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HomeMy WebLinkAboutfeb2017hraCH COLUMBIA HEIGHTS HOUSING AND REDEVELOPMENT AUTHORITY AGENDA February 13, 2017 7 pm, or immediately following the City Council Meeting City Hall City Council Chambers 590 40`h Avenue NE Columbia Heights, MN 55421 1. Call to Order 2. Roll Call 3. Approval of Minutes from August 1, 2016 & January 9, 2017 4. Amended and Restated Collateral Assignment of Note and Mortgage in Connection with the Terms of Conveyance of Parkview Villa (Resolution 2017 -02) 5. Adjourn HOUSING & REDEVELOPMENT AUTHORITY MINUTES OF THE MEETING OF AUGUST 1, 2016 1. Call to order —The meeting was called to order by Chair Diehm at 6:00 pm. 2. Roll Call — Members present: Bruce Nawrocki, Gary Peterson, John Murzyn Jr, Tammera Diehm, and Rheta Nelson. Donna Schmitt arrived at 6:09 pm. Staff Present: Executive Director -Walt Fehst, Community Development Director - Joseph Hogeboom, and Secretary- Shelley Hanson. 3. Pledge of Allegiance — Recited CONSENT AGENDA 4. Approve Minutes of March 14, 2016 Motion by Nawrocki, seconded by Murzyn, to approve the minutes of March 14, 2016 as presented. All ayes. MOTIONPASSED. BUSINESS ITEMS 5. Amend and Restate the Bylaws of the Housing and Redevelopment Authority of Columbia Heights, MN on Resolution 2016 -02 Hogeboom explained that following the sale of Parkview Villa, quarterly meetings of the Housing and Redevelopment Authority will no longer be necessary. However, the Housing and Redevelopment Authority must continue to exist in order to facilitate and process past business associated with the property. The HRA attorney has advised that the HRA amend its bylaws to enable Commissioner membership to be comprised of the Mayor and the City Council Members. Further, the proposed bylaws will reflect that one regular annual meeting of the HRA will be held on the first Monday in January at Columbia Heights City Hall. If the HRA votes to adopt the amended bylaws, Chair Tammera Diehm and Commissioner Rheta Nelson will effectively no longer serve on the HRA. Staff is grateful for their service and thanks them both for their time and commitment to the Housing and Redevelopment Authority. HRA Minutes Page 2 August 1, 2016 Staff recommends approval of the Restated Bylaws of the Housing and Redevelopment Authority of Columbia Heights, Minnesota as presented. Ouestions /comments: Nawrocki noted that the annual meeting is scheduled for the first Monday in January. He said this would mean that possible outgoing council members would be attending the meeting prior to new members being sworn in at the first official council meeting in January. Hogeboom stated that any action that would take place at these meetings would probably be informational matters that previously happened, so it would be appropriate to have the member who had served during the previous year to be at the meeting. However, he said it could be changed if the City Council so chooses to do it later in the year so that officers are chosen after the new members are sworn in. Schmitt said that the first meeting is when new members are usually sworn in and officers elected, so it might be appropriate to do it later. Diehm stated that the bylaws allow flexibility so a different date can be set each year as needed. Everyone agreed to adopt the bylaws as presented as long as it allows the flexibility. Motion by Peterson, seconded by Murzyn, to waive the reading of Resolution 2016 -02, there being ample copies available to the public. All ayes. MOTIONPASSED. Motion by Peterson, seconded by Murzyn, to adopt Resolution 2016 -02, amending and restating the bylaws of the Housing and Redevelopment Authority of Columbia Heights, Minnesota. All ayes. MOTIONPASSED. RESOLUTION 2016 -02 RESOLUTION TO AMEND AND RESTATE THE BY -LAWS OF THE HOUSING AND REDEVELOPMENT AUTHORITY OF COLUMBIA HEIGHTS, MINNESOTA. WHEREAS, the Bylaws of the Housing and Redevelopment Authority, dated August 1, 2016, have been changed to reflect the following: • Commissioner membership shall be comprised of the Columbia Heights Mayor and City Council. • Regular meetings shall take place at Columbia Heights City Hall on the fast Monday of the month of January at 6:30 pm. • Regular meetings shall no longer include "Management Reports"; rather meetings will include a HUD report. WHEREAS, the proposed changes to the Bylaws have been reviewed by the Authority Commissioners and Staff and found satisfactory; THEREFORE BE IT RESOLVED that the revised Bylaws of the Housing and Redevelopment Authority of Columbia Heights, Minnesota were adopted as written. Passed this V day of August, 2016. 1461M , Secretary HRA Minutes Page 3 August 1, 2016 AMENDED AND RESTATED BYLAWS OF THE HOUSING AND REDEVELOPMENT AUTHORITY OF COLUMBIA HEIGHTS, MINNESOTA DATE: ARTICLE I THE AUTHORITY Section 1. Name of the Authority. The name of the Authority shall be the "Housing and Redevelopment Authority of Columbia Heights, Minnesota." Section 2. Seal of Authority. The seal of the Authority shall be in the form of a circle and shall bear the name of the Authority and the year of its organization. Section 3. Office of the Authority, Place of Meeting The office of the Authority shall be at such place in the City of Columbia Heights, Minnesota as the Authority may from time to time determine by resolution. Regular and special meetings of the Board of Commissioners shall be open to the public and shall be held at Columbia Heights City Hall or at such a place in the City as the Authority may from time to time determine by resolution. Section 4. Powers of the Authority. The Authority, by and in its corporate name, shall have and exercise all powers, functions, rights and privileges pursuant to City Ordinance No. 1442 (Allocation Ordinance), and such portion of the powers described in Minnesota Statutes 469.001 to 469.047 as are allocated to the Authority under the Allocation Ordinance. ARTICLE II COMMISSIONERS Section 1. Authority. The business and affairs of the Authority shall be managed by or under the authority of the Board of Commissioners, except as otherwise permitted by statute. Section 2. Number, Oualification and Term of Office. There shall be si* five Commissioners comprised of the Mayor and City Council Members of Columbia Heights. aeseiat of Fedefal Regulations, tide 2n be paA non (HUD U e....l.,t:..ns) n ....r o � , whe i C:«., '� •Commissioners •° ° r,.