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HomeMy WebLinkAboutEDA AGN 06-13-16 SpecialCH COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AGENDA SPECIAL MEETING 1. Call to Order 2. Roll Call 3. Pledge of Allegiance MONDAY JUNE 13, 2016 6:30 pm City Hall Conference Room 1 590 40th Avenue NE Columbia Heights, MN 55421 BUSINESS ITEMS 4. Authorization to Issuance of Tax Increment Revenue Refunding Bonds (Huset Park Area Redevelopment Project), Series 2016, and Providing the Form, Terms, Pledge of Revenues, and Findings, Covenants, and Directions Relating to the Issuance of Such Obligations — Resolution 2016 -14 Motion: Move to waive the reading of Resolution 2016 -14, there being ample copies available to the public. Motion: Move to adopt Resolution 2016 -14, Resolution to Issue Tax Increment Revenue Refunding Bonds (Huset Park Area Redevelopment Project), Series 2016, and Providing the Form, Terms, Pledge of Revenues, and Findings, Covenants, and Directions Relating to the Issuance of Such Obligations. 5. Approval of Post - Issuance Compliance Procedure and Policy for Tax - Exempt Governmental Bonds — Resolution 2016 -15 Motion: Move to waive the reading of Resolution 2016 -15, there being ample copies available to the public. Motion: Move to adopt Resolution 2016 -15, Resolution Approving Post- Issuance Compliance Procedure and Policy for Tax - Exempt Governmental Bonds. The next regularly scheduled EDA meeting will be held on August 1, 2016. PUBLIC HEARINGS 6. Consideration of Sale of Scattered Site Property Located at 4011 Sth Street — Resolution 2016 -16 Motion: Move to waive the reading of Resolution 2016 -16, there being ample copies available to the public. Motion: Move to adopt Resolution 2016 -16, Resolution approving a Purchase and Redevelopment Agreement between the Columbia Heights Economic Development Authority and Timbercraft Enterprises, Inc. for the sale of 4011 5th Street. OTHER BUSINESS 7. Adjourn The next regular EDA meeting on July 4, 2016 at City Hall will be canceled CH COLUMBIA HEIGHTS AGENDA SECTION BUSINESS ITEMS ITEM NO. 4 MEETING DATE JUNE 13, 2016 CITY OF COLUMBIA HEIGHTS — ECONOMIC DEVELOPMENT AUTHORITY ITEM: Authorization to Issuance of Tax Increment Revenue Refunding Bonds ( Huset Park Area Redevelopment Project), Series 2016, and Providing the Form, Terms, Pledge of Revenues, and Findings, Covenants, and Directions Relating to the Issuance of Such Obligations DEPARTMENT: Community Development CITY MANAGER'S APPROVAL: BY /DATE: Martha Ingram /Joe Hogeboom, June 8, BY /DATE: 2016 This report provides a brief history of the Columbia Heights Economic Development Authority's $2,890,000 Tax Increment Revenue Bonds ( Huset Park Area Redevelopment Project), Series 2007, which currently remain outstanding in the amount of $2,475,000 (the "Current Bonds "), as well as a summary of the process required to refund the Current Bonds. The Current Bonds were issued in connection with certain public infrastructure improvements constructed as part of the Huset Park Tax Increment Financing District (the "TIF District "), pursuant to the Amended and Restated Contract for Private Redevelopment between the Columbia Heights Economic Development Authority ( "EDA "), the City of Columbia Heights ( "City'), and BNC National Bank, as successor in interest to Huset Park Development Corporation ( "BNC "), dated as of August 1, 2007, as amended (the "Prior Contract "), and pursuant to the Second Amended and Restated Contract for Private Redevelopment between the EDA, the City, and Columbia Heights Leased Housing Associates I, LLLP (the "Redeveloper "), dated as of October 30, 2015 (the "Contract "). The EDA issued the Current Bonds pursuant to the Prior Contract. The EDA pledged tax increment generated by all improvements to be constructed on the Redevelopment Property to the payment of debt service on the Current Bonds. The Current Bonds were issued after the first phases of construction required under the Prior Contract were complete, and the par amount of the Current Bonds was based on the flow of tax increment generated by the completed phases, such that tax increment generated by the completed phases of construction has always been sufficient to pay principal and interest in full on each payment date. The EDA also issued its Taxable Tax Increment Revenue Note, Series 2007A, in the principal amount of $6,650,000 (the "TIF Note ") to Huset Park Development Corporation ( "HPDC "), to reimburse HPDC for certain public redevelopment costs incurred by HPDC in development of the housing improvements within the TIF District. Like the Current Bonds, the TIF Note is also secured by tax increment generated within the TIF District, but on a subordinate basis to the Current Bonds. Since HPDC defaulted under the Prior Contract and never completed any improvements beyond the first phases, there has not been enough tax increment generated within the TIF District to pay any debt service on the TIF Note. Therefore, the TIF Note remains outstanding in the full original principal amount. The TIF Note was assigned to the Redeveloper on October 30, 2015 at the real estate closing on the Redevelopment Property from BNC to the Redeveloper, and is now held by the Redeveloper. The Contract with the Redeveloper, which the EDA and City Council approved in April of this year, provides that the EDA will agree to refund the Current Bonds if requested by the Redeveloper (see pertinent language in the attached Exhibit A). The Redeveloper has now made this request. Refunding the Current Bonds is financially beneficial to the Redeveloper because bonds issued to refund the Current Bonds (the "Refunding Bonds ") will carry lower interest rates, which means that the debt service payments on the Refunding Bonds City of Columbia Heights - EDA Letter City of Columbia Heights - EDA Letter Page 2 will be lower. This will result in some tax increment remaining after payment on the Refunding Bonds, which will be used to pay down the TIF Note (in addition, you will recall that the Contract requires the Redeveloper to construct a senior housing facility within the TIF District, which will generate additional tax increment that will also be used to pay principal and interest on the TIF Note). The Redeveloper recognizes that refunding the Current Bonds primarily benefits the Redeveloper, and has therefore agreed to pay all actual costs of issuance related to the issuance of the Refunding Bonds. The EDA will not pay any costs related to the refunding. In addition, the Redeveloper will pay an administrative fee of $100,000 to the EDA to be allocated to other redevelopment purposes within the City. The Redeveloper has engaged Dougherty & Company as underwriter (i.e. purchaser) for the Refunding Bonds. In order to refund the Current Bonds, the EDA must adopt a resolution awarding the sale of the Refunding Bonds to Dougherty and approving several documents required in connection with the refunding, and the EDA's action must be approved by the City Council. These actions were discussed by the Economic Development Authority on June 6, 2016. The actions are now to be considered by the EDA and City Council on this evening. Stacie Kvilvang from Ehlers & Associates, the City and EDA's municipal advisor, and an associate from Kennedy and Graven will be present at both the EDA and the Council meetings to answer any questions the EDA and /or City Council may have about the legal documents, the financial aspects of the process, or the contractual arrangement providing for this refunding. ATTACHMENTS: 1. First Amendment to Paying Agent Agreement, dated June 1, 2016 (6 pages) 2. Resolution 2016 -14 (8 pages) Second Draft June 9, 2016 FIRST AMENDMENT TO PAYING AGENT AGREEMENT between COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, as Issuer, and BOND TRUST SERVICES CORPORATION, as Paying Agent Dated as of June 1, 2016 Relating to: Columbia Heights Economic Development Authority Tax Increment Revenue Refunding Bonds (Huset Park Area Redevelopment Project) Series 2016 This document drafted by: Kennedy & Graven, Chartered (MNI) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, Minnesota 55402 -1458 48062542 MNI CL205-63 FIRST AMENDMENT TO PAYING AGENT AGREEMENT THIS FIRST AMENDMENT TO PAYING AGENT AGREEMENT is dated as of June 1, 2016 (the "First Amendment to Agreement "), between the COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, a municipal corporation organized and existing under its the laws of the State of Minnesota (the "Issuer "), and BOND TRUST SERVICES CORPORATION, a Minnesota limited purpose trust company, duly established, existing and authorized to accept and execute trusts of the character herein set out, with its principal office in the City of Roseville, Minnesota (the "Paying Agent "), amends the Paying Agent Agreement, dated as of August 1, 2007 (the "Original Agreement," and together with the First Amendment to Agreement, the "Agreement "), between the Issuer and the Paying Agent: I I XG) I K11 f.9 The Issuer and the City of Columbia Heights (the "City ") previously established the Huset Park Area Tax Increment Financing District (the "TIF District ") pursuant to authority granted by Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the "Tax Increment Act "), within the Downtown CBD Redevelopment Project (the "Redevelopment Project "), and adopted a tax increment financing plan for the purpose of financing certain improvements within the TIF District. In order to provide for the redevelopment of the Redevelopment Project and the TIF District, the Authority entered into an Amended and Restated Contract for Private Redevelopment, dated as of August 1, 2007, between the Authority, the City, and BNC National Bank, as successor in interest to Huset Park Development Corporation ( "BNC "), dated as of August 1, 2007, as amended, and pursuant to the Second Amended and Restated Contract for Private Redevelopment, dated October 30, 2015 (the "Contract") between the Issuer, the City, and Columbia Heights Leased Housing Associates I, LLLP, a Minnesota limited liability limited partnership (the "Redeveloper "). Pursuant to Section 469.178 of the Tax Increment Act, the Issuer is authorized to issue and sell its bonds or notes for the purpose of financing or refinancing public redevelopment costs in a project (which includes the Redevelopment Project established and administered under Minnesota Statues, Sections 469.001 through 469.047, as amended) and to pledge tax increment revenues derived from a tax increment financing district established within the Redevelopment Project to the payment of the principal of and interest on such obligations. On August 3, 2007, the Authority issued its Tax Increment Revenue Bonds ( Huset Park Area Redevelopment Project), Series 2007 (the "Prior Bonds "), in the original aggregate principal amount of $2,890,000, pursuant to the TIF Act, Minnesota Statutes, Sections 469.001 through 469.047, as amended, and Minnesota Statutes, Sections 469.090 through 469.1082, as amended (collectively, the "Act"). The Authority applied the proceeds of the Prior Bonds to finance certain public redevelopment costs of the Redevelopment Project (the "Project Costs "). The Prior Bonds are currently outstanding in the principal amount of $2,475,000 and are subject to redemption at the option of the Authority on or after August 15, 2015, at a price of par plus accrued interest. Pursuant to the Act, the terms of Resolution No. 2016 -14, adopted by the Board of Commissioners of the Issuer on June 13, 2016, and the terms and conditions of this First Amendment to Agreement, the Issuer will issue its Tax Increment Revenue Refunding Bonds ( Huset Park Area Redevelopment Project), Series 2016 (the "Bonds "), in the original aggregate principal amount of $ , and will apply the proceeds derived from the sale of the Bonds to (i) refinance the Project Costs through the redemption and prepayment of the outstanding Prior Bonds; (ii) pay costs of issuance and related costs with respect to the Bonds; and (iii) fund a reserve fund. 480625v2 MNI CL205 -63 The execution and delivery of this First Amendment to Agreement and the issuance of the Bonds by the Issuer have been in all respects duly and validly authorized by the Issuer. ARTICLE ONE AMENDMENTS TO ORIGINAL AGREEMENT Section 1 -1. Definitions. (a) The following definitions in Section 1 -I of the Original Agreement are amended to read as follows: "Available Tax Increment" means the Tax Increment derived from all of the property included in the TIF District during the six -month period preceding each Payment Date after deducting $16,500 and the fees of the Paying Agent described in Section 7 -2 hereof. "Bond Purchase Agreement" means the Bond Purchase Agreement, dated June _, 2016, between the Issuer and the Purchaser providing for the purchase of the Bonds, and any amendments to supplements thereto. "Bond" or "Bonds" means the Tax Increment Revenue Refunding Bonds (Huset Park Area Redevelopment Project), Series 2016, issued by the Issuer pursuant to the First Amendment to Agreement. "Bond Year" means initially the period from the date of Bond Closing to and including February 15, 2017, and thereafter each twelve -month period beginning on each February 16 and ending on February 15 of the following year. "Contract" means the Second Amended and Restated Contract for Private Redevelopment, dated October 30, 2015, between the Issuer, the City, and the Redeveloper, and as the same may be amended from time to time. "Excess Available Tax Increment" means, as of each Payment Date, the Available Tax Increment that is in excess of the amount needed to pay debt service due on the Bonds on such Payment Date, after taking into account any amounts then on deposit in the Bond Fund. "Payment Date" means each February 15 and August 15, commencing on August 15, 2016. "Purchaser" means Dougherty & Company LLC. "Redeveloper" means Columbia Heights Leased Housing Associates I, LLLP, a Minnesota limited liability limited partnership, its successors and assigns. "Tax Increment" means that portion of the real property taxes which is paid with respect to the all of the property included in the TIF District and which is remitted to the Authority as tax increment pursuant to the Tax Increment Act. The term Tax Increment does not include any amounts retained by or payable to the State auditor under Section 469.177, subd. I 1 of the Tax Increment Act, or any amounts described in Section 469.174, subd. 25, clauses (2) through (4) of the Tax Increment Act. 480625v2 MNI CL205 -63 (b) The following definitions are added to Section 1 -1 of the Original Agreement: "Agreement" means the Original Agreement, as amended by the First Amendment to Agreement, and as may be further amended or supplemented. "First Amendment to Agreement" means the First Amendment to Paying Agent Agreement, dated as of June 1, 2016, between the Issuer and the Paying Agent, and as may be amended or supplemented. "Original Agreement" means the Paying Agent Agreement, dated as of August 1, 2007, between the Issuer and the Paying Agent. "Prior Bonds" means the