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2021-10-28 HRA Regular Meeting Packet
Ag enda E dina H ousing and R edevelopm ent Author ity City of E dina, Minnesota City Hall, Council Chambers Thursday, October 28, 2021 7:30 AM Watch the m eeting on cable TV or at EdinaMN.gov/LiveMeeting s or Facebook.com /EdinaMN. To par ticipate in Com m unity Com m ent: Call 800-374-0221. E nter Conference ID 4591604. Give the operator your nam e, street address and telephone number. Press *1 on your telephone keypad when you would like to get in the queue to speak. A City sta: m em ber will introduce you when it is your tur n. Or attend the meeting to provide testimony, City Hall Council Cham bers, 4801 W. 50th St. I.Call to Ord er II.Roll Call III.Pledge of Allegia n ce IV.Ap p roval of Meetin g Agen d a V.Com m unity Com m en t Du ring "Com m unity Com m en t," th e Edin a Housing and Redevelop m ent Au thority (HRA) will in vite resid ents to sh are new issues or con cern s tha t h aven't been con sid ered in th e p ast 30 da y s b y th e HRA or w h ich a ren't slated for fu ture consideration . Individ u als m u st lim it their com m ents to three m inutes. Th e Ch air m a y lim it the num ber of sp ea kers on th e sa m e issue in th e interest of tim e a n d topic. Gen era lly sp ea king, item s tha t are elsewhere on tod ay's a genda m a y not b e addressed d u ring Com m unity Com m en t. In d ividua ls sh ould not expect th e Ch air or Com m issioners to resp ond to th eir com m en ts toda y . Instead the Com m issioners m ight refer the m atter to sta. for consideration a t a fu ture m eeting. VI.Ad option of Con sen t Agenda All a genda item s listed on the consent a genda a re con sid ered rou tin e and will be en acted by one m otion. There will be no sepa rate d iscussion of such item s unless requested to be rem oved from the Con sen t Agenda by a Com m ission er of the HRA. In su ch ca ses the item w ill b e rem oved from th e Consent Agen d a and con sid ered im m ediately follow ing the a d option of th e Consent Agen d a. (Fa vorable rollcall vote of m a jority of Com m issioners p resent to approve.) A.October 14, 2021 Regular Meeting Min u tes B.Approve Paym en t of Cla im s VII.Reports/Recom m enda tions: (Favora b le vote of m ajority of Com m ission ers p resent to approve excep t where n oted) A.4917 Eden Avenue - Redevelop m ent Agreem en t for Tax Increm en t Fina n cin g B.Resolution 2021-13 Ad opting Sp endin g Pla n for Una llocated Tax Increm en t Funds C.5146 Eden Avenue - Redevelop m ent Pla n n ing for Resta u rant Fa cility VIII.HRA Com m issioners' Com m en ts IX.Executive Director's Com m ents A.Dra ft 2022 HRA Meeting Sched u le X.Ad jou rn m ent Th e E d ina Housing a n d Redevelop m ent Au thority wa n ts all pa rticip ants to be com fortable b ein g pa rt of th e p u b lic p rocess. If y ou n ee d a ssista n ce in the w a y of h ea ring am pli@ca tion, a n in terp reter, large-p rint docum en ts or som ethin g else, p lease ca ll 952-927-8861 72 hou rs in advance of the m eeting. Date: O c tober 28, 2021 Agenda Item #: VI.A. To:C hair & C ommis s ioners of the Edina HR A Item Type: Minutes F rom:Liz O ls on, Administrative S upport S pecialist Item Activity: Subject:O c tober 14, 2021 R egular Meeting Minutes Action Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: Approve the regular minutes of October 14, 2021. I N TR O D U C TI O N: S ee attached meeting minutes of O ctober 14, 2021. AT TAC HME N T S: Description Draft Minutes October 14, 2021 Page 1 MINUTES OF THE REGULAR MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY OCTOBER 14, 2021 7:30 A.M. I. CALL TO ORDER Chair Hovland called the meeting to order at 7:30 a.m. then explained the processes created for public comment. II. ROLLCALL Answering rollcall were Commissioners Anderson, Jackson, Staunton, and Chair Hovland. Absent: Commissioner Pierce. III. PLEDGE OF ALLEGIANCE IV. MEETING AGENDA APPROVED - AS PRESENTED Motion by Commissioner Jackson, seconded by Commissioner Staunton, approving the meeting agenda as presented. Roll call: Ayes: Commissioners Anderson, Jackson, Staunton, and Chair Hovland Motion carried. V. COMMUNITY COMMENT No one appeared. VI. CONSENT AGENDA ADOPTED - AS PRESENTED Member Jackson made a motion, seconded by Member Anderson, approving the consent agenda as presented: VI.A. Approve minutes of the Regular Meeting August 26, 2021 VI.B. Approve minutes of the Special Meeting September 9, 2021 VI.C. Adopt Resolution No. 2021-11; Authorizing the Redemption of Public Project Revenue Bonds, Series 2009A VI.D. 3940 Market Street Lease Agreement with United States Postal Service VI.E. Pentagon Village LLC Redevelopment Agreement – Amendment #3 Rollcall: Ayes: Commissioners Anderson, Jackson, Staunton, and Chair Hovland Motion carried. VII. REPORTS/RECOMMENDATIONS VII.A. RESOLUTION NO. 2021-12; ESTABLISHING THE EDEN/WILLSON REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT AND APRPOVING A TAX INCREMENT FINANCING PLAN THEREFOR - ADOPTED Economic Development Manager Neuendorf said this item pertained to the creation of a new Tax Increment Financing (TIF) District to support the redevelopment of property in an around 4917 Eden Avenue. The redevelopment project was located at 4917 Eden Avenue and the existing commercial structure was anticipated to be vacated and demolished. A new 7-story apartment building would be constructed on the site with below ground and surface parking. The building would include commercial tenant space on the first floor and 10 percent of the apartment units would be affordably-priced. He said in July 2021, the developer was granted preliminary rezoning and site plan approval for the mixed-use development and noted staff had met with the developer to understand the financial conditions that warrant consideration of public financing. Staff also engaged legal and Minutes/HRA/October 14, 2021 Page 2 financial advisors at Ehlers Associates and Dorsey & Whitney to scrutinize the financial pro forma and provide input on the potential use of TIF for this project who determined that the financial gap for the $83.7 million project was approximately $5.1 million. Ehlers also confirmed that “but for” the use of TIF, this project would be unable to secure private financing then noted in August 2021, the HRA agreed with the general business terms identified for the use of TIF. Nick Anhut, Ehlers and Associates, provided further background on the proposed TIF district. The Board asked questions and provided feedback. Member Staunton moved to adopt Resolution No. 2021-12 establishing the Eden/Willson redevelopment tax increment financing district and approving a tax increment financing plan therefor. Member Jackson seconded the motion. Roll call: Ayes: Commissioners Jackson, Staunton, and Chair Hovland Nay: Commissioner Anderson Motion carried. VII.B. EDINA THEATER 3911 W. 50TH STREET – FINANCIAL SUPPORT FOR RE- OCCUPANCY - REVIEWED Mr. Neuendorf shared this item pertained to the re-modeling and re-occupancy of the Edina Theater. He said the previous tenant vacated the facility in early 2021 due largely to the economic impacts of the ongoing COVID-19 pandemic and noted the landlord was prepared to lease the facility to a new operator. He said substantial renovations were necessary before the facility would be viable in the marketplace and that due to the importance of this facility to the community, staff had prepared a term sheet to identify business terms by which the City and HRA could provide financial support. Mr. Neuendorf said staff recommended approval of the term sheet and was seeking authorization to prepare contractual agreements with the tenant and landlord based on the approved terms. He spoke about the proposed capital investment that would be included and the scope of work that included common areas, auditoriums, and repair of historic sign. He said the tenant would make the facilities available at cost to the local community for community events, film festivals, and other events and anticipated reopening in the beginning of 2022. Mr. Neuendorf outlined the details that included a $500,000 grant to the landlord that included ARPA funds, a $300,000 forgivable loan, and additional public improvements in the future. Steve Mann, Mann Theaters, shared about the demise of the theater due to both neglect and COVID- 19 and the need for a complete makeover that included new luxury recliners, bar, new screens and sound equipment and other amenities. He said their goal was to create a destination location similar to St. Paul and Rochester and said the minimum investment of $1.5 million would assist with that goal then outlined how the other cities helped and the results. The Board asked questions and provided feedback. Motion made by Commissioner Staunton, seconded by Commissioner Anderson, to approval of the Term Sheet and seeks authorization to prepare contractual agreements with the tenant and landlord based on the approved Terms. Roll call: Ayes: Commissioners Anderson, Jackson, Staunton, and Chair Hovland Motion carried. VII.C. MOTION TO CLOSE SESSION AS PERMITTED BY M.S. 13D.05 SUBDIVISION 3 TO DISCUSS THE POTENTIAL SALE OF REAL PROPERTY LOCATED AT 5146 EDEN AVENUE - APPROVED Minutes/HRA/October 14, 2021 Page 3 Motion made by Commissioner Staunton, seconded by Commissioner Jackson, to move to a closed session of the Edina HRA as permitted by MS. 13D.05 subdivision 3 to discuss the potential sale of real property located at 5146 Eden Avenue. Roll call: Ayes: Commissioners Anderson, Jackson, Staunton, and Chair Hovland Motion carried. VII.D. CLOSED SESSION - POTENTIAL SALE OF REAL PROPERTY LOCATED AT 5146 EDEN AVENUE Executive Director Neal said a developer had submitted a letter of intent to acquire a portion of the vacant site at 5146 Eden Avenue. The Board discussed summary of the terms of the potential sale. VII.E. MOTION TO MOVE BACK INTO OPEN SESSION - POTENTIAL SALE OF REAL PROPERTY LOCATED AT 5146 EDEN AVENUE - APPROVED Motion made by Commissioner Staunton, seconded by Commissioner Jackson, to move back to open session from a closed session as permitted by M.S. 13D.05 Subdivision 3 to discuss the potential sale of real property located at 5146 Eden Avenue. Roll call: Ayes: Commissioners Anderson, Jackson, Staunton, and Chair Hovland Motion carried. VIII. HRA COMMISSIONERS’ COMMENTS – Received IX. EXECUTIVE DIRECTOR’S COMMENTS – Received X. ADJOURNMENT Motion made by Commissioner Staunton, seconded by Commissioner Jackson, to adjourn the meeting at 9:06 a.m. Roll call: Ayes: Commissioners Anderson, Jackson, Staunton, and Chair Hovland Motion carried. Respectfully submitted, Scott Neal, Executive Director Date: O c tober 28, 2021 Agenda Item #: VI.B. To:C hair & C ommis s ioners of the Edina HR A Item Type: C laims F rom:Alis ha Mc Andrews , F inance Director Item Activity: Subject:Approve P ayment of C laims Ac tion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: M otion to approve payment of claims for H R A Check Register 09.2021 T O TAL $685,746.11. I N TR O D U C TI O N: P ayment of claims are attached. AT TAC HME N T S: Description HRA Check Register 09.2021 TOTAL $685,746.11 City of Edina, MN INVOICE LIST BY GL ACCOUNT Report generated: 10/21/2021 13:13 User: LJefferson Program ID: apinvgla Page 1 YEAR/PERIOD: 2021/9 TO 2021/9 ACCOUNT/VENDOR INVOICE PO YEAR/PR TYP S CHECK RUN CHECK DESCRIPTION 26026000 HRA Administration 26026000 2066 HRA Admin - OthrEscrow 100049 EHLERS AND ASSOCIATE 88163 0 2021 9 INV P 2,000.00 20211008 465338 4917 Eden Ave TIF R 100049 EHLERS AND ASSOCIATE 88166 0 2021 9 INV P 382.50 20211008 465338 TIF escrow - Pentag 2,382.50 100730 DORSEY & WHITNEY LLP 3690290 0 2021 9 INV P 4,117.00 20211008 465332 Pentagon Village So 100730 DORSEY & WHITNEY LLP 3690291 0 2021 9 INV P 19,810.00 20211008 465332 23,927.00 ACCOUNT TOTAL 26,309.50 26026000 6102 HRA Admin - Contr Svrs 151968 CHRISTMAS DECOR OF T 0 - 2021 0 2021 9 INV P 1,900.08 20211015 465497 ACCOUNT TOTAL 1,900.08 26026000 6136 HRA Admin - PrfSvOther 100438 STANTEC CONSULTING S 1834494 0 2021 9 INV P 2,424.88 20211015 465773 123129 TIMESAVER OFF SITE S M26717 0 2021 9 INV P 223.00 20211008 465451 8/26 HRA Minutes ACCOUNT TOTAL 2,647.88 ORG 26026000 TOTAL 30,857.46 26126100 Centennial TIF 26126100 6103 Cent TIF - Prof Svrs 100049 EHLERS AND ASSOCIATE 88167 0 2021 9 INV P 637.50 20211008 465338 ACCOUNT TOTAL 637.50 ORG 26126100 TOTAL 637.50 26126103 Southdale 2 TIF 26126103 6131 SoDa 2 TIF - PrfSvLegal 100730 DORSEY & WHITNEY LLP 3690288 0 2021 9 INV P 636.00 20211008 465332 Southdale 2 & Pent ACCOUNT TOTAL 636.00 ORG 26126103 TOTAL 636.00 26126104 Pentagon Park TIF 26126104 6131 Pentgn TIF - PrfSvLegal 100730 DORSEY & WHITNEY LLP 3690288 0 2021 9 INV P 238.50 20211008 465332 Southdale 2 & Pent 100730 DORSEY & WHITNEY LLP 3690289 0 2021 9 INV P 1,591.50 20211008 465332 Pentagon North - le 1,830.00 ACCOUNT TOTAL 1,830.00 City of Edina, MN INVOICE LIST BY GL ACCOUNT Report generated: 10/21/2021 13:13 User: LJefferson Program ID: apinvgla Page 2 YEAR/PERIOD: 2021/9 TO 2021/9 ACCOUNT/VENDOR INVOICE PO YEAR/PR TYP S CHECK RUN CHECK DESCRIPTION ORG 26126104 TOTAL 1,830.00 26126106 Grandview 2 TIF 26126106 6713 Grnd 2 TIF - CapBldStrc 105690 PRO-TEC DESIGN INC 102500 0 2021 9 INV A 26,937.00 ENG 21-6 Grandview 124002 KIMLEY-HORN AND ASSO 19516932-1 0 2021 9 INV P 2,174.56 20211001 465161 ENG 21-6 Grandview 124002 KIMLEY-HORN AND ASSO 19516932-2 0 2021 9 INV P 7,138.59 20211001 465161 Engineering Service 9,313.15 145403 RJM CONSTRUCTION 2152005601 0 2021 9 INV P 15,497.14 20211001 465237 Estimating Services 160106 RESTORATION & CONSTR ENG 21-6 #2 0 2021 9 INV A 169,225.16 ENG 21-6 Ramp Wayfi ACCOUNT TOTAL 220,972.45 26126106 6715 Grnd 2 TIF - CapInfrast 100664 BRAUN INTERTEC CORPO B265915 0 2021 9 INV P 1,734.00 20211008 465302 ENG 21-6 Grandview 100664 BRAUN INTERTEC CORPO B267478 0 2021 9 INV P 1,411.00 20211022 465827 ENG 21-6 Eden Ave/B 3,145.00 100932 NORTHERN STATES POWE 51-0013660801-3 0 2021 9 INV P 14,350.08 20211001 465200 ENG 21-6 Eden Ave/B 100995 SHORT-ELLIOT-HENDRIC 411330 0 2021 9 INV P 30,209.32 20211008 465438 ENG 21-6 Eden Ave/B 100995 SHORT-ELLIOT-HENDRIC 411825 0 2021 9 INV P 5,858.53 20211015 465761 Eden Ave Landscape 36,067.85 140989 S M HENTGES & SONS I 02-R 0 2021 9 INV P 153,986.86 20211008 465434 ENG 21-6 Eden Avenu ACCOUNT TOTAL 207,549.79 ORG 26126106 TOTAL 428,522.24 26126107 50th and France 2 TIF 26126107 6102 50 & F TIF - Contr Svrs 160173 BRIDGEWATER BANK MAY TIFF PYMT 0 2021 9 INV P 223,262.91 20211008 465306 ACCOUNT TOTAL 223,262.91 ORG 26126107 TOTAL 223,262.91 FUND 2600 Housing & Redvlpmt Authority TOTAL: 685,746.11 ** END OF REPORT - Generated by Lonnia Jefferson ** Date: O c tober 28, 2021 Agenda Item #: VI I.A. To:C hair & C ommis s ioners of the Edina HR A Item Type: R eport / R ecommendation F rom:Bill Neuendorf, Economic Development Manager Item Activity: Subject:4917 Eden Avenue - R edevelopment Agreement for Tax Inc rement F inanc ing Ac tion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: Approve the Redevelopment Agreement. I N TR O D U C TI O N: T his item pertains to the use of public financing to partially fund private redevelopment at 4917 E den Avenue. S pecial counsel at Dorsey and W hitney have prepared a complete R edevelopment Agreement based on the Term S heet that was presented to the E dina H R A in August 2021. T he developer and representatives from D orsey & Whitney and Ehlers Associates will be available to answer any questions about this proposed Agreement. T his Agreement will also be presented to the C ity C ouncil for consideration on November 3, 2021. S taff recommends that this R edevelopment Agreement be approved. AT TAC HME N T S: Description Staff Report Staff pres entation TIF Redevelopment Agreement October 28, 2021 Chair and Commissioners of Edina Housing & Redevelopment Authority Bill Neuendorf, Economic Development Manager 4917 Eden Avenue – Redevelopment Agreement for Tax Increment Financing Information / Background: Reuter Walton Development has requested that Tax Increment Financing (TIF) be provided for the proposed redevelopment of commercial property at 4917 Eden Avenue. The redevelopment proposal would transform the aging commercial site into a modern mixed use site that includes both market-rate and affordable apartments as well as new commercial space. The developer secured preliminary rezoning approvals for the site and scheduled for final zoning approvals on November 3, 2021. The total development cost for the 2.08 acre site has risen to $85.0 million. Ehlers has scrutinized the financial pro forma and determined that the financial gap is approximately $5.1 million. Ehlers also confirmed that “but for” the use of TIF, this project will be unable to secure private financing. Hennepin County and Edina Public Schools have been notified that the City and HRA are considering the use of TIF in this area. A public hearing was conducted on the potential TIF District on October 19th. Final consideration of the new TIF District is scheduled for November 3, 2021. The final consideration of a Redevelopment Agreement with the developer is also scheduled for the November 3rd City Council meeting. Leading up to the final approvals, the HRA is required to consider the proposed terms of the Redevelopment Agreement. Summary A complete Redevelopment Agreement has been prepared based on the Term Sheet that was presented to the HRA on August 26, 2021. The Redevelopment Agreement has been prepared by the HRA’s special counsel Dorsey & Whitney with input from Ehlers Associates. The developer – Reuter Walton – is agreeable to the terms, conditions and limitations contained in the Agreement. Housing and Redevelopment Authority Established 1974 STAFF REPORT Page 2 Additionally, the terms of the Agreement are based on the anticipated need for funding for several public improvements to the roadway network that surround the site and connect to the surrounding neighborhoods. The scope of these roadway improvements is anticipated to include improvements to Eden, Willson, Grange and W. 50th Street. The specific timing, design and cost of those public improvements will be determined in the future. Without the revenue generated from the redevelopment of 4917 Eden Ave, this scope of public improvements is not expected to occur for many years. Recommended Action: Staff recommends that the Redevelopment Agreement be approved. # # # The CITYofEDINA4917 Eden AvenueRedevelopment Agreement for Tax Increment FinancingEdina Housing and Redevelopment AuthorityOctober 28, 2021www.EdinaMN.gov The CITYofEDINA2Background - Current Conditions- 2.0 acre site- Built 1973- Restaurant with office and warehouse- Land value exceeds value of structure4917 The CITYofEDINA3GRANTED PRELIMINARY REZONING APPROVAL JULY 2021Background - Proposed Projectparking easementFutureroad easement The CITYofEDINA4Photo Source: Minnesota Historic SocietyBackground - Proposed ProjectGRANTED PRELIMINARY REZONING APPROVAL JULY 2021 The CITYofEDINA5Photo Source: Minnesota Historic SocietyGRANTED PRELIMINARY REZONING APPROVAL JULY 2021Background - Proposed ProjectFutureroad easementPublicparking easement The CITYofEDINA6Photo Source: Minnesota Historic SocietyGRANTED PRELIMINARY REZONING APPROVAL JULY 2021Background - Proposed ProjectGRANTED PRELIMINARY REZONING APPROVAL JULY 2021 The CITYofEDINA7Photo Source: Minnesota Historic SocietyBackground- Potential Public Roadway Improvements• Eden/Willson Intersection• 50th/ Grange Intersection• Eden Ave• Grange Road• 50thStreet The CITYofEDINA8Request for TIFDeveloper requested $5.1million over 15 years to make redevelopment project of this scale and quality financially viable.This request has been analyzed and evaluated.•A substantial budget gap has been confirmed. •Redevelopment Agreement has been prepared•Based on August 2021 Term Sheet•Staff recommends approval of Agreementgap The CITYofEDINA•Economic development financing tool used throughout the U.S.