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Home My WebLink AboutEDA AGN 11-27-07 AGENDA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY November 27,2007 7:00 p.m., Parkview Villa Community Room B 965 40th Avenue NE Columbia Heights, MN 1. Call to Order/Roll Call Gary L. Peterson, President Position Open, Vice President Bruce Kelzenberg, Secretary/Treasurer Tammera Diehm Bobby Williams Bruce Nawrocki 2. Pledge of Allegiance CONSENT AGENDA 3. Approve Minutes of October 23, 2007 Approve financial report and payment of bills for October 2007, Res. 2007-25. Motion: Move to Approve the minutes and Resolution 2007-25, approving the Financial Report and payment of bills for the month of October, 2007. BUSINESS ITEMS 4. Resolution 2007-26, Contract for Private Redevelopment Motion: Move to Adopt Resolution 2007-26, a Resolution approving a Contract for Private Redevelopment between the Columbia Heights Economic Development Authority and the Greater Metropolitan Housing Corporation (GMHC); and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. 5. Resolution 2007-27, GMHC Consulting Services Agreement for 2008 Motion: Move to Adopt Resolution 2007-27, a Resolution approving the 2008 Consultant Services Agreement with the Greater Metropolitan Housing Corporation (GMHC), and appropriating $15,000 from Fund 207- Housing Maintenance Fund for the same; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. 6. Resolution 2007-28, GMHC Rehab Incentives and Deferred Loan Agreement Motion: Move to Adopt Resolution 2007-28, a Resolution Approving funding for the Rehab Incentive Program in the amount of $45,137 and the Single-Family Home Deferred Loan Program in the amount of $30,643 to the Greater Metropolitan Housing Corporation (GMHC) from Fund 207 - Housing Maintenance Programs. 7. Other Business The next regular EDA meeting will be Wednesday, January 23, 2007 at City Hall. ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES OCTOBER 23, 2007 CALL TO ORDERIROLL CALL President, Gary L. Peterson called the meeting to order at 8:40 p.m. Present: Gary L. Peterson, Bruce Nawrocki, Tammera Diehm, Marlaine Szurek and Bruce Kelzenberg Absent: Bobby Williams Peterson asked for a moment of silence in remembrance of Commissioner, Patricia Jindra the recently passed away. PLEDGE OF ALLEGIANCE CONSENT AGENDA Approve Minutes of August 27 and 28th, 2007 meetings and the Financial Report and Payment of Bills for the months of August and September 2007 on Resolution 2007-23. Motion by Kelzenberg, second by Szurek, to approve the minutes and Resolution 2007- 23, approving the Financial Report and payment of bills for the months of August and September 2007. All ayes. Motion Carried. BUSINESS ITEMS Resolution 2007-24. Assianment and Assumption: Grand Central Lofts. Commercial Improvements Streetar stated this Assignment and Assumption Agreement transfers certain rights and obligations in the contract for private redevelopment between the EDA and Grand Central Properties, LLC to Grand Central Commons, LLC; Ehtesham Khoratty. This allows Grand Central Properties LLC to sell the approximate 2-acre commercial property to Grand Central Commons, LLC. Even though the commercial property would no longer be owned by Mr. Kloeber, he will still be responsible for completing the construction of the commercial improvements of the project in accordance with the requirements of the private contract. The EDA must determine that Grand Central Commons, LLC has the qualifications and financial capability to fulfill the obligations in the private contract for redevelopment. They have assembled a qualified and experienced team to complete the commercial improvements. Staff met with all parties and determined that Grand Central Commons, LLC is qualified and has the financial capability to fulfill the obligations in the contract for private redevelopment. Developer, Ehtesham Khoratty, Contractor, Pete Nelson, Designer, John Feges, Anchor Bank, Peter Miller and Mike Norton, Kennedy & Graven are all here tonight to answer any questions the board may have. Nawrocki said he would like to know more about Ehtesham Khoratty. Ehtesham stated he has his masters degree, went to Kellogg School of Management, he owns his own company in New Jersey, owns developments on the beaches in his country, Economic Development Authority Meeting Minutes October 23, 2007 Page 2 of8 developments, he has been in this country for 21 years. Nawrocki stated he wanted to know a little about his finances. Peter Miller, Anchor Bank, stated he has known Ehtesham for about two years and has handled his financial statements. The bank approved about a $1,000,000 acquisition. He felt that Ehtesham's finances are good and if this development goes through they would be financing the project at 100 percent. Streetar stated he has a letter from Peter Miller, of Anchor Bank which states they are going to provide all ofthe $1.4 million dollars for the development. When they come back to the EDA they will show us they have all of the ability to build whatever they are going to, which they have the ability to build 10,000 square feet of commercial that the development agreement requires. Nawrocki asked where the cost of the ramp would be coming from above and beyond the money from Met Council. Streetar stated the cost of the ramp is driven by: 1) the amount of commercial they build; 2) it is also driven by the value of that commercial space, which impacts how much tax increment is available and 3) when the ramp is built, it will be a public ramp, and this agreement would be set up something like the ramp at the medical building on 4dh and Central for maintenance. Peterson asked if Kloeber owns the Condos and the town homes are already split off to another owner. Streetar stated that was correct. Motion by Diehm, second by Kelzenberg, to Adopt Resolution 2007-24, a Resolution Approving Assignment and Assumption Agreement transferring certain rights and obligations in the contract for private redevelopment between the Columbia Heights Economic Development Authority and Grand Central Properties, LLC to Grand Central Commons; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. Preliminarv Development Aareement for the Buraer Kin!:! Redevelopment Site Schumacher stated the EDA acquired the Burger King site in 2004 for redevelopment purposes. Tom Frattalone, owner of Frattalone Ace Hardware met with staff in the spring to discuss the possible relocation of this hardware store, currently located near the comer of 3ih & McKinley, of which his lease will expire soon. Staff reviewed the redevelopment areas the EDA identified as priorities and Mr. Frattalone decided that the former Burger King site would best suit his needs. He proposes to build a 13,000- 14,000 square foot retail store with an adjacent 3,000-4,000 square foot garden center. Since his present lease expires on June 30, 2008, he would like to move through the review process in a timely manner. We don't have any financials yet as we need this first step approved first. This is a Preliminary Development Agreement, which provides the developer the chance to provide the City with plans for development of a new hardware store. Tom Frattalone, owner of Frattalone Ace Hardware is present tonight to state his case for the new building. Tom Frattalone stated he was here with his father, who started the company back in Economic Development Authority Meeting Minutes October 23,2007 Page 3 of8 1965, and his contractor, Jim Faulkner, of Faulkner Construction. They have been in the hardware business for 32 years and in Columbia Heights for 21 years. They are looking to move out of their current site that no longer meets their needs to a better site. His father is 64 and is no where ready to retire, they have 20 employees, they will be filling the building with roughly $40 per square foot of inventory and $20 per square foot of fixture and furniture costs, plus any other costs they may have. Nawrocki stated he was familiar with their business, the quality, and was impressed with his staff, but was concerned about discussions that staff has made with them on issues like contamination clean up and funding. Tom Frattalone stated, at this time they haven't had any financial discussions. Basically, he would be putting in $840,000 worth of inventory in the building, the garden center would have a full rod iron fence with concrete fillers, on a concrete slab, professional fixtures made to look like an up scale garden center that you might see at some of his other sites. Nawrocki asked how many square feet of space does he have in his current building. Frattalone stated it has 11,200 square feet with about 1,200 square feet of the mezzanine. Nawrocki stated the new store wouldn't be much bigger. Frattalone stated he is looking to continue servicing the residents that want to come and purchase from a small hardware store, and isn't looking to take on Menard's up the street. Diehm stated she was very excited to hear about this opportunity, and that having a Columbia Heights business relocate to another site in our City was a wonderful idea. Motion by Diehm, second by Kelzenberg, to Approve the Preliminary Development Agreement between Tom Frattalone and the EDA: and furthermore, to authorize the President and Executive director to enter into an agreement for the same. All ayes. Motion Carried. Preliminarv Development AQreement for the Beecroft Redevelopment Site Schumacher stated City Council designated the Beecroft Redevelopment site at 3ih & Central Avenues, and a gateway to the City, as a priority when it drafted their redevelopment goals for the City. Community Development Block Grant funds were used to acquire the two non-conforming, single-family homes and demolished them. In 2003, the City acquired the Beecroft building at 3710 Central Avenue, leased it out for a number of years to the Don-Murnane Wig Company, who retired in the fall of 2006, leaving the building vacant. This area provides a great gateway to the City. Chris Little and his father, Richard of CRO.S. Companies LLC and Loucks Associates, their planning and design firm, have met with staff for the past few months to discuss design options for a 9,600 square foot building on the site. The developer is working on sources and uses statements to determine the financial feasibility of the project and has also obtained and executed a proposal to purchase the Chutney Restaurant and parking lot adjacent to the Beecroft building, from its present owner, Julio Punjani. At this point, the developers would like to enter into a 120-day agreement to provide a Economic Development Authority Meeting Minutes October 23, 2007 Page 4 of 8 Preliminary Development agreement with the EDA to assure them the EDA will not enter into an agreement with another party for redevelopment of the property. Rick Little, has been involved as a real estate attorney, has done over a quarter of a million dollars in retail such as CUB foods, Hollywood Video, Caribou Coffee, Kinkos, Cost Cutters, Goodyear Store, 100,000 square feet of development in Coon Rapids. We feel this is a wonderful corner for some of these little shops and has had some preliminary discussions with some retailers that you don't have out here. Chris Little stated he lives in Columbia Heights, understands the areas needs and feels that we need this type of businesses in the City. Nawrocki stated he was concerned with the same issues as the previous item, funding, financing, what it will look like, etc. Schumacher stated this is a Preliminary Development Agreement to allow them 120 days to prepare and combine the documents that you are speaking about. Diehm stated it was a great idea and looked forward to working with them and having this type of businesses in Columbia Heights. Motion by Diehm, second by Kelzenberg, to Approve the Preliminary Development Agreement between C.R.O.S. Companies LLC and the EDA for the Beecroft Redevelopment Site; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. Demolition of Beecroft Buildina at 3710 Central Avenue Partenheimer stated the building is vacant and is needed for development. The City Council designated the Beecroft redevelopment site near the corner of 3ih & Central Avenues in their redevelopment goals. The retail building has been vacant since the fall of 2006 and the City has been granted $55,000 in Community Development Block Grant (CDBG) funds for its demolition. With a leaky roof and unstable foundation, the building is in poor condition and remains a liability for the City. On October 17, 2007, staff received the following four quotes for demolition of the building: 1) Frattalone Inc. in an amount of $23, 600; 2) Veit Inc at $23,859; 3) Rachel Contracting at $29,625; and 4) Belair Excavating at $29,830. Frattalone Inc provided the lowest quote of $23, 600 and would remove the entire building, as well as all bituminous and concrete paving, landscaping, grading and seeding. Nawrocki asked if we went out for bids. Partenheimer stated staff only went out and got four bids for the board to review. Motion by Szurek, second by Kelzenberg, to approve the low quote for the demolition of the Beecroft building at 3710 Central Avenue from Frattalone Inc. in an amount not to exceed $23,600. All ayes. Motion