Tax Increment Revenue Bonds (Huset Park Redevelopment Project), Series 2007, issued by the Authority on August 3, 2007, in the original aggregate principal amount of August 3, 2007. "Redemption Fund" means the Fund by that name created and established by Article Five of this Agreement. Section 1 -2. Exhibits. Exhibit A of the Original Agreement is hereby deleted in its entirety and replaced with the attached EXHIBIT A. Section 1 -3. Amendments to Article Two of the Original Agreement. Section 2 -3 of the Original Agreement is hereby deleted and replaced with the following: Section 2 -3. Principal Amount, Designation, Interest Rates. Maturities. (a) The Bonds shall be issued under and secured by this Agreement and designated the "Tax Increment Revenue Refunding Bonds (Huset Park Area Redevelopment Project), Series 2016." The Bonds shall be issued in the aggregate principal amount of $ and dated as of the date of original issue. (b) The Bonds shall be issued in fully registered form, numbered separately consecutively upward, and the Bonds shall bear interest from their date of issue, payable each Payment Date. If a default has occurred in the payment of any interest, the Paying Agent shall establish a special Record Date for such payment as hereinafter provided. Interest on the Bonds shall be computed on the basis of a 360 -day year with twelve (12) months of thirty (30) days. (c) The Bonds shall mature on the dates listed below, in the following respective principal amounts, and shall bear interest at the rates per annum for each stated maturity of the Bonds as set forth below opposite the respective stated maturities: 480625v2 MNI CL205 -63 Stated Maturity Principal Amount Interest Rate (d) To the extent lawful, interest shall accrue on all principal of and interest on the Bonds not paid when due at the rate of interest accruing on the Bonds immediately prior to such default. (e) The Bonds shall be subject to redemption and prepayment prior to maturity as provided in Article Three. Section 14. Amendments to Article Three of the Original Agreement. Section 3 -1 of the Original Agreement is hereby deleted and replaced with the following: Section 3 -1. Redemption. The Bonds are subject to redemption prior to maturity as follows: (a) Optional Redemption. The Bonds may be redeemed, in whole or in part, in principal increments of $1,000, at the option of the Issuer on or after 15, 20_, on any date for which timely notice of redemption can be given, at a Redemption Price equal to 101% of the principal amount of the Bonds so redeemed plus interest accrued thereon to the Redemption Date; and on or after 15,20 —, on any date for which timely notice of redemption can be given, at a Redemption Price equal to the principal amount of the Bonds so redeemed plus interest accrued thereon to the Redemption Date. Bonds shall be subject to optional redemption pursuant to this Section 3 -1(a) only if funds to implement such redemption are deposited in the Bond Fund on or before the date on which notice of redemption is required to be given by Section 3 -4. (b) Scheduled Mandatory Redemption. The Bonds maturing on 15, 20_ are subject to scheduled mandatory redemption on the mandatory sinking fund redemption dates and in the principal amounts set forth in the following tables, at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date, without premium, subject to pro rata reduction of such scheduled mandatory redemption payments to the extent that such Bonds are redeemed prior to maturity otherwise than pursuant to such scheduled mandatory redemption: Sinking Fund Installment Date 15,20 Term Bond Principal Amount * Maturity 480625v2 MNI CL205 -63 4 M Mandatory Redemption from Excess Available Tax Increment. The Bonds are subject to mandatory redemption, in principal increments of $1,000, on each Payment Date on which the conditions of Section 5- 3(b)(ii) hereof exist, at a redemption price equal to the principal amount of the Bonds to be redeemed plus accrued interest to the redemption date, without premium, from Excess Available Tax Increment held in the Prepayment Fund as required by Section 5- 3(b)(ii) hereof. Section 1 -5. Amendments to Article Four of the Original Agreement. (a) Clause (e) of Section 4 -2 of the Original Agreement is hereby deleted and replaced with the following: (e) The Issuer shall calculate debt service coverage on the Bonds and any Additional Obligations as of each February 1, commencing February 1, 20_. Debt service coverage shall be calculated as the Available Tax Increment received by the Issuer as of the prior August 15 Payment Date plus the Available Tax Increment received by the Issuer for payment on the immediately next February 15 Payment Date, divided by the total principal and interest due on such two Payment Dates. Written notice of such debt service coverage shall be delivered to the Purchaser on or before each February 2, and to any Bondholder promptly upon receipt of a written request therefor. (b) Section 4 -3 of the Original Agreement is hereby deleted and replaced with the following: Section 4 -3. Additional Obligations. The Subordinate Note has been issued. Other than the Subordinate Note, the Authority may not issue any additional bonds or notes secured by a parity or subordinate pledge of the Available Tax Increment ( "Additional Obligations "). Section 1 -6. Amendments to Article Five of the Original Agreement. (a) Section 5 -2 of the Original Agreement is hereby deleted and replaced with the following: Section 5 -2. Application of Proceeds. On the Bond Closing, the Issuer will receive proceeds of the Bonds in the amount of $ (the par amount of the Bonds, plus original issue premium of $ , less original issue discount of $ , less the Purchaser's discount of $ ). The Issuer shall deposit or disburse such proceeds of the Bonds as follows: (a) $ to the Costs of Issuance Fund; (b) $ to the Reserve Fund; and (c) $ to the Redemption Fund. (b) Clause (a) of Section 5 -3 of the Original Agreement is hereby deleted and replaced with the following: (a) Upon receipt during each Bond Year, the Issuer shall deposit Available Tax Increment into the Bond Fund in the amount that, together with any funds on deposit in the Bond Fund, is necessary to pay principal and interest on the Bonds in that Bond Year. 480625v2 MNI CL205 -63 (c) Clause (b)(i) of Section 5 -3 is hereby deleted and replaced with the following: (i) If on that February 15, the Available Tax Increment in the most recently completed Bond Year was at least 110% of the principal and interest due with the respect to the Bonds during that Bond Year, Excess Available Tax Increment is released from the pledge to the Bonds and may be used by the Issuer for any purpose under law. (d) Section 5 -4 of the Original Agreement is hereby deemed to apply to the Prior Bonds only (e) Section 5 -5 of the Original Agreement is hereby deemed to apply to the Prior Bonds only (f) The Original Agreement is hereby amended to add the following Section 5 -11: Section 5 -11. Redemption Fund. The Issuer shall deposit in the Redemption Fund the amounts referred to in Section 5 -2(c) hereof. Such amounts, along with $ transferred from the Reserve Fund created for the Prior Bonds, will be deposited in the Bond Fund created for the Prior Bonds to redeem and prepay the outstanding Prior Bonds on 2016. Section 1 -7. Amendments to Article Six of the Original Agreement. Section 6 -1 of the Original Agreement is hereby deleted and replaced with the following: Section 6 -1. Defeasance. When all Bonds have been discharged as provided in this Section, all pledges, covenants and other rights granted by Resolution No. 2016 - to the Holders shall, to the extent permitted by law, cease. The Issuer may discharge its obligations with respect to any Bonds which are due on any date by irrevocably depositing with the Paying Agent on or before that date a sum sufficient for the payment thereof in full; or if any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Paying Agent a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The Issuer may also discharge its obligations with respect to any prepayable Bonds called for redemption on any date when they are prepayable according to their terms, by depositing with the Paying Agent on or before that date a sum sufficient for the payment thereof in full, provided that notice of redemption thereof has been duly given. The Issuer may also at any time discharge its obligations with respect to any Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a suitable banking institution qualified by law as an escrow agent for this purpose, cash or securities described in Minnesota Statutes, Section 475.67, Subdivision 8, bearing interest payable at such times and at such rates and maturing on such dates as shall be required, without regard to sale and/or reinvestment, to pay all amounts to become due thereon to maturity or, if notice of redemption as herein required has been duly provided for, to such earlier redemption date. Section 1 -8. Amendments to Article Seven of the Original Agreement. Section 7 -2 of the Original Agreement is hereby deleted and replaced with the following: Section 7 -2. Fees. Charges. and Expenses of the Paving Agent. The Paying Agent shall be entitled to payment and/or reimbursement for reasonable fees for its services rendered hereunder and all necessary advances, counsel fees, and other expenses reasonable or necessarily made or incurred by it in connection with such service. The annual fee of the Paying Agent shall be $650, plus $100 in any Bond Year in which Excess Available Tax Increment is deposited in the Prepayment Fund under Section 5- 3(b)(ii) hereof. The Issuer shall pay to the Paying Agent, 480625v2 MNI CL205 -63 on the date of the execution and delivery of this Agreement, the amount of $ , which represents the Paying Agent's fee through 15, 20 . ARTICLE TWO MISCELLANEOUS Section 2 -1. Effective Date. This First Amendment to Agreement shall be effective as of June 2016. Section 2 -2. Confirmation of Agreement. Except as specifically amended by this First Amendment to Agreement, the Original Agreement is hereby ratified and confirmed, and remains in full force and effect. Section 2 -3. Severability. If any provision of this First Amendment to Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 2 -4. Countemarts. This First Amendment to Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. (The remainder of this page is intentionally left blank.) 480625v2 MNI CL205 -63 IN WITNESS WHEREOF, the Issuer has caused this First Amendment to Paying Agent Agreement to be signed in its name and on its behalf by its board of commissioners, and to evidence its acceptance of the trusts hereby created, Bond Trust Services Corporation, as Paying Agent, has caused these presents to be signed in its name and behalf by its duly authorized officers, all as of the date and year first written above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director 480625v2 MNI CL205 -63 S -1 Execution page of the Paying Agent to the First Amendment to Paying Agent Agreement, dated as of the date and year first written above, between the Columbia Heights Economic Development Authority, as Issuer, and Bond Trust Services Corporation, as Paying Agent. BOND TRUST SERVICES CORPORATION By Its 480625v2 MNl CL205 -63 S -2 EXHIBIT A FORM OF BOND UNITED STATES OF AMERICA STATE OF MINNESOTA ANOKA COUNTY Columbia Heights Economic Development Authority Tax Increment Revenue Refunding Bond (Huset Park Area Redevelopment Project) Series 2016 Maturity Date 15, 20 REGISTERED OWNER: PRINCIPAL AMOUNT: Date of Issuance June _, 2016 CEDE & CO. Interest Rate CUSIP DOLLARS KNOW ALL PERSONS BY THESE PRESENTS that the Columbia Heights Economic Development Authority, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the "Issuer"), certifies that it is indebted and for value received promises to pay to the registered owner specified above, or registered assigns, in the manner hereinafter set forth but only out of its Bond Fund or Prepayment Fund the principal amount specified above, on the stated maturity date specified above, unless called for earlier redemption, and to pay interest thereon semiannually on February 15 and August 15 of each year (each a "Payment Date "), commencing August 15, 2016, at the rate per annum specified above (calculated on the basis of a 360 -day year of twelve 30 -day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal corporate trust office of Bond Trust Services Corporation, as Paying Agent (the "Paying Agent," which term includes any successor to its functions under the Paying Agent Agreement hereinafter referred to), acting as paying agent, or any successor paying agent duly appointed by the Issuer, Interest on this Bond will be paid on each Payment Date by check or draft drawn upon the Paying Agent mailed (or under certain conditions specified in the Paying Agent Agreement sent by wire transfer) to the person in whose name this Bond is registered (the "Holder" or `Bondholder") on the registration books of the Issuer maintained by the Paying Agent and at the address appearing thereon at the close of business on the fifteenth day of the calendar month preceding such Payment Date (the "Regular Record Date "). Any interest not so timely paid shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder hereof at the close of business on a date (the "Special Record Date ") fixed by the Paying Agent whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall 480625v2 MNI CL205 -63 A -1 be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and interest on this Bond are payable in lawful money of the United States of America. If the date for payment of the principal of, premium, if any, or interest on this Bond shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the City of New York, New York, or the city where the principal office of the Paying Agent is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date of payment. This Bond is one of an issue in the aggregate principal amount of $ (the "Bonds'), all of like date of original issue and tenor, except as to number, maturity, interest rate, denomination, and redemption privilege, issued under and equally and ratably secured and entitled to the protection given by the First Amendment to Paying Agent Agreement, dated as of June 1, 2016 (the "Paying Agent Agreement "), between the Issuer and the Paying Agent, which amends the Paying Agent Agreement, dated as of August 1, 2007, between the Issuer and the Paying Agent. The Bonds are issued pursuant to Minnesota Statutes, Section 469.178, to refinance certain public redevelopment costs of a project under and pursuant to Minnesota Statutes, Sections 469.001 through 469.047 and 469.090 through 469.1081, as amended, and other applicable law (collectively, the "Act "). Reference is made to the Paying Agent Agreement, for a description of the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the Issuer and Paying Agent and the rights of the Holders of the Bonds, and the terms upon which the Bonds are issued and secured. The Bonds are subject to redemption