•,.,,, :1 member shall ..,.«..,. ° terms shall equal to the Commissioner' -s' City Council terms. All otl•er Coax.,. -ails ..hall s HRA Minutes Page 4 August 1, 2016 Section 3. Vacancies. Vacancies on the Board of Commissioners occurring by reason of death, resignation, removal or disqualification shall be filled for the unexpired term by the Mayor in accordance with the procedures and criteria set forth in Article II, Section 2. Section 4. Removal. For inefficiency or neglect of duty, or misconduct in office, a Commissioner may be removed from office by the City Council in accordance with Minnesota Statutes, Section 469.010. ARTICLE III OFFICERS Section 1. Officers. The officers of the Authority shall be elected from among the Commissioners and shall consist of a Chair, Vice - Chair, and a Secretary - Treasurer. A Commissioner shall not hold more than one of the above named offices at the same time. Section 2. Chair. The Chair shall preside at all meetings of the Board of Commissioners if present. Except as otherwise authorized by resolution of the Board of Commissioners, the Chair shall sign all contracts, deeds and other instruments made by the Authority. At each meeting the Chair shall submit such recommendations and information as considered proper concerning the business, affairs and policies of the Authority. Section 3. Vice Chair. The Vice -Chair shall perform the duties of the Chair in the absence or incapacity of the Chair; and in case of resignation or death of the Chair, the Vice -Chair shall perform such duties as are imposed on the Chair until such time as the Board of Commissioners shall select a new Chair. Section 4. Secretary- Treasurer. The Secretary- Treasurer shall perform the duties of the office of Secretary- Treasurer and shall preside at all meetings of the Board of Commissioners in the absence of the Chair and Vice- Chair. The Secretary - Treasurer may delegate the responsibility for recording the Minutes of the Board of Commissioner meetings to the Executive Director or to the Authority Office Secretary as is determined appropriate by the Secretary- Treasurer. Section 5. Execution of Instruments. All deeds, contracts, promissory notes, bonds and instruments of every kind, authorized by the Board of Commissioners shall be signed by the Chair on behalf of the Authority as well as the Executive Director, and shall be executed in the name of the Authority. Section 6. Additional Duties. The Officers of the Authority shall perform such other duties and functions as may from time to time be required by the Authority, or the By -Laws or rules and regulations of the Authority. HRA Minutes Page 5 August 1, 2016 Section 7. Election of Appointment. The Chair, Vice- Chair, and Secretary- Treasurer shall be elected annually from among the Commissioners of the Authority, and shall hold office for one year or until their successors are elected and qualified. Section 8. Vacancies. Should the office of Chair, Vice -Chair or Secretary- Treasurer become vacant, the Board of Commissioners shall elect a successor from its members at the next regular meetings, and such election shall be for the unexpired term of said office. ARTICLE IV Section 1. The Columbia Heights City Manager is the Executive Director of the Authority. The Executive Director shall have general supervision over the administration of the Authority's business and affairs, subject to the direction of the Board of Commissioners. As assistant to the Secretary, the Executive Director shall insure that proper records of the Authority are maintained. The Executive Director (or his designee) shall act as Secretary of the meetings of the Board of Commissioners and shall keep a record of the proceedings in a journal of proceedings to be kept for such purposes (the Minutes of the proceedings are to be signed by the recorder plus the Authority Commission acting as Chair at the meeting). The Executive Director shall perform all duties incident to the Executive Director position as may be assigned by the position description as approved by the Board of Commissioners. ARTICLE V ADDITIONAL PERSONNEL Section 1. Deputy Executive Director. The Columbia Heights Community Development Director is the Deputy Executive Director and performs such duties and services as specified by the Executive Director, subject to direction of the Authority. In the absence or incapacity of the Executive Director, the Deputy Executive Director may sign contracts, deeds and other instruments made by the Authority. Section 2. Other Personnel. The Board of Commissioners may from time to time employ such personnel as it deems necessary to exercise its powers, duties and functions as prescribed by the Allocation Ordinance and the relevant portions of Minnesota Statutes, Sections 469.001 to 469.047. The selection and compensation of such personnel (including the Executive Director) shall be determined by the Board of Commissioners subject to the laws of the State of Minnesota. The Board of Commissioners may also use the services of staff provided by the City as agreed to between the Authority and the City from time to rime. HRA Minutes Page 6 August 1, 2016 ARTICLE VI MEETINGS Section 1. Regular Meetings. Meetings shall be held on a-quarterl-y an annual basis without notice at the regular meeting place (PafkNciew Columbia Heights City Hall) on the F-Ai;;4h Tuesday :...we mon& of jaaffaF5- n prig r.,,. and Oet t at 7.00 n A4 first Monday in the month of January at 6:30 P.M. unless the same is a legal Holiday, in