documents; and (b) Each document constitutes a valid and legally enforceable agreement or contract under the laws of the Authority's State and the commitments and/or agreements evidenced thereby can be carried out in accordance with their terms under State and local law, and conform to the provisions of the Proposal approved by HUD and the requirements of this Mixed -Finance ACC Amendment, and that there is nothing in such document that conflicts with, or is inconsistent with, the Proposal and this Mixed -Finance ACC Amendment. (ii) Each opinion of counsel must be in writing and include the separate opinions of the Authority's counsel and the Owner Entity's counsel, unless .otherwise specified. (iii) Counsel may rely upon the certification of other persons, or the written statements or opinions of other counsel, provided that a copy of each such certification, statement, or opinion must be attached to the opinion of that counsel. (iv) If counsel predicates an opinion upon "information and belief," then in all such cases the counsel's opinion must contain, or have attached thereto, a statement or description of all of 9 May 21, 2002 the information upon which the belief of counsel is predicated. (C) AmendMeBLULapprnved evidentiojjo. After HUD has approved an evidentiary submitted in accordance with this Mixed -Finance ACC Amendment, the evidentiary may not be amended in any material respect without the prior written approval of HUD. (D) Implementation inhn asec. If Exhibit D contemplates implementation of the Proposal in phases, all of the evidentiary material for each phase must be delivered to HUD, in accordance with the provisions of this Mixed -Finance ACC Amendment, no later than the date specified in Exhibit D. (A) The Authority shall ensure that grant funds are expended only in accordance with the requirements set forth in this Mixed -Finance ACC Amendment and the approved budget set forth in Exhibit F to this Mixed -Finance ACC Amendment. (B) In the event that funds in addition to those set forth in the budget(s) at Exhibit F are received from any source in connection with the Development, such excess funds may only be used, as approved by HUD in writing, for: (1) cost overruns; (2) additional betterments; or (3) other purposes for the benefit of the Project residents and/or the Development. (C) Notwithstanding any contraryxequirement set -forth in 24 CFR § 85.21, the Authority shall request all draw downs of grant funds under the Line of Credit Control System - Voice Response System (LOCCS-VRS), unless and until another payment system is designated by HUD. The Authority shall comply with all rules, guidelines and notices established for the development of public housing under the LOCOS-VRS system, or any substitute system, in connection with the draw down of Capital Funds, Development Grant Funds, HOPE VI Grant Funds, and/or Operating Funds. If HUD designates an alternative payment system, it shall be based on 24 CFR § 85.21. (D) HUD may withhold payments under this Mixed -Finance ACC Amendment in accordance with 24 CFR § 85.21.(g), except that indebtedness of the Authority to the United States which is not related to a Project under this Mixed -Finance ACC Amendment shall not be the basis for withholding payments under this Mixed -Finance ACC Amendment pursuant to 24 CFR § 85.21(g)(1)(ii). (E) After HUD provides the Authority with written notification that the evidentiaries listed in Exhibit E have been reviewed and approved, the Authority may request a draw down of grant funds pursuant to the approved budget in Exhibit F. (F) The Authority may utilize grant funds, in accordance with the budget under Exhibit F, 10 May 21, 2002 for publication costs of reports or other media relating to Project accomplishments or results, which are allowable costs pursuant to OMB Circular A-87, Schedule B, paragraph 23. (G) No grant funds may be drawn down under this Mixed -Finance ACC Amendment during any period in which the Authority has failed to file with HUD any overdue financial report(s). With respect only to the Project under this Mixed -Finance ACC Amendment, Section 7 of the ACC is modified in its entirety to read as follows: (A) Neither the Project Units nor any part thereof shall be demolished or disposed of, other than in accordance with the terms of the Applicable Public Housing Requirements, so long as this Mixed -Finance ACC Amendment remains in force with respect to the Project. With the exception of (1) the First Mortgage and any mortgage(s) held by the Authority that have been approved by HUD, (2) dwelling leases with eligible families for the Project Units, and (3) normal uses associated with the operation of the Project, neither the Project nor any portion thereof shall be encumbered in any way, nor the assets of the Project pledged as collateral for a loan, without the prior written approval of HUD. (B) No transfer, conveyance, or assignment shall be made, without the prior written: approval of HUD, of (1)',anyinterest of a managing member, general partner, of controlling stockholder (any such interest being referred to as a "Controlling Interest") in the Owner Entity, or (2) a Controlling Interest in any entity which has a Controlling. Interest in the Owner Entity, or (3) prior to payment in full of all equity contributions described in the approved evidentiary documents, any other interest in the Owner Entity, or in any partner or member thereof. (C) Notwithstanding the foregoing, HUD consent is not required for the transfer of any non -managing member interest in any limited partners of the Owner Entity or any interest either as a member or a manager in any limited liability company which is a non -managing member of a limited partner of the Owner Entity, provided that the relevant LLC or Limited Partner, as appropriate: (i) provides HUD with written notice of such transfer; and (ii) certifies to HUD that the LLC or Limited Partner, as appropriate, remains obligated to fund its equity contribution in accordance with the approved organizational documents of the Owner Entity; (D) HUD will not unreasonably withhold, delay, or condition a request by the Owner Entity for HUD's consent to an internal reorganization of the corporate or partnership structure of the Owner Entity or any of the partners, members or stockholders of the Owner Entity. 11 May 21, 2002 With respect only to the Project under this Mixed -Finance ACC Amendment, Section 8 of the ACC is modified in its entirety to read as follows: The Authority shall require the Owner Entity to execute and file for record against the Development, prior to the recordation of any other. encumbrance, a Declaration in the form approved by HUD. The Declaration shall confirm and evidence the Owner Entity's obligation, during the term of this Mixed -Finance ACC Amendment and the Regulatory and Operating Agreement covering the Project Units and during such further period when such approval may be required by law as then in effect, to develop, maintain and operate the Project Units in compliance with the Applicable Public Housing Requirements. The Declaration shall provide further that it may not be modified, amended or released without the prior written approval of HUD. With respect only to the Project under this Mixed -Finance ACC Amendment, Section .13(B) of the ACC is modified in its entirety to read as follows: (B) The Authority, to the extent that insurance proceeds or condemnation award proceeds ("Proceeds") permit, shall promptly cause the restoration, reconstruction, and/or repair . ("Restoration") of any damaged or destroyed property of the Development. The obligation for Restoration, to the extent Proceeds and other funds (if any are made available by the Owner Entity or the Authority) permit, is a requirement with which the Owner Entity must comply to the extent Restoration is feasible. Each mortgagee must permit Restoration if feasible (rather than require application of Proceeds to reduction of debt). If Restoration is not feasible, as determined by HUD (which determination of infeasibility shall not be unreasonably withheld), then the following requirements, which shall be incorporated into the Regulatory and Operating Agreement between the Authority and :the Owner Entity (and ground lease or other relevant document(s), as applicable), and with which) all mortgage documents encumbering the Development shall be consistent, shall apply: (1) Partial lass. In the event that less than all of the dwelling units in the Development are damaged, destroyed or lost as a result of casualty or condemnation, the following provisions shall apply: (i) If the Proceeds are less than, or equal to, the sum of the existing outstanding mortgage debt secured by the Development, excluding any such debt held by the Authority to secure a loan of Capital Funds, Development Grant Funds, or HOPE VI Grant Funds for the Project ("Existing Mortgages"), and such Proceeds are applied to reduction of Existing Mortgages, the number of Project Units in the Development shall remain the number required immediately prior to the occurrence of the casualty or condemnation; 12 May 21, 2002 (ii) If the Proceeds are less than, or equal to, the sum of the Existing Mortgages but, at the election of the holders of the Existing Mortgages, are distributed among the holders thereof and the Authority, by application first to reduction of the Existing Mortgages in an aggregate amount not to exceed the proportion of the Proceeds :equal to the ratio of non -Project Units to all dwelling units in the Development, and then by payment to the Authority of the balance of the Proceeds; then the percentage of units in the Development (and the percentage of bedrooms contained therein) which shall be Project Units shall remain the same as required immediately prior to the casualty or condemnation; (iii) If the Proceeds are more than sufficient to pay off the Existing Mortgages, Proceeds in excess of the aggregate amount of the Existing Mortgages shall be applied in the following order of priority: (a) to reduce any outstanding indebtedness to the Authority for a loan of Capital Funds, Development Grant Funds, or HOPE VI Grant Funds; (b) to reimburse the Authority for any Capital Funds, Development Grant Funds, or HOPE VI Grant Funds disbursed to the Owner Entity for development of the Development other than by loan; (c) to the Authority an amount equal to the total "cost of construction attributable to the Project Units, less the sum of (a) and (b) above, and (d) to the Owner Entity. Following application of Proceeds in accordance with this subparagraph (iii), the percentage of dwelling units in the Development which shall be Project Units (and the percentage of bedrooms contained therein) shall remain the same as required immediately prior to the casualty or condemnation; provided,: however, that to the extent that the payment.to the Authority pursuant to clauses (a), (b), and (c) shall be less than the "cost of construction" attributable to the Project Units, the number of remaining units in the Development which shall be Project Units shall be increased by a number of units (rounded down) equal to (1) the amount by which such payments to the Authority shall be less than the cost of construction, divided by (2) the quotient of (x) cost of construction, divided by (y) the number of Project Units immediately prior to the occurrence of the casualty or condemnation. (1) Total less. In the event that all of the units in the Development are damaged, destroyed or lost as a result of casualty or condemnation, the following provisions shall apply: (i) The Proceeds shall be used to reduce the amount of the outstanding indebtedness of any mortgage(s) secured by the Development, including any mortgage(s) held by the Authority, 13 May 21, 2002 based on the priority recorded order of such mortgage(s). (ii) If the Proceeds are more than sufficient to pay off the amount of the outstanding indebtedness of all mortgage(s) secured by the Development, including any mortgage(s) held by the Authority, then the amount of the Proceeds in excess of such indebtedness shall be applied in the following order of priority: (a) to reduce any outstanding indebtedness to the Authority for an unsecured loan of Capital Funds, Development Grant Funds or HOPE VI Grant Funds; (b) to reimburse the Authority for any Capital Funds, Development Grant Funds or HOPE VI Grant Funds disbursed to the Owner Entity for development of the Development other than by loan; (c) to the Authority an amount equal to the total "cost of construction" attributable to the Project Units, less the sum of (a) and (b) above, and (d) to the Owner Entity. For the purposes of this paragraph, the term "cost of construction" shall mean the total cost of developing the Development, less land acquisition costs, if any, and non -capitalized "soft" costs. (A) Each of the following shall constitute an event of substantial default under the ACC: (1) The draw down of Capital Funds, Development Grant Funds, HOPE VI Grant Funds, and/or Operating Funds, as applicable, under the Proposal in amounts greater than authorized, or in amounts greater than allowed by the pro rata drawdown requirements in Exhibit G of this Mixed -Finance ACC Amendment; (2) Breach of any approved performance schedule; or (3) Serious and material breach of any terms, covenants, agreements, provisions, or warranties of: (i) the Authority, as set forth in this Mixed -Finance ACC Amendment; (ii) the Authority, as set forth in any agreement submitted to HUD as part of the evidentiary materials and entered into between the Authority and the Owner Entity, partner, or other participating party relating to the Proposal which, in the opinion of HUD, adversely affects 14 May 21, 2002 the performance obligations of the Authority, the Owner Entity, or other participating parties, as set forth in this Mixed -Finance ACC Amendment; and (iii) the Owner Entity, partner, or other participating party, made in any agreement submitted to. HUD as part of the evidentiary materials which, in the opinion of HUD, adversely affects the performance obligations of the Authority, the Owner Entity, partner; or other participating party as set forth in this Mixed -Finance ACC Amendment. (B) HUD shall permit an Owner Entity, partner, or lender to participate, and may, in its discretion, permit any other participating party to participate, in any appeal from a notice of substantial default delivered by HUD to the Authority pursuant to Section 17(C) of the ACC with respect to the Project. (C) During the term of the Regulatory and Operating Agreement between- the Authority and the Owner Entity, and so long as the Owner Entity shall not be in default of its obligations thereunder, HUD agrees that in the event of a substantial default by the Authority under the ACC, HUD shall exercise any remedies or sanctions authorized under the ACC, including taking possession of the Authority's interest in the Project, in such manner as not to disturb the Owner Entity's rights under the Regulatory and Operating Agreement. (D) The rights of the mortgagee under the Note and First Mortgage. (including the right to exercise all remedies specified therein) shall not be subordinate to any other obligations imposed upon the Development, except as such obligations (1) shall be reflected in the Declaration, as required by Section 9. of this Mixed -Finance ACC Amendment, or a memorandum of lease (if applicable), and/or any other recorded instrument which shall have been recorded prior to the lien of the First Mortgage, or (2) shall be the subject of a subordination agreement with such mortgagee. SIGNATURES OF HUD AND THE AUTHORITY APPEAR .ON THE FOLLOWING PAGE. 15 In consideration of the foregoing covenants, the parties do hereby execute this Mixed - Finance ACC Amendment: MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND -FOR THE CITY OF MINNEAPOLIS (SEAL) May 21, 2002 Director W 13 2003 L c UNITED STATES OF AMERICA Secretary of Housing and Urban Development By Diane C. Qniel, Director Office of Public Housing Minneapolis Field Office MAY 13 2003 16 [Exhibit A must include an identification and description of each participating party (including its role under the Proposal, the type of entity, its composition, and any relationships among parties) involved in the implementation of the full Proposal, with an address and a contact person for each such party. If the Proposal is being implemented in phases, list in Exhibit A-1 (through the applicable number of phases) the participating parties for each of the respective phases. If the identities of all participating parties are not known at the time this Mixed -Finance ACC Amendment is executed, this Mixed -Finance ACC Amendment shall be further amended to include the name, address and contact person for each such participating party.] Minneapolis Public Housing Authority in and for the City of Minneapolis (HA) 1001 Washington Avenue North Minneapohs, MN 55401 Dean Carlson 612-342-1490 Economic Development Authority in and for the City of New Hope (EDA) 4401 Xylon Avenue North New Hope, MN 55428-4898 Daniel Donahue 763-531-5100 City of New Hope (City) 4.401 Xylon Avenue North New Hope, MN .55428-4898 Ken Doresky 763-531-5137 County of Hennepin (County) A-2300 Government Center Minneapolis, MN 55487-0240 Tonya West-Hafner 612-348-2599 Hennepin County Housing And Redevelopment Authority (County HRA) 417 North 5'a Street, Suite 320 Minneapolis, MN 55401 Carol Stinar 612-348-2670 Franklin National Bank (Lender) 525 Washington Avenue North Minneapolis, MN 55401 Richard Esquivel 612-874-4316 17 May 21, 2002 Bass Lake Apartments LLC (Owner) and Project for Pride in Living, Inc. (PPL) (sole Member of Owner and acting as Developer and Managing Agent) 1925 Chicago Avenue South Minneapolis, MN 55404 Barbara McCormick 612-874-3301 18 May 21, 2002 (Exhibit B must include a description of the overall activities to be carried out under the Proposal, in addition to the activities ascribed to, and the financing to be provided by, each participating party. If the Proposal is to be implemented in phases, also describe the activities and financing by phase in Exhibits B - 1 through the applicable number of phases. This Exhibit must be amended if any of the foregoing information (for any phase subsequent to the first phase) is unavailable at the time this Mixed -Finance ACC Amendment is executed.) Project EIements means the rehabilitation of the project site which consists of a 2.5 story walk-up apartment building containing eleven (11) units, consisting of five (5) one -bedroom units andsix (6) two-bedroom units. Four (4) two-bedroom units will be operated as public housing units in the project. The two-bedroom units will not be physically identified, but will "float" throughout the Development. Project Site means the parcel described as follows: The East 113 of Lot 35, lying South of the North 1138.67 feet thereof, excepting the West 30 feet and the South 33 feet thereof, Auditor's Subdivision 226, Hennepin County, Minnesota. A The Housing Authority Activities shall consist of the following: Of the $505,000 grant received from HUD as identified in Section 5.(F)(2) of this Mixed -Finance ACC Amendment, the HA shall make a grant to Bass Lake Apartments LLC of not more than $469,000 of development funds which shall be used in accordance with the Housing Development Agreement; Regulatory and Operating Agreement, Management Agreement, and other evidentiary materials as listed in Exhibit E of this Mixed -Finance ACC Amendment. C The "Non Recipient Activities" shall consist of the following: Owner shall: (a) complete the project elements on the Project Site at a total cost of not more than $1,354,300 in accordance with Exhibit D to this Mixed -Finance ACC Amendment using not less than $126,300 in Lender funds, not more than $723,000 of other public money, and not more than $505,000 of public housing development funds, of which $36,000 is for Housing Authority administrative expenses; (b) borrow from the Lender as a first'mortgage not more than $126,300 for financing the Project; (c) borrow from the County HOME Program Fund not more than $350,000 for financing the Project; (d) borrow from the EDA not more than $223,000 for Iand acquisition costs for the Project; 19 May 21, 2002 (e) borrow from the County HRA Affordable Housing Incentive Fund not more than $150,000 for financing the Project; (f) invest not more than $505,000 of HA development funds in the Project;. (g) unconditionally and irrevocably guarantee the completion of the Project in accordance with the schedule set forth in Exhibit D to this Mixed -Finance ACC Amendment. 11 The Lender shall lend to Owner not more than $126,300 for financing the Project. The County shall lend to Owner not more than $350,000 for financing the Project. IV The EDA shall lend to Owner not more than $223,000 for financing the Project. V The County HRA shall lend to Owner not more than $150,000 for financing the Project. VI Upon completion, Owner entity will operate the project through its managing agent in accordance with the Regulatory and Operating Agreement and Management Agreement -by renting four (4) two-bedroom units to public housing eligible low-income families selected from the HA waiting list. To assist the Owner Entity in this endeavor, HA will provide operating subsidy in accordance with the terms of the Regulatory and Operating Agreement. The units will be operated as public housing units for the term indicated by the Regulatory and Operating Agreement and Declaration of Restrictive Covenants. 20 May 21, 2002 Exhibit C must include an identification of the total number of Project Units to be developed under the Proposal, with a breakdown by bedroom count. I. Proposed number of Project Units: If. Breakdown of Project Units by bedroom count:two-bed [If the Proposal is to be implemented in phases, provide the above information for each phase on Exhibits C - 1 through the applicable number of phases. If the number of Project Units, or the breakdown by bedroom count, in any particular phase subsequent to the first phase is unavailable at the time this Mixed -Finance ACC Amendment is executed, such information must be included by amendment to this Exhibit.] 21 May 21, 2002 1. The evidentiary materials described in Exhibit E of this Mixed -Finance ACC Amendment must be submitted to HUD by the Authority no later than: On or before the date of closing [SPECIFY THE DATE BY WHICH ALL. EVIDENTIARY MATERIALS MUST BE SUBU TTED OR, IF THE PROPOSAL IS TO BE RvIPLEMEIV'TED IN PHASES, FOR PHASE 1:] If. ff the Proposal is to be implemented in phases, for each phase (subsequent to the first phase) the Proposal submission package and the evidentiary materials, as described in -Exhibit E, must be delivered to HUD no later than the following dates: Date for Proposal Date for Evidentiary Submission Package _ ]Materials Phase 2 Not Applicable Not Applicable Phase 3 Not Applicable Not Applicable III. Upon HUD's notification to the Authority of its approval of the evidentiary materials required to be submitted under paragraph (I) of this exhibit, the Authority shall be authorized to draw down Capital Funds, Development Grant Funds, HOPE VI Grant Funds, and/or Operating Funds, as applicable, for the implementation of the Proposal, or the applicable phase of the Proposal, in accordance with all applicable requirements, including Section 8 of this Mixed - Finance ACC Amendment. IV. The activities described in the Proposal at Exhibit B of this Mixed -Finance ACC Amendment shall be commenced and completed in accordance with the following schedule: Start of Construction May 21, 2002 No later than June 1, 2003 No later than December 31, 2003 22 The evidentiary materials to be submitted by the Authority to HUD must be in one complete package or binder(s) (or, if applicable, in one complete package or binder for each phase), together with a copy of this Mixed -Finance ACC Amendment, with an index describing the material submitted, under tabbed dividers. All evidentiary materials must be submitted in accordance with the provisions of Section 7 of this Mixed -Finance ACC Amendment and for each phase and shall consist, as applicable, of the following: 1. X Declaration, as required by Section 9 of this Mixed -Finance ACC Amendment. 2. X A Regulatory and Operating Agreement that provides, among other things, for: (a) a methodology acceptable to HUD for distribution of a portion of the Authority's Operating Fund assistance to the Project Units; and (b) binding assurances that the percentage of Project Units and number of bedrooms will be operated and maintained as public housing in accordance with all requirements, and for the period, set forth in this Mixed -Finance ACC Amendment. 3. X A management agreement for the Project Units executed by the Owner Entity and the management agent. 4. _X_The proposed tenant lease to be entered into between the Owner Entity and the residents of the Project Units. [If the proposed -tenant lease differs from the Authority's standard public housing lease, the Authority must first comply with the notice and comment requirements of 24 CFR §§ 966.3 and/or 966.52(c), as applicable] 5.A) ___X_1f the Authority intends to pay PILOT to the locality with respect to the Project Units, it must submit its cooperation agreement with the unit of general local government. The Authority may satisfy this requirement either by entering into a new cooperation agreement executed by and between the Authority and the applicable local jurisdiction for the Project Units. Alternatively, the Authority may submit a copy of the existing cooperation agreement with a letter from the city solicitor's office indicating that the Project Units are covered under the existing cooperation agreement between the Authority and the locality; or (B) Tf the Project Units will be subject to local real estate taxes rather than PILOT, the Authority must submit a certification by the jurisdiction in which the Project Units are located affirming that the development of the Project Units is not inconsistent with the jurisdiction's comprehensive housing affordability strategy (as set forth in the jurisdiction's comprehensive plan). 23 May 21, 2002 6. X A guarantee of completion from 'Project for Pride in T.ivin& Inc- to the Authority. 7. Any partnership or joint venture agreement executed by and between the Authority, the partner, and the Owner Entity that establishes the relationships among the parties with respect to carrying out the Proposal, including all rights and liabilities (financial and otherwise) of the parties and the respective commitments of the parties with respect to carrying out the Proposal. 8. ^�L_The Authority certifications required by 24 CFR § 941.606(n)(1) (to be included in a resolution passed by the Authority's board of directors. 9. X vidence that the Owner Entity has site controlof the Development (either by deed or ground lease) encompassing all land necessary to the implementation of the Proposal. 10. _ _X An ALTA title policy in the form required by Section 6(A)(4) of this Mixed - Finance ACC Amendment, and receipts of recordation evidencing that the Declaration of Trust and Restrictive Covenants has been recorded in the order prescribed by HUD. 11. X A survey of the Development (to be submitted to HUD Field Counsel for review and approval). 12.(A) Unless specifically excluded under subparagraph (B) -of this paragraph, evidence. of all loans, notes, mortgages, deeds of trust, use restrictions, closings, bond sales, or other financing arrangements, whether private or publicJinancing (and including any financing to be provided by the Authority), evidencing the availability of the participating party(ies)' financing, the amount and source of financing committed to the Proposal by the participating party(ies), and the irrevocability of those funds. (B). The loan documents required under paragraph (A) may exclude the following documents: 1. [Loan documents approved by the Federal Housing Commissioner;] 2. 3. 4. 13. --X—The organizational documents of the Owner Entity, which documents may not provide equity investors, creditors, or any other parties, with rights that would be inconsistent with, or that could interfere with, HUD's interest in the Development. 14. _Opinions of the Authority's and the Owner Entity's counsel in accordance with Section 7(B)(2) of this Mixed -Finance ACC Amendment. 24 May 21, 2002 15. X Tf applicable, a program income agreement or certification, as prescribed by HUD with respect to income expected to be generated as a result of a grant -supported activity. M. —_ A copy of the review and approval form executed by the appropriate official conducting the subsidy layering review pursuant to section 102 of the HUD Reform Act of 1989. 17. X Tf applicable, any waivers granted by HUD in connection with the development and/or ,operation of the Development. 18. Any other agreements required or permitted to be entered into between the Authority, the Owner Entity, partner or participating parties under this Mixed -Finance ACC Amendment. 19. A certification by the Authority's counsel that the evidentiary materials submitted to HUD in the final binder(s) have not been altered following HUD approval. 20. For projects to be newly constructed, a certification under section 6(h) of the Act. 21. For projects involving FHA insurance, a certification of previous participation, as required by 24 CFR § 941.606(n)(2). 22. Such other documentation as HUD may require in connection with this Project. 25 May 21,1_1002 EXHIBIT F This Exhibit is the revised budget for the entire Proposal, including all public and private sources of funds, as applied to the uses (by category), as approved by HUD. See attached Schedule of Uses And Public Housing Development Cost Budget May 21, 2002 P121 Grantee. Bates Latae Apartments LLC 7910 mss Lake Apartments . ' Pr*d # (4) PAC Housing Menta! UrW% (5) HOME Unti% jq Tax Credtf Unh-, (2} Wgrkqw3ato Urdu SUMMARY PROJECT BUDGET REVISED 4/29/03 MHDP PHA) Fmnldln Nat'l Bank HOME Funds Hennepin County AHIF City or New Hope Total Funds A. Proposal: Development Sources HOPE VI Funds Capital Funds $ 504,ofxi - -- -- _ HOME CL)BG -J 350666 _ S ;COD 22.4A[10 $diD00 Tax Credit Equity - Federal Home Loan Bank Aft. Hsg. Funds First Mortgage ; -r--, •-.-��.--�---� - 1 Bridge Loan Other City Funds '— Other. Aftordable Housing Incentive Fund 1500060 �T $'. 1560130. Other, Waiver of Bldg Permit Fee Subtotal Development Sources B. Additional Project Sources $ 505,001)35QT D 15 --,. _$ - . ^_ g—' 4 34,9pD HOPE VI Funds Capital Funds— Other' TOTAL SOUACF_S (A & B) $ 505,000 $ 126,500 $ - 350,000 S 180,000 $ 229,000 $ 1,354,300 A. Prapoaal: Development Uses Construction Costs: Residential Ccnstnrctlon Site Work A__ t44:ZV $ $ 2,0w STA$& $ 1$8 7 $ 34 001- General Requirements Builder's Overhead $ $ 10,00047, 5,000 $4,000 $ _ S $ 25,4$0 gyy3q Builder's Profit S,000. Ti _ 4,987 _ 1 Bond Premium $ $� $ .$ t IVIes from the Street (Included In Residential Govan Cost AmcWrti— Flnish landscaping (Included in Site Work Amour, - t Public Improvements Constmaon Co'dngervoy $-•----'�---� $ �--. - ., , $ •'_w^`� °"- • Other. Constnrcticn of Parking Garages SutAutal $ 266,W. Development Fees: Architects 5' 1.3508_ $ $ $ $i tl08 $ tqb 0 Acmunling (Cost Certification7Audit) $ 1, 0 : $ - $ -9:ti(9ti. - .... $ - rww PHA Legal $ _ $ Developer Legal $ $$ E,11 ; $ $� 1 4S(F $ OAt00 Permits (Included in General Requirements Cost Arrourtt Appraisal S _ $ 11.760 $.., -�--�--�-�--� -- $ 2,a $ 4090 Environmental Engineering (Included in Architect Cost Amount) $ 1,91x1 $_,I - ! _ $. __ 1,000 TT^ ' 2300 $ $ _ 4.V0 Constr. PILOT &Tags Insurance $ $^ c - Sao $ _ 750 Tdle & Recording Fee& $. 1,500 >& First Modgaga Interest Bridge Loan Interest $Js $ Pemtaoent Loan Insurance CostsConsultants Equipment & Fumishfngs $ - - $ Tarr Credit Fees Mwicellng Lease -Up Interest 8L Expenses $ - $ $ 2(100 Initial Operating Period Reserve $ Operating Subsidy Reserve _-„-•�-- $ r 14.000 i _ $ $ . 1 B, -0(X1 is $.� Operating Deficit Reserve $� Exit Tax Reserve $ $ S -' Developer's Fee $ _ $ . 70,060 Other. Lot Boundary Survey $ 800 '' $ $ 756 $ 5® $ _ 1A0 Other. Processing Agent Development Contingency $ $ $ 6,250 $ _ - 1&,806 ;_ $ - 8 50 ! $ $ 500} $ 280 i's 10,000 2341p Subtotal $ 27:t50 $ 113.660 $ 19 2$560 .$ 49300 $ 212.ti06 Total Project Development Costs (Proposal) B. Additional Project Use $ ?94,000 15; 124,800 1. $ € $ 138,500 $ 2r1I0 $ 768,606 . Housing Authority Administration 8 38 080 1 r $ Program Management Community & Supportive Services Demolillon & Remediation Relocation $ �'T' Other. Property Acquisition $ '175,006 - $ -_ 111000 $g00 �. -- '' ” Other: Rerrt Paid Prior to Owning Bldg • $ � $ Other: Cornstructlo of Playground � $ 7.000 $ - 10,000 Total Additional Uses $ 211,000 $ 1,$O6- �$.__ 960.ag0 $� ^-11,560 $1YLL-,_ 3 700 $ W.700 TOTAL PROJECT USES (A & B S 505 000 1' 8,300 ' $ 950,000 '. $ 150,600I z 223:100 S T,554,3tJlf Development Cost Budget/ U.S. Department of Housing ON1B Approval No. 2577-0 P 9)AAY and Urban Development Cost Statement Office of Public and Indian Housing APR L 12003 ,' Dwelling Units j Copy Number: PPJProject Number. Nil Family Elderly Total Public Dousing Agency: Locality of Project: { 111 vloexwt ' b i i Jtb-j ick No financial or technical assistance may be provided to a project pursuant to an Annual Contributions Contract unless a PHA Proposal, including a development cost budget, has been approved (24 CFR 941). Housing Type and Production Method' Turnkey Conv. Force Act Status (Check one) PHA Proposal (PP) Budget New Construction [1 Budget Between PP and Contract Award Final Development Cost Budget. ACQ WlSubs#. Rehab. Contract of SalelContractAward Budget E]Development Cost Control Statement ACQ WO/Subst, Rehab. ❑ Budget Between Contract Award & Final 0 Statement of Actual Development Cost Suboart I - Budoet oevelopers vrlcs 1 11440 Site 2 1450 Site Improvements 3 1460 Dwelling Construction 4 1465 Dwelling Equipment 5 1470 Nondwelling Construction 6 1475 Nondwelling Equipment 7 1430.1 Archit. & Engr. Svcs. 8 Other 9 I Total Developer's Price 4icHousing Agency Costs 10perations w 11406 Operations Administration 11 1410.1 Nontechnical Salaries 12 1410.2 Technical Salaries 13 1410.4 Legal Expenses 14 1410.9 Employee Benefit Contribution 15 1410.10 Travel 16 1410.18.Equipment Expended 17 1410.19 Sundry 18 TotAlAdministration Liquidated Damages 19 11415 Liquidated Damages 20 21 22 23 25 26 27 28 29 Interest Initial Operating Deficit Planning Tnfel PF�nninn N form HUD -52484 (8196) Page 1 of 5 ref Handbook 7417.1 Latest Approved ActualDevelapment Estimated Line Budget Cost Incurred Actual Contract Additionalto Amount No. Account Classification Date—_ To Award Balance Complete (c) + (d) + (e) I Per Unit (a) (b) (c) (d) (e) (f) (g) oevelopers vrlcs 1 11440 Site 2 1450 Site Improvements 3 1460 Dwelling Construction 4 1465 Dwelling Equipment 5 1470 Nondwelling Construction 6 1475 Nondwelling Equipment 7 1430.1 Archit. & Engr. Svcs. 8 Other 9 I Total Developer's Price 4icHousing Agency Costs 10perations w 11406 Operations Administration 11 1410.1 Nontechnical Salaries 12 1410.2 Technical Salaries 13 1410.4 Legal Expenses 14 1410.9 Employee Benefit Contribution 15 1410.10 Travel 16 1410.18.Equipment Expended 17 1410.19 Sundry 18 TotAlAdministration Liquidated Damages 19 11415 Liquidated Damages 20 21 22 23 25 26 27 28 29 Interest Initial Operating Deficit Planning Tnfel PF�nninn N form HUD -52484 (8196) Page 1 of 5 ref Handbook 7417.1 Copy Number: ')Dart I - Budoet (continued) PR/Project Number: !_atestApproved Actual Development Estimated Budget Cost Incurred Actual Contract Additional to Amount .o. Account Classification Date To _ Award Balance Complete (c) + (d) + (e) Per Unit (a) (b) (c) (d) (e) M (g) Site Acquisition 32 11440.1 Property Purchases 33=1440.2 Condemnation Deposits 34 11440.3 Excess Property 35 1440.4 Surveys and Maps 36 1440.5 Appraisals 37 1440.6 Title Information 38 1440.8 Legal Costs—Site 39 1440.10 Option Negotiations 40 1440.12 Current Tax Settlement 41 1440.19 Sundry Site Costs 42 1440.20 Site Net Income 43 Total Site Acquisition 44 1450 Site Improvements 45 1460 Dwelling Construction 46 1465 Dwelling Equipment 47 1470 Nondwelling Construction 48 1475 Nondwelling Equipment 49 1480 Contract Work in Progress � 50 1465 Demolition 51 11495 Relocation Costs 1499 Development Used for Mod. Total (Including Donations) 54 Less Donations 55 Total Before Contingency (less Donations) 56 Contingency: 1% to 5% (or less) of line 57 Total Development Cost Subpart 11- Detail of Other in Developer's Price 1. Developer's Fee and Overhead $ 2. Interim Financing 3. Closing Costs 4. Property Taxes and Assessments 5. State or Local Sales, Excise or Other Taxes Total Other $ Subpart 111- Supporting Data for Cost Estimates Forthe PP Budget, attach an itemized breakdown of the costs chargeable to each of the following accounts. For subsequent budgets, provide this information only for accounts that are being changed. 1410.1 and 1410.2. List, by job title, each PHA employee whose salary, or portions thereof, will be chargeable to these accounts. For each, show the annual rate of gross salary, the estimated length of time to be spent in connection with development of this project, and the total gross salary which is properly charge- able to either of these accounts. If only a portion of the employee's time will be chargeable to this project, show the percentage that will be so chargeable; and show, in afootnote, the percentage distribution to other projects and the accounts to which distributed. 1410.19: List and show the cost of each item of administrative and general expense for which a speci,ic account is not provided in the 1410 group of accounts. If onlya portion of the cost of any item will be chargeable to this project, w the percentage and amount that will be so chargeable; and show, in a ote, the percentage distribution to other projects. j.2: List all planning consultants not paid underthe architect's contract and, for each, identify and show the cost of the services provided. 1430.7: Provide the same information required for 1410.1 and 1410.2, listing employees of the architect (or PHA when use of AHA employees has been previously approved) who will.perform inspection work for the project. 1450: Where off-site facilities are proposed to be included, identify and showthe cost of such facilities and provide justification for including such costs in TDC. 1465: Identify and show the cost of each item included in this account. 1475: Complete the Table below and, on a separate attachment, listand show the cost of each item included in each sub -account. Nondwelling Equipment (1475) Cost 1475.1 Office Furniture and Equipment �- 1475.2 Maintenance Equipment 1475.3 Community Space Equipment 1475.7 Automotive Equipment 1475.9 Expendab!e Equipment Total Nonswelling Equipment 1495: State the number of households and businesses to be displaced, and identify and show the estimated cost of relocation services and payments to be provided. form HUD -52484 (8196) Page 2 of 5 ref Handbook 7417.1 Copy Number: PPJProject Number: "--bpartlV- NewConstruction—PrototypeCostComparisonPercentage Subpart V-Acquisition—Development Cost Comparison Percentage welling Construction and Equipment (DC&E) Cost from Subpart I A. Proposed TDC from Subpart 1 $ 1. Total for Account 1460 $ B. HypotheticalTDC $ 2. Total for Account 1465 3. Subtotal (1 + 2) $ c {Attach calculation from PP, Part I, 4. Contingency (---% x line 3) _ Subpart B, Item 5a or, if applicable, $ other estimate and rationale.) 5. Total DC&E (3 + 4) B. PPCLTotal C. Comparison Percentage % (Attach calculation from PP, Part 1, Subpart B, Item 3) (Line A + Line B) C. Comparison Percentage (Line A5 + Line B) Subpart Vl - DetalI of Donations Subpart Vil - Previous/ p y Approved Budgets Line Item Amount List chronologically the dates and TDC on all previously approved bud ets, No. (Please List) (Value) 9 beginning with the PHA Proposal (P) Budget, and state the purpose (i.e., one of 1 the budgets listed in the "Status' block on page 1 and any amendments thereto). Date TDC Purpose 2 PP 3 4 Total I hereby certify that all the information stated herein, as well as any information provided in the accompaniment herewith, is true and accurate. Warning: HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties. (18 U.S.C. 9001,1010,1012; 31 U.S.C. 3729, 3802) Submitted By: Name & Title of Official Authorized to Sign for PHA: Signature of PH A's Authorized Official & Date: For HUD Use Only Recommended Name & Title of Authorized Official: forApproval By: Signat n e of Authorized Official & Date: X 3 !.t 1'-n � 0 ) , r - Approved By: Name & Title of Authorized Official: Signature of Authorized Official & Date: x form HUD -52484 (8196) Page 3 of 5 ref Handbook 7417.9 � rr: 1. Capital Funds, Development Grant Funds, HOPE Vi Grant Funds, and/or Operating Funds, as applicable, needed for the implementation of the Proposal (or, if the Proposal is being implemented in phases, for Phase 1 and any other phase for which no separate ratio is specified on Exhibits G - 2 through the applicable number of phases), may be drawn down under this Mixed -Finance ACC Amendment only in a ratio to other public and private funds in the Proposal of not more than $1.00 of Capital Funds (or Development Grant Funds or HOPE Vi Grant Funds, or Operating Funds, as applicable) to $_ 1.70 of the aggregate amount of other public and private funds provided for in the Proposal, excluding any amounts agreed to by HUD, as provided below. The dollar amount to which this ratio applies is $.294,000 (provided, however, that if the Proposal is to be implemented in phases and no other ratio is specified for any phase subsequent to Phase 1, this amount shall be deemed to be increased to the total amount of the Proposal. 2. Set forth below are the amounts and uses of funds that have been excluded, solely for the purposes of establishing the draw down ratio, from the aggregate amount of public and private funds to be provided under the Proposal. The following amounts are not subject to the draw down ratio requirement of Section 8 of this Mixed -Finance ACC Amendment (include amounts for front-end assistance approved by HUD): $ 175,000 Property Acquisition $-1640-0- Housing Authority Administration $ 211,000 TOTAL 28 May 21, 2002 Development Project Grant Amendment to Consolidated Annual Contributions Contract Development Project Grant Number: MN46P00207295A 2. Amendment to Annual Contributions Contract (Form HUD -53012A and HUD -53012B) Number C-953 dated 09126/01 (the Contract). 3. The Contract is amended to provide a grant assistance for the Development Grant Project. This amendment is a part of the Contract. 4. The following provisions shall be applicable to the Development Grant Project: a. Date of Development Grant Reservation: and 05/02195 b. Development Method and Housing Type Conventional - New _Construction c. Number of Units -- 80 d. Maximum Total Development Cost (Development Grant Authority) 21,121.80 5. The development of this Grant Project shall be carried out in accordance with all HUD regulations and other requirements applicable to the public housing development program. The PHA agrees to comply with these regulations and requirements. 6. The development work to be carried out is described in a PHA Proposal, a statement of the basic elements of the Development Grant Project. The PHA Proposal must be adopted by the PHA and approved by HUD, and may be revised from time to time by agreement between HUD and the PHA. The PHA agrees to carry out the development activities in accordance with the approved PHA Proposal. 7. The Maximum Total Development Cost of the Development Grant Project is stated in Section 4.d. of this amendment. The PHA shall complete the development of the Grant Project at the lowest possible development cost within the approved Development Cost Budget and in no event in excess of the stated Maximum Total Development Cost for the Grant Project. 8. Subject to the provisions of Part 11 of this Contract, and in order to assist the development of the Grant Project, HUD agrees to disburse to the PHA, from time to time as needed, up to the amount of the Maximum Grant Commitment. The Maximum Grant Commitment shalt be equal to the Maximum Total Development Cost for the Grant Project, as stated in Section 4.d. or the approved Actual Development Cost of the Grant Project. (SEAL) U.S. Department of Housing and Urban Development Amendment No. 179 9. After inclusion in an audit and HUD approval of the Actual Development Cost Certificate (in accordance with Section 405 of Part Il of the Contract), a copy of the Actual Development Cost Certificate shall be attached to this amendment and shall be deemed to further amend the Contract, where necessary, to reduce the amount of grant authority for the Development Grant Project to an amount equal to the approved Actual Development Cost. In no case shall the approved Actual Development Cost Certificate amount exceed the New Maximum Total Development Cost stated in Section 4.d. of this amendment. 10. The PHA shall continue to operate the Development Grant Project as lower income housing in compliance with this Contract, the Act and all HUD regulations and requirements for a period of forty years beginning on the Date of Full Availability of the Development Grant Project; provided, however, that the provisions of Section 308(B) and (C) of the Contract shall remain in effect for so long as HUD determines there is any outstanding indebtedness of the PHA to HUD.which arose in connection with any project or projects under the Contract and which is not eligible for forgiveness, and provided further that, for a period of ten years following the last payment of operating subsidy to the PHA, no disposition of the Grant Project shall occur unless approved by HUD. 11. If the PHA does not comply with any of its obligations under this amendment, HUD may direct the PHA to terminate all further development activities. In such case, the PHA shall only incur additional costs with HUD approval. 12. The PHA shall execute and file for record a Declaration of Trust as provided under Section 420(13) of the Contract to protect the rights and interests of HUD throughout the fortyL-year period during which the PHA is obligated to operate the Development Grant Project in accordance with the Contracts, the Act and HUD regulations and requirements. 13. These units are funded pursuant to the terms of the Consent Decree dated April 20, 1995, in settlement of jiollman -d jW: y. Cisneros eta[., U.S.D.C, (Minn Dist., 4th Div.) Civ. No. 492-712. Project units are to be used solely in accordance with the terms and conditions of the Consent Decree_ The parties have caused this amendment to be effective as of the date of execution on behalf of the United: States, as stated below. MINNPOLIS PUBLIC HOUSING AUTHORITY IN AND R THE CITY OF FNNEAPOLIS 1 e Date May 12 2003 UNITED STATES OF AMERICA SECRETARY OF HOUSING AND URBAN DEVELOPMENT By Diane C. Cmiel, Director Office of Public Housing Minneapolis Field Office Date Mav 13, 2003 HUD -53010—D (6/89.) ENENJIL CENTIFICATE OF LOCAL AGENCY I, SUSAN E. SEEL, do certify as follows: 1_ I am the duly appointed, qualified, and acting Assistant to the Executive Director and the Board of Commissioners of the Public Housing Authority in and for the City of Minneapolis (herein, called the "Local Agency"). In such capacity, I am custodian of its records and am familiar with its organization, membership and activities. 2. The proper and correct corporate title of the Local Agency is the Minneapolis Public Housing Authority in and for the City of Minneapolis. 3. The Local Agency was duly created pursuant to the authority of the Constitution and Statutes of the State of Minnesota, including, particularly, the Minnesota Municipal Housing and Redevelopment Act, Chapter 487, Laws of 1947, as amended, and duly organized on the 5th day of November, 1947; and since the date of its organization, the Local Agency has continued to exist without interruption in the performance of its public corporate purposes. As of June 1, 1981, the Local Agency became known as the Minneapolis Community Development Agency under Ordinance No. 81 -Or -017 adopted by the Minneapolis City Council on January 16, 1981. Effective June 1, 1986, the Agency became known as the MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS under Ordinance No. 86 -Or -034 adopted by the Minneapolis City Council on February 28, 1986, pursuant to authority contained in Chapter 595, Laws of'1981, with those powers in Minnesota Statutes Sections 462.411 through 462.716 as they relate to public. housing. 4_ The names and dates of election or appointment, and the dates of the beginning and ending of the terms of office, of the members of the governing body of the Local Agency and of its principal officers are as follows: Date of Date of Com- Date of Expir- Election of mencement of ation of Term Names and Offices Appointment Term of Office of Office Carol Batseil-Benner Commissioner 05-19-94 05-25-94 12-31-96 Vice Chairperson 02-27-97 02-27-97 next election Vice Chairperson 05-15-00 06-05-00 next election Vice Chairperson 04-15-03 04-23-03 next election Travis Emdin Commissioner 05-19-94 05-25-94 12-31-96 Commissioner 02-21-97 02-21-97 12-31-99 Commissioner 05-15-00 06-05-00 12-31-02 Grace Lee Commissioner 05-19-94 05-25-94 12-31-96 Commissioner 02-21-97 02-21-97 12-31-99 Commissioner 05-15-00 06-05-00 12-31-02 Secretary 04-15-03 04-23-03 next election Cornell Moore Commissioner 07-11-97 07-11-97 12-31-97 Chairperson 03-09-98 01-01-98 12-31-00 Chairperson 02-16-01 01-01-01 12-31-03 William Gabler 10-25-00 10-25-00 12-31-01 Commissioner 12-20-01 01-23-02 12-31-04 Bernadine Jaffe 12-20-01 01-23-02 12-31-03 Commissioner Judy Karon 01-14-03 02-26-03 12-31-05 Commissioner Mark Manbeck 01-14-03 02-26-03 12-31-04 Commissioner 5. Each of the above-named officers required to do so has duly taken and filed his/her oath of office arid each of them legally required to give bond or undertaking in form and amount as required by law and has otherwise duly qualified to act in the official capacity above designated, and each is the acting officer holding the respective office or offices stated beside his/her name. 6. None of the above-named officers is ineligible to hold or disqualified from holding, under the provisions of applicable law, the respective office, specified above, which he/she holds. 7. None of the above-named Commissioners is an officer or employee of the City of Minneapolis. 8, Since April 10, 2003, there have been no changes in or amendments to the charter, by-laws, ordinances, resolutions, or proceeding of the Local Agency with respect to: A. The time and other provisions concerning regular meetings of the Local Agency; (established annually) B. The provisions concerning the calling and holding of special meetings of the Local Agency and the business which may be taken up at such meetings; C. The requirements concerning a quorum; D. The manner in which the charter or by-laws of the Local Agency may be amended; E. The requirements regarding the introduction, passage, adoption, approval, and publication of resolutions, ordinances, or other measures, relating to the approval and execution of contracts and the authorization, award, execution, or issuance of bonds, notes, or other obligations of the Local Agency; F. The officers required to sign, countersign, or attest contracts, bonds, notes, or other obligations of the Local Agency; G. The office of the Local Agency; or H. The seal of the Local Agency. 9. The seal impressed below, opposite my signature, is the duly adopted official seal of the Local Agency. IN WITNESS WHEREOF, I have hereunto set my hand and the duly adopted official seal of the Local Agency this 25th day of April, 2003. (S E A L) I` IN AND FQ&THE CITY an E. S 1-,--Asstant to Executive ector and%-t4e.,goard of Commissioners CER TLFLCA TE I, Susan L S118L Assistant to the Executive Director and Board of Commissioners of the Minneapolis Public Housing Authority in and for the City of Minneapolis, do hereby certify that the attached RESOLUTION was duly adopted at a regular meeting of the Board of Commissioners of said Authority, held on December 18, 2002 and is a true and correct copy of the RESOLUTION adopted at said meeting and on file and of record in the official Minutes of said Authority. IN WITNESS WHEREOF, I have hereunto set my hand and the seal of said Authority this 18t' day of December, 2002. I DO HEREBY CERTIFY THAT I"DULYA UTHORIZED TO EXECUTE THIS CERTIFICATE. (SEAL) PROVED 00 r! � MINNEAPOLIS PUBLIC HOUSING AUTHORITY December 18, 2002 REPORT TO THE BOARD OF COMMISSIONERS FROM: Cara McCorvey, Executive Director SUBJECT: Resolution Authorizing the Board Chair and/or Executive Director or Her Designee to Execute the Cooperation Agreement with the City of New Hope for four MHOP Units in New Hope, Minnesota Previous Directives: The Hollman vs. Cisneros Consent Decree requires replacement of 770 public housing units in non -concentrated areas of Minneapolis and the Twin Cities suburbs. In February 1997 the Board of Commissioners passed a resolution authorizing the Chairperson and/or Executive Director or her designee to execute various documents relating to mixed finance developments after board approval of the Cooperation Agreement. Resident Council Notification: TAC has been notified of this action. Budget Impact: All costs associated with the development of the four units will be paid out of Hollman development funds. Affirmative Action Compliance: The City of New Hope has a written affirmative action plan. RECOMMENDATION: It is recommended that the Board of -Commissioners approve the attached resolution authorizing the Board Chair or the Executive Director or her designee to enter into a Cooperation Agreement with the City of New Hope for 4 MHOP Units. The MPHR has received a proposal from Project for Pride in Living; Inc., a Minnesota nonprofit corporation, on behalf of Bass Lake Apartments LLC (the "Owner") for funding the development of four public housing units (the "MHOP Units') in the City of New Hope. The MHOP Units will be' located within a development consisting of an 11 -unit. single-phase, renovation of a 1960's -era, walk-up apartment building at 7610 Bass Lake Road. The total development cost is estimated to be $1,354,300 for I 1 units (5 one bedroom and 6 two-bedroom units). Approximately $469,000 in construction funds and $36,000 MPHA administration funds of Hollman development funds will be utilized. It is intended that the MHOP units will consist of two-bedroom units. However, negotiations with the developer regarding final development costs could alter this slightly. The MHOP Units will not be physically identified but will "float" throughout the development. This MHOP transaction still contains the language which contemplates possible ongoing involvement of the Metropolitan Council. It is proposed that the MPHA close the transaction on an Annual Contributions Contract ("ACC") between the MPHA and HUD and that, upon completion of the MHOP Units, the ACC and all related documents may be assigned to the Metropolitan Council. Dean Carlson prepared this report. For further information, he may be reached at 342-1490. C.\DOCUMENTS AND SETTINGS\SSEELILOCAL SETTfNGSITEMPORARY INTERNET FILES10LK92U262 (2).60C DOCUMENT NO. THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS RESOLUTION NO. 02-39 SUBJECT: RESOLUTION AUTHORIZING EXECUTION OF THE COOPERATION AGREEMENT WHEREAS, the Minneapolis Public Housing Authority in and for the City of Minneapolis( the "MPHR") holds an Annual Contributions Contract ("MPHA ACC") from the United States Department of Housing and Urban Project ("HUD") for funding the capital and operating costs of low rent public housing units and projects throughout the Minneapolis -St. Paul Twin Cities metropolitan area pursuant to that certain consent decree entered in United States District Court (the "Consent Decree"); and WHEREAS, the MPHA has established the Metropolitan Housing Opportunity Program ("MHOP") pursuant to which it will cooperate with suburban counties and municipalities in the construction and operation of qualified housing units ( the "MHOP Units"); and WHEREAS, Project for Pride in Living, Inc., a Minnesota nonprofit corporation, on behalf of Bass Lake Apartments LLC (the "Owner"), has applied to the MPHA and the Economic Development Authority in and for the City of New Hope ("EDA") to locate four (4) MHOP Units in an 11 -unit multifamily housing development to be known as Bass Lake Apartments (the "Development") to be located within the City of New. Hope, Minnesota (the "City"); and WHEREAS, as part of the funding of the MHOP Units, HUD requires that the City agree, pursuant to the authority granted the City by Minnesota Statutes, §469.040, to exempt the MHOP Units from property taxation in consideration of agreement by the MPHA and EDA to subject said units to payments in lieu of taxes; and WHEREAS, the vehicle for proposing such tax treatment is a Cooperation Agreement between and among the MPHR, the EDA and City; and WHEREAS, it is the understanding of the parties that following development of the MHOP Units and completion of the Development, the MPHA may assign all related documents to the Metropolitan Council and in such event, the Metropolitan Council will thereafter hold the annual contributions contract for the MHOP Units and the MPHA will be released from all future administrative responsibility with respect thereto. NOW, THEREFORE, BE IT RESOLVED: 1. That the MPHA shall enter into a Cooperation Agreement in substantially the attached form. 2. That the Chairman and/or the Executive Director of the MPHA are authorized to execute said Cooperation Agreement on behalf of said MPHA and, upon completion of the CADOCGMENTS AND SETfINGSWEEMOCAL SETTINGSaEMPORARY WTERNEf FILES\OLK9211202 (2-ATPACF NENT).DOC Development, to assign it and other agreements relating to the MHOP Units to the Metropolitan Council.. I That the Chairman and/or the Executive Director are authorized to make such changes in said Cooperation Agreement as are not inconsistent with the spirit and purpose thereof. 4. That this Resolution shall take effect immediately. Dated 2C M1 55 f �g 5 � CADOCUMENTS AND SETTINGSISSEELILOCAL SETTINGSUEMPORARY INTERNET FILEMOLK9211242 (2-ATfACHMENT).DOC -CER TIFrCATE I, Susan E. SeeL, Assistant to the Executive Director and Board of Commissioners of the Minneapolis Public Housing Authority in and for the City of Minneapolis, do hereby certify that the attached RESOLUTION was duly adopted at a regular meeting of the Board of Commissioners of said Authority, held on February 26, 1997, and is a true and correct copy of the RESOLUTION adopted at said meeting and on file and of record in the official Minutes of said Authority. IN WITNESS WHEREOF, Y have hereunto set my hand and the seal of said Authority this 251h day of April, 2003. I DO HEREB Y CER77FY THA TI AM DUL YAUTHORIZED TO EXECUTE THIS CERTIFICATE. (SEAL) 000.0 .o 1 APPRovEn NOT ON PRINTED AGENDA bxm&v MINNEAPOLIS PUBW HousiNc Avrmowy REPORT TO THE BOARD OF CONMSSIONERS February 26, 1997 FROM: Cora McCorvey, Executive Director SUBJECT: Approval of Resolution Authorizing the Chairperson and/or Executive Director or Her Designee to Execute Various Documents Relating to Mixed -Finance Developments The Hollman vs. Cisneros Consent Decree requires the of replacement of 770 public housing units in non -concentrated areas of and the Twin Cities suburbs. This action does not require Resident Council Costs associated with Mixed -Finance Developments are paid out of funds. rmatiye Action Compliance Not applicable to this action; however, all icipalities and developers developing Mixed -Finance Developments are required to written affirmative action plans. COMMENDATION: It is recommended that the Board of Commissioners pass the ched resolution authorizing the Chairperson and/or the Executive Director or her .gnee to execute documents relating to Mixed -Finance Developments in order to close developments on behalf of the MPHR. It is further recommended that (i) the ration of such documents will only occur after the Board has specifically approved the )peration Agreement relating to the development, . and (ii) that the Executive Director report the execution of the documents and the related closing at the first regularly .-doled meeting of the Board following each closing. The MPHA Board of Commissioners has previously approved three Mixed -Finance Developments: Evergreen Pointe in Savage, Minnetonka Mills, and Crown Ridge Apartments, both in Minnetonka. Closings on Evergreen Pointe and Crown Ridge occurred well within the Board's schedule and did not require a Special Meeting. Minnetonka Mills, however, closed outside of the Board Schedule and, subsequently, DOCUMENT NO. _2Z -_,2_2J required a special meeting to approve exeuction of documents by the Chairperson and the Executive Director. To avoid having to call Special Meetings within tight closing schedules, staff is recommending that the Board approve the attached resolution authorizing the Chairperson and the Executive Director or her designee to execute related documents after the Board has approved the Cooperation Agreement on a Mixed -Finance Development. The Cooperation Agreement initiates MPHA's participation in a development and is a joint powers agreement between the MPHR, a local housing authority, and the elected body which created it. The Agreement contains: • the number of units and location of project, • a commitment by the local authorities to develop or acquire and administeF the development, • Payment in Lieu of Taxes (PILOT) provisions, • street and utility and public service dedications, and • time of agreement. Adoption of the Cooperation Agreement by the Board commits the MPHA to the development and the remaining documents are related to planning, construction, ownership and operation. These documents, collectively called the "Transaction Documents", include: • Amendment to the Annual Contributions Contract (ACC); • Initial Agreement; • Housing Development Agreement; • Regulatory and Operating Agreement; • Management Agreement; and • Master Disbursing Agreement. All documents on a Mixed -Finance Development are required by HUD regulations to be approved by HUD headquarters because they are privately owned. The developers, on the other hand, have often purchased a lock on the mortgage interest rates for a period of time which makes closing within the time frame of the lock imperative to them and the MPHA (if interest costs rise, so do costs to Hollman budget). These two events make it very difficult for MPHA staff to ensure that the MPHA Board of Commissioners meet in time to approve the documents for closing. As more MHOP Mixed -Finance Developments come on line with equally tight closing schedules, the problem will intensify. It is, for this reason, that the staff recommends that the Board authorize the Chairperson and Executive Director or her designee to execute "Transaction Documents" related to closing Mixed -Finance Developments. This report was prepared by Dorothy Jacobs. For further information, please call 342- 1215. RESOLUTION NO. 97-325 WHEREAS, Minneapolis Public Housing Authority ("MPHA") is a party to an Annual Contributions Contract ("ACC") with the United States Department of Housing and Urban Development ("HUD") for funding the capital and operating costs of low rent public housing units and projects throughout the Minneapolis -St. Paul Twin Cities metropolitan area pursuant to that certain consent decree entered in United States District Court ("Consent Decree"); and WHEREAS, MPHR has established the Metropolitan Housing Opportunity Program ("MHDP") pursuant to which it will provide fiends from the ACC to suburban counties and municipalities for the construction or rehabilitation and operation of qualified public housing units ("MHOP Units") within privately owned apartment developments ("Mixed -Finance Developments"); and WHEREAS, MPHR initiates its participation in each Mixed -Finance Development through the approval of a joint powers cooperation agreement ("Cooperation Agreement") between MPHR, a suburban county or city housing and redevelopment authority or. economic development authority ("Local Authority") and the elected governmental body which created the Local Authority; WHEREAS, after approval of the Cooperation. Agreement,. the participating parties prepare for execution an amendment or amendments to the. -ACC (the "ACC Amendments"), an Initial Agreement, a Housing Development Agreement, a Regulatory and Operating Agreement, a Management Agreement and a Master Disbursing Agreement (collectively, -the "Transaction Documents") for the planning, construction, ownership and operation of the. MHOP Units within the Mixed -Finance Development; and WHEREAS, the Transaction Documents are required by HUD regulations to be approved by HUD headquarters; and WHEREAS, the MPHA Boar. d of Commissioners has previously approved Transaction Documents relating to three separate Mixed -Finance Developments and has found that. (1) such Transaction Documents are similar in form and substance; (2) because of development schedules and financing requirements, time is of the essence in closing such transactions; (3) little advance notice of such closings can be given; and (4) it is difficult to schedule meetings of this Board in order to accommodate such closing schedules. NOW, THEREFORE, BE IT RESOLVED: That the MPHA Board shall specifically approve Cooperation Agreements relating to each Mixed -Finance Development in which MPHA is to participate. 2. After such approval, the Chairperson and/or Executive Director or her designee are authorized and directed to execute the Transaction Documents (including the ACC Amendments) relating to such Mixed -Finance Development, as well as such other ancillary agreements as may be necessary in order to effectuate such Transaction Documents, each in quadruplicate, on behalf of said MPHR. 3. That the Executive Director is directed to report the execution of such Transaction Documents and the related closing of the Mixed -Finance Development at the first regularly scheduled meeting of the MPHR Board of Commissioners following each such closing. 4. That this Resolution shall take effect immediately. Dated: February 26, 1997 STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss CITY OF NEW HOPE ) I, the undersigned, being the duly qualified City Clerk of the City of New Hope, Minnesota, hereby attest and certify that: 1. As such officer, I have the legal custody of the original record from which the attached resolution was transcribed. 2. 1 have carefully compared the attached resolution with the original record of the meeting at which the resolution was acted upon. 3. 1 find the attached resolution to be a true, correct and complete copy of the original: RESOLUTION NO. 2002-175 RESOLUTION APPROVING COOPERATION AGREEMENT BETWEEN THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY, THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND THE CITY OF NEW HOPE FOR THE PPUBASS LAKE APARTMENTS PROJECT AT 7610 BASS LAKE ROAD 4. 1 further certify that the affirmative vote on .said resolution was 5 ayes-, 0 nayes, and 0 absent/abstention. 5. Said meeting was duly held, pursuant to call and notice thereof, as required by law, and a quorum was present. WITNESS my hand officially as such Clerk and the seal of said City, this 24th day of April, 2003. Valerie Leone, City Clerk (Seal) CITY OF NEW HOPE 4401 Xylon Avenue North • New Hope, Minnesota 55425-4898 + 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 0 Police Fax: 763-531-5174 0 Public Works Fax: 763-592-6776 CITY OF NEW HOPE RESOLUTION NO. 02 - 175 RESOLUTION APPROVING COOPERATION AGREEMENT BETWEEN THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY, THE NEW HOPE ECONONIIC DEVELOPMENT AUTHORITY AND THE CITY OF NYWHOPE FOR F1PF%4R&S8LAK6,4_P.1_RTAMR4T PROJECT AT 7610 BASS LAKE ROAD (IMPROVEMENT PROTECT NO. 707) BE IT RESOLVED by the by the City Council of the City of New Hope as follows: WHEREAS, the City of New Hope (City) and the New Hope Economic Development Authority (EDA) desire to cooperate with Project for Pride in Living, Inc. (PPL), on behalf of Bass Lake Road Apartments LLC, on the redevelopment of an apartment complex located at 7610 Bass Lake Road; and WHEREAS, a Cooperation Agreement (Agreement) between the City, the EDA and the Minneapolis Public Housing Authority is necessary. to permit PPL, on behalf of Bass Lake Road Apartments LLC, to obtain funding from the MHOP program for said project; and WHEREAS, Section 3 of the Agreement states that the City will not assess real estate taxes against the four (4) MHDP -units within the development for the defined exemption period and that in lieu of real estate taxes, the, Owner will pay the City or the .EDA the PILOT (payment in lieu of taxes); and . WHEREAS, other provisions of the Agreement will require the City to provide the ,MHDP units with basic City services as provided to all other properties in the City and to cooperate in the successful development and operation of the housing units. NOW, THEREFORE, BE IT RESOLVED by the City Council iof the City of New Hope that the Cooperation Agreement is approved and that the Mayor and City Manager are authorized to execute the Agreement on behalf of the City of New Hope. Adapted by the City of New Hope, Hennepin County, Minnesota this 9& day of December, 2002. W. Peter Enck, Mayor Attest: �� Valerie Leone, City Clerk P:1AwmaylCah RemiudonslCNH99,11166-002-Rem Approving Coop AgrA04 STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss CITY OF NEW HOPE ) 1, the undersigned, being the duly qualified City Clerk of the City of New Hope, Minnesota, hereby attest and certify that: 1. As such officer, I have the legal custody of the original record from which the attached resolution was transcribed. 2. 1 have carefully compared the attached resolution with the original record of the meeting at which the resolution was acted upon. 3. 1 find the attached resolution to be a true, correct and complete copy of the original: EDA RESOLUTION NO. 2002-13 RESOLUTION APPROVING COOPERATION AGREEMENT BETWEEN THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY, THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND THE CITY OF NEW HOPE FOR THE PPLIBASS LAKE APARTMENTS PROJECT AT 7610 BASS LAKE ROAD 4. 1 further certify that the affirmative vote on said resolution was 5 ayes, 0 nayes, and 0 absent/abstention. 5. Said meeting was duly held, pursuant to call and notice thereof, as required by law, and a quorum was present. WITNESS my hand officially as such Clerk and the seal of said City, this 17th day of December, 2002. (Seal) Valerie Leone, City Clerk CITY OF NEW HOPE 4401 Xylon Avenue North + New Hope, Minnesota 55428-4898 • www. ci.new-hope.mn.us City Hall: 763-531-5100 • Police (non -emergency): 763-531-5170 + Public Works: 763-592-6777 • TDD: 763-531-5109 City Hall Fax: 763-531-5136 • Police Fax: 763-531-5174 • Public Works Fax: 763-592-6776 CITY OF NEW HOPE EDA RESOLUTION NO. 02 - 13 RESOLUTION APPROVING COOPERATION AGREEMENT BETWEEN THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY, THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND THE CITY OF NEW HOPE FOR THE PPL/BASS LAKE APARTMENTS PROJECT AT 7610 BASS LAKE ROAD BE IT RESOLVED by the Economic Development Authority of the City of New Hope as follows: WHEREAS, the City of New Hope (City) and the New Hope Economic Development Authority (EDA) desire to cooperate with Project for Pride in Living, Inc. (PPL), on behalf of Bass Lake Road Apartments LLC, on the redevelopment of an apartment complex located at 7610 Bass Lake Road; and WHEREAS, a Cooperation Agreement (Agreement) between the City, the EDA and the Minneapolis Public Housing Authority is necessary to permit PPL, on behalf of Bass Lake Road Apartments LLC, to obtain funding from the MHOP program for said project; and WHEREAS, Section 3 of the Agreement states that the City will not assess real estate taxes against the four -(4)� MHOP units within the development 'for the defined exemption period and that in lieu of real estate taxes, the Owner will pay the City or the EDA the PILOT (payment in lieu of taxes); and WHEREAS, other provisions of the Agreement will require the City to provide the MHOP units with basic City services as provided to all other properties in the City and to cooperate in the successful development and operation of the housing units. NOW, THEREFORE, BE IT RESOLVED by the Economic. Development Authority of the City of New Hope that the Cooperation Agreement is approved and that the President and Executive Director are authorized to execute the Agreement on behalf of the Economic Development Authority of the City of New Hope. Adopted by the Economic Development Authority of County, Minnesota this 9* day of December, 2002. • r Attest: �►.. v Daniel J. D nahue, Executive Direc - P:1AuOmey%Cnh Reao1utkM5%CNH".11166-001-SDA Resp Approving Coop AgtAm the City of New Hope, Hennepin W. Peter Enck, President v STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss CITY OF NEW HOPE ) I, the undersigned, being the duly qualified City Clerk of the City of New Hope, Minnesota, hereby attest and certify that: As such officer, I have the legal custody of the original record from which the attached resolution was transcribed. 2. 1 have carefully compared the attached resolution with the original-, record of the meeting at which the resolution was acted upon. 3. 1 find the attached resolution to be a true, correct and complete copy of the original: EDA RESOLUTION NO. 2002-12 RESOLUTION APPROVING INITIAL AGREEMENT BETWEEN THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY -AND THE NEVA HOPE ECONOMIC DEVELOPMENT AUTHORITY FOR THE PPL/BASS LAKE APARTMENTS PROJECT AT 7610 BASS LAKE ROAD 4. 1 further certify that the affirmative vote on said resolution was 5 ayes, 0 nayes, and 0 absentlabstention. 5. Said meeting was duly held, pursuant to call and notice thereof, as required by law, and a quorum was present. WITNESS my hand officially as such Clerk and the seal of said City, this 17th day of December, 2002. (Seal) Valerie Leone, City Jerk CITY OF NEW HOPE 4401 Xylon Avenue North • New Hope, Minnesota 55428-4898 • www. ci.new-hope.mn.us City Hall: 763-531-5100 + Police (non -emergency): 763-531-5170 • Public Works: 763-592-6777 * TDD: 763-531-5109 City Hall Fax: 763-531-5136 • Police Fax: 763-531-5174 • Public Works Fax: 763-592-6776 CITY OF NEW HOPE EDA RESOLUTION NO. 02 - 12 RESOLUTION APPROVING INITIAL AGREEMENT BETWEEN THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY AND THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY FOR THE PPL/BASS LAKE APARTMENTS PROJECT AT 7610 BASS LAKE ROAD BE IT RESOLVED by the Economic Development Authority of the City of New Hope as follows: WHEREAS, the New Hope Economic Development Authority (EDA) desires to cooperate with Project for Pride in' Living, Inc. (PPL) and Bass Lake Road Apartments LLC, on the redevelopment of an apartment complex located at 7610 Bass Lake Road; and WHEREAS, a Cooperation Agreement will be entered into between the City of New Hope (City), the EDA and the Minneapolis Public Housing Authority (MPHR) which will permit PPL, on behalf of Bass Lake Road Apartments LLC, to obtain funding from the MHOP program for said project; and WHEREAS, the Cooperation Agreement states that the City will not assess real estate taxes against the four (4) MHOP units within the development for the defined exemption period and that in lieu of real estate taxes, the Owner will pay the City of New Hope or the EDA the PILOT (payment in lieu of taxes), and WHEREAS, an Initial Agreement between the EDA and the MPHA is now also necessary to permit PPL, on behalf of Bass Lake Road Apartments LLC, to obtain funding from the MHDP program for said project; and WHEREAS, the Initial Agreement basically defines the relationship of the MPHA and the EDA with respect to the planning, construction, ownership and operation of the MHOP units; and WHEREAS, the Initial Agreement further indicates the MPHA and the EDA will cooperate to submit a proposal to HUD for development funds, the amount still to be determined, to assist in the development, construction and operation of three (3) replacement and one (1) incentive MHOP units of housing; and WHEREAS, the Initial Agreement will require the EDA, the MPHA and PPL, on behalf of Bass Lake Road Apartments, LLC, to enter into a Housing Development Agreement yet to be prepared which will establish the design specifications for the units, confirm amenities in and around the development, establish a float system for the MHOP units within the development rather than specify specific units, and require PPL, on behalf of the Bass Lake Road Apartments, LLC, to execute a Regulatory and Operating Agreement and provide a Declaration of Restrictive Covenants relating to the operation of the development; and WHEREAS, the EDA will be required to maintain a Waiting List and administer a Grievance Procedure for those people applying to occupy and occupying the MHOP units. However, this EDA responsibility may be satisfied through a subcontract with the Metropolitan Council. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of the City of New Hope that the Initial Agreement is approved and that the President and Executive Director are authorized to execute the Initial Agreement on behalf of the Economic Development Authority of the City of New Hope. Further, that the Executive Director take all necessary steps to subcontract with the Metropolitan Council to assume responsibility to maintain the Waiting List and administer the Grievance Procedure. Adopted by the Economic Development Authority of County, Minnesota this 9`' day of December, 2002. Attest:, y� Daniel 7. Donahue, Executive Director P:1AIoGrneY% ;nh Res0kufiunACNH99.11166-003-EDA Reso Approving Inifia! Agl.doc 2 the City of New Hope, Hennepin W. Peter Enck, President STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss CITY OF NEW HOPE ) I, the undersigned, being the duly qualified City Clerk of the City of New Hope, Minnesota, hereby attest and certify that: 1. As such officer, I have the legal custody of the original record from which the attached resolution was transcribed. 2. 1 have carefully compared the attached resolution with the original record of the meeting at which the resolution was acted upon. 3. 1 find the attached resolution to be a true, correct and complete copy of the original: EDA RESOLUTION NO. 2003-04 RESOLUTION APPROVING BASS LAKE APARTMENT HOUSING DEVELOPMENT AGREEMENT; REGULATORY. AND OPERATING AGREEMENT AND PROPERTY MANAGEMENT AGREEMENT FOR THE PPUBASS LAKE APARTMENTS PROJECT AT 7610 BASS LAKE ROAD AND AUTHORIZING THE PRESIDENT AND EXECUTIVE DIRECTOR TO SIGN SAID AGREEMENTS 4. 1 further certify that the affirmative vote on said resolution was 5 ayes, 0 nayes, and 0 absenttabstention. 