as follows: (a) Optional Redemption. The Bonds may be redeemed, in whole or in part, in principal increments of $1,000, at the option of the Issuer on or after 15, 20_ , on any date for which timely notice of redemption can be given, at a redemption price equal to 101% of the principal amount of the Bonds so redeemed plus interest accrued thereon to the redemption date; and on or after 15, 20_, on any date for which timely notice of redemption can be given, at a redemption price equal the principal amount of the Bonds so redeemed plus interest accrued thereon to the redemption date. (b) Scheduled Mandatory Redemption. The Bonds maturing on 15, 20 , are subject to scheduled mandatory redemption on the mandatory sinking fund redemption dates and in the principal amounts set forth in the following tables, at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date, without premium, subject to pro rata reduction of such scheduled mandatory redemption payments to the extent that such Bonds are redeemed prior to maturity otherwise than pursuant to such scheduled mandatory redemption: [Insert Mandatory Sinking Fund Redemption Schedule] (c) Mandatory Redemption from Excess Available Tax Increment. The Bonds are subject to mandatory redemption, and shall be redeemed and prepaid in inverse order of maturity in principal increments of $1,000, on each Payment Date on which the conditions specified in Section 5- 3(b)(ii) of the Paying Agent Agreement exist, at a redemption price equal to the principal amount of the Bonds to be redeemed plus accrued interest to the redemption date, without premium, from Excess Available Tax Increment held in the Prepayment Fund as required by Section 5- 3(b)(ii) of the Paying Agent Agreement. In the case of redemption of less than all Bonds Outstanding pursuant to paragraph (a) above, the Paying Agent shall select the maturities of the Bonds to be redeemed, and the principal amount (in 480625v2 MNI CL205-63 A -2 increments of $1,000) to be redeemed from each maturity. If less than all of the Outstanding principal amount of the Bonds of a specific maturity are to be redeemed, the specific Bonds to be redeemed shall be selected by the Paying Agent at random or in such manner as the Paying Agent shall deem fair and appropriate in increments of $1,000 or any integral multiple thereof. Notice of redemption shall be given by first class mail, postage prepaid, mailed not less than fifteen (15) days prior to the Redemption Date, to each Holder of Bonds to be redeemed at the address of the Holder appearing in the Bond Register. For Bonds registered to Cede & Co., as nominee of DTC, notice of redemption may instead by given by electronic notice, sent not less than fifteen (15) days prior to the Redemption Date. No defect in or failure to give notice by mail to any Holder shall affect the validity of the proceedings for redemption of any Bond held by any Holder to which proper notice by mail has been given. The Bonds are issued pursuant to and in full compliance with the Constitution and laws of the State of Minnesota, particularly the Act, and pursuant to a resolution adopted by the Board of Commissioners of the Issuer on June 13, 2016 (the "Resolution "). The Bonds are special obligations payable solely from Available Tax Increment and certain other funds pledged to the payment of the Bonds and interest thereon. The Bonds are issued by the Issuer to aid in refinancing a project under the Act. The Bonds do not constitute a general or moral obligation of the State of Minnesota or its political subdivisions, including the Issuer. The Bonds, including interest thereon, are payable solely from the revenues and assets expressly pledged to the payment thereof. The Bonds shall not constitute a debt of the Issuer within the meaning of any constitutional or statutory limitation of indebtedness. As provided in the Paying Agent Agreement and subject to certain limitations therein set forth, this Bond is transferable by the Holder in person or by his, her or its attorney duly authorized in writing at the principal office of the Paying Agent upon presentation and surrender hereof to the Paying Agent, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and Paying Agent duly executed by, the Holder hereof or his, her or its attorney duly authorized in writing. Thereupon the Issuer shall execute and the Paying Agent shall authenticate and deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation) of the same series, of an authorized denomination or denominations, for the same aggregate principal amount and of the same stated maturity and interest rate. The Bonds are issued as fully registered bonds in the denomination of $100,000 and integral multiples of $1,000 in excess of $25,000. The Bonds are exchangeable for one or more Bonds of the same series, aggregate principal amount, interest rate and maturity date, upon surrender thereof by the Holder at the principal office of the Paying Agent, in the manner and upon payment of the charges provided in the Paying Agent Agreement. The Paying Agent may require payment of a sum sufficient to cover any tax, fee or other governmental charge required to be made in connection with the transfer or exchange of this Bond. The Issuer, Paying Agent and any agent of the Issuer or Paying Agent may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and the Issuer, Paying Agent and agents of the Issuer or Paying Agent shall not be affected by notice to the contrary. 480625v2 MNI CL205 -63 A -3 The Bonds have been designated by the Issuer as "qualified tax- exempt obligations" for purposes of Section 265(b)(3) of the federal Internal Revenue Code of 1986, as amended. Capitalized terms which are used but not defined herein shall have the same meanings given them in, or pursuant to, the Paying Agent Agreement. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Paying Agent Agreement unless the Certificate of Authentication hereon shall have been executed by the Paying Agent. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to happen and to be performed, precedent to and in the execution and delivery of the Paying Agent Agreement and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law, and that this Bond, together with all other obligations of the Issuer outstanding on the Date of Original Issue hereof and on the date of its issuance and delivery to the purchaser, does not exceed any constitutional or statutory limitation of indebtedness. IN WITNESS WHEREOF, the Columbia Heights Economic Development Authority has caused this Bond to be executed in its name and on its behalf by the facsimile signatures of its authorized officers, as of the Date of Issuance. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director PAYING AGENT'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the within- mentioned Paying Agent Agreement. BOND TRUST SERVICES CORPORATION, as Paying Agent Date: June_, 2016 Responsible Agent 480625v2 MNI CL205 -63 A -4 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (Please Print or Typewrite Name and Address of Transferee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: Please Insert Social Security Number or Other Identifying Number of Assignee. Signature Guaranteed: Notice: The signature to this assignment must correspond with the name as it appears on the face of this Bond in every particular, without alteration or any change whatever. NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program ( "STAMP "), the Stock Exchange Medallion Program ( "SEMP "), the New York Stock Exchange, Inc. Medallion Signatures Program ( "MSP ") or other such "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STEMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) 480625v2 MNI CL205 -63 A -5 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations TEN COM — as tenants in common JT TEN — as joint tenants with right of survivorship and not as tenants in common TEN ENT — as tenants by entireties UNIF GIFT MIN ACT — Custodian (Cust) (Minor) under Uniform Gifts or Transfers to Minors Act (State) Additional abbreviations may also be used though not in the above list. 480625v2 MNI CL205 -63 A -6 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2016-14 RESOLUTION AUTHORIZING THE ISSUANCE OF TAX INCREMENT REVENUE REFUNDING BONDS (HUSET PARK AREA REDEVELOPMENT PROJECT), SERIES 2016, AND PROVIDING THE FORM, TERMS, PLEDGE OF REVENUES, AND FINDINGS, COVENANTS, AND DIRECTIONS RELATING TO THE ISSUANCE OF SUCH OBLIGATIONS BE IT RESOLVED by the Board of Commissioners (the `Board ") of the Columbia Heights Economic Development Authority (the "Authority "), as follows: SECTION 1. BACKGROUND. 1.01. The Columbia Heights Economic Development Authority (the "Authority ") and the City of Columbia Heights, Minnesota (the "City ") previously established the Huset Park Area Tax Increment Financing District (the "TIF District') pursuant to authority granted by Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the "Tax Increment Act'), within the Downtown CBD Redevelopment Project (the "Redevelopment Project'), and adopted a tax increment financing plan for the purpose of financing certain improvements within the TIF District. In order to provide for the redevelopment of the Redevelopment Project and the TIF District, the Authority entered into an Amended and Restated Contract for Private Redevelopment, dated as of August 1, 2007, between the Authority, the City, and BNC National Bank, as successor in interest to Huset Park Development Corporation, dated as of August 1, 2007, as amended, and pursuant to the Second Amended and Restated Contract for Private Redevelopment, dated October 30, 2015 (the "Contract') between the Authority, the City, and Columbia Heights Leased Housing Associates I, LLLP, a Minnesota limited liability limited partnership (the "Redeveloper "). 1.02. Pursuant to Section 469.178 of the Tax Increment Act, the Authority is authorized to issue and sell its bonds for the purpose of financing or refinancing public redevelopment costs of the Redevelopment Project and to pledge tax increment revenues derived from a tax increment financing district established within the Redevelopment Project to the payment of the principal of and interest on such obligations. 1.03. On August 3, 2007, the Authority issued its Tax Increment Revenue Bonds ( Huset Park Area Redevelopment Project), Series 2007 (the "Prior Bonds "), in the original aggregate principal amount of $2,890,000, pursuant to the TIF Act, Minnesota Statutes, Sections 469.001 through 469.047, as amended, and Minnesota Statutes, Sections 469.090 through 469.1082, as amended (collectively, the "Act'). The Authority applied the proceeds of the Prior Bonds to finance certain public redevelopment costs of the Redevelopment Project (the "Project Costs "). The Prior Bonds are currently outstanding in the principal amount of $2,475,000 and are subject to redemption at the option of the Authority on or after August 15, 2015, at a price of par plus accrued interest. SECTION 2. ISSUANCE OF BONDS. 2.01. In order to refinance the Project Costs through the redemption and prepayment of the outstanding Prior Bonds, pay costs of issuance and related costs with respect to the Bonds, and fund a 480618v2 MNI CL205 -63 reserve fund, the Board hereby authorizes the issuance of its Tax Increment Revenue Refunding Bonds (Huset Park Area Redevelopment Project), Series 2016 (the "Bonds "), in a principal amount not to exceed $2,800,000. The Bonds shall be issued on such date and upon the terms and conditions determined by the Executive Director of the Authority (the "Executive Director "), provided that the yield on the Bonds (for arbitrage purposes) shall not exceed 3.375 %. The Bonds may be designated such other name or names as determined to be appropriate by the Executive Director. The Bonds shall be issued in one or more series as the Executive Director may determine, and shall be assigned a separate series designation determined by the Executive Director for each series issued by the Authority. The Bonds are authorized to be issued as obligations the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. This authorization to issue the Bonds is effective without any additional action of the Board and shall be undertaken by the Executive Director on such date or dates and upon the terms and conditions deemed reasonable by the Executive Director. The Board hereby authorizes the sale of the Bonds to Dougherty & Company LLC (the "Underwriter ") upon the offer of the Underwriter to purchase the Bonds in accordance with the terms of a Bond Purchase Agreement between the Authority and the Underwriter (the "Bond Purchase Agreement') and conforming to the parameters set forth in this paragraph. 2.02. There have been presented to the Board forms of the following documents: (i) a First Amendment to Paying Agent Agreement (the "Paying Agent Agreement "), between the Authority and Bond Trust Services Corporation (the "Paying Agent'), which amends the Paying Agent Agreement with respect to the Prior Bonds, dated as of August 1, 2007, between the Authority and the Paying Agent; and (ii) a Bond Purchase Agreement. The Paying Agent Agreement and the Bond Purchase Agreement are hereby approved in substantially the forms on file with the Authority on the date hereof, subject to such changes not inconsistent with this resolution and applicable law that are approved by the Executive Director of the Authority. Upon approval by the Executive Director of the Paying Agent Agreement and Bond Purchase Agreement, the Chair and the Executive Director are authorized and directed to execute such documents on behalf of the Authority. 2.03. The Bonds shall have the maturities, interest rate provisions, shall be dated, numbered, and issued in such denominations, shall be subject to mandatory and optional redemptions and prepayment prior to maturity, shall be executed, and authenticated in such manner, shall be in such form, and shall have such other details and provisions as are prescribed in the Paying Agent Agreement. The form of the Bonds included in the Paying Agent Agreement is approved in substantially the form in the Paying Agent Agreement, subject to such changes not inconsistent with this resolution and applicable law, and subject to such changes as are approved by the Executive Director. Without limiting the generality of the foregoing, the Executive Director is authorized to approve the original aggregate principal amount of each series of Bonds to be issued under the terms of this resolution (subject to the maximum aggregate principal amount for all series authorized by this resolution), to establish the terms of redemption, the principal amounts subject to redemption, and the dates of redemption of the Bonds, and to approve other changes to the other terms of the Bonds which are deemed by the Executive Director to be in the best interests of the Authority. The issuance and delivery of the Bonds shall be conclusive evidence that the Executive Director has approved the terms and provisions of the Bonds in accordance with the authority granted by this resolution. The proceeds derived from the sale of the Bonds, and the earnings derived from the investment of such proceeds, shall be held, transferred, expended, and invested in accordance with determinations of the Executive Director. Upon approval by the Executive Director of the Bonds, the Chair and the Executive Director are authorized and directed to execute such Bonds on behalf of the Authority. 