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111494 EDA Official File Copy -- I CITY OF NEW HOPE ] EDA AGENDA EDA Regular Meeting #14 November 14, 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 October 24, 1994 4. Update on Site Improvements at Autohaus, 7709 42nd Avenue North (Improvement Project No. 467) 5. Resolution Approving Additional Multi-family Housing Policy Loan for New Hope Apartments, 7200-7260 43rd Avenue North (Improvement Project No. 510) 6. Resolution Authorizing Executive Director to Execute Letter of Agreement with Equal Access Homes to Provide Design Services for Handicapped Accessible Twin Home at 5009 Winnetlm Avenue North (Improvement Project No. 505) 7. Resolution Calling for a Closed Meeting of the Economic Development Authority in and for the City of New Hope Authorized by Minn. Stat. §471.705 to Discuss Litigation/Settlement Strategy on Eminent Domain Proceedings Regarding 5501 Boone Avenue North 8. Adjournment CITY OF NEW HOPE 4401 XYLON AVENUE NORTH HENNEPIN COUNTY, MINNESOTA 55428 Approved EDA Minutes October 24, 1994 Meeting #13 CALL TO ORDER In the absence of President Erickson and President Pro tern Enck, the EDA appointed Commissioner Wehling to chair the meeting. Chair Wehling called the meeting of the Economic Development Authority to order at 10:30 p.m. ROLL CALL Present: Otten, Williamson, Wehling Absent: Erickson, Enck Staff Present: Sondrall, Hanson, Donahue, Leone, McDonald, Bellefuil APPROVE MINUTES Motion was made by Commissioner Otten, seconded by Commissioner Wehling, to approve the EDA minutes of September 26, 1994. All present voted in favor. Motion carried. IMP. PROJECT467 Chair Wehling introduced for discussion Item 4, Update on Site Item 4 Improvements at Autohaus, 7709 42nd Avenue North (Improvement Project No. 467). Mr. Donahue advised the EDA that staff excused Mr. Oestrich of Autohaus from the meeting due to the number of items on the agenda and suggested that he return to a future meeting. MOTION Motion was made by Commissioner Otten, seconded by Commissioner Williamson, to table Item 4 until November 14, 1994. All present voted in favor. Motion carried. IMP. PROJECT 524 Chair Wehling introduced for discussion Item 5, Discussion Regarding Item 5 Vacant Property at 4400 Quebec Avenue North, Improvement Project No. 524. Mr. Daniel Donahue, City Manager, indicated a company known as Conductive Containers, Inc. contacted the City and indicated they were interested in negotiating to purchase the vacant industrial building located at 4500 Quebec Avenue North. However, the site cannot accommodate maneuvering of full-sized semi-trucks without utilizing a portion of the vacant lot to the south known as 4400 Quebec. The 4400 Quebec Avenue property is identified in the City's preliminary Surface Water Management Plan as a possible future ponding site. The City Engineer met with staff and developed a sketch whereby a future pond could be developed on the southern portion of the property to accommodate the City's storm water needs and the northern portion of the property could be combined with the property to the north to address trucking needs. Mr. Donahue indicated staff will present the storm water ponding report and recommendations for funding the regional ponding concept in December. He stated the City could share the cost of purchasing the property with the interested business and then the CiW would retain a large easement for a future regional storm water pond and deed the New Hope EDA October 24, 1994 Page 1 property over to the business so that the parcel would not be tax exempt. He noted the tax value benefit to the City would offset the cost of the pond. He noted the property is appraised at $96,000 and the asking price is $140,000. Mr. Mark Hanson, City Engineer, reviewed the legislative mandate for watershed districts regarding storm water ponding. MOTION Motion by Commissioner Wehling, seconded by Commissioner Otten, to Item ,5 proceed with the concept of continuing to negotiate the purchase of the property at 4400 Quebec Avenue North. Voting in favor: All. Motion carried. ADJOURNMENT Motion was made by Commissioner Williamson, seconded by Commissioner Otten, to adjourn the meeting. All present voted in favor. The New Hope EDA adjourned at 10:37 p.m. Respectfully submitted, Valerie Leone City Clerk New Hope EDA October 24, 1994 Page 2 ~ EDA ~ ) REQUEST FOR ACTION Originating Departmerg Approved for Agenda Agenda Section City Manager EDA /' 11-14-94 Kirk McDonald Item No. By: Management Assistant By: 4 / UPDATE ON SITE IMPROVEMENT/AT AUTOHAUS, 7709 42ND AVENUE NORTH (IMPROVEMENT PROJECT NO. 467) City staff have requested that representatives from Autohaus attend the EDA meeting to give an update on the progress of the site improvements for the property. Representatives from Autohaus were in attendance at the October 24th EDA meeting, but this item was tabled due to the number of items on the agenda. At the July 25th EDA meeting, the EDA declined a request to allow the existing front retaining wall to remain in place 5' from the property line until an update on all outstanding issues on the plan is presented. The EDA indicated that they do not want to amend the existing Development Agreement for only the retaining wall issue if other changes also need to be made. The existing agreement requires that all landscaping and remaining site improvements were to be completed by October 31, 1994. The Inspections Department has reviewed the property and the improvements that are completed and those that are not completed are identified on the attached copy of the most recently revised agreement between the City and Autohaus. MOTION~Y.~ SECOND BY Review: Administration: Finance: RFA-O01. ~ 4,4.01 Xylon Avenue North Te/ept~one: 612-531-5100 City Hall Fax. =E,2-55'.5 New Hope. M~nnesota 55428-4898 TDD L/ne: 612-531-5109 Police Fax: PuOlic Works Fax: October 25, 1994 Mr. Tom Oestrich Autohaus of Minneapolis 7709 42nd Avenue North New Hope, MN 55427 Subject: Autohaus Site Improvements Dear Tom: ,. Thank you for attending the October 24th Council meeting and I apologize that your item was tabled due to the number of items on the agenda. The City would appreciate it if you would plan on attending the November 14th Council meeting to update the Council on the progress of the Autohaus site improvements. Per our discussion, I would suggest that you respond to each item listed in the Development Agreement so that the Council is aware if the item is completed, in prOCess, or will be completed at a later date. Please contact me if you have any questions. Sincerely, Kirk McDonald Community Development Coordinator KM/prs cc: Dan Dotmhue, City Manager Steve SondraH, City Attorney Mark Hanson, City ~ Doug Sandstad, Building Official Thomas Boettcher, Autohaus ~mprov~nt Proj~gt iai67 Family Styled C~'~~ Fo~ Family Livin~ July _7. 1994 Mr. Thomas Boettcher Autohaus of Minneapolis, Inc. 7709 42nd Avenue North New Hope, MN 55427 Subject: REQUEST TO ALLOW FRONT RETAINING WALL TO REMAIN IN PLACE FIVE FEET FROM PROPERTY LINE Dear Mr. Boettcher: At the July 25th New Hope Economic Development Authority meeting, the City Manager presented your letter to the EDA requesting to allow the existing retaining wall to remain in place five feet from tl~ 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. The EDA declined to grant the request until an update regarding ail outstanding issues on the plan is presented. The EDA indicated that they do not want to amend the existing Development Agreement for only the retaining wall ~ if other changes also need to be made. As you are aware, all landscapil~ alld site im~rovemellts (includix~ those in the rear of the building) are to be completed by this fall. The EDA wants an update on all outstanding issues before it will consider your request to allow the retaining wall to remain in place, and the City c~nnot proceed with any curb improvem~ on your property in conjunction with the 42nd Avenue Landscape/~ ~ .,nl~ov~m Project until the retaining wall issue is resolved. I have enclos~ · copy of th~ most recently revised agreemenI between the City ~ Autohaus. Plea.se ~ ~ ~ and respond in writing regarding the outstanding improvements to be com.nl~ AI~o, p~ l~t Dan or myself know if you will be able to attend an upcoming Council/EDA meet/~ to ~nswer the EDA's questions so thst we can move forward on this inaRer. Family Styled City ~ For Family Livio~ Mr. Thomas Boettcher July 27, t994 Page 2 Sincerely. Daniel J. Donahue City Manager Kirk McDonald Management Assistant/ Community Developmem Coordinator Enclosure: Development Agreement cc: Dan Donahue, City Manager Steve Sondrall, City Attorney Mark Hanson, City Engineer Doug Sandstad, Building Official Improvement Project #467 ADDENDUM TO CITY OF NEW HOPE DEVELOPMENT CONTRACT 1. Parties. ~he parties to this Addendum are the City of New Hope (hereafter City), Autohaus of Minneapolis, Inc. (hereafter Autohaus) and Thomas W. Boettcher, individually (hereafter Boettcher). 2. Property, The real property (hereafter Property) to which the this Addendum applies is owned in fee by Boettcher and is located in Hennepin County, Minnesota, legally described as: (See attached Exhibit A) 3. Purpose. This Addendum shall modify the that certain Development Contract dated April 4, 1991 (hereafter Contract) entered into by the parties. Autohaus and Boettcher acknowledge and agree that they are in breach of the performance conditions of the Contract and in consideration for the City's agreement not to immediately pursue its remedies under the terms of the Contract Boettcher and Autohaus have agreed to enter into this Addendum. 4. Unperformed CondttfQns. Specifically, Autohaue and Boettcher acknowledge end agree that they have failed to perform all the requirements of paragraphs 2.A) through [) and 3 of the Contract, With respect to. the work required by those provisions the parties hereto agree that Autohaus and Boettcher will perform the work as followe: a. ) The tnetallattofl of concrete curb from the moat southerly wall of the butldtng northward to County Road No. 9 shall be co~pleted by October 31, lg93. The remainder of the COMPLETED curbing &e ehown on the site plan shill bm installed by October 31, 1994, except that curbing around the perimeter of the unpaved body shop and repat~ storage irma shill be Inet&lied if and when said body chop and r~tr storage area is paved aa eat forth below. All Gqlktng eh&11 be of a surmountable type aa approved by tll~¢tty. Autohaue end aoettcher shall submit a diagram Of IItd curbtng for approval to the Ctty prior to inetallatton. b. ) All planttnge shown on the site plan north of the build'~ng's moet southerly wall shall be installed by NOT October 31, 1993. All other planttnge shown on the site COMPLETED plan shall be installed by October 31, 1994. 1 c.) The six-foot opaque security fence around the perimeter of the body shop and collision repair storage area shall COMPLETED be installed by October 31, 1994. The existing fencing shall remain in place until the new security fence is i nst al 1 ed. d.) The installation of lighting shown on the site plan shall be comoleted by October 31, 1993. However, the parties COMPLETED agree-,-~hat the existing lighting for the collision repair area as of the date of this Addendum is adequate and no further lighting is required notwithstanding the lighting required by the site plan. e.) All planted areas completed in 1993 will be sprinkled by PARTIALLY October 31, 1993. All planted areas completed in 1994 COMPLETE will be sprinkled by October 31, 1994. f.) The installation of the outdoor trash enclosures will be NOT DONE completed by October 31, 1994. g.) The front display area will be completed by October 31, PAVING COMPLETED 1993. However, the parties agree that the front dtslllsY STRIPING NEEDS TO BE area can be paved with concrete and bituminous. DONE--NO HANDICAPPED SPACES h.) The ielande in the transport lane area will be installed NOT DONE by October 31, 1994. t.) Erosion control measures of grading and seeding in a form and manner approved by the City Engineer shall be completed by October 31, 1993. The eroeton control measuree shall apply to a11 unpaved areal. j. )' The City agreee to waive Indefinitely the requirement in the Contract that Autohaua and Boettcher pave the body shop and repair storage area. However, if Autohaus and Boattchar elect to pave the body ehop and repair storage area at alee p41nt tn the future, then Autohaus and aoattcher w~11 be reclutred to ineta11, prior to said paving, the public etorm water drainage improvements re~lutrad by paragraph 3 of the Contract. And, prior to tn~ta111nt laid storm water drainage Improvements, AIJ[_Mteua and-the Ctty muet agree on the reel~Xzitbtlity ~ p4ylient of the colt of laid storm water drainage llmveimnt ·. ITEMS THAT NEED TO BE COMPLETED: LANDSCAPING SPRINKLING TRASH ENCLOSURE STRIPING TRANSPORT LANES 2 5. Nonmerger. The parties agree that the terms of the Contract and this Addendum shall survive the satisfaction, release or termination of the April 4, 1991 Mortgage, Security Agreement and Fixture Financing Statement given by Boettcher, a~Q Autohaus and Boettcher shall be required to perform all work set forth above even if said Mortgage, Security Agreement and Fixture Financing Statement is satisfied, released, or terminated. 