112293 EDA Official File Copy
CITY OF NEW HOPE
EDA AGENDA
~ EDA Regular Meeting//16 November 22, 1993
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 November 8, 1993
4. Discussion Regarding Loan/Grant Agreements for Broadway Village Community
Center Expansion (Improvement Project No. 513)
5. Resolution Approving Minnesota Housing Finance Agency Publicly-Owned
Neighborhood Land Trust Program Loan Commitment Agreement
6. Adjournment
· CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
HENNEPIN COUNTY, MINNESOTA 55428
Approved EDA Minutes November 8, 1993
Meeting #15
CALL TO ORDER President Erickson called the meeting of the Economic Development
Authority to order at 7:28 p.m.
ROLL CALL Present: Erickson, Otten, Enck, Wehling
Absent: Williamson
APPROVE MINUTES Motion was made by Commissioner Enck, seconded by Commissioner
Wehling, to approve the EDA minutes of October 25, 1993. All present
voted in favor. Motion carried.
PRESENTATION President Erickson introduced for discussion Item 4, Presentation by
COMMUNITY Community Resource Partnerships, Inc. Regarding Summary Report on
BUSINESS New Hope Community Business Survey.
SURVEY
Item 4 Mr. Earl Netwal, Community Resource Partnerships, Inc., reviewed the
summary report of data generated from 74 companies in New Hope. He
noted companies view the survey as a message from the city that it cares
about local businesses. He stressed that in order to encourage business
retention and expansion, communities must be in a position to assist
existing companies with the problems and opportunities they encounter.
The program consists of four components: data collection, data analysis,
strategic recommendations, and marketing/promotional programs.
Mr. Donahue reported the preliminary survey and analysis were conducted
at no cost to the City. At this time the EDA must decide whether it
wishes to continue with the project at a cost of $30,000. He noted New
Hope is one of the four cities who are participating with "Community
Partners".
It was the consensus of the EDA to consider the proposal at a future work
session.
ADJOURNMENT Motion was made by Commissioner Enck, seconded by Commissioner
Wehling, to adjourn the meeting. All present voted in favor. The New
Hope EDA adjourned at 7:55 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA November 8, 1993
Page 1
1 REQUEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
City Manager ED^
11-22-93
Kirk McDonald Item No.
By: Management Assistant By: 4
DISCUSSION REGARDING LOAN/GRANT AGREEMENTS FOR BROADWAY VILLAGE
COMMUNITY CENTER EXPANSION, IMPROVEMENT PROJECT NO. 513
Enclosed are the preliminary drafts of the loan/grant agreements for the Broadway Village
Commtmity Center expansion, Improvement Project No. 513. Staff will be meeting with Lang
Nelson on Monday to work out the details on these agreements prior to the Council meeting,
otherwise we will be recommending tabling the issue until December. Besides reaching a
consensus on the terms of the agreements, Lang Nelson still needs to provide site and
construction plans for the community center and lighting project at the Broadway Village
Apartments and they also need to provide landscaping and/or development plans for the comer
property currently owned by Super America.
MOTION BY SECOND BY
Review: Administration: Finance:
I RFA-O01
CORRICK & SONDRALL, P.A.
ATTORNEYS AT LAW
Edinburgh Executive Office Plaza
8525 Edinbrook Crossing
Suite ~203
Broo~yn Park, Minnesota 55443
TELEPHONE (6~2) 425.5671
FAX (612) 425-58~
November 12, 1993
Mr. Paul Brewer
LaNel Financial Group
4601 Excelsior B1vd., Suite 650
Minneapolis, MN 55416
RE: Loan/Grant for Broadway Village Community Center Expansion
Our File No: 99.11115
Dear Paul:
Enclosed for your review in connection with the New Hope EDA's
loan/grant on the referenced project are the following documents:
1. Loan Commitment;
2. Deferred Loan Repayment Agreement and Mortgage;
3. Building Loan Agreement;
4. Disbursement Agreement; and
5. License Agreement.
Obviously, these are draft documents and subject to amendments.
[n addition to the items required by the enclosed documents, we
will also need your constructions plans and specifications for the
proposed improvements to the community center and the street
lighting project. Please contact Kirk McDonald regarding
construction plans and specifications. He will be able to more
fully advise concerning the exact nature of the documents needed by
the City.
Also, as we discussed, this deal will not hang together unless
there is a commitment to acquire and improve the gas station site
by the Broadway LaNel Limited Partnership, owners of the Anthony
James property. I believe the City Council will also want
development plans for this corner as a condition of the loan
agreement for the community center and street lighting project. At
a minimum, this will include landscaping of the site after it is
Mr. Paul Brewer
November 12, 1993
Page 2
received by the Partnership cleared of the existing vacant
building. This would be considered a minimal interim use by the
City until future development could occur on the site.
Contact me if you have any further questions.
Very truly yours,
ORIGINAL SIGNED
Steven A. Sondrall
New Hope City Attorney
slf2
Enclosures
cc: Daniel J. Donahue, City Manager (w/enc)
Kirk McDonald, Management Asst. (w/enc)~ THISC~PYFCR ~
LICENSE AGREEMENT
THIS AGREEMENT is entered into this day of ,
1993, by and between the City of New Hope, Minnesota, a Minnesota
municipal corporation, (hereinafter the "City"), and Broadway
LaNe]/Go]]e Holmes, a Minnesota Limited Partnership (hereinafter
"Partnership").
WHEREAS, the Partnership is the fee owner of certain rea]
property known as Broadway Vii]age, located at West
Broadway in Hennepin County, Minnesota and legally described in the
attached Exhibit A (hereinafter "the Premises"); and
WHEREAS, the Premises is improved with a community center
located in a building with a common address of West
Broadway; and
WHEREAS, the Economic Development Authority in and for the
City of New Hope as consideration for the Partnership's execution
of this Agreement has made a $142,500.00 no-interest deferred
payment loan to the Partnership to assist in the rehabilitation and
expansion of the community center; and
WHEREAS, the City wishes to use the community center on a non-
exclusive basis for public meetings and civic functions mutually
agreeable to the parties hereto; and
WHEREAS, the City and the Partnership wish to reach an
agreement by which the Partnership licenses the City to use the
community center on the Premises for public meetings and civic
functions.
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NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Use of the Premises. The Partnership agrees to license
and allow the City to use the community center on the Premises for
public meetings and civic functions mutually agreeable to the
parties. The City's right to use the community center shall be on
an as-needed non-exclusive basis subject to the following
conditions:
(a) The City may schedule meetings or functions
per year but not to exceed monthly.
(b) Hours of operation shall be between and
(c) The Partnership shall provide the City quarterly
with a schedule of dates and times when the community center
will be available for City use.
(d) The parties contemplate that meetings or functions
will be primarily geared toward senior citizen's issues and
activities, however, other appropriate groups, meetings or
functions will be permitted by the Partnership if proposed by
the City.
(e) The City shall provide the Partnership with seven
(.7) days notice, either verbal or written, of its intent to
use the community center. Said notice shall include the date
and time of the intended use, the approximate number of
participants and the nature of the use.
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(f) The City agrees to return the community center after
completion of a meeting, function or event to a condition
equivalent to its pre-use condition.
2. Insurance. During the term of this Agreement, the City
shall maintain public liability insurance in the amount of
$200,000.00 per person, $600,000.00 per occurrence for personal
damage, and $100,000.00 for property damage. The City shall
provide the Partnership with a Certificate of Insurance listing the
Partnership as an insured party on said policy and providing for 10
days written notice to the Partnership in the event of non-renewal
or cancellation of the insurance coverage.
3. Indemnification. The City will indemnify the Partnership
and its agents and employees against, and hold the Partnership, its
agents and employees harmless from, any and ali demands, claims,
causes of action, fines, penalties, damages (including
consequential damages), losses, liabilities, liens, mechanic's
liens, judgments and expenses (including, without ]imitation,
attorney's fees and court costs) incurred in connection with or
arising from:
a. The use or occupancy of the Premises by the City or
any person claiming under the City;
b. Any acts, omissions or negligence of the City or any
person claiming under the City, or the contractors, agents,
employees, invitees or visitors of the City or any such
person;
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c. Any breach, violation, or non-performance by the
City or any person claiming under the City or the employees,
agents, contractors, invitees or visitors of the City, or any
such person of any term, covenant, or provision of this
Agreement or any law, ordinance, or governmental requirement
of any kind; or
d. This indemnification shall not apply to any loss,
injury or damage proximately caused by or resulting from the
negligent acts or omissions of the Partnership, including but
not limited to, any injury or damage to the person, property,
or business of the City, it employees, agents, contractors,
invitees, visitors or any other person entering upon the
Premises under the express or implied invitation of the City.
4. Assignment. The City's interest in this Agreement shall
not be assigned, mortgaged, or otherwise encumbered or transferred
without the written consent of the Partnership which shall not be
unreasonably withheld.
5. Term/Removal. This Agreement shall run for a term of ten
years beginning upon the date of this Agreement, and upon the end
of initial ten year term, the City may renew this Agreement for
additional ten-year periods if the following conditions are
met:
a. Notice. The City delivers to the Partnership in
writing notice of its intent to renew the term of this
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Agreement by the additional ten year period, which notice must
be received by the Partnership prior to the expiration of the
then existing Agreement term.
b, Default. The City is not in default under any of
the terms of this Agreement.
6. Condemnation. In the event of a complete taking of the
Premises by eminent domain, this Agreement and any options to renew
shall terminate upon the commencement of the condemnation action,
and the City.shall not be entitled to any part of the condemnation
award of damages. Upon the taking of a part of the Premises by
eminent domain, this Agreement shall continue for that portion of
the Premises not taken as a result of the condemnation and the City
shall not be entitled to any part of the condemnation award of
damages.
7, Default, If the City is in default under any of the
terms of this Agreement and has not cured said default within 30
days after written notice of the existence of the defau]t by the
City, this Agreement shall terminate and the City shall forfeit
right and interest in this Agreement to the Partnership, Failure
of the Partnership to immediately notify the City of a condition of
default does not waive the right of the Partnership to notify the
City of said condition of default at a later date and to require
curing of the default, Additionally, failure of the Partnership to
notify the City of a condition of default shall not in any way
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reduce the City's liability for the condition of default.
Termination of this Agreement shall not waive or release the City
from any of its obligations under this Agreement prior to
termination.
8. Surrender of Premises. Upon the expiration or
termination of this Agreement, the City shall quietly yield and
surrender the Premises to the Partnership.
9. Addresses. For the purpose of notice, the following
shall be addresses for the parties:
a. City of New Hope
4401Xylon Avenue North
New Hope, MN 55428
b, Broadway LaNel/Golle Holmes
CITY OF NEW HOPE
By
Its Mayor
By
Its City Manager
BROADWAY LANEL/GOLLE HOLMES, A
MINNESOTA LIMITED PARTNERSHIP
By
Its
STATE OF MINNESOTA
COUNTY OF HENNEPIN
The foregoing was acknowledged before me this day of
, 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 corporation.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing was acknowledged before me this day of
, 1993 by , the
of Broadway LaNel/Golle Holmes, a Minnesota
Limited Partnership, on behalf of said limited partnership.
Notary Public
c:\wp51\cnh\broadway.la
LOAN COMMITMENT
TO- Broadway LaNel/Golle Holmes, a Minnesota Limited Partnership,
(hereinafter referred to as the "Borrower"):
The Economic Development Authority in and for the City of New
Hope {hereinafter referred to as the "EDA") hereby approves
Borrower's loan request (hereinafter referred to as the "Loan") for
the community center rehabilitation and expansion and street
lighting improvement (hereinafter referred to as the "Project").
The proceeds of the Loan are to be used to successfully complete
the Project,
This Commitment is subject to the following terms and
conditions:
1. Principal Amount of Loan. The amount advanced pursuant
to the Loan shall not exceed One Hundred Forty-Two Thousand Five
Hundred and 00/100 Dollars ($142,500.00)
2. Loan Interest Rate. The Loan shall be made as a no-
interest loan, and therefore there shall be no interest paid on
said Loan.
3, Repayment of Loan. The Loan shall be immediately due and
payable, in accordance with the repayment terms contained in the
Deferred Loan Repayment Agreement and Mortgage referred to in
Section 4.A. herein, upon the occurrence of any of the following
events within a ten (10) year time period from the date such loan
is closed.
A. If, _without the written consent of the EDA, the
Property ceases to be used as a taxable senior citizen
apartment complex with community center for benefit of the
complex residents and public generally per the License
Agreement and strip shopping center upon which the street
lighting improvements are intended to be made.
B. If, without the written consent of the EBA, Borrower
sells, transfers, ]eases, encumbers, other than the
encumbrances shown in the Repayment Agreement referred to in
Section 4.A. herein as Permitted Encumbrances, or otherwise
conveys, in any way or manner, whether voluntary, involuntary,
or by action of law, its fee interest in the Real Property.
C. If any Event of Default occurs under the Repayment
Agreement referred to in Section 4.A. herein.
If none of the events specified in this Section 3 occurs
within ten (10) years from the date the Loan is closed, then the
Loan will no longer need to be repaid, and will be extinguished.
4. Loan Closing. As a condition precedent to the
disbursement of the Loan, each of the following shall be delivered
to the EDA in form and substance satisfactory to the EDA:
A. A fully executed Deferred Loan Repayment Agreement
and Mortgage (hereinafter referred to as the "Repayment
Agreement"), in substantially the same form as the document
attached hereto as Exhibit A, which grants to the EDA a lien
on Borrower's interest in the Mortgaged Property.
B. A fully executed Building Loan Agreement (hereinafter
referred to as the "Building Loan Agreement"), in
substantially the same form as the document attached hereto as
Exhibit B, which controls the disbursement of the proceeds of
t he Loan.
C. A fully executed License Agreement attached hereto as
Exhibit C, which grants the City of New Hope and the EDA a
non-exclusive right to use Borrower's community center for
public meetings and civic functions.
D. A commitment for a title insurance policy insuring
the EDA's interest in the Mortgaged Property, and which shows
that as of the date of closing of the Loan the title to the
Mortgaged Property is vested in the Borrower free and clear of
all encumbrances other than the Repayment-Agreement, and free
and clear of all reservations of title (either junior or prior
to the Repayment Agreement) which are not specifically
determined to be acceptable to the EDA.
E. Evidence that Borrower has obtained fire and extended
covera9e insurance, in an amount equal to the lesser of the
amount of the Loan or the full insurable value of the Project,
with the EDA named as loss payee therein, which shall include
an overlap endorsement or rider covering the risk of any and
all rehabilitation work.
F. All such other documents, instruments and/or items
which the EDA may reasonably require.
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5. Financial Requirements. Prior to, or concurrently with,
the disbursement by the EDA of any of the proceeds of the Loan, the
Borrower shall deliver to the EDA, or any other entity that the EDA
may designate, an equity investment in an amount of One Hundred
Forty-Two Thousand Five Hundred ($142,500.00), which is the
estimated amount of funds it will take to complete the Project over
and above the amount of the Loan.
6. Changes in Conditions. Any changes in the conditions
upon which this Loan Commitment is based which shall occur after
the date hereof must have the written approval of the EDA prior to
the closing of the Loan, which written approval shall be subject to
such conditions as the EDA may deem to be appropriate.
7. Commencement of Construction Subsequent to Closing.
Construction and/or rehabilitation of the Project shall not
commence prior to the closing of the Loan unless, and until, such
commencement is specifically authorized, in writing, by the EDA,
and on such terms and conditions as the EDA may deem to be
appropriate.
8. Term of Commitment. This Loan Commitment shall terminate
December 31, 1993 unless the closing of the Loan shall have
occurred prior to such date, or unless this Loan Commitment is
renewed or extended by the EDA. Subsequent to the closing of the
Loan, the termination date for this Loan Commitment shall be as
provided in the Building Loan Agreement.
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9. Effectiveness of Commitment. This Loan Commitment shall
not become effective unless the accompanying three (3) duplicate
copies hereto are returned to the EDA, with acceptance endorsed
thereon by the signature of the party or parties indicated below,
or their authorized agent, on or before D~cember 31, 1993.
10. Mutual Enforceability of Loan Commitment. This Loan
Commitment shall be mutually enforceable by either party, and
either party hereto may apply to any court, State or Federal, for
specific performance of the agreements and requirements contained
herein, and for such other relief as may be appropriate, since the
injury to the EDA arising from any failure to comply with the
requirements contained herein would be irreparable and the amount
of damage would be difficult to ascertain.
11. Assignment or Transfer of Loan Commitment. This Loan
Commitment shall not be assigned or transferred without the prior
written consent of the EDA.
12. Additional or Special Conditions. This Loan Commitment
is subject to the following or special conditions, which are hereby
made a part hereof: None.
Dated: ECONOMIC DEVELOPMENT AUTHORZTY
IN AND FOR THE CZTY OF NEW HOPE
By
Its
By
Its
5
Accepted: BROADWAY LANEL/GOLLE HOLMES, A
MINNESOTA LIMITED PARTNERSHIP
By
Its
By
Its
c:\wp51\cnh\broadway.lc
DEFERRED LOAN REPAYMENT AGREEMENT AND MORTGAGE
THIS AGREEMENT, made this day of November, 1993,
between Broadway LaNel/Golle Holmes, a Minnesota Limited
Partnership (hereinafter referred to as "Borrower"), having its
principal place of business located at
, and the Economic Development Authority in
and for the City of New Hope (hereinafter referred to as "Lender"),
a Minnesota municipal corporation, having its principal place of
business located at 4401Xylon Avenue North, New Hope, MN 55428.
WHEREAS, Lender has authority, pursuant to Minn. Stat. Chap.
469.012 to loan funds intended to successfully complete duly
established redevelopment projects and redevelopment plans within
the City of New Hope, and
WHEREAS, Borrower is the owner of property within the City
located in a redevelopment area duly established pursuant to
Redevelopment Plan and Redevelopment Project 85-1 and amendments
thereto and has requested a loan from Lender for a project which
will promote the successful completion of the referenced
redevelopment plan and project, and
WHEREAS, as a result, Lender has made a no-interest deferred
repayment loan to Borrower, the proceeds of which are to be used to
promote the successful completion of Redevelopment Plan 85-1 and
Redevelopment Project 85-1, and
1
WHEREAS, Borrower and Lender desire to set forth herein the
provisions for Borrower's repayment of said loan, and to provide
for securing said repayment with a mortgage on Borrower's interest
in the real estate hereinafter described.
NOW, THEREFORE, in consideration of the loan described herein,
and al1 applicable laws, the parties hereto do hereby agree as
follows:
1. Loan of Monies. Lender, concurrent with the execution of
this Agreement by all of the parties hereto makes a zero interest
rate loan of monies to Borrower (hereinafter referred to as the
"Loan"), in an amount of One Hundred Forty-Two Thousand Five
Hundred Dollars ($142,500.00), which shall be repaid in accordance
with the provisions contained in Section 5 hereinbelow.
