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HomeMy WebLinkAboutEDA MIN 02-23-10ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE REGULAR MEETING February 23, 2010 The meeting was called to order at 7:00 pm by President-Gary Peterson. Members Present: Bruce Nawrocki, Marlaine Szurek, Tammera Diehm, Gary Peterson, Gerry Herringer, Bobby Williams, and Bruce Kelzenberg. Staff Present: Scott Clark, Sheila Cartney, and Shelley Hanson. Also present were: Clark Gassen, Jack Boarman and Gretchen Camp from BKV, and Steve Bubul- EDA attorney from Kennedy & Graven. 2. PLEDGE OF ALLEGIANCE- RECITED 3. ELECTION OF OFFICERS- Motion by Diehm, seconded by Williams, to cast a unanimous ballot nominating and appointing Gary Peterson Chair, Marlaine Szurek for Vice Chair, and Bruce Kelzenberg for Secretary/Treasurer. All ayes. MOTION PASSED. 4. CONSENT AGENDA 1. Approve the Minutes of November 24th and December 2nd, 2009. 2. Approve the Financial Report and Payment of Bills for November and December 2009, and January 2010 per Resolution 2010-01 Questions from members: Nawrocki questioned several expenses from the November-January Reports as follows: *Asked what the payment to Google was for-Staff checked into this expense and found it is the department's share of the City's Anti-Spam Service. *Check to Cartney was for mileage/parking reimbursements. *$5,300 check to Carlson Co-was for Huset Park III expenses that will be reimbursed by Shafer Richardson. *Check to Clark for $42.40 was for mileage reimbursement. *$8,500 check to Carlson Co. was for Phase III for RAP Plan that will be reimbursed by Shafer Richardson. *$1,300 check to Carlson Co.was for conceptual RAP Plan for 39th and Central Ave. project. This is a preliminary action plan that will be submitted to the PCA for the Mady's site, Heights Rental site, and the Burger King site, that will save time when that site is redeveloped in the future. *Check to TMS was for demolition of one of the scattered site homes. *Checks to Tim Sullivan and Fadia Salem were for Planning Case refunds. Nawrocki asked about the contract with Carlson Company and the amount authorized for payment to them. Clark explained that there isn't a contract in place for a certain amount. Based on past practice, Carlson bills us, and we in turn bill the developers for reimbursement. It was set up this way as we received funding from grants for some of the analysis and clean up costs for these sites. Most of the bills are for soils tests and reports, removal of wells, and RAP Plan for the PCA. EDA MINUTES PAGE 2 FEBRUARY 23, 2010 3. Approve Consulting Services Agreement with GMHC The EDA has partnered with the Greater Metropolitan Housing Corp (GMHC) and its Housing Resource Center since 2002 to provide our residents with a variety of housing services. Services include information on home rehabilitation and construction consultation services, as well as loan and grant programs available. Staff recommends the EDA enter into an agreement with GMHC/Housing Resource Center at a cost of $15,000 for the year 2010. Funding is available from Fund 408- Housing Maintenance Fund. Questions from members: Nawrocki asked if anything had been done with the property at 38th and 2"d Street. Clark told him that nothing has been built to date. He said the e~tended agreement calls for construction to begin by May and for it to be completed by December 2010. Nawrocki then asked staff to check to ensure GMHC has the proper insurance per the Administrative Agreement. Motion by Nawrocki, seconded by Williams, to waive the Reading of Resolution 2010-01 and 2010-02, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Nawrocki, seconded by Williams, to approve the Minutes from November 24tn and December 2, 2009; and to adopt Resolutions 2010-01, approving the Financial Report and payment of bills for November and December 2009 and January 2010; Resolution 2010-02 approving the Consulting Services Agreement with GMHC, and appropriating $15,000 from Fund 408-EDA Housing Maintenance for the same; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. MOTION PASSED. EDA RESOLUTION 2010-O1 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR NOVEMBER AND DECEMBER 2009 AND JANUARY 2010 AND PAYMENT OF BILLS FOR THE MONTHS OF NOVEMBER AND DECEMBER 2009, AND JANUARY 2010. 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 EDA MINUTES PAGE 3 FEBRUARY 23, 2010 WHEREAS, the financial statement for the months of November and December 2009 and January 2010 and the list of bills for the months of November and December 2009, and January 2010 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 23rd day of February, 2010. MOTION BY: Nawrocki SECONDED BY: Williams AYES: All ayes Attest by: President Shelley Hanson, Recording Secretary EDA RESOLUTION NO. 2010-02 A RESOLUTION APPROVING THE 2010 CONSULTANT SERVICES AGREEMENT WITH THE GREATER METROPOLITAN HOUSING CORPORATION (GMHC) AND APPROPRIATING $15,000 FROM FUND 408 - EDA 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. EDA MINUTES PAGE 4 FEBRUARY 23, 2010 THEREFORE, BE IT RESOLVED, that the EDA approves the 2010 Consultant Services Agreement with the Greater Metropolitan Housing Corporation and appropriates $15,000 from Fund 408 - EDA Housing Maintenance Fund for the same. Passed