080894 EDA Official File Copy
CiTY OF NEW HOPE I EDA AGENDA
EDA Regular Meeting #10 August 8, 1994
President Edward J. Erickson
Commissioner W. Peter Enck
Commissioner Gerald Otten
Commissioner Terri Wehling
Commissioner Marky Williamson
1. Call to Order
2. Roll Call
3. Approval of Minutes of July 25, 1994
4. Resolution Approving the Section 8 Housing Assistance Payments Program
Contract for Administrative Services Between the Metropolitan Council and the
City of New Hope and Authorizing President and Executive Director to Execute
Agreement
5. Consideration of Request to Delay Payment of Real Estate Taxes, Foremost, Inc.,
7528 42nd Avenue North (#474)
6. Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
HENNEPIN COUNTY, MINNESOTA 55428
Approved EDA Minutes July 25, 1994
Meeting //9
CALL TO ORDER President Erickson called the meeting of the Economic Development
Authority to order at 7:18 p.m.
ROLL CALL Present: Erickson, Enck, Otten, Williamson, Wehling
Absent: None
APPROVE MINUTES Motion was made by Commissioner Williamson, seconded by
Commissioner Enck, to approve the EDA minutes of June 27, 1994. All
present voted in favor. Motion carried.
REDEVELOPMENT President Erickson introduced for discussion Item 4, Resolution Approving
PLANS Master Modification to Redevelopment Plans and Tax Increment Financing
Item 4 Plans and Requesting the Approval of the City Council.
Mr. Donahue stated that this agenda item should be considered prior to the
City Council public hearing because the Economic Development Authority
is making a recommendation to City Council to consider modifications to
the Redevelopment Plan and Tax Increment Financing Plan and making
findings with respect thereto. Mr. Dorrahue stated that any time the
Redevelopment Plan for the City is changed, it is required to hold a public
hearing if it involves tax increment financing. The City has six tax
increment districts and what staff is asking for is modification to the plan
in order to create a master plan. The reasons for the master plan
modifications is to have the ability to .undertake certain activities designed
to remove, prevent, and reduce blight and the cause of blight in the City.
In addition, the City wants the ability to provide for facilities intended to
serve all residents of the City. The purpose of modification of the plans
is to set up a future financing mechanism to be in a position to help
finance both housing programs and the possibility of a community center
if it is agreed to at a later date. Mr. Donahue stated that the City has six
redevelopment plans that now exist. He said the City has six tax
increment financing districts and the purpose of tax increment financing
is that the benefiting properties which makes up the district, benefit from
the proceeds of tax increment financing. The tax increment financing is
that difference between the frozen value of when the project starts to the
increased value due to the new development. Mr. Donahue said the six
districts'are as follows:
1) 61st and W. Broadway - Anthony James Senior Housing
Project
2) North Ridge - Care Center
North Ridge - Senior Housing
3) Volunteers of America - 44th and Xylon
4) 36th & Hillsboro
5) Apartment Complex located on 36th Avenue
6) Includes the 42nd Avenue Redevelopment Plan
New Hope EDA July 25, 1994
Page I
Mr. Donahue explained that what the City would like to do is to modif~
of the six plans within the six districts to incorporate and pool the exc
tax increment funds to benefit properties. He said the objective is.
combine the six tax increment districts to the redevelopment plans and
inclusion of additional properties (274) that will aid in the redevelopm
of properties specified in the master plan in a manner beneficial to
residents of the City and consistent with the objectives of the Econo
Development Authority. It will also aid in the construction of a pu
facility (community center) which will serve all residents of the City if i
decided to proceed. Mr. Donahue stated that a maximum budget ha,~
be established. He said that over the next ten years there will
approximately $15 million in excess funds that could possibly be used.
said that $6 million will be set aside for multi-family housing, acquisil
and rehab, $4 million for single family housing, acquisition and rehab.
million for commercial rehab and a community center of $4 million. -I
money could only be spent within the tax increment district and only if
Council and Economic Development Authority decides that suffici
acquisition and rehab is warranted because of blight, blighting conditi
or other factors leading to substandard housing in the City.
Mayor Erickson asked Mr. Donahue to explain to the audience what
legal uses of tax increment financing is so that it is understood th~
cannot be used for budget purposes. Mr. Donahue said that the increm
generated by the properties within a district can only benefit th
properties in the district. The only exception in the law is that funds
be spent for a community center facility. Tax increment money canno'
spent on City operations, new City Hall, fire trucks, etc., but only th
benefits to the property. Mr. Donahue said there are very specific.
limited uses to tax increment financing and how the money can be s~
is controlled by state law.
EDA RESOLUTION Commissioner Enck introduced the following resolution and moved
94-07 adoption: "RESOLUTION APPROVING MASTER MODIFICATION
REDEVELOPMENT PLANS AND TAX INCREMENT FINANCING PLANS ~
REQUESTING THE APPROVAL OF THE CITY COUNCIL," The motion
adoption of the foregoing resolution was seconded by Commissi¢
Otten, and upon vote being taken thereon the following voted in f~
thereof: Erickson, Otten, Williamson, Enck, Wehling; and the follo~,
voted against the same: None; Absent: None; whereupon the resolu
was declared duly passed and adopted, signed by the president which ~
attested to by the executive director.
SUSPEND MEETING The EDA meeting was suspended at 7:21 p.m.
RECONVENE MEETING The EDA meeting was reconvened at 9:01 p.m.
LAND TRUST President Erickson introduced for discussion Item 4, Resolution Establist
Item 5 the Economic Development Authority as a Neighborhood Land Trust to
as Authorized by Minn. Stat. § §462A.30 and 462A.31.
City Manager Donahue stated that the Economic Development Authc
had some questions relative to the State of Minnesota's Land Trust
and how this impacts cities. He explained that the property is owneC
the City and the homeowner leases it from the City. President Ericks
New Hope EDA July 25, 1994'~ "
Page 2 '
inquired about maintenance of the property if a person is disabled and
unable to care for the prQper~y~ Mr.~ D. o0a!~ue said he saw no difference
in this property than any other property in the City, if the weeds grow and
the grass gets high, the property owner gets an order, the City cuts the
grass if necessary, .and the cost is billed back to the property owner.
President Erickson inquired if an agreement would have to be signed for
the responsibility of maintenance. City Attorney Sondrall stated the home
would have to be maintained and the property maintained in accordance
with all of the building maintenance codes that regulate property.
Commissioner Enck inquired if City personnel have to cut weeds and it is
assessed against the property owner and that is the City of New Hope, is
that not assessing ourselves. Mr. Donahue said the owner of the home
who is leasing the property is responsible and will go against their taxes.
City Attorney Sondrall explained that a lease payment will be made to the
City under the lease agreement and part of that lease payment would be
1/12 of the property taxes that are attributable to that land so the land is
not tax free. He said the purpose of the program is to allow the City as a
land trust to underwrite the cost of the land and continue to own the land
so that the acquisition of the land is not necessary to construct the house.
Commissioner Enck stated one of his concerns is how long the City will
own this property. He said he sees too many complications long range in
trying to sell this property in the future. He went on to say he is
concerned about the exposure of being a property owner if contaminants
are found on the property. He stated he is opposed to the City proceeding
with this dual ownership type of lease.
City Attorney sondrall said that CO-OP Northwest Community
Revitalization Corporation is a qualifying non-profit association and also
can establish itself as a land trust if it desires to do so. He said it is his
understanding that because the City owned the property and wanted to
control the development of the property, it was desirous of establishing
itself as a land trust. If the City would like to sell the property to CO-OP
Northwest and allow them to develop it, they could apply for the funding.
He said this is a funding vehicle wherein the City is able to obtain state
General Obligation Bond money for the project by establishing the City as
a land trust. He said the establishment as a land trust also allows the City
in conjunction with CO-OP Northwest to work with the county on the
HOME Program that would allow for CO-OP Northwest to receive monies
in the form of mortgages from the county for the purpose of assisting the
owners of the structure to obtain financing to build the structure.