6. Secur. ity. The subdivision bond or other security required of Autohaus and Boettcher to ensure their performance under the Contract shall be reduced to $1,000.00. 7. Effect of Addendum. The parties agree that this Addendum shall not change the other provisions of the Contract, which shall remain in ful~ force and effect. This Addendum shall be construed as supplemental to and not inconsistent with the Contract. The parties further agree that a breach of this Addendum sh&ll also constitute a breach of the April 4, 1991 Mortgage, Security Agreement and Fixture Financing Statement given by Boettcher to secure the April 4, 1991 Mortgage Note executed by 8oettcher. Autohaus further agrees that the assignment of the Certificate of Deposit given as fin&n¢ial security to insure performance of the Contract shal~ subject to reduction am set forth above, also extend to secure performance under th~s Addendum, Dated: I'ividu&l ly STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEP[N ) T going was acknowledged before me this ~o~ dayof , 1993, by Edw, J, Erickson and Daniel J, Donahue,/ the Mayor and City Manager, respectively, of the City of New Hope, a Minnesota municipal corporation, on behalf of said municipal corpoFat ion, ~-~ HENNEPINCOU~ ~ ~o~ry Publ~ STATE OF MINNESOTA ) ) COUNTY OF HENNEPZN ) , 1993, by - . , the President of Autohaus of Minneapo11 s, Inc., a Minnesota corporation, on behalf of sa~d co~ STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The for®going was &Gknowlsdgsd before me thts -.~' dmy of This DOG &fted b~: CORRICK &~lill~LL, A PARTNERSHIP OF PFIOFEUZOIIAL 8525 Edtnbrook Brooklyn Park, lan 55443 (612) 425-5671- c:\wpS1\&utohaul.&dd cu Ii~l~ PAVII~ Z o~ 2 EXIST GREE~ _4/ ASH y~iN ~ " ~I~ED ~ EXIS~ ~UILDI~ ~ · ~0 PAV,,cl ~Mi OI~AY ; (~,lOl I.F.) B~ ~ .~'~ ~ ~ ~ ~AY AREA) I ~ "~29 - AUSTRIAN R~ ON CO.RITE CW M IMaM (~ ~) 1l - ~ ~ EDA RI 9 T FOR A ?IOI Originating Department Approved for Agenda Agenda Section City Manager EDA i! 11-14-94 Kirk McDonald Item No. By: Management Assistant By: 5 RESOLUTION APPROVING ADDITIOI~AL MULTI-FAMILY HOUSING POLICY LOAN FOR NEW HOPE APARTMENTS, 7200-7260 43RD AVENUE NORTH (IMPROVEMENT PROJECT NO. 510) In September, 1993, the EDA approved a resolution/policy whereby under certain conditions the EDA would make loans for the upgrading of multi-family housing complexes (apartments) in the City. In February, 1994, the EDA approved the first of such loans for extensive rehabilitation work at the New Hope Apartments, a four-building complex located at 7200-7260 43rd Avenue North. The original estimated project cost was $194,700, with the property owners putting up 50 percent of the project cost and the EDA making a loan for 50 percent of the project cost ($97,350). Rehabilitation work has progressed through the summer and City staff are pleased with the completed work, the cooperation of the owners, and the overall execution of the rehabilitation project. Due to unanticipated additional costs, including $14,000 to redo the entire fire alarm system and $20,000 to replace unforeseen rotten wood around window and door openings, the property owners have exceeded the initial budget by aPproximately $40,000. The owners are requesting an additional $20,000 loan from the EDA to cover one-half of the additional expenses. The enclosed resolution approves the additional loan in the amount of $20,000. The loan is secured by a Promissory Note and Mortgage and this resolution, and the attached documents, continue the existing project with the original terms and conditions, but increase the loan amount by $20,000. Staff recommends approval of the resolution. adex 94-09 Renew: Administration: Finance: RFA-O01 ~ CORRICK & SONDRALL, P.A. STEVEN A. $ONORALL AI~ORNEYS AT LAW MICHAEL R. LAFLEUR Edinburgh Execu~ve Office Plaza LAVONNE E. KESKE MARTIN P. MALECHA W,~UAM c. S~a~T 8525 ~dinbrook Crossing Suite ~203 Brookl~ P~k, Minnesota 55443 TELEPHONE (612) 425-5671 FAX (612) 42~5867 November 9, 1994 CMr. Daniel J. Donahue Executive Director EDA in and for the City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 RE:New Hope Apartments Rehabilitation Loan Our File No: 99.11118 Dear Dan: Enclosed for consideration by the EDA please find a Resolution Approving Additional Multi-Family Housing Policy Loan for New Hope Apartments, 7200 -7260 43rd Avenue North. This Resolution authorizes an additional $20,000 loan to New Hope Apartments. The loan will be secured by a Promissory Note and Mortgage. As with the initial loan, this mortgage will require repayment of principal only as long as the property owner does not raise rents by more than the Consumer Price Index for a period of two years ending July 10, 1996. The EDA's interest in the property will stand in line behind the EDA's Second Mortgage and Promissory Note and the First yMortgage on the property held by Town & Country Bank. Essentially, this Resolution and the attached documents continue the existing project with the original terms and conditions, but increase the loan amount by $20,000. Do not hesitate to contact me if you have any questions. S i n (~l~l~l SIGNED BY MARTIN A UALECHA Martin P. Malecha s3w Enclosures cc: Kirk McDonald (w/en Valerie Leone (w/enc) Steven A. Sondrall, Esq. EDA RESOLUTION 94-' RESOLUTION APPROVING ADDITIONAL MULTI-FAMILY HOUSING POLICY LOAN FOR NEW HOPE APARTMENTS, 7200 - 7260 43RD AVENUE NORTH IMPROVEMENT PROJECT NO. 510 WHEREAS, the Economic Development Authority in and for the City of New Hope (EDA) adopted a Resolution Approving Multi-Family Housing Policies on September 13, 1993, EDA Resolution No. 93-13, and WHEREAS, in furtherance of those policies the EDA adopted a Resolution Approving Multi-Family Housing Policy Loan for New Hope Apartments, 7200 -7260 43rd Avenue North (Improvement Project No. 510) on February 28, 1994, EDA Resolution No. 94-02, and WHEREAS, said rehabilitation project involves a four building multi-family complex located at 7200 -7260 43rd Avenue North in the City of New Hope and owned by New Hope Apartments, and WHEREAS, the recitals of EDA Resolution No. 94-02 are incorporated herein by reference, and WHEREAS, unanticipated additional costs have arisen during the rehabilitation project, including $14,000.00 to redo the entire fire alarm system in order to comply with new fire codes, and approximately $20,000.00 to replace unforeseen rotten wood around window and door openings, and WHEREAS, the property owners have exceeded the initial budget of Project No. 510 by nearly $40,000.00, and WHEREAS, the property owners are requesting an additional loan of $20,000.00 from the EDA, and WHEREAS, the City Staff has reported favorably regarding the execution of the original rehabilitation project, and WHEREAS, the attached Amendment to Loan Agreement and Construction Disbursing Agreement, Third Mortgage Note and Third Mortgage (collectively "Loan Documents") set forth acceptable terms and conditions for this additional loan. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the foregoing recitals are incorporated herein by reference. 2. That t~is Amendment to the rehabilitation project known as Improvement Project No. 510, involving an additional loan in the amount of $20,000.00 to New Hope Apartments, a Minnesota general partnership, in accordance with the Loan Documents attached hereto and incorporated by reference, is approved. 3. That the President and Executive Director are hereby authorized and directed to sign the Loan Documents, and along with staff, are further authorized and directed to take such steps as are necessary to complete the ~oan and oversee this rehabilitation project. Dated this day of , 1994. Edw. J. Erickson, President Attest: Daniel J. Donahue, Executive Director November 4, 1 Mr. Dan Donahue City Manager City of New Hope '4401 Xylon Avenue North New Hope, Mn 55428 Dear Mr. Donahue: Enclosed is a list of invoices submitted to Kirk McDonald and Jean Coone last Friday. I explained to them that our original estimate of costs would be $194,700.00. As you can see we are at $187,1t30.74 to date. We still need to complete an additional $40~45,000.00 worth of work if we are going to really complete the rehab as planned. The reason we misjudged the initial dollar amount was due primarily to two things: (1) I did not anticipate the need to redo the entire fire alarm system, but the new codes are coming into play so in order to comply, we spent an additional $14,000.00 and (2) the window project exceeded budget by nearly $20,000.00 due to the excessive amount of rotten work around the door and window openings. This had to be fixed and done properly; otherwise the new windows would be useless. We also installed new window coverings on all new windows as well as repaired and replaced all sidewalks that were badly cracked and/or dangerous. The net result was we went over budget by nearly $40,000.00 dollars. My request is that the current second mortgage amount of $97,350.00 be increased up to $117,350.00 so that we can complete the project as planned. I think you will be very pleased with the project once completed. Please call me if I should meet with you to discuss further. My phone number is 341-9395. S~cer,ely, David P. Stewart, Partner New Hope Apartments DPS:slh cc: Kirk McDonald Jean Coone INVOICES SUBMITIZD FOR PAYMENT NEW HOPE REHAB VENDOR TOTAL BILLS COMMENTS Rayco Constructic~n Z5,888.00 Submitted and paid Dorglass, Inc. 93,138.19 Graphic Floor 6,550.06 Bituminous Roadways 6,637.00 Safeway Alarm 21,836.00 New Hope Partnership for *Kings Window Covering 3,867.66 *Management Ser. Inc.-Labor 3,817.50 Thru 8/15/94 *Bush Barbers 600.00 *Creative Lighting 1,184.00 *Norsk Concrete 2,967.00 *Carpet Resources, Inc. 3,570.75 *JJ. Walker Construction 3,352.05 *Patrick Henry Trust 4,405.50 *Greg Janilcula-Painting 7,485.00 *Petty Cash 1, I00.00 *Specialty Sales Set., Inc. 762.00 Total Invoices Through 11/3/94 $187,160.74 ITEMS NEEDED TO BE COMPLETED 1. Master key new security system $ 900.00 2. Sealcoat and stripe driveway 2,800.00 3. Purchase 4 stoves 330 = 1320 4 refrig. 