•Governed by Minnesota Statute•Enabled by City Council•“Tax Increment” Financing - uses growth in property tax base to fund private investment and public infrastructure9What is TIF?Growth of Property Tax BaseGrowth of Property Tax BaseGrowth of Property Tax BaseGrowth of Property Tax Base“Incremental Taxes” remain in TIF DistrictOriginal + Market Value Taxes available to all agenciesOriginal + Incremental Taxes available to all agenciesYear 1Year 15 Year 26Year 40+$3.0M$54.8M The CITYofEDINA10Staff Evaluation –Tax Base GrowthCurrent Current Current Current conditions conditions conditions conditions (2021)(2021)(2021)(2021)Estimate after Estimate after Estimate after Estimate after redevelopmentredevelopmentredevelopmentredevelopment(2024)(2024)(2024)(2024)PercentPercentPercentPercentChangeChangeChangeChangeEstimated Market Value$3.01 M $54.8 to $60.3 M+1,800%Annual Property Taxes Paid$99,960 $739,092 to $813,668+739%•This degree of growth would not happen if the site was remodeled or rebuilt as a simple commercial structure•Redevelopment projects of this scale and caliber deliver a tremendous boost to the tax base•Without TIF, the proposed project does not appear to be viable The CITYofEDINA11Staff Evaluation – Public Benefits•High quality mixed-use development•Increase property tax base•Improve storm water conditions•Public sidewalks and streetscapes, including public art•Affordable housing (20 units for 21 years)•Public parking (29 stalls)•Land for future public use (roadway)•Enable adjacent public roadway improvements The CITYofEDINA12Staff Evaluation – Sources and UsesUSESUSESUSESUSES AmountAmountAmountAmountPercentPercentPercentPercentAcquisition and Land Costs$ 12,000,00014.1%Construction Hard Costs including:$ 63,607,99974.8%Parking12,188,680Soil Correction & Remediation750,000Public Plaza with public art200,000Contingency2,550,0003.0%Soft Costs including:$ 12,011,12014.1%Developer Fee$ 2,895,0003.4%Financing Costs$ 4,290,9805.0%TOTALTOTALTOTALTOTAL$85,069,119SOURCESSOURCESSOURCESSOURCES AmountAmountAmountAmountEquity - developer$ 26,375,57431%Equity - TIF supported$ 5,100,0006%Mortgage$ 53,593,54563%Grants$ TBD0%TOTAL$85,069,119100%Budget has increased $1.3 M since AugustTIF contribution remains the same The CITYofEDINA13Staff Evaluation – Eligible TIF Costs•Follow Minnesota statutes regarding eligible expenses•Follow Edina policy regarding TIF reimbursement•TIF Note Not To Exceed $5.1 MDescription of Statutory Eligible ExpensesDescription of Statutory Eligible ExpensesDescription of Statutory Eligible ExpensesDescription of Statutory Eligible Expenses Estimated CostEstimated CostEstimated CostEstimated CostLand Acquisition $12,000,000Parking (structured) $12,100,000Site prep, including general utilities Included in demoAffordable housing not includedSite prep, storm water $350,000+Demolition and remediation $750,000Public plaza with streetscape and art $200,000+Other public infrastructure $150,000+City TIF advisors $75,000TOTAL = $25.6+ Million The CITYofEDINA14Staff Evaluation – Operating Pro FormaYear 1Year 1Year 1Year 1 Stabilization Year 2Stabilization Year 2Stabilization Year 2Stabilization Year 2Net Income- Residential- Commercial- Effective Gross Income4,052,93677,6884,130,6246,496,370109,5886,605,958Expenses- Residential- Commercial- TOTAL1,179,44301,179,4432,005,46231,3172,036,779Net Operating Income 2,951,181 4,569,179TIF reimbursement 0 456,620 (estimate)Adjusted NOI 2,951,181 5,025,799Returns Analysis- Cash on Cost w/o TIF- Cash on Cost with TIF3.5% (< market)3.5% (< market)5.5% (< market)6.0% (= market)(= market)(= market)(= market)Annual TIF ReimbursementAnnual TIF ReimbursementAnnual TIF ReimbursementAnnual TIF ReimbursementTotal Dev. Cost 83,763,316Stabilized NOI 4,569,1796% Return Target 5,025,799Financing Gap = Financing Gap = Financing Gap = Financing Gap = 456,620456,620456,620456,620 The CITYofEDINA15Key Terms of AgreementPrivate Redevelopment1.Assumes a 26-year Redevelopment TIF District2.Pledge up to $5.1 million TIF Note paid from incremental tax revenue over 15 years3.If eligible, pursue grants from DEED and Met. Council to reduce gapPublic Roadway Improvements4.City to prepare engineering documents for related public roadway improvements and plan for construction within 5-years The CITYofEDINA16Key Terms of Agreement•Earns 4.00% interest (to match debt)•Payable from no more than 70% of incremental taxes for first 15 yearsTIF Note•Issued after all conditions successfully delivered and documented•- financial risk stays with developer•Sized based on actual costs at completion•Not to exceed $5.1 million (or 6.1% of TDC)•Reimbursement resized at stabilization•Subject to “lookback” and “clawback” upon sale The CITYofEDINAKey Terms of Agreement17Public Benefits – Streetscapes•Permanent easements for public sidewalks and plaza•Public plaza with public art sculpture•Future easement for mass transit accessPublic Benefits – Parking and Future Roadway•Permanent easement for 29 parking stalls•- Reasonable rules to ensure these areas are properly used•Easement and dedication of approx. 10,500 sq ft land for future roadway or public use The CITYofEDINAKey Terms of Agreement•City retains first right to purchase if building is converted to condominium•Both parties agree to discuss – in good faith – opportunities to extend term past 21 years prior to terminationPublic Benefits –Affordable Housing•10% of total units priced to be affordable to families earning 50% Area Median Income (AMI)•21-year term of affordability•Units are scattered throughout building•Sizes include studio, 1-bed and 2-bed•All residents have same access to all amenities (including covered parking)18 The CITYofEDINA19Key Terms of AgrementPublic Benefits –Advancing Diversity and Equity Goals•Developer and Contractor shared Equal Opportunity employment polices•Contractor to make good faith efforts to include women, indigenous and people of color on the project as well as WBE and MBE in the subcontracting•- subject to availability•Contractor to report on total hours worked and contracts awarded by these groups at completionImage Source: Commercial Construction and Renovation The CITYofEDINA20Key Terms of AgreementPublic Benefits –Adjacent Roadway Improvements•Improvements for pedestrians, bicyclists and drivers•Benefit site, adjacent neighborhoods and general public •Contracted separately by City•Potentially include:•- Eden –Willson intersection•- Grange – 50thSt intersection•- 50thSt turn lanes and sidewalks•- Grange Rd sidewalks•- Eden Ave sidewalksFinal layout and extent of roadway work subject to further review The CITYofEDINA21SummaryRedevelopment Agreement prepared by City staff, Dorsey & Whitney and Ehlers Associates+ Consistent with August 2021 Term Sheet+ Consistent with applicable City policiesDeveloper is agreeable to the terms, conditions and limitationsStaff recommends that the Redevelopment Agreement be approved The CITYofEDINA22Questions / Discussion Execution Draft Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 REDEVELOPMENT AGREEMENT by and among CITY OF EDINA, MINNESOTA, HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA, and EDEN AVENUE GROUP, LLC Dated as of November 3, 2021 THIS DOCUMENT WAS DRAFTED BY: Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402-1498 Execution Draft -i- Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 TABLE OF CONTENTS Page Article I Recitals; Exhibits, Definitions ..................................................................................................... 3 1.1 Recitals ......................................................................................................................... 3 1.2 Exhibits ......................................................................................................................... 3 1.3 Definitions .................................................................................................................... 3 Article II Representations and Warranties .............................................................................................. 7 2.1 Representations and Warranties of the City ................................................................. 7 2.2 Representations and Warranties of the Authority ........................................................ 7 2.3 Representations and Warranties of Developer ............................................................. 8 Article III TIF Assistance ........................................................................................................................... 9 3.1 Creation of TIF District; Certification .......................................................................... 9 3.2 Qualified Redevelopment Costs ................................................................................... 9 3.3 TIF Note ..................................................................................................................... 10 3.4 TIF Assistance and Potential Adjustment .................................................................. 12 3.5 Assignment of Note .................................................................................................... 14 3.6 Action to Reduce Taxes ............................................................................................. 15 3.7 Reservation of Tax Increments; Additional Public Benefits ...................................... 16 Article IV Project Requirements ............................................................................................................. 16 4.1 Commencement and Completion of Project............................................................... 16 4.2 Zoning and Land Use Approvals ................................................................................ 17 4.3 Building and Construction Permits ............................................................................ 17 4.4 Restrictions on Development ..................................................................................... 17 4.5 Submission and Approval of Evidence of Financing and Land Acquisition.............. 17 4.6 Affordable Housing .................................................................................................... 18 4.7 Public Easements ........................................................................................................ 19 4.8 Streetscape Elements and Public Art .......................................................................... 21 4.9 Coordination with Future City Infrastructure Improvements ..................................... 21 4.10 Equity and Inclusion ................................................................................................... 21 4.11 Effect of Delay ........................................................................................................... 24 4.12 Additional Responsibilities of Developer. ................................................................. 24 4.13 Certificate of Completion ........................................................................................... 25 Article V Encumbrance of the Project Area .......................................................................................... 25 5.1 Mortgage of the Project Area ..................................................................................... 25 5.2 Copy of Notice of Default to Mortgagee .................................................................... 25 5.3 Mortgagee’s Option to Cure Events of Default .......................................................... 26 5.4 Rights of a Foreclosing Mortgagee ............................................................................ 26 5.5 Events of Default Under Mortgage ............................................................................ 26 5.6 Subordination of Agreement ...................................................................................... 27 Execution Draft -ii- Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 Article VI Insurance and Indemnification .............................................................................................. 27 6.1 Insurance .................................................................................................................... 27 6.2 Indemnification .......................................................................................................... 28 Article VII Other Developer Covenants ................................................................................................. 28 7.1 Developer Reimbursement Obligations ..................................................................... 28 7.2 Maintenance and Operation of the Improvements ..................................................... 28 7.3 Cooperation with Litigation ....................................................................................... 29 7.4 Condemnation, Damage, or Destruction .................................................................... 29 7.5 Business Subsidy Agreement ..................................................................................... 29 7.6 Developer/Authority Grant Applications ................................................................... 29 7.7 Project Information .................................................................................................... 30 Article VIII Transfer Limitations ........................................................................................................... 30 8.1 Representation as to the Minimum Improvements ..................................................... 30 8.2 Limitation on Transfers .............................................................................................. 30 Article IX Events of Default and Remedies ............................................................................................ 31 9.1 Events of Default Defined .......................................................................................... 31 9.2 Developer Events of Default ...................................................................................... 31 9.3 City and Authority Events of Default ......................................................................... 32 9.4 Cure Rights ................................................................................................................. 32 9.5 Authority Remedies on Developer Events of Default ................................................ 32 9.6 City Remedies on Developer Events of Default ......................................................... 33 9.7 Developer Remedies on City or Authority Events of Default .................................... 33 9.8 No Remedy Exclusive ................................................................................................ 33 9.9 No Additional Waiver Implied by One Waiver ......................................................... 33 9.10 Reimbursement of Attorneys’ Fees ............................................................................ 33 Article X Additional Provisions ............................................................................................................... 34 10.1 Conflicts of Interest .................................................................................................... 34 10.2 Titles of Articles and Sections .................................................................................... 34 10.3 Notices and Demands ................................................................................................. 34 10.4 Governing Law, Jurisdiction, Venue and Waiver of Trial by Jury ............................ 35 10.5 Severability ................................................................................................................. 35 10.6 Consents and Approvals ............................................................................................. 35 10.7 Additional Documents ................................................................................................ 35 10.8 Limitation ................................................................................................................... 35 10.9 City/Authority Approval ............................................................................................ 35 10.10 Superseding Effect ..................................................................................................... 35 10.11 Relationship of Parties................................................................................................ 35 10.12 Survival of Terms ....................................................................................................... 36 10.13 Data Practices Act ...................................................................................................... 36 10.14 No Waiver of Governmental Immunity and Limitations on Liability ........................ 36 10.15 City and Authority Regulatory Authority................................................................... 36 10.16 Memorandum of Agreement ...................................................................................... 36 Execution Draft -iii- Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 10.17 Limited Liability ........................................................................................................ 36 10.18 Time is of the Essence ................................................................................................ 36 10.19 Counterparts ............................................................................................................... 36 10.20 Amendments ............................................................................................................... 37 10.21 Term ........................................................................................................................... 37 Execution Draft -iv- Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 LIST OF EXHIBITS Exhibit A Legal Description of the Project Area Exhibit B Project Plans Exhibit C TIF Pro Forma Exhibit D Form of Go-Ahead Letter Exhibit E Form of Certificate of Completion with Completion Checklist Exhibit F Memorandum of Redevelopment Agreement Exhibit G Form of TIF Note Exhibit H Sample IRR Calculations and Project TIF Adjustment Calculation Exhibit I Concept Plan for Future City Transportation Infrastructure Project Exhibit J Inclusionary Housing Policy Program Guide Exhibit K Form of Affordable Housing Restrictive Covenant Exhibit L Form of Right of First Purchase Option Agreement Exhibit M Form of Parking Easement Agreement Exhibit N Intentionally omitted. Exhibit O Form of Future Land Agreement Exhibit P Equity and Inclusion Outreach Plan Exhibit Q Form of Equity and Inclusion Report Execution Draft 1 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 REDEVELOPMENT AGREEMENT (4917 Eden Avenue) THIS REDEVELOPMENT AGREEMENT (this “Agreement”) is made and entered into November 3, 2021 (“Effective Date”), by and among the City of Edina, Minnesota, a Minnesota statutory city (the “City”), the Housing and Redevelopment Authority of Edina, Minnesota, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the “Authority”), and Eden Avenue Group, LLC, a Delaware limited liability company (“Developer”). RECITALS A. Pursuant to and in accordance with Minnesota Statutes, Sections 469.174 to 469.1799, as amended (the “TIF Act”), the Authority is authorized to finance certain eligible redevelopment costs of redevelopment projects with tax increment revenues derived from a tax increment financing district established in accordance with the TIF Act. B. The City and the Authority previously established the “Southeast Edina Redevelopment Project Area” pursuant to Sections 469.001 through 469.047, inclusive, of the TIF Act, in an effort to encourage the development and redevelopment of such designated area within the City (the “Redevelopment Area”). C. Developer is under contract to purchase from Eden Ventures, LLC, the current owner, that certain land within the Redevelopment Area located at 4917 Eden Avenue, as such land is legally described on the attached Exhibit A (the “Project Area”). D. In accordance with the City Approvals (defined herein), Developer has proposed to redevelop and improve the Project Area with a project consisting of: (i) a seven-story building with approximately 176 market rate apartment units, at least 20 affordable rental apartment units, and an approximately 3,400 square-foot restaurant; (ii) approximately 277 below grade parking stalls to serve the private components of the proposed project; (iii) at least 29 at-grade, public parking stalls for public, district parking (collectively, the “Public Parking”), in the area generally depicted on the Project Plans attached as Exhibit B, which Public Parking will be subject to the Parking Easement (as defined herein); (iv) the sidewalk and streetscape improvements and amenities (the “Sidewalks and Streetscapes”) along Eden Avenue and Willson Road adjoining the Minimum Improvements, as required under the terms of the City Approvals and in the areas generally depicted on the Project Plans attached as Exhibit B, which Sidewalks and Streetscapes will be subject to the Public Access Easement (as defined herein); and (v) inclusion of parcel to be used for future roadway project or other public