this 23rd day of February, 2010 Offered by: Nawrocki Seconded by: Williams Roll Call: All ayes President Walter R. Fehst, Executive Director 5. BUSINESS ITEMS 1. Fourth Amendment to Development Agreement for Grand Central Lofts-Resolution 2010-03 Clark gave the background of the original Grand Central Lofts project that began in 2003. It was envisioned to include a three phased condo project, townhomes, and new commercial development by one developer that would take about four years to complete. The City's participation included: 1) Issuance of a$700,000 tax increment note to the Developer based on completion 2) A potential second tax increment note for the commercial development and 3) A policy understanding that after construction of Phase I, no new construction could occur until a sewer expansion was completed on Central Avenue, and that obligation rested with the Housing Developer. (The expansion of the sewer was amended by means of a new Agreement that shifted the burden to the Commercial Developer, although that Agreement is now in default). Since 2003 many events have occurred that made this project falter: Phase I of the condos did not sell well (29 of the 67 units are currently sold), the sale of the project to a new developer, the commercial piece being sold to a separate developer in 2007, and the commercial developer not being able to lease and finance the project. Other factors included the collapse of residential markets and a world wide recession, and most recently, the housing developer looking at amending the Agreement to allow rental buildings, rather than condos for Phase II and III. Staff believes the objectives of the original agreement would be hard to achieve, especially given the fact, that multiple developers are now involved. Staff views that the primary objective is to get the site ready for the ne~t development phase, and therefore, proposes a major change to the original agreement. The proposal is to have the City construct and for the EDA to pay for the expanded sewer line on Central Avenue, and in exchange, the Housing Developer forfeits any and all rights to the $700,000 TIF note. To clarify, the EDA would use TIF funds to construct the sanitary sewer expansion instead of paying the Housing Developer for past eligible TIF costs. EDA MINUTES PAGE 5 FEBRUARY 23, 2010 The net effect would be to remove the Housing Developer from receiving TIF (the EDA retains the rights to use the TIF for the eligible public improvement), which would result in the EDA's control over this site being effectively removed since the Housing Developer would no longer receive assistance. The City's primary control for future development on the site would happen through the land use permitting process. If the amendment is approved by the EDA, it would be implemented regardless of the final outcome of the rental project as these are two separate issues. Clark then explained the proposed funding for this project. He recommends using cash funds that were derived from "non-obligated Sewer Access Charge credits" and TIF funds from District T4 which would cover the cost of the projected sewer expansion. Clark then went on to explain the benefits to "exchange" the TIF note obligation for the obligation to construct the sewer expansion for Central Avenue. The following was noted: 1) Cost and liability of paying off the Housing Developer's TIF note is estimated to be $820,000. The cost of the pipe expansion is estimated to be $625,000 equating to $195,000 of reduced TIF expenditure from the District. 2) If the City uses the SAC cash account of $120,000 this will reduce the TIF expenditure by the same amount (resulting in $505,000 of TIF funds being used). This reduces the future obligation of the TIF District from the $820,000 TIF note estimate to $505,000 for the expansion pipe, which is a$315,000 reduction in obligations. 3) And several Engineering improvements as outlined in a memo from the Public Works Director dated February 18, 2010. Clark stated that staff recommends approval of the Fourth Amendment as written, including use of the non-obligated SAC credit fees as a source of financing. He told members by approving this plan, the City would not have to bond for this project. Questions from members: Nawrocki asked why the sewer expansion was needed. Clark told him the sewer system is at 100% capacity in that area. It was part of the original development agreement that the sewer needs to be expanded before any more construction could be done after the construction of Phase 1 of the condos, including any additional townhouses. Nawrocki then asked why the burden of paying for this expansion was shifted to the Commercial Developer. Clark explained that originally we had one developer for the entire site. After Dave Klober took over as owner he sold off the commercial site to another developer. After that the EDA entered into a formal agreement with the new commercial developer and transferred responsibility for the sewer expansion to the new owner. Since that agreement is now in default, the pipe bursting obligation falls back to the original housing developer. EDA MINUTES PAGE 6 FEBRUARY 23, 2010 Herringer asked if Ehteshim Khoratty has fee title to the commercial piece. Clark said as far as the City knows, he does. Steve