2.04. The Bonds shall be secured by the terms of the Paying Agent Agreement and shall be payable solely from Available Tax Increment (as defined in the Paying Agent Agreement) that is 480618v2 MNI CL205 -63 2 expressly pledged to the payment of the Bonds pursuant to the terms of the Paying Agent Agreement. The covenants, representations and warranties of the Authority contained in the Paying Agent Agreement are expressly incorporated herein for the benefit of the holders of the Bonds. 2.05. It is hereby found, determined and declared that the issuance and sale of the Bonds, the execution and delivery by the Authority of the Paying Agent Agreement and the Bond Purchase Agreement (the "Authority Documents "), and the performance of all covenants and agreements of the Authority contained in the Authority Documents, and of all other acts required under the Constitution and laws of the State of Minnesota to make the Bonds the valid and binding special obligations of the Authority enforceable in accordance with their respective terms, are authorized by applicable Minnesota law, including, without limitation, the Tax Increment Act, and this Resolution. 2.06. Under the provisions of the Tax Increment Act, and as provided in the Paying Agent Agreement and under the terms of the Bonds, the Bonds are not to be payable from or chargeable against any funds other than the revenues pledged to the payment thereof; the Authority shall not be subject to any liability thereon other than from such revenues pledged thereto; no holder of any Bonds shall ever have the right to compel any exercise by the Authority of its taxing powers (other than as contemplated by the pledge of tax increment revenues under the terms of the Paying Agent Agreement) to pay the principal of, premium, if any, and interest on the Bonds, or to enforce payment thereof against any property of the Authority other than the property expressly pledged thereto; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Authority other than the revenues expressly pledged thereto; the Bonds shall recite that the Bonds are issued without a pledge of the general or moral obligation of the Authority, and that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof, and the Bonds shall not constitute a debt of the Authority within the meaning of any constitutional or statutory limitation of indebtedness. SECTION 3. REFUNDING OF PRIOR BONDS; FINDINGS; REDEMPTION OF PRIOR BONDS. 3.01. The outstanding Prior Bonds will be called for redemption on August 15, 2016, or the first date on which timely notice of redemption can be given (the "Redemption Date "), in the principal amount of $2,475,000 plus accrued interest to the Redemption Date. It is hereby found and determined that based upon information presently available from the Authority's municipal advisor, the issuance of the Bonds will result in a reduction of debt service costs to the Authority. 3.02. It is hereby found and determined that the proceeds of the Bonds deposited in the Redemption Fund created under the Paying Agent Agreement, along with any other funds on hand in the reserve fund established for the Prior Bonds, will be sufficient to prepay all of the principal of, interest on and redemption premium (if any) on the Prior Bonds on the Redemption Date. 3.03. The Prior Bonds maturing after the Redemption Date will be redeemed and prepaid on the Redemption Date. The Prior Bonds will be redeemed and prepaid in accordance with their terms and in accordance with the terms and conditions set forth in the form of Notice of Call for Redemption attached hereto as EXHIBIT A, which terms and conditions are hereby approved and incorporated herein by reference. The registrar for the Prior Bonds is authorized and directed to send a copy of the respective Notice of Call for Redemption to each registered holder of the Prior Bonds at least thirty (30) days prior to the Redemption Date. 48061W MNI CL205 -63 Q SECTION 4. DISCLOSURE DOCUMENTS AND CLOSING CERTIFICATES. 4.01. The Authority approves the preparation and distribution of a Preliminary Official Statement and an Official Statement with respect to the offer and sale of the Bonds. In order to provide for continuing disclosure with respect to the Bonds, to the extent deemed necessary, required, or appropriate by the Executive Director, the Executive Director may execute a certificate providing for continuing disclosure with respect to the Bonds. 4.02. The Executive Director is authorized to furnish to the purchasers of the Bonds, on the date of issuance and sale of the Bonds, a certificate that, to the best of the knowledge of such officer, the Official Statement (or other form of disclosure document) does not, as of the date of closing, and did not, as the time of sale of the Bonds, contain any untrue statement of a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. Unless litigation shall have been commenced and be pending questioning the Bonds, the proceedings for approval of the Bonds, tax increment revenues generated or collected for payment of the Bonds, revenues pledged for payment of the Bonds, or the organization of the Authority, or incumbency of its officers, the Chair and the Executive Director shall also execute and deliver a suitable certificate as to absence of material litigation, and the Executive Director shall also execute and deliver a certificate as to payment for and delivery of the Bonds, and the signed approving legal opinion of Kennedy & Graven, Chartered, as to the validity and enforceability of the Bonds and the tax - exempt status of interest on the Bonds. 4.03. The Chair, the Executive Director, and other agents, officers, and employees of the Authority are hereby authorized and directed, individually and collectively, to furnish to the attorneys approving the Bonds, on behalf of the purchasers of the Bonds, certified copies of all proceedings and certifications as to facts as shown by the books and records of the Authority, and the right and authority of the Authority to issue the Bonds, and all such certified copies and certifications shall be deemed representations of fact on the part of the Authority. Such officers, employees, and agents of the Authority are hereby authorized to execute and deliver, on behalf of the Authority, all other certificates, instruments, and other written documents that may be requested by bond counsel, the Underwriter, the Paying Agent, or other persons or entities in conjunction with the issuance of the Bonds and the expenditure of the proceeds of the Bonds. Without imposing any limitations on the scope of the preceding sentence, such officers and employees are specifically authorized to execute and deliver a certificate relating to federal tax matters including matters relating to arbitrage and arbitrage rebate, a receipt for the proceeds derived from the sale of the Bonds, an order to the Paying Agent, a general certificate of the Authority, and an Information Return for Tax - Exempt Governmental Obligations, Form 8038 -G (Rev. September 2011). SECTION 5. BANK QUALIFICATION. The Authority hereby designates the Bonds as "qualified tax - exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code "), and represents that the Authority does not reasonably anticipate that the Authority, the City, or any other subordinate entity of the City will issue in calendar year 2016 more than $10,000,000 of bonds or other tax - exempt obligations (excluding "private activity bonds" other than "qualified 501(c)(3) bonds," as such terms are defined in the Code, and excluding certain refunding obligations, that are not included in the $10,000,000 limitation set forth in Section 265(b)(3)(C)(i) of the Code). 480618v2 MNI CL205 -63 4 SECTION 6. MISCELLANEOUS. 6.01. All agreements, covenants, and obligations of the Authority contained in this resolution and in the above - referenced documents shall be deemed to be the agreements, covenants, and obligations of the Authority to the full extent authorized or permitted by law, and all such agreements, covenants, and obligations shall be binding on the Authority and enforceable in accordance with their terms. No agreement, covenant, or obligation contained in this resolution or in the above - referenced documents shall be deemed to be an agreement, covenant, or obligation of any member of the Board, or of any officer, employee, or agent of the Authority in that person's individual capacity. Neither the members of the Board, nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance of the Bonds. 6.02. Nothing in this resolution or in the above - referenced documents is intended or shall be constructed to confer upon any person (other than as provided in the Paying Agent Agreement, the Bonds, and the other agreements, instruments, and documents hereby approved) any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provision of this resolution. 6.03. If for any reason the Chair or the Executive Director, or any other officers, employees, or agents of the Authority authorized to execute certificates, instruments, or other written documents on behalf of the Authority shall for any reason cease to be an officer, employee, or agent of the Authority after the execution by such person of any certificate, instrument, or other written document, such fact shall not affect the validity or enforceability of such certificate, instrument, or other written document. If for any reason the Chair or the Executive Director, or any other officers, employees, or agents of the Authority authorized to execute certificates, instruments, or other written documents on behalf of the Authority shall be unavailable to execute such certificates, instruments, or other written documents for any reason, such certificates, instruments, or other written documents may be executed by a deputy or assistant to such officer, or by such other officer of the Authority as in the opinion of the Authority Attorney is authorized to sign such document. 6.04. The Authority shall not take any action or authorize any action to be taken in connection with the application or investment of the proceeds of the Bonds or any related activity which would cause the Bonds to be deemed to be "private activity bonds," within the meaning of Section 141 of the Code. The Authority shall not take any action or authorize any action to be taken in connection with the application or investment of the proceeds of the Bonds or any related activity which would cause the Bonds to be deemed to be "arbitrage bonds," within the meaning of Section 148 of the Code. Furthermore, the Authority shall take all such actions as may be required under the Code to ensure that interest on the Bonds is not and does not become includable in gross income for federal income tax purposes. 6.05. The authority to approve, execute, and deliver future amendments to the documents executed and delivered by the Authority in connection with the transactions contemplated hereby is hereby delegated to the Executive Director, subject to the following conditions: (a) such amendments do not require the consent of the holders of the Bonds or, if required, such consent has been obtained; (b) such amendments do not materially adversely affect the interests of the Authority as the issuer of the Bonds; (c) such amendments do not contravene or violate any policy of the Authority; (d) such amendments are acceptable in form and substance to the Authority Attorney, bond counsel or other counsel retained by the Authority to review such amendments; (e) the Authority has received, if necessary, an opinion of bond counsel to the effect that the amendments will not adversely affect the tax- exempt character of interest on the Bonds, if the Bonds are then tax- exempt obligations; and (f) such amendments do not materially prejudice the interests of the owners of the Bonds. The authorization 480618v2 MNI CL205 -63 hereby given shall be further construed as authorization for the execution and delivery of such certificates and related items as may be required to demonstrate compliance with the agreements being amended and the terms of this resolution. The execution of any instrument by the Executive Director shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. In the absence of the Executive Director, any instrument authorized by this paragraph to be executed and delivered by the Executive Director may be executed by such other officer of the Authority as in the opinion of the Authority Attorney is authorized to execute and deliver such document. SECTION 7. Effective Date. This Resolution shall take effect and be in force from and after its approval, subject to approval by the City Council of the City of the Authority's proposed issuance of the Bonds. Adopted by the Board of Commissioners of the Columbia Heights Economic Development Authority this 13`s day of June, 2016. Gary L. Peterson, President Attest: Walter R. Fehst, Executive Director 480618v2 MNI CL205 -63 EXHIBIT A NOTICE OF CALL FOR REDEMPTION $2,890,000 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY TAX INCREMENT REVENUE BONDS (HUSET PARK AREA REDEVELOPMENT PROJECT) SERIES 2007 NOTICE IS HEREBY GIVEN that, by order of the Board of Commissioners of the Columbia Heights Economic Development Authority (the "Authority "), there have been called for redemption and prepayment on August 15, 2016 all outstanding bonds (the "Bonds ") of the Authority designated as Tax Increment Revenue Bonds (Huset Park Area Redevelopment Project), Series 2007, dated August 3, 2007, having stated maturity dates of February 1 in the years 2017 through 2032, both inclusive, totaling $2,475,000 in principal amount, and with the following CUSIP numbers: Year of Maturity 2017 2022 2032 Amount CUSIP Number $ 80,000 197690 AA8 510,000 197690 AB6 1,885,000 197690 AD2 The Bonds are being called at a price of par plus accrued interest to August 15, 2016, on which date all interest on said Bonds will cease to accrue. The redemption of the Bonds is contingent upon the receipt by Bond Trust Services Corporation (the "Paying Agent "), of sufficient funds, on or before the redemption date, for the redemption of all Bonds. If such funds are not received in accordance with the preceding sentence then the redemption will be cancelled. Holders of the Bonds hereby called for redemption are requested to present their Bonds for payment at the main office of Bond Trust Services Corporation, 3060 Centre Pointe Drive, Roseville, Minnesota 55113, on or before August 15,2016: Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of 2003, the registrar is required to withhold a specified percentage of the principal amount of the redemption price payable to the holder of any Bonds subject to redemption and prepayment on the redemption date, unless the registrar is provided with the Social Security Number or Federal Employer Identification Number of the holder, properly certified. Submission of a fully executed Request for Taxpayer Identification Number and Certification, Form W -9, will satisfy the requirements of this paragraph. 