400 = 1600 8 air. cond. 400 = 3200 = 6,120.00 4. Replace 4 carpets 1041 = 4,164.00 5. Complete landscaping - pool area 1,500.00 7. Plumbing/bathroom repairs 4,000.00 8. Kitchen/bath fixtures and flooring 6,000.00 9. Sheetrock repair - 10 units 2,000.00 Total $27,484.00 Total Spent to Date $187,160.74 Planned for next 6 months 27,484.00 $214,644.74 Amount requested 214,644.74 Amount agreed 194,700.00 Excess amount needed $ 19,944.74 Request the City increase the note from $97,350.00 to $107,322,37 - say $107,350.00. AMENDMENT TO LOAN AGREEMENT AND CONSTRUCT[ON LOAN DISBURSING AGREEMENT THIS AMENDMENT to Loan Agreement and Construction Loan Disbursing Agreement (hereinafter referred to as "Amendment") is made this day of , 1994, by and between New Hope Apartments, a Minnesota genera] partnership (hereinafter referred to as "Borrower") and the Economic Development Authority in and for the City of New Hope, a Minnesota Municipal Corporation (hereinafter referred to as "Lender"). WHEREAS, Borrower and Lender entered into a Loan Agreement and Construction Loan Disbursing Agreement dated June 10, 1994 (hereinafter referred to as "Loan Agreement") in which Borrower applied to Lender for a real estate mortgage loan on the loan property, as defined in the Loan Agreement, in the principal amount of $97,350.00 (the Initial Loan Amount), and WHEREAS, Borrower issued the following security documents to Lender for the Initial Loan Amount, all dated June 10, 1994: (a) Second Mortgage Note in the original principal amount Of $g7,350.00; (b) Second Mortgage securing the loan note in the amount of $97,350.00; and (c) the Loan Agreement, and WHEREAS, Borrower has applied to Lender for an additional real estate mortgage loan on the loan property in the principal amount of $20,000.00 (the Additional Loan Amount), and WHEREAS, Borrower has issued the following security documents: (a) Third Mortgage Note of even date herewith made by Borrower and 1 payable to the order of Lender in the original principal amount of $20,000.00 (Loan Note or Note); (b) Third Mortgage securing the Loan Note in the amount of $20,000.00 (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); and (c) this Amendment. NOW, THEREFORE in consideration of the mutual covenant's hereinafter contained, it is hereby agreed as follows- 1. The terms of this Amendment shall amend the Loan Agreement, and any conflicts between the terms of this Amendment and the Loan Agreement shall be resolved in favor of this Amendment. 2. The purpose of this Amendment is to amend the terms of the Loan Agreement so that the terms of the Loan Agreement apply to the Initial Loan Amount and the Additional Loan Amount. 3. Amount of Loan. Borrower agrees to take and Lender agrees to make a loan in the principal amount of $20,000.00 (the Additional Loan Amount) to be advanced as hereinafter provided, said loan to be evidenced by a Third Mortgage Promissory Note and secured by a Third Mortgage and any other security documents required under this Amendment. The terms and conditions of the Third Mortgage Loan Note, the Third Mortgage and any other instrument required under this Amendment are hereby expressly incorporated herein by reference and made a part hereto. The total amount of the Initial Loan Amount plus Additional Loan Amount sha]] be $117,350.00. 4. In addition to documents required to be delivered by Borrower under the Loan Agreement, Borrower also covenants and agrees to immediately without expense to Lender cause the compliance with the following conditions, such conditions being hereby made a condition precedent to Lender's obligation to make any advance of the Additional Loan Amount: (a) deliver to Lender the Third Mortgage Note; (b) deliver to Lender the Third Mortgage together with evidence that the mortgage has been duly filed for record; (c) deliver to Lender evidence of marketable title, including an updated Abstract of Title and a Registered Property Abstract; (c) deliver to Lender such evidence of consent of the First Mortgagee to the Third Mortgage as required by Lender. 5. All duties, obligations, covenants, warranties and indemnifications contained in the Loan Agreement shall apply to the Second Mortgage and Second Mortgage Note and also apply to the Third Mortgage and Third Mortgage Note. 6. Disbursement of the Additional Loan Amount shall be governed by the terms of the Construction Loan Disbursing Agreement, but with the following amendments to said Loan Disbursing Agreement: (a) the Loan amount shall total in the aggregate $117,350.00; (b) deposit into Owner Fund by Owner of the Additional Loan Amount shall be made within ten (10) days of the date of this Amendment or before the owner submits an advance request to Lender involving the Additional Loan Amount; (c) indemnification with respect to mechanic's ]iens shall be extended to cover the Third Mortgage; (d) in the event of any conflict between this Amendment and the Construction Loan Agreement or the Construction Loan Disbursing Agreement, the provisions of this Amendment shall govern. NEW HOPE APARTMENTS, a Minnesota general partnership By: Its General Partner By: Its General Partner THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE By: Its President By: Its Executive Director c: \ w p5 l\cnh\eda, a~ld 4 TH]'RD MORTGAGE LOAN NOTE $20,000.00 , Minnesota , 1994 FOR VALUE RECEIVED, the undersigned, New Hope Apartments, a Minnesota general partnership (hereinafter designated as "Borrower"), promises to pay to the order of the Economic Development Authority in and for the City of New Hope (hereinafter referred to as "Lender"), (Lender and any holder of this Note from time to time are each hereinafter sometimes referred to as "Holder"), 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 Twenty Thousand and No/lO0 Dollars ($20,000.00) or so much thereof as shall have been advanced hereunder to or for the benefit of the undersigned pursuant to the terms of a Construction Loan Agreement dated June 10, 1994, as amended, made by the Borrower and Lender (hereinafter referred to as the "Loan Agreement"), together with no interest from the date hereof until fully paid except such interest as set forth below. The Principal Balance and interest (if any) shall be due as follows- A. Monthly principal payments commencing on the first day of the eleventh month after June 10, 1994, shall be in the amount of $200.00 per month and a like amount shall be due and payable on the same day of each month thereafter until the principal balance is paid in full. B. In addition to the monthly principal payments, at the same time Borrower shall pay no monthly interest payments, unless such interest shall accrue for the previous month in accordance with the terms hereinafter set forth. C. All payments made by Borrower pursuant to the terms of this Note shall be applied first to interest (if any) and then to reduction of principal. D. No interest on the Principal Balance shall accrue because of rental rate increases at the Mortgaged Premises during each month in which the rental rate for each unit in the Mortgage Premises remain the same as of June 10, 1994, or increases no more than the Allowable Rent Adjustment as described hereafter. Borrower will have the right to increase rents on individual apartment units on the Mortgage Premises for new tenants or renewals of leases for current tenants by the allowable rent adjustment as set forth below. The allowable rent adjustment ("Adjustment") will be calculated annually, based on the previous year's Consumer Price Index for general goods, or its reasonable potential future substitute as available from the federal government. For the purposes of this Note, the 1993 Consumer Price Index was 2.7%. Base rents for each apartment unit in the Mortgage Premises will be established as of the date hereof. The base rents will be limited to the lowest rent charged for that particular unit during the six months prior to June 10, 1994. As of June t0, 1994, Borrower will certify a rent roll listing each apartment unit on the Mortgage Premises and the lowest rent charged for each unit during the previous six months, and including the identification of all "identical" units. On the anniversary date the year after June 10, 1994, Borrower will update the maximum rents that may be charged for each unit, as adjusted by the 1994 Consumer Price Index and send this new certified rental roll to the Lender. If Borrower charges rents for any individual unit higher than the maximum allowable rents for that unit on the certified rent roll interest will commence to accrue on the entire outstanding Principal Balance as of the date the higher than certified rent was first in effect. It is the Borrower's responsibility to maintain an accurate certified maximum rental roll. There is no requirement that Lender evaluate the rental roll for accuracy or any other purpose. In the event of substantial or intentional misstatement by Borrower on the certified rent roll, Lender may, in its sole discretion, declare a default and cause the entire outstanding Principal Balance to be immediately due and payable, together with any accrued interest. Any rents that are lower than the rents charged for identical units can be raised only by the Consumer Price Index amount until such time as the unit becomes vacant. For example, if unit were rented for $380.00 per month, and the remainder of the identical units on the Mortgage Premises rented for $400 per month, and if the Consumer Price Index were five (5%) percent, a maximum rental increase allowed during the next year would be $19.00 for the unit renting at $380.00, and $20.00 for the identical units renting at $400.00. At the time that the $380.00 unit became vacant, it could be re- rented at the then certified price for the identical $400.00 units. Borrower agrees not to evict tenants paying lower rents than those charged for identical units, if such eviction is for the purpose of raising rents on these units. Such an eviction would constitute a Event of Default, allowing Lender to declare the entire outstanding Principal Balance immediately due and payable, together with any accrued interest. 2 E. No interest on the Principal Balance shall accrue because of rental rate increases after the date two years from June 10, 1994, regardless of any increase in the rental rate charged by Borrower for any rental units on the Mortgage Premises after such two year date. F. Interest shell also accrue from the date of any default hereunder. G. If interest is payable under this Note, the interest rate shall be eight (8%) percent per annum. 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 at any time. tn the event Borrower sells or otherwise transfers the Mortgage Premises, or in the event Borrower receives any funds or economic benefit following the award of low income tax credits in connection with the Mortgaged Permises, the entire Principal balance and any interest accrued thereon shall be immediately paid to Lender. This Note is secured by a Third 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 in the payment of any principal or interest 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 accrued thereon, 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 in or in 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 re]ease 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. 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 t'o 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. 4 NEW HOPE APARTMENTS, a Minnesota genera] partnership By. Its General Partner By. Its General Partner The undersigned do hereby guaranty performance of ail terms and obligations as specified in the foregoing Second Mortgage Note for a period of two years from June 10, 1994. Signature Print Name (Address) Signature Print Name (Address) Si gnature Print Name (Address) Signature Print Name (Address) Si gnat ure Print Name (Address) Signature Print Name (Address) c: \ w pS l\cnh\ed~.l-3 6 THIRD MORTGAGE THIS INDENTURE, (hereinafter referred to as "Mortgage") is made this day of , 1994, between New Hope Apartments, a Minnesota general partnership, whose address is 100 South Fifth Street, Suite 1250, Minneapolis, MN 55402, the ("Mortgagor"), and the Economic Development Authority in and for the City of New Hope, having its office at 4401Xy]on Avenue North, New Hope, MN 55428, (hereinafter called "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 Twenty Thousand and No/lO0 Dollars ($20,000.00) and bearing no interest except as 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, the Mortgagor conveys forever all of the Mortgagor's right, title and interest in the tract or parcel of land, legally described in Exhibit I hereto, (hereinafter the "Land") together with all of the buildings, structures and other improvements now standing or at any time hereafter constructed or placed upon the Land, all easements, appurtenances and other rights and interests now or hereafter located thereon (all of the foregoing, together with the land, hereinafter being referred to as the "Property" or "Mortgaged Property"), 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 (if any) on the Note, and shall also keep and perform all and singular the covenants herein contained, 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 the Note contravene any covenant in any 1 indenture or agreement affecting the Mortgagor; that the Mortgaged Property is free from all liens and encumbrances except those identified in 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 located entirely within ~"he boundaries of the Land. The covenants and warranties of this paragraph shall survive foreclosure of this Mortgage and shall run with the land. AND IT FURTHER COVENANTED AND AGREED AS FOLLOWS: ARTICLE ONE GENERAL COVENANTS, AGREEMENTS, WARRANT[ES 1.1 Payment of Indebtedness, Observance of Covenants. Mortgagor will duly pay each installment of principal and interest 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, the Loan Agreement, or any other security document referred to herein. Mortgagor will also duly pay each installment of principal and interest on the First Mortgage and First Mortgage Note and on the Second Mortgage and Second Mortgage Note and will perform all other agreements and covenants to be performed under the First Mortgage, First Mortgage Note, Second Mortgage and Second Mortgage Note. 