Commissioner Enck questioned Mr. Donahue if New Hope has more
subsidized, Iow income housing units than any other community in the
metro area. Mr. Donahue stated the City has recipients of Section 8
dollars and most of it is going toward rental property. He said the City is
high in subsidy given for rental property, but for single family home
ownership there is not very much that is subsidized. Commissioner Enck
stated although that is not the issue here, the legal aspects of attempting
to coordinate between the owner of the property being one and the owner
of the structure being another, the assessments, maintenance of the lease,
and complications at time of sale, he said he is not comfortable with the
situation.
New Hope EDA July 25, 1994
Page 3
President Erickson questioned Mr. Donahue about the clean-up of the site
in question. Mr. Donahue replied that the building has been burned, the
City received the contract today for the final site clearance. He said there
are three sources of funds for this project: CDBG funds, HOME funds, and
the land trust and everything has to work together. He said if the land
trust is not agreed to, then staff would ask the EDA not to consider Items
6 and 7 on this agenda. He said staff would have to work out some
alternate options. He said the award of HOME funds was based on this
project.
Commissioner Enck stated his inclination would be to ask staff to forego
the grant, clean up the property and put it on the market for sale.
President Erickson stated that some legitimate concerns were raised on
this issue and the EDA would like staff to address some of those concerns
and bring this item back to the next EDA meeting.
MOTION Motion by Commissioner Enck, seconded by Commissioner Wehling, to
Item 5 table Item 5 (Establishing the Economic Development Authority as a
Neighborhood Land Trust) until the August 8, 1994 EDA meeting to enable
staff to gather more information. Voting in favor: All. Motion carried.
IMP. PROJECT 505 President Erickson introduced for discussion Item 6, Resolution Establishing
Item 6 Development Relationship with CO-OP Northwest Community
Revitalization Corporation to Construct Specially Designed Twin Homes at
5009 Winnetka Avenue North (Improvement Project 505).
Motion Motion by Commissioner Enck, seconded by Commissioner Wehling, to
Item 6 table Item 6 (Improvement Project 505) until the August 8, 1994 EDA
meeting. Voting in favor: All. Motion carried.
5009 WINNETKA President Erickson introduced for discussion Item 7, Resolution Approving
Item 7 Thompson Associates to Screen Applicants that Wish to Purchase the
Twin Home to be Built at 5009 Winnetka Avenue North.
MOTION Motion by Commissioner Enck, seconded by Commissioner Wehling to
Item 7 table Item 7 (Improvement Project 505) until the August 8, 1994
Economic Development Authority meeting. Voting in favor: All. Motion
carried.
ALL STAR SPORTS President Erickson introduced for discussion Item 8, Consideration of
#492 Request by All Star Sports for Assistance with Site Improvements.
Item 8
President Erickson stated he would like to see a site plan before any action
is taken'on this matter. Commissioner Enck stated he believes the site
improvement includes blacktop, handicap access door, and pylon sign.
Commissioner Enck questioned if there is any enhancement to 42nd
Avenue with this site improvement. Mr. Donahue asked for the EDA's
direction in whether the parking lot and pylon sign constitutes
improvements that would enhance 42nd Avenue. Commissioner Enck
suggested denying the request by All Star Sports for assistance with a Iow
interest loan. Mr. Donahue asked if All Star Sports reapplied, what is it
that the EDA needs from them to consider the request. Commissioner
Enck said he would like to have the whole facility look better rather than
putting up a sign and redoing the blacktop which are maintenance items.
New Hope EDA July 25, 1994
Page 4
MOTION Motion by Commissioner Enck, seconded by Commissioner Otten to deny
Item 8 the request by All Star Sports for Assistance with Site Improvements.
Voting in favor: All. Motion carried.
AUTOHAUS Mr. Donahue asked the President if he could add Item 9. He presented a
#467 letter from Autohaus requesting the EDA to allow the existing retaining
Item 9 wall to remain in place five feet from the property line, due to the fact that
Universal Colour Lab, Inc. will be extending their lease and the plan for the
front display area will be delayed. Mr. Donahue said the basis for the ten
feet setback on the retaining wall was that Autohaus was going to use
that area for display of vehicles and not a parking lot or driveway. He said
Autohaus will be extending their lease to Universal Color Lab for at least
one year so there is a dual use of the property. Mr. Donahue said
Autohaus is asking for consideration to leave the retaining wall at five feet
and thus use it as a parking lot and driveway. Mr. Donahue said putting
it out five feet causes more problems for traffic.
Commissioner Enck suggested staff look at all of the outstanding issues in
this matter and address what guarantees were made by Autohaus on the
timing and removal of the tenant before this issue is addressed any further.
President Erickson asked if this will have an impact on the 42nd Avenue
beautification plan. Mr. Donahue said the City cannot proceed with any
curb improvement on the property in conjunction with the 42nd Avenue
Landscape/Maintenance Improvement Project until the retaining wall issue
is resolved. The EDA recommended that staff review the agreements
made with Autohaus and bring it back before the Economic Development
Authority at a future meeting.
ADJOURNMENT Motion was made by Commissioner Enck, seconded by Commissioner
Otten adjourn the meeting. All present voted in favor. The New Hope
EDA adjourned at 9:30 p.m.
Respectfully submitted,
New Hope EDA July 25, 1994
Page 5
~ EDA
REQUF~T FOR ACTION
originating Department Approved for Agenda Agenda Section
City Manager EDA
~'x 8-8-94
Kirk
McDonald
i/ ) Item No.
By: Management Assistant By:j / 4
RESOLUTION APPROVING THE SF,~TION 8 HOUSING ASSISTANCE
pAyMENTS
PROGRAM CONTRACT FOR A/DMINISTRATIVE SERVICES BETWEEN THE
METROPOLITAN COUNCIL AND THE CITY OF NEW HOPE AN/) AUTHORIZING
PRESIDENT AND EXECUTIVE DIRECTOR TO EXECUTE AGREEMENT
This revised contract establishes the responsibilities of the Metropolitan Council and the City of
New Hope in managing the Section 8 Housing Assistance Program.
There are two basic changes in the contract:
1. The administration fee available to the Ci_ty will increase from $16.56 per unit/month to
$21.00 per unit/month for basic administrative services. (The contract allows the City
to receive an increase in fee for program management concurrent with an increase fee
available to the Metropolitan Council. The fee increases are regulated by the Department
of Housing and Urban Development.)
2. The Metropolitan Council will pay ongoing administrative fees on a monthly basis, even
though the City will only be required to submit quarterly invoices/reports. (The City is
currently required to submit monthly invoices/reports.)
Staff finds that the $21.00 per unit/month is an adequate administration fee. Currently 255
families in New Hope receive assistance from this program.
Staff recommends approval of the resolution.
MOTION BY ~~ SECOND BY
!
Review: Administration: Finance:
RFA ,O01
CITY OF NEW HOPE
RESOLUTION NO. 94-
RESOLUTION APPROVING THE SECTION 8 HOUSING ASSISTANCE PAYMENTS
PROGRAM CONTRACT FOR ADMINISTRATIVE SERVICES BETWEEN THE
METROPOLITAN COUNCIL AND THE CITY OF NEW HOPE AND
AUTHORIZING PRESIDENT AND EXECUTIVE DIRECTOR
TO EXECUTE AGREEMENT
WHEREAS, the Metropolitan Council is engaged in a program to provide rent assistance
payments to low-income elderly, disabled, and handicapped families and to assist
them in obtaining adequate housing; and
WHEREAS, the Metropolitan Council has received funding from the United States Department
of Housing and Urban Development (HUD) under a HUD Section 8 Existing
Housing Assistance Payments Program, Master Annual Contributions Contract
to act as a public housing agency to implement the program; and
WHEREAS, the City of New Hope desires to participate in this program and to assist eligible
individuals and families to obtain decent, safe, and sanitary housing in the City
of New Hope at prices they can afford; and
WHEREAS, the Metropolitan Council desires to purchase certain necessary administrative
services from the City of New Hope in connection with carrying out the program;
and
WHEREAS, the Metropolitan Council is authorized to execute an agreement for the purchase
of program services and to take all action specified or contemplated herein
pursuant to Minnesota Statutes Section '473.195.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of the City
of New Hope, Hennepin County, Minnesota, that the Section 8 Housing
Assistance Payments Program Contract for Administrative Services is approved
and the President and Executive Director are authorized to sign.