2. Use of Loan Proceeds. Borrower shall use the proceeds of
the Loan to construct improvements to structures and buildings on
real property Borrower owns situated in the County of Hennepin,
State of Minnesota, and legally described as follows:
(hereinafter referred to as the "Real Property"), and to operate,
or cause to be operated, the Real Property and Buildings located
thereon (the Real Property and Buildings are hereinafter
cumulatively referred to as the "Mortgaged Property") as a taxable
senior citizen apartment complex with a community center for the
2
benefit of its residents and public generally and strip shopping
center.
3. Ownership of the Property. Borrower covenants with and
warrants to Lender that Borrower possesses a fee simple interest in
the Mortgaged Property, and that such inte'rest is free and clear of
all liens and/or encumbrances, other than the lien and security
interest created by this Agreement, and the following listed liens
and encumbrances (hereinafter referred to as the "Permitted
Encumbrances"), which Lender specifically consents to:
4. Operation of the Property. With respect to the ownership
and operation of the Mortgaged Property:
A. Borrower shall operate, or cause to be operated, the
Mortgaged Property as a taxable senior citizen apartment
complex with community center for the benefit of its residents
and public generally and strip shopping center.
B. Borrower shall not, wit.hout the written consent of
Lender, sell, transfer, lease, encumber (other than the
Permitted Encumbrances), or otherwise convey, in any way or
manner, whether voluntary, involuntary, or by action of law,
its fee interest in the Real Property.
5. Repayment of the Loan. Borrower covenants and agrees
with Lender that if an Event of Default, as such term is defined in
Section 8 hereinbelow, occurs within ten (10) years from the date
of this Agreement, then the Loan shall immediately become due and
payable, and Borrower shall repay the Loan by paying the full
outstanding balance of the Loan to Lender in full and complete
satisfaction of the Loan.
All payments due hereunder shall be made to the order of
Lender, at the office of the Lender or at such other place as
Lender may designate in writing, delivered or mailed to Borrower.
If no Event of Default, as such term is defined in Section 8
hereinbelow, occurs within ten (10) years from the date of this
Agreement, then upon commencement of the eleventh (11) year after
the date of this Agreement, the Loan shall be deemed to have been
paid in full and no repayment thereof shall be required, and the
requirements contained in and imposed by this Agreement shall
terminate and no longer be of any force or effect.
6. Insurance. For as long as the Loan is outstanding,
Borrower shall maintain standard fire and extended coverage
insurance on the Mortgaged Property in an amount equal to or
greater than the lesser of the amount of the Loan or the full
insurable value of the Mortgaged Property. At the written request
of Lender, Borrower shall promptly furnish to Lender all written
notices and all paid premium receipts received by Borrower.
7. Borrower Representations and Warranties. Borrower
further covenants with, represents and warrants to Lender as
follows:
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A. It will comply with all of the terms, conditions,
provisions, and requirements contained in this Agreement, the
Building Loan Agreement, the License Agreement and Loan
Commitment.
B. It has made no material false statement, or
misstatement of fact, in connection with its request for the
Loan.
C. It has legal authority to enter into, execute, and
deliver this Agreement and all other documents referred to
herein, and it has taken all actions necessary and incident to
its execution and delivery of this Agreement and such other
documents.
D. It is not in violation of any provisions of its
organizational documents, or of the laws of the State of
Minnesota, and there are no actions, suits, or proceedings
pending, or to its knowledge threatened, before or by any
judicial body or governmental authority, against or effecting
it, and it is not in default with respect to any order, writ,
injunction, decree, or demand of any court or any governmental
authority which would impair its ability to enter into this
Agreement, or to perform any of the acts required of it in
this Agreement or any document referred to herein.
E. Neither the execution and delivery of this Agreement,
nor compliance with any of the terms, conditions, requirements
5
or provisions contained herein is prevented by any term,
condition, or provision of any agreement or document to which
it is now a party, or by which it is bound.
F. It will comply with all of the terms, conditions,
provisions, covenants and/or warranties contained in this
Agreement, the Building Loan Agreement, the License Agreement
and Loan Commitment.
8. Event(s) of Default. Any of the following shall, upon
Lender giving Borrower thirty (30) days notice thereof, and
Borrower's failure to cure during such time period, constitute an
Event of Default under this Agreement.
A. If any part of the Mortgaged Property ceases to be
used as a taxable senior citizen apartment complex with
community center or strip shopping center.
B. If, without the written consent of the Lender,
Borrower sells, transfers, leases, encumbers (other than the
Permitted Encumbrances), or otherwise conveys, in any way or
manner, whether voluntary, involuntary, or by action of law,
all or part of its fee interest in the Real Property.
C. If Borrower fails to maintain fire and extended
coverage insurance on the Mortgaged Property in an amount
equal to or greater than the lesser of the amount of the Loan
or the full insurable value of the Mortgaged Property.
D. If Borrower refuses to allow Lender, at any
reasonable time and upon prior written notice, to inspect,
audit, copy, or abstract, any and all of Borrower's books,
records, papers or other documents relevant to the Loan.
E. If Borrower refuses to allow the Lender, at any
reasonable time and upon prior written notice, to inspect the
Mortgaged Property.
F. If Borrower fails to comply with, or breaches any of
the terms, conditions, provisions, covenants, and/or
warranties contained in this Agreement, the Building Loan
Agreement, the Licensing Agreement or Loan Commitment.
G. If Borrower shall make an assignment for the benefit
of its creditors, or shall be dissolved, or shall commit an
act of bankruptcy under the United States Bankruptcy Act (as
now or hereafter amended), or shall admit in writing its
inability to pay its debts as they become due, or shall file
a petition in bankruptcy, or shall become or be adjudicated
bankrupt or insolvent, however defined, or shall file a
petition seeking any reorganization, dissolution, liquidation,
arrangement, composition, readjustment, or similar relief
under any present or future bankruptcy or insolvency statute,
law, or regulation, or shall file an answer admitting to or
not contesting the material allegations of a petition filed
against it in such proceedings, or shall not, within sixty
(60) days after the filing of such a petition against it, have
the same dismissed or vacated, or shall seek or consent to or
acquiesce in the appointment of any trustee, receiver, or
liquidator of a material part of its properties, or shall not,
within sixty (60) days after the appointment (without its
consent or acquiescence) of a trustee, receiver, or liquidator
of any material part of its properties, have such appointment
vacated; and
H, Tf, without the written consent of the Lender,
Borrower fails to comply with any of the following specific
requi rement s:
Upon the occurrence of an Event of Default the Loan shall
immediately become due and payable, and shall be repaid in
accordance with the provisions contained in Section 5 herein.
9. Mortgage Lien. As security for Borrower's covenants and
obligation for repayment of the Loan as herein provided, and
subject to the terms and conditions of this Agreement, Borrower
hereby grants, and the Lender shall and hereby does have, a
mortgage lien on Borrower's interest in the Mortgaged Property,
together with all hereditaments and appurtenances thereto, in the
full amount necessary to satisfy such repayment obligation, and the
cost, including reasonable attorney's fees, of collecting the same.
To have and to hold the Mortgaged Property, together with the
tenements, hereditaments, and appurtenances, unto the Lender, its
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successors and assigns, in fee simple, forever. Borrower covenants
with Lender that (i) Borrower is lawfully seized of the Mortgaged
Property and has good right to convey the same, (ii) the Mortgaged
Property is free from all encumbrances, except for the Permitted
Encumbrances, (iii) Lender shall quietly enjoy and possess the
Mortgaged Property, and (iv) Borrower will warrant and defend the
title to the same against atl lawful claims not hereinabove
specifically excepted.
Provided, nevertheless, that if the Loan is paid
accordance with the provisions contained herein, then this Mortgage
shall become nu]] and void, and shall be released.
10. Notice of Sale, Transfer, Conveyance, or Encumbrance.
Borrower, or its successors and assigns, shall promptly give Lender
notice (i) of any sa]e, transfer, lease, encumbrance (other than
the Permitted Encumbrances), or other conveyance of any part of
Borrower's interest in the Mortgaged Property which occurs within
ten (10) years of the date of this Agreement, or (ii) if the
Mortgaged Property ceases to be used as a taxable senior citizen
apartment comp]ex or strip shopping center.
11. Acceleration of Indebtedness and Foreclosure of Mortgage.
In the event Borrower, or its successors and assigns, shall fail or
refuse to repay the Loan in accordance with the provisions
contained in Section 5 herein, or otherwise, or in any way, be
default under this Agreement, Borrower confers upon the Lender the
options of declaring all sums then owing by the Borrower
immediately due and payable without notice, and hereby authorizes
and empowers the Lender to foreclose this Mortgage by judicial
proceedings, or to sell the Mortgaged Property at public auction
and convey the same to the purchaser in accordance with the laws of
the State of Minnesota, and out of the moneys arising from such
sale to retain al~ sums secured hereby, with interest and all legal
costs and charges of such foreclosure and the maximum attorney's
fee permitted by law, which costs, charges, and fees the Borrower
herein agrees to pay.
The Borrower and Lender further covenant and agree as follows:
A. Borrower shall be furnished a conformed copy of this
Agreement at th® time of execution or after recordation
thereof.
B. Upon a default by @orrower under this Agreement,
Lender shall, prior to foreclosure, mail a notice to the
Borrower specifying (i) the nature of the default, (ii) the
action required to cure such default, (iii) a date, if such
default is capable of being cured, not less than thirty (30)
days from the date the notice is mailed to Borrower by which
such default must be cured, and (iv) if the default is capable
of being cured, that failure to cure such default on or before
the date specified in the notice may result in the
acceleration of the sums secured by this Mortgage, and sale of
10
the Mortgaged Property. The notice shall further inform
Borrower of the right, if any, to reinstate after acceleration
and the right to bring a court action to assert the
nonexistence of a default or any other defense of the Borrower
to acceleration and sale.
12. Miscellaneous Provisions. Borrower consents and agrees
to the following miscellaneous provisions:
A. Record Keeping and Reporting. Borrower shall allow
Lender at any reasonable time and upon prior written notice,
to inspect, audit, copy, or abstract, any and all of its
books, records, papers, or other documents relevant to the
Loan.
B. Inspection of Mortgaged Property. Borrower shall
allow Lender, at any reasonable time and upon prior written
notice, to inspect the Mortgaged Property.
C. Notices. In addition to any notice required under
applicable law to be given in another manner, any notices
required hereunder must be in writing, and shall be sufficient
if personally served or sent by prepaid, registered or
certified mail (return receipt requested), to the business
address of the party to whom it is directed. Such business
address shall be that address specified hereinbelow, or such
different address as may hereafter be specified, by either
party by written notice to the other:
11
To Borrower:
To Lender:
Executive Director
New Hope Economic Development Authority
4401Xylon Avenue North
New Hope, MN 55428
D. Assignment or Modification. Neither Borrower or
Lender may assign any of its rights or obligations under this
Agreement without the prior written consent of the other
party. No change or modification of the terms or provisions
of this Agreement shall be binding on either the Borrower or
Lender unless such change or modification is in writing and
signed by an authorized official of the party against which
such change or modification is to be imposed.
E. Successors and Assigns. The terms, provisions,
conditions, covenants, and warranties contained in this
Agreement shall be binding upon Borrower and Lender, and upon
their successors and assigns.
F. Waiver. Neither the failure by Borrower or Lender,
in any one or more instances, to insist upon the complete and
total observance or performance of any term or provision
hereof, nor the failure of Borrower or Lender to exercise any
right, privilege, or remedy conferred hereunder, or afforded
by law, shall be construed as waiving any breach of such term,
12
provision, or the right to exercise such right, privilege, or
remedy thereafter.
G. Entire Agreement. This Agreement embodies the entire
Agreement between Borrower and Lender, and that are no other
Agreements, either ora1 or written, between Borrower and
Lender on the subject matter hereof.
H. Choice of Law. All matters, whether sounding in tort
or in contract, relating to the validity, construction,
performance, or enforcement of this Agreement shall be
controlled by and determined in accordance with the laws of
the State of Minnesota.
I. Severability. If any term or provision of this
Agreement is finally judged by any court to be invalid, the
remaining terms and provisions shall remain in full force and
effect, and they shall be interpreted, performed, and enforced
as if said invalid provision did not appear herein.
d. Time of Essence. Time is of the essence with respect
to all of the matters contained in this Agreement.
(THE REMAINING PORTION OF THIS PAGE WAS INTENTIONALLY LEFT
BLANK)
13
IN TESTIMONY HEREOF, the said Borrower has executed this
Agreement on the day and year first above written.
8roadway LaNel/Golle Holmes, a
Minnesota Limited Partnership
By
Its
By
Its
STATE OF MINNESOTA )
) ss.
COUNTY OF )
The foregoing Deferred Loan Repayment Agreement and Mortgage
was acknowledged before me this day of ,
1993, by and
,the and
of Broadway LaNel/Golle Holmes, a Minnesota
Limited Partnership, on behalf of said limited partnership.
Notary Public
Tax Statement for the real property
described in this instrument should
be sent to:
THIS INSTRUMENT WAS DRAFTED BY:
CORRICK & SONDRALL, P.A.
8525 Edinbrook Crossing, Suite 203
Brooklyn Park, MN 55443
c:\wp51\cnh\broadway.dla
14
BUILDING LOAN AGREEMENT
THIS AGREEMENT is made and entered into on
1993, by and between Broadway LaNel/Golle Holmes, a Minnesota
Limited Partnership (hereinafter referred to as "Borrower"), with
its principal place of business located at
, and the Economic Development Authority in and
for the City of New Hope, a Minnesota Municipal Corporation
(hereinafter referred to as "Lender"), with its place of business
located at 4401Xylon Avenue North, New Hope, MN 55428.
ARTICLE I
Definitions
Section 1.01 Defined Terms. As used in this Agreement, the
following terms shall have the meanings set out respectively after
each (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
(a) "Advance" - An advance made or to be made by the
Lender to the Borrower pursuant to Article II hereof.
(b) "Architect", if any - ,
which will administer the Construction Contract Documents.
(c) "Borrower" - Broadway LaNel/Golle Holmes.
(d) "Completion Date" -
(provided that if the Lender shall extend such date in
writing, then the Completion Date shall be such later date),
being the date of required completion of the Project.
1
(e) "Contractor" - Any person who shall be engaged to
work on or to furnish materials and supplies for, the Project,
if applicable, a general contractor.
(f) "Construction Contract Documents" - The document or
documents, including but not limited Go any construction plans
and specifications, which, together with the exhibits thereto,
collectively form the contract between the Borrower and
Contractor or Contractors concerning construction and/or
rehabilitation of the Project.
(g) "Disbursing Agent" - Commonwealth Land Title
Insurance Company.
(h) "Disbursing Agreement" - The disbursement agreement
by and between Lender, Borrower and Disbursing Agent which
controls the disbursement of the loan proceeds, which such
document is incorporated herein by reference as if it were
attached hereto as a separate exhibit.
(i) "Draw Requisition" - The form, substantially in the
form of Exhibit B attached hereto, which is to be submitted to
the Disbursing Agent when an Advance is requested, and which
is referred to in Section 2.02 hereof.
(j) "Event of Default" - One of the events of default
specified in Section 6.01 hereof.
(k) "Inspecting Engineer", if any - Bonestroo, Rosene,
Anderlik & Associates.
(1) "Lender" - The Economic Development Authority in and
for the City of New Hope.
(m) "Loan Commitment" - The commitment of the Lender
hereunder to make loan to the Borrower in an aggregate
principal amount of up to and including One Hundred Forty-Two
Thousand Five Hundred Dollars ($142,500.00)~ which such
document is incorporated herein by reference as if it were
attached hereto as a separate exhibit.
(n) "Commitment Termination Date" - The completion date
or the date of the termination of the Loan Commitment pursuant
to Section 6.02 hereof, whichever date occurs earlier.
(o) "Loan" - A loan of monies from Lender to Borrower in
an amount not to exceed One Hundred Forty-Two Thousand Five
Hundred Dollars ($142,500.00).
(p) "Mortgage" - The Deferred Loan Repayment Agreement
and Mortgage evidencing the Advances to be made hereunder for
the Loan and granting the Lender a lien on the Real Estate and
Project as security for payment of the Loan, which such
document is incorporated herein by reference as if it were
attached hereto as a separate exhibit.
(q) "Project" - The buildings and structures to which
the improvements described in the Construction Contract
Documents are to be made.
(r) "Real Estate" - The land upon which the Project is
located, which is more particularly described in the Mortgage.
3
ART[CLE 1!
Commitment to Make Advances
Terms of Advances and Draw Requests
Section 2.01 The Advances. The Lender agrees, on the terms
and subject to the conditions hereinafter set forth, to approve
Advances from the Loan to the Borrower from time to time during the
period from the date hereof to the Commitment Termination Date in
an aggregate principal amount of up to and including One Hundred
Forty-Two Thousand Five Hundred Dollars ($142,500.00). The
obligation of the Borrower to repay the Advances from the Loan
shall be evidenced by the Mortgage.
Section 2.02 Draw Requisitions. Whenever the Borrower
desires to borrow hereunder, which shall be no more often than
monthly, the Borrower shall submit to the Disbursing Agent and
Lender a Draw Requisition, duly executed on behalf of the Borrower,
setting forth the information requested therein. Each draw
requisition shall be certified as true and accurate by Borrower's
construction control manager relative to the percentage of work
completed on which payment is requested. Each Draw Requisition
with respect to construction items shall be limited to amounts
equal' to (i) the total value of the work by percentage of
completion as approved by Borrower and Lender, plus (ii) the value
of materials and equipment not incorporated in the Project, but
delivered and suitably stored on or off the Project site in a
4
manner acceptable to Lender, less (iii) five percent (5%), and less
prior Advances.
Notwithstanding anything herein to the contrary, no Advances
for materials stored on or off the Project site will be made by
Lender unless Borrower shall advise Lender of its intention to so
store materials prior to their delivery. It is specifically agreed
that the propriety of Advances for materials stored on or off the
Project site shall be determined in the Lender's sole discretion.
At the time of submission of each Draw Requisition, other than
the final Draw Requisition~ the Borrower shall submit to the Lender
and Disbursing Agent the following:
(a) A written lien waiver from each Contractor for work
done and materials supplied by it in accordance with the terms
of the Disbursement Agreement.
(b) Such other supporting evidence as may be requested
by the Lender or the Disbursing Agent to substantiate all
payments which are to be made out of the relevant Draw
Requisition and/or to substantiate all payments then made with
respect to the Project.
(c) A written lien waiver from each Contractor for ali
work done and all materials furnished by it for the Project.
(d) Such other supporting evidence as may be requested
by the Lender or the Disbursing Agent to substantiate all
payments which are to be made out of the final Draw
5
Requisition and/or to substantiate all payments then made with
respect to the Project.
(e) Satisfactory evidence that all work requiring
inspection by municipal or other governmental authorities
having jurisdiction has been duly inspected and approved by
such jurisdiction, and that all requisite certificates of
occupancy and other approvals have been issued.
