090996 EDA Official File Copy
CITY OF NEW HOPE
EDA AGENDA
EDA Regular Meeting ~-T2~/~ September 9, 1996
Agenda g~3 j5L
Pres~dent Edward J. Erickson
Comm/ss/oner W. Peter Enck
Comrn/ssioner Pat La V/ne Norb¥
Comm/ss/oner Gerald Otten
Commiss/oner Terri Weh/ing
1. Call to Order
2. Roll Call
3. Approval of Minutes of~, 1996
4. Discussion Regarding Revised Request for Tax Increment Financing
Assistance for Car-X/PUD Development at 7180 42nd Avenue North
5. Resolution Approving Loan to Tasks Unlimited Lodges to Purchase
3579/3581 Independence Avenue North (Improvement Project No. 554)
6. Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
HENNEPIN COUNTY, MINNESOTA 55428
Approved EDA Minutes July 22, 1996
Meeting #12
CALL TO ORDER President Erickson called the meeting of the Economic Development
Authority to order at 7:41 p.m.
ROLL CALL Present: Erickson, Enck, Otten, Norby, Wehling
Staff Present: McDonald, Leone, Sondrall, Hanson-, Bellefuil, Clancy
APPROVE MINUTES Motion was made by Commissioner Enck, seconded by Commissioner
Otten, to approve the EDA minutes of June 24, 1996. Voting in favor:
All. Motion carried.
IMP. PROJECT 566 President Erickson introduced for discussion Item 4, Discussion Regarding
Item 4 City Financial Assistance for Improvements to Super Valu Space at
Winnetka Shopping Center for Data Recognition Corporation
(Improvement Project No. 566).
Mr. McDonald, Management Assistant/Community Development
Coordinator, explained that since the June 24~ EDA Meeting, staff has
met with DRC representatives regarding their proposal. DRC has
submitted a funding proposal and an aggressive development schedule.
He stated the company employs 250-400 people and is currently
headquartered in Minnetonka. The Winnetka Shopping Center location is
desirable because of the access to public transportation.
DRC estimates that it will cost a total of $800,000 for remodeling,
furniture, fixtures, and moving expenses. They are requesting that the
EDA provide a $100,000 grant and a $450,000 Iow interest loan. Data
Recognition would make an investment of $250,000. Mr. McDonald
pointed out that the City Manager is not in agreement with the requested
funding. The Manager has indicated his support of assistance of a lesser
amount such as $50,000 grant and $200,000 loan with an optional
payback on the grant.
Mr. McDonald said the City is having a financial analysis prepared by
Springsted, but it is not yet complete.
He stated the staff is requesting direction from the EDA regarding the
proposal. If a concept can be achieved tonight, the final documents could
be approved mid-August.
President Erickson expressed support in the project but concurred with the
City Manager's recommendation to table the item until August 12, 1996.
Mr. Russell Hagen, President of Data Recognition Corporation (DRC), was
recognized. He explained the background of the company and the type of
services provided by DRC. He also provided a letter explaining the
number of jobs that would be moved from the Minnetonka facility to this
location. Mr. Hagen indicated DRC currently has seven full-time regular
positions {year-round) and 351 full-time temporary positions (six months).
He stated the company is currently bidding on a number of projects which
if awarded would increase the temporary positions from six months to 10-
11 months per year. The temporary employees are not provided benefits.
The average hourly wage is $7.50.
.The EDA expressed concern regarding the level of financial assistance
requested by DRC.
New Hope EDA July 22, 1996
Page 1
Mr. Hagen invited the EDA to tour any of the existing DRC sites.
The EDA expressed willingness to schedule a work session after receipt of
the Springsted financial analysis and prior to the August 12 regular EDA
meeting to further negotiate the financial request.
MOTION Motion was made by Councilmember Enck, seconded by Councilmember
Item 4 Otten, to table the proposal to August 12, 1996, or earlier if necessary.
Voting in favor: All. Motion carried.
IMP. PROJECT 554 President Erickson introduced for discussion Item 5, Resolution
Item 5 Transferring Approval of Letter of Understanding for Loan to Purchase
Housing From Tasks Unlimited, Inc. to Tasks Unlimited Lodges
(Improvement Project No. 554).
Mr. McDonald stated this action is necessary for the correct agency
name: Tasks Unlimited Lodges.
EDA RESOLUTION Commissioner Wehling introduced the following resolution and moved its
96-15 adoption: "RESOLUTION TRANSFERRING APPROVAL OF LETTER OF
Item 5 UNDERSTANDING FOR LOAN TO PURCHASE HOUSING FROM TASKS
UNLIMITED, INC. TO TASKS UNLIMITED LODGES (IMPROVEMENT
PROJECT NO. 554)." The motion for adoption of the foregoing resolution
was seconded by Commissioner Enck, and upon vote being taken thereon
the following voted in favor thereof: Erickson, Enck, Otten, Wehling,
Norby; and the following voted against the same: None; Abstained:
None; Absent: None; whereupon the resolution was declared duly passed
and adopted, signed by the president which was attested to by the
executive director.
IMP. PROJECT 554 President Erickson introduced for discussion Item 6, Motion Approving
Item 6 Tasks Unlimited Lodges to Sign a Purchase Agreement for a Duplex
Property Located at 3579/3581 Independence Avenue North
(Improvement Project No. 554).
Mr. McDonald explained that Tasks Unlimited had previously expressed
interest in purchasing the property at 2829/2833 Flag Avenue North, but
has since found a duplex located at 3579/3581 Independence which they
believe better suits the needs of their clients.
MOTION Motion was made by Commissioner Wehiing, seconded by Commissioner
Item 6 Enck, to approve the purchase agreement at 3578/3581 Independence
Avenue North. Voting in favor: All. Motion carried.
ADJOURNMENT Motion was made by Commissioner Enck, seconded by Commissioner
Wehling, to adjourn the meeting. All present voted in favor. The New
Hope EDA adjourned at 8:12 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA July 22, 1996
Page 2
EDA
REQUEST FOR ACTION
Originating DepaH~uent Approved for Agenda Agenda Section
City Manager EDA
9-9-96
Kirk McDonald !.) Item No.
By: Management Assistant By:.// 4
DISCUSSION REGARDING REVISE~ REQUEST FOR TAX INCREMENT FINANCING
ASSISTANCE FOR CAR-X/PUD DEVELOPMENT AT 7180 42N° AVENUE NORTH
David Lasky, owner of the property at 7180 42"d Avenue, has submitted the attached revised
request for tax increment financing assistance from the City for the proposed Car-X/PUD
Development at the northeast corner of 42"d and Nevada Avenues.
At the October 9, 1995, EDA meeting, the EDA discussed a similar request in the amount of
$200,000. At that time Lasky had submitted a concept plan to the Planning Commission, but
the plan had not been approved by the Commission or Council and did not include any
financial data regarding the cost of the project or increased tax base projections. The EDA
declined the request due to the auto-oriented nature of the project.
Lasky continued through the planning process and revised the plans many times to address
the Council, Commission and staff concerns. On March 25, 1996, the Council approved the
request for a Planned Unit Development/Conditional Use Permit to allow the construction of a
Car-X Muffler, Brake and Alignment Facility in a mini-mall concept with future retail space. The
approved plan included a clock tower, extensive landscaping, matching building materials, etc.
Lasky has recently contacted the City and informed us that due to the increased costs
associated with the revised plans, the rental cost for Car-X increased to a level that they could
not afford to become a tenant. As a result, the proposed project has come to a halt. Lasky
estimates that the difference in cost from the original plans and the revised plans is
approximately $100,000.
MOTION BY SECOND BY
TO:
Administration: Finance:
Request for Action Page 2 9-9-96
Per the attached letter, Lasky is requesting reconsideration from the EDA on TIF assistance
and is requesting consideration of $100,000 in "pay-as-you-go" TIF assistance. This basically
means that as additional tax revenues are generated from the project that a portion of those
revenues could be paid back to the developer to reimburse the developer for TIF eligible
improvements. Lasky has indicated that the current real estate taxes generated on the
property are $!6,646 per year and that the building addition would double that amount,
although these numbers have not been confirmed by staff.
Staff requests direction from the EDA on this matter. Issues that the EDA should take into.
consideration when considering this request include:
· Do the plans for the development meet the criteria of the City?
· Is the property unique in that it may not be developed without TIF assistance?
· Under a new Minnesota law, the developer must establish that the development will create
a net increase in jobs to qualify for the assistance.
If the EDA is interested in pursuing this request, staff could further discuss the project with
Hennepin County and the City's Bond Consultant to determine exactly what expenses are
eligible for TIF assistance and what amount of increment would be generated by the
development. If the EDA is not interested in considering this request, staff probably does not
need to pursue this further.
· . REAL ESTA'T
FAX (612) 922-8540
2506 MONTEREY AVENUE SOUTH ST. LOUIS PARK, MINNESOTA 55416 PHONE (612) 922-3334 or 377-1167
September 4, 1996
Dan Donahue, City Manager
City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428
RE: New Hope Mini-Mall Project
7180 42nd Avenue North
Dear Mr. Donahue:
About two years ago, we were approached by the Car-X franchises in this area.
