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HomeMy WebLinkAboutJULY 28, 2015 HRA minutes HOUSING & REDEVELOPMENT AUTHORITY MINUTES OF THE MEETING OF JULY 28, 2015 1.Call to order – The meeting was called to order by Chair Diehm at 7:00 pm. 2.Roll Call – Members present: Bruce Nawrocki, Gary Peterson, Donna Schmitt, John Murzyn Jr, Tammera Diehm, and Rheta Nelson. Staff Present: Executive Director-Walt Fehst, Community Development Director-Joseph Hogeboom, and Secretary-Shelley Hanson. Legal Counsel- Martha Ingram, Kennedy & Graven CommonBond Staff- Laura Frost. Aeon Representative-James Lenhoff 3.Pledge of Allegiance – Recited CONSENT AGENDA 4.Approve Minutes of April 28, 2015 5.Approve Financial Report and Payment of Bills for April, May, and June 2015 on Resolutions 2015-06 Questions from members; There were no questions from members. Motion by Peterson, seconded by Nawrocki, to approve items on the Consent Agenda as presented. All ayes. MOTION PASSED. HRA Minutes Page 2 July 28, 2015 HRA RESOLUTION 2015-06 RESOLUTION OF THE COLUMBIA HEIGHTS HOUSING & REDEVELOPMENT AUTHORITY (HRA) APPROVING THE FINANCIAL STATEMENT FOR APRIL, MAY, AND JUNE, 2015 AND PAYMENT OF BILLS FOR THE MONTHS OF APRIL, MAY, AND JUNE, 2015. WHEREAS, the Columbia Heights Housing and Redevelopment Authority (HRA) 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 HRA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the HRA 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 months of April, May and June, 2015 and the list of bills for the months of April, May and June, 2015 are attached hereto and made a part of this resolution; and WHEREAS, the HRA 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 Housing & Redevelopment 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 Housing & Redevelopment Authority. th Passed this 28 day of July, 2015. MOTION BY: Peterson SECONDED BY: Nawrocki AYES: All ayes __________________________________ Chair Attest by: ________________________________________ Shelley Hanson, Secretary HRA Minutes Page 3 July 28, 2015 BUSINESS ITEMS 6.Approve 60 day Extension to Management Agreement for Parkview Villa North and South with CommonBond Housing on Resolution 2015-07 Hogeboom explained that the current contract with CommonBond Housing for the management of Parkview Villa expires on July 31, 2015. When the last extension of the contract was approved in January of 2015, it was anticipated that the sale of the property would close in the spring. Due to unforeseen issues, the sale of Parkview Villa has been delayed. If the sale is approved this evening, closing is expected to occur by August 14. Staff is recommending extending the management contract with CommonBond Housing until September 30, 2015 should any additional unforeseen issues arise. Once the sale occurs, this contract retains the services of CommonBond housing to complete bill payment, HUD reporting and other administrative duties associated with the property prior to the time of closing. Staff recommends adopting Resolution 2015-07 approving the extension of the Management Agreement with CommonBond Housing for Parkview Villa North and South. Questions from members: Schmitt asked who would be performing the audit after the sale is complete. Hogeboom stated that the financial reports are those required by HUD and will be completed by CommonBond. The annual year end audits will be done by the Auditors the City uses as it has been in the past. th Diehm asked if September 30 is enough time to get all the outstanding bills paid and the financial reports done. Frost and Hogeboom both thought it should be adequate. Motion by Peterson, seconded by Nawrocki, to waive the reading of Resolution 2015-07, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Peterson, seconded by Nawrocki, to adopt Resolution 2015-07, being a Resolution of the Housing and Redevelopment Authority in and for the City of Columbia Heights, approving an extension to the Management Agreement for Parkview Villa North and South and authorizing the Chairperson and Executive Director of the HRA to execute the contract. All ayes. MOTION PASSED. HRA Minutes Page 4 July 28, 2015 HRA RESOLUTION NO. 2015-07 RESOLUTION APPROVING 60-DAY EXTENSION TO MANAGEMENT AGREEMENT FOR PARKVIEW VILLA NORTH AND SOUTH WITH COMMONBOND HOUSING BE IT RESOLVED BY the Board of Commissioners ("Board") of the Housing and Redevelopment Authority in and for the City of Columbia Heights (the "Authority") as follows: Section 1. Recitals. 1.01. The Authority previously entered into a Management Agreement dated February 1, 2008 (the “Agreement”) with CommonBond Housing (the “Agent”) for the management of a housing facility known as Parkview Villa North and South (the “Property”). 1.02. The original term of the Agreement has expired, and the Authority has previously entered into four one-year extensions and one six-month extension of the Agreement, the latest of which terminates on July 31, 2015. 1.03. The parties have agreed to an additional sixty-day extension of the Agreement (the “Extension”), to allow for continued management of the Property by the Agent until the Property is conveyed to a third party, which conveyance is expected to take place in August 2015. The termination of the management services described in the Agreement shall be the date of closing on the conveyance. 1.04. The parties have further agreed to incorporate the terms of a Letter of Understanding between the Authority and the Agent as revised on June 9, 2015, into the Extension, providing for additional financial and accounting services to be performed by the Agent after closing on the conveyance of the Property, which additional services shall terminate on September 30, 2015. Section 2. Extension Approved. 