If on the date an Advance is desired, the Borrower has
performed all of its agreements and complied with all requirements
therefore to be performed or complied with hereunder, and the
Lender approves the relevant Draw Requisition, the Lender shall
authorize the Disbursing Agent to pay the amount of the requested
Advance, which agent will disburse such funds pursuant to and in
accordance with the terms of the Disbursing Agreement. Provided,
however, the final Advance to Borrower hereunder shall be payable
fifteen (15) days after final completion of the Project and
satisfaction of the conditions for final payment as provided in the
Construction Contract Documents.
Section 2.03 Disbursement of Borrower's Funds. If the Lender
shall at any time in good faith determine that the undisbursed
amount of the Advances, plus the amount of all other funds
committed to the completion of the Project, is less than the amount
required to pay all costs and expenses of any kind which reasonably
may be anticipated in connection with the completion of the
Project, and shall thereupon send written notice thereof to
Borrower specifying the amount required to be deposited by Borrower
with the Disbursing Agent to provide sufficient funds to complete
the Project, then the Borrower agrees that it will, within ten (10)
calendar days of receipt of any such notice, deposit with the
Disbursing Agent, in a non-interest bearing account, the amount of
funds specified in the Lender's notice. Borrower agrees that any
such funds deposited with the Disbursing Agent may be disbursed by
the Disbursing Agent before any further disbursement of loan
proceeds from the Lender, to pay any and alt costs and expenses of
any kind in connection with completion of the Project.
Section 2.04 Advances Without Receipt of Draw Requisition.
Notwithstanding anything herein to the contrary, the Lender shall
have the irrevocable right at any time and from time to time, to
apply funds which it agrees to advance hereunder to pay any and all
of the expenses referred to in Section 7.04 hereof, all without
receipt of a Draw Requisition for funds from the Borrower.
ARTICLE III
Conditions of Lending
Section 3.01 Condition Precedent to Any Advance. The
obligation of the Lender to approve Advances hereunder (including
the initial funding) shall be subject to the condition precedent
that it shall have received the following on or before the date of
7
the initial funding hereunder (or in the case of items to be
furnished to the Lender on or before the date of a later Advance,
on or before the date of the relevant Advance):
(a) The Mortgage duly executed by the Borrower, with
constituting a valid and perfected lien on a good and
marketable fee simple title to the Real Estate, and the other
real property and fixtures described therein.
(b) Evidence, in form and substance satisfactory to
Lender, that the Disbursing Agent ~s holding sufficient funds,
including the proceeds of the Loan, to complete the Project as
contemplated by the Construction Contract Documents.
(c) A copy of the fully executed Construction Contract
Documents, with such contracts being acceptable to the Lender.
(d) A sworn construction statement duly executed on
behalf of the 8orrower, in form and substance satisfactory to
the Lender, showing all costs and expenses of any incurred and
to be incurred in constructing the Project.
(e) A title binder, in form and substance satisfactory
to the Lender, issued by the DisbuFsing Agent, at the
Borrower's expense, with such title binder' constituting
commitment by such title company to issue a mortgagee's title
policy in favor of the Lender, as holder of the Mortgage, that
will be free from exceptions for mechanics' and materialmen's
liens and free from other exceptions not previously approved
8
by the Lender, and that will insure the Mortgage to be a valid
lien on the Real Estate, subject only to such prior liens and
encumbrances as are approved by the Lender, in not less than
the principal amount of that portion of the total Advances
issued under the Loan and outstanding at any given time.
(f) Evidence satisfactory to the Lender that all
required permits and other permits have been obtained as
required.
(g) Copies of or binders for the delivery of the policy
of fire and extended coverage and comprehensive general
liability insurance required under Section 5.01 (c) hereof,
with all such insurance in full force and effect and approved
by the Lender.
(h) Where applicable, a copy of the partnership
agreement or corporate documents of the Borrower.
(i) The License Agreement duly executed by Borrower
granting the City of New Hope and Lender a non-exclusive right
to use Borrower's community center for public meetings and
civil functions.
(j) A binding commitment from
that it will acquire and develop real property legally
described as
in a manner satisfactory, to Lender.
(k) Unless waived by Lender, a survey showing the Real
Estate, ali structures and easements located thereon, and all
zoning restrictions such as set-back requirements.
(1) Any and all such other documents and agreements
which Lender deems necessary to establish the organization to
repay the Loan, and to secure such repayment.
(m) Any and all such other documents and agreements
which Lender deems necessary to establish that there is
sufficient additional funds, other than the proceeds of the
Loan, to pay for the work to be performed under the
Construction Contract Documents.
Section 3.02 Further Conditions Precedent to Any Advance.
The obligation of the Lender to make any Advance hereunder
(including the initial binder) shall also be subject to the
following conditions precedent:
(a) No Event of Default hereunder, or event which would
constitute such an Event of Default but for the requirement
that notice be given or that a period of grace or time elapse,
shall have occurred and be continuing.
(b) No determination shall have been made by the Lender
that the undisbursed amount of the Advances plus the amount of
all other funds committed to the completion of the Project is
less than the amount required to pay all costs and expenses of
any kind which reasonably may be anticipated in connection
with the completion of the Project, or if such a determination
10
has been made and notice thereof sent to Borrower, 8orrower
has deposited the necessary funds with the Disbursing Agent in
accordance with Section 2.03 hereof.
(c) The requirements of the Disbursing Agent set forth
in the Oisbursing Agreement has been satisfied.
ARTICLE IV
Representations and Warranties
Section 4.01 Representations and Warranties. The Borrower
represents and warrants as follows:
(a) The execution of this Agreement, the Mortgage, the
License Agreement, Loan Commitment, and any and all other
documents referred to herein are, where applicable, within the
powers of Borrower, and do not violate any provision of law.
(b) The Mortgage, when duly executed and delivered for
value, will constitute the legal, valid and binding obligation
of the Borrower enforceable in accordance with its terms.
(c) This Agreement, the Mortgage, and any and all other
documents referred to herein are the legal, valid and binding
obligations of the Borrower enforceable against the Borrower
in accordance with their respective terms.
(d) The Borrower has good and marketable title to the
Real Estate and Project, subject to no mortgage, lien or other
encumbrance, except those permitted by Section 3.01(e)
hereinabove.
11
(e) The Project will be constructed strictly in
accordance with the Construction Contract Documents, will be
constructed entirely on the Real Estate, and wil] not encroach
upon or overhang any easement right-of-way of land not
constituting part of the Real Estate,
(f) The Project and the contemplated use thereof, both
during construction and at the time of completion, will not
violate any applicable zoning or use statute, ordinance,
building code, rule or regulation, or any covenant or
agreement of record,
(g) The Borrower agrees that it will furnish from time
to time such satisfactory evidence regarding the
representations and warranties described herein as may be
required by the Lender,
ARTICLE V
Additional Covenants of Borrower
Section 5.01 Affirmative Covenants. The Borrower agrees
that:
(a) Borrower will cause construction of the Project to
commence, and thereafter will cause the Contractor or
Contractors to diligently proceed with construction of the
Project according to the Construction Contract Documents, so
that the Project can be completed by the Completion Date.
Borrower further agrees to provide all funds required over and
12
above the proceeds of the Loan plus the amoUnt of all other
funds committed to the completion of the Project if such
additional funds should be necessary to complete the
construction of the Project.
(b) Borrower will require its construction contract
manager to comply with the Uniform Municipal Contracting Law
in letting contracts and expending public funds on this
project. Also Borrower will require the Contractor or
Contractors to comply with all rules, regulations, ordinances
and laws bearing on its conduct of work on the Project.
(c) The Borrower will provide and maintain, or will
cause the Contractor or Contractors to provide and maintain,
at all times during the. process of building the Project, and,
from time to time at the request of the Lender, furnish the
Lender with proof of payment of premiums on, the following
insurance:
(1) Borrower to maintain fire and extended
coverage, in an amount equal to the lesser of the amount
of the Loan or the full insurable value of the Project,
with the Lender named as loss payee, and to include an
overlap endorsement or rider covering the risk of any
rehabilitation work;
(2) Borrower or Contractor(s) to provide
comprehensive general liability insurance, including the
13
Lender as a named insured, including operations, contingent
liability, operations of subcontractors, completed operations
and contractual liability insurance with limits (i) against
bodily injury of not less than $1,000,000, and (ii) against
property damage of not less than $250,000 (to accomplish the
above-required limits, an umbrella excess liability policy may
be used); and
(3) Contractor(s) to provideworkmen's compensation
insurance, with statutory coverage.
The policies of insurance required pursuant to Sections
5.01 (c}{1} and (2) hereinabove shall be in form and content
satisfactory to the Lender, and shall be placed with
financially sound and reputable insurers licensed to transact
business in the State of Minnesota. The policy of insurance
delivered pursuant to Section 5.01 {c)(1) hereinabove shall
contain an agreement of the insurer to give not less than ten
(10) days advance written notice to the Lender in the event of
cancellation of such policy or change affecting the coverage
thereunder. Acceptance of insurance policies delivered
pursuant to Sections 5.01 {c)(1) and (2) hereinabove shall not
bar the Lender from requiring additional insurance which it
reasonably deems necessary.
(d) Borrower will pay all taxes and assessments levied
or assessed against the Real Estate prior to the date on which
14
penalties attach thereto; provided, however, that the Borrower
may pay assessments in installments so long as no fine or
penalty is added to any installment for the nonpayment
thereof.
(e) Borrower will permit the Lender, acting by and
through its officers, employees and agents, to examine all
books, records, contracts, plans, drawings, permits, bills and
statements of account pertaining to the Project and to make
extracts therefrom and copies thereof.
(f) The Borrower will furnish to the Lender as soon as
possible and in any event within seven (7) days after the
Borrower has obtained knowledge of the occurrence of each
Event of Default, or each event which with the giving of
notice or lapse of time or both would constitute an Event of
Default, which is continuing on the date of such statement,
the statement of the Borrower setting forth details of such
Event of Default or event and the action which the Borrower
proposes to take with respect thereto.
Section 5.02 Negative Covenants. The Borrower agrees that,
without the prior written consent of the Lender, it will not:
(a) Create or permit to be created or allow to exist any
mortgage, encumbrance or other lien upon the Real Estate,
except the lien created by the Mortgage and those shown in the
title binder referred to in Section 3.01(e) hereinabove and
15
approved by the Lender, and except mechanics' and
materialmen's liens for which assurances of payment,
satisfactory to Lender, have been given,
(b) Agree or consent to any changes in the Construction
Contract Documents, to any change orders, or to any of the
terms and provisions of the Construction Contract Documents
without the consent of Lender which will not be unreasonably
withheld,
ARTICLE VI
Events of Default and Rights and Remedies
Section 6.01 Events of Default. The following shall
constitute events of default:
{a} The Borrower shall fail to duly observe or perform
any of the terms, conditions, covenants, or agreements
required to be observed or performed by the Borrower
hereunder, under the Mortgage, or under the License Agreement.
(b) Any representation or warranty made by the Borrower
herein, in the Mortgage, or in any financial statement,
certificate, report or Draw Requisition furnished pursuant to
this Agreement or the Disbursing Agreement, or in order to
induce the Lender to approve any Advance hereunder, shall
prove to have been untrue in any material respect or
materially misleading as of the time such representation or
warranty was made.
16
(c) The Borrower shall be in default under or in breach
of any of the terms of the Mortgage, and such default or
breach shall not be cured or waived by the Lender within the
period or periods of grace, if any, applicable thereto.
(d) At the time any Advance is requested by the Borrower
the title to the Real Estate is not reasonably satisfactory to
the Lender, regardless of whether the lien, encumbrance or
other question existed at the time of any prior Advance.
(e) The Project is materially damaged or destroyed by
fire or other casualty and the loss, in the reasonable
judgment of the Lender, is not adequately covered by insurance
actually collected or in the process of collection.
(f) The Borrower shall make an assignment for the
benefits of its creditors, or shall be dissolved, or shall
commit an act of bankruptcy under the United States Bankruptcy
Act (as now or hereafter amended) or shall admit in writing
its inability to pay its debts as they become due, or shall
file a petition in bankruptcy, or shall become or be
adjudicated bankrupt or insolvent, however defined, or shall
file a petition seeking any reorganization, dissolution,
liquidation, arrangement, composition, readjustment or similar
relief under any present or future bankruptcy or insolvency
statute, law or regulation or shall file an answer admitting
to or not contesting the material allegations of a petition
filed against it in such proceedings, or shall not, within
thirty {30) days after the filing of such a petition against
it, have the same dismissed or vacated, or shall seek or
consent to or acquiesce in the appointment of any trustee,
receiver or liquidator of a material part of its properties,
or shall not, within thirty {30) days after the appointment
(without its consent or acquiescence) of a trustee, receiver
or liquidator of any material part of its properties, have
such appointment vacated.
(g} Execution shall have been levied against the Real
Estate or any other property subject to the Mortgage, or any
lien creditor's suit to enforce a judgment against the Real
Estate or such other property shall have been brought, and (in
either case) shall continue unstayed and in effect for a
period of more than ten consecutive calendar days,
(h) The construction of the Project is abandoned or
shall be unreasonably delayed or be discontinued for a period
of twenty (20) consecutive calendar days, in each instance for
reasons other than acts of God, fire, storm, strikes,
blackouts, labor difficulties, riots, inability to obtain
materials, equipment or labor, governmental restrictions or
any similar cause over which the Borrower is unable to
exercise control,
(i) The Project is not substantially completed to the
18
satisfaction of the Lender in accordance with the Construction
Contract Oocuments by the Completion Date, subject to such
extensions as may be permitted in accordance with the
Construction Contract Documents.
(j) When applicable, upon completion of the Project, the
Borrower fails to obtain a certificate of occupancy, or such
other equivalent document from the municipality in which the
Project is located.
(k) Lender shall, in good faith, ascertain that the cost
of completing the Project in substantial accordance with the
Construction Contract Documents is greater than the sum of (i)
the then undisbursed portion of the Advances; and (ii) the
amount of Borrower's funds on deposit with the Disbursing
Agent.
Section 6.02 Rights and Remedies. Upon the occurrence of an
Event of Default and at any time thereafter until such Event of
Default is cured to the satisfaction of the Lender, the Lender may,
at its option, exercise any and all of the following rights and
remedies, along with any other rights and remedies available to it:
(a) The Lender may, by notice in writing to the
Borrower, refrain from approving Advances hereunder (but
Lender may make Advances after the occurrence of an Event of
Default without thereby waiving its rights and remedies
hereunder), or terminate the Commitment.
19
(b) The Lender shall have the right, in addition to any
other rights provided by law, to enforce its rights and
remedies under the Mortgage.
ARTICLE VII
Miscellaneous
Section 7.O1 Inspections. The Borrower, the Architect, if
any, and the Construction Manager, shall be responsible for making
inspections of the Project during the course of construction, and
shall determine to their own satisfaction that the work done or
materials supplied by the Contractors to whom payment is to be made
out of each Advance has been properly done or supplied in
accordance with the applicable contracts with such Contractors. If
any work done or materials supplied by a Contractor are not
satisfactory to Borrower and/or the Architect, if any, or if a
Contractor does not' comply with the Construction Contract Documents
in any respect, the Borrower will immediately notify the Lender in
writing of such fact. It is expressly understood and agreed that
the Lender and the Inspecting Engineer may conduct such inspections
of the Project as either may deem necessary for the protection of
the Lender's interest, and that any inspections which may be made
of the Project by the Lender or the Inspecting Engineer are made,
and all certificates issued by the Inspecting Engineer will be
issued, solely for the benefit and protection of the Lender, and
that the Borrower will not rely thereon.
20
Section 7.02 Indemnification by Borrower. The Borrower shall
bear all loss, expense (including attorney's fees) and damage in
connection with, and agrees to indemnify and hold harmless the
Lender, its agents, servants and employees from all claims, demands
and judgments made or recovered against the Lender, its agents,
servants and employees, because of bodily injuries, including death
at any time resulting therefrom, and/or because of damages to
property of the Lender or others (including loss of use) from any
cause whatsoever, arising out of, incidental to, or in connection
with the construction of the Project, whether or not due to any act
of omission or commission, including negligence of the Borrower or
any Contractor or his or their employees, servants or agents, and
whether or not due to any act of omission or commission (excluding
however, negligence or breach of statutory duty) of the Lender, its
employees, servants or agents. The Borrower's liability hereunder
shall not be limited to the extent of insurance carried by or
provided by the Borrower, or subject to any exclusions from
coverage in any insurance policy. The obligation of the Borrower
under this Section shall survive the payment of the Loan.
Section 7.03 Additional Security Interest. In the event any
Advance is to be made for materials then being fabricated or
stored, or both, for later use in the completion of the Project,
but which are not then stored upon the Real Estate or installed or
incorporated into the Project, then such Advance shall be made only
after the Borrower has given to the Lender such security
instruments and insurance on such materials as the Lender may
reasonably request.
Upon completion of the Project, Borrower shall execute and
deliver to Lender an additional financing statement, amendment to
financing statement, security agreement or similar instrument
covering all property of any kind whatsoever purchased with
mortgage proceeds and concerning which there may be any doubt as to
such property's being subject to the lien of the mortgage under the
laws of the State of Minnesota.
Section 7.04 Fees. Whether or not any Advance shall be made
hereunder, the Borrower agrees to pay all fees of the Disbursing
Agent, inspection fees, appraisal fees, survey fees, recording
fees, license and permit fees and title insurance and other
insurance premiums, and agrees to reimburse the Lender upon demand
for all reasonable out-of-pocket expenses actually incurred by the
Lender in connection with this Agreement or in connection with the
transactions contemplated by this Agreement, including, but not
limited to any and all reasonable legal expenses and attorneys'
fees sustained by the Lender in the exercise of any right or remedy
available to it under this Agreement or otherwise by law or equity.
Section 7.05 Addresses for Notices. All notices to be given
by either party to the other hereunder shall be in writing and
deemed to have been given when delivered personally or when
22
deposited in the United States Mail, registered or certified
postage prepaid, addressed as follows:
To the Borrower at:
Broadway LaNel/Golle Holmes
To the Lender at:
Economic Development Authority in and
for the City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428
or addressed to such party at such other address as such party
shall hereafter furnish by notice to the other party. Any notice
delivered personally to Borrower shall be delivered to a general
partner of Borrower and any notice delivered personally to Lender
shall be delivered to an officer of Lender.
Section 7.06 Termination of this A9reement. The obligations
of Borrower under this Agreement, but not under the Mortgage or any
other agreement(s) attached hereto or incorporated herein by
reference, shall cease upon Lender's certification that the
construction of the Project has been completed in accordance with
the Construction Contract Documents.
Section 7.07 Time of Essence. Time is of the essence in the
performance of this Agreement.
Section 7.08 Bindin9 Effect and Assignment. This Agreement
23
shall be binding upon and inure to the benefit of the Borrower and
the Lender and their respective successors and assigns, except that
the Borrower may not transfer or assign its rights hereunder
without the prior written consent of the Lender.