Carried. Economic Development Authority Meeting Minutes October 23,2007 Page 5 of8 Industrial Park Groundwater Investiqation Report of Contaminated Soil Schumacher stated after three years, the clean up of the Industrial Park is complete, using over $4,500,000 of grant funding to remove over 138,000 cubic yards of contaminated soil. To date, 139 units have been built in Phase 1, with an additional 32 units under construction in Phase II. The final step as required by the MPCA is to conduct a Groundwater Investigation Report of the contaminated Industrial Park. ProSource will meet with staff from the MPCA to review the existing data, discuss our approach and determination for well locations. Then they will prepare access agreements and coordinate with landowners for well installation. A total of eight monitoring wells will have to be installed as part of this investigation. Drilling services will be provided by Traut Well Company of Waite Park, Minnesota. All work will be done in accordance with the Minnesota Department of Health Well Construction Code, Minnesota Rule 4725. A geologist from ProSource will provide over site during all soil boring and well installation activities. After the well development, Pro Source will conduct two rounds of base line sampling to evaluate groundwater quality and will also survey each well to provide vertical and horizontal control. Once the fieldwork is complete, Pro Source will prepare a report for submittal to the MPCA, which will include a discussion of field methods, geologic/hydro geologic conditions and analytical results, applicable tables, figures, and/or supporting data. The cost to complete this project is $84,748, which $45,568 will cover the cost of drilling services and the remaining $39,180 includes all labor, equipment and expenses related to coordination with subcontractors, over site, well development, base line sampling, surveying, reporting, project management and liaison with the MPCA. The entire cost for this scope of work will be funded by Community Development Block Grant funds as well as the Metropolitan Council grant dollars that have already been secured. This will show the MPCA how deep and wide the contamination is still present. As you know the foundry had some large drums that leaked down into the soil, which was removed, this is the kind of information that the MPCA needs to finalize the project. Szurek asked where are they going to put the wells. Schumacher stated they just located them today. The sandstone rock comes up on the corner of 5th, where Rayco was. It all spins back to the old Honeywell building. Szurek asked how often they monitor them and how deep will they be. Schumacher stated they will monitor them for two years and they are 100 to 200 feet deep. What we are saying now is that we have done what we said we would do. This is the findings. Peterson asked after two years, what becomes of the wells, would Pro Source remove them. Schumacher stated Pro Source will not remove them, we would have to remove them and wasn't sure of the cost. Motion by Diehm, second by Kelzenberg, to Approve the ProSource Industrial Park Groundwater Investigation Report of contaminated soil scope of work and contract, not to exceed $84,748 and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. Economic Development Authority Meeting Minutes October 23,2007 Page 6 of8 Resolution 2007-21 and 2007-22, 2008 Bud~et and Levv Streetar stated the focus of the EDA since 2002 has been redevelopment of specific areas and improvement of the housing stock. The EDA budget for 2008 is $274,863, which allows the continued implementation of the EDA's priorities related to redevelopment, and housing. This is a reduction from last year of approximately $40,000. The EDA raises this amount through two levies; the EDA levy of $78,622 and the HRA levy of $196, 241. These fund the authority staffing and supplies. The EDA must pass a resolution approving and recommending the EDA budget of $274,863 and a levy of $78, 622 to the City Council for approval and a resolution approving and levying subject to City Council approval, the special benefit levy of $196,241. Over six years the whole budget has increase $22.5 or about 1.6% a year. There is no new programs or new staff, just a reduction in the amount. Nawrocki stated this wasn't the total budget for your department, but it is far from true. You have all these special funds that people keep dipping their hands in. Streetar asked, if there were any special funds he would like information on, as he isn't aware of these funds. Nawrocki stated he would get him a list. Nawrocki asked what is the special benefits levy for. Streetar stated the $274,000 funds the redevelopment and housing activities in this City or the EDA and HRA. Nawrocki asked if the EDA levy is a part of the general fund and the HRA levy is the hidden funds. Streetar stated this is a public meeting, and taxes in this City are taxed at the lowest effective rate in the metropolitan area. Motion by Diehm, second by Kelzenberg, to Adopt Resolution 2007-21, being a Resolution of the Columbia Heights EDA Adopting the 2008 Budget of $274,863 and a levy of $78,622 and recommending approval of the same to the City Council. All ayes. Motion Carried. Motion by Diehm, second by Kelzenberg, to Adopt Resolution 2007-22, being a Resolution of the Columbia Heights EDA approving a special benefit of $196,241 and recommending approval of the same to the City Council. All ayes. Motion Carried. ACQuisition of 3805 2nd Street Partenheimer stated the owners, Lisa and Steve Petersen of 3805 2nd Street, approached staff to determine if the City would be interested in negotiating a sale price for the single-family home, built in 1922, approximately 732 square feet, on a corner lot 80 x 130, zoned R-2, after they determined the home would be unprofitable to repair after the fire on September 7, 2007, which left it uninhabitable. The land and improvements are assessed at $139,200 and the land at $91,600 for pay 2008. The property owner is willing to sell the property for $100,000, plus closing costs and outstanding assessments, which would result in the purchase price of approximately $105,000. Staff has talked to GMHC, which would demolish the home and build two, new, single-family for sale homes similar to the ones they are building on Jefferson Street, with a target price of $235,000 each. The cost, to acquire the property, demolish, and construct two, new homes is estimated at $556,647. The sale of both Economic Development Authority Meeting Minutes October 23,2007 Page 7 of8 homes would generate $470,000 of revenue, leaving a balance of $86,647 necessary for funding assistance to make it feasible. GAP funding assistance could come from the Anoka County HRA levy the City Council approved on September 10, 2007. Funds would initially come from Fund 420- Capital Improvement- Development Fund, and would be repaid after January 1st with the Anoka County HRA Levy funds. To access these funds, the City Council would need to pass a resolution requesting the funds from the Anoka County HRA's meeting of November 26,2007. Karen Skepper from Anoka County has indicated this could be a qualifying expenditure. Staff is requesting authorization to negotiate a purchase agreement with the owners of 3805 2nd Street and prepare a development agreement between the EDA and GMHC to be presented for approval at the EDA's November 2ih meeting. Peterson stated it was a good deal. Diehm and Szurek agreed with him. Nawrocki stated the property is certainly not worth $100,000, they bought the home a couple of years ago when it was habitable and now it is uninhabitable, and felt it wasn't a good deal. Streetar stated the land is valued at $92,000, which is $10,000 difference, they have a mortgage to payoff, so if the City chooses not to do anything, I'm sure it will stay there just like 4141 Jefferson did for two years and become blighted in the neighborhood. So it is a way to get two brand new, single family homes and provide a boost to that neighborhood and as Partenheimer mentioned the money could come from the Anoka County levy. All the council has to do is to pass that resolution before the end of the year and you will get that money immediately. Nawrocki stated it is questionable if that property will sit that long, if they have a mortgage on the property, which you said they do, we assume they had insurance, maybe they didn't. Diehm stated what we are saying is even if the bank forecloses, it will sit. Nawrocki stated his point is that we are paying way too much for the property. Peterson stated that is your opinion. Resident, Lisa Peterson stated she is the owner of the property, it's not going to just sit, I'm going to fix it up if the City doesn't buy the house. But being a resident of Columbia Heights also she would much rather that the City buy the property, tear down the little tiny house and build two beautiful homes, like what they are doing on Jefferson. She tried to rent out the home, and got some bad renters who burned the inside of the house. Nawrocki stated if he were her, he would probably say the same things. Lisa Peterson stated, actually Bruce I am loosing about $25,000, of what I have originally put into that house. Economic Developmcnt Authority Meeting Minutes October 23, 2007 Page 8 01'8 Motion by Diehm, second by Szurek, to authorize staff to negotiate a purchase agreement with the owners of 3805 2nd street NE for a total price, including closing costs and outstanding assessments, not to exceed $105,000. All ayes. Motion Carried. Upon Vote: Nawrocki-nay, Kelzenberg-aye, Diehm-aye, Peterson-aye, Szurek-aye. Motion Carried. ADJOURNMENT President, Peterson, adjourned the meeting at 10:03 p.m. Respectfully submitted, Cheryl Bakken Community Development Secretary H:\EDAminutes2007\10-23-2007 EDA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of November 27, 2007 AGENDA SECTION: Consent Agenda ORIGINATING EXECUTIVE NO: 3 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Financial Report and Payment of Bills BY: Robert Streetar BY: DATE: November 15, 2007 BACKGROUND: The bound Financial Report for the month of October, Resolution 2007-25 is attached for review. The enclosed Financial Report lists the Summary (white), the Check History (Green), the Expenditure Guideline with Detail (blue) and Revenue Guideline with detail (yellow) for each fund. The reports cover the activity in the calendar (fiscal) year from January 1 through October 31. RECOMMENDATION: Staff will be available to answer specific questions. If the report is satisfactorily complete, we recommend the Board take affirmative action to receive the Financial Report and approve the payment of bills. RECOMMENDED MOTION: Move to approve Resolution 2007-25, Resolution of the Columbia Heights Economic Development Authority (EDA) approving the Financial Statement and Payment of Bills for the month of October 2007. EDA ACTION: H:\EDAConsent2007\Oclober Fin Rep 2007 EDA RESOLUTION 2007-25 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR OCTOBER 2007 AND PAYMENT OF BILLS FOR THE MONTH OF OCTOBER 2007. WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial statement which shows all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the EDA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and if correct, to approve them by resolution and enter the resolution in its records; and WHEREAS, the financial statement for the month of October 2007 and the list of bills for the month of October 2007 are attached hereto and made a part of this resolution; and WHEREAS, the EDA has examined the financial statement and the list of bills and finds them to be acceptable as to both form and accuracy. NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the attached financial statements and list of bills, which are attached hereto and made a part hereof, and they are found to be correct, as to form and content; and BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the list of bills as presented in writing are approved for payment out of proper funds; and BE IT FURTHER RESOLVED this resolution and attachments are to be made a part of the permanent records of the Columbia Heights Economic Development Authority. Passed this _ day of ,2007. MOTION BY: SECONDED BY: AYES: NAYS: President- Gary L. Peterson Attest by: Cheryl Bakken, Assistant Secretary H:\Resolutions2007\EDA2007-25 fin October 2007 Meetina 0 : ovember27,2007 AGENDA SECTION: Business Items ORIGINATING EXECUTIVE NO: 4 DEPARTMENT: Community DIRECTOR Development APPROVAL ITEM: Adopt Resolution 2007-26, Approving BY: Kirsten Partenheimer BY: a Contract for Private Redevelopment DATE: November 16, 2007 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY f N BACKGROUND: The purpose of this memorandum is to ask Commissioners to approve a contract for private redevelopment with the Greater Metropolitan Housing Corporation (GMHC) for the redevelopment of the residential property at 3805 2nd Street NE. The rental property currently contains a small single-family home, which is uninhabitable due to a recent fire, and remains vacant, and GMHC proposes to demolish it and construct two new single-family homes. Property Background The home, which was built in 1922 and has