use; and (vi) such other improvements required under the terms of the City Approvals; Execution Draft 2 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 the foregoing items described in clauses (i) through (vi), all to be constructed at the general scale and massing using the architectural quality, exterior finish materials and landscaping as shown in the Project Plans attached as Exhibit B and the City Approvals, are collectively referred to herein as the “Minimum Improvements”). E. Upon completion, this project is anticipated to deliver many benefits to the general public. In addition to the redevelopment of an underutilized building and long-term increase in the property tax base, this project will deliver additional public benefits including: creation of new affordable housing units, stormwater improvements, environmental remediation, streetscape improvements, public parking, and dedication of land for future roadway. Upon completion, this project will also enable several improvements to the local transportation network including improvements for pedestrians, bicyclists, and motorists. These improvements are intended to benefit this project, the surrounding neighborhoods and the general public who travel to and through this area. F. The Authority has analyzed the current use of the Project Area in accordance with the TIF Act, including a building-by-building structural analysis, and determined that the Project Area is currently underutilized, with obsolete structures and physical arrangements, substantial vacant areas, and potential contamination, with outdated and inadequate public infrastructure and circulation. G. Having analyzed the current land use in the Project Area, consistent with the TIF Act, the Authority and the City held public hearings after appropriate notices to consider the need and desirability for adoption of a tax increment financing plan and the creation and establishment of the Project Area and certain other adjoining land as a tax increment financing district pursuant to the TIF Act, and determined that absent such authorization and the provision of certain funds to undertake various qualified redevelopment activities, the redevelopment contemplated herein would not be undertaken. H. After such hearings, the Authority and the City, having determined that the creation and establishment of a tax increment financing district in the Project Area and such other adjoining land is in the public interest, the Authority and the City established the Eden / Willson Tax Increment Financing District (a redevelopment district) (the “TIF District”) under the TIF Act and adopted the Tax Increment Financing plan (the “TIF Plan”) for the TIF District in accordance with Minnesota Statutes, Section 469.175, pursuant to Authority Resolution No. 2021-12. I. The Authority and the City have adopted findings which include a determination that (i) the redevelopment to occur through the proposed Minimum Improvements would not occur solely through private investment within the reasonably foreseeable future and that the increased market value of the Project Area that could reasonably be expected to occur without the use of the tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the Minimum Improvement’s tax increments for the 26-year duration of the TIF District, (ii) that the proposed Minimum Improvements conform to the general plan for the development or redevelopment of the City as a whole, and (iii) that the proposed Minimum Improvements afford maximum opportunity consistent with the sound needs of the City as a whole, for the development or redevelopment of the TIF District by private enterprise. J. Upon certification of the TIF District and the satisfaction of certain conditions set forth in this Agreement, the Authority will provide Developer certain TIF Assistance (as defined herein) in accordance with Article III of this Agreement in connection with Developer’s development and construction of the Minimum Improvements. Execution Draft 3 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 NOW, THEREFORE, in consideration of foregoing Recitals, which are incorporated into the provisions of this Agreement by this reference, and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the others as follows: Article I Recitals; Exhibits, Definitions 1.1 Recitals. The foregoing Recitals are incorporated into this Agreement by this reference, including the definitions set forth therein. 1.2 Exhibits. All Exhibits referred to in and attached to this Agreement upon execution are incorporated in and form a part of this Agreement as if fully set forth herein. 1.3 Definitions. Unless the context otherwise specifies or requires, the following terms have the following definitions. Certain other capitalized terms are defined elsewhere in this Agreement. All defined terms may be used in the singular or the plural, as the context requires. “Affordable Housing Requirements” has the meaning set forth in Section 4.6(a). “Affordable Housing Restrictive Covenant” has the meaning set forth in Section 4.6(d). “Affordable Units” has the meaning set forth in Section 4.6(e). “Agreement” means this Redevelopment Agreement, as the same may be from time to time modified, amended or supplemented. “Authority” means the Housing and Redevelopment Authority of Edina, Minnesota. “Authorized Representative” means, with respect to the Authority, the Executive Director of the Authority or its designee, and, with respect to the City, the City Manager or its designee. “Available Tax Increments” means up to 70% of the Tax Increments received and retained by the Authority from the County during any applicable time frame. “Board” means the Board of Commissioners of the Authority. “Certificate of Completion” means a certificate in substantially the form attached as Exhibit E, signed by the Authorized Representative for the Authority, to be issued pursuant to the terms of Section 4.13. “City” means the City of Edina, Minnesota. “City Approvals” means, collectively, the PUD Ordinance, the Project Approval Resolution, the Final Development Plan, and the Development Contract, and all other approvals, permits, licenses, and agreements issued by or entered into with the City, the Authority, or other governmental authority relating to the Project Area and Developer’s improvement thereof. “City Consultants” means the financial, engineering, legal, TIF eligibility and other similar advisors to the City and the Authority. “City Council” means the City Council of the City. Execution Draft 4 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 “City Parties” means the City and the Authority, and their respective governing body members and elected officials, officers, employees, agents, independent contractors and attorneys. “City Easement(s)” has the meaning set forth in Section 4.7(a). “Commencement” means (i) with respect to pre-construction activities necessary for Commencement of the vertical construction of the Minimum Improvements (e.g., demolition, environmental remediation and site preparation), actual physical activity related to such pre-construction activity and (ii) with respect to vertical construction of the Minimum Improvements, the date on which actual physical construction of the building foundation begins. “Completion” means (i) with respect to the Minimum Improvement, Developer’s receipt of the Certificate of Completion from the Authority and (ii) with respect to the individual aspects of the Minimum Improvements described in the Minimum Improvements timeline set forth in Section 4.1, substantial completion of such aspect or element such that Developer can proceed with Commencement of the next aspect or element in a manner consistent with normal construction practices “County” means the County of Hennepin, Minnesota. “Cure Rights” means the rights to cure a Default as specified in Section 9.4 before such Default is deemed to be an Event of Default. “Default” means an act or omission by the City, the Authority or Developer which becomes an Event of Default under this Agreement if it is not cured following notice thereof from the other party pursuant to any applicable Cure Rights. “Default Date” has the meaning set forth in Section 4.1(a). “Developer” means Eden Avenue Group, LLC, a Delaware limited liability company. “Development Contract” means that certain Site Improvement Performance Agreement dated on or about the date hereof entered into by and between the City and Developer, and recorded against the Project Area. “Effective Date” means the date first set forth above. “Environmental Law” means any federal, state or local law, rule, regulation, ordinance, or other legal requirement relating to (a) a release or threatened release of any Hazardous Material, (b) pollution or protection of public health or the environment or (c) the manufacture, handling, transport, use, treatment, storage, or disposal of any Hazardous Material. “Event of Default” means any of the events by the City, the Authority or Developer described in Article IX. “Final Development Plan” means the final development plans for the Minimum Improvements and Project Area as approved by the City pursuant to the Project Approval Resolution and the PUD Ordinance. “Financing Commitments” means financing commitments, binding term sheets and/or other evidence of Project financing commitments from debt and equity sources sufficient, with all other available sources of funding, to fund all costs to construct the Minimum Improvements, all in a form reasonably satisfactory to the Authority and disclosing (i) the identity of the mortgage lender(s), (ii) mortgage rate and Execution Draft 5 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 terms, and (iii) an organizational chart of Developer with the identity of all equity sources with greater than a 10% direct or indirect investment in the Project, and the identity of all individuals and entities with direct or indirect management control of Developer. “Future City Land” has the meaning set forth in Section 4.7(a)(iii). “Future City Transportation Infrastructure Project” has the meaning set forth in Section 3.7. “Future Land Easement” has the meaning set forth in Section 4.7(a)(iii). “Go-Ahead Letter” means Developer’s letter to the City and the Authority, substantially in the form attached as Exhibit D, and including the Financing Commitments and stating that Developer is prepared to (or has) closed on the acquisition of the Project Area and the Project financing, and is prepared to proceed with the construction of the Minimum Improvements. “Hazardous Material” means petroleum, asbestos-containing materials, and any substance, waste, pollutant, contaminant or material that is defined as hazardous or toxic in any Environmental Law. “Law” means federal, state, or local governmental or quasi-governmental laws, ordinances, rules, codes, regulations, directives, orders and/or requirements. “Market Return Rate” Section 3.4(c) “Memorandum of Agreement” means the document described in Section 10.16 and substantially in the form shown in Exhibit F. “Minimum Improvements” has the meaning set forth in Recital D. “Mortgage” has the meaning set forth in Section 5.1(a). “Parking Easement” has the meaning set forth in Section 4.7(a)(i). “Project” means the construction and development of the Minimum Improvements on the Project Area in accordance with the City Approvals and this Agreement. “Project Approval Resolution” means City Council Resolution No. _______. “Project Area” means the land legally described on the attached Exhibit A. “Project Excess Return” has the meaning set forth in Section 3.4(e)(ii). “Project Plans” means the plans for the Project attached as Exhibit B. “Project TIF Adjustment” has the meaning set forth in Section 3.4(e)(iii). “Policy Guide” has the meaning set forth in Section 4.6(b)(vii). “Public Access Easement” has the meaning set forth in Section 4.7(a)(ii). “Public Parking” has the meaning set forth in Recital D. “PUD Ordinance” means City Ordinance No. _______. Execution Draft 6 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 “Purchase Right” has the meaning set forth in Section 4.6(g). “Qualified Redevelopment Costs” has the meaning set forth in Section 3.2(a). “Redevelopment Area” has the meaning set forth in Recital B. “Related Party” means with respect to any person or entity (i) any other person or entity controlling, controlled by or under common control with such person or entity; or (ii) any other person or entity in which the majority equity interest is owned by the parties that have a majority equity interest in such person or entity. “Sale Pro Forma” has the meaning set forth in Section 3.4(e)(i). “Sidewalks and Streetscapes” has the meaning set forth in Recital D. “State” means the state of Minnesota. “Tax Increments” means the tax increment (as defined in the TIF Act) derived from the Project Area which have been received and retained by the Authority in accordance with the provisions of the TIF Act, including without limitation Minnesota Statutes, Section 469.177. “TIF” means tax increment financing pursuant to the TIF Act. “TIF Act” has the meaning set forth in Recital A. “TIF Assistance” means reimbursement of Qualified Redevelopment Costs through payments from the Authority to Developer of Available Tax Increments under the TIF Note, pursuant to the terms and conditions of Article III of this Agreement and the TIF Act. “TIF District” has the meaning set forth in Recital G. “TIF Note” has the meaning set forth in Section 3.3(a). “TIF Plan” has the meaning set forth in Recital G. “TIF Pro Forma” means a detailed financial pro forma for the Project, including total Project costs, sources and uses of Project financing, return calculations based on Project income and expenses, in substantially the form attached hereto as Exhibit C, and all as updated by Developer from time to time in accordance with this Agreement based on actual and/or projected Project information, as the same becomes available during the development of the Project. “Unavoidable Delays” means actual delays in the Commencement and Completion of the Minimum Improvements, outside the reasonable control of Developer, to extent such actual delays are a result of (i) unusually severe or prolonged bad weather, (ii) acts of God, acts of war, civil unrest, terrorism, criminal conduct of third parties, fire or other casualty to the Project, (iii) litigation commenced by third parties, (iv) actions or inactions of any federal, State, or local government unit which directly result in delays, including a declared emergency under Minnesota Statutes, Chapter 12 or due to pandemic or quarantine restrictions imposed by applicable Law, and/or (v) strikes, or other labor trouble, and in each instance to the extent Developer gives written notice to the Authority and City within 10 days after either the occurrence of such event giving rise to each Unavoidable Delay or Developer’s reasonable realization that the occurrence will cause an Unavoidable Delay. Execution Draft 7 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 Article II Representations and Warranties 2.1 Representations and Warranties of the City. The City makes the following representations and warranties: (a) The City is a Minnesota municipal corporation and has the power to enter into this Agreement and carry out its obligations hereunder. The City has duly authorized the execution, delivery and performance of this Agreement. (b) There is not pending, nor to the best of the City’s knowledge is there threatened, any suit, action or proceeding against the City before any court, arbitrator, administrative agency or other governmental authority that may materially and adversely affect the validity of any of the transactions contemplated hereby, the ability of the City to perform its obligations hereunder or as contemplated hereby, or the validity or enforceability of this Agreement. (c) To the best of the City’s knowledge and belief, no member of the City Council or officer of the City, has either a direct or indirect financial interest in this Agreement, nor will any City Councilmember or officer of the City, benefit financially from this Agreement within the meaning of Minnesota Statutes, Section 469.009, as amended. (d) The execution, delivery and performance of this Agreement, and any other documents, instruments or actions required or contemplated pursuant to this Agreement by the City does not, and consummation of the transactions contemplated therein and the fulfillment of the terms thereof will not conflict with or constitute on the part of the City a breach of or default under any existing agreement or instrument to which the City is a party or violate any law, charter or other proceeding or action establishing or relating to the establishment and powers of the City or its officers, officials or resolutions. 2.2 Representations and Warranties of the Authority. The Authority makes the following representations and warranties: (a) The Authority is a public body corporate and politic and a governmental subdivision of the State, duly organized and existing under State law and the Authority has the authority to enter into this Agreement and carry out its obligations hereunder. (b) Except as provided in this Agreement, and provided that the Authority will fund fiscal disparities from within the TIF District, in accordance with Minnesota Statutes, Section 469.177, subdivision 3, the Authority agrees to retain all of the captured net tax capacity of the Project Area to finance the Qualified Redevelopment Costs as provided in this Agreement, and will elect that the duration of the TIF District will be the maximum duration permitted by the TIF Act. The Authority will not voluntarily take any action to reduce the amount of captured tax capacity retained to finance the Qualified Redevelopment Costs or to further reduce the duration of the District until the amount paid to Developer from Available Tax Increments reaches the maximum amount specified in Article III. (c) The execution, delivery and performance of this Agreement and any other documents or instruments required pursuant to this Agreement by the Authority does not, and consummation of the transactions contemplated therein and the fulfillment of the terms thereof will not, conflict with or constitute on the part of the Authority a breach of or default under any existing (i) indenture, mortgage, deed of trust or other agreement or instrument to which the Authority is a party or by which the Authority or any of its property is or may be bound, (ii) legislative act, constitution or other proceeding establishing or relating to the establishment of the Authority or its officers or its resolutions, or (iii) any Execution Draft 8 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 Minnesota statute or any provisions of any bond, debenture, loan agreement, regulation or order of the United States of America or the State, or any agency or political subdivisions thereof or any court order or judgment in any proceeding to which the Authority is or was a party by which it is bound. (d) There is not pending, nor to the best of the Authority’s knowledge is there threatened, any suit, action or proceeding against the Authority before any court, arbitrator, administrative agency or other governmental authority that may materially and adversely affect the validity of any of the transactions contemplated hereby, the ability of the Authority to perform its obligations hereunder or as contemplated hereby, or the validity or enforceability of this Agreement. (e) To the best of the Authority’s knowledge and belief, no member of the Board of the Authority or officer of the Authority, has either a direct or indirect financial interest in this Agreement, nor will any Commissioner of the Authority or officer of the Authority, benefit financially from this Agreement within the meaning of Minnesota Statutes, Section 469.009, as amended. 