2.01. The Extension 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 Chair and Executive Director, provided that execution of the Extension by such officials shall be conclusive evidence of approval. The Chair and Executive Director are hereby authorized to execute, on behalf of the Authority, the Extension. Adopted by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Columbia Heights, this 28th day of July, 2015. Chair ATTEST: Secretary HRA Minutes Page 5 July 28, 2015 ND 2 EXTENSION OF MANAGEMENT AGREEMENT FOR PARKVIEW VILLA NORTH AND SOUTH th THIS AGREEMENT, made as of the 28 day of July, 2015, by and between the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF COLUMBIA HEIGHTS, a public body corporate and politic (the “Owner”), established pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (hereinafter referred to as the “Act”); and CommonBond Housing, a Minnesota nonprofit corporation (“Agent”). WITNESSETH: WHEREAS, on January 23, 2008 the Owner approved a Management Agreement with Agent, dated February 1, 2008 (the “Contract”), for the management of a housing facility known as Parkview Villa North and South (the “Property”), which among other terms, provided for a five-year term; and WHEREAS, the Department of Housing and Urban Development (“HUD”) denied the ability of the Owner to enter into a five-year contract based on a previously approved 1969 Annual Contributions Contract which limits all contracts to two years; and WHEREAS, in order to meet the spirit and intent of the originally approved Contract, both HUD and the Owner agreed to an amended Contract term of an initial two-year period with three one-year extensions; and WHEREAS, this language is memorialized in Section 1.3 of the Contract as approved by the Owner on April 22, 2008; and WHEREAS, the parties agreed to an additional one-year extension of the Contract in January 2014, and the Owner approved such extension by Resolution No. 2014-04 on January 28, 2014; and WHEREAS, the parties agreed to an additional six-month extension of the Contract in January 2015, and the Owner approved such extension by Resolution No. _________ on January 26, 2015; and WHEREAS, the parties agree and understand that the Owner has entered into a purchase agreement pursuant to which the Owner will convey the Property to Aeon, with an expected closing in August 2015 (“Closing”); and WHEREAS, the parties desire to enter into an additional extension of the Contract, to allow for the continued management of the Property by Agent until the date of Closing and for continued financial and accounting services to be performed by Agent through September 30, 2015 (the “Financial and Accounting Services”), as provided in the Letter of Understanding between the Authority and the Agent, dated as of June 9, 2015, which is attached to this Agreement and fully incorporated by reference (the “Letter of Understanding”). 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: HRA Minutes Page 6 July 28, 2015 1. The Contract is hereby extended for a sixty-day period, commencing August 1, 2015 and terminating September 30, 2015 (the “Termination Date”). The Agent shall provide the management services described in the Contract through the date of Closing, and shall provide the Financial and Accounting Services described in the Letter of Understanding through the Termination Date. 2. Section 10.2 of the Contract shall be amended to read, “This Agreement shall terminate upon the sale of the Premises or in the case of building demolition caused by natural or man- made causes; provided that the Financial and Accounting Services shall terminate on September 30, 2015.” 3. The Contract, as amended by the extension thereto approved January 26, 2015 and by this Agreement, remains in full force and effect, and is not modified except as expressly provided herein. IN WITNESS WHEREOF, the Owner has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Agent has caused this Agreement to be duly executed in its name and behalf as of the date first above written. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF COLUMBIA HEIGHTS By ___________________________________ Its Chair By ___________________________________ Its Executive Director COMMONBOND HOUSING By ____________________________________ Its _____________________________ EXHIBIT A HRA Minutes Page 8 July 28, 2015 7.Sale Update from Aeon Hogeboom explained the sale has been a very complex and long process since there are actually two separate entities and two sets of accounts to consider. Getting approval from HUD to sell the north building took much longer than the Commission thought it would. The proposed th closing date of May 15 was also delayed several times because not all of the financing was secured. James Lenhoff, Director of Housing Development for Aeon, told those present that the financing is finally in place now and Aeon has made plans to start remodeling immediate after the closing date. He said 4 million dollars of improvements will be done in the next 9-10 months. The community space will be remodeled, so that a game room and fitness center will be added, upgrades will be made to the kitchen and the salon areas, and the remaining community space will be updated. Lenhoff said a sun porch will also be constructed along the front of the building. He thanked City Officials, the commission members, the residents at Parkview Villa and the management company for being so patient during this long process. Nawrocki asked if the parking area would be affected or if it would be expanded. Lenhoff said there are no plans to change the parking area for the building and there is no room to expand the lot. PUBLIC HEARING th 8.Resolution 2015-08: Conveyance of 965 40 Avenue NE – Parkview Villa North and South to Aeon In 2011, the Housing and Redevelopment Authority initiated a process to transfer ownership of Parkview Villa to a private entity. Aeon, a local non-profit affordable housing provider, was selected to be the purchaser of the property. In 2014, the United States Department of Housing and Urban Development (HUD) approved the method of “voluntary conversion” for the sale of the property, allowing the public housing units in Parkview Villa North to be converted to Section 8-based housing. The HRA will continue to receive revenue from the roof-top antenna until 2027. The HRA will