5. Said meeting was duly held, pursuant to call and notice thereof, as required by law, and a quorum was present. WITNESS my hand officially as such Clerk and the seal of said City, this 12th day of May, 2003. (Seal) Va erie Leone, City Clerk CITY OF STEW 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: 763-531-51.36 + Police Fax: 763-531-5174 + Public Works Fax: 763-592-6776 CI'T'Y OF NEW HOPE EDA RESOLUTION NO. 03 - 04 RESOLUTION APPROVING BASS LAKE APARTMENT HOUSING DEVELOPMENT AGREEMENT, REGULATORY AND OPERATING AGREEMENT AND PROPERTY MANAGEMENT AGREEMENT FOR THE PPL/BASS LAKE APARTMENTS PROJECT AT 7610 BASS LAKE ROAD AND AUTHORIZING THE PRESIDENT AND EXECUTIVE DIRECTOR TO SIGN SAID AGREEMENT'S BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: WHEREAS, the Economic Development Authority has entered into a December 9, 2002 Initial Agreement, as amended, with the Minneapolis Public Housing Authority (,,MPHA,,), which Agreement basically defines the relationship between the MPHR, the' EDA and Bass Lake Apartments, LLC (hereinafter "PPL") with respect to the planning, construction, ownership and operation of 4 MHDP units within an 11unit multifamily housing project at 7610 Bass Lake Road known as the Bass Lake Apartments; and WHEREAS, the Initial Agreement furtherindicates the MPHA and EDA will cooperate to submit a proposal to HUD for development funds', to assist PPL in the development, construction and operation of three (3) replacement and one (1) incentive MHOP units of housing; and WHEREAS, the Initial Agreement requires the EDA, MPHR and. PPL to enter into a Housing Development Agreement to establish design specifications for the units, confirm amenities in and around the development, establish a float system for the MHO P units within the development rather than specify specific units and require PPL to execute a Re gulatory d Operating Agreement and a Property Management Agreement ail development; and relating to the operation of the WHEREAS, the attached Housing Development Agreement, Regulatoryand Agreement and Property Management Agreement attached hereto as Exhibits A, B and C are eranow prepared aad ready for execution by the respective authorized officials of the.MPHA, EDA and PPL. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope, Minnesota, as follows: ' �. The Housing Development Agreement, Regulatory and Operating Agzeement and Property Management Agreement in the forms attached hereto as Exhibits A, B and C are hereby approved. 2. That the President and. Executive Director are hereby authorized and directed to sign the Housing Development Agreement; Regulatory and Operating Agreement and Property Management Agreement as proposed in the attached Exhibits A, B and C. 3. That the Executive Director is hereby authorized and directed to take all appropriate steps necessary to implement the terms and conditions of the Housing Development Agreement, Regulatory and Operating Agreement and Property Management Agreement: Adopted by the Economic Development Authority in and for City of New Hope, Hennepin County, Minnesota this 12" day of May, 2003. Attest: aniel J. Donahue, Executive -Director P:1A—neplCnh R -0h1 wACNH-FMA Res App Bass Lal. AF.d. 2 W. Peter Enck, President OF BOARD OF GOVERNORS OF BASS LAKE APARTMENTS LLC I, Barbara McCormick, being the sole Governor of Bass Lake Apartments LLC, a Minnesota limited liability company (the "Company"), in lieu of holding a meeting of the Board of Governors to consider the same, hereby adopt and approve the following resolutions: RESOLVED, that any one of the following: the Chairman of the Board, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary, any Assistant Secretary, or any other officer, agent or employees of this Company who may hereafter be designated in writing by the Chairman of the Board, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of this Company (each such person being hereinafter referred to as a "Designated Person') is hereby authorized, directed and empowered now and from time to time hereafter to make, execute and deliver for and on behalf of and in the name of this Company (1) a Housing Development Agreement between this. Company and The Minneapolis Public Housing Authority in and for the City of Minneapolis ("MPHA") and The Economic Development Authority in and for the City of New Hope ("New Hope"), with such changes, additions and deletions as to any or all of the terms or provisions thereof as the officer executing the Housing Development Agreement on behalf of this Company shall deem proper; (2) a Regulatory and Operating Agreement between this Company and MPHA and New Hope, with such changes, additions and deletions as to any or all of the terms or provisions thereof as the officer executing the Regulatory Operating Agreement on behalf of this Company shall deem proper, (3) a. Property Management Agreement between this Company and Project for Pride in Living, Inc., with _such changes, additions and deletions as to any or. all of the terms or provisions thereof as the officer executing the Property Management Agreement on behalf of this Company shall deem proper; (4) a Master Disbursement Agreement between and among MPHA, New Hope, the Company, Hennepin County Housing and Redevelopment Authority (the "HRA"), Hennepin County (the "County"), Franklin National Bank of Minneapolis: (the "Bank"), and Old Republic National Title,Insurance Company, with such changes, additions and deletions as to any or all of the terms or provisions thereof as the officer executing the Master Disbursement Agreement on behalf of this Company shall deem proper; (5) a Master Subordination Agreement and Estoppel Certificate between and among the MPHA, New Hope, the Company, the HRA, the County, and the Bank, with such changes, additions and deletions as to any or all of the terms or provisions thereof as the officer executing the Master Subordination Agreement and Estoppel Certificate on behalf of this Company shall deem proper; and (b) the other agreements, notes, mortgages, hest deeds, assignments, certificates and other such agreements, instruments and documents, with or for the benefit of MPHA or New Hope, as he/she may in his/her sole discretion deem advisable, necessary, expedient, convenient or proper (collectively, the MPHA Documents"); BE IT FURTHER RESOLVED, that the MPHA Documents may contain such provisions, terms, conditions, covenants, warranties and representations as any Designated Person may in his/her sole discretion deem advisable, necessary, or expedient; BE IT FURTHER RESOLVED, that any Designated Person is hereby authorized, directed and empowered for and on behalf of and in the name of this Company now and from time to time hereafter, as he/she in his/her sole discretion deems advisable, necessary, expedient, convenient or proper, to: (a) borrow or accept monies from MPHA or New Hope; (b) execute and deliver to MPHA or New Hope such agreements, instruments and documents as MPHA or New Hope may request or require to effectuate the purpose and intent of the MPHA Documents or these resolutions; (c) amend, modify, alter, extend, renew or otherwise change any of the provisions, terms, conditions, covenants, guaranties or representations contained in the MPHA Documents; and (d) execute and deliver to MPHA or New Hope any direction or authorization for the application, payment, transfer, receipt or other disposition of any property, real or personal, belonging to this Company; BE IT FURTHER RESOLVED, that any Designated Person is hereby authorized, directed and empowered to do and perform all acts and things he/she deems `advisable, necessary, expedient, convenient or proper in order to consummate fully all of the transactions contemplated under the MPHA Documents or these resolutions; BE IT FURTHER RESOLVED, that in order to facilitate borrowings or acceptance by this Company from MPHA or New Hope under the terms of the MPHA Documents, pursuant to which it is or will be required that certain documents be periodically supplied to MPHA or New Hope, itis in the best interest of this Company to provide to MPHA or New Hope a list of employees of this Company which, are authorized to sign any such documents on behalf of this Company, along with examples of such employees' signatures; BE IT FURTHER RESOLVED; that in order to accomplish the resolutions hereinabove stated; the President of this Company is hereby authorized to sign any such documents on behalf of this Company, and further, the President is hereby authorized to designate in writing to MPHA or New Hope from time to time any other persons authorized to sign such documents, and to delete any persons theretofore authorized, or add other persons not theretofore authorized, and to cause examples of any such persons' signatures to be delivered to MPHA or New Hope; . BE IT FURTHER RESOLVED, that the President of this Company, and any other person or persons which the President may from time to time designate in writing to MPHA or New Hope„ are authorized to make requests for borrowings or grants, including, without limitation, telephonic requests for borrowings or grants, under the MPHA Documents on behalf of this Company and MPHA or New Hope is hereby authorized to honor such requests of the President, or of any person so designated by the President, until such time as MPHA or New Hope is notified in writing by this Company of the election of a new president or of the revocation of the authorization of any person designated by the President to make such requests for borrowings or grants under the MPHA Documents; BE IT FURTHER RESOLVED, that by adopting the above resolutions at this meeting, the Governors of this Company hereby ratify, approve and confirm any and all acts and things that any Designated Person has done or may do in any way relating to or arising from or in connection with the MPHR Documents and these resolutions and such acts and things of any Designated Person shall -at all times receive full faith and credit,.by this Company without the necessity of inquiry by MPHA or New Hope; and. BE IT FURTHER RESOLVED, that (a) the authorizations herein set forth shall remain in frill force and effect for the term of the MPHA Documents and all renewal terms thereof; and (b) the Secretary or any Assistant Secretary of this Company is hereby authorized and directed to furnish to MPHA or New Hope a copy of these resolutions. This Written Action of the Board of Governors will be effective as of April 25, 2403. Barbara. McCormick tate of M inneso ta SECRETARY OF STATE Certificate of Good Standing I, Mary Kifftneyer, Secretary of State of Minnesota, do certify that: The limited liability company listed below is a limited liability company formed or registered to do business under the laws of Minnesota; the limited liability company was formed by the filing of articles of organization or registered to do business by filing an application for a certificate of authority with the Office of the Secretary of State on the date listed below; the limited liability company is governed by Chapter 322B of Minnesota Statutes; and this limited liability company is authorized to do business as a limited liability company at the time this certificate is issued. Name: Bass Lake Apartments LLC Date Formed or Registered: November 25, 2002 State of Organization: Minnesota This certificate has been issued on February 24, 2003, M w --. � - r 900/%00QN T YTdti 90:9T IZI3 E003/60/90 .ate of Minnesota SECRETARY OF STATE Certificate of Good Standing I, Mary Kiffineyer, Secretary of State of Minnesota, do certify that: The corporation listed below is a corporation formed under the Jaws of Minnesota; that the corporation was formed by the filing of Articles of Incorporation with the Office of the Secretary of State on the date listed below; that the corporation is governed by the chapter of Minnesota Statutes listed below; and that this corporation is authorized to do business as a corporation at the time this certificate is issued. Name: Project for Pride in Living, Inc. Date Formed.: 08/01/1972 Chapter Governed By: 317A This certificate has been issued on 02/24/03, 400/900in T %Vd 9O:9T IRA EOOZ/60/50 /lddrsas a �y az redw-m 8aidint and LL i Caurt Hausa.. 316 MGM Rad�eft�t ,S�yrOx��.t�.�5!{. ftuLL 5XIOI Gen—tlenea: Internal Revenue Service oz.s VP/EO-.TS A 0" MW+s JAT•5= 617--7ZS-5927 Frojcct For Pride is Living fnc. ZS15 Cu=90 .Avmw `Hma=ota 55404 Fuss lyaap- - - 990 rwfoad Ended: Deco er 31, 11-373 We are pleased to tell you that as a result of our &==4- atiaa for the above periods we wi31 cant "THe to recogm = pa'ar -cry tion as tax-Oxempt . We have ind3.catad below whether there is a change in your liability for the unrelatad business income tax as. provided by sections 531 thraugs 515 at the 3:atersal Revenue Code. LW There is no change - ❑ You will receive as e==_n tlom repart exPlaiaing the proposed adjustments. Thank you far your cooperation. 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'5 dZ Lam» C y\ r O V J~C Nus 4�_ 0 9 L 4 1rCCLa 4 _FL « tiv. a 0<2Cpcr !.'Y■41.00 i;O. rrlM=Q a t -.7 sM+$� �• . w +rL�a�.� '10 .L+y y�i$ au S. �� qua' _ g a`:nwe [�J Q wI i1a -C D . it pp +per+�p ��11 pppp s . a►+ D 1h a ea L A'� '..'P � C L M f� M ec L o a mr1 w r rh r r i.— r Md •! p O � C � � o w� 1. � e� a� r Lr+v r pa.a r.,alsa'e' �.�•1 w1 a i p ►1 OL B Rr w O�+gjRw ^. 4a o n y± 4 a O Fj 1r1 pp% Oe D F. %T% ►�^wr,Dars. rw a. a y s••s'osaip G� -L1 Rr • qq 1�11 y� S I■■14 N ioiv rLarl.iM1•�. 9 r L..00M g w M mb i' L 40.9 vtiv i ay.~ia~ D r 4M 9 r 4 a tl4 lot 5 u• ppwI' ]SRO. 43.4-g .6 LP V� e' y � C 'A y '+ir c pp �MS 6S C gg Mar A y O -00 gv L ti b rI J6 J6 w 42 4F . tlGl OMM K a �'•Da �� K O L1�pr••- C d r � M1 [ 4 0 r V ucs iui vi rtca rt: va me utc a t % a944 rrL 444 H(USING&DEVELaPY ' 40002' T V COMBINED CERTIFICATE OF ELECTION To. BECOiM roVER=D HY M3M ESOTA STATUTES 1989, CIMPTER 3178 AND cERTIFIcATB of SECOND RESTATED ARTICLES OF MCORX20RATION of PROJECT FOR PRIDE Ili! LlvIHG, INC. The undersigned, Joseph R. Selvaggio, the President of project for pride in Living, Inc., a Minnesota nonprofit corporation organized and existing under Minnesota Statutes, Chapter 317, hereby certifies that on November 4, 1990, in accordance with the articles of incorporation and bylaws of the carp©ration, each as heretofore amended, and Chapter 317, the followingresolutions relating to the election'by the corporation to become goverrned by Minnesota Statutes 1989, Chapter 317A, 'and to the adoption of second restated articles of incorporation of the corporation, as heretofore amended and resmated, were adopted by a majority of the. directors and members of the corporation at a duty called and halo tweeting of said directors and members at wh;ch meeting a quorum was present and acting throughout, effective On that date: I.. ELECTION RESOLVED, that this corporation elects to be governed by Minnesota Statutes 1989, Chapter�317A. 2. ADOPTION OF SECOND RESTATED e1RTICLES OF -INCORPORATION RESOLVED, that on the date which the election -by this Corporation to become governed by Minnesota Statutes 1989, Chapter 317A•, is effective by the filing of an 'appropriate certificate With the Minnesota Secreta -,T of State,the existing articles of incorporation of this corporation, as heretofore amended and restated, are. further amended and restated in their entirety by the adoption of the following second restated articles of incorporation :of this corporation to supersede and take t_Ke place of t.'xa existing articles of incorporation of this eorporatian, as heretofore amended and restated: Wr.1 AU, vi rni AA.UV rnn UX4 are 041% rrL -►i-3 ttuU llVt;rYrJIML0PH 10003 SECOND RESTATED ARTICLE3 OF IMCOItPORATION OP PROJECT FOR PRIDE IN LIVING, INC. ARTICLE I NAME Inc. NThe name of this corporation is "Project for pride in Living, ARTICLE Ii MPOSES AND POWERS -This corporation is organized and shall be operated exc7lusively for charitable and educational purposes within the meaning of, and -as contemplated and Permitted by, Sections 170(e)(2) and 301(c)(3) of the Internal Revenue Code of 1986 (the. "Code"). Within the framework and limitations of the foregoing, this organization is orSanized and shall be operated exclusively to engage in, advance, support„ promote, and administer charitable and educational activities; causes, and projects o; ev+cry kind and mature WttaLsaever in : is own behalf, or as agent, trt.,stee, or representative of others, and, to the extern consistent with the foregoing purposes, to aid, assist, and contribute to tae support of corporations, associations, t;"'ttats, fourtdativns, and institutions (1) that are organized and operated exclusively for one or more purposes described in sections 170 (c-) (2) and Sol(c) (3) of the Code, (2) that are described in 301(c) (3),ai .�:`te Cede, and (3) that are exempt Pram federal income taxes under Section 50I(a) of the Code. For such purposes, and not other4ie this corsoration shall have and may exercise ail powers that are afforded to this corporation by the Minnesota Nonprofit Corporation act, provided, however, that this corporation shall not carry ort adv a,ct;ro not •pex-mitted to be carried on by a corporation that is exempt. from 'federal income tax under Section 50.1(a) of the Code as an organization described • in Section 501 (c) (3) or by a corporation that is described in, and contributions to which are deductible for federal income tax PI=Posts under, Section 170(c) (2) of the Code. All references in these Second ' Restated Articles of Incorporation to a pa^icuiar section o.f the Internal Revenue Code of 1988 shall mean and include, as ndu enacted or as'hereafter amended, such $action and any provision of federal law as is or may hereafter be applicable, cognate to such section. All references in these Second Restated Articles of Incorporation to the Minnesota Nonprofit Corporation Act shall mean and include, as now enacted or as hereafter amended, Chapter 317A of the Minnesota statutes and any provision of Minnesota law as is or may hereafter be applicable cogna za to such chap" -a=. Vhf lo/ ul rxa II;UV rJ%A e1G are ileee YYL .444- HOU aING&DSYSLOPH 9100$ ARTICLE XIX PROHIBITED ACTIVITIES This 'corporation shall not, directly or indirectly, afford or PaY any pecuniary gain, dividends, or other pecuniary remuneration to its members, if any, as such, and no part of the net income or earnings of this corporation shall, directly or indirectly, inure to the benefit of any member, if any, -or any other person having a personal and private interest in the activities of the corporation, but this corporation may pay reasonable compensation for services rendered to this corporation in furtherance of its purposes set forth in Article II hereof. No substantial part of the activities Of this corporation shall- be the carrying on of propaganda, or otherwise attempting, to influences legislation, and this corporation shall not participate in, or intervene in (including the .publishing or .distributing of statements), any political ca=Paign on behalf of, or in opposition to, any candidate for public office. Except as peratitted by. applicable law, this Corporation shall not Land money to, or guarantee the obligation of, any director or officer of this corporation. -ARTICLE iv REGISTMED OFA -CE The registered of -ice of this corporation is located at 25I.S� Chicago Avenue south, Minneapolis, MixmGsota 55404. ✓ ARTICLE v NO PERSONAL LTABILITy The officers, directors, and members, if any, of this Corporation shall not be personally liable to any extent whatsoever for any debts or obligations of this Corporation. ARTICLE VI DISSOLUTION This corporation may be dissolved in accordance with the laws of the State of Minnesota. Upon dissolution of this corporation, and after the payment of all liabilities and obligations of this corporation and all costs and expenses incurred by this corporation in connection with such dissolution, any remaining assets shall be distributed to such one or more corporations, associations, trusts, foundations, and institutions as are then in existence, are exempt from federal income taxes under jSection 501(a) of the Codec, and are organized and operated exclusively for one or more purposes described in sections 170(e) (2): and 501(c) (3) of the Code and are described in Section 590 (a) (1).' (2) , or (3) of the Code, in such proportions as shall -be determined by the Board. of Directors of 02/16/01 FRI 11:09 FAX 612 874 6444 PPL ►¢ � 11009ING&DEVELOPM ID005 93:1 N . this corporation, or, only if required by Laws 'of the State of a Minnesota- then in existence that a court of comaetu conduct the dissolution, by such court. Notwjurisdiction aPe ent gntjuq anything apparently or expressly to the contrary contained in this Article, if any assets are than held -by this corporation in trust or upon condition or subject to any executory or special limitation, and if the condition or limitation occurs by reason of the dissolution of this corporation,_ such assets shall revert or be returned, transferred, or conveyed in- accordance with the tarots and provisions of such trust, condition, or limitation. ARTICLE VIr WRnTE.'4 ACTIoN BX DIRECTORS . An action required or peittad to be taken ata meeting of the Board of Dirogtors of the corporation may be taken by a written action signed, or counterparts -of a written action signed in the aggregate, by all of the directors unless the .action need not be approved by the members, if any, of the corporation, in which cage .-the action Miry be taken by a written action_ signed, or counterparts of a written action signed in the aggregate, by the number of directors that would be required to take the same action at a meeting of the Board of Directors of .ze corporation at which all of the directors were present. 3. FILING or CERTIFICATE �. RESOLVED, that the President of t.�is corporation is hereby authorized and directed to prepare, sign, and file. with the Minnesota Secretary of State a combined cer_if+cate with respect to the adoption of the foregoing resolution relatinq to the election by this corporation to become governed by Minnesota Statutes 2983, Chapter 317A, and to the adoption of second restated articles of incorporation of this corporation. IN, WYTNESS WHEREOF, the Undersigned has executed this certificate this f aA day of s,• c.sL.� 1990. Jose K. Selvaggic,. wrsident of ?A,,NKsbTX Gc? TAY aF ST -'n SLED C��s7�35� of S13I PROJECT FOR PRIDE IN WING, INC. Housing and Development 1925 Chicago Avenue South° Minneapolis, MN 55404-1904 Telephone (612) 874-8512 CAX (612) 872-8995 } PROJECT FOR PRIDE IN LIVING, INC. BOARD OF DIRECTORS 2002 Paul E. Anders, Jr. Retired — Xcel Energy Patrick J_ Aylward, Chair Realtor, ReMax, Resident Powderhorn Neighborhood Paul Bauknight, Jr. Bauknight Associates, Inc. David A. Byfield Peer Environmental & Engineering Resources, Inc. Michael P. Ducar American Express Financial Advisors Kim Eastman American Express Financial Advisors Robyn Flewellen ProGroup and Edison/PPL School parent Evelyn Franklin Professor of Housing, University of MN Gardner Gay The Edina ABC Foundation, President John J. Grieman Business Consulting Services John M. Hartwell, Treasurer Retired - Business Investor Doug Hile Marquette Bank, President James A. Howard Cargill, Inc., Retired Edward A. Ihns Pillsbury Orlena A. Iversen TCF Banking & Savings, Commercial Loan Officer Margaret Jones Field -Regina Neighborhood Resident Jay Kiedrowski Wells Fargo Bank, Vice President Patricia Kovacs Imation, Community Affairs Manager Kathleen Larkin Merrill Corporation, Vice President Human Resources Bill Lieder Marshall Fields Corporation Mary Lieder Real Estate Sales & Marketing Consultant, Lieder Co. Marie Manthey Creative Nursing Management, President Tom Milbrandt ADC Telecommunications Cyndi Patrick Allianz Life Insurance, PPL Resident, Advisory Committee Ronald J. Poole Loomis, Sayles & Company, L.P., Vice President Karen Pritz, Secretary Hale, Page, Diamond Lake Neighborhood Association, Board of Mpls Toby Rapson Architect, Ralph Rapson & Associates, Inc Nancy Reeves Reeves and Associates Hazel Reinhardt Reinhardt Consulting Services, President Thomas G. Rock, Vice Chair GE Capital Fleet Jonathan Seltzer Consultant Christopher Shaheen Dorsey & Whitney, LLP Glen Skovholt Retired, Honeywell Nancy Smith Women's Foundation of Minnesota Joyce Traynor Firstar Bank Jeff Zlonis Public Strategies Group Additional Officers: Jim Scheibel, President Steve Studt, Vice President Becky Stewart, Assistant Secretary Susan Baldwin, Vice President Barbara McCormick, Vice President Elizabeth Bovee, Assistant Treasurer 3/15/02 Give me a fish and I eat for a day teach me to fish and i eat for a lifetime. 05/09/2003 FRI 18:12 FAX PROJECT FOR PRIDE IN LIVING 2515 Chicago Avenue Mnneapok M55404 6121874-8511 FAX:612/874-6444 ee-mall: ppl@ppi4no.org Project for Pride in Living, Inc. CERTMCATE OF CORPORATE RESOLUTION OF THE EXECU rM COMMITTEE OF THE BOARD OF DIRECTORS OF PROJECT FOR PRIDE IN LIVING, INC REGARDING BASS LAKE APARTNnMS The following resolution of the Executive Committee of Project for Pride in Living, Inc., a Minnesota non profit corporation (`°Company') was duly adopted by the [majorityMnanimous] vote of the members of the Executive Committee at a duly scheduled meeting of the Executive Committee held on April 3, 2002 at which a quorum of the members of the executive committee was present. [it 002/00 WHEREAS Project for Pride in Living, Inc., has as its mission addressing the housing needs of low and moderate income persons; and WHEREAS in furtherance of this ntissiGn, Project for Pride in Living seeks to stabilize the 11 unit development located at 7610 Bass Lake Road, New Hope, Minnesota; and WFIMEAS Project for Pride in Living has requested and expects to receive funding in the amount of $1,323,300 to acquire and renovate Bass Lake Aparhnexits; and NOW THEREFORE BE IT RESOLVED that the Board of Directors of Project for Pride in Living does hereby authorize staff to proceed with all requisite applications and negotiations for the acquisition, financing and legal ownership of the structures for the development of 11 units of rental housing to be located at 7610 Bass Lake Road in New Hope, Minnesota; and BE IT FURTHER RESOLVED, that Jim Scheibe], President of the Corporation or Barbara McCormick, Vice President of the Corporation be and they are hereby authorized and directed on behalf of the Corporation at any time and from time to time hereafter and without further action by or authority or direction from the Board of Directors of the Corporation to execute and deliver or cause to be executed and delivered any and all documents that may be deemed necessary or appropriate in connection with the Project, to acquire property, and to secure the financing identified. F � 3, Stew Assistant Secretary oard of Directors of Project for Pride in Living, Inc 05/09/2003 FRI 18:12 FAX IM 003/00 MEETING OF THE EXECUTIVE COMMITTEE of Project for Pride in Living (PPL) Data. Wednesday, April 3, 2002 Time: 7:46 am. Location: PPL Administration Building -- 2616 Chicago Avenue South* AGENDA ONO 7.45 am Financial Notes 7:50 am Updates: Capital Campaign Industries Building Charter School Executive Director Performance Review Strategic Plan Retreat 8:15 am Resolutions (see attached): 1. Repeal "director compensation" language from PPL Bylaws 2. Bass Lake Apartments 8:25 am Strategic Marketing Plan — presentation and discussion 9:00 am Adjourn Free, off-street parldng is available behind PPL's Administration Buildings 05/09/2003 FRI 18:13 FA% Note to the Executive Committee on the: Resolution to approve staff proceeding with negotiation and acquisition, financing and ownership of Bass Lake Apartments in Now Hope Project: Bass Lake Apartments-- City of New Hope Approx # of Units: 11 Concept: Rehab and rent to low and moderate income. Proposed First Mortgage 126,300 Proposed Acquisition 525,000 Sources: New Hope EDA 223,000 Uses: Construction 555,000 Henn. Co. HOME 350,000 Soft Costs 148,300 M140P 469,000 Fee 45,000 Henn. Co. AHiF 150,000 Playground Donations 5,000 Total: $1,323,300 Total: $1,323,300 Status: All fending has been committed. Closing anticipated by summer. RESOLUTION OF THE BOARD OF DIRECTORS OF PROJECT FOR PRIDE IN LIVING REGARDING BASS LAKE APARTNHIM WHEREAS Project for Pride in Living, Inc., has as its mission addressing the housing needs of low and moderate income persons; and WHEREAS in furtherance of this mission, Project for Pride in Living seeks to stabilize the 11 unit development located at 761.0 Bass Lake Road, New Hope, Minnesota; and SAS Project for Pride in Living has requested and expects to receive funding in the amount of $1,323,300 to acquire and renovate Bass Lake Apartments; and NOW THEREFORE BE IT RESOLVED that the Board of Directors of Project for Pride in Living does hereby authorize staff to proceed with all requisite applications and negotiations for the acquisition, financing and legal ownership of the structures for the development of 11 units of rental housing to be located at 7610 Bass Lake Road in New Hope, Minnesota; and BE IT FURTER RESOLVED, that: Jim Scheibel, President of the Corporation or Barbara McCormick, Vice President of the Corporation be and they are hereby authorized and directed on behalf of the Corporation at any time and from time to tithe hereafter and without further action by or authority or direction from the Board of Directors of the Corporation to execute and deliver or cause to be executed and delivered any and all documents that may be deemed necessary or appropriate in connection with the Project, to acquire property, and to secure the financing identified. 9004/00 11/26/02 COOPERATION AGREEMENT t This Agreement made and entered into this 0%.^ day of dµ, %r 2002, by and between the Minneapolis Public Housing Authority in and. for the City of Minneapolis (the "Authority"), the Economic Development Authority in and for the City of New Hope (the "EDA") and the City of New Hope, State of Minnesota (the "Municipality"). WITNESSETH: In consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows: 1. Whenever used in this Agreement: (a) The term WHOP Units" means four (4) units of low -rent housing hereafter to be developed with the financial assistance of the United States of America acting through the Secretary of Housing and Urban Development (the "Government") and located within an eleven (11) unit multifamily development (the "Development") to be owned by Bass Lake Apartments LLC ("Owner"), a Minnesota limited liability company to be formed in which Project for Pride in Living, Inc., a Minnesota nonprofit corporation, will be the controlling member and located at 7610 Bass Lake Road in the City of New Hope, Minnesota. (b) The term "Taxing Body" or "Taxing Bodies" means the..State of Minnesota and any and all political subdivisions or taxing units thereof in which the MHOP Units are situated and which would have authority to assess or levy real or personal property taxes, or to certify such taxes to a taxing body or public officer, to be levied for its use and benefit with respect to the MHOP Units if they were not exempt from such taxation. (c) The term "Shelter Rent" means the total of all charges to all MHOP Unit tenants for dwelling rents and nondwelling rents (excluding all other income of the MHOP Units) less the cost of all dwelling and nondwelling utilities. 2. The Authority shall endeavor: (a) to secure a contract with the Government for capital grants and annual contributions for the MHOP Units; and (b) to cause the development of the MHOP Units. C; UNMCOORDOC 1 COOPERATION AGREEMENT (c) to assign to the Metropolitan Council its responsibilities under this and other agreements relating to the MHOP Units for purposes of ongoing administration thereof. 3. (a) Pursuant to Minnesota Statutes, Section 469.040, the MHDP Units are exempt from all real and personal property taxes levied or imposed by any Taxing Body for so. long as either (i) the MHDP Units are , owned by a public body or governmental agency and are used for low -rent housing purposes, (ii) the MHOP Units are subject to the requirements of Section 5 of the United States Housing Act of 1937, (iii) the contract between the Authority and the Owner in connection with the MHOP Units continues to obligate the Owner to operate the MHOP Units as a low income housing project, or (iv) any obligations issued in connection with the MHOP Units or any moneys due to the Government in connection with such MHOP Units remain unpaid, whichever period is the longest (the "Exemption Period"). (b) During the Exemption Period, the Municipality, on behalf of the Taxing Bodies, agrees that it will not levy or impose any real or personal property taxes upon the MHOP Units or upon the Authority with respect thereto_ Because the MHOP Units consist of four (4) units located within and under common private ownership with 7 additional housing units which comprise the Development, the property taxes and property tax exemption shall be determined as follows: (i) the tax capacity of the total Development shall be multiplied by a fraction, the numerator of which equals. the total number of MHDP Units and the denominator of which equals the total number of housing units in the Development and (ii) the product thereof shall be deducted from said tax capacity. (c) During the Exemption Period, the EDA shall make, or cause to be made, annual payments in lieu of taxes ("PILOT") in payment. for the public services and facilities furnished from time to time without other cost or charge for or with respect to the MHOP Units. Each. PILOT shall be made at the time when real property taxes on the MHDP Units would be paid if it was subject to taxation, and shall be in an amount equal to either (i) five percent (5%) of the Shelter Rent actually collected but in no event to exceed five percent (5%) of the Shelter Rent charged with respect to such MHDP Units during the preceding calendar year, or (ii) the amount permitted to be paid by applicable State law in effect on the date such payment is made, whichever is lower. (d) Pursuant to Minnesota Statutes, Section 464.040, subdivision 3, the County of Hennepin shall distribute the PILOT among the Taxing Bodies in the proportion which the real property taxes which would have been paid to each Taxing Body for such year if the MHDP Units were not exempt from taxation; provided, however, that na payment for any year shall be made to any Taxing Body in excess of the amount of the real property taxes which .would have been paid to such Taxing Body for such year if the MHOP Units were not exempt from taxation. C:ITEMIMCOORDOC 2 COOPERATION AGREIIvBN i' (e) In the event the PILOT is not paid, no lien against the MHOP Units or assets of the Authority or EDA shall attach, nor shall any interest or penalties accrue or attach on account thereof. 4. During the Exemption Period, the Municipality, or other appropriate Taxing Body, without cost or charge to the Authority, the EDA or tenants of the MHOP Units (other than PILOT) shall: (a) Furnish or cause to be furnished to the MHOP Units public services and facilities of the same character and to the same extent as are furnished from time to time without cost or charge to other dwellings and inhabitants in the Municipality; (b) Insofar as the Municipality may lawfully do so, vacate such streets, roads, and alleys within the area of the MHOP Units as may be necessary in the development thereof, and convey without charge to the Authority, the EDA or Owner of the MHOP Units such interest as the Municipality, or other Taxing Body may have in such vacated areas; and, in so far as it is lawfully able to do so without cost or expense to the Authority, the EDA, the Owner of the MHOP Units or to the Municipality or other Taxing Body, cause to be removed from such vacated areas, in so far as it may be necessary, all public or private utility lines and equipment; (c) Insofar as the Municipality or other Taxing Body may lawfully do so, (i) grant such deviations from the building code of the Municipality or other Taxing Body as are reasonable and necessary to promote economy and efficiency in the development and administration of the MHOP Units, and at the same time safeguard health and safety, and (ii) make such changes in any zoning of the site and surrounding territory of the MHOP Units as are reasonable and necessary for the development and protection of the MHOP Units and the surrounding territory; (d) Accept grants of easements necessary for the development of the MHDP Units; and (c) Cooperate with the Authority and EDA by such other lawful action or.ways as the Municipality or other Taxing Body and the Authority may find necessary in connection with the development and administration of the MHDP Units. In the initial development of the MHOP Units, the Municipality further agrees, on behalf of all Taxing Bodies, that within a reasonable time after receipt of a written request from the Authority or EDA: (a) that it will .accept the dedication of all interiorstreets, roads, alleys, and adjacent sidewalks within the area of the Development, together with all storm and sanitary sewer mains -in such dedicated areas, after the Ownerof the MHOP Units, at its own expense, has completed the grading, improvement, paving, and installation ONTEMMOOP.DOC 2 COOPERATION AGREEMENT thereof in accordance with specifications acceptable to the Municipality or other Taxing Body; (b) that it will accept necessary dedications of land for, and will grade, improve, pave, and provide sidewalks for, all streets bounding the Developments as are necessary to provide adequate access thereto (in consideration whereof the Owner shall pay to the Municipality or other Taxing Body such amount as are or could be assessed against the Development); and (c) that it will provide, or cause to be provided, water mains, and storm and sanitary sewer mains, leading to the Development and serving the bounding streets thereof (in consideration. whereof the Owner of the MHOP Units shall pay to the Municipality or other Taxing Body such amount as are or could be assessed against the Development). 6. If by reason of the Municipality's or other "faxing Body's failure or refusal to furnish or cause to be furnished any public services or facilities which it has agreed hereunder to famish or cause to be firrnished to the Authority, the EDA, the Owner or tenants of the MHOP Units, and the Authority, the EDA or the Owner of the MHOP Units incurs any expense to obtain' such services or facilities, then the Authority or. EDA may cause to be deducted the amount of such expense from any PILOT due or to becomedue to the Municipality or other Taxing Body in respect to the MHOP Units, provided that the Authority shall notify the Municipality or other taxing -body of the alleged failure in writing at least thirty (30) days prior to deductingsuch m-pense..from any PILOT. 7. No Cooperation Agreement heretofore entered into between the Municipality and the Authority or EDA shall be construed to apply to any MHOP Units covered by this Agreement. No member of the governing body or any other public official of the Municipality or Other Taxing Body who exercises any responsibilities.• or functions with respect to the MHOP Units during his/her tenure or for one year thereafter shall have any interest, direct or indirect, in the MHOP Units or any property included or planned to be included in the MHOP Units, or any contracts in connection with the MHDP Units or property. If any such governing body member or such other public official of a Taxing Body involuntarily acquires or had acquired prior to the beginning of his/her tenure any such interest, he/she shall immediately disclose such interest to the Authority. 9. During the Exemption Period this Agreement shall not be abrogated, changed, or modified without the consent of the Government. The privileges and obligations of the. Municipality and other Taxing Bodies hereunder shall also remain in full force and effect with respect to the MHOP Units so long as the beneficial title to the MHOP Units is held by the Authority or by any. other public body or governmental agency,. inclWing the Government, authorized; by law to engage in the development or administration of low - rent housing projects. If at any time the beneficial title to, or possession of, the MHDP C:NTFwMCOOP.DOC 4 COOPERAMN nGItMMENr Units is held by such other public body or governmental agency, including the Government, the provisions hereof shall inure to the benefit of and may be enforced by, such other public body or governmental agency, including the Government. 10. The Government, the Municipality and the HRA hereby consent to the future assignment of the Authority's interest in this Agreement to the Metropolitan Council. CATEMMOOP.DOC 5 COOPERAMN AGREEMENT IN WITNESS WHEREOF the Municipality, the EDA and the Authority have respectively signed this Agreement and caused their seals to be affixed and attested as of the day and year first above written. MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS By G- . Cornell L. Moore Its Chairman VL And by 0/�Cr Cora McCorvey Its Executive Director W:IDCAPLSON1SCATTMED SUESUvMOPSASS LAMCOOP.DOC COOPERA'i'l N AGREEMENT CITY OF NEW HOPE, MINNESOTA By W. Peter Enck Its Mayor In I ww.;'�W� 1�7544 ON � MU� Daniel J. Donahue Its City Manager C:1W[NDOWSITEMPICOOP.DOC ^r COOPERATION AGREEMENT ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE - M--n� �F�,' Its President Danie J. r Donahue— Its Executive Director This Document Drafted by: Holmes & Associates, Ltd. Two Carlson Parkway, Suite 155 Minneapolis, -MN 55447 763-249-0888 763-249-0777(Fax) C:IWINDOWSITEMPICOOP.DOC 8 COOPERATION AGREEMENT DECLARATION OF RESTRICTIVE COVENANTS THIS DECLARATION OF RESTRICTIVE COVENANTS (Declaration) dated as of May 13, 2003, by Bass Lake Apartments LLC (Company), its successors and assigns, is given to the Minneapolis Public Housing Authority in and for the City of Minneapolis (MPHA) and to the U.S. Department of Housing and Urban Development (HUD).. RECITALS WHEREAS, the Company entered into a Housing Development Agreement and a Regulatory and Operating Agreement (the "Agreements") with the MPHA dated as of Ma -y 1-1 2003; and WHEREAS, pursuant to the Agreements, the Company is' obligated to construct and operate an eleven (11) unit rental housing project on property described in Exhibit A hereto (the "Property"), in which four (4) units are to be maintained and operated as public housing units as defined by the Agreements; and - WHEREAS, the Company has received financial assistance provided by the MPHA for construction of the project, and will continue to receive financial assistance throughout the term of the Agreements from the MPHA to operate the public housing units; and WHEREAS, the MPHR has provided financial assistance and will continue to provide financial assistance received through a Mixed -Finance Amendment to Consolidated Annual Contributions Contract with the Secretary of HUD dated as of -Mny 13 , 2003, as amended (the "ACC- Amendment"); -and WHEREAS, the ACC Amendment provides for annual contributions by HUD to the MPHA to assist in achieving and maintaining the lower income character of the four (4) public housing units to be located on the Property, which units are known as Project No. MN4CP002091, 55FF, and as a requirement for receiving said funding, the MPHA is required to include certain restrictions in all Agreements; and WHEREAS, the Company is required through the Agreements to cause to be executed an instrument in recordable form which obligates the Company, its successors and assigns to operate and maintain the public housing units in accordance with the Agreements, the ACC and ACC Amendments as provided for in the Agreements, and all federal, state and local regulations; and WHEREAS, the Company under this Declaration intends, declares and covenants that the restrictive covenants set forth herein shall be and are covenants running with the Property for the term described herein and binding upon all subsequent owners of the Property for -such term, and are not merely personal covenants of the Company; NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth and of other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company declares as follows: 1. That for the period established by the ACC, that is, forty (40) years beginning on the date of full availability of the facilities, the Company, its successors or assigns, shall maintain and operate the public housing units in accordance with the terms of the Agreements, the ACC and ACC Amendments as provided for in the Agreements, and all federal, state and local regulations. 2. That the Company shall remain seized of the title to the Property and shall refrain from transferring, conveying, assigning, leasing, mortgaging, pledging, or otherwise encumbering or permitting or suffering any transfer, conveyance, assignment, lease, mortgage, pledge or other encumbrance of the Property or any part thereof or appurtenant thereto, or any rent, revenues, income or receipts therefrom, or in connection therewith, or any of the benefits or contributions granted to it by or pursuant to the Agreements, or pursuant to the ACC through the Agreements or any interest in any of the same, or demolishing any appurtenant thereto, without the approval of the MPHA and HUD. (a) To the extent permitted by Section 9.1 of the Housing Development Agreement, the Company may encumber the Property, provided that any and all encumbrances permitted by this clause shall at all times be subject and subordinate to the terms and conditions of the Agreements and the ACC. (b) To the extent and in the manner provided by the Agreements and the ACC, the Company may (i) lease dwelling units and other spaces and facilities in the Property; (ii) convey or dedicate land for use as alleys, streets, or other public right-of-way, and grant easements for the establishment, operation and maintenance of public utilities. (c) The MPHA with the prior approval of HUD may, in its sole discretion, approve release of the project and Property from the restrictions hereby created and said release shall be effective to terminate this Declaration. Upon expiration of the period during which the Company is obligated to operate the Property in accordance with the Agreements, the ACC; 'and the ACC Amendments as provided for in the Agreements, this 'Declaration shall terminate and shall no longer be effective. 3. The MPHA with the prior approval of HUD, acting by and through duly authorized officials, may approve such action as may be necessary to allow the transfer, conveyance, assignment, leasing, mortgaging, or encumbering of the Property or to accomplish the acts described above. 4. This Declaration and the covenants set forth herein regulating and restricting the use and occupancy of the Property (i) shall be and are covenants running with the Property, encumbering the Property for the term of this Declaration, and binding upon the Company's successors in title and all subsequent owners of the Property, (ii) are not merely personal covenants of the Company, and (iii) shall bind the Company and its respective successors and assigns during the term of this Declaration. 5. Any and all requirements of the laws of the State to be satisfied in order for the provisions of this Declaration to constitute deed restrictions and covenants running with the land shall be deemed to be satisfied in full, and that any requirements or privileges of estate are intended to be satisfied, or in the alternate, that an equitable servitude has been created to insure that these restrictions run with the land. For the term of this Declaration, each and every contract, deed, or other instrument hereafter executed conveying the Property or portion thereof shall expressly provide that such conveyance is subject to this Declaration, provided, however, that the covenants contained herein shall survive and be effective regardless of whether such contract, deed or other instrument hereafter executed conveying the Property or portion thereof provides that such conveyance is subject to this Declaration. 6. The invalidity of any clause, part or provision of this Declaration shall not affect the validity of the remaining portions thereof. IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its duly authorized representatives, as of the day and year first above written. BASS LAKE APARTMENTS LLC a Minnesota limited liability company By �- Barbara McCormick, its President STATE OF MINNESOTA ) )ss. COUNTY OF�e- ��!' ) The foregoing instrument was acknowledged before me this _ I Ith day of Maw , 2003, by Barbara McCormick, the President of Bass Lake Apartments LLC, a Minnesota limited liability company, named in the foregoing instrument, on behalf of the Company. S. CHARLES SOREAMON NOTARY PUBLIC -MINNESOTA �'ycommIssionExpirasJam 31,2005 aam8 k -s This Document was drafted by: U.S. Department of Housing and Urban Development 920 Second Avenue South Minneapolis, MN 55402 Notary Public EXHIBIT A TO DECLARATION OF RESTRICTIVE COVENANTS PROPERTY T EGAT • DESC'RTP' DN The East 1/3 of Lot 35, lying South of the North 1138.67 feet thereof, excepting the West 30 feet and the South 33 feet thereof, Auditor's Subdivision 226, Hennepin County, Minnesota. Abstract Property 12/09/02 INITIAL AGREEMENT THIS AGREEMENT, made this 17lay ofeer) 2002 by and between the Minneapolis Public Housing Authority in and for the City of Minneapolis, a public body corporate and politic (the "MPHA") and the Economic Development Authority in and for the City of New Hope, a public body corporate and politic (the "EDA") is entered into pursuant to Minnesota Statutes, § 471.59 and § 469.012, Subds. 1(11) and 3. WHEREAS, the MPHA has entered into an Annual Contributions Contract ("ACC") with the United States Department of Housing and Urban Development ("HUD") for funding the capital and operating costs of low rent public housing units and projects. throughout the Minneapolis -St. Paul metropolitan area; and WHEREAS, the MPHA has established the Metropolitan Housing Opportunities Program ("MHOP") pursuant to which it will cooperate with suburban counties and municipalities in the construction and operation of qualified housing units (the "MHDP Units"); and WHEREAS, Project for Pride in Living, Inc., a Minnesota nonprofit corporation, on behalf of Bass Lake Apartments LLC (the "Owner") has applied to the MPHA to locate four (4) MHDP Units within its development of an 11 -unit multifamily housing project to be known as Bass Lake Apartments. (the "Development's to be located in the City of New Hope.. (the "City"); and WHEREAS, the MPHR, the EDA and the City have agreed to cooperate in the location of four (4) MHOP Units in the Development; and WHEREAS, the purpose of this Agreement is to define the relationship of the MPHA and EDA, with respect to the planning, construction, ownership and operation of the MHOP Units. NOW, THEREFORE, it is agreed by the parties hereto as follows_ I. PROPOSAL. The parties will jointly prepare and submit to HUD a proposal for development funds in the approximate amount of $505,000 (including administration funds) and ongoing operating subsidy under a MPHA ACC for the rehabilitation, construction and operation of 3 replacement units and 1 incentive unit of MHOP housing. A. All required Development information, including financial pro formas and design and construction documents, will be gathered and assembled by the EDA and delivered to the MPHA. CATENUI% dTPIAL.DOC 1. WMAI. AGREEMENT B. Final document preparation, including initial operating budgets, and conformity with federal regulations and HUD requirements will be the responsibility of the MPHA. C. The MPHA shall be responsible for administering the processing of the Proposal and obtaining its approval by HUD.. D. The EDA shall be responsible for all liaison with the Metropolitan Council and the Minnesota Housing Finance Agency ("MHFA") with respect to all other funding effecting the Development. E. The -EDA will provide to the MPHA a copy of the ERA's Equal Opportunity Housing Plan and the MPHA will provide the EDA with. a copy of the current MPHA plan. The parties will make reasonable efforts to coordinate the substance and implementation of these plans in the development and operation of the MHDP Units. F. The MPHA will monitor the application of federal Davis -Bacon wage requirements which shall apply to the Development provided that the Housing Development Agreement between and among the. EDA, MPHA and the Owner shall require the Owner and construction contractors to provide the MPHA.such information as it may reasonably require in order to, meet its obligation hereunder. G. Upon completion of MHOP Units, the MPHA may, without further action by the EDA, assign all documents related thereto. to the Metropolitan Council for ongoing administration of the operating subsidy and grievance procedures as well as management of the waiting lists (the "Assignment and Reformulation"). In that event, MHDP Units shall be removed from the MPHA ACC and added to the ACC of the Metropolitan Council (the "Metro ACC"). Subsequent to the Assignment and Reformulation: 1. All of the duties of the MPHA described herein that are yet to be performed shall be performed by the Metropolitan Council; 2. All of the rights of the MPHA described herein shall be rights of the Metropolitan Council; and 3. The Operating .Subsidy described in Section VII will be determined or re- determined in accordance with the Metro ACC and based upon the Metropolitan Council Fiscal Year. II. DEVELOPMENT. The MPHA and the EDA shall enter into a Housing Development Agreement with the Owner which will: CAILWIAL ooc 2 Mnai. nGxFIhffirrr A. Establish the design and construction specifications of the four (4) MHOP Units as four (4) two-bedroom units; B. Confirm the amenities to be provided within and around the Development; C. Provide that the level of MHOP funding for the Development will equal certified construction costs (pro rata based on bedroom size but not to exceed allowable total development costs established by HUD); D. Provide that the operating subsidy reserve fund be drawn upon in the event operating subsidies paid by the WHA axe inadequate to pay the difference between MHOP Unit income and expenses, as defined below; E. Provide for the draw -down of public housing development funds on a pro rata basis with other Development funding sources; F. Establish a system by which the MHDP units within the Development will not be physically identified, but rather will "float" throughout the Development depending upon vacancies and availability; G. Identify the system for construction inspections, cost certifications. and development audits; H. Require execution by the Owner of the Regulatory and Operating Agreement and a Declaration of Restrictive Covenants creating.a covenant running with the land obligating the Owner of the Development and all successors in interest .to maintain and operate the MHOP Units in compliance with all applicable requirements of Section 5 of the United States Housing Act of 1937 and the ACC; and 1. Require the recording of the Declaration of Restrictive Covenants against. the Development property. III. MANAGEMENT. The Regulatory and Operating Agreement shall provide that the Owner or its agent (the "Managing Agent's shall manage all the units at the Development, including the MHOP Units and: A. shall comply with all federal law, regulations and policies and the ACC. B. shall provide the MPHA/EDA and HUD with access to all books and records maintained by the manager or managers with respect to the MHOP Units. C. shall be subject to terminatioin and replacement as to the entire Development if it is determined by the MPHA/EDA, subject to appropriate judicial; review by. any court of competent jurisdiction, that the Managing Agent or any successor has c_Arfl„aNNrrrAL,Doc 3 IMrdAL AGREEMEW materially violated, breached, or failed to comply with any provision of federal law, regulation, policy, or the ACC. D. shall receive from the MPHA/EDA the names of persons and families who meet the income and waiting list criteria for admission into the MHOP Units and shall carry out such administrative functions as (but not limited to) applicant interviews and screening, verifications, determination of suitability for admission, unit assignment, execution of leases, terminations and evictions. W. WAITING LIST MANAGEMENT. The EDA, in cooperation with the Metropolitan Council, shall maintain the waiting lists for those applying for housing in the MHOP Units, using applicable federal, MHDP and local priorities: A. Applicants for the MHOP Replacement Units (as defined in the Regulatory and Operating Agreement) will be selected from waiting lists based upon the following priorities: 1. First, to families displaced by the demolition of Minneapolis public housing units pursuant to that certain Consent Decree entered in settlement of Hollman et al. vs. Cisneros et al., U.S.D.C. (Minn. Dist., 4th Div.) Civil Case No. 4-92-712. 2. Second, to families on the MPHA waiting and transfer lists who. live in minority or poverty concentrated areas in the metropolitan area. 3. Third, to families on the MPHR waiting list. This will include all families wishing to participate in MHOP, including both Minneapolis waiting list families and applicants from the EDA. The MPHA will automatically place all applicants from the EDA on its waiting list,, thus making both Minneapolis and City of New Hope residents equally eligible for this priority. B. The MHOP Incentive Units (as defined in the Regulatory and Operating Agreement) will be filled pursuant to the EDA's waiting list- procedures. The EDA shall, or shall cause the Metropolitan Council, to have full and complete control over the management of the waiting list, and the Managing Agent shall have complete control over. the selection of residents, so long as the MHOP priorities and all federal and state laws are followed. The MPHA will promptly and continuously refer all Minneapolis applicants to the EDA for placement on the MHOP waiting list. If the referral system results in no eligible and suitable tenant with Consent Decree priorities, the unit can be filled with other applicants on the waiting list. The EDA. shall provide -HUD a certification, inlhe form' attached hereto as Exhibit A, certifying that its waiting list procedures will: conform with applicable law and regulations. C:ITEMP%DUT AL.DOC 4 II fITIAL AGREEMENT V. POST CONSTRUCTION DUTIES. As a part of the HUD close-out requirements with respect to the MHOP Units, the following responsibilities will be assigned: A. The MPHA shall designate the End of the Initial Operating Period ("EIOP") and shall coordinate the inclusion of the MHDP Units in the MPHA Annual Operating Budget. B. Within 12 months of EIOP, the EDA shall gather information and provide HUD with the Actual Development Cost Certificate ("ADCC"). C. The MPHA shall be responsible for the preparation of an audit by an independent public accountant as a part of its submission of the ADCC. The EDA shall provide such information as is in its possession or can be reasonably obtained in order to assist the NIPHA with such audit. D. The MPHR shall monitor the Managing Agent's procedures and results in screening applicants provided from the EDA waiting lists and report the results thereof to HUD as may be requested or required. VI. TAX CERTIFICATIONS The MPHA and EDA shall provide in its agreements with the Owner that the Owner, or its Managing Agent, shall annually prepare and present to the EDA a certification .to the appropriate assessing officials of the number of MHOP units located within the Development. The EDA shall annually certify to the appropriate assessing officials the number of MHOP units located within the Development, pursuant to Minnesota Statutes, Section 469.040, subdivision 4. VII. OPERATING SUBSIDY. Under the ACC, HUD contracts to provide an operating subsidy to the MPHA for all units subject to the ACC, which will include these MHOP Units_ It is therefore necessary to establish a methodology by which the MPHA will pay operating subsidy to the Owner of the MHOP Units. That system, to be described more fully in a Regulatory and Operating Agreement between the MPHA and the Owner, will be generally as follows: A. As used in this Section VII., the following terms shall have the following meanings: "Allowed Project Expenses" means all necessary and reasonable operating expenses of the Development for any period, including: (a) all ordinary and. - necessary expenses of operations of the Development shown as line items on Form HUD -92547-A (Budget Worksheet), exclusive of real estate taxes and debt service C �TOVHMNmaLL.Doc 5 ixmAL AcRfxw T- requirements of any lender and exclusive of utility expenses which are the direct responsibility of tenants; provided, however, that if the Owner shall be required to borrow funds for repairs, replacements or improvements not funded from a Development reserve fund for replacements, debt service requirements for any such borrowing approved by the MPHA (which approval shall not unreasonably be withheld) shall be included in Allowed Project Expenses; provided, further, that MHOP Unit Expenses (as hereinafter defined) shall be reduced by any amounts contributed by the MPHA or EDA, on a grant basis, for repairs, replacements or improvements; (b) management fees payable pursuant to the Property Management Agreement; (c) legal expenses associated with the operation of the Development as well as accounting and audit expenses, including tax return preparation expenses, permitted to be charged as project expenses pursuant to HUD Handbook 4370.2 REV -1, Financial Operations and Accounting Procedures for Insured Multifamily Projects, or any successor thereto; and (d) reserves for replacements and for any other purposes, as .required:. by any lender and approved by the MPHA. 2. WHOP Percentage" shall mean the higher of (i) the number .of MHDP Units, divided by the total number of units at the Development, or (ii) the net rentable square feet of the MHOP Units (assuming 4 two-bedroom units), divided by the net rentable square feet of all the units at the Development. 3. "MHOP Unit Expenses" shall mean (A) Allowed Project Expenses, multiplied by the MHOP Percentage, plus (B) the payment in lieu of real estate taxes made in respect of the MHOP Units, if any, plus (Q) -amounts paid to MHOP Unit occupants as utility reimbursement (i.e., "negative rent"); provided, however, that if any line item expense shall be included in Estimated MHDP Unit Expenses on the basis of a percentage other than. the MHOP Percentage pursuant to the second sentence of Section VII.B.1. hereof, such expense shall be included in MHOP Unit Expenses on the basis of the same percentage; 4. "MHOP Unit Income" shall mean all income received in respect of MHDP Units,' including tenant rents ("Tenant Rent" as defined in 24 CPR § 90-.1432).and any other sources of 'income received. in respect of MHOP CA1TNIP1IN nU,DQC - 6. BUTIAL AGMENEW Units, including all types of revenue shown as line items on Form HUD 92547-A, but exclusive of operating subsidy. 5. "Estimated AIlowed Project Expenses," "Estimated MHOP Unit Expenses," and "Estimated MHOP Unit Income" shall mean the estimated amounts of such items for any period determined in accordance with subsection B. hereof. B. Not later than 90 days prior to the anticipated Date of Full Availability ("DOFA") for occupancy of any unit of the Development, and not later than 150 days before the first day of any subsequent MPHA Fiscal Year, the Owner shall prepare and submit to the MPHA a proposed operating budget for the following MPHA Fiscal Year (or, in the case of the year in which DOM occurs, the remainder thereof) ("Operating Budget"). The Operating Budget shall project Estimated Allowed Project Expenses, Estimated MHOP Unit Expenses, and Estimated MHOP Unit Income for the subject period, subject to the following conditions: Estimated Allowed Project Expenses shall be as reasonably estimated by the Owner. The MPHA may comment upon and propose changes to the Estimated Allowed Project Expenses as provided: by the Owner and set forth in the Operating Budget submitted to the MPHR, but the Owner shall not be required to reduce any estimated expense below the Development - wide amount for such expenditure reasonably anticipated by the Owner for the period. However, the portion of any line item within the Estimated. Allowed Project Expenses included in Estimated MHOP Unit Expenses shall be altered from the MHOP Percentage if the. MPHA demonstrates satisfactorily that allocation of such item to the MHOP Units on the basis of the MHOP Percentage is inappropriate (e.g., marketing and advertising costs, if such relate solely or preponderantly to the non MHOP units). 2. Until the completion of initial rent -up of the MHOP Units, Estimated MHOP Unit Income shall be determined on the basis of assumed tenant rent collections for each unit size equal to the average tenant rent collections for all units of comparable size owned and administered by the MPHA in the most recent annual or semiannual period for which such statistics are available at the time of the Owner's submission of the Operating Budget for such period to the MPHA. For each subsequent MPHA Fiscal Year, Estimated MHOP Unit Income shall be determined on the basis of the aggregate tenant rents actually collected for all MHOP Units during the first six months of the preceding MPHA Fiscal Year. Notwithstanding the foregoing, with respect to any MPHA Fiscal Year, the MPHA may agree to project Estimated MHOP Unit Income at a level different from that. which would otherwise be established pursuant to the preceding sentence, taking into account (a). the reasonably .anticipated level of incomes of tenants anticipated to be admitted to the MHDP Units C:ITENHWTUL-AOC 7 [3@1"iTAL AGREEMENT during such period, based on anticipated turnover and the admissions policies, and (b) reasonably anticipated increases in income levels of existing tenants based on tenant participation in employment training and other supportive services programs. C. During each MPHA Fiscal Year commencing with the first MPHA Fiscal Year after DOFA, and subject to any limitations arising from application of Section 20 (e) of the Act and operation of the Development Operating Subsidy Cap, the MPHA shall pay to the Owner an amount equal to (1) Estimated MHOP Unit Expenses for such period, less (2) Estimated MHOP Unit Income for the period (the "Operating Subsidy Requirement"). The MPHA shall pay to the Owner, on the first day of each month of an MPHA Fiscal Year, one -twelfth (1112) of the Operating Subsidy Requirement for such MPHA Fiscal Year; provided, however, that the Owner and the MPHR may agree, upon determination of the Operating Budget and Operating Subsidy Requirement for any MPHA Fiscal Year, to provide for unequal monthly payments for such year. VIII. REGULATORY AND OPERATING AGREEMENT RESPONSIBILITY. The Regulatory and Operating Agreement provides for ongoing joint monitoring and decision- making by the EDA and MPHR. If the two entities cannot. agree as to any action or response called for in said Agreement, or any other agreement involving the MHOP Units, the decision of the MPHA shall be controlling with respect to all matters which directly or indirectly effect either its financial obligations with respect to the MHOP Units or its relationship with HUD arising from the ACC, In all other matters, the decision of the EDA shall control. LX. RESERVE FUND. An operating. reserve will be created by the Owner from its funds. The reserve will equal three years' estimated operating subsidy for the MHOP Units, but will be allowed to grow through interest earnings and certain operating subsidy reimbursements, if any. Shortfalls, either because of the recalculation of three years' estimated operating subsidy or because of necessary withdrawal from the reserve may be made up by the MPHA or EDA, but they are not obligated to do so. ADMINISTRATIVE COSTS. The MPHA and EDA shall each bear the costs associated with their respective obligations and responsibilities described herein or otherwise related to the construction and operation of the MHOP Units. The MPHA and the EDA shall separately . agree as to reimbursements to the EDA, if any, for administering the waiting list and grievance procedure. M. TERMINATION AND/011e ASSIGNMENT A. In the event the EDA wishes to terminate this Agreement it may do -so as follows: I. Ninety (90) days!, -notice of its intention to terminate shall.be served upon the MPHA by the EDA in writing; cNTEMAi+ MAL.DOc.g . INrriAL AGREEMENT 2. The EDA shall assume and undertake all of the obligations and responsibilities of the MPHA as set forth in all written agreements relating to the Development between the MPHA, on the one hand, and the EDA, the Owner, the MHFA, HUD or any other contracting party, on the other; 3. The EDA shall become the contracting party with HUD with respect to the annual contributions contract governing the construction and operation of the Development; 4. Subject to HUD's review and approval in writing to such termination; and 5. The MPHA shall be released from all future liability arising from. and responsibility for the ongoing construction or operation of the Development. B. In the event the EDA and the Metropolitan Council or any other eligible governmental entity ("Successor Public Entity') agree that the Successor .Public Entity will undertake the responsibilities and obligations of the MPHA with respect to the Development, and provided that the Successor Public Entity fulfills the conditions described in paragraph XI.A.1. through 5., above, the MPHA shall assign to the Successor Public Entity all of the agreements to which it is a party as they may relate to the construction or operation of the Development. C. All agreements executed by the MPHA. with respect to. the Development shall provide for the. eventualities described in this paragraph M. XII, MISCELLANEOUS. A. No member,., official, or employee of the MPHA or EDA 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 this Agreement which affects his or her personal interests or the interests of any corporation, partnership, or association in which he or she is, directly or indirectly, interested... No member, official, or employee of the MPHR or EDA shall be personally liable to a party to this Agreement, or any successor in interest, in the event of any default or breach by any party or for any amount which may become due a party or. successor or on any obligations under the terms of this Agreement. B_ The parties hereto, for themselves and their successors and assigns, agree that during the term of this Agreement they will comply with all affirmative action and non-discrimination requirements of applicable federal, state or local laws or regulations. C:1C$M1P1INMAL DOC 9 WMAL AGREEMENT C. Any titles of the several parts, 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. D. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the 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, or delivered personally; and 1. in the case of the MPHR, is addressed to or delivered personally to the MPHA at 1001 North Washington Avenue, Minneapolis, MN 55441, Attention: Executive Director; and 2. in the case of the EDA, is addressed to or delivered personally to the EDA at 4401 Xylon Avenue North, New Hope, MN 55428 4898 Attention: Executive Director, or at such other address with respect to either such party as that party may, from -time to time, designate in writing and forward to the other as provided in this Section. E. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. CATEhUMNUTAL.DOC 10: INUFAL AGRLENER r IN WITl\ESS WHEREOF, the MPHA has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the EDA has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS By Z. Cornell L. Moore Its Chairman By Cora McCorvey Its Executive Director STATE OF MINNESOTA } ss. CITY OF HENNEPIN } On this �Aay of ; 2002, before me, a notary public within and for Hennepin City, personally ap ared Cornell L. Moore and Cora McCorvey, the Chairman and Executive Director, respectively, of the Minneapolis Public Housing Authority in and for the City of Minneapolis, a public body corporate and politic under the laws of the State of Minnesota (the "MPHR"), named in the foregoing instrument and acknowledged said instrument on behalf of the MPHR. i otary Public • SUSAN E. SEES N DTARY PUBIC -MINNESOTA way COmmisslM Expires Jan 33, 2405 e: :.lth��r�„�M�MAh,W1A44NV�.\:sir.., ., 1 wit WADCARLSONISCATTERED SITESVHOMASS LAKEIWITIAL.DOC 1 INITIAL AGREEMENT STATE OF MINNESOTA ) ) ss. COUNTY OF Hennepin On this 13 Hennepin ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE i By W. Peter Enck Its President By Daniel J. Donahue Its Executive Director _ day of December , 2002, County, personally appeared Daniel J. Donahue , the President before me, a notary public within and for W. Peter Enck and and Executive Director respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic under the laws of the State of Minnesota (the "EDA"), named in the foregoing instrument and acknowledged said instrument on behalf of the EDA. 2L� Notary Public ,... VALERIE J. LEONE NOTARY PUBLIC -MINNESOTA My Commission Expires Jan. 31. 2005 C:IwTNDows\TEMPVNniAL.Doc 2 n4nIAL AGREEMENT EXHIBIT A Waiting List Certification We hereby certify that the waiting list of the Economic Development Authority in and for the City of New Hope for the Metropolitan Housing Opportunity Program at the Bass Lake Apartments Development in New Hope, Minnesota will conform to a Consent Decree in settlement of HoIlman et al. v. Cisneros et al., U.S.D.C. (Minn. Dist., 4th Div.) Civil No. 4-92- 712 and 24 CFR Part 5, Part 8, 913, 960 and 966 and applicable Fair Housing and Equal Opportunity laws and regulations. Dated: December 9 .2002 STATE OF MINNESOTA ) ) ss. COUNTY OF Hennepin On this 13 day of December Hennepin County Daniel J. Donahue ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE W�_By W. Peter Enck Its President B Daniel J. Donahue Its Executive Director 2002, before me, a notary public within and for personally appeared W. Peter Enck and the President and Executive Director respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic under the laws of the State of Minnesota (the "EDA"), named in the foregoing instrument and acknowledged said instrument on behalf of the EDA. a VALERIE J, LEONE 41a-4• NOTARY PUBLIC -MINNESOTA '.° My Commission Expires Jan. 31, 2005 C:IWINDOW SITEMPIMnAL.DOC Notary Public A-1 INITIAL AGREEMENT MPHA/NEW HOPE, EDA BASS LAKE, TOWNHOMES EXECUTION COPY 05/12/2003 HOUSING DEVELOPMENT AGREEMENT By and Between THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS and BASS LAKE APARTMENTS LLC and THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE This document was drafted by: HOLMES & ASSOCIATES, LTD. Two Carlson Parkway, Suite 155 Minneapolis, Minnesota 55447 (612)249-0888 (612) 249-0777 (fax) F:IMNN ] 251035000110DEVAORBOC HOUSING DEVELOPMENT AGREEMENT TABLE OF CONTENTS PARTIES.................................................................................................................................1 RECITALS....................................................................................................... ARTICLE I Definitions Section1.1. Definitions............................................................................................................... 2 ARTICLE H Representations and Warranties Section 2.1. General Representations........................................................................ ..... 5 Section 2.2. Representations and Warranties of the MPHA....................................................... 5 Section 2.3. Representations and Warranties of the EDA .......................................................... 5 Section 2.4. Representations and Warranties by the Owner .............:.......................................... 5 ARTICLE III The Development Section3.1. Description...............................................................................................................8 Section3.2. Construction............................................................................................................ 8 Section 3.3. Construction Plans.................................................................................................. 8 Section 3.4. Commencement and Completion of Construction.................................................. 9 Section 3.5. Certificate of Completion...................................................................................... 10 ARTICLE IV The Public Housine Units Section4.1. Described.............................................................................................................. 11 Section 4.2. Interchangeable Units............................................................................................ 11 ARTICLE V Public Assistance Section 5.1. Funds Description................................................................................................. 12 Section 5.2. Development Funds.............................................................................................. 12 F:1MNN125W351D0CS\I0DEVAGR.D0C 1 HOUSING DEVELOPMENT AGREEMENT Section 5.3. Operating Subsidy ............................................................................... 12 Section 5.4. Payments in Lieu of Taxes.................................................................................... 13 Section 5.5. Payment Limitations............................................................................................. 13 ARTICLE VI Additional Regulatory Requirements Section 6.1. Additional Regulatory Requirements.................................................................... 14 ARTICLE VII Mortgage Financing Section 7.1. Mortgage Financing and/or Equity....................................................................... 16 Section 7.2. Authorities' Option to Cure Default on Mortgage ................................................. 16 ARTICLE VIII Insurance Section8.1. Insurance............................................................................................................... 17 Section 8.2. Damage or Destruction........................................................................................ 18 ARTICLE IX Encumbrances: Sale; Indemnification Section 9.1. Encumbrances .......... Section 9.2. Sale ........................... Section 9.3. Indemnification ........ ................ 20 ................20 ................ 20 �,N ............................................. 22 ............................................. 22 ............................................. 22 F:IMNN12514351DOCS110DEVAGR.DOC it HOUSING DEVELOPMENT AGREEMENT ARTICLE X Events of Default Section 10.1. Event of Default Defined .................................. Section 10.2. Remedies Upon Default .................................... Section 10.3. No Remedy Exclusive... .................................... Section 10.4. No Additional Waiver Implied by One Waiver ................ 20 ................20 ................ 20 �,N ............................................. 22 ............................................. 22 ............................................. 