which event said meeting shall be held on the next succeeding secular day. In the event the date /time /meeting place of a particular meeting must be changed, the Executive Director may make such change deemed necessary by notifying all Commissioners of the revised meeting time and date in accordance with the procedures for a special meeting. Section 2. Special Meetings. Special meetings of the Board of Commissioners may be called by the Chair, two members of the Board of Commissioners, or the Executive Director for the purpose of transacting any business designated in the call. The call (including location of meeting) for a special meeting must be delivered to Commissioners at least two days before the meeting, and notice of the meeting must be posted in the Authority's offices at least three days before the meeting. At a special meeting no business may be considered other than as designated in the call, except that if all the members of the Authority are present at a special meeting, any business may be transacted at such special meeting by unanimous vote. ARTICLE VII QUORUM Section 1. Few Three Commissioners constitute a quorum for the purpose of conducting its business and exercising its powers and for all other purposes, but a smaller number may adjourn from time to time until a quorum is obtained. When a quorum is in attendance, action may be taken by the Board of Commissioners upon a vote of a majority of the Commissioners present. ARTICLE VIII ORDER OF BUSINESS Section 1. Order of Business. At the regular meetings of the Board of Commissions the following shall be the Order of Business: 1. Roll Call 2. Approval of Minutes of the previous meeting 3. MaRagement Report- HUD Updates 4. Consent 5. All other items 6. Adjournment HRA Minutes Page 7 August 1, 2016 Upon direction of the Chair, or the motion by two members of the Board of Commissioner, any resolution shall be in writing and shall be copied in the journal of the proceedings of the Board of Commissioners. ARTICLE IX MANNER OF VOTING The voting on all questions coming before the Board of Commissioners shall be by the Chair calling for yeas and nays on the quest9ions and shall be entered upon the Minutes of each meeting. The Chair and all members of the Board of Commissioners at every meeting if said Board of Commissioners shall be entitled to a vote. In the event that any Commissioners shall have a personal interest of any kind in a matter then before the Board of Commissioners, the Commissioners shall disclose his/her interest and be disqualified from voting upon the matter, and the Secretary shall so record in the Minutes that no vote was cast by said Commissioner. ARTICLE X AMENDMENTS The By -Laws of the Board of Commissioners shall be amended by Resolution only with the approval of at least a majority of the Commissioners in office at any time. These By -Laws were amended as the By -Laws of the Authority by the Board of Commissioners on this I" day of August, 2016. Shelley Hanson, Secretary Commission member Nelson gave an update on the improvements and remodeling that has been done at Parkview Villa since Aeon took ownership. She said that air conditioners were added to all the units, windows were replaced, they remodeled the main floor to relocate the offices, make a lounge area rather than the large community room, added a porch area in the front, remodeled the beauty shop, added an exercise room and computer room and remodeled the handicap units on the main floor. She said one thing that still needs to be resolved is to get all the elevators in working order. Currently only one is operating. Peterson thanked both Diehm and Nelson for their service to the community and for their attendance at this meeting. The meeting was adjourned at 6:20pm. Respectfully submitted, Shelley Hanson Secretary HOUSING & REDEVELOPMENT AUTHORITY MINUTES OF THE MEETING OF JANUARY 9, 2017 1. Call to order — The meeting was called to order by Executive Director Fehst at 8:47 pm. 2. Roll Call — Members present: Donna Schmitt, Bobby Williams, John Murzyn Jr., and Connie Buesgens. Others Present: Executive Director Walt Fehst, Deputy Director Joe Hogeboom, Assistant Treasurer Joe Kloiber, HRA Attorney Martha Ingram and Economic Development Manager Keith Dahl 3. Oath of Office: a. Connie Buesgens b. Robert Williams 4. Election of Officers: Motion by Schmitt, seconded by Buesgens, to elect officers as follows: Chair- Murzyn Vice Chair- Williams Secretary /Treasurer- Buesgens All ayes. Motion Passed. 5. Approval of Modification of Note Terms for Parkview Villa HRA Attorney Martha Ingram introduced this item. Ingram explained that the HRA sold Parkview Villa to Aeon in September, 2015. At that time, the majority of the purchase price was financed through a promissory note from Aeon to the HRA. The 30 year term of the note matured no later than September 30, 2045. Attorney Ingram further explained that the bulk of the financing is through Minnesota Housing Finance Agency (MHFA), and that the HRA agreed to subordinate its interest in the facility to MHFA. Now that construction improvements are complete at the facility, Aeon is taking out its construction loan with a permanent loan from MHFA. As such, MHFA requires both the Note and the Partnership Note be amended, extending their final maturity to December 2047. Chair Murzyn asked if the Board had any questions. Vice Chair Williams inquired about the nature of the original sale, as he was not serving on the HRA at the time of the sale. Assistant Treasurer Kloiber explained that the sale transaction was constructed in a way in which the HRA would not receive funds from the Note until the Notes maturity. Assistant Treasurer Kloiber indicated that the bulk of the proceeds must be paid to the U.S. Department of Housing and Urban Development (HUD) at that time. Assistant Treasurer Kloiber pointed out that the HRA had retained the fund balance associated with Parkview Villa South, which amounts to a