Bubul, legal counsel for the EDA, stated that the TIF generated from Phase I will pay for this pipe expansion as detailed in the proposal. It was noted that so far a$650,000 fund balance has been generated, and in addition the EDA capitalized the future revenue stream in order to secure $580,000 in bonding proceeds to be used in the Sheffield Area Development. Nawrocki asked what the terms were for the Bond. Clark responded that he did not know the specific time, but estimated it to be approximately 6 years. Clark explained that originally $700,000 of TIF revenue would have gone back to the developer to cover qualified costs if all requirements of the Agreement were done. These requirements have not been done to date. The plan being considered currently would improve the public utilities by using a portion of these funds and would benefit this area of Central Avenue, as well as any future development that may occur on this site. Herringer commented that this development hasn't actually cost the City much and has generated a tax base that has paid back the TIF. He then asked whether spending the SAC credits now would hurt future developments, as it would take away this small incentive we could use at a later time. Clark said it wouldn't affect future development projects since the Met Council has changed the rules governing SAC credits and staff felt the credits on hand should be used for sewer related projects, such as this proposal. Peterson thought by enhancing the utilities on this site, it will help any future development of the site. He felt it was a good economic move for the City and its residents as it saves money and provides an improvement at the same time. Nawrocki asked whether this is considered a business subsidy. Bubul responded that this is the same language that was used in the original agreement and that state statute defines what is considered a subsidy. Nawrocki then asked what the administrative costs were as referenced in #5. Clark stated these would be for Attorney, Consultant and other professional services. Herringer was concerned with the language on page 2 regarding the "Housing Improvements" section. It included rental units, which he thought was premature since we haven't yet approved an amendment to the development agreement to allow the addition of rental units. He thinks this language needs to be removed for this approval. If, and when, the rental project is ever approved, the agreement will have to be amended again at that time. Diehm agreed that the "rental" language needs to be removed. Diehm questioned section 9.2 whereby our option would be limited in the event of default. Clark said that is true and any issues now would have to be handled by drawing on the Letter of Credit. He noted that as part of this agreement, since the pipe expansion is being removed as an obligation of the developer, the Letter of Credit will be reduced from approximately $400,000 to $75,000. EDA MINUTES PAGE 7 FEBRUARY 23, 2010 Diehm also wanted the language changed in Section 9.4.5 to clarify that the Minimum Improvements would still be owner occupied. This section should not address rental units as that has not yet been approved. Nawrocki stated he feels the developer should be responsible for the costs of this expansion as the original agreement was approved. He also stated he felt the consideration of changing this to allow rental buildings is a move backwards in his opinion. Clark stated that if this amendment is approved, Kevin Hansen would start the pipe expansion as soon as possible and hopes for a completion date of mid-September. Motion by Williams, seconded by Kelzenberg, to waive the reading of Resolution 2010-12, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Williams, seconded by Kelzenberg, to adopt Resolution 2010-12, approving a Fourth Amendment to Contract for Private Redevelopment between the Columbia Heights Economic Development Authority and Grand Central Properties LLC, with the changes as noted, and furthermore to authorize the EDA President and EDA Executive Director to enter into an agreement for the same. Roll Call: Ayes: Kelzenberg, Diehm, Szurek, Herringer, Williams, Peterson, Nays: Nawrocki COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2010-03 RESOLUTION APPROVING A FOURTH AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND GRAND CENTRAL PROPERTIES, LLC BE IT RESOLVED By the Board of Commissioners (the `Board") of the Columbia Heights Economic Development Authority (the "Authority") as follows: Section 1. Recitals. 1.01. The Authority and New Heights Development, LLC entered into that certain Contract for Private Redevelopment dated as of September 22, 2003, as amended by a First Amendment thereto dated April 26, 2005 and by a Second Amendment thereto dated November 22, 2005 and a Third Amendment thereto dated August 28, 2007 (the "Contract") providing for the redevelopment of certain property in the City. 1.02. New Heights Development, LLC has changed its legal name to Grand Central Properties, LLC but in all respects remains the Redeveloper under the Contract. 1.03. The Authority considered and approved a further amendment to the Contract in September, 2008, but such amendment was not executed. EDA MINUTES PAGE 8 FEBRUARY 23, 2010 1.04. The parties have determined a need to amend the Contract further, and staff has submitted to the Board a Fourth Amendment to the Contract which supersedes any prior unexecuted versions of such amendment. 