They had a strong interest in our erecting a facility for them on our property at
Nevada and 42nd Avenue in New Hope.
After many meetings with prospective tenants, our architects, various
contractors and numerous staff members of the City of New Hope, we outlined
a project for Car-X on our site.
On the basis of this preliminary plan, we generated a rental schedule that was
acceptable to the tenant. Unfortunately, the plan that we had proposed was
not acceptable to the City Planning Commission.
Because we felt the project had merit for us, for Car-X, for the City of New
Hope and for residents of a broad area around this corner, we pursued a new
approach to developing the property, including a building for Car-X.
As it turned out, 'the project grew in complexity, beauty and cost. After
finishing all of the drawings for the entire project and taking new bids on the
changes everyone desired, the costs increased $100,000 from our original plan.
Unfortunately, these additional costs raised the rent needed from Car-X. With
these increases, Car-X said they could not afford to become a tenant. As a
result, the project came to a halt in July of this year.
Mini-Mall Project- September 4, 1996
Page 2
In order to make this site come to life as the Mall we proposed, we can only
move ahead with Car-X if we get some assistance from the City of New Hope.
It appears tha! Tax Increment Financing in the amount of $100,000. is the
minimum needed for us to move ahead with development on this site.
The following pages included in this request will outline costs and benefits to
the City. Obviously, the corner where the property is located will be vastly
improved by the project. Based on information from Car-X, other businesses in
the area, and experts we have talked with, there is sound business value in
such a facility. Besides yielding greater tax revenue, the development will add
local employment opportunities that are above average for retail businesses.
I hope that the City will agree that this vastly improved Mini-Mall project is
worthy of support from the City by way of TIF financing.
If you require any further information, please contact me at your earliest
convenience. I am very anxious to move this project ahead.
Sincerely,
David Lasky
DL/dlr
Enclosures
NEW HOPE MINI-MALL PROJECT
7180 42nd AVENUE NORTH
SEPTEMBER 4, 1996
SITE DEVELOPMENT COSTS
Survey $ 1,500
Soil tests 1,750
Permits 5,000
City storm sewer 20,000
Excavation, fill, compacting 20,000
Blacktop 28,000
Curbs & concrete walks 9,000
Sewer & water on-site 6,000
Site lighting 20,000
Landscaping & plantings 16,000
Landscape sprinkler system 6,000
SAC & WAC charges ~5,000
TOTAL DEVELOPMENT COSTS: $148,250
-3-
NEW HOPE MINI-MALL PROJECT
7180 42nd AVENUE NORTH
SEPTEMBER 5, 1996
FACTS ABOUT THE MINI-MALL
I. ABOUT THIS SITE
The site of the planned mini-mall is the northeast corner of 42nd
Avenue North and Nevada. A few of the business in the area are:
to the west, the new Gill Brothers Funeral Home; to the south, a
service station, bowling alley, grocery, and a Rapid Oil Change; and
to the east is Crown Auto.
The property is approximately an acre and a half in size, with 292
feet along 42nd Avenue North and 190 feet along Nevada.
The contour of the site is both complex and severe, rising from east
to west, and dropping off over 10 feet from 42nd Avenue to the
north border. Among other challenges, this makes for costly
development. In addition, the high water table of the area
eliminates many types of uses the property might otherwise have.
With the new street alignment, semaphores and other changes, we
agree that the site has great potential for serving many communities
along 42nd Avenue.
II. MARKETING HISTORY
The property at 42nd Avenue was purchased from the City in 1978
and the existing bar was purchased by others. The use was
consistent until the late 1980's when the business was taken back
by the first tenants, who were under lease to us. They devoted
about two years to trying to find a new tenant for the building or
property. In 1989 we cancelled their lease and took possession of
the property.
Since then we made several attempts to put the property to better
use. For part of a year, we explored a residential development with
New Hope City staff, which turned out to be too costly for the
existing market.
-4-
MARKETING HISTORY, continued
Then, we spent over two years presenting the property to many
potential users, particularly tenants in the restaurant, hardware,
video, bank, medical and auto areas.
The primary businesses that were interested were in the automotive
field. However, they required certain rental arrangements that
would allow them to be competitive with others in the industry.
After intensive negotiating, we have come to the present working
relationship with Car-X. They would like to be tenants once we
find a way to maintain the original rental structure proposed to
them.
III. COSTS OF THE MINI-MALL
The following page shows a brief outline of the costs for the
project. These figures are based on expenses already incurred, bids
for most elements of the development, and a few estimates of
forthcoming costs.
-5-
COST SUMMARY FOR 7180 42ND AVENUE
Architect $ 26,142
Engineering ---
Survey 1,500
Soil Test 1,760
City Fees and Charges 5,848
Legal Costs 5,000
Permits 5,000
Construction Financing 15,000
Excavating and Fill 20,000
Blacktop 28,000
CUrbs, All Concrete 9,900
Clock tower 38,964
Plumbing-interior only 16,000
Electrical-interior only 27,000
Concrete and masonry 92,571
Steel 28,973
Roof 16,692
Heating and A/C 21,000
Sewer and water 16,280
Carpentry 11,780
Painting 9,500
Doors and windows 22,950
Sprinkler system 10,272
Lighting 20,000
Landscaping 16,000
Irrigation 6,000
Signs ---
Stripping ---
SAC and WAC charges 5,000
Loan initiation 5,000
Miscellaneous 40,000
TOTAL PROJECT COST: $ 522,132
Less site development - 148.250
TOTAL BUILDING COSTS $ 373,882
-6-
IV. REAL ESTATE TAX IMPACT
At the present time the real estate taxes on the property before
assessments are $16,646.
It is fair to assume that the value of the property will double from
its present $302,000 assessed valuation.
In that case, the completed project will likely produce an estimated
annual real estate tax of $33,292.
This amounts to an estimated additional real estate tax return for a
ten year period of $166,460.
-7-
LASKY NEW HOPE MINI MALL
42 AVENUENEW HOPE MINNESOTA
./~-' Commissioner Enck asked the City Attorney to adv: e the EDA of legal
/ issues pertaining to a moratorium of auto-related uses for this property.
Mr. Donahue stated there are storm water problems on the site and staff
, may make a future request to use a small amount of tax increment funds
to correct problems on the rear of the property since it involves more than
one properW,
The EDA declined intereet in utilizing tax increment financing for an auto-
oriented use since an auto-oriented use is generally not compatible with
the 42nd Avenue Redevelopment Plan goals and objectives.
ADJOURNMENT Motion wee made by Commissioner Otten, seconded by Commissioner
Wehling, to edjoum the meeting. All present voted in favor. The New
Hope EDA adjourned at 8:31 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA October 9, 1995
Page 4
~$; X?cn Ave,,~ue Nortl~ C,t? Hall: 612.531-5!00 C,;t'/ Halt Pax: 5'2.53
.N'e,~/.~c£e. ,'v!,innescta 55428-4898 .~ciice: 612.531-5170 r~o/ice Fax:
Public Works: 612.533-4823 Public Works Fax:
TOD: 612-531-5109 Fire Oep't. Fax: 512-531.5175
October 18, 1995
Mr. David Lasky
Lasky Company Real Estate
2506 Monterey Avenue South
St. Louis Park, MN 55416
Subject: Request for Tax Increment Financing Assistance for Car-X/PUD Development at 7180 42nd
Avenue North
Dear Mr. Lasky:
The City of New Hope is in receipt of your September 20th correspondence requesting consideration of
$200,000 in Tax Increment Financing assistance for your Car-X/PUD Development at 7180 42nd Avenue
North. The New Hope Economic Development Authority discussed the request at their October 9th meeting...
The EDA was generally not favorable towards the request due to the fact that the auto-oriented use is
generally not compatible with the 42nd Avenue Redevelopment Plan goals and objectives. The EDA
generally did not feel that the auto-oriented use was the highest and best use for the property. Other
differences between this request and the recently considered Gill Brothers request include the fact that the
property is not owned by the City, the parcel is not necessarily unique in its size/shape complicating the
development of the site, and Gill Brothers allowed the City to have significant input into the development
of their site plan, including landscaping and traffic issues. At this time, the EDA respectfully declines your
request.
Please contact me if you have any further questions or comments.
Sincerely,
Daniel J. Donahue
City Manager
Kirk McDonald
Management Assistant/
Community Development Coordinator
Enclosure: October 9th EDA Minutes
cc: Steve Sondrall, City Attorney
Mark Hanson, City Engineer
Doug Sandstad, Building Official
Valerie Leone, City Clerk
Planning Case File g95-15
Family Styled City '~*,,,~^~ ~.~ For Family Living
REQUF~T FOR ACTION
Originating Department Approved for Agenda Agenda Section
City Manager EDA
9-9-96
Sarah Bellefuil !'-'~ Item No.