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. 1.3 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. 1.4 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, 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 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). The Mortgagor shall pay all premiums on insurance r~quired hereunder by making payment directly to the insurer, and upon request of Mortgagee, the Mortgagor shall promptly furnish to the Mortgagee evidence of all such policies, renewals thereof, renewal notices and all paid-premium receipts received by it, (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. 1.5 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. 1.6 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 as amended and all other documents or instruments of security referred to in this Mortgage. 1.7 Low Income Tax Credits. Mortgagor agrees to repay the Note in full immediately upon the receipt of initial funds or economic benefit following the award of low income tax credits for the Mortgaged Property. 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 interest or 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. 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 Volunt~ry 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. 2.6 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 or other competent jurisdiction, which order, judgment or decree shall have remained in force undischarged or unstayed for a period of thirty (30) days. 2.7 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). 2.8 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). ARTICLE THREE ACCELERATION AND FORECLOSURE; OTHER REMEDIES Upon any Event of Default, the Mortgagee may, at its option, exercise one or more of the following 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 auct.~on and convey the same to the purchaser in fee simple and, out of the proceeds arising from such sale, 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 real 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, 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 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 acce]erate the maturity of such Indebtedness by reason of any past, present or future event which would permit acce]eration. The procurement of insurance or the payment of taxes or other liens or charges by the Mortgagee sha]] not be a waiver of the Mortgagee's right to acce]e'~ate 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 a]ter 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 priority and first lien status of this Mortgage upon any property not so released. ARTICLE FOUR MISCELLANEOUS 4.1 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. 4.2 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. 4.3 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: New Hope Apartments, a Minnesota general partnership David P. Stewart 100 South Fifth St., Suite 1250 Minneapolis, MN 55402 6 or at such other address as the Mortgagor may designate in writing to the Mortgagee. 4.4 Governing Law; Severability. 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 law, such conflict shall not affect other provisions of this Mortgage which c&n be given effect without conflicting provisions and to this end the provisions of the Mortgage are declared to be severable. 4.5 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. 4.6 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 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 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. 4.7 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 $20,000.00. (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. IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be duly executed as of the day and year first above written, ' NEW HOPE APARTMENTS, a Minnesota general partnership By Its By. Its 8 STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 1994, by and , both general partners of New Hope Apartments, a Mi.nnesota general partnership, on behalf of the partnership. Notary Public THIS INSTRUMENT DRAFTED BY: CORRICK & SONDRALL, P.A. 8525 Edinbrook Crossing, Suite 203 Brooklyn Park, MN 55443 (612) 425-5671 c: \ w p51 \cnh\eda. t a EXHIBIT I That part of Lot 34 lying South of a line drawn parallel to and 60 feet North of the South line of Lot 3t, extended East, to the East line of said Lot 34, and lying North of the South line of Lot 32, extending East to the East line of said Lot 34, except the East 163 feet thereof, ,. all in "Auditor's Subdivision Number 324, Hennepin County, Minnesota", according to the recorded plat thereof,  EDA REQUF~T FOR ACTION Originating Department Approved for Agenda Agenda Section City Manager EDA ~ 11-14-94 Kirk McDonald //x) Item No. By: Management Assistant By: 6 RESOLUTION AUTHORIZING EXECIJ~IVE DIRECTOR TO EXECUTE LETTER OF AGREEMENT WITH EQUAL ACCESS HOMES TO PROVIDE DESIGN SERVICES FOR HANDICAPPED ACCESSIBLE TWIN HOME AT 5009 WINNETKA AVENUE NORTH (IMPROVEMENT PROJECT NO. 505) The EDA is cooperating with the CO-OP Northwest Community Revitalization Corporation to construct a handicapped accessible twin home on City-owned property at 5009 Winnetka Avenue North. When completed, the homes/property will be sold to provide affordable home ownership opportunities for persons with disabilities. It is the intent that the City hire a firrn to work with staff to develop house plans for the site and then seek bids on the construction. City staff have solicited Requests for Proposals from four architects/designers who specialize in the design of accessible homes and have reviewed/checked their references and previous work. The firms and their estimated costs are listed below and described in more detail in the attached materials: Firm Estimated Cost LHB Engineers & Architects $9,500.00 Accessibility design $7,475.00 Roark, Kramer, Rascoe $3,600.00 Equal Access Homes $1,800.00 Staff requests authorization for the Executive Director to enter into and execute a Letter of Agreement to be drafted by the City Attorney, with Equal Access Homes, the low quote, to provide design services for this project. Staff will bring the twin home design back to the EDA for approval prior to the construction bidding process. Staff recommends approval of the resolution. To: n 7iOt q4- 10 : Es/On Review: Administration: Finance: RFA-O01 !~ EDA RESOLUTION NO. 94- RESOLUTION AUTHORIZING EXECUTIVE DIRECTOR TO EXECUTE LETTER OF AGREEMENT WITH EQUAL ACCESS HOMES TO PROVIDE DESIGN SERVICES FOR HANDICAPPED ACCESSIBLE TWIN HOME AT 5009 WINNETKA AVENUE NORTH (IMPROVEMENT PROJECT NO. 505) WHEREAS, the New Hope Economic Development Authority is cooperating with CO-OP Northwest Community Revitalization Corporation to construct a handicapped accessible twin home on City-owned property at 5009 Winnetka Avenue North; and WHEREAS, when completed the homes/property will be sold to provide affordable home ownership opportunities with disabilities; and WlIEREAS, it is the intent that the City hire a f'uma to work with staff to develop house plans for the site and then seek bids for the construction; and WHEREAS, City staff have solicited Requests for Proposals from architects/designers who specialize in the design of accessible homes and have reviewed/checked their references and previous work; and WHEREAS, the fa'ms and their estimated costs are as follows: Firm Estimated Cost LHB Engineers & Architects $9,500.00 Accessibility Design $7,475.00 Roark, Kramer, Rascoe $3,600.00 Equal Access Homes $1,800.00; and WHEREAS, staff requests authorization for the Executive Director to enter into and execute a Letter of Agreement, to be drafted by the City Attorney, with Equal Access Homes, the low quote, to provide design services for this project. NOW, THEREFORE, BE IT RESOLVED, by the New Hope Economic Development Authority that the Executive Director is hereby authorized to enter into and execute a Letter of Agreement with Equal Access Homes to provide design services for handicapped accessible twin home at 5009 Winnetka Avenue North (Improvement Project No. 505). Adopted by the Economic Development Authority in and for the City of New Hope this 14th day of November, 1994. President Attest: Executive Director Memorandum DATE: NovemDer 9, 1994 TO: Kirk McDcnald, Management Assistant/Community Devetol~, nent Coordinator FROM: Sarah Bellefuil, Administrative Analyst RE: Architect/Designer for 5009 Accessible Twin Home Project On October 28, I sent the attached letter to four architects/designers who have done work specifically with accessibihty design m the past. All four responded to my RFP. Since then, I have .done reference checks on these individuals and have visited some of the accessible homes that they designed. In response to my reference checks I have the follov, ang information: LHB Engineers & Architects: They have very good design quality and produce thorough plans and specifications. They also have a staff imenor designer that is knowledgeable about accessibility design. LHB Engineers & Architects has done a number of accessible projects including eight barrier flee houses for Habitat for Humamty, two of which were fully accessible. They have also designed accessible housing for Project for Pnfle in Living, Inc. Their estimated cost is $9,500. Accessibility Design: They ate very knowledgeable about accessibility needs and design. They have completed a number of ~ acceasible homea (2800 square fe~ or more) and additions. They have taken both ~ d~i~ and modified them and have designed homes fxom scratch. I recently viaited a accessible home that Accessibility Design comple',ed and think that they could do a good job. Their estimated co~t is $7,475 phm "out-of-pock~ expense." Roark, Kramer, Rosco,: They have dooe two acceasible houses in the Powderhom Park neighbortm~ ~f~. The ~ze oftheae homea were between 1,300 and 1,500 square feet. The ~ I e~ac~d s~at,~ that they were a good design company but do not have good Their eaximated coat is $3,600. Equal Access Homes: I spoke with numerous references concerning thi.