approximately 732 square feet of living space, is on a corner lot measuring 80' x 130'. Zoned R2-A (One- and Two-Family Residential District) the lot is comprised of two legal lots of record, facing Second Street. (Please see attached photographs of existing structure.) A fire on September 7, 2007 damaged the home and the building official has posted it as uninhabitable. When the owners, Lisa and Steve Petersen, determined that it would be unprofitable to repair the property, and were unable to find new investors, they approached the City of Columbia Heights, to determine if the City would be interested in purchasing the property for redevelopment. Redevelopment Project Upon acquisition of the property, GMHC will demolish the existing home and build two new single-family homes, similar to those at 4141 Jefferson Street NE. Each home would be two stories with three bedrooms and two and a half baths and would comprise approximately 1,650 square feet. Both of these homes would sell for a target price of $235,000. Demolition could begin as early as December 2007, with construction occurring soon thereafter. Marketing would begin simultaneously with demolition. (Please see attached photographs of GMHC homes previously constructed in Columbia Heights.) The table provides a quick look at the results of redeveloping this property. Before After Chanqe # of Single-Family Homes 1 2 1 Property Value $ 139,200 * $ 470,000 * $ 330,800 Property Tax $ 1,284 $ 4,335 * $ 3,051 *Approximate The cost to acquire the property, demolish the existing structure, and construct two new homes is estimated to be $556,647. The sale of both homes would generate $470,000 of revenue. Subsequently, in order to successfully redevelop the property, the project is estimated to require $86,647 of funding assistance to make it feasible. The gap will be funded from the new Anoka County HRA levy the City Council approved on September 10, 2007. To access these funds, the City Council will be asked to pass a resolution requesting the funds from the Anoka County HRA at their November 26, 2007 meeting. Karen Skepper from Anoka County indicated this could be a qualified expenditure. Comprehensive Plan By facilitating the redevelopment of this property, the EDA would be implementing two goals of the Housing component of the Comprehensive Plan. These goals and their corresponding action steps are listed below. Goal: Promote and preserve the single-family housing stock as the community's strongest asset. . Action Step: The City will acquire and demolish the most seriously deteriorated single-family homes and work with the private sector to develop appropriate replacement housing. . Action Step: The City will acquire and assemble residential lots, as opportunities arise, for the purpose of developing infill housing. Goal: Provide a variety of life cycle housing opportunities within the community. . Action Step: The City will foster partnerships with the private sector to help diversify housing in the community. Housing Maintenance Plan 2008-2017 The EDA approved the 10-Year Housing Maintenance Plan to provide to maintain the City's housing stock. Of the five programs implemented as part of the plan, the redevelopment of 3805 2nd Street would meet the intent of the Single-Family Home Replacement Program, which provides funding for the replacement of the most blighted and dilapidated single-family detached homes within the city with new single-family detached housing. Summary In summary, the EDA is presented with an opportunity to remove a vacant and blighted home and replace it with two new single-family for-sale homes with target sales prices of $235,000. To accomplish this task, the City would partner with GMHC as the homebuilder, as well as provide financial assistance to GMHC to make this redevelopment feasible. This redevelopment would implement the goals of the Comprehensive Plan and the Housing Maintenance Plan, and would result in a much-needed physical improvement to the neighborhood. Therefore, staff is requesting approval of a contract for private redevelopment between the EDA and GMHC to be presented at the November 27,2007 EDA meeting. RECOMMENDATION: Staff recommends the EDA approve the contract for private redevelopment between the EDA and the Greater Metropolitan Housing Corporation (GMHC). RECOMMENDED MOTION: Move to Adopt Resolution 2007-26, a Resolution approving a Contract for Private Redevelopment between the Columbia Heights Economic Development Authority and the Greater Metropolitan Housing Corporation (GMHC); and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. EDA ACTION: COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2007-26 RESOLUTION APPROVING A CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND GREATER METROPOLITAN HOUSING CORPORATION BE IT RESOLVED By the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority ("Authority") as follows: Section 1. Recitals. 1.01. The Authority has determined a need to exercise the powers of a housing and redevelopment authority, pursuant to Minnesota Statutes, Sections. 469.090 to 469.108 ("EDA Act"), and is currently administering the Downtown CBD Redevelopment Project ("Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 ("HRA Act"). 1.02. The Authority and the Greater Metropolitan Housing Corporation (the "Redeveloper") have proposed to enter into a Contract for Private Redevelopment (the "Contract"), setting forth the terms and conditions of redevelopment of certain property within the Redevelopment Project located at 3805 Second Street and described as Lots 19 and 20, Block 71, Columbia Heights Annex to Minneapolis (the "Redevelopment Property"). 1.03. Pursuant to the Contract, the Redeveloper will acquire the Redevelopment Property from a third party owner, divide the property into two lots and construct two single family homes with a target price of $235,000 each, and the Authority will provide certain financial assistance in that effort. 1.04. The activities of the Authority under the Contract implement housing goals of the City's Comprehensive Plan: "Promote and preserve the single-family housing stock as the community's strongest asset." and "Provide a variety of life-cycle housing opportunities within the community." 1.05. The Board has reviewed the Contract and finds that the execution thereof and performance of the Authority's obligations thereunder further the goals of the Comprehensive Plan and are in the best interests of the City and its residents. Section 2. Authoritv Approval: Further Proceedinqs. 2.01. The Contract as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the documents by such officials shall be conclusive evidence of approval. 2.02. The President and Executive Director are hereby authorized to execute on behalf of the Authority the Contract and any documents referenced therein requiring execution by the Authority, and to carry out, on behalf of the Authority its obligations thereunder. 2.03. Authority and City staff are authorized and directed to take all actions to implement the Contract. Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this 27th day of November 2007. President-Gary L. Peterson ATTEST: Secretary/CAP- Cheryl Bakken 2 3805 2ND STREET NE \ '-- \ \ I-- - ~. - w ~ z ITIJ I- W W a: I- w lIlT IJl ~ C ~ Z >- N I- (jj IT a: w > Z ::l g 38TH AVE NE L.- o , 0.05 0.1 Miles , N A Legend D Redevelopment Area D City Parcels Date: October 18, 2007. Prepared by: Kirsten Partenheimer, Community Development Specialist, City of Columbia Heights. 3805 Second Street NE Figure 1. (above) 3805 Second St. NE Figure 2. (left) Fire damage in kitchen. Second Draft 11/16/07 CONTRACT FOR PRIVATE REDEVELOPMENT By and Between COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY COLUMBIA HEIGHTS, MINNESOTA and GREATER METROPOLITAN HOUSING CORPORATION Dated as of: ,2007 This document was drafted by: KENNEDY & GRA YEN, Chartered (MTN) 470 US Bank Plaza 200 South Sixth Street Minneapolis, Minnesota 55402 Telephone: (612) 337-9300 324344v3 sm CL205-43 PREAMBLE Section 1.1. Section 2.1. Section 2.2. Section 3.1. Section 3.2. Section 3.3 Section 3.4 Section 3.5 Section 3.6. Section 4.1. Section 4.2. Section 4.3. Section 4.4. Section 5.1. Section 5.2. Section 5.3. Section 6.1. Section 6.2. 324344v3 SJB CL205-43 TABLE OF CONTENTS ............................................................................................................................1 ARTICLE I Definitions Definitions......................................................................................................... .2 ARTICLE II Representations and Warranties Representations by the Authority.......................................................................4 Representations and Warranties by the Redeveloper.........................................4 ARTICLE III Acquisition and Conveyance of Property Status of Redevelopment Property.................................................................. ...6 Environmental Conditions.................................................................................6 Authority Assistance..........................................................................................6 Look-Back Participation.................................................................................... 7 Place of Document Execution............................................................................ 7 Records ..... ... ... ... ..... .... ... .................. ... ............. .... ....... ................ .... .......... .... .....8 ARTICLE IV Construction of Minimnm Improvements and Public Improvements Construction of Minimum Improvements and Public Improvements ...............9 Construction Plans.......................................................................................... ...9 Completion of Construction.............................................................................1 0 Certificate of Completion ................................................................................1 0 ARTICLE V Insurance Insurance......................................................................................................... .12 Subordination.................................................................................................. .13 Qualifications.................................................................................................. .13 ARTICLE VI Taxes Right to Collect Delinquent Taxes...................................................................14 Review of Taxes........................................................................................... ...14 Section 7.1. Section 8.1. Section 8.2. Section 8.3. Section 9.1. Section 9.2. Section 9.3. Section 9.4. Section 9.5. Section 10.1. Section 10.2. Section 10.3. Section 10.4. Section 10.5. Section 10.6. Section 10.7. Section 10.8. Section 10.9. Section 10.1 O. Section 10.11. EXHIBIT A EXHIBIT B EXHIBIT C 324344v3 SJB CL205-43 ARTICLE VII Financing Mortgage Financing........................................................................................ .15 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Representation as to Redevelopment...............................................................16 Prohibition Against Redeveloper's Transfer of Redevelopment Property and Assignment of Agreement ...............................................................................16 Release and Indemnification Covenants ..........................................................17 ARTICLE IX Events of Default Events of Default Defined ...............................................................................19 Remedies on Default....................................................................................... .19 No Remedy Exclusive..................................................................................... .20 No Additional Waiver Implied by One Waiver ...............................................20 Attorney Fees................................................................................................. ..20 ARTICLE X Additional Provisions Conflict ofInterests; Authority Representatives Not Individually Liable.......21 Equal Employment Opportunity ......................................................................21 Restrictions on Use......................................................................................... .21 Provisions Not Merged With Deed..................................................................21 Titles of Articles and Sections .........................................................................21 Notices and Demands ......................................................................................21 Counterpmts .................................................................................................... .22 Recording................. ............ .................................. .... ... .............. .............. ...... .22 Amendment.......... .... ........... ............................... ........ ... .............. .... ................ .22 Authority or City Approvals ............................................................................22 Termination.. ... ........ .... ........... ....... .............. ... ... ............... ..................... .......... .22 Legal Description of Redevelopment Propelty Concept Materials for Redevelopment Propelty Certificate of Completion 11 CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made on or as of the _ day of , 2007, by and between COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, COLUMBIA HEIGHTS, MINNESOTA, a public body corporate and politic (the "Authority"), established pursuant to Minnesota Statutes, Sections 469.090 to 469.1081 (hereinafter referred to as the "Act"), and GREATER METROPOLITAN HOUSING CORPORATION ("GHMC"), a Minnesota non-profit corporation (the "Redeveloper"). WITNESSETH: WHEREAS, the Authority was created pursuant to the Act and was authorized to transact business and exercise its powers by a resolution of the City Council of the City of Columbia Heights ("City"); and WHEREAS, the City and the Authority (as successor to the Housing and Redevelopment Authority in and for the City of Columbia Heights) have undertaken a program to promote redevelopment of land which that is characterized by blight and blighting factors within the City pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act"); and WHEREAS, pursuant to the Act and the HRA Act, the Authority is authorized to undertake cel1ain activities to facilitate the redevelopment of real Redevelopment Property by private enterprise; and WHEREAS, the Authority believes that the redevelopment of the Redevelopment Property pursuant to this Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of the applicable State and local laws and requirements under which the Project has been undertaken and is being assisted. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 324344v3 8m CL205-43 1 ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means the Economic Development Authority Act, Minnesota Statutes, Sections 469.090 to 469.108, as amended. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "Authority" means the Columbia Heights Economic Development Authority, or any successor or assign. "Authority Representative" means the Executive Director of the Authority, or any person designated by the Executive Director to act as the Authority Representative for the purposes of this Agreement. "Business Day" means any day except a Saturday, Sunday, legal holiday, a day on which the City is closed for business, or a day on which banking institutions in the City are authorized by law or executive order to close. "Certificate of Completion" means the certification provided to the Redeveloper, or the purchaser of any part, parcel or unit of the Redevelopment Property, pursuant to Section 4.4 of this Agreement. "City" means the City of Columbia Heights, Minnesota. "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which a) shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the appropriate building officials of the City, and (b) shall include at least the following for each building: (I) site plan; (2) foundation plan; (3) basement plans; (4) floor plan for each floor; (5) cross sections of each (length and width); (6) elevations (all sides); (7) landscape plan; and (8) such other plans or supplements to the foregoing plans as the Authority may reasonably request to allow it to ascertain the nature and quality of the proposed construction work. "County" means the County of Anoka, Minnesota. "Event of Default" means an action by the Redeveloper listed in At1icle IX of this Agreement. 324344v3 sm CL205-43 2 "Holder" means the owner of a Mortgage. "Minimum Improvements" means the division of the Redevelopment Property into two lots and the constmction of a single family home on each lot with associated amenities. "Moligage" means any m01igage made by the Redeveloper which is secured, in whole or in part, with the Redevelopment Propeliy and which is a permitted encumbrance pursuant to the provisions of Article VIII of this Agreement. "Redevelopment Property" means the Redevelopment Propeliy so described on Exhibit A. "Redeveloper" means Greater Metropolitan Housing Corporation or its permitted successors and assigns. "State" means the State of Minnesota. "Tax Official" means any County assessor; County auditor; County or State board of equalization, the commissioner of revenue of the State, or any State or federal district couti, the tax couti of the State, or the State Supreme Couti. "Termination Date" means the last date the Redeveloper closes on sale of all the Minimum Improvements to third parties. "Transfer" has the meaning set fOlth in Section 8.2(a) hereof. "Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be excused as a result thereof which are the direct result of war, significant weather conditions such as floods, tornadoes, or the like, terrorism, strikes, other labor troubles, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Authority in exercising its rights under this Agreement) which directly result in delays. Unavoidable Delays shall not include delays in the Redeveloper's obtaining of permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such constmction is required under Section 4.3 of this Agreement. 324344v3 SJB CL205.43 3 ARTICLE II Representations and Wan-anties Section 2.1. Representations bv the Authoritv. The Authority makes the following representations as the basis for the undellaking on its pall herein contained: (a) The Authority is an economic development authority duly organized and existing under the laws of the State. Under the provisions of the Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The activities of the Authority are undertaken to foster the redevelopment of cellain real Redevelopment Propelly which for a variety of reasons is presently underutilized, to eliminate current blighting factors and prevent the emergence of fmlher blight at a critical location in the City, to create increased tax base in the City, to stimulate fmlher development in the City as a whole. Section 2.2. Representations and Warranties bv the Redeveloper. The Redeveloper represents and warrants that: (a) The Redeveloper is a non-profit corporation duly organized and in good standing under the laws of the State of Mimlesota, is not in violation of any provisions of its allicles of incorporation or the laws of the State, is duly authorized to transact business within the State, has power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its goveming body. (b) Upon acquisition of the Redevelopment Property, the Redeveloper will cause the Minimum Improvements to be constructed in accordance with the terms of this Agreement and all applicable local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (c) The Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper or the Authority may be or will be in violation of any environmental law or regulation (other than those notices or communications of which the Authority is aware). The Redeveloper is aware of no facts the existence of which would cause it to be in violation of or give any person a valid claim under any local, state or federal environmental law, regulation or review procedure. (d) The Redeveloper will cause the Minimum Improvements to be constructed in accordance with all local, state or federal energy-conservation laws or regulations. (e) The Redeveloper will obtain or cause to be obtained, in a timely mamler, all required permits, licenses and approvals, and will meet, in a timely maill1er, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. 324344v3 SJB CL205-43 4 (f) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a patty or by which it is bound, or constitutes a default under any of the foregoing. (g) The Redeveloper shall promptly advise the Authority in writing of all litigation or claims affecting any part of the Minimum Improvements and all written complaints and charges made by any governmental authority materially affecting the Minimum Improvements or materially affecting Redeveloper or its business which may delay or require changes in constmction of the Minimum Improvements. 324344v3 sm CL20S-43 5 ARTICLE III Acquisition and Convevance of Property Section 3.1. Status of Redevelopment Propertv. (a) The Redeveloper has entered into a purchase agreement with a third pmty (the "Purchase Agreement") to acquire the Redevelopment Property for a purchase price of $105,000. The Redeveloper shall acquire the Redevelopment Property in accordance with the terms of the Purchase Agreement. Upon closing on such acquisition, Redeveloper shall deliver to the Authority a copy of the settlement statement showing the total net amount paid by Redeveloper. The Authority has no obligation to acquire title to the Redevelopment Property, but in lieu of direct acquisition will help finance Redeveloper's acquisition in accordance with the terms ofthis Agreement. (b) Before commencing construction of the Minimum Improvements, the Redeveloper shall obtain approval from the City of a lot division of the Redevelopment Property, creating two lots in accordance with City ordinances and procedures and in accordance with the Concept Materials for Redevelopment Property attached as Schedule B. Section 3.2. Environmental Conditions. (a) The Redeveloper acknowledges that the Authority makes no representations or warranties as to the condition of the soils or environmental conditions on the Redevelopment Property or the fitness of such Redevelopment Property for construction of the Minimum Improvements or any other purpose for which the Redeveloper may make use of such Redevelopment Property, mId that the assistance provided to the Redeveloper under this Agreement neither implies any responsibility by the Authority or the City for any contamination of the Redevelopment Property nor imposes any obligation on such pmties to paJticipate in any cleanup of such Redevelopment Property. (b) Without limiting its obligations under Section 8.3 of this Agreement the Redeveloper further agrees that it will indemnify, defend, and hold harmless the Authority, the City, and their goveming body members, officers, and employees, from allY claims or actions arising out of the presence, if any, of hazardous wastes or pollutants existing on or in the Redevelopment Redevelopment Property and the activities of any contractor or agent in conducting its activities on the Redevelopment Property. The provisions of this Section 3.2(b) shall not become effective until the date on which Redeveloper acquires fee title to the Redevelopment Property. Section 3.3. Authoritv Assistance. (a) In order to facilitate construction of the Minimum Improvements, which will achieve approved goals and objectives of the Authority, the Authority will reimburse the Redeveloper for $86,647 of the cost of acquisition of the Redevelopment Property (the "Authority Assistance"), subject to all the terms and conditions of this Agreement. (b) The Authority Assistance shall be provided to the Redeveloper upon satisfaction ofthe following conditions precedent: 324344v3 sm CL205-43 6 (i) No Event of Default under this Agreement 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; (ii) Redeveloper has submitted, and the Authority has approved, Construction Plans for the Minimum Improvements in accordance with Article IV hereof; (iii) Redeveloper has submitted to the Authority the Redeveloper's purchase evidence required under Section 3.1 hereof; (iv) Redeveloper has completed construction of the Minimum Improvements and received the Certificate of Completion as provided in Section 4.4. of this Agreement; and (v) the Redeveloper has submitted and Authority has reviewed the Redevelopment Costs, and the Authority has detennined whether any offset for Development Profits will be made under Section 3.5 hereof. Section 3.4. Business Subsidv. The parties agree and understand that the financial assistance under this Agreement that benefits the Redevelopment Property does not constitute a business subsidy pursuant to Section 116J.993, subd. 3, clause (7) of the Business Subsidy Act because the assistance is provided for housing. The Redeveloper releases and waives any claim against the City and the Authority and their respective governing body members, officers, agents, servants and employees thereof arising from application of the Business Subsidy Act to this Agreement, including without limitation any claim that the Authority failed to comply with the Business Subsidy Act with respect to this Agreement. Section 3.5 Look-Back Patticipation. (a) If Redeveloper's total development expenses at'e less than $556,647 (which amount represents the projected acquisition, demolition and construction costs of the Redeveloper on the Redevelopment Property and is referred to as the "Redevelopment Costs"), such cost savings (referred to as the "Development Profits") shall be split equally by Redeveloper and the Authority. The Authority's share of Development Profits, if any, shall be deducted from the Authority Assistance under Section 3.3. (b) The parties agree that the Redeveloper intends to sell the homes constructed on the Redevelopment Property for the target price of $235,000 each (the "Target Price"). If a home is sold for a purchase price in excess of the Target Price (the "Excess Profit"), the Excess Profit shall be split equally by Redeveloper and the Authority. Promptly upon execution of each purchase agreement for sale of a home to a third party, Redeveloper shall deliver a copy of the purchase agreement to the Authority. The Redeveloper shall pay the Authority's share of any Excess Profit to the Authority at closing on sale of the relevant home to a third patty. (c) The total look-back participation of the Authority (collectively, the Excess Profits and the Development Profits) shall not exceed the amount of Authority Assistance ($86,647). The Redeveloper shall provide documentation sufficient in the judgment of the Authority to verify the Redeveloper's Redevelopment Costs and sale price of each home. The Authority shall 324344v3 SIB CL20S-43 7 not be responsible for any deficit incurred by the Redeveloper in the acquisition, construction and sale of the Minimum Improvements. The provisions of this Section 3.5 shall survive the Certificate of Completion for any portion of the Minimum Improvements and the sale and issuance of any deed thereof to a subsequent purchaser. Section 3.6. Records. The Authority or its representatives shall have the right at all reasonable times after reasonable notice to inspect, examine and copy all books and records of Redeveloper relating to consttUction of the Minimum Improvements. 