1.05. The Board has reviewed the Fourth Amendment to the Contract and finds that the execution thereof and performance of the Authority's obligations thereunder are in the best interest of the City and its residents. Section 2. Authorit~~proval; Further Proceedin~s. 2.01. The Fourth Amendment to 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 Fourth Amendment to the Contract and any documents referenced therein requiring execution by the Authority, and to carry out, on behalf of the Authority its obligations thereunder. Passed this 23rd day of February 2010. Motion By: Williams Second By: Kelzenberg Ayes: Kelzenberg, Diehm, Szurek, Herringer, Williams, Peterson Nay: Nawrocki President ATTEST: Secretary 2. Discussion on Rental Proposal Clark told members that BKV Architects submitted plans in early February for review by the Planning Commission and City Council in March for a rental development at Grand Central Lofts. Staff wanted the EDA to review the plans also and give direction to the Planning Commission for their formal review. Comments by members: Jack Boarman from BKV Group showed the members the revised design plan based on feedback he has received thus far. He said they have had communication with the condo owners about the circulation of traffic on the site, and have received feedback from the Public Works Department from staff that lead to changes in the layout of the internal streets to eliminate traffic problems. He noted the Fire Department would have break-away access in the SW corner for emergencies. They have also changed the buildings to 4 story buildings with 100 units in each. The new design also creates more green space for all the residents that creates more of a sense of a small community. EDA MINUTES PAGE 9 FEBRUARY 23, 2010 There was a discussion regarding the amount of parking provided in the design and whether there could be any deviation from the requirements. The current design depicted 217 underground parking spaces in the lower level combined garage for the two buildings and 32 parking spaces at ground level. The zoning ordinance requires 1 covered parking space per bedroom. This means they need to add 49 covered spaces in order to meet the minimum requirement of 266 parking spaces. Boarman told members this is the expensive part of the project with a cost of $18,000-$20,000 per spot (which amounts to over $900,000 additional cost). Therefore, they want the most efficient use of the space as possible. Boarman also stated they want to keep as much green space around the buildings as possible. His desire was to provide one underground spot for each unit with the remaining required spaces to be outside at grade. Boarman said the options are as follows: He could keep the garage size as proposed and add more parking outside. He could reduce the number of two bedroom units which is now 33% of the units. He could try to keep the same number of two bedroom units if he would be allowed to design tandem parking spaces for the two bedroom units. He could design the garage to accommodate as many tandem spots as possible and then reduce the number of two bedroom units until the required number is met. Kelzenberg asked if they couldn't have two levels of underground parking. Boarman said they could, but it could be cost prohibitive. Boarman asked what has been the typical policy of the City in other developments. Clark said what must be remembered is that in the first rental discussions it was agreed to that the apartment plans would reflect the quality of the condo building, which included the concept that all required parking be underground. Boarman said they would accommodate that by providing as many tandem spaces as they could and then reduce the number of two bedroom units to meet the requirement. They would also plan for 20 spaces at grade for visitors. Clark questioned if both buildings would be constructed at one time. Boarman said they would construct one at a time with the garage below being constructed at the same time. Once the second building is built, they will open up the wall between the garage areas. The Community Center would be constructed along with the first building. Diehm stated this is a significant change from the owner occupied units that were originally proposed. She told the developer she thought the tour went well and that the other buildings they looked at were nicely constructed and maintained. She went on to say that in order to make a decision about this, she wants to make sure it is a viable project, and would like to see the results of a market study in order to help her make that determination. She wanted to know what protection is in place to keep this a market rate rental site. How do you keep it from becoming a subsidized housing rental project. Boarman said the City can list any stipulations it wants in the development agreement to prohibit that from happening. Clark said the City can't do that as it falls under the Federal Fair Housing Laws. He said a better way to ensure it remains market rate is to approve a plan that has amenities that will drive the rates up. Gassen said