have to remain in place, at least into the foreseeable future, in order to perform audit and bookkeeping activities related to its time as owner of the property. Martha Ingram from Kennedy & Graven stated that the Commission is being asked to approve the amended and restated Purchase and Development Agreement to allow the closing to move forward. th Staff recommends adopting Resolution 2015-08 approving the conveyance of 965 40 Avenue NE – Parkview Villa North and South – to Aeon. HRA Minutes Page 9 July 28, 2015 Comments/Questions from members: Nawrocki asked about what happens to the fund reserve balances. Ingram told members that the fund balance for the north building must go back to HUD. Some of it will be used to pay outstanding bills and legal fees. Once that is all reconciled, the balance will be paid to HUD as required. The fund balance of $885,000 for the south building will be retained by the City. Ingram also told members that negotiations are still being finalized on the terms of the antenna lease as an additional fund source to the City for a period of 11 years. Ingram told members that the Purchase and Development Agreement has been amended several times as one of the investors, a limited partner who purchased the tax credits, had several revisions to the legal terms of the Agreement. Nawrocki asked who the investors were. Lenhoff said the MN Housing Finance Agency helped coordinate some of the financing and was instrumental in overseeing the sale of the tax credits. US Bank is the investor who required changes to the agreement and as a result has postponed the closing. Nawrocki asked how the note would be paid back and wanted details about the terms of the sale price. Ingram explained that the buildings are being sold for 7.4 million. The City will receive $885,000 at the time of closing and will also receive the antenna lease revenues for 11 years. There is a Promissory Note in the amount of 6.585 million dollars payable by Aeon in 30 years to the HRA. The Note is at zero percent interest, and payable in full at the end of the 30 years. No monthly payments are required during this 30 year time frame. Out of the 6.585 million, 5.2 million must be paid back to HUD at the end of the 30 years. The HUD letter of approval dictates this amount based on the figure of the appraisal done in 2012. The HRA would retain the difference of 1.385 million, along with the initial cash payment. Nawrocki asked what happens if Aeon isn’t in business 30 years from now. How do we get our money? He felt an amount should be set aside along the way or put in escrow towards the pay off at the end of the term. Ingram responded that we can’t force them to set aside funds, nor can we control their accounting practices. This was discussed during the negotiation process, but Aeon agreed to the antenna lease revenue going to the City in lieu of partial payments of the note itself. Ingram stated the HRA’s security is the Assignment of Mortgage and that if necessary, the HRA can foreclose on the mortgage and take the building back. Lenhoff said that if Aeon ever went out of business or sold the building, the new owner would inherit whatever debt and payoffs that are attached to the building. HRA Minutes Page 10 July 28, 2015 Schmitt asked what happens if the HRA disbands between now and then. Ingram said the HRA will remain intact for the time being as there will be many loose ends to tie up. Research is being done on whether the HRA can transfer its responsibilities to the EDA. If not, then the HRA must remain in effect until the 30 years is up. Schmitt said to make sure the language is accurate because she came across a typo in the legal description. Ingram said “Tract C” will also be added to the property description. Nawrocki questioned some of the restrictions in the Memo of Understanding. Ingram stated they are the same requirements that are in place now. Public Hearing Opened: No one wished to speak on this. Public Hearing Closed. Motion by Peterson, seconded by Murzyn, to waive the reading of Resolution 2015-08, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Peterson, seconded by Murzyn, to adopt Resolution 2015-08 approving the conveyance of land and the housing facility known as Parkview Villa thereon, located in the City of Columbia Heights, Minnesota and legally described as follows, to Aeon: That part of the South 1/2 of Lot 13, lying Northwesterly of the following line: Beginning at the Northeast corner of the South 1/2 of Lot 13; thence Southwesterly to a point on the South line of said Lot 13, said point being 2 feet Easterly of the Southwest Corners of Lot 13; the South 241 feet of Lot 14; then south 1/2 of Lot 15; Lot 39 except the West 30 feet thereof; Lots 40, 41, 42 and 43 and the West 1/2 of Lot 44, all in Block 5 Reservoir Hills, Columbia Heights, Anoka County, Minnesota; And the East 40 feet of the South 1/2 of Lot 16, Block 5, Reservoir Hills, Columbia Heights, Anoka County, Minnesota. All Ayes- MOTION PASSED. HRA Minutes Page 11 July 28, 2015 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF COLUMBIA HEIGHTS RESOLUTION NO. 2015-08 RESOLUTION APPROVING AN AMENDED AND RESTATED PURCHASE AND DEVELOPMENT CONTRACT (INCLUDING THE SALE OF LAND AND PROVISION OF A LOAN) BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF COLUMBIA HEIGHTS AND AEON BE IT RESOLVED By the Board of Commissioners (the “Board”) of the Housing and Redevelopment Authority in and for the City of Columbia Heights (the “Authority”) as follows: Section 1. Recitals. 1.01. The Authority is authorized to exercise the powers of a housing and redevelopment authority, pursuant to Minnesota Statutes, Sections 469.001 to 469.047, as amended (the “HRA Act”). 1.02. The Authority and Aeon (the “Buyer”) have proposed to enter into an Amended and Restated Purchase and Redevelopment Contract (the “Contract”), setting forth the terms and conditions of sale and redevelopment of certain property owned by the Authority, located at 965 th 40 Avenue NE and described on Exhibit A attached hereto (the “Property”), including the housing facility known as Parkview Villa (the “Facility”). 