480618v2 MNI CI.205 -63 A -1 Dated: , 2016. BY ORDER OF THE BOARD OF COMMISSIONERS OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By: /s/ Walter R. Fehst Executive Director Columbia Heights Economic Development Authority 480618v2 MNI CL205 -63 A -2 CH COLUMBIA HEIGHTS AGENDA SECTION BUSINESS ITEMS ITEM NO. 5 MEETING DATE JUNE 13, 2016 CITY OF COLUMBIA HEIGHTS — ECONOMIC DEVELOPMENT AUTHORITY ITEM: Approval of Post - Issuance Compliance Procedure and Policy for Tax - Exempt Governmental Bonds DEPARTMENT: Community Development CITY MANAGER'S APPROVAL: BY /DATE: Martha Ingram, June 1, 2016 BY /DATE: The Columbia Heights Economic Development Authority (the "Authority ") is an issuer of tax - exempt governmental bonds. Over time, the Internal Revenue Service (the "IRS ") has developed a series of regulations that require issuers of such bonds to take certain actions after the bonds have been issued to ensure that the bonds remain tax - exempt. The IRS has also begun to investigate whether issuers of tax - exempt bonds are complying with these regulations. For example, in early 2009, the IRS mailed its Governmental Bond Financings Compliance Check Questionnaire, Form 14002 to two hundred governmental entities that had issued tax - exempt bonds in 2005. A major focus of the IRS questionnaire is whether the governing body of the issuer responding to the questionnaire has adopted written procedures for its required post- issuance compliance actions. The questions in this questionnaire provide clear guidance from the IRS on the post- issuance actions that are expected from issuers of tax - exempt governmental bonds, the records that the IRS expects such issuers to retain, and the period of time such records are expected to be retained. The IRS has suggested that it may send this or a similar questionnaire to more issuers in the near future. In September 2011, the IRS revised its Form 8038 -G, which is the informational tax return that issuers of tax - exempt governmental bonds are required to submit in connection with each bond issue. The new version of the Form 8038 -G requires the issuer to certify whether it has written procedures in place for its post- issuance compliance activities. In addition, if a problem with the tax exemption of the bonds is identified at some point, the IRS has indicated it will allow reduced closing agreement amounts under its Voluntary Closing Agreement Program for issuers who implement written post- issuance compliance procedures. Our office has prepared a model policy which, if implemented and followed, will meet IRS requirements for post- issuance compliance. I strongly recommend that the Board of Commissioners of the Authority adopt this policy, and that it follow the adopted policy with regard to all of its tax - exempt bonds. If you have any questions about post- issuance compliance or the proposed policy, please do not hesitate to call me at (612) 337 -9231. ATTACHMENTS: 1. Post Issue Compliance Procedure and Policy for Tax Exempt Governmental Bonds, dated June 1, 2016 (5 pages) 2. Resolution 2016 -15 (1 page) City of Columbia Heights - EDA Letter Columbia Heights Economic Development Authority POST - ISSUANCE COMPLIANCE PROCEDURE AND POLICY FOR TAX - EXEMPT GOVERNMENTAL BONDS June 13, 2016 480657v] MM CL205 -63 Post- Issuance Compliance Procedure and Policy for Tax - Exempt Governmental Bonds The Columbia Heights Economic Development Authority (the "Authority ") issues tax - exempt governmental bonds to finance capital improvements. As an issuer of tax - exempt governmental bonds, the Authority is required by the terms of Sections 103 and 141 -150 of the Internal Revenue Code of 1986, as amended (the "Code "), and the Treasury Regulations promulgated thereunder (the "Treasury Regulations "), to take certain actions subsequent to the issuance of such bonds to ensure the continuing tax - exempt status of such bonds. In addition, Section 6001 of the Code and Section 1.6001 -1(a) of the Treasury Regulations, impose record retention requirements on the Authority with respect to its tax - exempt governmental bonds. This Post - Issuance Compliance Procedure and Policy for Tax - Exempt Governmental Bonds (the "Policy ") has been approved and adopted by the Authority to ensure that the Authority complies with its post - issuance compliance obligations under applicable provisions of the Code and Treasury Regulations. 1. Effective Date and Term. The effective date of this Policy is June 13, 2016, and shall remain in effect until superseded or terminated by the Authority. 2. Responsible Parties. The Executive Director of the Authority shall be the party primarily responsible for ensuring that the Authority successfully carries out its post - issuance compliance requirements under applicable provisions of the Code and Treasury Regulations. The Executive Director will be assisted by the Finance Department and other staff of the City of Columbia Heights, Minnesota (the "City") and by Authority staff and officials when appropriate. The Executive Director of the Authority will also be assisted in carrying out post - issuance compliance requirements by the following organizations: (a) Bond Counsel (the law firm primarily responsible for providing bond counsel services for the Authority); (b) Municipal Advisor (the organization utilized from time to time for providing financial advisor services to the Authority); (c) Paying Agent (the person, organization, or Authority officer primarily responsible for providing paying agent services for the Authority); and (d) Rebate Analyst (the organization primarily responsible for providing rebate analyst services for the Authority). The Executive Director shall be responsible for assigning post - issuance compliance responsibilities to the Finance Department and other staff of the City, staff of the Authority, Bond Counsel, Municipal Advisor, Paying Agent, and Rebate Analyst. The Executive Director shall utilize such other professional service organizations as are necessary to ensure compliance with the post - issuance compliance requirements of the Authority. The Executive Director shall provide training and educational resources to Authority staff who are responsible for ensuring compliance with any portion of the post - issuance compliance requirements of this Policy. 3. Post - Issuance Compliance Actions. The Executive Director shall take the following post- issuance compliance actions or shall verify that the following post- issuance compliance actions have been taken on behalf of the Authority with respect to each issue of tax - exempt governmental bonds issued by the Authority: 480657vt MNI CL205 -63 (a) The Executive Director shall prepare a transcript of principal documents (this action will be the primary responsibility of Bond Counsel). (b) The Executive Director shall file with the Internal Revenue Service (the "IRS "), within the time limit imposed by Section 149(e) of the Code and applicable Treasury Regulations, an Information Return for Tax - Exempt Governmental Obligations, Form 8038 -G (this action will be the primary responsibility of Bond Counsel). (c) The Executive Director shall prepare an "allocation memorandum" for each issue of tax- exempt governmental bonds in accordance with the provisions of Treasury Regulations, Section 1.148- 6(d)(1), that accounts for the allocation of the proceeds of the tax - exempt bonds to expenditures not later than the earlier of (i) eighteen (18) months after the later of (A) the date the expenditure is paid, or (B) the date the project, if any, that is financed by the tax - exempt bond issue is placed in service; or (ii) the date sixty (60) days after the earlier of (A) the fifth anniversary of the issue date of the tax - exempt bond issue, or (B) the date sixty (60) days after the retirement of the tax- exempt bond issue. Preparation of the allocation memorandum will be the primary responsibility of the Executive Director (in consultation with Bond Counsel, and, if employed with respect to the tax - exempt issue, the Municipal Advisor). (d) The Executive Director, in consultation with Bond Counsel, shall identify proceeds of tax- exempt governmental bonds that must be yield- restricted and shall monitor the investments of any yield - restricted funds to ensure that the yield on such investments does not exceed the yield to which such investments are restricted. (e) In consultation with Bond Counsel, the Executive Director shall determine whether the Authority is subject to the rebate requirements of Section 148(f) of the Code with respect to each issue of tax - exempt governmental bonds. In consultation with Bond Counsel, the Executive Director shall determine, with respect to each issue of tax - exempt governmental bonds of the Authority, whether the Authority is eligible for any of the temporary periods for unrestricted investments and is eligible for any of the spending exceptions to the rebate requirements. The Executive Director shall contact the Rebate Analyst (and, if appropriate, Bond Counsel) prior to the fifth anniversary of the date of issuance of each issue of tax- exempt governmental bonds of the Authority and each fifth anniversary thereafter to arrange for calculations of the rebate requirements with respect to such tax- exempt governmental bonds. If a rebate payment is required to be paid by the Authority, the Executive Director shall prepare or cause to be prepared the Arbitrage Rebate, Yield Reduction and Penalty in Lieu of Arbitrage Rebate, Form 8038 -T, and submit such Form 8038 -T to the IRS with the required rebate payment. If the Authority is authorized to recover a rebate payment previously paid, the Executive Director shall prepare or cause to be prepared the Request for Recovery of Overpayments Under Arbitrage Rebate Provisions, Form 8038 -R, with respect to such rebate recovery, and submit such Form 8038 -R to the IRS. 4. Procedures for Monitoring, Verification, and Inspections. The Executive Director shall institute such procedures as the Executive Director shall deem necessary and appropriate to monitor the 4806570 MNI CL205 -63 2 use of the proceeds of tax- exempt governmental bonds issued by the Authority, to verify that certain post - issuance compliance actions have been taken by the Authority, and to provide for the inspection of the facilities financed with the proceeds of such bonds. At a minimum, the Executive Director shall establish the following procedures: (a) The Executive Director shall monitor the use of the proceeds of tax - exempt governmental bonds to: (i) ensure compliance with the expenditure and investment requirements under the temporary period provisions set forth in Treasury Regulations, Section 1.148 -2(e); (ii) ensure compliance with the safe harbor restrictions on the acquisition of investments set forth in Treasury Regulations, Section 1.148 -5(d); (iii) ensure that the investments of any yield - restricted funds do not exceed the yield to which such investments are restricted; and (iv) determine whether there has been compliance with the spend -down requirements under the spending exceptions to the rebate requirements set forth in Treasury Regulations, Section 1.148 -7. (b) The Executive Director shall monitor the use of all bond-financed facilities in order to: (i) determine whether private business uses of bond - financed facilities have exceeded the de minimus limits set forth in Section 141(b) of the Code as a result of leases and subleases, licenses, management contracts, research contracts, naming rights agreements, or other arrangements that provide special legal entitlements to nongovernmental persons; and (ii) determine whether private security or payments that exceed the de minimus limits set forth in Section 141(b) of the Code have been provided by nongovernmental persons with respect to such bond - financed facilities. The Executive Director shall provide training and educational resources to any Authority staff who have the primary responsibility for the operation, maintenance, or inspection of bond - financed facilities with regard to the limitations on the private business use of bond-financed facilities and as to the limitations on the private security or payments with respect to bond - financed facilities. (c) The Executive Director shall undertake the following with respect to each outstanding issue of tax - exempt governmental bonds of the Authority: (i) an annual review of the books and records maintained by the Authority with respect to such bonds; and (ii) an annual physical inspection of the facilities financed with the proceeds of such bonds, conducted by the Executive Director with the assistance of any Authority staff who have the primary responsibility for the operation, maintenance, or inspection of such bond - financed facilities. 5. Record Retention Requirements. The Executive Director shall collect and retain the following records with respect to each issue of tax - exempt governmental bonds of the Authority and with respect to the facilities financed with the proceeds of such bonds: (i) audited financial statements of the Authority; (ii) appraisals, demand surveys, or feasibility studies with respect to the facilities to be financed with the proceeds of such bonds; (iii) publications, brochures, and newspaper articles related to the bond financing; (iv) trustee or paying agent statements; (v) records of all investments and the gains (or losses) from such investments; (vi) paying agent or trustee statements regarding investments and investment earnings; (vii) reimbursement resolutions and expenditures reimbursed with the proceeds of such bonds; (viii) allocations of proceeds to expenditures (including costs of issuance) and the dates and amounts of such expenditures (including requisitions, draw schedules, draw requests, invoices, bills, and cancelled checks with respect to such expenditures); (ix) contracts entered into for the construction, renovation, or purchase of bond - financed facilities; (x) an asset list or schedule of all bond - financed depreciable property and any depreciation schedules with respect to such assets or property; (xi) records of the purchases and sales of bond - financed assets; (xii) private business uses of bond - financed facilities that arise subsequent to the date of issue through leases and subleases, licenses, management contracts, research contracts, naming rights agreements, or other arrangements that provide special legal 4806570 MNI CL205 -63 3 entitlements to nongovernmental persons and copies of any such agreements or instruments; (xiii) arbitrage rebate reports and records of rebate and yield reduction payments; (xiv) resolutions or other actions taken by the governing body subsequent to the date of issue with respect to such bonds; (xv) formal elections authorized by the Code or Treasury Regulations that are taken with respect to such bonds; (xvi) relevant correspondence, including letters, faxes or emails, relating to such bonds; (xvii) documents related to guaranteed investment contracts or certificates of deposit, credit enhancement transactions, and financial derivatives entered into subsequent to the date of issue; (xviii) bidding of financial products for investment securities; (xix) copies of all Form 8038 -Ts, Form 8038 -Rs, and Form 8038 -CPs filed with the IRS and any other forms or documents filed with the IRS; (xx) the transcript prepared with respect to such tax- exempt governmental bonds, including but not limited to (a) official statements, private placement documents, or other offering documents, (b) minutes and resolutions, orders, or ordinances or other similar authorization for the issuance of such bonds, and (c) certification of the issue price of such bonds; and (xxi) documents related to government grants associated with the construction, renovation, or purchase of bond - financed facilities. The records collected by the Executive Director shall be stored in any format deemed appropriate by the Executive Director and shall be retained for a period equal to the life of the tax- exempt governmental bonds with respect to which the records are collected (which shall include the life of any bonds issued to refund any portion of such tax- exempt governmental bonds or to refund any refunding bonds) plus three (3) years. The Executive Director shall also collect and retain reports of any IRS examination of the Authority or any of its bond financings. 