~ company and visited one home that th~ recently built. Each stated that they were very pleased with their work, that they built ~thin budget and were very. knowledgeable about accesslbflit~- issues. Each of the references I contacted lived ua moderate sized homes, be~'een 1,100 to 2.400 square feet. The reference stated that the company e~ther took an exastmg plan and modified it or drew up their own plan. They also stated that Equal Access Homes is always avaalable for questions. This company has done a tot of work w~th the Veterans Administration and is knowledgeable about their accesstbllitv requtrements for materials and design. Thetr estunated cost ix'$1,800 plus $35.00 an hour for any unscheduled meetings. The reason the cost is so low ts because the person that designs the houses bulk by Equal Access Homes ts a designer, not an architect. In addition, the specs are written up by a builder, not an arcbatect. Equal Access Homes is a designer/builder. Therefore, they will also bid the construction work for this project. After reviewing the four proposals, I feel that Equal Access Homes may be the best option for the accessible twin home project. They arc knowledgeable about handicap accessible design and have designed and built small, accessible homes. They arc also inexpensive and have received very. good recommendations from people they designed and built houses for in the past. 4401 Xylon Avenue North Tetepl~one: ~12-531-5100 . , City Hall New Hope, Minnesota 55428-4898 TDD L~ne: 612-531.5109 Pot~ce Fax PuOtic Wor~$ Fax. October 28, [994 1ane A. Tnmble, ASB'~-- Access~bdity Design 2933 D~om Avenue So~ ~~lis, ~ 55416 D~ J~e: ~ you for m~g ~ me ~ w~ to ~s ~e ~p a~essible ~n home proj~t to develo~ by ~ Ci~ of New Ho~. You pr~d~ me demo~ ~owl~ge ~ ~m~ m ~i~i.s inmr~ m ~g out yo~ e~im~t~ ~ for ~e ~mces li~ ~low. ~e~ e~t~ shoed ~ ~n dol~ fi~e fo~. 1) M~ ~ Ci~ ~ ~ ~ ~ ~ble ~ home dmi~. 2) ~ a ~~ ~" for ~ 3) D~elop ~on ~ ~ fo~l ~ ~ ~ ~ ~ ~ ~ b~d~. ~ Ci~ roll go out for bid on ~ ~ you ~. 4) V~t ~ a~ ~ w~on on a ~ or ~-~ 5) M~t~~~~~n~~~r~m~epmj~. E~ples incl~ ~ ~ ~ ~ ~ ~ ~ 6) Mint ~ ~ ~ to ~i,e ~lom ~ ~g ~ ~m, ~te~, ~c. Balm ~es It ~ ~e Ci~'s ~ ~ ~ ~ ~ ~ llSO ~ 1250 ~ f~ ~h. ~ ~o~d ~ch ~ve a ling ~ ~ ~ini~ ~ O~ ~ ~ ~th~ a ~ r~~r, ~ ~o ~. The Ci~ ho~ m ~ ~ ~ ~ ~ a ~ of $15~,~. ~ ~~~~ ~Ci~~~pof~e~ ~~pmg ~ ~ ~ ~ ~ ~ ~ Ci~ Fo~ ~= m~on ~ ~ m~l~ I ~e ~a~~g~~~. ~ ~ ~ ~ ~ ~ble ~ 51~ Avenue. Family Styled City'~~ For Family LJvin8 November 3, 1994 Sarah Bellefuil ~ ' Administrative Analyst City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428-4898 Dear Sarah: Thank you for your letter requesting a proposal for the accessible twin homes. LHB is very interested and uniquely qualified to do this project. Listed below are our per home costs to complete the project, based upon the list of services you have outlined: Marketing Plans $1,500 Conslruction Documents $3,500 Construction Administration $1,000 Buyer Assistance Per Home C~ TOTAL COST $13,000 If the twin homes wer~ done at the same time, our total cost would be reduced to $9,500. LHB will provide the greatest overall quality including the following value-added services: · LHB's experience and ~ designing five similar ~ble homes · Proven plan layouts which can be modified for this project · An ~ intelior desi~ller who speci~li,_~ in accessibility We are ~ that when you ~aluate our qualifications, compatibility and value, LHB will be your besi ~ to desi~ your accessible twin homes. Please let me know if you will need referenc~ in ~klition to those already provided. I will call you next week to follow-up with you regarding this proposal. Thank you for your consideration. Vie~-Pr~idem Minneapolis Office Duluth, MN Minneapolis, MN Superior, WI Project Experience Dayton's Bluff& Thomas Dale Projects In two separate projects in St. Daytons' BluffHomes & Paul LHB was involved in Thomas~ale Replac. mnent designing 15 new single Houses family houses in historic neighborhoods. The project Client involved working with a new Dayton's BIMfN~rh~ Community Development Housing Sm'vic~, Coiporation in Thomas Dale, District 7 Planning Council and attaining approval by the ~ St. Paul Historic Preservation Location Commision for Dayton's Bluff St. Paul, Minnesota Neighborhood Service. LHB Engineers & Architects Project Experience Project For Pride In Living Project For Pride In Livi~ Two new home~ designed to be Homes acceesibk to handicapp~ individu~ sad to compliment Client the netF, bb~s exJ~inf Projec~ Fo~ ~ la Livid, Ino. hom~. Project Experience Lyton Park Place Project Design of 21 single-family homes with complementary optiom and Lyton Park Place styles to integrate into an estab- Residential Development lished urban neighbothood. Five of the homes were designed to be Client completely barrier free, and others Habitat for Humanity have one level of accessibility Justin Propetti~, Inc. with bm'tier ft~ entries. New on- Locatiol site parking lots and street parking St. Paul, Minnesota were al~o created. Published Architecture Minngsota Magazine May/June 1992 Architecture Magazine May 1992 ,4~arded LHB Engineers & Architects 1991 MSAIA Honor dward Project Experience Commonsview Development Project ~ Design ofthr~ single-family Commonaview Development home~ with complementary options and styles to integrate Client into an established tn'ban neigh- Habitat for Humanity borhood. Three other home~ wer~ built by ~ the Ortlffill£ IViinnlllipolJ$ Metro- Minneapolis, Minn~m politan Housing Corporation and Habitat for Humanity. This site is in the 1900 block of Morgan Avenue North. Project included these elements: Single/multiple-family home~ and apatqment blli]clings Multiple construction projects Multiple jurisdictions Public contacts Consultant team structure Field data collection References Joarme Toolcy Thomas Dale District 7 Planning Council 369 University Avenue St. Paul, MN 55103 (612) 298-5068 Susanne Patterson Kloven Project for Prid~ in Living 216 Chicago Avenue South Minneapolis, MN 55404 (612) 874-8851 Stephal Siedel Twin Cities Habitat for Httmanity P.O. Box 7053 Minneapolis, MN 55404 (612) 332-3372 Amscan Lung Association 1829 Portland Aventm (612) 871-7332 David Van Landsehaot Mem's Park: Place, Sui~ 125 405 Sibley Stre~ St. Paul, MN 55101 (612) 227.*9842 Am F./chul Dayton's Bluff Neisborixxxt 951 East Fitth Strut St. Paul, MN 55106 (612) 774-6995 lB Il Letter of Agreement Date: November 3, 1994 Client: City of New Hope 4401 Xylon Ave. North New Hope, Minnesota 55428 Contact: Sarah Beilefuil - Ph. (612) 531-5137 Project: Handicap Accessible Twin Home, New Hope, Minnesota sco,,, o,S.r,,,c.,: Accessibility Design will provi and consultation, project management and product research, buyer assistance, and marketing services for the handicap accessible twin home project to be developed by the City of New Hope. In reference to the attached request for services compiled by Sarah Beilefuil, the following services will be provided by Accessibility Design under the terms of this agreement: Consultation and Dmian -~ewie~,~ - Meetings with (~jty to dJ~'~.-'uss the accessible twin home project. - Preparation of comtruction documents to include: floor plans, elevations, sections, details and product/finish specifications as needed to build twin home. - Site and landscape comultation for access issues. - Conducting a needs assessment of the buyers to assist with determining special needs with respect to the design and product selections. - Review finishes and appliances which have been presented to the homeowner by the builder for accessibility features. Proiaef Marm~m~ne S~rvi~ - Produ~'tion of drawings and text lay-outs for marketing flyers. - Product research, specification and procurement of specialty products and equipment for each home. - Site visits during construction twice per month or as needed. · · iiI mm m--m- Service Fees: The proiect fee for consultotion ond design ond proied' monogement services performed by Accessibility Design for the ~in home outlined in this ogreement is $7,475.00 equivotent to 1 '15 hours ot o rote of $65.00 per hour. Any 'out-of-pocket expenses" incurred by Accessibility Design which ore incidentol to the tim~Jy completion of this project, such os long distonce phone coils, postoge, photocopying, focsimiles, film developing, typing, binding services, postoge ond hondling, ond other documented expenses, sholl be invoiced to client monthly. Reimbursement for mileoge will be billed to client ot o rote of $0.28/mile. Trovel time will be billed ot o rote of $24.00/Hour. A retainer of $2,500.00 will be collected by Accessibility Design upon client's signature of this agreement and will engage the services listed herein. The remainder of service fees will be due monthly according to the payment schedule below: Contract Signing (retainer) 2,500.00 December 1, 1994 1,500.00 January 1, 1995 1,500.00 February 1, 1995 .1,500.00 March 1, 1995 475.00 (balance) This fee schedule is based on the project fee for the services listed above and is designed to distribute payment evenly throughout the project phases for ease of billing and record keeping. It is not representative of monthly work loads and will not be altered unless the scope of services changes. Monthly fees above do not include "additional expenses", which will be invoiced separately each month. If project is completed before March 31,1995, the balance of the :$7,475.00 project fee will be payable in full at completion date. If project extends beyond March 31,1995, monthly invoices will consist only of additional fees. For items purchased by Accessibility Design on client's behalf, such as special equipment, furnishings, and accessories, Accessibility Design will prepare estimates in the form of sales orders and submit them to client for review. Purchase orders will not be issued until dient returns o signed copy of the sales order together with the required deposit wh~ sl~r. ified. All purchases will be billed to client at Accessibility Design's cost+ 25'~oncl shipping/handling charges plus any rush processing and/or delivery charges For the duration of this agreement only. On most purchases, this represents a substantial discount from retail prices. Additional terms and conditions of purchasing will appear on the back of each sales order. · · II In mm If Accessibility Design is required to render services not contemplated by this agreement, to provide extra drafting or incur additional expenses due'to change orders made by client, Accessibility Design shall be paid for such extra services and expenses, for the reasonable value or cost thereof. Revisions and changes may be made during the study of the work. Changes that must be made by Accessibility Design resulting from revised ideas, structural or mechanical after the work of Accessibility Design has been completed and accepted, will be billed to the client at the regular hourly rate plus any other specific c~sts incurred. Such changes or revisions will be made only upon receipt of written order from the client. All invoices are due and payable upon receipt. Amounts ¢emaining unpaid thi~ (30) days from date of invoice will be charged interest at the rate of 1.5 percent per month on the outstanding balance (equal to 18% per annum). Liability: Accessibility Design's liability to client and all others for claims, losses, or other damages or expenses due to negligent errors or omissions and other breaches of this agreement shall be limited to the total compensation paid to Accessibility Design by the client. Accessibilily Design is not an architectural or engineering firm. Where appropriate or required by law, Accessibility Design will retain licensed professionals as subconsultants to provide architectural and engineering services. Acting as a design and consultation service, Accessibility Design cannot be held responsible for work engaged by third parties or decisions not made by Accessibility Design. Accessibility Design cannot be held responsible for warranties not provided by our manufacturers and resources. Review and approval of all designs and documents prepared by Accessibility Design is the responsibility of the client. AccessJbility Design upholds the right to place lien on properly according to the Minnesota Statutes and State of Minnesota Lien Rights. Termination: The agreement between client and Accessibility Design may be terminated by either party in case of substantial breach by the other, upon seven (7) days written notice. In case of such termination, Accessibility Design shall be paid for services rendered 1~ date in accordance with this agreement, including additional services, product oedem, and reimbursable expenses then due. Except by breech by either party, this letter of agreement and it's terms will terminate one year from its date, November 3, 1995. · [] mm mm Il In I · Ownership and Use of Documents: Ail documents prepared on behalf of this project by Accessibility Design are the property of the party that originally prepared them. All designs remain the property of Accessibility Design and may only be usecl for the purpose of the project for which this c~greement presides. Permission for use of designs by third parties for future projects must be granted by Accessibility Design. Accessibility Design reserves the right to videotape, photograph and otherwise document the execution of the project for educational use and Accessibility Design's project portfolio, promotional aids, and design competitions. General Conditions: This agreement comprises the entire agreement between client and Accessibility Design and supersedes any prior discussions. Any amendments must be in writing and signed by all parties. Respectfully submitted, Date Jane A. Trimble, ASID President, Trimble Enterprises, Inc. Accessibility Design ACCEPTANCE Accessibility Design is hereby authorized to furnish all services mentioned above, for which the undersigned agrees to pay the amount mentioned in said to the terms . proposal/agreement, according cO.