Section 7.09 Waivers. No waiver by the Lender of any default
hereunder shall operate as a waiver of any other default or of the
same default on a future occasion. No delay on the part of the
Lender in exercising any right or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any
right or remedy preclude other or further exercise thereof or the
exercise of any other right or remedy.
Section 7.10 The Lender's Remedies Cumulative. The rights
and remedies herein specified are cumulative and not exclusive of
any rights or remedies which the Lender would otherwise have.
Section 7.11 Governing Law and Entire Agreement. This
Agreement and the Mortgage issued hereunder and all security
therefor shall be governed by the laws of the State of Minnesota.
This Agreement contains the entire agreement of the parties on the
matters covered herein. No other agreement, statement or promise
made by any party or by any employee, officer, or agent of any
party that is not in writing and signed by all the parties to this
Agreement shall be binding.
Section 7.12 Counterparts. This Agreement may be executed in
any number of counterparts, each of which, when so executed and
24
delivered, shall be an original, but such counterparts shall
together constitute one and the same instrument.
(THE REMAINING PORTION OF THIS PAGE WAS INTENTIONALLY LEFT BLANK)
25
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, or caused it to be executed by their duly authorized
officers or partners, as of the date first above written,
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF NEW HOPE
By
Its President
By
Its Executive Director
BROADWAY LANEL/GOLLE HOLMES, A
MINNESOTA LIMITED PARTNERSHIP
By
Its
STATE OF MINNESOTA )
) ss,
COUNTY OF HENNEPIN )
The foregoing was acknowledged before me this day of
, 1993, by Edw. J. Erickson and Daniel J.
Donahue, the President and Executive Director, respectively, of the
Economic Development Authority in and for the City of New Hope, a
Minnesota municipal corporation, on behalf of said municipal
corporation.
Notary Public
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEP[N )
The foregoing was acknowledged before me this day of
, 1993 by , the
of Broadway LaNe1/Golle Holmes, a Minnesota
Limited Partnership, on behalf of said limited partnership.
Notary Public
c:\wp51\cnh\broadway.bla
26
D[SBURSEMENT AGREEMENT
THIS AGREEMENT is made and entered into as of the day
of , 1993, by and between Broadway
LaNel/Golle Holmes, a Minnesota Limited Partnership (the
"Borrower"), the New Hope Economic Development Authority (the
"Lender"}, and Commonwealth Land Title Insurance Company (the
"Title Company") for the following reasons:
A. Borrower and Lender have entered into a Loan Commitment,
Deferred Loan Repayment Agreement and Mortgage and Building Loan
Agreement for rehabilitation and expansion of Borrower's community
center at its property known as Broadway Village and street
lighting improvements at the Broadway ViTlage Shopping Center.
Both properties are legally described by the Mortgage. The
Borrower and Lender desire that the Title Company disburse the
monies advanced during the construction phases of the community
center and street lighting project (collectively the "Project") to
the contractors and materialmen and the Title Company is willing to
do so on the terms and subject to the conditions herein set forth;
and
B. The parties hereto contemplate that approximately
disbursements will be made from the Capital Contributions of the
Borrower and the loan proceeds of Lender and the total
disbursements will not exceed the total amount of Two Hundred
Eighty-Five Thousand Dollars ($285,000.00) and that such
disbursements shall occur no more frequently than once each month,
1
NOW, THEREFORE, in consideration of the covenants and
commitments herein contained, the parties agree as follows:
1. Ali proceeds will be disbursed pursuant to a draw request
to the Title Company as provided in Section of the Building
Loan Agreement.
2. At the time of the Loan closing, or shortly thereafter,
the Borrower and Lender wi]] each deposit One Hundred Forty-Two
Thousand Five Hundred Dollars ($142,500.00) with the Title Company
which:
(a) shall invest the money in instruments in which the
City of New Hope, Minnesota may legally invest in accordance
with Minnesota Statutes Section 475.66;
(b) shall disburse the funds so deposited in accordance
with the terms of this Agreement and the Building Loan
Agreement to pay the costs of the Project on the premises
located in the County of Hennepin, State of Minnesota, and
described in the Mortgage as approved by the Lender; and
(c) shall obtain partial and/or final lien waivers and
releases and satisfactions of liens and other encumbrances, if
any, pursuant to the Construction Manager's draw request for
amounts due and approved by the Lender,
3, Prior to the deposit of funds with the Title Company:
(a) the Title Company shall furnish to the Lender a
"marked-up" Title Binder in the maximum amount of One Hundred
Forty-Two Thousand Five Hundred Dollars ($142,500.00), which
policy shall set forth the condition of title to the Premises;
and
(b) The Borrower shall furnish to the Title Company:
(i) a sworn statement of the Borrower disclosing
the sources and uses of the Capital Contributions and
loan proceeds in connection with the Project.
4. Prior to each request for payment by the Construction
Manager, the Borrower shall cause to be delivered to the Title
Company and Lender:
(a) A copy of the Construction Manager's draw request
for disbursement of funds approved by the Lender including:
(i) all change orders;
(ii) the amount due to date on all subcontracts; and
(iii) all payments for project costs made in excess
of those set for the construction cost budget for each
line item and any payments for project costs made less
than those estimated in the construction cost budget for
each line item; and
(b) Statements, partial or final lien waivers, and
affidavits, as required by the construction contracts,
supporting waivers and releases of liens, if necessary, in
form and content satisfactory to the Title Company.
Not later than three (3) business days following receipt of
3
the documents delivered pursuant to sections 4(a) and (b),
the Title Company will orally notify the Lender, Borrower and the
Construction Manager whether it has received all such required
documents. As soon as the Title Company has received such required
documents and the Borrower transmits to the Title Company the
amount of the requested payment, the Title Company shall disburse
the payment in accordance with this section.
It is hereby agreed by and between the parties hereto that
simultaneously with the disbursement of funds so deposited by the
Lender and Borrower for disbursement by the Title Company, the
Title Company shall issue to the Borrower its endorsement to the
ALTA Title Insurance Policy, which endorsement shall increase the
coverage of said policy to the aggregate amount of the funds then
on deposit to be disbursed hereunder and any funds previously
disbursed.
It is understood by and between the parties that the Title
Company shall not be required to make any disbursement until all of
the foregoing requirements have been satisfied and that when all of
the foregoing requirements have been so satisfied the Title Company
shall disburse the funds.
5. Disbursements for construction purposes will be made by
the Title Company directly to the contractors set forth on the draw
request or to the subcontractors and/or materialmen as the Title
Company elects. Each disbursement to said subcontractors and/or
4
materia]men is considered to be a separate disbursement and a
payment to any subcontractor and/or materialman and shall not
obligate the Title Company to make disbursements to any other
subcontractor and/or materialman.
6. In no event shall the final disbursement be made until
all conditions are satisfied to enable the Title Company to issue
a final endorsement to the ALTA Title Insurance Policy.
7. The Title Company will keep and maintain at all times
true and correct books and records, in sufficient detail to reflect
the payments made by it. The Lender and Borrower may at any
reasonable time and from time to time examine a~l books and records
of the Tit3e Company pertaining to the disbursements made by it and
make extracts and copies from the books and records examined,
8. The parties covenant and agree with each other as
follows:
(a) Any capitalized term used in this Disbursement
Agreement and not otherwise defined shall have the meaning
ascribed to it in the Mortgage or Building Loan Agreement;
(b) In the event that the Title Company discovers a
misstatement in any affidavit, statement or certificate
furnished pursuant to this Disbursement Agreement, it sha3]
make no further disbursements until such misstatement has been
corrected;
(c) The functions and duties of the Title Company
include only those set forth in this Disbursement Agreement
and Building Loan Agreement and the Title Company is not
required to act and shall not act, except in accordance with
the terms and conditions of this Disbursement Agreement and
Building Loan Agreement;
(d) The Title Company does not insure that the Project
will be completed or that when completed the Project will be
accordance with the plans and specifications or that
sufficient funds will be available for completion; and
(e) If at any time during the course of construction the
total of the unpaid disclosed cost of construction, as
indicated by the Borrower's sworn statements exceeds the
amount of undisbursed proceeds as calculated by the Title
Company, the Title Company shall not make further
disbursements under the terms of this Disbursement Agreement
until the Borrower has provided evidence satisfactory to the
Title Company that sufficient funds are available to pay for
the unpaid disclosed costs of construction.
9. This Disbursement Agreement shall be attached to the
Building Loan Agreement and made a part thereof as Exhibit ~.
[N WITNESS WHEREOF, the Disbursement Agreement has been
executed as of the day, month and year first written above.
COMMONWEALTH LAND TITLE
INSURANCE COMPANY
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing was acknowledged before me this day of
, 199 , by
the of Commonwealth Land Title Insurance Company,
on behalf of the partnerships,
Notary Public
BROADWAY LANEL/GOLLE HOLMES,
A MINNESOTA LIMITED PARTNERSHIP
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing was acknowledged before me this day of
, 199__, by
the of Broadway LaNel/Golle Holmes, a Minnesota
limited partnership, on behalf of said limited partnership.
THE ECONOMIC DEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF NEW HOPE
By
Its
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing was acknowledged before me this day of
, 199 , by Edw. J. Erickson and Daniel J.
Donahue, the President and Executive Director, respectively, of the
Economic Development Authority in and for the City of New Hope, a
Minnesota municipal corporation, on behalf of said municipal
corporation.
Notary Public
c:\wp51\cnh\broadway.da
8
EDA
REQUEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
City Manager EDA
11-22-93
Kirk McDonald Item No.
By: Management Assistant By: 5
RESOLUTION APPROVING MINNESOTA HOUSING FINANCE AGENCY PUBLICLY-
OWNED NEIGHBORHOOD LAND TRUST PROGRAM LOAN COMMITMENT
AGREEMENT
At the end of August, the City was notified that New Hope's application to the Minnesota
Housing Finance Agency's Neighborhood Land Trust Program was funded in the amount of
$45,000. The MHFA has now forwarded the loan commitment agreements to the City for
execution, which must be approved before the funds can be disbursed. The purpose of the grant
funds is to provide housing at a reasonable cost to residents. It is staff's intention to utilize these
funds, in conjunction with other HOME and CDBG funds, to acquire the property at 5009
Winnetka Avenue North, demolish the existing structure and construct a new handicapped
accessible two-family dwelling unit for resale to low/moderate income New Hope residents.
The City Attorney has reviewed the documents and staff recommends approval of the resolution
approving the agreement.
Review: Administration: Finance:
RFA-O01 ~
CITY OF NEW HOPE
~/~/~ RESOLUTION NO. 93-
RESOLUTION APPROVING MINNESOTA HOUSING
FINANCE AGENCY PUBLICLYtOWNED NEIGHBORHOOD
LAND TRUST PROGRAM LOAN COMMITMENT AGREEMENT
WHEREAS, the City of New Hope's application to the Minnesota Housing Finance Agency's
Neighborhood Land Trust Program has been funded in the amount of $45,000;
and
WHEREAS, the purpose of the grant funds is to provide housing at a reasonable cost to
residents of New Hope; and
WHEREAS, it is the City's intention to utilize these funds in conjunction with HOME and
CDBG funds, to acquire property at 5009 Winnetlm Avenue North, demolish the
existing structure and construct a new handicapped accessible two-family dwelling
unit for resale to low/moderate income New Hope residents.
NOW, THEREFORE, BE IT RESOLVED, by the New Hope Economic Development Authority that
the Minnesota Housing Finance Agency Publicly-Owned Land Trust Program
Loan Commitment Agreement is hereby approved.
Adopted by the New Hope Economic Development Authority of the City of New Hope, Hennepin
County, Minnesota, on this 22nd day of November, 1993.
President
Attest:
Executive Director
MINNESOTA
HOUSING
FINANCE
AGENCY
August 30,1993
Kirk McDonald
City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428
Dear Mr. McDonald:
Thank you for submitting an application for a commitment of funds from the Publicly-Owned
Neighborhood Land Trust Program. I am pleased to inform you that after thorough review
and discussion, your application was selected for funding in the amount of $45,000.
Twenty applications were received, requesting a total amount of $4,654,859 in program
funds. The proposals were very diverse and unique to the needs of each individual city. A
team of staff members from the various divisions in the Agency reviewed each proposal, and
developed recommendations based on program eligibility, selection criteria, and financial
sensibility. The Agency's Board of Directors made final selections at its regular meeting on
August 26, 1993.
We now need to formally commit these funds to you. To accomplish this, the Agency will be
drafting a "Loan Commitment" document that provides evidence of the Agency's willingness
to provide loan funds. Because your proposal is somewhat unique, I will contact you in the
near future to discuss the terms of the commitment.
These terms will include effective dates and performance requirements affecting the
disbursement process. An acceptable ground lease must be drafted which reflects the
statutory requirements of the Program, and certain resolutions will have to be provided.
Before funds can be disbursed, you will have to enter into a Deferred Loan Repayment
Agreement and Mortgage that sPecifies the terms and conditions under which loan funds will
have to be repaid. If your proposal involves new construction, it may also be necessary for
you to enter into a Building Loan Agreement stating the terms of construction/rehabilitation
and loan disbUrsement.
Please contact me at (612) 297-3123 or toll-free 1-800-657-3960 if you have any questions
on this process. Thank you for your interest in this innovative program, ancl ~ ~ook forward to
your continued cooperation.
Si nc~rel_y.:_ _
Program Coordinator
Publicly-Owned Neighborhood Land Trust Program
: GB:Im
400 Sibl®y Street, Suite 300, St. Paul, Minnesota 55101 (612) 296.7608 Tetecopier (612) 296-8139 TDD (612) 297-2361
Equal Opportunity Housing and Equal Opportunity Employment
MINNESOTA
HOUSING
FINANCE
AGENCY
November 3, 1993
Kirk McDonald
City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428
Subject: Publicly Owned Neighborhood Land Trust Program
Loan Commitment
Dear Kirk:
Thank you for submitting an application for a loan under the Publicly Owned
Neighborhood Land Trust Program.
The enclosed Loan Commitment Agreement provides evidence of the Minnesota
Housing Finance Agency's (MHFA's) willingness, subject to stated terms, to provide
loan funds. The Commitment Agreement is not effective until three (3) signed copies
of the Loan Commitment are returned to the MHFA, and these must be returned to the
MHFA by December 3, 1993.
The closing of this loan and disbursement of funds depends on the particular activity
being funded. Please contact me so we can discuss when and how the closing should
be held. The loan closing will not occur until all requirements of the Loan Commitment
have been submitted to the MHFA in a satisfactory form and substance. Please refer
to Item 4 of the Loan Commitment for a list of the requirements to be met.
At the closing, the City and MHFA will enter into a Repayment Agreement (Exhibit A of
the Loan Commitment) which must be recorded in a first pdority lien position on the
land. Depending on the activity, the City may also be required to enter into a Building
Loan Agreement (Exhibit B of the Loan Commitment). Please refer to these exhibits.
The funds will be disbursed after the Loan has closed and the City has complied with
the terms of the documents. If you should have any questions, please contact me at
(612) 297-3123, or toll-free at 1-800-657-3960. I look forward to working with you.
Program Coordinator
Publicly Owned Neighborhood Land Trust Program
GAB:ss
400 Sibley Street, Suite 300, St. Paul, Minnesota 55101 (612) 296-7608 Telecopier (612) 296-8139 TDD (612) 297.2361
Equal Opportunity Housing and Equal Opportunity Employment
MINNESOTA HOUSING FINANCE AGENCY
PUBLICLY-OWNED NEIGHBORHOOD LAND TRUST PROGRAM
LOAN COMMITMENT
MI-IFA Development No:
Sponsor/Borrowe~.
Development Name:
T~. City of New Hol~ (hereinafter referred to as the "Borrower).
The Minnesota Housing Finance Agency (hereinafter referred to as the "MHFA") hereby
notifies you of approval of your application for a MI-IFA Publicly-Owned Neighborhood Land
Trust Program Deferred Loan (hereinafter referred to as the "Loan") for the above-captioned
proposed housing development (hereinafter referred to as the "Development"). The Development
consists of certain real property located in the County of Hennepin (hereinafter referred to as the
"Real Property"), and all of the structures permanently affixed to the land and situated thereon
(hereinafter referred to as the "Buildings"). The proceeds of the Loan are to be used to acquire,
rehabilitate, or construct the Buildings and the Real Property (the Buildings and Real Property are
hereinafter cumulatively referred to as the ".Mortgaged Property"), all in accordance with the
provisions contained in Minn. Stat. § 462A.202 subd. 6 0992) (hereinafter referred to as the
"Act"), and in Minn. Rules pts. 4900.3430-.3434 (hereinafter refenzd to as the "Rules"). This Cotnoaitment is subject to the following terms and conditions:
1. Principal Amount of Loan. The amount advanced pursuant to the Loan shall not
exceed forty five thousand and 00/100 Dollars ($45,000.00).
2. Lo~ Interest Rate. The Loan shall be made as a no-interest loan, and therefore
there shall be no interest paid on said loan.
3. Repayment of Loan. The Loan shall be immediately due and payable, in
accoidance with the repayment terms contained in the Deferred Loan Repayment Agreement and
Mortgage referred to in Section 4.A. hereinbelow, upon the occurrence of any of the following
events within a twenty (20) year time period from the date such loan is closed.
A. If, without the written consent of the MI-IFA, the Development ceases to be used
to provide affordable housing in accordance with the provisions of the Act and the Rules.
B. If, without the written consent of the MI-IFA, Borrower sells, transfers, leases,
encumbers, other than the encumbrances shown in the Repayment Agreement referred to in
section 4.A hereinbelow as Permitted Encumbrances, or otherwise conveys, in any way or
manner, whether voluntary, involuntary, or by action of law, its fee interest in the Real
Property. Provided, however, if the Mortgaged Property consists only of the Real Property
and not of any Buildings, then Borrower may lease the Real Property for a term not to exceed
ninety-nine (99) years to a non-profit corporation, approved of by MHFA in writing, which
will use the Real Property ~o provide affordable housing in accordance with the provisions of
the Act and the Rules.
Pubi~ly.O*n~l ~ L~I Trim Pro,mn 1 (?f20/q ~
C. If, ~thout the w~i~n consent of the MI-IFA. Borrow~ sells, transfers, leases,
encumbers (other than thc hereinabovc referred to Pertained £ncumbrances), or
conveys in any wa~ or manner, whether voluntary, involunta~, or b~ action of law, any of
its interest in thc Buildings. Provided* however, Bon~wer may:
(i) For an annual rental equal to the amount of the Loan atuib~_~L~_ to the cost of
the Buildings divided by the number of years of useful life of the Buildings, lease the
Buildings to a non-profit organization, approved of by bfHFA in writing, which will
use the Buildings to provide affordable housing in accordance with the provisions of
the Act and the Rules, or
(ii) For a nominal amount, lease the Buildings to a non-profit organization,
approved of by Lender in writing, which will use the Buildings to provide affordable
housing in accordance with the provisions of the Act and the Rules, as long as the lease
dc~ not ex~_,~ ten (10) yea~ and Borrower has the option to cancel the lease, with or
without cause, at the end of any three (3) year period.