By: Community Development Specialist By:. ~// 5
RESOLUTION APPROVING LOAN T/~) TASKS UNLIMITED LODGES TO PURCHASE
3579/3581 INDEPENDENCE AVENUE NORTH (IMPROVEMENT PROJECT NO. 554)
At me May ZU ~-conomlc Development Authority meeting, the EDA approved Tasks Unlimited
as the owner and service provider for a special needs rental housing project to be located in
New Hope. On June 24, the EDA passed a resolution approving a Letter of Understanding
with Tasks Unlimited for a loan to purchase housing in New Hope for persons with serious or
persistent mental illness. Tasks Unlimited would also provide support services to the residents.
At the July 22 EDA meeting, the EDA approved a motion allowing Tasks Unlimited to sign a
purchase agreement for the duplex property at 3579/3581 Independence Avenue North. After
the July 22 motion was approved, Tasks Unlimited signed a purchase agreement and are
scheduled to close on the property on September 20, 1996.
Since the July 22 meeting, Assistant City Attorney Marry Malecha, Tasks Unlimited, and City
staff have been finalizing a loan document between the City and Tasks Unlimited. The
attached resolution approves the loan to Tasks Unlimited Lodges. The loan provided by the
City will be a $90,000 zero interest, 30-year first mortgage that will be used for the purchase of
the property. If the loan is defaulted, the EDA can declare a default, begin charging interest
2% over prime, and foreclose on the property.
CO-OP NW Community Revitalization Corporation will be supplying a $90,000 second
mortgage that will be used toward the purchase and remodeling of the property. The second
mortgage is provided through 1995 Federal HOME funds that have been designated
specifically for special needs rental housing to be located in New Hope.
Review: Administration: Finance:
RFA-O01
Request for Action Page 2 9-9-96
The house that the EDA approved at the July 22 meeting is located at 3579/3581
Independence Avenue North. The duplex was built in 1981 and is 1440 square feet per side.
Each unit contains three bedrooms, two bathrooms, a kitchen, living room, dining room, den,
laundry room, and two-car garage. Only one of the two-car garages is needed by Tasks
Unlimited, the other garage will probably be converted into a recreation room. Tasks Unlimited
will be presenting architectural drawings of the interior remodeling at the September 23, EDA
meeting.
Staff recommends approval of the resolution.
SEP-05-96 THU 10:15 P, 02/04
Comic[ & Sorrnm~b, P.A.
~n~rgh Exccu~ Office ~a~
5525 Edi~oR C~sslng
S~ ~203
Brookl~ P~k, ~neso~ 55443
~ept~.mber 5, 1996
Oa. ni~.l J. Donahue
New Hope EDA
4401 Xylon Avenue North
New Hope, MN 55428
RE: Tasks Unlimited Loan
Our File No. 99.11169
Dear Dan:
Tasks Unlimited Indges has now located a suitable site in New Hope
for its group liv{ng facility. The property is 357g/lBSl
Independence Avenue North. A closing on 'the purchase is scheduled
for September 20. The EDA has committed to held Tasks Unlimited
Lodges complete the purchase by providing a 30 year loan of SgO,O00'
aT zero Interest in the rorm of a first mortgage ,
The enclosed Resolution approves the loan and the attached loan
documenLs. Consistent with the loan commitment, the loan documents
call for a no interest loan for 30 years, requiring princlloa] only
payments. If a condition of default exists (including the usus]
mortgage conditions plus requirements of rehabilitating the
property and using iT as a peer supported group residence), the EDA
can declare a default, cnmmence charging interest at 24 over prime,
and foreclose the mortgage. This mortgage shall be the first
priority encumbrance on :he property.
If the EDA approves this loan~ the enclosed Resolution should be
passed at the September g meeting.
E~e sure to call if you have any questions.
Sincerely,
M~rtin P. Malecha
cc: Valerie Leone, City Clerk (w/enc)
Kirk McDonald, Management Assistant (w/eric)
~arath Bellefuil, Administrative Assistant (w/eric)
Steven A. Sondrall, City Attorney
EDA RESOLUTION NO. 96-__
RESOLUTION APPROVING LOAN
TO TASKS UNLIMITED LODGES
TO PURCHASE 3581 INDEPENDENCE AVENUE NORTH
WHEREAS, the Economic Deve]opment Authority in and for the
City of New Hope (EDA) has a goal of encouraging special needs
housing in the City of New Hope (City), and
WHEREAS, CO-OP Northwest Community Revitalization Corporation
(CO-OP Northwest) has received 1995 Federal HOME Investment
Partnership Program funds which member cities, including the City
of New Hope, can use toward their affordab]e housing goals,and
WHEREAS, $90,000 of the 1995 Federal HOME funds has been
designated for special needs rental housing in the City, and
WHEREAS, the EDA previously approved Tasks Unlimited Lodges,
a Minnesota non-profit corporation, (Tasks Unlimited) as the owner
and service provider for special needs rental housing to be located
in the City, and
WHEREAS, the EDA then entered into a Letter of Understanding
with Tasks Unlimited which includes a commitment by the EDA to
provide a 30 year no interest $90,000,00 loan (the Loan) as part of
the financing to help Tasks Unlimited purchase suitable housing in
the C-ity for use as a peer supported group living facility for six
to eight adults with serious and persistent mental illness, and
WHEREAS, Tasks Unlimited has entered into an agreement to
purchase certain real estate known as 3581 Independence Avenue
North in the City for its group ~iving facility, and now looks to
the EDA for the Loan to enable Task Unlimited to purchase said real
estate, and
WHEREAS, the Loan will be a first mortgage secured by said
real estate, and supplemented by a $90,000 loan to Tasks Unlimited
from the 1995 CO-OP Northwest 1995 Federal HOME funds allocated to
the City, and
WHEREAS, the details of the Loan are as set forth in the Loan
Agreement, the Loan Note, and the Mortgage, attached hereto as
Exhibits A, B, and C, respectively, and
WHEREAS, entering into the Loan is in the best interests of
the City and its residents, and will further the general plan of
economic development,
NOW, THEREFORE, BE IT RESOLVED by the Economic Development
Authority in and for the City of New Hope as follows:
1. That the above recitals are incorporated herein by
reference.
2. That the Loan of $90,000.00 to Tasks Unlimited Lodges as
set forth in the Loan Agreement, the Loan Note, and the
Mortgage attached hereto as Exhibits A, B, and C, is
approved.
3. That the President and Executive Director are authorized
and directed to sign the Loan Agreement on behalf of the
EDA.
4. That the EDA staff is authorized and directed to take
such other actions as are necessary and advisable to
complete the Loan.
Adopted by the Economic Development Authority in and for the
City of New Hope this 9th day of September, 1996.
Edw. J. Erickson, President
Attest:
Daniel J. Donahue, Executive Director
NORTHWO00 PARK
i
36 TH AVE. N.
AVE.
~zz
LOAN AGREEMENT
THfS LOAN AGRFEMENT (hereinafter referred to as "Loan
Agreement") .made this day of September, 1996, by and between
TASKS UNLIMITED LODGES, a Minnesota non-profit corporation
(hereinafter referred to as "Borrower"), and ECONOMIC DEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF NEW HOPE, a Minnesota municipal
corporation (hereinafter referred to as "Lender").
WITNESSETH'
WHEREAS, Borrower has applied to Lender for a real estate
mortgage loan on certain real estate as set forth on Exhibit A (the
"Loan Property"), in the principal amount of $90,000.00 (the "Loan
Amount"); and
WHEREAS, Borrower has issued the following security documents:
(a) Note of even date herewith made by Borrower and payable
to the order of Lender in the original principal amount
of $90,000.00 ("Loan Note" or "Note").
(b) Mortgage securing the Loan Note in the amount of
$90,000.00 ("Loan Mortgage" or "Mortgage") of even date
herewith, executed by Borrower, as Mortgagor, in favor of
Lender, as Mortgagee, covering property therein described
situated in Hennepin County, Minnesota (the "Loan
Property").
(c) A Loan Agreement executed by the Borrower to the Lender.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter contained, it is hereby agreed as follows:
1. Amount of Loan. Borrower agrees to take and Lender agrees
to make a loan in the principal amount of $90,000.00 (hereinafter
called the "Loan") to be advanced as hereinafter provided, said
Loar~ to be evidenced by the Loan Note and secured by the Loan
Mortgage and any other security documents required under this Loan
Agreement. The terms and conditions of the Loan Note, the Loan
Mortgage and any other instrument required under this Agreement are
~reb~reor.express]y incorporated herein by reference and made a part
2. Documents to be Delivered. Borrower covenants and agrees
to immediately without expense to Lender cause the compliance wJth
th~ following conditions, such conditions being hereby made a
condition preoeder~t to lender's obligation to make any advance of
t he Loan:
(a) Note. Del Jver to Lender the Loan Note.
..... EXHIBIT A
(b). Mortgage. Deliver to Lender the Loan Mortgage together
with evidence that the Mortgage has been duly filed for
record.
(c) Title Insurance Policy. Oeliver to Lender a Mortgagee's
Title Policy, hereinafter called "Title Policy", from a
reputable title insurance company, issued to Lender in
the amount of $90,000.00 with respect to the Loan
Mortgage and insuring that the Mortgage is a lien on the
Loan Property to the extent it purports to be free and
clear of mechanic's liens, materialmen's liens, taxes,
special assessments, rights of parties in possession and
questions of survey and subject only to exceptions
specifically approved in writing by Lender.