1.03. Pursuant to the Contract, the Buyer will acquire the Property and will construct certain improvements to the Facility’s critical building systems, including HVAC, plumbing, elevator, and fire alarms, along with other improvements as provided in the Contract. 1.04. The Authority has on this date conducted a duly noticed public hearing regarding the sale of the Property to the Buyer, at which all interested persons were given an opportunity to be heard. 1.05. The Authority finds and determines that conveyance of the Property to the Buyer has no relationship to the City’s comprehensive plan, in that no amendment or modification of the comprehensive plan is required for the conveyance or redevelopment of the Property and the Facility will continue to be operated as a rental housing facility for low- to moderate-income persons. The activities of the parties under the Contract implement housing goals of the City’s Comprehensive Plan: “Provide a variety of life-cycle housing opportunities within the community.” Page 12 1.06. Pursuant to the HRA Act, the Authority is authorized to provide loans, interest rate subsidies, or assistance in any form to private development consisting of the construction or substantial rehabilitation of buildings and ancillary facilities for low- to moderate-income housing facilities. The Authority hereby finds and determines that it is in the best interests of the Authority to provide a Loan to the Buyer for the purpose of financing a portion of the Purchase Price of the Facility, all as such terms are defined in the Contract. 1.07. The Board has reviewed the Contract and finds that the execution thereof and performance of the Authority's obligations thereunder, including conveyance of the Property and provision of the Loan, are in the public interest and will further the objectives of its general plan of economic development and redevelopment, because it will further the above-stated housing goals. Section 2. Authority Approval; Further Proceedings. 2.01. (a) The Contract as presented to the Board, including the sale of the Property described therein and provision of the Loan, is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the Chair and Executive Director, provided that execution of the Contract by such officials shall be conclusive evidence of approval. (b) Pursuant to the Contract, the Authority will loan to the Buyer the Loan in the principal amount of $6,585,000, evidenced by a promissory note (the “Note”) and secured by a Collateral Assignment of Note and Mortgage (the “Assignment”) to be executed and delivered to the Authority by the Buyer in substantially the forms attached hereto as Exhibit B and Exhibit C. The Loan shall not bear interest. 2.02. The Chair 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, including without limitation the deed, 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. Section 3. Effective Date. This resolution shall be effective upon approval. Approved by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Columbia Heights this __ day of ___________, 2015. Chair ATTEST: Secretary HRA Minutes Page 13 July 28, 2015 Exhibit A Property Tract A: That part of the South 1/2 of Lot 13, lying Northwesterly of the following line: Beginning at the Northeast corner of the South 1/2 of Lot 13; thence Southwesterly to a point on the South line of said Lot 13, said point being 2 feet Easterly of the Southwest Corners of Lot 13; the South 241 feet of Lot 14; then south 1/2 of Lot 15; Lot 39 except the West 30 feet thereof; Lots 40, 41, 42 and 43 and the West 1/2 of Lot 44, all in Block 5 Reservoir Hills, Columbia Heights, Anoka County, Minnesota (Abstract) Tract B: The East 40 feet of the South 1/2 of Lot 16, Block 5, Reservoir Hills, Columbia Heights, Anoka County, Minnesota. HRA Minutes Page 14 July 28, 2015 Exhibit B PROMISSORY NOTE $6,585,000 ____________, 2015 Aeon (“Maker”), for value received, hereby promises to pay to the Housing and Redevelopment Authority in and for the City of Columbia Heights, a public body corporate and politic under the laws of Minnesota, or its assigns (collectively referred to herein as “Holder”), at its designated principal office or such other place as the Holder may designate in writing, the principal sum of Six Million Five Hundred ths Eighty-Five Thousand and no/100 Dollars ($6,585,000.00), in any coin or currency that at the time or times of payment is legal tender for the payment of private debts in the United States of America. This Note shall not bear interest. The principal of this Note is payable as follows: 1. The entire unpaid balance of principal shall be due and payable upon the earlier of the following: (i) thirty (30) days (or such longer period as is set forth in the Agreement) after written notification by Holder to Maker of the occurrence of an Event of Default as defined in the Amended and Restated Purchase and Development Contract between the Maker and the Holder, dated as of ___________, 2015 (the “Agreement”) not timely cured thereunder; or (ii) ______________, 2045. This Note may be prepaid, at any time or from time to time, in full or in part, without notice, penalty or premium. 