2.3 Representations and Warranties of Developer. Developer represents and warrants that: (a) Developer is a limited liability company organized and in good standing under the laws of the state of Delaware, is not in violation of any provisions of its operating agreement or other organizational documents or the laws of the State, has power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its members. (b) Developer holds a valid purchase contract to acquire the Project Area at a market price that is reflective of current regional market for redevelopment projects of the size and quality of the Minimum Improvements. The transaction contemplated by such purchase contract, as the same may be amended, is an arm’s length transaction and the buyer and seller have no other business relationship with respect to this Project. (c) The execution and delivery of this Agreement and the consummation of the transactions contemplated thereby, and the fulfillment of the terms and conditions thereof do not and will not conflict with or result in a breach of any material terms or conditions of Developer’s organizational documents, any restriction or any agreement or instrument to which Developer is now a party or by which it is bound or to which any property of Developer is subject, and do not and will not constitute a default under any of the foregoing or to the best of Developer’s knowledge be a violation of any order, decree, statute, rule or regulation of any court or of any state or Federal regulatory body having jurisdiction over Developer or its properties, including its interest in the Minimum Improvements, and do not and will not result in the creation or imposition of any lien, charge or encumbrance of any nature upon any of the property or assets of Developer contrary to the terms of any instrument or agreement to which Developer is a party or by which it is bound. (d) To the best of Developer’s knowledge and belief, the execution and delivery of this Agreement will not create a conflict of interest prohibited by Minnesota Statutes, Section 469.009, as amended. (e) Developer would not construct the Minimum Improvements, but for the execution of this Agreement and the TIF Assistance for the Qualified Redevelopment Costs and other public assistance contemplated to be made available hereunder. (f) Developer shall reasonably cooperate with the City and the Authority with respect to any litigation commenced by third parties with respect to the Minimum Improvements; however, this Execution Draft 9 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 provision does not obligate Developer to incur costs, except as otherwise provided in this Agreement or elsewhere (g) There are no pending or to the best of Developer’s knowledge, threatened legal proceedings, of which Developer has notice, contemplating the liquidation or dissolution of Developer or threatening its existence, or seeking to restrain or enjoin the transactions contemplated by the Agreement, or questioning the authority of Developer to execute and deliver this Agreement or the validity of this Agreement. (h) Neither Developer nor any Related Party of Developer is currently delinquent in the payment of any business, occupation, sales, use, gross receipts, rental, real and personal property and other similar taxes imposed with respect to any real property owned or leased by any of such parties in the State. (i) Developer has not received any notice from any local, state or federal official that the activities of Developer or the Authority with respect to the Project Area may or will be in violation of any Environmental Law, except as has been identified in any report, audit, inspection or survey, undertaken by or provided to the City and the Authority. Developer represents that to the best of Developer’s knowledge: (i) it is not aware of any state or federal claim filed or planned to be filed by any party relating to any violation of any local, state or federal Environmental Law, regulation or review procedure, and (ii) it is not aware of any violation of any local, state or federal law, regulation or review procedure which would give any person a valid claim under any Environmental Law, including the Minnesota Environmental Rights Act or the Minnesota Environmental Policy Act. (j) Developer reasonably expects that it will be able to obtain private financing in an amount sufficient, together with funds provided by the Authority and any other public agencies, to enable Developer to successfully construct the Minimum Improvements, as provided herein. Article III TIF Assistance 3.1 Creation of TIF District; Certification. The Authority and City have taken all necessary actions to create and establish the TIF District as of the Effective Date. The TIF District has been created and established as a “redevelopment” district under the TIF Act. The Authority will cause the TIF District to be certified prior to June 30, 2022, such that Tax Increments will be available commencing in the calendar year 2025. Developer acknowledges and agrees that the Authority and the City may take appropriate steps to modify the TIF District in the future, including, without limitation, incorporating additional land into the TIF District. Developer shall cooperate with the Authority and the City with any such future modification, including to execute and deliver any supplements or modifications to this Agreement that are reasonably required in connection therewith, provided that no such modification or supplement shall (a) increase any obligation of Developer hereunder or (b) adversely affect any right of or benefit of Developer hereunder. 3.2 Qualified Redevelopment Costs. (a) Costs and expense for the items described below, initially paid by Developer from Developer’s own sources and incurred in furtherance of the construction and development of the Minimum Improvements, shall be eligible for TIF Assistance under the terms and conditions of this Agreement (collectively, “Qualified Redevelopment Costs”): (i) demolition of the existing structures and other existing improvements within the Project Area; Execution Draft 10 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 (ii) design and construction of the Public Parking; (iii) design and construction of the foundation work and underground parking serving the Minimum Improvements; (iv) design and construction of the Sidewalks and Streetscapes and other public realm improvements required in connection with this Agreement and/or the City Approvals; (v) stormwater management studies and design and construction of the stormwater management-related improvements required in connection with this Agreement and/or the City Approvals; (vi) acquisition of City rights in the Future City Land (defined below); (vii) TIF-related professional fees. (b) The actual amount of Qualified Redevelopment Costs within each of the foregoing categories may be allocated among such categories, subject to reasonable review and approval by the Authority, and provided that Developer must provide reasonable evidence of the actual amounts of Qualified Redevelopment Cost actually incurred or committed in each such category. 3.3 TIF Note. (a) TIF Note. In order for Developer to obtain the TIF Assistance contemplated by this Agreement, the Authority shall issue, subject to the terms and conditions of this Agreement, one “pay- as-you-go” TIF note (“TIF Note”) in substantially the form attached as Exhibit G, with a maximum term of 15 years, and in the aggregate maximum principal amount of not to exceed $5,100,000.00, subject to adjustment pursuant to Section 3.4 and in no event shall the principal amount of the TIF Note exceed 6.10% of the actual, documented costs of the Minimum Improvements as shown in the updated TIF Pro Forma provided by Developer pursuant to Section 3.4(c). (b) Interest. The TIF Note shall bear simple interest on the unpaid principal balance thereof at a fixed rate equal to the lesser of: (i) the rate of interest charged by the lender providing the initial permanent financing (including any mini-perm loan used to pay-off the initial construction financing) in place following Completion of the Minimum Improvements which is secured by a first priority Mortgage on the Project Area, which rate shall be calculated once as of the date of the issuance of the TIF Note if permanent financing is in place as of such date; and (ii) 4.00% per annum. (c) Payments and Interest. Semi-annual payments upon and accrual of interest on the unpaid principal balance of the TIF Note will commence upon the Authority’s issuance of the TIF Note, all in accordance with terms and condition set forth in the TIF Note. (d) Condition of Issuance. The Authority’s obligation to issue the TIF Note to Developer is subject to satisfaction of each of the following conditions: Execution Draft 11 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 (i) Developer shall have provided evidence satisfactory to the Authority that Developer has actually incurred (A) Qualified Redevelopment Costs in an amount equal to at least the amount of the requested TIF Note and (B) total Project costs corresponding to the line item detail shown in the initial TIF Pro Forma attached as Exhibit C; (ii) Developer shall have provided evidence satisfactory to the Authority that all parties have been paid for work related to the completion of the Minimum Improvements (e.g., lien waivers or similar); (iii) Developer shall have provided the updated TIF Pro Forma to the Authority, and the Authority shall have completed their review, analysis, and audit of the same as necessary to determine the original principal amount of the TIF Note in accordance with Section 3.4(c); (iv) Developer shall have submitted documentation necessary to secure all grant payments as well as other documents to administer the closing of all grant agreements. (v) Developer shall have granted to the City and/or the Authority, as applicable, each of the City Easements; each of the City Easements shall have been recorded against the applicable portion of the Project Area; and the Public Parking, the Sidewalks and Streetscapes, and the Future City Land shall have been open to the public pursuant to the terms of each applicable City Easement agreement; (vi) Developer shall have executed the Affordable Housing Restrictive Covenant and caused the same to be recorded against the Project Area; (vii) Developer shall have granted to the Authority the Purchase Right and caused the same to be recorded against the Project Area; (viii) Developer has delivered to the Authority a final report and certificate detailing and certifying as to Developer’s activities and final outcomes of Developer’s efforts to achieve the Equity and Inclusion goals under Section 12 of this Agreement; and (ix) No Developer Default or Developer Event of Default have occurred and be ongoing under this Agreement and no Developer default shall exist under any of the City Approvals. (x) the Certificate of Completion for the Minimum Improvements shall have been issued by the Authority in accordance with the terms and conditions of this Agreement; (e) No Representation or Warranty. Payments of principal and interest under the TIF Note shall be payable solely from Available Tax Increments from the Project Area. The Authority does not represent or warrant the amounts of Available Tax Increments that will be available for payment principal and interest under the TIF Note. The Authority will not reimburse Developer for Qualified Redevelopment Costs from Authority revenues, other than from Available Tax Increments, nor guaranty the amount of money which Developer will receive as a reimbursement, such amount being payable solely from the Available Tax Increments in accordance with this section, unless the Authority elects, in its sole and absolute discretion, with no obligation to do so, to pay down the TIF Note from other funds. Execution Draft 12 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 3.4 TIF Assistance and Potential Adjustment. (a) Generally. The financial assistance to Developer under this Agreement is based on certain assumptions regarding anticipated costs and expenses associated with constructing the Minimum Improvements. Specifically, the maximum aggregate principal amount of the TIF Note has been determined based on the amount of assistance needed to make the Minimum Improvements financially feasible, as shown in the initial TIF Pro Forma attached as Exhibit C. The Authority and Developer agree that those assumptions will be reviewed at the times described in this section, and that the amount of TIF Assistance provided herein shall be adjusted in accordance with this Section 3.4. (b) Definitions. For the purposes of this section, the following terms have the following meanings: (i) “Cash Flow” means Net Operating Income less debt service (principal and interest) with respect to the Mortgage loan(s) encumbering the Minimum Improvements. (ii) “Cash-on-Cost Return” means Net Operating Income divided by the sum of the total actual cost of the Minimum Improvements (less any grants or City, Authority, federal or State funds received by Developer) as set forth in an updated TIF Pro Forma. For purposes of clarity, an example calculations of the Cash-On-Cost Return is included in the initial TIF Pro Forma attached as Exhibit C. (iii) “IRR” means the internal rate of return for the Minimum Improvements, where the IRR is calculated as the annualized return of the annual cash flow over the applicable period on Developer’s actual utilization of equity for Project costs. For purposes of clarity, example calculations of IRR are attached hereto in Exhibit H. (iv) “Net Operating Income” means total income and other project-derived revenue, including payments under the TIF Note, less Operating Expenses. (v) “Operating Expenses” means reasonable and customary expenses incurred in operating the Minimum Improvements and any other improvements and land within the Project Area or properly allocated to the Project Area, including, but not limited to all management and related expenses, all real estate taxes and special assessments for the Project Area. (vi) “Stabilization” means (A) 95% of the residential units in the Minimum Improvements are leased with a term of at least six months and (B) 100% of the commercial space is leased. (c) Confirmation of TIF Assistance Upon Project Completion. After substantial completion of the Project, but before, and as a condition to, issuance of the Certificate of Completion and issuance of the TIF Note, Developer shall provide to the Authority an updated TIF Pro Forma based on actual, documented costs of the Minimum Improvements and any reasonable and relevant information and documentation as the Authority requires in order to calculate the reasonably anticipated Cash-on-Cost Return for the Minimum Improvements and to otherwise confirm that the “but for” finding adopted by the City and the Authority continues to be satisfied. The Authority may retain a financial advisor, accountant, and/or other professional with similar expertise to audit the submitted updated TIF Pro Forma, at Developer’s cost. If the updated TIF Pro Forma demonstrates that the reasonably anticipated Cash-on-Cost Return for the Minimum Improvements exceeds 6.03% (the “Market Return Rate”), then the amount of TIF Assistance provided herein, as reflected in the principal amount of the TIF Note, shall be reduced based on Execution Draft 13 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 the actual TIF Assistance that is sufficient to assist the Minimum Improvements to achieve the Market Return Rate based on the updated TIF Pro Forma. Additionally, the actual use of the contingency funds shall be identified in detail in the updated TIF Pro Forma. In no case shall the developer fee be increased from the amount in the initial TIF Pro Forma attached as Exhibit C. Any increase in Project expenses must be documented and substantiated and covered from contingency funds, and unwarranted increases shall not be allowed. Furthermore, the principal amount of the TIF Note may be reduced if Project contingency funds have been used in a manner that enhances the residential amenities and private spaces with no benefit to the public. (d) Review of TIF Assistance Upon Stabilization. No later than sixty (60) days after Stabilization, Developer shall provide to the Authority with an updated TIF Pro Forma and any reasonable and relevant information and documentation as the Authority requires in order to calculate the annual Cash- On-Cost Return based on financial conditions at Stabilization. The Authority may retain a financial advisor, accountant, and/or other professional with similar expertise to audit the submitted updated TIF Pro Forma, at Developer’s cost. If such information demonstrates that the Cash-on-Cost Return for the Minimum Improvements exceeds the Market Return Rate, then the amount of TIF Assistance provided herein, as reflected in the principal amount of the TIF Note, shall be reduced based on the actual TIF Assistance necessary to assist the Minimum Improvements to achieve the Market Return Rate based on the Cash-on- Cost Return at Stabilization. In such event, Developer shall surrender the original TIF Note to the Authority and the Authority will reissue the TIF Note at such reduced principal and payment amounts sufficient to assist the Minimum Improvements to achieve the Market Return Rate. (e) Sale Lookback and Determination of Project Excess Returns. (i) No later than 30 days after each sale of all or part of the Minimum Improvements to any party other than a Related Party occurring prior to the date upon which the TIF Note is paid in full or terminated hereunder, Developer shall submit to the Authority an updated TIF Pro Forma and any other reasonable and relevant information and documentation as the Authority requires in order to calculate the IRR for such sale, including, without limitation, a certified cost and revenue analysis for such sale prepared in accordance with generally accepted accounting principles (“Sale Pro Forma”). This analysis will include, without limitation, all acquisition costs, Qualified Redevelopment Costs, and all other improvement and redevelopment costs incurred by Developer for the Project, as well as historical Net Operating Income, debt service, and TIF Note payments. The Authority may retain a financial advisor, accountant, and/or other professional with similar expertise to audit the submitted Sale Pro Forma, at Developer’s cost (ii) The Sale Pro Forma and related information shall be used by the Authority to determine whether the sale yields a “Project Excess Return” to Developer. The IRR shall be used to measure any Project Excess Return in accordance with the following sliding scale: Period of Sale IRR beyond which Project Excess Return is created Before three (3) years after Completion 22.0% From three (3) years to six (5) years after Completion 20.0% Execution Draft 14 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 From six (6) years to nine (9) years after Completion 18.0% More than nine (9) years after Completion 16.0% (iii) Should the Developer’s proceeds of such sale of the Minimum Improvements, or a part thereof, exceed the applicable IRR (i.e., the Project Excess Return), payments on the TIF Note shall cease, the outstanding balance forgiven, and the TIF Note shall automatically terminate. In the event of any sale of the Minimum Improvements (partial or full) in which the Project Excess Return exceeds the then outstanding principal balance of the TIF Note, Developer shall pay such excess (the “Project TIF Adjustment”) in lawful money of the United States within 30 days from the date on which the Authority gives Developer notice of the amount of the Project TIF Adjustment due to the Authority; provided, however, in no event shall the Project TIF Adjustment exceed the aggregate sum of all payments (both principal and interest) actually made by the Authority to Developer under the TIF Note. Until the Authority is paid the Project TIF Adjustment in full, the Authority shall have a lien in its favor upon the Minimum Improvements to secure the amount of the Project TIF Adjustment. Such lien shall attach and take effect from the date of the sale of the Minimum Improvements contemplated by this section. Any such lien may be foreclosed as a mortgage on real estate if the Project TIF Adjustment is not paid by the date required by this section. A lien under this section is prior to all other liens and encumbrances on the Minimum Improvements except (1) the first priority Mortgage on the Project Area; (2) liens for real estate taxes and other governmental assessments or charges against the Minimum Improvements; and (3) all leases executed prior to the date that the lien attaches and takes effect. The parties will reasonably cooperate with the sale process and work in good faith to promptly determine any Project TIF Adjustment such that any Project TIF Adjustment is paid by Developer at or before the closing of the sale of the Minimum Improvements so as to avoid any unreasonable delay to the closing of such sale. (iv) If the sale does not result in Excess Returns to Developer, payments on the TIF Note shall continue pursuant to the terms of the existing TIF Note. (v) For purposes of clarity, example calculations