(d) Corporate Existence. Deliver to Lender evidence
satisfactory to Lender that Borrower is duly organized
and validly existing under the laws of the State of
Minnesota; that the execution of this Agreement, the
Note, the Mortgage and any other instrument required
under this Agreement have been duly authorized by all
necessary corporate action; and that this Agreement, the
Note, the Mortgage and any other document required under
this Agreement have been duly executed and delivered and
are the legal, valid and binding obligation of Borrower,
enforceable in accordance with their terms, and
containing such other resolutions and certifications as
Lender may require.
(e) Insurance. Deliver to Lender a certificate or policy for
all insurance required, under the terms hereof or of the
Mortgage, to be maintained by Borrower.
3. Affirmative Covenants. The Borrower covenants and agrees
that it will, until the borrowing hereunder and thereafter, so long
as any indebtedness remains outstanding under this Agreement:
(a) Furnish to Lender:
(ii) Such information as required by the terms and
conditions of this Agreement and all other
documents or instruments of security referred to in
this Agreement;
(iii) Promptly and in a form satisfactory to the Lender,
such other information as Lender may reasonably
request from time to time;
(b) Repay and discharge all taxes and other governmental
charges and all contractual obligations calling for the
payment of money before the same shall become overdue,
unless to' the extent only that such payment is being
contested in good faith.
(c) Pay all charges required by local, state and federal
governments for the maintenance and operation of the Loan
Property.
(d) Maintain insurance coverage on its physical assets and
against other business risks in such amounts and of such
types as are customarily carried by entities similar in
size and nature, and in the event of acquisition of
additional property, real or personal, or of incurrence
of additional risks of any nature, increase such
insurance coverage in such manner and to such extent as
prudent business judgment and present practice would
dictate; and in the case of all policies covering
property mortgaged or pledged to Lender or property in
which Lender shall have a security interest of any kind
whatsoever, other than those policies protecting against
casualty liabilities to strangers, all such insurance
policies shall provide that the loss payable thereunder
shall be payable to the Borrower and Lender as their
respective interests may appear, all said policies or
copies thereof,including all endorsements thereon and
those required hereunder, to be deposited with Lender.
(e) Permit the Lender, through its authorized attorneys,
accountants and representatives, to examine the
Borrower's books, accounts, records, ledgers and assets
of every kind and description at all reasonable times
upon oral or written request of Lender.
(f) Promptly notify the Lender of any condition or event
which constitutes, or with the running of time and/or the
giving of notice would constitute default under this
Agreement, and promptly inform the Lender of any
materially adverse change in 8orrower's financial
condition.
(g) Execute and deliver to the Lender at any time or times,
assignments or supplemental assignments and such other
and further instruments of assurance as the Lender may
request and deem necessary in order to carry into effect
the full intent and purpose of this Loan Agreement, and
otherwise to do any and all things and acts whatsoever
which the Lender may request as reasonably required in
order to perfect the assignment to the Lender of security
granted pursuant to this Loan Agreement.
(h) Rehabilitate the Loan Property for the occupation and use
as a peer supported group residence for adult persons
with persistent mental illness, which rehabilitation
shall be only in accordance with plans and specifications
approved by Lender in advance of the commencement of such
rehabilitation. Such rehabilitation shall be completed
within on-e year of the date of this Loan Agreement, and
shall also be in compliance with all applicable
restrictions, conditions, codes, ordinances, regulations
3
and laws of all governmental bodies having jurisdiction
over the Loan Property.
Apply for and obtain a loan of up to $90,000.00 from CO-
OP Northwest Community Revitalization Corporation using
1995 Federal HOME funds, said loan proceeds to be used
for the balance of the purchase price of the Loan
Property or any improvement or rehabilitation of the Loan
Property.
(j) Allow the Loan Property to be used only as a peer
supported group residence for adult persons with
persistent mental illness.
(k) Through its affiliates and related corporations provide
support services and mental health case coordination
services to the occupants of the Loan Property.
4. Encumbrances and Transfer. Borrower agrees not to sell,
transfer or convey the Loan Property or any part thereof, or
encumber the Loan Property or any part thereof, in any manner,
without written consent of Lender, which consent shall be given or
withheld in the sole discretion of Lender. By this Loan Agreement
Lender consents to Borrower obtaining a loan of up to $90,000.00
from CO-OP Northwest Community Revitalization Corporation, secured
by a second mortgage on the Loan Property, as set forth above.
5. Time of Essence. Time is of the essence in the
performance of this Agreement.
6. Assignability. Borrower shall not assign this Agreement
nor assign its obligations as specified herein without the written
consent of Lender, which consent shall be granted or withheld in
the sole discretion of Lender.
7. Representations and Warranties. Borrower represents and
warrants to Lender the following:
(a) The Borrower is a Minnesota non-profit corporation duly
formed, validly existing and in good standing under the
laws and regulations of the State of Minnesota and the
rnternal Revenue Code.
(b) The making and performance of this Loan Agreement and the
execution and delivery of the herein described Note,
Mortgage and all other instruments required hereunder are
within the corporate powers of the Borrower and have been
duly authorized by all necessary action. This Loan
Agreement° and the Note, Mortgage and any other
instruments required hereunder have been duly executed
and delivered and are the legal, valid and binding
obligations of the Borrower enforceable in accordance
with their respective terms.
c) No litigation, tax claims or governmental proceedings are
pen.ding or threatened against the Borrower, and no
judgment or order of any court or administrative agency
is outstanding against the Borrower.
d) The Borrower has filed and will file and cause to be
filed all tax returns (federal and state) required to be
filed and pay all taxes shown thereon to be due,
including interest and penalties, or has provided
adequate reserves for payment thereof.
e) No pollutants or other toxic or hazardous substances,
including any solid, liquid, gaseous, or thermal irritant
or contaminant, such as smoke, vapor, soot, fumes, acids,
alkalis, chemicals or waste (including materials to be
recycled, reconditioned or reclaimed) (collectively
"substances") have been or shall be discharged,
dispersed, released, stored, treated, generated, disposed
of, or allowed to escape (collectively referred to as the
"incident") on the Loan Property.
(f) No asbestos or asbestos-containing materials have been
installed, used, incorporated into, or disposed of on the
Loan Property.
(g) No polychlorinated biphenyls ("PCBs") are located on or
in the Loan Property, in the form of electrical
transformers, fluorescent light fixtures with ballasts,
cooling oils, or any other device or form.
(h) No underground storage tanks are located on the Loan
Property or were located on the Loan Property and
subsequently removed or filled.
(i) No investigation, administrative order, consent order and
agreement, litigation, or settlement (collectively
referred to as the "action") with respect to substances
is proposed, threatened, anticipated or in existence with
respect to Borrower's property,
(j) The Loan Property and Borrower's activity in connection
with the Loan Property are in compliance with all
applicable federal, state and local statutes, laws and
regulations. No notice has been served on Borrower from
any entity, governmental body, or individual claiming any
violation of any law, regulation, ordinance or code, or
requiring compliance with any law, regulation, ordinance
or code, 'or demanding payment or contribution for
environmental damage or injury to natural resources.
8. Indemnification. Borrower agrees to indemnify Lender and
save it harmless against all loss, liability, expense, or damages
in¢;]uding but not limited to attorneys fees, which may arise by
reason of a breach by Borrower of any warranties or representations
contained in this Loan Agreement or the assertion of any lien
against the Loan PropertY.
9. Defaults. In the event:
(a) Borrower abandons the Loan Property; or
(b) Bankruptcy, reorganization, assignment, insolvency or
liquidation proceedings, or other proceedings for relief
under any applicable bankruptcy taw or other law for
relief of debtors are instituted by or against Borrower;
or
(c) Any judgment, attachment, garnishment or other similar
process is entered against Borrower or against any
property or assets of Borrower and is not released,
satisfied or discharged or bonded to Lender's
satisfaction; or
(d) Any of the terms, covenants, or conditions of any permit
or agreement issued or made by the City or other
governmental body having jurisdiction over the Loan
Property have not been complied with or are terminated or
modified by the City or such other governmental body; or
(e) Any mechanic's or materialmen's lien is filed, against
the Loan Property and is not released, satisfied or
discharged or bonded to Lender's satisfaction; or
(f) Borrower defaults in the payment or performance of
anything by it to be paid or performed under this Loan
Agreement or under the Loan Note or Loan Mortgage;
(g) Any change of the corporate structure or non-profit
status of the Borrower, voluntarily or involuntarily,
without the consent of Lender;
(h) Any representation or warranty by Borrower contained
herein or in the Loan Note, Mortgage or any other
instrument required hereunder is false or untrue in any
material respect;
(i) Borrower defaults in the payment or performance of
anything by it to be paid or performed under any note,
mortgage or other agreement now or hereafter made by
Borrower in favor of or with Lender or otherwise now or
hereafter held by Lender;
then Lender, at its option, shall, in addition to any other
remedies which it might be entitled to by law, have the right:
6
(a) To refrain from making an advance under this Agreement;
(b) Cancel this Agreement;
(c) Bring appropriate action to enforce performance and the
correction of such failure or default;
(d) To declare the entire unpaid principal of the Loan Note
and alt accrued interest thereon immediately due and
payable without notice;
(e) To foreclose the Mortgage and any other security
instrument referred to in this Agreement.