sum slightly under $1 million. Commissioner Buesgens inquired about how the former Parkview Villa South funds can be used. Attorney Ingram stated that HUD requires the funds can be used for either housing or certain economic development activities. Deputy Executive Director Hogeboom stated that the Economic Development Authority will discuss this matter in further detail at a later meeting. Commissioner Schmitt acknowledged that the City continues to receive revenue from a lease of a cellular telephone tower on the roof of Parkview Villa. Chair Murzyn asked if there were any further questions or comments. Hearing none, Murzyn requested a motion. Motion by Buesgens, seconded by Schmitt to adopt HRA Resolution 2017 -01, Approving the Extension of the Term of Certain Promissory Notes in Connection with Parkview, Villa. Hogeboom stated that there are currently no additional HRA meetings scheduled in 2017. The meeting was adjourned at 9:20 pm. Respectfully submitted, Joseph Hogeboom Deputy Director/ Acting Secretary CH COLUMBIA HEIGHTS AGENDA SECTION HRA ITEM NO. 4 MEETING DATE FEBRUARY 13, 2017 CITY OF COLUMBIA HEIGHTS — HOUSING AND REDEVELOPMENT AUTHORITY ITEM: Amended and Restated Collateral Assignment of Note and Mortgage in Connection with the Terms of Conveyance of Parkview Villa (Resolution 2017 -02) DEPARTMENT: Housing and Redevelopment EXECUTIVE DIRECTOR'S APPROVAL: Authority BY /DATE: Joe Hogeboom, July 26, 2015 BY /DATE: Walter Fehst, Background HRA Attorney Martha Ingram will be present to discuss her attached memorandum. As the attached memorandum explains, Aeon's legal counsel recently approached HRA staff regarding a request to correct a perceived error in the Collateral Assignment of Note related to the sale of Parkview Villa. Attorney Ingram will explain the situation, and seek HRA consideration of the approval of Resolution 2017 -02. Recommended Motion Move to waive the reading of Resolution 2017 -02, there being ample copies available to the public. Move to adopt Resolution 2017 -02, amending and restating the collateral assignment of note and mortgage in connection with the terms of the conveyance of Parkview Villa. Attachments 1. Memorandum from HRA Attorney Martha Ingram to HRA, dated January 31, 2017 (2 pages) 2. Amended and Restated Collateral Assignment of Note and Mortgage (9 pages) 3. Resolution 2017 -02 (2 pages) City of Columbia Heights - HRA Letter 470 US Bank Plaza Kennedy 200Sonth Sixth Street Minneapolis MN 55402 (612) 337 -9300 telephone Graven (612) 337 -9310 fax http://www.kmnedy-graven.com HARTERED MEMORANDUM To: Housing and Redevelopment Authority for Columbia Heights, Minnesota From: Martha higram, Kennedy & Graven Re: Parkview Villa Matters Date: January 31, 2017 On September 24, 2015, the Housing and Redevelopment Authority for Columbia Heights, Minnesota (the "Authority") sold the HUD- supported multifamily rental housing facility known as Parkview Villa (the "Facility") to Aeon, a nonprofit housing organization ( "Aeon "). A portion of the purchase price for the Facility was deferred by means of a promissory note in the amount of $6,585,000 given to the Authority by Aeon (the "Aeon Note "), secured by a collateral assignment (the "Assignment ") of a promissory note (the "Partnership Note ") and mortgage (the "Mortgage ") given to Aeon by its limited partner, Parkview Limited Partnership (the "Partnership "), which is the entity that actively manages the Facility. The Aeon Note does not bear interest. However, the Partnership Note bears interest at the rate of 2.64% per annum. The Partnership Note is structured as a cash -flow note and is subject to the terms of a Master Subordination Agreement between Aeon, the Partnership, the Minnesota Housing Finance Agency, and the Authority (the "Subordination Agreement "). Pursuant to the Subordination Agreement, interest payments are only due and payable on the Partnership Note if there is sufficient Cash Flow (defined as the excess of any income to the Partnership remaining after Partnership expenses are made) after all required payments under all senior loans are made. To date, no Net Cash Flow has been available to make interest payments on the Partnership Note. At the time Aeon executed the Aeon Note and Assignment, the stated intent of Aeon and the Partnership was that any interest payments actually made on the Partnership Note would be retained by Aeon and used to support services and operations benefiting the Facility, particularly Resident Connections, Aeon's in -house support service team. According to an Aeon representative, Resident Connections provides community engagement and eviction prevention services to residents of the Facility, as well as connections to community services. In addition to the support for Resident Connections, interest payments would also potentially be used to support the general operations of the Facility, such as maintenance and repair and additional staffing needs. Aeon discussed this use of the hypothetical interest payments with Authority staff and legal counsel at the time the Facility was conveyed. 491940v1 MNI CL160 -82 Aeon's legal counsel recently approached Authority staff and Kennedy & Graven with a request to inform the Authority that as currently drafted, paragraph 7 of the Assignment provides that if and to the extent that Aeon receives payments of interest under the Partnership Note, those payments will be held in trust for the benefit of the Authority, and will be paid over to the Authority to be applied to the principal payable under the Aeon Note. Given the stated intent of Aeon to retain any interest payments from the Partnership Note for the uses outlined above, counsel to Aeon believes that this provision was the result of an error in drafting of the Assignment. Counsel to Aeon has requested that the Authority agree to enter into an Amended and Restated Collateral Assignment of Note and Mortgage, which would modify the language of paragraph 7 so that Aeon would be allowed to collect interest payments under the Partnership Note as originally contemplated. The proposed Amended and Restated Collateral Assignment, with the proposed changes highlighted in blue, is attached as Exhibit A to this memo. The Board of Commissioners will be requested to adopt a resolution approving the Amended and Restated Collateral Assignment at its meeting on February 6, 2017. If you have any questions about this matter, please do not hesitate to contact me at the number above. 