2. This Note is secured by a Collateral Assignment of Note and Mortgage (the “Assignment”) given to the Holder on the date hereof, pursuant to which Maker provides an assignment of a certain Promissory Note from Parkview Villa Limited Partnership, a Minnesota limited liability partnership, in favor of Maker (the “Parkview Note”), and the Mortgage securing the Parkview Note (the “Parkview Mortgage,” and together with the Parkview Note, the “Pledged Documents”). All of the agreements, conditions, covenants, provisions, and stipulations contained in the Agreement and the Assignment are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. It is agreed that time is of the essence of this Note. If an Event of Default occurs under the Agreement, the Assignment, or any other instrument securing this Note, then the Holder of this Note may at its right and option, in accordance with the terms hereof, declare immediately due and payable the principal balance of this Note and interest accrued thereon, together with reasonable attorneys’ fees and expenses incurred by the Holder of this Note in collecting or enforcing payment hereof, whether by lawsuit or otherwise, and all other sums due hereunder or any instrument securing this Note. The Maker of this Note agrees that the Holder of this Note may, without notice to and without affecting the liability of the Maker, accept additional or substitute security for this Note, or release any security or any party liable for this Note or extend or renew this Note. This Note is contingent upon Maker’s receipt of principal payments under and pursuant to the Parkview Note, and the sole recourse of Holder for repayment of the principal balance of this Note shall be the exercise of its rights against the Pledged Documents and related security thereunder. 3. The remedies of the Holder of this Note as provided herein, and in the Agreement, the Assignment, or any other instrument securing this Note, shall be cumulative and concurrent and may be pursued singly, successively, or together, and, at the sole discretion of the Holder of this Note, may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. The Holder of this Note shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Holder and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. This Note may not be amended, modified, or changed except only by an instrument in writing signed by the party against whom enforcement of any such amendment, modifications, or change is sought. 4. If any term of this Note, or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Note, or the application of such term to persons or circumstances other than those to which it is invalid or unenforceable shall not be affected thereby, and each term of this Note shall be valid and enforceable to the fullest extent permitted by law. 5. If the Maker causes an Event of Default to occur, and if the Holder engages legal counsel or others in connection with advice to the Holder or the Holder’s rights and remedies under the Agreement or this Note, the Maker shall pay all reasonable expenses incurred by the Holder for such persons, irrespective of whether any suit or other proceeding has been or is filed or commenced. Any such expenses, costs and charges shall constitute additional principal, payable upon demand, and subject to this Note and the Assignment. 6. It is intended that this Note is made with reference to and shall be construed as a Minnesota contract and is governed by the laws thereof. Any disputes, controversies, or claims arising out of this Note or the Agreement shall be heard in the state or federal courts of Minnesota, and all parties to this Note and the Agreement waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. 7. The performance or observance of any promise or condition set forth in this Note may be waived, amended, or modified only by a writing signed by the Maker and the Holder. No delay in the exercise of any power, right, or remedy operates as a waiver thereof, nor shall any single or partial exercise of any other power, right, or remedy. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things required to exist, happen, and be performed precedent to or in the issuance of this Note do exist, have happened, and have been performed in regular and due form as required by law. IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed as of the ________ day of ______________, 2015. AEON By: ______________________________________ Its _________________________________ Page 16 Exhibit C COLLATERAL ASSIGNMENT OF NOTE and MORTGAGE THIS COLLATERAL ASSIGNMENT OF NOTE AND MORTGAGE (the "Assignment") is made effective as of the ___ day of ________, 2015, by AEON, a Minnesota nonprofit corporation (the "Borrower"), in favor of THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF COLUMBIA HEIGHTS, a public body corporate and politic and political subdivision of the State of Minnesota (the "HRA"). WHEREAS, Borrower has provided to HRA a certain Promissory Note dated as of ___________, 2015, pursuant to which Borrower promises to pay to HRA the principal sum of $6,585,000 in accordance with the terms thereof (the “Note”); and WHEREAS, to secure payment and performance of the obligations of Borrower under the Note, HRA has required that Borrower execute and deliver to HRA this Assignment to collaterally assign to HRA Borrower's right, title and interest in and to (a) that certain Promissory Note dated ___________, 2015, made by Parkview Limited Partnership, a Minnesota limited partnership ("Partnership") to the order of Borrower in the original principal amount of $6,585,000 (as it may be amended, restated, replaced or otherwise modified from time to time, the "Partnership Note"); and (b) that certain Mortgage, dated ___________, 2015, executed and delivered by Partnership and filed for record on or about the date hereof, with Anoka County Office of Registrar of Titles and Office of the Recorder, securing the Partnership Note and covering, among other things, real estate legally described on Exhibit A attached hereto and hereby made a part hereof (as it may be amended, restated, replaced or otherwise modified from time to time, the "Partnership Mortgage"). NOW THEREFORE , in consideration of the foregoing, for and in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Borrower agrees as follows: 1.Collateral Assignment. Borrower hereby collaterally assigns and transfers to HRA, and grants a security interest in, all right, title and interest of Borrower in and to the Partnership Note and the Partnership Mortgage (collectively, the "Pledged Documents"), including all cash, proceeds, interest or other income or property, accrued and hereafter accruing, received, receivable or otherwise distributed in respect of, in exchange for or upon the sale or other disposition of the Pledged Documents, for the purpose of securing the Note. 2.Performance of Obligations. Borrower agrees to promptly, faithfully and diligently observe, perform and discharge each and every term, condition, obligation, covenant and agreement which Borrower is now, or hereafter becomes, liable to observe, perform or discharge under this Assignment and the Pledged Documents; to give prompt written notice to HRA of any notice of default received by Borrower under the Pledged Documents on the part of any party thereunder, together with an accurate and complete copy of any such notice; and, at the sole cost and expense of Borrower, to enforce or secure the performance of each and every obligation, covenant, condition and agreement to be performed by Partnership under any of the Pledged Documents. 