of the Project TIF Adjustment pursuant to this Section 3.4(e) are attached hereto in Exhibit H. 3.5 Assignment of Note. The TIF Note shall not be assignable or transferable without the prior written consent of the Authority, which consent shall not be unreasonably withheld; provided, however, Developer may, without the City’s or the Authority’s consent collaterally assign Developer’s rights and obligations under this Agreement and the TIF Note to the holder of any Mortgage that is permitted under the terms of Section 5.1. Any assignee or transferee must execute and deliver to the Authority a certificate, in form and substance reasonably satisfactory to the Authority, pursuant to which, among other things, such assignee or transferee acknowledges and represents: (i) the limited nature of the Authority’s payment obligations under the TIF Note; (ii) that the TIF Note is being acquired for investment for such assignee’s or transferee’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof; Execution Draft 15 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 (iii) that the assignee or transferee has no present intention of selling, granting any participation in, or otherwise distributing the same; (iv) that the assignee or transferee, either alone or with such assignee’s or transferee’s representatives, has knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of the prospective investment in the TIF Note and the assignee or transferee is able to bear the economic consequences thereof; (v) that in making its decision to acquire the TIF Note, the assignee or transferee has relied upon independent investigations made by the assignee or transferee and, to the extent believed by such assignee or transferee to be appropriate, the assignee’s or transferee’s representatives, including its own professional, tax and other advisors, and has not relied upon any representation or warranty from the Authority, or any of its officers, employees, agents, affiliates or representatives, with respect to the value of the TIF Note; (vi) that the Authority has not made any warranty, acknowledgment or covenant, in writing or otherwise, to the assignee or transferee regarding the tax consequences, if any, of the acquisition and investment in the TIF Note; (vii) that the assignee or transferee or its representatives have been given a full opportunity to examine all documents and to ask questions of, and to receive answers from, the Authority and its representatives concerning the terms of the TIF Note and such other information as the assignee or transferee desires in order to evaluate the acquisition of and investment in the TIF Note, and all such questions have been answered to the full satisfaction of the assignee or transferee; (viii) that the assignee or transferee has evaluated the merits and risks of investment in the TIF Note and has determined that the TIF Note is a suitable investment for the assignee or transferee in light of such party’s overall financial condition and prospects; (ix) that the TIF Note will be characterized as “restricted securities” under the federal securities laws because the TIF Note is being acquired in a transaction not involving a public offering and that under such laws and applicable regulations such securities may not be resold without registration under the Securities Act of 1933, as amended, except in certain limited circumstances; and (x) for purposes of federal securities laws, that no market for the TIF Note exists and no market for the TIF Note is intended to be developed. Subject to the terms and conditions of this Section 3.5, the holder of the TIF Note may be different than the owner of the Project Area or the party responsible for the obligations of Developer under the Redevelopment Agreement, provided, however, that such holder will be subject to all limitations and conditions to payments under the TIF Note set forth herein. 3.6 Action to Reduce Taxes. Throughout the term of this Agreement, Developer shall take no action, and suffer no circumstances to exist or action to be taken by others (to the extent Developer may prevent the same), the effect of which would be to render the Project Area or any portion thereof to be no longer generally subject to real property taxation. Before the expiration or termination of this Agreement, Developer shall not: Execution Draft 16 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 (a) seek administrative review or judicial review of the applicability of any tax statute relating to the taxation of the Property determined by any tax official to be applicable or raise the inapplicability of any such tax statute as a defense in any proceedings, including delinquent tax proceedings; (b) seek administrative review or judicial review of the constitutionality of any tax statute relating to the taxation of the Property determined by any tax official, or raise the unconstitutionality of any such tax statute as a defense in any proceedings, including delinquent tax proceedings; or (c) seek any tax deferral or abatement, either presently or prospectively authorized under any state or federal law, of the taxation of the Property. 3.7 Reservation of Tax Increments; Additional Public Benefits. Developer, the City and the Authority acknowledge and agree that all Tax Increments that are not required to be paid to Developer under the terms of this Agreement and the TIF Note will be reserved to the Authority for qualified City projects. By way of example and not limitation, it is anticipated that approximately $11.4 million of Tax Increments will not be used by Developer, but will be retained by the Authority for Project-related City public improvement costs that improve the connectivity of the Project to the surrounding transportation network while also benefiting the nearby neighborhoods and the general public (collectively, the “Future City Transportation Infrastructure Project”). For illustrative purposes only, attached hereto as Exhibit I is preliminary concept plan for such Future City Transportation Infrastructure Project. Article IV Project Requirements 4.1 Commencement and Completion of Project. (a) The timeline for the Commencement and Completion of the Minimum Improvements is identified in this Section 4.1. Following Commencement, construction or other activity must continue in a sequence consistent with normal redevelopment and construction practices. Failure to meet any of the dates identified as “Default Date” shall be considered a default, unless mutually determined to be the result of Unavoidable Delay. (b) The Commencement and Completion timeline for the Minimum Improvements is as follow: Description of Work Commencement Date Completion Date Anticipated Default Date Anticipated Default Date Final Zoning Approvals N/A N/A October 31, 2021 December 31, 2021 Real Estate Acquisition Closing N/A N/A December 1, 2021 March 1, 2022 Submission of “Go Ahead” Letter N/A N/A December 1, 2021 May 1, 2022 Demolition February 1, 2022 May 1, 2022 March 1, 2022 June 1, 2022 Site Remediation March 1, 2022 June 1, 2022 April 1, 2022 July 1, 2022 Specified Site Preparation March 1, 2022 June 1, 2022 April 1, 2022 July 1, 2022 Execution Draft 17 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 Description of Work Commencement Date Completion Date Anticipated Default Date Anticipated Default Date Foundation April 1, 2022 July 1, 2022 August 1, 2022 November 1, 2022 Shell Construction August 1, 2022 November 1, 2022 October 1, 2023 February 1, 2024 Core Construction/Tenant Improvements August 1, 2022 November 1, 2022 October 1, 2023 February 1, 2024 Certificate of Occupancy* N/A N/A April 1, 2024 August 1, 2024 Certificate of Completion N/A N/A December 31, 2024 N/A (c) Market Value of Minimum Improvements. It is anticipated that upon completion, the total cost of the Minimum Improvements will be approximately $85,069,119. 4.2 Zoning and Land Use Approvals. Nothing in this Agreement shall limit the authority of the City with respect to zoning and land use approvals. Subject to the foregoing, the staff of the Authority shall cooperate with Developer and assist Developer in the processing and obtaining of zoning and land use approvals. Developer shall be responsible for applying for and obtaining all land use and zoning approvals necessary for the Project, including, without limitation, any conditions contained in the City Approvals. All zoning and land use approvals shall be by the City Council or the City Planning Commission in accordance with the ordinances of the City. Notwithstanding the foregoing and for avoidance of doubt, in addition to the Authority’s other rights and remedies hereunder, the Authority’s consent shall be required for any changes to the Minimum Improvements, specifically including, without limitation, changes to the scale, massing or exterior finish materials set forth in the original City Approvals that could reduce the taxable value of the Project Area 4.3 Building and Construction Permits. Nothing in this Agreement shall limit the governmental authority of the City with respect to its building and construction permitting process for the Project. Developer shall comply with all applicable City building codes and construction requirements and shall be responsible for obtaining all building permits prior to construction. 4.4 Restrictions on Development. Developer may not construct or permit construction of any of the Project until Developer satisfies the following conditions: (a) Developer executes and records the Development Contract against the Project Area, and causes any lien holder affecting any of the property to subject its interest as provided in this Agreement and in the Development Contract; (b) Developer satisfies all of the conditions precedent to construction of the Project established by the City in the City Approvals; and (c) Developer executes and records a Memorandum of Agreement in accordance with Section 10.16 hereof. 4.5 Submission and Approval of Evidence of Financing and Land Acquisition. No later than the issuance of the applicable construction or building permit for the Minimum Improvements, Developer shall provide the Authority with the Go-Ahead Letter, including the Financing Commitments and final Execution Draft 18 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 purchase agreement and other land acquisition documents sufficient for the Authority to confirm the actual Project Area acquisition cost. If Developer fails to submit the Go-Ahead Letter and the foregoing information acceptable to the Authority within said period of time or any additional period to which the Authority may agree, the Authority may notify Developer of its failure to comply with the requirement of this Section 4.5, such failure being a Default hereunder. 4.6 Affordable Housing. (a) Affordable Housing Requirements. Developer covenants that at least 10% of the residential units within the Minimum Improvements, but in no event fewer than 20 of such residential units (the “Affordable Units”) will be leased at rates (inclusive of utilities and mandatory fees, such as parking) that are considered affordable to individuals or households earning less than 50% of the U.S. Department of Housing and Urban Development’s Area Median Income for the Minneapolis-Saint Paul-Bloomington Metropolitan Statistical Area for a period of 21 years commencing on the date that all the Affordable Units are first occupied by qualified households (the “Affordable Housing Requirements”). (b) The Affordable Housing Requirements shall also incorporate and include the following conditions and requirements: (i) no security deposit shall be required in excess of the amount of one month of rent in connection with any Affordable Unit; (ii) during the final year of the affordability period, new leases for the Affordable Units must be for a term of no less than six months, and such newly leased Affordable Units will be subject to all the Affordable Housing Requirements until the expiration of such new leases; (iii) Developer shall affirmatively market the Affordable Units to one or more traditionally underserved populations as affordable at the rates required hereunder; (iv) prior to Commencement of the Minimum Improvements, Developer shall notify the Authority of Developer’s initial determination as to whether the Affordable Units will be “fixed” to particular housing units within the Minimum Improvements or floating among various housing units with the Minimum Improvements. If the Affordable Units are to be fixed, Developer shall provide the Authority with the unit numbers of such fixed Affordable Units; (v) the two-bedroom units must be leased to households consisting of at least two members; (vi) During the affordability period, Developer will not refuse to lease an Affordable Unit to the holder of a voucher or certificate of eligibility under Section 8 of the United States Housing Act of 1937 solely because of the status of the prospective tenant as such a holder. (vii) the Affordable Units shall be subject to the terms and condition of the Inclusionary Housing Policy Program Guide (“Policy Guide”), a current version of which is attached as Exhibit J, provided, however, the Affordable Housing Requirements hereunder shall not include changes in the Policy Guide adopted by the City which differ from the Policy Guide attached as Exhibit J; and Execution Draft 19 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 (viii) Developer shall, upon annual invoicing, reimburse the City (or such subdivision of the City administrating the Affordable Housing Requirements) for third- party expenses related to monitoring of Developer’s compliance with the Affordable Housing Requirements, which such costs shall initially not exceed $2,700 per year (plus any additional costs necessitated by re-inspections for noncompliance with the Affordable Housing Requirements) and thereafter be subject to reasonable adjustment from time to time. (c) Compliance with Affordable Housing Requirements. For avoidance of doubt, any failure by Developer to comply with the Affordable Housing Requirements will be a Default under this Agreement and, if such Default is not cured within any applicable notice and cure period hereunder, it shall be an Event of Default, during which, in addition to the City’s and Authority’s other rights and remedies hereunder, payments and accrual of interest on the TIF Note shall be suspended. (d) Restrictive Covenant. The Affordable Housing Requirements will be set forth in a restrictive covenant in substantially the form shown in the attached Exhibit K and to be recorded against the Project Area prior to, and as a condition to, the issuance of the TIF Note (the “Affordable Housing Restrictive Covenant”). The Affordable Housing Restrictive Covenant shall not be subordinated or junior to any Mortgage on the Minimum Improvements, and if any Mortgage exists at the time the Affordable Housing Restrictive Covenant is to be recorded, Developer shall cause the mortgagee under such Mortgage to subordinates the Mortgage and the lien thereof to the Affordable Housing Restrictive Covenant. (e) Affordable Unit Mix. The Affordable Units shall consist of at least four (4) studio units, ten (10) one bedroom units, and six (6) two bedroom units. Any change in the foregoing distribution of units shall require the prior written approval of the Authority, which such consent will not be unreasonably conditioned, delayed or withheld. Any change in the unit distribution shall be accounted for in any updated TIF Pro Forma. (f) Affordable Unit Size and Amenities. Residents of the affordable units shall have the same access to building amenities as residents of the market-rate units. The minimum size of the affordable units shall be: studio: 500 square feet; one-bedroom: 700 square feet; and two-bedrooms: 1,000 square feet. The level of finish within the affordable units must be consistent with the level of finish within new construction, affordable apartments in the Twin Cities metropolitan area. (g) Purchase Right. Prior to the issuance of the Certificate of Completion and as a condition to issuance of the TIF Note, Developer shall grant to the Authority the one-time right to purchase one or more of the Affordable Units (the “Purchase Right”), which such Purchase Right shall be exercisable by the Authority only in the event the Affordable Units are converted from rental units to condominium or other for-sale units during the term of the TIF District. The Purchase Right shall be granted to Authority pursuant to a Right of First Purchase Option agreement in the form attached as Exhibit L and on the terms and conditions set forth therein. (h) Future Extension of Affordable Housing. On or about the date which is one year before the original expiration of the Affordable Housing Restrictive Covenant, the Authority and Developer shall negotiate in good faith the terms and conditions of an extension of initial 21-year term of the Affordable Housing Restrictive Covenant. Both parties agree to negotiate in good faith but without binding either party to a particular outcome. 4.7 Public Easements Execution Draft 20 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 (a) Prior to the issuance of the Certificate of Completion and as a condition to issuance of the TIF Note, Developer shall grant to the City or the Authority (at City and Authority’s discretion) the following easements with respect to the Minimum Improvements (each a “City Easement”, and collectively the “City Easements”): (i) A permanent, public easements for access and use of the Public Parking (the “Parking Easement”), subject to reasonable, nondiscriminatory limitations, rules and regulations governing its use adopted by Developer and approved by City Manager or its designee. The Public Parking shall include typical signage that identifies the same as being available for public parking. Developer shall be responsible for all maintenance of the Public Parking at no cost or expense to the City or Authority. The Parking Easements shall be granted pursuant to easement agreements in the form attached as Exhibit M. (ii) A permanent, public easement for access and use of the Sidewalks and Streetscapes (the “Public Access Easement”), subject to reasonable, nondiscriminatory limitations, rules and regulations governing its use adopted by Developer and subject to the approval of the City Manager or its designee. The Public Access Easement shall be granted pursuant to an easement agreement in a form reasonably required by the City attorney. (iii) A perpetual easement over the approximately 10,500 square feet of the Project Area in the area generally depicted on the Project Plans attached as Exhibit B and designated thereon and referred to herein as the “Future City Land” (the “Future Land Easement”). The Future Land Easement shall allow any public use of the Future City Land by the City and shall include future purchase right for the City or the Authority to convert the ownership in the Future City Land to fee title for the minimum required consideration. The Future Land Easement and related rights shall be granted pursuant to an easement agreement in the form attached as Exhibit O. For purposes of the Future Land Easement, “public use” shall mean (A) transportation routes and improvements, including, but not limited to: roadways, sidewalks, trails and wayfinding systems, (B) infrastructure and utility uses and improvements, including but not limited to, water, sewer, stormwater, communication, telecommunication, energy generation and transmission; and including both publicly owned and privately owned utilities, and/or (C) green or other open space for landscaping, gardening, public art, public gathering and/or similar uses, together with related improvements. (b) Other Terms of City Easements. Neither the City nor the Authority will pay an acquisition cost to Developer for any of the City Easements. Each City Easement must be recorded by Developer as a condition to issuance of the TIF Note. Developer shall, at Developer’s sole cost and expense, either cause a licensed surveyor to determine the final, actual legal description of the Public Parking, the Sidewalks and Streetscapes, and the Future City Land for the purpose of the granting the City Easements with respect to such elements. Such legal descriptions will be consistent with the areas and boundaries of such areas as described and depicted in the City Approvals and the exhibits to this Agreement. (c) Future Transit Easements. Developer agrees to grant future easements for future mass transit (e.g., bus) stops in open areas of the Project Area adjoining public rights-of-way at no cost to the City, the Authority, or the responsible transit agency(ies), subject only to the responsible transit agency(ies) being responsible for initial construction and maintenance of the surface improvements in any future easement area. Execution Draft 21 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 4.8 Streetscape Elements and Public Art. The Project shall include public art in the area generally depicted on the Project Plans attached as Exhibit B, such public art shall be a permanent sculpture or similar art installation and Developer shall (a) engage a professional art consultant or a landscape architect experienced in public art visioning, commissioning, and implementation in connection with the creation of such public art and (b) such installation shall have a value of no less than $200,000.00, in the aggregate, in and for such public art (exclusive of fees paid to such professional art consultant and exclusive of costs for other aspects of the Minimum Improvements which are installed in connection with or ancillary to such public art, but which do not directly form a part of such public art). Developer shall at all times maintain the public art in good, first class condition, at no cost to the City or the Authority. 