D. If any Event of D~fault occurs under the Repayment Agreement referred to in
Section 4.A hereinbelow.
ff none of the events specified in this Section 3 occurs within twenty (20) years from the date
the Loan is ciosed* then the Loan will no longer need to be repaid, and will be extinguished.
4. Loan Closing. As a condition precedent to the disbm'sement of the Loan, each of the
following shall be delivered to MI-IFA in form'and substance satisfactory to biZ-iFA:
A. A fully executed Deferred Loan Repayment Agreement and Mortgage (hereinafter
referr~ to as the *'Repayment Agreement"), in substantially the same form as the document
attached hereto as Exhibit A, which grants to MI-IFA a lien on Borrower's interest in the
B. A fully executed Building Loan Agreement (hereinafter referred to as the
*'Building Loan Agreement"), in substantially the same form as the document attached hereto
as Exhibit B, which controls the disbursement of the proceeds of the Loan.
C. A commimlent for a title insurance policy insuring the MHFA's interest in the
Mortgaged Property, and which shows that as of the date of closing of the Loan the title to
the Mortgaged Property is vested in the Borrower ~ and clear of all encumbrances other
than the Repayment Agreement, and free and clear of all reservations of title (either junior or
prior to the Repayment Agreement) which a~ not specifically deir~,mined to be acceptable to
the MHFA. Such tide insurance policy shall be extended contemporaneously with each
disb~nt of proceeds of the Loan to show that thc status of title to the Mortgaged
Prope~ has not changed to thc deuiment of the MHFA, and to extend the coverage thereof
to all funds to be disbursed. Such tide policy shall aim have the survey exception deleted.
D. Assurances from appropriate public authorities and public utility companies that
adequate sewer, water, gas, and electric facilities are available, will be made available, or
have been fully installed for the Deveiopment.
E. Evidence satisfactory to MHFA the Borrower is a '*city", as defined in Minn.
Stat. § 462C.02, subd. 6 (1992).
F. A resolution from the Borrower in,eating its intent to act with thc powers and
duties described in Minn. Stat. §§ 462A.31, subd. 1 to $ (1992), inclusive.
G. An opinion letter adc~ssed to the MHFA, f~xn Borrowers anorney, sta~ng that
(i) Borrower is a *'city** as such term is defined in Minn. Stat. § 462C.02, subd. 6 (1992),
(il) all legal requirements have bcen complied with in Borrowers execution of ail documents
relating to the Loan, (iii) all such Loan documents are fully enforceable against Borrower in
accordance with theh' terms and conditions, and (iv) such Loan documents create a valid and
existing lien on Borrower'S interest in the Mortgaged Property.
H. Evidence that thc Mortgaged Property is zoned or restricted so as to permit the
consu'uction and operation of the Development.
I. At the sole discretion of the MI-IFA, either a zoning endorsement insuring, or an
opinion letter from Borrower's attorney and addressed to the MI-IFA indicating, that the
Development and the contemplated use thereof are permitted by and comply with all
applicable usc or other restrictions and requirements imposed by applicable zoning
ordinances or regulations, and have been duly approved by the applicable municipal or
governmental authorities having jurisdiction.
$. Evidence satisfactory to MI-IFA that the Development and the contemplated use
thereof are permitted by and comply with all applicable use or other restrictions and
requirements imposed by applicable zoning ordinances or regulations, and have been duly
approved by the applicable municipal or governmental authorities having jurisdiction.
K. All instruments necessary, in the opinion of MI-IFA or its counsel, to authorize
and effectuate the execution of the Repayment Agreement
L. Evidence satisfactory to MHFA that any non-profit corporation involved with the
Development and the contemplated use thereof is organized under Chapter 317A of the
Minnesota Statutes, complies with Minn. Stat. §§ 462A.30 and 462A.31 (1992), and
qualifies for tax-exempt status under 26 United States Code § 501 (e) (3).
M. A copy of any agreements between the Borrower and others which cite the terms,
conditions, and performance requirements of the parties necessary to complete the initial
construction, renovation, or acquisition of the Development, and the long-term management
of the Development.
N. A long-term lease (hereinafter referred to as the "Crround Lease") of the Real
Property which has been approved by MI-IFA, and meets the requirements of Minn. Stat. §§
462A.30 and 462A.31 (1992).
O. Evidence that Borrower has obtained fee and extended coverage insurance, in an
amount equal to the lesser of the amount of the Loan or the full insurable value of the
Development, with the MI-IFA named as loss payee therein, which shall include an overlap
endorsement or rider covering the risk of any and all rehabilitation work.
P. All necessary and applicable building permits issued by legally constituted
authorities having jurisdiction thereover.
Q. All such other documents, insu'urnems and/or items which the MHFA may
reasonably requi~.
5. Financial Requirements, Prior to, or concurrently with, the disbursement by
MI-IFA of any of the procee.~ of the Loan, the Borrower shall deliver to MI4FA, or any other
entity that the MHFA may designate, an equity investment and/or com,niunents for such from other
sources, in an amount of one hundred eighty five thousand and 00/100 Dollars ($185,000.00),
which is the estimated amount of funds it will take to complete the Development over and above the
amount of the Loan.
6. Changes in Conditions. Any changes in the conditions upon which this Loan
Commitment is based which shall occur after the d~r, hereof must have the written approval of
MI-IFA prior to the closing of the Loan, which written approval shall be subject to such conditions
as MPIFA may deem to be approlmate.
Pulfliely-Own~ Yi~l~aorlmod ~ Trmt l~ro~-~m 3 (?/20;~ 3 ~
l~uildi~ Lorn ~
7. Commencement of Construction Subsequent to Closing. Consffuctiofl
and/or rehabilitation of the Development shall not commence prior to the closing of the Loan
unless, and umil, such commencement is specifically authorized, in writing,, by the MI*IFA, and on
such terms and conditions aa the MI-IFA may deem to be appropriate.
8. Term of Commitment. This Loan Commitment shall terminate on June 3, 1994,
unless the closing of the Loan shall have occurred prior to such date, or unless this Loan
Commitment is renewed or extended by M~-IFA. Subsequent to the closing of the Loan, the
termination date for this Loan Cornmi~t shall be as provided in the Building Loan Agreement.
9. Effectiveness of Commitment. This Loan Commitment shall not become
effective unless the accompanying three (3) duplicate copies hereof are returned to the MHFA, with
acceptance endorsed thereon by the signature of the party or parties indicated below, or their
authorized agent, on or before December 3, 1993.
10. Mutual Enforceability of Loan Commitment. This Loan Commitment shall be
mutually enforceable by either patty, and either party hereto may apply to any court, State or
Federal, for specific performance of the agreements and requirements contained herein, and for
such other relief as may be appropriate, since the injury to MHFA arising from any failure to
comply with the requirements contained herein would be irreparable and the amount of damage
would be difficult to ascertain.
11. Assignment or Transfer of Loan Commitment. This Loan Commitment shall
not be aa.signed or wansferred without the prior written consent of the MHFA.
12. Additional or Special Conditions. This Loan Commitment is subject to the
following or special conditions, which ~re hereby ~de a part hereof:
(If there ate no ,4ditional conditions insert the word "None".)
None
MINNESOTA HOUSING FINANCE AGENCY
By:
lames ~. Solem, Commissioner
Dated:
BORROWER
By:
ACCepted this_ day of ,19__.
Exhibit A
MINNESOTA HOUSING FINANCE AGENCY
PUBLICLY OWNED NEIGHBORHOOD LAND TRUST PROGRAM
DEFERRED LOAN REPAYMENT AGREEMENT AND MORTGAGE
THIS AGREEMENT. made this ,day, day of *month,. 19,year,. between ~name of
loan recipient. (hereinafter referred to as "Borrower"), having its principal place of business
located at .borrower's ~ress., and the Minnesota Housing Finance Agency (hereinafter referred
to aa "Lender"), a public body corporate and politic of the State of Minnesota, having its principal
place of business located at 400 Sibley Street, Suite 300, Saint Paul, Minnesota 55101-1998.
WHEREAS, Lender has, pursuant to the authority granted by Minn. Stat. § 4-62A.202
subd. 6 (hereinafter referred to as the "Act"), and the provisions contained in Minn. Rules pts.
4900.3430-,3434 (hereinafter referred to as the "Rules"), implemented a Publicly Owned
Neighborhoud Land Trust Program (herinafter referred to a~ the "Program"), which is intended to
promote the pt~luction and preservation of affordable housing by the use of a land trust; and
WHEREAS, Borrower has submitted an application under the Program (hereinafter
refea-red to as "Borrower's Application"), and has been selected for participation in the Program;
WHEREAS, aa a result of Borrower's selection for participation in the Program, Lender
has made a no-interest defert~ repayment loan to Borrower, the proceeds of which are to be used
to promote the production and preservation of affordable housing by the use of a land mist, all in
accordance with the provisions of the Act and the Rules; and
WHEREAS, in accordance with the provisions of the Ac~ and the Rules, Borrower and
Lender desire to set forth herein the provisions for Borrower's repayment of said loan, and to
provide for securing said repayment with a mortgage on Borrower's interest in the real estate
NOW, THEREFORE, in consideration of the loan described berein, and in accordance
with the provisions of the Act, the Rules, and ali other applicable laws, the parties he. to do hereby
agree aa follows:
1. Participation in Pro,ram and Loan of Monies. Lender approves Borrower for
participation in the Program, and concurrent with the execution of this Agreement by all of the
parties he. to makes a zero interest rate loan of monies to Borrower (ber~inafter r~fer~ to as the
"Loan") in an amount of .amount of the loan in words. Dollars ($.arnount of the loan in
numbers.), which shall be repaid in accordance with the provisions contained in Section 5
ber~below.
2. U~ of Loan Proct~ls. Borrower shall use the proceeda of the Loan to acquire the
rral pmpe~ situated in the County of .name of the county the real estate is situated in., State of
Minneso~ and legally described as follows:
.legal description for the rede. state.
(he~inaf?~ refmxed to a~ the "Real Property"), along with any and all su'uctu~s located thereon
(herinafter referred to aa the "Buildings"), and to operate, or cause to b~ operated, the Real
~ and Buildinga (the Real Prope~ and Bulldinga are h~inafter cumulatively referred to as
th~ "Mortgaged Property") aa affordable housing in aocordan~ with the provisions of the Act and
tl~ Rules.
3. Ownt, r~hip of the Prol~rty. Borrower covenants with and wal'rants to Lender that
Borrower possesses a fee simple interest in the Mortgaged Property, and that such int.'est is free
Publk:iy Owed N~i~m'~ood Land Trim Prolxam
l~f~r~l Lt~a Rq~ym~u A~'~m~nt and
and clear of all liens and/or encumbrances, other than the lien and security interest created by this
Agreement, a ground lease from Borrower to .occupant or non-profit or owner of Buildings, and
the following listed liens and encumbrances (hereinafter referred to as the "Permitted
Encumbrances"), which Lender specifically consents to:
(If none, so state.)
,tlist of other permitted encumbrances~
4. Ol~ration of the Proi~rty. With respect to the ownership and operation of the
Mortgaged Property:
A. Borrower shall operate, or cause to be operated, the Mortgaged Property as as
affordable housing in accordance with the provisions of the Act and the Rules.
B. Borrower shall not, without the written consent of Lender, sell, mmsfer, lease,
encumber (other than the Permitted Encumbrances), or otherwise convey, in any way or
manner, whether voluntary, involuntary, or by action of law, its fee interest in the Real
Property. Provided, however, if the Mortgaged Property consists only of the Real Property
and not of any Buildings, then Borrower may lease the Real Property for a term not to exceed
ninety-nine (99) years to a non-profit corporation, approved of by Lender in writing, which
will use the Real Property to provide affordable housing in accordance with the provisions of
the Act and the Rules.
C. Borrower shall not, without the written consent of Lender, sell, mmsfer, lease,
encumber (other than the Permitted Encumbrances), or otherwise convey, in any way or
manner, whether voluntary, involuntary, or by action of law, its fee interest in the Buildings.
Provided, however, Borrower may:
(i) For an annual rental equal to the amount of the Loan amibuted to the cost of
the Buildings divided by the number of years of useful life of the Buildings, lease the
Buildings to a non-profit organization, approved of by Lender in writing, which will
use the Buildings to provide affordable housing in accordance with the provisions of
the Act and the Rules; or
('ti) For a nominal amount, lease the Buildings to a non-profit organization,
approved of by Lender in writing, which will use the Buildings to provide affordable
housing in accordance with the provisions of the Act and the Rules, as long as the lease
does not exceed ten (10) years and Borrower has the option to cancel the lease, with or
without cause, at the end of any three (3) year period.
D. Borrower must annually determine that the Mongaged Property is being used to
provide affordable housing in accordance with the provisions of the Act and the Rules, and
supply to Lender a statement to such effect which is sworn to before a notary public. The
first of such sworn statements must he supplied to Lender during the thirty (30) day time
period starting one (1) year from the date of this A~reement, and all subsequent sworn
statements must be annually supplied to Lender during the same ~ (30) day time period
during each calendar year.
5. Repayment of the Loan. Borrower covenants and agrees with Lender that if an
Event of Default, as such term is defined in Section 8 hereinhelow, occurs within twenty (20)
years from the date of this Agreement, then the Loan shall immediately become due and payable,
and Borrower shall repay the Loan by either:.
A. Paying the full outstanding balance of the Loan to Lender in full and complete
satisfaction of the loan; or
B. Selling the entire Mortgaged Property at its fair market value, and Iransmitting the
sum of the net proceeds of such sale, plus any insurance proceeds which were obtam~i
because the Mortgaged Property was damaged ~ were not used to repair the Mortgaged
Publicly Chened Neilhlxn'hood Lind Trust Pro,mn 2 (6/'30~
Defmted ~ Re~symmt Altemmu and Morale
* Property, plus any condemnation awards which were received for the Mortgaged Property
and we~ not used to improve and/or repair the Mortgaged Property, to the Lender in full and
complete satisfaction of the Loan.
All payments due hereunder shall be made to the order of Lender, or its successors and
assigns, at the office of the Lender in Saint Paul, Minnesota, or at such other place as Lender may
designate in writing, delivered or mailed to the Borrower.
If no Event of Default, as such term is del'reed in Section 8 hereinbelow, occurs within
twenty (20) years from the date of this Agreement, then upon commencement of the twenty-first
(2 I) year a~ter the date of this Agreement, the Loan shall be deemed to have been paid in full and
no repayment thereof shall be required, and the requirements contained in and imposed by this
Agreement shall terminate and no longer be of any force or effect.
6. Insurance. For as long as the Loan is outstanding, Borrower shall mnir~tain standard
f'tre and extended coverage insurance on the Mortgaged Property in an amount equal to or greater
than the lesser of the amount of the Loan or the full insurable value of the Mortgaged Property. At
the written request of Lender, Borrower shall promptly finnish to Lender all written notices and all
paid premium receipts received by Borrower.
7. Borrower Representations and Warranties. Borrower further covenants with,
represents, and warrants to Lender as follows:
A. It is eligible for the Loan under the provisions of the Act and the Rules.
B. It is a city, as such term is used in the Act and the Rules.
C. It will comply with all of the terms, conditions, provisions, and requirements,
contained in this Agreement, Borrower'sApplication, the Act, and the Rules.
D. It has made no material false statement, or misstatement of fact, in connection
with its application for the Loan, and all of the information contained in Borrower's
Application. is true and correct.
E. It has legal authority to enter into, execute, and deliver this Agreement and all
other documents referred to herein, and it has taken all actions necessary and incident to its
execution and delivery of this Agreement and such other documents.
F. h is not in violation of any provisions of its organizational documents, or of the
laws of the State of Minnesota, and there are no actions, suits, or proceedings pending, or to
its knowledge threatened, before or by any judicial bedy or governmental authority, against
or effecting it, and it is not in default with respect to any order, writ, injunction, decree, or
demand of any court or any governmental authority which would impair its ability to enter
into this Agreement, or to perform any of the acts required of it in this Agreement or any
document referred to herein.
G. Neither the execution and delivery of this Agr~-ment, nor compliance with any of
the terms, conditions, requirements, or.provisions contained herein, is prevented by, is a
brach of, or will l~sult in a breach, of any term, condition, or provision of any agreement or
document to which it is now a party, or by which it is bound.
H. It will comply with ail of the terms, conditions, provisions, covenants, anti/or
warranties contained in this Agreement, Borrowers Application, the Act, and the Rules.
8. Event(s) of Default. Any of the following shall, upon Lender giving Borrower
thirty (30) days notice thereof, and Borrower's failure to ctn~ during such lime period, constitute
an Event of Default under this A~reement.
A. If any part of the Mortgaged Property ceases to be used to provide affordable
housing in accordance with the provisions of the Act and the Rules.
B. If, without the written consent of the Lender, Borrower sells, Iransfers, leases,
encumbers (other than the Permitted Encumbrances), or otherwise conveys, in any way or
Publicly Ownnd lqei~nhood ~ Trust Pr~rsm 3 t 6/9 0
D~fm'r~l loan ~ A~re~nm~nt and Mor~a~e
manner, whether voluntary, involuntary, or by action of law, ail or part of its fee interest in
the Real Property. Provided, however, if the Mortgaged Property consists only of the Real
Property and not of any Buildings, then Borrower may lease the Real Property for a term no~
to exceed ninety-nine (99) years to a non-profit corporation, approved of by Lender in
writing, which will use the Real Property to provide affordable housing in accordance with
the provisions of the Act and the Rules.
C. If, without the written consent of the Lender, Borrower sells, Iransfers, leases,
encumbers (other than the Permitted Encumbrances), or otherwise conveys in any way or
manner, whether volunta~, involuntary, or by action of law, any part of its interest in the
Buildings. Provided, however, Borrower may:
(i) For an annual rental equal to the amount of the Loan atlributed to the c°st of
the Buildings divided by the number of years of useful life of the Buildings, lease the
Buildings to a non-profit organization, approved of by Lender in writing, which will
use the Buildings to provide affordable housing in accordance with the provisions of
the Act and the Rules; or
(ii) For a nominal amount, lease the Buildings to a non-profit organization,
approved of by Lender in writing, which will use the Buildings to provide affordable
housing in accordance with the provisions of the Act and the Rules, as long a.s the lease
does no~ exceed ten (10) year~ and Borrower has the option to cancel the lease, wi~h or
without cause, at the end of any three (3) year period.
D. If Borrower fails to annually determine that the Mortgaged Property is being used
to provide affordable housing in accordance with the p~visions of the Act and the Rules.
E. If Borrower fails to annually supply to Lender the statement required under
Section 4.1). herein.
F. If Borrower fails to maintain fire and extended coverage insurance on the
Mortgaged Property in an amount equal to or ~reater than the lesser of the amount of the
Loan or the full insurable value of the Mortgaged Property.
G. If Borrower refuses to allow Lender, or the Legislative Auditor for the State of
Minnesota, at any reasonable time and upon prior written notice, to inspect, audit, copy, or
abstract, any and all of Borrower's books, records, paper~, or other documents relevant to
the Loan, the Mortgaged Property, or the Program.