22 F:IMNN12514351DOCS110DEVAGR.DOC it HOUSING DEVELOPMENT AGREEMENT ARTICLE XI Additional Provisions Section 11.1. Duration of Agreement...................................................... Section 11.2. Assignment.......................................................................o. Section 11.3. Recording of Agreement .......................... Section11.4. Amendment........................................................................ Section 11.5. Authorities.......................................................................... Section 11.6. Conflict of Interests; MPHA and EDA Representatives Not Individually Liable ...................................................... Section11.7. No Merger.......................................................................... Section 11.8. Notices and Demands............................................:.....I...... Section 11.9. Counterparts..........................................................6............ Section 11.10. Lary Governing.................................................................... Section 11.11. Severability........................................................................ TESTIMONrUM SIGNATURES EXHIBIT A Legal Description EXHIBIT B Declaration of Restrictive Covenants EXHIBIT C Certificate of Completion EXHIBIT D Title Insurance Commitment EXHIBIT E Davis -Bacon Wage Rate ................................. 23 ................................. 23 ................................. 23 ................................. 23 ................................. 23 .................................. 23 .................................. 24 .................................. 24 .................................. 24 .................................. 24 .................................. 25 F.\MNN125\035\DOCS\10DEVAGR.DOC ill HOUSING DEVELOPMENT AGREEMENT k HOUSING DEVELOPMENT AGREEMENT THIS AGREEMENT, made this 13th day of May, 2003 by, between, and among the MINNEAPOLIS PUBLIC HOUSP G AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS, a public body corporate and politic under the laws of the State of Minnesota (hereinafter referred to as the "MPHA"), BASS. LAKE APARTMENTS LLC, a Minnesota limited liability company (hereinafter referred to as the "Owner"), and the ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE, a public body corporate and politic under the laws of the State of Minnesota (hereinafter referred to as the "EDA"). WITNESSETH: WHEREAS, the parties to this Agreement have participated in negotiations concerning an 11 -unit multi -family housing facility (the "Development") to be rehabilitated and constructed in the City of New Hope, Minnesota; and WHEREAS, the MPHA and the United States Department of Housing and Urban Development ("HUD") are parties to a Mixed -Finance Amendment to Consolidated Annual Contributions Contract dated May 13, 2003 (the "ACC Amendment") pursuant to which the MPHA has been granted funding for Public Housing Units within Mixed -Finance Developments throughout the Minneapolis -St. Paul metropolitan area; and WHEREAS, the MPHR and the EDA have entered into that certain. Initial Agreement dated December 18, 2002, for the purpose of seeking the inclusion of Public Housing Units within the Development; and WHEREAS, the parties to this Agreement have proposed to include four (4) Public Housing Units within the Development and to fund the development of the four (4) Public Housing Units in accordance with the terms and conditions of this Agreement. WHEREAS, the MPHA, EDA and the Owner will enter into a Regulatory and Operating Agreement (the "Regulatory Agreement") providing for the maintenance and operation of the Public Housing Units and the payment of operating subsidy by the MPHA. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: F:\MNN125\035\D0C%I0DEVAGR.DOC I HOUSING DFVHLOPMENT AGREEMENT ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means the United States Housing Act of 1937, as amended. "Authorities" means the MPHA and the EDA collectively. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "ACC" means the Annual Contributions Contract between the MPHA and HUD. "ACC Amendment" means the Mixed -Finance Amendment to Consolidated Annual Contributions Contract between the MPHA and HUD which define the terms of Mixed Finance Developments. "Certified Costs" means the Owner's cost of rehabilitating and constructing four (4). Public Housing Units, which shall equal (i) the sum: of all site acquisition, relocation, demolition, construction and equipment, on-site utilities, non -dwelling facilities, - construction period insurance premiums and other costs necessary to develop the+Development, (ii) divided by 17 (the number of bedrooms in the Development), (iii) multiplied.by 8 (number of Public Housing Unit bedrooms). "City" means the City of New Hope, Minnesota. "Closing" means delivery of the Development Funds to. the. Owner which shall occur upon the closing of the Mortgage and submission of evidentiary documents to MPHA and HUD. "Construction Plans" means the Construction Plans submitted in connection with Article 111 of this Agreement. "Cooperation Agreement" means the agreement between the MPHA, the EDA, and the City exempting the Public Housing Units from property taxes and providing for payments in lieu of taxes (PILOT). "County" means the County of Hennepin, Minnesota. "Development" means the 11 -unit multi -family housing facility to be rehabilitated and constructed upon the Development Site, which shall contain four (4) Public Housing Units. F:\MNN12510351DOCS\10DEVAGR.DOC 2 HOUSING DEVELOPMENT AGREEMENT "Development Cost Budget" means the line item budget approved by the MPHA and HUD for the rehabilitation, construction and development of the Public Housing Units. "Development Funds" means funds derived by the MPHA from HUD and to be paid to the Owner, for Certified Costs of four (4) Public Housing Units within the Development. "Development Site" means the property legally described in Exhibit A to this Agreement upon which the Development will be constructed. "BDA" means the Economic Development Authority in and for the City of New Hope. "Event of Default" means an action by the Parties as provided in Article X of this Agreement. "HUD" means the United States Department of Housing and Urban Development. "Initial Operating Deficit Account" means an account maintained by the MPHA during the Initial Operating Period into which all rental income from the Public Housing Units is deposited and from which expenses of the Public Housing Units are paid. "Initial Operating Period" or "IOP" means the period between DOFA and EIOP and is the period during which operating costs of the Public Housing Units are charged to .the development or capital budget, after which such costs are paid from Operating Subsidy. "Management Agreement" means the agreement between the Owner, the EDA, the. MPHA and Project for Pride in Living, Inc., or any approved successor management company, for the management of the Development, including the Public Housing Units. "Mortgage" means that certain first mortgage made by the Owner, as mortgagor, and ..Franklin National Bank, as Mortgagee, or any successor mortgage which is secured, in.whole or -in part, by the Development Site and which is a permitted encumbrance pursuant to Section 9.1. "MPHR" means the Minneapolis Public Housing Authority in and for the City of Minneapolis. "Mixed Finance Development" means the development of Public Housing Units through the use of both public and private financing in accordance with HUD regulations and the ACC Amendment. "Net Proceeds" means any proceeds paid by an insurer to Owner or the Authorities under a policy or policies of insurance required to be provided and maintained by the Owner pursuant to Article VIII and remaining after deducting all expenses (including fees and disbursements of counsel) incurred in the collection of such proceeds. F:IMNN12510351DOCS110DEVAGR.DOC J HOUSING DEVELOPMENT AGREEMENT "Operating Subsidy" means funds derived by the MPHA from HUD to be paid to the Owner to reimburse the Owner for all or a part of the difference between the cost of operating and income derived from the Public Housing Units. "Owner" means Bass Lake Apartments LLC, a Minnesota limited liability company having its principal office at 1925 Chicago Avenue South, Minneapolis, Minnesota. 55404, Attention: Barbara McCormick. "Parties" mean the MPHA, the EDA, and the Owner collectively. "Public Assistance" means the total financial assistance paid to the Owner by the MPHA in accordance with Article V of this Agreement for the purpose of funding the development and operation of the Public Housing Units. "Public Housing Units" means the four (4) residential units within the Development that will be reserved for low-income public housing pursuant to this Agreement and the Regulatory Agreement and will be eligible to receive both the Public Assistance under this Agreement and the Operating Subsidy under the Regulatory Agreement. "Regulatory Agreement" means the agreement by, between, and among the Parties setting forth the rights and obligations of each with respect to the day-to-day operation of the Public Housing Units and the operating subsidy payable by the MPHA in connection therewith. "Restrictive Covenant means the Declaration of Restrictive Covenants attached as Exhibit B to this Agreement which obligates the Owner to operate and: maintain the Public Housing Units in accordance with the Act, the ACC, the ACC Amendment and all federal, state and local laws and regulations. "State" means the State of Minnesota. "Unavoidable. Delays" means delay in the performance of obligations hereunder due to acts of God, acts of the public enemy, acts of the federal government, acts of the other party, fire, floods, epidemics, quarantine restrictions, strikes, freight embargoes, unusually severe weather or delays of subcontractors due to such causes or any other cause beyond the reasonable control of a Party- F:IMNN12510355DOCS110DEVAGR.DOC 4 HOUSING DEVELOPMENT AGREEMENT ARTICLE II Representations and Warranties Section '2.1. General Representations. The Parties to this Agreement acknowledge and understand -that the purpose of this Agreement is to provide for the development of the Public Housing Units within the Development in accordance with the terms hereof and the ACC Amendment and all federal and state laws and regulations. Section 2.2. Representations and Warranties of the MPHA. The MPHA represents and warrants the following: (a) The MPHA is a public body corporate and politic duly organized and existing under the laws of the State. (b) The MPHA is a party to the ACC Amendment which grants HUD funding to the MPHA for the development and operation of Public Housing Units in Mixed Finance Developments. (c) The MPHA shall provide Public Assistance to the Owner in accordance with the provisions of this Agreement and the ACC Amendment. (d) This Agreement constitutes a valid and binding obligation upon the MPHA and is enforceableaccording to its terms. Section 2.3. Representations and Warranties of the EDA. The EDA represents and warrants the following: (a) The EDA is a public body corporate and politic duly organized and existing under the laws of the State. (b) This Agreement constitutes a valid and binding obligation upon the EDA and is enforceable according to its terms. Section 2.4. Representations and Warranties by the Owner. The Owner represents and warrants the following: (a) The Owner is a Minnesota limited liability company duly organized and in good standing under the laws of the State, is not in violation of any provisions of its Articles of Organization or Member Control Agreement or, to the best of its knowledge, the laws of the State or federal government, and has all necessary power and authority to enter into this Agreement and to carry out its obligations hereunder. F:IMNNM%0351DOCS110DEVAGR.D0C 5 HOUSING DEVELOPMENT AGREEMENT (b) The Owner will construct, or cause to be constructed, the Development in accordance with the terms of this Agreement and all local, State and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations), as contemplated in Construction Plans approved by the Authorities. (c) The Owner has received no notice or communication from any local, State or federal official that the activities of the Owner, the MPHA, or the EDA with respect to the Development may be or will be in violation of any environmental law or regulation. The Owner is aware of no facts 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 Policy Act or the Minnesota Environmental Rights Act with respect to the Development Site. (d) The Owner will use all reasonable efforts to obtain, in a timely manner, all required permits, licenses and approvals, and 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 Development and the Public Housing Units may be lawfully constructed. (e) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby; nor the fulfillment of or compliance with the. terms and conditions of this Agreement is prevented, limited by' or conflicts with or results in a material breach of, the terms, conditions or provisions :of any restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Owner is now a party or by which it is bound, or constitutes a default under any of the foregoing. (f) The Owner will cooperate with the Authorities with respect to any .litigation commenced with respect to this Agreement or the Development. (g) The Owner has full authority and financial capacity to execute and perform this Agreement to completion. (h) The Owner will comply with the requirements set forth in the ACC Amendment as they relate to the development of the Public Housing Units and the eligibility and payment of Public Assistance to the Owner in connection therewith. (i) The Development constitutes a permitted use under the zoning ordinances of the City. F:IMNN12510351DOCS110DEVAGR.DOC 6 HOUSING DEVELOPMENT AGREEMENT (j) Upon execution of this Agreement, the Owner will execute the Restrictive Covenant and the Regulatory Agreement. (k) In the event that there occurs an Event of Default by the Owner. under the terms of this Agreement and the MPHA and/or the EDA incurs legal fees or other costs or expenses in connection with the enforcement of any term or provision of this Agreement or the recovery of any damages as a result of the Event of Default, the Owner agrees that it will, upon demand by the MPHA and/or the EDA, pay the amount of such costs and expenses, including reasonable attorneys' fees. (1) The Owner possesses or will possess fee simple title to the Development Site, free and clear of any encumbrances except for the encumbrances set forth in Section 9.1 hereof. F:IMNN12M0351DOCSII0DEVAGR.D0C 7 HOUSING DEVELOPMENT AGREEMENT ARTICLE III The Development Section 3.1. Description. The Development consists of an 11 -unit multifamily, rental, housing project for families to be constructed upon the Development. Site located on Bass Lake Road in the City of New Hope, Minnesota. Section 3.2. Construction. The Owner agrees that it will construct, or cause to be constructed, the Development on the Development Site in accordance with the approved Construction Plans and at all times prior to the termination of the ACC Amendment will operate and maintain, preserve and keep the Development or cause the Development to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. Section 3.3. Construction Plans. (a) The Development and all of the units therein shall comply with the design and construction standards for public housing units set forth in 24 CFR 941.203. (b) The Owner shall submit Construction Plans to the Authorities for the proposed Development within thirty (30) days of the Agreement Date. The Construction Plans shall provide for the construction of the Development and shall be in conformity with this Agreement and all applicable State andlocal laws and regulations. The Authorities shall approve the Construction Plans in writing if, in the reasonable discretion of the Authorities: (i) the Construction Plans conform to the terms and conditions of this Agreement; (ii) the Construction Plans conform to all applicable federal, State and local law, ordinances, rules and regulations, (iii) the Construction Plans are adequate to provide for the construction of the Development and (iv) the Construction Plans shall comply with Section 3.3 hereof. Such Construction Plans shall, in any event, be deemed approved unless rejected in writing by the Authorities, in whole or in part, within twenty (20) days after their receipt by the Authorities. Any rejection shall set forth in detail the reasons therefor, and shall be made within twenty (20) days after the receipt of the Construction Plans by the Authorities. If the Authorities reject the Construction Plans in whole or in part, the Owner may submit new or corrected Construction Plans within thirty (30) days after written notification to the Owner 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 Authorities or until this Agreement has been terminated pursuant to the terms hereof. Approval by the Authorities shall not be unreasonably withheld. Said approval shall constitute a conclusive determination that the Construction Plans (and the Development, if constructed in F:\MNN125\035\DOCSX10DEVAGR,DOC 8 HOUSING DEVELOPMENT AGREEMENT accordance with said plans) comply with the provisions of this Agreement relating thereto. (c) The Owner shall submit to the Authorities for their approval any substantial changes of single items over $5,000 in the Construction Plans. The Authorities shall approve changes in the Construction Plans in writing if, in the reasonable discretion of. the Authorities: (a) the changed Construction Plans conform to the terms and conditions of this Agreement; (b) the changed Construction Plans conform to all applicable federal, State and local law, ordinances, rules and regulations; (c) the changed Construction Plans are adequate to provide for the construction of the Development; (d) the changed Construction Plans comply with Section 3.3. hereof; (e) the changed Construction Plans do not provide for expenditures in excess of the funds available to the Owner for the construction of the Development; and (f) no Event of Default has occurred. No approval by the Authorities of changes to the Construction Plans shall relieve the Owner of the obligation to comply with the terms of this Agreement, applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Development. Such changed Construction Plans shall, in any event, be deemed approved unless rejected in writing by the Authorities, in whole or in part within ten (10) days of receipt. Any rejection shall set forth in detail the :reasons therefore. Approval by the Authorities shall not be unreasonably withheld. Said approval shall constitute a conclusive determination that the changed Construction PIans (and the Development, if constructed in accordance with said plans) comply with the provisions of this Agreement relating thereto. Section 3.4. Commencement and Completion of Construction. (a) Subject to Unavoidable Delays, the Owner shall complete the construction of the Development on or before December 31, 2003. All work with respect to the Development to be constructed or provided by the Owner on the Development Site shall be in conformity with the Construction Plans as :submitted .by the Owner and approved by the Authorities. During the construction of the. Development, the Owner shall make available to the Authorities such inspection opportunities and project information, including cost certifications, as they. may from time to time request. (b) The Owner agrees for itself, its successors and assigns, and every successor in interest to the Development Site, or any part thereof, that the Owner, and such successors and assigns, shall promptly begin and diligently prosecute to completion the development of the Development Site through the construction of the Development thereon, and that such construction shall in any event be commenced and completed within the period specified in this Section 3.4, subject to Unavoidable Delays. Until construction of the Development has been completed, the Owner shall make reports, in such detail and at such times as may F:1MNN12510351D0CS1l0DEVAGR.DOC 9 HOUSING DEVELOPMENT AGREEMENT reasonably be requested by the Authorities as to the actual progress of the Owner with respect to such construction. (c) The Owner agrees to notify the MPHA in writing (a) when the Public Housing Units become substantially complete and available for occupancy, and (b) when 95% of the Public Housing Units first become occupied.. For purposes of this subclause "substantially complete" shall mean upon the later of (a) the issuance of the Certificate of Completion by the Authorities, or (b) the issuance of a certificate of occupancy by the City. During the IOP, operating expenses for the Public Housing Units will be paid by the MPHA from the Initial Operating Deficit Account -to the extent contained as a line item of the Development Cost Budget. The Owner will submit all rental income from the Public :Housing Units to the MPHA for deposit into the Initial Operating Deficit Account. Section 3.5. Certificate of Completion. (a) It is the intention of the Authorities to rely upon the inspections, punch lists, cost certifications and other lender directives of the Mortgagee throughout the construction and rehabilitation phase. The Owner shall forward to the Authorities, or cause the Mortgagee to forward to the Authorities, copies of all written communications to the Owner regarding these matters. Promptly after substantial completion of the Development in accordance with those provisions of the Agreement relating solely to the obligations of the Owner to construct the Development (including the dates for. beginning and completion ,thereof), the Authorities will furnish the Owner with a Certificate of Completion in the form attached hereto as Exhibit C so certifying. Such. certification by the Authorities shall be a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement with respect to. the obligations of the Owner, and its successors and assigns, to construct the Development and the dates for the beginning and completion thereof. Such . certification and such determination shall not constitute evidence. ;of . compliance with ongoing Obligations under this Agreement or satisfaction .of any obligation of the Owner to any Holder of a Mortgage, or any insurer of a Mortgage, securing money loaned to finance the Development, or any part thereof. (b) If the Authorities shall refuse or fail to provide any certification in accordance with the provisions of this Section 3.5, the Authorities shall, within thirty (30) days after written request by the Owner, provide the Owner with a written statement, indicating in adequate detail in what respects the Owner has failed to complete the Development in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts will be necessary, in the opinion of the Authorities, for the Owner to take or perform in order to obtain such certification. F:\MNN125N035\DOCS%IGDEVAGR.DOC 10 HOUSING DEVELOPMENT AGREEMENT ARTICLE IV The Public Housing Units Section 4.1. Described. Upon completion of the. Development, and for the term of the ACC, the Owner shall set aside four (4) Public Housing Units within the Development for the term of the ACC Amendment. All four (4) Public Housing Units will be two-bedroom units. Section 4.2. Interchangeable Units. Any unit within the Development shall be eligible to constitute a Public Housing Unit at any given time, at the Owner's discretion, provided: (a) The Public Housing Units to be reserved within the Development shall consist of four (4) two-bedroom units; (b) The Public Housing Units shall be comparable to the non -Public Housing Units with respect to size, location, internal and external appearance and amenities; and (c) The two-bedroom units being utilized as the Public Housing Units shall float throughout the Development. F;1MNN12510351DOCS110DEVAGR.DOC 11 HOUSING DEVELOPMENT AGREEMENT ARTICLE V Public Assistance Section 5.1. Funds Description. The funds payable to the Owner with respect to the development and operation of the four (4) Public Housing Units consists of the following components: (a) The lesser of (i) the Certified Costs or (ii) $469,000; (b) Operating subsidy in accordance with the Regulatory Agreement. Section 5.2. Development Funds. (a) Payment. The Development Funds described in Section 5.1(a) of this Agreement shall be disbursed pursuant to the following terms: (i) The MPHA shall pay the amount set forth in Section 5.1(a) to the Owner during construction pursuant to a Disbursement Agreement to be entered into at Closing, to which the MPHA, EDA and Owner are parties. (ii) The Owner shall deposit in the "Operating Subsidy Reserve" provided for in Article V of the Regulatory Agreement, an amount equal to three (3) years' estimated Operating Subsidy, which shall be payable in accordance therewith. (iii) The Development Funds paid to the Owner pursuant to this Article V shall be used only for eligible costs actually incurred by the Owner with respect to the Public Housing Units as provided in the ACC.Amendment. (iv) The MPHA shall segregate and maintain an Initial Operating Deficit Account to be funded from the Development Budget and utilized during the Initial Operating Period for the payment of Public Housing Unit operating expenses. (b) Payment Conditions. Payment of Development Funds as provided in this Article V is conditioned upon each of the following: (i) The approval by HUD of all evidentiary materials required to be provided under the ACC Amendment, including this Agreement. F.\MNN12514351DOCSIIODEVAGR.DOC 12 HOUSING DEVELOPMENT AGREEMENT (ii) The satisfaction of all conditions precedent to the MPHA's authority to draw down the Public Assistance from HUD, as provided in the ACC Amendment. (iii) The Owner's compliance with the terms and conditions of this Agreement, including the regulatory requirements set forth in Article VI. No payment of Public Assistance shall be required if there exists an Event of Default. (iv) The written approval by HUD of the MPHA's proposal for the development and operation of the Public Housing Units provided for in this Agreement. (v) For final payment, the issuance of Certificate of Completion by the Authorities pursuant to Section 3.5. Section 5.3. Operating Subsidy. Simultaneously with the execution of this Agreement, the parties hereto have entered into the Regulatory Agreement. The MPHA shall pay to the Owner the Operating Subsidy in accordance with the Regulatory Agreement. Section 5.4. Payments in Lieu of Taxes. Minnesota Statutes, §.469.044 provides for the exemption of the Public Housing Units from property taxation and that payments in lieu of taxes in the amount of five percent (5%) of "shelter rents," as defined therein, be paid as though property taxes. Owner shall make the appropriate calculations and shall remit such payments in lieu of taxes at such times and in such manner as though such payments were property taxes, except the obligation to do so shall be a direct and personal obligation of.the Owner. A copy of each payment shall be mailed to the Authorities. Failure by the Owner to timely remit such payments or notify the Authorities thereof shall constitute a default hereunder. Section 5.5. Payment Limitations. (a) The payment of Public Assistance to the Owner shall not be deemed to be an.. assignment of the grant funds paid by HUD to the MPHA, and the Owner shall not succeed to any rights or benefits of the MPHA under the ACC Amendment or the ACC, or attain any privileges, authority, interests, or rights under the ACC Amendment or the ACC. (b) Nothing contained in the ACC Amendment, the ACC, or in any agreement or contract between the Parties, nor any act of HUD or the Parties, shall be deemed or construed to create any relationship of third -party beneficiary, principal and agent, limited or general partnership, joint venture, or any association or relationship involving HUD, except between HUD and the MPHA as provided under the ACC Amendment and the ACC. F.\MNN M\0351DOCS110DEVAGR.D0C 13 HOUSING DEVELOPMENT AGREEMENT ARTICLE VI Additional Regulatory Requirements Section 6.1. Additional Ree ulatory Requirements. The Development shall be subject. to and the Owner shall comply with the following regulatory requirements and shall provide evidence of such compliance as deemed necessary by the MPHR: (a) The labor and wage requirements set forth in the Davis -Bacon Act, 40 U.S.C. 276a et seq. The Owner shall provide such records and information as reasonably requested by the MPHA in order to confirm Owner's compliance with this clause. Attached as Exhibit E is the Davis -Bacon Wage Rate decision issued as: of execution of this Agreement. (b) All Federal statutory, regulatory, and executive order requirements applicable to public housing and the activities undertaken by the Owner under this Agreement pertaining to civil rights, equal opportunity, and nondiscrimination, as those requirements now exist, or as they may be enacted, promulgated, or amended from time to time. Such requirements include, but are not limited to, the following: (i) The Fair Housing Act, 42 U.S.C. 3601-19, and regulations issued thereunder, 24 CFR Part 100; Executive Order 11063_ (Equal Opportunity in Housing) and regulations issued thereunder, 24 CFR Part 107; the .fair housing poster regulations, 24 CFR Part 110, and advertising ..guidelines, 24 CFR Part 109. (ii) Title V1 of the Civil Rights Act of 1964, 42 U.S.C. 2000d, and regulations issued thereunder relating to nondiscrimination in housing, 24 CFR Part 1. (iii) Age Discrimination Act of 1975, 42 U.S.C. 6101-07, and regulations issued thereunder, 24 CFR Part 146. (iv) Section 504 of the Rehabilitation Act of 1973, 29 U.S_C. 794, and regulations issued thereunder, 24 Part 8; the Americans with Disabilities Act, 42 U.S.C. 12181-89, and regulations issued thereunder, 28 CFR Part 36; and the elderly and handicapped requirements of Section 209 of the Housing and Community Development Act of 1974. (v) Section 3 of the Housing and Urban Development Act of 1968, 12 U.S.C. 1701u, and its implementing regulations at 24 CFR Part 135. P:1MNN12510351DOCS114DP-VAGR.DOC 14 HOUSING DEVELOPMENT AGREEMENT (c) In the event that any other federal, state, or local government assistance is received, or can reasonably be expected to be received, by the Owner with respect to the Public Housing Units within the Development in addition to the Public Assistance under this Agreement, the Owner shall comply with the requirements of Section 102 of the Housing and Urban Development Reform Act of 1989. (d) The Uniform Relocation and Property Acquisitions Act in the event there are any "displaced persons," as that term is defined therein, as a result of the Development. (e) 24 CFR §§ 941.202, 941.203, 941.205, 941.207, 941.208, 941.209, 941.306, 941.402, 941.404, and 941.501. F:\MNN1251035WOCSki0DEVAGR.DOC 15 HOUSING DEVELOPMENT AGREEMENT ARTICLE VII Mortgage Financing Section 7.1. Mortgage Financing and/or E ui . (a) Prior to commencement of construction of the Development, the Owner shall provide to the Executive Directors of the Authorities evidence of one or more commitments for mortgage financing or equity, or both, which is sufficient for the construction of the Development. Such commitments may be provided as short term financing, long term mortgage financing, a bridge Ioan with a Iong term take- out financing commitment, or any combination of the foregoing. Such commitment or commitments for short term or long term mortgage financing shall be subject only to such conditions as are normal and customary in the mortgage banking industry. (b) The Executive Directors of the Authorities, together with such legal and financial advisors to the Authorities as the Executive Directors shall choose, shall review such information as is submitted pursuant to Section 7.1(a). If the Executive Directors of the Authorities find that the financing and/or equity is sufficiently committed and adequate in amount to provide for the construction of the Development, then the Authorities shall notify the Owner in writing of its approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be given within fifteen (15) days:. from the: date when the Authorities are provided the evidence thereof. A failure by the Authorities to respond to such evidence of financing shall be deemed to constitute an approval hereunder. If the Authorities reject the evidence of financing as inadequate, they shall do so in writing specifying the basis for the rejection. In any event, the Owner shall provide adequate evidence of financing prior to commencement of construction of the Development. Section 7.2. Authorities' Option to Cure Default on Morta e. In the event that there occurs a default under any Mortgage, the Owner shall cause the Authorities to receive copies of any notice of default received by the Owner from the holder of such Mortgage. Thereafter, the MPHA or the EDA shall have the right, but not the obligation, to cure any such default on behalf of the Owner within such cure periods as are available to the Owner under the Mortgage documents. FAMNN12510351DOCS1IODEVAGR.DOC 16 HOUSING DEVELOPMENT AGREEMENT ARTICLE VIII Insurance Section 8.1. Insurance. The Owner shall agree to provide and maintain at all times from the date of its possession of property which comprises the Development Site and thereafter throughout the period of this Agreement the insurance coverages set forth in this section, and to otherwise comply with the provisions that follow. (a) Builders' Risk. Builders' Risk Insurance, written on a Completed Value coverage form (non -reporting), in an amount equal to one hundred percent (100%) of the insurable value of the Development at the date of completion. Such coverage shall become effective concurrent with the beginning of the process of construction, and shall continue until replaced by the permanent all risk Property Insurance described below. Coverage shall be provided on an "all risk" basis. (b) Workers' Compensation. Workers' Compensation insurance in compliance with all applicable statutes. Such policy shall include Employer's Liability coverage in at least such amounts) as are customarily provided in workers' compensation policies issued in Minnesota. The Owner shall further agree to require all contractors and subcontractors involved in the project to maintain Workers' Compensation insurance in compliance with all applicable statutes, and to monitor (by requirements for and review of Certificates of . Insurance or by other reasonable means) the compliance of such contractors and subcontractors with such Workers' Compensation insurance requirements. (c) General Liability. Occurrence -Based Commercial General Liability insurance, providing coverage on an "occurrence", rather than on a "claims made" basis, which policy shall include coverage for the Completed Operations Hazard, and which shall also include a Broad Form General Liability Endorsement GL 0404 (Insurance Services Office form designation), or an equivalent form (or forms), so long as such equivalent form (or forms) affords coverage which is in all material respects at least as broad. The Owner shall agree to maintain total liability policy limits of at least $1,000,000, applying to liability for Bodily Injury, Personal Injury, and Property Damage, which total limits may be satisfied by the limits afforded under its Occurrence -Based Commercial General Liability Policy (which Policy is to include the Broad Foran Endorsement coverage specified above), or by such Policy in combination with the limits afforded by an Umbrella Liability Policy (or policies); provided, however, that the coverage afforded under any such Umbrella Liability Policy shall be at least as broad as that afforded by the underlying Occurrence -Based Commercial General Liability Policy (including Broad Form coverage). RVYINN1251O351DOCS1IODEVAGR.DOC 17 HOUSING DEVELOPMENT AGREEMENT Such Occurrence -Based Commercial General Liability Policy and Umbrella Liability Policy (or policies) may provide aggregate limits for some or all of the coverages afforded thereunder, so long as such aggregate limits have not, as of the date of the Owner's possession of the Development Site, been reduced to less than the total required limits stated above, and further, that the Umbrella Liability Policy provides coverage from the point that such aggregate limits in the underlying Occurrence -Based Commercial General Liability Policy become reduced or exhausted. An Umbrella Policy which "drops down" to respond immediately over reduced underlying limits, or in place of exhausted underlying limits, but subject to a deductible amount, shall be acceptable in this regard so long as such deductible amount does not cause the Owner's total deductible for each occurrence to exceed the amount shown in the provision immediately below. The Owner's liability insurance coverage may be subject to a deductible (or "retention" or similar provision) requiring the Owner to remain responsible for a stated amount of each covered loss. (d) Property Insurance. All risk property insurance in an amount not less than the full insurable replacement value of the Development.. The term "full insurable replacement value" shall mean the actual replacement cost of the Development (excluding foundation and excavation costs and costs of underground flues, pipes, drains, and other items customarily omitted from replacement cost valuation for insurance purposes), without deduction for depreciation. Net Proceeds of insurance shall be paid as required by the Mortgage and related documents. Section 8.2. Dama a or Destruction. (a) In the event of damage to the Development which permanently diminishes the total number of residential units: (i) thirty-six percent (36%) of the remaining units, in as near as practicable the same bedroom mix as the original Development, shall constitute Public Housing Units; and (ii) thirty-six percent (36%) of the Net Proceeds payable to the Owner shall be paid to the MPHA for the purpose of constructing or acquiring replacement Public Housing Units. (b) In the event of partial or total destruction of the Development and the application of Net Proceeds to the reconstruction thereof, the ratio of Public Housing Units to other units, including bedroom mix, shall be the same in the reconstructed development as in the original development. F:\MNN1251035MOC8\I0DEVAGR.D0C is HOUSING DEVELOPMENT AGREEMENT (c) In the event of total destruction and the application of Net Proceeds to the Mortgage rather than to reconstruction, thirty-six percent (36%) of the Net Proceeds shall be paid to the MPHA for the purpose of constructing or acquiring replacement Public Housing Units. F.\M[NN 12510351DOCSU 0DEVAGR.DOC 19 HOUSING DEVELOPMENT AGREEMENT ARTICLE IX Encumbrances; Sale; Indemnification Section 9.1. Encumbrances. The Public Housing Units shall not be encumbered, except for (a) the Mortgage, (b) the Declaration of Restrictive Covenants, (c) such security interests as shall be required by the EDA, the County, County HRA and the MPHA, as a part of any loan or grant to the Development, and (d) such title matters as are set forth in the title insurance commitment attached hereto as Exhibit D. Section 9.2. Sale. There shall be no disposition of the Public Housing Units during and for a period of ten (10) years after the end of the period in which the Public Housing Units receive operating subsidy under the Regulatory Agreement. Section 9.3. Indemnification. (a) The Owner shall release from and covenants and agrees that the Authorities and the governing body members, officers, agents, servants and employees thereof shall not be liable for and agrees to defend, indemnify and hold harmless the Authorities, and the governing body members, officers, agents, servants and employees thereof against any loss or damage to property or any damages, injury to, or death of any person occurring at or about or resulting from the acquisition of, and from any defect in the construction and operation of the Development, provided, however, that this release and indemnification shall not apply to an entity or individual named in this paragraph if the loss, damage, injury or death was caused by such entity or individual. (b) Except for any misrepresentation or breach of any covenant hereunder or any willful or wanton misconduct or negligence of the following named parties, the Owner agrees to protect and defend the Authorities and the governing body members, officers, agents, servants and employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Development. (c) The Authorities and the governing body members, officers, agents, servants and employees thereof shall not be liable for any damage or injury to the persons or property of the Owner or its officers, agents, servants or employees or any other person who may be on or about the Development, due to any act of negligence of any person or entity other than the Authorities and the governing body members, officers, agents, servants and employees thereof. F;IMNNI2510351D0CS110DEVAGR.DOC 20 HOUSING DEVELOPMENT AGREEMENT (d) All covenants, stipulations, promises, agreements and obligations of the Authorities contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authorities and not of any governing body member, officer, agent, servant or employee of the Authorities in the individual capacity thereof. (e) As a condition of the indemnification covenant, the Owner shall have the right to defend any claim or suit for any loss or damage to property or any damages, injury to, or death of any person occurring at or about or resulting from the acquisition of, from any defect in the construction and operation of the Development, provided, however, that this right to defend shall not apply to an entity or individual named in Section 9.3(a), if the loss, damage, injury or death was caused by such entity or individual. F;1MNNM%0351DOCS110DEVAGR.DOC 21 HOUSING DEVELOPMENT AGREEMENT ARTICLE X Events of Default Section 10.1. Event of Default Defined. Event of Default shall mean any failure by any party to this Agreement to observe or perform any covenant, condition, obligation or agreement to be observed or performed on its part under this Agreement or according to any governing law, regulation, or other agreement referenced herein. Section 10.2. Remedies Upon Default. (a) Upon the occurrence of an Event of Default, the non -defaulting party shall notify the defaulting party of. (i) the nature of the default; (ii) the actions required to cure the default; and (iii) the time within which the defaulting party shall respond with a showing that all required actions to cure the default have been taken. (b) If the defaulting party fails to respond or take corrective action to the satisfaction of the non -defaulting party within thirty (30) days of receipt of such notice, the non -defaulting party shall have the right to exercise any remedy available to it by reason of the default, if any, including legal and equitable remedies available in any court having proper jurisdiction. The MPHA and EDA shall have the right to exercise any remedies available under the ACC Amendment and/or the ACC. Section 10.3. No Remedy Exclusive. No remedy conferred in this Article X is intended to be exclusive of any other available remedy or remedies. Each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or hereafter existing at law or in equity. No delay or omission to exercise any remedy accruing upon any default shall impair any such remedy or be construed to be a waiver thereof. Any such remedy may be exercised from time to time and as often as may be deemed expedient. Section WA. No Additional Waiver Implied by One Waiver. In the event any default under this Agreement shall be waived by the non -defaulting party, such waiver shall be limited to the particular default so waived and shall not be deemed to waive any other concurrent, previous, or subsequent default. FAMNN1251O351DOCSIIODEVAGR.DOC 22 HOUSING DEVELOPMENT AGREEMENT ARTICLE XI Additional Provisions Section 11.1. Duration of Agreement. This Agreement shall continue in full force and effect for the entire term of the ACC Amendment or for such shorter period as may be agreed to by the Parties in writing and consented to by HUD. Section 11.2. Assignment and Release. (a) This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Parties, provided, the Owner may not sell or assign its rights or obligations under this Agreement without the prior written consent of the MPHR, the EDA and HUD. Such consent shall not be unreasonably withheld. (b) In the event that HUD agrees to enter into an annual contributions contract directly with the EDA, which said contract includes Development Funds and/or Operating Subsidy for the Public Housing Units, simultaneously with the execution of said contract the MPHA shall be forever released from all responsibilities and obligations contained in this Agreement, without further action of the parties hereto, and this Agreement shall exist solely as an agreement between the Owner and the EDA. Section 11.3. Recording of Agreement. This Agreement and/or any other document containing the ongoing obligations of the parties described herein may be recorded by the MPHA with the County Recorder and/or Registrar of Titles for the County of Hennepin. The Parties understand and acknowledge that terms and conditions of this Agreement, or such other document containing the ongoing obligations of the parties described herein, including the requirements with respect to Public Housing Units, shall run with the land for the entire term of this Agreement as set forth in Section 11.1. Section 11.4. Amendment. This Agreement may be modified or amended only by a written instrument signed on behalf of each of the Parties. Section 11.5. Authorities. Each of the Parties warrants that it has full authority to execute this Agreement, and each individual signing this Agreement on behalf of the Parties warrants that he/she has full authority to sign on behalf of the party he/she represents and binds such party by such signature. Section 11.6. Conflict of Interests • MPHA and EDA Re resentatives Not Individuall Liable. No member, official, or employee of the MPHA or the EDA 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 this Agreement which affects his/her personal interests or F:1MNN 1251Q35\DOCS11 DDEVAGR.DOC 23 HOUSING DEVELOPMENT AGREEMENT the interests of any corporation, partnership, or association in which he/she is, directly or indirectly, interested. No member, official, or employee of the MPHA or the EDA shall be personally liable to the Owner, or any successor in interest, in the event of any default or breach by the MPHA or the EDA or for any amount which may become due to the Owner or successor or on any obligations under the terms of this Agreement. Section 11.7. No Merger. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Development Site and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 11.8. Notices and Demands. Except as otherwise expressly provided in this Agreement, any notice, demand, or other communication under this Agreement between the Parties shall be deemed given if: (i) delivered personally or by courier; (ii) telecopied with proof of transmission; or (iii) sent by overnight express delivery or registered or certified mail, postage prepaid, return receipt requested to the party at the following respective address (or at such other address with respect to each party as that party may, from time to time, designate in writing and forward to the other parties as provided in this Section): To the MPHA: Minneapolis Public Housing Authority in and for the City of Minneapolis 1001 North Washington Avenue Minneapolis, Minnesota 55401 Attention: Executive Director To the EDA: Economic Development Authority in and for the City of New Hope 4401 Xylon Avenue North New Hope, MN 55428-4898 Attention: Executive Director To the Owner: Bass Lake Apartments LLC 1925 Chicago Avenue South Minneapolis, Minnesota 55404 Attention: Project for Pride in Living, Inc. Barbara McCormick, Vice President All such notices and other communications shall be deemed to be received on the date of receipt thereof by the party to which such notice or communication is directed. Section 11.9. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. F:IMNN12510351DOCS110DEVAGR.DOC 24 HOUSING DEVELOPMENT AGREEMENT Section 11. 10. Law Governin . This Agreement will be governed and construed in accordance with the laws of the State of Minnesota. Section 11.11. Severabili . If any provision of this Agreement is declared void or otherwise unenforceable, that provision shall be deemed to have been severed from this Agreement and the remainder of this Agreement shall otherwise remain in full force and effect. F:IMNN12510351DOCSIIODEVAGR.DOC 25 ROUSING DEVELOPMENT AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS 01 B s Y Cornell L. Moore Its Chairman And by V� 14 C� Cora McCorvey Its Executive Director STATE OF MINNESOTA ) } ss COUNTY OF HENNEPIN } On thisay of April, 2003, before me, a notary public, personally appeared Cornell L. Moore and Cora McCorvey, the Chairman and Executive Director, respectively, of the Minneapolis Public Housing Authority in and for the City of Minneapolis, a public body corporate and politic under the laws of the State of Minnesota (the "MPHR"), named in the foregoing instrument and acknowledged said instrument on be#lf of the F:\NINN 12510351DOCSU ODEV AGR.DOC Publi ■ SUSAN E. SEEL tiOTARY PUBLIC -MINNESOTA Vy Commission Expires Jan, 31, 20M tr ann+ti��NV'/� fa HOUSING DEVELOPMENT AGREEMENT ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE .- _. By W. Peter Enck ` Its President And by Daniel J. Donahue Its Executive Director STATE OF MINNESOTA ) ss COUNTY OF Hennepin ) The foregoing instrument was acknowledged before me this 12th day of May, 2003, by W. Peter Enck and Daniel J. Donahue, the President and Executive Director, respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic under the laws of the State of Minnesota, on behalf of such ublic body. Notary Public O vYq VALERIE J. LEO"aE • IVOTP,;r ?U'LiC ta3ir;, =_^'A �'. My cumnisssi C:IWIND0WSITEMP110DEVAGR.D0C C-2 HOUSING DEVELOPMENT AGREEMENT BASS LAKE APARTMENTS LLC By Barbara McCormick Its President STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) On this day of May, 2003, before me, a notary public, personally appeared Barbara McCormick, the President of Bass Lake Apartments LLC, a Minnesota limited liability company, named in the foregoing instrument and acknowledged said instrument on behalf of the company. i� �` :.. •3 a A. S. -WRLES SORENSON Notary Public ' My COMMIsgen Expirs8 Jan. H, 2005 y,. C:IDOCUMENTS AND SEY MGSIBILLi1LOCAL SETT NMTEMPORARY INTERNET MEMOM25110DEVAGRI.DOC HOUS EXHIBIT A Le -gal Description The East 113 of Lot 35, lying South of the North 1138:67 feet thereof, excepting the West 30 feet and the South 33 feet thereof, Auditor's Subdivision 226, Hennepin County, Minnesota. FAMNN125W5SDOCS110DEVAGR.DOC A-1 HOUSING DEVELOPMENT AGREEMENT EXHIBIT B Declaration of Restrictive Covenants [To be supplied by the Department of Housing and Urban Development] F:', vANN125W351DOCS110DEV AGR.DOC B-1 HOUSING DEVELOPMENT AGREEMENT DECLARATION OF RESTRICTIVE COVENANTS THIS DECLARATION OF RESTRICTIVE COVENANTS (Declaration) dated as of May 11 2003, by Bass Lake Apartments LLC (Company), its successors and assigns, is given to the Minneapolis Public Housing Authority in and for the City of Minneapolis (UTHA) and to the U.S. Department of Housing and Urban Development (HUD). RECITALS WHEIR AS, the Company entered into a Housing Development Agreement and a Regulatory and Operating Agreement (the "Agreements") with the MPHA dated as of May 1-3 2003 -,and WHEREAS, pursuant to the Agreements, the Company is obligated to construct and operate an eleven (11) unit rental housing project on property described in Exhibit A hereto (the 'Property"), in which four (4) units are to be maintained and operated as public housing units as defined by the Agreements; and WHEREAS, the Company has received financial assistance provided by the MPHA for construction of the project, and will continue to receive financial assistance throughout the term of the Agreements from the MPHA to operate the public housing units; and WHEREAS, the WHA has provided financial as; and will continue to provide financial assistance received through a Mixed -Finance Amendment to Consolidated Annual Contributions Contract with the Secretary of HUD dated as of May 13-, 2003, as amended (the "ACC Amendment"); and WHEREAS, the ACC Amendment provides for annual contributions by HUD to the MPHA to assist in achieving and maintaining the lower income character of the four (4) public housing units to be located on the Property, which units are known as Project No. and as a requirement for receiving said funding, the MPHA is required to include certain restrictions in all Agreements; and WHEREAS, the Company is required through the Agreements to cause to be executed an instrument in recordable form which obligates the Company, its successors and assigns to operate and maintain the public housing units in accordance with the Agreements, the ACC and ACC Amendments as provided for in the Agreements, and all federal, state and local regulations; and WHEREAS, the Company under this Declaration intends, declares and covenants that the restrictive covenants set forth herein shall be and are covenants running with the Property for the term described herein and binding upon all subsequent owners of the Property for such term, and are not merely personal covenants of the Company; NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth and of other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company declares as follows: 1. That for the period established by the ACC, that is, forty (40) years beginning on the date of full availability of the facilities, the Company, its successors or assigns, shall maintain and operate the public housing units in accordance with the terms of the Agreements, the ACC and ACC Amendments as provided for in the Agreements, and all federal, state and local regulations. 2. That the Company shall remain seized of the title to the Property and shall refrain from transferring, conveying, assigning, leasing, mortgaging, pledging, or otherwise encumbering or permitting or suffering any transfer, conveyance, assignment, lease, mortgage, pledge or other encumbrance of the Property or any part thereof or appurtenant thereto, or any rent, revenues, income or receipts therefrom, or in connection therewith, or any of the benefits or contributions granted to it by or pursuant to the Agreements, or pursuant to the ACC through the Agreements or any interest in any of the same, or demolishing any appurtenant thereto, without the approval of the MPHA and HUD. (a) To the extent permitted by Section 9.1 of the Housing Development Agreement, the Company may encumber the Property, provided that any and all encumbrances permitted by this clause shall at all times be subject and subordinate to the terms and conditions of the Agreements and the ACC. (b) To the extent and in the manner provided by the Agreements and the ACC, the Company may (i) lease dwelling units and other spaces and facilities in the Property; (ii) convey or dedicate land for use as alleys, streets, or other public right-of-way, and grant easements for the establishment, operation and maintenance of public utilities. (c) The MPHA with the prior approval of HUD may, in its sole discretion, approve release of the project and Property from the restrictions hereby created and said release shall be effective to terminate this Declaration. Upon expiration of the period during which the Company is obligated to operate the Property in accordance with the Agreements, the: ACC, and the ACC Amendments as provided for in the Agreements, this Declaration shall terminate and shall no longer be effective. 3. The MPHA with the prior approval of HUD, acting by and through duly authorized - officials, may approve such action as may be necessary to allow the transfer, conveyance, assignment, leasing, mortgaging, or encumbering of the Property or to accomplish the acts described above. 4. This Declaration and the covenants set forth herein regulating and restricting the use and occupancy of the Property (i) shall be and are covenants running with the Property, encumbering the Property for the term of this Declaration, and binding upon the Company's successors in title and all subsequent owners of the Property, (ii) are not merely personal covenants of the Company, and (iii) shall bind the Company and its respective successors and assigns during the term of this Declaration. 5. Any and all requirements of the laws of the State to be satisfied in order for the provisions of this Declaration to constitute deed restrictions and covenants running with the land shall be deemed to be satisfied in full, and that any requirements or privileges of estate are intended to be satisfied, or in the alternate, that an equitable servitude has been created to insure that these restrictions run with the land. For the term of this Declaration, each and every contract, deed, or other instrument hereafter executed conveying the Property or portion thereof shall expressly provide that such conveyance is subject to this Declaration, provided, however, that the covenants contained herein shall survive and be effective regardless of whether such contract, deed or other instrument hereafter executed conveying the Property or portion thereof provides that such conveyance is subject to this Declaration. 5. The invalidity of any clause, part or provision of this Declaration shall not affect the validity of the remaining portions thereof. IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its duly authorized representatives, as of the day and year first above written. BASS LAKE APARTMENTS LLC a Minnesota limited liability company By Barbara McCormick, its President STATE OF MFNESOTA ) )ss. COUNTY OF P— /7c, t,7/4 The foregoing instrument was acknowledged before me this _l 3th day of May 2003 by Barbara McCormick, the President of Bass Lake Apartments LLC, a N innesota limited liability company, named in the foregoing instrument, on behalf of the Company. % & CHARLES SORENS4� Notary Public T. NWARY PUBLIC-NNNESOT& My Con. mWon Exgiroa Jan. $1, 20GS ��aAb�Nm^d'k 4l4h�- It This Document was drafted by: U.S. Department of Housing and Urban Development 920 Second Avenue South Minneapolis, MN 55402 11: TO DECLARATION OF RESTRICTIVE COVENANTS The East 113 of Lot 35, lying South of the North 1138.67 feet thereof, excepting the West 30 feet and the South 33 feet thereof, Auditor's Subdivision 226, Hennepin County, Minnesota. Abstract Property EXHIBIT C Certificate of Completion The undersigned hereby certifies that Bass Lake Apartments LLC, a Minnesota limited liability company (the "Owner") has fully and completely complied with its obligations under Article III of Housing Development Agreement by, between and among the Minneapolis Public Housing Authority in and for the City of Minneapolis, the Economic Development Authority in and for the City of New Hope and the Owner dated , 2003 with respect to construction of the "Development" (located on the real property legally described in Attachment A hereto) in accordance with the "Construction Plans" as such terms are defined therein, and the Owner is released and forever discharged from its obligations under the above -referenced Article III. MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS By - Its Chairman By , Its Executive Director STATE OF MINNESOTA ) ss COUNTY OF On this day of , 20, before me, a notary public, personally appeared and Cora McCorvey, the Chairman and Executive Director, respectively, of the Minneapolis Public Housing Authority in and for the City of Minneapolis, a public body corporate and politic under the laws of the State of Minnesota (the "MPHA"), named in the foregoing instrument and acknowledged said instrument on behalf of the MPHA. Notary Public F:IMNN12510351D0CS110DEVAGR.D0C C-1 HOUSING DEVELOPMENT AGREEMENT ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE {7 Its- 11M t 1 M STATE OF MINNESOTA ) ss COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of 20 , by _ and , the and , respectively, of the Economic Development Authority in and for the City of New Hope,, a public body corporate and politic under the laws of the State of Minnesota, on behalf of such public body. Notary Public F:1MNN12510351DOCS110DEVAGR.DOC C-2 HOUSING DEVELOPMENT AGREEMENT ATTACMIENT A Leval Description The East 1/3 of Lot 35, lying South of the North 1138.67 feet thereof, excepting the West 30 feet and the South 33 feet thereof, Auditor's Subdivision 226, Hennepin County, Minnesota. P:1MNN125W5tiD0CS114DEVAGR.D0C C-3 HOUSING DEVELOPMENT AGREEMENT EXHIBIT D Title Insurance Commitment F.-X"N1210351DOCSIIODEVAGR.DOC D-1 HOUSING DEVELOPMENT AGREEMENT May .1-3. 2003 11:29AW APPLICATION NO.: MST-ORI001414 ALTA. COl INUTMENT — 1982 Rev. SCHEDULE A A.PPLICA.TION NO.: OR1001414-C (Supplemental No. 2) 1. EFFECTIVE DATE: November 7, 2402 AT 7:00 AM 2. POLICY OR POLICIES TO 13E ISSUED: ❑ 'ALTA'RESIDENTIAL OWNERS POLICY REV 1987 Na 2092 P. 2/6 21AL'7f ct NER'S . LICY 10-17.92 $525,000.00 ti PROPOSED INSURED: Bass Lal e A attments LLC �2.l0l�� /n ��.i7`- n/f�.x�°st( {9ai1�.F d % "� •,� �,17'-�+x � 3 �� • . �'� ® 'ALTA' LOAN POLICE'' 10-17-92 5350,000.00 PROPOSED INSURED: Helmepill Cotu'Ity X'ALTA' LOAN POLICY 10-17-92 $150,000.00 PROPOSED INSURED: Hennepin County Housing and Redevelopment Authority Z'ALTA.' LOAN POLICY 10-17-92 $223,000.00 PROPOSED INSURED: ,New Mope Economic Development �iutb.ority 3. T14E ESTATE OR INTEREST IN THE LAND DESCRIBED OR REFERRED TO iN THIS COIv11V1ITMENT AND COVERED HERFIN IS A FEE SIMPLE AND TITLE THERETO IS AT THE EFFECTIVE DATE HEREOF VESTED IN: Bass Lake Apaaztments LLC, a Minnesota W-nited liability company ORDOCS OIiT AL7,.1. CONIA'GTIVlr,,N ` 1942 I:OR ALL POLIO' TYPESK 'r '� x PAGE L Ar oLD REPUBLIC as * National TT1le Insu7ghra Company Mau•13 2003 I1:29AM ° AFFLfCA•TION N=O.: HZIN-OR1001414 No -2092 P 36 4. THE LAND REFERRED TO .IN TH15 COMMITMENT NT IS DESCRIBED AS FOLLOWS: The East 1/3 of Lot 35, lying South of the North. 1.138.67 feet thereof excepting the West 30 feet and the South 33 feet thereof, Auditor's Subdivision 226, Henrnepin Coujity, Jvfjnnesota. Abstract property ORI)OCS OlZT ALTA Corv'MITMLNT 1982 FOR ALL POLICY TYPES PAGE z *- OLD REPuBLI May -13. 2003 11:29AM No 2092 P 4/6 �.. ' APPLZCATION No.: SIGN-OZt1001414 SCHEDULE. B — SECTION 1 REQUIREMENTS The following are the requirements to be complied with: Zee,-& 1- A properly executed mortgage from Bass Lake Apartments LLC to Franklin National Bark of Minneapolis. 2. A properly executed mortgage Froin Bass Lake Apartments LLC to Hemepin County. ,o&eee� 3. A, properly executed mortgage from Bass Labe Apartments LLC to Hemepin County Housing and Redevelopment Authority. 6,r 4. A properly executed mortgage from Bass Lace A.partmera.ts LLC to New Ilope Economic. Development Authority. e2� 5. A, properly executed mortgage from Bass Lake. Apartments LLC to The .Mmi lleapoiis Public Idousing Authority. 6. We have been requested to waive our Standard Exception(s) A, B, C, D wad E asid to issue various Endorsements on the Final Loam. Policy. Said exceptions can be waived and the Fiadorsement(s) given upon the following conditions: a. Staaidard Exception A. (Survey Exception). We inust be supplied with. an acceptable survey certified to ALTA standards, Old Republic National Title Izasurance Company and the proposed insureds. Upon receipt and review of said survey, the Final Loan Policy will be subject to our findings but free and clear of the General Exception A. b. Standard Exception B (Parties in Possession Excepti.onl. We must be supplied with an affidavit executed by the seller dated the day of closing which sets forth the status of any unrecorded leases, options to purchase, rights of first refusals easements, etc. The Final Loan Policy will be subject to the disclosures of said Affidavit > ut free and clear of tlae dreneral Exception 13. c. Standard Exception C (Mechanic's Lien Exception). We must be advised of the status of improvements on premises before a detertx)ination can ba made in regard to waiving said exception. d.. Standaxd Exception D (Gap in. Recording Exception). This exception can be waived at closing only if this transactioia is closed by Old Republic National Title Insurance Compally. e. Standard Exception E (Unrecorded Easements Exception). This exception can. be waived upon receipt of the items required at paragraplxs (a) atad (b) above. The Final Loan FoliCV will be subject to the disclosures in the items required in said paragraphs, but free quad clear of the General Exception E. MOCS ORT ALTA COMMMM-N '.1982 POR ALL POLICY TIV",s PAGE � (j� .� OLD REPUBLIC a(. Ndt[onsl Titia rnaiti'ancc company May.13 2003 II 29AM No.2092 P. 5/6 AX -V ICATIONNO.r HEN-OR1001414 SCHEDULE B — BE, 2 STANDARD EXCEPTIONS A Facts which would be disclosed by a comprehensive survey of the premises described herein. B Fights and claims of parties in possession. C Mechai ies', Contractors%. or Mate4za men's liens and lien claims, if ally where no notice appears of record. D Aziy change in title occurring subsequent to the effective date of this CoInmitmezlt and pzioz to the date of issuance of the Title Policy. E Easemerits, or claims of easements, not shown by die -public records. IN ADDITION TO TBE STANDARD EXCEPTIONS, CONDITIONS, STIPULATIOI`.TS AND EXCLUSIONS FROM COVERAGE CONTAINED HEREIN AND IN THE COMPANY'S USUAL FORM OF POLICY, THE LAND REP'ZFRED TO IS, AS OF TI-rE EFFECTIVE DATE HEREOF, SUBJECT TO, THE FOLLOWI iG: 1. There are no levied or pending special assessments. The date of the special assessraent search is November 12, 2002. 2. Taxes for 2002 in the amount of $6,771.15 of which $6,717.24 has been paid. (Ba$e tax amount $6.698.54.) (Tax No. 05-11.8-21-32-0004.) NOTE: Hennepin County tax records indicate property is non-hozrmestead for tees payable in the year 2002. 3. Terms and. conditions of Rent Restriction Covelialts filed No-erriber 20, 1998, as Doctunept No. 7006621. Mortgage executed by project for pride in Living Inc. in favor of Franklin National Bank of Minneapolis, dated July 31, 2002, fled August 29, 2002, as Document No. 7804197, in the original amount of $400,000.00. 5. Declaration of Cove atzs from Bass Lake Apartments LLC to Kinneapoils Public Houaiag Authority hated May 13, 2003, filed , as Doc. No. 6- Mortgage executed by Bass. Lake Apartments LLC dated April 25, 2003, filed as Doc. No. in the amount of $126,300.00 in favor of �ra.nklin National Hank of Mpl 7. Mortgage executed by Bass Lake Apartments LLC dated April _, 2003, filed as DQc. No. in the,.•amodnt of $350,000.00 in favor of Hennepin Cpunty, 8. Mortgage executed by Bass Lake Apartments LLC dated April , 2003, filed as Doc. No. in the amount of $150,000.00 in favor of Hennepin County Housing and Redevelopment Authority. 9. Mortgage executed by Bass Lake Apartments LLC dated April: 2003, filed as Doc. No. in,.the amount of $223,000.00 in favor of New Hope Economic Development Authority. ORDOU Ort? ALTA COWIUTMENT I.98; FOR ALL POLICY TYPES ?AG7-4 ( * OLID REPUBLLC 10 ' �� 1 R NAdanal TRI& immrevm Company May 13 2003 11:29AM No 2092 P• 6/6 11: Master Subordination Agreement dated , filed as Doc. No. 12. Declaration of Covenants axed Restrictions dated- filed as Doc. 'No. Old Republic National Title Insurance Company BY: Jul' Matning, Assistant Secretary EXHIBIT E Davis -Bacon Wage Rate F:1MNN12510351DOCS110DEVAGR.DOC E-1 HOUSING DEVELOPMENT AGREEMENT May 13, 2003 Memorandum To: Dean Carlson From: A J.B. Mooney Subject: Wage Determination For: Rehab/New Construction At: Bass Lake Apartments 7610 Bass Lake Road Plymouth, MN This is the Wage Determination (LRPN 02-079-265) you requested on May 12, 2003 for labor to be performed at the subject site(s). I have already provided you with General Decision Number MN020007 with 11 modification(s) and MN020062 with 3 modification(s) in addition to a copy of the Labor Standards HUD -5370, both of which must be included with your solicitation documents. The same applies to any other Davis -Bacon determination (MN 20005 or MN020061) I may have enclosed. If I have enclosed herewith a copy of the Maintenance Wage Rate Determination or the Non- routine Maintenance Wage 14ate Determination, the rates included in those forms apply to this project (i. e., Department of Labor General Decision does not then apply) and must be included u ithyour solicitation documents. Please include the above LRPN with the solicitation documents you forward to the Procurement Department, as applicable. PLEASE CALL ME AT 342-1207 PRIOR TO THE SUCCESSFUL CONTRACTOR BEGINNING WORK SO THAT I MAYATTEND THE PRE -CONSTRUCTION CONFERENCE. IF YOU DO NOT INTEND TO CONDUCT A PRE - CONSTRUCTION CONFERENCE PLEASE CALL ME TO SO ADVISE. Note: If this is a construction -related `open account' project, an Implementing Order JO) must be issued for eacb project ordered under this contract. A copy of the applicable IO containing the above LRPN must accompany your request for a Wage Determination.. The Compliance Officer will then provide you with the modification appropriate to the work listed on the IO. Rev.: 10/01 MINNEAPOLIS PUBLIC HOUSING AUTHORITY EQUAL HOUSING OPPORTUNITY- EQUAL EMPLOYMENT OPPORTUNITY WAI,') mcumem itciriQva! GENERAL DECISION MU020062 04/18/2003 MN62 Date: April 18, 2003 General Decision Number MbT020062 Superseded 'General Decision •Ivo State: Minnesota Construction Type: RESIDENTIAL• County (ies): ANOKA DAKOTA SCOTT BENTON HENNEPIN .SHERBURNE CARLTON. KOOCHICHING ST LOUIS CARVER LAKE STEARNS COOK 'RAMSEY WASHINGTON RESIDENTIAL CONSTRUCTION PROJECTS (consisting of single family }carnes and apartments up to and including.4 staries.1 Modification Number 0 1 2 3 COUN'rY(ies) : ANOKA BENTON CARLTON CARVER COOK Publication Date 09/27/2002 10/18/2002 12/06/2002 04/18/2003 DAKOTA HENNEPIN KOOCHICHING LAKE` RAMSEY ASBE0.034A- 06/01/2002 SCOTT SHERBURNE ST 'LOUIS STEARNS WASHINGTON Rates Fringes ANOKA, BENTON, CARVER,.DAKOTA, HENNEPIN, RAMSEY, SCOTT,. SHERBURNE, STEARNS & WASHINGTON COUNTIES INSULATOR/ASBESTOS WORKERS (Includes application -of all insulating materials, protective coverings, coatings & finishings to all types of mechanical systems) 29.59 12.34 ASBE0049E 06/01/2002' CARLTON, COOK, KOOCHICHING, LAKE & ST ASBESTOS WORKERS/.INSULATORS Includes application of all insulating materials, protective coverings, coatings and fiAishings..to all types Rates Fringes LOUIS COUNTIES 11th://frvvebgate.access.gpo.gov/cgi-bin/,getdoc.cgi?dbname=Davis-Bacon&docid=MN020062 .Page I of 25 4/18/03 t w xa3 lJocumem 'Keirleval BRM_N0001M 05/01/2002 Rates. Fringes BENTON AND STEARNS COUNTIES CEMENT MASONS 26.20 8.70 ------------------------------------------------------------ BRMN0001Q 06/01/2002 Rates .Fringes AN'OKA., BENTON, CARVER, 'DAKOTA, HENNEPIN, ,-KOOCHICHING, LAKE, l RAMSEY, SCOTT, SHERBURNE, ST LOUIS (Except Duluth and South of Twp line 55), STEARNS, AND WASHINGTON COUNTIES TILE LAYERS' 27.29 9.65 BRMN0001U 05/01/2002. Rates Fringes TILE FINISHERS 23.90 7.55 BRMN000"3B 05/01/2.002 Rates Fringes CARLTON, COOK, LAKE & ST. LOUIS (South of a line between -Townships ##54 &.#55, 2 miles north of .Cotton) COUNTIES: BRICKLAYERS 25-.81 10.53 BRMN0003C 06/.01/2002 Rates Fringes CARLTON, COOK, LAKE & ST. LOUIS (City of Duluth and south of Township Line 55) TILE LAYERS -21,96 9.00 BRMN0015B 05/01/2002, Rates Fringes KOOCHICHING COUNTY BRICKLAYERS 25.82 9.05 --------------------------------------------------------- BRMN0015D 05/01/2002 Rates Fringes KOOCHICHING COUNT! CEMENT MASONS 25.42 9.05 BRMN0016D .05/01/2002 Rates Fringes ST. LOUIS COUNTY (North of a line between Townships #54 & #55., 2 miles north of Cotton) BRICKLAYERS '25.11 11.20 .Page 3 of' 25 http:l/frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbDame=Davis-Bacon&docid=MN020062 4/18/03 WA.IZ� .Uccument Ketrleval CARP0361P 05/01/2002 Rates Fringes ST LOUIS' COL= (DULUTH) CARPENTERS & PILEDRIVERMEN (Site Preparation, Excavation, and Incidental Paving) 22.91 10.96 OARPu361Q, 05/0'1/2002 Rates Fringes ST LOUIS COUNTY (Remainder) CARPENTERS & PILEDRIVERMEN (Site Preparation, Excavation, and Incidental Paving) 22.51 10 9.6 CARP0361V -05/01/2001 Rates Fringes CARLTON, COOK, KOOCHI.CHING, LAKE, & ST. LOUIS COUNTIES LATHERS 20.82 9.00 ---------------------------- ---------'--=------------------------- CARP0548A 04/28/2002 Rates Fringes ANOKA, DENTON, CARVER, DAKOTA, HENNEPIN, RAMSEY, SCOTT,. SHERBURNE, STEARNS & WASHINGTON COUNTIES: ' MILLWRIGHTS 29.44 8-.18 CARPOS96A 06/01/2002 Rates Fringes ANOKA, CARVER, DAKOTA, HENNEPIN, RAMSEY, SCOTT, SHERBURNE (E. 'of Hwy #169, inclu_ Zimmerman, Big Lake & Elk River) & WASHINGTON COUNTIES: SOFT FLOOR LAYERS 25.44 - 9.-73 ----------------------------------------------------------------- CARP0606K 05/01/2002 Rates Fringes KOOCHICHING, LAKE (Northern part, including Sawbill Landing) AND ST. LOUIS (Excluding Alborn, Arnold,- Bartlett, Birch,-Brookstone, Canyon, Clinton, Culver; Duluth, Floodwood, Gowan, Island, Kelsey,.Lakewood,-Meadowlands, Munger, Palmers; Payne,Prasit, .� Shaw & Taft) COUNTIES CARPENTERS; PILEDRIVERMEN; & SOFT -FLOOR LAYERS 19.96 10.10 CMP0930A 05/01/2002 Rates Fringes BENTON, SHERBURNE (Extreme NW portion, Including St.. Cloud & extending 5 miles beyond the city limits of -St. Cloud) & STEARNS COUNTIES Page 5 of 25 http://frwebgate.access.gpo.gov/cgi-binlgetdoc.cgi?dbname=Davis-Bacon&docld=MN020062 4/18/03 WAIS Docun-zent Retrieval vacation b. 8 Paid Holidays: New Year's Day; Memorial Day; 4th of July; Labor Day; Thanksgiving Day; Day After Thanksgiving; the normal work day preceding Christmas Day; & Christmas Day ELECO242B 06%01/2002 Rates Fringes CARLTON, COOK, ITASCA (Southerly `12 Twps. incllxding Harris, Feely, Blackberry, Spang, Coodland,.Sago & Wawina), LAKE & ST. LOUIS (South part bounded on the north by the north line of Kelsey Township extended east & west) COUNTIES ELECTRICIANS 26.14 49:5% ---------------------------------------------------------------- ELECO292A 05/01/2002 Rates Fringes ANOKA (Anoka & Fridley Townships & the cities of Andover, Anoka, Columbia Heights, Coon.Rapids,.Fridley, Hilltop, Ramsey &.Spring Lake Park) CARVER,- HENNEPIN, AND SCOTT COUNTIES.; BENTON AND SHERBURNE COUNTIES (East of Hwy 25 to Hwy 10 and an imaginary ,line straight West to the Mississiippi .River) ELECTRICIANS: ,Electricians' 30.00 14.1.9 Cable Splicers 31.00 14.66 4=0292I 05/01/2002 Rates Fringes BENTON AND SHERBURNE COUNTIES.(West of Hwy 25 to Hwy 10 and an imaginary line straight West to -.the Mississiippi.-River), AND STEARNS COUNTY .ELECTRICAL_ CONTRACTS $5-00,0.00 AND OVER: Electricians .10.00 14.19 Cable Splicers 31.00 34.66 ELECTRICAL CONTRACTS UNDER $500,0.00 Electricians 27.04 13.29 Cable Splicers 28.04 13.78 * ELECO294C 02/01/2003 Rates Fringes KOOCHICHING & ST. LOUIS (North part bounded on the south by the south line of Ellsburg Township, extended east & west) COUNTIES: .ELECTRICIANS Up to & including 5-plex -under one roof 21.13 3.91+28.5% All Othei Work 26.09 45% ----------------------------------------------------------------- ELEV0009A 07/03/2002 Page 7 of 25 http:l/frwebgate.acecss.gpo-govlcgi-binlgetdoc.cgi?dbiaailxe=Davis-Bacon&doeid=NIN020062 4/18/03 WA[,S Document Retrieval Operator, up to 1 cu. yd. GROUP 7 - Air Compressor Operator 600 CFM.or over; Pump and/or -Conveyor Operator; Brakeman; Pick-up Sweeper (1 cu. yd. & over Hopper capacity); Truck Crane Oiler; & Welding Machine Operator, Fireman temporary heat. GROUP B - Mechanical Space'Heater (Temporary Heat) Oiler or Greaser; & Elevator Operator ------------------------------------------------------------ * ENGIO049H 05/01/2002 Rates Fringes POWER EQUIPMENT OPERATORS (Site preparation, Excavation & :Incidental Paving) AREA 1: GROUP 1 26.27 8.4.5 GROUP 2 25.7 8.45 GROUP 3 25.54 8.45 GROUP 4 25.42 8.45 GROUP S. 22.38 8.45 GROUP 6 21.17 8.45 AREA 2: GROUP 1 24.06 8.45 GROUP 2 23.61 .8'.45 GROUP 3 23.44 8.45 GROUP 4, 23.31 8.45 GROPU 5 20.74 8.45 GROUP 6 19.87 8.45 AREA 3. GROUP 1 21.65 8.45 GROUP 2 20.72 8.45 GROUP 3 2,0.52 ..8.45 GROUP 4 20-.41 8.45 .GROUP .'S 16..70 8.45- .45- GROUP GROUP 6 18.10 8.45 AREA DESCRIPTIONS AREA 1 (METRO): ANOKA, CARVER, COOK, DAKOTA, HENNEPIN, LAKE, RAMSEY, SCOTT, SHERBURNE (South of the northern boundary of T. 33-N& East of the Western boundary of R. 27-W), ST. LOUIS, and WASHINGTON COUNTIES AREA 2 (EASTERN): BENTON (East of the western right-of-way of U.S. Hwy #10), CARLTON, KOOCHICHING (East of a N -S line from the Canadianborder to Pelland, the western right-of-way of U.S. Hwy- a #71 from Pellarid to Big Falls & Minn. Hwy #6), SHERBURNE (Area North of the northern boundary of T. 33-N and East of the western boundary of R. 27-W) & STEARNS (East of the western right-of-way of Minn_ Hwy #15) COUNTIES. AREA 3 (WESTERN): BENTON-(Remainder), KOOCHICHING (Remainder), and STEARNS (Remainder) COUNTIES POWER EQUIPMENT OPERATOR CLASSIFICATIONS Page 9 of 25 http://frwebgate.access.gpo.gov/cgi-binlgetdoe.egi?dbnatne=Davis-Bacon&docid=MNO20062 4/18/03 WAib Docuanent Ketneval (Power Operated); Form Trench Digger (Power); Front End Loader, up to & incl. 1 cu. yd.; Grader_(Motor Patrol.); Ganite Gunall; Hydraulic Lag Splitter; Loader (Barber Greene or similar type); Payhauler or similar type; Post Hole Driving Machine/Post Hole_ Augar; Power Actuated Auger & Boring Machine; Power Actuated Jack;,Pump; Self-propelled Chip Spreader'(Flaherty'or similar); Sheep Foot Compactor with B?ade -- 200 HP &.over; Shouldering Machine (Power) Apsco or similar type incl.u, self-propelled Sand & Chip Spreader; Stump Chipper & Tree Chipper;. Tractor. "Operator,' Bulldozer, 50' HP or.less; & Tree Farmer (Machine) GROUP 6 - Challenger 75-D or 85-D when pulling Disk or Roller;. Conveyor,' Dredge Deck Hand; Fireman or Tank Car Heater; Gravel Screening Plant (Portable not Crushing or Washing); Greaser (Truck or Tractor); Leverman; Mechanic Tender; Mechanic, Space Heater (Temporary Heat); Oiler (Power Shovel, Crane,'Dragline).; Power Sweeper; Roller on Gravel Compaction; Self-propelled ,Vibrating Packer (35 HP & over).; Sheep Foot Roller; Tractor, Wheel Type (over 50. HP); & Truck Crane Oiler *CRANE OVER 1351- BOOM, EXCLUDING JIB - $ .25 PREMIUM; CRANE OVER, 2001 BOOM, EXCLUDING JIB --$ .50 PREMIUM UNDERGROUND WORK: TUNNELS, SHAFTS, ETC. - $ .25 PREMIUM UNDER AIR PRESSURE - .50 -PREMIUM HAZARDOUS WASTE PROJECTS (PPE Required): LEVEL- A - $1.25. PREMIUM r LEVEL B - $ .90 PREMIUM .LEVEL C - $ .60.PREMIUM IRON0512A 05/01/2002 Rates Fringes. ANOKA, BENTON,-CARVER, DAKOTA, HENNEPIN, RAMSEY, SCOTT_, SHERBURNE, STEARNS, -& WASHINGTON COUNTIES IRONWORKERS 29-50 11.84 ------------------------------------------------------------- 1RON0563M 05/01/2002 Rates Fringes CARLTON, COOK, KOOCHICHING, LAKE AND ST. LOUIS COUNTIES . IRONWORKERS 23.78 12.70 ----------------------------------------------------------------- LABO001OD 05/01/2002 Rates Fringes LANDSCAPE LABORERS 13.34 5.05 ---------------------------------------------------------------- LABOO132B 01/01/2000 Rates Fringes ANOKA, BENTON, CARVER, DAKOTA, HENNEPIN, RAMSEY, SCOTT, SHERBURNE, STEARNS & WASHINGTON -COUNTIES: LABORERS, Asbestos Abatement 19.16 6.62 ----------------------------------------------------------------- Page 1 I of 25 0 http://frwebgate.access.gpo.gov/cgi-biiVgetdoc.cgi?dbname=Davis-Bacon&docid=MN020062 4/18103 WAIS Document Retrieval _Page 13 of 25 Total Construction Projects Under ,$950,000: GROUP 1. 