~f Client Signature · · Il II II Projects and Affiliations Accessibility Design is a State of Minnesota Approved Vendor and a Targeted Group Woman Owned Business. Professional Affiliations American Sociel,/of Interior Designers - Professional Member and Guest Lecturer Builders Association of lhe Twin Cities. Professional Member Rotary Club of Minneapolis * Accessibility/Interior Design Representative University of Minnesota, Dept. of Design, Housing & Apparel - Adjunct Profetsor Wildeme~ Inqui~/* Board of Director; Sister Kenny In~itute Center for Asii~Ive Rehabilitation - Advi~oe/Council Member Minnesota Gerontological Sociely - Member Access Resource Netwa~ - Member Residential Projects (In alphabetical order) John and 8elh Bmdemus Reeidence Access~le Renovation New Brighton, MN 2200 Square Feet Spring Preview 1992, Showcme Home Universal Twin Home Buildem Amxiaflon a~ the Twin C'~ie~ 1300 Square Feet Canlin Calmmaion Dr. IMIIMI'MM ~ Oe~r Addition, Interkx Design Cad and Margaret Chri~en~on Rmidence Acc--~ible Renovation Fridley, MN 2000 Square Feet · · Il Il nn · Residential Projects (continued) Spring Preview 1993, Showcase Home Accessible New Construction F F.C Construction 4200 Square Feet 2765 Niagara Lane Plymouth, MN Rod an~ Nan~,~er Residence Four Season Porch A~ition Design E~en Prairie, MN 400 Square Feet Jan and Bruce Gilbe~son ~idence Accessible Spa Modifications Roseville, MN Sally Heule Residence Condominium Rem~el Edina, MN 1000 Square Fee~ Richard and ~hel Hollinb~ Residence Stair ~ff In~allation & Proje~ Managemem Edina, MN Chad~ and Linda Homing Residence Acce~ible N~ Const~ion ~d~er, MN 1800 Square F~ St~ Johnson ~id~nc~ Acc~ibl~ N~ Con~ion LeCent~r, MN 3400 Square Fe~t Car~ K~nnedy ~idenco Acce~ible M~ific~i~s Minn~pdis, MN El~nor Lage~u~ ~id~ Acc~ible ~i~s Minnetonka, MN Je~ and R~e M~e ~e~ ~c~ible N~ C~i~ Sta~, MN 25~ Square Fe~ CP ~il: · ~ and ~ P~ ~c~i~e Br~ Pa~, ~- 16~ Square F~ J~ and C~le ~ ~~ ~c~i~e T~n H~ C~ ~, ~ 17~ Square F~ Fr~ ~ ~e ~ ~~ Stair Uff In~all~i~ ~ St~ I~m: Bob and ~ ~ing Brained, MN 35~ Square Jeff and M~ne Skdd ~~ A~c~ible N~ C~i~ H~, MN 22~ Square . Roark Kramer Roscoe DESIGN :929 Fo~ .,\~enue ~ou~, Mirme~polis. MN 55408 '~22-~200 Noveml~er 1. 1994 Sarah Betlefuil Administrative Analyst City of New Hope Dear Sarah: Thank you for gMng our firm the opportunity to meet with you and discuss our experience in d.,esigning accessible housing. After our meeting I visited the site and looked around the surrounding area, so now I have some feeling for the context of the proposed project. Roark Krarner Roscoe Design proposes an architectural fee of $3,600 for the following scope of work: 1. meet with City staff to discuss the twin home project. 2. produce a marketing design 3. Produce construction drawings and complete specifications for bidding, appraisals, public agency reviews, inspections department building permit approvals 4. Construction observation on a twice-weekly basis from placement of footings t~ough interior trim installation; once a week before and after those procedures, ar~ as required by coordination with contractor. One of.the twice.weeldy site visits could be coordinated with a once-a- week job meeting, se~ at a pre-eetal3#shed time (sucfl as 9;00 am. every Wednesday) with yourself and t~e corm'actor to discuss ~ progress.) 5. Meet witl~ buyer at whatever occasiofis required to determine special needs for tile ~ units basecl on tfle owners requirements 6. Meet wi~ buyer for ~ materials selections. I would present tttree concep~ proposaJs for your review and selection before riately-scale~l scltematic floor plans, site plan, description of materials, F'~yfirst Avenue allgllllll~ Averlue elevatiorts am:la perspective sketch, one copy of the skel~t ~ wittt color, the otber copy at 8112'x11' size for copy duplicatk:~ IIIIIIIte for yo~ use. Duplicate reduced-size copies of the floor plans, sll Illlt'al~l elevalion~ would also be Prel:mred for your use. The floor plans world imlcale ~ r~ dimemions. This project is of great interest to me, an opportunity to design a unique dwelling environment witttin ttm spectrum of Ix)using tl~at hes been the t)asis of our firm's practice. Sincerely, Robert R(~coe Roark Krame~ Roscoe 0esign prov,des architectural services in cles~jn, construction ~lrawings and specifications, construction observation and other related services for a wide range of building types and for a diverse clientele. Housing design is a major aspecl: of our practice. Roark Warner Roscoe Design has designed a wide variety of housing units, including historically-designated houses, townhous~% brownstone apartment building renovation, artist studio residences, private r~idences in remote rural settings, mixed-use: apartments adore storefront commercial shops, and others. Most of our housing work involves city-based non-profit community housing organizations producing single-unit, duplex, and multi-unit housing for affordable income buyers, using government-assisted financing and coordination. In the past 15 years our clients have included the Minneapolis Community Development Agency, Urban Ventures Corp., Rykodisc, Minneapolis Television Network and many community housing groc~ps: The Whittier Alliance, Seward Redesign, Powderhorn Community Council, Artspace, Project For Pride in Living. References: 3201 21st Avenue South, Minneapolis Handicap-accessible house 3304 25th Avenue South Handicap adaptable house Powderhorn Communib/Council Glenn SamlTson 724-150~ Cupola Condominuirns Minneapolis historic restoration of 1870s. house; design of three new carraige house units Whittier Alliance Lisa Kugler 338-8494" 'Kuqler's new work ohone Healy Block Houses, Healy Historic District Minneapolis Restoration documents for 3 single unit houses Minneatmlis Community_ Dev--_ ent Aaencv CYnthia Lee 673-5266 Artspac~ 7 housing MlY, lgtUres for artists' studio housing Will LaW 339-4372 House rehal~ on Nicollet Island David Hert~0rl 673-9314 Il Ada _ntab~.lror- Hlndicannmi ~04 ~th Av~nu~ ~ Minnnpoih Dam of ~attzma~l: 1994 (2)Produce a mar]ce~ino d~si~n for ~ho sit~. Do~i~ will i~cl'~: ~ron~ clcv~i~;~, FI~O~ O -- 2 hour ~e=tods =onsis~n~ of I hr./15 min. ~buuL th~ vaLiabl~ iizvulv~d wiLl~ ~11 a:~l~s~CL~ of Tha~ you rot your consideration. Charl~l P. Braun ~UD & U~:~ BROOK~ 454-~33 ~AGAN DO~ & 3EAN W~R ,I5g-3~ q~ COTTAGE C~O','" JEFF ~ARFER/REN~ ['F, RSSON 730- ]7~7 MADf,EWOOD GARRY & MA~Y KINNEY- 777-6133 OA~DAL~ EMMET & PAT KUKT,OCK 4~2-B2~ EARr, & VIRGiNiA wICK 730-6831 ~OG=R & COLLEEN KUNU~ 450-7880 ~RUCE & MARY ANDRZEJESKI 1-507-64~-23~6 ~ORTNFI~LD VANN KRANZ & SI.t~LLY OWEN-'' 45]-962] BRIAN & f, INDA GARRICK-' :-' '/3~-t823 WOODBURY ~ EDA REQUF~T FOR ACTION Originating Department Approved for Agenda Agenda Section City Manager EDA By:Management Assistant By: [ / 7 RESOLUTION CALLING FOR A/CLOSED MEETING OF THE ECONOMIC DEVELOPMENT AUTHORITY IN A~D FOR THE CITY OF NEW HOPE AUTHORIZED BY MINN. STAT. {}471.705 TO DISCUSS LITIGATION/SETTLEMENT STRATEGY ON EMINENT DOMAIN PROCEEDINGS REGARDING 5501 BOONE AVENUE NORTH The City Attorney has requested that a closed meeting of the Economic Development Authority be conducted after regular business is completed to discuss litigation/settlement strategy on eminent domain proceedings regarding 5501 Boone Avenue North. The attached resolution authorizes a closed meeting and staff recommends approval of the resolution. Re~rlew: Administration: Ftrmrme: RFA-O01 ~ EDA RESOLUTION NO. 94- RESOLUTION CALLING FOR A CLOSED MEETING OF THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE ~UTHORIZED BY MINN. STAT. §471.705 TO DISCUSS LITIGATION/SETTLEMENT STRATEGY ON EMINENT DOMAIN PROCEEDINGS REGARDING 5501 BOONE AVENUE NORTH WHEREAS, Minn. Stat. §471.705, Subd. l(d) authorizes and permits the Economic Development Authority in and for the City New Hope (hereafter EDA) to hold a closed meeting to discuss EDA issues and information protected by the attorney-client privilege, and WHEREAS, the EDA commenced or has been made a party to a lawsuit or been threatened with litigation which has presently activated its right under the referenced statute to hold a closed meeting, and WHEREAS, specifically the EDA is a party to a lawsuit commenced pursuant to Minn. Stat. Chap. 117 identified as Hennepin County District Court File No. CD - 2290 for the purpose of determining whether an award of damages for the taking of property located at 5501 Boone Avenue North, and WHEREAS, a closed meeting of the EDA is necessary to consider a settlement offer for presentation at a pre-trial/settlement conference scheduled before Judge Andrew Danielson on November 15, 1994, and to consider various legal strategies for the continued prosecution or defense of said action. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That a closed meeting of the Economic Development Authority in and for the City of New Hope shall be held on November 14, 1994 immediately following the adjournment of the regular meeting of the New Hope City Council, or adjournment of the regular meetings of the New Hope EDA or HRA in the event said public bodies have a regularly scheduled meeting on said day, at the New Hope City Council Chambers. 2. That the purpose of the meeting shall be the discussion of settlement alternatives and prosecution/defense strategies in connection with litigation of Hennepin County District Court File No. DC - 2290. 3. That said meeting shall not be open to the public. 4. That the New Hope City Clerk is hereby directed to tape record the closed meeting and preserve the tape recording for a period of two years from the date of the meeting. 