3.Actions Arising out of the Pledged Documents. Borrower shall, at Borrower's sole cost and expense, appear in and defend any dispute, action or proceeding against Borrower or HRA arising under, growing out of or in any manner connected with or affecting any of the Pledged Documents, or the obligations, duties or liabilities of Borrower or Partnership thereunder, and shall pay all costs and expenses of HRA, including attorneys’ fees (prior to trial, at trial and on appeal) in connection with any such dispute, action or proceeding in which HRA may appear or with respect to which it may otherwise incur costs or expenses, whether or not HRA prevails therein. 4.HRA’s Right to Perform. Should Borrower fail to make any payment or to do any act as herein provided, then HRA may, but without obligation to do so, without notice or demand to or upon Borrower, and without releasing Borrower from any obligation hereof, make or do the same in such manner and to such extent as HRA may deem necessary or desirable to protect the security hereof, including specifically, without limiting its general powers, appearing in and defending any action or proceeding purporting to affect the security hereof or the rights or powers of HRA, and observing, performing and discharging all or any of the obligations, covenants and agreements of Borrower in the Pledged Documents. In exercising any such powers, HRA may pay its costs and expenses, employ counsel and incur and pay reasonable attorneys' fees (prior to trial, at trial and on appeal). Borrower hereby grants to HRA an irrevocable power of attorney, coupled with an interest, to perform all of the acts and things provided for in this section as Borrower's agent and in Borrower's name. 5.No Modification Without Consent. Each of Borrower and Partnership agrees not to modify, amend, extend, waive, subordinate or in any manner alter the terms of either of the Partnership Note or the Partnership Mortgage, or reduce the indebtedness secured thereby; not to waive, excuse or condone any default by the other party under either of the Partnership Note or the Partnership Mortgage; and not to in any manner release or discharge the other party of or from any obligation, covenant, condition or agreement by Partnership or Borrower, as applicable, to be performed under either of the Partnership Note or the Partnership Mortgage. Any attempt on the part of Borrower or Partnership to exercise any such right, power or authority without the prior written consent of HRA shall be a nullity and shall be a default hereunder. 6.Borrower's Representations, Warranties and Covenants. Borrower represents and warrants to HRA that: a.Borrower has good right and lawful authority to grant, transfer, set over and assign the Pledged Documents to HRA. b.This Assignment has been duly authorized, executed and delivered by and on behalf of Borrower so as to constitute the valid and binding obligations of Borrower, enforceable in accordance with the terms hereof. c.Borrower has not performed or committed any act or executed any instrument, and is not bound by any law, statute, regulation, order, pledge agreement, indenture, contract or agreement, which might prevent HRA from operating under any of the terms and conditions hereof, or which would limit HRA in such operation. d.Borrower has not executed or agreed to, shall not execute or agree to, and shall not permit to occur by operation of law any other assignment, alienation, pledge, encumbrance or transfer of any its of right, title or interest in, to or under any of the Pledged Documents. e.The Pledged Documents are in full force and effect; neither of the Pledged Documents has been amended or modified; and there is no default by Borrower nor by Partnership now existing under any of the Pledged Documents, nor has any event occurred which, with the passage of time and/or the giving of notice, would constitute a default thereunder. f.Borrower has delivered or will deliver to HRA fully executed originals of the Pledged Documents, and such documents have not been modified, amended or canceled. g.The Pledged Documents each constitute a valid, genuine and legally enforceable obligation, subject to no defense, set off or counterclaim of Partnership. h.The Partnership Mortgage has been duly executed and delivered, and will be recorded or otherwise properly perfected in Anoka County, Minnesota. i.The outstanding principal balance on the Partnership Note as of the date hereof of is $6,585,000. 7.Present Assignment. Subject to the terms and conditions set forth herein, this is a perfected, absolute and present assignment by Borrower to HRA of the Pledged Documents. During the pendency and effectiveness of this Assignment, Borrower shall have no authority to collect or receive, as and when due and payable or otherwise, any payments of principal, interest or other sums under the Partnership Note, and any and all such payments of principal, interest or other sums if and to the extent so received by Borrower shall be held in trust by Borrower for the benefit of HRA, and shall be promptly paid over and delivered by Borrower to HRA to be applied to the secured obligations. At any time after the occurrence and during the continuance of an Event of Default (as defined below), Borrower hereby authorizes and directs Partnership to pay amounts secured by the Partnership Mortgage directly to HRA in an amount up to the amount of the secured obligations. Failure of HRA to collect, or discontinuance by HRA from collecting, at any time, and from time to time, any amounts secured by the Partnership Mortgage shall not in any manner affect the rights of HRA to thereafter collect the same. Borrower hereby authorizes HRA to file UCC financing statements and amendments to financing statements with respect to the Pledged Documents consistent with the terms of this Agreement in such form and substance as HRA, in its sole discretion, may determine. 