324344v3 S1l3 CL20S-43 8 ARTICLE IV Construction of Minimum Improvements and Public ImJJl'ovements Section 4.1. ConstlUction of Minimum Improvements and Public Improvements. The Redeveloper agrees that, upon acquisition of the Redevelopment Property, it will construct or cause construction of the Minimum Improvements on the Redevelopment Propelty, in substantial compliance with the Redeveloper's pro forma submitted to the staff of the Authority, the Concept Materials for Redevelopment Property attached as Schedule B, and the approved Construction Plans, and at all times while Redeveloper owns the Redevelopment Property, will operate and maintain, preserve and keep the respective components of the Minimum Improvements or cause such components be maintained, preserved and kept with the appurtenances and every palt and parcel thereof, in good repair and condition. Section 4.2. Construction Plans. (a) Before commencement of construction of the Minimum Improvements the Redeveloper shall submit to the Authority the Construction Plans. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity with this Agreement and all applicable State and local laws and regulations. The Authority Representative will approve the Construction Plans in writing if: (i) the Construction Plans conform to the terms and conditions of this Agreement, including the Concept Materials for Redevelopment Property attached as Schedule B; (ii) the Construction Plans conform to the goals and objectives of the Redevelopment Plan; (iii) the Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and regulations; (iv) the Construction Plans al'e adequate to provide for construction of the Minimum Improvements; (v) the Construction Plans do not provide for expenditures in excess of the funds available to the Redeveloper from all sources (including Redeveloper's equity) for constlUction of the Minimum Improvements; and (vi) no Event of Default has occu11'ed. Approval may be based upon a review by the City's Engineer and Building Official of the Construction Plans. No approval by the Authority Representative shall relieve the Redeveloper of the obligation to comply with the terms of this Agreement or ofthe Redevelopment Plan, applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority Representative shall constitute a waiver of an Event of Default. If approval of the Construction Plans is requested by the Redeveloper in writing at the time of submission, such Construction Plans shall be deemed approved unless rejected in writing by the Authority Representative, in whole or in part. Such rejections shall set forth in detail the reasons therefore, and shall be made within 15 days after the date of their receipt by the Authority. Ifthe Authority Representative rejects any Construction Plans in whole or in pm, the Redeveloper shall submit new or corrected Construction Plans within 15 days after written notification to the Redeveloper of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority. The Authority Representative's approval shall not be unreasonably withheld, delayed or conditioned. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements to be constructed in accordance with said plans) comply to the Authority's satisfaction with the provisions of this Agreement relating thereto. 324344v3 sm CL205-43 9 (b) If the Redeveloper desires to make any material change in the Construction Plans after their approval by the Authority, the Redeveloper shall submit the proposed change to the Authority for its approval. If the Construction Plans, as modified by the proposed change, conform to the requirements of Section 4.2 of this Agreement with respect to such previously approved Construction Plans, the Authority shall approve the proposed change and notify the Redeveloper in writing of its approval. Such change in the Construction Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority to the Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made within 15 days after receipt of the notice of such change. The Authority's approval of any such change in the Construction Plans will not be umeasonably withheld. Section 4.3. Completion of Construction. (a) Subject to Unavoidable Delays, the Redeveloper must commence construction of the Minimum Improvements by May 1, 2007 and must substantially complete construction of the Minimum Improvements by December 31, 2007. All work with respect to the Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in substantial conformity with the Construction Plans as submitted by the Redeveloper and approved by the Authority and the City. If the Redeveloper is making substantial progress with respect to the redevelopment proj ect, and is unable to meet one or more of the above-referenced deadlines, the Authority and the Redeveloper shall negotiate in good faith for a reasonable period to extend the time in which necessary action(s) must be taken or occur, the lapse of which time would otherwise constitute a default under this Agreement. (b) The Redeveloper agrees for itself, its successors and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such successors and assigns, shall promptly begin and diligently prosecute to completion the redevelopment of the Redevelopment Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be commenced and completed subject to Unavoidable Delay within the period specified in this Section 4.3 of this Agreement. Subsequent to conveyance of the Redevelopment Property, or any part thereof, to the Redeveloper, and until construction of the Minimum Improvements has been completed, the Redeveloper shall make reports, in such detail and at such times as may reasonably be requested by the Authority, as to the actual progress of the Redeveloper with respect to such construction. Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Redeveloper to construct the Minimum Improvements (including the dates for completion thereof), the President and Executive Director of the Authority shall furnish the Redeveloper with a Certificate of Completion in substantially the form attached as Exhibit C. Such certification shall be a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement with respect to the obligations of the Redeveloper, and its successors and assigns, to construct the relevant component of the Minimum Improvements and the dates for the completion thereof. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation 324344v3 sm CL205-43 10 of the Redeveloper to any Holder of a Mortgage, or any insurer of a Mortgage, securing money loaned to finance the Minimum Improvements, or any part thereof. (b) The Cettificate of Completion provided for in this Section 4.4 of this Agreement shall be in such fOlID as will enable it to be recorded in the proper office for the recordation of deeds and other instruments pettaining to the Redevelopment Property. If the President and Executive Director of the Authority shall refuse or fail to provide any certification in accordance with the provisions of this Section 4.4 of this Agreement, the Authority shall, within thirty (30) days after written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to obtain such cettification. (c) The construction of the Minimum Improvements shall be deemed to be substantially completed when the Redeveloper has received a certificate of occupancy for both homes from the City, and all site improvements have been substantially completed as reasonably determined by the Authority Representative. 324344v3 SJB CL205-43 11 ARTICLE V Insurance Section 5.1. Insurance. (a) The Redeveloper will provide and maintain at all times during the process of constructing the Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time during that period, at the request of the Authority, furnish the Authority with proof of payment of premiums on policies covering the following: (i) Builder's risk insurance, written on the so-called "Builder's Risk Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in non-reporting form on the so-called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content satisfactory to the Authority; (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an Owner's Contractor's Policy with limits against bodily injury and Redevelopment Property damage of not less than $1,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used); (iii) Automobile liability insurance to cover claims for damages because of bodily injury or death of any person or Redevelopment Property damage arising out of the ownership, maintenance or use of any motor vehicle of not less than $1,000,000; and (iv) Workers' compensation insurance, with statutory coverage. (b) All insurance required in Article V of this Agreement shall be taken out and maintained in responsible insurance companies selected by the Redeveloper which are authorized under the laws of the State to assume the risks covered thereby, and shall name the Authority, the City and any Mortgagee as an additional named insured thereunder. Upon request, the Redeveloper will deposit annually with the Authority policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless othelwise provided in this Article V of this Agreement each policy shall contain a provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided below the amounts required herein without giving written notice to the Redeveloper and the Authority at least thirty (30) days before the cancellation or modification becomes effective. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or celiificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. 324344v3 SIB CL205-43 12 ( c) The Redeveloper agrees to notify the Authority immediately in the case of damage exceeding $100,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In such event the Redeveloper will forthwith repair, reconstruct and restore the Minimum Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Redeveloper will apply the net proceeds of any insurance relating to such damage received by the Redeveloper to the payment or reimbursement of the costs thereof. The Redeveloper shall complete the repair, reconstruction and restoration of the Minimum Improvements, whether or not the net proceeds of insurance received by the Redeveloper for such purposes m'e sufficient to pay for the same. Any net proceeds remaining after completion of such repairs, construction and restoration shall be the Redevelopment Property of the Redeveloper. (d) The Redeveloper and the Authority agree that all of the insurance provisions set forth in this Article V shall terminate on the Termination Date. Section 5.2. Subordination. Notwithstmlding anything to the contrary contained in this Article V, the rights of the Authority with respect to the receipt and application of any proceeds of insurance shall, in all respects, be subject and subordinate to the rights of any lender under a Mortgage approved pursuant to Article VII of this Agreement. Section 5.3. Qualifications. Notwithstanding anything herein to the contrary, the parties acknowledge and agree that: (a) Upon transfer of the Redevelopment Propelty or portion thereof to another person or entity, the Redeveloper will remain obligated under Section 5.1 hereof relating to such pOltion transferred, unless the Redeveloper is released from such obligations in accordance with the terms and conditions of Section 8.2(b), (c), or 8.3 hereof. 