H. If Borrower refuses to allow the Lender, at any reasonable ~ and upon prior
written notice, to inspect the Mortgaged Prop~.
I. If Borrower fails to comply with, or breaches any of the terms, conditions,
provisions, covenants, and/or warranties contained in this Agreement, Borrower's
Applicalion, the Act, or the Rules.
J. If any rep~sentation, covenant, or warranty made by Borrower hereunder, or in
Borrower's Application, shall prove to have been unlrue in any material respect, or materially
misl,',~,tlng a.s of the ~ such representation, covenant, or warranty wss made.
K. If Borrower shall make an assignment for the b~nefit of its c~ditors, or shall be
dissolved, or shall commit an act of bankruptcy under the United States Bankruptcy Act (as
now or hereafter amended), or shall admit in writing its inability to pay its debts as they
become due, or shall file a petition in bankruptcy, or shall become or b~ adjudicated bankrupt
or insolvent, however defined, or shall file a petition seeking any reorganizalion, dissolution,
liquidation, arrangement, composition, r~adjustment, or similar relief under any present or
futu~ bankruptcy or insolvency statute, law, or re~ulalion, or shall file an answer admimng
to or not contesgng the material allegations of a petition filed against it in such proce~xiings,
or shall not, within sixty (60) days after the filing of such a petition against it, have the same
Publicty Ownnd N~ilhlx~tm~l La~d T~st Program 4 ~6~o/~
dismissed or vacated, or shaLl seek or consent to or acquiesce in the appointment of any
trustee, receiver, or liquidator of a material part of its properties, or shall not, within sixty
(60) days after the appointment (without its consent or acquiescence) of a trustee, receiver, or
liquidator of any material part of its properties, have such appoinunent vacated; and
L. If, without the written consent of the Lender, Borrower fails to comply with any
of the following specific requirements:
(ff none, so state.)
,dist o/any specO~c requirements~
Upon the occurrence of an Event of Default the Loan shall immediately become due and
payable, and shall be repaid in accordance with the provisions contained in Section 5 herein.
9. Mortgage Lien. As security for Borrower's covenants and obligation for repayment
of the Loan as herein provided, and subject to the terms and conditions of this Agreement,
Borrower hereby grants, and the Lender shall and hereby does have, a mortgage lien on
Borrower's interest in the Mortgaged Property, together with all hereditaments and appurtenances
thereto, in the full amount necessary to satisfy such repayment obligation, and the cost, including
reasonable attorney's fees, of coUecfing the same.
To have and to hold the Mortgaged Property, together with the tenements, hereditarnents, and
appurtenances, unto the Lender, its successors and assigns, in fee simple, forever. Borrower
covenants with Lender that (i) Borrower is lawfully seized of the Mortgaged Property and has
good right to convey the same, (ii) the Mortgaged Property is free from all encumbrances, except
for the Permitted Encumbrances, (iii) Lender shall quietly enjoy and possess the Mortgaged
Property, and (iv) Borrower will warrant and defend the title to the same against all lawful claims
not hereinabove specifically excepted.
Provided, nevertheless, that if the Loan is paid in full in accordance with the provisions
contained herein, then this Mortgage shall become nutl and void, and shall be releasecL
10. Notice of Sale, Transfer, Conveyance, or Encumbrance. Borrower, or its
successors and assigns, shall promptly give Lender notice (i) of any sale, transfer, lease,
encumbrance (other than the Permitted Encumbrances), or other conveyance of any pan of
Borrower's interest in the Mortgaged Property which occur~ within ~venty (20) years of the date
of this Agreement, or (ii) if the Mortgaged Property ceases to be used to provide affordable
housing in accordance with the provisions of the Act and the Rules, anytime during said twenty
(2o) year period.
1 I. Acceleration of Indebtedness and Foreclosure of Mortgage. In the event
Borrower, or its succes,~rs and assigns, shall'fail or refuse to repay the Loan in accordance with
the provisions contained in Section 5 herein, or otherwise, or in any way, be in default under this
AgrccmenL Borrower confers upon the Lender the options of declaring ail sums then owing by the
Borrower immediately due and payable without notice, and hereby authorizes and empowers the
Lender to foreclose this Mortgage by judicial proceedings, or to sell the Mortgaged Property at
public auction and convey the same to the purchaser in acco-~tnce with the laws of the State of
Minnesota, and out of the moneys arising from such sale to retain ail snm_~ secured hereby, with
interest and ail legal costs and charges of such foreclosure and the maximum attorney's fee
permitled by law, which costs, charges, and fees the Borrower herein ag~os to pay.
The Borrower and Lender further covenant and agree as follows:
A. Borrower shall be furnished a conformed copy of this Agreement at the time of
execution er af~ tecc~dn~on thereof.
B. Upon a default by Borrower under this Agreement, Lender shall, prior to
foreclosm'e, mail a notice to the Borrower specifying (i) the nature of the default, (ii) the
action requited to cure such defauit, (iii) a date, if such default is capable of being cured, not
Publicly Owned Neilhlsxlmod Lind Trust Progrsm 5 (6/'3O/93
Defm'ed Lam Rqaayment ,*,~ement md Mor~a~e
less than thirty (30) days from the date the notice is mailed to Borrower by which such
default must be cured, and (iv) if the default is capable of being cur~, that failure to cure
such default on or befor~ the date specified in the notice may result in the acceleration of thc
sums secumt by this Mortgage, and sale of the Mortgaged Property. The nodce shall further
inform Borrower of the right, if any, to reinstate after acceleration and the right to bring a
court action to assert the nonexistence of a default or any other defense of the Borrower to
acceleration and sale.
12. Miscellaneous Provisions. Borrower consents and agrees to the following
miscellaneous provisions:
A. Record Keeping and Reporting. Borrower shall allow Lender and the
Legislative Auditor for the State of Minnesota, at any reasonable time and upon prior written
notice, to inspect, audit, copy, or abstract, any and ail of its books, records, papers, or other
documents relevant to the Loan and the Program. In addition, Borrower shall aiso promptly
supply Lender with any other information it may reasonably requir~ regarding Borrower's
participation in the Program, and compliance with the requirements contained in this
Agreement, Borrowers Application, the Act, and/or the Rules.
B. Inspection of Mortpged Property. Borrower shall allow, and will require
any non-profit organization to whom it leases the Buildings to allow, Lender, at any
reasonable time and upon prior written notice, to inspect the Mortgaged Property.
C. Notices. In addition to any notice requh~ under applicable law to be given in
another manner, any notices required hereunder must be in writing, and shall be sufficient if
personally served or sent by prepaid, registered, or cerdfied mail (return receipt card
requested), to the business address of the party to whom it is directed. Such business
address shall be that nddress specified hereinbelow, or such different address as may
hereae, er be specified, by either party by wri~n notice to the oth~'.
To Borrower:.
Di~ctor of Home Improvement Programs
Minnesota Hou.~ng F~mnee Agency
400 Sibley Sn'eet, S~ite 300
Saint Paul, M1N 55101-1998
D. Asd~nment or Modification. Neither Borrower nor l.~.-nder may assign any
of its rights or obligations under this Agreement without the prior written consent of the other
party. No change or modification of the terms or provisions of this Agreement shall be
binding on either thc Borrower or Lender unless such change or medificedon is in writing
and si~ned by an authorized official of the party against which such change or modification is
E. Sueeeesors and kssik, ns. The terms, provisions, conditions, covenants, and
warranties contained in this Agreement. shall be binding upon Borrower and Lender, and
upon their succ_~___~tars_ and aasi~ns.
F. Waiver. Neither the failure by Borrower or Lender, in any one or more
instances, to insist upon the complete and total observance or perfmmance of any term or
provision hereof, nor the failu~ of Borrower or Lender to exercise any right, privilege, or
renmty conferred hereunder, or afforded by law, shall be construed as waiving any breach of
such ~ provision, or the right to exercise such right, privilege, or remedy thnv. after.
Publicly Ovnssd N~ifbbn'iu~l Laud Trust Pro,tam 6 (6/'3o/~
G. Entire A~reemenL This Agreement embodies the entire Agreement between
Borrower and Lender, and there are no other Agreements, either oral or written, between
Borrower and Lender on the subject matter hereof.
H. Choic~ of Law. All matters, whether sounding in ton or in contract, relating
to the validity, constructiOn, performance, or enforcement of this Agreement shall be
controlled by and determined in accordance with the laws of the State of Minnesota.
I. SeverabiHty, If any ~erm or provision of this Agreement is finally judged by
any court to be invalid, the remaining terms and provisions shall remain in full force and
effect, and they shall be interpreted, performed, and enforced as if said invalid provision did
not appear herein.
$. Time of Essence, Time is of the essence with respect to all of the matters
contained in this Agreement.
~ REMAINING PORTION OF THIS PAGE WAS INTENTIONALLY LEFT BLANK)
Publicly Owu~l N~ilhl~ehood I. md Trim Pm~m 7 (6/3o,~ ~
D~fm'~d Lorn Rqaw/mmu Alx'~mmau md
IN TESTIMONY HEREOF, the said Borrower has executed this Agreement on the day
and year first above written.
BORROWER:
By:
Its:
By:,
Its:
STATE OF MINNES(YI'A )
COUNTY OF )
The foregoing Deferred Loan Repayment A~reement and Mortgage was acknowledged
before me this da), of ,19__, by and
., the and
of , a corlxxafion under the laws of Minnesota,
on behalf of the coqx~ration.
No~-y Public
Tax Sta~ment for ~ real property
described in this instrument should
be s~nt to:
THiS INSTR~ WAS DRAFTED BY:
Minnesota Housing Finance Agency
400 Sibley Su~et, Suit~ 300
Saint Paul, ~ 55101-1998
The insumunent is ex~mpt from re~istra~on tax und~ Section 287.06 of Minnesota Statutes.
l'~bli~b, O,m~d Neilbl, u,baed Lind Trust P~tsm 8 (6/~ o/v_~,
Delta'ed Loan Repayme~ A~,eemem ~i Mot~a{e
Exhibit B
MINNESOTA HOUSING FINANCE AGENCY
PUBLICLY OWNED NEIGHBORHOOD LAND TRUST PROGRAM
BUILDING LOAN AGREEMENT
THIS AGREEMENT, is made and entered into on ,~date of the loan closings, by and
between ~name of the borrower~ (hereinafter referred to as "Borrower"), ~type of entity that the
borrower is,. with its principal place of business located at ~borrower's address~, and thc
Minnesota Housing Fimmce Agency (hereinafter referred to as 'T,ender"), a public body corporate
and politic of the State of Minnesota, with its place of business located at 4iX) Sibley Street, Suite
300, St. Paul, MN 55101-1998.
WHEREAS, Lender has, pumuant to the authority granted by Minn. Stat. § 462A.202
subd. 6, and the provisions contained in Minn. Rules pts. 4900.3430-.3434, implemented a
Publicly Owned Neighborhood Land Trust Program (hereinafter referred to as the "Program"),
which is intended to promote the production and preservation of affordable housing by the use of a
land wast; and
WHEREAS, Borrower has submitted an application under the Program, and has been
selected for participation in the Program; and
WHEREAS, as a result of Borrower's selection for participation in the Program, Lender
has made a no-interest deferred repayment loan to Borrower (hereinafter refen~ to as the "NLT
Loan") in the amount of earnount of the loan in words. Dollars ($.anwunt of the loan in
numbers*;), the proceeds of which are to be used to aid the Borrower in the financing of the
acquisition, construction and/or rehabilitation of a housing development intended to be used as
housing for persons and famih'es of low and moderate income, identhCied as MHFA Development
No. ,~numer/ca/designation for the development.; and
WHEREAS, Lender is prepared to make the aforesaid financing assistance available to
Borrower ou the basis of the conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual promises herein contained, the
parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01 Defined Terms. As used-in this Agreement, the following terms shall have
the meanings set out respectively after each (such meanings to be equaUy applicable to both the
singular and plural fem~s of the terms defined):
(a) "Advance" - An advance made or to be made by the Lender to the Borrower
pursuant to Article II hereof.
"Architect'*, if any - ename of the architect~,, which will administer thc
(c) "Borrower" - -name o/borrower,.
'(d) "Completion Date". ,tthe anticipated required completion _da_ ~, (provided that if
the Lender shall extend such date in writing, then the Completion Date shall be such later
date), I~qng the date of mlulmt completion of the Project
(e) 'Contractor" - Any person who shall be engaged to work on or to furnish
materials and supplies for, the Project, including,, if applicable, a general contractor.
(f) "Construction Conlract Docmnents** - The docmnent or docunaents, including but
not limited to any conslruction plans and specifications, which, together with thc exhibits
PubU, cly-Ownfd Neill~n)t'hood ~ Trust Pmlram 1 ('t/20,~
thereto, collectively form the contract between the Borrower and Contractor or Con.actors
con~f~ing consUxlction and/or rehabilitation of the Project.
(g) "Disbursing Agent" - .the name of the title company that will disburse the
proceeds o/the loan,.
(h) "Disbursing Agreement" - The disbursement agreement by and between Lender
and the Disbursing Agent which controls the disbursement of the Advances, which such
document is incorporated herein by reference as if it were attached hereto as a separate
exhibit.
(i) "Draw Requisition" - The form, substantially in the form of Exhibit B attached
hereto, which is to be submitted to the Lender when an Advance is requested, and which is
referred to in Section 2.02 hereof.
O) "Event of Default" - One of the events of default specified in Section 6.01 hereof.
(k) "Inspecting Engineer", if any - *name of the inspecting engineer..
(1) '~ender" - The Minnesota Housing Finance agency.
(m) "NLT Commitment" - The commitment of the Lender bereundet to make
Advances to the BcaTower under the NLT Loan in an agg~gate principal amount of up to and
including .amount o/the loan in words~ Dollars ($.arnount of the loan in numbers~), which
such document is incorporated herein by reference as if it were attached hereto as a separate
exhibit.
(n) "NLT Commitment Termination Date" - The completion date or the date of the
termination of the NLT Commitment pursuant to Section 6.02 hereof, whichever date occurs
(o) "NLT Loan" - A loan of monies fi'om Lender to Borrower in an amount not to
exceed .amount o/the loan in words. Dollars ($.arnount o/the loan in numbers.).
(p) "NLT Mortgage" - The Deferred Loan Repayment Agreement and Mortgage
evidencing the Advances to be made hereunder for the NLT Loan and gran~ng the Lender a
lien on the Real Estate and Project as security for payment of the NIT Loan, which such
document is incorporated herein by reference as if it were attached hereto as a separate
exhibit.
(q) "Project" - The rental development which the improvements described in the
Construction Contract Documents are to be made.
(r) "Real Estate" - The land upon which the Project is located, which is more
pattiodafly described in the NIT Mortgage.
ARTICLE !I
Commitment to Make Advances,
Terms of Advances and Draw Requests
Section 2.01 The Advances. The Lender a~rees, on the terms and subject to the
conditions hereinafter set forth, to make Advances from the NLT Loan to the Borrower from time
to time during the period from the date hereof to the NIT Commitment Terminan'on,Date in an
agstegate principal amount of up to and including .amount O~ the loan in words. Dollars
($,~amouat o/the/aah/n numbers.). The oblig~on of the Borrower to repay the Advances from
the NLT Loan shah be evidenced by the NIT Mortgage.
Section 2.02 Draw Requisitions. Whenever the Borrower desiras to borrow hereunder,
which shah be no more often than monthly, the Borrower shall submit to the Lender a Draw
Requisition, duly executed on behalf of the Borrower, setting forth the information requested
therein. Each Draw Requisition shall be submitted on or between the fa-st (lst) day and the
~ (lSth) day of the month in which an Advance is requested, and shall be filed at least seven
(7) days before the date the Advance is desired. Each Draw Requisition with respect to
i~blidy-O~mad ~ ~ T~st Pto~'sm 2
comma:don items shall be limited to amounts equal to (i) the total value of ~he classes of the work
by percentage of completion as approved by Borrower and Lender, plus (ii) the value of materials
and equipment not incorporated in the Project, but delivered and suitably stored on or off the
Project site in a manner acceptable to Lender, less (iii) ten percent (10%), and less prior Advances.
The "values" of both (i) and (ii) shall be computed in accordance with the amounts assigned to
classes of the work within the budget amount shown in the "Owner's Application for Payments,"
attached hereto as Exhibit D, and made a par~ hereof.
Notwithstanding anything herein to the contrary, no Advances for materials stored on or off
the Project site will be made by Lender unless Borrower shall advise Lender of its intention to so
store materials prior to their delivery. It is specifically agreed that the propriety of Advances for
materials stored on or off the Project site shall be determined in the Lender's sole discretion.
At the ~ of submission of each Draw Requisition, other than the final Draw Requisition,
the Borrower shall submit to the Lender the following:
(a) A written lien waiver from each Contractor for work done and materials supplied
by it in accordance with the terms of the Disbursement Agreement.
(b) Such other supporting evidence as may be requested by the Lender or the
Disbursing Agent to substantiate ali payments which are to be made out of the relevant Draw
Requisition and/or to substantiate all payments then made with respect to the Project.
At the time of submission of the final Draw Requisition, which shall not be submitted before
completion of the Project, including ail landscape requirements and off-site utilities and streets and
correction of defects in workmanship and/or materials as provided in the Consltuction Contract
Documents, the Borrower shall submit to the Lender the following:
(c) A written lien waiver from each Contractor for all work done and ail materials
furnished by it for the Project.
(d) Such other supporting evidence as may be requested by the l_~nder or the
Disbursing Agent to substantiate all payments which are to be made out of the final Draw
Requisition and/or to subslandate ail payments then m~4~ with respect to the Project
(e) Satisfactory evidence that all work requiring inspection by municipal or other
governmental authorities having jurisdiction has been duly in~ and approved by such
authorities and by the rating or inspection organization, bureau, corporation or office having
jurisdiction, and that ail requisite certificates of occupancy and other approvals have been
issued.
If on the date an Advance is desire, the Borrower has performed all of its agreements and
complied with all requirements the~fore to be performed or complied with he. under, and the
Lender approves I~ relevant Draw Requisition and receives a current consu'uction repert from the
Inspecting F.,ngineer recommending payment, the Lender shall pay to the Disbursing Agent the
amount of the requested Advance, which agent will dishurse such funds pursuant to and in
accordance with the t~ms of the Disbursing Agreement. Provided, however, the final Advance to
Borrower hereunder shall be payable fifteen (15) days ~'ter final completion of tbe Project and
satisfaction of the conditions for final payment as provided in the Construction Contract
Documents.