8.Events of Default. The occurrence of one or more of the following shall constitute an "Event of Default" within the meaning of this Assignment, provided, however, that such event shall not be an Event of Default unless and until written notice of such failure shall have been given to Borrower and such failure shall not have been cured before expiration of (i) the period of thirty (30) days next following the giving of such notice or (ii) if cure cannot reasonably be effected within such thirty (30) day period, then such longer period as shall be reasonably needed to cure such event if Borrower timely commences cure and diligently prosecutes cure to completion: a.Borrower shall fail to abide or observe any term or condition of this Assignment, or any representation made by Borrower was materially false when made; b.an event of default shall occur under the Note, or any of the other related documents (together with the Note, the “HRA Loan Documents”), or Borrower shall otherwise fail to abide by the terms and conditions of any of the HRA Loan Documents; c.a petition commencing a proceeding under the United States Bankruptcy Code or any similar state law is filed by or against Borrower; or a receiver, custodian, assignee, or trustee is appointed for Borrower or any of their respective assets; or d.any third party seizes or pursues repossession, foreclosure, replevin or liquidation of any property of Borrower. 9.HRA Rights Upon Default. a.Upon or at any time after the occurrence of any Event of Default under this Assignment, HRA may, at its option, but without obligation to do so, and without notice to or consent of Borrower, sell, assign or transfer to itself or any third party purchaser all of Borrower's right, title and interest in, to and under the Pledged Documents subject to the terms and conditions hereof; make, execute, enforce, modify, alter, cancel, release or satisfy the Partnership Mortgage, in its own name or in the name of Borrower; and/or pursue all other remedies available at law or in equity, including all remedies available under the Uniform Commercial Code. Borrower shall in every way facilitate the transfer of its interests in, to and under the Partnership Mortgage and the proceeds of the Partnership Note, including without limitation executing and recording any and all additional instruments necessary to evidence the transfer of the Pledged Documents. Borrower hereby grants to HRA an irrevocable power of attorney, coupled with an interest, to perform all of the acts and things provided in this section as Borrower's agent and in Borrower's name. b.If any Event of Default shall occur, then HRA may, at its option, declare the secured obligations due and payable as set forth in the Note and other HRA Loan Documents, and, in addition to making available to HRA any remedies for default herein set forth, such Event of Default shall, at HRA's option, constitute and be deemed to be an event of default under the Note and other HRA Loan Documents, entitling HRA to every and all rights and remedies therein contained, in addition to those rights and remedies herein set forth, without regard to the adequacy of security for the indebtedness secured hereby, the commission of waste or the insolvency of Borrower. 10.Release Upon Payment in Full. Upon the payment in full of the Note, this Assignment shall become and be void and of no further effect and, upon request of Borrower, HRA shall execute a release hereof or an assignment to Borrower of the Pledged Documents. 11.Construction According to Applicable Law. All rights, powers and remedies provided herein may be exercised only to the extent that the exercise thereof does not violate any applicable law, and they are intended to be limited to the extent necessary so that they will not render this Assignment invalid, unenforceable or not entitled to be recorded, registered or filed under any applicable law. If any term of this Assignment shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the other terms hereof shall be in no way affected thereby. HRA shall be entitled to all rights and remedies available under this Assignment, under the Note, under the other HRA Loan Documents, at law, in equity or under any statute in existence now and/or at the time of exercise thereof, even though such rights and remedies were not available on the date first above written, and all such rights and remedies may be exercised at any time and from time to time concurrently, separately, successively and in any order of preference, at HRA's sole discretion. 12.Successors and Assigns. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of Borrower, Partnership and HRA. 13.Additional Security. HRA shall not be required to resort first to the security of this Assignment or of any of the other HRA Loan Documents before resorting to the security of the other, and HRA may exercise its rights hereunder, under this Assignment and any of the other HRA Loan Documents concurrently or independently and in any order of preference; all rights and remedies of HRA set forth herein, in the Note, any of the other HRA Loan Documents, at law, in equity, under statute and by contract being cumulative. No failure by HRA to avail itself of any of the terms, covenants or conditions of this Assignment for any period of time shall be deemed to constitute a waiver thereof. 