11. Notices. Any notices given hereunder shall be in writing
and shall be deemed to have been given when delivered personally or
when deposited in the United States mail, registered, postage
prepaid, addressed as follows:
If to Borrower at: Tasks Unlimited Lodges
Attn:
2419 Nicollet Avenue South
Minneapolis, MN 55404-3450
If to Lender at: New Hope EDA
Attn: Daniel J. Donahue
4401Xylon Avenue North
New Hope, MN 55428
or addressed to any such party at such other address as such party
shall hereafter furnish by notice to the other party.
12. Fee~. Borrower agrees to pay to Lender upon demand all
attorneys fees incurred by Lender in connection with this Loan
Agreement or the transactions contemplated hereby. If Borrower
does not comply with the terms and conditions of this Agreement,
Borrower shall remain liable to pay and shall pay to Lender the
attorneys fees referred to in this Section.
13. Headings. The headings used in this Agreement are for
convenience only and do not define, limit or construe the contents
of this Agreement.
14. Bindings on Successors and Assigns. Subject to the
limitations contained in this Agreement, this Agreement shall be
binding upon and inure to the benefit of the successors and assigns
of the parties hereto.
IN TESTIMONY WHEREOF, each Of the parties hereto have caused
these presents to be duly executed as of the day and year first
above written.
TASKS UNLIMITED LODGES, a
Minnesota non-profit corporation
By:
Its
By:
Its
ECONOMIC DEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF NEW HOPE, a Minnesota
municipal corporation
By:
Its President
By:
Its Executive Director
THIS INSTRUMENT DRAFTED BY:
CORRICK & SONBRALL, P.A.
8525 Edinbrook Crossing
Brooklyn Park, MN 55443
(612) 425-5671
99.11169
ta~k$.agr
LOAN NOTE
$90,000.00 , Minnesota
September ....... 1996
FOR VALUE RECEIVED, the undersigned, TASKS UNLIMITED LODGES,
a M~nnesota non-profit corporation (hereinafter designated as
"Borrower"), promises to pay to the order of ECONOMIC DEVELOPMENT
AUTHORITY iN AND FOR THE CiTY OF NEW HOPE, a Minnesota municipal
corporation (hereinafter referred to as "Lender"), (Lender and any
ho]der of this Note from time to time are each hereinafter
sometimes referred to as "Ho]der"), at 4401Xylon Avenue North, New
Hope, MN 55428, or such other place as may hereinafter be
designated from time to time in writing by the Holder hereof, the
principal sum of Ninety Thousand and no/lO0 Dollars ($90,000.00) or
so much thereof as shall have been advanced hereunder to or for the
benefit of the undersigned pursuant to the terms of a Loan
Agreement of even date herewith, made by the Borrower and Lender
(hereinafter referred to as the "Loan Agreement"), together with
interest from the date hereof as set forth below, until fully paid,
at the rates hereinafter provided, on the Principal Balance, from
time to time, advanced and remaining unpaid (hereinafter referred
to as the "Principal Balance"), the Principal Balance and interest
shall be due as follows:
A. Until the declaration of a default by Lender for the failure
of Borrower to make the payment of any principal due hereunder
or in the payment or performance of anything by Borrower to be
paid or performed under any of the terms and conditions in
this Note or in the Mortgage or Loan Agreement, the Principal
Ba]ance shall bear no interest. Commencing as of the date of
such a declaration by Lender of a default, interest shall
accrue on the Principal Balance at a rate equal to 2% per
annum over the rate of interest announced from time to time by
First National Bank of Minneapolis, N.A., as its Prime Rate.
Said interest shall increase or decrease, automatically and
without notice, effective on the day of any increase or
decrease in the Prime Rate of interest announced by First
National Bank of Minneapolis, N.A. Interest shall be computed
on the Principal Balance at the end of each day as follows-
The rate of interest as determined above shall be divided by
360 days and the Principal Balance of this Note shall be
multiplied by the percentage so obtained.
B. Monthly payments commencing October~, 1996 shall be in the
amount of $250.00 per month and a like amount shall be due and
payable on the same day of each month thereafter through and
including September ~, 2026.
C. All payments made by Borrower' pursuant to the terms of th~s
Note shall be applied first to interest, if any, and then to
reduction of principal.
EXHIBIT B
D. ALL AMOUNTS DUE AND OWING PURSUANT TO THIS NOTE SHALL, UNLESS
SOONER PAID, BE DUE AND PAYABLE SEPTEMBER __, 2026. SAID
PAYMENT IS NOT A BALLOON PAYMENT.
If any installment is paid more than fifteen (15) days after
the due date thereof, the Borrower shall pay a late charge of 4% of
the installment to cover the expenses of collection.
Borrower may prepay this Note in whole or in part upon ten
(10) days written notice to Holder and upon payment to Holder of
all interest, if any, which has accrued to the date of such
prepayment on the Principal Balance of this Note.
This Note is secured by a Mortgage of even date herewith upon
real property situated in Hennepin County, Minnesota. All of the
terms and conditions contained in said Mortgage and in the Loan
Agreement which are to be kept and performed by Borrower are hereby
made a part of this Note and to the same extent and with the same
force and effect as if they were fully set forth herein; and
Borrower covenants and agrees to keep and perform them, or cause
them to be kept and performed, strictly in accordance with their
terms.
Time is of the essence hereof. In the event of a default
the payment of any principal due hereunder or in the payment or
performance of anything by Borrower to be paid or performed under
any of the terms and conditions in this Note or in the Mortgage or
Loan Agreement, the Holder at its option and without further
notice, demand or presentment for payment to Borrower or others,
may declare immediately due and payable the Principal Balance, and
interest accruing thereon from the date of declaration of the
default, together with any reasonable attorneys' fees incurred by
Holder in collecting or enforcing payment thereof, whether suit be
brought or not, and all other sums due by Borrower hereunder or
under the Mortgage and Loan Agreement anything herein or in the
Mortgage or Loan Agreement to the contrary notwithstanding, and
payment thereof may be enforced and recovered in whole
part at any time by one or more of the remedies provided to Holder
in this Note or in the Mortgage or Loan Agreement.
The remedies of Holder as provided herein and in the Mortgage
or Loan Agreement shall be cumulative and concurrent and may be
pursued singly, successively or together, at the sole discretion of
Holder, and may be exercised as often as occasion therefor shall
occur; and the failure to exercise any such right or remedy shall
in no event be construed as a waiver or release thereof.
Borrower waives presentment for payment, demand, notice of
demand, notice of nonpayment or dishonor, protest and notice of
protest of this Note, and all other notices in connection with the
delivery, acceptance, performance, default or enforcement of the
payment of this Note.
2
Holder shall not be deemed by any act of omission or
commission to have waived any of its rights or remedies hereunder
unless such waiver is in writing and signed by the Holder, and then
only to the extent specifically set forth in the writing. A waiver
with reference to one event shall not be construed as continuing or
as a bar to or waiver of any right or remedy as to a subsequent
event.
All agreements herein are expressly limited so that in no
contingency or event whatsoever shall the amount paid or agreed to
be paid to the Holder for the use, forbearance or detention of the
money to be advanced hereunder exceed the highest lawful rate
permissible under applicable usury laws. If from any circumstances
whatsoever fulfillment of any provision hereof at the time
performance of such provisions shall be due, shall involve
transcending the limit of validity prescribed by law which a court
of competent jurisdiction may deem applicable hereto, then the
obligation to be fulfilled shall be reduced to the limit of such
validity and if from any circumstance the Holder shall ever receive
as interest an amount which would exceed the highest lawful rate,
such amount which would be excessive interest shall be applied to
the reduction of the unpaid principal balance due hereunder and not
to the payment of interest.
This instrument shall be governed by and construed according
to the laws of the State of Minnesota.
IN WITNESS WHEREOF, Borrower, intending to be legally bound
hereby, has duly executed this Note the day and year first above
written.
TASKS UNLIMITED LODGES, a
Minnesota non-profit corporation
By.
Its
By.
Its
tasks, pm
3
MORTGAGE
THfS INDENTURE. (hereinafter referred to as "Mortgage") is
made this day of September, 1996, between TASKS UNLIMITED
LODGES, a Minnesota non-profit, whose address is 2419 Nicollet
Avenue South, Minneapolis, MN 55404-3450, the (hereinafter'called
"Mortgagor"), and ECONOMIC OEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF NEW HOPE, a Minnesota municipal corporation, having its
office at 4401Xylon Avenue North, New Hope, MN 55428, (hereinafter
catled "Mortgagee").
WHEREAS, the Mortgagor has requested and the Mortgagee has
agreed to make a loan to the Mortgagor, evidenced by Mortgagor's
Note (hereinafter the "Note") of even date herewith, payable to the
order of Mortgagee in the principal amount of Ninety Thousand and
no/lO0 Dollars ($90,000.:00) and bearing interest at the rate set
forth therein.