Adopted by the Economic Development Authority of the City of New Hope this 8th day of
August, 1994.
President
Attest:
Executive Director
. Metropolitan Council
Advocatin9 regional economic, soc,.etal and e,~,vironmen~al issues and solutions
July 29, 1994
Mr. Kirk McDonald
New Hope City Hall
4401 Xylon Avenue
New Hope, MN 55428
Re: Revised Section 8 Program Administrative Services Contract
Dear Kirk:
Enclosed for execution is a revised contract under which the Carver County HRA will provide
Section 8 administrative services for the Metropolitan Council. The revised contract reflects the
Metropolitan Council's recent approval of higher administrative fees for contractors performing
Section 8 program administrative services on behalf of the Metropolitan Council. This revised
administrative services contract is similar to the current contract between the Carver County HRA
and the Metropolitan Council but also contains other provisions approved by the Metropolitan ~
Council at its May 5, 1994 regular meeting. The following is a summary of some of the new
provisions:
Basic and Enhanced Administrative Services. The contract requires the Carver County HRA to
perform 'basic' Section 8 administrative services similar to the administrative services currently
performed by the Carver County HRA under the existing administrative services contract. However,
the contract also permits the Carver County HtLa. to perform certain "enhanced' Section 8
administrative services.
Administrative Fees. The Council will pay an ongoing administrative fee on a per-unit-per-month
basis. The current ongoing administrative fee for 'basic' administrative services is $21.00. That fee
amount will be increase or decrease at the same time and by the same percentage the Council's
ongoing administrative fee from HUD is increased or decreased. If the Carver County HRA later
decides to perform the 'enhanced" Section 8 administrative services, the ongoing administrative fee
received by the Carver County I-IRA will be increased by 12.81 percent. Based on the currently
prevail/hi on/oin~ administrati~ fee amount of $21.00, a public housing authority providing the
'enhanced' Section 8 administrative services currently would receive $21.00 plus an additional :[;2.69
for a total fee p~,ment of $23.69 calculated as follows: $21.00 + ($21.00 × .1281) = $23.69. Since
thc 'enhanced' administrative services fee is a fixed percentage of the 'basic" administrative services
fee amount, the current $2.69 amount will increase or decrease as the 'basic' administrative services
fee amount increases or decreases.
Full Utilization Limit. Because the Council attempts to keep its Section 8 program running at full
capacity, the Council sometimes uses slightly more than 100 percent of its Section 8 ACC fund
allocation from HUD. The overutilization eXl~nSes will be borne internally by the Council and all
its Section 8 administrative services contractors. Accordingly, the Council will pay to the Carver
County I-IRA those ongoing administrative fee amounts which will not result in the Council using
Mears Park Centre 230 East Fifth Street St. Paul, Minnesota 55101-1634 612 291-6359 Fax 291-6550 TDD 291-0904
{~)1 Recycled An Equal Opportunity Employer
Pal=er
more than 100 percent of the Council's Section 8 ACC fund allocation from HUD.
Portability Adjustment. Since the Council only receives 80 percent of an Initial PHA's ongoing
administrative fee for families 'porting' into the Council's Section 8 program jurisdiction, the Council
will pay to the Carver County HRA only 80 percent of the then-prevailing ongoing administrative fee
for each unit month a Section 8 family receiving Section 8 assistance under the portability provisions
receives assistance in the jurisdictions serviced by Carver County HR.A.
Method of Payment. The Council will pay ongoing administrative fees, enhanced fees (if applicable),
and hard-to-house fees on a monthly basis, even though the Carver County HRA only will be
required to submit quarterly invoices/reports. The fees reimbursement payments to the' Carver
County HRA will be based on the number of units as indicated in Metro HRA's monthly utilization
reports and monthly hard-to-house reports, rather than Carver County I-IRA's unit counts.
Operating Reserve. The contract permits the Carver County HR~ to accumulate in its operating
reserve account up to $10,000 per year for payment of future Section 8 administrative expenses or
for the payment of expenditures related to the provision of affordable housing for low- or moderate-
income familiea.
Prior Contracts. The current administrative services contract between the Carver County HRA and
the Council will terminate upon final execution of this contract.
Please sign and date both copies of the contract and return both copies to me for final execution by'
the Council. I will return one fully executed copy to you. Please call me if you have any questions.
Sincerely,
Thomas McElveen
Metro HRA Unit Manager
(612) 291-6306
Contract No.
SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM
CONTRACT FOR ADMINISTRATIVE SERVICES
CITY OF NEW HOPE
THIS ADMINISTRATIVE SERVICES CONTRACT is made and entered into by the Metropolitan
Council ("Council") and the City of New Hope ("Contractor").
WHEREAS, the Council is authorized by Minnesota Statutes section 473.t95 to function as a housing
and redevelopment authority throughout the seven-county metropolitan area and exercises its
statutory authority through its Homing and Redevelopment Authority unit; and
WHEREAS, the Council has entered into an Annual Contributions Contract ("ACC") with the U.S.
Department of Homing and Urban Development ("HUD") and has federal contract authority to
operate a federal Section 8 homing assistance payments program ("Section 8 program') within the
seven-county "metropolitan area" as del'reed by Minnesota Statutes section 473.121; and
WHEREAS, the City of New Hope is a public body, corporate and politic, duly organized under the
laws of Minnesota and is authorized to perform the administrative services contemplated by this
contract; and
WHEREAS, the City of New Hope performs certain Section 8 program administrative services within
the City of New Hope on behalf of the Council under a Section 8 program administrative services
contract ("Contract No. M-88-4").
NOW THEREFORE, in consideration of the mutual promises and covenants contained in this
contract, the City of New Hope and the Council agree as follows:
I. DEFINITIONS
1.0L Definition of Terms. For the purposes of this contract, the terms defined in this section have
the meanings given them in this section, except as otherwise provided or indicated by the context.
'(a) "Metropolitan Council" or "Council." The Metropolitan Council established bli Minnesota
Statutes section 473.123. When expressly stated or otherwise indicated by the context of this
contract, the term "Council" means the Metropolitan Council acting through its Homing and
Redevelopment Authority unit ("Metro HRA").
(b) "Contractor." The City of New Hope acting though its governing body and its duly authorized
or designated employees, staff, or agents.
(c) "Section 8prograrn." An existing homing assistance payments program under section 8 of the
United States Homing Act of 1937, title 42, United States Code, section 1437f, as amended.
Page 1 o.t' 11 pages
Section 8 program; maintaining lists of available dwelling units; and promptly notifying Metro
HRA staff of any Section 8 applicant and participant problems or changes in participant
status, including but not limited to, participant evictions, mutual lease terminations,
abandonment of dwelling units, lack of proper eligibility documentation, changes in household
composition and income, changes in property ownership, noncompliance with housing
assistance payments contract provisions, or noncompliance with HQS requirements.
(d) Program Requirements; Training. (1) The Contractor is responsible for developing and
maintaining a thorough understanding of 'the Section 8 program regulations and the
requirements and procedures set forth in manuals and other materials provided by the
Council. The Contractor agrees to send a representative to all Section 8 program training
sessions conducted by the Council.