491940vl MALI CL160 -82 Exhibit A AMENDED AND RESTATED COLLATERAL ASSIGNMENT OF NOTE AND MORTGAGE THIS AMENDED AND RESTATED COLLATERAL ASSIGNMENT OF NOTE AND MORTGAGE (the "Assignment ") is signed on this day of February 2017, but made effective as of the 24th day of September, 2015, by AEON, a Minnesota nonprofit corporation (the "Borrower "), in favor of the HOUSING AND REDEVELOPMENT AUTHORITY OF COLUMBIA HEIGHTS, MINNESOTA, a public body corporate and politic and political subdivision of the State of Minnesota (the "HRA "). WHEREAS, Borrower has provided to HRA a certain Promissory Note dated as of September 24, 2015, pursuant to which Borrower promises to pay to HRA the principal sum of $6,585,000 in accordance with the terms thereof (the "Note "); and WHEREAS, to secure payment and performance of the obligations of Borrower under the Note, HRA has required that Borrower execute and deliver to HRA this Assignment to collaterally assign to HRA Borrower's right, title and interest in and to (a) that certain Promissory Note dated September 24, 2015, made by Parkview Limited Partnership, a Minnesota limited partnership ( "Partnership ") to the order of Borrower in the original principal amount of $6,585,000 (as it may be amended, restated, replaced or otherwise modified from time to time, the "Partnership Note "); and (b) that certain Mortgage, dated September 24, 2015, executed and delivered by Partnership and filed for record on or about the date hereof, with Anoka County Office of Registrar of Titles and Office of the Recorder, securing the Partnership Note and covering, among other things, real estate legally described on Exhibit A attached hereto and hereby made a part hereof (as it may be amended, restated, replaced or otherwise modified from time to time, the "Partnership Mortgage "). NOW THEREFORE, in consideration of the foregoing, for and in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Borrower agrees as follows: 1. Collateral Assignment. Borrower hereby collaterally assigns and transfers to HRA, and grants a security interest in, all right, title and interest of Borrower in and to the Partnership Note and the Partnership Mortgage (collectively, the "Pledged Documents "), including all cash, proceeds, interest or other income or property, accrued and hereafter accruing, received, receivable or otherwise distributed in respect of, in exchange for or upon the sale or other disposition of the Pledged Documents, for the purpose of securing the Note. 2. Performance of Obligations. Borrower agrees to promptly, faithfully and diligently observe, perform and discharge each and every term, condition, obligation, covenant and agreement which Borrower is now, or hereafter becomes, liable to observe, perform or discharge under this Assignment and the Pledged Documents; to give prompt written notice to HRA of any notice of default received by Borrower under the Pledged Documents on the part of any party thereunder, together with an accurate and complete copy of any such notice; and, at the sole cost and expense of Borrower, to enforce or secure the performance of each and every obligation, covenant, condition and agreement to be performed by Partnership under any of the Pledged Documents. 491940v1 M II CL160 -82 3. Actions Arising out of the Pledged Documents. Borrower shall, at Borrower's sole cost and expense, appear in and defend any dispute, action or proceeding against Borrower or HRA arising under, growing out of or in any manner connected with or affecting any of the Pledged Documents, or the obligations, duties or liabilities of Borrower or Partnership thereunder, and shall pay all costs and expenses of HRA, including attorneys' fees (prior to trial, at trial and on appeal) in connection with any such dispute, action or proceeding in which HRA may appear or with respect to which it may otherwise incur costs or expenses, whether or not HRA prevails therein. 4. HRA's Right to Perform. Should Borrower fail to make any payment or to do any act as herein provided, then HRA may, but without obligation to do so, without notice or demand to or upon Borrower, and without releasing Borrower from any obligation hereof, make or do the same in such manner and to such extent as HRA may deem necessary or desirable to protect the security hereof, including specifically, without limiting its general powers, appearing in and defending any action or proceeding purporting to affect the security hereof or the rights or powers of HRA, and observing, performing and discharging all or any of the obligations, covenants and agreements of Borrower in the Pledged Documents. In exercising any such powers, HRA may pay its costs and expenses, employ counsel and incur and pay reasonable attorneys' fees (prior to trial, at trial and on appeal). Borrower hereby grants to HRA an irrevocable power of attorney, coupled with an interest, to perform all of the acts and things provided for in this section as Borrower's agent and in Borrower's name. 5. No Modification Without Consent. Each of Borrower and Partnership agrees not to modify, amend, extend, waive, subordinate or in any manner alter the terms of either of the Partnership Note or the Partnership Mortgage, or reduce the indebtedness secured thereby; not to waive, excuse or condone any default by the other party under either of the Partnership Note or the Partnership Mortgage; and not to in any manner release or discharge the other party of or from any obligation, covenant, condition or agreement by Partnership or Borrower, as applicable, to be performed under either of the Partnership Note or the Partnership Mortgage. Any attempt on the part of Borrower or Partnership to exercise any such right, power or authority without the prior written consent of HRA shall be a nullity and shall be a default hereunder. 