17.53 7.26 GROUP 2 18.28 7.26 GROUP 3 18.53 7.26 LABORER CLASSIFICATIONS GROUP 1--Constructioh Craft ."Laborer; Asbestos & Hazardous Waste Technician; Carpenter Tender; Chain Saw Operator; Concrete -Saw, Drill Operator; Concrete vibrator; Concrete; Damp Proofer.Below Grade; Demolition & Remodeling, -Excluding Demolition of an . entire Structural -System; Drill Runner Tender; Dump Person - Dirt, Asphalt, Concrete, Cement; Heater Tender; Hot Tar Caulker - Corker-; Hydro Blast or.Waterblaster; Joist Handler; Mason Tender; Material Handler- Power Buggy; Mortar Mixer - Cement or any other Substitute material or Composition; Pipe Handler; Pneumatic & Electric -tools, Jackhammer, Paving"Buster, Chipping Hammer, Tamper Operator, etc.; Remote Control Tamper; Signal Person; Snow Blowe-r Operator; Swing Stage'Lne Scaffold (Not including "Patent" Scaffolding); Torehperson -"Gas, Electric, - Thermal. or similar device; Flagperson GROUP 2 - Caisson Work; Mounted Wall Saw Operator; Nozzle Operator - Gunite, Cement, Sandblasting; Pipelayer; Pipe Rehab Technician (Including Cleaning, Cutting, Cameraing, etc.); Refractory Worker; Sheeting "Setter & Driver, Heavy"Building Excavation; Underground Work - Open -Ditch or Excavation_ 8' .Below Grade; & Underpinning GROUP 3- - Driller for Blasting:Purposes; Dynamite Blaster or substitute products Tovel,TR, Water., Gas, Gel; Bristar, Silent Dynamite, etc. * LABOO"563P" 05/01/2002 Rates Fringes LABORERS.(Site Preparation, Excavation &'-Incidental Paving): AREA 1. GROUP 1 22.89 6.21, GROUP 2 23.09 6.21 , GROUP 3 23.24 6.21 GROUP 4 23.34 6.21 GROUP 5 23.59 6.21 GROUP 6 24.89 6.2.1 AREA 2: GROUP 1 22.17 5.96 GROUP 2 22.37 5.96 GROUP 3 22.52 5.96 .4 GROUP 4 22.62 5.96 GROUP 5 22.87 5.96 GROUP 6 24.17 S..96 AREA 3: GROUP 1 21.62 6.51 GROUP 2 21.82 6.51. GROUP 3 21.97 6.51 GROUP 4 22.07 6.51 GROUP 5 22.32 GROUP.6 23.62 6.51 AREA 4: http://fiwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=Davis-Bacon&docid=MN020062 4/18/03 WA 16 liocument Ketrleval Paving Buster, Chipping Hammer, etc.; Remote Control Demo Machine & Related Accessories•(Electric/Hydraulic); Stone Tender/Mason Tender; & Torchperson - Gas, Electric, Thermal or Similar Device GROUP .3: Brick or Block Paving Setter; Caisson Work; Cofferdam Work GROUP 4: Cement Gun Operator (1 1/2" or Over); Driller - Air Track or; Similar;.& Nozzle Operator (Gunite, Sandblasting, Cement); Pipe Rehab.(Including Cleaning, Relining, Camera). GROUP 5: Asbestos & Hazardous -Waste Technician;Bottom person (Sewer, Water, or Gas Trench more than 8 ft below starting level of manual work); 'funnel Laborer; Tunnel Miner; Tunnel Miner Tender; Underground Laborer; & Underpinning GROUP 6: 'runnel Miner..Under Pressure LABO1091A 05/01/2002 Rates Fringes CARLTON, COOK, LAKE & ST. LOUIS (South of T 55 N) COUNTIES - LABORERS: GROUP 1 :21.13 6.06 GROUP 2 21.28 6.06 GROUP 3 21.58 6.06 GROUP 4 21.83 6.06 GROUP 5 19.23 6.06 LABORER CLASSIFICATIONS GROUP 1: General; Carpenter Tender; Concrete Laborer; Damp`' Proofer.Below.Grade; Drill Runner Tender; Dumpman .- Dirt,.' Asphalt,. Concrete, Cement.;' Heater Tender; Hot Tar,Caulker Corker; Joist Handler; Rebar; Snow Blower Operator; Signalperson; Material Handler (All types Power'Buggy); Fire Control; Asbestos Removal; & Hazardous Waste GROUP 2: Chain Saw 0-oerator; Concrete Saw, Drill Operator; Concrete Vibrator; Demolition & Wrecking, Excluding Remodeling; Gunite, Sandblasting Machine Operator; Mason Tender; Mortar Mixer - Cement or any other substitute material ar composition; Pipe Handler; Pneumatic & Electric Tools,Jackhammer, Paving Buster, Chipping Hammer, Tamper Operator, etc:; Swing. Stage Line Scaffold (not including "patent" scaffolding); Torchman - Gas, Electric, Thermal or similar device; & Hydroblast GROUP 3: Caisson Work; Nozzle Operator - Gunite, Cement, Sandblasting; Pipelayer; Refractory Worker; Sheeting Setter & Driver, Heavy Building Excavation; Underground Work - Open Ditch or Excavation 81 Below Grade; -Underpinning;. & Hod Carrier GROUP 4: Driller for Blasting Purposes; Dynamite Blasters or substitute products Tovex TR, Water, Gas, Gel, Bristar, Silent Dynamite, etc.; Asbestos Abatement Worker; & Hazardous Waste Worker GROUP 5: FLAGPEASON http://frwebgate. acce,ss.gpo.gov/cgi-bin/getdoc. cgi?dbname=Davis-Bacoi3&docid=MNO20062 Page 15 of 25 4/18/03 ¢y w Heb i.)oeument xetrievai Page 17 of 25 PAIN0061A 05/01/2002 Rates Fringes DAKOTA, RAMSEY AND WASHINGTON COUNTIES PAINTERS:'I GROUP 1 26.25 9.,38 GROUP 2 26.25 9.28 GROUP 3 19.69 9.28. GROUP 4 27.00 9.38 PAINTER CLASSIFICATIONS GROUP 1: Brush;. Paperhanger GROUP 2 Drywall Finisher GROUP 3: Drywall Sander GROUP 4: Sandblaster; Spray; Swing Stage; Boatswain Chair,; Window Jack; Safety Belt; Erected Structural Steel; ApplAcation of Epoxy Materials & Materials containing over 50% Creosote ------------------------------------------- 'i--------------==------ PAIN0106D 05/01/2001 Rates Fringes CARLTON, COOK, KOOCHICHING, LAKE'AND ST. LOUIS COUNTIES PAINTERS: Brush; Roller; & Lead Base Paint Removal &-Abatement with Basic .Hand Tools suchas Scrapers 21.23 7._73 ,Paperhanging; Spray; Steel; Taping; & Lead Base Paint Removal & Abatement with Other Than Basic Hand Tools 21.83 7.73 PAIN_010GL 05/01/200,. Rates Fringe's. CARLTON, COOK, -KOOCITTCHING, LAKE & ST. LOUTS ,COUNTIES: GLAZIERS _20.11 7.24+a r FOOTNOTE: a. 1 to 4 years' service - 1 week's paid vacation; 5 to 11 years' service - 2 weeks' paid vacation; 11 years' service or more,- 3 weeks' paid vacation -------------------------------------- --------------=------i----- PAIN0386A 05/01/2002, Rates Fringes ANOKA, CARVER, HENNEPIN, SCOTT & SHERBURNE (South and East of a line drawn between the town of Santiago in Sherburne County and the town of Clearwater in Wright County) COUNTIES PAINTERS: Brush; Roller & Paperhanger .25.50 10.13 Spzay; Steel; Sandblaster; Swing Stage & Epoxy 26.25 10.13 MN020062 1 P bttp://fTwebgate.access.gpo.gov/cgi-bin/getdoc.egi?dbiiame=Davis-Bacon&docid=NM020062 4/18/03 WA15 I)ocument Ketnevaf PLASTERERS 24.88 8.35 ---------------------------------------------------------------- PLAS0633A 05%01/2002 Rates Fringes ANOKA, CARVER,' -DAKOTA, HEI@NEPIN, RAMSEY, SCOTT; SHERBURNE.& WASHINGTON COUNTIES CEMENT MASONS 27.34 9.31 PLAS0633D 05/01/2002 Rates Fringes ANOKA, CARVER, DAKOTA, HENNEPIN, RAMSEY, SCOTT, SHERBUPNE & WASHINGTON COUNTIES; CEMENT MASONS (Site Preparation, Excavation, & Incidental Paving) 26.1 9.31 ----------------------------------------------------------------- PI�AS0633K 05/01/2002 - Rates Fringes CARLTON, COOK, LAKE .& ST.. LOUIS ' (South, of T 55N) ' COUNTIES CEMENT MASONS 22.79 9.30 ---------------------------------------------------------------- PLAS0633N 05/01/2002. Rates Fringes ST.. LOUIS COUNTY .(North of White Face River) CEMENT MASONS 18.24 8.21 PIAS0633T 05/01/2002 Rates Fringes CARLTON, COOK, LAKE & ST. LOUIS (South of T-.-#55 north) COUNTIES CEMENT MASONS (Site Preparation, Excavation & Incidental Paving) 24.93 9.30 ---------------------------------------------------------------- PLAS633OZ 05/01/2002 Rates Fringes -CARLTON, COOK, LAKE AND ST. LOUIS COUNTIES PLASTERERS 22.79 9.30 ------------------------------------------------- =-------------- PLUMO011A 05/01/2001 Rates Fringes CARLTON, COOK (A strip 20 miles inland along the shores of Lake Superior), LAKE (A strip 20 miles inland along the shores of Lake Superior) & ST. LOUIS (South of an east -west line drawn through Cotton) COUNTIES PLUMBERS, PIPEFITTERS and STEAMFITTERS 26.35 '9.15 Page 19 of'25 nttp://frwebgate,access,gpo.gov/cgi-bit►/getdoc.cgiidbnarne=Davis-Bacon&docid=NEN020062 4/18/03 WA16 L)ocument xetnevat PIPEFITTERS 31.30 10.70 ---------------------------------------------------------------- PLUM0539D 05/-01/2002 Rates Fringes ANOKA, BENTOPT, CARVER, HENNEPIN, SCOTT, SHERBURNE & STEARNS COUNTIES PIPEFITTERS & STEAMFITTERS (Residential Construction) 23.83 6.04 PLUY0539H 05/01/2002 Rates 'Fringes SHERBURNE (West of a line running North -Easterly from point of Wright Co. lies furthest North to point.of Milia Lacs that is South by West) COUNTY PIPEFITTERS 24.71 13.03 --------------------------------------------------------------- PLUM0589F. 06/01/2002 Rates Fringes' COOK -(Except a strip 20 miles inland along the shores of Lake. Superior) KOOCHICHING, LAKE (Except -a strip 20�miles-inland along the shores of Lake Superior).& ST. LOUIS (North of an East- West line drawn. through;Cotton) ,COUNTIES PIPEFITTERS, PLUMBERS, STEAMFITTERS 24.56 12.13 ROOF0096C 09/30/2002.. Rates Fringes CARLTON, COOK, LAKE & ST. LOUIS (South of Hwy 16, excluding city of Forbes) COUNTIES ROOFERS 24.20 -8.15 ROOP009GE 05/01/2002 Rates Fringes ANOKA, CARVER, DAKOTA, HENNEPIN, RAMSEY,.SCOTT & WASHINGTON COUNTIES ROOFERS 27.19 8.95+a FOOTNOTE: } a. 1 Paid Holiday: Labor Day ROOF0096I 05/01/2001 Rates - Fringes KOOCHICHING AND ST. LOUIS (Northern two-thirds) COUNTIES ROOFERS 19.05 5.45 ------------------------------------------------- ROOF0096M 09/30/2002 Page 21 of 25 w http://frwebgate.access.gpo.gov/cgi-bin/getdoe.cgi?dbnan-ie=Davis-Bacon&docid=N4NO20062 4/18/03 wpl�i llocument xetneval Page 23 of 25 GROUP 1 20.45 6.50 GROUP 2 19.90 6.50 GROUP 3 19.80 6.50 GROUP 4 19.55 6.50 AREA 4: GROUP 1 17.52 6.50 GROUP 2 '. 17.01 '6.50 GROUP.3 16.86 6.50 GROUP 4 16.86.. 6.50 AREA DESCRIPTIONS AREA I (District 1): ANOKA, CARVER, DAKOTA, HENNEPIN, RAMSEY, SCOTT, SHERBURNE & WASHINGTON COUNTIES AREA 2 (District 2): COOK, LAKE & ST. LOUIS -COUNTIES AREA 3 (District 2A): CARLTON COUNTY a AREA 4 (District 4): DENTON, KOOCHICHING & STEARNS COUNTIES TRUCK DRIVER CLASSIFICATIONS GROUP 1 - Boom; Mechanic; Off -Road, including Articulated Dump Truck; Tractor Trailer; Winch Truck GROUP 2 - Tri Axles (Including Four Axles) GROUP 3 -.Bituminous Distributor; Bituminous Distributor (One. man operation); Tandem Axles & Single Axles GROUP 4 - Bituminous Distributor Spray Operator (Rear and . Oiler); Dumpman; Pilot Car; Self-propelled Packer; Slurry Operator; Tank Truck Tender (Gas,- Oil, Road Oil &•Water) Tractor Operator ('Wheel type used for any purpose) THE FOLLOWING CLASSIFICATIONS SHALL COME UNDER THE APPROPRIATE AXLE RATE WAGE GROUP: Frame; Dry -Batch Hauler; Ready -,Mix -Concrete; Slurry; Tank (Gas, Oil, Road Oil & Water)" ------------------------------------------------------------------- TEAM0221A 06/01/2002 Rates Fringes TRUCK DRIVERS (LANDSCAPE): Single Axle & Farm Tractor .14.20 6.20 Tandem Axle 14.35 6.20 Truck -Train Combination .14.50 6.20 --------------------------------------------------------------- TEAM0346A -05/01/2002 Rates Fringes ANOKA, CARLTON, CARVER, COOK, DAKOTA, HENNEPIN, -ITASCA (East of T.H. #6), LAKE, RAMSEY, ST. LOUIS; SCOTT, SHERBURNE & WASHINGTON COUNTIES TRUCK DRIVERS: GROUP •1 22.(10 6.30 GROUP 2 21.45 6.30 L%v http://frwcbgate.access.gpo.gov/egi-bin/gctdoc.cgi?dbname=Davis-Bacon&docid=NIN0200'62 4/18/03 WAIS Document Retrieval Page 25 of 25 Regional Office for the area in which the survey was conducted because those Regional Offices have responsibility for the Davis -Bacon survey program. If the response from `this initial contact is not satisfactory, then the process described in 2.) and 3.) should be followed. , With regard to any other matter not yet ripe for the formal process described here, initial ccntact should be with the Branch of Construction Wage Determinations. Write to: Branch of Construction Wage Determinations Wage and Hour Div 'ision U. S. Department of Labor 200 Constitution'Avenue, N. W. Washington, D. -C. 20210 2.) If the answer to the question in 1.) is yes, then an interested party (,those affected -by the action) can request review and reconsideration.from the Wage aAd Hour Administrator. (See 29 CFR part 1.8 and 29 CFR Part '7). Write to-- Wage o: Wage and Hour Administrator U.S. Department of Labor 200 Constitution Avenue, N. W. Washington, D. C. 20210 The request should be accompanied by 'a full statement of -the interested partyls,position and by any information (wage payment data, project description, area practice material, etc.) that the requestor considers relevant to the issue. 3,.) If the decision of the Administrator is not favorable, an interested party may appeal. directly to the Administrative -Review Board (formerly the Wage Appeals Board -).'Write to: Administrative Review Board U. S. Department of Labor 200 Constitution Avenue,N. W. Washington, D:.C. 20210 4.) All decisions by the.Administrative Review Board are final -END OF GENERAL DECISION Y http://frwebgate.access.gpo.govlcgi-binlgetdoe.cgl?dbname=Davis-Bacon&docid=MN020062 4118/03 EXECUTION COPY 04/23/2003 REGULATORY AND OPERATING AGREEMENT BY, BETWEEN AND AMONG THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS, THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE AND BASS LAKE APARTMENTS LLC Dated: May 13, 2043 This document drafted by: HOLMES & ASSOCIATES, LTD. Two Carlson Parkway, Suite 155 Minneapolis, MN 55447 612-249-0888 (Telephone) 612-249-0777 (Facsimile) P:1MNN1251D351DOCSIIIREGOPRAG.DOC REGULATORY AND OPERATING AGREEMENT TABLE OF CONTENTS REGULATORY AND OPERATING AGREEMENT Page PREAMBLE.................................................................................................................................1 ARTICLE I Definitions Section1.1 Definitions............................................................................................................... 2 ARTICLE 11 Authority Units Section 2.1. Owner Commitment................................................................................................ 4 Section 2.2. Authority Units Described...................................................................................... 4 Section 2.3. Casualty and Condemnation................................................................................... 4 Section 2.4. Excess Insurance Proceeds...................................................................................... 4 ARTICLE 111 Operation of Authority Units Section 3.1. Legal Compliance................................................................................................... 6 Section 3.2. Administrative Flexibility....................................................................................... 6 Section3.3. Management............................................................................................................ 6 Section3.4. Waiting Lists............................................................................................................ 7 Section 3.5. Managing Agent Responsibilities.:......................................................................... 7 Section3.6. Lease Forms............................................................................................................. 7 Section 3.7. Grievance Procedures...................:::........................................................................ 7 ARTICLE IV Development Operating Subsidy Section 4.1. Further Definitions.................................................................................................. 9 Section 4.2. ............................................. Operating Budget Submittals ............................ ....... 10 Section 4.3. Payment of Operating Subsidy.............................................................................. 11 Section 4.4. Development Operating Subsidy Cap................................................................... 11 Section 4.5. Segregated Account.............................................................................................. 12 Section 4.6. Monthly Operating Reports................................................................................... 13 Section 4.7. Audited Financials and Supplemental Data.......................................................... 13 Section 4.8. Post -Year Adjustments......................................................................................... 13 Section 4.9 Vacancy Adjustment............................................................................................. 14 Section 4.10. Incidental Development Income........................................................................... 14 Section 4.11. Future Legislation.......:......................................................................................... 14 ARTICLE V Development Operating Subsidy Reserve Section 5.1. Establishment of Reserve and Accounts............................................................... 15 Section5.2. Investments..................................•........................................................................ 15 Section 5.3. Floor Level Adjustments....................................................................................... 15 F;1MNN12510351DOCSIIIREGOPRAG.DOC i REGULATORY AND OPERATING AGREEMENT Section 5.4. Voluntary Replenishment of Reserve................................................................... 15 Section 5.5. Owner Surplus Cash Contribution........................................................................ 16 Section 5.6 Utilization of Reserve........................................................................................... 16 ARTICLE VI Owner Remedies Section 6.1. Limited Owner Obligation.................................................................................... 18 Section 6.2. Relationship to Separate Agreements................................................................... 18 Section 6.3. Remedies When Vacancy..................................................................................... 18 Section 6.4. Remedies When No Vacancy.....................................................................6.......... 19 Section 6.5. MPHA Failure to Elect......................................................................................... 21 ARTICLE VII Non -Discrimination and Other Federal Requirements Section 7.1. Non -Discrimination and Other Federal Requirements ......................................... 22 ARTICLE VIII Owner Default Section8.1. Defined.................................................................................................................. 23 Section8.2. Notification........................................................................................................... 23 Section8.3. MPHA Remedies.................................................................................................. 23 ARTICLE IX Disclaimer of. Relationships Section 9.1. No Assignment of ACC .................. ........ 24 ................. ............................ .............. Section 9.2. No Third Party Beneficiary.................................................................................. 24. ARTICLE X Miscellaneous Section 10.1. Binding Obligation ............ Section 10.2. Assignment ........................ Section 10.3_ No Waiver ......................... Section 10.4_ Amendment ....................... Section 10.5. Notice .... ............................. Section 10.6. Law Governing .................. Section 10.7. Severability ....................... Section 10.8. Headings and Titles........... TESTIMONIUM SIGNATURES EXHIBIT A Development Site EXHIBIT B Dispute Resolution Procedures EXHIBIT C Development Operating Subsidy Cap Worksheet EXHIBIT D Management Agreement F:1MNN12510351D00511 IREGOPRAG.DOC ii REGULATORY AND OPERATING AGREEMENT REGULATORY AND OPERATING AGREEMENT THIS AGREEMENT made this 13th day of May, 2403 by, between and among the MIlQN"EAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS, a public body corporate and politic, organized and existing under the laws of the State of Minnesota (the "MPHA"), the ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE, a public body corporate and politic, organized and existing under the laws of Minnesota (the "EDA") (together with the MPHA sometimes called the "Authorities") and the BASS LAKE APARTMENTS LLC, a Minnesota limited liability company (the "Owner"). The MPHA and the United States Department of Housing and Urban Development ("HUD") are parties to an Annual Contributions Contract ("ACC") pursuant to which the MPHA has been granted funding for the demolition and replacement of 770 units of low rent public housing pursuant to Section 5 of the United States Housing Act of 1937, as amended (the "Act"), and pursuant to the terms of that certain Consent Decree entered in settlement of Hollman et at, vs. Cisneros et al, U.S.D.C. (Minn. Dist., 4th Div.) Civil Case No. 4-92-712. As a part of its effort to locate replacement units in areas of nonconcentration as to race and poverty throughout the Minneapolis -St. Paul Metropolitan area it has entered into a joint powers agreement with the EDA for the purpose of seeking inclusion of replacement units in the Owner's multifamily housing project to be constructed within the City of New Hope, Minnesota (the "Development"). The Development is to be a mixed -income community consisting of eleven (11) units. Four (4) units shall be set aside and maintained as "public housing," as defined in Section 3(b) of the Act, and eligible to receive the benefit of operating subsidies by HUD .pursuant to Section 9 of the Act for the term of the ACC. Owner intends that nine (9) of the units will be available to households with income restrictions at or below 50 percent:of the area median. and two (2) of the units will be at market rates. NOW, THEREFORE, the parties hereto agree as follows: F:IMNNUM0351DOCS11 IREGOPRAG.DOC I REGULATORY AND OPERATING AGREEMENT ARTICLE I Section 1.1. Definitions. As used herein, the following terms shall have the following meanings: "ACC" shall mean the Consolidated Annual Contributions Contract between HUD and the MPHA dated April 10, 1971, as amended from time to time including, specifically, as amended by a Mixed -Finance Amendment dated May 13, 2003. "Act" shall mean the United States Housing Act of 1937, as amended from time to time, and any successor legislation. "Authority Units" shall mean the dwelling units in the Development operated and maintained from time to time as "public housing" units in accordance with the Act, the ACC, and this Agreement. "Consent Decree" shall mean the Order of the United States District Court, District of Minnesota in the action entitled Hollman et al vs. Cisneros et al, Civil Action No. 4-92-712, which provides, among other things, for the development of 770 public housing units in the Minneapolis -St. Paul metropolitan area and for priority occupancy by certain families relocated or displaced from demolished public housing in Minneapolis. "Development" shall mean the 11 -unit rental housing development to be rehabilitated, constructed and operated by Owner, during the term of the ACC, on the Development Site. "Development Fiscal Year" shall mean the fiscal year of the Owner, irrespective of whether such fiscal year coincides with the MPHA Fiscal Year. "Development Site" shall mean the real. property upon which the Development will be constructed, as more particularly described in Exhibit A hereto. "Development Operating Subsidy" shall mean that part of the Operating Subsidy received by the MPHA from HUD which the MPHA shall pay to the Owner pursuant to this Agreement. "Development Operating Subsidy Reserve" shall mean the trust account established by the Owner pursuant to Article V hereof and consisting of an Owner Account and a Public Account to which contributions made by the Owner, MPHA and EDA to their respective accounts, shall fund shortfalls in Development Operating Subsidy. "Fair Market Rent" shall mean the maximum allowable rent permitted to be charged under Section 8 of the Act. "Housing Agreement" shall mean the Housing Development Agreement dated May 13, 2003 by and between the EDA, the MPHA and the Owner. "Incentive Authority Unit" shall mean one (1) Authority Unit which is not subject to the waiting list requirements of the Consent Decree. "Initial Operating Period" or "IOP" means the period between DOFA and EIOP and is the period during which operating costs of the Public Housing Units are charged to the development or capital budget, after which such costs are paid from Operating Subsidy. F:1MNN12510351DOCS\I IREGOPRAG.DOC 2 REGUI ATORY AND OPERATING AGREEMENT "Lender" shall mean the lender under a first mortgage loan secured by the Owner's interest in the Development Site obtained by Owner to assist in financing the construction of the Development. Upon the date hereof, Lender shall mean Franklin National Bank, a national banking association. "MPHA Fiscal Year" shall mean the MPHA's October 1 through September 30 fiscal year, used for purposes of calculating the Operating Subsidy received by the MPHA pursuant to Section 9 of the Act. "Managing Agent" shall mean the managing agent named in the Management Agreement, or any successor managing agent of the Development named from time to time and approved by the Authorities as provided herein. "Management Agreement" shall mean the agreement governing management of the Development to be entered into between the Owner and the Managing Agent (with the approval of the Authorities) pursuant to Section 3.3 hereof. "Metropolitan Council" means the Metropolitan Council which is a political subdivision of the State of Minnesota. "Operating Subsidy" shall mean financial payments provided to the MPHA by HUD pursuant to Section 9 of the Act or pursuant to any successor legislation providing for project - based or tenant -based operating or rental assistance in respect of units in public housing developments or eligible occupants thereof. "Proposal" shall mean the. MPHA and EDA proposal for the Development approved by HUD. "Replacement Authority Units" shall mean those three (3) Authority Units which are subject to the waiting list requirements of the Consent Decree., "Restrictive Covenant" shall mean the covenants and restrictions contained in that certain Declaration of Restrictive Covenants granted by the Owner which shall run with the land obligating the party and any successors in title, including any successor who acquires title to the Owner's estate by foreclosure of a mortgage, to maintain and operate the Authority Units in compliance with all applicable requirements of the Act, the ACC and this Agreement during the period required by law. F:IMNN12%351DOCS1l1REGOPRAG.DOC 3 REGULATORY AND OPERATING AGREEMENT ARTICLE H Section 2.1. Owner Commitment. During the term of flus Agreement, but subject to Article VI hereof, Owner will continuously set aside four (4) units of the Development, having a total of 8 bedrooms and having initially the unit size distribution set forth below, for occupancy by public housing -eligible households at rents and subject to all other conditions of the Act, the ACC and the Consent Decree. Provided that the Owner continues operating the public housing units in accordance with the Act, the ACC and the Consent Decree, and in accordance with the terms of this Agreement, such units shall be eligible to receive the benefits of Operating Subsidy. Consistent with the requirements currently applicable to public housing, a unit shall not lose its status as an Authority Unit solely because the income of the tenant residing therein rises above the applicable public housing income limit; any such unit shall be governed by rules generally applicable to units occupied by over -income tenants in the public housing program (subject to such modifications in lease and occupancy terms as are permitted hereunder). Section 2.2. Anthority Units Described. The Authority Units shall initially comprise the following mixture of unit sizes and descriptions: 2 BR 4 Owner may change the specific units designated as Authority Units at any time provided that (a) the number of bedrooms contained in the Authority Units remains 8, (b) if such change is to be made with respect to an occupied Authority Unit, the tenant of such unit shall have the same rights with respect to occupancy and rent as applied prior . to removal of the unit's designation as an . Authority Unit, and (c) the Authority Units shall at all times, to the extent feasible, be scattered evenly or "float" throughout the Development, and shall not be concentrated in any particular area or areas within the Development. Section 2.3. Casualty and C'.ondemnntion. In the event of a casualty loss or taking by eminent domain, Owner shall apply the proceeds .of such casualty loss or condemnation to the rebuilding of the units, and units representing the same bedroom mix described above to the extent possible, shall be set aside as Authority Units. Section 2.4. Ingurance. Proceeds. In the event of (a) a casualty, (b) a decision by the Lender to apply insurance proceeds to the first mortgage loan rather than reconstruction of units, insurance proceeds shall be prorated among the entities holding encumbrances permitted by Section 9.1 of the Housing Agreement in accordance with the outstanding balances thereof and, in the case of the MPHA, to the extent of the low income public housing development funds initially paid to the Owner. The MPHA's prorated share of the insurance proceeds shall be returned to the MPHA. All amounts remaining in the Development Operating Subsidy Reserve shall be returned to the Owner, the MPHA and the EDA in accordance with their respective contributions thereto. F.\MNN1251D351DOCS111REGOPRAG.DOC 4 REGULATORY AND OPERATING AGREEMENT ARTICLE III Section 3.1.. Legal Compliance. Owner shall maintain and operate the Authority Units in compliance with all applicable requirements of the Act, HUD regulations thereunder, and the applicable regulations and policies of the MPHA (including the imposition of minimum rent), and in accordance with the ACC (including any waivers granted pursuant thereto), the Consent Decree, and this Agreement. In the event of any conflict among the foregoing authorities, the ACC (including any waivers granted pursuant thereto) shall control (to the extent pemutted by law). Notwithstanding the Owner's agreement to perform substantial obligations and responsibilities with regard to the Authority Units pursuant hereto, and the agreement of the EDA to assist in carrying out certain functions and responsibilities, the MPHA remains accountable to HUD for performance of such functions under and pursuant to the ACC and must monitor the performance of the Owner and the EDA to assure compliance therewith; provided, however, that the MPHA shall be entitled to rely upon the truth and accuracy of information provided to it by the Owner or the EDA. Section 3.2. Administrative Flexibility. Authorities and Owner acknowledge that the goal of achieving long-term sustainability of the Development as a mixed -income community will be enhanced by administrative procedures and terms and conditions of occupancy which reduce discernible distinctions in maintenance and operation, and conditions of continued occupancy, between the Authority Units and other units in the Development to the greatest extent feasible while assuring that the Authority Units are available to house families who meet the occupancy objectives of the Authorities. Sections 3.3 to 3.7 of this Article III enumerate certain respects in which operating procedures and other requirements as to the Authority Units will differ from . those in effect with respect to public housing units owned by the MPHR. The Authorities and Owner agree that, if experience demonstrates a need for or the desirability of further departures from standard procedures applicable to PHA -owned public housing, they will consult with each other regarding such further modifications and will take such further. implementing steps as they agree to be advisable, including, as appropriate, requests to HUD for revision or waiver of regulations necessary to permit the Authorities to undertake measures that enhance the long-term viability of the Development, or requests to implement statutory revisions made by Congress from time to time affecting either public housing in general or public housing located within privately -owned mixed -income communities in particular. Section 3.3. Management. Owner will retain a Managing Agent for. the Development, including the Authority Units. (the "Managing Agent"), pursuant to a management agreement (the "Management Agreement") which will be subject to written approval by the Authorities. The initial Managing Agent shall be Project for Pride in Living, Inc. The Managing Agent will be responsible to Owner for management of the Authority Units in accordance with the terms of this Agreement and all applicable requirements referenced in Section 3.1 hereof. The Management Agreement will contain appropriate provisions providing access by the Authorities, upon request therefor, to books and records maintained by the Managing Agent with respect to the Development, and pursuant to which the Owner may be required to terminate the Management Agreement and the appointment of the Managing Agent thereunder, subject to appropriate judicial review in any court of competent jurisdiction, if the Authorities determine that the Managing Agent has violated, breached, or failed to comply with any provision of, or obligation under, this Agreement (including, without limitation, by reason of its violation, breach or failure to comply with any governing law, regulation, or agreement referenced in Section 3.1 or Article VIII hereof). Section 3.4. Waiting Lists. The Authorities shall create, maintain and manage the waiting list or lists for occupancy to the Authority Units in accordance with the Consent Decree F:%MNN12510351DOCS111REGOPRAG.DOC 5 REGULATORY AND OPERATING AGREEMENT and all applicable laws and regulation. Upon request of the Managing Agent, the EDA shall supply the names of potentially eligible tenants to the Managing Agent as more fully described in the Management Agreement. The waiting list or lists policy created by the Authorities is subject to HUD approval. Section 3.5. Managing Agent Responsibilities. The Authorities delegate to Owner, subject to re -delegation to the Managing Agent, the following administrative functions in connection with admission of applicants to occupancy of the Authority Units: applicant screening, income and data verification, income recertification, record maintenance, unit assignment, execution of leases and terminations, all in accordance with criteria and procedures approved by the Authorities. Screening criteria and procedures proposed by the Managing Agent with respect to the Authority tints will not necessarily be identical. to those utilized by the MPHA with respect to MPHA-owned public housing but will, to the maximum extent permissible under applicable HUD requirements and the ACC, be consistent with those utilized by the Managing Agent with respect to other units of the Development; provided, however, that such procedures shall at all times be fair and evenhanded and shall not be more stringent as they relate to Replacement Authority Unit applicants than the Incentive Authority Unit applicants or other applicants. The MPHA shall have the right to monitor the procedures and results of the Managing Agent's activities in this regard. The Authorities shall establish procedures for informal and formal review of eligibility or suitability determinations for applicants for admission to the Authority Units consistent with HUD regulations. Section 3.6. Lease Forms. Tenant leases executed with respect to Authority Units will be in a form attached to the Management Agreement, subject to HUD approval, if required, of variations from the requirements of 24 CFR Part 966, Subpart A, as amended or replaced from time to time. Such leases shall accommodate the remedies available to the Owner pursuant to Section 6.3 and 6.4 hereof. Section 3.7. . The Authorities_ will establish a tenant grievance procedure for residents of the Authority Units in compliance with the requirements of Section 6(k) of the Act and 24 CFR Part 966 and consistent, tothe maximum extent feasible, with the intent stated in Section 3.2 above with the Metropolitan Council_.. Such procedures will provide for such informal and formal hearings as set forth in the HUD regulations. The Authorities will seek HUD approval, to the extent required, of variations from the requirements of 24 CFR Part 966, Subpart B, as amended or replaced from time to time. F-.WNN12514351DOCSti11REGOPRAG.DOC 6 REGULATORY AND OPERATING AGREEMENT ARTICLE IV Development Operating Subsidy Section 4.1. Further I7efinitionc. As used herein: (a) "Allowed Development Expenses" shall mean all necessary and reasonable operating expenses of the Development for any period, including: (i) all ordinary and necessary expenses of operations of the Development shown as line items on Form HUD -92547-A (Budget Worksheet), exclusive of (A) the amount by which real estate taxes attributable to the Authority Units exceed the amount of the payment in lieu of taxes, for so long as under Minnesota law the Authority Units are entitled to payment in lieu of tax treatment, (B) debt service requirements of any lender (including the Authorities) and (C) utility expenses which are the direct responsibility of the tenant. If the MPHA and HUD approve the borrowing of funds for repairs, replacements or improvements not funded from the Development reserve for replacements (which approval shall not be unreasonably withheld), then the debt service requirements for such borrowing shall be included in Allowed Development Expenses, Authority Unit Expenses (as hereinafter defined) shall be reduced by any amounts contributed by the Authorities, on a grant basis, for repairs, replacements or improvements of the Authority Units, up to the amount of the Authorities' share (based on the Authority Percentage, as hereinafter defined) of debt service requirements for any such borrowing for similar repairs, replacements or improvements to units other than the Authority Units; (ii) management fees payable pursuant to the Management Agreement; (iii) legal expenses associated with the operation of Development and accounting and audit expenses, including tax return preparation expenses, permitted to be charged. as. project expenses pursuant to the HUD .Handbook 4370.2 REV -1, Financial Operations and Accounting Procedures for Insured Multifamily Projects, or any successor thereto; and (iv) reserves for replacements and for any other purposes, as required by the Lender and approved by the MPHR. (b) "Authority Percentage" shall mean the higher of. (i) the number of Authority Units, divided by the total number of units in the Development; or (ii) the net rentable square feet of the Authority Units, divided by the net rentable square feet of all units of the Development. Any change in the "Authority Percentage" resulting from a change in the composition of the units comprising the Authority Units permitted by Article 1I hereof shall become effective for the MPHA Fiscal Year following the year in which such changes occur. (c) "Authority Unit Expenses" shall mean (i) Allowed Development Expenses, multiplied by the Authority Percentage, plus (ii) the portion of any payment in lieu of real estate taxes to be paid in respect of the Authority Units, if any, made by the Owner and not directly by the Authorities, plus (iii) amounts payable to Authority Unit occupants as utility reimbursement (i.e., "negative rent"); provided, however, that if any line item expense shall be included in Estimated Authority Unit Expenses on the basis of a percentage other than the Authority Percentage pursuant to the second sentence of F:IMNN12510351D0CS11 IREGOPRAG:DOC 7 REGULATORY AND OPERATING AGREEMENT Section 4.2(a) hereof, such expense shall be included in Authority Unit Expenses on the basis of the same percentage; (d) "Authority Unit Income" shall mean all income received in respect of Authority Units, including tenant rents ("Tenant Rent" as defined in 24 CFR 913.102) and any other sources of income anticipated in respect of Authority Units, including all types of revenue shown as line items on Form HUD 92547-A, but exclusive of operating subsidy. (e) "Estimated Allowed Development Expenses," "Estimated Authority Unit Expenses," and "Estimated Authority Unit Income" shall mean the estimated amounts of such items for any period determined in accordance with Section 4.2 hereof. Section 4.2. Operating RidWRiihmittals. Not later than 90 days prior to the anticipated date of first availability for occupancy of any unit of the Development, and not later than the first day of June preceding any subsequent MPHA Fiscal Year, the Owner shall submit to the MPHA its proposed Operating Budget for the following MPHA Fiscal Year (or, in the case of the year in which first availability for occupancy occurs, the remainder thereof).. The Operating Budget shall project Estimated Allowed Development Expenses, Estimated Authority Unit Expenses, and Estimated Authority Unit Income for the subject period, subject to the following conditions: (a) Estimated Allowed Development Expenses shall be reasonably within industry standards for similar housing type, materials and location.. The MPHA may comment upon and propose changes to the Estimated Allowed Development Expenses set forth in the Operating Budget submitted by the Owner, but the Owner shall not be required to reduce any estimated expense below industry standards for such expenditure reasonably anticipated by the Owner for the period provided, however: (i) the portion of any line item within the Estimated Allowed Development Expenses including in Estimated Authority Unit.Expenses shall be altered from the Authority Percentage if either the MPHA or the Owner demonstrates satisfactorily that allocation of such item to the Authority Units on the basis of the Authority Percentage is inappropriate (e.g., marketing and advertising costs, if such relate solely or preponderantly to the non -Authority Units); and (ii) if the MPHA and Owner disagree about whether the Estimated Allowed Development Expenses, or any line -item therein, are consistent with industry standards, the Owner's estimate shall be utilized for budget purposes, but the MPHA may institute the dispute resolution procedures described in Exhibit B hereto. (b) For the period in which first occupancy of the Development is anticipated to occur, Estimated Authority Unit Income shall be determined on the basis of assumed tenant rent collections for each unit size equal to the average tenant rent collections for all units of comparable size owned and administered by the MPHA in the most recent annual or semiannual period for which such statistics are available at the time of Owner's submission of the Operating Budget for such period to the MPHA. For each subsequent MPHA Fiscal Year, Estimated Authority Unit Income shall be determined on the basis of the aggregate tenant rents actually collected for all Authority Units during the first nine months of the preceding MPHA Fiscal Year. Notwithstanding the foregoing, with respect to any MPHA Fiscal Year, Owner and the MPHA may agree to project Estimated Authority Unit Income at a level different from that which would otherwise be established pursuant to the preceding sentence, taking into account (i) the reasonably F:1MNN12M16350OC8111REGOPRAG.DOC 8 REGULATORY AND OPERATING AGREEMENT anticipated level of incomes of tenants anticipated to be admitted to the Authority Units during such period, based on anticipated turnover and the admissions policies referenced in Section 3.5 hereof, and (ii) reasonably anticipated increases in income levels of existing tenants based on tenant participation in employment training and other supportive services programs. Section 4.3. Payment � fr_atsng Subsidy. (a) During the Initial Operating Period, the MPHA shall pay operating costs of the Authority Units from the Initial Operating Deficit line item of the Development budget. During such period, all rental income received by the Owner from the Authority Units shall be delivered to the MPHA for deposit in said Initial Operating Deficit account. (b) Subject to Section 4.12 hereof, during each MPHA Fiscal Year after the end of the Initial Operating Period, the MPHA shall payto the Owner a Development Operating Subsidy equal to the lesser of (1) (i) Estimated Authority Unit Expenses for such period less (ii) Estimated Authority Unit Income for the period or (2) the Development Operating Subsidy Cap (such amount with respect to any period being referred to herein as the 'Development Operating Subsidy Requirement"). The MPHA shall pay to Owner, on the first day of each month of an MPHA Fiscal Year, one -twelfth (1112) of the Development Operating Subsidy Requirement for such MPHA Fiscal Year; provided, however, that Owner and the MPHA may agree, upon determination of the Operating Budget and Development Operating Subsidy Requirement for any MPHR Fiscal Year, to provide for lump sum or unequal monthly payments for such year. Section 4.4. Dayelopmmt Operating Subsidy Cap. The Development Operating Subsidy Cap shall be determined annually as follows: (a) On or before September. 15 of each year the MPHA shall determine, in accordance with its budget submittals to HUD (i) the total .number of available public r housing units which are then subject to the ACC, (ii) the distribution of such units by number of bedrooms and (iii) the total Operating Subsidy for such units approved by HUD for the following MPHA Fiscal Year, exclusive of that portion of the Operating Subsidy allocable to accounting costs. (b) The MPHA shall multiply the number of units of each bedroom size by the number of rooms per unit using the following Minnesota Housing Finance Agency table. of rooms per unit and add the products for each bedroom size in order to calculate (i) the total number of rooms existing in the MPHA inventory and (ii) the total number of rooms in the Authority Units: Unit Size Rooms per Unit 0 3.5 1 3.5 2 4.5 3 6.0 4 7.0 (c) The MPHA sriall divide the total Operating Subsidy approved by HUD for the following MPHA Fiscal Year by the total number of rooms determined under Section 4.4(b)(i) hereof to determine an average subsidy per room per year for all MPHA units. F:1MNN125%0351DOCS1I IREGOPRAG.DOC 9 REGULATORY AND OPERATING AGREEMENT (d) 'ne MFtiA shalt multiply the average subsidy per room determined under Section 4.4(c) times the number of rooms in the Authority Units determined under Section 4.4 (b)(h) which shall constitute the Development Operating Subsidy Cap for the following MPHA Fiscal Year. (e) On or before December 15 of each year the MPHA shall submit to HUD its post -year audit with respect to the preceding MPHA Fiscal Year. On or before February 1 of each succeeding year the MPHA shall take into account all HUD -approved post -year adjustments in MPHA Operating Subsidy and shall recalculate . the Development Operating Subsidy Cap pursuant to Section 4.4 above (the 'Recalculated Development Operating Subsidy Cap"). The calculations required by this Section 4.4 shall be made on the form attached hereto as Exhibit C and shall be mailed to the Owner and the EDA on or before October 1, the beginning of the MPHA Fiscal Year. Section 4.5. Segregated Account. All payments of Development Operating Subsidy received from the MPHA, plus all payments, if any, made to Owner from the Development Operating Subsidy Reserve (as hereinafter defined), shall be deposited by Owner in a Development -wide operating account maintained in a financial institution whose deposits are insured by an agency of the Federal Government; provided, however, that at all times the funds shall be invested in a manner consistent with Minnesota Statutes, Section 469.12, Subdivision 1, paragraph 16. Owner shall also cause all receipts in respect of Development units, including tenant rents and other revenues (but exclusive of tenant security deposits), to be deposited into the Development -wide operating account and shall make all Allowed Development Expenses disbursements therefrom. Section 4.6. Monthly Operating Rei ortc, Monthly operating budget and expense. reports shall be prepared on forms supplied by the MPHA and submitted by the Owner to the MPHA on or before the twentieth (20th) of each calendar month showing activity for.the previous. month. Not later than 60 days after the end of each successive quarterly period commencing with the calendar quarter in which first occupancy of the Development occurs, Owner shall deliver to the Authorities, separately with respect to the Authority Units and with respect to the Development (including the Authority Units), itemized statements of income and expenses, prepared on an accrual basis, in form substantially comparable to Form HUD -92410 (Statement of Profit and Loss), certified by the chief financial officer of the Managing General Partner of Owner, for the quarterly period and from the beginning of the Development fiscal Year to the end of such quarterly period. Section 4.7. Audited Financials and Supplemental Data. Not later than March 1 of each year, Owner shall deliver to the Authorities a copy of the audited financial statements of Owner for such year and the period then ended, prepared in accordance with generally accepted accounting principles and accompanied by the report of independent public accountants thereon, together with a copy of any additional financial statements or reports delivered by Owner to its partners. Such financial statement shall be accompanied by supplemental data, together with the report of independent public accountants thereon, which shall show on a cash basis for such period (a) actual income from the Authority Units, (b) actual expenditures for Authority Unit Expenses, (c) the amount of Development Operating Subsidy received by Owner, showing separately amounts received from the Authorities and amounts withdrawn from the Development Operating Subsidy Reserve, (d) the balance of the Development Operating Subsidy Reserve at the end of the period, and (e) aggregate stated lease rents and the amounts thereof uncollected from Authority Units for which no eviction actions have been commenced ("Supplemental Data"). If Owner shall fail to deliver such financial statements and Supplemental Data to the Authorities, the Authorities shall have the right to retain an independent auditor to conduct an F:SMNN1251035\DOCSII IREGOPRAG.DOC 10 REGULATORY AND OPERATING AGREEMENT audit of the financial statements of the Owner and to charge the reasonable cost thereof to the Owner. Section 4.8. Post -Year Adjnctments. (a) Upon receipt of the Section 4.6 monthly operating report for the month of September, the MPHA shall each year determine, based upon the monthly operating reports and MPHA records, (i) actual income from the Authority Units, (ii) actual expenditures for Authority Unit Expenses and (iii) the amount of Development Operating Subsidy received by the Owner during the preceding MPHA Fiscal Year. If the amount described in clause (i)(or the amounts described in clauses (i) and (iii) combined) shall exceed the amount described in clause (ii), the Owner shall immediately forward the amount of such excess to the Public Account of the Development Operating Subsidy Reserve. If the amounts described in clauses (i) and (iii) shall be less than the amount described in clause (ii), the MPHA shall immediately reimburse the Owner for the amount of such deficit, provided that total Development Operating Subsidy payable by the MPHA for such preceding year shall not exceed the Recalculated Development Operating Subsidy Cap. (b) Within sixty (60) days of receipt of .the audited financial statements and Supplemental Data pursuant to Section 4.7, the MPHA shall (i) reconcile the same with its determination made pursuant to Section 4.8(a) and (ii) notify the Owner, in writing, of any discrepancy. In accordance with such reconciliation and notice, the parties shall immediately correct any post -year adjustments previously made in accordance with Section 4.8(a) and Floor Level adjustments made pursuant to Section 5.3. Section 4.9. Vacancy Adjnstment. Separately and independently from the reconciliations provided for under Section 4.8 above, the Owner shall contribute to the Development Operating Subsidy Reserve, not later than March 1 of each year, the amount, if any, of Development Operating Subsidy received by Owner during such period attributable to any Authority Unit for a period in which such Authority Unit was vacant for more than 90 days, provided that such period of vacancy shall not be attributable to any action or omission by the Authorities. For purposes of this provision- . (a). an Authority Unit shall be deemed vacant (i) commencing on the first day for which rent is not charged for the unit following termination or expiration of its occupancy as an Authority Unit, and (ii) ending on the day preceding the first day for which rent is charged for such unit based on re -occupancy as an Authority Unit, or the first day for which rent is charged for occupancy as an Authority Unit of a different unit which was not previously occupied as an Authority Unit, whichever shall first occur; and (b) the amount of Development Operating Subsidy attributable to a unit for a period in which such unit was vacant more than ninety (90) days shall be determined by multiplying the amount of Development Operating Subsidy received by Owner during such year, as reported pursuant to Section 4.3 above, by the product of (x) the net rentable square feet of such unit, divided by the net rentable square feet of all Authority Units (including such vacant unit), multiplied by (y) the number of days in excess of ninety (90) during which such unit is vacant, divided by 365. Section 4.10. Incidental Development Income, Separately and independently from the reconciliations provided for under Section 4.8 above, the Owner shall contribute to the Public Account of the Development Operating Subsidy Reserve, not later than March 1 of each year, 4111 of all incidental income derived from the operation of the Development to the extent it is derived from charges applied to both Authority Units and non -Authority Units. Incidental income shall include, but not be limited to (1) vending and laundry machine income and (2) income received from rental of parking spaces, garage spaces and commercial space. RVONN12M03500CM1 IREGOPRAG.DOC 11 REGULATORY AND OPERATING AGREEMENT Section 4.11. Future Legislation. Subject to remedies provided in Article VI hereof, nothing contained herein shall prevent or diminish the full application to the Authority Units of any legislation enacted after the date hereof which provides for the termination of operating subsidies under Section 9 of the Act or of other Federal project -based assistance to public housing developments, including, without limitation, any provision thereof releasing or otherwise modifying occupancy or tenant rent restrictions. previously applicable to units in such developments. Section 412. Rights Upon Assignment. It is understood by the parties hereto that upon (a) completion of Authority Units and (b) execution of an annual contributions contract by HUD and the Metropolitan Council providing for Operating Subsidy from HUD to the Metropolitan Council for the Authority Units (the "Metro ACC"), the MPHA may, without further action by the Owner, assign this Agreement and all related documents to the Metropolitan Council for ongoing administration of said Operating Subsidy and grievance procedures as well as management of the waiting lists. In such event, the Authority Units shall be removed from the MPHA ACC and added to the Metro ACC. Subsequent to such assignment: (i) All of the duties of the MPHA described herein that are yet to be performed (except for the obligation of the MPHA to provide names of eligible Minneapolis applicants pursuant to the Consent Decree) shall be performed by the Metropolitan Council and the MPHA shall be forever released therefrom; (ii) All of the rights of the MPHA described herein shall be rights of the Metropolitan Council; and (iii) The Operating Subsidy described in this Article IV shall be determined or re -determined solely in accordance with the Metro ACC, payments thereunder shall be limited by such amount as are received by the Metropolitan Council pursuant to the Metro ACC and all matters relating to Operating Subsidy shall be governed by the Metropolitan Council's fiscal year. F:IMNNI2510351DOCS1IIREGOPRAG.DOC 12 REGULATORY AND OPERATING AGREEMENT ARTICLE V Section 5.1. Fstahlishment of Reserve and Accn„nts_ Prior to initial occupancy of each Authority Unit, the Owner will establish a separate trust account known as the "Development Operating Subsidy Reserve"), consisting of two separate accounts in a financial institution chosen by the Owner and acceptable to the Authorities whose deposits are insured by an agency of the Federal Government (the "Escrow Agent"), provided, however, that at all times the funds shall be invested in a manner consistent with Minnesota Statutes, Section 469.12, Subdivision 1, paragraph 16. One account shall be designated the "Owner Account" and the Owner shall deposit therein an amount not less than $7,704.00 for each Authority Unit (the "Initial Owner Deposit"), which represents an amount equal to three times the estimated annualized amount of the Development Operating Subsidy Requirement determined pursuant to Article IV hereof with respect to the MPHA Fiscal Year in which first occupancy of the Development occurs. Additional deposits to the Development Operating Subsidy Reserve by the Owner shall be deposited and maintained as provided herein. All funds in the Owner's Account shall remain funds of the Owner, but shall be held in trust by the Escrow Agent, and shall be held and applied in accordance with the terms and conditions hereof. All deposits to the Development Operating Subsidy Reserve made by any public entity, except as otherwise provided herein, shall be deposited in an account known as the "Public Account," shall remainn the funds of the entity making such contributions and shall be held and applied in accordance with the terms and conditions hereof. Interest earnings in the Development Operating Subsidy Reserve shall be. allocated to the Owner's Account and Public Account in accordance with their respective balances. When a withdrawal is authorized or required by the terms of this Agreement, such withdrawal shall be made first from the Public Account and then, if the Public Account has been exhausted, from the Owner Account. Section 5.2: Tnve menu. The Escrow Agent shall be directed by the Owner to invest and re -invest funds held in the Development Operating Subsidy Reserve in investments permitted for the general funds of the MPHA provided, however, that at all times the funds shall be invested in a manner consistent with Minnesota Statutes, Section 469.12, Subdivision 1, paragraph 16. Income from investments shall be retained in the Development Operating Subsidy Reserve and shall be deemed part thereof. Section 5.3. Floor Level Adjustments. As used hereinafter, the term "Floor Level" shall mean, initially, the amount required by Section 5.1 to be held in the Development Operating Subsidy Reserve as of the date of first occupancy of each public housing unit. The "Floor Level" amount shall be adjusted annually, following delivery of each September monthly operating statement furnished pursuant to Section 4.6 hereof, to an amount equal to three times the difference between actual annual Authority Unit Income and actual annual Authority Unit Expenses as shown in such financial statements. The MPHA and the Owner shall jointly give notice to the Escrow Agent of adjustments in the Floor Level as promptly and practicable following the calculation of such adjustments. Section 5.4. yczVuntary Replenishment of Reserve. If at any time the amount in the Development Operating Subsidy Reserve shall be below the Floor Level as a consequence of either (a) adjustment to the Floor Level pursuant to Section 5.3 or (b) payments authorized to be made therefrom pursuant to this Agreement, the Escrow Agent shall notify the MPHA, the EDA and the Owner in writing of such fact and of the amount of such deficit (the "Upper Floor Level Shortfall"). Within ninety (90) days following receipt of such notice, the MPHA and/or the EDA may, but shall not be obligated to pay to the Escrow Agent, for deposit into the Development Operating Subsidy Reserve, from any fiends legally available therefor (which may include Operating Subsidy or other public housing or nonpublic housing funds) the amount of the P:IMNN12510351DOC8111REGOPRAG.DOC 13 REGULATORY AND OPERATING AGREEMENT Upper Floor Level Shortfall. To the extent such deposit (a) replaces funds previously withdrawn from the Owner's Account of the Development Operating Subsidy Reserve and not previously replaced and (b) do not cause the Floor Level of the Development Operating Subsidy Reserve to be exceeded, such deposit shall be credited to the Owner's Account. To the extent such deposit (a) is in excess of funds previously withdrawn from the Owner's Account of the Development Operating Subsidy Reserve and not previously replaced or (b) causes the Floor Level of the Development Operating Reserve to be exceeded, such deposit shall be credited to the Public Account of the Development Operating Subsidy Reserve. Section 5.5. Owner Surplus Cash C'.nntrihn 'nn. (a) If at any time the amount in the Development Operating Subsidy Reserve shall fall below seventy-five percent (75%) of the Floor Level, the Escrow Agent shall (a) notify the MPHA, the EDA and the Owner in writing of such fact, and (b) five (5) days before the end of the next following Development. Fiscal Year notify the MPHA, the EDA and the Owner in writing of the amount by which the then balance of the Development Operating Subsidy Reserve is less than seventy-five percent (75%) of its Floor Level (the "Mid Floor Level Shortfall"). At the end of such next following Development Fiscal Year the Owner shall deposit into the Owner's Account of the Development Operating Subsidy Reserve the lesser of (i) the amount of the Mid Floor Level Shortfall or (ii) fifty percent (50%) of the surplus cash from the Development. (b) There shall be deducted from any amount payable by the Owner pursuant to Section 5.5(a), with respect to the applicable Development Fiscal Year, an amount equal to the difference between (i) the rental income received by the Owner from a Development unit occupied by a tenant with a Section 8 housing choice voucher by operation of Section 6.4(c), and (ii) the rental income which would have been received by the Owner from such Development unit without the operation of Section 6.4(c). Section 5.6. Utilization of Reserve. If (a) by the tenth day of any month (i) the MPHA shall not have paid to Owner the full amount of the scheduled installment of the Development Operating Subsidy Requirement due for such month or (ii) the amount of Development Operating Subsidy paid by the MPHA is less than the amount by which the Estimated Authority Unit Expenses for such period exceed the Estimated Authority Unit Income for such period or (b) the MPHA shall not have fully reimbursed the Owner for the amount of the actual deficit described in the second sentence of Section 4.8(a) hereof, the Owner shall be authorized to request a disbursement in the amount of the deficiency from the Development Operating Subsidy Reserve. The Escrow Agent shall make such disbursement upon receipt of a certification from the Owner as to the failure of the MPHA to fulfill the conditions described in subclauses (a) and (b) of this Section 5.6 and shall immediately notify the MPHA of the amount of the withdrawal from and balance in the Development Operating Subsidy Reserve. P:1MNN12510351D0CS11IREGOPRAG.DOC 14 REGULATORY AND OPERATING AGREEMENT ARTICLE VI Section 6.1. Limited Owner Obligation. It is of the essence of this Agreement that for the term of the ACC, Owner will maintain and operate the number and type of dwelling units in the Development stated in Article II hereof as public housing units in accordance with all applicable requirements of the Act, the Consent Decree, and the ACC; provided, however, that if Authority Unit Income, plus any form of governmental operating or rental assistance received in respect of the Authority Units (including, without limitation, withdrawals from the Development Operating Subsidy Reserve or other contributions by the Authorities) shall be less than Authority Unit Expenses, the Owner shall at no time be required to contribute from its own funds (except as set forth in Section 5.5) toward Authority Unit Expenses in order to preserve the character of the number of units stated in Article II as public housing units. Section 6.2. Relationship to Separate Agreements. The obligations of the Owner with respect to the Authority Units are separate from other obligations which may arise under the Development Agreement or as a result of some or all of the other units in the Development. Accordingly, Owner remedies provided herein are not intended to diminish or otherwise effect such other obligations. Section 6.3. Remedies When Vacancy. If at the time of a vacancy in an Authority Unit the balance of the Development Operating Subsidy Reserve is determined to be less than its Floor Level, the Owner shall notify the MPHA. and HUD of such fact and, if the last Supplemental Data delivered to the MPHA pursuant to Section 4.7 is more than one -hundred eighty (180) days old, shall deliver to the MPHA and HUD with such notice Supplemental. Data updated through the last month end. Within ten (10) days of receipt of such notice, the Owner, the EDA, the MPHA and HUD shall confer regarding the course of action to pursue with respect to the Authority Units. The MPHA shall, within thirty (30) days of receipt of such notice (the "Section 6.3 Option Date"), exercise one or more of the following options: (a) Replenish the Development Operating Subsidy Reserve to its Floor Level. To the extent such a deposit (a) replaces funds previously withdrawn from the Owner's Account of the Development Operating Subsidy Reserve and not previously replaced and (b) does not cause the Floor Level of the Development Operating Subsidy Reserve to be exceeded, such deposit shall be credited to the Owner's Account. To the extent such deposit (a) is in excess of funds previously withdrawn from the Owner's Account of the Development Operating Subsidy Reserve and not previously replaced or (b) causes the Floor Level of the Development Operating Reserve to be exceeded, such deposit shall be credited to the Public Account of the Development Operating Subsidy Reserve; (b) Agree to and provide such Operating Subsidy in excess of the Development Operating Subsidy Cap necessary to assure the Owner that no further withdrawals from the Operating Reserve will be required; (c) Authorize the Owner to select a qualified public housing applicant for such vacant Authority Unit with income sufficient to afford rent in an amount which will prevent the Authority Unit Expense from exceeding the Authority Unit Income (including Development Operating Subsidy). Such selection shall first be attempted within the priorities established by the Consent Decree and other waiting list criteria; provided that if such a tenant cannot be so identified or selected, the Owner shall be authorized to select such a tenant notwithstanding Consent Decree priorities, other waiting list criteria or percentage of family income required to meet said rental obligation; F:IMNNI2 \0351DOCSU IREGOPRAG.DOC 15 REGULATORY AND OPERATING AGREEMENT (d) Notify the Owner of such other option agreed upon by the MPHA and HUD as will reasonably assure the Owner that sufficient funds will be received with respect to the Authority Units so that further withdrawal from the Development Operating Subsidy Reserve Fund will be avoided. Section 6.4. Remedies When No Vacanev. If the balance of the Development Operating Subsidy Reserve is determined to be less then fifty percent (50%) of the Floor Level and no vacancy in Authority Units exists, the Owner shall notify the MPHA and HUD of such fact and, if the last Supplemental Data delivered to the MPHA pursuant to Section 4..7 is more than one - hundred eighty (180) days old, shall deliver to the MPHA and HUD with such notice Supplemental Data updated through the last month end. Within ten (10) days of receipt of such notice, the Owner, the EDA, the MPHA and HUD shall confer regarding the course of action to pursue with respect to the Authority Units. The MPHA shall, within thirty (30) days of receipt of such notice (the "Section 6.4 Option Date"), exercise one or more of the following options: (a) Replenish the Development Operating Subsidy Reserve so that it remains above the seventy-five percent (75%) of its Floor Level. To the extent such a deposit (a) replaces funds previously withdrawn from the Owner's Account of the Development Operating Subsidy Reserve and not previously replaced and (b) does not cause the Floor Level of the Development Operating Subsidy Reserve to be exceeded, such deposit shall be credited to the Owner's Account. To the extent such deposit (a) is in excess of funds previously withdrawn from the Owner's Account of the Development Operating Subsidy Reserve and not previously replaced or (b) causes the Floor Level of the Development Operating Reserve to be exceeded, such deposit shall be credited to the Public Account of the Development Operating Subsidy Reserve; (b) Agree to and provide such Operating Subsidy in excess of the Development Operating Subsidy Cap necessary to assure the Owner that no further withdrawals from the Development Operating Reserve will be required; (c) Notify the Owner that the MPHA intends to make available to the tenants of a specified number of Authority Units (not to exceed four, in the aggregate, at any time) Section 8 housing choice voucher, whereupon the Owner shall agree not to exercise the remedy provided by Section 6.4(e) but shall continue to operate the Authority Units, drawing upon the Development Operating Subsidy Reserve as .necessary, until vacancies occur in reasonably comparable non Authority Units. As such vacancies occur, (i) the Owner shall convert the vacant non Authority Unit to an Authority Unit ("Converted Authority Unit"), which Converted Authority Unit shall- replace an existing Authority Unit ("Replaced Authority Unit"), (ii) the Replaced Authority Unit shall be converted to a Section 8 unit, (iii) the MPHA shall provide the existing tenant of the Replaced Authority Unit with a Section 8 housing choice voucher, (iv) the Owner shall lease the Replaced Authority Unit to the existing tenant thereof at the Fair. Market Rent and (v) the Owner shall lease the Converted Authority Unit pursuant to Section 6.3(c); (d) Notify the Owner of such other option agreed upon by the MPHA and HUD as will reasonably assure the Owner that sufficient funds will be received with respect to the Authority Units so that further withdrawal from the Development Operating Subsidy Reserve Fund will be avoided; or (e) If in the sole judgment of the MPHA no other remedy contemplated by this Section 6.4 is reasonably available to prevent the Authority Unit Expenses from exceeding the Authority Unit Income (plus available Development Operating Subsidy), notify the Owner that it may elect not to renew existing Authority Unit leases at the end of their then current term, beginning with the Incentive Authority Units, and relet such F:1MNN12510351D0CS\IIREGOPRAG.DOC 16 REGULATORY AND OPERATING AGREEMENT Authority Units in accordance with the provisions of Section 6.3(c). Authority Unit tenants whose leases are not renewed pursuant to this provision shall be given not less than sixty (60) days' advance written notice to vacate by Owner. In such event, the MPHA shall make all reasonable effort to relocate such tenant to another public housing unit owned by the MPHA. Such effort shall include: (i) making up to two (2) offers of the first available and suitable MPHA units to such tenant, without regard to Consent Decree or other waiting list priorities or criteria. The MPHA shall use its best efforts to provide such tenant with thirty (30) days' written notice of the availability of a suitably sized unit. Such tenant's written response to such notice must be received by the MPHA within five (S) days of receipt. If such tenant rejects the first unit offered, the MPHA shall again offer the next available, suitably sized unit to such tenant and such tenant shall have five (5) days of receipt of such second notice to deliver to the MPHA written acceptance of such offer. Rejection of said second offer or failure to respond to an MPHA notice shall relieve the MPHA of any further best efforts obligation; and (ii) offering such tenant a Section 8 housing choice voucher, if one is available to the MPHA. Section 6.5. MPHA Failure to Flect. Failure by the MPHA to notify the Owner of the selection of an option described in Section 6.3 on or before the Section 6.3 Option Date shall constitute MPHA approval of the option described in Section 6.3(c). Failure by the MPHA to notify the Owner of the selection of an option described in Section 6.4 on or before the Section 6.4 Option Date shall constitute MPHA approval of the option described in Section 6.4(e). F:1MNN12510351DOCS111REGOPRAG.DOC 17 REGULATORY AND OPERATING AGREEMENT ARTICLE VII Section 7.1. Non -Discrimination and Other Federal Requirements. The Owner will comply with all applicable requirements of the following, as the same may be amended from time to time and shall provide evidence of such compliance as deemed necessary by the MPHA: (a) The labor and wage requirements set forth in the Davis -Bacon Act, 40 U.S.C. 276a et seq. The Owner shall provide such records and information as reasonably requested by the '_VIPHA in order to confirm Owner's compliance with this clause. (b) All Federal statutory, regulatory, and executive order requirements applicable to public housing and the activities undertaken by the Owner under this Agreement pertaining to civil rights, equal opportunity, and nondiscrimination, as those requirements now exist, or as they may be enacted, promulgated, or amended from time to time. Such requirements include, but are not limited to, the following: (i) The Fair Housing Act, 42 U.S.C. 3601-19, and regulations issued thereunder, 24 CFR Part 100; Executive Order 11063 (Equal Opportunity in Housing) and regulations issued thereunder, 24 CFR Part 107; the fair housing poster regulations, 24 CFR Part 110, and advertising guidelines, 24 CFR Part 109. (ii) Title VI of the Civil Rights Act of 1964, 42 U&C. 2000d, and regulations issued thereunder relating to nondiscrimination in housing, 24 CFR Part 1. (iii) Age Discrimination Act of 1975, 42 U.S.C. 6101-07, and regulations issued thereunder, 24 CFR Part 146. (iv) Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, and regulations issued thereunder, 24 Part 8; the Americans with Disabilities Act, 42 U.S.C. 12181-89, and regulations issued thereunder, 28 CFR Part 36; and the elderly and handicapped requirements of Section 209 of the Housing and Community Development Act of 1974. (v) Section 3 of the Housing and Urban Development Act of 1968, 12 U.S.C. 1701u, and its implementing regulations at 24 CFR Part 135. (c) In the event that any other federal, state, or local government assistance is received, or can reasonably be expected to be received, by the Owner with respect to the Authority Units within the Development in addition to the Public Assistance under the Housing Agreement, the Owner shall comply with the requirements of Section 102 of the Housing and Urban Development Reform Act of 1989. (d) The Uniform Relocation and Property Acquisitions Act in the event there are any "displaced persons," as that term is defined therein, as a result of the Development. (e) 24 CFR §§ 941.202, 941.203, 941.205, 941.207, 941.208, 941.209, 941.306, 941.402, 941.404, 941.501. F.NMNNIn0351DOCS11tREGOPRAG.DOC 18 REGULATORY AND OPERATING AGREEMENT ARTICLE VIII Section 8.1_ Defined. A default by Owner under this Agreement shall occur if (a) Owner violates, breaches, or fails to comply with any provision of, or obligation under, this Agreement (including, without limitation, by reason of its violation, breach, or failure to comply with any governing law, regulation, or agreement referenced in Section 3.1 hereof); or (b) Owner asserts or demonstrates an intention to violate, breach or fail to comply with any such provision or obligation. A default by Owner which is attributable to an action or omission, or assertion or demonstration of an intended action or omission, of the Managing Agent shall be deemed a default by Owner for purposes of this Article. Section 8.2. Notification. Upon a determination by the Authorities that a default by Owner has occurred, the Authorities shall notify Owner of (a) the nature of the default, (b) the actions required to be taken by Owner to cure the default, and (c) the time within which Owner shall respond with a showing that all required actions have been taken, which period of time shall be not less than that reasonably necessary to affect a cure. If the default or alleged default is attributable to the Managing Agent, the Authorities shall give a copy of such notice to the Managing Agent. Section 8.3. MPHA Remedies. If Owner (or, as applicable, the Managing Agent) fails to respond or take corrective action to the reasonable satisfaction of the Authorities, the Authorities shall have the right to (a) Withhold further Development Operating Subsidy payments until such time as such corrective action is taken. All Development Operating Subsidy payments so withheld shall be forfeited by the Owner and retained by the .MPHA and such withholding and forfeiture shall not constitute an event of default with respect to any agreement between the Owner and the MPHA which would excuse the continued operation of the Authority Units. as public housing units in accordance with the ACC and Declaration of Restrictive Covenants. (b) Exercise any remedy available to it by reason of the nature of such default under and in accordance with the terms of this Agreement, the Housing Agreement or the ACC, to institute the dispute resolution procedure set forth in Exhibit B hereto, or to seek appropriate relief in any court having jurisdiction, including but not limited to specific performance or injunctive relief. F:IMNN12514351DOCs1l I REGOPRAG.DOC 19 REGULATORY AND OPERATING AGREEMENT ARTICLE IX Section 9.L No Assignment of Af'.C'. The Authorities and Owner acknowledge that any transfer of public housing development grant funds by the MPHA to Owner shall not be or be deemed to be an assignment of grant funds, and Owner shall not succeed to any rights or benefits of the MPHA under the ACC, or attain any privileges, authority, interests, or rights in or under the ACC. Section 9.2. No Third ParryRenes. Nothing contained in the ACC or in. any agreement between the Authorities and Owner, nor any act of HUD or the Authorities, shall be deemed or construed to create any relationship of third -party beneficiary, principal and agent, limited or general partnership, joint venture, or any association or relationship involving HUD, except between HUD and the MPHA as provided under the terms of the ACC. FAMNN125W51D0CS111REGOPRAG.DOC 20 REGULATORY AND OPERATING AGREEMENT ARTICLE X Section 10.1. Binding Obligation. This Agreement shall continue in full force and effect during the entire term of the ACC, or for such shorter period during which the Authority Units shall be required by law or by the ACC to be set aside, and maintained and operated, as public housing. Through the recording of a Declaration of Restrictive Covenants, the obligations and restrictions contained herein shall run with the land and bind all future owners and encumbrancers thereof. Section 10.2. Assignment. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of each of the parties; provided, however, that Owner may not assign its interest in the Agreement without the prior written consent of the Authorities and HUD, which shall not unreasonably be withheld. The Authorities shall have the right to assign their interests in this Agreement, including the right of the MPHA to assign its interest as described in Section 4.12, without further consent of the Owner. Section 10.3. No Waiver. No delay or omission by either party in exercising any right or remedy available hereunder shall impair any such right or remedy or constitute a waiver thereof in the event of any subsequent occasion giving rise to such right or availability of remedy, whether of a similar or dissimilar nature. Section 10.4. Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties and approved by HUD. Section 10.5. Notice. Any notice or other communication given or made pursuant to this Agreement shall be in writing and shall be deemed given if (a) delivered personally or by courier, (b) telecopied, (c) sent by overnight express delivery, or (d). mailed by registered or certified mail (return receipt requested), postage prepaid, to a party at .its respective address set forth below (or at such other address as shall be specified by the party by like notice given to the other ply) To the MPHA: Minneapolis Public Housing Authority in and for the City of Minneapolis 1001 North Washington Avenue Minneapolis, Minnesota 55401 Attention: Executive Director To the EDA: Economic Development Authority in and for the City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428-4898 Attention: Executive Director To the Owner: Bass Lake Apartments LLC 1925 Chicago Avenue South Minneapolis, Minnesota 55404 Attention: Project for Pride in Living, Inc. Barbara McCormick, Vice President All such notices and other communications shall be deemed given on the date of personal or local courier delivery, telecopy transmission, delivery to overnight courier or express delivery service, or deposit in the United States Mail, and shall be deemed to have been received (a) in the F:1MNN12510351DOCS1IIREGOPRAG.DOC 21 REGULATORY AND OPERATING AGREEMENT case of personal or local courier delivery, on the date of such delivery, (b) in the case of telecopy, upon receipt of electronic confirmation thereof, (c) in the case of delivery by overnight courier or express delivery service, on the date following dispatch, and (d) in the case of mailing, on the date specified in the return receipt therefor. Section 10.6. Law Governing. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota applicable to contracts made and to be performed therein. Section 10.7. Severability. If any provision of this Agreement is declared void or otherwise unenforceable, that provision shall be deemed to have been severed from this Agreement and the remainder of this Agreement shall otherwise remain in full force and effect. Section 10.8. Headings and Titles. Any titles or headings of the several parts, Articles and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. F:IMNN12510351DOCS111REGOPRAG.DOC 22 REGULATORY AND OPERATING AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS By: - Cornell Y -Cornell L. Moore Its Chairman ' L And by: '� ;>C Cora McCorvey Its Executive Director STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEEPIN ) On this e day of April, 2003, before me, a notary public, personally appeared Cornell L. Moore and Cora McCorvey, the Chairman and, Executive Director, respectively, of the Minneapolis Public Housing Authority in and for the City of Minneapolis, a public body 'corporate and politic under the laws of the State of Minnes (the "MPHA"), n ed..in the foregoing instrument and acknowledged said instrument on be)of the lA. F!\MNN125M5\DOCS\1 I REGOPRAG.DOC Notary • SUSAN E. SEEL NOTARY PUBLIC -MINNESOTA +' My Coexnisaion Expires Jan. 31, 2005 � s REGULATORY AND OPERATING AGREEMENT STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THVCIT OFNEW HOPE $y W_ Peter F.nck Its _President I� I� !.�MM On this 12`s day of May, 2003, before me, a notary public, personally appeared W. Peter Enck and D-aniel 7_ Donahue, the President and Executive Director respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic under the laws of the State of Minnesota (the "EDA"), named in the foregoing instrument and acknowledged said instrument on behalf of the EDA. Notary Public o tMa. Y •, VALERIE J. LEONE NOTAP� PUBUC-h1INKSOTA My COlnrli:;5i0r, : ;� : cs �zn yf, 2iX5 C:IWINDOWSITHMP11 IREGOPRAG.DOC REGULATORY AND OPERATING AGREEMENT STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) BASS LAKE APARTMENTS LLC By:. Barbara McCormick Its President On this day of May, 2003, before me, a notary public, personally appeared Barbara McCormick, the President, of Bass Lake Apartments LLC, a Minnesota limited liability company, named in the foregoing instrument and acknowledged said instrument on behalf of the company. W W ,L r S. CHARLES SORENSON— Ur NOTARY PUBLIC -MINNESOTA Notary Public A9y CommWon Exons Jan. 81, 20a 4rx�'enAaiA{aP�hdO.� � QWCUMENTS AND SETTINGSMILLFdMAL SE7"FTNGSITk,MPORARY RMRNEF FILES1OLK12511 IREGOPRAG.DOC REGULATORY AND OPERATING AGREEMENT EXHIBIT A The East 113 of Lot 35, lying South of the North 1138.67 feet thereof, excepting the West 30 feet and the South 33 feet thereof, Auditor's Subdivision 226, Hennepin County, Minnesota. F:IIvINN I25\0351DOCs11 I REGOPRAG.DOC A-1 REGULATORY AND OPERATING AGREEMENT EXHIBIT B (1) The MPHA shall give written notice thereof to the Owner, describing briefly the nature of its disagreement with the Owner. The date of receipt of such notice shall constitute the Submission Date. (2) The parties shall have five (5) days from the Submission mate to agree upon a mutually acceptable neutral person not affiliated with either of the parties (the "Neutral"). If no Neutral has been selected within such time, the parties agree jointly to request the American Arbitration Association to supply within five (5) days a list of potential Neutrals with qualifications as specified by the parties in the joint request. Within five (5) days of receipt of the list, the parties shall simultaneously exchange rankings, and shall select as the Neutral the individual receiving the highest combined ranking who is available to serve. (3) In consultation with the Neutral, the parties shall promptly designate a mutually convenient time and place for the Mediation and unless circumstances require otherwise, such time to be not later than ten (10) days after selection of the Neutral. (4) In the event either of the parties has substantial need for information in the possession of the other party in order to prepare for the Mediation, the parties shall attempt in good faith to agree on procedures for the expeditious exchange of such information, with the help of the Neutral if required. (5) One week prior to the first scheduled session of the Mediation, each party shall deliver to the Neutral and to the other party a concise written summary of its view as to the facts in connection with the matter in dispute. (6) In the Mediation, each party shall be represented by such persons, including counsel, as needed to respond to questions, contribute information and participate in the negotiations, the number of such additional persons to be agreed upon by the parties in advance, with the assistance of the Neutral, if necessary (the "Participating Persons"). (7) The parties, in consultation with the Neutral, will agree upon a format for the meetings, designed to assure that both the Neutral and Participating Persons have an opportunity to hear an oral presentation of each party's view on the matter in dispute, and that the Participating Persons attempt to negotiate a resolution of the matter in dispute, with or without the assistance of counsel or others, but with the assistance of the Neutral. To this end, the Neutral is authorized to conduct both joint meetings and separate private caucuses with the parties. During the Mediation the Neutral will be free to divulge to either party all information learned in private caucus with either party unless specifically requested by a disclosing party to keep such information confidential as to the other party. (8) The Neutral, not later than thirty (30) days after the first scheduled session of the Mediation, (i) shall provide his or her opinion to both parties on matter being mediated and the probable outcome of litigation, and (ii) shall make one or more recommendations as to the terms of a possible settlement, upon any conditions imposed by the parties. The Neutral shall base his or her opinions and recommendations on information then requested by the parties to be kept confidential. The opinions and recommendations of the Neutral shall not be binding on the parties. F.WNN 125W351DOCS111 REGOPRAG.DOC B-1 REGULATORY AND OPERATING AGREEMENT (9) The parties agree to participate in the Mediation to its conclusion (as designated by the Neutral) and not to terminate negotiations concerning resolution of the matters in dispute until at least ten (10) days thereafter. Each party agrees not to commence litigation or seek other remedies prior to the conclusion of the ten (10) day post -Mediation negotiation period; provided, however, that either party may commence litigation within thirty (30) days prior to the date after which the commencement of litigation could be barred by an applicable statute of limitations or at any time in order to request an injunction to prevent irreparable harm or other equitable relief, in which event, the parties agree (except as prohibited by court order) to nevertheless continue to participate in the Mediation to its conclusion. (10) The fees of the Neutral shall be shared equally by the parties. The Neutral shall be disqualified as a witness, consultant, expert or counsel for either party with respect to the matters in dispute and any related matters. (11) The Mediation is a compromise negotiation for purposes of applicable State and Federal Rules of Evidence. The entire procedure is confidential, and no stenographic, visual or audio record shall be made. All conduct, statements, promises, offers, view and opinions, whether oral or written, made in the course of the Mediation by either of the parties, their agents, employees, representatives or other invitees and by the Neutral (who will be the parties' joint agent for purposes of these compromise negotiations) are confidential and shall, in addition and where appropriate, be deemed to be work product and privileged. Such conduct, statements, promises, offers, views and opinions shall not be discoverable or admissible for any purposes, including impeachment, in any litigation or other proceeding involving the parties, and shall not be disclosed to anyone not an agent, employee, expert, witness, or representative of any of the parties; provided, however, that evidence otherwise discoverable or admissible is not excluded from discovery or admission as a result of its use in the Mediation. F:\MNN12510351DOCS111REGOPRAG.DOC B-2 REGULATORY AND OPERATING AGREEMENT F:1MNN1251035WOC8111REGOPRAG,DOC D-1 REGULATORY AND OPERATING AGREEMENT EXHIBIT C Development Operating Suhsidy Cap Worksheet Development Mame: Bass Lake Apartments Line 1 Annual MPHA Operating Subsidy Approved by HUD for the next fiscal year Line 2 Rooms in all MPHA units by size of unit #units (a) 0 BR x 3.5 = (b) 1 BR x 3.5 — (c) 2 BR x 4.5 = (d) 3 BR x 6.0 = (e) 4+ BR x 7.0 = Line 3 Sum of all rooms in all MPHA units (sum of Lines 2(a) through 2(e)) Line 4 Average annual MPHA Subsidy Per Room (Line 1 divided by Line 3) Line 5 Rooms in Authority Units by size of unit #units (a) 0 BR x 3.5 — - (b) 1 BR x 3.5 i (c) 2 BR x 4.5 = (d) 3 BR x 6.0 (e) 4+ BR x 7.0 = Line 6 Sum of all rooms in all Authority Units (sum of Lines 5(a) through 5(e)) Line 7 Development Operating Subsidy Cap (Line b times Line 4) F:1MNN1251035WOC8111REGOPRAG,DOC D-1 REGULATORY AND OPERATING AGREEMENT EXHIBIT C Development Operating Subsidy Cap Worksheet (EXAMPLE) Development Name: Bass Lake Apartments Line 1 Annual MPHA Operating Subsidy 3.5 = Approved by HUD for the next fiscal year Line 2 Rooms in all MPHA units by size of unit 6.0 = #units (a) 0 BR 955 x (b) 1 BR 3,895 x (c) 2 BR 280 x (d) 3 BR 447 x (e) 4+ BR 278 x Line 3 Sum of all rooms in all MPHA units (sum of Lines 2(a) through 2(e)) Line 4 Average annual MPHA Subsidy Per Room (Line 1 divided by Line 3) Line 5 Rooms in Authority Units by size of unit #units 15,730,765.00 3.5 = 3,342.50 3.5 = 13,632.50 4.5 — 1,260.00 6.0 = 2,682.00 7.0 = 1,946.00 22,863.00 (a) 0 BR 0 x 3.5 (b) 1 BR 0 x 3.5 (c) 2 BR 4 x 4.5 (d) 3 BR 0 x 6.0 (e) 4+ BR 0 x 7.0 Line 6 Sum of all rooms in all Authority Units (sum of Lines 5(a) through 5(e)) Line 7 Development Operating Subsidy Cap (Line 6 times Line 4) 688.04 = 18.00 E 12,384.72 F.\MNN12510351DOCS111REGOPRAG.DOC D-2 REGULATORY AND OPERATING AGREEMENT EXECUTION COPY 05/12/2003 PROPERTY MANAGEMENT AGREEMENT between BASS LAKE APARTMENTS LLC and PROJECT FOR PRIDE IN LIVING, INC. Dated as of May 13, 2003 This Document Prepared by: HOLMES & ASSOCIATES, LTD. Two Carlson Parkway, Suite 155 Minneapolis, MN 55447 Telephone: 763-249-0888 Facsimile: 763-249.0777 F:1MNN12510351DOCS112ABASSLAKEMNGMTAG.LIOC PROPERTY MANAGEMENT AGREEMENT TABLE OF CONTENTS OF PROPERTY MANAGEMENT AGREEMENT PREAMBLE.................................................................................................................................1 ARTICLE I Scope; Representations and Covenants Section 1.01. Appointment and Acceptance................................................................................. 2 Section 1.02. Representations and Covenants of the Managing Agent ........................................ 3 Section1.03. Definitions............................................................................................................... 3 ARTICLE II General Functions of Mana in A ent Section 2.01. Basic Information............................................:....................................................... 5 Section2.02. Insurance................................................................................................................. 5 Section 2.03. Non-discrimination................................................................................................. 5 Section 2.04. Meetings and Conferences with Owner.................................................................. 5 ARTICLE III Rental Section3.01. Marketing................................................................................................................ 6 Section3.02. Authority Units....................................................................................................... 6 Section 3.03. Tenant Selection...................................................................................................... 7 Section 3.04. Income Certifications.........................................................................._.._................ 8 Section 3.05. Enforcement of Leases.........................:................................................................... 9 Section3.06. Inspections.............................................................................................................. 9 ARTICLE IV Collection and Deposit of Rents, Security Deposits and Public Housing Funds Section 4.01. Collection of Rents............................................................................................... 11 Section 4.02. Security Deposit Account ....................................... Section 4.03. Public Housing Funds........................................................................................... 1 i F.\MNN12510351DOCS\12ABASSLAKEMNGMTAG.DOC i PROPERTY MANAGEMENT AGREEMENT ARTICLE V Maintenance and Repairs Section 5.01. Maintenance and Repair........................................................................................ 12 Section5.02. Taxes..................................................................................................................... 12 Section 5.03. Compliance with Government Orders.................................................................. 13 Section 5.04. Utilities and Services............................................................................................ 13 Section 5.05. Bids and Discounts................................................................................................ 13 Section 5.06. Safety and Health Regulations ....................................... ........... 13 ARTICLE VI Employees Section6.01. Employees............................................................................................................. 14 Section6.02. Fidelity Bond......................................................................................................... 14 Section6.03. Training................................................................................................................. 15 ARTICLE VII The Development Revenue and Expense Account Section 7.01. Disbursements from Development Revenue and Expense Account ..................... 16 Section 7.02. Managing Agent's Compensation .............. .. 16 .......................................................... Section7.03. Deficiencies..........................................:................................................................ 17 Section 7.04. Development Budget .......................:::::..:..............:......................'.:::::....:.:...:.....:.. 17 ARTICLE VIII Record and Reports Section 8.01. Records and Reports ...................................................................1....:...................... 18 Section 8.02. Owner's Right to Re -Allocate Functions.................................................:............. 19 Section 8.03. Owner's ResponsibiIity......................................................................................... 19 ARTICLE IX Term, of Agreement Section 9.01. Term of Agreement.............................................................................................. 20 F;1MNN12510351DOCS\12ABASSLAXEMNCiMTAG.DOC ii PROPERTY MANAGEMENT AGREEMENT ARTICLE X Indemnities Section 10.01. Owner's Indemnities.............................................................................................. 22 Section 10.02. Managing Agent's Indemnities ............................. ... 22 ..................................... Section10.03. Exceptions............................................................................................................. 22 ARTICLE XI Additional Provisions Section11.01. Successors............................................................................................................. 23 Section 11.02. Addresses and Notices.......................................................................................... 23 Section 11.03. Title and Captions........................................................................... Section11.04. Further Action....................................................................................................... 23 Section11.05. Applicable Law..................................................................................................... 23 Section11.06. Amendment........................................................................................................... 23 Section11.07. Assignment...................................................................................I........................ 24 Section11.08. Waiver................................................................................................................... 24 Section 11.09 Interpretative Provisions....................................................................................... 24 Section 11.10. Availability of Funds............................................................................................. 24 Section11.11. Counterparts........................................................................................................... 24 TESTIMONIUM SIGNATURES EXHIBIT A Legal Description EXHIBIT B Management Plan EXHIBIT C Authority Unit Lease Form F:1MNN125103511)OCS112ABASSLAKEMNGMTAG.DOC ill PROPERTY -MANAGEMENT AGREEMENT PROPERTY MANAGEMENT AGREEMENT This Agreement is made this 13th day of May, 2003 between the BASS LAKE APARTMENTS LLC, a Minnesota limited liability company (the "Owner"), and PROJECT FOR PRIDE Lel LIVING, INC., a Minnesota nonprofit corporation (the "Managing Agent"). WHEREAS, the Owner is renovating an eleven (11) unit multifamily housing project in the City of New Hope (the "City"), Minnesota known as Bass Lake Apartments (the "Development"); and WHEREAS, pursuant to a consent decree entered in the case of Hollman et al. v. Cisneros et al., U.S.D.C. (Minn. Dist., 4th Div.) Civil No. 4-92-712 ("Consent Decree") certain low income public housing units located within the City of Minneapolis are to be demolished and replaced with new units throughout the Minneapolis -St. Paul metropolitan area; and WHEREAS, pursuant to Section 5 of the United States Housing Act of 1937 (the "Act"), the Minneapolis Public Housing Authority in and for the City of Minneapolis ("MPHA") and the United States Department of Housing and Urban Development ("HUD") are parties to an Annual Contributions Contract Amendment ("ACC"), in accordance with which the MPHA has been granted funding in cooperation with the City and. the Economic Development Authority in and for the City of New Hope (the "EDA") for four (4) low income public housing units (the "Authority Units") within the Development; and WHEREAS, the construction and operation of the Authority Units is subject to the terms and conditions of an existing Housing Development Agreement (the "Housing Agreemdnt") and. a Regulatory and Operating Agreement (the "Regulatory Agreement") between the MPHA,.. the EDA and the Owner; and WHEREAS, the Owner wishes to appoint the Managing Agent as its agent for purposes of managing the Development, which include the Authority Units, NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth; the parties hereto agree as follows: F:1MNN12.5T351DOCS\12AEASSLAKEMNGMTAG.DOC I PROPERTY MANAGEMENT AGREEMENT ARTICLE I Scope; Representations and Covenants Section 1.01. Appointment and Acceptance. (a) The Owner appoints the Managing Agent as exclusive agent for the management of the Development, and the Managing Agent accepts the appointment, subject to the terms and conditions set forth in this Agreement. The Managing Agent agrees that it will operate the Development in a first class manner; provided, however, that this Agreement shall not shift to the Managing Agent nor relieve the Owner of any of the Owner's responsibilities or obligations under the Act, the ACC, the Consent Decree, the Housing Agreement and the Regulatory Agreement (sometimes collectively called the "Housing Covenants") or under any agreement to which the Owner is a party. (b) Attached to this Agreement as "Exhibit B" and incorporated herein by reference is a copy of a Management Plan (the "Management Plan") for the Development, which contains a detailed description of the policies and procedures to be followed in the management of the Development. In many of its provisions, this Agreement briefly defines the nature of the Managing Agent's obligations, with the intention that reference is made to the Management Plan for more detailed policies and procedures. Accordingly, the Managing Agent and the Owner will comply with applicable provisions of the Management Plan, regardless of whether specific -reference is made thereto in ' any. particular provision .of this Agreement. To the extent the Management Plan and this Agreement :are inconsistent, this Agreement shall control. (c) The Managing Agent hereby agrees to perform for and on behalf 'of the Owner all rights, powers, authorities and obligations of the Owner under and pursuant to the Management Plan and any relevant portions of the Housing: Covenants pertaining to the day-to-day operation and maintenance of the Development and the use of the land constituting the site of the Development as described in Exhibit A hereto; it being acknowledged and agreed that the agency relationship hereby created is for the benefit and security of HUD and the MPHA under the Housing Covenants and that this Agreement cannot be modified or terminated or the obligations of the Managing Agent hereunder modified in any material way or terminated without the express prior written consent of the MPHA. (d) All third parties in dealing with the Managing Agent as agent under this Agreement shall have the right to rely upon the authority of the Managing Agent without any investigation or inquiry and such third parties shall not be responsible to see to the application of any funds paid or delivered to said Managing Agent. F:1MNN12510351DOCS\12ABASSLAKEMNGMTAG.DDC 2 PROPERTY MANAGEMENT AGREEMENT Section 1.02. Representations and Covenants of the Managing Agent. (a) The Managing Agent hereby represents and warrants that some of its officers and owners have at least five (5) years of demonstrated experience in the management and leasing of low income housing developments; and (b) the Managing Agent hereby covenants and warrants that it will not: (1) commit or suffer waste, or fail to use its best efforts to prevent any other person from committing or suffering waste at the Development, (2) cause or permit the Development (subject to the availability of sufficient funds from Development revenues or other funds provided by the Owner or the MPHA) to be repaired; replaced, operated, managed or maintained in a negligent manner, (3) cause or permit development revenues in its possession or under its control to be paid or disbursed to any person other than for deposit in the Development Revenue and Expense Account (as hereinafter defined), except in accordance with this Agreement, or (4) take any actions or permit any actions within its control to be taken which are intended to cause any reduction in value or loss or damage to the Development, or (5) take any action or permit any actions within its control to be taken which would, to the knowledge of the Managing Agent, violate the Housing Covenants. All of the obligations, representations and undertakings of the Managing Agent in this Agreement shall be subject to the following conditions: (i) Funding must be provided from the Development Revenue and Expense Account or by the Owner in an amount sufficient to pay for and compensate those items required by this Agreement: to be paid by the Owner or from the Development Revenue and Expense Account. (ii) The Managing Agent shall only be responsible for performing those specific obligations of which the Managing Agent has actual knowledge or of which the Managing Agent should have had actual knowledge. (iii) The Managing Agent shall not be responsible for any omissions or commissions to the extent limited or directed by express instructions of the Owner. (b) The Managing Agent shall carry out the obligations of the Owner as set forth in the Housing Covenants and as they relate to the management and operation of the Development; provided, however, that assumption of such obligations by the Managing Agent shall not relieve the Owner of the responsibility therefor. (c) The Managing Agent understand that the Owner may be receiving federal subsidy derived from the MPHA ACC with HUD and that the Managing Agent, on behalf of the Owner, must comply with the requirements of the Housing Covenants. The Managing Agent further understands that, pursuant to the Regulatory Agreement, failure of the Managing Agent to comply with the Housing Covenants or MPHA administrative policies may result in the withholding of such federal subsidy. F.WNN1254035U)005112ABASSLAKEMNGMTAG.DOC 3 PROPERTY MANAGEMENT AGREEMENT Section 1.03. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Housing Covenants. Unless the context otherwise specifies or requires a different meaning or intent, the words and terms herein shall have the meanings specified in the Housing Covenants, except that the words "hereof," "herein," "hereunder" or other words of similar import refer to this Agreement as a whole and the following words have the following definitions unless used otherwise in this Agreement: (a) "Development Fiscal Year" means the twelve-month period commencing January 1 and ending December 31. (b) 'Development Budgets" means the Development Budgets to be prepared periodically pursuant to Section 7.04 hereof. (c) 'Development Revenue and Expense Account" means an account established. by the Managing Agent in the name of the Owner into which the Managing Agent shall deposit all revenues derived from the Development and .from which the Managing Agent, on behalf of the Owner, shall pay all expenses related to the Development. (d) 'Development Security Deposit Account" means an account established by the Managing Agent in the name of the Owner into which all tenant security deposits shall be deposited, invested and returned in accordance with Section 4.02 of this Agreement. (e) "LIPH" means the low income public housing units. (f) "MPHA Fiscal Year" means the twelve-month period commencing October 1 and ending September 30. (g) "State" means the State of Minnesota. P MNN12M351DOCS112ABASSLAKEMNGMTAG.DOC 4 PROPERTY MANAGEMENT AGREEMENT ARTICLE H General Functions of Managing Agent Section 2.01. Basic Information. The Owner will furnish the Managing Agent with a complete set of the construction plans and specifications and copies of all; . guaranties and warranties pertinent to construction, fixtures, and equipment incorporated into the Development. With the aid of this information and inspection by competent personnel, the Managing Agent will thoroughly familiarize itself with the character, location, construction, layout, Management Plan and operation of the Development, and especially of the electrical, heating, plumbing, air- conditioning and ventilating systems, the elevators and other mechanical equipment. Section 2.02. Insurance. (a) The Owner will inform the Managing Agent of insurance to be carried with respect to the Development and its operations and, subject to the provisions of Subsection (b) hereof, the Managing Agent will cause such insurance to be placed and kept in effect at all times with such companies on such conditions, in such amounts and with such beneficial interest appearing thereon as shall be acceptable to the Owner. Owner will maintain liability policies in an amount required by the MPHA naming the Managing Agent as an additional insured-. (b) Premiums and any other amounts payable with respect to insurance.. required in. Subsection (a) above shall be paid from the Development Revenue and Expense Account for the Development established hereunder or from other moneys of the Owner. (c) The Managing Agent shall investigate all accidents, claims, and potential claims for damages relating to the Development and shall notify the Owner and shall cooperate with the Owner and the insurance company in.connection therewith. Section 2.03. Non-discrimination. In the performance of its obligations under this Agreement, the Managing Agent will comply with the applicable provisions of any federal, State, or local law prohibiting discrimination in housing on the grounds of race, color, creed, religion, sex, marital status, status with regard to public assistance, disability, familial status, sexual orientation or national origin, including Title VI of the Civil Rights Act of 1964 (Public Law 88- 352, 78 Stat. 241), all requirements imposed by or pursuant to the Regulations of HUD (24 CFR, Subtitle A, Part 1) issued pursuant to that Title; regulations issued pursuant to Executive Order 11063, and Title VIII of the 1968 Civil Rights Act. Section 2.04. Meetings and Conferences with Owner. The Managing Agent shall cause a representative of the Managing Agent to attend meetings and to confer with the Owner with respect to the Development and the Managing Agent's duties under this Agreement on a periodical basis as requested by the Owner. F:\MNNM\035\DOCS\12ABASSLAKEMNGMTAG.DOC 5 PROPERTY MANAGEMENT AGREEMENT ARTICLE III Rental Section 3.01. Marketing. During the initial rent -up period, the Managing Agent, with the cooperation of the Owner, shall conduct a marketing and promotional campaign to lease up the Development. The Managing Agent will offer for rent and will rent the dwelling units, parking spaces, and other rental facilities and concessions in the Development. Incident thereto, the Managing Agent will make all necessary preparations for rent -up in a timely manner and in harmony with the marketing requirements of the Development including but not limited to those prescribed in the Management Plan. Section 3.42. Authority Units. (a) All parties hereto acknowledge that the goal of achieving long-term sustainability of the Development as a mixed -income community will be enhanced by administrative procedures and terms and conditions of occupancy which reduce discernible distinctions in maintenance and operation, and conditions of continued occupancy, between the Authority Units .and other units in the Development to the greatest extent feasible while assuring that the Authority Units are available to house families who meet the occupancy objectives .of the MPHR and EDA. This Agreement enumerates certain respects in which operating procedures and other requirements as to the Authority Unitswill differ .from ,those in effect with respect, to public housing units owned by the MPHR. The -parties agree that, if experience demonstrates a need for or the desirability of further departures from standard procedures applicable to MPHA-owned public housing, they will consult with each other regarding such further modifications and will take such further implementing steps as they agree to be advisable, including, as appropriate, requests to HUD for revision or waiver of regulations necessary to permit the MPHA to undertake measures that enhance the long-term viability of the Development, or requests to implement statutory revisions made by Congress::. from time to time affecting either public housing in general or public housing located within privately -owned mixed -income communities in particular. (b) The Managing Agent, property managers/supervisors and on-site office staff appointed or assigned to the Development and all site personnel shall carefully review and become familiar with all regulatory requirements applicable to LIPH. Key members of the aforementioned personnel (the "Staff') shall attend LIPH compliance training as soon as is practicable. At least once every 2 years thereafter, the Staff must attend seminars, conference and/or workshops on the LIPH to ensure continued knowledge of and compliance with LIPH regulations and policies, as may be periodically amended by HUD. The Managing Agent shall ensure that the Authority Units are operated and managed in compliance with all of the foregoing, cooperate with MPHA, HUD and other governmental authorities in connection therewith; and inform the Owner of any such information which may subsequently become available, which may be material to F.\MNN12510351DOCS112ABAS5LAKEMNGMTAG.DOC 6 PROPERTY MANAGEMENT AGREEMENT the operation and management of the Authority Units and/or Owner's investment therein. (c) Owner shall provide the Managing Agent with copies of the following MPHA policies and documents in a timely manner: (i) Leasing; (ii) Admissions; (iii) Rent Calculation; (iv) Occupancy Standards; (v) Security Deposits; (vi) Grievance Procedures; (vii) Regulatory and Operating Agreement; and (viii) Housing Development Agreement. (d) The Owner further agrees to provide the Managing Agent with amendments, changes, rulings and announcements to the aforementioned documents, as they, may occur. The Managing Agent agrees to provide copies .of documents for the Staff. Cutrent copies are to be maintained at the Development fonthe.duration of the compliance period required by the Authority Units. (e) The Managing Agent will provide MPHA with a copy of all tenant file documentation for any and all tenants who occupied an Authority Unit in the Development from the date the Development was : placed , in- service through December 31of the following year. Such documentation will be submitted to MPHA within thirty (30) days of said December 31 date: Section 3.03. Tenant Selection. (a) The Managing Agent will follow the resident selection policy described in the Management Plan. (b) The Managing Agent will show the premises to prospective residents. (c) With respect to all units within the Development, the Managing Agent will take and process applications for rentals and shall perform all applicant screening, income and data verification, income recertification, background investigations and unit assignments. If an application for an Authority Unit is rejected, the applicant will be told the reasons for rejection, and the rejected application, with reason for rejection noted thereon, will be kept on file for three (3) years. A F:1NINN12510351DOCS112ABASSLAKWNGMTAG.DOC 7 PROPERTY MANAGEMENT AGREEMENT current list of prospective residents will be maintained. In the event this Agreement is terminated or not renewed for any reason, Managing Agent shall forthwith deliver to Owner Managing Agent's list of prospective or rejected tenants. (d) With respect to the Authority Units, the MPHA and EDA shall create, maintain and manage one or more waiting lists in accordance with the Housing Covenants. When a vacancy will occur in an Authority Unit, .: the Managing Agent shall request and the MPHA shall supply to the Managing Agent the names of potentially eligible tenants for the Authority Units. Screening criteria and procedures employed by the Managing Agent with respect to applicants for Authority Units shall, to the extent permissible under the Housing Covenants, be no more restrictive than those utilized by the Managing Agent with respect to other units in the Development; provided that at all times such procedures shall be fair and evenhanded and shall not be more stringent as they relate to waiting list applicants than other applicants. The MPHA shall have the right to monitor the procedures and results of the Managing Agent's activities in this regard. The MPHA shall establish procedures for formal and informal review of eligibility or suitability determinations for applicants for admission to the Authority Units, consistent with HUD regulations. Application fees shall not be charged applicants for the Authority Units. Any applicant initially denied admission to an Authority Unit shall be advised of the reason or reasons for the denial and shall be offered anopportunity for a hearing under established grievance procedures. (e) The Managing Agent will prepare all rent calculations and: dwelling leases . and parking permits in the name of the Owner -and will. execute: the same as. agent for the Owner. The terms of all leases will comply; with the pertinent provisions of state and local law. Dwelling leases will be in a form approved by the Owner, but individual dwelling leases and parking permits need not be submitted for approval . by the Owner. Leases for the Authority Units will be on the -form attached hereto as Exhibit C, subject to such changes as shall. be: approved in writing by the MPHR and HUD. (f) The Owner will furnish the Managing Agent with rent schedules from time to time. (g) The Managing Agent will negotiate concession agreements, and will execute the same in the name of the Owner, identified thereon as agent for the Owner, subject to the Owner's prior approval of all terms and conditions. (h) The Managing Agent will comply with all policies of the Owner regarding rentals. Section 3.04. Income Certifications. Prior to move -in on an interim basis as necessary and at least annually thereafter, the Managing Agent shall certify/recertify incomes of tenants as required by the Housing Covenants for LIPH. An annual report regarding the Authority Units shall be forwarded to the MPHA. Tenant incomes must be in compliance with the Act, any F:1MNN12510351DOCS\12ABASSLAKEMNGMTAG.AOC 8 PROPERTY MANAGEMENT AGREEMENT subsidy contract for the Development and/or as required by any federal or state law relating to the use of proceeds for the funding of the Development's grant. Section 3.05. Enforcement of Leases. (a) The Managing Agent will use its best efforts to secure full compliance by each resident with the terms of his/her lease. Subject to the pertinent procedures prescribed in the Management Plan, the Managing Agent may lawfully terminate any tenancy when, in the Managing Agent's judgment, sufficient cause (including but not limited to nonpayment of rent) for such termination occurs under the terms of the resident's lease. For this purpose, the Managing Agent is authorized to consult with legal counsel to be designated by the Managing Agent, subject to reasonable approval of the Owner, to bring actions for evictions and to execute. notices to vacate and judicial pleadings incident to such actions; provided, however, that the Managing Agent will keep the Owner informed of such actions . and will follow such instructions as the Owner may prescribe for the conduct of any such action. Subject to the Owner's approval, attorney's fees and other necessary costs incurred in connection with such actions will be paid out of the appropriate Rental Project Account as Development expenses. (b)' The MPHA will establish a tenant grievance procedure for residents of the Authority Units in compliance with the requirements of -Section 6(k) of the Act and CFR Part 966 and consistent, to the maximum extent.feasible, with the intent stated in Section 3.02 above. Such procedures will provide for informal discussion and settlement of grievances by the Managing Agent . and hearing before - a formal hearing panel:, appointed in accordance with such : grievance procedures. The MPHA . will seek HUD approval, to the extent required, of variations from the requirements of 24 CFR Part 966, Subpart B, .as amended or replaced from time to time. (c) It is agreed that payments of Development Operating Subsidy from the 'MPHA shall be made directly to the Managing Agent. In the event that the-MPHA does not provide the Managing Agent with the Development Operating Subsidy or the Development Operating . Subsidy is inadequate to pay the difference. between Authority Unit Income and Authority Unit Expenses, all as defined in Article IV of the Regulatory Agreement, the Managing Agent shall utilize funds in the Development Operating Subsidy Reserve as described in Section 5.6 of the Regulatory Agreement. In the event the Development Operating Subsidy Reserve reaches the levels described in Sections 6.3 and 6.4 of the Regulatory Agreement, the Owner and MPHA shall exercise the remedies provided therein. Section 3.06. Inspections. (a) The Managing Agent shall participate in the final inspection(s) to certify the readiness of the units for occupancy and shall (1) inform the Owner of any defects in material and workmanship discovered within the construction warranty period, F-.WNN12510354DOCS112ABASSLAKEMNGMTAG.DOC 9 PROPERTY MANAGEMENT AGREEMENT and (2) participate in any formal inspection held for the purpose of identifying construction defects. (b) Prior to occupancy of any unit by a resident, the Managing Agent and resident shall inspect the unit and both shall certify on forms prescribed by the Managing Agent, that they have inspected the unit and have determined it to be decent, safe, and sanitary in accordance with the criteria provided in the prescribed terms. Copies of these reports shall be kept by the Managing Agent for at least three (3) years. (c) The Managing Agent shall annually certify to the MPHA the condition of the Authority Units and cooperate with the MPHA in conducting semi-annual inspections of Authority Units as well as HUD -required REAC inspections. (d) The Managing Agent shall permit the Owner and any of its invitees or representatives, to have reasonable access to the Development and any Development records, including those required to be maintained under the terms of this Agreement. The Managing Agent shall cooperate with respect to any on- site evaluations of the Development and its operation, maintenance and management. The Managing Agent shall apply its best efforts. to correct within 30 days any shortfalls in the management, maintenance or, evaluation of the Development reported by the Owner, and shall report to the Ownerin writing about such .shortfalls and the Managing Agent's efforts to correct them. F:1MNN125103500CS%12AHASSLAKEMNGMTAG.DOC 10 PROPERTY MANAGEMENT AGREEMENT ARTICLE 1V Collection and Deposit of Rents, Security Deposits and Public Housine Funds Section 4.01. Collection of Rents. The Managing Agent will collect when due all rents, late fees, service charges and all other amounts receivable on the Owner's account in connection with the management and operation of the Development. Such, receipts from the Development (except for resident's security deposits, which will be deposited into the Development Security Deposit Account as specified in Section 4.02 below) will be deposited in a separate account for the Development, which is also separate from all other accounts and funds. The Managing Agent is hereby authorized to establish the Development Revenue and Expense Account and the Development Security Deposit Account that shall be insured by the Federal Deposit Insurance Corporation. These accounts will be carried in the Owner's name, but the Managing Agent or the Owner shall be entitled to withdraw funds from said account. Section 4.02. Security Deposit Account. Any funds .collected as security deposits for the Development must be maintained in the Development Security Deposit Account, a trust account in the name of the Owner separate and apart from all other funds of the Development. The balance in each such account must at all times equal or exceed the Development's liability for tenant security deposits. The Managing Agent shall comply with State or local laws .regarding investment of security deposits and distribution of any interest or .other income earned thereon. Security -deposits for the Authority Units will be handled in' accordance with MPHA policies. Section 4.03. Public Housing Funds. All payments of Development Operating Subsidy'_ made to the Development pursuant to the Regulatory Agreement shall be : deposited by. the Managing Agent into the Development Revenue and.Expense Account. The Initial Deposit to..- the o..the Authority Reserve shall be segregated and invested as set forth in Article V of the Regulatory Agreement. P:11vMN 125Q35\DOCS112ABASSLAKEMNGMTAG.DOC 1 1 PROPERTY MANAGEMENT AGREEMENT ARTICLE V Maintenance and Repairs Section 5.01. Maintenance and Repair. The Managing Agent will cause the Development to be maintained and repaired in accordance with the Management Plan and local codes, and in a first class condition consistent with developments of a similar nature at all .times acceptable to the Owner, including but not limited to cleaning, painting, decorating, plumbing, carpentry, grounds care, and such other maintenance and repair work as may be necessary, subject to any limitations imposed by the Owner in addition to those contained herein, Incident thereto, the following provisions will apply: (a) The Managing Agent will prepare, and adhere to, a preventive maintenance schedule approved by the Owner. Special attention will be !given to preventive maintenance, and to the greatest extent feasible, the services of regular maintenance employees will be used. (b) Subject to the Owner's prior approval, the Managing Agent will coordinate the Owner's contracting with qualified independent contractors for the maintenance . and repair of air conditioning systems and elevators, as appropriate, and for extraordinary repairs beyond the capability of regular maintenance and employees. (c) The Managing. Agent will systematically and promptly receive. and investigate all service requests from residents, take action thereon as may be Justified, and will, keep records of the same. Emergency requests will be received. and serviced on a twenty-four (24) hour basis. Complaints of a serious nature will be reported to the Owner after investigation. (d) All health and safety deficiencies identified through its own• inspections, those of the MPHA or the HUD -required REAC inspections shall be (1). remediedand certified to the MPHR as remedied within 24 hours of discovery. " (d) All payments for purchase of all materials, equipment, tools, appliances, supplies and services necessary for proper maintenance and repair shall be made by Managing Agent from the Development Revenue and Expense Account as provided in Article VII hereof. Section 5.02. Taxes. (a) The parties hereto acknowledge that property taxes shall be paid by the Owner according to law. The Managing Agent shall obtain statements for ad valorem property taxes and assessments against the Development and transmit copies thereof to the Owner promptly upon receipt thereof by the Managing Agent. F.\MNN1251035\DOCS112ABASSLAKEMNGMTAG.DOC 12 PROPERTY MANAGEMENT AGREEMENT (b) Pursuant to Minnesota Statutes, §469.040, the Authority Units are exempt from property taxation and instead the Owner will be obligated to forward payments in lieu of . taxes equal to five percent (5%) of "shelter rents," as defined therein. It shall be the duty of the Managing Agent to annually certify to the appropriate assessing officials the number of Authority Units in the Development and the obligation of the Managing Agent to calculate and provide to the Owner and MPHA the amount of such payments in such a manner as to permit the timely payment thereof: (c) Notwithstanding anything in the preceding paragraphs of this Section 5.02 to the contrary, the Owner or Managing Agent shall have the right at any time during the term of this Agreement to contest the amount of or assessment pertaining to real estate taxes, assessments, or any other imposition levied or imposed by any governmental authority concerning the Development. . Section 5.03. Compliance with Government Orders. The Managing Agent shall promptly take such action as may be necessary to comply and cause the Development to comply with any and all governmental orders, or other requirements affecting the Development, of which Managing Agent knows or should have known, whether imposed by federal, State, county, or municipal authority;: subject, however, to the expenditure approval stated in Article VII. Nevertheless, the Managing Agent shall take no such action so long as the Owner is contesting, or has affirmed its intention to contest, any such order or requirement.: The Managing Agent will notify the Owner in writing of all notices of such orders or other requirements, within seventy- two (72) hours from the time of their receipt and promptly notify, the Ownerof the action proposed to �be taken by the Managing Agent with respect thereto. _ Section 5.04. Utilities and Services. In accordance with the operating budget, the Managing Agent will make arrangements for water, electricity, gas, fuel, oil, sewage, and trash disposal, vermin extermination, decorating, laundry facilities, and telephone service, provided that contracts for such utilities and services shall be made with vendors proposed by the Managing Agent: but in the name of and approved by Owner. Disbursements for such utilities and services. shall be made by the Managing Agent as provided'inWrticle VII hereof. Section 5.05. Bids and Discounts. The Managing Agent shall assist the Owner by soliciting bids and making recommendations regarding obtaining contracts, materials, supplies and services all in compliance with Minnesota law. The Managing Agent will secure to the Development all discounts, rebates or commissions obtainable with respect to purchases, service, contracts, and other transactions on behalf of the Development. The Managing Agent shall ensure that all goods and services purchased from individuals or companies having an identity - of -interest with the Managing Agent shall be purchased at costs not in excess of those that would be incurred in making arms -length purchases on the open market. In the event charges levied by a firm with an identity -of -interest with the Managing Agent exceed charges that were or would have been levied by non -identity -of interest firms for similar services or materials, the Managing Agent shall refund such excess to the Owner. Section 5.06_ Safety and Health Regulations. The Owner and Managing Agent shall take such action as may be necessary to assure that the Owner and the Managing Agent are at all times F-.WNN125\035\1:)OCS\12ABASSLAKEMNGMTAG.DOC 13 PROPERTY MANAGEMENT AGREEMENT in compliance with wage, hour, health, safety, and other federal, state, and local laws, ordinances, regulations, notices and orders of courts or other administrative bodies relating to their respective employees who furnish service in connection with the Development. F;\MNN 125\035\DOCS112ABASSLAKEMNGMTAG.DOC 14 PROPERTY MANAGEMENT AGREEMENT ARTICLE VI Employees Section 6.01. Employees. The Management Plan prescribes the number, qualifications and duties of the personnel to be regularly employed in the management of the Development, including Resident Managers, maintenance, bookkeeping, clerical, and other managerial employees. All such personnel will be hired, paid, supervised, and discharged subject to the following conditions: (a) As more particularly described in the Management Plan, the Resident Manager will have duties of the type usually associated with this position. He/She will be directly responsible to the Managing Agent. (b) The amount of compensation (including fringe benefits) of all on-site personnel will be as prescribed in the Management Plan. (c) Compensation (including fringe benefits) payable to any off-site bookkeeping, clerical, and other managerial personnel who are employees of the Managing Agent, plus all local, State and Federal taxes and assessments incident to the employment of such Personnel will be borne solely by the Managing Agent, and will not be paid out of Owner funds or treated as Development expenses. (d) All such personnel will be employees of the Managing Agent and not the Owner, and will be hired, supervised, and discharged by the Managing Agent. Subject to Article VII hereof, the Owner will reimburse the Managing Agent for compensation (including fringe benefits) payable by the Managing Agent to on- site personnel, as prescribed in the Management Plan, and for all local, State and Federal taxes and assessments (including but not limited to Social Security taxes, unemployment insurance, and Workers Compensation insurance) incident to the employment of such personnel. Such reimbursements will be paid out of the appropriate Development Revenue and Expense Account, as provided in Article VII hereof, and will be treated as Development expenses. The rental value of any dwelling units furnished rent free to the Resident Managers will not be considered a part of his/her compensation, but will instead be treated as a cost to the Development. Provided such amounts are paid to Managing Agent in the first instance, Owner shall have no obligation with respect to employee withholding and taxes to assure that said amounts are timely paid to the proper third parties. (e) All employees of the Managing Agent having access to any unit in the Development or access to keys to any unit in the Development shall undergo a criminal background check by the Managing Agent in accordance with the requirements of Minnesota Statutes, Sections 299C.66 to 299C.71. Section 6.02. Fidelity Bond. The Managing Agent will furnish, at its own expense, an employee theft insurance policy in the principal sum of not less than the fully leased monthly F.XMNNi2510351DOCS\12ABASSLAKEMNGMTAG.DOC 45 PROPERTY MANAGEMENT AGREEMENT gross rent for all of the Development. Such employee theft insurance policy must contain conditions protecting the Owner against misapplication of Development funds by the Managing Agent and its employees and shall insure the Owner against any loss or damage by reason of any fraudulent or dishonest acts of any person acting on behalf of the Managing Agent. The other terms and conditions of the policy shall be subject to the approval of the Owner. The Managing Agent upon execution of this Agreement will deliver a certificate from its insurance company addressed to the Owner evidencing such insurance to be in effect. Section 6.03. Training. The Managing Agent shall provide training for key management personnel, including attendance at conferences and seminars on housing management. The Managing Agent will cooperate with the MPHA and EDA to facilitate resident awareness of and access to available social services. Such cooperation shall include keeping and displaying, on site, information concerning such services as is from time to time provided to the Managing Agent by the MPHA or such other entity or entities as designated by the MPHA. Training on public housing will be made available as needed by MPHA, however, Managing Agent is required to attend LIPH training as outlined in Section 3.02. F:%MNN12516351DOCSN12AHASSLAKEMNGMTAG.POC 16 PROPERTY MANAGEMENT AGREEMENT ARTICLE VII The Development Revenue and Expense Account Section 7.01. Disbursements from Development Revenue and Expense Account. (a) From the funds collected and deposited by the Managing Agent, in the Development Revenue and Expense Account established pursuant to Section 4.01 above, the Owner will make the following disbursements promptly when payable upon written request of Managing Agent: (i) To the Managing Agent for compensation payable to the employees specified in Article VI above, and for the taxes and assessments payable to local, State, and Federal governments in connection with the employment of such personnel. (ii) The payments required to be made by the Owner for fire and other hazards and liability insurance premiums, all as required by the MPHA. (iii) All sums otherwise due and payable by the Owner as expenses of the Development authorized to be incurred by the Managing Agent under the terms of this Agreement, including compensation payable to the Managing Agent, pursuant to Section 7.02 below, for its service hereunder. In all cases, funds disbursed from the Development Revenue and Expense Account shall only be used to pay expenses of the Development. (b) In no event will the Managing Agent be required to use its own funds to pay such disbursements. (c) All disbursements out of the Development Revenue and Expense Account shall be made in accordance with the provisions of this subparagraph. All withdrawals shall be made by check issued by the Managing Agent in the name of the Owner Section 7.02. Managing Agent's Compensation. The Managing Agent will be compensated for its services under this Agreement by monthly fees to be paid out of the Development Revenue and Expense Account and treated as Development expenses. Such fees will be payable in 12 monthly installments on the first day of each month, for the preceding month, beginning with the first day of the second month after this Agreement becomes effective for a particular Development and ending on the first day of the month after the last month that this Agreement is effective for a particular Development. The fee shall be equal to $49.62 per unit. The Owner shall be responsible for timely payment of the foregoing amounts notwithstanding any lack of funds in the Development Revenue and Expense Account. F:1MNN12510351DOCSI12ABASSLAKEMNGMTAG.DOC 17 PROPERTY MANAGEMENT AGREEMENT Section 7.03. Deficiencies. In the event that the balance in the Development Revenue and Expense Account is at any time insufficient to pay disbursements due and payable for the Development from the Development Revenue and Expense Account under Section 7.01 hereof by reason of expenses in excess of the then -current budget, the Managing Agent shall give the Owner at least five (5) days' notice thereof and shall promptly file an amendment to the Development Budget showing the required amount and requesting a deposit from the Owner to cover such deficiency. The Managing Agent will provide the Owner with monthly estimates of Development revenue and expenses for the forthcoming month, and the Owner shall calculate and make available sufficient funds to cover any anticipated deficiency by the 10th of each month. Section 7.04. Development Bum. Annual operating budgets for the Development will be as approved by the Owner. In addition to preparation and submission of a recommended operating budget for the initial Development Fiscal Year, the Managing Agent will prepare a recommended operating budget for the Development for each subsequent Development Fiscal Year beginning during the term of this Agreement, and will :submit the same to the .Owner at least sixty (60) days before the beginning of the Development Fiscal Year. In addition, the Managing Agent shall prepare and submit the initial estimated and subsequent operating budgets for the Authority Units pursuant to Article IV of the Regulatory Agreement and shall provide such other information and reports as required of the Owner thereby. The Owner will promptly inform the Managing Agent of changes, if any, incorporated in approved budgets, and the Managing Agent will keep the Owner informed of any anticipated deviation from the receipts or disbursements stated therein. Any amendments to the budgets must be approved by the Owner. F:1MNN12514351DOCS112ABASSLAKEMNGMTAG.DOC 18 PROPERTY MANAGEMENT AGREEMENT ARTICLE VIII Record and Reports Section 8.01. Records and Reports. In addition to any requirements specified in the Management Plan or other provisions of this Agreement, the Managing Agent will have the following responsibilities with respect to records and reports: (a) The Managing Agent will establish and maintain a comprehensive system for the Development of records, books, and accounts in a manner required by the relevant Management Plan. All records, books, and accounts will be subject to examination at reasonable hours by any authorized representative of the Owner, HUD or the MPHR. The Managing Agent. shall be responsible for providing the budgets and reports described in Article 4 of the Regulatory Agreement. The Managing Agent must submit monthly occupancy data as required by HUD ,on HUD forms 50058 and 51234. (b) With respect to each Development Fiscal Year ending during the term of this Agreement, the Managing Agent will cooperate in the preparation of an annual audited financial report to be prepared by a Certified Public Accountant selected by the Owner, based upon the preparer's examination of the books and records of the Owner and the Managing Agent. Compensation for the preparer's services will be paid out of the Development Revenue and Expense Account as an expense of the Development. (c) The Managing Agent will prepare a monthly report for the Development comparing budgeted figures with actual receipts and disbursements, and will submit each such report to the Owner and the MPHR. (d) The Managing Agent will furnish such information (including occupancy reports) . as may be requested by the Owner or the MPHA from time to time with respect to the financial, physical, or operational condition of the Development, provided that Owner shall compensate the Managing Agent for its costs in furnishing any information not otherwise required by this Agreement or the relevant Management Plan in the event the Managing Agent is required to retain independent contractors not otherwise employed or retained by the Managing Agent. (e) By the twentieth (20th) day of each month, the Managing Agent will furnish the Owner with an occupancy report and an itemized list of all delinquent accounts, including rental accounts, as of the tenth (10th) day of the same month. (f} By the twentieth (20th) day of each month, the Managing Agent will furnish the Owner with a statement of receipts and disbursements during the previous month, and with a schedule of accounts receivable and payable, and reconciled bank statements for each Development Revenue and Expense Account, each Development Revenue and Expense Account, and each Security Deposit Account F:1MNN1251035W005112ABASSLAKEMNGMTAG.DOC 19 PROPERTY MANAGEMENT AGREEMENT as of the end of the previous month and income and balance sheet statements for the previous month. (g) Except as otherwise provided in this Agreement and except with respect to provisions of this Agreement requiring independent contractors who are not employees of the Managing Agent, all off-site bookkeeping, clerical, and other managerial overhead expenses (including but not limited to costs of office supplies and equipment, data processing services, postage, transportation of managerial personnel, and telephone services) will be borne by the Managing Agent out of its own funds and will not be treated as Development expenses. Section 8.02. Owner's Right to Re -Allocate Functions. If the Owner determines that the books of account of the Development are not being maintained in accordance with acceptable standards or that reporting timetables have not been met or are not likely to be met, the Owner, at its expense, may cause such functions to be performed by personnel selected by the Owner. Section 8.03. Owner's Responsibility. Notwithstanding the obligations of the managing Agent to the Owner and the MPHA, nothing contained in this Agreement shall be construed to reduce or eliminate the obligations of the Owner to the MPHA, or any other party, arising from the Housing Covenants. P:1MNN M\0351D005U 2ABASSLAKHMNGMTAG.DOC 20 PROPERTY MANAGEMENT AGREEMENT ARTICLE IX Term of Agreement Section 9.01. Term of Agreement. (a) This Agreement shall terminate as follows: (i) This Agreement shall be effective beginning on the date hereof and ending one year later. (ii) This Agreement shall be extended automatically for successive periods of one (1) year unless either the Owner or the Managing Agent provide written notice ninety (90) days prior to expiration of then -current term indicating their intention to have this Agreement terminate. (iii) This Agreement may be terminated by the either of the parties hereto as of the end of any calendar month with a written thirty (30) day notice and with the express prior written consent of the MPH -A. (iv) In the event of a default by either party hereunder and upon thirty (30) days written notice by the non -defaulting party to the defaulting party, and failure to cure during said period by the defaulting party, this Agreement shall terminate and, except as set forth in Section 10.02 hereof, such termination shall be the exclusive remedy of the non -defaulting party. (v) In the event that a petition in bankruptcy is filed by or against the Owner or Managing Agent, or in the event that either makes an assignment for the benefit of creditors or takes advantage of any insolvency act, the other party may terminate this Agreement without notice to the other. (vi) In the event of sale of the Development, either party may terminate this Agreement upon ninety (90) days written notice. (vii) In the event the MPHA determines that the Managing Agent has violated, breached, or failed to comply with any provision of, or obligation under, the Housing Covenants, it shall so notify the Owner in writing and the Owner shall immediately so notify the Managing Agent and this Agreement shall terminate within thirty (30) days of receipt by the Managing Agent of such notification provided that the Managing Agent has not cured the violation within thirty (30) days. (b) Within ten (10) days of the date that this Agreement is terminated, the Managing Agent shall turn over to the Owner all of the Development's cash, trust accounts, investments and records. After the Owner and Managing Agent have accounted to each other with respect to all matters outstanding for the Development as of the F.\MNN12510351DOCS112ABASSLAKEMNGMTAG.DOC 21 PROPERTY MANAGEMENT AGREEMENT date of termination, the Owner shall furnish Managing Agent security, in the form and principal amount satisfactory to the Managing Agent, against obligations or liabilities which the Managing Agent may properly have incurred with respect to the Development on behalf of the Owner. F.WNN12510351DOCS112ABASSLAKEMNGMTAG.DOC 22 PROPERTY MANAGEMENT AGREEMENT ARTICLE X Indemnities Section 10.01. Owner's Indemnities. The Owner shall indemnify and hold the Managing Agent harmless from and against all claims, damages and costs (including reasonable attorneys fees and costs), arising out of or in connection with the management of the Development and the operation thereof, except (i) for acts of the Managing Agent taken outside the scope of its responsibilities, (ii) for acts of fraud, negligence, or willful misconduct, and (iii) for actual violations by the Managing Agent of local, State, Federal, or other laws pertaining to employees, fair housing, equal opportunity or non-discrimination, provided that this indemnity shall not relieve the Managing Agent from any responsibility or liability to the MPHA or HUD. Section 10.02. Managing Agent's Indemnities. The Managing Agent shall indemnify and hold the Owner harmless from and against all claims, damages and costs (including reasonable attorney's fees and costs) arising out of or in connection with acts outside of the scope or acts of the Managing Agent's duties and responsibilities under this Agreement, arising out of or in connection with acts of fraud, negligence, or willful misconduct, or arising out of or in connection with any actual violation by the Managing Agent of local, State, Federal or other laws pertaining to employees, fair housing, equal opportunity or non-discrimination. Section 10.03. Exceptions. The indemnities herein contained shall not apply to any claim with respect to which the indemnified party is fully covered by insurance, provided that the foregoing exclusion does not invalidate the indemnified parties' insurance coverage. Each party shall endeavor to procure from its insurers waiver of subrogation with respect to claims against the other party under policies in which the other party is not a named insured, and shall promptly notify the other party in the event that any such waiver is unobtainable, or is obtainable only upon payment of an additional premium. If such waiver is obtainable only upon payment of an additional premium, the other party shall have the right, at its option, to require such waiver only if such party pays such additional premium. P:1MNN12510351DOCS%12ABASSLAYEMNGMTAG.DOC 23 PROPERTY MANAGEMENT AGREEMENT ARTICLE XI Additional Provisions Section 11.01. Successors. Any reference in this Agreement, by name or number, to a governmental agency, statute, program, or form shall include any successor agency, statute, program, or form. Section 11.02. Addresses and Notices. Whenever any approval or notice on behalf of the Owner, Managing Agent and MPHA is required under this Agreement, the address for all purposes shall be as set forth below, or such other address of which the other parties have received written notice. Any notice, demand, or request required or permitted to be given or made hereunder shall be in writing and shall be deemed given or made when hand delivered or three (3) business days after having been sent by certified or registered mail, return receipt requested, to such party at such address: Bass Lake Apartments LLC 1925 Chicago Avenue South Minneapolis, Minnesota 55404 Attention: Project for Pride in Living, Inc. Barbara McCormick, Vice President Project for Pride in Living, Inc. 1925 Chicago Avenue South Minneapolis, Minnesota 55404 Attention: Morris Manning, PMD Manager Minneapolis Public Housing Authority in and for the City of Minneapolis 1001 Washington Avenue North Minneapolis, MN 55401 Attention: Executive Director Section 11.03. Title and Captions. All articles, section titles or captions in this Agreement are for convenience only. They shall not be deemed part of this Agreement and in no way define, limit, extend, or describe the scope or intent of any provisions hereof. Section 11.04. Further Action. The parties shall execute and deliver all documents, provide all information, and take or forebear from all such action as may be necessary or appropriate to achieve the purpose of this Agreement. Section 11.05. Applicable Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Minnesota. Section 11.06. Amendment. This Agreement may be modified or amended only with the written approval of the parties hereto and with the prior written consent of the MPHR. F.kMNN12510351DOCS112ABASSLAKEMNGMTAG.DOC 24 PROPERTY MANAGEMENT AGREEMENT Section 11.07. Assignment. It is understood and agreed by the parties hereto that this Agreement shall not be assigned by the Managing Agent without the written consent of the Owner and the MPHA. Section 11.08. Waiver. No failure by any party to insist upon the strict performance of any covenant, duty, agreement, or condition of this Agreement or the Housing Covenants or to exercise any right or remedy consequent upon a breach thereof shall constitute a waiver of any. such breach or any other covenant, agreement, term, or conditions. Any party, by notice to the other parties, may waive any of its rights or any conditions to its obligations hereunder, or any duty, obligation, or covenant of any other parry. Section 11.09. Interpretative Provisions. (a) At all times, this Agreement will inure to the benefit of and constitute a binding obligation upon the parties and their respective successors and assigns. (b) This Agreement constitutes the entire agreement between the Owner and the Managing Agent with respect to the management and operation of the Development, and no change will be valid, unless made by supplemental written agreement in compliance with the provisions of the Housing Covenants and executed by the parties. (c) This Agreement has been executed in several counterparts, each of which shall constitute a complete original agreement, which may be introduced in evidence or used for any other purpose without production of any of the other counterparts. (d) The MPHA shall be promptly notified of any disagreement between the Owner and Managing Agent with respect to any matter pertaining to the operation, management or leasing of the Development or otherwise pertaining to the Development or any action taken or proposed or required to be . taken by the Managing Agent or the Owner under this Agreement or the Housing Covenants. Section 11.10. Availability of Funds. Notwithstanding anything to the contrary herein contained, the Managing Agent shall not be required to make payments herein required or to take actions herein required unless funds necessary therefor are made available by the Owner. Section 11.11. Counterparts. This Agreement may be executed in any number of counterparts, each of whom shall be regarded as an original and all of which shall constitute but one and the same instrument. F,\MNNM2 03500CS\12ABASSLAKEMNGMTAG.DOC 25 PROPERTY MANAGEMENT AGREEMENT IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. OWNER: BASS LAKE APARTMENTS LLC By: _ 4 Barbara McCormick Its President MANAGING AGENT: PROJECT FOR PRIDE IN LIVING, INC. By: c91 -Z C� Barbara McCormick Its Vice President C:1D0(:UMEM AND SETTINGSIBII 1WCAL SETTINGSITEMPORARY INTERNET' FILESIOLK12nl2ABASSLAKEMNGMTAG.DOC PROP" The MPHA hereby approves and consents to the foregoing Agreement and the Managing Agent appointed therein. MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAP LIS BY Z Cornell L. Moore Its Ch 'rman By Cora McCorvey Its Executive Director DATE: &V 4-4 6W3 _ FWNNI2510351D0CSII2ARASSLAKEMNGMTAG.DOC PROPERTY MANAGEMENT AGREEMENT The EDA hereby approves and consents to the foregoing Agreement and the Managing Agent appointed therein. ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE By W. Peter Enck Its President c And by Daniel J. Donahue Its Executive Director DATE: May 12, 2003 C:IWINDOWSSTEMP112ABASSLAKEMNGMTAG.DOC PROPERTY MANAGEMENT AGREEMENT EXHIBIT A Leizal Description The East 1/3 of Lot 35, lying South of the North 1138.67 feet thereof, excepting the West 30 feet and the South 33 feet thereof, Auditor's Subdivision 226, Hennepin County, Minnesota. F:IMNN125W351DOCS112ABASSLAKEMNGMTAG.DOC A-1 PROPERTY MANAGEMENT AGREEMENT EXHIBIT B Manazement Plan F:VNNN12510355TOCS112ABASSLAKEMNGMTAG.DOC &-1 PROPERTY MANAGEMENT AGREEMENT Management Plan 1.0 Management Mission Project for Pride in Living, Inc. (PPL) was established in 1972. PPL's mission is to assist low and moderate -income people to become self-sufficient by addressing their job, housing and neighborhood needs. We believe that all people should have the opportunity to live in decent, affordable housing in a safe, functioning community. Project for Pride in Living, Inc. provides professional Property Management with the expertise needed to market and manage this development in the best interest of its residents and funders. 2.0 General Policy Statement Properties managed by Project for Pride in Living are operated efficiently and as a "service" to our residents. In addition, Project for Pride in Living recognizes that the goal of investors and funders is to have properties maintained for long -terms value. The function of Project for Pride in Living personnel, in view of this policy, is to act as facilitators and to provide necessary assistance so all residents can expect to be treated fairly and by uniformly applied standards, while maintaining the physical property in the best condition possible with resources available. Project for Pride in Living personnel are expected to develop a high level of professionalism as they evaluate management problems and seek solutions. Good property management also depends on acting in accordance with sound financial and accounting principles, implementing a solid preventive and emergency.maintenance.program, and designing a comprehensive system of information dissemination. 