4.9 Coordination with Future City Infrastructure Improvements. Related to the Project, the City may construct improvements to the roadway network and sidewalk system that serves the Project Area and the surrounding areas. Developer shall work in cooperation with the City and the City’s design and construction team to coordinate the final streetscape design taking into consideration the potential realignment of the Willson Road and Eden Avenue curblines. The City will strive to design the new roadway layout before Developer installs the new curb, utilities and streetscape. 4.10 Equity and Inclusion. Developer shall cause its general contractor to use good faith efforts as defined by Minnesota Department of Human Rights to include businesses that are majority owned by under-represented groups including minorities, women, veterans and people with disabilities in the development and construction of the Project. Developer shall also cause its general contractor to use, good faith efforts to employ under-represented people on the construction site. (a) Good Faith Efforts. For the purpose of this section, “good faith efforts” shall be defined by compliance with the following: (i) At the Project site • Post EEO policy and anti-harassment policies prominently on employee bulletin boards and job sites. Update at least once a year with new contact information and signature of the contractor’s chief executive officer. • Post all government-mandated posters (Minnesota, federal, local) in areas available to employees and applicants and on all job sites. • All job sites to the extent possible should be accessible to people with disabilities, specifically people with mobility impairments (restrooms, break-rooms, etc.). If all restrooms are not accessible, provide comparable facilities for people with disabilities. • Check employee locker rooms, break rooms, restrooms, and work areas (job sites) for potentially offensive cartoons, etc. (ii) Recruiting • All personnel involved in hiring, selection, promotion, disciplinary and related processes should be trained to ensure the elimination of bias (implicit bias training) in personnel actions Execution Draft 22 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 • Include an EEO tagline or similar statement in all want ads or other external job announcements. If you post jobs on your web site, include an EEO tagline. • Communicate to the union to ensure that the union accepts people for membership in a nondiscriminatory way and that they refer people to jobs fairly. • Make formal and informal contact with community organizations, apprenticeship training organizations, and unions, and other recruitment organizations (specifically those organizations that focus on women, people of color, Indigenous people, and people with disabilities) that may be able to refer qualified applicants for jobs you have available. • Provide training, preparation and workplace accommodations so that people with disabilities can have rewarding careers. • Contact the Department of Employment and Economic Development (DEED) Vocational Rehabilitation Services unit for the purpose of forming partnerships to help prepare people with disabilities for meaningful employment opportunities. • Participate in construction community job fairs or other construction-related events. • When using paid advertising, include news media or websites geared toward women, communities of color, and/or people with disabilities. (iii) Selection and Hiring • Review your application form and remove any questions that are not job-related. Include an EEO statement on the form itself. Review the application to make sure no illegal/potentially illegal information is requested. • Review EEO/Applicant tracking surveys: they should ask for necessary tracking information only and should be clearly marked as voluntary. Remove the forms from the application itself before the selection process begins. • Make sure supervisors are using legal criteria in their hiring decisions. • If you use any pre-employment tests (math tests, typing tests, skill tests, “personality” or “integrity” tests), these tests should directly relate to the jobs for which they’re used. (iv) Termination of Employment • Develop a written termination policy and/or progressive discipline policy. All supervisors should implement your process consistently. Execution Draft 23 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 • If appropriate, conduct exit interviews or administer exit surveys. (v) Employee Files and Record-Keeping • Retain all information that could reveal age, race, disability, religion, etc. as confidentially as possible. (I-9 forms, insurance forms, medical leave requests, etc.) • An employee’s file should tell the complete story of this employee’s history with your company: orientation, training, performance evaluations, wage increases, promotion information, disciplinary notices, etc. All pay increases should be documented, and nondiscriminatory reasons for pay should be obvious. (Some companies create a checklist for each employee file so that they can be certain that all important documentation is retained.) • Retain applications for at least a year. Develop an applicant flow log or similar tracking system. Make sure that you can track each applicant back to their EEO survey or affirmative action data page, if completed. (You cannot conduct a meaningful analysis of your selection process without this information.) • All files of terminated employees should show the reason for termination, whether voluntary or involuntary. (vi) Other • Conduct training for all employees of your EEO and anti- harassment policies in safety meetings at the beginning of each project and additionally throughout the year for new hires. Emphasize reporting procedures. • Make reasonable efforts to solicit people of color, Indigenous, and female-owned businesses to participate in subcontracts or vendor contracts. (b) Developer shall cause its general contractor to implement the equity and inclusion outreach plan attached as Exhibit P, (the “Outreach Plan”) as may be modified with the Authority’s prior written consent, which consent shall will not be unreasonably withheld or delayed. For a project of this scale and complexity, Developer anticipates that the labor hours contributed by women is approximately five percent (5%) of the total labor hours and that the labor hours contributed by Black, Indigenous and other people of color (BIPOC) is approximately ten percent (10%) of the total labor hours. These estimates are not considered minimums but merely estimates based on Developer’s knowledge of the available qualified workforce. (c) Upon Completion, and as a condition to issuance of the Certificate of Completion and TIF Note, Developer shall submit the Equity and Inclusion Report in substantially the form attached as Exhibit Q. This report shall summarize the actual percentages attained after implementation of the Outreach Plan. This report shall include, without limitation: Execution Draft 24 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 (i) business name, trade category, contact name and business address of each MBE, WBE, or VBE firm engaged in the Project; (ii) total hours worked for each construction trade; (iii) hours worked for each construction trade by minority workers including women workers, and workers considered BIPOC; (iv) employer of the BIPOC and women workers; and (v) calculation of percentage. (d) In the event that the Authority reasonably determines that Developer has not used good faith effort to achieve these goals (by failing to cause its contractor to comply with the approved Outreach Plan), a penalty shall be assessed by the Authority. The penalty shall be a cash payment made to a workforce training organization that actively trains underrepresented people in the construction trades. The penalty shall be no more than $100,000. 4.11 Effect of Delay. Developer acknowledges that if construction of the Minimum Improvements is delayed due to Unavoidable Delays or for any other reason, this could affect the amount of Available Tax Increments and thus the total amount which may be available to pay the TIF Note. Developer acknowledges that if the Completion of the Minimum Improvements is delayed due to Unavoidable Delays or for any other reason, there will be no compensation to Developer or any other party for any reduction in the amount available to pay or refund the TIF Note. 4.12 Additional Responsibilities of Developer. (a) Developer shall cause the Minimum Improvements to be constructed, operated and maintained in substantial accordance with the terms of this Agreement, the Final Development Plans and Development Contract, and all applicable Law (including, without limitation, zoning, building code and public health laws and regulations). (b) Developer shall obtain, in a timely manner, all required permits, licenses, and approvals, and will meet, in a timely manner, all requirements of all applicable Law that must be obtained or met before the Project may be lawfully constructed. (c) Developer shall not construct any building or other structures on, over, or within the boundary lines of any public utility easement unless such construction is provided for in such easement, approved by the utility involved, or approved by the City if no utility is then utilizing the easement area. (d) Prior to delivery of a Certificate of Completion to Developer, upon the request of the Authority, Developer shall, after reasonable advance notice from the Authority, provide the Authority and the City with reasonable access to the Property to inspect the Project for compliance with this Agreement. (e) Prior to delivery of the Certificate of Completion, Developer shall deliver monthly progress reports to the Authority. The progress reports shall include: summary of progress to date, percent construction completion, identification of any Unavoidable Delays, and projected occupancy date. Execution Draft 25 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 (f) Developer shall comply and cause its contractors to comply with all applicable Environmental Law as it relates to the Project Area and the Minimum Improvements. 4.13 Certificate of Completion. Developer may notify the Authority and request a Certificate of Completion in accordance with this section. Developer may request a Certificate of Completion for the Minimum Improvements after the City has issued a final certificate of occupancy covering all elements of the Minimum Improvements. Within 30 days after receipt of such request, the Authority shall inspect the Minimum Improvements to determine if such Minimum Improvements have been completed in accordance with the terms and conditions of this Agreement. An example of the Authority’s Completion checklist is included as part of the form of Certificate of Completion attached as Exhibit E. Following such inspection the Authority shall either furnish Developer with (a) an appropriate Certificate of Completion or (b) a written statement, indicating in adequate detail in what respects Developer has failed to complete the relevant portion of the Minimum Improvements and what measures or acts will be necessary, in the opinion of the Authority, for Developer to take or perform in order to obtain such certification. If the Authority issues a written statement in accordance with clause (b) above, Developer shall thereafter take such actions necessary to cure such deficiencies in the applicable Minimum Improvements. After such deficiencies have been cured, Developer shall notify the Authority and the Authority will re-inspect the applicable Minimum Improvements and take one of the actions described in clauses (a) and (b) hereof, and such process will continue until the Authority issues the applicable Certificate of Completion. Issuance of a Certificate of Completion by the Authority shall be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement with respect to the obligations of Developer to construct, or cause to be constructed, the Minimum Improvements. Article V Encumbrance of the Project Area 5.1 Mortgage of the Project Area. (a) Until the Completion of the Minimum Improvements, Developer shall not engage in any financing or any other transaction creating any mortgage or other security interest in or lien upon the Project Area, or portion thereof, whether by express agreement or operation of law (a “Mortgage”), or suffer any Mortgage to be made on or attach to the Project Area except for the purpose of obtaining funds necessary for acquiring and constructing the Minimum Improvements and paying the costs set forth in the TIF Pro Forma. (b) This restriction on encumbrance shall terminate upon Completion of the Minimum Improvements. Developer or any successor in interest to the Minimum Improvements or portion thereof, may sell or engage in financing or any other transaction creating a mortgage or encumbrance or lien on the Minimum Improvements or portion thereof after the Certificate of Completion has been obtained with respect to the Minimum Improvements, without obtaining the prior written approval of the Authority. (c) Notwithstanding anything in this Agreement to the contrary, Developer is authorized, without the approval of the Authority, to obtain acquisition and construction financing to cover the costs of acquisition and construction of the Minimum Improvements and the costs set forth in the TIF Pro Forma and to mortgage the Project Area to provide security for acquisition and construction financing. 5.2 Copy of Notice of Default to Mortgagee. If the City or the Authority delivers any notice or demand to Developer with respect to any Default under this Agreement, the City or the Authority, as applicable, will endeavor to also deliver a copy of such notice or demand to the mortgagee of any Mortgage at the address of such mortgagee provided in the recorded Mortgage or any other address thereafter provided to the Authority in a written notice from Developer or the mortgagee, provided that failure of the City or Execution Draft 26 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 the Authority to give any such notice shall not limit the City’s or the Authority’s ability to exercise any of its remedies hereunder. 5.3 Mortgagee’s Option to Cure Events of Default. Upon the occurrence of an Event of Default, the mortgagee under any Mortgage will have the right at its option, to cure or remedy such Event of Default within the cure periods set forth herein. 5.4 Rights of a Foreclosing Mortgagee. Except as provided in Section 5.6, an individual or entity who acquires title to all or a portion of the Minimum Improvements through the foreclosure of a mortgage or deed in lieu of foreclosure on such portion of the Project Area remains subject to each of the restrictions set forth in this Agreement and remains subject to all of the obligations of Developer, or any successor in interest to Developer, under the terms of this Agreement, but neither the purchaser at a foreclosure sale, the grantee under a deed in lieu of foreclosure, nor any subsequent transferee from a mortgagee shall have any personal liability for a breach of such obligations under this Agreement so long as: (a) The party acquiring title through foreclosure or deed in lieu of foreclosure observes all of the restrictions set forth in the Agreement; (b) The party who acquired title through foreclosure or deed in lieu of foreclosure does not undertake or permit any other party to undertake any Minimum Improvements on the portion of the Project Area it owns; (c) The City has no obligation to approve any plans for Minimum Improvements or a portion of the Minimum Improvements the foreclosing mortgagee (or mortgagee obtaining a deed in lieu of foreclosure) owns or to issue any related building permits. The purpose of this section is to permit a foreclosing lender (or mortgagee or purchaser obtaining a deed in lieu of foreclosure or a subsequent transferee) to hold title to the portion of the Project Area it acquires through foreclosure or deed in lieu of foreclosure, subject to, but without personal liability for the obligations under this Agreement, until it can sell the portion it holds to a third party who will assume the obligations of Developer under the terms of this Agreement and proceed with the construction of the Minimum Improvements pursuant to the terms of this Agreement. If, rather than passively holding title to the portion of the Project Area it acquires through foreclosure or deed in lieu of foreclosure, the foreclosing lender (or mortgagee obtaining a deed in lieu of foreclosure or subsequent transferee) or other purchaser at a foreclosure sale desires to construct the Minimum Improvements, the purchaser at the foreclosure sale must assume and perform each of the obligations of Developer, or the applicable successor to the interest of Developer, under this Agreement as to the portion of the Minimum Improvements subject to foreclosure. This section does not restrict the authority of the Authority to pursue its rights under any outstanding security, exercise remedies otherwise available under this Agreement or suspend the performance of the obligations of the Authority or Developer under this Agreement as otherwise allowed. The Authority agrees to reasonably cooperate with any foreclosing lender (or mortgagee obtaining a deed in lieu of foreclosure) or other purchaser at a foreclosure sale in pursuing the Minimum Improvements in accordance with this Agreement. Unless acting other than passively holding title as described above in this section, a lender or an independent third party that purchases at a foreclosure sale will have no liability for breach under this Agreement. 5.5 Events of Default Under Mortgage. Developer shall use commercially reasonable efforts to obtain an agreement from any mortgagee under a Mortgage that in the event Developer is in default under any Mortgage, the mortgagee will use commercially reasonable efforts, within 30 days after it becomes aware of any such default and prior to exercising any remedy available to it due to such default, Execution Draft 27 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 to notify the Authority in writing of (i) the fact of default; (ii) the elements of default; and (iii) the actions required to cure the default. Developer shall use its commercially reasonable efforts to obtain an agreement in any such Mortgage, that if, within the time period required by the Mortgage, the Authority cures any default under the Mortgage, the mortgagee will pursue none of its remedies under the Mortgage based on such default, provided that failure of Developer to obtain such an agreement from any such mortgagee shall not constitute a breach of this Agreement. 