(2) The Contractor shall provide adequate staff time and office or program space to
perform the Section 8 program administrative services contemplated by this contract and shall
make staff and office or program space available to Section 8 applicants and participants
during scheduled business hours approved by Metro HRA staff. The Contractor shall provide
adequate signs and other directional materials to inform applicants and prospective applicants
about the place and manner of making application. The Contractor shall keep available for
distribution adequate brochures and other information or materials as may be prepared by the
Council and shall supplement the brochures with local informational materials as appropriate
or needed. The manner of furnishing these services shall be agreed upon by the Contractor
and the Council. The Contractor and the Council shall from time to time confer about the
details of the furnishing of these services. The Contractor agrees to comply with reasonable
demands made by the Council concerning these program requirements.
(e) Notice of Actions and Claims. The Contractor will immediately notify Metro HRA staff by
telephone about any summons or other legal or judicial notices, including conciliation court
summons or notices, involving claims or disputes related to the administration of the Council's
Section 8 program within the jurisdictions identified in Exhibit A. The Contractor will
confirm its telephone notification by written notice within three (3) business days after the
telephone notification.
2.02 Enhanced Administrative Services. At the Contractor's option, the Contractor may perform
"enhanced`' Section 8 program administrative services.
(a) Additional Administrative Services. In addition to performing the "basic" Section 8 program
administrative services described in paragraph 2.01, the Contractor may perform the following
"enhanced" Section 8 program administrative services: entering file data through remote
computer connection to tho Council's Section 8 program data files; verifying,income and
other eligibility information for Section 8 applicants selected by the Council from the
Council's Section 8 waiting list for participation in the Section 8 program; determining
applicant and participant eligibility for Section 8 program assistance; conducting Section 8
program briefing sessions for applicant families selected for participation in the Council's
Section 8 program; conducting informal hearings to review denial, reduction, or termination
of Section 8 program assistance; processing housing assistance payments contract claims filed
by rental property owners; and conducting informal hearings to review and determine rental
property owner and Section 8 participant claim matters.
(b) Eligibility to Perform Enhanced Services. The Contractor.may perform the "enhanced" Section
8 program administrative services described in paragraph 2.02(a), commencing on January 1
of any year, if: by June 1 preceding the January 1 start date the Contractor has provided the
Page 3 of 11 pages
will be adjusted (increased or decreased) wheneVer the administrative fee received by the
Council from HUD for the Section 8 housing voucher or Section 8 certificate/moderate
rehabilitation programs changes. Effective upon written notice from the Council, the per-
unit-per-month flat fee reimbursement amount will be adjusted (increased or decreased)
whenever and by the same percentage the Council's ongoing administrative fee is adjusted
(increased or decreased) by HUD. Until otherwise indicated in writing by the Council, the
ongoing administrative fee payable to the Contractor is twenty-one dollars ($21.00) per-unit-
per-month. Notwithstanding any other provision of this contract, the Contractor and the
Council agree the twenty-one dollar ongoing administrative fee amount is payable for Section
8 administrative services performed by the Contractor since January 1, 1994 to the date of
contract execution. The Council will make a one-time lump-sum payment to the Contractor
to effectuate the retroactive application of this provision. The lump sum payment will
represent the difference between: the payments already made to the Contractor for services
rendered from January 1, 1994 to the date of contract execution; and the current $21.00 per-
unit-per-month reimbursement amount.
(b) Enhanced Services Administrative Fee. If the conditions stated in paragraphs 2.02(a) and
2.02(b) have been satisfied and the Contractor is performing the "enhanced" Section 8
program administrative services described in paragraph 2.02(a), the per-unit-per-month
ongoing administrative fee amount payable to the Contractor under paragraph 3.02(a) will be
increased by 12.81 percent [ ongoing administrative fee × 1.1281 ]. The 1.1281 multiplier
factor currently represents a $2.69 increase in the current $21.00 per-unit-per-month ongoing
administrative fee.
(c) Full Utilization Limit. The Contractor agrees it shall not receive from the Council any
ongoing administrative fee payment (as adjusted or enhanced under paragraphs 3.02(a) or
3.02(b) ), or portion of such payment if such payment or portion of such payment will result
in the Council using more than one hundred (100) percent of the Council's Section 8 ACC
fund allocation from HUD.
(d) Portability Adjustment. In accordance with the portability provisions of the federal laws
governing the Section 8 program, the Council receives from each "Initial PHA" eighty (80)
percent of the Initial PHA's ongoing administrative fee for each unit month a participant
family resides in the Council's Section 8 operating jurisdiction under the federal portability
provisions. Accordingly, the Contractor and the Council agree that, for each unit month a
Section 8 family receiving Section 8 assistance under the federal portability provisions resides
in the jurisdictions identified in F..xh~it A, the Contractor will receive from the Council only
eighty (80) percent of the administrative fees described in paragraph 3.02(a), and paragraph
3.02(b) as applicable.
(e) HaM-to-House Fee. Provide~i hard-to-home fees are reimbursed to the Council by HUD, the
Council shall pay to the Contractor on a monthly basis forty-five dollars ($45.00), or such
other increased or decreased fee amount established by law or by HUD, for each hard-to-
house famiIy actually homed in a different unit than the family's pre-program dwelling unit.
A hard-to-home family is a family with three or more minors. A hard-to-house family is
actually homed if both a lease and a homing assistance payments contract are executed. The
hard-to-home fee is not payable to the Contractor if the hard-to-house family remains in its
pre-program dwelling unit. The Council will pay the Contractor a hard-to-house fee each
time a hard-to-home assisted family moves to another dwelling unit with continued Section
8 assistance.
Page $ of 11 pages
V. CONTRACT TERM
5.01 Period of Performance. This contract is effective on the date this contract is finally executed
by the Council and shall continue until the earlier of the following: termination of Section 8 program
funding by HUD; or termination of this contract by either party pursuant to paragraph 5.02 of this
contract.
5.02 Termination of Contract. The Council and the Contractor both shall have the right to
terminate this contract at any time and for any reason by submitting written notice of termination to
the other party at least ninety (90) days prior to the specified effective date of the termination. In
addition, the Council shall have the right to terminate this contract on fourteen (14) calendar days'
written notice if the Contractor's performance is not timely or is substantially unsatisfactory, or if'the
Contractor has violated any of the terms, conditions, or agreements contained in this contract. In
either event, on the termination of this contract all finished and unfinished documents and work
papers and products prepared by the Contractor under this contract shall become the property of the
Council. On the termination of this contract, the Contractor will be paid for administrative services
satisfactorily performed up to the date of the contract termination according to the terms stated in
article III of this contract.
VI. CONTRACT PERFORMANCE AND MODIFICATION
6.01 Assignment. The Contractor shall perform with its own organization the total work provided
for under this contract and shall not assign, subcontract, sublet, or transfer any of the contract work
without the written consent of Metro HRA staff.
6.02 Prompt Payment of Subcontractors. If the Contractor receives prior written consent from the
Council pursuant to paragraph 6.01 of this contract and assigns, subcontracts, sublets, or transfers any
of the work provided for under this contract, the Contractor agrees to pay any subcontractor within
ten (10) days of the Contractor's receipt of payment from the Council for undisputed services
provided by the subcontractor(s). Thc Contractor further agrees to pay interest of one and one-half
(1¥2) percent per month or any part of a month to the subcontractor(s) on any undisputed amount
not paid on time to the subcontractor(s). The Contractor agrees the minimum monthly interest
penalty payment for an unpaid balance of one hundred dollars ($100.00) or more is ten dollars
($10.00). For an unpaid balance of leas than one hundred dollars ($100.00), the Contractor agrees
to pay the actual penalty due to the subcontractor(s).
6.03 Amendments. The tertm of this contract may be changed or modified by mutual agreement of
the parties. Such amendments, changes, or modifications shall be effective only on the execution of
written amendment(s) signed by the Council and the Contractor.
7.01 Indemnification. The Contractor agrees to indemnify and save and hold the Council, its agents,
and employees harmle~ from any and all claims or causes of action arising from the performance of
this contract by the Contractor or the Contractor's employees and agents. This clause shall not be
construed to bar any legal remedies the Contractor may have for the Council's failure to perform its
obligations under this contract.