3.0 General Management Responsibilities Project for Pride in Living is responsible for planning and directing the fiscal and physical operation of 7610 Bass Lake Road, and will carry out the following major functions as specified in this document, applicable regulatory agreements and the management agreement: );;- Maintenance and Cleaning ➢ Marketing during Sustained Occupancy ➢ Tenant Selection Resident Orientation Budgeting and Financial Reporting 4.0 Staffing 1). Barbara McCormick, Director of Housing and Development Reports To: Executive Director Direct Reports: Construction Manager Indirect Reports: Architectural Volunteers Development Coordinator Construction staff Property Management Department Manager PMD staff Asset Manager Development Staff Office Manager Job Summary: The Director of Housing and Development is responsible for the smooth operations of PPL's Property Management, Development and Construction programs.. The position is directly accountable to the Executive Director, and works with the appropriate Board Committees. The Director is responsible for budget and program goal planning and achievement, and establishing and measuring performance by the program managers. The Director is expected to provide adequate oversight of administrative matters to ensure smooth and efficient operations, and to assist in the identification and securing of project opportunities, which advance the goals of PPL. 2). Morris Manning, Property Management Department Manager Reports To: Director of Housing and Development Direct Reports: Administrative Coordinator Indirect Reports: Site Managers Maintenance Superv. Job Summary Manages the staff of the Property Management Division., focusing on new acquisitions and special projects. Initiates, maintains and/or strengthens PPL's relationships with other organizations of significance to community stability and growth in key neighborhoods. Works as the key contact person for staffing and resident issues beyond the scope of normal operations. Ensures that regulations and procedures specific to Hollman units are followed. 3). Property Manager, Adrienne Lund Reports To: Department Manager, Property Management Job Summary Manage a designated portfolio of rental and other properties under contract with PPL (including 7610 Bass Lake Road). Ensure proper maintenance, budget design and control, establish and collect rents, and build good rapport with all of PPL's residents. 4). Maintenance Supervisor, Seamus Rea Reports To: Property Management Department Director Direct Reports: Maintenance Staff 2 Job Summary Provide appropriate care and maintenance of the physical condition of a designated portfolio of rental properties under contract with PPL. Ensure proper repairs and preventive maintenance, as budgeted and needed, and to build good rapport with all PPL residents. 5.0 Hiring Policies Staffing recruitment and selection criteria is as follows: An important element of Project for Pride in Living efforts in the Twin Cities is our commitment to provide opportunities for people. We believe bringing not only quality housing but also stable employment will become a positive force in this community. All position openings will be advertised in the standard manner. The sources we use to obtain employees are through present employees, newspaper ads, companies like ours, community outreach, and unsolicited applicants. Our procedure for filling these new positions will include the following steps: 1. Prepare job descriptions. 2. Mail notices and summary job description to community organizations, etc. 3. Place ads in local and community newspapers. 4. Post job opening notices at the PPL offices for internal applicants. 5. Accept applications from prospective employees. 6. Interview qualified candidates, check references, complete criminal check for all positions. 6.0 On -Site Staffing Staff will include one part-time property manager, floating maintenance staff and an on-site caretaker, as necessary. Around-the-clock emergency maintenance service will be provided to residents through the PPL maintenance department. When a resident calls the Minneapolis management office after hours or during the weekend, an answering service will direct his/her call to the on-call maintenance staff member. Service contracts will be negotiated with outside vendors for exterminating, trash removal, snow plowing, lawn maintenance and other services deemed necessary for the current and future well being of the property. Service contracts typically are re -bid yearly. 3 7.0 Security Measures Provisions for resident safety include the installation of a intercom tenant buzzer system as part of the rehabilitation scope. Our communication network involves making the site manager available for telephone calls form concerned residents and neighbors. As with all of PPL=s projects, the well being of our neighbors is a top priority, and both the management and development staff are available to work through neighborhood concerns. Additionally, PPL provides a range of social services for residents and have established relationships with other social service providers in the area where residents may be referred for needs outside of the realm of our agency. 7.01 Storage of Keys PPL stores keys for individual apartments off site at our Property Management office. Keys are stored in locked key boxes in a locked room outside of the view of the general public. A numbering system bearing no resemblance to the building address or the apartment number is used to organize property keys. Apartment keys are not stamped with any information. PPL uses Medico keys for main entries, where possible, and also for laundry rooms. Medico keys are custom made and cannot be duplicated without the signed permission of PPL=s division or maintenance manager. These keys are numbered and each key given to a resident is registered. Master keys are given to the maintenance technician, site manager and division manager only. 8.0 Compensation PPL complies with the Fair Labor Standards Act. Site managers are salaried employees, maintenance is charged by the hour, and caretakers are compensated with either a rent reduction or monthly salary. 19 9.0 Marketing 9.01 Identify the Market: On any given day the following organizations contact PPL or refers a client to PPL looking for housing vacancies: AIHC, New Foundations, MN Indian Women's Resource Center, Lutheran Social Services, MPHA, Lutheran Social Services, African American Family Services, The Somali Community of MN and the Housing Link. 9.02 Tenant Selection Plan: Selection criteria and procedures have been developed to guide the steps for selecting the best possible applicants for housing at 7610 Bass Lake Road Apartments, and to define the minimum criteria for any applicant to be approved for housing, 1). The Application Process Each adult member of the household (a person over the age of 18) must complete a formal application which requests previous addresses, employment and credit references, and authorization to perform a criminal background check. Each of these is an important resource in determining an applicant=s eligibility. Therefore, any incomplete application will be denied. The full names of all persons who would be living in the unit, their dates of birth, and social security numbers will be required. A non- refundable application fee of $40.00 is required for all applications, except MHOP and project -based Section 8. Part of this fee is applied to the services of a research firm to verify and provide additional information about the applicant's rental, credit, and criminal history. 2). Rental History Applicants must have at least two (2) consecutive years of good, verifiable residence history that includes prompt payment of rent or mortgage, acceptable care and upkeep of their existing housing, and no history of lease violations. This information must be verified by an agent for the owner or taxpayer of the property previously occupied by the applicant.. The PPLJBass Lake management staff may request additional information on any of the current and/or past landlords and their references of the applicant. 3). Credit history The rental application will provide the information and approval necessary to run a complete credit check through an approved credit company such as TRW or CSC credit services. While previous credit problems do not automatically disqualify a prospective resident, a responsible way of handling credit and repayment of debt will be required. 4). Criminal history V1 Applicants must supply copies of social security cards, State identification or INS identification for all adult household members so that a criminal check can be done. A history of drug charges, violent crimes against persons or property or any other behavior that would jeopardize the health, safety or welfare of other persons would disqualify a prospective resident. 5). Household income Income for all adult household members must be verified. To qualify, the household annual income must not exceed the income limits established for the apartments by the terms of the financing, if applicable. 9.03 Resident Orientation: The site manager meets with each resident to review the Resident Handbook with them verifying that the resident understands the contents and answering subsequent questions. Please see attached Resident Handbook. 10.0 Human Services There will be no ora -site support services provided by PPL to tenants at 7610 Bass Lake Road. However, these tenants will be eligible to participate in PPL's Self Sufficiency Program (SSP), which is housed at PPL's Administration office at 2516 Chicago Avenue South in Minneapolis. SSP, which is the family outreach arm of Project for Pride in Living, offers multi -dimensional services that are available to any person who lives in PPL housing or who participates in PPL programs. SSP provides services to strengthen family stability and economic independence through a comprehensive and flexible approach that addresses the issues of each family member. SSP is dedicated to not only moving people into jobs, but also teaching self-sufficiency skills, so that families are better able to make good decisions, handle crisis situations, and plan for the future. Participants are offered assistance with such things as childcare referrals, personal finance counseling, and interviewing techniques. 11.0 Rent Collection Policies and Procedures PPL utilizes property management software to track rental income and security deposits. Site managers and Property Managers meet weekly with PPL=s Property Management Department Manager to discuss delinquencies and collection procedures. Although PPL has implemented a standard time frame for collection actions, each case is reviewed on an individual basis. ➢ All rent is due on the first day of the month. ➢ Rent uncollected by 5:00 on the fifth day of the month is considered late. Resident is sent a late rent notice asking that they contact the site manager immediately. A $15 charge is added to their amount due. ➢ If payment is not received by the seventh day of the month, the process will be started to file an Unlawful Detainer action against the resident. T ➢ All reasonable efforts are made to collect rent in full at the time it is due. However, PPL believes that if a resident is willing to make a written agreement to pay their outstanding rent within a specific amount of time, we will work with the resident in order that they may keep their housing. If at any point the resident falls behind on their agreement, PPL will immediately file an unlawful Detainer. 12.0 Budgeting ➢ Site manager prepares a list of large necessary repairs and a wish list with accompanying bids. ➢ The budget team, including the Asset Manager, Division Manager and Site Manager audit all utility bills and service contracts. Service contracts, including waste removal and snow plowing are sent out for bids by competing companies. ➢ A comparison of past and current income and expenses of other properties with similar features and resident composition is performed. ➢ Data is compiled and placed into an appropriate spreadsheet format with accompanying budget notes. ➢ Budget is reviewed for final acceptance by the Asset Manager, Department Manager, Housing and Development Director, Chief Financial- Officer and the Budget Review Committee of the PPL Board of Directors. 13.0 ,Maintenance and Cleaning 13.01 Maintenance ➢ Although we encourage residents to make maintenance requests in writing, the majority of requests are made by phone. ➢ The Site Manager writes a work order explaining the problem and schedules the work to be performed with the Maintenance Technician. ➢ The Maintenance Technician completes the work order, leaves a copy of their comments for the resident, and returns the completed work order to the Site Manager. ➢ Regular maintenance is performed at no charge to the resident. Resident damages are charged to the resident at the same rate that the property is charged for maintenance. 13.02 Cleaning ➢ When possible, PPL employs a on-site caretaker to perform daily, weekly and monthly cleaning according to the needs of the property. 7 ➢ Apartment turnovers are scheduled with the caretaker or a contractor in order to have the apartment ready for a new tenant in the quickest possible time. 14.4 Resident Handbook Enclosed on the following pages is a copy of the PPL Resident Handbook, which is distributed to all new tenants. EXHIBIT C Authority Unit Lease Form F;1MNN125103500CS112ABASSLAKEMNGMTAG.DOC C-1 PROPERTY MANAGEMENT AGREEMENT LEASE MANAGING AGENT: BUILDING MANAGEMENT OFFICE TELEPHONE NO. -- Work Order/After Hour EMERGENCY NO. LEGAL NAME OF HEAD(S) OF HOUSEHOLD First Middle Last First Middle Last ADDRESS PROJECT NO. UNIT REEAM MO. KNIT SIZE (NO. OF BEDROOMS) SECURITY DEPOSIT i'J sm DWELLING UNIT CITY: STATE: MN ZIP CODE: Managing Agent rents to Tenant Family the. dwelling unit described above according to the terms and conditions of this Lease. 1. LEASE DEFINITIONS: A. Common Areas. Shared areas including entryway, hallway, stairwell, balcony, lobby, community room, laundry room, parking lot, patio or lawn and other shared areas not listed. B. Community Service. The performance of voluntary work or duties in the public benefit that serve to improve the quality of life, enhance resident self-sufficiency, or increase the tenant's self -responsibility in the community.. C. Dependent. A member of the Tenant Family, excluding foster children or.foster.adults and heads of household, who is less than 18 years of age, a person with a disability, or a full-time student. D. Documentation. Written, accurate, current, objective and verifiable information. E. Emergency. An unexpected situation or sudden occurrence of a serious and urgent nature that demands immediate action. F. Family Unit. All units. G. Flat Rent. Management's determination of the amount of rent based upon the market value of the unit. H. Grounds for Termination: Serious or repeated violations of a material term of the Lease or other good cause. I. Guest. Person not listed in Section 5 of this Lease or in a Lease Addendum and who is/was in the unit or on the premises with Tenant Family's implied or express consent. J. Income Based Rent. Tenant rent that is based on the Tenant Familys income and Statement of Policies. K. Lease. This Lease and incorporated herein by reference any Addendum .to the Lease and, Management's Statement of Policies. L. Live-in Aide. A person whom Management verifies to be essential to the care and well-being of an elderly or near elderly person or a person with a disability, is not obligated for the support of Tenant Family, and resides in the tenant's unit for the sole purpose of providing necessary supportive services to Tenant Family. M. Management. (Agent). N. Material. Having real importance. O. Member(s) of the Household. Person(s) listed in Section 5 of this Lease or in a Lease Addendum. P. Pet. An animal belonging to a tenant limited to a cat or dog that weighs no more than 25 pounds, small caged bird, caged gerbil or hamster, or fish in a thirty gallon or less aquarium. This definition does not include an animal specifically trained to assist a person with a specific disability. Q. Person with a Disability. A person with a disability, as further defined by federal law and regulation and Agent's Statement of Policies. R. Premises. Tenant's unit and its building, common areas and development. S. Reasonable Accommodation. A change in Agent's rules, policies or, procedures or a physical change to its property to accommodate a disability as further defined by applicable law and regulation and Agent's Statement of Policies and Reasonable Accommodation Policy. T. Statement of Policies. Agent's most recent Statement of Policies Governing Admission to and Continued Occupancy of Low Rent Housing as approved and amended by the Agent's. U. Tenant(s). Person(s) listed as Head(s) of Household in this Lease or in a Lease Addendum. V. Tenant Family. Includes Heads of Household and Members of ;the Household listed in Section 5 of this Lease or in a Lease Addendum. W. Unit or Dwelling Unit. Living unit and any area assigned for the Tenant's exclusive use. 2. MINNESOTA STATUTE § 50413.181 DISCLOSURE OF MANAGER AND AGENT.TO ACCEPT SERVICES The address of your Management Office is the BuNin Management Office address listed on page one. A. The person authorized to accept service of process and receive and give receipt for notices and demands is: 3. TERM OF LEASE A. This Lease begins on 20 11 `, This is a 12 month lease. B. This Lease will renew automatically unless the Tenant Family does not comply with the community service requirements. Violation of the community service requirements is grounds for non -renewal of the Lease and termination of the Lease at the end of the 12 month lease term. C. Tenant shall sign a revision to the lease after Agent gives a 60 calendar day notice stating the effective date of the revision. Failure to sign the revision is grounds for termination. 4. RENTAL PAYMENTS AND OTHER REQUIRED PAYMENTS A. Tenant will pay the first rent payment of for the period beginning ending 20 Payment is due as billed. 2 20 , and B. Tenant will pay the monthly rent of $ . on or before the 16�t day of each month beginning , 20 . This monthly rent may change as the Lease or Addendum provides. - C. Tenant shall give a 30 day written notice of intent to vacate. (See Section 13-D). Tenant shall pay rent prorated on a daily basis for a minimum of thirty (30) days after Tenant gives written notice to Management of an intent to vacate. If Tenant does not give Management a written notice of intent to vacate, rent will be charged for thirty (30) days from the day that Management learns that Tenant has moved out. D. Tenant shall pay any charges, penalties and assessments within 30 days of written notice. Within 10 working days from the date of the notice, Tenant shall in writing tell Management of any dispute and request in writing to use the grievance procedure. If Tenant does not request to use the grievance procedure within 10 days, Tenant waives the right to use the grievance procedure. E. Tenant shall deposit $ as a security deposit with Management. Management shall hold the security deposit during the tenancy and refund the security deposit with interest in accordance with Management's Statement of Policies and applicable law and regulation. 5. MEMBERS OF HOUSEHOLD Only the following persons have the right to the exclusive use and occupancy of the dwelling unit with the heads of household named above: Name SSN Relationship Sex DOB 6. UTILITIES A. Management shall pay the cost of the reasonable use (based upon the size of the unit and Tenant Family) of water, garbage collection and sewer service. Tenant shall pay all costs beyond reasonable use. B. Management shall furnish a stove and refrigerator. C. Tenant shall pay the full cost of gas and electricity. Management shall provide a utility allowance as stated in Management's Statement of Policies. D. Tenant shall contact all utility supplier(s) within 24 hours after signing the Lease to place the utilities in Tenant's name and to give the utility supplier the date the lease begins. Gas and electricity shall remain in service for the duration of this Lease. Tenant shall be charged for any damages resulting from Tenant's failure to maintain gas and electricity to the unit. Tenant shall immediately notify the Management Office if heat is not maintained in the 3 unit. Tenant shall immediately report to the Management Office when utility is shµt off. The 1 enant's failure to maintain gas or electric service shall be grounds for Lease termination 7. GUEST POLICY A. The Tenant has the right to the reasonable accommodation of their guests, subject to the terms of this Lease. B. Tenant shall cause each guest to comply with the terms of this Lease. A guest's failure to comply with the terms of this Lease shall be grounds for the trespass of the guest and Lease termination.: . C. Upon a showing of special circumstances or need, Management in its discretion may extend any time period or make an exception to this Section. Agent shall pre -approve in writing any extension or exception to 7D through 71. D. Before a Tenant Family may house a day or night guest for seven consecutive days, Tenant shall provide to Property Management Staff in writing the guest's name, address, dates of the stay and a picture identification for Agent to make a copy of. E. A Tenant may house guests in the unit a total of 30 days per calendar year. F. No more than four persons including the Tenant Family and guests may stay in a one -bedroom unit at the same time. The maximum number of guests permitted to stay in a unit larger than a one -bedroom shall be reasonable in relation to the size of the unit as management determines. G. Guests shall not have any animal(s) on the premises except for an animal specifically trained to assist a person with a specific disability. H. Only a Member of the Tenant Family may receive mail at Tenant's address. Tenant Family will assure that no other person uses Tenant's address or receives mail at Tenant's address. I. When needed, a Tenant shall request in writing Agent's approval for a live-in aide. A medical doctor shall verify in writing a Tenant Family's need for a live-in aide. A live-in aide shall meet all tenant selection criteria as outlined in Agent's Statement of Policies, except for income criteria, and shall comply with the.terms of this lease. 8. DETERMINATION OF RENT, ELIGIBILITY AND UNIT SIZE Management shall determine Tenant Family's rent, eligibility and unit size as stated in Management's Statement of Policies and applicable laws, regulations, and ordinances. Tenant may choose between income -based rent or flat rent. Re -determinations will be held every third year for tenants choosing Flat Rent. All other tenants will have annual re -determinations. The rent listed in Section 4 shall remain in effect until. changed by the most recent Lease Addendum. Tenant shall report all changes to the property manager or the building management office stated on page 1. A. Annual Re -determination 1.) Tenant shall attend the scheduled annual re -determination meeting. Adult Tenant Family Members shall sign all forms in the Re -determination Package and any other forms required to complete the re -determination process. Tenant shall also provide documentation regarding income, assets, family composition, childcare, community service and any other information as Management requests. All signed forms and documentation shall be returned to Management within 30 days from the date of the first scheduled annual re -determination meeting. 2.) If Tenant does not attend the scheduled or rescheduled annual re -determination meeting without good cause or does not comply with any requirements in the re -determination process, it shall be grounds for termination. 3.) If Tenant fails at any time to timely provide written, accurate, current, objective and verifiable information or misrepresents any information relevant to the re -determination process at any time, it shall be grounds for termination. 4 4.) It -Tenant does not comply with this Section and as a result Tenant pays a lower rent than the amount they should have paid, Tenant shall pay the difference between the actual rent paid and the amount they should have paid even if the Lease is terminated. B. Interim Re -determination 1.) Interim re -determinations may be required between the annual re -determinations when there is a change in Tenant Family's income, source of income, household composition, or if Tenant is transferring to another unit. 2.) Tenant shall report within five working days any change: a) To the Tenant Family's household including but not limited to a birth, death, childcare, marriage, divorce, separation or other circumstance; b) To the receipt or discontinuance of public assistance; c) In Tenant Family's source of income or assets; or d) In Tenant Family's income (increase or decrease) which affects the rent or payment as the Statement of Policies provides. 3.) Tenant shall provide within 30 days, written, accurate, current, objective and verifiable documentation of any change listed above. Tenant should keep a copy of the documentation. 4.) Tenant shall pay a lower rent on the first day of the month after Tenant reports a decrease in income and timely provides the documentation of the decrease. If Tenant does not timely provide documentation, Tenant's rent will not be lowered until the first day of the month after Management receives the documentation. 5.) When a change in circumstance results in an increase in rent, Agent shall give the Tenant a month's notice of the increase in rent. In cases where the Tenant does not report a change as stated in 2 above, the rent will be increased as if timely notice had been given. C. Repayment Agreement and Termination 1.) if Tenant Family does not comply with this Section it shall be grounds for termination. 2.) if Tenant Family does not comply with this Section and as a result Tenant pays a lower rent than the amount 'they should have paid, Tenant shall pay the difference between the actual rent paid and the amount they should have paid even if the lease is terminated. 3.) If Management does not terminate the lease under this Section: a.) Tenant shall pay the difference Detween the actual rent paid and the amount required under the Statement of Policies within 30 days after Agent's notification; or b.) Tenant shall sign Management's Repayment Agreement within 30 days after Agent's notification. D. Misrepresentation or Failure to Provide Documentation If Agent determines that Tenant Family was admitted to housing or has remained in housing because of Tenant Family's misrepresentation, or because Tenant Family did not timely provide written accurate, current, objective and verifiable information regarding income, assets, family composition, child care, abuse or pattern of abuse of alcohol, illegal use or pattern of illegal use of a controlled substance or criminal activity, it shall be grounds for termination even if the Tenant Family is eligible for housing at the time of the determination. E. If tenant disagrees with any Agent decision in this Section, tenant may use the grievance procedure. 5 9. TRANSFER POLICY A. A transfer is a Management approved move trom one owned unit to another owned unit. Agent will determine the appropriate size of the unit according to its Statement of Policies. Suitable offers of an available unit will be made according to the Statement of Policies. Family units are solely for the use of a Tenant with dependent(s). Tenant shall move within 15 days after the tenant accepts the offer of the dwelling unit and three days after signing the lease. A tenant who does not completely move out of the existing unit by the date established by Agent, shall pay a holdover fee according to the Statement of Policies. B. An involuntary transfer is a transfer that Agent initiates based upon family composition, modernization/demolition of the unit or other circumstance or because the unit is uninhabitable. A tenant's failure to timely transfer shall be grounds for lease termination. A tenant's failure to accept the offer of an appropriate unit shall be grounds for lease termination. 1.) Tenant shall pay all moving expenses when the transfer is based upon occupancy standards in the Statement of Policies. 2.) Tenant shall move immediately upon Agent's request when unit is uninhabitable. If the tenant, a person under tenant's control or tenant's guests causes the uninhabitable condition of the unit, Tenant shall pay all moving expenses and the cost of repair to the unit and Lease may be terminated. 3.) Tenant shall move upon Agent's request waren the transfer is based upon the construction or.demolition of the unit. Agent shall pay moving expenses according to applicable law and regulation. 4.) A Tenant in an accessible unit, who does not require the features of the unit, shall move upon Agent's request when another person requires the features of the unit. Agent shall pay for the reasonable moving expenses. C. A voluntary transfer is initiated by the tenant's written request. Tenant shall pay for all moving expenses. 1.) If Tenant is lease compliant and Agent approves the transfer, Tenant is offered one suitable unit. If tenant does not accept the offer, the transfer request shall be cancelled. 2.) A tenant's request for a transfer based upon a reasonable accommodation shall be decided according to Agent's Reasonable Accommodation Policy. 10. MANAGEMENT'S OBLIGATIONS Except in circumstances beyond Agent's control, Agent agrees to do the following: A. Provide an after hour emergency work order phone number for emergency maintenance. B. Maintain the unit, building, facilities, grounds, common areas and management's appliances, not otherwise assigned to Tenant for maintenance in a decent, safe and sanitary condition. C. Comply with applicable building codes, housing codes and HUD regulations materially affecting health and safety. D. Make necessary repairs to the unit. Agent may abate the rent in proportion to the seriousness of the damage to the unit and loss in value of the unit if necessary repairs are not made in a reasonable time and a replacement unit is not offered. There will be no abatement in the rent, if the Tenant Family refuses the replacement unit or if the damage is caused by the fault or negligence of the Tenant Family, person under Tenant Family's control or Tenant Family's guest. E. Maintain in good and safe working condition all electrical, plumbing, heating, ventilation, sanitary and other facilities, appliances and elevators supplied or required to be supplied by management. F. Provide and maintain trash and garbage containers for highrise buildings except those containers for the exclusive use of a Tenant Family. 11 G. Supply running water, reasonable amounts of hot water and reasonable amounts of heat at appropriate times of the year, in compliance with applicable law and ordinance. H. Offer a replacement unit if available, to the Tenant when the condition of the unit is uninhabitable and Management does not repair the condition within a reasonable time. However, Management will not offer a replacement unit, when the condition is due to Tenant Family's poor housekeeping. I. Notify the Tenant in writing, of the specific grounds for Management's proposed adverse action and Tenant's rights under the grievance procedure. Adverse action includes but is not limited to: rent adjustment, proposed lease termination, transfer and sales or service charges. J. Post a notice in the Management Office that Management's Statement of Policies, Grievance Procedure, Post Orders, and Building House/Community Rules are available to Tenant upon request from the Property Manager. 11. TENANT FAMILY'S OBLIGATIONS A. Tenant shall assure that Tenant Family, other persons under Tenant Family's control, live-in aide and Tenant Family's guests comply with all obligations, terms and conditions in the Lease, including but not limited to the following: B. Tenant Family shall: 1.) Pay rent when due. 2.) Pay reasonable charges, beyond normal wear and tear, in accordance with the Sales and Service Charge Schedule in the Statement of Policies, for the repair of damages to the unit or the premises when the Tenant Family or Tenant Family guest's intentional or negligent conduct caused the damage. 3.) Use the unit as their sole and principal residence. If the Tenant is away from the unit for more than 30 consecutive days in a calendar year, Tenant shall notify management. 4.) Use the unit solely as a private place to live for Tenant Family and assure that the unit is not used for any other purpose without Agent's prior written consent. Tenant Family may engage in legal profit making activities in the unit if Agent pre -determines in writing that the activities are incidental to the primary use of the unit as a residence. 5.) Not assign the lease or sublease the unit. 6.) Not house day or night boarders or lodgers. 7.) Be in compliance with the Statement of Policies, which is available upon request from the Property Manager. 8.) Comply with all applicable codes, ordinances, laws and regulations including but not limited to building, housing, health, sanitation, safety, fire and the recycling of items. 9.) Park vehicles only in designated parking areas, which do not obstruct traffic. Assure that the vehicles on the premises have current license tabs, no flat tires or broken windshields and are currently operable and in compliance with applicable motor vehicle laws and ordinances. The repair or maintenance of vehicles on the premises is prohibited. A Tenant may fix a flat tire, replace a windshield or jump start a vehicle on the premises. Remove vehicles from parking area as requested by Management. At Tenant's expense, Management may tow vehicles that are not in compliance with this Lease or Management's parking policy. 10.) Not disturb other residents or neighbors. Shall cause household members or guests to act in a manner which will not disturb other residents and neighbor's peaceful enjoyment of the premises and which will keep the premises and the neighborhood in a decent, safe and sanitary manner. 7 11.) Not create or permit (by an act or omission) any.condition or situation on the premises resulting in a serious risk to the health or safety to any person or damage to property. 12.) Use discretion when opening windows when the outside temperature is below 32 degrees. Tenant shall pay for any damages that occur if the windows are left open, including flood damages and repairs to the plumbing and heating systems. if major damage occurs or if Tenant repeatedly violates this section, Agent may terminate the Lease. 13.) Not engage in and assure that a person under Tenant Family's control, Tenant Family's guests and members of the household will not engage in any activity which Management determines may threaten the health, safety, or right to peaceful enjoyment of the premises by any Tenant Family, guest, neighbor, Agent employee, Agent's vendor or other person. Such activity even in the absence of an arrest or conviction shall be grounds for termination. 14.) Not use the dwelling unit to manufacture, sell, give away, barter, deliver, exchange or distribute, or use an illegal drug in violation of any applicable law, ordinance or regulation even in the absence of an arrest or conviction. 15.) Not commit fraud in connection with any Federal or State housing assistance program. 16.) Meet with Management at any reasonable time and place as Management requests and after reasonable notice. 17.) Transfer to an appropriate size unit based on family composition when Agent notifies Tenant that a unit is available. 18.) Not interfere with Agent's employees or contractors' performance of duties. 19.) Immediately report to the Management Office any vandalism damage or the need for repair to the interior or exterior of the premises. 20.) Keep the unit in a clean and safe condition. Dispose of all garbage, rubbish and other waste in a sanitary and safe manner. 21.) Not make any repairs or alterations to or install or use any equipment in the unit or on the premises such as an antenna, satellite dish, deck, swimming pool, glued or nailed down carpet, water bed, lock or other like items. 22.) Not damage, destroy, deface, mar, alter or remove any part of the unit or premises or affix anything to the outside or inside of the unit or premises. This includes but is not limited to no painting, wallpaper, corkboard, mirror tiles, shelves or contact paper. This does not include the hanging of reasonable wall hangings inside the unit. 23.) Use only in a reasonable manner all electrical, plumbing, heating, ventilating and other facilities, or appliances in the dwelling unit, common areas or premises. 24.) Arrange for a licensed electrician to install a ceiling fan after written approval from management. Tenant must remove the ceiling fan prior to the vacate date. 25.) At Agent's discretion and with Agent's prior written approval, Tenant may have cable, alarm system, fence, air conditioner, freezer, dishwasher, washing machine or clothes dryer properly vented. In family units, the freezer, washing machine and clothes dryer shall be kept in the basement. 26.) Not have miscellaneous items, fire hazards or clutter in the dwelling unit or on the premises including but not limited to motor vehicle parts, tires, bike parts, flammables, gas, naphtha, or solvents. 27.) Not obstruct an entryway, hallway, walkway, doorway, bathroom, shower, bathtub, sink, appliance, heating source, circuit breaker, window or smoke detector. D 28.) Not use or have any furniture, grills or playground -like equipment in the front yard or on the front porch. Only outdoor yard furniture may be used in the backyard and no grills on a porch or balcony. 29.) Keep the windows and screens in place and in working order. Shall provide proper window covering and maintain windows to prevent mildew and dry rot. 30.) Receive Management's prior written approval to create or expand an existing garden. C. Tenant Maintenance If the Tenant does not maintain the areas assigned for Tenant Family's exclusive use, the Tenant shall pay to Management all expenses necessary to maintain or repair these areas: 1) Tenant shall: a. Keep clean and free of debris walkways, stairs, landings, hallways, grounds, patios and landscaping adjacent to the unit. b. Tenant shall remove snow and ice from the sidewalks and steps connected with the unit and maintain the front and rear yards in a neat and orderly manner; and c. Tenant shall mow the lawn weekly; fertilize and re -seed the worn lawn areas; provide weed and dandelion control; water; edge; trim shrubs and small trees; remove volunteer growth next to the foundations, fences, garage/shed, walkways and parking pads; rake leaves and other debris; and maintain fruit trees on the premises. 2) Tenant shall do the following maintenance tasks: a. PLUMBING — Open simple blocked drains if possible with plunger and replace toilet seats. b. MECHANICAL WORK — Replace broken electrical switch plates, receptacle covers, light fixture globes, light bulbs (including bulbs in refrigerators and stoves), replace. burned. out fuses and: reset electrical current breakers, replace smoke detector batteries and clean and/or replace the furnace filter (forced air furnace) at least once a month during normal heating season. c. GENERAL REPAIRS — Repair or replace storm door latches, closures and springs, door knobs, curtain rods, kitchen cabinet hinges and knobs, screws, mailboxes, garbage cans and medicine cabinet mirrors. d. STORM WINDOWS, SCREENS AND STORM DOOR INSERTS Repair or take damaged items to a hardware store or repair shop at Tenant's expense. 12. PET POLICY AND DEPOSIT A. Tenant shall follow the Pet Policy in the Statement of Policies. With Agent's prior written approval, Tenant may keep as a pet only one of the following: one cat or one dog which weighs no more than 25 pounds; two caged birds; an aquarium of thirty gallons or less for fish only; or two caged gerbils or hamsters. (See Appendix D to the Statement of Policies for a list of prohibited pets.) Agent may make exceptions in writing to this paragraph, for a Tenant who obtained approval for a pet and complied with the prior pet policy before July 12, 2000. B. Tenant shall register a cat or dog with Management and complete the Pet Lease Addendum before the Tenant may keep the pet on the premises or unit. Pet sitting for pets not registered in your building or a guest pet is not permitted. Only pets registered in your building and owned by Tenant are permitted on the premises. C. Tenant shall pay a deposit of $75.00 ($150.00 if the unit has Owner owned carpet) for a cat or dog. Agent shall return the deposit with interest less any damage claims when Tenant moves out or no longer has a cat or dog. D. If Agent reasonably believes an animal is in distress or is causing a disturbance or property damage, the Tenant or the local emergency contact shall remove the animal upon Agent's request. If the Tenant or local emergency X01 contact does not remove the animal or if Agent is unable to reach the Tenant or the local emergency contact, Agent at its sole discretion, may enter the unit and remove the -animal. Tenant shall be responsible for all fees and costs related to the animal's removal and boarding. E. A Tenant Family or guest who has a animal specifically trained to assist the person with a specific disability is required to follow Agent's pet policy with regard to registration and pet control requirements. F. Failure to follow the pet policy, may be grounds for termination. G. EXCEPTIONS. 13. TERMINATION OF LEASE A. Except as provided in Section 13.B., management shall terminate the Lease or refuse to renew the Lease or evict the Tenant Family from the unit only for serious or repeated violations of a material term of the Lease or other good cause. Serious or repeated violations of the Lease include but are not limited to: 1.) Tenant's failure to timely provide written, accurate, current, objective and verifiable information or to timely provide signed forms to permit Agent to obtain such information. 2.) Tenant's misrepresentation of any material information at any time relevant to the determination or re- determination of the Tenant's rent, eligibility or unit size. 3.) Tenant's non-payment of rent, sales or other service charges (see Appendix C to the Statement of Policies). 4.) The filing of two valid Eviction Actions for the non-payment of rent in four consecutive months or three valid Eviction Actions for the non-payment of rent in 12 consecutive months. 5.) Making major unauthorized alterations to the unit or premises. 6.) Serious, major or repeated disturbance to other tenants or neighbors. 7.) Negligent or intentional conduct that results in serious, major or repeated damage to the unit or premises -including but not limited to fires or floods. 8.) Any activity including criminal activity engaged in by the Tenant family, even in the absence of an arrest or conviction, that Agent determines may threaten the health, safety or right to peaceful enjoyment of the premises of any person on the premises, Tenant Family, guest, neighbor, or Agent's employee or vendor. 9.) Any violent or drug related criminal activity, engaged in by the Tenant Family on or off the premises even in the absence of an arrest or conviction or any activity resulting in a felony conviction by the Tenant Family. 10.) Any criminal activity, even in the absence of an arrest or conviction, that Agent determines may threaten any Tenant Family, guest, neighbor or Agent's employee or vendor aide or any drug-related criminal activity on or off the premises engaged in by a person under Tenant Family s control, guest, or five -in aide. 11.) Tenant Family's alcohol abuse even in the absence of an arrest or conviction that Agent determines may interfere with the health, safety or right to peaceful enjoyment of the premises of any person on the premises, Tenant Family, guest, neighbor or Agent's employee or vendor. 12.) Weapons or illegal drugs seized in a unit by a law enforcement officer. 13.) Failure of the Tenant Family, other person under Tenant Family's control, Tenant Family's guest or live-in aide to comply with all obligations, terms and conditions in this lease. 14.) When a member of the Tenant Family is violating a condition of probation or parole imposed by federal or state law. 10 15.) When a member of the Tenant Family is fleeing to avoid prosecution or custody or confinement after conviction, under the laws of the place from which the individual flees, for a crime, or attempt to commit a crime, which is a felony under the laws of the place from which the individual flees, or in the case of the State of New Jersey, is a high misdemeanor under the laws of the State. 16.) When a member of the Tenant Family or Tenant Family's guest wrongfully takes any money or property from another Tenant, a guest, Agent or a Tenant organization regardless of whether the money or property is returned and regardless of an arrest or conviction. B. Reduction in Operating Subsidy. 1.) It is understood by the parties hereto that the operating expenses of the dwelling unit are being paid, in part, by certain subsidies to be received by the Owner from the Minneapolis Public Housing Authority in and for the City of Minneapolis (the "MPHR'). Such operating subsidies are, in turn, to be received by the MPHA from HUD and are subject to appropriation by the United States Congress. Pursuant to a Regulatory and Operating Agreement between the Owner and the MPHA, in the event that, for any reason, the Owner does not receive sufficient operating subsidy to make up the difference between (i) the cost of operating the dwelling unit, and (ii) the rent paid by the Tenant (taking into account certain reserve funds), the Management Agent shall have the right, subject to the notice requirements of Section 13.B.2.a. and Section 15, to elect not to renew this Lease at the end of its then current term. 2.) In the event that in accordance with Section 13.6.1., this Lease is not renewed, the MPHA has agreed to make all reasonable effort to relocate the Tenant to another public housing unit owned by the MPHA. Such effort shall include: a.) making of up to two (2) offers of the first available and suitable MPHA units to Tenant, without regard to then -existing waiting list criteria or priorities. Tenant shall be given sixty (60) days' advance written notice by the Managing Agent prior to being required to move. The MPHA will use its best efforts to provide Tenant with thirty (30) days' written notice of the availability of a suitably sized unit. Tenant's written response to the notice must be received by the MPHA within five (5) days of receipt. If Tenant rejects the first unit offered, the MPHA has agreed to again offer the next available, suitably sized unit.to Tenant and Tenant shall have five (5) days of receipt of such second notice to deliver to the MPHA written acceptance of such offer. Failure to respond to an MPHA notice within the required five (5) days shall be considered a rejection; and b.) offering Tenant a Section 8 certificate, to the extent one is available to the MPHA. C. Management shall give the Tenant written notice of termination of the Lease as follows: 1.) Fourteen (14) days for.fallure to pay rent. 2.) A reasonable time depending on the seriousness of the situation and in the case of a threat or act against the health or safety of other Tenants, guests, neighbors, Management's employees or vendors or others. 3.) Thirty (30) days in all other cases except if state or local law provides otherwise. D. Management shall give Tenant a written notice stating the specific grounds for the termination and the Tenant's right to reply and rights under the Grievance Procedure as described in Section 17 of this Lease. Tenant has the right to terminate the Lease. To terminate the lease, Tenant shall give a thirty (30) days written notice properly addressed and either delivered to the assigned Building Management Office or sent by prepaid first class mail to the Area Management Office listed in Section 2. F. The Tenant shall leave the unit clean and in good condition, and return the keys to Management on or before the lease termination date. If the Tenant does not provide proper written notice, leave the unit clean and in good condition or timely return the keys, Tenant may owe additional charges. 11 G. If the Tenant(s) is (are) no longer a memoer of the i enant Family's household, this Lease shall terminate. Management may approve a new Lease with remaining adult household remembers who are lease compliant and meet eligibility requirements. H. If the Tenant transfers to another unit, this Lease shall terminate. A new Lease shall be executed for the other unit. However, the signing of a new Lease does not remove or abate prior or existing Lease violations or outstanding debts. I. Management's acceptance of rent when there is cause for termination of the Lease, shall not be a waiver of Management's right to terminate this Lease. J. If the Tenant continues to occupy the dwelling unit after the termination of the Lease, the Tenant agrees to pay to Managing Agent the reasonable value of the use of the premises for the period that the Tenant occupies the unit. The reasonable value for the use of the premises shall equal the amount of rent for such period. However, such payments shall not constitute rent. Also, Management's acceptance of the payments shall not waive Managing Agent's right to assert any lease violations in any legal action. 14. INSPECTIONS AND ACCESS A. Management and Tenant shall conduct a move -in inspection of the unit. Management shall give the Tenant a written statement of the condition of the unit and the equipment in the unit and needed repairs. ( See Section 10 D). Management and the Tenant shall sign the statement. A copy of the statement shall be kept in the Tenant's file. When Tenant moves out, Management shall inspect the unit and complete a written statement about the condition of the unit and the equipment in the unit. Management shall provide a copy of the statement and a statement of the charges, if any, to Tenant. A copy of the statement shall be kept in the Tenant's file. B. Management shall have the right to enter Tenant's unit as follows: 1.) Management shall provide Tenant with a minimum 48 hour written notice stating the purpose of the entry into the unit. The entry shall be at reasonable hours between approximately 8:00 a.m. and 6:00 p.m. for the purposes of performing routine, annual or follow-up inspections, HUD inspections, preventative maintenance inspections, pest control operations, making improvements or repairs, or showing the premises for re-leasing. 2.) Management may enter the unit at any time without advance notification when there is reasonable cause to believe an emergency exists. 3.) If all adult members of the household are absent at the time of entry, Management shall leave in the unit a written statement specifying the date, time, purpose of entry and name of the person who entered. 4.) During any entry permitted by this section, Management may take pictures to show damage to Owner property, unsafe conditions or housekeeping lease violations. 5.) Tenant's failure to allow access, interference with Management's right to enter or any other non-compliance with this section shall be grounds for termination. 15. NOTICE PROCEDURES A. Management's notice to Tenant regarding lease violations, lease terminations or eviction actions shall be in writing and: 1.) Delivered to the Tenant or an adult Household Member; or 2.) Properly addressed to the unit address on this Lease and sent by prepaid first class mail. 12 B. Tenant's notice to Management snail be in writing and be aervered or sent by prepaid tirst-class mail properly addressed to the assigned Building Management Office -or the area management office listed in Section 2. C. Management may deliver written communications to the unit regarding the parking policy, events, pest control, inspections, meetings, tenant and MPHA publications and other like communications. 16. ABANDONED UNIT OR PROPERTY A. If Management determines that the Tenant has abandoned the unit, Management shall terminate the lease. B. If any of Tenant's personal property remains in the unit after the Tenant has vacated, the Lease is voided or the Lease is terminated by agreement, judicial action or otherwise, it shall be considered abandoned. Management shall dispose of the property according to Minnesota law and Management's Statement of Policies. 17. GRIEVANCE PROCEDURE A. All disputes about the lease snail be processed according to Management's Grievance Procedure. The Grievance Procedure is available upon request from the property manager. B. The Tenant is not entitled to a grievance hearing when MPHA: 1.) Denies a request for a lease add-on. 2.) Terminates a lease for: a.) The non-payment of rent or other charges unless the grievance concerns the amount of money owed and the amount in dispute is placed in escrow according to the Grievance Procedure in the Statement of Policies. b.) Any activity even in the absence of an arrest or conviction that threatens the health, safety or right to peaceful enjoyment of the premises by a tenant, guest, neighbor, Management's employee, vendor or other person. c.) Any violent or drug-related criminal activity on or off the premises regardless of an arrest or conviction. d.) Any activity resulting in a felony conviction. C. If a Tenant is not entitled to use the grievance procedure or it a grievance hearing panel or officer, upholds Management's decision to terminate the lease, and if tenant does not timely vacate the unit after Management sends a notice of termination, Management will file an eviction action in district/housing court. D. Under 42 U.S.C. §1437d(k) and 24 C.F.R. § 966.51, HUD has determined that a Minnesota court hearing provides the basic elements of due process as set out in 24 C.F.R. § 966.53 (c). 18. CHANGES TO LEASE Management shall give each affected Tenant a thirty (30) day written notice of any changes to the Lease except for changes in the Tenant's rent. The notice shall explain the proposed change, the reasons for the change and how the Tenant may give written comments for Management's consideration before the change is put into effect. The form of this written notice will comply with applicable federal law and regulation. Management and Tenant shall sign all lease changes. 19. RECEIPT OF LEASE AND OTHER DOCUMENTS BY TENANT The Tenant has received a signed copy of this Lease and the Grievance Procedure, was given an opportunity to read the Statement of Policies and understands how these documents apply to the Tenant. 13 20. CONFLICT BETWEEN LEASE DOCUMENTS If there is a conflict between the Lease documents, the order of priority of the Lease documents shall be the Lease and then the Statement of Policies. 21. ADDITIONAL PROVISIONS (Intentionally left blank) After Tenant and Agent sign below, this Lease shall take effect on the date shown in Section 3, TERM OF LEASE. Date: By: Tenant Tenant Supervisor 14 Tenant Tenant Mau.13. 2003 11:280 a - `, .'IAPPLICATION NO.: MW-OR1001414 ALTA COl4' "MITMLNT --1982 Rev_ 8CHEDULIE A APPLICATION NO.: OR1001414-C (Supplemental No. 2) 1. EFFECTIVE DATE: November. 7, 2002 AT 7:00 AM 2. POLICY OR POLICIES TO BE ISSUED: A ❑ 'ALTA' RESW1';NTLkL OWNERS POLICY FE, V 1987 NG 2092 P 2/6 Z'ALT OVVN kt'S ' LICY 10-17-92 $525,000.00 PROPOSED INSURED: Bass Labe Akartments LLC 'ALTA' LOAN POLICY 10-17-92 $350,000.00 PROPOSED INSURED: Hennepin Coturty N'ALTA' LOAN POLICY 10-17-92 $150,000.00 PROPOSED INSURED: Hennepin County Housing and Redevelopme)at Authority N'ALTA' LOAN POLICY 10-17-92 $223,000.0.0 PROPOSED INSURED: New Hope Economic Development .4uthority 3. TI -M ESTATE OR INTEREST IN THE .LAND DESCRIBED OR RE1aERRED TO IN THIS COMMITMENT AND COVERED HEREIN IS A I1'LE SIMPLE AND TITLE 7-TERFTO IS AT THE EFFECTIVE DATE HEREOF VESTED IN: Bass Lake Apartments LLC, a Minnesota limited liability cornpany ORDOCS ORT ALTA C0b1b[ITM—r T 1992 -'OR ALL P0LIC7TI'i'LZS PAGE t 4 * OLD RXPUBLIC * * Nottiona{ Tole InsurHnce Comp4ny May -13, 2003 11:29AM ..F.i..i7eA ti q . AFFMCATION NO.: Ml N-OR10014Z4 No•2092 P. 3A 4. THE LAND REFERRED TO IN THIS COMMITMENT IS DESCRIBED AS FOLLOWS, The East 113 of Lot 35, ]Ping South of the North 1.1138,67 feet thereof, excepting the West 30 :Feet and the South 33 feet `hereof, Auditor's Subdivision 226, Hennepin Couzxty, Minnesota. Abstract property ORD QC5 ORT ALTA COM?djTMIrN r 1982 I? Olt ALL poLlCY yy,, S x x rr PALL Z ( OLD REPUBLIC ;F �' *� "10nml title in6L lAtc Company May .13, 2003 11 29AM No.209? P. 4/6 �.. a APPLICATION NO.: IMM-Ortl001414 SCHEDULE B --. SECTION X REQUZ MP_NTS The following are the requirements to be complied with: 1. A, properly executed mortgage from Bass Lake Apartments LLC to Franklin National Bank of Minneapolis. 2. A properly executed mortgage from Bass Lake Apartments LLC to Hennepin County: 3. A properly executed mortgage from Bass Labe Apartments LLC to Hennepin County Housing and Redevelopment Authority. 4- A properly executed mortgage from Bass Lake Apartments LLC to New Tope Economic. Development Authority. S. A properly executed mortgage from Bass Lake. Apartments LLC to The Minneapolis Public Dousing Authority, 6, We Have been requested to waive our Standard Exception(s) A, B, C, D atad E and to issue various Endorsements on the Final Loan. Policy. Said exceptions caul be waived and the Endorsement(s) given upon the following conditions: a. Standard Exception A (Survey Exceptioll). We must be supplied with an acceptable survey certified to ALTA, standards, Old Republic National Title Insurance Company and the proposed insureds. Upon receipt and review of said survey, the Final_ Loan Policy will be subject to our findings but fzee and clear of the General Exception A. b. Standard Exception B (Patties in Possession: Exception.). We inust be supplied with an affidavit executed by the seller dated the day of closing which sets forth the status of any unrecorded leases, options to purchase, rights of first refusal, easements, etc. The Final, Loan. Policy will be subject to the disclosures of said Affidavit but free and clear of the General Exception D. c. Standard Exception C (N.(echanlc's Lien Exception). We tnust be advised of the status of improvements on premises before a deterixiinatioi} can be Made in regard to waiving said exception. d. Standard Exception D (Gap in Recording Exception). This exception caia be waived at closing only if this transaction is closed by Old Republic National Title Lisuxalace Company. e. Standard Exception. E (Unrecorded Easersierl{,s Exception). This excepl-io.n can be waived upon receipt of the items required at paragraphs (a) and (b) above. The Final Loam Policv will be subject to the disclosures in tlae iteins required in said paragraphs, but free and clear of the General Exception E. ORD OCs ORT AL T.k COM MITMNT.082 FOR ALL POLXCY TTFrs PA (;Z 3 , ( OLD REPUBLIC { 'f Natlonsi TTIN rnzaranco company -k May .13, 2003 6 i : NAM No.2092 P. 5/6 .�f A.PPLICATZON NO.: HEN-OR1001414 SCHEDULE B — SECTION 2 STANDAR EXCEPTIONS A Facts which would be disclosed by a comprehensive survey of tine premises described herein. B Rights and claims of parties in possession. C Mechmies', Contractors', or Materialmeu's liens and lien claims, if aty where 110 notice appears of record. D Any change in title occurring subsequent to the effective date of this Commitment and prior to the date of issuance of the Title policy. E Easerneats, or claims of easements, not shown by tllapublic records. IN ADDITION TO THE STANDARD EXCEPTIONS, CONDITIONS, STIPULA.TIONS AND EXCLUS;ONS FROM COVERAGE CONTAINED HEREIN AND IN THE COMPANyS USUAL FORM OF POLICY, THE LAND REFERRED TO IS, AS OF TIBC EFFECTIVE DATE HEREOF, SUBJECT To. THE FOLLOWING. 1. There are no levied or pending special assessments. The date of the special assessment search is November 12, 2002. 2. Taxes for. 2002 im the amount of 56,771.15 of which $6,717.24 has been paid. (Base tax amount 56.698:54.) (Tax No. 05-118-21-32-0004.) NOTE: Heruiepin County tax records indicate property is non -homestead for taxes payable in the yeax 2002. 3. Ten -us and -conditions of Rent Restriction Covenants filed November 20, 1998, as Docuinept No. 7006621. 4. Mortgage executed by Project for Pride in Living Inc. in. favor ofFrankiiu National Bank of '� Minneapolis, dated July 31, 2002, filed August 29 2002- as Document g 1 o u,rzaent No. 7804197, in the original amount of $400,000.00. 5. Declaration of Coveuants from Baas Lake Apartments LLC to Rian.eapoils.. Public Housing Authority dared'May 13, 2003, filed , as Doc. No. 6- Mortgage exeeuted by Bass. Lake Apartmettts LLC dated April 25, 2003, filed as Doc. No. in the amount of $126,300.00 in favor of Franklin National Bank of Mp 7. Mortgage executed by Bass'Lake Apartments LLC dated April _, 2003, filed as Doc. No. in then -amount of $350,000.00 in favor of Hennepin Cpcnty. 8- Mortgage executed by Bass Lake Apartments LLC dated j,prwl , 2003, filed as Doc. No. in the amount of $150,000.00 in favor of Hennepin County Housing and Redevelopment Authority. 9. Mortgage executed by Bass Lake Apartments LLC dated April ,'2003, filed as Doc. No. in.,the amount of $223,000.00 in favor of New Hope Economic Development Authority. ORDOCSORT ALTA COMhS�Ti� ENT 1981, VOR ALL POUCX TYPES FAo� a * QLD REPUBLIC 10 ' �Q * NaHanal Title Insuranr Company .,�. J... 4 7 May 13. 2003 11:29AY! 11. Master Subordiiation Agreement dated No•2092 P. 6/6 , filed , as Doc. No. 12. Declaration. of Covenants and Restrictions dated. filed , as Doc. 'No . Old Republic National Title Insurance Company By: Jul' Manning, Assistant Secretary PERFORMANCEAND COMPLETION GUARANTY PERFORMANCE AND COMPLETION GUARANTY THIS GUARANTY OF COMPLETION (this "Guaranty") is made this 13a` day of May, 2003, by and between the Minneapolis Public Housing Authority in and for the City of Minneapolis (the "Authority"), a public body corporate and politic, organized and existing under the laws of the State of Minnesota, and Project for Pride in Living, Inc., a Minnesota nonprofit corporation, having its address at 1925 Chicago Avenue South, Minneapolis, Minnesota, 55404 (the "Guarantor"). RECITALS WHEREAS, the Authority has agreed to provide to Bass Lake Apartments LLC, a duly organized and existing limited liability company in the State of Minnesota, having its address at 1925 Chicago Avenue South, Minneapolis, Minnesota, 55404 (the "Recipient"), a grant of Capital Funds in the amount of exactly five hundred and five thousand ($505,000) (the "Authority Grant") for the development of four (4) public housing units and associated appurtenances (hereafter referred to as the "Project"), which is a part of a larger complex known as the Bass Lake Apartments to be located at 7610 Bass Lake Road, New Hope, Minnesota, 55428 (the "Development"); and, WHEREAS, the Authority Grant is evidenced by a Housing Development Agreement and Regulatory and Operating Agreement, each dated May 13, 2003 (the "Authority Loan Documents"), and Authority further agrees to provide to the Recipient additional financial assistance on behalf of the Project to ensure its low-income character, which funds will be derived pursuant to the Authority's Annual Contributions Contract ("ACC") with the U.S. Department of Housing and Urban Development ("HUD"); and, WHEREAS, the Recipient acknowledges that in return for its receipt of the Authority Loan funds, and any additional assistance to be provided by the Authority under the ACC with respect to the Project, it is required to construct and operate the Project in accordance with all requirements applicable to public housing, including the U.S. Housing Act of 1937 (42 U.S.C. 1437, et. seq.), HUD regulations thereunder, the Annual Contributions Contract entered into between HUD and the Authority (the "ACC"), the Mixed Finance Amendment to the ACC, the HUD -approved declaration of restrictive covenants (the "Declaration"), the HOPE VI grant agreement (if applicable), and all pertinent Federal statutory, executive order, and regulatory requirements, as those requirements may be amended from time to time (hereafter collectively referred to as the "Applicable Public Housing Requirements"); and, WHEREAS, the Guarantor has a financial interest in the Recipient and will derive a direct financial benefit from the construction of the Project; and, WHEREAS, in order to induce the Authority to make the Authority Loan to the Recipient, and to enter into other arrangements with the Recipient, the Guarantor has agreed to Page 1 of 6 PERFORMANCE AND COMPLETION GUARANTY —BASS LAKE APARTMENTS execute and deliver this Guaranty. GUARANTY NOW THEREFORE, to induce the Authority to make the Authority Funds available to the Recipient, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby covenants and agrees as follows; 1. Guarantor absolutely and unconditionally guarantees to the Authority that the Recipient shall construct, equip and complete the Project free and clear of liens in accordance with the Applicable Public Housing Requirements and in accordance with the time periods set forth in the Mixed Finance ACC Amendment; 2. If the Recipient fails to do the matters specified in Paragraph 1 on or before the time periods set forth in the Mixed Finance ACC Amendment, immediately upon such failure to perform, Guarantor shall: (a) construct, equip, and complete the Project free and clear of liens in accordance with the Applicable Public Housing Requirements, and in accordance with the terms and conditions of the -HUD -approved documents relating to the development of the Project, as identified in the Mixed Finance ACC Amendment (the "Development Documents'l; . . (b) remove any lien arising from, constructing, equipping, or completing the Project, and make payment in full to all laborers, subcontractors and materialmen on or before the date of completion for the costs of the Project and related costs; (c) pay all costs and expenses incurred in doing (a) or (b) of this paragraph 2, and pay to or reimburse the Authority for all expenses incurred by the Authority with respect to its carrying out of obligations otherwise imposed upon the Recipient under the Applicable Public Housing Requirements and the Development Documents. 3. The Guarantor expressly agrees that the Authority may, in its sole and absolute discretion, without notice to or further assent of the Guarantor and without in any way releasing, affecting or impairing the obligations and liabilities of the Guarantor hereunder: (i) waive compliance with, or any defaults under, or grant any other indulgences with respect to, the Development Documents; (ii) modify, amend, or change any provisions of the Development documents; (iii) grant extensions or renewals of or with respect to the Development Documents or effect any release, compromise or settlement in connection with the Development Documents; (iv) make advances for the purpose of performing any term or covenant with respect to the Development Documents which the Recipient or the then owner of the premises shall be in default; (v) assign or otherwise transfer this Guaranty or any interest therein or herein; and (vi) deal in all respect with the Recipient or the then owner of the premises as if this guaranty were not in effect. The obligations of the Guarantor under this Guaranty shall be unconditional, absolute and irrevocable and shall continue in full force and effect until the full and final completion of the Project, as required by the terms and conditions of the Applicable Public Page 2 of 6 PERFORMANCE AND COMPLETION GUARANTY —BASS LAKE APARTMENTS Housing Requirements and the Development Documents. 4. The liability of the Guarantor under this Guaranty shall be primary, direct and immediate and not conditional or contingent upon pursuit by the Authority of any remedies it may have against, its successors and assigns, with respect to the Development Documents whether pursuant to the terms thereof or by law. Without limiting the generality of the foregoing, the Authority shall not be required to make any demand on the Recipient or the then owner of the premises, or to sell at foreclosure or otherwise pursue or exhaust its remedies against the premises or any part thereof or against the Recipient or the then owner of the premises, before, simultaneously with or after enforcing its rights and remedies hereunder against the Guarantor. Any one or more successive or concurrent actions may be brought hereon against the Guarantor either in the same action, if any, brought against the Recipient, any other guarantor or the then owner of the premises or in separate actions, as often as the Authority, may deem advisable. 5. The Guarantor hereby expressly waives (i) presentment and demand for payment and protest non-payment; (ii) notice of acceptance of this Guaranty and of presentiment, demand and protest; (iii) notice of any default hereunder,or under the Development Documents and of all indulgences; (iv) demand for observance or performance of, or enforcement of, any terms or Provisions of this Guaranty or the Development: Documents; (v) all other notices and demands otherwise required by law which the Guarantor may lawfully waive; and (yi) any defense to any action brought against Guarantor, including, withoutlimitation, any defense based on any statute of limitations and on any legal disability of the Recipient and any discharge and limitation or liability of the Recipient to the Authority.whether consensual or arising by operation of law or any bankruptcy, insolvency or debtor -relief proceeding, or from any other cause. The Guarantor also waives trial by jury in any action brought on or with respect to this Guarantyand agrees that in the event this Guaranty shall be enforced by suit or otherwise, the Guarantor will reimburse the Authority, upon demand, for all expenses incurred in connection therewith, including, without limitation, reasonable attorneys' fees. 6. If the Guarantor shall advance any sums to the Recipient or its successors or -assigns or if the Recipient or its successors or assigns shall hereafter become indebted to the Guarantor, such sums and indebtedness shall be subordinate in all respects to the amounts then or thereafter due and owing to the Authority under the Development Documents. Nothing herein contained shall be construed to give the Guarantor any right of subrogation in and to the Development Documents or all or any part of the Authority's interest therein, until all amounts owing to the Authority have been paid in full. 7. Any notice, demand, request or other communication which the Authority may desire to give to the Guarantor with respect to this Guaranty, shall be deemed sufficient if in writing and sent to the Guarantor postage prepaid, certified, registered, or U.S. express mail, return receipt requested, addressed to the Guarantor at the address set forth below. 8. All rights and remedies afforded to the Authority, by reason of this Guaranty, the Development Documents, or by law, are separate and cumulative and the exercise of one shall not in any way limit or prejudice the exercise of any other such rights or remedies, No Page 3 of 6 PERFORMANCE AND COMPLETION GUARANTY — BASS LAKE APARTMENTS delay or omission by the Authority in exercising any such right or remedy shall operate as ;i waiver thereof No waiver of any rights and remedies hereunder, and no modification or amendment hereof, shall be deemed made by the Authority unless in writing and duly signed by the Authority and HUD. Any such written waiver shall apply only to the particular instance specified therein and shall not impair the further exercise of such right or remedy or of any other right or remedy of the Authority and no single or partial exercise of any right or remedy hereunder shall preclude other or further exercise thereof or any other right or remedy, 9. The Guarantor represents and warrants that: (a) it has a financial interest in the Recipient; (b) It has examined or has had an opportunity to examine documents referred to herein; (c) it has full power, authority and legal right to execute and deliver this Guaranty, (d) this Guaranty is a binding legal obligation of the Guarantor; (e) the financial statements of Guarantor heretofore provided to HUD are, as of the date specified therein, complete and correct in all material respects, fairly present the financial condition of the Guarantor, and are prepared by financial professionals in a consistent manner; (f) there is no litigation pending or to the best of the Guarantor's knowledge, threatened against the Guarantor, (g) its Sole Member is Project for Pride in Living, Inc., the Project Developer; and (h) no other fact or circumstances exists, which would diminish or negate the liability of the Guarantor to the Authority hereunder, or materially impair its ability to perform its obligations, and neither execution nor delivery of this Guaranty nor compliance with the terms hereof will conflict with, or_ constitute a breach of or default under any agreements or instrument to which the Guarantor maybe a party. 10. Until such time as this Guaranty shall have been terminated, the Guarantor shall provide to the Authority on each anniversary date hereof its financial statements in such form and. detail as maybe reasonably requested by the Authority. The Guarantor. also agrees to provide the Authority and HUD with financial statements at such other times .as maybe reasonably requested by the Authority and HUD. 11. If any of the amounts required to be paid hereunder by the Guarantor, including, without limitation, the amount necessary to complete the Project and discharge all liens, is not paid within ten days after the date written notice of such required payment is sent to the Guarantor by the Authority, the Guarantor hereby authorizes any attorney at law to appear for it before any court having jurisdiction and to confess judgment -Against it for the amounts then due together with interest, court costs, and attorney's fees in an amount equal to 15% of the amount due hereunder. 12. If any provision, or part of any provision, contained in this Guaranty shall for any reason be determined to be invalid, illegal, or unenforceable in any respect, such determination shall not affect the remaining part(s) of the provisions of this Guaranty. 13. This Guaranty shall inure to the benefit of, and be enforceable by, the Authority, its successors and assigns, and shall be binding upon, and enforceable against, the Guarantor and its heirs, personal representatives and assigns. 14. This Guaranty shall not create any rights in any surety under payment and performance bonds, among the surety, if any, the Recipient, the general contractor, and Page 4 of 6 PERFORMANCE AND COMPLETION GUARANTY -BASS LAKE APARTMENTS the Authority, with respect to the Project, either as a third party beneficiary, or in any other manner, it being understood and agreed that this Guaranty is intended for the sole benefit of the Authority and HUD,' or such other party as the Authority and HUD may designate in their sole discretion. 15. Guarantor agrees that no Member in Guarantor shall transfer all or any part of its ownership interest in Guarantor, by operation of law or otherwise, without the prior written consent of the Authority and HUD. A transfer of ownership in the Guarantor, in whole or in part, or any other significant change in the ownership of the Guarantor with respect to the Membership of the Guarantor or the degree thereof, or by any other method or means, whether by increased capitalization, merger with another company, company or other amendments, or change in the Guarantor's Board of Governors, shall be deemed a transfer with respect to this covenant. The term "transfer" shall include a sale, assignment, lease, pledge or other encumbrance and a transfer in any other form of the stock or interest therein or limitation thereon. Notwithstanding the foregoing, the term "transfer' shall not include transfers among existing shareholders or transfers for estate planning purposes to immediate family members or trusts for the benefit of immediate family members. Guarantor agrees to notify the Authority and HUD promptly of any such proposed transfer and to obtain written approval thereof from the Authority and HUD before such transfer is completed and before the person proposing to make such a transfer executes or enters into any binding obligation to make such a transfer. 16. Guarantor acknowledges that, in the event of a conflict between the PIans and the remaining Applicable Public Housing Requirements, or between the Development Documents and the Applicable Public Housing Requirements, the Applicable Public Housing Requirements shall in all' instances be controlling. IT This Guaranty shall be construed under the laws of the State of Minnesota. 18. The liability of the parties which compose the Guarantor hereunder shall be joint and several in all respects. 