324344v3 sm CL205-43 13 ARTICLE VI Taxes Section 6.1. Right to Collect Delinquent Taxes. The Redeveloper acknowledges that the Authority is providing financial assistance in furtherance of the redevelopment described in this Agreement, and that part of the consideration for such assistance is the improvement of tax base in the City. To that end, the Redeveloper agrees for itself, its successors and assigns, in addition to the obligation pursuant to statute to pay real estate taxes, that it is also obligated by reason of this Agreement to pay before delinquency all real estate taxes assessed against the Redevelopment Property and the Minimum Improvements. The Redeveloper acknowledges that this obligation creates a contractual right prior to the Termination Date to sue the Redeveloper or its successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the county auditor. In any such suit, the Authority shall also be entitled to recover its costs, expenses and reasonable attorney fees. Section 6.2. Review of Taxes. The Redeveloper agrees that prior to the Termination Date, it will not cause a reduction in the real Redevelopment Property taxes paid in respect of the Redevelopment Property through: (A) willful destruction of the Redevelopment Property or any part thereof; or (B) willful refusal to reconstruct damaged or destroyed Property pursuant to Section 5.1 of this Agreement. The Redeveloper also agrees that it will not, prior to the Termination Date, apply for a deferral of Redevelopment Property tax on the Redevelopment Property pursuant to any law, or transfer or permit transfer of the Redevelopment Propelty to any entity whose ownership or operation of the Redevelopment Property would result in the Redevelopment Propelty being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City or Authority in accordance with this Agreement). 324344v3 SIB CL205-43 14 ARTICLE VII Financinl!: Section 7.1. Mortgage Financing. (a) The Redeveloper shall obtain one or more commitments for financing which, together with committed equity for such construction, is sufficient for payment of the Construction Costs for the Minimum Improvements. Such commitments may be short term financing, long term mOltgage financing, a bridge loan with a long term take-out financing commitment, or any combination of the foregoing. (b) In the event that there occurs a default under any MOlt gage obtained by the Redeveloper pursuant to Section 7.1 of this Agreement, the Redeveloper shall cause the Authority to receive copies of any notice of default received by the Redeveloper from the holder of such Mortgage. Thereafter, the Authority shall have the right, but not the obligation, to cure any such default on behalf of the Redeveloper within such cure periods as are available to the Redeveloper under the MOltgage documents. In the event there is an event of default under this Agreement, the Authority will transmit to the Holder of any MOltgage a copy of any notice of default given by the Authority pursuant to Alticle IX of this Agreement. (c) In order to facilitate the securing of other financing, the Authority agrees to subordinate its rights under this Agreement provided that such subordination shall be subject to such reasonable terms and conditions as the Authority and Holder mutually agree in writing. 324344v3 SJB CL20S-43 15 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Redevelopment. The Redeveloper represents and agrees that its purchase of the Redevelopment Propelty, and its other undertakings pursuant to the Agreement, are, and will be used, for the purpose of redevelopment of the Redevelopment Property and not for speculation in land holding. Section 8.2, Prohibition Against Redeveloper's Transfer of Redevelopment Propertv and Assignment of Agreement. The Redeveloper represents and agrees that prior to issuance of the Certificate of Completion for the Minimum Improvements: (a) Except as specifically described in this Agreement, the Redeveloper has not made or created and will not make or create or suffer to be made or created any total or pattial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Redevelopment Propelty or any palt thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a "Transfer"), without the prior written approval of the Authority's boat'd of commissioners, The term "Transfer" does not include (i) encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or permanent financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property or to construct the Minimum Improvements or component thereof; (ii) any lease, license, easement or similat' arrangement entered into in the ordinat'y course of business related to operation of the Minimum Improvements; or any (iii) sale of a single family home constituting a pOltion of the Minimum Improvements to a purchaser who will occupy such home as the purchaser's principal place of residence. (b) If the Redeveloper seeks to effect a Transfer prior to issuance of the Certificate of Completion, the Authority shall be entitled to require as conditions to such Transfer that: (i) any proposed transferee shall have the qualifications and financial responsibility, in the sole and reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undeltaken in this Agreement by the Redeveloper as to the pOltion of the Redevelopment Property to be transferred; and (ii) Any proposed transferee, by instrument in writing satisfactory to the Authority atld in form recordable in the public land records of Anoka County, Minnesota, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority, have expressly assumed all of the obligations of the Redeveloper under this Agreement as to the portion of the Redevelopment Propelty to be transferred and agreed to be subject to all the conditions and restrictions to which the Redeveloper is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Redevelopment Property, or any patt thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed 324344v3 SJB CL205-43 16 to in writing by the Authority) deprive the Authority of any rights or remedies or controls with respect to the Redevelopment Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the pmties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Redevelopment Property or any pmt thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit the Authority of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Redevelopment Property that the Authority would have had, had there been no such transfer or change. In the absence of specific written agreement by the Authority to the contrary, such transfer or approval by the Authority thereof shall not be deemed to relieve the Redeveloper, or any other pmty bound in any way by this Agreement or otherwise with respect to the Redevelopment Property, from any of its obligations with respect thereto; and (iii) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Redevelopment Property governed by this Article VIII, shall be in a form reasonably satisfactory to the Authority. (c) If the conditions described in paragraph (b) are satisfied in the sole judgment of the Authority, then the Transfer will be approved and the Redeveloper shall be released from its obligation under this Agreement, as to the portion of the Redevelopment Property that is transferred, assigned, or otherwise conveyed. The provisions of this paragraph (c) apply to all subsequent transferors, assuming compliance with the terms of this Article. (d) Upon issuance of the Celtificate of Completion, the Redeveloper may transfer or assign the Minimum Improvements and/or the Redeveloper's rights and obligations under this Agreement with respect to such Redevelopment Property without the prior written consent of the Authority. Section 8.3. Release and Indemnification Covenants. (a) The Redeveloper releases from mId covenants and agrees that the Authority and the City and the governing body members, officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify and hold harmless the Authority and the City and the governing body members, officers, agents, servants and employees thereof against any loss or dmnage to Redevelopment Property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements, except for any such damages or injuries directly related to the gross negligence of the Authority or the City. (b) Except for any willful or negligent misrepresentation or any willful or wanton misconduct or negligence of the following named parties, the Redeveloper agrees to protect and defend the Authority and the City and the governing body members, officers, agents, servants and employees thereof (the "Indemnified Pmties"), now or forever, and further agrees to hold the Indemnified Pmties harmless from any claim, demand, suit, action or other proceeding 324344v3 SJB CL205-43 17 whatsoever by any person or entity whatsoever ansmg or purportedly ansmg from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation ofthe Minimum Improvements. (c) Except for any negligence of the Indemnified Parties (as defined in clause (b) above), and except for any breach by any of the Indemnified Parties of their obligations under this Agreement, the Indemnified Parties shall not be liable for any damage or injury to the persons or Redevelopment Property of the Redeveloper or its officers, agents, servants or employees or any other person who may be about the Minimum Improvements or Public Improvements due to any act of negligence of any person. (d) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the individual capacity thereof. 324344v3 SJlJ CL205-43 18 ARTICLE IX Events of Default Section 9.1. Events of Default Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement, anyone or more of the following events, after the non-defaulting party provides 30 days written notice to the defaulting party of the event, but only if the event has not been cured within said 30 days or, if the event is by its nature incurable within 30 days, the defaulting patty does not, within such 30-day period, provide assurances reasonably satisfactory to the patty providing notice of default that the event will be cured and will be cured as soon as reasonably possible: (a) Failure by the Redeveloper or the Authority to observe or perform any material covenant, condition, obligation, or agreement on its pm to be observed or performed under this Agreement; (b) The Redeveloper: (i) files any petition in bankruptcy or for atlY reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act or under any similar federal or State law; (ii) makes an assignment for benefit of its creditors; (iii) admits in writing its inability to pay its debts generally as they become due; (iv) is adjudicated a bankrupt or insolvent; (v) attempts a Transfer without complying with the requirements of Article VIII of this Agreement Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the non-defaulting patty may exercise its rights under this Section 9.2 after providing thirty days written notice to the defaulting party of the Event of Default, but only if the Event of Default has not been cured within said thitty days or, if the Event of Default is by its nature incurable within thirty days, the defaulting patty does not provide assurances reasonably satisfactory to the non-defaulting party that the Event of Default will be cured and will be cured as soon as reasonably possible: (a) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. 324344v3 sm CL205-43 19 Section 9.3. No Remedv Exclusive. No remedy herein conferred upon or reserved to the Authority or Redeveloper is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article IX. Section 9.4. No Additional Waiver Implied bv One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 9.5. Attornev Fees. Whenever any Event of Default occurs and if the Authority or Redeveloper shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on the patt of the Redeveloper or Authority under this Agreement, the non-prevailing patty in any such action agrees that it shall, within 10 days of written demand by the prevailing party, pay to the prevailing party the reasonable fees of such attorneys and such other reasonable expenses so incurred. 324344v3 SJB CL205-43 20 ARTICLE X Additional Provisions Section 10.1. Conflict of Interest: Authoritv Representatives Not Individuallv Liable. The Authority and the Redeveloper, to the best of their respective knowledge, represent and agree that no member, official, or employee of the Authority shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official, or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of the Agreement. Section 10.2. Equal Emplovment OpPOliunitv. The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in the Agreement it will comply with all applicable federal, state and local equal employment and non-discrimination laws and regulations. Section 10.3. Restrictions on Use. The Redeveloper agrees that until the Termination Date, the Redeveloper, and such successors and assigns, shall devote the Redevelopment Propeliy to, the operation of the Minimum Improvements for uses described in the definition of such term in this Agreement, and shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Redevelopment Propeliy or any improvements erected or to be erected thereon, or any part thereof. Section 10.4. Provisions Not Merged With Deed. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Redevelopment Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of the Agreement are inselied for convenience of reference only and shall be disregarded in constming or interpreting any of its provisions. Section 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally; and (a) in the case ofthe Redeveloper, is addressed to or delivered personally to the Redeveloper at 15 South Fifth Street, Suite 710, Minneapolis, MN 55402, Attn: President; and 324344v3 SJB CL20S-43 21 (b) in the case of the Authority, is addressed to or delivered personally to the Authority at 590 - 40th Avenue NE, Columbia Heights, Minnesota 55421, Attn: Executive Director; or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in this Section. Section 10.