that the management companies are allowed to prohibit the use of EDA MINUTES PAGE 10 FEBRUARY 23, 2010 Section 8 vouchers. Diehm said that could vary depending on management company in control and that is something to consider. Diehm stated that our community struggles with lower property values more so than other communities. Herringer said the original plan depicted units that were 700 sf to 1,200 sf in size with a rental rate of approximately $1.20/sf. He noted the units that the group looked at on the tour were a higher value per square foot. He wanted to know what quality of construction would be sacrificed to lower it to the $1.20 target price. Boarman stated that some of the difference was in site acquisition costs, not having two level parking, no demo costs, and less brick on the e~terior. They will try to keep the inside quality the same in case it is ever converted to a condo situation. They also are pursuing a HUD Loan which will keep interest rates on their loan at a lower level than previous projects. Herringer asked them how much equity they needed to have for the HUD loan. Gassen stated they would be required to have 10% down on the project and that it would be a 40 year fixed loan that cannot be transferred for 10 years. The broker they are working with said HUD is anxious to provide a loan for a project in this area. Herringer said this project would be adding appro~mately 11% more rental to the City. He knows the City Council will be the body that decides whether or not to approve this project. He wants them to consider the following issues: 1) Would they have approved this type of project if Nedegaard had brought it in originally. 2) What if Ryland would come back and ask to build some rental units as part of their proj ect? 3) He is concerned over subsequent owners and/or managers of the property. Boarman wanted to know what their ne~t step should be and in which order they need to get their approvals done. They don't want to expend a lot of additional funds if the EDA or other commissions are not interested in the project. They need to get approval from the Planning Commission on the Site Plan first. Then the City Council will need to approve or deny the proposed project. If they approve it, then the Development Agreement would need to be changed and approved again by the EDA. Nawrocki felt we should stick with the original plan of building owner occupied housing on the site. He said the majority of the people at the public meetings were against this project. Kelzenberg and Williams said if all the requirements can be met and the design worked out to pass the approvals they would be in favor of the project. Williams thought it would help promote development of the commercial piece as well. Diehm said she is less concerned over the parking policy issue than she is from taking the leap from owner occupied to additional rental. She said the market study would provide additional information with which to make a decision. Szurek thought a market study should be done also. Boarman and Gassen said they would get one started. EDA MINUTES PAGE 11 FEBRUARY 23, 2010 3. Access and Indemnification Agreement - Twin Cities Community Land Bank Cartney told members about a new program that has been established to deal with foreclosed or abandoned properties. She explained that the National Community Stabilization Trust was created in 2008. The trust is comprised of Enterprise Community Partners, the Housing Partnership Network, the Local Initiatives Support Corporation and NeighborWorks America which have day-to-day working relationships with hundreds of local non-profit organizations and state and local governments. The Trust is working to stem the decline of neighborhoods with high concentrations of vacant, foreclosed properties. The Trust coordinates the acquisition or transfer of real estate owned (REO) properties from lenders, loan servicers, investors nationwide while working through state and local governments; to return the properties to the stock of rental and ownership housing available primarily for low-and- moderate income families. The First Look program gives local buyers early access to REO properties, which can reduce carrying costs for REO sellers. When financial institutions receive newly foreclosed properties, local buyers begin working with the Trust to determine if they are interested in acquiring the property. This occurs well before financial institutions would otherwise be ready to market properties. This allows local buyers to inspect the property and decide if they want to purchase the properties at the prices set by the financial institutions. This process benefits financial institutions: as REO sales occur more quickly, financial institutions reduce carrying and marketing costs and avoid further declines in property value, vandalism, and other risks. In turn, financial institutions are expected to pass on these savings as pricing adjustments to local Stabilization Trust users. At the local level the Trust has partnered with Twin Cities Community Land Bank to handle these properties and process. The City of Columbia Heights has the opportunity to access the First Look program. As proposed, the City will have the "first look" at any REO properties and determine our interest. If we are