19. Notices required to be given under this Guaranty shall be served by mailing a copy thereof by certified mail, or by nationally recognized overnight delivery service, addressed to either the Authority or the Guarantor at the addresses first set forth above. Any notices required to be given to HUD shall be served in this same manner to the following address: U.S. Department of Housing and Urban Development 451 Seventh Street, S.W., Fourth Floor Washington, D.C. 20410 Attention: Office of Public Housing Investments 20. This Guaranty shall terminate upon the Authority's receiving a certificate of occupancy covering all of the units in the Development. Page 5 of 6 PERFORMANCE AND COMPLETION GUARANTY IN WITNESS WHEREOF, the Guarantor has executed and sealed this Guaranty on the date first above written. GUARANTOR PROJECT FOR PRIDE IN LIVING, INC. I: Name: Barbara McCormick Title: Vice President The foregoing instrument was acknowledged before me this 13 , 2003, by Barbara McCormick, the Vice President of PROJECT FOR PRIDE INLIVING, INC., a Minnesota nonprofit corporation, on behalf of the nonprofit corporation. f �--s" ' z1�- S. CHARLES SORENSON�-�-�— r� t4OTARYPUBLIC-MUNNESOTA 1 ` s � ' u� Commi�iars Expire' Jai. 3�, 2flfrS Page 6 of 6 Holmes & Associates, Ltd., May 13, 2003 The Secretary of the U.S. Department of Housing and Urban Development 451 Seventh Street, SW Washington, D.C. 29410 Re: Bass Lake Apartments/New Hope, Minnesota Grant No. MN46P00209195F Dear Sir: We are counsel for the Minneapolis Public Housing Authority in and for the City of Minneapolis ("Authority"), a public body corporate and politic created pursuant to Minnesota Statutes, Section 469.001 to 469.047, in connection with the Mixed -Finance Amendment to the Consolidated Annual Contributions Contract dated May 13, 2003, by and between the U.S. Department of Housing and Urban Development ("HUD") and the Authority (the "ACC Amendment"). We have been requested by the Authority to deliver this opinion in accordance with and pursuant to the ACC Amendment. In our capacity as counsel for the Authority, we have examined such matters of law, certificates and documents as we have determined to be necessary for the purposes of this opinion, including, among other documents, originals or true and complete copies of the following: (a) A certified copy of the Authority bylaws and certain other corporate records, documents and proceedings of the Authority; (b) An executed copy of the ACC Amendment; (c) An executed copy of the Initial Agreement dated December 18, 2002 between the Authority and the Economic Development Authority in and for the City of New Hope, Minnesota (the "EDA"); (d) An executed copy of the Cooperation Agreement dated December 18, 2002 by, between and among the City of New Hope (the "City"), the EDA and the Authority; Secretary of U.S. Department of Housing and Urban Development May 13, 2003 Page 2 of 2 (e) An executed copy of the Housing Development Agreement dated May 13, 2003 by, between and among the Authority, the EDA and Bass Lake Apartments LLC (the "Owner"); (f) An executed copy of the Regulatory and Operating Agreement dated May 13, 2003 by, between and among the Authority, the EDA and the Owner; (g) An executed copy of the Property Management Agreement dated May 13, 2003 between the Owner and Project for Pride in Living, Inc. (the "Managing Agent"); (h) An executed copy of the Declaration of Restrictive Covenants dated May 13, 2003 executed by the Owner; (i) An executed copy of the Master Disbursement Agreement dated as of May 13, 2003 by, between and among the Owner, the Authority, the City, the EDA, the County of Hennepin (the "County"), the Hennepin County Housing and Redevelopment Authority (the "County HRA"), the Franklin National Bank ("Franklin") and Old Republic National Title Insurance Company ("Title"); (j) An executed copy of the Master Subordination Agreement and Estoppel Certificate dated as of May 13, 2003 by, between and among the Owner, the Authority, the City, the EDA, the County, the County HRA and Franklin. (k) A Proposal originally dated December 19, 2002, as amended May 13, 2003 submitted to HUD by the Authority and the EDA. The documents listed in (a) through (k), above, are hereinafter referred to as the "Authority Documents." The opinions expressed herein are subject to the following assumptions, in addition to the assumptions and qualifications set forth elsewhere herein: (i) all copies of all documents and all records and letters examined by me are accurate, true, complete and correct copies of the originals thereof and all factual warranties, representations and statements made by the parties in such instruments are true, accurate and correct; (ii) each of the individuals executing the Authority Documents has the requisite legal capacity and all signatures on the Authority Documents other than those of the Authority are genuine; F:1MNN I251035%DOCSU 6MPHAOPIN ION.DOC Secretary of U.S. Department of Housing and Urban Development May 13, 2003 Page 3 of 3 (iii) each of the Authority Documents has been duly authorized, executed and delivered by all parties other then the Authority and constitute the legal, valid and binding obligations of each such other party, enforceable in accordance with their terms; and (iv) each party to the Authority Documents, other than the Authority, has all requisite certifications of authority, licenses, permits, consents, qualifications and documentation, and all requisite organizational power and authority to execute such documents to which it is a party, to perform its obligations under such documents to which it is a party and to enforce documents to which it is a party. With your permission, we have mane no investigation of the facts or law undergoing the foregoing assumptions, and the Authority has not requested us to do so, but we wish to advise you that nothing has come to our attention which would provide us with actual knowledge that we are not justified in making the assumptions. We have made no investigation regarding the accuracy or completeness of any documents, records, instruments, letters or other writings examined by us, or the accuracies of all warranties, representations and statements of fact contained thereon, nor has the Authority requested us to do so, and we express no opinion herein regarding the same. No opinion is expressed herein regarding the existence or nonexistence of, or the effect of, any form of fraud, misrepresentation, mistake, duress or criminal activity upon the legality, validity, binding effect or enforceability of the Authority Documents and we have made no investigation of the facts or law pertaining to such conduct, but we wish to advise you that nothing has come to our attention which would provide us with actual knowledge of the existence of any such conduct. Based upon the foregoing and such other proceedings, documents and certificates which we have deemed necessary and relevant to form our opinion, we are of the opinion that: 1. The Authority is a public body corporate and politic, duly organized and validly existing under the laws of the State of Minnesota with full power and authority pursuant thereto to engage in the activities contemplated by the Authority Documents. 2. The Authority Documents have been duly executed prior to May 13, 2003 and delivered on the part of the Authority to be effective as dated in the Authority Documents and those parties executing the Authority Documents on behalf of the Authority have been duly authorized to do so in accordance with the Bylaws and authorizing resolutions of the Authority. 3. The Authority Documents constitute the valid and legally binding obligations of the Authority enforceable in accordance with their terms. FAMNN I2510351DOCSV 6MPHAOPINION.DOC Secretary of U.S. Department of Housing and Urban Development May 13, 2003 Page 4 of 4 4. The procurement of the Owner to serve as owner and developer to design and implement the project pursuant to the Housing Development Agreement complies with the requirements of 24 C.F.R. Part 941, Subpart F to the satisfaction of HUD. 5. Based on the foregoing and subject to the assumptions and qualifications set forth in this opinion, that each of the Authority Documents conforms to the Proposal and the requirements of the ACC Amendment, and that there is nothing in any of the Authority Documents which conflicts or is inconsistent with the requirements of the ACC Amendment. The obligations of the Authority contained in the Authority Documents and the enforcement thereof are subject to general principles of equity which may permit the exercise of judicial discretion, the reasonable exercise in the future by the State of Minnesota and its governmental bodies of the police power inherent in the sovereignty of the State, applicable bankruptcy, insolvency, moratorium or similar laws relating to or affecting creditors' rights generally, and the exercise by the United States of America by the powers delegated to it by the Constitution. The opinions set forth herein are limited to the matters expressly set forth herein, and no opinion is to be inferred or may be implied beyond the matters expressly so stated. The opinions set forth herein are based solely upon the laws and regulations of the State of Minnesota and the United States of America. This opinion is solely for the benefit and use of the party to whom it is addressed and its respective successors and assigns, and is not to be relied upon in any manner or for any purpose by any other party or entity, whether such person or entity claims any reliance or entitlement by rights of assignment, subrogation or otherwise. HOLME & ASSOCIATES, LTD. / FAMNN12510351D005116WHAONNION.DOC MASTER SUBORDINATION AGREEMENT AND ESTOPPEL CERTIFICATE This MASTER SUBORDINATION AGREEMENT AND ESTOPPEL CERTIFICATE (this "Agreement") is made and entered into as of May 13, 2003, by and among Bass Lake Apartments LLC, a Minnesota limited liability company (the "Developer"); Franklin National Bank of Minneapolis, a national banking association (the `Bank"); Hennepin County, a political subdivision of the State of Minnesota (the "County"), on behalf of the Hennepin County Housing Consortium,, a joint powers consortium; the Hennepin County Housing and Redevelopment Authority, a political subdivision of the State of Minnesota "(the "County HRA"); the New Hope Economic Development Authority in and for the City of New Hope, a Minnesota municipal corporation (the "EDA"); and the Minneapolis Public Housing Authority in and for the City of Minneapolis (the "MPHR"). Background A. The Developer owns certain real property located at 7610 Bass Lake Road in the City of New Hope, Hennepin County, Minnesota, more particularly described on Exhibit A attached hereto (the "Real Property"). B. The Bank has loaned or agreed to loan to the Developer the principal sum of. $126;300.00 (the "Bank Loan"), evidenced by that certain Promissory Note dated Mril 23, 2003 (the "Bank Note"), executed by the Developer in favor of the Bank, and secured by that certain Mortgage dated as of A ri123 2003 (the "Bank Mortgage"), executed by the Developer in favor of the Bank with respect to the Real Property and to be recorded in the Office of the County Recorder in and for Hennepin County, Minnesota. Also in connection with the Bank Loan, the Developer has adopted those certain LLC Resolutions to Borrow, and the Developer and the Bank have entered into that certain Disbursement Request and Authorization dated A np .123, 2003, and that certain Agreement to Provide Insurance, dated April 23, 2003 (collectively, with the Bank Note and the Bank Mortgage, the "Bank Loan Documents," which term shall include any amendments, modifications, supplements, extensions, renewals, replacements or restatements to any thereof). C. The Hennepin County Housing Consortium is a joint powers consortium established by the Joint Cooperation Agreement effective October 1, 1999, for the purpose of forming a consortium of units of general local government for designation as a Participating Jurisdiction under the HOME Investment Partnerships Program created through Title II of the Cranston -Gonzales National Affordable Housing Act of 1990, as amended. The County is authorized to act in a representative capacity for all members of the Hennepin Housing Consortium under the terms of the Joint Cooperation Agreement. The County has loaned or agreed to loan to the Developer the principal sum of $350,000.00 (the "County Loan"), evidenced by that certain Promissory Note dated April 25, 2003 (the "County Note"), executed by the Developer in favor of the County, and secured by that certain Combination Mortgage, Assignment of Rents, Security Agreement, and Fixture Financing Statement dated Aril 225, 2003 (the "County Mortgage'), executed by the Developer in favor of the County with respect to the Real Property and to be recorded in the Office of the County Recorder in and for Hennepin County, Minnesota. Also in connection with the County Loan, the Developer and the County have entered into that certain Loan Agreement dated March 26, 2003, and that certain Declaration of Covenants and Restrictions dated April 25, 2003 (collectively, with -the County Note and the County Mortgage, the "County Loan Documents," which term shall include any amendments, modifications, supplements, extensions, renewals, replacements or restatements to any thereof). D. The EDA has loaned or agreed to loan to the Developer the principal sum of $223,000.00 (the "EDA Loan"), evidenced by that certain Note dated as of November 7 2002 (the "EDA Note"), executed by Project for Pride in Living, Inc., a Minnesota nonprofit corporation (the "Assignor") in favor of the EDA, and secured by that certain Combination Mortgage, Assignment of Rents, Security Agreement, and Fixture Financing Statement dated as of November 7, 2002 (the "EDA Mortgage"), executed. by the Assignor in favor of the EDA with respect to the Real Property and to be recorded in the Office of the County Recorder in and for Hennepin County, Minnesota. Also in connection with the EDA Loan, the Assignor and the EDA entered into that certain Loan Agreement dated as of November 7, 2002 (collectively, with the EDA Note and the EDA Mortgage, the "EDA Loan Documents,"' which term shall include any amendments, modifications, supplements, extensions, renewals, replacements or restatements to any thereof). Pursuant to that certain Assignment, Assumption, and Amendment of Loan Documents dated as of Apr -i! ;;2!V , 2003, the Assignor assigned all of its rights, privileges, title, and interest�under the EDA Loan Documents to the Developer, and the Developer assumed the obligations of Assignor thereunder. E. The County HRA has loaned or agreed to loan to the, Developer the principal sum of $150,000.00 (the "County HRA Loan"), evidenced by that certain Promissory Note dated A tl 25 2003 (the "County HRA Note"), executed by the Developer in favor of the County HRA, and secured by that certain Combination Mortgage, Assignment of Rents, Security Agreement, and Fixture Financing Statement dated Apri125, 2003 (the "County HRA Mortgage"), executed by the Developer in favor of the County HRA with respect to the Real Property and to be recorded in the Office of the County Recorder in and for Hennepin County, Minnesota. Also in connection with the County HRA Loan, the Developer and the County HRA have entered into that certain Loan Agreement dated March 26 2003, and that certain Declaration of Covenants and Restrictions of dated ApJI 25, 2003 (collectively, with the County HRA Note and the County HRA Mortgage, the "County HRA Loan Documents," which term shall include any amendments, modifications, supplements, extensions, renewals, replacements or restatements to any thereof). 4 F. Pursuant to that certain Housing Development Agreement of even --date herewith (the "Housing Development Agreement') between MPHA, EDA, and the Developer, MPHA has granted or agreed to grant to the Developer the sum of $469,000.00 (the "MPHA Grant"), which MPHA Grant the Developer is not obligated to repay. G. The Bank Loan Documents, the County Loan Documents, the EDA Loan Documents, and the County HRA Loan Documents are sometimes referred to herein collectively as the "Loan Documents." The Bank Loan, the County Loan, the EDA Loan, and the County HRA Loan are sometimes referred to herein collectively as the "Loans." The Bank, the County, the EDA, and the County HRA are sometimes referred to herein as the "Lenders." H. The Developer will use the proceeds of the Bank Loan, the County Loan, the EDA Loan, the County HRA Loan, the MPHA Grant, and additional equity to fund the construction and rehabilitation of a. multifamily housing development (the "Development"), which will be situated on the Real Property. 1. The parties hereto intend that the Loans and the Loan Documents, and the liens created thereby, will have a certain order of priority, and the parties wish to specify how- the terms and conditions contained in the Loan Documents will be interpreted in the event of a conflict or inconsistency between them. Agreement NOW, THEREFORE, in consideration of one dollar and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in further consideration of the parties hereto making and entering into the Loans, the parties hereto agree as follows: 1. Consent. The Lenders and the MPHA consent and agree to the MPHA Grant and each of the Loans, and to the execution, delivery, filing, and recordation of each of the Loan Documents, and to the performance and enforcement of the terms of each of the Loan Documents in accordance with the respective terms thereof. The Lenders and the MPHA agree not to assert such Loans, or the execution, delivery, filing, or recordation of any of the Loan Documents, or the performance or enforcement of any of the terms of the Loan Documents, as defaults or Events of Default under any of their respective Loan Documents. a. The Bank agrees that all of the liens, encumbrances, and restrictive covenants, if any, created by the County Loan Documents, the EDA Loan Documents and the County HRA Loan Documents will be deemed to be "Permitted Encumbrances" under the Bank Loan Documents, and that the Bank Loan Documents are all hereby amended, if and where and as needed, to include all of the liens, encumbrances, and restrictive covenants, if any, created by the County Loan Documents, the EDA Loan Documents and the County HRA Loan Documents as "Permitted Encumbrances" thereunder. b. The County agrees that all of the liens, encumbrances, and restrictive covenants, if any, created by the Bank Loan Documents, the EDA Loan Documents and the County HRA Loan Documents will be deemed to be "Permitted Encumbrances" 3 -A under the County Loan Documents, and that the County Loan Documents are all hereby amended, if and where and as needed, to include all of the liens, encumbrances, and restrictive covenants, if any, created by the Bank Loan Documents, the EDA Loan Documents and the County HRA Loan Documents as "Permitted Encumbrances" thereunder. C. The EDA agrees that all of the liens, encumbrances, and restrictive covenants, if any, created by the Bank Loan. Documents, the County Loan Documents and the County HRA Loan Documents will be deemed to be "Permitted Encumbrances" under the EDA Loan Documents, and that the EDA Loan Documents are all hereby amended, if and where and as needed, to include all of the liens, encumbrances, and restrictive covenants, if any, created by the Bank Loan Documents,,the County Loan Documents, and the County HRA Loan Documents as "Permitted Encumbrances". thereunder. d. The County HRA agrees that all of the liens, encumbrances, and restrictive covenants, if any, created by the Bank Loan Documents, the County Loan Documents and the EDA Loan Documents will be deemed to be "Permitted Encumbrances" under the County HRA Loan Documents, and that the County HRA Loan Documents are all hereby amended, if and where and as needed, to include all of the liens, encumbrances, and restrictive covenants, if any, created by the Bank Loan Documents, the County Loan Documents, and the EDA Loan Documents as "Permitted Encumbrances" thereunder... The Lenders and the MPHA fiirther agree to execute any and all documents that any party hereto may reasonably request in order to document that the liens and encumbrances created by such requesting parties' Loan Documents are permitted encumbrances under the Loan Documents for each of the Loans. 2. Subordination and Priority. Each party to this Agreement agrees that, notwithstanding the order of execution,, delivery, or recordation, the Loan Documents will have the following priority: a. The Bank Loan Documents will have first and senior priority. All right, title, estate, interest, lien, and security interest of the Bank under the Bank Loan Documents are and will be superior to all right, title, estate, interest, lien, and security interest of the County, the EDA, and the County HRA under the County Loan Documents, the EDA Loan Documents, and the County HRA Loan Documents. b. The County Loan Documents will have second priority. All right, title, estate, interest, lien, and security interest of the County under the County Loan Documents are and will be superior to all right, title, estate, interest, lien, and security interest of the EDA and the County HRA under the EDA Loan Documents and the County HRA Loan Documents. The County hereby subordinates and subjects the County Loan Documents and all liens, security interests and restrictive covenants, if any, securing repayment of the County Loan 4 or created by the County Loan Documents to the Bank Loan Documents and any and all liens, security interests and restrictive covenants, if any, securing repayment of the Bank Loan or created by the Bank Loan Documents. C. The EDA Loan Documents will have third priority. All right, title, estate, interest, lien, and security interest of the EDA under the EDA Loan Documents will be superior to all right, title, estate, interest, lien, and security interest of the County HRA under the County HRA Loan Documents. The EDA hereby subordinates and subjects the EDA Loan Documents and all liens, security interests and restrictive covenants, if any, securing repayment of the EDA Loan or created by the EDA Loan Documents to the Bank Loan Documents and the County Loan Documents and any and all liens, security interests and restrictive covenants, if any, securing repayment of the Bank Loan or the County Loan or created by the Bank Loan Documents or the County Loan Documents. d. The County HRA Loan Documents will have fourth priority. The County HRA hereby subordinates and subjects the County HRA Loan Documents and all liens, security interests and restrictive covenants, if any, securing repayment of the County HRA Loan or created by the County HRA Loan Documents to the Bank Loan Documents, the County Loan Documents, and the EDA Loan Documents and any and all liens, security interests and restrictive covenants, if any, securing repayment of the Bank Loan, the County Loan, or the EDA Loan or created by the Bank Loan Documents, the County Loan Documents, or the EDA Loan Documents. e. The parties hereto acknowledge that the Development is receiving benefits pursuant to the Housing Development Agreement, and that as a condition of receiving such benefits, the Developer is required to execute and record the Declaration of Restrictive Covenants substantially in the form attached hereto as Exhibit B, which Declaration of Restrictive Covenants by its terms is intended to be binding on the successors in interest to the Developer, including any successors in interest acquiring the Development through foreclosure.. The Developer, the Bank, the County, the County HRA, the EDA, and the MPHA hereby consent to the terms of the Declaration of Restrictive Covenants and fin-ther agree that, notwithstanding any provision herein to the contrary, the Bank Loan Documents, the County Loan Documents, the EDA Loan Documents, and the County HRA Loan Documents are subordinate to the Declaration of Restrictive Covenants. 3. Estoppel and Agreement. With respect to the Loan Documents referred to and described herein, the parties hereto do hereby covenant, warranty, consent and agree as follows: a. The Bank hereby covenants, represents, warrants, consents, and agrees that (i) the Bank Loan Documents are all of the documents it has entered into regarding the Bank Loan, (ii) there are no other documents relating to the Bank Loan, (iii) the Bank will not enter into any other documents relating to the Bank Loan that would have an adverse impact upon any other party to this Agreement without the 5 prior written consent of such party or parties, (iv) any document relating to the Bank Loan that may exist and is not listed in the Bank Loan Documents, or may come into existence in the future, shall not have any force or effect until approved and consented to by all of the parties to this Agreement upon which such documents has, or will have, an adverse effect, and upon such written approval such document will be automatically considered to be included in the Bank Loan Documents and the Bank will execute any and all documents necessary to include such document in the Bank Loan Documents, (v) there are no defaults, or events that with the passage of time could constitute such a default, currently existing with respect to any of the Bank Loan Documents, and (vi) the Developer has complied with all of the requirements imposed under the Bank Loan Documents for the closing of the Bank Loan. b. The County hereby covenants, represents, warrants, consents, and agrees that (i) the County Loan Documents are all of the documents it has entered into regarding the County Loan, (ii) there are no other documents relating to the County Loan, (iii) the County will not enter into any other documents relating to the County Loan that would have an adverse impact upon any other party to this Agreement without the prior written consent of such party or parties, (iv) any document relating to the County Loan that may exist and is not listed in the County Loan Documents, or may come into existence in the future, shall not have any force or effect until approved and consented to by all of the parties to this Agreement upon which such documents has, or will have, an adverse effect, and upon such written approval such document will be automatically considered to be included in the County Loan. Documents and the County will execute any and all documents necessary to include such document in the County. Loan Documents, (v) there are no defaults,"or events that with the passage of time could constitute such a default, currently existing with respect to any of the County Loan Documents, and (vi) the Developer has complied with all of the requirements imposed under the County Loan Documents for the closing of the County Loan. G. The EDA hereby covenants, represents, warrants, consents, and agrees that (i) the EDA Loan Documents are all of the documents it has entered into regarding'the EDA Loan, (ii) there are no other documents relating to the EDA Loan, (iii) the . EDA will not enter into any other documents relating to the EDA Loan that would have an adverse impact upon any other party to this Agreement without the prior written consent of such party or parties, (iv) any document relating to the EDA Loan that may exist and is not listed in the EDA Loan Documents, or may come into existence in the future, shall not have any force or effect until approved and consented to by all of the parties to this Agreement upon which such documents has, or will have, an adverse effect, and upon such written approval such document will be automatically considered to be included in the EDA Loan Documents and the EDA will execute any and all documents necessary to include such document in the EDA Loan Documents, (v) there are no defaults, or events that with the passage of time could constitute such a default, currently existing with respect to any of the EDA Loan Documents, and (vi) the Developer has 31 complied with all of the requirements imposed under the EDA Loan Documents for the closing of the EDA Loan. d. The County HRA hereby covenants, represents, warrants, consents, and agrees that (i) the County HRA Loan Documents are all of the documents it has entered into regarding the County HRA Loan, (ii) there are no other documents relating to the County HRA Loan, (iii) the County HRA will not enter into any other documents relating to the County HRA Loan that would have an adverse impact upon any other party to this Agreement without the prior written consent of such party or parties, (iv) any document relating to the County HRA Loan that may exist and is not listed in the County HRA Loan Documents, or may come into existence in the future, shall not have any force or effect until approved and consented to by all of the parties to this Agreement upon which such documents has, or will have, an adverse effect, and upon such written approval such document will be automatically considered to be included in the County HRA Loan Documents and the County HRA will execute any and all documents necessary to include such document in the County HRA Loan Documents, (v) there are no defaults, or events that with the passage of time could constitute such a default, currently existing.with respect to any of the County HRA Loan Documents, and (vi) the Developer has complied with all of the requirements imposed under the County HRA Loan Documents for the closing of the County HRA Loan. 4. Document Provisions. If any terms or provisions of the -Loan Documents are inconsistent with the terms of this Agreement, the terms of this Agreement will control. Notwithstanding any provisions to the contrary contained herein or in any of the Loan Documents, the parties hereto agree that any and all insurance or condemnation proceeds will be applied first to the repair and replacement of the Development, and any excess shall be applied to payments of outstanding principal owing on the Loans, in order of the priority set forth in Section 2 herein. 5. Interpretation. The parties hereto enter into and execute this Agreement in part to establish the subordination and priority of the Loan Documents and any liens or encumbrances created thereby, and, accordingly, the parties hereto hereby agree, understand, and acknowledge. that the enforceability of this Agreement is not, and shall not be, restricted, limited, or impaired, by the fact that not all of the parties hereto are signatories to each of the Loan Documents. 6. Miscellaneous. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which shall constitute one instrument. The laws of the State of Minnesota govern this Agreement. This Agreement and each and every covenant, agreement, and other provision hereof will be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, including any person who acquires title to the Real Property through one of the Lenders by foreclosure or deed in lieu of foreclosure. The unenforceability or invalidity of any provisions hereof will not render any other provision or provisions herein contained unenforceable or invalid. (THE REMAINING PORTION OF THIS PAGE IS INTENTIONALLY LEFT BLANK.) 7 IN WITNESS WHEREOF, the parties hereto have executed this Muer Subordination Agreement and Estoppel Certificate as of the date first written above. BASS LAKE APARTMENTS LLC By; Ad64:i�, Barbara McCormick President STATE OF Minnesota } COUNTY OF � 'r"`• ) The foregoing instrument was acknowledged before me this µ: 2003, by Barbara McCormick, the President of BASS LAKE APARTMENTI�Ma limited liability company under the laws of Minnesota, on behalf o e limited liabian�y�. I�d tary Public f ZEFiLEENE W. Ct)j-LA..i) NOTARY P�,81JG.'AlNkr30TA MYCOA9F,SISaiONE%PIRE3 s-v7-iCtJ.i Signature page to Master Subordination Agreement and Estoppel Certificate BASS LAKE APARTMENTS Richard Esquivel Vice President STATE OF Minnesota ) )ss. COUNTY OF } The foregoing nstnnnent was acknowledged before me this Richard Esquivel, the Vice President of FRANKL�TION L a national banking association, on behalf of the n b g a Ndtaty Pu 7 / J , 2003, by 1F MINNEAPOLIS, Signature page to Master Subordination Agreementt aitd Estoppel Certificate BASS LAKE APARTMENTS Date: C STATE OF Minnesota ) )ss. COUNTY OF HENNEPIN ) e for 'n=msent was acknowle the Ch DeputylExecutive Direclk of the HENNEPIN HENNEPIN COUNTY HOUSING AND REDEVELOPMENT AUTHORITY By: bq ' Its: Chair ( J And I.,, By: Its Deputy/Executive Dir ctor dged before a this. of A ril, 2003, by air and the COUNTY HOUSING AND REDEVELOPMENT AUTHORITY, a political subdivision of the State ofMinnesota, on behalf of the political subdivision. (?, Cj'j' )04t u"y �Public — 67- 10 aiRfTFIA cHmgy Signature page to Master Subordination Agreement and Estoppel Certificate BASS LAKE APARTMENTS MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MLN'OLIS ,�/� By: ., / <,O Name: Cornell L. Moore Its: Chairman And L � Name: Cora McCorvey Its: Executive Director STATE OF MINNESOTA ) )ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this April ,&, 2003, by Cornell L. Moore and Cora McCorvey, the Chairman and Executive Director of THE. MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FORT CITY OF MINNE71, LIS, a public body corporate and politic, on behalf of the public boA � . Public SUSAN E. SE11 NOTARY PUBLIC -MINNESOTA My Commission Expires Jan. 31, 2005 1/ II Signature page to Master Subordination Agreement and Estoppel Certificate SASS LAKE APARTMENTS Approved as to form: Date: STATE OF MINNESOTA ) )ss COUNTY OF HENNEPIN ) COUNTY OF HENNEPIN, STATE OF MINNESOTA ON BEHALF OF THE HENNEPIN HOUSING CONSORTIUM County By: , I V I#�G} Its: Chair Ulti County B Its: of the County Board The foregoing instrument was acknowledged before me this day of April, 2003, by , the Chair of its County Bo aid " the Assistant/D uty/County Administrator and , Deputy/Clerk of the County Board of HENNEPIN COUNTY, State of Minnes to on behalf of the Hennepin Housing Consortium, on behalf of such political subdivision. 7Votary Public P YOLANDA C. McCRARY NOTARY PUBLIC — MINNESOTA My Commission Expires 1-31.2005 e w W Signature page to Master Subordination Agreement and Estoppel Certificate BASS LAKE APARTMENTS THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE W. Peter Enck President Danie onahue Executive Director STATE OF Minnesota ) )SR. COUNTY OF Hennepin ) The foregoing instrument was acknowledged before me this April 94 .2003, by W. Peter Enck , the President of the NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE, a Minnesota municipal corporation, on behalf of the mun'cipal corporation. Notary Public -STATE OF Minnesota )ss. : � rN'a'; VALERIE J. LEONE NOTARY PUBLIC -MINNESOTA COUNTY OF Hennepin -) MY Commission Expires Jan. 31, 2m Rf The foregoing instrument was acknowledged before me this April 24 , 2003, by Daniel J. Donahue the Executive Director of the NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY .IN AND FOR THE CITY OF NEW HOPE, a,. Minnesota municipal corporation, on behalf of the n3pnicipal corpora"n. Notary Public WV ; VALLi'ilEJ. NOTARY PUBLIC-MINNESWd .; W My Commission Expires Jan. 31,2085 ma 5M 13 A Exhibit A LEGAL DESCRIPTION That part of the East 1/3 of Lot 35, Auditor's Subdivision No. 226, Hennepin County, Minnesota, lying South of the North 1138.67 feet thereof, EXCEPTING the West 34 feet and the South 33 feet thereof. Subject to Easements of Record 14 MASTER DISBURSEMENT AGREEMENT BASS LAKE APARTMENTS THIS MASTER DISBURSEMENT AGREEMENT is entered into as of the 13th day of May 2003, by and among the following parties: 1. BASS LAKE APARTMENTS LLC, a Minnesota limited liability company, with offices at 1925 Chicago Avenue South, Minneapolis, Minnesota 55404 ('Borrower"); 2. FRANKLIN NATIONAL BANK OF MINNEAPOLIS, a national banking association, with offices at 525 Washington Avenue North, Minneapolis, Minnesota, 55401 ("Bank"); 3. HENNEPIN COUNTY, a political subdivision of the State of Minnesota, with offices at 417 North Fifth Street, #320, Minneapolis, Minnesota 55401 (the "County"); 4. HENNEPIN COUNTY HOUSING AND REDEVELOPMENT AUTHORITY, a public body corporate and politic, located at 417 North Fifth Street, #320, Minneapolis, Minnesota 55401 ("County HRA"); 5. NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE, a Minnesota municipal corporation, with offices at 4401 Xylon Avenue North, New Hope, Minnesota 55428-4898 ("EDA"); 6. THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE, CITY OF MINNEAPOLIS, a public body corporate and politic, located at 1001 Washington Avenue North, Minneapolis, MN 55401-1043 ("MPHA"); 7. OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY, a Minnesota corporation, with offices at 400 Second Avenue South, Minneapolis, Minnesota 55401 ("Title Company"). RECITALS A. Borrower is renovating an eleven -unit apartment building and constructing twelve new garages to provide rental housing for low- and moderate -income households (the "Project") located at 7610 Bass Lake Road, New Hope, Minnesota, legally described in attached Exhibit A (the "Property"), with funds from sources that include those listed below, pursuant to the agreements described below, all of the same date as this Agreement unless noted otherwise: 1. A mortgage loan from the Bank in the amount of up to $126,300 (the "First Mortgage Funds" pursuant to loan documents), none of which has been disbursed, which will be used for the acquisition, construction and/or rehabilitation of the Development; 2. A loan from the County, on behalf of the Hennepin Housing Consortium, in the amount of $350,000 pursuant to a Loan Agreement, Promissory Note, Mortgage, Security Agreement and Assignment of Rents, and Declaration of Covenants and Restrictions under the Home Investment Partnership Program (the "HOME Funds"), none of which has been disbursed, which will be used for the acquisition of the Development; 3. A loan from the County HRA in the amount of $150,000, pursuant to a Loan Agreement, Promissory Note, Mortgage, Security Agreement and Assignment of Rents, and Declaration of Covenants and Restrictions under the Affordable Housing Incentive Fund Program (the "AHIF Funds"), none of which has been disbursed, which will be used for the acquisition, construction and/or rehabilitation of the Development; 4. A loan from the EDA in the amount of $223,000 pursuant to a Redevelopment Agreement and Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement, to be entered into between the EDA and the Borrower (the "EDA Funds"), none of which has been disbursed, which will be used for the acquisition, construction and/or rehabilitation of the Development; 5. A grant from the MPHA in the amount of $469,000 pursuant to a Housing Development Agreement ("Housing Development Agreement") between the MPHA and the Borrower, under the Metropolitan Housing Opportunities Program ("MHOP Funds"),. none of which has been disbursed, which will be used for the acquisition, construction and/or rehabilitation of. the Development. B; Title Company is willing to act as disbursing agent for disbursing or coordinating the. disbursement of the First Mortgage funds, the HOME Funds, the AHIF Funds, the EDA Funds,. and the MHOP Funds, (collectively, the "Funds"; each provider of Funds is a "Funder"), pursuant to the terms of this Agreement. C. The.Funders have each reviewed and approved the. total Project Cost Statement which enumerates total project costs in the amount of $1,318,300, a copy of which is attached as Exhibit B ("Summary Project Budget") and incorporated herein (the "Project Costs"). D. The parties desire to provide for the order and conditions for disbursing the Funds. E. Borrower and Funders desire the Title Company to act as the construction administrator for the disbursement of the Funds (in such capacity, the Title Company is the "Construction Administrator"). NOW THEREFORE, in consideration of the premises, the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Designated Uses for each Funding Source: The Funders will from time to time supply the Title Company with the Funds that the Title Company shall disburse according to the attached Exhibit B, which indicates the dollar amounts of each 2 funding source that will be disbursed for each line item. At. least -ten days advance notice must be given to the Funders to supply Funds to the Title Company. 2. Order of Priority for Disbursement: Beginning with the initial disbursement, the Title Company shall disburse Funds in the following order of priority: a) All of the HOME Funds, allocated across specific cost line items as designated in Exhibit B - Summary Project Budget. b) All of the EDA Funds, allocated across specific cost line items as designated in Exhibit B - Summary Project Budget. c) All of the AHIF Funds, allocated across specific cost line items as designated in Exhibit B - Summary Project Budget. d) All of the First Mortgage Funds, allocated across specific cost line items as designated in Exhibit B- Summary Project Budget. e) On a pro -rata basis with the items (a) through (d) of the above sources, the funds received under the Housing Development Agreement, in amounts as approved by MPHA. These funds are to be allocated across specific cost line items as designated in Exhibit B. In each instance, except as indicated in item (e) above or approved in writing by the party whose funds are to be disbursed and by the Borrower, none of the Funds designated in any subparagraph shall be disbursed until all of the Funds listed in previous subparagraphs have been disbursed. 3. Conditions of Each Disbursement: The Funders have agreed to disburse funds to the Title Company for disbursement to Borrower or Borrower's contractors on the basis .of separate draw requests pursuant to this Master Disbursing Agreement and separate loan; grant or disbursement agreements among. Borrower, the respective Funder and the Title. Company. Before each disbursement of Funds under this Agreement, Title Company and Construction Administrator shall be famished the following, in form and substance satisfactory to Title Company and Construction Administrator: a). A copy of the Request for Payment in the form attached to this Agreement as Exhibit C, duly executed by Borrower setting forth the information requested therein; b). With respect to all hard costs, an original executed lien waiver from each contractor for work done and materials supplied by it which were paid for pursuant to the immediately preceding Request for Payment; c). With respect to all soft costs, copies of such documents as Title Company or Construction Administrator may require (receipts, canceled checks and the like) evidencing payment of all soft costs which were paid in connection with the immediately preceding Request for Payment; d). With respect to all hard costs and soft costs, copies of invoices and such other supporting evidence as may be requested by Title Company of the Construction Administrator to substantiate all payments which are to be made out of the relevant Request for Payment and/or to substantiate all previous payments then made with respect to the Project; and e). With respect to all hard costs, a letter or other information satisfactory to Construction Administrator from the Project's general contractor listing each contractor and the amount each is to be paid from such Request for Payment. 4. Disbursement Process. When Borrower desires the disbursement of any of the Funds, it will submit a draw request to the Construction Administrator. The Funders' obligations to disburse funds shall be subject to the more restrictive requirements contained in an applicable loan document between Borrower and the respective Funders; provided, however, that the deposit by a Funder of its Funds with the Title Company shall constitute an acknowledgment that all such requirements shall have been satisfied, subject only to the conditions contained in paragraph 3 above. The Construction Administrator shall have no obligation to independently determine that all such requirements have been satisfied. The following shall apply to all disbursements under this Master Disbursement Agreement: a). The Title Company agrees to act as the disbursing agent under this Master Disbursement Agreement, and shall account for all funds deposited with it. Such fiends shall be deposited in a non -risk, interest -beating account and the interest, if any, earned on the undisbursed funds shall be needed to pay for Project Costs. b). Borrower and the Funders have approved and provided to the Title Company a budget for all costs for the Project ("Project Costs") and a sworn construction statement accounting for all costs of construction ("Construction Costs"). If at any time during the course of construction, the total of the unpaid disclosed Project Costs or Construction Costs, as indicated by the column totals on the sworn construction statement presented to the Title Company, exceeds the amount of the aggregate undisbursed proceeds of the escrowed or committed funds, as calculated by subtracting the total amount of liability on the Title Company's endorsements from the amount of such loans, the Title Company shall not make further disbursements under the terms of this Master Disbursement Agreement until the Borrower has deposited with the Title Company the sum necessary to make the available funds equal to the unpaid disclosed cost of construction. c). Upon receipt of a disbursement request approved by the Construction Administrator for funds to pay Construction Costs, and sufficient funds to pay such request, the Title Company shall obtain partial and/or full lien waivers, lien releases or lien satisfactions, in the customary form, from the contractor and all subcontractors and material suppliers with whom the Borrower has contracted in connection with the Project. The Title Company shall promptly notify Borrower and the Construction Administrator of its inability to obtain satisfactions with respect to any disbursement request. Upon receipt of any such notice, the Construction Administrator shall be entitled, but not obligated, to revoke its approval of such disbursement request. d). The Title Company and the Construction Administrator may rely on the statements made by Borrower, the Funders or others in any documents submitted to it under this Master Disbursement Agreement and shall not be re4uired to verify the accuracy of IV. such statements and shall not be liable for any disbursements of funds made in. reliance on any such statement, unless the Title Company or the Construction Administrator is negligent with respect to its duties under this Agreement. e). Borrower agrees to indemnify and hold harmless the Funders from any and all claims, demands or costs associated with the disbursement of the Funds, including any attorney's fees arising therefrom. f). The functions and duties of the Title Company include only those set forth in the loan and/or disbursement agreements with respect to the Funds and this Master Disbursement Agreement and the Title Company is not entitled to act and shall not act, except in accordance with the terms and conditions of such agreements. g). The Borrower and the Funders agree to indemnify and hold the Title Company and the Construction Administrator harmless from any claims or expenses which it may incur in connection with the instructions contained in this Master Disbursement Agreement, including court costs and reasonable attorneys' fees, other than with respect to the failure of the Title Company to account for moneys or documents delivered pursuant to the instructions herein, or to comply with the instructions set forth in this Master Disbursement Agreement. h). Borrower shall pay all title insurance and escrow charges related to this Master Disbursement Agreement. i). MHOP Funds will not be disbursed until (i) Borrower has submitted and the MPHA has approved certifications from the project architect that the project is being constructed in accordance with the construction plans;,(ii) all of the conditions in Section 5.2 of the Housing Development Agreement have been fulfilled, as applicable; and (iii) the labor and wage requirements have been met as set forth in Section 6.1(a) of the Housing Development Agreement. j). Borrower may obtain advances of Funds only for Project Costs approved by the MPHA (i) incorporated. into the Project, and (ii) uninstalled materials to be incorporated into the Project and stored on the Project site for which.title rests in the Borrower free and clear of liens and claims. Applications for advances with respect to construction items shall be for amounts equal to (i) the total value or classes of work acceptably completed, plus (ii) the value of materials and equipment not incorporated into the. work, but delivered to and suitably stored at the site, less (iii) ten (10) percent holdback and less prior advances. 5. Binding Effect. This Master Disbursement Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 6 Execution in Counterparts_ This Master Disbursement Agreement may be executed in any number of counterparts each of which shall be an original, but all of which shall constitute one instrument. 7. Tracing of Funds. Some of the agreements relating toAhe Funds limit the use of proceeds of such Funds to the payment of certain categories of permissible costs (the "Mortgageable 5 Costs"). In order to avoid the necessity of tracing the.use of the proceeds of the Funds to the payment of specific Mortgageable Costs, disbursement of the proceeds of the Funds will be deemed to be Mortgageable Costs so long as the Total Project Cost Statement, as updated, shows that the Mortgageable Costs have or will be paid from the Funds. (THE REMAINING PORTION OF THIS PAGE IS INTENTIONALLY LEFT BLANK.) IN WITNESS WHEREOF, the parties have executed this instrument as of the day and year first above written. BASS LAKE APARTMENTS LLC By:1;4ac Barbara McCormick President STATE OF Minnesota } }ss. COUNTY OF �� d�.ci. } The foregoing instrument was acknowledged before me this i 2003, by Barbara McCormick, the President of BASS LAKE APARTMENTS VLC, a limited liability company under the laws of Minnesota, on behalf o the limited liability company. m otary Public AAAmZI ZERLEENE W. COLLASo NOTARY PUSUGN!?N1 MMA MYCOAdPBf5 M EXPIRES iii 2005 —_ !! APPROVED 10 Signature page to Master Disbursement Agreement BASS LAKE APARTMENTS Attorney Date:l %f+� STATE OF Minnesota } )ss. COUNTY OF HENNEPIN ) HE'_�P�'EPIN COUNTY HOUSING AND REDEVELOPMENT AUTHORITY By: r Its: Chair And By:'Jr'� '/' It Deputy/Executive IV6r e fo g instrument was acknowledged before m this �a of April, 2003, by the Chair and the Deputy/Executive Dzr of re othe HENNEPIN COUNTY H USING AND REDEVELOPMENT AUTHORITY, a political subdivision of the State of Minnesota, on behalf of the political subdivision. Y y Public 7 A:. XTI 1 a� Y� Signature page to Master Disbursement Agreement BASS LAKE APARTMENTS MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNE LIS By: Name: Cornell L. Moore Its: Chairman And L By: 5 Name: Cora McCorvey Its: Executive Director STATE OF MINNESOTA ) )ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this Apri]�� 2003, -by Cornell L. Moore and Cora McCorvey, -the .Chairman and Executive Director of THE -'MINNEAPOLIS PUBLIC'HOUSIl�G AUTHORITY IN AND FOR T PH CITY 0717ELIS, a public body corporate and politic, on behalf of the public bAy./) Public API L -on Dat Signature page to Master Disbursement Agreement BASS LAKE APARTMENTS STATE OF Minnesota } }ss. COUNTY OF HENNEPIN, STATE OF MINNESOTA EHi COUNTY%nty ( By: Chair of its And: By: As stantlDeputy/County THE HENNEPIN V Attest: r Deput lerk of the County Board COUNTY OF HENNEPIN ) T e foregoing instrument was acknowledged before me this 6 —of day pril,,2p 03, by Lt the Chair of its Count Board V ith?Assist t/Deputy/County Administrator and Q . the Deputy/Clerk of the County Board of HENNEPIN COUNTY, a political subd;l ision of the State of Minnesota, on behalf of the political subdivision. tary Public • r YOLAN©A C. Mcoll 11Y NOTARY PUBLIC — MINPdESOTA Ny Cei1 MISSIon Expires 1-31-2005 v r Signature page to Master Disbursement Agreement BASS LAKE APARTMENTS OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY STATE OF Minnesota ss. COUNTY OF Hennepin The foregoing instrurnent was acknowledged before Ine thio !2y of nd, 2003, by the � 2 ; of OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY, a Minnesota corporation. NOTARIAL STAMP OR SEAL ELIZABET:A. ESE NOTARY PUBLESOTA Commission E. 31, 2005 R s SIGNA ERSON TAILING ACKNOWLEDGEMENT 10 Signature page to Master Disbursement Agreement BASS LAK STATE OF Minnesota l }ss. COUNTY OF } The foregoing tnumment was acknowledged Richard Esquivel, the Vice President of FRANKLIT a national banking association, on behalf of the 12 me this 2003, by [O AN OF MINNEAPOLIS, Signature Page to Master Disbursement Agreement BASS LADE APARTMENTS THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE W. Peter Enck P esi t el nJ. Don e Executive Director STATE OF Minnesota ) )ss. COUNTY OF } r�he fare oing instrument was acknowl ged before me this 2003, by f�:� a GIL , the Pty_�jd?jjj of the NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE, a Minnesota municipal corporation, on behalf of the nicipal corporation. Notary Public STATE OF Minnesota )- )ss.1(9 VALERIEJ. LEONE COUNTY OF NOTARY PUBLIC -MINNESOTA My Commission Expires Jan. 31, 2005 The foregoing instrument was acknowledged before me this a - A (/ 2003, by janLagbae_ ,th-e(ltthrla AiLec17 U ?' of the NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE, a Minnesota municipal corporation, on behalf of the unicipal corporation. Notary Public E(jDj-, VALERIE I. LEONE iVOTARYPUBLIC_MINNESOTAMy Commissian Expires Jan. 31, 2005 12 EXHIBIT A The Real Estate referred to in the foregoing Master Disbursement Agreement is located in Hennepin County, Minnesota, and is legally described as follows: That part of the East 113 of Lot 35, Auditor's Subdivision No. 226, Hennepin County, Minnesota, lying South of the North 1138.67 feet thereof, EXCEPTING the West 3D feet and the South 33 feet thereof. Subject to Easements of Record 14 EXHIBIT B �r8ntet36 mss Lake Pgti l rFte�tts L C 7610 Bess: Like f{partrrtenis - Protect # HOMI�TIrits._ (i�} Tex Cledit Urntr () lkfatkt Ile t]nits , Sources Funds I Home Loan Bank Alf. Hsg. Funds Drtgage Loan NII Funds ubtolal Development Sources Additional Project Sources IOPE %I Funds �apltel Funds Ither. OTAL SOURCES (A & 9J Proposal: Development Uses :onstrucBon Costs; Residential Constructlon Site Work General Requirements Builder's Overhead Builder's PraBI Bond Premium Utilities from the Street (included In Residential Finish Landscaping (Included in Site Work Amc Public Improvements Construction Continnencv levelopment Fees: Architects A=unting (Cost Certf6catlon/Auc PHA Legal _ DevelDper Legal Permits (Included In General Req ApWalsal Environmental Engineering (included In Architect Constr. PILOT & Taxes Insurance Ttile & Recording Fees First Mortgage Interest Bridge Loan Interest Permanent Loan Insurance Costs Consultants Equipment & Furnishings Tax Credit Fees Marketing Lease -Up Interest & Facpenses Initial Operating Period Resew' Operating Subsidy Reserve Operating DsOclt Resen• Exit Tax Reserve Davaloper's Fee Other: Lot SQr Other: Pro Devely MHOP {PHA) Franklin Nat'l Bank HOME Funds Hennepin County AHIF City of Naw He a Total Funds ISO= i :.:. _ 128 add — , . $ . ts11 po S 150 3040: S. ,_ -gilt} $. ... � ��sB,�rlo �� .... 1 3'(t13170 $ 469,000 $ 126,300 $ 350,000 $ 150,000 $ 223,000 S 1,318,300 3f13,o81 :. .. $ hod $ 34 10 Poo $ ..: �t1DLr $ .... :. $ X381 S .. 'W it anxltucbonORst=Aigoun --..., ..._ .: 2$ 6B' ...�. K-956 $ 1,50U R". 00.0 $;to $::'; 1,159 S use. [ i $ 00 2.340 $ 4.640 756 $50n.. $ 4.000 ..I S . .�.. 1fl_6tltl I R tl,nnn EXHIBIT C Disbursement Request Number — Date — Project — Bass Lake Apartments The undersigned, pursuant to that certain Master Disbursement Agreement dated May 13, 2003, by and among BASS LAKE APARTMENTS LLC ('Borrower"); FRANKLIN NATIONAL BANK ('Bank"); HENNEPIN COUNTY (the "County"); HENNEPIN COUNTY HOUSING AND REDEVELOPMENT AUTHORITY ("County HRA"); NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE ("EDA"); THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS ("Authorizing Agent"); and OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY ("Escrow Agent"), hereby certifies and requests as follows: 1. The Borrower requests that the following amounts be paid by the Escrow Agent to the following persons from the Loan and Grant Proceeds as described in the Master Disbursement Agreement: a. Name and Address of Payee Amount Requested to be Paid .A 0 2. Attached hereto are completed AIA Documents G702 and 703 (if applicable). 3. Attached hereto are invoices with respect to each item for which payment is requested pursuant to paragraph 1 hereof. d. Borrower certifies that the disbursements are for Permitted Uses as defined in the Master Disbursement Agreement. 5. The Borrower hereby requests the Authorizing Agent to approve this Disbursement Request and forward it to the Escrow Agent for payment of the amounts listed in paragraph l hereof. Signed Title Date • 9 Wi]ii":�i BASS LAKE APARTMENTS LLC, a Minnesota limited liability company LO Barbara McCormick President 05/12/2003 PROPOSAL of THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS and THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE for MIXED -FINANCE DEVELOPMENT (Bass Lake Apartments/New Hope, Minnesota) Submitted to: United States Department of Housing and Urban Development 920 Second Avenue South, Suite 1300 Minneapolis, MN 55401 Attention: Steve Gronewold Dated: December 13, 2002 This Document Drafted By: Holmes & Associates, Ltd. Two Carlson Parkway, Suite 155 Minneapolis, MN 55447 Telephone: 763-249-0888 Facsimile: 763-249-0777 F:1MNN125W351DOCSN19PR0POSAL.DOC PROPOSAL TABLE OF CONTENTS 1. Identification of Participating Parties Participants Contact List 2. Activities Undertaken by Parties Commitments 3. Legal and Business Relationships Between the MPHR and the Participating Parties 4. Development Description Development Site Data 5. Sources with Pro Forma 6, Operating Subsidy Methodology 7. Management Plan Resume of Owner/Developer Previous Participation Resume of Managing Agent S. The Site, Site Plan and Neighborhood Site Map, Site Views Parcel Data City Planning Commission Statement Title Work 9. Market Analysis 10. Development Cost Estimates Contractor's Breakdown Construction Schedule 11. Adequacy of Existing Facilities and Services Neighborhood Maps — Services and Employers Letter from School District 12. Relocation Plan 13. Operating Feasibility 14. New Construction and 6{h} Compliance Recent Listings 15. Certifications 16. Environmental Review County Environmental Review Phase I Environmental Site Assessment Asbestos and Lead Risk Assessment/Lead Paint 17. Rental Term Sheet Unit Mix Entire Project Entire Project Budget TDC Calculation FAMNN12510351DOCS1I9PROPOSAL.DOC PROPOSAL EXHIBITS A Initial Agreement (MPHA, EDA) B Cooperation Agreement (MPHR, City, EDA) C Housing Development Agreement (MPHA, EDA, Owner) Exhibit A Legal Description Exhibit B Declaration of Restrictive Covenants Exhibit C Certificate of Completion Exhibit D Title Insurance Commitment D Regulatory and Operating Agreement (MPHA, EDA, Owner) Exhibit A Development Site Exhibit B Dispute Resolution Procedures Exhibit C Development Operating Subsidy Cap Worksheet E :Management Agreement (Owner, Managing Agent with Consent of MPHR, EDA and MHFA) Exhibit A Legal Description Exhibit B Management Plan Exhibit C Authority Unit Lease Form F Development Agreement (Owner and City) Exhibit A Legal Description of Tax Increment District Exhibit B Legal Description of Development Property Exhibit C Form of Tax Increment Note Exhibit D Compliance Certificate G Construction Contract (Owner and Contractor) H Project Manual (Owner and Architect -Specifications) I Disbursement Agreement F:WNN 125U500CSU9PROP0SAL.DOC PROPOSAL 1. Identification of Participating Parties. A. The Minneapolis Public Housing Authority in and for the City of Minneapolis ("MPHA"), a public body corporate and politic, created pursuant to Minnesota Statutes, Section 469.001 to 469.047. The MPHA holds an Annual Contributions Contract ("ACC") with the United States Department of Housing and Urban Development ("HUD") for the demolition and replacement of 770 units of public housing pursuant to a Consent Decree in settlement of Hollman et al. v. Cisneros et al, U.S.D.C. (Minn. Dist., 4th Div.) Civil No. 4-92-712. B. The City of New Hope, Minnesota, a municipal corporation ("City") C. The Economic Development Authority in and for the City of New Hope, a public body corporate and politic (the "EDA"). D. The County of Hennepin, a political subdivision of the State of Minnesota ("County"). E. The Hennepin County Housing and Redevelopment Authority, a political subdivision of the State of Minnesota ("County HRA"). F. The Bass Lake Apartments LLC, a Minnesota limited liability company ("Owner"). G. Project for Pride in Living, Inc., a Minnesota nonprofit corporation ("PPL") (the sole Member of Owner and acting as Developer and Managing Agent). H. The United States Department of Housing and Urban Development, a department of the United States government ("HUD"). 1. The Franklin National Bank, a national banking corporation ("Franklin Bank") J. Old Republic National Title Insurance Company, a Minnesota corporation ("Title"). K. Blumentals Architecture, Inc., a Minnesota corporation ("Architect"). L. Flannery Construction, a Minnesota corporation ("Contractor"), F:WNN125W351DOM19PROPOSAI..DOC PROPOSAL. PARTICIPANTS F:IMNNI2510351DOCS119PROPOSAL.DOC PROPOSAL NAME AND ADDRESS TELEPHONE FAX EMAIL MPHA Cora McCorvey, Executive Director 612-342-1439 612-371-0421 Dean Carlson, Housing Development 612-342-1490 612-335-4401 dcarlson@mplspha.org Coordinator* 612-342-1400 Minneapolis Public Housing Authority 1001 Washington Avenue North Minneapolis, MN 55401-1043 MPHA's James S. Holmes* 763-249-2900 763-249-0777 jholmes@holmesltd.com Counsel Timothy R. Velner 763-249-2908 763-249-0777 tvelner@holmesltd.com Mary Jaworsky, Paralegal 763-249-2906 763-249-2907 mjaworsky@holmesltd.com Holmes & Associates, Ltd. Two Carlson Parkway, Suite 155 Minneapolis, MN 55447 HUD- Steve Gronewold* 612-370-3000 612-370-3090 stephen,j._gronewold@hud.gov Minnesota x2210 Office Debbie Kravik* 612-370-3135 612-370-3003 deborah—kravik@hud.gov x2225 Al Chandler 612-370-3000 612-370-3090 allen_chandler@hud.gov US Department of HUD x2212 920 Second Avenue South, Suite 1300 Minneapolis, MN 55402 HUD - Vickie S. Longosz 202-708-0470 202-401-2115 Washington, Attorney Advisor x5266 D.C. Office of Assisted Housing and Development Office General Counsel Department of HUD 451 Seventh Street Southwest Room 8166 Washington, D.C. 20410 Luci Blackburn* 202-708-0614 202-401-2370 luci_ann_blackburn@hud.gov Department of HUD x4190 451 Seventh Street Southwest Room 4130 Washington, D.C. 20410 City & EDA Ken Doresky 763-531-5137 763-531-5136 kdoresky@ci.new-hope.mn.us Community Development Specialist City of New Hope Daniel Donahue* 763-531-5100 Executive Director New Hope EDA Both Offices at: 4401 Xylon Ave N New Hope, MN 55428-4898 EDA's Counsel Steve Sondrall 763-424-8811 763-493-5193 sas@jensen-sondrall.com Jensen Sondrall PA 8525 Edirlbrook Crossing, Suite 201 Brooklyn Park, MN 55443 Owner Bass Lake Apartments LLC c/o Project for Pride in Living, Inc. Barbara McCormick, Vice President 612-874-3301 1925 Chicago Avenue South Minneapolis, MN 55404 F:IMNNI2510351DOCS119PROPOSAL.DOC PROPOSAL ( NAME AND ADDRESS TELEPHONE FAX EMAIL Pr i, aka Bill Flaig, Project Manager 612-874-3335 612-872-8995 bill,flaig@ppl-inc.org Developer Project for Pride in Living, Inc. 1925 Chicago Avenue South Minneapolis, MN 55404 Owner's & Cassandra Headrick 612-752-7316 612-340-2644 headrick.cassandra@dorseylaw.com Developer's Dorsey & Whitney LLP Counsel 50 South Sixth Street, Suite 1500 Minnea olis, MN 55402 PPL Morris Manning, PMD Manager 612-874-8512 612-872-8995 aka Managing Project for Pride in Living, Inc. Agent 1925 Chicago Avenue South Minneapolis, MN 55404 E County HRA Carol Stinar 612-348-2670 612-348-2920 carol.stinar@co.hennepin.mn.us Principal Planning Analyst Hennepin County HRA 417 North 5b Street, Suite 320 Minneapolis, MN 55401 Franklin Richard Esquivel, Vice President 612-8744316 612-874-7978 Franklin National Bank 525 Washington Avenue North Minneapolis, MN 5501 County Tonja West-Hafner 612-348-2599 612-348-9710 tonja.west-hafner@co.hennepin.mn.us Hennepin County A-2300 Government Center Minneapolis, MN 55487-0240 A—hitect John Klockeman, AIA 763-561-5757 763-561-2914 Blumentals Architecture, Inc. 6235 Earle Brown Drive, D -Barn Brooklyn Center, MN 55430-2105 Contractor Mark Welch, Project Manager 651-225-1105 651-225-1100 Flannery Construction 351 East Kellogg Boulevard St. Paul, NLT�T 55101 Title Rick Zilka 612-371-1111 612-371-1179 railka@oldrepnatt.com Old Republic National Title Insurance Company 400 Second Avenue South Minneapolis, MN 55401 Metropolitan Cecile Bedor 651-602-1345 651-602-1313 cecile.bedor@metc.state.mn.us Council Metropolitan Council Mears Park Centre 230 East Fifth Street St. Paul, MN 55101-1626 Relocation Edith Vargas 651-645-6892 Consultant to 1737 Ashland Avenue PPL St. Paul, MN 55104 F:1MNN12550351DOCSIl9PROPOSALDOC PROPOSAL 2. Activities Undertaken by the Parties. A. The MPHA has created a program known as the Metropolitan Housing Opportunities Program ("MHOP") for the location of public housing throughout the metropolitan area other than Minneapolis, St. Paul, or any area of concentration as to race or poverty. B. The Owner has acquired the real estate upon which the Owner is proposing to rehabilitate, construct and operate an eleven (11) -unit multifamily rental project to be known as Bass Lake Apartments located at 7610 Bass Lake Road in the City (the "Development"). Construction is estimated to commence in May, 2003. C. The MPHA the EDA and the City have agreed to the location of four (4) MHOP public housing units within the Development. D. The MPHA and EDA have entered into an agreement (the "Initial Agreement") (Exhibit A) pursuant to the joint powers authority contained in Minnesota Statutes, Section 471.59 which authorizes the MPHA to prepare and submit this Proposal for a Mixed Finance Development to HUD pursuant to subpart F of 24 CFR part 941 (the "Regulations"). The specific information regarding the Development has been developed by the MPHA and the Owner. E. The MPHA, City and EDA have entered into an agreement (the "Cooperation Agreement") (Exhibit B), which grants an ad valorem tax exemption and provides for payments in lieu of taxes ("PILOT") for that portion of the Development taxes represented by units made subject to Section 5 of the United States Housing Act of 1937 (the "Act"). Minnesota Statutes, Section 469.040 authorizes such pro rata exemption agreements with respect to mixed finance projects. F. HUD will participate in the proposed transaction by providing to the MPHA up to $505,000 (including administration funds) in public housing development grants and providing operating subsidy for sustained operation of the MHOP public housing units. G. The MPHA and EDA will enter into an agreement with the Owner (the "Housing Development Agreement") (Exhibit C) by which the MPHA agrees to fund, in part, the acquisition of the Development site and the actual rehabilitation and construction cost of eleven (11) units, based upon number of bedrooms, and the Owner agrees to (1) rehabilitate and construct the Development, (2) cause four (4) units therein to be set aside, operated and maintained as public housing and (3) fund an operating reserve fund. H. The MPHA and EDA will enter into an agreement with the Owner (the "Regulatory and Operating Agreement") (Exhibit D) which (1) obligates the Owner to operate the public housing in accordance with all federal, state and local laws and regulations for the period of the ACC, (2) describes that the MHDP public housing units within the Development will not be physically identified, but will "float" throughout the Development, (3) obligates the Owner's designee to manage all of the units within the Development, subject to the MPHA's right RNNN 1251D351DOCM14PROPOSAL.DOC PROPOSAL to terminate and replace the Owner's designee for failure to abide by law, regulation, policy or the ACC and (4) provides a method for payment of operating subsidy to the Owner by the MPHA. I. PPL will manage the Development, including the MHOP public housing units, pursuant to a management agreement (Exhibit E) between it and the Owner. J. Franklin Bank is providing a first mortgage loan in the amount of approximately $126,300. The terms of this loan include an interest rate of 6.25% annual interest rate for 5 years with a 20 year amortization period. K. The County has awarded $350,000 as a subordinate mortgage loan from their HOME Program Funds. The terms of this note includes a zero percent (0%) interest rate with the principal due at the end of the 30 year term. L. The EDA on May 13, 2002 approved the Redevelopment Agreement with PPL (Exhibit F) to reimburse PPL for certain of the costs incurred for land acquisition costs, architects and engineers' fees and the cost of construction of the Development. The EDA is providing a subordinate mortgage loan for approximately $223,000. The loan shall be without interest and be due and payable on or before June 1, 2032. The EDA may forgive or defer payment of a portion of the loan, if, in the sole discretion of the EDA, the Development is still being used for low and moderate income housing. M. The County HRA has awarded $150,000 as a subordinate mortgage loan from their Affordable Housing Incentive Fund. The terms of this note includes a zero percent (0%) interest rate with the principal due at the end of the 30 year term.: N. PPL has entered into a Construction Contract with the Contractor and the Architect on October 4, 2002 (Exhibit G). O. Dean Carlson at the MPHA will monitor and inspect the construction, approve construction draws and conduct the post construction certifications and monitoring of the Development. The Master Disbursement Agreement provides that the MPHA Funds will not be disbursed until the Owner has submitted and the MPHA has approved certifications from the Architect that the Development is being constructed in accordance with the construction plans and the federal Davis -Bacon wage requirements have been met. Jeff Mooney at the MPHA will monitor the application of federal Davis -Bacon wage requirements that shall apply to the Development. (The MPHA, County, County HRA, EDA and Franklin Commitments are attached hereto.) C;1MNN12510351DOCW 9PROPOSAL.DOC PROPOSAL 3. Legal and Business Relationships Between the MPHR and the Participating Parties. A. Although the Minnesota Legislature in 1996 granted the authority for the MPHA and City to form a joint board for purposes of owning, operating, managing or administering public housing developed under MHDP, it is intended that for the Development the legal relationship between them shall be controlled by the Initial Agreement. B. Because the MHOP public housing units represent thirty-six percent (36%) of the units in the Development, the MPHA does not want to acquire a partnership interest, general or limited, in the Owner. The Regulatory and Operating Agreement, the Declaration of Restrictive Covenants to be recorded against the Development and the ongoing monitoring for audit and operating subsidy purposes will adequately protect the interests of the MPHA. P:IMNNI2M0351DOCS5I9PROPOSAL,DOC PROPOSAL 4. Development Description. A. The Development is a 2.5 story walk-up apartment building (brick and siding) containing eleven (11) units, consisting of five (5) one -bedroom units and six (6) two-bedroom units. The four (4) MHOP public housing units will all be two-bedroom units. These MHOP units will not be physically identified, but will "float" throughout the Development. Number of Units 1 Bedroom 2 Bedroom TOTAL UNITS MHOP Units 0 4 4 HOME Units 3 2 5 Market Rate Units 2 0 2 TOTAL UNITS 5 6 11 Detailed Unit -information Unit Level Type Sq. Ftg' 0 Lower <Laundry/Mech. Room 680 1 Lower 2BR 680 __.;........._ 2 .............................................................................................................. Lpwer 2BR _... -- 680 3 Lower 1BR 565 4 1st2BR 680 ......... 5 .......... ..... ...._......... ........... ......................... 1st ..... .................... .......... 2BR 680 6 1 1st 1BR 565 7 1st 1BR 565 ..._....._.:._.._....._..........._.............................. 8 ' ...................- 2nd - --- 2BR ........................ 680 9 1 2nd 2BR 680 10 F 2nd 1BR 565 11 " 2nd IBR 565 1 Square Footages are approximate values only. Source: PPL B. The Bass Lake Apartments Project entails the large-scale renovation of the existing 11 -unit apartment building. The building exterior will be completely renovated, including the replacement of all soffits, fascia, gutters, downspouts, siding, and windows. In addition, the landscaping will be improved (including improvements to the existing grade), the drive expanded and resurfaced, and garages added for each unit. Interior work will include updating the existing units in their present configuration. New cabinets and counters, new carpeting and vinyl flooring, updated electrical, and wall repair and painting will be provided. In addition, the entire building will be retrofitted with a new ventilation system and all window AIC units will be replaced with new sleeves and units. Exhibit H is the Project Manual for Roofing, Windows, Interior Renovations, New Garages and Related Exterior Work for ... 7610 Bass Lake F:IMNN125%035\DOCS1l9PROPOSAL. DOC PROPOSAL Road (i.e. "Project Manual'). It represents Volume One of a two -volume project manual submitted by Blumentals Architecture Inc. for this Development. Volume Two consists of a Lead Risk Assessment and Asbestos Survey prepared for this Development by Liesch and Associates, an environmental consulting firm hired by PPL (see Tab #16 — Environmental Review). The first section of the Project Manual provides detail on the scope of work. The second section consists of small sheet drawings of the site plan, unit plans, building elevations, etc. C. There are no handicapped units, nor hearing/sight-impaired units. Attached hereto are (i) a letter from Emilio Bettaglio of MPHA; (ii) a letter from Curt Wiehle, Building Code Representative for State of Minnesota; and (iii) a memo submitted by PPL providing cost estimates for creating a handicapped -accessible building. These attachments indicate that (1) assessments of the proposed Development conclude that it entails primarily maintenance repair and cosmetic alterations, and (2) that it would cause an undue burden to the Development to require an accessible route and to create HCPD-accessible units. D. Non -dwelling space consists solely of hallways on each floor (including the I/2 story garden level) and a combination mechanical/laundry room. The laundry room contains two coin-operated wash machines and two coin-operated dryers, .a utility sink, and eleven (11) storage lockers for residents. E. The Owner intends to commence construction of the Development in May, 2003 and estimates that the Date of Full Availability ("DOFA") will be on or about May 31, 2003. F. Based upon this schedule, the End of the Initial Operating Period ("EIOP") will be December 31„ 2003. G. The Actual Development Cost Certification is anticipated to be submitted to HUD by June 30, 2004, F:WNN125VMDOMOPROPOSAL.DOC PROPOSAL 5. Sources and Uses Budget with Pro Forma. A. The currently estimated total development cost for the Development is $1,354,300.00. The sources of funding are as follows: Franklin Hennepin County - HOME Funds EDA County HRA - ARIF MPHA Total $ 126,300.00 $ 350,000.00 $ 223,000.00 $ 150,000.00 $ 505,000.00 $ 1,354,300.00 B. The sources and uses analysis is in Tab 17 (Term Sheet). C. Attached are the following tables detailing projected revenues and expenses for the Development over the next ten years: Table 5A — Housing Income_ Detail — indicates total projected housing income for MHOP Units, County (HOME) Units and Market -rate units during Year One of operations (i.e. 2003) assuming the following per unit rents: 2 BR MHOP Unit @ $230 per month* 1 BR HOME Unit @ $625 per month 2BR HOME Unit @ $725 per month I.BR Market Rate Unit @ $625 per month - Based on average collected monthly rents for MHOP units by the MPHA during Fiscal Year 2001. Table 5B — Income and Operating Expense Detail — provides detail on all projected income sources and expenses for (a) all units, (b) MPHA units only, and (c) non-MPHA units, for Year One of operations. The source of information for these projections was the Property Management Department of PPL, which will be the permanent managing entity for this Development. Table 5C — Ten -Year Operating Pro Forma —presents a ten-year operating pro forma for all housing units. The notes at the bottom of the table indicate that the following assumptions were used in formulating the projections: (a) Annual 4.0% increase in Managing and Operating Expenses. (b) Annual 4.0% increase in Reserves and Escrows. (c) Annual 3.0% increase in Overall Project Income. D. Income from the entire Development has been estimated, taking into account the income and rental limitations of both the tax credit and public housing programs. Based upon !