6. Borrower's Representations. Warranties and Covenants. Borrower represents and warrants to HRA that: a. Borrower has good right and lawful authority to grant, transfer, set over and assign the Pledged Documents to HRA. b. This Assignment has been duly authorized, executed and delivered by and on behalf of Borrower so as to constitute the valid and binding obligations of Borrower, enforceable in accordance with the terms hereof. C. Borrower has not performed or committed any act or executed any instrument, and is not bound by any law, statute, regulation, order, pledge agreement, indenture, contract or agreement, which might prevent HRA from operating under any of the terms and conditions hereof, or which would limit HRA in such operation. 491940v1 MNI CL160 -82 d. Borrower has not executed or agreed to, shall not execute or agree to, and shall not permit to occur by operation of law any other assignment, alienation, pledge, encumbrance or transfer of any its of right, title or interest in, to or under any of the Pledged Documents. e. The Pledged Documents are in full force and effect; neither of the Pledged Documents has been amended or modified; and there is no default by Borrower nor by Partnership now existing under any of the Pledged Documents, nor has any event occurred which, with the passage of time and/or the giving of notice, would constitute a default thereunder. f. Borrower has delivered or will deliver to HRA fully executed originals of the Pledged Documents, and such documents have not been modified, amended or canceled. g. The Pledged Documents each constitute a valid, genuine and legally enforceable obligation, subject to no defense, set off or counterclaim of Partnership. h. The Partnership Mortgage has been duly executed and delivered, and will be recorded or otherwise properly perfected in Anoka County, Minnesota. i. The outstanding principal balance on the Partnership Note as of the date hereof of is $6,585,000. 7. Present Assignment. Subject to the terms and conditions set forth herein, this is a perfected, absolute and present assignment by Borrower to HRA of the Pledged Documents. During the pendency and effectiveness of this Assignment: (a) Borrower is permitted to collect and receive as and when due and payable or otherwise all payments of interest due under the Partnership Note; and (b) Borrower shall have no authority to collect or receive, as and when due and payable or otherwise, any payments of principal, interest or other sums due under the Partnership Note other than payments of interest, and any and all such payments of principal or other sums (other than � interest` `� .s if and to the extent so received by Borrower shall be held in trust by Borrower for the benefit of HRA, and shall be promptly paid over and delivered by Borrower to HRA to be applied to the secured obligations. At any time after the occurrence and during the continuance of an Event of Default (as defined below), Borrower hereby authorizes and directs Partnership to pay amounts secured by the Partnership Mortgage directly to HRA in an amount up to the amount of the secured obligations. Failure of HRA to collect, or discontinuance by HRA from collecting, at any time, and from time to time, any amounts secured by the Partnership Mortgage shall not in any manner affect the rights of HRA to thereafter collect the same. Borrower hereby authorizes HRA to file UCC financing statements and amendments to financing statements with respect to the Pledged Documents consistent with the terns of this Agreement in such form and substance as HRA, in its sole discretion, may determine. 8. Events of Default. The occurrence of one or more of the following shall constitute an 'Event of Default" within the meaning of this Assignment, provided, however, that such event shall not be an Event of Default unless and until written notice of such failure shall have been given to Borrower and such failure shall not have been cured before expiration of (i) the period of thirty (30) days next following the giving of such notice or (ii) if cure cannot 491940v1 MAII CL160 -82 reasonably be effected within such thirty (30) day period, then such longer period as shall be reasonably needed to cure such event if Borrower timely commences cure and diligently prosecutes cure to completion: a. Borrower shall fail to abide or observe any term or condition of this Assignment, or any representation made by Borrower was materially false when made; b. an event of default shall occur under the Note, or any of the other related documents (together with the Note, the "HRA Loan Documents "), or Borrower shall otherwise fail to abide by the terms and conditions of any of the HRA Loan Documents; C. a petition commencing a proceeding under the United States Bankruptcy Code or any similar state law is filed by or against Borrower; or a receiver, custodian, assignee, or trustee is appointed for Borrower or any of their respective assets; or d. any third party seizes or pursues repossession, foreclosure, replevin or liquidation of any property of Borrower. 