7.02 Insurance. The Council assumes no liability with respect to bodily injury, illness, accident, theft,
or any other damages or losses concerning persons or property arising out of the use or maintenance
of Contractor's premises, equipment, or vehicles. The Contractor is responsible for providing
adequate imurance coverage to protect against lcgai liability arising out of the Contractor's activities
Page 7 of 11 pages
status, or natiOnal origin and with any implementing regulations. The ConJ:ractor shall comply
with Section 504 of the Rehabilitation Act of 1973, as amended, which prohibits
discrimination against handicapped persons who would otherwise qualify to participate in the
Section 8 homing certificate or housing voucher programs and, where applicable, the Age
Discrimination Act of 1975, as amended, which prohibits discrimination on the basis of age.
Unwed parents, families with children born out of wedlock, and recipients of public assistance
shall not be excluded from participation in or be denied the benefit of the Section 8 housing
certificate or housing voucher programs became of such status.
(b) State Laws. The Contractor shall comply with all applicable provisions of the Minnesota
Human Rights Act.
IX. GENERAL PROVISIONS
9.01 Conflict of Interest. The Contractor agrees to abide by federal and state conflict of interest
laws pertaining to the performance of this contract.
(a) Federal Conflict Provisions. (1) In accordance with part II, section 2.13 of the ACC [form
HUD-52520-E ] between HUD and the Council, the Contractor shall not enter into any
contract, subcontract, or arrangement in connection with the Section 8 homing certificate and
homing voucher programs in which any of the following classes of persons has an interest,
direct or indirect, during tenure or for one year thereafter:
(i) Any present or former member or officer of the Council or the Contractor, except
a 'tenant commissioner.'
(ii) Any employee of the Council or the Contractor who formulates policy or who
infiuences decisions with respect to the Section 8 homing certificate or homing voucher
programs.
(iii) Any public official, member of a governing body, or state or local legislator who
exercises functions or responsibilities with respect to the Section 8 housing certificate or
homing voucher programs.
(2) Any members of the classes described in paragraph 9.01(a)(1) must disclose their
interest or prospective interest to the Contractor, the Council, and HUD.
(3) The requirements of paragraph 9.01(a)(1) of this contract may be waived by ~ for
good cause. No person to whom a waiver is granted shall be permitted (in the capacity as
a member of a class described in paragraph 9.01(a)(1)) to exercise responsibilitie~or functions
with respect to a contract for homing assistance payment executed, or to be executed, on his
or her behalf, or with respect to a contract for homing assistance payments to which this
person is a party.
(4) No member of or delegate to the Congress of the United States of America or
resident commissioner shall be admitted to any share or part of this contract or to any
benefits which may arise from it.
(b) State Conflict Provisions. The members, officers, and employees of the Contractor will comply
with all applicable state statutory and regulatory conflict of interest laws, including Minnesota
Statutes section 469.009, as amended.
Page 9 o,f 11 pages
IN WITNESS WHEREOF, the Contractor and the Council have caused this contract to be executed
by their duly author/zed representatives.
Approved as to form: METROPOLITAN COUNCIL
By:
Assistant Counsel James Solem, Regional Administrator
Date:
CITY OF NEW HOPE
Its:
Date:
MfITI~O HRA
Page II of 11 pages
EXHIBIT A
CITY OF NEW HOPE
The City of New Hope ("Contractor") shall perform the Section 8 program contract services within
the City of New Hope located in Hennepin County, Minnesota.
~ EDA
REQUEST FOR ACTION
Originating Depaxtment Approved for Agenda Agenda Section
City Manager EDA
8-08-94
Kirk McDonald ~ I '"~ Item No.
By:Management Assistant By: ,// 5
/
CONSIDERATION OF REQUEST TO/DELAY PAYMENT OF REAL ESTATE TAXES,
FOREMOST, INC., 7528 42ND AVENUE NORTH (#474)
The EDA acquired the Foremost property at 7528 42nd Avenue for redevelopment purposes on
July 19, 1993. The City entered into a two-year lease with Foremost at that time, which
allowed Foremost to occupy the property for a 24-month period commencing on the date of
closing pursuant to the terms of the lease. The lease requires Foremost to pay all operating
expenses and real estate taxes during the course of the 24-month period in lieu of a specific
rental payment. Payments under the lease consist of the real estate taxes due May 15, 1994 (the
full year's taxes), and February 1, 1995 (a prorata share of taxes due and payable in 1995
through July 19, 1995). The City forwarded the property tax statement to Foremost, Inc. this
spring and the property taxes have not yet been paid.
Staff has contacted and met with the owner of Foremost, Inc. and per the enclosed letter, the
owner is requesting EDA consideration of allowing him to pay only the first half of taxes
at this time and paying the second half taxes this fall.
The City Attorney also officially notified Foremost, Inc. on June 20th that they were in default
of the lease agreement and that if the default was not corrected within 10 days after the notice
the EDA has remedies available to it, as set forth in the lease agreement. Said lease agreement
is enclosed.
s .co
Review: Administration: Finance:
RFA-O01 ~
INCORPORATED
7528- 42nd AVENUE NORTH MINNEAPOLIS, MINNESOTA 55427 * TELEPHONE: (612) 533-0793 FAX: (612) 533-3087
August 3, 1994
City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428
ATTN: Dan Donahue
Dear Dan;
I will need to pay the property taxes in two payments,
as Hennepin County requests.
Thank you.
Respectfully,
Allen Fredendall
President
AF:dj
PRECISION SHEET METAL · STAMPINGS · SILK SCREENING
4401 Xylon Avenue North Telephone: 612-531-5100 City Hall Fax: #612-531-5136
New Hope, Minnesota 55428-4898 TDD Line: 612-531-5109 Police Fax: #612-531-5174
Public Works Fax: #612-533-7650
May 6, 1994
Mr. Allen Fredendall
Foremost, Inc.
7528 42nd Avenue North
New Hope, MN 55428
· Subject: 1994 Property Tax Statement
Dear Mr. Fredendall:
Enclosed please find the 1994 tax statement for 7528 42nd Avenue North. Per the City's
agreement with you, Foremost is responsible for real estate taxes during the two-year lease
period.
Please contact me if you have any comments or questions at 531-5119.
Sincerely,
Kirk McDonald
Management Assistant/
Community Development Coordinator
KM/prs
Enclosure: 1994 Property Tax Statement
cc: Dan Donahue, City Manager
Steve Sondrall, City Attorney
Iatrry Watts, Director of Finance
Improvement Project File No. 474
Family Styled City ~ Fo~ Family Livin~
HENNEPIN COUNTY
1994 PROPERTY TAX STATEMENT
PLEASE READ BACK OF FORM FOR
CE~~~ ~ PENALTY, PAYMENT AND ESCROW
INFORMATION
1993 1994
PID 17-118-21 22 0008
1. Use this amount on Form M-1PR to see if you're eligible · 0 0
for a property tax refund ..................................................................................................................
2. Use this amount for the special property tax refund on .0 0
schedule 1 of Form M-1 PR .................................................................