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instmment. Section 10.8. Recording. The Authority may record this Agreement and any amendments thereto with the Anoka County recorder. The Redeveloper shall pay all costs for recording. Section 10.9. Amendment. This Agreement may be amended only by written agreement approved by the Authority and the Redeveloper. Section 10.1 O. Authoritv or Citv Annrovals. Unless otherwise specified, any approval required by the Authority under this Agreement may be given by the Authority Representative. Section 10.11. Termination. This Agreement terminates on the Tennination Date, except that termination of the Agreement does not terminate, limit or affect the rights of any party that arises before the Terminated Date, or as otherwise provided herein. 324344v3 8m CL205-43 22 IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Redeveloper has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President-Gary L. Peterson By Its Executive Director-Walter R. Fehst STATE OF MINNESOTA ) ) ss. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this _ day of 2007, by and , the President and Executive Director of the Columbia Heights Economic Development Authority, a public body politic and corporate, on behalf of the Authority. Notary Public 324344v3 SJB CL205-43 8-1 GREATER METROPOLITAN HOUSING CORPORATION By Its STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of , 2007 by , the of the Greater Metropolitan Housing Corporation, a Minnesota non-profit corporation, on behalf of the corporation. Notary Public 324344v3 SJB CL205-43 8-2 EXHIBIT A Legal Description of Redevelopment Property Lots 19 and 20, Block 71, Columbia Heights Annex to Minneapolis, Anoka County B-1 EXHIBIT B t Materials for Redevelo , B-1 -~~i..... .....\;:; .' ''6#::;'' . g,':~ GREATER METROPOLITAN HOUSING CORPORATION - Twin Cities 15 South Fifth Street. Suite 710. Minneapolis, MN 55402 phone: (612) 339.0601. fex: 612-339-0608 e-mail: bbuelow@qmmhc.ora . website: www.9mhctc.org BUILDING FEATURES: . 1,650 Finished S.F on the 1" and 2nd Floors . 3 Bedroom . 2 and 14 Bathrooms . Master suite wI walk-In closet and master-bathroom . Full Basement... Poured Concrete Foundatlon....832 S.F. . 2 Basement Egress Windows and FuU Bathroom Rough-In, Ready for finish! . Formlll Dining Room . Large Kitchen . Oak Cabinets . Kitchen AppUances . Oak Interior Doors and Oak Millwork . Ceramic Floors and Tub Surround In Bathrooms . High Efficiency Mechanical System o 90% + Efficient Furnace o AIr-to-AIr Exchanger o Central AIr-Conditioning o Direct-Vent Water Heater o Programmable Thermostat . Large Front Porch . Low Maintenance Exterior o Vinyl Siding o Pre-Finished Aluminum Soffits, Facia, and Trim o Vinyl Doubl~Hung Windows o Aluminum Gutters and Down Spouts . Large Two-Car Detached Garage with additional parking space . Landscaping includes front bushes and new sod on the entire site. . SALES PRICE.....$ 235,000 ! B-2 :c: ~ r ~ ~ 5 -i CIl ;:Y =1 )> z WEST PROPliRT'( llHl!.~40.o i I ~ ~ ..' ~ ~ CIl iil ~ [ll lil ~ 1:7 ~ I i ~ i ~ II 22'f ! q~ ,_~ ~i i , fuu~~'fun~~.i l ! ~ . i : :: I ,........:.....m................! """'""'" ,..v.""" EASTPRClf'!RTYl'lE..AO.G ..... D ; , ~ ; I g II I 3 ~ In II ..... if = I I ~ ~ ALlEY ~ 2ND STREET NE kW - I-'~ WESTPR~TVUMf_40'O I ~ ~ % ... I ~ . . r... Iii II U I I I ~ " "'" . ! qe . "'I =s ! qli ~ ..__.._.~~.u_.. . , , ! ! ! i : =" l EASTPROf'ERiYUfE...4Ul B-3 EXHIBIT C CERTIFICATE OF COMPLETION The undersigned hereby certifies that Greater Metropolitan Housing Corporation (the "Redeveloper") has fully complied with its obligations under Articles III and IV of that document titled "Contract for Private Redevelopment," dated November 28, 2006 between the Columbia Heights Economic Development Authority and the Redeveloper (the "Contract"), with respect to construction of the Minimum Improvements in accordance with the Construction Plans, and that the Redeveloper is released and forever discharged from its obligations to construct the Minimum Improvements under A11icles III and IV. Dated: ,2007 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President-Gary L. Peterson By Its Executive Director-Walter R. Fehst STATE OF MINNESOTA ) ) ss. COUNTY OF ANOKA ) On this day of , 2007, before me, a Notary Public within and for said County, personally appeared , to me personally known, who, being by me duly sworn, did say that (s)he is the President of the Authority named in the foregoing instrument; that the seal affixed to said instrument is the seal of said Authority; that said instrument was signed and sealed in behalf of said Authority by authority of its governing body; and said acknowledged said instrument to be the free act and deed of said Authority. Notary Public C-l STATE OF MINNESOTA ) ) ss. COUNTYOFANOKA ) On this _ day of , 2007, before me, a Notary Public within and for said County, personally appeared , to me personally known, who, being by me duly sworn, did say that (s)he is the Executive Director of the Authority named in the foregoing instrument; that the seal affixed to said instrument is the seal of said Authority; that said instrument was signed and sealed in behalf of said Authority by authority of its governing body; and said acknowledged said instrument to be the free act and deed of said Authority. Notary Public This instrument was drafted by: Kennedy & Graven, Chattered 470 US Bank Plaza 200 South Sixth Street Minneapolis, Minnesota 55402 C-2 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meetina of November 27, 2007 EXECUTIVE AGENDA SECTION: Business Items ORIGDEPARTMENT DIRECTOR NO.5 Community Development APPROVAL BY: ITEM: Adopt Resolution 2007-27, Consultant BY: Kirsten Partenheimer Services Agreement with the Greater DATE: November 16, 2007 Metropolitan Housing Corporation (GMHC) BACKGROUND: Since 2002, the EDA has partnered with the Greater Metropolitan Housing Corporation (GMHC) and its HousingResource Center to provide the residents of Columbia Heights with a variety of housing services to help maintain and improve their homes. The services provided are of great value to residents, as they have access through the organization to information on such issues as home rehabilitation or mortgage foreclosure prevention, and can receive construction consultation services. In addition, residents can access home rehabilitation funds through MHFA Fix-Up Fund loan, the City's Rehab Incentive Fund or the City's new Single-Family Home Deferred Loan Program. The complete list of services is listed in section i. Scope of Services in the attached Consultant Services Agreement. Staff recommends the EDA enter into an agreement with the HousingResource Center at a cost of $15,000 for the year 2008. The $15,000 annual fee gives residents access at no cost to the services of GMHC's HousingResource Center, where they can receive information on nearly any topic related to housing and construction consultation, as well as apply for GMHC-administered programs, such as the Fix-Up Fund, the Columbia Heights Rehab Incentive Program or the new Single-Family Home Deferred Loan Program. Funding is available from Fund 207 - Housing Maintenance Fund. The Consultant Services Agreement begins 1/1/2008 and ends 12/31/2008 and can be terminated by either party with 30 days' notices. See attached agreement for further details. Suzanne Snyder, Housing Resources Coordinator, will be present at the November 27 meeting to answer questions. RECOMMENDATION: Staff recommends Adoption of Resolution 2007-27 approving the 2008 Consultant Services Agreement with the Greater Metropolitan Housing Corporation (GMHC), and appropriating $15,000 from Fund 207 - Housing Maintenance Fund for the same. RECOMMENDED MOTION: Move to Adopt Resolution 2007-27, a Resolution approving the 2008 Consultant Services Agreement with the Greater Metropolitan Housing Corporation (GMHC), and appropriating $15,000 from Fund 207 - Housing Maintenance Fund for the same; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Attachments EDA ACTION: EDA RESOLUTION NO. 2007-27 A RESOLUTION APPROVING THE 2008 CONSULTANT SERVICES AGREEMENT WITH THE GREATER METROPOLITAN HOUSING CORPORATION (GMHC) AND APPROPRIATING $15,000 FROM FUND 207 - HOUSING MAINTENANCE FUND FOR THE SAME. WHEREAS, the Greater Metropolitan Housing Corporation (GMHC) has agreed to provide consulting services. WHEREAS, the Columbia Heights Economic Development Authority through its Comprehensive Plan has established as a goal the preservation of the single-family housing stock. WHEREAS, the Greater Metropolitan Housing Corporation has provided housing preservation services since 2002. WHEREAS, the residents have found these services to be a significant assistance to help preserve and maintain their homes. THEREFORE, BE IT RESOLVED, that the EDA approves the 2008 Consultant Services Agreement with the Greater Metropolitan Housing Corporation and appropriates $15,000 from Fund 207 - Housing Maintenance Fund for the same. Passed this 2ih day of November, 2007 Offered by: Seconded by: Roll Call: Gary L. Peterson, President Walter R. Fehst, Executive Director CONSULTANT SERVICES AGREEMENT THIS IS AN AGREEMENT entered into the day of , 2007, by and between the Columbia Heights Economic Development Authority hereinafter referred to as the EDA, and the Greater Metropolitan Housing Corporation (GMHC), a nonprofit corporation organized and existing under the laws of the State of Minnesota, hereinafter referred to as the Consultant. WITNESSETH: WHEREAS, the Columbia Heights Economic Development Authority desires to hire the Consultant to render certain technical, professional, and marketing assistance in connection with such undertakings of the EDA. NOW THEREFORE, the parties hereto do mutually agree as follows: I. Scope of Services. The Consultant shall provide technical rehabilitation advisory services, loan administration and fundraising for the Programs as follows: A. Provide HousingResource Center™ services, as directed by the EDA, to residents of the City of Columbia Heights out of its Northeast office with scheduled visits to residences when needed and providing staff at City Hall as needed. These services include the following: 1. Administer home improvement programs including the MHFA Fix Up Fund, Community Fix Up Fund, the MHFA Rental Rehab program and the MHFA Rehabilitation Loan Program; 2. Provide construction management services including home inspections to homeowners considering rehabilitation, preparing scopes of work, educating homeowners on the construction bid process, evaluating bids and work completed to ensure quality and cost effective renovations and monitoring the construction process; 3. Provide housing information to residents including information on emergency assistance, housing rehabilitation, first time homebuyers and limited rental information; 4. Assist the EDA in developing programs to purchase and rehabilitate homes. II. Term. This Agreement shall be effective from January 1,2008 and shall continue through December 31, 2008. This Agreement can be terminated by either party with a 30-day notice. If terminated by either party, the EDA shall pay a prorated share of the $15,000 for services rendered as of the date of termination. III. Compensation. The fee for service by the Consultant will be $15,000. Payment of such fee shall be made by invoice from GMHC. IV. Insurance. During the term of this Agreement, the Consultant shall obtain and maintain workers compensation, comprehensive general liability, and automobile liability insurance. Comprehensive general liability insurance shall have an aggregate limit of $2,000,000. Upon request by the EDA, the Consultant shall provide a certificate or certificates of insurance relating to the insurance required. V. Indemnification. Each party shall indemnify and hold harmless the other party and it's officials, agents, and employees from any loss, claim, liability, and expense (including reasonable attorney's fees and expenses of litigation) arising out of any action of such parties in the performance of this Contract. VI. Assiqnment. This Agreement shall not be assigned, sublet, or transferred without the written consent of the EDA. VII. Conflict of Interest. The Consultant agrees to immediately alert the Executive Director of possible contractual conflicts of interest in representing the EDA, as well as property owners or developers on the same project. Conflicts of interest may be grounds for termination of this Agreement. THIS AGREEMENT was adopted by the Columbia Heights Economic Development Authority on the _ day of , 2007. ATTEST: Columbia Heights Economic Development Authority Its President - Gary L. Peterson Its Executive Director- Walter R. Fehst THIS AGREEMENT was accepted by Greater Metropolitan Housing Corporation on the day _of ,2007. WITNESSES: GREATER METROPOLITAN HOUSING CORPORATION, a nonprofit Minnesota corporation Its President COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Meetina of November 27,2007 AGENDA SECTION: Business Items ORIGINATING DEPARTMENT: EXECUTIVE NO: 6 Community Development DIRECTOR APPROVAL ITEM: Adopt Resolution 2007-28, Approving funding BY: Kirsten Partenheimer BY: for the Rehab I ncentive Program and the DATE: November 16, 2007 Single-Family Home Deferred Loan Program (SFHD). Introduction Staff requests that the Columbia Heights Economic Development Authority (EDA) authorize $45,1370f funding for the Columbia Heights Rehab Incentive Program and $30,643 for the new Single-Family Home Deferred Loan Program (SFHD). Both programs are included in the Housing Maintenance Plan 2008 - 2017, approved by the EDA on August 18, 2007. The Greater Metropolitan Housing Corporation (GMHC) administers the programs for the City and will continue to do so. Suzanne Snyder of GMHC will be available at the November 27,2007 EDA meeting to answer questions. Rehab Incentive Program The Columbia Heights Rehab Incentive Program is designed to assist homeowners in the City in maintaining and improving their homes by providing a rebate to homeowners after an improvement has been completed. The upgrades foster a stabilization and revitalization of the City's housing stock. Homeowners of single- family or owner-occupied duplexes with a household income at 115% of the area median income or less are eligible to apply. Calculated as a percentage of total construction costs, a rebate payment of 10%, 12% or 15% may be granted, up to $3,000. Examples of eligible improvements include repairing or replacing dilapidated porches, roofs, retaining walls, siding, exterior steps or railings and heating, plumbing or electrical systems. Single-Family Home Deferred Loan Program (SFHD) The purpose of the Single-Family Home Deferred Loan Program (SFHD) is to provide no- or low-interest loans to homeowners of lower income to complete structural improvements that would help maintain the quality of their homes and the City's housing stock. Assistance is targeted at homeowners who need to perform home maintenance, but who may not be able to pay a monthly debt service of a conventional loan. The SFHD would provide half of the total project costs, or up to $7,500, in a deferred loan to homeowners making 80% of the median area income or less. To qualify for the program, the homeowner must provide matching funds for the remaining project costs. Home equity loans or an MHFA loan qualify as matching funds. Exterior home improvements related to health and safety, code violations or energy efficiency, such as windows, siding and roofs would be eligible. Repayment of the loan, plus simple interest of two percent, will be required upon sale of the house or transfer of title. The homeowner can use the proceeds from the sale of the house to pay the loan. Repaid loans will be returned to the funds available to finance future loans. A lien applied to the property by Anoka County ensures that the loan will be repaid. Recommendation: Staff recommends the EDA fund the Rehabilitation Incentive Program in the amount of $45,137 and the Single-Family Home Deferred Loan in the amount of $30,643 from Fund 207 - Housing Maintenance Programs. Recommended Motion: Move to Adopt Resolution 2007 -28, a Resolution Approving funding for the Rehab Incentive Program in the amount of $45,137 and the Single-Family Home Deferred Loan Program in the amount of $30,643 to the Greater Metropolitan Housing Corporation (GMHC) from Fund 207 - Housing Maintenance Proarams. EDA ACTION: EDA RESOLUTION NO. 2007-28 A RESOLUTION APPROVING FUNDING FOR THE REHAB INCENTIVE PROGRAM ($45,137) AND THE SINGLE-FAMILY HOME DEFERRED LOAN PROGRAM (SFHD) ($30,643) TO THE GREATER METROPOLITAN HOUSING CORPORATION (GMHC) WHEREAS, the Columbia Heights Economic Development Authority (EDA) through its Comprehensive Plan has established as a goal the preservation of the single-family housing stock. WHEREAS, the EDA approved the Housing Maintenance Plan 2008-2017 to improve and maintain the residential homestead housing stock. WHEREAS, the Greater Metropolitan Housing Corporation has agreed to provide consulting services. WHEREAS, the Greater Metropolitan Housing Corporation has provided housing preservation services since 2002. THEREFORE, BE IT RESOLVED, that the EDA allocates $45,137 for the Rehab Incentive Program and $30,643 for the Single-Family Home Deferred Loan Program to the Greater metropolitan Housing Corporation from Fund 207 - Housing Maintenance Programs. Passed this day of ,2007. Offered by: Seconded by: RollCall: Gary 1. Peterson, President Walter R. Fehst, Executive Director AGREEMENT Sin2:le-Familv Home Deferred Loan Pro2:ram A. Parties. This agreement is entered into between the Economic Development Authority ("EDA") and the Greater Metropolitan I-lousing Corporation ("GMHC"). B. Program Title. This agreement is in regards to the Single-Family Home Deferred Loan Program administered for the EDA by GMHC at the Northeast Housing Resource Center. c. Program Outline. 1. Objective. Encourage reinvestment in the City's owner-occupied housing stock. 2. Goal. Assist with improvements to a minimum of four houses (maximum loan to be $7,500). 3. Eligibility. a. Type of Property. The following property types are eligible: o Owner-occupied, single-family homes in the City of Columbia Heights, including owner-occupied townhouses. o Two-family dwellings in the City of Columbia Heights, provided that (I) the owner occupies one of the units and the property is homesteaded according to the Anoka County Assessor, (2) the rental unit has a current rental license from the City of Columbia Heights and (3) the use of the property as a two- family dwelling is listed as a permitted use in the zoning district in which it is located. Before approving such a request, GMHC staff shall contact City staff to ensure that these requirements have been met. Rental property is not eligible, except for the aforementioned qualifying two- family dwellings subject to pre-approval by City staff. b. Household Income. Eligibility will be based on household income as a percentage of the regional median income. Households with a combined income at 80% of the regional median income or less are eligible. In the case of qualifying two-family dwellings, eligibility will be based on the household income of the owner occupant. Households with incomes over 80% of the regional median income are ineligible. Page 1013 c. Type of Expenditures. Materials and labor expenditures related to exterior renovations (roofing, siding, windows and doors) are considered eligible expenditures, except for do-it-yourself projects, in which case, only materials costs are eligible expenditures. d. Eligible Projects. Exterior doors, windows, exterior steps and railings, exterior painting, fences, garages, porch/ramps/decks, retaining walls, roof, stucco/siding, and the like. General remodeling projects that make physical improvement to the exterior stmcture or property are eligible. e. Ineligible Projects. Single-Family Home Deferred Loan Program loans may not be administered for the payment of water, sewer and road assessments. 4. Funding. Funds shall be disbursed on a first-come, first-served basis ending whenever EDA funds have been expended. The maximum EDA expenditure during the term of this agreement shall be $30,643. S. Loan Amount. Depending on household income (see "Eligibility" above), a household may receive a loan for half the total improvement cost, up to $7,500. Applicant must meet all requirements established by GMHC and EDA, including submittal of proof of payment and satisfactory completion of work including final inspection as verified by GMHC with the City's Building Official. An application must be made to and approved by GMHC before costs are incuned and work begins. 6. Loan Repayment. Loan to be repaid, with two percent (2%) simple interest upon the sale of the propelty or title transfer. 7. Disbursement of Funds. GMHC will request an advance from the City of $30,643 once the contract has been signed. GMHC shall provide to the EDA copies of any audit repOlts and financial management reports that include funds disbursed under this agreement. 8. Records Retention and Availability. GMHC shall retain all records and files relating to EDA funded projects for no less than 6 years from the date of expenditure. EDA retains the right to inspect or audit all records relating to Columbia Heights projects and the associated funding. Upon proper notice, the EDA or its delegate (City Auditors, State Auditor, etc.) can review and inspect all records. 9. Qualification in Conjunction with Other Rehabilitation Programs. An applicant of the Single-Family Home Deferred Loan Program may also apply for a rebate from the Rehab Incentive Program and for MHF A loans. Page 2 013 D. Signatures. For Economic Development Authoritv of the City of Columbia Heil!hts: Name: Walter R. Fehst Title: Executive Director Signature Name: Gary L. Peterson Title: President Signature Date Date For Greater Metropolitan Housiul! Corporation: Name: Carolyn E. Olson Title: President Signature Date Page 3 013 AGREEMENT Rehab Incentive Rebate Pro2:ram A. Parties. This agreement is entered into between the Columbia Heights Economic Development Authority ("EDA") and the Greater Metropolitan Housing Corporation ("GMHC"). B. Program Title. This agreement is in regards to the Rehab Incentive Rebate administered for the EDA by GMHC at the Northeast I-lousing Resource Center. C. Program Outline. 1. Objective. Encourage reinvestment in the City's owner-occupied housing stock. 2. Goal. Assist with improvements to approximately 40 houses (average rebate estimated to be approximately $1,125). 3. Eligibility. a. Type of Property. The following property types are eligible: o Owner-occupied, single-family homes in the City of Columbia Heights, including owner-occupied townhouses. o Two-family dwellings in the City of Columbia Heights, provided that (I) the owner occupies one of the units and the prope11y is homesteaded according to the Anoka County Assessor, (2) the rental unit has a CUITent rental license from the City of Columbia Heights and (3) the use of the property as a two- family dwelling is listed as a permitted use in the zoning district in which it is located. Before approving such a request, GMHC staff shall contact City staff to ensure that these requirements have been met. Rental property is not eligible, except for the aforementioned qualifying two- family dwellings subject to pre-approval by City staff. b. Household Income. Eligibility will be based on household income as a percentage of the regional median income. In the case of qualifying two-family dwellings, eligibility will be based on the household income of the owner occupant. Eligibility shall be based on income as follows: Page 1013 15% rebate: Households with incomes up to 50% of the regional median Income 12% rebate Households with incomes between 51 % and 80% of the regional median income. 10% rebate: Households with incomes between 81 % and 115% of the regional median income. Households with incomes over 115% of the regional median income are ineligible. c. Type of Expenditures. Materials and labor expenditures for mechanical, plumbing, electrical, exterior (roofing, siding, windows and doors), general remodeling and additions are considered to be eligible expenditures, except for do-it-yourself projects, in which case, only materials costs are eligible expenditures. d. Eligible Projects. Kitchen and bath remodel, exterior and interior doors, windows, exterior steps and railings, exterior and interior painting, fences, garages, heating/ plumbing/electrical, porch/ramps/decks, retaining walls, roof, stucco/siding, and the like. General remodeling projects that make physical improvement to the structure or property are eligible. 4. Funding. Funds shall be disbursed on a first-come, first-served basis ending whenever EDA funds have been expended. The maximum EDA expenditure during the term of this agreement shall be $45,137. 5. Amount of Rebate. Depending on household income (see "Eligibility" above), 10%, 12% or 15% of eligible expenditures, not to exceed $3,000 per property. Rebate to be paid upon fulfillment of all requirements established by GMHC and EDA including submittal of proof of payment and satisfactory completion of work including final inspection as verified by GMHC with the City's Building Official. Rebates are not retroactive; an application must be made to and approved by GMHC before costs are incuned and work begins. 6. Disbursement of Funds. GMHC will request an advance from the EDA of$45,137 once the contract has been signed. GMHC shall provide to EDA copies of any audit reports and financial management reports that include funds disbursed under this agreement. 8. Records Retention and Availability. GMHC shall retain all records and files relating to EDA funded projects for no less than 6 years from the date of expenditure. EDA retains the right to inspect or audit all records relating to Columbia Heights projects and the associated funding. Upon proper notice, the EDA or its delegate (City Auditors, State Auditor, etc.) can review and inspect all records. Page 2 013 D. Signatures. For: Economic Development Authority of the City of Columbia Heights: Name: Walter R. Fehst Title: Executive Director Signature Name: Gary L. Peterson Title: President Signature Date Date For: Greater Metropolitan Housing Corporation: Name: Carolyn E. Olson Title: President Signature Date Page 3 of 3