9. HRA Rights Upon Default. a. Upon or at any time after the occurrence of any Event of Default under this Assignment, HRA may, at its option, but without obligation to do so, and without notice to or consent of Borrower, sell, assign or transfer to itself or any third party purchaser all of Borrower's right, title and interest in, to and under the Pledged Documents subject to the terms and conditions hereof; make, execute, enforce, modify, alter, cancel, release or satisfy the Partnership Mortgage, in its own name or in the name of Borrower; and/or pursue all other remedies available at law or in equity, including all remedies available under the Uniform Commercial Code. Borrower shall in every way facilitate the transfer of its interests in, to and under the Partnership Mortgage and the proceeds of the Partnership Note, including without limitation executing and recording any and all additional instruments necessary to evidence the transfer of the Pledged Documents. Borrower hereby grants to HRA an irrevocable power of attorney, coupled with an interest, to perform all of the acts and things provided in this section as Borrower's agent and in Borrower's name. b. If any Event of Default shall occur, then HRA may, at its option, declare the secured obligations due and payable as set forth in the Note and other HRA Loan Documents, and, in addition to making available to HRA any remedies for default herein set forth, such Event of Default shall, at HRA's option, constitute and be deemed to be an event of default under the Note and other HRA Loan Documents, entitling HRA to every and all rights and remedies therein contained, in addition to those rights and remedies herein set forth, without regard to the adequacy of security for the indebtedness secured hereby, the commission of waste or the insolvency of Borrower. 10. Release Upon Payment in Full. Upon the payment in full of the Note, this Assignment shall become and be void and of no further effect and, upon request of Borrower, HRA shall execute a release hereof or an assignment to Borrower of the Pledged Documents. 491940v1 MM CL160 -82 11. Construction According to Applicable Law. All rights, powers and remedies provided herein may be exercised only to the extent that the exercise thereof does not violate any applicable law, and they are intended to be limited to the extent necessary so that they will not render this Assignment invalid, unenforceable or not entitled to be recorded, registered or filed under any applicable law. If any term of this Assignment shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the other terms hereof shall be in no way affected thereby. HRA shall be entitled to all rights and remedies available under this Assignment, under the Note, under the other HRA Loan Documents, at law, in equity or under any statute in existence now and/or at the time of exercise thereof, even though such rights and remedies were not available on the date first above written, and all such rights and remedies may be exercised at any time and from time to time concurrently, separately, successively and in any order of preference, at HRA's sole discretion. 12. Successors and Assigns. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of Borrower, Partnership and HRA. 13. Additional Security. HRA shall not be required to resort first to the security of this Assignment or of any of the other HRA Loan Documents before resorting to the security of the other, and HRA may exercise its rights hereunder, under this Assignment and any of the other HRA Loan Documents concurrently or independently and in any order of preference; all rights and remedies of HRA set forth herein, in the Note, any of the other HRA Loan Documents, at law, in equity, under statute and by contract being cumulative. No failure by HRA to avail itself of any of the terms, covenants or conditions of this Assignment for any period of time shall be deemed to constitute a waiver thereof. 14. Notices. Any notice or other communication to any party in connection herewith shall be deemed to have been given on the date the same is deposited in the United States mail, registered or certified, return receipt requested, postage prepaid, or deposited with Federal Express, Airborne or another reputable overnight carrier, addressed to the party to which the notice is to be given at the address specified below, or at such other address as such party shall have specified to the other party hereto in writing and not less than ten (10) days prior to the effective date of the address change: To Borrower: Aeon Attn: Eric Schnell, Chief Operating Officer 901 North Third Street, Suite 150 Minneapolis, MN 55401 With a copy to USBCDC: U.S. Bancorp Community Development Corporation Attn: Director of LIHTC Asset Management 1307 Washington Avenue, Suite 300 St. Louis, Missouri 63103 To HRA: Columbia Heights HRA Attn: Executive Director 590 40s' Avenue Northeast 491940v1 MM CL160 -82 Columbia Heights, Minnesota 55421 15. Governing Law; Waiver of Jury Trial. This Assignment, the rights of the parties hereunder and the interpretation hereof shall be governed by, and construed in accordance with, the laws of the State of Minnesota, in all respects. Any disputes related to this Assignment or any of the other Loan Documents shall be resolved in either Hennepin County, Minnesota or the United States District Court, District of Minnesota. THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY AND ANY RIGHT EACH MAY HAVE TO OBJECT TO PERSONAL JURISDICTION, ASSERT THE DOCTRINE OF FORUM NON CONVENIENS, OR OBJECT TO VENUE ON ANY BASIS WHATSOEVER IN ANY ACTION ARISING FROM OR RELATING TO THIS ASSIGNMENT. 16. Further Assurances. Borrower shall, at the request of HRA, at any time and from time to time following the execution of this Assignment promptly execute and deliver, or cause to be executed and delivered, to HRA all such further documents and instruments and take all such further action as may be reasonably necessary or appropriate to confirm or carry out the provisions and intent of this Assignment. 17. Headings. The headings or captions of the sections set forth herein are for convenience only, are not a part of this Assignment and are not to be considered in interpreting this Assignment. 18. Recitals Incorporated. The recitals to this Assignment are incorporated into and constitute an integral part of this Assignment. 