6. Remedies. In consultation with Bond Counsel, the Executive Director shall become acquainted with the remedial actions (including redemption or defeasance) under Treasury Regulations, Section 1.141 -12, to be utilized in the event that private business use of bond - financed facilities exceeds the de minimus limits under Section 141(b)(1) of the Code. In consultation with Bond Counsel, the Executive Director shall become acquainted with the Tax Exempt Bonds Voluntary Closing Agreement Program described in Notice 2008 -31, 2008 -11 I.R.B. 592, to be utilized as a means for an issuer to correct any post - issuance infractions of the Code and Treasury Regulations with respect to outstanding tax - exempt bonds. 7. Continuing Disclosure Obligations. In addition to its post- issuance compliance requirements under applicable provisions of the Code and Treasury Regulations, the Authority has agreed to provide continuing disclosure, such as annual financial information and material event notices, pursuant to a continuing disclosure certificate or similar document (the "Continuing Disclosure Document ") prepared by Bond Counsel and made a part of the transcript with respect to each issue of bonds of the Authority that is subject to such continuing disclosure requirements. The Continuing Disclosure Documents are executed by the Authority to assist the underwriters of the Authority's bonds in meeting their obligations under Securities and Exchange Commission Regulation, 17 C.F.R. Section 240.15c2 -12, as in effect and interpreted from time to time ( "Rule 15c2 -12 "). The continuing disclosure obligations of the Authority are governed by the Continuing Disclosure Documents and by the terms of Rule 15c2 -12. The Executive Director is primarily responsible for undertaking such continuing disclosure obligations and to monitor compliance with such obligations. 8. Other Post - Issuance Actions. If, in consultation with Bond Counsel, Municipal Advisor, Paying Agent, Rebate Analyst, the Executive Director, the Authority Attorney, or the Board of Commissioners, the Executive Director determines that any additional action not identified in this Policy must be taken by the Executive Director to ensure the continuing tax - exempt status of any issue of governmental bonds of the Authority, the Executive Director shall take such action if the Executive Director has the authority to do so. If, after consultation with Bond Counsel, Municipal Advisor, Paying Agent, Rebate Analyst, the Executive Director, the Authority Attorney, or the Board of Commissioners, 450657A MNI CL205 -63 4 the Executive Director and the Executive Director determine that this Policy must be amended or supplemented to ensure the continuing tax- exempt status of any issue of governmental bonds of the Authority, the Executive Director shall recommend to the Board of Commissioners that this Policy be so amended or supplemented. 9. Taxable Governmental Bonds. Most of the provisions of this Policy, other than the provisions of Section 7, are not applicable to governmental bonds the interest on which is includable in gross income for federal income tax purposes. However, if an issue of taxable governmental bonds is later refunded with the proceeds of an issue of tax - exempt governmental refunding bonds, then the uses of the proceeds of the taxable governmental bonds and the uses of the facilities financed with the proceeds of the taxable governmental bonds will be relevant to the tax - exempt status of the governmental refunding bonds. Therefore, if there is any reasonable possibility that an issue of taxable governmental bonds may be refunded, in whole or in part, with the proceeds of an issue of tax - exempt governmental bonds, for purposes of this Policy, the Executive Director shall treat the issue of taxable governmental bonds as if such issue were an issue of tax - exempt governmental bonds and shall carry out and comply with the requirements of this Policy with respect to such taxable governmental bonds. The Executive Director shall seek the advice of Bond Counsel as to whether there is any reasonable possibility of issuing tax - exempt governmental bonds to refund an issue of taxable governmental bonds. 10. Qualified 501(c)(3) Bonds. If the Authority issues bonds to finance a facility to be owned by the Authority but which may be used, in whole or in substantial part, by a nongovernmental organization that is exempt from federal income taxation under Section 501(a) of the Code as a result of the application of Section 501(c)(3) of the Code (a "501(c)(3) Organization'), the Authority may elect to issue the bonds as "qualified 501(c)(3) bonds" the interest on which is exempt from federal income taxation under Sections 103 and 145 of the Code and applicable Treasury Regulations. Although such qualified 501(c)(3) bonds are not governmental bonds, at the election of the Executive Director, for purposes of this Policy, the Executive Director shall treat such issue of qualified 501(c)(3) bonds as if such issue were an issue of tax - exempt governmental bonds and shall carry out and comply with the requirements of this Policy with respect to such qualified 501(c)(3) bonds. 450657v1 MNI CL205 -63 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2016-15 RESOLUTION APPROVING POST- ISSUANCE COMPLIANCE PROCEDURE AND POLICY FOR TAX- EXEMPT GOVERNMENTALBONDS BE IT RESOLVED By the Board of Commissioners (the `Board of Commissioners ") of the Columbia Heights Economic Development Authority, a body corporate and politic and political subdivision of the State of Minnesota (the "Authority "), as follows: Section 1. Recitals. 1.01. The Authority from time to time issues tax- exempt governmental bonds to finance various public capital improvements. 1.02. Under Sections 103 and 140 to 150 of the Internal Revenue Code of 1986, as amended (the "Code ") and related regulations, the Authority is required to take certain actions after the issuance of such bonds to ensure that interest on those bonds remains tax- exempt. 1.03. The Authority has determined to adopt written procedures regarding how the Authority will carry out its bond compliance responsibilities, and to that end has caused to be prepared a document titled Post - Issuance Compliance Procedure and Policy for Tax - Exempt Governmental Bonds (the "Policy "). 1.04. The Board of Commissioners has reviewed the Policy has determined that it is in the best interest of the Authority to adopt the Policy. Section 2. Policy Approved. 2.01. The Board of Commissioners approves the Policy in substantially the form on file with the Executive Director. 2.02. Authority staff are authorized to take all actions necessary to carry out the Policy. Adopted by the Board of Commissioners of the Columbia Heights Economic Development Authority this 131° day of June, 2016. President ATTEST: Secretary 480658v1 MNI CI205 -63 CH COLUMBIA HEIGHTS AGENDA SECTION PUBLIC HEARING ITEM NO. 6 MEETING DATE JUNE 13, 2016 CITY OF COLUMBIA HEIGHTS — ECONOMIC DEVELOPMENT AUTHORITY ITEM: Scattered Site TIF District — Consideration of Lot Sale Authorization 40115`° Street DEPARTMENT: Community Development CITY MANAGER'S APPROVAL: BY /DATE: Keith M Dahl, June 9, 2016 BY /DATE: BACKGROUND: Over the years, the Columbia Heights Economic Development Authority (EDA) has acquired property within the City of Columbia Heights for economic development purposes. In 2009, the EDA approved the "Scattered Site Housing Program" in an effort to address foreclosure issues and remediate the emergence of blight within Columbia Height's neighborhoods. The program was setup to purchase blighted residential properties, demolish the house, and then sell the vacant lots to families seeking new construction of single - family homes. In 2013, the EDA approved Resolution 2013 -07, a resolution approving plan for conveyance of certain scattered site lots owned by the EDA. The EDA intended to convey twelve properties to contractors that will construct homes, and to that end has engaged the services of Re /Max Synergy through an Exclusive Right to Sell Listing Contract. The property located at 40115th Street Columbia Heights, MN 55421 is one of the twelve properties intended to be conveyed to a contractor, however the aforementioned property was and is owned by the City. In order for the EDA to convey this property to Timbercraft, the City needs to approve Ordinance 1631 conveying 4011 5th Street from the City to the EDA. Initially, Timbercraft wanted to close on this property on May 25, 2016, however while preparing closing documents it was determined that the EDA was not the fee owner. Timbercraft has a buyer for the subject property and wants to close on this as soon as possible for construction to begin late spring/ early fall. The resolution before the EDA tonight is approving a Purchase and Redevelopment Agreement between the EDA and Timbercraft for the property located at 40115 1h Street that is contingent upon the City of Columbia Heights transferring title of the property to the EDA. STAFF RECOMMENDATION: Staff recommends approval of Resolution 2016 -16, authorizing approval of the Purchase and Redevelopment Agreement with Timbercraft Enterprises Inc. for the conveyance of 40115 th Street, Columbia Heights, MN 55421. RECOMMENDED MOTION(S): Motion: Move to waive the reading of Resolution 2016 -16, there being ample copies available to the public. Motion: Move to adopt Resolution 2016 -16, Resolution approving a Purchase and Redevelopment Agreements with Timbercraft Enterprises Inc. for the conveyance of 40115 th Street, Columbia Heights, MN 55421. ATTACHMENTS: 1. Resolution 2016 -16 2. Purchase Agreement City of Columbia Heights - EDA Letter AMENDED AND RESTATED PURCHASE AND REDEVELOPMENT AGREEMENT 4011 5'h Street, Columbia Heights, Minnesota 1. Parties. This Purchase Agreement is made as of , 2016 (the "Agreement') between the COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of Minnesota having its office located at 590 40TH Avenue NE, Columbia Heights, MN (the "Seller'), and TimberCraft Enterprises, hie., a Minnesota corporation (the `Buyer'). This Agreement amends and supersedes the Purchase and Redevelopment Agreement between Seller and Buyer dated May 7, 2016 in all respects. 2. Offer /Acceptance. Buyer offers to purchase and Seller agrees to sell real property legally described as follows (the "Property): Lot 18, Block 52, Columbia Heights Annex to Minneapolis, Anoka County, Minnesota. The sale of the Property by Seller to Buyer is expressly contingent upon the conveyance of the Property by the City of Columbia Heights to Seller. 3. Price and Terms. The price for the Property is Seven Thousand Five Hundred Dollars ($7,500.00) which Buyer shall pay as follows: Earnest money of $500.00 by cla=ck, receipt of which is hereby acknowledged by Seller, and the balance of $7,000.00 to be paid by certified check on the Date of Closing. The "Date of Closing" shall be , or such other earlier or later date as the parties mutually agree. 4. Personal Property Included in Sale. There are no items of personal property or fixtures owned by Seller and currently located on the Property for purposes of this sale. 5. Deed. Upon performance by Buyer, Seller shall deliver a quit claim deed conveying title to the Property to Buyer, in substantially the form attached as Exhibit A (the "Deed'). 480938vl CL205 -49 6. Real Estate Taxes and Special Assessments. The parties agree and understand that the Property is exempt from real estate taxes for taxes payable in the current year. Seller shall pay on Date of Closing all special assessments levied against the Property as of the date of this Agreement, including those certified for payment with taxes due and payable in 2016. Seller represents that there are no special assessments pending as of the date of this Agreement. If special assessment becomes pending after the date of this Agreement and before the Date of Closing, Buyer may, as Buyer's option: A. Assume payment of the pending special assessment without adjustment to the purchase Agreement price of the Property, or B. Require Seller to pay the pending special assessment and Buyer shall pay a conmrensurate increase in the purchase price of the Property, which increase shall be the same as the estanated amount of the assessment; or C. Declare this Agreement will and void by notice to Seller, and earnest money shall be refinnded to Buyer. 7. Closing Costs and Related Items. The Seller shall be responsible for the following costs: (a) recording fees and conservation fees for all instruments required to establish marketable title in Seller; (b) deed transfer taxes and conservation fees required to be paid in connection with the Deed be given by Seller; and (c) Seller's broker fees. Buyer shall be responsible for the payment of the following costs: (d) recording fees required to be paid in connection with the Deed to be given by Seller; (e) the cost of the registered property abstract or updated abstract, or in the absence of an abstract, and the premium for an owner's policy of title insurance, and (1) closing fee, if any. Each party shall be responsible for its own attorneys' fees and costs. 