NOW, THEREFORE, in consideration of the premises and for the
purposes of securing the repayment of the loan made pursuant to the
Note and this Mortgage, and of all other sums which may be advanced
by the Mortgagee in accordance with this Mortgage, and all interest
(hereinafter the "Indebtedness"), and to secure the performance of
all covenants, conditions and agreements herein and in the Note,
and any other security document referred to therein, the Mortgagor
conveys forever all of the Mortgagor's right, title and interest in
the tract or parcel of land, 1egatly described in Exhibit I hereto,
(hereinafter the "Land") together with (i) all building materials,
supplies and equipment now Or hereafter incorporated in any
building, structure, or other improvement located or to be erected
on the Land; and (ii) all of the buildings, structures and other
improvements now standing or at any time hereafter constructed or
placed upon the Land; and (iii) all heating, plumbing and lighting
apparatus, motors, engines, and machinery, electrical equipment,
incinerator apparatus, air-conditioning equipment, water and gas
apparatus, pipes, faucets, and all other fixtures of every
description which are now or may hereafter be placed or used upon
the Land or in any building or improvement now or hereafter located
thereon; and (vi) all additions, accessions, increases, parts,
Fittings, accessories, replacements, substitutions, betterments,
repairs and proceeds to any and all of the foregoing; (v) all right
to receive disbursement of amounts due as a result of the
establishment of a Tax Increment District which includes the Land
together with ail (;ontract rights of Borrower and/or attributable
fo the Land as a result of such District; and (vi) ail
heredJtaments, easements, appurtenances, estates, condemnation
awards and other' rights and interests now or hereafter located
thereon (all of the f~rego~ng, together with the ]and, hereinafter
b~9 referred to as the "Property" or "Mortgaged Property"),
EXHIBIT C
1
TO HAVE AND TO HOLD, the Mortgaged Property unto the Mortgagee
forever;
PROVIDED, NEVERTHELESS, that this Mortgage is upon the express
condition that if the Mortgagor shall pay to the Mortgagee as and
when due and payable the principal and the interest on the Note,
and shall also keep and perform all and singular the covenants
herein contained, or any other security document referred to
therein, on the part of the Mortgagor to be kept and performed,
then, the Mortgage and the estate hereby granted shall cease and be
and become void and shall be released of record at the expense of
the Mortgagor; otherwise this Mortgage shall be and remain in full
force and effect.
THE MORTGAGOR REPRESENTS, WARRANTS AND COVENANTS to and with
the Mortgagee that it is lawfully seized of the Mortgaged Property
in fee simple and has good right and full power and authority to
execute this Mortgage and to mortgage the Mortgaged Property; that
neither this Mortgage, nor any other security document referred to
therein nor the Note contravene any¢covenant in any indenture or
agreement affecting the Mortgagor; that the Mortgaged Property
free from all liens and encumbrances except those identified
Exhibit II; that the Mortgagee shall quietly enjoy and possess the
Mortgaged Property; that the Mortgagor will warrant and defend the
title to the Mortgaged Property against all claims, whether now
existing or hereafter arising; and that all buildings and
improvements now or hereafter located on the Land are, or will be,
located entirely within the boundaries of the Land. The covenants
and warranties of this paragraph shall survive foreclosure of this
Mortgage and shall run with the land.
ANO IT FURTHER COVENANTED AND AGREED AS FOLLOWS:
ARTICLE ONE
GENERAL COVENANTS, AGREEMENTS, WARRANTIES
1.1 Payment of Indebtedness, Observance of Covenants.
Mortgagor will duly pay each installment of principal on the Note
and all other indebtedness and will perform all other agreements
and covenants by Mortgagor to be performed hereunder or under the
Note or the Loan Agreement.
1.2 Payment of Impositions. The Mortgagor agrees to pay,
before a penalty might attach for non-payment thereof, all taxes,
assessments, water and sewer charges, and other fees, taxes and
charges of whatsoever nature levied upon or assessed or placed
against the Mortgaged Property. The Mortgagor will likewise pay
all taxes, assessments and other charges, levied upon or assessed,
placed or made against, or measured by, this Mortgage, or the
recordation hereof, or the Indebtedness, provided that the
Mortgagor shall not be obliged to pay such tax, assessment or
charge if such paymGnt wou]d be contrary to law or would result in
the payment of a usurious rate of interest on the ~ndebtedness.
The Mortgagor shall promptly furnish to the Mortgagee all notices
received by the Mortgagor of amounts due under this paragraph and
upon the Mortgagee's request, shall deliver proper receipts
evidencing the payment of such amounts. In the event of a judicial
decree or legislative enactment after the date of this Mortgage,
providing that any such imposition may not be lawfully paid by the
Mortgagor, or in the event that the payment of any such imposition
by Mortgagor would result in the payment of a usurious rate of
interest on the Indebtedness, the Indebtedness, together with
interest, shall become immediately due and payable, or, at
Mortgagee's option, Mortgagee may pay any amount or portion of such
Imposition as renders the Indebtedness unlawful or usurious, in
which event Mortgagor shall concurrently therewith pay the
remaining lawful and non-usurious portion or balance of said
Imposition.
1.3 Payment of Operating Costs; Prior Mortgages and Liens.
Mortgagor agrees t. hat it will pay all operating costs and expenses
of the Premises; keep the Premises free from mechanic's,
materialmen's and other liens not expressly subordinated to the
lien of this Mortgage; will keep the Property free from levyz
execution or attachment and will immediately pay whether or not
then due all indebtedness which may be secured by mortgage, lien or
charge on the Property (other than this Mortgage) and upon request
will exhibit to Mortgagee satisfactory evidence of such payment and
discharge.
1.4 Contest of Impositions, Liens and Levies. Mortgagor
shall not be required to pay, discharge or remove any imposition,
lien or levy so long as the Mortgagor shall in good faith contest
the same or the validity thereof by appropriate legal proceedings
which shall operate to prevent the collection of the levy, lien or
imposition so contested and the sale of the Property, or any part
thereof to satisfy the same, provided that the Mortgagor shall,
prior to the date such levy, lien or imposition is due and payable,
having given such reasonable security as may be demanded by the
Mortgagee to insure such payments and any penalties and interest
that may accrue thereon and prevent any sale or forfeiture of the
Property by reason of such nonpayment. Any such contest shall be
prosecuted with due diligence and the Mortgagor shall promptly
after final determination thereof pay the amount of any such levy,
lien or imposition so determined, together with all interest and
penalties, which may be payable in connection therewith.
Notwithstanding the provisions of this section, Mortgagor shall,
and Mortgagee may, pay any such levy, lien or imposition
notwithstanding such contest if in the reasonable opinion of the
Mortgagee, the Property is in jeopardy or in danger of being
forfeited or foreclosed.
1.5 Maintenance and Repairs. Mortgagor agrees that it will
keep and maintain the Property in good condition and repair, free
from any waste or misuse, and will comply with all requirements of
law, municipal ordinances and regulations, restrictions and
covenants affecting the Property and its use, and will promptly
repair or restore any buildings, improvements or structures now or
hereafter on the Property which may become damaged or destroyed.
Mortgagor further agrees that without the prior consent of the
Mortgagee it will not remove from the Property any fixtures unless
3
the same is immediately replaced with like fixtures of at least
equal value; or expand any improvements on the Property, erect any
new improvements or make any material alterations in any
improvements which will alter the basic structure, affect the
market value or change the existing architectural character of the
Property except as the same may be done in accordance with the Loan
Agreement. Mortgagor agrees that it will complete within a
reasonable time any buildings now or any time in the process of
erection on the Property. Mortgagor agrees not to acquiesce in any
rezonin9 classification, modification or restriction affecting the
Property without the Mortgagee's written consent. Mortgagor agrees
that it will not vacate or abandon the Property.
1.6 Insurance.
(a) So long as the Indebtedness remains unpaid, the
Mortgagor shall, at its own cost, maintain with insurers
of recognized responsibility acceptable to the Mortgagee,
the insurance required by the Loan Agreement, and upon
completion of the Improvements contemplated by the Loan
Agreement, hazard and fire insurance on such completed
improvements insuring against loss by fire, hazards
included in the term "extended coverage", loss by
vandalism or malicious mischief, and such other hazards,
casualties and contingencies as may be required by the
Mortgagee, on the basis of replacement cost without a co-
insurance clause, in an amount sufficient to prevent the
Mortgagor from becoming a co-insurer of any loss
thereunder and at least equal to the sum of the unpaid
balance of the Indebtedness and all amounts secured by
any senior mortgage or other lien which exists from time
to time against the Mortgaged Property (to which the
Mortgagee does not necessarily consent) or such
additional amounts and for such periods as may be
required by the Mortgagee. The Mortgagor shall pay all
premiums on insurance required hereunder by making
payment directly to the insurer. The Mortgagee shall
have the right to hold the policies and renewals thereof,
and the Mortgagor shall promptly furnish to the Mortgagee
all such policies, renewals thereof, renewal notices and
all paid-premium receipts received by it. All policies
of insurance and any and all refunds of unearned premiums
are hereby assigned to the Mortgagee as additional
security for the payment of the Indebtedness secured
hereby. In the event of foreclosure of this Mortgage,
all right, title and interest of the Mortgagor in and to
any insurance policies then in force shall pass to the
purchaser.at the foreclosure sale.