Your Property Tax and How It Is Reduced By The State
3. Property tax before reduction by state paid aids and credits .............. 2 6 · 1/+ 2 . 0 4 2 ? · 9 0 9./~ 6
4. Aid paid by the state of Minnesota to reduce your property tax .......... 8,7 5 2.3 6 9,9 0 3.4 8
5. Credits paid by the state of Minnesota to reduce your property tax: "
a. Homestead and agricultural credit ................................................... 0 0 .0 0
b. Other credits ................................................................................... 0 0 · 0 0
6. Property tax after reduction by state paid aids and credits ................. 17, :589.68 18,005.98
Where Your Property Tax Dollars Go
7. County ................................................................................................ 1,952.22 2,278.18
7A. Hennepin Parks .................................................................................. 69 · 39 87.73
8. Municipality ......................................................................................... 1 ¢ 223.2 :~ 1 ¢ 420 · 29
9A. School District Excess Levy Referenda Tax ....................................... 9 0 ? · 2 1 9:73.2 3
9B. School District Remaining School Tax ................................................ 2,519. 19 3,0Z~ 4.62
10A. Metropolitan Special Taxing Districts .................................................. 2 3 9.6 ? 26 8.70
10B. Other Special Taxing Districts ............................................................. ~ 0 · 0 9 ~ 2-. 9 5
10C FISCAL DISP. 5,991.63 6,590.83
1OD TAX INCREMENT 4,467.06 3,369.45
11. Non-school voter approved referenda levies ...................................... · 0 0
12. Property Taxes before special assessments ...................................... 17,389.68 18,005 · 98
13. Special Assessments added to this property tax bill
SPECIALS PRINCIPAL 1,060.45
SPECIAL INTEREST 1,153.29
Pay this amount no later than May 15. 1994 ................................... 9 , 0 0 2 · ~ ~
. Pay this amount no later than October 15. 1994 ............................. 9,0 0 2 · 9 9
Make Check Payable to HENNEPIN COUNTRY TREASURER
DETACH' PAYMENT STUB HERE BEFORE MAILING
THIS STUB MUST ACCOMPANY SECOND HALF PAYMENT.
Pay on or before October 15. 1994 to avoid penalty.
Please read reverse side for payment information. ~,~ ND HALF
PAY STUB 1 994
TAXPAYER On AGENT MUN~C a'rG CODE LOAN NO.
ECONOMIC DEV AUTH NEW HOPE 86 894
4401 XYLON AVE N
NEW HOPE MN 55&28-&8&3 7528 &2ND AVE N
17-118-21 0008 !
2111817:)2000800000000000090029921118172200087
1994 PROPERTY TAX STATEMENT HE~NEPIN,-CCq. N~T~'~ TBEASURER
HENNEPIN COUNTY GOVERNMENT CENTER
MINNEAPOLIS, MINNESOTA 55487-0063
~C !330
Use this copy to claim Property Tax Refunds. Read Office Hours. 8 to 5 - Monday - Friday
back for information on eligit~ility snc] how to obtain Phone 612-348-3011
forrns. File by August 15th. Hearing Impaired with TDD Equipment 612-348-3461
TAXPAYER OR AGENT TAXPAYER OR AGENT
1,1,1,,I,1,,I,,I,,I,I1,,I,,I,,11,,I,,I,,I,,11,11,,,,,,11,11,,I ECONOMIC bEV AUTH NEW HOPE
ECONOMIC DEV AUTH NEW HOPE 4401 ×YLON AVE N
4401 XYLON AVE N NEW HOPE MN 55428-4843
NEW HOPE MN 55428-4843
OWNER '
ECONOMIC DEV AUTH NEW HOPE
: PROPERTY' IDENTIRCATiON:_ ,,,._, ¢,.~, . ~. ~ NO; MUNIC SCHOOL
DISTRICT
;~17-'118'21 ~:22 ~ 0008 c 86 281 :
OWNER
ECONOMIC DEV AUTH NEW HOPE PROPER~rYADDRESS
7528 42ND AVE N
OPERTY IDENTIFIOATJO~ NO.. i '. ' ' '' . MUNIC ADDITION
17-118-21 22 0008 86 AUDITOR'S SUBD. NO. 32/+
WATER SEWER
.~e these amounts when filling out Form M-1 PR to see if LOT 0 0 5 BLOCK SHED 0 DISTRICT 0 2
,u are eligible for one or both of the refunds available. THE W 125 &&lO FT OF E 320 4&10
Line 1'
Line 2: MTG CODE 894 LOAN NO.
if this box is checked you owe delinquent taxes and ~ If this box is checked you owe delinquent taxes and
· may not apply for the Property Tax Refund. It may not apply for the Property Tax Refund.
Contact our office for the amount due. Contact our office for the amount due.
Taxes. P~aya, b!e in,1993: :?'t ':~'T"~esp'ayable'!pl'994r"' ['' ': Taxes Payable in199.3 ,TaxeS~Pa~alS[ejE1.9949
New Improvements New Impr¢/ements
Property, Class Proped Class
'NDUST-LOW RATE INDUST-LOW RATE INDUST-LOW RATE INDUST-LOW RATE
/
Estimated Market Value Estimated Market Value
330.000 t 330,000 330,000 ~ 330,000
Taxable Market Value Taxable Ma et Value
330,000 I 330,000 330,000 I 330,000
DETACH PAYMENT STUB HEllE BEFOFIE MAILING
THIS STUB MUST ACCOMPANY FIRST HALF PAYMENT.
Pay on or before May 15, 1994 to avoid penalty.
Please read reverse side for payment information. .-,.! ST HALF
PAY STUB 1994
TAXPAYER OR AGENT MUNIC MTG CODE LOAN NO.
ECONOMZC DEV AUTH NEW HOPE 86. 894
4401 XYLON AVE N P~ADDRESS
NEW HOPE MN 55428-4843 7528 &2)ND AVE N
-'--'] If name and/or address as shown above are
not correct, check box and make correction on
back of this form.
17-118-21. a~ 0.~08_~;~.'l 18,005.98 ;L~ ~ 9,Ooa~.
211181722000800180059800090029921118172200087
~U6-03-94 WED 14;22 P, 02/02
June 20, 1994
Mr. Al~en Fredendal~
Foremost, Inc.
7528 42nd Avenue North
New Hope~ MN 55428
RE: Default in Lease Agreement for 7528 42nd Avenue Nor~fl
Our File No; 99.11090
Dear Mr. Fredenda11:
Th~s le[ter wi13 put you on notice 0er Daragraph 17 of the Lease
Agreement dated JtJ3y 19, 1993 between the New Hope EDA and
Foremost, [nc. that Foremost, ~nc, is currently in default because
of 4ts failure to pay the rea~ estate taxes due and payab3e in
1994. [~ accordance w~th the terms of the 3ease~ if you do not
curn this default w4thin 10 days after this no~ce, the EDA will
h~ve availab3e to it the remedies set forth in the Lease Agreement.
Sincerely,
Martin P. Malecha
Assr. New Hope Clty Attorney
s3t
cc: Dan~el J. Donahue, Exe~ut{ve D~rector, New Hope EDA
K~rk McDonald, Management Asst.
Steven A. $ondrall, City Attorney
4401 Xyton Avenue North Telephone: 612-531-5100 City Hail Fax: =6!2-_;3!-~'
New Hope. Minnesota 55428-,~898 TDD L~ne: 612-531-5109 Police Fax: =6 ~2-E$ '-~' ~
Public Works Fax: =612-5,~- ~55
June 22, 1994
Mr. Allen Fredendall
Foremost, Inc.
7528 42nd Avenue North
New Hope, MN 55428
Subject: Real Estate Taxes for 7528 42nd Avenue North
Dear Mr. Fredendall:
I am aware that the New Hope City Attorney has contacted you regarding the non-payment of
property taxes for the property located at 7528 42nd Avenue North. As stated in his June 3rd
and June 20th correspondence, the lease between Foremost and the City requires the entire
year's taxes be paid by May 15th. The City is hopeful that you will resolve this matter
promptly. I am writing to inform you that the City Manager will be notifying the City Council
about this matter in the near future so that they are aware of the situation should further action
be necessary.
Sincerely,
Kirk McDonald
Management Assistant/
Community Development Coordinator
KM/prs
cc: Dan Donahue, City Manager
Steve Sondrall, City Attorney
Valerie Leone, City Clerk
Improvement Project No. 474
Family Styled City ~ For Family Living
CORRICK & SONDRALL
L~wY~R$
COR,~C~ ~W OmC~S. ~.