491940v1 MNI CL160 -82 IN WITNESS WHEREOF, Borrower and HRA have caused this Amended and Restated Assignment to be duly executed as of the day and year first above written. AEON MS STATE OF MINNESOTA ) SS. COUNTY OF ) Caroline Horton, Chief Financial Officer The foregoing instrument was acknowledged before me this day of February, 2017, by Caroline Horton, the Chief Financial Officer of Aeon, a Minnesota nonprofit corporation, on behalf of the corporation. Notary Public HOUSING AND REDEVELOPMENT AUTHORITY OF COLUMBIA HEIGHTS, MINNESOTA Its Chair Its Executive Director STATE OF MINNESOTA 1 COUNTY OF ANOKA ) On this day of February, 2017, before me, a notary public within and for Anoka County, personally appeared John Murzyn Jr and Walter Fehst to me personally known who by me duly sworn, did say that they are the Chair and Executive Director of the Housing and Redevelopment Authority of Columbia Heights Minnesota a public body corporate and politic under the laws of the State of Minnesota (the "Authority ") named in the foregoing instrument; that said instrument was signed on behalf of said Authority and said John Murzyn Jr and Walter Fehst acknowledged said instrument to be the free act and deed of said Authority. MRS-113288-12 I Eel11G111M ACKNOWLEDGMENT OF PARKVIEW LIMITED PARTNERSHIP Partnership hereby acknowledges, agrees with and consents to the foregoing Assignment and agrees to comply with the covenants of the Partnership set forth in Section 5 of the Assignment. Partnership represents and warrants to the Borrower and HRA that (a) this Assignment has been duly authorized, executed and delivered by and on behalf of Partnership so as to constitute the valid and binding agreement of the Partnership, enforceable in accordance with the terms hereof; (b) the Pledged Documents each constitute a valid, genuine and legally enforceable obligation of the Partnership, enforceable in accordance with its applicable terns; none of the Pledged Documents has been amended or modified; and, to its knowledge, there is no default by Borrower or by Partnership now existing under either of the Pledged Documents; and (c) the outstanding principal balance on the Partnership Note as of the date hereof of is $6,585,000. Partnership hereby acknowledges that HRA is relying upon the foregoing in connection with HRA entering into certain HRA Loan Documents with Borrower. Sinned on February . 2017 but made effective as of September 24, 2015. PARTNERSHIP: PARKVIEW LIMITED PARTNERSHIP, Minnesota limited partnership By: Aeon, a Minnesota nonprofit corporation Its: General Partner am 491940v1 MNI CL160 -82 Caroline Horton, Chief Financial Officer EXHIBIT A Legal Description Tract A: That part of the South 1/2 of Lot 13, lying Northwesterly of the following line: Beginning at the Northeast corner of the South 1/2 of Lot 13; thence Southwesterly to a point on the South line of said Lot 13, said point being 2 feet Easterly of the Southwest Comer of Lot 13; the South 241 feet of Lot 14; then south 1/2 of Lot 15; Lot 39 except the West 30 feet thereof; Lots 40, 41, 42 and 43 and the West 1/2 of Lot 44, all in Block 5 Reservoir Hills, Columbia Heights, Anoka County, Minnesota (Abstract) Tract B: The East 40 feet of the South 1/2 of Lot 16, Block 5, Reservoir Hills, Columbia Heights, Anoka County, Minnesota. (Toren) 491940vl MNI CL160 -82 HRA RESOLUTION NO. 2017-02 RESOLUTION APPROVING AN AMENDED AND RESTATED COLLATERAL ASSIGNMENT OF NOTE AND MORTGAGE IN CONNECTION WITH THE TERMS OF CONVEYANCE OF PARKVIEW VILLA BE IT RESOLVED BY the Board of Commissioners ( "Board ") of the Housing and Redevelopment Authority of Columbia Heights, Minnesota (the "Authority ") as follows: Section 1. Recitals. 1.01. The Authority previously owned and operated a public housing facility known as Parkview Villa (the "Facility") within the City of Columbia Heights (the "City"). 1.02. The Authority and Aeon (the "Purchaser") executed a certain Amended and Restated Purchase and Development Contract, dated as of July 28, 2015 (the "Agreement "), pursuant to which the Authority conveyed the Facility to the Purchaser and received a Promissory Note for the payment of the purchase price (the "Note "), secured by the Collateral Assignment of Note and Mortgage dated as of September 24, 2015 (the "Assignment "), which pledges the Inclusive Promissory Note (the "Partnership Note ") from Parkview Limited Partnership (the "Partnership ") to the Purchaser, as well as a mortgage from the Partnership to the Purchaser. 1.03. Although the intent of the parties was to allow any interest payments under the Partnership Note to be retained by the Purchaser and used to pay operating and other costs of the Facility, the terms of the Assignment incorrectly provide that any interest due and payable under the Partnership Note shall be held in trust by the Purchaser for the benefit of the Authority. 1.04. The Purchaser has requested that the Authority agree to an Amended and Restated Collateral Assignment of Note and Mortgage (the "Amended Assignment"), which clarifies that interest payments under the Partnership Note may be retained by the Purchaser and applied to operating costs of the Facility. The HRA's legal counsel has reviewed the Amended Assignment in the form presented to the HRA and on file with the HRA's Executive Director. Section 2. Amended Assignment Approved. 2.01. The Amended Assignment is hereby approved. 2.02. The Chair and Executive Director are hereby authorized to execute on behalf of the Authority the Amended Assignment in substantially the form presented to the Board, subject to changes that do not materially alter the substance of the transaction and that are approved by the Chair and Executive Director, provided that execution of the Amended Assignment by such officials shall be conclusive evidence of approval. a*1!1311% [yaL1111.36 Approved by the Board of Commissioners of the Housing and Redevelopment Authority for Columbia Heights, Minnesota this 13th day of February, 2017. Chair ATTEST: Secretary 4944880 CL160 -82