8. Sewer and Water. Seller wan•ants that city sewer is available at the Property fine, and that city water is available in the right of way adjacent to the Property. Seller makes no warranty regarding the conditions of any existing water stub from the main to the Property fine. Seller advises Buyer to inspect the condition of the water stub. 9. Condition of Property. Buyer acknowledges that they have inspected or have had the opportunity to inspect the Property and agree to accept the Property "AS IS." Buyer has the right, at its own expense to take soil samples for the purpose of determining if the soil is suitable for construction of the dwelling described in section 14 below. If the soil is determined to be unacceptable the Buyer may rescind this Agreement by written notice to the Seller, in which case the Agreement shall be null and void and all earnest money paid hereunder shall be ref ended to the Buyer. Seller makes no warranties as to the condition of the Property. 10. Marketability of Title. As soon as reasonably practicable after the date of this Agreement, Seller shall funissh to Buyer a registered property abstract or an updated abstract oftitle to the Property, certified to date to include proper searches covering bankruptcies, state and federal 2 480938v1 CL205 -49 judgment and liens. In the absence of an abstract of title, the Seller will provide a title commihnent and title insurance. Buyer shall have fifteen (15) business days after receipt of the abstract or title commitment to examine the same and to deliver written objections to title, if any, to Seller. Seller shall have the greater of (u) the number of days remaining until the Date of Closing or (n) thirty (30) days to have such objections removed or satisfied. 11. Title Clearance and Remedies. If Seller shall fall to have title objections timely removed, the Buyer may, at its sole election (a) terminate this Agreement without any liability on its part; in which event the earnest money shall be promptly refianded in exchange for a quit claim deed to the Property from Buyer; or (b) take title to the Property subject to such objections. If title is marketable, or is made marketable as provided herein, and Buyer defaults in any of the Agreements herein, Seller may elect either of the following options, as permitted by law: A. Cancel this Agreement as provided by statute and retain all payments made hereunder as liquidated damages. The parties acknowledge their intention that airy note given pursuant to this contract is a down payment note, and may be presented for payment notwithstanding cancellation; B. Seek specific performance within six months after such right of action arises, including costs and reasonable attorney's fees, as permitted by law. If title is marketable, or is made marketable as provided herein, and Seller defaults in any of the Agreements herein, Buyer may, as permitted by law: C. Seek damages from Seller including costs and reasonable attorneys fees; D. Seek specific performance within six months after such right of action arises. 12. Well Disclosure. Seller certifies that Seller does not know of any wells on the Property. 13. Individual Sewage Treatment System Disclosure. Seller certifies that there is no individual sewage treatment system on or serving the Property. 14. Construction and Sale of Dwelling. Buyer agrees that it will construct a new single fannly dwelling on the Property, intended for sale to a person or persons for residential occupancy (an "Owner Occupant'). This covenant shall survive the delivery ofthe Deed. A. The single family dwelling described in this Section is referred to as the "Minimum Improvements." 480938v1 CL205 -49 B. The Minimum Improvemertts shall consist of a house with approximately 1248 square feet, 3 bedrooms, and shall be constructed substantially in accordance with the Scattered Site Housing Program Design Requirements on file in City Hall Construction plans must be approved by the Conn utity Development Department prior to commencement of construction Construction of the Minimum Improvements must be substantially completed by December 31, 2016. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of Columbia Heights building official C. Promptly after substantial completion of the Minimum hnprovements in accordance with those provisions of the Agreement relating solely to the obligations of the Buyer to construct such Minimum Improvements (including the date for completion thereol), the Seller will fimtish the Buyer with a Certificate of Completion, in substantially the form attached hereto as Exhibit B, for such improvements. Such certification by the Seller shall be (and it shall be so provided in the Deed and in the certification itself) a conclusive determination of satisfaction and termination of the Agreements and covenants in the Agreement and in the Deed with respect to the obligations of the Buyer and its successors and assigns, to constraint the Minimum Improvements and the dates for completion thereof The certificate provided for in this Section of this Agreement shall be in such form as win enable it to be recorded in the proper office for the recordation of deeds and other instruments pertaining to the Property. If the Seller shall refuse or fail to provide any certification in accordance with the provisions of this Section, the Seller shall, within thirty (30) days after written request by the Buyer, provide the Buyer with a written statement, indicating in adequate detail in what respects the Buyer has failed to complete the Mi in mi 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 Seller for the Buyer to take or perform in order to obtain such certification D. The Buyer represents and agrees that until issuance of the Certificate of Completion for the Minimum Improvements: (1) Except for any sale to an Owner Occupant, the Buyer has not made or created and will not make or create or suffer to be made or created any total or partial 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 Property or any part 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 Seller's board of commissioners. The term "Transfer" does not include 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 Buyer or any 4 480938v1 CL205 -49 successor in interest to the Property, or any part thereof; to construct the Mininn m Improvements or component thereof (2) If the Buyer seeks to effect a Transfer to any person or entity other than an Owner Occupant prior to issuance of the Certificate of Completion, the Seller shall be entitled to require as conditions to such Transfer that: (r) any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Seller, necessary and adequate to RM the obligations undertaken in this Agreement by the Buyer as to the portion of the Property to be transferred; and (u) Arty proposed transferee, by instrument in writing satisfactory to the Seller and 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 Seller, have expressly assumed all of the obligations of the Buyer under this Agreement as to the portion of the Property to be transferred and agreed to be subject to all the conditions and restrictions to which the Buyer is subject as to such portion; provided, however, that the fact that any transferee of or any other successor in interest whatsoever to, the Property, or any part thereof; shall riot, 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 to in writing by the Seller) deprive the Seller of any rights or remedies or controls with respect to the Property, the Mininaun Improvements or any part thereof or the construction of the Mininnnn Improvements; it being the intent of the parties as expressed in this Agreement that (to the Ulest extent permitted at law and in equity and excepting only in the mariner and to the extent specifically provided otherwise in this Agreement) no transfer of or change with respect to, ownership in the Property or any part thereof; or any interest therein, however consummated or occurrurg, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit the Seller of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Property that the Seller would have had, had there been no such transfer or change. In the absence of specific written Agreement by the Seller to the contrary, no such transfer or approval by the Seller thereof shall be deemed to relieve the Buyer, or any other party bond in any way by this Agreement or otherwise with respect to the Property, from any of its obligations with respect thereto. (iu) Any and all instnanents and other legal documents involved in effecting the transfer of any interest in this Agreement or the Property governed by this subsection E. shall be in a form reasonably satisfactory to the Seller. 5 480938A CL205 -49 (3) If the conditions described in paragraph (2) above are satisfied then the Transfer will be approved and the Buyer shall be released from its obligation under this Agreement, as to the portion of the Property that is transferred, assigned, or otherwise conveyed. The provislons of this paragraph (3) apply to all subsequent transferors. (4) Upon issuance of the Certificate of Completion, the Buyer may Transfer the Property and/or the Buyer's rights and obligations under this Agreement with respect to such Property without the prior written consent of the Seller [, except to the extent required under paragraph F of this Section]. E. The Buyer, and its successors and assigns, agree that they (a) will use the Minimum Improvements only as a single fiunily dwelling, and in the case of an Owner Occupant, will occupy the Property as a residence, (b) will not rent the Property to any person or entity, (c) will not seek exemption from real estate taxes on the Property under State law, and (d) will not transfer or permit transfer of the Property to any entity whose ownership or operation of the Property would result in the Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City of Columbia Heights or Seller in accordance with this Agreement). The covenants in this paragraph nur with the land, survive both delivery of the Deed and issuance of the Certificate of Completion for the Minimum hnprovements, and shall remain in effect for ten years after the Date of Closing. F. The Buyer shall use its best efforts to convey the Property (either before or after issuance of the Certificate of Completion) to an Owner Occupant whose household income does not exceed (a) 100% of median income in the case of one or two person household Owner Occupants, or (b) 115% of median income in the case of three or more person Owner Occupants. The term `Sredian income" means the median income in the seven -county metropolitan area, or the State as a whole, whichever is greater, using income data available from the Minnesota Housing Finance Agency as of the date of closing on sale to the Owner Occupant. Prior to closing on sale the Property by Buyer to an Owner Occupant, Buyer shall: (1) Notify the Seller in writing whether the proposed Owner Occupant will meet the income qualifications under this paragraph; and (2) If the proposed Owner Occupant will not meet the income limits, describe Buyer's efforts to find an income- qualified buyer; and (2) If the proposed Owner Occupant will meet the income limits, submit to Seller evidence of Owner Occupant's income in a form satisfactory to Seller, evidencing compliance with the income lurits described above. The covenant in this Section applies only to the first sale of the Property to an Owner Occupant, and does not apply to any subsequent sale by an Owner Occupant to any other person or party. 6 480938v1 CL205 -49 15. Revestiug Title in Seller upon Happening of Event Subsequent to Conveyance to Buyer. In the event that subsequent to conveyance of the Property or any part thereof to the Buyer and prior to receipt by the Buyer of the Certificate of Completion for of the Minimum Improvements, the Buyer, subject to Unavoidable Delays (as hereafter defined), fads to carry out its obligations with respect to the construction of the Minimum Improvements (including the nature and the date for the completion thereof), or abandons or substantially suspends construction work, and any such failure, abandonment, or suspension shall not be cured, ended, or remedied within thirty (30) days after written demand from the Seller to the Buyer to do so, then the Seller shall have the right to re -enter and take possession of the Property and to terminate (and revest in the Seller) the estate conveyed by the Deed to the Buyer, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the Property to the Buyer shall be made upon, and that the Deed shall contain a condition subsequent to the efti;ct that in the event of any default on the part of the Buyer and failure on the part of the Buyer to remedy, end, or abrogate such default within the period and in the manner stated in such subdivisions, the Seller at its option may declare a temiration in favor of the Seller of the title, and of all the rights and interests in and to the Property conveyed to the Buyer, and that such title and all rights and interests of the Buyer, and any assigns or successors in interest to and in the Property, shall revert to the Seller, but only if the events stated in this Section have not been cured within the time periods provided above. Notwithstanding anything to the contrary contained in this Section, the Seller shall have no right to reenter or retake title to and possession of portion of the Property for which a Certificate of Completion has been issued. For the purposes of this Agreement, the term "Unavoidable Delays" means delays beyond the reasonable control of the Buyer as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse weather or acts of God, free or other casualty to the Minurnan 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 Seller in exercising its rights ruder this Agreement) which directly results in delays. Unavoidable Delays shall not include delays in the Buyer's obtaining of permQs or govemmental approvals necessary to enable construction of the Minimum Improvements by the dates such construction is required under this section of this Agreement. 16. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the Seller of title to and/or possession of the Property or arry part thereof as provided in Section 16, the Seller shall apply the purchase price paid by the Buyer under Section 4 of this Agreement as follows: (a) First, to reimburse the Seller for all costs and expenses incurred by the Seller, including but not limited to proportionate salaries of personnel, in connection with the recapture, management, and resale of the Property or part thereof (but less any income derived by 7 480938v1 CL205 -49 the Seller from the Property or part thereof in connection with such management); an taxes, assessments, and water and sewer charges with respect to the Property or part thereof (or, in the event the Property is exempt from taxation or assessment or such charge during the period of ownership thereof by the Seller, an amount, ifpaid, equal to such taxes, assessments, or charges (as determined by the Seller assessing official) as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge any encurrbrances or liens existing on the Property or part thereof at the time of revestmg of title thereto in the Seller or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts ofthe Buyer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the Minimum Improvements or any part thereof on the Property or part thereof and any amounts otherwise owing the Seller by the Buyer and its successor or transferee; and (b) Second, to reimburse the Buyer for the balance of the purchase price remaining after the reimbursements specified in paragraph (a) above. Such reimbursement chaff be paid to the Buyer upon delivery of an executed, recordable warranty deed to the Property by the Buyer to the Seller. 