14.Notices. Any notice or other communication to any party in connection herewith shall be deemed to have been given on the date the same is deposited in the United States mail, registered or certified, return receipt requested, postage prepaid, or deposited with Federal Express, Airborne or another reputable overnight carrier, addressed to the party to which the notice is to be given at the address specified below, or at such other address as such party shall have specified to the other party hereto in writing and not less than ten (10) days prior to the effective date of the address change: To Borrower: Aeon Attn: Eric Schnell, Chief Operating Officer 901 North Third Street, Suite 150 Minneapolis, MN 55401 With a copy to USBCDC: U.S. Bancorp Community Development Corporation Attn: Director of LIHTC Asset Management 1307 Washington Avenue, Suite 300 St. Louis, Missouri 63103 To HRA: Columbia Heights HRA Attn: Executive Director th 590 40 Avenue Northeast Columbia Heights, Minnesota 55421 15.Governing Law; Waiver of Jury Trial. This Assignment, the rights of the parties hereunder and the interpretation hereof shall be governed by, and construed in accordance with, the laws of the State of Minnesota, in all respects. Any disputes related to this Assignment or any of the other Loan Documents shall be resolved in either Hennepin County, Minnesota or the United States District Court, District of Minnesota. THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY AND ANY RIGHT EACH MAY HAVE TO OBJECT TO PERSONAL JURISDICTION, ASSERT THE DOCTRINE OF FORUM NON CONVENIENS, OR OBJECT TO VENUE ON ANY BASIS WHATSOEVER IN ANY ACTION ARISING FROM OR RELATING TO THIS ASSIGNMENT. 16.Further Assurances. Borrower shall, at the request of HRA, at any time and from time to time following the execution of this Assignment promptly execute and deliver, or cause to be executed and delivered, to HRA all such further documents and instruments and take all such further action as may be reasonably necessary or appropriate to confirm or carry out the provisions and intent of this Assignment. 17.Headings. The headings or captions of the sections set forth herein are for convenience only, are not a part of this Assignment and are not to be considered in interpreting this Assignment. 18.Recitals Incorporated. The recitals to this Assignment are incorporated into and constitute an integral part of this Assignment. IN WITNESS WHEREOF, Borrower has caused this Assignment to be duly executed as of the day and year first above written. AEON By Its ________________________________________ STATE OF MINNESOTA ) ) SS. COUNTY OF _________ ) The foregoing instrument was acknowledged before me this _____ day of ________, 2015, by _________________________, the _________________ of Aeon, a Minnesota nonprofit corporation, on behalf of the corporation. Notary Public ACKNOWLEDGMENT OF PARKVIEW LIMITED PARTNERSHIP Partnership hereby acknowledges, agrees with and consents to the foregoing Assignment and agrees to comply with the covenants of the Partnership set forth in Section 5 of the Assignment. Partnership represents and warrants to the Borrower and HRA that (a) this Assignment has been duly authorized, executed and delivered by and on behalf of Partnership so as to constitute the valid and binding agreement of the Partnership, enforceable in accordance with the terms hereof; (b) the Pledged Documents each constitute a valid, genuine and legally enforceable obligation of the Partnership, enforceable in accordance with its applicable terms; none of the Pledged Documents has been amended or modified; and, to its knowledge, there is no default by Borrower or by Partnership now existing under either of the Pledged Documents; and (c) the outstanding principal balance on the Partnership Note as of the date hereof of is $6,585,000. Partnership hereby acknowledges that HRA is relying upon the foregoing in connection with HRA entering into certain HRA Loan Documents with Borrower. Dated effective as of ______________, 2015. PARTNERSHIP: PARKVIEW LIMITED PARTNERSHIP , a Minnesota limited partnership By: Aeon, a Minnesota nonprofit corporation Its: General Partner By: Its: HRA Minutes Page 23 July 28, 2015 EXHIBIT A TO ASSIGNMENT Legal Description Tract A: That part of the South 1/2 of Lot 13, lying Northwesterly of the following line: Beginning at the Northeast corner of the South 1/2 of Lot 13; thence Southwesterly to a point on the South line of said Lot 13, said point being 2 feet Easterly of the Southwest Corners of Lot 13; the South 241 feet of Lot 14; then south 1/2 of Lot 15; Lot 39 except the West 30 feet thereof; Lots 40, 41, 42 and 43 and the West 1/2 of Lot 44, all in Block 5 Reservoir Hills, Columbia Heights, Anoka County, Minnesota (Abstract) Tract B: The East 40 feet of the South 1/2 of Lot 16, Block 5, Reservoir Hills, Columbia Heights, Anoka County, Minnesota. (Torrens) Tract C: To be added C-17 HRA Minutes Page 24 July 28, 2015 9.Report of Management Company Management has notified residents that the august rent checks should be made out to the City of Columbia Heights. They also have notified all contractors that their services will expire august 31, 2015. This meets the required 30 day notice. Frost also reported that the garden area has been cleaned up by the residents of the building and they did a nice job. 10.Resident Council Update No one was present to give a report. 11.Citizen Forum Edward Blue #411 asked if air conditioners will be provided by the new owners. He said it gets very hot for residents, especially on the upper floors. Frost told members that it is up to residents to obtain their own air conditioners. Tom, the maintenance person, does help service them but several have gone out this year. Residents were told to contact ACCAP to see if they qualify for help in obtaining a unit through energy assistance or emergency assistance programs they administer. The next regular HRA meeting will be October 27, 2015, and will be held at City Hall. This will be the last meeting held at Parkview Villa. The meeting was adjourned at 8:00 pm. Respectfully submitted, Shelley Hanson Secretary