not interested then the ne~t look goes to GMHC and if they are not interested the ne~t look goes to Habitat for Humanity. It is set up this way because GMHC and Habitat have requested access to our city cascade. The cost of this program initially is free. The only time a fee is paid to the Trust is when we buy a property through this program. The transaction cost is $2,000, which is paid as part of the closing costs. This fee covers the Trust's administration fees. They keep an e~tensive web-based spreadsheet for each city that is part of this program. The spreadsheet is managed and updated everyday by the Trust. If we do not purchase any homes through the First Look program we do not pay anything to the trust. The EDA attorney has reviewed the agreement. Staff recommends the EDA enter into an Access and Indemnification Agreement with Twin Cities Community Land Bank in order to be part of the First Look program; further authorizing staff to participate in this program. As in any property acquisition the EDA or City Council will have to approve the purchase. Questions by members: Members thought this agreement was a good idea as it gives us the right of first refusal. After a brief discussion it was decided that Habitat for Humanity should not have a preferred spot on our first look program list. EDA MINUTES PAGE 12 FEBRUARY 23, 2010 Nawrocki asked what other closing costs would be involved when we purchase a property through this program. Cartney responded that it would be the usual closing costs that usually amount to around $900 (pro-rated taxes, title transfer). Since there is no agent involved, there is no commission being paid. The $2,000 fee is the cost to administer the program so that we can purchase properties at prices that have been reduced by 10-12% o average. Diehm stated she also wanted staff to continue promoting programs that help homeowners fix up the homes they have. Motion by Diehm, seconded by Herringer, to approve the Access and Indemnification Agreement with Twin Cities Community Land Bank as part of the First Look program; further authorizing the EDA President and Executive Director to enter into an agreement for the same. Roll Call: All ayes ACCESS AND INDEMNIFICATION AGREEMENT This ACCESS AND INDEMNIFICATION AGREEMENT ("Agreement") is made this lst day of March, 2010 ("Effective Date"), by and among TWIN CITIES COMMUNITY LAND BANK LLC, a Minnesota nonprofit limited liability company ("TCCLB") whose address is 615 First Avenue NE, Suite 410, Minneapolis, Minnesota 55413, THE CITY OF COLUMBIA HEIGHTS, a municipal corporation and political subdivision under the laws of the State of Minnesota ("City"), whose address is 590 40t'' Avenue NE, Columbia Heights, Minnesota 55421, and the COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY ("EDA"), a public body corporate and politic and political subdivision under the laws of the State of Minnesota, whose address is 590 40t'' Avenue NE, Columbia Heights, Minnesota 55421. RECITALS WHEREAS, TCCLB and certain qualified sellers consisting of lenders and servicers ("Sellers") as owners of certain foreclosed and abandoned properties located in certain economically distressed neighborhoods in the greater Minneapolis and St. Paul metropolitan area which are heavily affected by the foreclosure crisis ("Targeted Communities") are participants in the Real Estate Owned Purchase Program ("REO Purchase Program") of the National Community Stabilization Trust ("NCST"); WHEREAS, pursuant to the REO Purchase Program, TCCLB is provided with (a) a right of first offer to purchase real estate owned properties ("REO Properties") located in the Targeted Communities from Seller prior to the traditional marketing and listing for sale of such REO Properties ("First Look Program") and/or (b) a bulk aged REO Property purchase program for purchasing significant numbers of currently-listed properties (`Bulk and Aged Property Program" and collectively with the First Look Program shall be referred to as the "Program") all of which REO Properties are located in the Targeted Communities; WHEREAS, the certain Program guidelines and agreements ("Program Guidelines") agreed to by TCCLB and by the Sellers provide TCCLB with an opportunity and limited right to access and inspect certain REO Properties identified through NCST prior to the execution of a Purchase and Sale Agreement; EDA MINUTES PAGE 13 FEBRUARY 23, 2010 WHEREAS, the Program contemplates the re-sale by TCCLB of certain of the REO Properties to City and EDA and City and EDA has expressed an interest in purchasing certain of the REO Properties ("Identified Properties"); WHEREAS, TCCLB desires to assign to City and EDA its rights to access and inspect the Identified Properties; WHEREAS, as a condition of TCCLB's assignment of its right to access and inspect the Identified Properties, City and EDA each agree to defend, indemnify, and hold TCCLB harmless from any and all claims made against TCCLB in connection with City and EDA's inspection ofthe REO Properties; NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Assignment of Right to Access and Inspect. TCCLB hereby assigns and delegates to City and EDA its rights to enter upon and access and to inspect the REO Properties pursuant to the Program Guidelines. This assignment and delegation is non-delegable without TCCLB's prior written permission. 