Section 2.03 Disbursement of Borrower's Funds. If the Lender shaft at any time in
good faith determine that the undisbursed amount of the Advances, plus the amount of all other
funds committed to thc completion of thc Project, is less than thc ~mount required to pay all costs
and expenses of any kind which reasonably may be anticipated in coonection with the completion
of thc Project, md shall ther~ulx~n send written notic~ thereof to Borrower sp~c~g th~ amount
requir~ to be deposited by Borrower with the Disbursing Agent to provide sufficient funds to
complete the Project, then the Borrower agrees that it will, within ten (10) calendar days of receipt
Publicly-Own~l N~i~mt~l Land Trim Bufldins ~
of any such notice, deposit with the Disbursing Agent, in a non-interest bearing account, the
amount of funds specified in the Lender's notice. Borrower agrees that any such funds deposited
with the Disbursing Agent may be disbursed by the Disbursing Agent before any further
disbursement of loan proceeds from the Lender, no matter what program such proc_-e_ds may be
from, to pay any and all costs and expenses of any kind in connection with completion of the
Project.
Section 2.04 Advances Without Receipt of Draw Requisition. Notwithstanding
anything herein to the contrary, the Lender shall have the irrevocable right at any time and from
time to time, to apply funds which it agrees to advance hereunder to pay any and all of the
expenses referred to in Section 7.04 hereof, all without receipt of a Draw Requisition for funds
from the Borrower.
ARTICLE III
Conditions of Lendln~
Section 3.01 Condition Precedent to Any Advance. The obligation of the Lender to
make Advances hereunder (including the initial Advance) shall be subject to the condition
precedent that it shall have received the following on or before the date of the initial Advance
hereunder (or in the case of items to be furnished to the Lender on or before the date of a later
Advance, on or before the date of the relevant Advance):
(a) The NLT Mortgage duly executed by the Borrower, with it constituting a valid
and perfected lb'st lien on a good and marketable fee simple title to the Real Estate, and the
other real property and fixtures described therein.
(b) Evidence, in form and substance satisfactory to Lender, that the Disbursing Agent
is holding sufficient funds, including the proceeds of the NLT Loan, to complete the Project
as contemplated by the Construction Contract Documents.
(c) A copy of the fully executed Conslxuction Con,'act Documents, with such
contracts being acceptable to the L~xler.
(d) A sworn construction statement duly executed on behalf of the Borrower, in form
and substance satisfactory to the Lender, showing all costs and expenses of any incurred and
to be incurred in constructing the Project.
(e) A title binder, in form and substance satisfactory to the Lender, issued by the
Disbursing Agent, at the Borrower's expense, with such rifle binder constituting a
cc~nmi~aent by such title company to issue a mortgagee's title policy in favor of the Lender,
as holder of the NLT Mortgage, that will be free from exceptions for mechanics' and
materialmon's liens and free from other exceptions not previously approved by the Lender,
and that will insure the NLT Mortgage to be a valid first Lien on the Real ~e, subject only
to such prior liens and encumbrances as are approved by the Lender, in not less than the
principal amount of that portion of the total Advances issued under the NLT Loan and
(f) Evidence satisfactory to the Lender that all required building permits and other
permits have been obtained as required, and that no environmental impact statement is
required under Chapter 116D of the Minnesota Statutes, or the rules and regulations
(g) Copies of or binders for the delivery of the policy of fire and extended coverage
and comprehensive general liability insurance required under Section $.01 (c) he..of, with all
such insm-ance in full force and effect and approved by the Lender.
(h) Where applicable, a copy of the parmership ageemont or corlxaate documents of
the Borrower.
(i) A favorable opinion of counsel to the Borrower as to (i) the matters mferr~d to in
Sections 4.01 (a), (b). (c), and (d) hereinbelow, and (ii) such other matters relative to the
wanssc~ns contempl~t_~ by this Agreement as the Lender may reasonably r~luest.
(j) At the sole discretion of Lender, and in form and subsumce acceptable to Lender,
either a zoning endorsement insuring, or an opinion letter from Borrower's attorney and
addressed to Lender indicating, that the Project and the contemplated use thereof are
permitted by and comply with all applicable use or other r~strictions and requirements
imposed by applicable zoning ordinances or regulations, and have been duly approved by ~he
applicable municipal or governmental authorities having jurisdiction.
(k) The deletion of the survey exception from the mortgagee's policy of title
insurance refermt to Section 3.01(e) he~inabove.
(1) Unless waived by Lender, a survey showing the Real E~tate, all structures and
easements located th~l'~on, and all zoffing restrictions such as set-back requi~ments.
(m) Any and all such other documents and agreements which Lender deems necessary
to establish the obligation to repay the NLT Loan, and to secure such repayment.
(n) Any and all such other documents and agreements which Lender deems necessary
to establish that there is sufficient additional funds, other than the proceeds of the NLT Loan,
to pay for the work to be performed under the Construction Conuact Documents.
(o) An original, or copy, of a fully executed long-term lease for the Real Property
which has been approved by MHFA, and meets the requirements of Minn. Stat §§ 462A.30
and 462A.31 (1992).
Section 3.02 Further Conditions Precedent to Any Advance. The obligation of the
Lender to malre any Advance hereunder (including the initial Advance) shall also be subject to the
following conditions precedent:
(a) No Event of Default he, under, or event which would constitute such an Event of
Default but for the requirement that notice be given or that a period of grace or time elapse,
shall have Occurred and be continuing.
Co) No determination shall have been made by the Lender that the undisbursed
amount of the Advances plus the amount of ail other funds committed to the completion of
the Project is less than the amount required to pay all costs and expenses of any kind which
reasonably may be anticipated in connection with the completion of the Project, or if such a
detm'mination has been made and notice thereof sent to Borrower, Borrower has deposited
the necessary funds with the Disbursing Agent in accolxiance with Section 2.03 hereof.
(c) The r~qui~-~nts of the Disbursing Agent set forth in the Disbursing Agreement
have been satisfied.
ARTICLE IV
Representations and Warranties
Section 4.01 Representations and Warranties. The Borrower represents and warrants
as follows:
(a) The Borrower is a "city', as such term is used ia Minn. Stat. § 4~2A.202 subd. 2
(1990), as supplemented by Minn. Laws of 1992, Chapter 522, Section 33.
(b) The execution of this Agreement, the NLT Mortgage, sad any and all other
docum~nta referred to ~ ar~, whe~ applicable, within the powers of Bo~ower, and do
ncl viohue any provision of law.
(c) The NIT Mortgage, when duly executed and delivemt for value, will constitute
the le$~l, valid and binding obligagon of th~ Boo'ower enforceable in accordance with its
terms.
Publi~ly-Ownnd Ne~ ~ Trust Pro,ram 5 (?/20~ ~
nuiMinS l.~n qrumm~
(c) This Agreement, thc NLT Mortgage, and any and all other documents referred to
herein are the legal, valid and binding obligations of thc Borrower enforceable against thc
Borrower in accordance with their respective terms.
(e) The Borrower has good and marketable title to the Real Estate and ~oject,
subject to no mo~gage, lien or other encumbrance, except those permitted by Section 3.01(e)
hereinabove.
(f) The Project will be constructed stricdy in accordance with the Construction
Conlract Documents, will be constructed entirely on the Reai Estate, and will not encroach
upon or overhang any easement or fight-of-way of land not constituting part of the Real
Estate.
(g) The Project and the contemplated use thereof, both during coostruction and at the
time of completion, will not violate any applicable zoning or use statute, ordinance, building
code, rule or regulation, or any covenant or agreement of recorcL
(h) The Borrower agrees that it will furnish from time to time such satisfactory
evidence regarding the representations and warranties described herein as may be required by
the Lender.
ARTICLE V
Additional Covenants of Borrower
Section 5.01 Affirmative Covenants. The Borrower agrees that:
(a) Upon receipt of Lender's written start order, Borrower will cause consmiction of
the Project to commence, and thereaft~ will cause the Contractor or Contractors to diligently
proceed with consu'uction of the Project according to the Cons~u~on Contrac~ Documents,
so that the Project can be completed by the Completion Date. Borrower further agrees to
provide all funds required over and above the proceeds of the NLT Loan plus the amount of
ail other funds committed to the completion of the Project if such additional funds should be
necessary to complete the consmiction of the Project.
(b) Borrower will require the Contractor or Conu'actors to comply with a11 rules,
regulations~ ordinances, and laws bearing on its conduct of work on the Project.
(c) The Borrower will provide and maintain, or will cause the Contractor or
Contractors to provide and maintain, at ail times during the process of building the Project,
and, from time to time at the request of the Lender, furnish the Lender with proof of payment
of premium~ on,the foUowing insurance:
(1) Borrower to maintain fi~ and extended coverage, in an amount equal to the
lesser of the amount of the NLT Loan or the full insurable vaiue of the Project, with the
Lender named as loss payee, and to include an overlap endorsement or rider covering
(2) Borrower or Conu'actor(s) to provide comprehensive general liability
insurance, including the Lender as a named insured, including operations, contingent
liability, operations of subcomractors, completed operations and contractual liability
insm'a~e with limits (i) against bodily injury of not less than $1,000,000, and (ii)
against property damage of not less than $250,000 (to accomplish the above-required
limiL~ an umbrella excess liability policy may be used); and
(3) Conu'actor(s) to provide worlm~n's compensation insurance, with statutory
coverage.
The policies of insurance required pursuant to Sections 5.01 (c) (1) ~ (2) hereinabov¢
shall be in form and content satisfactory to the Lender, and shaft be placed with finanoally
sound and reputable insurers licensed to transact business in the Stale of Minnesota. The
policy of insurance delivered pursuant to Section 5.01 (c) (1) hereinabove shall contain an
agreement of the insurer to give not less than ten (10) days advance written notice to the
Lender in thc event of cancellation of such policy or change affecting the coverage
thereunder. Acceptance of insurance policies delivered punuant to Sections 5.01 (c) 0) and
(2) hcrcinabovc shall not bar thc Lender from requiring additional insurance which it
reasonably deems necessary.
(d) Borrower will pay aL1 taxes and assessments levied or assessed against thc Real
Estate prior to the date on which penalties attach thereto; provided, however, that the
Borrower may pay assessments in installments so long as no fine or penalty is added to any
installment for the nonpayment thereof.
(e) Borrower will permit the Lender, acting by and thnaugh its officers, employees
and agents, to examine all books, records, contracts, plans, drawings, permits, bills and
statements of account pertaining to the Project and to make extracts therefrom and copies
thereof.
(0 The Borrower will furnish to the Lender as soon as possible and in any event
within seven (?) days after the Borrower has obtained knowledge of the occurrence of each
Event of Default, or each event which with the giving of notice or lapse of time or both
would constitute an Event of Default, which is continuing on the date of such statement, thc
statement of the Borrower setting forth details of such Event of Default or event and the
action which the Borrower proposes to take with respect thereto.
Section 5.02 Negative Covenants. The Borrower agrees that, without the prior written
consent of the Lender, it will not:
(a) Allow any actual and visible improvement on the Real Estate to occur prior to
recording of the NLT Mortgage, and receipt of Lender's written start order.
(b) Create or permit to be created or allow to exist any mortgage, encumbrance or
other lien upon the Real Estate, excep~ the lien created by the NLT Mortgage and those
shown in the title binder referred to in Section 3.01(e) hereinabove and approved by the
Lender, and except mechanics' and materialmen's liens for which assurances of payment,
satisfactory to Lender, have been given.
(c) A~I~e or consent to any changes in the Construction Contract D~cuments, to any
change orders, or to any of the terms and Provisions of the Construction Conu'act
Documents.
ARTICLI~ VI
Events of Default and Rights and Remedies
S~ction 6.01 Evmts of l)~fault. The following shali constitut~ events of default:
(~) The Borrower shall fail to duly observe or perform any of the terms, conditions,
covenants, or agreements ~quired to be observed or performed by the Borrower hereunder,
or under the NLT Mortgage.
(b) Any representation or warramy ms,ie by the Borrower herein, in the NLT
Mortgage, or in any financial statement, certificate, report or Draw Requisition furnished
pursuant to this Agreement or the Disbursing A~r~ment, or in order to induce the Lender to
mak~ any Advance hereunder, shall prove to have been unuue in any material respect or
malmially misleading as of the ~ such representation or warranty was ms,t~,
(c) The Borrower shall b¢ in default und~ or in brr~h of any of the terms of the
NLT Mortgage, and such default or breach shall not be cured or waived by the Lender within
the period or periods of ~ace, if any, applicable thereto.
(d) At tho ~ any Advan~ is nXlUOSUxl by tl~ Borrower thc tide to the Real Estate
is not rea.sonably satisfactorlt to the Lender, regardless of whether the lien, encumbrance or
other question existed at the lime of any prior Advance.
Publicly-Ownnd N~tla:Mmod ~ Trust Ptolram 7 (v/20~
(e) A survey shows that the P~jec~ being construcu~:l on the Real Estate encroaches
upon any unvacated street or upon any adjoining property to an extent deemed material by
Lender.
(f) The Projec~ is materislly damaged or desu'oyed by fire or other casualty aod thc
loss, in the reasonable judgment of the Lender, is not adequately covered by insurance
(g) The Borrower shall make an assignment for the benefit of its creditors, or shall be
dissolved, or shall commit an act of banlcruptcy under the United States Bankruptcy Act (as
now or hereafter amended) or shall admit in writing its inability to pay its debts as they
become due, or shall file a pedtion in bankruptcy, or shall become or be adjudicated bankrupt
or insolvent, however defined, or shall file a petition seeking any reorganization, dissolution,
liquidation, an-angement, composition, readjustment or similar relief under any present or
future bankrupt~ or insolvency statute, law or red, clarion c~ shall file an answer admitting to
or not contesting the material allegations of a petition filed against it in such proceedings, or
shall not, within thirty (30) days after the filing of such a petition against it, have thc same
dismissed or vacated, or shall seek or consent to or acquiesce in the appointmem of any
trustee, r~ceiver or liquidator of a material part of its properties, or shall not, within rf~rry
(30) days after the appointment (without its consent or acquiescence) of a u'ustec, receiver or
liquidator of any material part of its properties, have such appointment vacated.
(h) Execution shall have been levied against the Real Estate or any other property
subject to the NLT Mortgage, or any lien creditor's suit to enfor~ a judgment against the
Real Estate or such other propm~y shall have been thought, and (in either case) shall continue
unstayed and in effect for a period of mom than ten consecutive calendar days.
(i) The construction of the Project is abandoned or shall be unreasonably delayed or
be discontinued for a period of twenty (20) consecutive calendar days, in each instance for
reasons other than acts of God, tim, storm, strikes, blackouts, labor difficulties, riots,
inability to obtain materials, equipment or labor, governmental restrictions or any similar
cause over which the Borrower is unable to exe~'ise control.
(j) The Project is not substantially completed to the satisfaction of the Lender in
accordance with the Construction Contract Documents by the Completion Date. subject to
such extensions as may be permitted in accordance with the Construction Contract
(k) When applicable, upon completion of the Project, the Borrower fails to obtain a
cmxificate of occupancy, or such other equivalent document from the municipality in which
(1) Lender shall, in good faith, asc~tain that the cost of completing the Project in
substantial accordance with the Construction Con~act Documents is ~renter than the sum of
(i) the then uudisbursed lXn'fion of the Advances, and (ii) the amount of Borrowings funds on
deposit with the Disbursing Agent.
Section 6.02 Rights and Remedies. Upon the occurrence of an Event of Default and at
any time the~L~ter until such Event of Default is c~red m the satisfaction of the Lender, the Lender
may, at its option, exercise any and all of the following fights and remedies, along with any other
rights and rmxdies av-lt-hle to it
(a) The Lender may, by notice in writing to the Borrower, refrain from making
Advances ts~,eunder (but Lender may n~ce Advances after the occurrence of an Event of
Default without the~by waiving its rights and remedies hereunder), or tmmxinate the NLT
Public¥Owned lqeiahbm'hocd Lind Trust Pro,ram 8 (7/'20/93
Bu~ Loan ~
Co) The Lender shall have the right, in addition to any other rights provided by law,
to enforce its rights and remedies under the NLT Mortgage.
ARTICLE VII
Miscellaneous
Section 7.01 Inspections. The Borrower and the Architect, if any, shall be responsible
for mA~qg inspections of the Project during thc course of consm~ction, and shall determine to their
own satisfaction that the work done or materials supplied by the C~ontractors to whom payment is
to be made out of each Advance has been properly done or supplied in accorclance with thc
applicable conlracts with such Contractors. If any work done or materials supplied by a
Contractor are not satisfactory to the Borrower and/or the Architect, if any, or if a Conu*actor does
not comply with the Conslruction Contract Documents in any respect, the Borrower will
imrr~dlst, ly notify the Lender' in writing of such fact. It is expressly understood and ag~ that
thc Lender and the Inspecting Engineer may conduc~ such inspections of the Projec~ as either may
deem necessary for the protection of the Lenclm~s interest, and that any inspections which may be
made of the Project by the Lender or the Inspecting Engineer arc made, and all cc~ificates issued
by the Inspecting Engineer w~ll be issued, solely for the benefit and protection of the Lender, and
that the Borrower will not rely thereon.
Section 7.02 Indenmific~tion by Borrower. The Borrower shall bear ail loss, expense
(including attorneys' fees) and d~m*gC in connection with, and agrees to indemnify and hold
harm,less the Lender, its agents, servants and employees from all clnim~, den~s and judg~nents
made or recovered against the Lender, its agents, servants and employees, because of bcc[ily
injuries, including death at any ~ne resui~ng therefrom, and/or because of damages m prolx~y of
thc Lender or others (including loss of use) from any cause whatsoever, arising out of, incidental
to, or in connection with the construction of the Project, whether or not due to any act of omission
or con~rnlssiou, including negligence of the Borrower or any Conwactor or his or their employees,
servants or agents, and whether or not duc to any act of omission or commission (excluding,
however, negligence or breach of statutory duty) of the Lencler, its e~loyees, servants or agents.
The Borrowers liability hereunder shnll not be limitecl to the extent of insttrance carried by or
provided by the Borrower, or subjec~ to any exclusions from coverage in any insurance policy.
Th~ obligation of the Bon'ower under this Section shall survive the pey~lent of the NLT Loan.
Section 7.03 Additional Security Interest. In the event any Advance is to be made for
materials then being fabricated or stored, or both, for later use in the completiou of the Project, but
which are not then stored upon the Real Estate or installed or incor~ into the Project, then
such Advance shall be made only after the Borrower has given to the Lender such security
insu'~ments and insurance on such ma~ as the Lender may reasonably request.
Upon completion of the Project, Borrower shall execute and deliver to Lender an additional
finan~g statement, amenc~nt to financing statement, secm'ity agree~nent or s~ insl~umcnt
covering all pro~ of any kind whatsoever purchased with mortgage 1~ and couceruing
which there may be any doubt as to such property*s being subject to the lien of the mortgage under
the laws of the State of biinnesom.
$~cion 7.04 Fees. V~'hether or not any Advance shall be made hereunder, the Borrower
agrees to pay all fees of the Disbursing Agent, inspection fees, appraisal fees, survey fees,
recording fees, license and permit fees and tide insurance and other insurance premiums, and
a~ to rehnburse the Lender upon demand for all reasouable out-of-pocket expenses actually
incurred by the Lender in connection with this Agreement or in connection with the wansactions
contm~pla~ by this Agree~tent, inclucting, but not llmlt~cl m any and ~11 re~l~ k~gal expenses
and alxorneys* fees sustained by the Lender in the exercise of any right or remedy available to it
under this Agreement or otherwise by law or equity.