5. That the New Hope City Clerk shall prepare a written roll of the members and all other persons present at the closed meeting and make said roll available for public inspection upon adjournment of the closed meeting. Adopted by the New Hope City Council this 14th day of November, 1994. Edw. J. Erickson, President Attest: Daniel J. Donahue, Executive Director CORRICK & SONDRALL, P.A. ATTORNEYS AT LAW STEVEN A. SONORALL LAVONNE E. KESKE ~C~A~L a. ~^~LEU. Edinburgh Executive Office Plaza W~LUA. C. S~.A~T 8525 Bdinbrook Crossing Suite ~203 Brookly~ Park, Minneso~ 55443 TELEPHONE (612) 425-5671 FAX (612) 42~5867 November 9, 1994 Mr. Daniel d. Donahue City Manager City of New Hope 4401Xylon Avenue North New Hope, MN 55428 RE: North Ridge Care Break Adult Day Care Center Condemnation Our File No: 99.53010 Dear Dan: I would like to discuss the referenced condemnation matter at a closed EDA meeting. Please find enclosed a proposed Resolution Calling for a Closed Meetin§ of the Economic Development Authority after close of regular business of the November 14, 1994 Council meeting. This matter is proceeding to trial. A pretrial conference is scheduled for November 15, 1994 before Judge Andrew Danielson to consider the issues stated in the Order Setting Pretrial/Settlement Conference, a copy of which is also enclosed. Also enclosed is relevant information the EDA may want to review prior to our closed meeting: 1. My October 5, 1993 letter submitted at a prior closed meeting to consider an appeal from the Commissioner's Award; 2. A danuary 7, 1993 Certification from Brad Bjorklund, the EDA appraiser, establishing property value at $141,400; 3. A September 7, 1993 letter from William Warner, the appraiser for the property owner, establishing property value at $371,800; Mr. Daniel J, Donahue November 9, 1994 Page 2 4. A September 15, 1993 letter I submitted to the Commissioners in support of a $141,400 payment for damages to the property owner from the taking; 5. A November 2, 1993 letter from the City Engineer indicating soil correction costs between $130,800 and $598,900. The main purpose of the meeting with Judge Danielson on November 15th is to determine if the case can be settled. Basically, as in the case with most condemnation cases, this matter boils down to the amount of money the EDA is required to pay the property owner for taking the property. We have a current exposure of $277,177.00. This is the amount of the Commissioners' award. We have paid the property owner $208,382.75. This payment equals 75% of the Commissioners' award ($207,882.75) plus $500 in appraisal fees. ' We still owe the property owner the remaining 25~ of the award or $69,295 plus interest of $4,538.09 through November 14, 1994, for a total of $73,833.09. Interest is accruing at a $5.77 daily rate. In other words, if both parties decided to drop their appeals, a payment to the property owner of the $73,833.00 plus accruing daily interest after November 14, 1994 would settle this case. I find it' very difficult to accept the Commissioners' award and agree to pay such a high price for this property in light of its significant and costly soil correction problems and its industrial zoning classification. The legal basis for determining damages in a condemnation case is simply what a willing buyer would pay a willing seller for property with knowledge of all relevant facts relating to value. The property owner also has the burden of proof to establish the fair market value of his property. In order for the property owner to win this appeal and establish a market value of $371,800, he will need to show that the property in probability would be rezoned for residential purposes and that a developer would pay this price regardless of soil conditions existing at the site. This property owner has owned the property since the early 60's. The fact that it has remained vacant and unimproved for 30 years is prima facia evidence that the site is not buildable. This should be strong evidence to suggest a high density residential project is not feasible for the site regardless of its proximity to other residential developments. The soil correction problems brought out in the City Engineer's November 2, 1993 tetter make that argument Mr. Daniel J. Donahue November 9, 1994 Page 3 even more convincing. Basically, the soil correction costs should constitute a dot~r for dollar reduction in the market price of the property. Utilizing the property owner's appraisal amount of $371,800, the market value of the property for a typical 3-story apartment complex would be $40,900 if the City Engineer's $330,900 minimum soil correction costs for an R-4 building are accurate. As you can see, the soil correction costs to render this property buildable significantly affect the value of the property. The EDA has previously offered to buy this property for $240,000 (see the City Manager's July 10, 1992 letter). Based on Bjorklund's appraisal of $141,400 and the extensive soil correction problems associated with this property, a $240,000 settlement offer is extremely generous, especially in light of the fact we have now incurred Commissioners' fees of $5,887.00 plus costs, attorney's fees and appraisal fees in addition thereto. The draw back, however, for pursuing this litigation is our exposure to payment of the property owner's costs, appraisal fees and expert witness fees even if he is not the "prevailing party" (See Matter of Minneapolis Community Development Agency, 447 N.W.2d 891 (Minn. App. 1989)). In conclusion, I feel confident we would be successful in our appeal to establish that fair market value for the subject property should be no more than $141,400. Nowever, there is always a risk that a court or jury will disagree with our expert witnesses despite the fact they seem to be the most credible witnesses. I would refer you to the MPRS lawsuit as an example of that phenomenon. We have previously offered $240,000 for this property. I would limit any settlement offer to that figure at this time. It is my understanding that the dollars for the acquisition of this property will come from either CDBG funds or reserve TIF funds and certainly TIF funds can be used for soil correction problems that exist at the property. Sincerely, Steven A, Sondrall slw3 Enclosures cc: Valerie Leone (w/eric) PS: Val, this is a closed meeting agenda item. As a result, only the resolution should be enclosed in the agenda made available for public review. SAS October 5, 1993 Daniel J. Donahue City Manager City of New Hope 4401Xylon Avenue North New Hope, MN 55428 RE: North Rtdge/Carebreak Adult Day Care Center Condemnation Our File No: 99.53010 Dear Oan: Please find enclosed a proposed Resolution calling for a closed meeting of the Economic Development Authority. The meeting is necessary to discuss litigation/settlement strategy in connection with the eminent domain proceedings on the Doyle and Lee Bros. property. As you know, these are the properties being acquired to construct the Carebreak Adult Day Care Center. On September 9th and loth, 1993, hearings were conducted to determine damages resulting from the taking of the proDerties. Enclosed are the Award of Commissioners regarding said hearings. The awards are as follows: Doyle property - $277,177.00; Lee property - $56,100.00. Both parties were also awarded appraisal fees of $500.00, therefore that amount should also be added to the above figures. Regarding the Lee award, ! am not recommending an appeal. As you know, we used Brad Bjorklund as our appraiser in this matter. Bjorklund's opinion for damages on the Lee property is $56,000. The appraiser for the Lee Bros. estimated damages at $90,000. As you can see, the Commissioners adopted the B~orklund appraisal awarding the Lee Bros. only $100 in excess of our appraiser's opinion of damages. The award for the Doyle property does, however, cause some concern. Bjorklund's opinion on damages is $141,000.00. The appraiser for Mr. Daniel J. Oonahue October 5, 1993 Page 2 Mr. Doyle estimated damages at $371,800.00. The award is $94,623.00 below the property owner's appraisal, but $136,177.00 above our own appraisal submitted by Bjorklund. [ spoke with Commissioner Newsome regarding the high award. Basically, the Commission concluded the highest and best use of the Doyle property is R-4 or R-5 multiple residential, not industrial. They came to this conclusion because the Pheasant Park apartment complex is 500 feet north of the Doyle property and the North Ridge Nursing Home complex is right across the street. Therefore, they accepted the property owner's position that it is highly probable the City would allow a rezoning to utilize the Doyle property for a multiple residential use despite the fact it is bordered on three sides by industrial property and located in an identifiable industrial park. I take some exception to their logic. Specifically, the Commission has not properly analyzed the costs associated with the construction of a multiple residential facility on the Doyle property. These costs are connected to both soil correction and administrative and legal fees necessary to obtain a rezoning assuming the City would allow R-4 or R-5 zoning for this property. The soil correction costs are the most troubling issue. Basically, these costs might be anywhere from $50,000 to $300,000 depending upon the type of building constructed upon the site. If we buy into the Commission's logic and assume that an apartment complex will be built on the site, like the Pheasant Park complex 500 feet to the north, significant soil correction costs will be incurred. These costs will reduce the fair market value of the site dollar for dollar. Obviously, if a single story industrial building were constructed on the site, the soil correction costs would be much cheaper. Currently, Bonestroo's office is preparing an analysis of construction costs for soil correction due to the poor soils on that site. When that analysis is completed, we wilt be in a better position to gauge the reasonableness of the Commissioners' award. If Bonestroo's estimate of soil correction costs comes in Iow, say $50,000, the present award may not be unreasonably high. If the Property is buildable with corFectable soil, the square foot value of t~e property may be as high as $2.00. The site is basically 148,800 square feet. Multiplying that number by $2.00 gives us a value on the property of $297,600.00. You will recall that we paid $2.00 a square foot for the Custom Mold property adjacent to and Mr. Daniel J. Donahue October 5, 1993 Page 3 west of the Dcw le property. Therefore, considering a $50,000 soil correction cost, the fair market value of the property would be $247,000.00. If we appealed this case to argue about $30,000, we may quickly reach the point of diminishing returns in that court costs and legal fees may be $10,000 on the low side and $20,000 on the high side. However, if the cost for soil correction is in the $100,000 to $200,000 range, the case should be appealed and we should try the matter unless the property owner is willing to significantly reduce his settlement price. I recommend that we discuss these issues with the EDA at a closed meeting on October 11th, 1993. It is my understanding that the award will be filed on October 5th. If the award is filed on October 5th, we will have 40 days from said date to appeal this matter to District Court. If we appeal the matter to District Court, there will be a trial de novo on these damages issues. Please bear in mind, however, that we run the risk of having to pay the property owner's appraisal and expert witness fees if the property owner is successful in District Court. Unfortunately, the eminent domain law does not provide for the property owner to pay our expert witness and appraisal fees if the EDA is successful. Please contact me if you have any questions. Very truly yours, Steven A. Sondrall slt3 Enclosures cc: Kirk McDonald, Management Asst. Valerie Leone, City Clerk bps: Val, this letter is not for publication in the regular agenda packet nor should it be made available to the public in connection with the regular agenda for the October 11th meeting. SAS I certify to have personally inspected the ~ubject property on Jan~y 7, 1993, after offering the owner, Melvin Doyle the opportunity to accompany me and that to the best of my knowledge and belief the statements contained in subject to the "Certification, Assumptions and Conditions" herein set forth. In addition, this report conforms with and is subject to requirements of the Code of Ethics ard Stardards of Professional Practice of the Appraisal Institute. Employment in and compensation for makLng this appraisal are in no way contingent upon the value reported. I certify to have no interest, either present or contempla~, in the subject property. It is my opinion that as of January 7, 1993, the market value of the subject property assuming subsoils are not contaminated is: { C~E ~ ~ (~{E ~ PC~R ~ DOLIARS (141,400) { Brad ~orklund, MAI, SRA MN License No. 4000377 WILLIAM C. WARNER & ASSOCIATES Real Estate Appraisers Box One Wayzata, Minnesota 55391 (612) 473-0313 September 7, 1993 Mr. Melvin J. Doyle 10625 34th Avenue North Plymouth, Minnesota 55441 In re: Taking by eminent domain of your property at 5501 Boone Avenue North, New Hope, Minnesota 55428. Dear Mr. Doyle: At your request I have personally inspected the above referenced property for the purpose of estimating its market value as per the definition of market value and subject to the underlying assumptions and limiting conditions as found in the attached appraisal and analysis. It is my understanding that I am to appear at a commission hearing for the purpose of determining the value of your property. Analysis of your property has indicated that its Highest and Best Use is for an adult day care center. This use is R-5 zoning which is to be changed by the city of New Hope from the existing I-1 zoning which is an industrial type zoning. Highest and Best Use is defined in the attached appraisal and analysis. After giving consideration to a great deal of data I have arrived at an estimated market value of $2.50 per square foot for your property. Thus: 148,718 s.f. ~ $2.50 per square foot is rounded to $371,800 as the estimated value of your property. Thank you for this opportunity to be of service to you. If I may be of additional assistance, please feel free to call me. Yours very truly, William C. Warner Real Estate Appraiser Certified General Real Property Appraiser Number 4000032 wcw/j o O. Jerome Newsom Attorney at Law 200 South Si:th St.. Suite 215 Minnen~<:l i s. MN 55402 C)&iFe Hichey [:,t i f~ Realty 140,> ~uuth Lilac Drive Min~eapol i s, Mt4 55410 R. D~vid L~nge 55,.:):s Popano [,~ ire Mi~l')etot~ ~. MN 55342 '....