W,~ CO~ ~lnb~gh Execu~ve Office Pl~
~C.AE~, ~uR S~te ~203 SHA~N O. DERBY
~m~., ~c., Br~ Park. M~nesom 5~43
~LEPHONE (612)
FAX (612) 425-~7
September 27, 1993
Valerie Leone
City Clerk
City of New Hope
4401Xylon Avenue North
New Hope, MN 55428
RE: Foremost Property Lease
Our File No: 99,11090
Dear Valerie:
Enclosed for City records please find the one and only fully
executed copy of the Lease Agreement between the EDA and Foremost,
Inc. for the property at 7526 42nd Avenue North. You should put
this original in a safe place.
Payments under the lease consist of the real estate taxes due May
15th, 1994 (the full year's taxes), and February 1st, 1995 {a pro-
rata share of taxes due and payable in 1995 through July 19th,
1995).
Absent any other issues with the property or the lease, we will
check on payment of the taxes shortly after the due dates.
Please contact me if you have any questions.
Sincerely,
Martin P. Malecha
Asst. New Hope City Attorney
s3m
Enclosure
cc- Daniel J. Donahue, City Manager
Kirk McDonald, Management Asst.
Larry Watts, Finance Director
Steven A. Sondrall, Esq.
LEASE AGREEMENT
THIS AGREEMENT made and entered into this Iq ~*' day of
-J~, f~/ , 1993, by and between The Economic
De'el opment
Authority in and for the City of New Hope (hereinafter "Lessor")
and Foremost, Inc., a Minnesota Corporation (hereinafter "Lessee" ;
W I T N E S S E T H-
1. LEASED PREMISES.
The Lessor in consideration of the rents and covenants here n
contained, to be paid, kept and performed by the Lessee, does
hereby demise, lease and let unto the Lessee, and the Lessee
does hereby hire and take from the Lessor the following, to-
wit- (the "Leased Premises")-
7526 42nd Avenue North, commonly known as the Foremost,
Inc. property
2. TERM.
The Lessee shall have and hold the Leased Premises herein
demised, together with all rights, privileges and
appurtenances thereunto pertaining and belonging unto the said
Lessee for a.term of two (2)years, commencin9 on the
da% of ~ , 19~ and ending the /¢¢" day of
~_~-~ , 1995. The Lessee may terminate this lease
at an~ time during the rental period by giving Lessor ninety
(90) days written notice of their intention to terminate the
lease. In the event of termination by the Lessee, the rent
shall be adjusted on a pro-rata based to the date of
termination. This lease shall automatically terminate at the
end of the 24 month period without notice by either party.
3. RENT.
The Lessee shall pay, during the term of this Lease, One
Dollar ($1.OO) and other good and valuable consideration as
set forth herein. .On the date of execution of this Lease, the
Lessee shall pay th'e rent and the real estate taxes payable in
1993 against the property. On May 15, 1994, Lessee shall pay
the real estate taxes payable in 1994 against the property.
On February 1, 1995, Lessee shall pay its pro rata share of
real estate taxes in 1995 against the property. The payment
of real estate taxes shall be deemed as a prepayment of
additional rent and not as a security deposit hereunder.
4. AUTHORIZED USE.
It is agreed that the Leased Premises shall be used by the
Lessee for the Foremost, Inc. sheet metal business and for no
other' purpose, subject to all local and state regulations
regarding the use of said premises. Lessee further
acknowledges and agrees that it is accepting the property in
an "as is" condition and agrees that the property is fit for
Lessee's intended use. Lessee further acknowledges it has
occupied this building prior to Lessor's ownership and will
indemnify and hold harmless Lessor for any injury or damage
caused by the condition of this property and improvements
thereon or Lessor's use of the property notwithstanding any
contrary language in other provisions of this lease.
5. ADDITIONAL RENT.
Lessee shall pay as additional rent all operating expense as
defined herein. Any additional rent payable hereunder which
remains unpaid at the end of the term of this Lease shall be
due and payable upon the termination date.
"Operating Expenses" shall mean and include the following
expenses with respect to the building in which the Leased
Premises are situated, the parking lot serving said building,
and the real estate on which said building and parking lot are
located:
(a) Real estate taxes, including installments of special
assessments payable in the year for which such expenses
are being determined;
(b) Insurance premiums and any license, permit or inspection
fees; and
(c) Costs for all labor, material and services, including,
but not limited to, security service, janitor service and
utilities, for the operation, repair, maintenance,
management an.d upkeep of the building, including common
areas thereof, parking lot, and lands on which the same
are situated to the extent that the Lessor is responsible
for such expenses under this Lease.
6. HOLDING OVER.
If the Lessee holds over beyond the term of this Lease with
the written consent of the Lessor, it is agreed that the Lease
ts automatically extended for a period of thirty (30) days
under the same terms and conditions.
7. RENEWAL OPTION.
Lessee shall have no option to renew this lease.
8. CARE AND MAINTENANCE.
The Lessee shall be wholly responsible for the exterior and
interior maintenance of the Leased Premises and all costs
associated therewith. The Lessee shall further keep the
Leased Premises in an orderly, clean and sanitary condition,
as required by the laws and ordinances applicable thereto;
shall neither do nor permit to be done on said premises
anything in violation of laws or ordinances applicable
thereto; shall neither omit nor suffer waste in said premises;
and shall pay for all glass broken by its fault or negligence,
or the fault or ne91igence of its employees.
It is agreed that the maintenance and repair obligations of
the Lessee hereunder shall extend to all parts or portions of
the Leased Premises, including the grounds, parking areas,
entrance and overhead garage doors, and including heating and
plumbing, electrical and mechanical fixtures and equipment
whether located on the interior or on the exterior of the
Leased Premises.
It is further understood and agreed by the parties hereto that
upon termnination of this Lease the building may be demolished
by the Lessor and, therefore, that fact will be taken into
account regarding painting, upkeep and repair of the premises.
9. UTILITIES.
The Lessee shall pay for all utilities, including gas,
electricity, city water, and any other service used by Lessee
during the term of this Lease.
10. INSURANCE.
The Lessee shall maintain in full force and effect during the
term of its Lease a policy of public liability insurance under
which both Lessor and Lessee are named insureds. The minimum
limits of liability of such insurance shall be $1,000,000 for
injury or death to any one person, $2,000,000 for injury or
death to more than one person and $100,000 for property
damage. The policy shall further contain a provision
requiring ten (10) days written notice to be given to the
Lessor before a cance]]ation of the policy can be effected.
Lessee hereby agrees to deliver a duplicate copy of said
policy to Lessor. Said coverage may be provided by a
combination of primary and excess liability coverage.
1t. DESTRUCTION OF EASED PREMISES.
Should the Leased Premises become untenantable or unfit for
occupancy in whole or in part by the total or partial
destruction of the building by fire or other casualty, this
Lease shall be terminated and Lessee shall have no further
rights hereunder. The Lessor shall have no obligation to
restore the premises and the rent to be paid hereunder shall
be abated in proportion to the loss and impairment of the
agreement between the parties hereto.
12. CLAIMS FOR LOSS.
The Lessee shall make no claim against the Lessor and shall
hold the Lessor harmless for any loss of or damage to property
of the Lessee caused by theft, burglary, fire, water,
windstorm or other casualty or cause, unless said loss or
damage was caused by Lessor.
13. RIGHT TO INSPECT.
The Lessor may at all reasonable times enter the Leased
Premises to inspect the same.
14. ALTERATIONS/REMOVABLE FIXTURES.
The Lessee shall pay the cost of any alterations made to the
Leased Premises and will not be compensated for any
alterations at the termination of the Lease. Further, Lessor
agrees Lessee may during the rental period remove all persona]
property, trade fixtures, machinery and equipment and any
other removable fixtures and to otherwise salvage all
removable property from the real property. Lessee shall not
be required to pay for any salvaged item except all costs of
removal and all costs to secure the building shall be paid by
Lessee. However, Lessee agrees that nothing shall be removed
from the property unless Lessee is current on all payments due
hereunder to Lessor. Lessee further agrees that it will give
Lessor at least 24 hours notice before removing any salvagable
property from the premises and a description of the property
to be removed.