17. Time is of the essence for all provisions of this contract. 18. Notices. All notices required herein shall be in writing and delivered personally or mailed to the address shown at paragraph I above and, if mailed, are effective as of the date of mail*. 19. Minnesota Law. This contract shall be governed by the laws of the State of Minnesota. 20. Specific Performance. This Agreement may be specifically enforced by the parties, provided that an action is brought within one year of the date of alleged breach of this Agreement. 21. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Seller or Buyer 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 in pair 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. 22. No Merger of Representations, Warranties. All representations and warranties contained in this Purchase Agreement shall not be merged into any instruments ants or conveyance delivered at closing, and the parties shall be bound accordingly. 23. Recording. This Agreement shall be filed of record with the Anoka County Registrar of Titles or Office of Recorder, as the case may be. Buyer shall pay all recording costs. 480938vl CL205 -49 480938v1 CL205 -49 In witness of the foregoing, the parties have executed this Agreement on the year and date written above. SELLER: COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY 0 Its President STATE OF MINNESOTA } ss. COUNTY OF ANOKA 0 Its Executive Director The foregoing was acknowledged before me this day of 20_, by Gary Peterson and Walter Febst, the President and Executive Director, respectively, of Columbia Heights Economic Development Authority, a public body corporate and politic under the laws of Minnesota, on behalf of the public body corporate and politic. Notary Public BUYER: TIMBERCRAFT ENTERPRISES, INC. By. STATE OF MINNESOTA } ss. COUNTY OF ANOKA The foregoing was acknowledged before me this , the Minnesota corporation, on behalf of the corporation This document drafted by. Kennedy & Graven, Chartered 470 U.S. Bank Plaza Minneapolis, MN 55402 10 480938vl CL205 -49 _ day of 20_, by of TimberCraft Enterprises, Inc., a Notary Public 11 480938v1 CL205 -49 EXHIBIT A to PURCHASE AND REDEVELOPMENT AGREEMENT FORM OF QUIT CLAIM DEED Deed Tax Due: $ ECRU Date: THIS INDENTURE, between the Columbia Heights Economic Development Authority, a Minnesota, a public body corporate and politic (the "Grantor'), and , a Minnesota (the "Grantee'). WITNESSETH, that Grantor, in consideration of the sum of $ and other good and valaable consideration the receipt whereof is hereby acknowledged, does hereby grant, bargain, quitclaim and convey to the Grantee, its successors and assigns forever, all the tract or parcel of land lying and being in the County of Anoka and State of Minnesota described as follows, to -wit (such tract or parcel of land is hereinafter referred to as the "Property'): Lot 18, Block 52, Columbia Heights Annex to Minneapolis, Anoka County, Minnesota. Check here if part or all of the land is Registered (Torrens) a To have and to hold the same, together with all the hereditaments and appurtenances thereunto belonging. SECTION 1. It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and provisions of an Agreement recorded herewith entered into between the Grantor and Grantee on the of , 20_, identified as "Amended and Restated Purchase and Redevelopment Agreement" (hereafter referred to as the "Agreement') and that the Grantee shall not convey this Property, or any part thereof; except as pemvtted by the Agreement until a certificate of completion releasing the Grantee from certain obligations of said Agreement as to this Property or such part thereof then to be conveyed, has been placed of record. This provision, however, shall in no way prevent the Grantee from mortgaging this Property in order to obtain fluids for the purchase of the Property hereby conveyed or for erecting the Minimum Improvements thereon (as defined in the Agreement) in confontiily with the Agreement, any applicable development program and applicable provisions of the zoning ordinance of the City of Columbia Heights, Minnesota, or for the refinancing of the same. A -I 480938v1 CL205 -49 It is specifically agreed that the Grantee shall promptly begin and diligently prosecute to completion the redevelopment of the Property through the construction of the Minurnun hnprovements thereon, as provided in the Agreement. Promptly after completion of the Mininnun Improvements in accordance with the provisions of the Agreement, the Grantor will furnish the Grantee with an appropriate instrument so certifying. Such certification by the Grantor shall be (and it shall be so provided in the certification itself) a conclusive determination of satisfaction and termination of the Agreements and covenants of the Agreement and of this Deed with respect to the obligation of the Grantee, and its successors and assigns, to construct the Minimurn Improvements and the dates for the beginning ing and completion thereof Such certification and such detennimtion shall not constitute evidence of compliance with or satisfaction of arty obligation of the Grantee to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance the purchase of the Property hereby conveyed or the Minun rn Improvements, or any part thereof All certifications provided for herein shall be in such form as will enable them to be recorded with the County Recorder, or Registrar ofTitles, Anoka County, Minnesota. If the Grantor shall refuse or fall to provide any such certification in accordance with the provisions of the Agreement and this Deed, the Grantor shall, within thirty (30) days after written request by the Grantee, provide the Grantee with a written statement indicating in adequate detail in what respects the Grantee has failed to complete the Minfi n rn hnprovements 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 Grantor, for the Grantee to take or perform in order to obtain such certification. SECTION 2. The Grantee's rights and interest in the Property are subject to the terms and conditions of Sections 14A, 14B and 15 of the Agreement relating to the Grantor's right to re-enter and revest in Grantor title to the Property under conditions specified therein, including but not limited to termination of such right upon issuance of Certificate ofCompletion as defined in the Agreement. SECTION 3. The Grantee agrees for itself and its successors and assigns to or of the Property or arty part thereof; hereinbefore described, that the Grantee and such successors and assigns shall comply with Section 14E of the Agreement for a period often years after the date hereof It is intended and agreed that the above and foregoing Agreements and covenants shall be covenants running with the land for the respective terms herein provided, and that they shall, in any event, and without regard to technical classification or designation, legal or otherwise, and except only as otherwise specifically provided in this Deed, be binding, to the fullest extent permitted by law and equity for the benefit and in favor o1; and enforceable by, the Grantor against the Grantee, its successors and assigns, and every successor in interest to the Property, or any part thereof or any interest therein, and any party in possession or occupancy of the Property or any part thereof A -2 480938v1 CL205 -49 In amplification, and not in restriction ot; the provisions of the preceding section, it is intended and agreed that the Grantor shall be deerned a beneficiary of the Agreements and covenants provided herein, both for and in its own right, and also for the purposes of protecting the interest of the connrnmity and the other parties, public or private, in whose favor or for whose benefit these Agreements and covenants have been provided. Such Agreements and covenants shall rim in favor of the Grantor without regard to whether the Grantor has at any time been, remains, or is an owner of any land or interest therein to, or in favor ot; which such Agreements and covenants relate. The Grantor shall have the right, in the event of any breach of any such Agreement or covenant to exercise all the rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breach of Agreement or covenant, to which it or airy other beneficiaries of such Agreement or covenant may be entitled; provided that Grantor shall not have any right to re-enter the Property or revest in the Grantor the estate conveyed by this Deed on grounds of Grantee's failure to comply with its obligations under this Section 3. IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its President and Executive Director, the date written above. [R] The Seller certifies that the Seller does not know of arty wells on the described real property. ❑ A well disclosure certificate accorr>panies this document or has been electronically filed. (If electronically filed, insert WDC number. ❑ I am famrliar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously fled well disclosure certificate. 4809380 CL205 -49 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY A -3 By Gary Peterson Its President By Walter Febst Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF ) On this day of 2016, before me, a notary public within and for County, personally appeared Gary Peterson and Walter Fehst to me personally known who by me duly sworn, did say that they are the President and Executive Director, respectively, of the Col unbia Heights Economic Development Authority (the "Authority) named in the foregoing mstnunent; that said instnnnent was signed on behalf of said Authority pursuant to a resolution of its governing body, and said Gary Peterson and Walter Fehst acknowledged said instnunent to be the free act and deed of said Authority. Notary Public This instrument was drafted by: Tax Statements should be sent to: Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612)337 -9300 A -4 480938v1 CL205 -49 I *1416 111.11 a To PURCHASE AND REDEVELOPMENT AGREEMENT FORM OF CERTIFICATE OF COMPLETION WHEREAS, the Columbia Heights Economic Development Authority, a public body, corporate and politic (the "Grantor'), conveyed land in Anoka County, Minnesota to , a (the "Grantee'), by a Deed recorded in the Office of the Courtly Recorder [and in the Office of the Registrar of Titles] in and for the County ofAnoka and State of Minnesota, as Document Numbers and , respectively; and WHEREAS, said Deed contained certain covenants and restrictions set forth in Sections I and 2 of said Deed; and WHEREAS, said Grantee has performed said covenants and conditions insofar as it is able in a nmanner deemed sufficient by the Grantor to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that an building construction and other physical improvements specified to be done and made by the Grantee have been completed and the above covenants and conditions in said Deed and the Agreements and covenants in Sections 14A and 14B of the Agreement (as described in said Deed) have been performed by the Grantee therein, and the Courtly Recorder [and the Registrar of Titles] in and for the County of Anoka and State ofMnmesota are hereby authorized to accept for recording and to record, the Sling of this instrument, to be a conclusive determination of the satisfactory ternmumation of the covenants and conditions of Sections 14A and 14B of the Agreement and the covenants and restrictions set forth in Sections 1 and 2 of said Deed; provided that the covenants set forth in Sections 14E of the Agreement, and in Section 3 of the Deed, remain in full force and effect through the period stated thereon B -1 480938v1 CL205 -49 Dated: , 20 COLUMBIA HEIGHTS ECONOMIC DEVELOPMEN AUTHORITY By Its President By Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF ANOKA ) The foregoing instnunent was acknowledged before me this day of 20_, by and , the President and Executive Director, respectively, of the Columbia Heigbts Economy Development Authority, on behalf of the authority. Notary Public This document drafted by: KENNEDY & GRAVEN, CHARTERED 470 U.S. Bank Plana Minneapolis, MN 55402 (612) 337 -9300 B-2 4809380 CL20549 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2016-16 RESOLUTION APPROVING A PURCHASE AND REDEVELOPMENT AGREEMENT (INCLUDING THE SALE OF LAND) BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND TIMBERCRAFT ENTERPRISES, INC. 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 has previously established its Central Business District Redevelopment Project (the "Project") within the City of Columbia Heights (the "City") and its City-Wide Scattered Site Tax Increment Financing District (the "TIF District ") within the Project, and has developed program design guidelines in connection with the construction of homes within the TIF District (the "Guidelines "). 1.02. The Authority and TimberCraft Enterprises, hic. (the "Buyer ") have proposed to enter into an Amended Purchase and Redevelopment Agreement (the "Contract "), setting forth the terms and conditions of sale and redevelopment of certain property within the TIF District, currently owned by the City, located at 4011 5d' Street NE and described as Lot 18, Block 52, Columbia Heights Annex to Minneapolis, Anoka County, Minnesota (the "Property"). 1.03. Pursuant to the Contract, the Buyer will acquire the Property and will construct a single- family home, subject further to the Guidelines and to the City's zoning and building codes and policies. 1.04. On this date, the City Council of the City is scheduled to consider an ordinance approving the conveyance of the Property to the Authority (the "Ordinance "). The conveyance of the Property by the Authority to the Buyer is contingent on the conveyance of the Property by the City to the Authority. 1.05. 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. 1.06. 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. The activities of the parties under the Contract implement housing goals established for the TIF District pursuant to the Tax Increment Financing Plan for the TIF District. 480983v1 MNICI205 -64 1.07. The Board has reviewed the Contract and finds that the execution thereof and performance of the Authority's obligations thereunder 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 Annroval: Further Proceedings. 2.01. The Contract as presented to the Board, including the sale of the Property described therein, is hereby in all respects approved, subject to approval of the Ordinance by the City Council and 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, including without limitation the deed, and to cant' 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 13th day of June, 2016. President ATTEST: Secretary 480983A MNIC1205 -64 2