5.6 Subordination of Agreement. The City and the Authority will, upon the request of the holder of a Mortgage, execute and record a subordination agreement pursuant to which the City and the Authority agree that, upon a default by Developer under a Mortgage, the holder of the Mortgage may elect, in an instrument to be recorded in the Hennepin County land records and delivered to the City and the Authority before the commencement of proceedings to foreclose the Mortgage, to either (1) treat this Agreement as being subordinate to the lien of the Mortgage such that the foreclosure of the Mortgage and the failure to redeem from such foreclosure will extinguish and terminate this Agreement and the TIF Note will automatically be cancelled and rescinded; or (2) to treat this Agreement as having priority over the Mortgage in which case this Agreement and the TIF Note will survive the foreclosure of the Mortgage and this Agreement will be binding upon the holder of the Sheriff's Certificate issued in conjunction with the foreclosure of the Mortgage. If the holder of the Mortgage fails to notify the City and the Authority of its election under this Section 5.6 on or before the commencement of foreclosure proceedings, the holder of the Mortgage shall be deemed to have elected to treat this Agreement as being subordinate to the lien of the Mortgage such that the foreclosure of the Mortgage and the failure to redeem from such foreclosure will extinguish and terminate this Agreement and the TIF Note will automatically terminate. The City and Authority each further agree that if the holder of a Mortgage elects to treat this Agreement as having priority over the Mortgage, the City and Authority, upon the completion of the foreclosure without redemption, agree that the time for the completion of the Minimum Improvements is extended to a date 12 months following the expiration of all applicable redemption periods. Article VI Insurance and Indemnification 6.1 Insurance. (a) Developer shall obtain and continuously maintain insurance on the Minimum Improvements and, from time to time at the request of the Authority, furnish proof to the Authority that the premiums for such insurance have been paid and the insurance is in effect. The insurance coverage described below is the minimum insurance coverage that Developer must obtain and continuously maintain, provided that Developer shall obtain the insurance described in clause (i) below with respect to the Minimum Improvements prior to the Commencement of construction thereof and is only obligated to maintain the insurance described in clause (i) until Developer receives a Certificate of Completion: (i) Builder’s risk insurance, written on the so-called “Builder’s Risk- Completed Value Basis,” in an amount equal to 100% of the insurable value of the Minimum Improvements at the date of Completion, and with coverage available in non- reporting form on the so-called “all risk” form of policy. (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an Owner’s/Contractor’s Policy naming the Authority, and the City as an additional insured, with limits against bodily injury and property damage of not less than $5,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used), written on an occurrence basis. Execution Draft 28 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 (iii) Workers compensation insurance, for employees of Developer if and to the extent required by Law. (b) All insurance required in this Article shall be obtained and continuously maintained by responsible insurance companies selected by Developer which are authorized under the laws of the State to assume the risks covered by such policies. If available on commercially reasonable terms, each policy must contain a provision that the insurer will not cancel nor modify the policy without giving written notice to the insured at least 30 days before the cancellation or modification becomes effective. Not less than 15 days prior to the expiration of any policy, Developer must renew the existing policy or replace the policy with another policy conforming to the provisions of this Article. In lieu of separate policies, Developer may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein. 6.2 Indemnification. (a) Developer releases and covenants and agrees that the City Parties shall not be liable for and agrees to indemnify and hold harmless the City Parties against any loss or damage to property or any injury to or death of any person occurring at or about, or resulting from any defect in the Minimum Improvements constructed by Developer, except to the extent attributable to the negligence or intentional misconduct of any City Party. (b) Except to the extent of the negligence or intentional misconduct of any City Party, Developer shall indemnify the City Parties, now and forever, and further agrees to hold the aforesaid harmless from any claims, demands, suits, costs, expenses (including reasonable attorney’s fees), actions or other proceedings whatsoever by any person or entity whatsoever arising or purportedly arising from the actions or inactions of Developer (or other persons under its direction or control) under this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements. Article VII Other Developer Covenants 7.1 Developer Reimbursement Obligations. Developer shall pay all reasonable out of pocket costs of the City and the Authority in connection with the Minimum Improvements and the TIF Assistance provided to Developer, including, but not limited, the costs and expenses of the City Consultants, the costs of the development and negotiation of this Agreement and any amendments or modifications to this Agreement, the development of the TIF Plan, the creation of the TIF District, the blight study of the existing buildings, fiscal analysis, legal fees, and all other costs and expenses related thereto. Sufficient monies must be provided to the Authority along with the request for TIF Assistance. These monies shall be held in escrow. Any unused monies shall be returned to Developer. These monies shall not bear interest. After the escrowed monies have been used, Developer shall pay such costs monthly upon presentation of invoices and other documentation of such costs, not more than 30 days after the request for payment is delivered to Developer. All such costs will be Qualified Redevelopment Costs pursuant to the TIF Pro Forma. 7.2 Maintenance and Operation of the Improvements. Developer shall, at all times during the term of this Agreement, maintain and operate the Minimum Improvements in a safe and secure way and in compliance with this Agreement and applicable Law. Developer shall pay all of the reasonable and necessary expenses of the operation and maintenance of the Minimum Improvements, including all premiums for insurance insuring against loss or damage thereto and adequate insurance against liability for injury to persons or property arising from the construction of the Minimum Improvements as required pursuant to this Agreement. During construction of the Minimum Improvements, Developer shall not Execution Draft 29 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 knowingly cause any person working in or attending the Minimum Improvements for any purpose, or any tenant of the Minimum Improvements, to be exposed to any hazardous or unsafe condition; provided that such party shall not be in Default hereunder if it has required the contractors employed to perform work on the Minimum Improvements to take such precautions as may be available to protect the persons in and around the Minimum Improvements from hazards arising from the work, and has further required each such contractor to obtain and maintain liability insurance protecting against liability to persons for injury arising from the work. The expenses of operation and maintenance of the Minimum Improvements shall be borne solely by Developer. After reconstruction of the Eden Avenue/Willson Road intersection, Developer shall be responsible for maintenance of the plaza and landscape area beginning at the back of finished curb. 7.3 Cooperation with Litigation. Developer shall reasonably cooperate with the Authority with respect to any litigation commenced by third parties with respect to the Project; however, this provision does not obligate Developer to incur costs, except as otherwise provided in this Agreement or elsewhere. 7.4 Condemnation, Damage, or Destruction. In the event that title to and possession of the Project or any material part thereof shall be taken in condemnation or by the exercise of the power of eminent domain by any governmental body or other person (except the Authority or the City) or the Project is damaged or destroyed, Developer shall, with reasonable promptness after such taking, notify the Authority as to the nature and extent of such damage or taking, as applicable. Upon receipt of any condemnation award or insurance proceeds Developer shall elect to either: (a) use the entire condemnation award or insurance proceeds to reconstruct the Project (or, in the event only a part of the Project has been taken or damaged, then to reconstruct such part) upon the remaining Property to the extent necessary to maintain and continue operations of Project for its intended purpose; or (b) in the event that the condemnation affects or taking or damage or destruction affects the Property but not the Project improvements thereon, retain, for the account of Developer, all of the condemnation award or insurance proceeds. 7.5 Business Subsidy Agreement. The Authority and Developer have determined that a business subsidy agreement within the meaning of the Minnesota Business Subsidy Act, Minnesota Statutes, Sections 116J.993 through 116J.995 is not required in accordance with the exception contained in the Minnesota Business Subsidy Act, Minnesota Statutes, Section 116J.993, subd. 3(17), because Developer’s investment in the purchase of the Minimum Improvements Area and site preparation thereon is 70% or more of the assessor’s current year’s estimated market value for the Minimum Improvements Area. 7.6 Developer/Authority Grant Applications. Developer and the Authority will cooperate in efforts to obtain available public grant funding to undertake the Project, including but not limited to grants from the Hennepin County Environmental Response Fund (ERF), Met Council Tax Base Revitalization Account (TBRA), Met Council Livable Communities Demonstration Account (LCDA), DEED Contamination Cleanup Grant, DEED Redevelopment Grant, and any other funding from metropolitan, state, county, and federal sources identified by the Authority or Developer as reasonably available. Costs of preparing the grant applications shall be borne by Developer. City staff shall have the final authority to review and submit the grant applications to the applicable agency. To the extent additional grant funds not reflected in the TIF Pro Forma are obtained, any such amounts shall be taken into consideration by the Authority when the Authority reviews the updated TIF Pro Formas and other information under Article III prior to issuing the TIF Note. Developer shall reasonably cooperate with the City and the Authority with Execution Draft 30 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 respect to the administration of any grants received from Hennepin County, Metropolitan Council, or State of Minnesota to support the construction of the Minimum Improvements. 7.7 Project Information. (a) Project Ownership. Developer shall provide the City and Authority with the final organizational structure for the ownership of the Project Area and the Minimum Improvements, and the identity of all parties with a beneficial interest in the Project. Developer shall confirm such organizational and ownership information at the time Developer submits the Go-Ahead Letter, and periodically thereafter in accordance with clause (b) below. For purposes of clarity, nothing in this paragraph will be deemed to replace, modify, or supersede the requirements and restrictions set forth in Article XIII. (b) Other Information. In addition to the other Project information required to be provided by Developer hereunder, Developer shall provide to the City and/or Authority such information regarding Developer and the Project as the City and/or Authority may reasonably request in writing from time to time in order for the City and Authority to monitor Developer’s progress on the Project, the prospects of the Project, and/or the status of Developer’s obligations hereunder, including without limitation the follow: (i) market studies and/or market data used by Developer to make decision regarding the financing, design, and development of the Project promptly upon request in writing and in no event later than two business days following such request and (ii) the status of Project ownership, organizational structure, financing, leasing, and sales, no more frequently than monthly, but otherwise promptly upon request in writing and in no event later than two business days following such request. The City and Authority will endeavor to treat all such information which Developer deems to be proprietary or trade secret information as nonpublic data under and in accordance with the Minnesota Data Practices Act, Minnesota Statutes chapter 13. Article VIII Transfer Limitations 8.1 Representation as to the Minimum Improvements. Developer represents to the City and the Authority that its undertakings under this Agreement are for the purpose of developing the Minimum Improvements and not for the purpose of speculation in land holding. Developer acknowledges that, in view of the importance of the Minimum Improvements to the general welfare of the City and the Authority, and the substantial financing and other public aids that have been made available by the City and the Authority for the purpose of making such Minimum Improvements possible, the qualifications and identity of Developer are of particular concern to the Authority. Developer further acknowledges that the City and the Authority are willing to enter into this Agreement with Developer because of the qualifications and identity of Developer. 8.2 Limitation on Transfers. (a) Until the Authority’s issuance of the Certificate of Completion, Developer shall not sell, assign, convey, lease or transfer in any other mode or manner any of its right, title, and interest in and to this Agreement, all or any part of the Project Area or the Minimum Improvements, without the express written approval of the Authority, provided that the consent of the Authority shall not be required for any of the following: (i) granting of a mortgage or other security interests in the Project Area as provided in Article V hereof; Execution Draft 31 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 (ii) leasing the Minimum Improvements in the normal course of business in a manner consistent with this Agreement and the City Approvals; or (iii) transfer to a Related Party, provided such Related Party, upon request of the Authority, executes an agreement in a form reasonably approved by the Authority pursuant to which such Related Party assumes and agrees to perform the obligations of Developer under this Agreement. (b) If the Authority’s consent to a transfer is required pursuant to this Section 8.2, the Authority shall be entitled to require, as conditions to its approval of any sale, assignment, conveyance, use or transfer of any rights, title, and interest in and to this Agreement, the Project Area or the Minimum Improvements that: (i) Any proposed transferee shall not be exempt from the payment of real estate taxes and shall have the qualifications and financial responsibility, as determined by the Authority, necessary and adequate to fulfill the obligations undertaken in this Agreement by Developer; (ii) Any proposed transferee, by instrument in writing satisfactory to the Authority and in form recordable among the land records shall, for itself and its successors and assigns, and expressly for the benefit of the Authority have expressly assumed all of the obligations of Developer (or such obligations of Developer as are applicable to the portion of the Minimum Improvements acquired) under this Agreement and agree to be subject to all the conditions and restrictions to which Developer is subject; (iii) Developer must submit all instruments and other legal documents involved in effecting transfer to the Authority; and (iv) Developer and the transferee must comply with such other conditions as the Authority may find desirable in order to achieve and safeguard the purposes of the HRA Act and TIF Act, this Agreement, and the Project; and (v) The transferee must demonstrate, in a manner satisfactory to the Authority, its ability to perform all assumed obligations in this Agreement. (c) In the absence of specific written agreement by the City and the Authority to the contrary, neither the transfer of the Minimum Improvements, or any portion thereof, prior to the issuance of the Certificate of Completion for the Minimum Improvements or the City’s or the Authority’s consent to such a transfer will relieve Developer of its obligations under this Agreement. Article IX Events of Default and Remedies 9.1 Events of Default Defined. “Events of Default” under this Agreement include any one or more of the events listed in Sections 9.2 and 9.3. 9.2 Developer Events of Default. The following shall be Events of Default for Developer: (a) subject to Unavoidable Delays and Cure Rights, Developer’s failure to achieve Commencement and Completion of any aspect of the Minimum Improvements by the applicable “Default Date” set forth in Section 4.1; Execution Draft 32 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 (b) subject to Unavoidable Delays and Cure Rights, Developer shall Default in its obligations with respect to the construction of the Minimum Improvements (including the nature and the date for the completion of the various elements thereof), or shall abandon or substantially suspend construction work on the Minimum Improvements, and any such Default, violation, abandonment or suspension is not cured, ended or remedied within 30 days after written notice to do so; (c) there is, in violation of this Agreement, any conveyance, encumbrance or other transfer of the Project Area or any part thereof, and such violation is not cured within 30 days after written notice to do so; (d) subject to Unavoidable Delay and Cure Rights, failure by Developer to observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement, any of the City Easements, the Affordable Housing Restrictive Covenant, or the agreement regarding the Purchase Right, and the continuation of such failure for a period of 30 days after written notice of such failure from any party hereto; (e) if, prior to the delivery of the Certificate of Completion, Developer shall (i) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act of 1978, as amended or under any similar federal or State law; or (ii) make an assignment for the benefit of its creditors; or (iii) become insolvent or adjudicated a bankrupt; or if a petition or answer proposing the adjudication of Developer, as a bankrupt or its reorganization under any present or future Federal bankruptcy act or any similar Federal or State law shall be filed in any court and such petition or answer shall not be discharged or denied within 90 days after the filing thereof; or a receiver, trustee or liquidator of Developer, or of the Minimum Improvements, or part thereof, shall be appointed in any proceeding brought against Developer, and shall not be discharged within 90 days after such appointed, or if Developer shall consent to or acquiesce in such appointment. 9.3 City and Authority Events of Default. Subject to Cure Rights and events beyond the City’s and/or the Authority’s control, the failure of the City or the Authority to observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement, and the continuation of such failure for a period of 30 days after written notice of such failure from any party hereto shall be an Event of Default for the City or the Authority. 9.4 Cure Rights. If a Default occurs under Section 9.2(a), (b) or (d) or under Section 9.3 which reasonably requires more than 30 days to cure, such Default shall not constitute an Event of Default, provided that the curing of the Default is promptly commenced upon receipt by the defaulting party of the written notice of the Default, and with due diligence is thereafter continuously prosecuted to completion and is completed within a reasonable period of time, and provided that the defaulting party keeps the non- defaulting party well informed at all times of its progress in curing the Default; provided, however in no event shall such additional cure period for any Default extend beyond 60 days. 9.5 Authority Remedies on Developer Events of Default. Whenever any Event of Default occurs by Developer, the Authority may take any one or more of the following actions: (a) terminate this Agreement; (b) the Authority may suspend interest accrual and/or withhold payments due under the TIF Note until Developer has cured the Default which gave rise to the Event of Default; Execution Draft 33 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 (c) suspend performance under this Agreement until it receives assurances from Developer or the holder of any Mortgage, deemed adequate by the Authority, that Developer or the holder of any Mortgage will cure the Event of Default and continue its performance under this Agreement, (d) withhold the Certificate of Completion where such Event of Default relates to Completion of the Minimum Improvements or the issuance of the Certificate of Completion; (e) take whatever action at law or in equity may appear necessary or desirable to the Authority to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant of Developer under this Agreement; and (f) the Authority shall have all remedies available at law and in equity to enforce performance of this Agreement including a right to specific performance. 