(ti ~ [ ~ ia NO: -.L' ("UI-'~U811( tc, the Co~15SlOn'5 instruction~ at tl~e ~. lo~e of ora) re%Iii,on) <)l) September 9tii, 1093 in connection with the )efefenced matt. em', p)e~'~e accept thi~ letter ~s the City of New Hope"~ fin~) al gume~il if~ connect ion ,,~i'th the he~-]in proceeding. the property owner $141.4,.~O.,:',0 b~sed on said i'p<.ated ~r, an ~dent~f~a~ie ~dustl ~al park surrounded by other ~['i~,J~t ~. iA~ pr.O[,e'Yr i~5. _ ~.C. ~qe s.';'u~ Nuts i~lg, HOIT~ ~S 1 ocat ~-d._ a<.i'O~S_ t~'a. ,, _ ~ ~ ~ eet '~ r c,m t he subj e< ~. t,o ~he' agprc.',~ma~e]? 3.42 .acre? The owners appraisal ind~':ates the property is zomewha~ sma'ilar at 48. 71.3 .sq. ft. ,. see Warner appra~ ~.:~] p,20~ eporE~d ~o have poor sub-so, i at dep~h~ .3¢ ~ ~ to ;'} feet below grade. , see March 13, I')"2C, ' % ]L;L' ... ' What ~ -~ the ,':-, , :=' - % k i',Oer-L ', ~ ~, -;'F~' The commission should a'w~t.:d ;h<- p~.~,pert'u owJ;er ~4'. ,.:,]~,> based p,'oper~y. (see Biorklund, appra~s:3] E;F'...~,s'*~) ~ and u~i )~ze, ~he most accura(.e comparable sales data in a, r~vir]g FiT value using the market value aDproach. prope¢ fy, the same as ti~e subject ~. f,i i are l,"':¢~ted ,~, ~ r:c- -' t , ,c.f re',a~ ',~'eJy ;'ecer~ sales Furthermore, BjOr'F'!L~r]d ma~e.:. : ~asof~able ~dj~'m~c,T ~ ~]orklund appraisal pp.S--i ~ ). He is t",e only apor~ ss~ ;.c, C,:>f~s ti~e )nfer'ior so~ I condit ion OT the ';:uP iec'.t :'educing the value the compar~.~es accord~q~y =r,u .... , :. .. ,}~}~ .,. :uon:[ruct~on of ai'~ adult da,' care for L'riowiedge .~b.:'ut the Cit ~'-:= pr .z] "The Hi,jhest ~,j ~ ,j~.~ September 1 5. 1'593 Page 4 adjustmenzs are $2.63 and $2.53 for _~n average rate ,.':.f .~2.58 per sq. ft. or 49.~ higl~er than the industrla] comps. ,, ~ ea~/ to see Warner used the resident 1al comps ~nd comp]etely ~ 9n,:.red the industr]a~ comps despite the fact the proDer~y ~s zoned ]r~dus~r' ~a] ~nd (ne only reasof~ tot ~ L,r'oD~ed zc, n~n9 change ~s due to the 'Zi~y pro~ect for which the property attached Minnesota Supreme CoDI t A.t the very least , Warner's vatuat ~on must be cut ~.~.' :~.,3~ h~s ~ndustr~ai comp average of $1.74 per' sq. ft. ,a c]os~ review h~s industr i~i comps aisc shows ac, pra~sal errors ~n ~is rendering his opinion o: little value, r:~rst, he ne::, given no pr~,:es for t ~me cor-,clud~,',,~ ~ c% ~i"~rlu.~l ~nf~t~c.n rare re;IL.ill 83 ub~'ard &..ljustmeqt . ~ Le? ~eve the '.::.mm~ ~:i.j,~ .can ta; ~ ~:.,:.::"_ ~t ~.~ ~.. :..~r t~i~t ":, ~it~ '_','~t-i IFi;J~J~~ i la ~ -[I'~'L ~'~ ; I ~. '': bcc' Brad Bjork]und Daniel d. Donahue, City Manager Kirk McDonald, Administrative Assistant 4401 Xylon Avenue North New Hope, Minnesota 55428 Phone: 533-15 21~/~ ~Zy ZO~ Z992 Mr. Mel Doyle 10625 34th Avenue North Plymouth, MN 55441 Subject: ACQUISITION OF PROPERTY AT 5501 BOONE AVENUE NORTH IN NEW HOPE Dear Mr. Doyle: This letter is intended to serve as a brief follow-up to the meeting we conducted on Tuesday, July 7th, regarding the City's acquisition of your property at 5501 Boone Avenue North in New Hope for the development proposed by North Ridge and Senior Outreach Services. As I indicated, the City Council desires to participate in the proposed development by North Ridge and Senior Outreach Services and finds that said development would greatly benefit the City and its citizens. The Council has directed me to facilitate the acquisition of the property. The property can either be acquired through a direct purchase or through other means available. I previously have indicated to you that I am willing to recommend to the Council and the EDA that we split the difference on the two appraisal amounts and settle on a direct purchase price of $240,000. The City finds that this is a reasonable offer, taking into account the existing soil problems and decreasing market value. At our meeting and through previous correspondence, I indicated that if this offer is not acceptable to you, the EDA has directed me to acquire your property by an eminent domain or condemnation Proceeding. Acquisition of the property by eminent domain was approved by resolution at the June 22nd New Hope Economic Development Authority meeting. Minnesota Statute §469.101, Subd. 4, gives the EDA the authority to acquire the property by power of eminent domain under Minnesota Statute Chapter 117. Minnesota Statute §117.042 authorizes the City to utilize the "quick-take" procedure, if it is necessary, to acquire possession of the property prior to the conclusion of the eminent domain proceedings. You should explore FamilyS~ledCi~'~~ForFamilyLiving the alternatives of direct purchase, eminent domain or condemnation with your financial and legal advisors, as there are certain tax advantages and disadvantages to each procedure. "Friendly" condemnation merely refers to the fact that the buyer and seller have agreed upon a mutual sale price. If an agreement or price is ngt reached, the price is established by a 3-person commission within the condemnation proceedings. The property owner has the burden of proof to establish the value of the taking. If the property owner is not satisfied with the award at the Commissioners' hearing, an appeal process through the court system is available. As I indicated earlier, I hope you will strongly consider the above purchase offer. The City cannot wait any longer and must begin the development process. All final agreements rest with the City Council and the Economic Development Authority as to actual offer, purchase, and acceptance. Also, this offer is contingent upon the City formally entering into a development agreement for development on your praperty. After you discuss the options available with your advisors, please inform me how you would like to proceed with this matter. Sincerely, Daniel -J. Donahue City Manager DJD/lb cc: City Council Chuck Thompson Steve Sondrall, City Attorney Project File #493 NOV 0 -- Thomas E Angus. PE A Rick ~r,m~dt PE Leo M November 2, 1993 Mr. Daniel Donahue ~~': i~'' f Ci~ of New Hope 4401 Xylon Avenue N. New Hope, MN 55428 Re: North Ridge Adult Daycare Center (5501 Boone Avenue) City Project No. 493 Our File No. 34158 Dear Mr. Donahue: This letter updates the October 11, 1993 letter regarding soil correction work required at the site. A one story industrial type building has been included in the review in addition to the proposed building and a three story R-4 type building. The review was based upon the geotechnical report prepared by GME and the proposed site plan prepared by L.W. Samuelson. The additional construction cost to construct a building on this site (5501 Boone Avenue) versus a site which has good subgrade soils for the proposed two story building, a 3 story R-4 type building and a one story industrial type building is summarized below: One Story Proposed Two R-4 Three I-1 Building Story Building Story Building (30,000 Sq. Ft.) (30,000 Sq. Ft.) (30,00.0 Sq. Ft.) Minimum $130,800 $229,500 $330,900 Maximum $432,500 $497,500 $598,900 The cost estimates are based on the following assumptions for the different building types: Item One Story Two Story_ Three Story_ Building Size 30,000 SF 30,000 SF 30,000 SF Bay Size 40' x 42' 30' x 32' 30' x 32' Story Height 16 Feet 12 Feet 12 Feet Exterior Walls Precast Brick w/block Brick w/block Interior Walls None Studs w/gypsum Studs w/gypsum Floor Live Load 125 Psf 50 Psf 50 Psf Partition Load None 20 Psf 20 Psf 2335 West Highway 36 · St. Paul, MN 55113 · 612-636-4600 Mr. Daniel Donahue, City of New Hope Page 2 November 2, 1993 Other assumptions apl21icable to all buildings included: Floors at first and second level - precast plank with 2" topping Roof - steel bar joists with metal decking and ballasted roof 12.75" cast-in-place pipe piles, 65 feet long, 40 ton capacity Subcut parking lot and driveways 3 feet, add geotextile fabric and granular fill The following is a summary of additional costs anticipated to develop the site for a one story industrial type building: Estimated Item Cost Piles: 170 piles x 65 ft/pile x $20/1f $221,000 Structural floor: 30,000 SF x $4.00/SF 120,000 Excavation of parking lot: 9,000 CY x $4.00/CY 36,000 Granular fill: 7,500 CY x $5.00/CY 37,500 Geotextile fabric: 9,000 SY x $2.00/SY 18,000 Total estimated cost $432,500 The following is a summary of additional costs anticipated to develop the site for the two story building: Estimated Item Cost Piles: 220 piles x 65 ft/pile x $20/lf $286,000 Structural floor: 30,000 SF x $4.00/SF 120,000 Excavation of parking lot: 9,000 CY x $4.00/CY 36,000 Granular fill: 7,500 CY x $5.00/CY 37,500 Geotextile fabric: 9,000 SY x $2.00/SY 18,000 Total estimated cost $497,500 Th'e site has been rezoned to R-4. According to Doug Sandstad, the maximum height the building can be constructed is 4 stories. However, in New Hope the maximum height of a .typical R-4 building is usually 3 stories. If the building described above was increased from two stories to three stories, the estimated additional costs would be as follows: Mr. Daniel Donahue. C/tv of New Hope Page 3 No~'ernber 2, I993 Estimated Item , Cost Piles: 298 piles x 65 fffpile x $20/lf $387,400 Structural floor: 30,000 SF x $4.00/SF 120,000 Excavation of parking lot: 9,000 CY x $4.00/CY 36,000 Granular fill: 7,500 CY x $5.00/CY 37,500 Geotextile fabric: 9,000 SY x $2.00/SY 18,000 Total estimated cost $598,900 The calculations for this cost analysis are attached for your information. While we agree that building should be supported on a deep foundation such as piles, the need for a structural floor at grade would appear to warrant a closer look. In both a two story and three story building, a conventional cast-in-place slab on grade could possibly be used on first floor if care is taken in preparing the subgrade soils. This would reduce the foundation cost by approximately $135,200 for a one story industrial type building and $101,500 for the proposed two story building and a R-4 three story building. In all three buildings, the structural floor cost would be reduced by $120,000. The total cost reduction would range from $221,500 to $255,200. The parking lot is another area in which the proposed corrective work should be looked at in more detail. With approximately 10 to 15 feet of fairly good soil above the peat, we are not sure what the benefit is of removing 3 feet of existing soil and then installing a geotextile fabric and granular fill. While some corrective work may be necessary, it is likely to be much less than the estimated amount. If half of the corrective work is required, the parking lot and driveway corrective work would be $45,000 instead of $91,500. If a slab on grade could be used on the first floor of the building and less corrective work was required in the parking lot, the additional cost for the two story building would be $231,000. For the same assumption, the additional cost for the three story building would be $332,400. If you have any questions on this matter, please contact Mark Hanson or myself at 636-4600. Sincerely, BONESTROO, ROSENE, ANDERLIK & ASSOCIATES, INC. , ry D. Pertzsch cc: Steve Sondrali, Mark Hanson