Publicly-Ovmmt Nei~ Last Trust Prosram 9 (7/~0/~
Section 7.05 Addresses for Notices. All notices to be given by either pa~'ty to the other
hereunder shall be in wri~ng and deemed to have been given when delivered peri.ally or when
deposited in the United States Mail, reentered or certified postage prepaid, addressed as follows:
To the Borrower at:
~Narne of the Borrower~
,tStreet addre~ for the borrower,
~City, state and z~o code for the borrower,
Attention: ,tName of individ,~! to whom notices should be sent,
Minnesota Hon$ing Finance Agency
400 5ibley 5a'eet, Suite 300
St. Paul, M.N 55101-1998
or ~tt~es,~d to any such party at such other ~dth~ as ~uch patty shall hereafter furnish by notice
to the ot~r party. Any notice delivered per,really to Borrower shall be delivered to a general
partner of Borrower and any notice delivered Per~°nally to Lender shall be delivered to an officer
of Lender.
Section 7.06 Termination of this Agreement. The obligations of Borrower under
this Agreement, but not under the NLT Mortgage or any other ag~ement(s) attached hereto or
incorporated herein by reference, shall Cease upon Lentils certi~cation that the construction of the
Section 7.07 'rime of E~s~nce. Time is of the essence in the performance of th~s
Agreement.
Section 7.08 Binding Effi,n:t and A~ignment. This Agreement shall be binding
upon and inure to the benefit of the Borrower and the Lender and theix respective successors and
assigns, except that the Bon~wer may not transfer or assign its rights bereundcr ~rithout the prior
wri~n conr~m of the Lender.
Szcxion 7.09 Waivers. No waiver by the Lender of any default he,under shall operate
as a waiver of any other default or of the same default on a future occaaion. No delay on the part
of th~ Lender in exeax:ising any right or remedy hereunder shall operate aa a waiver thereof, nor
shall any ~ngl~ or partial exe~ae of any right or remedy p~clude other or further exercise thereof
or the exerci~ of any other right or remedy.
Section 7.10 The Lender's Remedies Cumulative. The rights and remedies herein
specitied axe cumulative, and not exclusive of any rights or remedies which the Lender would
5eetion 7.11 C~vorning Law and Entire Agn-~m~nt. This Agreement and the NLT
M~tgage i,~ued hereunder and all ~eeurRy therefor ~ be governed by the laws of the 5tam of
Minnesota. This Agr~ment contains the entixe agre~-ment of the pardea on the matter~ covered
head-in. No other agr~ment, statement or promise m~ by any party or by any ~nnpioyee, officer,
or agent of any patty l~t is not in wri~ng and signed by all the parties to this A~'eement shall be
binding.
Section 7.12 Counterparts. This Agreement may be executed in any number of
counterpaxts, ~ach of which, when ~o executed and dellvea'ed, shall be an ~iginal, but such
counun~xu~ shall together constitut~ one and the same instrumznt.
(THE REMAEN~G PORTION OF TH~ PAGE WAS Hq'rEN~ONALL.Y LEFT BI.ANK)
.' Pul~l~-O~n~l N~ L~fl Tm~ Pm~'~m 10 (7/20/~3)
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
caused it to be execuu~d by their duly authorized officcrs or panners, ss of thc date ftrst above
written.
(ACKNOWl-I~K3EM~NTS & SIGNATURES)
Publicly-OMud Neifld~tb~d Lind Tr~ Profram 11
Buildin~ loan qlwnum
most of the funding has come fi.om the selling the house for less than $70,000. cable franchise with. Midwest Cable,' ,
city itself. The council finally chose Nancy Williamson, Lyle's city clerk (who Tyier's current cable operator. The citx
~regional airport" on the basis of just retired), and Daryl Franklin, Mower had planned to overbuild its own cable
marketing considerations, because the County planner, were instrumental in system in competition with Midwest-
name demonstrated the city's efforts to putting the project together. However, a federal regulation would have
reach out and involve the surrounding Three ci.ties in Swift County and the prevented the municipal cable service
county's economic development organi- from carrying a particular sports channel.
zafion have decided to pool their After a number of residents said in a
resources to obtain administrative telephone poll that they would defect to
development NN services. Kerkhoven, Murdoek, and the private carrier in order to receive that
Seven Minnesota cities~Brooldya ~ Danvers will contract with the county channel, the city council reconsidered
Park, Ca'ysml, Hutehlrt~on, Marine-on.,St. arganization, Greater Rural Opportuni- the project. Midwest has agreed to
Croix, New Hope, Sar*ell, and des Working (GROW), and in mm purchase the system the city had begun,
Thrums--are sharing $2 million from gROW will hire a new person to provide and to rebuild it to a 60-channel capabil-
the Neighborhood Land Trust Program, the various services the cities need. ity. The company also promised Tyler
a Minnesota Housing Finance Agency Three neighboring cities-- "most favored nation status," meaning
program. The grant funds will provide Maplewood, North St. Paul, and that Tyler customers cannot be charged
housing at a reasonable cost to residents/ Oakdale, are working on a joint eco- any more than the lowest paying Midwest
of the communities. ~......_../ nomic development plan under which customers in any comparable system.
Lyle has beghn a housing project that they will cooperate, rather than compete,
officials say is unique because it involves in their efforts to attract businesses. The P$1rks End recr~c~tJon
so many groups including city officials, cities will hire a part-time employee or an A previous column reported that the
the local economic development intern in a graduate school program to city of Mankato had approved construc-
authority, the county housing and develop the plan. tion of an indoor skateboard facility.
Fafibault has also created a separate
redevelopment authority, the Austin Cable television
Development Corporation, and a bank. facility for skateboard athletes. This one is
The participants acquired some tax- The Tyler city council stopped outdoors, on the site of some old tennis
forfeited property and built a three- constructing a proposed municipal cable courts the school district gave to the city
bedroom house on it, with the goal of system and began implementing a new five years ago. The site is large enough to
3 Greater Attention
Protection-By-Annual
A Proven Yearly Maintenance
Plan For Your Elevated
Watertowers
To accommodate Increasing system demands, the
Gopher State One Call Board of Directors b ~
pleased to announce the Implementation of the
latest in one-call technology... Servicing HJnicipaHtles
PRISM, Since 1921
Wlth the use of digitized mapping, PRISM will allow
members to fine tune thel~ databases and
eliminate many unwanted tickets. Watertower Paint & Repair Co., Inc.
The Gopher State One Call Board would like to "The Tank With the Red Roof"
extend a heartfelt "1hank You* to the Minnesota
" Municll:>alilf~ who~ sb$)port and efforls have Providing dependable service to municipalities since
helped to make Gopher State One Call one of the 1921 and offering the experience, skilled workmen,
largest one-call centers in the nation, adequate insurance coverage and the best of equipment
and materials to perform the highly specialized trade of
If you have any questions pedalning to this new painting and repairing elevated watertowers. Prompt
service on emergency winter work.
system, do not hesitate to call the Gopher State
One Call admlnisffcrlNe lines: Interior Inspection By Color
612-454-8388 · 800-422-1242 Video Camera Available.
Area Code P.O. Box 67
Call 48 Hours Before You Dig 515-357-2101 Clear Lake, Iowa 50428
454-0002 Twin City Area / 800-252-1166 Toll Free
Member of American Waterworks Association
PUBLICLY OWNED -April, 1993
NEIGHBORHOOD LAND TRUST PROGRAM GUIDELINES
The Slatl Legislature hat authorized the Minnesota Housing Irk"]ancl Agency (MHFA) Io Implement the
Publicly Owned Neighborhood Land Trust Program. The program provides no interest. Cleferred loans to
cities to aCcluirl, construct, or rehal:)ilRate housing (lnclucling land and t)uik:lings) by the use of a land trust. .'
The program is financed with proceeds from state general obligation bonds. Therefore, various
restrictions apply as to thl uti o! the property and the program lunds. Only eligible local units of
govlrruTmnt (see City) may receive funds. Nonprofit organizatio~ will not qualify for financing, I:xJt are
encouraged to w~rk in partnership with tligible local units 04 govlmrnent.
Funds are Ilmlted in this program. It is expected ti'alt these funds will be used In conjunction with other
State, federal, local, ~r conventional fainting sources a~ alX)mprimt.
Definitions 04 the capitalized won:ts used in these Program Guide~s am at the end 04 these guidelines.
These guidelines are for general reference only. Current legislative activity ma), result in revisions to tine
program. Actual i~lrticipation In the program will be governed by' a City's approved Application For
Funcling. Loan Agreement, and other related documents. These documents will not be provicled until
alX)licanU are selected for funding.
Ellnlbl.~ Uael, of Lain Rut,,da :
Loin funds mum I)e used 0nly ~or cs;mai costs m developing. ICCluiring, constructing, iml:~'oving, or
re~llaatinf I"~ (l~nd aM I~s). Many a~ivities afl IMPlore tlio~ie for linlncing. However.
In,ns are sul:~ 1o certain lens and conditions o! tM ownership and use c4 tM prope~y. These
In general, a Ca~ __ _mum- maintain ~ 04 the land and mum ,mu~ I i~ ,.4 k)r land tam I:Umoses.
· ' Witfl mOafd to ~ m ~e Inncl, a City may sell or ihs. IM Bulitling 1o a noq:mflk or tM Cly may
1. A CI~ mly I)Urr, ll~ee lind ~ I)raGIm ! for new clevelopm~nl (~ clemoBion of txtsting
Iouaclir~). I ~il il lbo lgllvl~. ~e CI~ may leto the vl~anl lind Io Iff ~lOkl. ~ ~ion
-1-
2. A City may purchase the land involving a manufactured home park (where st~ctures are ta. xect as
personal prope~y). If this is the activity, the City may lease the lancl to an Eligible Nonprcfi!
Organization for a tem'~ of up to 99 years for a nominal annual rental amount.
3. The City may purchase vacant land and proceed to build a new Building, or purchase land ancl a
Building and rehabilitate the Building. In these cases a City may cio the following:
a) The City may continue to own the building and contractually agree with an approved Eligibie
Nonprofit Organization to manage the propert~.
b) The City may sell any Buildings situated on the land to an Eligible Nonprofit Organization,
provided all the following conditions are satisfied:
(1) the City retains ownership of the land;
(2) the City sells the bu~'ldings for a fair market value, and complies with the Loan Repayment
Requirements (see below); and
(3) the City annually determines tl~at the Buildings are owned by an Eligible Nonprofit
Organization and am I:)eing used for eligil~le lancl trust activities.
c) The City may lease any Buildings situated on the land to an Elig~le Nonprofit Organization for an
annual rental amount equal to the total amount of ban proceeds attributaJ:)le to fie cost of the
Buildings divided by the number of years of the useful life of the Buildings. To reduce the costs
of the annual rental amount, the City may lease the Buildings for a nominal annual rental amount if
all the folloWing conditions are satisfied:
(1) the lease doee not exceed 10 years;
(2) the City has the at)solute attcl unconditional offiion to cancel the. lease at the end of any three
year periocl; and
(3) the City annually cleten'nines that the property LI being used for ~ trust activities, 'and is
benefiting Persons and Families of Low and Moderate Income.
4. A mtentlaJ eligble Kav~ i~ that a C~/may I~chase vacant land and rnceed to ~i~ a lingiHanlJly
Building (a structure with one-to-four units), or ~mhase land and a single.family Building and
rehal:)ilitate the single-family Building. In this case the City may sell the aingle-fam~ Building (one-to-
four units) directly to persona and families of Iow anti moderate income. MHFA is c~rrently seeking
authont~ from the State Legislature to a~4~w tl~Ja activity. It is anticipated ttu's autho~fty will be effective
il? late May, 1993.
InellcHble Uses of Loan Funds
General ac!ministrative expenses to apply f,'Jr and receive the loan funds am not eiig~le. Also, operating
expenses for the land trust am net eligible to be financed W~ the ;eon funds.
Terms of Flnlnglrlo
loans Ire in the form of no interest, defan'ed loans from MHFA to the City. There are no minimum or
maximum.loan IITlOUnIS estal~ishecl in the Ix~gram at this t~ne.
Loan RePayment Reoulrement~i
To qual~ for finan~, a C~ ~ a~e ~ ~ the pm~W ~ a ~ tN~. ~ C~ ml ~ ~imd
-2-
t/ If t~e Cay sells a#of the property (land amd bu~ir~s) pr~r to the expir/t~n of the ~e~ year ~. t~en
' .'" the sale ~ De at fair ~et va~e a~ t~e C~ must repay t~e lessi~ of e~er the net p~ee~s
'% ~11 or t~ a~u~ owi~ to the age~ at me Ume of the sale. ~e a~um mpa~ s~all ~
paymem ~ full of the entire ~a~ ~ala~e of me fina~a~ a~is~a~e ~ me age~.
ff ~ C~ sel~ a~ ~ of ~e pm~ {la~ or ~i~gs), ~n the ~ ~ be m f~r ~et va~e and
the Ci~ ~ repay the lesser ~ ea~r t~e net p~e~s of the sale or Iht I~u~ ~i~ tO t~ aGe~ at
the time of ~e sale. ~e i~u~ ~aid shall be ~Kaed agam~ the o~sta~i~ bala~e of me tinanciat
~sista~e ow~ the aGe~.
If the C~y ~ws the use of t~ p~e~ for any ~ of differe~ ~se: the Ci~ ~ repay the full
a~u~ of the o~inal ~an ~le~ ol the fair ~m ~e dj ~he ~.
For Further Informetlon
Anyone needing additional Information on the program a~ ~ng ~b~y may ca~ 6~2.~7-3~ 2~, or
(toll-free) 1~00-657-3960. Re~e~s ~ w~U~ ~u~ ~ ~ess~ m:
· 400 S~ley StreW, Suffe 3~
St. Paul, MN 55101
~n: ~
MHFA msewes aa ~W · ~e sel~n ~ el~le ~a~. ~ ~mm ~ m~ea W aa ~p,cabl~
f~eral, ~ae, I~ ~nidp~ ~, mis, ~ r~la~. MHFA msewes ~ ~ t~ ~ or w~raw
lhe p~ram It a~ ~ ~ is W ~ ~ mi~e aW a~m I~ ~m ~n~ ~ the ~eparat~n or
Selection Criteria
Agency ~ t~m t~m folmv~ Cffl~da ~o ~~t~n ~tn ~m~ ~ ~~ For
Fu~l~ w~ ~ ~:
~a~ ~u~s;
O. ~ ~~ ~n ~ ~ ~t~ns, ~ ~ e~e~ ~ ~ ~n ~ us~ for I~
E. ~ e~em ~ ~ ~ er t~s of ~ ~ ~eme ~ ~ ~Ma lmm the
H. ~ eaem to ~ ~ ~rcat~n r~es ~ ~n ~ pa~m~n of trio ~cal
J, ~e ex~e~ a~ ~ ~ ~ ~p~ ~ ~o~ ~ ~ aa~ies a~ provide
~ses to e~r ~ ~h or lue a~ pa~ of ~e ~.
APPLICATION FOR FUNDING: means a sul~miffal, in a form prescribed by MHFA, requesting financial
assistance to pay the cost of the development, acquisition, improvement, construction, or rehal~ilitation of
property to provide housing for persons and families of iow and moderate income. The a,oplicatlon must
include a completed MHFA clara form and other information as requested 13y MHFA.
BUILDING: means a structure physically attached in some manner to a parcel of land, and carried on the
property tax rolls of the locality as real property.
CITY: means a city or housing and redevelopmenf authority (as defined in Minnesota Statute, section
462C.02, subdivision 6) which, I~y resolution, has determined to I:)erform land Imst activities in accorclance
with Minnesota Statute, section 462A.31, subdivisions 1 to 5. These activities include holding ancl leasing
land for ti'is purpose of preserving aflorclat:ility of housing by using a Gmuncl Lease.
LOAN AGREEMENT: means an ezecuted agreement between MHFA and the entity a,oplying for funcs
whic,"t e,..=~:~---...,..., ...,,...,,/¢~¢ the :&,,T~, ~:nclitions, ancl performance ~'equireme~s necessary for the entity to
receive the funds. '
ELIGIBLE NONPROFIT ORGANIZATION: means a nonprofit corporation organized under chapter 317A,
qualifying for tax exempt status under the United States Code, title 26. section 501 (c) (3), and meeting
the requirements of I~eing a neighbortx)od land trust as specified in Minnesota Statute, sections 462.A.30
and 462A.31. These Include I~avtng, as one of its purposes, to hold land and leasing of land for
preserving atfo~al=ility of housing to perso~ and families of Iow and moderate income; and, have the
powers to buy, sell, mortgage, and otherwise encun~er land, and negotiate and enter into Ground
L/Isls. It may also I~avt any and all powers permitted to a nonprofit corporation under' MS Cit. 317A.
GROUND LEASE: means a long-term lease of real property, ~ not inc~ucling builctlngs. The Ground
Lease requires a lessee to meet t,~oecific provisions designed to preserve the ~o~ai~iiity of the housing
located on the land. The ground lease must be approved by MHFA, and meet specific statutory
requirements (as indicated in MS Section 462A.30 and MS Section 462A.31).
The mCluirements which must be included in the ground lease am: an initial term of 99 years; a f','s: Ol:¢ion
to purchase clauses in favor of the land trust and MHFA; a description of the leasehoid interest (the real
property interest of the lessee); a limited equity formula to arrive at a limited equity price, and designed to
maintain the affo~al3ility of the I~using (tt~e formula, allOwS the bu~cllng owner to recover a reasona=le
amount of their put. ass c~sts and permanent improvement costs, ~ ac~ustments for Inflation and use
of the building); a requirement to c~ain al:q:~oval of ~e land trust to encurnl=er the lessee's interest in the
property (lessees may not sell, transfer, rent, assign, or mortgage their interests in the lease or the
building without the consent of t~ land trust: rlgnt'of aasumption ~ ~irs (t~ leasee's ~lrs may assume
the lease, if the heirs occupy the property as their legal homestead; prol'a'bifion on mortgaging the land
trus'.'s inter, st (the land t,u,~. ,'~ftr.'~ mortga.?e or otherwise e;,aJmber ~3 pn,;perty during th~ ;drm uf the
lease); and other appropriate restrictions, Ul~n al~roval of MHFA (e.g. ~J:letting or assigning the
C..~ound Lease; construction, renovation, or sale of buildings and improvements; etc.)
PERSONS ANO FAMILIES OF LOw AND MODERATE INCOME: means persons or families whose
income does not exceed 80 pemsnt of the greater of statewide or ama median income as determined
from time to time I~ the United $~les Department of Housing and Ufoan Development.
PROPERTY: means land or buildings subject to the financial assistance as iclentif'~d in the al~r,'.ation.