(b) The policies of all such insurance shall have
loss payable provisions in favor of and in form
acceptable to the Mortgagee, shall provide for at least
thirty (30) days prior to written notices of
cancellation, termination or modification thereof to the
Mortgagee, shall permit Mortgagee to make premium
payments to prevent cancellation, and shall provide that
no act or negligence of the Mortgagor or of any occupant
of the Mortgaged Property, and no occupancy or use of the
Mortgaged Property for purposes more hazardous than
permitted by the terms of the policy, will affect the
validity or enforceability of such insurance as against
Mortgagee. In the event of loss under such insurance the
Mortgagor shall give prompt notice to the insurance
carrier and the Mortgagee; Mortgagor shall duly make
proof of loss, and shall immediately furnish to Mortgagee
a copy of such proof of loss. The Mortgagee is
authorized and empowered to collect and receive all
insurance proceeds, and if no Event of Default has
occurred under this Mortgage, it will apply such proceeds
to the restoration of the Property. Any insurance
proceeds not so applied shall be applied to the payment
of the Indebtedness.
1.7 Inspection. The Mortgagee, or its agents, shall have the
right to enter upon the Mortgaged Property during ordinary business
hours for the purposes of inspecting the Mortgaged Property or any
part thereof. The Mortgagee shall have no duty, however, to make
such inspection.
1.8 Protection of Mort9agee's Security. If the Mortgagor
fails to perform any of the covenants and agreements contained in
this Mortgage or if any action or proceeding is commenced which
does or may adversely affect the Mortgaged Property or the interest
of the Mortgagor, the Mortgagee, at Mortgagee's option, may perform
such covenants and agreements, defend against such action or
proceeding, or otherwise act as the Mortgagee deems necessary to
protect its interest. In the event that, after damage to or
destruction of the Mortgaged Property or condemnation of a portion
of the Mortgaged Property or a sale under threat thereof, the
Mortgagee elects or is obligated to use the proceeds to restore the
Mortgaged Property, and the insurance, sale or condemnation
proceeds which are paid to the Mortgagee are not sufficient to pay
for such restoration, the Mortgagee may, nevertheless effect the
restoration. Any amounts disbursed or costs incurred by the
Mortgagee pursuant to this paragraph, including interest and
reasonable attorneys' fees, shall become additional indebtedness of
the Mortgagor secured by this Mortgage. All amounts disbursed or
costs incurred by the Mortgagee pursuant to this paragraph shall be
payable upon demand, and shall bear interest from the date of
disbursement or incurrence at the rate set forth in the Note for a
default declaration, unless payment of interest at such rate would
be contrary to law, in which event such amounts shall bear interest
at the highest rate permitted by law. The Mortgagee shall, at its
option, be subrogated to any encumbrance, lien, claim or demand,
and to all the rights.and securities for the payment thereof, paid
or discharged with the principal sum secured hereby or by the
Mortgagee under the provisions hereof, and any such subrogation
rights shall be additional and cumulative security for this
Mortgage. Nothing contained in this paragraph shall require the
Mor-tgagee to incur any expense or do any act hereunder, and the
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Mortgagee shall not be liable to the Mortgagor for any damages or
claims arising out of action taken by the Mortgagee pursuant to
this paragraph.
1.9 Mortgagor's Covenant to Provide Information. Mortgagor
covenants to provide documentation and such other information as is
required by the terms and conditions of this Mortgage, the Loan
Agreement and all other documents or instruments of security
referred to in this Mortgage.
ARTICLE TWO
EVENTS OF DEFAULT
Each of the following occurrences shall constitute an Event of
Default hereunder:
2.1 Failure to Pay. The Mortgagor's failure to pay, when
due, any payment of principal on the Note or any other amount
required to be paid by Mortgagor hereunder.
2.2 Other Performance Failure. The Mortgagor's failure duly
to observe or perform any of the other terms, conditions, covenants
or agreements required to be observed or performed by the Mortgagor
hereunder or pursuant to any other agreement between Mortgagor and
Mortgagee, specifically including the Loan Agreement.
2.3 Breach of Warranty of Title. The breach of any warranty
of title made by the Mortgagor hereunder.
2.4 Misrepresentation. The making of any misrepresentation
in any financial statement or report submitted to the Mortgagee by
or on behalf of the Mortgagor.
2.5 Entry of Judgment. The entry of a final judgment for the
payment of money in excess of One Hundred Thousand and no/lO0
Dollars ($100,000.00) against Mortgagor, undischarged for a period
of thirty (30) consecutive days while execution shall not be
effectively stayed.
2.8 Voluntary Bankruptcy. The filing of a petition in
bankruptcy by the Mortgagor, or its request or consent to the
appointment of a receiver or trustee for the Mortgagor or for all
or any part of its property, or the making of a general assignment
for the benefit of creditors.
2.7 Involuntary Bankruptcy or Receivership. The entry of an
order, judgment or decree appointing, without the consent of
Mortgagor, a receiver or trustee for it or for all or any part of
its property or approving a petition filed against it seeking
relief under the bankruptcy laws of the United States or similar
laws of any state Qr other competent jurisdiction, which order,
judgment or decree shall have remained in force undischarged or
unstayed for a period of thirty (30) days.
2.8 Foreclosure. The institution of foreclosure or other
enforcement proceedings by the holder of any other lien on the
Mortgaged Property (without hereby implying Mortgagee's consent to
any mortgage or other lien).
2.9 Sale of Property. A sale, assignment, conveyance,
encumbrance or transfer of the Mortgaged Property, or any part
thereof, or any interest therein (except leases for a term of less
than three (3) years) without the prior written consent of the
Mortgagee, which consent may be granted or withheld by Mortgagee at
its sole discretion.
2.10 Tax Increment Financing. The Mortgagor has obtained Tax
Increment Financing in connection with development of the Land.
Default in any terms or conditions of the requirements for payment
in connection therewith shall be deemed an Event of Default.
ARTICLE THREE
ACCELERATION AND FORECLOSURE; OTHER REMEDIES
Upon any Event of Default, the Mortgagee may, at its option,
exercise one or more of the fo]lowing rights and remedies (and any
other rights and remedies available to it):
3.1 Acceleration. The Mortgagee may declare immediately due
and payable all unmatured Indebtedness secured by this Mortgage,
and the same shall thereupon be immediately due and payable,
without notice or demand.
3.2 Foreclosure; Action or Advertisement. The Mortgagee may
(and is hereby authorized and empowered to) foreclose this Mortgage
by action or advertisement, pursuant to the statutes of the State
of Minnesota in such case made and provided, power being expressly
granted to sell the Mortgaged Property at public auction and convey
the same to the purchaser in fee simple and, out of the proceeds
arising from such sa]e, to pay all Indebtedness secured hereby with
interest, and all legal costs and charges of such foreclosure and
the maximum attorneys' fees permitted by law, which costs, charges
and fees the Mortgagor agrees to pay. Any rea] estate or interest
or estate sold hereunder may be sold in one parcel, as an entirety,
or in such parcels and in such manner or order as the Mortgagee, in
its sole discretion, may elect. In case of any sale of the
Mortgaged Property pursuant to any judgment or decree of any court
or at public auction or otherwise in connection with the
enforcement of any of the terms of this Mortgage, the Mortgagee,
its successors and assigns, may become the purchaser, and for the
purpose of making settlement for or payment of the purchase price,
shall be entitled to deliver over and use the Note and any claims
for interest accrued and unpaid thereon, together with all other
sums, with interest, advanced and unpaid hereunder, and all
statutory charges for such foreclosure including maximum attorneys'
fees allowed by law in order that there may be credited as paid on
the purchase price the sum then due under the Note including
principal and interest thereon and all other sums, with interest,
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advanced and unpaid hereunder, and all charges and expenses of such
foreclosure including maximum attorneys' fees allowed by law.
Mortgagor acknowledges that if the Mortgagee elects to foreclose by
advertisement and cause the Property or any part thereof to be sold
at public auction, notice of such sale must be published at least
once a week for six (6) successive weeks in a newspaper of general
circulation and that personal notice is not required to be served
upon Mortgagor. Mortgagor further understands that under the
Constitution of the United States and the Constitution of the State
of Minnesota it may have the right to notice and hearing before the
Property may be sold and that the procedure for foreclosure by
advertisement described above does not insure that notice will be
given and said procedure for foreclosure by advertisement does not
require any hearing or other judicial proceeding. MORTGAGOR HEREBY
RELINQUISHES, WAIVES AND GIVES UP ANY AND ALL OF THE CONSTITUTIONAL
RIGHTS TO NOTICE AND HEARING BEFORE SALE OF THE PROPERTY AND
EXPRESSLY CONSENTS AND AGREES THAT THE PREMISES MAY BE FORECLOSED
BY ADVERTISEMENT ALL AS DESCRIBED ABOVE. MORTGAGOR ACKNOWLEDGES
THAT IT IS REPRESENTED BY LEGAL COUNSEL; THAT BEFORE SIGNING THIS
DOCUMENT THIS PARAGRAPH AND MORTGAGOR'S CONSTITUTIONAL RIGHTS WERE
FULLY EXPLAINED BY SUCH COUNSEL AND THAT MORTGAGOR UNDERSTANDS THE
NATURE AND EXTENT OF THE RIGHTS WAIVED HEREBY AND THE EFFECT OF
SUCH WAIVER.