15. HAZARDOUS MATERIALS.
Lessee agrees that it will not transport, store, use,
generate, treat or dispose of any toxic or hazardous
substances, and will use the Premises, all in compliance with
any local, state or federal zoning, environmental or hazardous
waste ]aws or other environmental laws or regulations from and
after the commencement of this lease. Lessee wilt comply with
all Federal, State and local laws or regulations regarding any
disposal or transportation of any toxic or hazardous
substances including, without limitation, any reporting
requirements, relating to any storage tanks located in the
Leased Premises. If required, Lessee shall file reports on
any such activities with the appropriate authority. At the
expiration or termination of this Lease, Lessee shall remove
any tanks for storage of any toxic or hazardous substances
installed by Lessee in compliance with all applicable statues,
rules and regulations. If, at any time during the Term of
this Lease, any local, state or federal authority should
request a report on any toxic or hazardous substances Lessee
has stored, used or disposed of on or from the Leased
Premises, Lessee will either cause said report to be made as
soon as practicable at its own cost and expense, or if not
made within thirty (30) days of Lessor's request for the same,
will reimburse Lessor, as Additional Rent, for Lessor's cost
of obtaining said report.
Lessee agrees to absolutely indemnify, defend and hold Lessor
harmless of and from any loss, damage, costs, expenses,
including all attorneys fees, arising out of or in any manner
related to the generation, transportation, treatment, storage,
manufacture, emission, use or disposal of any toxic or
hazardous substances in, from, to or about the Leased
Premises. This warranty shall survive the expiration or
termination of this Lease.
16. WAIVER AND INDEMNITY. '
Lessor shall not be liable to Lessee, or those claiming by,
through or under Lessee, for any injury, death or property
damage occurring in, on or about the Premises unless caused by
the fault of Lessor. Without limitation of the foregoing,
Lessor shall not be liable to Lessee for any, and Lessee
hereby releases Lessor from all damage, compensation or claims
arising from: loss or damage to books, records, files, money,
securities, negotiable instruments or other papers in or about
the Premises; the necessity of repairing any portion of the
Premises or the amenities within or without the Premises; any
interruption in the use of the Premises; accident or damage
resulting from the use or operation of Lessor, Lessee, or any
other person or persons whatsoever of elevators, or heating,
cooling, electrical or plumbing equipment or apparatus; any
fire, robbery, theft, or any other casualty; and leakage or
bursting of pipes or water vessels or any roof or wall
leakage, in any part or portion of the Premises; water, rain,
snow or underground water that may leak into, flow on, or flow
from, any part of the Premises.
Lessee shall defend with counsel approved by Lessor (which
approval will not be unreasonably withheld), indemnify and
save Lessor harmless from and against all liabilities,
obligations, damages, fines, penalties, claims, demands,
costs, charges, judgment and expenses, including, but not
limited to, reasonable architects' and attorneys' fees, which
may be imposed upon or incurred or paid by or asserted against
the Lessor, the Property or any interest therein by reason of
or in connection with any of the following occurring during
the term of this Lease: (i) Any alterations and anything done
in, on or about the Premises or any part thereof in connection
therewith; (ii) The use, non-use, possession, occupation,
condition, operation, maintenance or management part of Lessee
or any of its agents, contractors, servants, employees,
licensees or invitees; (iv) Any accident, injury, death or
damage to any person or property occurring in or on the
Premises; and (v) Any failure on the part of Lessee to perform
or comply with any of the covenants, agreements, terms,
provisions, conditions or limitations contained in this Lease
or its part to be performed or complied with. Nothing
contained in this Section shall be deemed to require Lessee to
indemnify Lessor to any extent prohibited by law.
After termination of this lease, it is agreed that Lessee
shall not be responsible for any care, upkeep or removal of
the four (4) test wells on the Premises.
17. DEFAULT.
Should the Lessee (a) fail to pay rent in accordance with the
terms of this Lease, or (b) default in any of the covenants
contained herein add said default remains uncured after ten
(10) days written hotice thereof is given by the Lessor, the
Lessor, in either such event, shall hereby be authorized to
re-enter the Leased Premises, eject the Lessee and take full
possession of the premises, terminate this Lease at its
option, and relet the premises should it deem such a reletting
to be in its best interest. The Lessee shall further, in the
event of either nonpayment of rent or default, have the right
to remove from the Leased Premises all personal property of
the Lessee and store the same at the risk and expenses of the
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Lessee. Should the Lessor determine that any action or
proceeding at ]aw or otherwise is necessary to enforce the
terms and conditions hereof, the Lessee agrees that reasonable
attorney's fees and all other necessary costs and
disbursements may be charged against the Lessee as additional
rent, which additional rent shall be due and payable upon
receipt of an invoice therefor from the Lessor.
The Lessee also a9rees that if it, or any permitted sublessee
or assignees, if such be the case, be the subject to any
voluntary or involuntary proceedings under the Bankruptcy Act
of the United States, as amended, or any other insolvency
proceeding, or shou]d any proceeding for the appointment of a
receiver or trustee be commenced against the Lessee, or any
permitted sub]essee or assignee, then, and in any such events,
the Lessor may in addition to its other remedies at law, and
at its option, terminate this Lease and pursue one or more of
the remedies set forth in the first paragraph of this Section
in the same manner as if the Lessee had defaulted in any
covenant contained herein.
18. ASSZGNMENT.
The Lessee shall not assign this Lease or any interest herein,
or sublet any part of the Leased Premises, or permit any other
person or entity, whether jointly with the Lessee or
otherwise, to occupy any part thereof with the exception of
Foremost, Inc. Should the Lessee make any such assignment or
subletting or permit any such occupancy, neither the
acceptance of rent by the Lessor thereafter from Lessee or any
other person or entity, nor any failure on the part of the
Lessor for any particular period of time to take action on
account of such breach or to enforce its rights with respect
thereof, shall be deemed a waiver of the breach, and such
breach shall be a continuing breach for so long as may such
sub-tenancy or occupancy continue. It is understood and
agreed that any assignment of this Lease made with the consent
of the Lessor shall not release or discharge the obligations
of the Lessee hereunder; further, the Lessee shall remain
secondarily liable for any rent or other obligation to the
extent that the same is not satisfied in full by any sub-
lessee or assignee.
IN WITNESS WHEREOF, the Lessor and Lessee have caused this
lease to be executed in duplicate as of the day and year first
above written.
In the presence of' THE ECONOMIC DEVELOPMENT
AUTHOR:[TY IN AND FOR THE
CTTY OF NEW HOPE
(Lessee) ~ - ~ " ~
By
Zts
The undersigned, for and in consideration of the Lessor's
execution of this tease, do hereby unconditionally guarantee the
performance of alt obligations of the Lessee herein, including
specifically the obligation to pay rent as set forth in the
agreement,
Allen V. Fredendall
~thleen ~.'~redenda]]
8
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing was ackn.owledged before me this _~- day of
~/;~: -, . , 199__~_~-, by Edw. J. Erickson and Daniel J
Donghue, t he ¢~s, ~-, and
respectively, of the Economic Development Authority in and for the
Notary Public
NOTARY PUBLIC~M:NNESOTA
STATE OF MINNESOTA ) ':%" H[NNEPINCOUN~
) S S. ~ ~ [xp~re~ Nov 9. 1993
COUNTY OF HENNEPIN )
Th 1rig was acknowledged before me this /~ day of
e~o ,~99.~ . .99~ by ~~ ~ and
~ ~ _, t he ~ and ,
respectively, of Foremost, [nc., a M~nnesota corporation, on behalf
of sa~d corporation.
~ My 60mml~i0fl Expires Sept. 25. ~.995~
STATE OF M~NNESOTA )
) ss.
COUNTY OF HENNEP~N )
regoin9 was acknowledged before me this ~ day of
~ .., 19~, by Allen V. Fredendall and Kathleen
Fred~da~.
~N~IN ~
~ ~n ~pires ~ ~, ~9~
c:\wp51\cnh\fredendall.le~
9