-:%MNN 1 Z510355DOCSII9PROPOSAL. DOC PROPOSAL the experience of the MPHR through. September 2001 in operating its MHOP public housing units, it is estimated that (1) average monthly income from these units will be $230 per month, not including a utility allowance for the tenants averaging $93, (2) average monthly per unit operating costs will be $444.00, and (3) the average monthly operating subsidy for each public housing unit will be $214.00. In order to support $230.00 in rent plus a $93 utility allowance, the public housing tenant family would need to earn at least $9,200 per year. The MPHA experience is that the average family tenant in a MHOP public housing unit earns $16,000 per year. E. Details of the expense, income and operating subsidy calculations are contained in the Regulatory and Operating Agreement. F. Any moneys allocated to development of the MHOP public housing units as a result of, in accordance with Section 5.1(a) of the Housing Development Agreement, certified costs being less than $469,000, shall be utilized by the MPHA to reimburse costs initially incurred in establishing the Metropolitan Housing Opportunities Program. r:\MINN125W35\DOCS114PROPOSAL.DOC PROPOSAL 6. Operating Subsidy Methodology. A. The MPHA has not sought waivers of income levels and has no reason to believe that the average income levels of tenants in the Development will vary from those which exist throughout the MPHA public housing program. The following is a summary of how the operating subsidy will be structured. B. The MPHA shall pay the Owner an operating subsidy equal to the lesser of (a) the difference between the "Estimated MHOP Unit Expenses" and the "Estimated MHOP Unit Income," or (b) the "Operating Subsidy Cap," as those terms are defined in the Regulatory and Operating Agreement. The Operating Subsidy Cap is an amount intended to reflect the annual subsidy which HUD has committed to pay to the MPHA per public housing unit room, so that the MPHA will not be required to pay to the Owner an amount which exceeds that which it receives from HUD for other units in its inventory. For this reason, the MPHA has duly considered the projected needs of all other MPHA public housing units and projects and, more specifically, the increased needs of all MPHA units, including the MHOP units, as a result of inflation and increased costs of operation over time. C. In the event the MPHA requests that HUD reformulate the annual contributions contract applicable to the MHDP Units, the Operating Subsidy paid by HUD to the Metropolitan Council, and by the Metropolitan Council to the Owner, will be determined or re -determined in accordance with said Metropolitan Council annual contributions contract, and the Operating Subsidy Cap will be calculated or re -calculated taking into account the Metropolitan Council public housing inventory only. D. The Owner will create an Operating Subsidy Reserve, equal to three years' total estimated operating subsidy of $7,704.00 for each of the four (4) MHOP Units, or in a total arnount of $30,816. This will constitute the initial Floor Level of the reserve fund for purposes of triggering Owner remedies in the event of operating subsidy shortfalls, but will be adjusted annually based upon the prior years' actual operating subsidy. All investment earnings and the Owner reimbursements of excess operating subsidy will be deposited in this reserve. E. The Owner shall have the right to utilize this Operating Subsidy Reserve in the event the MPHA fails to make timely payment of the agreed upon operating subsidy amount or in the event the amount of subsidy paid is less than the difference between unit income and expenses because of the Operating Subsidy Cap. The MPHA may, but will not be obligated to replenish the Reserve to its Floor Level. F. If the Operating Subsidy Reserve falls below the Floor Level, either because of Floor Level adjustments or withdrawals, and there is a vacancy in an MHOP Unit, the MPHA is given a series of options for maintaining the vacant unit as a public housing unit, including the leasing of the vacant unit to a qualified public housing tenant with sufficient income to afford a rent which will assure that Authority Unit Expenses do not exceed Authority Unit Income (including operating subsidy). FAMNN I251035%DOCS\ I9PROPOSAL. DOC PROPOSAL G. If the Operating Subsidy Reserve falls below 50vo of the floor Level, and no vacancy in an MHOP Unit has occurred, the MPHA is given another series of options for maintaining the MHOP Units as public housing units. If it does not do so, the Owner is given the right to permit leases of the MHOP Units to expire and, beginning with the incentive units, lease them to qualified public housing tenants with sufficient income to afford rent which will assure that Authority Unit Expenses do not exceed Authority Unit Income (including operating subsidy). F:IMNNI251635MOCSll9PROPOSAL.DOC PROPOSAL 7. Management Plan. A. The Owner agrees in the Regulatory and Operating Agreement and in the Management Agreement, to operate and manage the MHOP public housing units at the Development in accordance with all federal, state and local public housing requirements for the period of the ACC. B. The Developer is a nonprofit community development corporation that has 30 years of experience rehabilitating and building new housing. PPL has built over 900 units and owns and manages over 500 units in the Metro Area, including 34 in the City of New Hope. Attached to this tab section is a table detailing the multi -family housing development projects in which PPL has played a major role, since 1978. The table indicates the role that PPL played in each project (i.e. owner, developer, consultant, general contractor, and/or manager). Also listed for each project is the total development costs, as well as the project lender. Resumes of PPL Development Staff Following are brief descriptions of the work history and experience of PPL development staff that will be involved in the subject project: Barbara McCormick -- Vice President of PPL and Director of Housing and Development Barbara McCormick brings nearly 17 years of work in the nonprofit housing field to her position as PPL Director of Housing and Development. Beginning with the West Seventh/Fort Road Federation, Ms. McCormick has developed single-family homes for sale, with a special interest in historic preservation. Ms. McCormick has also worked in new construction and rehab of multi -family housing at Twin Cities Housing Development Corporation (TCHDC), where her activities included syndication of historic preservation tax credits, older building credits and low-income housing tax credits. In addition to her residential development activities, Ms. McCormick served as the Asset Manager for nearly four years for much of TCHDC Is management portfolio of approximately 500 units of affordable rental housing located in both inner city and suburban areas. After a year as Field Officer for the Greater Minnesota Housing Fund, Ms. McCormick returned to nonprofit housing development in her current position at Project for Pride in Living, where she oversees the development, construction and management services PPL offers. Ms. McCormick holds an MBA and is a licensed Minnesota Real Estate Broker. Chris Wilson — PPL Development Manager At PPL, Chris Wilson is involved in commercial and multi -family development production, managing projects from inception to completion. He served as the lead staff person on PPL' s Mercado, a commercial project located at Lake and Bloomington in Minneapolis that provides reasonably priced retail and office space for Hispanic entrepreneurs. In addition, Mr. Wilson supervised the 25 -unit Lyndale Avenue multi- family conversion project, which was Minneapolis' first project involving Hollman units. F:kMNN1210351DOCS\19PROPOSAI_DOC PROPOSAL. Further, Mr. Wilson managed PPL' s Bass Lake Road Development project, a 34 -unit mixed income development located in the city of New Hope. Mr. Wilson has over 10 years of development experience using his architectural training and construction background to administer more than 30 building projects with construction costs ranging from $65,000 to $4.2 million. He brings to PPL an Architecture degree from the University of Minnesota as well as a B.A. in English from the University of Chicago. Bfll Flaig — PPL Project Manager At PPL, Bill Flaig serves as project manager for many of the organization's single- and multi -family housing development projects. Most recently, he managed the development of 13 new single-family houses built on scattered sites in Minneapolis, from land acquisition through final sale of units. He also served as assistant project manager for the 46 -unit Portland Place project,. which featured the development of new single-family, twin home, and townhouse units on the 2600 and 2700 blocks of Portland Avenue in Minneapolis. Mr. Flaig brings to PPL an Economics degree from Marquette University, as well as 1.5 years of experience working in real estate feasibility analysis with Maxfield Research of Minneapolis. Morris Manning — PPL PMD Manager At PPL, Morris Manning serves as Property Director. Mr. Manning brings to PPL a Masters degree from the University of Minnesota and a Bachelor of Arts from Drake University. Morris Manning joined PPL in June 2002 bringing a diverse and rich managerial background in early childhood, family support, paraprofessional training and housing programs. Morris was active in the expansion of the Wilder Foundation's housing activities in Saint Paul during the 1980's. and, for six years, was Director of Wilder's Housing Services which managed a 2000 unit portfolio of single room occupancy, subsidized senior and family housing, market rate rental and ownership housing. Morris advocated for stable housing for homeless youth, adults and families as a member of the Saint Paul Shelter Board and led Wilder's participation in a major community development initiative on Saint Paul's westside. Morris has lived since 1975 in a limited equity cooperative in the Frogtown area of Saint Paul and been active in neighborhood affairs. C. The Owner will enter into a management agreement with the Managing Agent to manage all eleven (11) units at the Development. The Management Plan submitted by the Managing Agent is attached hereto and is also an exhibit to the Management Agreement. The Managing Agent currently has an on-site management office at its other City of New Hope rental property (i.e. Bass Lake Court Townhomes at 7300 Bass Lake Road), which is located only three blocks from this Development. P:1MNN12510351pOCS119PROPOSAL DOC PROPOSAL S. The Site, Site Plan and Neighborhood. A. The site is located at 7610 Bass Lake Road in the City of New Hope. The parcel is 0.5241 acres and is a permitted use in the R -O, Residential -Office zoning district. Adjacent land uses to the North and South are residential in character with average quality and condition single family homes developed in the 1970's and 1980's. Attached is the Land Use Confirmation statement from the City of New Hope Zoning Administrator with a detailed description of the present site use. There is also attached the Hennepin County Property Information, a Surveyors Certificate and specific driving instructions. B. Site Control. The Commitments for Title Insurance from Title are attached hereto and also will be attached to the Housing Development Agreement. (Exhibit Q. The property was purchased on July 31, 2002 by PPL. The Buyer's Closing Statement is attached with their Evidence of Property Insurance. C;1MNNI25%035=CS519PROPOSAL.DOC PROPOSAL 9. Market Analysis. This market analysis assesses demand for both the MHDP- and non -MHDP portions of the proposed multi -family rehab project at 7610 Bass Lake Road in New Hope. MHOP tints The 7610 Bass Lake Road rehab project will feature a total of four (4) two-bedroom units reserved for households eligible for public housing. Tenants of these units will be charged monthly rents equal to 30 percent of their annual incomes, or $25.00 -- whichever is greater. There exists to -date a lengthy waiting list of eligible households seeking public housing units in suburban areas. HOME and Market -Rate Units Overview The remaining two (2) two-bedroom units and three (3) of the live (5) one -bedroom units at 7610 Bass Lake Road will be HOME units, while the remaining two (2) one -bedroom units will be market -rate units. The HOME and market -rate units will share the same monthly rents. However, the HOME units will be restricted to households at or below 50 percent of the area median income, whereas the market rate units will not.be subject to any income limitations. Rgmos The purpose of the following market analysis is to demonstrate that the combination of unit type, price point, and amenities offered by the HOME and market -rate units at the 7610 Bass Lake Road Project will compete favorably with what is currently being offered by comparable rental properties in the Crystal/New Hope rental sub market. Data Source Used for Market Analysis The data source used for this market analysis was Housing Links Private Market Vacancy Report (PMVR), a weekly online database (http://www.mnhl.org/Vacancy%20Report.htm) featuring a compilation of private market housing units currently available for rent in the Twin Cities. Some of the properties listed in the PMVR may take Section 8 Vouchers, but not all do. Sources used in compiling the PMVR include various suburban and metro daily newspapers, as well as Housing Link's landlord line. Only those rental openings considered to be "affordable" are included in the PMVR.I One -Bedroom Units 1 "Affordability" is defined in terms of the HUD's Fair Market Rent Limits and the Minnesota Housing Finance Agency's 4d rent ceilings. The rent limits are $863/month and $1,035/month for one- and two-bedroom units, respectively. F:\MNN12510351DOCS119PROPOSAI..DOC PROPOSAL The October 14, 2002 edition of the PMVR listed a total of 21 one -bedroom rental units available in the cities of New Hope and Crystal. However, according to the PMVR, only 14 of these available units featured garages for tenants. Excluding the two (2) of these 14 units featuring extensive amenities such as a pool and fitness room, advertised rents for the twelve (12) remaining comparable units ranged from $550/month to $715/month, with an overall average of $593/month. The five (5) one -bedroom units at 7610 Bass Lake Road (i.e. 7610 Property) currently rent for $570 to $575/month and have remained 100% occupied since February 1, 2002. PPL's proposed new monthly rent of $595 for both the HOME and market -rate one-bedroom'units at the 7610 Property is approximately the same as that currently being charged for those comparable units listed as being available for occupancy in the PMVR. However, the 7610 Bass Lake Road property will have at least two marketing advantages over these comparable properties: At the completion of the rehab, all units at the 7610 Property will feature new flooring, carpeting, cabinetry, countertops, interior lighting, windows, blinds, and window -unit air conditioners; and, 2. The 7610 Property features a common -area laundry room, whereas only two (2) of the 14 comparable units listed in the PMVR indicate the availability of an on-site laundry room in their listings. 3. Whereas the cost of the garage will be included in the monthly rent for all tenants at 7610 Bass Lake Road, it is likely that access to this particular amenity entails an extra monthly charge for at least some of the comparable units listed in the PMVR. Two Bedroom Units The PMVR listed a total of 17 two-bedroom rental units available in New Hope and Crystal. However, according to the PMVR, only 11 of these available units featured garages. Excluding the one (1) rental unit featuring more than one bathroom, advertised rents for the remaining ten (10) comparable units ranged from $680/month to $750/month, with an overall average of $694/month. The six (6) two-bedroom units at 7610 Bass Lake Road currently rent for $600 to $625/month. PPL has purposely kept two (2) of these units vacant since April 1, 2002, in order to be able to use them for temporary housing for current tenants during the extensive interior rehab project.2 2 At PPL's request, the former owner of the 7610 Property kept these two (2) units vacant once the former tenants of each terminated their leases in February and March of this year, respectively. PPL paid the monthly rent for these two units to the former property owner until PPL acquired the 7610 Property on July 30, 2002. F:1MNN12510351D005119PROPOSAL.DOC PROPOSAL PPL's proposed new monthly rent of $710 for both the HOME and market -rate two-bedroom units at the 7610 Property is slightly above that being charged, on average, for those comparable units listed in the PMVR. However, as indicated earlier, the 7610 Bass Lake Road property will have the distinct marketing advantage of being newly remodeled and not charging extra for garage parking. Also, whereas the 7610 Property features a common area laundry room, only one (1) of the comparable two- bedroom units listed in the PMVR indicate that it has laundry facilities available to tenants. Attachments See attached copy of the actual listings from the PMVR of the comparable units cited above. F:WNN I254035W005119PR0PO8AL. DOC PROPOSAL 10. Development Cost Estimates. A. Construction Contract Please see Exhibit G for the signed construction contract between the Developer, PPL, and the general contractor, Flannery Construction. Blumentals Architecture, Inc., the architect hired by PPL for this project, drew up the contract. PPL solicited Requests for Qualifications (RFQ's) from general contractors for this project, through an advertisement run in the publication Finance and Commerce. Two general contractors responded within the stated deadline — Flannery Construction, Inc. and Watson - Forsberg, Inc. PPL, Inc. and Blumentals Architecture held an interview with each of these two firms. Flannery Construction was awarded the construction contract by PPL on the basis of its recent experience with similar projects and its favorable terms. B. Construction Schedule Attached is the construction schedule submitted by Flannery Construction. C. Sworn Construction Statement Inserted immediately after the aforementioned construction schedule is the sworn construction statement prepared by Flannery Construction for the proposed project. PPL and Flannery Construction met on several occasions over the last few months to review every cost item, to seek additional subcontractor bids, and to consider material changes. Please note that the "Alternates" listed on the bottom of Page Two (2) of the sworn construction statement features items that might be added or deducted from the base bid if PPL elects to accept any or all of these "alternates." The "Unit Prices" listed on page three of the sworn construction statement indicate per square foot prices for other items that might also be added or deducted from the base bid, if PPL elects to accept any and/or all of them. P:1MNN12510351D0MOPROPOSAL.DOC PROPOSAL. 11. Adequacy of Existing Facilities and Services. Attached is a map of the City of New Hope identifying the following nearby facilities and services in the area: Y Schools ➢ Child Care Centers ➢ Parks ➢ Churches ➢ Libraries ➢ Medical Clinics ➢ Hospitals ➢ Shopping Centers ➢ Drug Stores Banks ➢ Post Office The locations shown on the map are described in more detail, as follows: Project Site • The 7610 Bass Lake Road Apartment Project is identified as "Proposed Redevelopment" on the accompanying map. It will be referred to as "site" or "development site" in the following text. Nearby Parks • The closest park is Elm Grove Park, which is located approximately .25 miles to the southeast of the development site. Schools • The grade school that serves the development site, Winnetka Elementary School, is located less than 0.20 miles west of the development site. + Other schools serving the site include Hosterman Junior High School (0.25 miles west) and Cooper High School (slightly less than 1.0 mile southwest). Sources of Employment • The development site is approximately 0.5 mile west of the large concentration of employment clustered around the intersection of West Broadway and Bass Lake Road. This cluster includes the Crystal Gallery Mall, Park National Bank, the Crystal Shopping Center, a new Walgreen's drug store, the Crystal Town Center Mall, and Crystal Supervalu. i In addition, employment is rapidly growing at Crystal Business Commons, a new 92,500 sq. ft. office/warehouse building developed in 1999. Crystal Business Commons is located approximately 0.5 mile east of the development site. F;1MNN I25%035\DOCS119PROPOSAL. DOC PROPOSAL Shopping and Retail Services • The closest full-service supermarket is the Crystal Supervalu, located at 4200 Douglas Ave. North, approximately 2.0 miles east from the development site. • Other daily necessities are available to residents of Bass Lake Apartments at the nearby cluster of retail and service businesses around the intersection of West Broadway and Bass Lake Road. This cluster, which is 0.5 mile due east of the Bass Lake Apartments, includes the Crystal Gallery Mall, the Crystal Shopping Center, a new Walgreen's drug store, the Crystal Town Center mall, and Thriftway supermarket. • The wide variety of retail goods available at a typical regional shopping mall are available - to residents of the Bass Lake Apartments at the Brookdale Center, which is located at Bass Lake Road and Hwy 100, approximately 4.5 miles east. Public Transit Routes and Stops Transit connections are available to residents via the #81 bus, which passes by the development site on Bass Lake Road and provides direct service to Bass Lake Road, Boone Avenue, Downtown Minneapolis, and Hennepin Technical College. Regional and Interregional Transportation Corridors and Transit ways • A regional transit hub is located on Xerxes Avenue along the west side of Brookdale Center, which is accessible via the #81 bus passing directly in front of the development site. • The current Burlington Northern -Santa Fe rail line between the Cities of Rogers and Minneapolis has been designated as a future regional transit way in the Met Council's Transit 2020 Master Plan. This Plan calls for the construction of a dedicated busway that would provide fast convenient service between downtown Minneapolis and the County Road 81 corridor, which runs north -south approximately 0.75 mile east of the development site. Religious Institutions The development site is in close proximity to churches representing a wide variety of denominations. St. Raphael's Church, School, and Convent, for example, are all located at 7301 Bass Lake Road, only 3 blocks from the development site. Recreational Facilities The closest park featuring athletic fields is Victory Park at Bass Lake Road and Interstate 169, approximately 0.80 mile west of the development site. This park features a baseball diamond and soccer field. Social Service Institutions County -administered social services are provided to residents by the Hennepin County Service Center, located at Shingle Creek Parkway and Interstate 94, approximately 4.3 miles east of the development site. F:MNN12510351DOCS114PROPOSAL.DOC PROPOSAL There is attached a letter from the School District regarding the ability of neighborhood schools to accommodate the children expected to reside in the MHOP public housing units. P: IMNN12510351DOCSU 9PROPOSAL.DOC PROPOSAL 12. Relocation Plan. Current tenants that meet the new income requirements as well as PPL's leasing requirements, and wish to continue renting at 7610 Bass Lake Road will be encouraged to do so. PPL has already secured a commitment from the general contractor to schedule the rehab work in such a way so as to minimize temporary displacement of these tenants from their apartments. PPL purposely has kept two (2) of the two-bedroom units vacant since April 1 of this year in order to make them available as temporary living quarters for tenants while the "invasive" portion of the rehab work in their units is being performed. Existing tenants at 7610 Bass Lake Road that fail to meet the new income requirements and/or PPL's leasing criteria will be entered into PPL's relocation process for the property. PPL has entered into a contract with Edie Vargas, an independent consultant, to provide relocation services for the 7610 Bass Lake Road Project. The purpose of providing these relocation services is to ensure that all tenants eligible for relocation assistance receive those benefits that are due them, in accordance with the Uniform Relocation Act (11 RA). PPL and Ms. Vargas will offer current tenants eligible for relocation assistance the following types of assistance. 1. Advisory Services, including (a) referrals to comparable and sanitary replacement housing, (b) inspection of such replacement housing to ensure it meets established standards, (c) help in submitting claim forms for relocation payments, etc. 2. Payment for moving expenses. 3. Payment of rental assistance for a 42 -month period to enable the tenant to afford the higher cost of his/her replacement housing (if applicable). Displaced tenants who opt to purchase a replacement home may be eligible to receive their "rental assistance payment" in the form of a lump sum that is applied to their down payment. Attached on the following pages is a copy of the Contract for Services between PPL and Ms., Vargas. It provides a more detailed description of the relocation plan for the 7610 Bass Lake Road Project. FAMNNI251035U?OCSkl9PROPOSAL.DOC PROPOSAL 13. Operating Feasibility. A. The financial feasibility of the Development has been reviewed by the MPHA, the County, the County HRA, the City and EDA. B. Minnesota Statutes, Section 469.040 provides for property tax exemption and payments in lieu of taxes. The statute, enacted in 1996 in anticipation of the Mixed Finance Development regulations, provides for the prorating of the Development taxes based upon number of public housing units as a percentage of total units. The regulations provide that the prorating should be "a ratio reflecting the proposed bedroom mix of the public housing units as compared to the bedroom mix of the non-public housing units in the development." The regulations do, however, anticipate that HUD may provide an alternative method. In order to comply with State law, the MPHA proposes to prorate based upon units rather than bedrooms. Fi\MNN125W351DOCS419PROPOSAL DOC PROPOSAL 14. New Construction and 6(h) Compliance. Not Applicable Rehab FiWNNM\0351DOCSI19PROPOSAL.D0C PROPOSAL 15. Certifications. A. The MPHA warrants to HUD as follows: (1) That it constitutes a PHA, as defined in 24 CFR § 941.103, and possesses the necessary authority to develop MHOP public housing units and to enter into the agreements described herein or otherwise required in order to carry out the terms of this Proposal; (2) That it has the legal authority to transfer the public housing development funds provided to it through the ACC to the Owner in return for the obligations of the Owner contained in the Housing Development Agreement and the Regulatory and Operating Agreement; (3) That the selection of the Owner and related entities to participate in this transaction was the result of an open and competitive process conducted by the MPHA in conjunction with the MHFA, the Metropolitan Council and certain private funding organizations. The MHOP funds, the tax credits and the "soft" money were all allocated to the Development after a full "request for proposals" by the MHFA; (4) That in structuring the transaction described in this Proposal and selecting the Participating Parties thereto, all state and local procurement and conflict of interest provisions have been fully complied with; (S) That pursuant to the agreements described herein and attached hereto, the MHOP public housing units will be developed and operated in accordance with all applicable public housing requirements; (6) Through the agreements described herein and attached hereto, as well as through monitoring of the MHOP public housing units and the Development, the MPHA will assure that the units remain available to eligible public housing tenants for the. period of the ACC; (7) Section 2.1 of the Regulatory and Operating Agreement attached hereto, and any subsequent management agreement respecting the MHOP public housing units will require that the units be operated in accordance with all public housing requirements; (S) In accordance with Article II of the Regulatory and Operating Agreement, during a forty (40) year period the MHOP public housing units will be maintained and operated in accordance with all public housing requirements; (9) In accordance with Section 9.2 of the Housing Development Agreement, the MHOP public housing units will not be disposed of without the prior written consent of HUD during and for ten (10) years after the end of the period in which the MHOP public housing units receive operating subsidy. F:%MNN I25V 5%D0CS1t9PR0P0SALD0C PROPOSAL (10) In accordance with Article H of the Regulatory and Operating Agreement, the Owner will maintain the four (4) MHOP units in the Development as MHOP public housing units at all times, and in the event that through condemnation or natural disaster the total number of units in the Development is reduced, no less than thirty-six percent (36%) of the largest remaining units shall be set aside and maintained as MHOP public housing units. (11) In accordance with Section 11.3 of the Housing Development Agreement, Section 10.1 of the Regulatory and Operating Agreement and the recorded restrictive covenants, the obligations contained in the Regulatory and Operating Agreement shall run with the land and shall survive foreclosure or acceptance of a deed in lieu of foreclosure. (12) In accordance with Sections 8.2 and 9.1 of the Housing Development Agreement and the recorded restrictive covenants, the MHOP public housing units shall not be encumbered or demolished without the prior written consent of HUD. (13) The Owner is bound by the ACC because the Regulatory and Operating Agreement in Section 3.1 incorporates by reference the terms and conditions of the ACC. (14) Article 9 of the Regulatory and Operating Agreement contains an acknowledgment by the Owner that the transfer of funds to the Owner does not constitute an assignment of funds and that the Owner is not a third -parry beneficiary thereof. (15) That the participation of the MPHA and all other parties in this transaction, and the Development, including the MHOP Units tube.contained therein, are consistent and in compliance with the Consent Decree: (16) That the procurement of the Owner to serve as owner and developer to design and implement the Development pursuant to the Housing Development Agreement satisfied the requirements of 24 CFR 85.36. F:WNN12511)351DOCS 19PROPOSAL.DOC PROPOSAL 1.6. Environmental Review. A. The County Environmental Review is attached hereto. B. Phase One Environmental Site Assessment Attached is the Phase One Environmental Site Assessment prepared for 7610 Bass Lake Road by Liesch and Associates. The following work items were completed for this Phase One: ➢ State, county, and municipal regulatory agencies were contacted to determine if any known environmental concerns have been reported on or adjacent to the Property; ➢ A walk -over survey of the Property was conducted in order to identify readily apparent environmental concerns on or adjacent to the Property; ➢ A historical review of the Property was conducted, using available aerial photographs, USGS topographic maps, City Directories, and Sanborn Fire Insurance Company Maps; ➢ A review of the Minnesota Geological Survey well log files was conducted in order to determine presence of wells on the Property; and, ➢ A final report meeting ASTM Practice E 1527-00 was prepared, summarizing the findings and recommendations. C. Asbestos Survey Report and Lead Risk Assessment/Lead-Based Paint Inspection PPL contracted with Liesch and Associates to conduct both of the following types of special environmental assessments for 7610 Bass Lake Road: ➢ Lead Risk Assessment/Lead-Based Paint Inspection ➢ Asbestos Survey Report The reports submitted by Liesch and Associates to PPL are attached. F:WNN 1 251035\DOCSA 19PROPOSAL.DOC PROPOSAL Environmental Assessment U.S. Department of Housing 1. Project Number: MN46pao2091 and Compliance Findings and Urban Development HUD Program: for the Related Laws 2. Date Received: lings and Recommendations are to be prepared atter the environmental analysis is completed. Complete items 1 through 15 as appropriate for all ,acts. For projects requiring an environmental assessment, also complete parts A and B. For projects categorically excluded under 24 CFR 50.20, Complete Part A. Attach notes and source documentation that support the findings. 3. Project Name and Location (Street, City, County, ST): Bass Lake Apartments 7614 Bass Lake Road New Hope, MN 4. Applicant Name, Address (Street, City, ST, Zip Code), Phone: PPL 1925 Chicago Avenue So Minneapolis, MN 55404 5. ® Multifamily ❑ Elderly ❑ Other 1 6. Number of: dwelling un17. Displacement: ® No ❑ Yes (Explain) buildings 1 ;stories 3 ® New Construction ® Rehabilitation ❑ Other (Explain) 9. Has an Environmental Report (Federal, State, or local) been used in completing this foram? ❑ No ® Yes (identify) County ;acres 1 I (Explain) 10. Planning Findings: Is the project in compliance or conformance with the following plans? Local Zoning: ® Yes ❑ No ❑ Not Applicable Coastal Zone: ® Yes ❑ No ❑ Not Applicable Air Quality (SIP): ® Yes ❑ No ❑ Not Applicable Explain any `too' answer: Are there any unresolved conflicts concerning the use of the site? ` 11. Environmental Finding: (Check one) ® No ❑Yes (explain): r - Categorical Exclusion is made in accordance with § 50.20 or k_.:j Environmental Assessment and Finding of No Significant ❑ Environmental Assessment and a Finding of Significant Impact is Impact (FONSI) is made in accordance with § 50.33 or made, and an Environmental Impact Statement is required in accordance with 50.33 d and 50.41. ®Project is recommended for approval (list any conditions ❑Project is recommended for rejection (state reasons): and requirements): 13. Sypervisor: (Signature) 14- Comments—by Environmental Clearance( (Required for projects over 200 lots/units) EGO: (signature) . ':omments any) Dy nuu,vpproving utticiai: HUD Approving Date: 4 /2 5 /o Previous Editions Are Obsolete form HUD -4128 (10128196) 24 CFR Part 50 Part A: Compliance Findings for § 50.4 Related Laws and Authorities Part B: Env! ronmental/Program Factors: Factors Project is Source Documentation and Requirements for Approval § 50.4 -Laws and In Compliance Source Documentation and Requirements for Approval 25. Unique natural features and areas x Authorities Hennepin County Environmental Review for HOME Program Yes No J. Coastal Barrier Resources x 27. Soil stability, erosion, and drainage Hennepin County Environmental Review for HOME Program 17. Floodplain Management x Hennepin County Environmental Review for HOME Program Hennepin County Environmental Review for HOME Program (24 CFR Part 55) Hennepin County Environmental Review for HOME Program 18. Historic Preservation x Hennepin County Environmental Review for HOME Program (36 GFR Part -800) 30. Solid waste disposal x 19. Noise Abatement x 31. Schools, parks, recreation, and social services Hennepin County Environmental Review for HOME Program (24 CFR Part 51 Subpart B) Hennepin County Environmental Review for HOME Program 32. Emergency health care, fire and police services 20. Hazardous Operations x Hennepin County Environmental Review for HOME Program (24 CFR Part 51 Subpart C) x 21. Airport Hazards x x Hennepin County Environmental Review for HOME Program (24 CFR Part 51 Subpart D) Hennepin County Environmental Review for HOME Program 22. Protection of Wetlands x Hennepin County Environmental Review for HOME Program (E.0.11990) 23. Toxic Chemicals and Radio- x active Materials (§ 50.3(j)) Hennepin County Environmental Review for HOME Program 24, Other § 50.4 authorities x Hennepin County Environmental Review for HOME Program (e.g., endangered species, sole source aquifers farmlands protection, flood insurance, environmental justice); Part B: Env! ronmental/Program Factors: Factors Anticipated Imp a ct[Deficiencies Source Documentation and Requirements for Approval None Minor Major 25. Unique natural features and areas x Hennepin County Environmental Review for HOME Program 26. Site suitability, access, and compatibility with surrounding development x Hennepin County Environmental Review for HOME Program 27. Soil stability, erosion, and drainage x Hennepin County Environmental Review for HOME Program 28. Nuisances and hazards (natural and built) x Hennepin County Environmental Review for HOME Program 29. Water supply/sanitary sewers x Hennepin County Environmental Review for HOME Program 30. Solid waste disposal x Hennepin County Environmental Review for HOME Program 31. Schools, parks, recreation, and social services x Hennepin County Environmental Review for HOME Program 32. Emergency health care, fire and police services x Hennepin County Environmental Review for HOME Program ...,. Commercial/retall and transportation x Hennepin County Environmental Review for HOME Program 34. Other x Hennepin County Environmental Review for HOME Program The term sheet consists of four sections that are to be filled out by the PHA as part of the Mixed -Finance Proposal and submitted to the HUD Grant Manager for presentation to the Project Review Panel: A. Specific Phase Project Summary: A one -paragraph narrative description of the specific phase for posting on the HUD web site. B. Program Overview: A description of the overall development program, financing, and schedule. C. Specific Phase Overview: A description of the program details for the specific phase under review. D. Statement of Business Terms: A description of the deal terms between the PHA and other parties for the specific phase under review. A. Specific Phase Project Summary Purpose: To provide a short summary description of the specific phase under review for posting on HUD's web site. Other PHAs can then review the summary of closed phases to find PHAs with similar deals and can contact those authorities for information, sample documents, etc. Instructions: Provide a brief narrative that describes the specific phase to be reviewed. Include the following information: • The overall unit count broken down by unit type (i.e., ACC, LIHTC, ACULUITC, market, etc.); • Sources of funding; • The names of the major partners; • The building type(s) being constructed (e.g., row, detached/semi-detached, walk-up, etc.); ■ Any non-residential or mixed uses; Any elderly designated units in the phase; * Any unusual features of the phase (e.g., a land swap, commercial facilities, operating subsidy only units, scattered site acquisition and development, etc.). Name of PHA: Minneapolis Public Housing Authority in and for the City of Minneapolis Name of Development: Bass Lake Apartments HOPE VI Grant NoJDevelopment Project No.: Contact Name: Dean Carlson, HousiM Development Coordinator Contact Phone No.: 612-342-1490 Rental Term Sheet September 26, 2001 Page 1 Narrative: The Development is an 11 -unit mixed -finance apartment complex located in New Hope, Minnesota ("City"), which will consist of 5 one -bedroom and 6 two-bedroom units to be owned by Bass Lake Apartments LLC ("Owner') Four units are public housing ACC subsidized (all two-bedroom units), 5 ate HOME subsidized and 2 are at market rates This Development has funding from Franklin National Bank as the first mortgagor and the Subordinate Mortgage Lenders are theCzty EDA, Hentlepin County, Hennepin County HRA and an MPHA ACC There are no specific elderly designated units to the B. Program Overview Purpose of this section: To provide a context for reviewing the overall project. I. Proposed Unit Mix Purpose: To provide the unit mix for the overall project so that HUD can evaluate the current phase in context. Instructions: Complete the Excel spreadsheet Unit Mix Entire Project to describe the proposed unit mix for the entire project. II. Non -Residential Uses Purpose: To describe the types of non-residential uses for the overall project so that HUD can evaluate the current phase in context. Instructions: For each non-residential, building planned, complete the following table for the overall project. Building Name/Use(s) Gross Square Feet Developer Owner Phase Hallways St MechanicaliLaundty Bass Labe Bass Lake Only Room 1 2,700 A attnients LLC A, artments LLC ; One Bass Lake Bass Lake Only Garages l 2,440 A attments LLC A artments LLC One III. Key Milestones for the Project Purpose: To ascertain where the PHA is in the development process with regard to its program schedule and the schedule requirements of the Grant Agreement. Instructions: Complete the following table by listing the dates (actual or anticipated, as appropriate) for the listed project milestones. Rental Term Sheet September 26, 2001 Page 2 Milestone Date Effective Date of Grant Agreement 05/2003 Date of HUD Approval of the Revitalization Plan or Supplemental Submissions Residential Construction Start (First Phase) 05/2003 Residential Construction Completion (Final Phase) 12/2003 Lease -Up (Final Phase) 06/2004 IV. Project Sources and Uses Purpose: To provide an overview of the permanent sources and uses for the entire project. Instructions: Complete the Excel spreadsheet Exhibit F Entire Project Budget to describe the projected sources and uses for the entire project, including all rental, homeownership, and nonresidential phases. C. Specific Phase Overview Purpose of this section: To provide the information on phase components, budget, and schedule needed to review the business terms for the specific phase under review. I. Proposed Unit Mix Purpose: To describe the housing number, type, and bedroom count as required by 24 CFR 941.606(d). Instructions:.. Complete the Excel spreadsheet Unit Mix Phase to describe the unit mix for the specific phase under review. II. Non -Residential Uses Purpose: To describe the types and amounts of non -dwelling space as required by 24 CFR 941.606(d). Instructions: Complete the following table for the specific phase under review. Building Narnelllse(s) Gross Square Feet Developer Owner Bass Lake Bass Lake Hallwa •s & MechanicaliLaunchy Room 2.700 4partments LLC Apartments LLC Garages 2,440 Bass Lake Bass Lake A artments LLC A attments LLC Rental Term Sheet September 26, 2001 Page 3 III. Key Milestones Purpose: To provide HUD with the status of the phase, to establish the timeline for phase completion, and to identify which party is responsible for each activity for the phase under review. Instructions: Complete the chart below for the specific phase under review. Indicate whether the activity listed is appropriate for the phase, provide a date for actual or anticipated dates of completion, and check the party responsible for the implementation of the activity. If a box is shaded, it is not applicable and does not need to be completed. Provide any comments in the Activity column. Activity Date Responsible Party Program Manager under Contract ❑ NIA At Closing Predevelopment Agreement Signed ❑ NIA . . ... .... ... ... .... .... ... ... . .. . Development Agreement Signed ❑ NIA At Closing : Community and Supportive Services Oversight 1:1 N/A >< ®PHA Staff or Consultants ® Developer ❑ Other: Site Acquisition Proposal Approval from HLA ®NIA ❑ ❑ PHA Staff or Consultants Developer ❑ Other: Acquisition/Site Control ❑ NIA❑ 07/30/2002 ® PHA Staff or Consultants Developer ❑ Other: Demolition Approval from HUD ® NIA ❑ ❑ PHA Staff or Consultants Developer ❑ Other: Disposition Approval from HUD ® NIA ❑ ❑ PHA Staff or Consultants Developer ❑ Other: Relocation Plan Approval from HUD❑ N/A At Closing L1 PHA Staff or Consultants ❑ Developer ❑ Other: Relocation Completion ® N/A ❑ PHA Staff or Consultants ❑ Developer Construction has been designed to work around current 02/2003 ❑ Other: tenants Abatement and Demolition Completion ® N/A ❑ PHA Staff or Consultants ❑ Developer Lead and asbestos testing have aheady been conducted 02/2003 ❑ Other: Lead hazards will be addressed thru replacement of existing windows and sills as reno-vation process -proceeds Rental Term Sheet September 26, 2001 Page 4 Activity date Responsible Party LIHTC Application Submission ® N/A Function(s) Exercised; ❑ PHA Staff or Consultants ❑ Developer ❑ Other: Award of LIHTC Allocation ® N/A ❑ PHA Staff or Consultants ❑ Developer ❑ Other: Environmental Review Approval from HUD and ROF ❑ PHA Staff or Consultants ❑ Developer Statement ❑ N/A At Closing ❑ Other: Closing❑NIA 05/2003 ® PHA Staff or Consultants ® Developer ❑ Other: Infrastructure Construction Start ❑ N/A 05/003 ❑ PHA Staff or Consultants ® Developer ❑ Other: Residential Construction Start ❑ N/A003 ❑ PHA Staff or Consultants ® Developer ❑ Other: Residential Construction Completion❑NIA 12/2003 ❑ PHA Staff or Consultants ® Developer ❑ Other: Lease -Up ❑ N/A 06/2004 ® PHA Staff or Consultants ❑ Developer ® Other: Managing Agent IV. Ownership Purpose: To provide HUD with a list of the partners of the ownership entity (i.e., general partner, limited partner, special limited partner, etc.) and a description of each role as required by 24 CFR 941.606(a). Instructions: Complete the following table to list the proposed partners of the ownership entity and to describe their ownership interest and function for the specific phase under review. Proposed Partner 1: Project for Pride in Liven , Inc % Interest: 100.00 Function(s) Exercised; Sole Mernber Proposed Partner 2: % Interest: Function(s) Exercised: Proposed Partner 3: % Interest: Functions) Exercised: Rental Terre Sheet September 26, 2001 Page 5 Proposed Partner 4: i % Interest: Function(s) Exercised: V. Sources and Uses Purpose: To provide an understanding of the sources and uses as required by 24 CFR 941.606(b) for the specific phase under review. HUD will be evaluating: whether the sources listed are sufficient to build the project, considering timing of sources; which sources are construction (temporary) vs. permanent; the terms of loans; the terms of grants; whether the public housing funds are bearing the appropriate pro rata share; and whether the uses appear reasonable. Instructions: Complete the Excel spreadsheet Exhibit F-1 Phase Budget to describe the sources and uses for the specific phase under review. Complete both permanent and construction sources and uses. N/A One Phase Budget See Exhibit F VI. TDC Calculation Purpose: To determine whether the proposed activities for the phase under review are within HUD's Total Development Cost Limits. For information on TDC, see Notice PIH 2001-22 and refer to 24 CFR 941.606(8). Instructions: Complete the Excel spreadsheet TDC & Instructions to calculate the TDC for the specific phase under review. D. Business Terms Purpose of this section: To evaluate whether the business terms proposed constitute an appropriate use of public funds. HUD will evaluate the costs of the project against its Cost Control and Safe Harbor standards in light of the risks taken by the developer and PHA. To determine whether the phase meets HUD's cost guidelines and to evaluate the risks associated with the phase, PHAs should refer to the February 23, 2000 Cost Control and Safe Harbor Standards for Rental Mixed -Finance Development. These guidelines are available on the HUD web page at: httr).,//www.hud.qov/plh/programs/ph/hope6/control.pdf. 1. Developer Compensation Instructions: Provide the following information for the net developer fee as defined in the Cost Control and Safe Harbor Standards for the specific phase under review. Express all fee amounts as a percentage of the overall project costs. HUD will verify the stated percentages against the provided sources and uses. If necessary, provide a justification for any term(s) above the HUD Safe Harbor Standards. Net developer fee for the specific phase under review: 70% Rental Term Sheet September 26, 2001 Page 6 Is the developer receiving any compensation negotiated separately from the developer fee? ❑ Yes ® No If so, in the following table, list any other tasks for which the Developer is being compensated (e.g., master planning, relocation, CSS, etc.) and the amount of compensation. Task Compensation t ,Ii Justification for Developer Fees above Safe Harbor Standards: II. Pay -Out Schedule for Developer Fee/Overhead Instructions: For the specific phase under review, provide the milestone at which the developer receives compensation (e.g., closing, 50% construction completion, stabilized occupancy) and the percentage of the total developer fee that is to be paid (percentages should total 100%) as defined in the Cost Control and Safe Harbor Standards. If the Developer is being reimbursed for overhead prior to closing, provide a justification in the space below the table and confirm that the compensation is structured as a loan. Milestone % of Total Developer Fee Closing 50% Construction Completion 25% Stabilized Occupancy 25% Justification for deviating from the Safe Harbor Standard (if applicable): Justification for providing a loan to the developer prior to closing (if applicable): Rental Term Sheet September 26, 2001 Page 7 III. Sharing of Third -Party Predevelopment Costs and Reimbursement Schedule Instructions: Complete the following table for the specific phase under review. For each of the primary predevelopment costs indicate the percentages to be borne by the PHA and the developer. If necessary, provide a justification for any term(s) above the HUD Safe Harbor Standards. Estimated Amount of Predevelopment Costs: S Length of Predevelopment Period: Percentage Borne by PHA: 0% Percentage Borne by Developer: 100% Justification for PHA bearing greater than 75% of the predevelopment costs (if applicable): IV. Identity of Interest Parties Instructions: In the table below, disclose whether the Developer has an identity of interest with any party. For each identity of interest party, indicate what steps have been or will be taken to ensure cost competitiveness. Party Related Entity? Cost Control Measures Planned/Completed Builder/Contractor (waiver ❑ Yes ® No required from HUD) Property Manager ® Yes ❑ No The Property Managment Department of PPL will serve as the permanent property manager PPL is a nonprofit 501(c)3 organization with a large. current portfolio of state and federally subsidized properties Thus. PPL is already required to submit financial statements on many of its subsidized properties to the Minnesota Housing Finance Agency and HUD Construction Manager ❑ Yes ® No Investor* ❑ Yes ® No Other (specify): [:]Yes ® No *Include both related entities and "preferred" entities. V. Construction Fees Instructions: Fill in the following blanks to indicate the amount and percentage for contractor profit, overhead, and general conditions for the specific phase under review. In the space below, Rental Term Sheet September 26, 2001 Page 8 describe how any construction savings will be allocated between the PHA and Developer. If necessary, provide a justification for any term(s) above the HUD Safe Harbor Standards. The amount and percentage for contractor's profit: The amount and percentage for contractor's overhead: The amount and percentage for contractor's general conditions: Justification for fees in excess of HUD Safe Harbor Standards (if applicable): Methodology for allocating construction savings: Construction savings applied to reduce deferred Developer fee VI, Property Management Fees 523,857 =1 8% .%10,334 =0.8% $32,126 =2 4% Instructions: Indicate whether the PHA or an outside firm will manage the development. In the table below, check the applicable methodology for determining property management fees and indicate the amount of the proposed fee. Describe the amount of any incentive management fee(s) and the conditions under which they are paid. If necessary, provide a justification for any term(s) above the HUD Safe Harbor Standards. Who is managing the mixed -finance development? ❑ PHA ® Private firm ❑ Joint Venture (PHA/private) Method and Amount of Property Management Compensation ® $106 20 ❑ s ❑■ % of effective gross income Other (specify): PUM (all units) Note: Includes Property Management Fee of $49.62 PUM, and On -Site Management Payroll of $56.58 PUM PUM (occupied units) and $ PUM (vacant units) Justification for property management fees in excess of HUD's Safe Harbor Standards, if applicable, supported by a regional market analysis: Based on PPL --s experience of similar sized developments, the average management fee per unit is $49 99 (See ,attached L.ettei of May 9, 2003 with table of managed propettie5 ). The fee is stable and supported b) the market analysis Rental Term Sheet September 26, 2001 Page 9 Are there any incentive property management fees? Dyes ® No If yes, describe: VII. LIHTC Equity Instructions: If LIHTC are a funding source for this phase, provide the following information. What is the amount of the equity raise (cents on the dollar for 10 -year allocation): Describe the pay -in schedule for the equity: Milestone/Anticipated Date Amount NIA VIII. Allocation of Operating Subsidy Instructions: Indicate which of the following methodologies for allocating operating subsidy from the PHA to the owner entity will be used, and the estimated amount of operating subsidy to be provided on a per-unit per month basis. (For more information on these methodologies, refer to the Mixed -Finance Guidebook, Chapter 5.) In the space below, provide a narrative that describes the methodology for allocating operating subsidy, as required by 24 CFR 941.606(c). Prorata-share (based on number of units and bedroom sizes in phase ® compared to PHA portfolio overall) PUM ® Budget Based (based on actual gap between operating costs and rental $ PUM income) ❑ Negotiated (flat negotiated fee) PUM ❑ Separate ACC PUM ❑ Other (describe): $ PUM Description of Operating Subsidy Methodology: Rental Term Sheet September 26, 2001 Page 10 The Owner is required to annually subrrut to the PHA for approval an operating budget establishing the gap between estimated allowable operating costs and rental income The PHA pays to the owner one - twelfth of the estimated gap amount monthly, but Subject to an operating Subsidy cap w hich Is calculated annually and represents a pro rata share of the total operating subsidy received by the PHA_ based upon number of units and bedroom saes in the PHA portfolio overall Post -year adjustments ate made to reflect actual experience. IX. Size and Use of Reserves Instructions: In the following table, for each of the project reserves indicate its size (as a dollar amount or as a number of months or years of ACC), how the reserve is replenished, the conditions under which it can be accessed, and ownership of the reserve. NOTE: Public housing funds can not be used for the initial funding of reserves. Submission of the Rental Term Sheet constitutes certification that the reserves are not funded with public housing funds. In addition, HUD expects all reserves that are replenished by public housing funds to remain with the project at the end of the tax -credit compliance period. If this is not the case for any of the reserves (with the exception of the exit tax reserve, which cannot be established or replenished with public housing funds), provide a justification for the alternate reserve ownership where indicated. Type of Reserve: Operating Subsidy/ACC/Public Housing SiZW-%30,816 How is the reserve capitalized? Ilie reserve consists of an "Owner's Account" and a "Pubhe.Aecount" How is the reserve replenished? The tnttial deposit rs made to the Owner's Account fiom owner fonds How is the reserve replenished? Replenishment may occur from the following sources (1) Voluntaty PHk deposits to the Public Account (2) Mandatary deposits by the owner to the Owner's Account from 5090 of project surplus cash (3) Investment income, allocated to the Owner's Account and Public Account (4) Deposit into the Public Account of excess operating subsidy pard to the owner, as detetnuned in connection wtth post -year adjustments (5) Deposit into the Public Account of a pro rata share of piolvet incidental income When can the reserve be accessed? The owner may access the reserve in the following events (1) The PHA falls to pay operating subsidy legally due (?) The opetating subsidy duly paid by PHA is less than the gap between expenses and rent (3) 'The PHA, tails to pay operating subsidy deficits, as determined in connection with post-yeat adjustments Who owns the reserve? The Ow•net's kccount is owned by the Owner and the Public Account is owned by the PH.X Type of Reserve: Operating Deficit Size: How is the reserve capitalized? How is the reserve replenished? When can the reserve be accessed? Rental Term Sheet September 26, 2001 page 11 Who owns the reserve? Type of Reserve: Replacement Size: S2,40000 How is the reserve capitalized? The Projected Gross Income is budgeted to be reinvested into How is the reserve replenished? the Replacement Reserves How is the reserve replenished? Each year thereafter, the $ amount added to the Replacement Who owns the reserve? Reserve Account would increase by approximately �4% o-', ca the previous year (in order to Ikeep pace with inflation). Thus, in Year Two, a total of $6.032 would be added to the Account When can the reserve be accessed? The reserve can be accessed to pay for large capital items, such as replacement of the existing roof and boilers stem Who owns the reserve? Bass Lake Apartments LLC Type of Reserve: Exit Tax Size: How is the reserve capitalized? How is the reserve replenished? When can the reserve be accessed? Who owns the reserve? Type of Reserve: Other: Size: How is the reserve capitalized? How is the reserve replenished? When can the reserve be accessed? Who owns the reserve? Provide a justification for any unusual reserve structures, including ownership of the reserves: X. Cash Flow, Program Income, and Fees to the PHA Instructions: Answer the following questions in narrative form for the specific phase under review, as appropriate. After payment of all expenses, how is cash flow distributed? Any cash flow remaining after payment of all expenses will first be used to make the payments on the $126,300 first mortgage loan from Franklin National Bank It is anticipated that annual debt service payments on this loan will be approximately $ 11,000 any cash flow Stili leftover after debt sen -ice is Rental Term Sheet September 26, 2001 Page 12 paid would be used to either (a) make higher monthly payments to Franklin National Bank on the mortgage loan, of (b) supplement the Replacement Reserves What are the expected sources of program income (e.g., repayments of loans, PHA development fees, etc.) and what is the PHA's planned use for this program income? None Complete the following table to indicate what fees (e.g., developer fee, asset management fee, property management fee, etc.) are to be paid to the PHA/PHA Affiliate. Type of FeelDescription Amount None Xi. Additional Information on the Project Instructions: In narrative form, provide any additional information on the project and business terms of which HUD should be aware when reviewing the terms for this phase. Such issues might include: • unusual programs or fee structures HUD will need to evaluate; • justifications for any fees or structures proposed outside of HUD's Safe Harbor or Cost Control limitations; 4 effect of a consent decree on the mixed -finance project; • market concerns; • use of Capital Funds as bridge loan; and/or • other circumstances that will result in unusual terms or the need for a delayed or accelerated closing. Narrative on additional project/phase information: Acquisition Cost In July 2002, PPL financed the %525,000 price to acquire the 7510 Bass Lake Road Apartment Building by drawing on the following two sources (1) $400,000 loan from a piivate lender --Franklin National Bank, and. (2) $125.000 cash paid out of the general funds of Project for Pride in Living, Inc PPL. intends to pay back the entite S400.000 loan to Fianklm Bank including interest --once it closes on the funding fiom the NIHOP and other public funding sources The funding received from NIHOP and the other funding sources would also be used to iepleni5h the $125,000 cash paid out of general PPL funds Thus, the financed .$525,000 acquisition cost of the apaitment building is included in the $1,354,300 total ptoject cost Rental Term Sheet September 26, 2001 Page 13 -30 Yi�ars I'FO9A@dft9FUWYes May 9, 2003 Mary Jaworsky Holmes and Associates 2 Carlson Parkway North Plymouth, MN 55447 RE: Management Fees for Bass Lake Apartments Dear Mary: Affordable Housing & Community Development Enclosed please find a table presenting the information the US Department of Housing and Urban Development had requested regarding management fees charged by PPL at the various apartment properties in its management portfolio. For each property in PPL's portfolio, the following information is presented: (a) Total number of apartment units (b) 2003 budgeted management fee (total and per unit per month) (c) 2003 budgeted property manager salary (total and per unit per month) The PPL managed properties included on this table that contain MHDP units are as follows: Prosperity Village 8 units Bass lake Court 12 units Louisiana Court 12 units Basg Lake Apartments 4 units Sub total 36 units Please contact me with any further questions. Sincerely, Bill Flaig Project Manager Affordable Housing & Community Development Employment & Job Training Youth Development Support Services Project Far ?ride in living • 1925 Chicago Avenue • Minneapolis, MN 55404 • 612-874- 85 r2 • FAX: 612.872-8995 • ppl®ppl-inc.org • www.ppl-inc.oig Rental Term Sheet September 26, 2001 Page 14 2003 BudRated Management Fees & Manager Salaries 1 PPL-Mana ed Rental Prortiea 'Creates d for PPL'a Internal Use on iT 03" Total --Pro rty M mt Fee-- - Proporiy Manager Salary- P e Name Address CI Units Total; $per MoJUnit Total $ 1 $ Per ModUnit PPL Owned Pro ertles West 26th St. Sarre Minnea otis 6 $4,80x.00 $50.00 $5,432.00 $56.58 2748 Pleasant Ave S. Sarre Minnea lis 8 $4,800.00 $50.00 $543200 $56.58 3044 - 5th Ave. S. 7 Same Centre) Nei hborhoori A s i 3312 - 4th Ave 3. 3628 Columbus Ave, S. Same 2924Aldrich Ave. S. Same [Minneapolis 1 Minne oils IMinneapolls Minneapolis 1 6 4 1 4 4 $3,80q.00' $2 400.00 $2.400-001 $2;400.00 $50.00 $50.00 $50.00 $50.00 $4 074.00 $2,716.00 $2,716.00 $2,716.00 $56.56 $56.58 $56.58 $56.58 3521-2nd Ave. S. Same Minneapolis 1Q $6,000.00 $50.00 $6,790.00. $56.58 3822 Stevens Ave. S. _ Same Minneapolis 2 $1,200.00 $50.00 $1,358.00 $56,56 683 Hague 700-718SeIbyAve. PPL Limited ParinershiDs Logan Apartments Same Same to Fea Mana ed 610 Lo an Ave N St. Paul St. Paul _ Minnea oils 13 38 11 $7,800.00 $22,800.00 1 $6,600,00 $50.00 $50.00 $50.00 $8,827.00 ;25,601.00 $7,469.00 $56.58 $56.58 $56.58 ",123 Logan Ave. N Same Minneapolis 4 $2,400. $50.00 $2,716.00 $56.58 rAnlshinabe Wakla un Various Canadian Terrace I 920 E. 19th St. I Central Nei hbDFhood Apts i 3144 Columbus Central Neighborhood Ais l 33CS - 4th. Ave. S St. Paul Minna olia Minne oils Minneapolis 40 19 2 2 $24,000.00 _ $11,440.66 $1,200.00 $1,200.00 $50.00 $50.00 $50.00 $50.00 $27,159.00 $12,900.00 $1,358.00 $1,356.00 _ $56..56 $56.58 $56.58 $56.8$ Central Ne" hborhood A s Central Neighborhood A Central Neighborhood A is 3316 -4th Ave. S. 3320.4th Ave. S. 3637 Columbus Minneapolis Minneapolis 1 Minneapolis 2 2 4 St,200.00 $1,200.00 $2,400.00 $50.00 $50.00 $50.00 $1,956.00 $1,358.013 $2,716.00 $56.58 $56.58 $58.58 Columbus Park A Elliot Apartments IMo 2835 Park Ave S. 1819-25 Elliot Ave Minnes oils Minneapolis f 10 24 $6,000.00 $14,400.00 $50.00 $50.00) $6,790.00 $16,295.00 $66.68 $56.58 an Apartments 1027 Morgan Ave N Minneapalls 1 10 i $6,000.00 $50.00 $6,790.00 $56.58 Morgan Arms A rtments Mo en Arora R artments 914 Oliver Ave. N. 1220 Mor an Ave. N Minnea olis Minnea olis 4 9 52,400.00 $5,400.00 $50.00 $50.00 $2,718,00 $6,1111.00 $56.56 $55.58 Morgan Arms artments Oliver Apartments 1400 E. 251h SL N. 909113 Oliver AvN_ Min nea alis Minneapolis 4 1 8 $2,400.00 $4,800.00 $50.DO $50,00 $2,716.00 $5432.00 $56.58 _.._ $66,58 Oliver/Logan Apartments 920 Oliver Ave. N. Minneapolis 4 $2,400.00 $50,00 $2,716,001 $58.58 OliverlLo en Apartments Elm Corp. 1119 Logan Ave. N. I 810 E. 15th St. Minneapolis Minneapolis 4 25 $2,4DO $15 OOO.Oq $50.00 $50.00 $2,716.00 516 974.00 $5658 $56.56 Pros r1ityVillage 4046 Lyn Sale Ave N. Minneapolis 25 $15,$00.00 $50.00 $16,974.00 $56.58 Sass Laka Court 7300 Bass Lake Rd. New Hoe 34 $20,400.00 $50.00 1 $23,OM.001 $56.58 Baas Lake Apartments i 7610 Bass Lake Rd. New Hope 11 1 $6,550.00 ;49.62 1 $5.067.00 $38.39 Crestview Apts Louisiana Court 1161 Westminster :� 2730 Louisiana CL St. Paul St. Louis Pk 33$19800.00 122 $73,,200.00 $50.00 $50,00 $22,406.00 $74,687.013 $56.58 $51.02 JoeSelvaggio lntha6ve } IVarious _ Minnes alis 30 $18,000.pq $60.00 -$20389.DO $56.58 Armadillo Flats Villa elirivestments 12727 - 1a Ave. S. 12743-1stAve.S. Minneapolis Minneapolis _ 19 19 $71,400.00 $11,400.00 $50.00 $50.00 $12,900.00 $12,900.00 $56.58 $56.58 Doubts Flats 211 - W. 26th St. Minneapolis 11 $6,600.00 $60.00 $7 469.00 $56.56 Park Crosain A 18 1068 Raymond Ave. St. Paul 18 $10,900,00 $50.00 $12,221.00 $56.58 Martin Luther Kin 838 !Uterahall St. Paul I 6 $4,800.00 $50.00 $5,432.00 $56.58 Families First I Iverrous- lat. Paul 5 $3,000.00 $50.00 $3,395.00 $58,58 Averages $49.99 $66.56 LNbers may he suhjecr to change_ I tted ,sill Flei , ProjeU Mana er, PPL - 5!8103 _ I - - - Rental Term Sheet September 26, 2001 Page 15 Grantee: Bass Lake Apartments LLC 7614 Bass Lake Apartments Project # (4) Public Housing Rental Units; (5) HOME Units; (0) Tax Credit Units; (2) Market -Rate Units SUMMARY PROJECT aUDGET REVISED 4129103 MHDP PHA Franklin Nat'l Bank HOME Funds Hennepin CourrtyAHIF City of New Hoe Tole) Funds A- Proposal: Development Sources HOPE VI Funds Capital Funds $ 505,000 $ 505,000 HOME $ 350,000 $ 350,000 CDBG $ 223,000 $ 223,000 Tax Credit Equity Federal Home Loan Bank AH. Hsg, Funds First Mortgage $ 126,300 _ _ $ 126,300 Bridge Loan Other City Funds $ Other. Affordable Housing Incentive Fund $ 150,000 $ 150,000_ Other. Waiver of Bldg Permit Fee $ Subtotal Development Sources $ 505,000 $ 126,300 $ 350,000 $ 150,000 $ 223,000 $ 1,354,300 B. Additional Project Sources HOPI: VI Funds Capital Funds Other. TOTAL SOURCES 1A & Bj $ 506,000 $ 126,300 $ 350.0001$ 150,000 $ 223,000 $ 1,354,300 A. Proposal: Development Uses Construction Costs: Residential Construction $ 144,750 $ 2,000 $ 57,424 $ 138,_917 $ $ 343,091 Site work General Requirements $ $ 47,250 20,000 $ - $ $ 5490 $ - $ $ _47,zs0 25,490 Bullder's Overhead Builder's Profit $ $ 5,000_ 10,000 I $ $ 4,000 ! $ $ $_ 4,0_00 8,000 $ $ 334 4,381 $ $ 9,334 26,381 Bond Premium Utilities from the Street (Included in Residential Construction Cost Amount) $ Finish Landscaping (Included in Site Work Amount) $ Public Improvements $ - $ $ Construction Contingency Other: Construction of Parking Garages $ 39,850 $ 5,150 $ 35,086 $ 22,368 $ $ 102,454 Subtotal $ 266,850 $ 11,150 $ $ 110,000 $ 166,000 S 554,000 Development Fees: Architects $ 13,500 $ $ $ 11,000 $ 10,450 $ 34,950 Accounting (Cost Certification/Audit) $ 1,500 $ $ $ 1,500 $ 3,000 PHA Legal $ Developer Legal $ Permits (Included in General Requirements Cost Amount) $ $ $ 8,850 $ $- $ $ $ - $ $ 1,150 $ $ $ 10,000 _ Appraisal Is 1,750 $ $ $ 2,250 $ 4,000 Environmental Engineering (Included in Architect Cast Amount) Constr. PILOT & Taxes $ 1,300 $ $ $ _ $ 1,000 $ $ 2,340 550 $ $ $ 4,540 _ 550 Insurance $ 750 $ $ 750 Title & Recording Fees First Mortgage Interest Bridge Loan Interest Permanent Loan Insurance Costs $ $ $ $ 1,500 $ $ $ $ 3,000 _ $ $ 2,500 $_ $ 10,000 $ 5 $ $ 4,000 13,000 Consultants Equipment & Furnishings $ $ $ Tax Credit Fees Marketing $ $ $ $ $ Lease -Up Interest & Expenses Initial Operating Period Reserve $ $ $ $ $ $ s-2,000 $ $ 2,000 Operating Subsidy Reserve Operating Deficit Reserve $ - $ $ - 15,000 _ $ $ _ S 16,000 $ $ 31,000 Exit Tax Reserve $ $ $ $ - Developer's Fee $ $ 70,000 $ $ $ 70,000 Other: Lot Boundary Survey $ 600 $ $ 750 $ 50 $ 1,400 Other Processing Agent $ - $ $ 9,500 $ Soo $ 10,000 Development Contingency Subtotal $ $ 6,250 27.1501 $ $ 16,800 113,650 $ $ 28,500 $ $ 260 43,300 $ $ 23,310 212,600 Total Project Development Costs (Proposal) B. Additional Project Uses $ 294,0001 $ 124,800 $ $ 138,500 $ 209,300 $ 766,600 Housing Authority Administration $ 36,000 $ 36,000 Program Management $ $ Community & Supportive Services $ $ Demolition & Remediation $ _ $ Relocation $ - $ - $- $ 10,000 $ 3,000 $ 13,000 Other: Property Acquisition Other: Rent Paid Prior to Owning Bldg $ 175,000 $ -- 350,000 $ $ - 3,700 $ $ 525,000 3,700 Other. Constructlo of Playground $ 1,500 $ 1,500 $ 7,000 $ 10,000 Total Additional Uses $ 211,400 $ 1,500 $ 350,000 $ 11,500 $ 13,700 $ 587,700 TOTAL PROAXT USPS A & B $ 505,000 $ 126,900 S 350.000 19 19(1.000 S 22zmn s i a+.e eon rropvsea enure rrvJecs CrnIC IRR rOSC rWVMII;MIon 1 I Ptn;=azftr Pa C-41 in 1,70kc bw " e mP t "ane Rehab of E)dsting Public Housing I I MO WO RKd . MnWft New Construction (development or acquisitionlreheb) PH ACC Affordable PH ACC I Affordable Humberof Replacement Non ACC Homeownership Market Replacement Non -ACC Homeownership Market Type of Structure Bedrooms Units Rented Units Replacement Units Homeownership 1 Units Rental Units Replacement Units Homeownership Detached 2 Other (describe) 2 a Other (describe) Row House -" —_ — --- -- - -- --- i— — --- - —._ _ --- Other (describe)Walk-Up Other (describe) Elevator -- -- -- - -- -- _— — —. - Totals 0 0 ... --- 0 --- 0 41 7 Rehab of Existing Public Housing New Construction (de . opment or a quisitlonlrehab) PH ACC Affordable PH ACC Affordable Replacement Non -ACC Homeownership Market Replacement Non -ACC Homeownership Market Units Rental Unita Replaoement Units Homeownership Units Rerltel Units Replacement Units Homeownership Mobility Impaired - % of Category Hearing impaired % e . and sight - of Category Describe methods to be used to ft:, is bar rq madq ceder V CFR: 823 Cite Iced ulvelves fgh2;b 1 ?i>s'-1 app � ,std ; `� cam make the development visitable: mer �g ye 6/13/2003 EXHIBIT F Page 1 and Housing Cost tik�ry c4ure 7 jun f Detechedlsemi-detached f49 1 U, N's [raflaW0—car l kirin0eareat. I= pmu ng in ®lent silr �`H)j pr8tn(juie C,* Ih s, Lir 0 li g *WLm&m Cast rap f i1':"1s l', r, Crap W Upif3bd Lf f9ev ft nm , S $ $ $ $ S $ $ $ 294,692 $ $ $ $ $ $ S $ $ Is $ $ $ $ S. 515,716 $ $ $ $ g _ DetachedlsemFdetachad 2 0 0 $ $ Detschedthemi-detached 3 0 0 $ $ Detached/aemf-delached 4 0 0 $ $ Row house 1 D a S HDPE VI demolition -only gran) Row house 2 0 0 S $ Row house 3 0 O$ S Row house 4 0 0 $ $ Wel 1 0 0 S $ Widkup 2 0 4 $ 73 673 $ 126 929 Walkup 3 0 0 $ $ Walikup 4 0 0 S S Elevator 1 0 0 S $ Elevator 2 0 0 $ S $ Elevator 3 0 0 $ Pubic housing unks to be demolished – total for all phases of the project (Less) public housing unite to be replaced an original site – total for all phases of the project Public housing units demolished and not replaced an the original site – total for all phases of the project HUD Public Housing (PH) Sources HOPE VI Funds: HOPE VI revitalization Want ant HDPE VI demolition -only gran) $ Other HUD Public Housing (PH) Funds: PH development funds $ 505.000 PH modernization, CLAP or other capital funds for development $ PH modernization, CLAP or other capila[ funds for rehabllliallon $ Total HUD Public Houaing Sources $ 505,000 HUD Public Housing Fund Uses (FDC calculation) Community and Supportive Services (CSS) 1408 $ Management Improvements 1408 $ Administration, PHA 1410 $ 22,0110 Fees & costs, planning, prog mgmt, ins., Initial op. deficit, etc. 1430 $ 14,000 Site acquisition 1440 S 175 000 Site improvements & infrastructure, public right-of-way & common areas 1450 $ Dwelling structure rehab & dev, VWOH&P, finish landscaping, contingency 1450 $ 292,70D Dwelling equipment 1465 $ Non -dwelling sVuctureskommunity facilities 1470 $ Non-dwaling equipment 1475 S Demolition and environmental remediation 1465 Relocation 1495 $ Total HUD Public Housing Fund Uses $ 505,000 (robal Uses must equal Excluded Demolition and Abatement Cost Total Sources above) Total PH unit demolition and environmental abatement cost $ 1,300 Less demolabate cost far PH units replaced on-site $ _ F_nichided Demolition & Abatement Cost hist $ 1,300 Excluded Community Renewal and CSS Costs Community and Supportive Services (CSS) S Extraordinary site work cost Extraordinary site work, design cost of S Total Excluded CR and CSS Costs $ Total Excluded Costs $ (1,300 Total Uses Included In TDC 503,700 Total Development Cost Cap $ 515,716 a % ofTDC TDCs Ca 97.57% Housing Cost Cap Uses (HCC calculation) Dwelling structures, builders OH&P, & contingency 1460 $ 292,700 (Less) extraordinary site work casts – only 9Included in 1460 (1460) IS Plus dwelling equipment 1465 $ Total Housing Costs ,700 Housing Cost Cap 5 294,692 I Housing Cost as % of HC Cap 99.32% 17cHUDTOC.ds Printed 8113/2003, 10:28 AM 05/13/03 06:17 9 M o i 1r R OFAMOF nM 09516 tA1f� SEG4d1'AQY FOR p MUM AA@ WDIAN HOZ P* HUD PHI 202 ?08 9936 i 916123?03003 U'S. MpAR'IMENT OF II0USIl1iC AND LTIJMN DIVELOPhIIM WA9KINGiON, D.C. 20410-3000 Ms. Cora McCorvey Executive Director Minneapolis Public Housing Authority in and for the City of Minneapolis 1001 Washington Avenue North Minneapolis, Minnesota 55401-1043 KAY 1 3 2003 Subject: Bass Lake Apartments, New Hope, MN Mixed Finance Proposal Approval Dear Ms. McCorvey: NO.454 o02 The Department of Housing and Urban Development ("HUD") has completed its review of the Mixed -Finance Proposal submitted by 1he Minneapolis Public Housing. Authority in and for the City of Minneapolis CIMPHAJ for the Bass Lake Apartniente . project ("Proposal"). We are pleased to inform you that the Proposal, is hereby approved. Submission of the Proposal and the accompanying documents satisfie.1p'the conditions set forth in 24 CFR 941, subpart F. Approval of this Proposal is based on the HUD Minneapolis Office's reviewlof the Proposal and its recommendation for approval. However, approval is contingent Ripon the submission of all evidentiary materials and the HUD Minneapolis Office's review and approval of these documents. Should you have any questions; please contact Steve Gronewold, the HUD Chief Counsel, or Debbie Kravik, the HUD Project Manager, at the HUD Minneapolis Office. The Pro ect The Project will contain renovation of an existing 11 -unit 21!2 story walk-up apartment building. Four 2 -bedroom units, which will float throughout the development, will be operated as public housing. There will be no handicapped units as the renovation has been determined to be primarily maintenance repair and cosmetic alterations. The Project will be owned by Bass Lake Apartments LLC, of which the Project for Pride in Living is the sole member and developer of the Project. The total project development budget is $1,354,300. Of this amount, up to $469,000 in HUD funds will be provided for acquisition and renovation of the projOct. 05`13/03 06:17 HUD PHI 202 708 9936-} 916123703003 NO. 454. D03 2 HUD funds up to $36,000 will be provided for MPHA administrative expenses related to the Project. Additional funding will be provided through a $125,300 loan from Franklin Bank; $350,000 from Hennepin County HOME Funds; $150,040 from the Hennepin County Housing and Redevelopment Authority; and, $223,000 from the Economic Development Authority for the City of New Hope. Total Development Cost Limits The budget for the Project, which is included as Exhibit F to the Mixed -Finance Amendment to the Annual Contributions Contract ("ACC Amendment'), results in a Total Development Cost ("TDC') that is 99% of the TOC limits, as specified in HUD Notice PIH 2003-8. The Housing Cost Cap limits imposed on public housing development projects are not applicable to this project, as it involves no new construction. Execution of Evide'ntiorY Materials Upon submission of all evidentiary materials by MPHA and their review and! approval by the HUD Minneapolis Office, closing can proceed. All documents should be executed and recorded, if required. After execution, MPHA should provide to the FEUD Minneapolis Office two final and complete binders containing copies of all evidentiary materials, executed and recorded, if required, for final review and.approval. MPHA must include in the binder the required opinions of counsel, together with a certific4tion attesting -that no changes to the -evidentiary materials have been made since the documents were last submitted and approved by HUD. In addition, MPHA must include a final title insurance policy that reflects the recordation of all liens, mortgages and encumbrances against the property, in the order approved by HUD. Once the executed documents are approved by the HUD Minneapolis Office, one copy of the approved binder should be sent to HUD Headquarters, to the attention of Luci Blackburn, Office of Public Housing Investments, 451 7%h Street, S.W., Room 4130, Washington. DC; 2041,0. Execution of the ACC Amendment Once evident'lary materials have been submitted and approved by the Hud Minneapolis Office, five copies of the ACC Amendment will be forwarded by HUD°to MPHA for execution. Once executed, all five copies must be returned to the HUD Minneapolis Office, where the copies will be eXecuted by HUD and distributed, wiib two fully executed copies returned to MPHA. Access to Funds Following approval of the executed and recorded documents, HUD funds in the amount of $505,000 will be made available. MPHA will then be permitted to access these funds in the following Budget line Items, in accordance with the AGC Amendment: 05�13��3 06:17 HUD PHI 202 708 9936.-4 916123703003 N0.454 1704 3 Budget Line Item 1410 $14.000 Budget Line Item 1430 $22,000 Budget Line Item 1460 $469,000 Congratulations on the approval of the Bass Lake Apartment project, which gill benefit public housing and other low-income families in the Twin Cities area. Shoulid you have any additional questions, please do not hesitate to call Luci Blackburn of eny staff on 2021709-6014, extension 4190. Sincerely, Milan Ozdinec Deputy Assistant Secretary Office of Public Housing Investments cc: Diane Cmiel HUD Minneapolis Hub Jack Cann Attorney February 13, 2003 Hollman Counsel (list attached) 570 Asbury St. #105 St. Paul, Mn. 55104 651-642-0102 651-649-1667 fax Request for authorization of replacement housing in concentrated area. Dear Counsel: 'a Project for Pride in Living proposes to rehabilitate an 11 -unit building located at 7610 Bass Lake Road in New Hope. The proposal includesfourHollman replacement units. All units in the building are 2 -bedroom units. The project has received funding support from Hennepin County ($400,000 from County HOME funds and Affordable Housing Incentive Funds) and New Hope ($223,000 from the New Hope EDA). The project is located in census tract 215.02, which has a poverty rate of 12.8%. In the suburbs, a census tract is poverty -concentrated if it has a poverty rate of 10.4% or greater (using the 2000 census data). A map of tract 215.02 is attached. Note that the N.W. corner of the map is oddly shaped, with several "fingers" reaching into the.adjacent tract, 208.01. The adjacent tract, 208.01, has a poverty rate of _8%— Neither tract is minority concentrated. The project is located at the N.Y. intersection of Bass Lake Road and Rhode Island Avenue, within one of these fingers. If it were located across Rhode Island Avenue, it would be in tract 208.01, with a miniscule poverty rate. If tract 205.02 did not have these odd fingers, and the northern border were Bass Lake Road, the project would be located in the adjacent non -concentrated tract. For these reasons, the MPHR believes that location of four replacement units at this site is consistent with the purposes of the Decree and thus ask the parties to authorize the four replacement units in this project by written agreement, pursuant to paragraph 35 of the Decree as amended on March 21, 2000_ PPL had intended to close around the end of this month, when this issue was discovered. I apologize that no one caught this prdblem earlier and for the resulting time pressure. However, it is the case that PPL has already purchased this property and is counting on the Hollman funds to make it work. Please indicate your clients' approval, as soon as you can, by signing the attached sheet and returning to me. If you have any questions, please call me. Thanks for your cooperation. Yours truly, Jack Cann The location of four Hollman replacement units in a rehabilitated 11 unit building at 7610 Bass Lake Road, New Hope, Minnesota is approved pursuant to paragraph 35 of the Hollman decree as amended on March 21, 2000. Dated: ZO-72103 JoWCarn , Representing MPHA and Cora McCorvey Dated: Timothy L. Thompson, Representing the Class Plaintiffs Dated: Dated: Thomas J. White, Representing the NAACP Stephen J. Gronmvold, Representing HUD Dated'), ' 3 Micha l T. Norton, Representins Minneapolis and the MCDA The location of four Holtman replacement units in a rehabilitated 11 unit building at 7510 Bass Lake Road, New Hope, iNfinnesota is approved pursuant to paragraph 35 of the Holtman decree as amended on March 21, 2000, Dated: �/ �� 9'0_� C"� Jo Cann, Representing MPHA and Cora McCorvey Dated: Dated: Dated: Dated: Timothy L. Tho psora, Re rese ing the Class Plaintiffs Thomas I White, Representing the NAACP Stephen J_ Gronewold, Representing HUD Michael T_ Norton, Representing Minneapolis and the MCDA 2 MAY -07-2003 O2:14PM FROM -LAW OFFICES 852-835-5959 T-977 P.0O2/002 F-737 The locatiait offour Holtman repiac=ent units in a rehabilitated l.1 unit binding at 7610 Bass Lake Road, New Hope, Mmesota is approved pursuant to paragraph 35 of the Holtman decree as amended on March 21, 2000. Dated: Z'�/03 Jo1Caxui, Representing MFHA and Cora McCorvey Dated Timathy L. Thompson, Representing the Class plaintiffs Dated: �� 4;2�J. WMte, �Repr�esentjjq the NAACP Dated: Stephen Y. Gronewold, Representing HUD Dated. Michael. T_ Norton, presentingAlumeapolis and the MCDA The location of four HolIman replacement units in a rehabilitated 11 unit building at 7510 Bass Lake Road, New Hope, Minnesota is approved pursuant to paragraph 35 of the Hollman decree as amended on March 21, 2000. Dated: Z `47,/ fo Cahn, Representing MPHA and Cora McCorvey Dated: Dated: Timothy L. Thompson, Representing the Class Plaintiffs Thomas I White, Representing the NAACP Dated: ,r 3/0 3 Stephen I Gronewold, iQesenting HUD Dated: Michael T. Norton, Representing Minneapolis and the MCDA Amercan racTrower Page ! of I Census Tract 21 5.02, Hennepin County, Minnesota L0 P "4x Qsoa Boundaries "WS aze a . T 3F. "v57 �r�7 Arai f'iP f � � 'w0 'ter, .iraa vt�� Features t ��Sti� �Cu Hoe v. - i'"1 :fie j of .�7 _ + if 4 y - Ti' S_r?a]A6�A�c�$ff :: i-E--s�• rte, 7e }M _- . r � 7-1 17 : • _t - - --- r �Jlillllf3�iQ�IS��#- �39��. ck� r� �_.� `o.--�,"�' _ c { 1.6 miles across m ./NIapitDrawServiet?geoid=14000U527053021503,L'�-,tree id=403,R:.context=dtL%- lang=er& ts=2113/0' Holtman v.1NIartinez Distribution List z egarl Aid Society (Individual and class plaintiffs) Mr. Timothy L. Thompson Legal Aid Society of Mweapolis 430 Fust Avenue North, Suite 300 ?Minneapolis, Minnesota 55401-1780 NAACP Thomas J. White Klein & White 4570 West 77th St., Suite 100 Minneapolis, Mn 55435 U.S. Department of Housing and Urban Development Mr. Stephen J. Gronewold HUD Minnesota Office 920 Second Ave. S. Room 1300 Minneapolis, Mn 55442-4012 Minneapolis Community Development Agency and 'ity of ylinneapolis Mr. Michael T. Norton Office of the Minneapolis City Attorney 300 Metropolitan Centre 333.South Seventh Street Minneapolis, Minnesota 55402-2453 .4