3.3 Forbearance and Other Rights of Mortgagee. Any delay by
the Mortgagee in exercising any right or remedy hereunder, or
otherwise afforded by law or equity, shall not be a waiver of or
preclude the exercise of such right or remedy or any other right or
remedy hereunder or at law or in equity. The failure of the
Mortgagee to exercise any option to accelerate maturity of the
Indebtedness secured by the Mortgage, the forbearance by the
Mortgagee before or after the exercise of such option, or the
withdrawal or abandonment of proceedings provided for by this
Mortgage shall not be a waiver of the right to exercise such option
or to accelerate the maturity of such Indebtedness by reason of any
past, present or future event which would permit acceleration. The
procurement of insurance or the payment of taxes or other liens or
charges by the Mortgagee shall not be a waiver of the Mortgagee's
right to accelerate the maturity of the Indebtedness. The
Mortgagee's receipt of any awards, proceeds or damages shall not
operate to cure or waive default by the Mortgagor. The Mortgagee
may at any time, without notice, release any person liable for
payment of any Indebtedness, extend the time or agree to alter the
terms of payment of any of the Indebtedness, accept additional
security of any kind, release any plat or map of the Mortgaged
Property or the creation of any easement thereon or any covenants
restricting use or occupancy thereof, or alter or amend the terms
of this Mortgage in any way. No such release, modification,
addition or change shall affect the liability of any person other
than the person so released, for payment of any Indebtedness, nor
the pr'~ority and first lien status of this Mortgage upon any
property not so released.
ARTICLE FOUR
CONDEMNATION
4.1 Notice. Mortgagor will give the Mortgagee prompt notice
of any action, actual or threatened, in condemnation or eminent
domain, direct or inverse.
4.2 Awards. Mortgagor hereby assigns, transfers, and sets
over to the Mortgagee the entire proceeds of any award or payment
which becomes payable by reason of any taking of or damage to the
Mortgaged Property, or any part or appurtenance thereof, either
temporarily, permanently, in or by condemnation or other eminent
domain proceedings or by reason of sale under threat thereof, or in
anticipation of the exercise of the right of condemnation or other
eminent domain proceedings. The Mortgagor will file or prosecute
in good faith and with due diligence what would otherwise be its
claim in any such award or payment and cause the same to be
collected and paid over to the Mortgagee, and the Mortgagor
irrevocably authorizes and empowers the Mortgagee, which power is
coupled with an interest and is irrevocable, in the name of the
Mortgagor or otherwise, in the event that the Mortgagor fails to do
so, to file and prosecute any such claim and to collect, receipt
for and retain the same. The proceeds or the award or payment,
after deducting all reasonable costs, attorneys fees and other
expenses which may have been incurred by the Mortgagee in
collection thereof, at the sole discretion of the Mortgagee, may be
released to the Mortgagor, applied to restoration of the Mortgaged
Property or applied to the payment of any part of the Indebtedness,
in such order of application as the Mortgagee may determine.
ARTICLE FIVE
MISCELLANEOUS
5.1 Mortgagee's Remedies Cumulative. All remedies of the
Mortgagee are distinct and cumulative to any other right or remedy
under this Mortgage or afforded by law or equity, and may be
exercised concurrently or independently, as often as the occasion
therefore arises.
5.2 Successors and Assigns Bound; Captions. The covenants
and agreements herein contained shall bind, and the rights
hereunder shall inure to, the respective heirs, legal
representatives, successors and assigns of the Mortgagee and the
Mortgagor. The captions and headings of the paragraphs of this
Mortgage are for convenience only and are not to be used to
interpret or define the provisions hereof.
5.3 Notice. Any notice from the Mortgagee to the Mortgagor
under this Mortgage shall be deemed to have been given by the
Mortgagee and received by the Mortgagor when mailed by certified
mail by the Mortgagee to the Mortgagor at the following address:
9
Tasks Unlimited Lodges
Attn:
2419 Nicotlet Avenue South
Minneapolis, MN 55404-3450
or at such other address as the Mortgagor may designate in writing
to the Mortgagee.
5.4 Governing Law; Severabilit¥. This Mortgage shall be
governed by the laws of the State of Minnesota. In the event that
any provision or clause of this Mortgage conflicts with applicable
taw, such conflict shall not affect other provisions of this
Mortgage which can be given effect without conflicting provisions
and to this end the provisions of the Mortgage are declared to be
severable.
5.5 Counterparts. This Mortgage may be executed in any
number of counterparts, each of which shall be an original but all
of which together shall constitute one instrument.
5.6 Waiver of Appraisement, Homestead, Marshaling. The
Mortgagor hereby waives the benefit of any homestead, appraisement,
evaluation, stay and extension laws now or hereinafter in force.
Mortgagor hereby waives any rights available with respect to
marshaling of assets so as to require the separate sales of any
portion of the Property, or to require the Mortgagee to exhaust its
remedies against a specific portion of the Property before
proceeding against the other.
5.7 Subsequent Agreements. Any agreement hereafter made by
Mortgagor and Mortgagee pursuant to this Mortgage shall be superior
to the rights of the holder of any intervening lien or encumbrance.
5.8 Hazardous Materials. Mortgagor covenants, represents and
warrants to Mortgagee, its successors and assigns, that during the
Mortgagor's ownership of the Property, the operation of said
Property has not violated and is not currently violating any
federal, state or local law, regulation, ordinance or requirement
governing Hazardous Materials; that the Property is not listed in
the United States Environmental Protection Agency's National
Priorities List of Hazardous Waste Sites nor any other list,
schedule, log, inventory or record of Hazardous Materials or
hazardous waste sites, whether maintained by the United States
Government or any state or local agency, and that the building
improvements do not contain any formaldehyde, urea or asbestos,
except as may have been disclosed in writing to the Mortgagee by
the Mortgagor at the time of execution and delivery of this
Mortgage. The Mortgagor agrees to indemnify and reimburse the
Mortgagee, its successors and assigns, for any breach of these
representations and warranties and from any loss, damage, expense
or cost arising out of or incurred by Mortgagee which is the result
of a breach of, misstatement of or misrepresentation of the above
covenants, representations and warranties, together with all
attorneys' fees incurred in connection with the defense of any
action against the Mortgagee arising out of the above. These
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covenants, representations and warranties shall be deemed
continuing covenants, representations and warranties for the
benefit of the Mortgagee, including any purchaser at a mortgage
foreclosure sale, any transferee of the title of the Mortgagee or
any subsequent purchaser at a foreclosure sale, and any subsequent
owner of the Property and shall survive any foreclosure of the
Mortgage and any acquisition of title by Mortgagee or anyone
claiming through or under the Mortgage as the title of the
Mortgagee. The amount of all such indemnified loss, damage,
expense or cost, shall bear interest thereon at the rate of
interest in effect after a default declaration on the Note and
shall become so much additional indebtedness, secured by this
Mortgage and shall become immediately due and payable in full on
demand of the Mortgagee, its successors and assigns. Said
indemnity shall only apply in connection with the conditions which
were in existence, in whole or in part, prior to the date on which
Mortgagee acquires possession and title to the Property and shall
not apply in connection with liability of the Mortgagee due to
action taken by it or its assigns while it was Mortgagee.
5.9 Future Advances.
(a) To the extent that this Mortgage secures future
advances, the amount of such advances is not currently
known. The acceptance of this Mortgage by the Mortgagee,
however, constitutes an acknowledgement that the
Mortgagee is aware of the provisions of Minnesota
Statutes §287.05, Subd. 5, and intends to comply with the
requirements contained therein.
(b) The maximum principal amount of indebtedness
secured by this Mortgage at any one time, excluding
advances made by the Mortgagee in protection of the
mortgaged property or the lien of this Mortgage, shall be
$90,000.00.
(c) The representations contained in this section
are made solely for the benefit of the county recording
authorities in determining the mortgage registry tax
payable as a prerequisite to the recording of this
Mortgage. The Mortgagor acknowledges that such
representations do not constitute or imply any agreement
by the Mortgagee to make any future advances to the
Mortgagor.
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IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to
be duly executed as of the day and year first above written.
TASKS UNLIMITED LODGES, a
Minnesota non-profit corporation
By.
Its
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this
day of September, 1996, by and
, the and
, respective]y, of Tasks Unlimited Lodges, a
Minnesota non-profit corporation, on behalf of the non-profit
corporation,
Notary Public
THIS INSTRUMENT DRAFTED BY:
CORRICK & SONDRALL, P.A.
8525 Edinbrook Crossing
Brooklyn Park, MN 55443
(612) 425-5671
99.11169
tasks, mt9
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