2. Indemni~cation. In consideration for TCCLB's assignment of its rights to inspect the Identified Properties and other consideration, including the right to purchase certain of the Identified Properties, City and EDA hereby agree to indemnify and fully protect, defend, and hold TCCLB, its officers, directors, employees, shareholders, servicers, representatives, agents, attorneys, tenants, brokers, successors or assigns harmless from and against any and all claims, costs, liens, loss, damages, attorney's fees and expenses of every kind and nature that may be sustained by or made against TCCLB, its officers, directors, employees, shareholders, servicers, representatives, agents, attorneys, tenants, brokers, successors or assigns, resulting from or arising out of (a) the entry upon and (b) inspection of the Identified Properties by the City and EDA, or its employees, officers, agents or its permitted successors or assigns. Liability of City and EDA shall be governed by the provisions of Minnesota Statutes, Chapter 466, as amended, or other applicable law. 3. Insurance Requirements. City and EDA shall maintain during the term of this Agreement comprehensive general liability insurance with minimum limits of $1,000,000 per occurrence and $3,000,000 in the aggregate. Upon request, City and EDA shall provide a certificate of insurance evidencing such coverage and naming TCCLB as an additional insured. The certificate of insurance shall also state that the insurer shall provide written notice to TCCLB of cancellation or material change in the insurance coverage stated on the certificate not less than 30 days prior to the cancellation or change of coverage. Notwithstanding anything to the contrary, the liability of City and EDA shall be governed by the provisions of Minnesota Statutes, Chapter 466, as amended, or other applicable law. 4. Costs of Inspection and Appraisals. City and EDA shall be responsible for paying all costs resulting from its access to and inspection of the REO Properties. In addition, City and EDA shall be responsible for paying the costs of any appraisals or broker price opinions ordered by City and EDA. 5. Term. The term of this Agreement shall commence on the Effective Date and shall continue until December 31, 2010 unless sooner terminated pursuant to Paragraph 6 below. Any sections of this Agreement which are intended by their terms to continue after termination survive the expiration or earlier termination of this Agreement. EDA NIlN UTES PAGE 14 FEBRUARY 23, 2010 6. Termination. Either party may terminate this Agreement at its discretion and without further obligation: (a) immediately if the other party breaches this Agreement and fails to cure such breach within five (5) days of written notice of default, ar(b) at any time upon ten (10) days written notice to the other party. Upon termination, all unpaid fees owed to TCCLB or any third party by City and EDA shall be immediately due and payable. 7. Independent Contractor. City and EDA will at all times act as an independent City and EDA and nothing contained herein will be construed to create the relationships of joint-venturers, agency or employer and employee between the parties. City and EDA shall be responsible for the manner and means of performing its services under this Agreement and said manner and means are subject to the City and EDA's sole control. 8. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument. 9. Entire Agreement. This Agreement contains the entire agreement of the parties regarding the subject matter of this Agreement, and there are no other promises or conditions in any other agreement, whether oral or written. This Agreement may only be amended by a written instrument signed by both parties. 10. Severabilitv. If any provision of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date first above written. TWIN CITIES COMMUNITY LAND BANK LLC, a Minnesota nonprofit limited liability company By: Rebecca L. Rom Its: Vice Chair COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic and political subdivision under the laws of the State of Minnesota By: CITY OF COLUMBIA HEIGHTS, a municipal corporation and political subdivision Its under the laws of the State of Minnesota By: Gary Peterson Its: Mayor By: Walter Fehst Its: City Manager Gary Peterson President By: Walter Fehst Its: Executive Director EDA MINUTES PAGE 15 FEBRUARY 23, 2010 6. ADMINISTRATIVE REPORT Staff inet with Developer Chris Little this week and will be bringing an updated plan for the 37tn and Central Avenue project to the March meeting. Staff also received an initial offer from Gene Mady this week and will bring that to the March meeting for discussion. Clark said they are hoping to have an update on the NHHI Senior housing project by then. Clark stated that foreclosures still haven't subsided. There have been 30 since January 1, 2010. He said they seem to be selling, but many of the home sales are around $100,000. Nawrocki asked about the Root property. Clark said they are in process of doing a Phase 1 environmental. 7. OTHER BUSINESS The ne~t regular EDA meeting is scheduled for March 23, 2010. The meeting was adjourned at 9:20 pm. Respectfully submitted, Shelley Hanson Secretary