9.6 City Remedies on Developer Events of Default. Whenever any Event of Default of Developer occurs, the City may suspend performance of its obligations under this Agreement and take whatever action at law or in equity may appear necessary or desirable to the City to enforce performance and observance of any obligation, agreement, or covenant of Developer under this Agreement, including an action for specific performance. 9.7 Developer Remedies on City or Authority Events of Default. Whenever any Event of Default of the City or the Authority occurs, Developer, may take whatever action at law or in equity may appear necessary or desirable to enforce performance and observance of any obligation, agreement, or covenant of the City or the Authority under this Agreement, including an action for specific performance. 9.8 No Remedy Exclusive. No remedy herein conferred upon or reserved to the City, the Authority or Developer is intended to be exclusive of any other available remedy or remedies unless otherwise expressly stated, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority, the City or Developer to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article X. 9.9 No Additional Waiver Implied by One Waiver. If any agreement contained in this Agreement should be breached by any party and thereafter waived by another party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. 9.10 Reimbursement of Attorneys’ Fees. Whenever a Default occurs and the non-defaulting party shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement under this Agreement, the defaulting party shall, within 10 days of written demand by the non-defaulting party pay to such non- defaulting party the reasonable fees of such attorneys and such other expenses so incurred by non-defaulting party. In the event of any enforcement action hereunder following a Default, the prevailing party, in addition to other relief, shall be entitled to an award of attorney’s fees and costs. The City, Authority and Developer waive their right to a jury trial on the issues of who is the prevailing party and the reasonable amount of attorneys’ fees and costs to be awarded to the prevailing party. Those issues will be decided by the trial judge upon motion by one or both parties, such motion to be decided based on the record as of the end of the jury trial augmented only by the testimony and/or affidavits from the attorneys and their staff. The Execution Draft 34 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 parties agree that, subject to the trial judge’s discretion, the intent of this clause is to have all issues related to the award of attorneys’ fees and costs decided by the trial judge as quickly as practicable. Article X Additional Provisions 10.1 Conflicts of Interest. No member of the Board or other official of the Authority shall have any financial interest, direct or indirect, in this Agreement, the TIF District or the Minimum Improvements, or any contract, agreement or other transaction contemplated to occur or be undertaken thereunder or with respect thereto, nor shall any such member of the governing body or other official participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. No member, official or employee of the City or the Authority shall be personally liable to the City or the Authority in the event of any Default or breach by Developer of any obligations under the terms of this Agreement. 10.2 Titles of Articles and Sections. Any titles of the several parts, Articles and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. 10.3 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by any party to any other shall be in writing and shall be sufficiently given or delivered if it is dispatched by reputable overnight courier, sent registered or certified mail, postage prepaid, return receipt requested, or delivered personally, and addressed to: Developer at: c/o Reuter Walton Development, LLC Attn: Nicholas Walton 4450 Excelsior Boulevard, Suite 400 St. Louis Park, MN 55416 with a copy to: The Northwestern Mutual Life Insurance Company Attention: Real Estate Investment Department 720 East Wisconsin Avenue Milwaukee, WI 53202 The Authority at: Housing and Redevelopment Authority of Edina, Minnesota Attention: Executive Director 4801 West 50th Street Edina, MN 55424 with a copy to: Dorsey & Whitney LLP Attention: Jay R. Lindgren 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402 The City at: City of Edina Attention: City Manager 4801 West 50th Street Edina, MN 55424 with a copy to: Dorsey & Whitney LLP Attention: Jay R. Lindgren Execution Draft 35 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402 or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other, as provided in this section. 10.4 Governing Law, Jurisdiction, Venue and Waiver of Trial by Jury. All matters, whether sounding in tort or in contract, relating to the validity, construction, performance, or enforcement of this Agreement shall be controlled by, interpreted and determined in accordance with the laws of the state of Minnesota without regard to its conflict and choice of law provisions. Any litigation arising out of this Agreement shall be venued exclusively in Hennepin County District Court, Fourth Judicial District, state of Minnesota and shall not be removed therefrom to any other federal or state court. The Authority and Developer hereby consent to personal jurisdiction and venue in the foregoing court. The Authority and Developer hereby waive trial by jury for any litigation arising out of this Agreement. 10.5 Severability. If any term or provision of this Agreement is determined to be invalid or unenforceable under applicable Law, the remainder of this Agreement shall not be affected thereby, and each remaining term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by applicable Law. 10.6 Consents and Approvals. Whenever the terms “consent,” “approve,” or “approval” are used herein, they shall mean consent or approval in a party’s sole discretion, unless specifically provided otherwise. All consents or approvals must be delivered in writing in order to be effective. 10.7 Additional Documents. When reasonably requested to do so by another party, each party shall execute or cause to be executed any further documents as may be reasonably necessary or expedient and within their lawful obligation in order to consummate the transactions provided for in, and to carry out the purpose and intent of, this Agreement. 10.8 Limitation. All covenants, stipulations, promises, agreements and obligations of the Authority or Developer contained in this Agreement shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and Developer, and not of any governing body member, officer, agent, servant, manager or employee of the Authority or Developer in the individual capacity thereof. 10.9 City/Authority Approval. Unless the City Council or the Board, as applicable, determines otherwise in its discretion, all approvals and other actions required of or taken by the Authority or the City shall be effective upon action by the Authorized Representative of the Authority or City, as applicable (or in either case his/her designee), unless (a) this Agreement explicitly provides for approval by the City Council or the Board of the Authority, (b) approval by the Council or Board is required by law or (c) the approval, in the opinion of the City Manager or the Executive Director, would result in a material change in the terms of this Agreement. 10.10 Superseding Effect. This Agreement reflects the entire agreement of the parties with respect to the items covered by this Agreement, and supersedes in all respects all prior agreements of the parties, whether written or otherwise, with respect to the items covered by this Agreement. 10.11 Relationship of Parties. Nothing in this Agreement is intended, or shall be construed, to create a partnership or joint venture among or between the parties hereto, and the rights and remedies of the parties hereto shall be strictly as set forth in this Agreement. Execution Draft 36 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 10.12 Survival of Terms. The following Sections will survive the expiration or earlier termination of this Agreement: Section 6.1 [Insurance]; Section 6.2 [Indemnification]; Sections 9.5 through 9.7 [Remedies on Default] to the extent of any Event of Default arising prior to such termination or expiration; Section 10.3 [Notices and Demands]; Section 10.4 [Governing Law, Jurisdiction, Venue and Waiver of Trial by Jury]; and Section 10.18 [Limited Liability]. 10.13 Data Practices Act. Developer acknowledges that all of the data created, collected, received, stored, used, maintained, or disseminated by Developer with regard to the performance of its duties under this Agreement are subject to the requirements of Chapter 13, Minnesota Statutes. 10.14 No Waiver of Governmental Immunity and Limitations on Liability. Nothing in this Agreement shall in any way affect or impair the City’s or Authority’s immunity or the immunity of the City’s and Authority’s employees, consultants and contractors, whether on account of official immunity, legislative immunity, statutory immunity, discretionary immunity or otherwise. Nothing in this Agreement shall in any way affect or impair the limitations on the City’s or Authority’s liability or the liability of the City’s and Authority’s employees, consultants and independent contractors. By entering into this Agreement, the Authority does not waive any rights, protections, or limitations as provided under law and equity for the Authority, or of their respective employees, consultants and contractors. 10.15 City and Authority Regulatory Authority. Nothing in this Agreement shall be construed to limit or modify the City’s or Authority’s regulatory authority. 10.16 Memorandum of Agreement. Neither party shall cause this Agreement to be recorded or filed in the real estate records of the County. However, Developer shall cause a memorandum of this Agreement to be so recorded or filed in the form attached as Exhibit F, and hereby incorporated herein by reference upon execution of this Agreement upon that portion of the Property owned by Developer. At the time of execution of this Agreement the parties hereto will also execute and acknowledge the Memorandum of Agreement. 10.17 Limited Liability. Notwithstanding anything to contrary provided in this Agreement, it is specifically understood and agreed, such agreement being the primary consideration for the execution of this Agreement by Developer, that (a) there should be absolutely no personal liability on the part of any director, officer, manager, member, employee or agent of Developer or the City or Authority with respect to any terms, covenants and conditions in this Agreement; (b) Developer and the Authority waive all claims, demands and causes of action against the other parties’ directors, officers, managers, members, employees and agents in any Event of Default, by either party, as the case may be, of any of the terms, covenants and conditions of this Agreement to be performed by either party; and (c) Developer and the Authority, as the case may be, shall look solely to the assets of the other party for the satisfaction of each and every applicable remedy in the Event of Default by any party, as the case may be, of any of the terms, covenants and conditions of this Agreement such exculpation of liability to be absolute and without any exception whatsoever. 10.18 Time is of the Essence. Time is of the essence of this Agreement and each and every term and condition hereof; provided, however, that if any date herein set forth for the performance of any obligations by Developer or the Authority or for the delivery of any instrument or notice as herein provided should not be on a business day, the compliance with such obligations or delivery shall be deemed acceptable on the next following business day. 10.19 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Execution Draft 37 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 10.20 Amendments. This Agreement shall not be amended unless in writing and executed by the parties hereto. Developer shall be responsible for obtaining any necessary consent to an amendment to this Agreement from the Construction Lender or Permanent Lender, as applicable. 10.21 Term. The term of this Agreement shall be effective from the Effective Date above written until the earlier of (a) the date this Agreement is terminated pursuant to the terms and conditions hereof, (b) payment in full of the TIF Note, or (c) the date of termination of the TIF District. Upon termination, the parties agree to execute and record a document terminating this Agreement and providing for the release of the obligations under this Agreement. [SIGNATURES APPEAR ON FOLLOWING PAGES] Execution Draft 38 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 IN WITNESS WHEREOF, the City, the Authority and Developer have caused this Agreement to be duly executed in their names and on their behalf, all on or as of the date first above written. CITY OF EDINA, MINNESOTA By: __________________________________ James B. Hovland, Mayor By: __________________________________ Scott H. Neal, City Manager STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _____________, 2021, by James B. Hovland and Scott H. Neal, the Mayor and City Manager, respectively, of the City of Edina, Minnesota, on behalf of the City of Edina. ______________________________________ Notary Public Execution Draft 39 Redevelopment Agreement (4917 Eden Avenue) 4833-8228-6843\11 HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA By: ______________________________ James B. Hovland, Chair By: ______________________________ James Pierce, Secretary STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _______________, 2021, by James B. Hovland and James Pierce, the Chair and Secretary, respectively, of the Housing and Redevelopment Authority of Edina, Minnesota, on behalf of said Authority. ______________________________________ Notary Public Execution Draft [Signature Page to Redevelopment Agreement (4917 Eden Avenue)] 4833-8228-6843\11 EDEN AVENUE GROUP, LLC By: Eden Avenue Partners, LLC, its Manager By: _________________________________________ Name: Nicholas Walton Its: Manager STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___ day of ________________, 2021, by Nicholas Walton, the Manager of Eden Avenue Partners, LLC, a Minnesota limited liability company, the Manager of Eden Avenue Group, LLC, a Delaware limited liability company, on behalf of the company. Notary Public A-1 4820-3049-8044\3 Exhibit A Legal Description of Project Area Tracts A and C, Registered Land Survey No. 1501, Hennepin County, Minnesota B-1 4891-1861-9392\1 Exhibit B Project Plans [See attached.] ':'16,19",19"21("1(&770+"((5 &3 &&&&%,775$,/6,*1),%(5237,&%,780,1286%,780,1286:LOOVRQ5RDG(GHQ$YHQXH*URXS *URXS *URXS *URXS *URXS *URXS *URXS *URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS *URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS *URXS*URXS*URXS *URXS*URXS *URXS*URXS *URXS *URXS *URXS*URXS*URXS*URXS*URXS *URXS *URXS *URXS *URXS *URXS *URXS *URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS *URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS*URXS *URXS*URXS*URXS *URXS*URXS *URXS*URXS *URXS *URXS *URXS*URXS*URXS*URXS*5$3+,&/(*(1' &,367$1'$5'*5$<&21&5(7(%5220),1,6+('7<3785)*5$66 62',55,*$7(' 6((63(& 3/$17,1*%('685)$&,1* 52&.08/&+0,175$352&.&/($13/$17,1*%('685)$&,1* +$5':22'08/&+0,17<3&,3&2/25('&21&5(7( % &(06721( 025&+(//$*2/'&3&/ %5220),1,6+('7<36+257*5$6635$,5,(6(('0,;7%'&,3&2/25('&21&5(7( $ &(06721( +$5%250,67&3&/ %5220),1,6+('7<33('(67$/3$9(56<67(0:$86$87,/( 6721(<&5((.6& :;/'2*5813($*5$9(/&/($10,1'(37+7<3///////////////////////////////// ////// //////////////////////////////////////.(<127(6 758(1257+3/$11257+GArchitectureInterior DesignLandscape ArchitectureEngineeringBKVROUP222 North Second StreetLong & Kees Bldg Suite 101Minneapolis, MN 55401612.339.3752www.bkvgroup.com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rchitectureInterior DesignLandscape ArchitectureEngineeringBoarmanKroosVogelGroupInc.EOELicense NumberI hereby certify that this plan, specificationor report was prepared by me or under mydirect supervision and that I am a dulyLicensed Professionalunder the laws of the State of Minnesota.BKVTB-30x42EngineerDateXX/XX/XXXX24440Michael J. St. Martin, PELOUCKS7200 Hemlock Lane, Suite 300Maple Grove, MN 55369763.424.5505www.loucksinc.comPLANNINGCIVIL ENGINEERINGLAND SURVEYINGLANDSCAPE ARCHITECTUREENVIRONMENTALLOUCKS PROJECT NO. 21081.00© 2016 BKV Group, Inc. EOESHEET NUMBERSHEET TITLEDRAWN BYCHECKED BYCOMMISSION NUMBERISSUE # DATE DESCRIPTIONPROJECT TITLECONSULTANTSNOT FORCONSTRUCTIONCERTIFICATIONDATE4917 EDEN AVE.21081.0007/02/2021JBTMJSOWNER/DEVELOPER03/12/2021 PRELIMINARY DESIGN07/02/2021 SCHEMATIC DESIGN09/10/2021DESIGNDEVELOPMENT SET10/05/2021FINALDEVELOPMENT SETEXISTING UTILITIES. THEY SHALL COOPERATE WITH ALL UTILITY COMPANIES INTHE ABOVE WHEN DAMAGED DURING CONSTRUCTION AT NO COST TO THESTRUCTURES BEFORE DIGGING. THE CONTRACTOR SHALL REPAIR OR REPLACEWIRES, CABLES, CONDUITS, PIPES, MANHOLES, VALVES OR OTHER BURIEDTHE CONTRACTOR SHALL CONTACT GOPHER STATE ONE CALL AT 651-454-0002MAINTAINING THEIR SERVICE AND / OR RELOCATION OF LINES.OWNER.THE CONTRACTOR SHALL BE RESPONSIBLE FOR CALLING FOR LOCATIONS OF ALL WARNING:AT LEAST 48 HOURS IN ADVANCE FOR THE LOCATIONS OF ALL UNDERGROUNDGopher State One CallSITE PLANC2-1REQUIRED SURFACE ACCESSIBLE PARKING: xxx STALLS**REQUIRED MINIMUM NUMBER OF ACCESSIBLE SPACES FOR 101-150 STALLSSURFACE ACCESSIBLE PARKING: xxx STALLSACCESSIBLE PARKINGOFF-STREET PARKING CALCULATIONSPROPOSED SURFACE PARKING PROVIDED: 37 STALLSSITE NOTES1. ALL PAVING, CONCRETE CURB, GUTTER AND SIDEWALK SHALL BE FURNISHED AND INSTALLEDIN ACCORDANCE WITH THE DETAILS SHOWN PER THE DETAIL SHEET(S) AND STATE/LOCALJURISDICTION REQUIREMENTS.2. ACCESSIBLE PARKING AND ACCESSIBLE ROUTES SHALL BE PROVIDED PER CURRENT ADASTANDARDS AND LOCAL/STATE REQUIREMENTS.3. ALL CURB DIMENSIONS SHOWN ARE TO THE FACE OF CURB UNLESS OTHERWISE NOTED.4. ALL BUILDING DIMENSIONS ARE TO THE OUTSIDE FACE OF WALL UNLESS OTHERWISE NOTED.5. TYPICAL FULL SIZED PARKING STALL IS 9' X 18' WITH A 24' WIDE TWO WAY DRIVE UNLESSOTHERWISE NOTED.6. ALL CURB RADII SHALL BE 3.0' UNLESS OTHERWISE NOTED.7. BITUMINOUS IMPREGNATED FIBER BOARD TO BE PLACED AT FULL DEPTH OF CONCRETEADJACENT TO EXISTING STRUCTURES AND BEHIND CURB ADJACENT TO DRIVEWAYS ANDSIDEWALKS.8. SEE SITE ELECTRICAL PLAN FOR SITE LIGHTING.CURRENT ZONING: xxxPROPOSED ZONING: xxxBUILDING SETBACK: xxxTOTAL PROPERTY AREA: 2.08 AC.AREA OF DISTURBANCE: 2.58 AC.EXISTING IMPERVIOUS AREA: 1.82 ACPROPOSED IMPERVIOUS AREA: 1.48 AC.SITE DATASITE PLAN LEGENDCONCRETE SIDEWALKBITUMINOUS PAVEMENTHEAVY DUTY BITUMINOUS PAVEMENTHEAVY-DUTY CONCRETE PAVEMENTCONCRETE PAVEMENTSPECIALTY LANDSCAPE PAVINGNSCALE IN FEET020 40SCALE IN FEET020 40NN 8383$$''((-%( 67$,5$3$(/(9$725$(/(9$725&(/(9$725%67$,5%3%83/2:(5/(9(/3$5.,1*3$$$$(/(&75,&$/ 0(&+30(&+(;+$86733%3$39(67,%8/(39(67,%8/(33 5$03:,'7+ 9(+,&/( '5,9($,6/( '5,9($,6/( '5 ,9 ($,6 /( 6 7$// )& +26(%,%$$9(+,&/(5$03 .%%$$%%/%&%%' &(&&&'&%&$++**&&))&&%% $$$&$(%%%$&&&&$$ +%$%)'%25$03)')')')')')')')')')')')')')')''5,9($,6/( $$$ $5($:(//$$$' 6 000$/,*1(1'2):$//:,7+'5,9($,6/( 00$,17(1$1&(33$/,*1$/,*1&(17(5:$//21&2/801000(&+$1,&$/(;+$867%)&&758(1257+3/$11257+GArchitectureInterior DesignLandscape ArchitectureEngineeringBKVROUP222 North Second StreetLong & Kees 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87,/,7<67$&.,1* 5811,1*%21'/(9(/ /(9(/ /(9(/3 /(9(/ /(9(/ 522) /(9(/ /(9(/ /(9(/ FSDG-1DCMU-1 $(/(9(/ /(9(/ /(9(/ /(9(/ 522) /(9(/ /(9(/ /(9(/ FBR-1FSDG-1STN-1 $($($(GArchitectureInterior DesignLandscape ArchitectureEngineeringBKVROUP222 North Second StreetLong & Kees Bldg Suite 101Minneapolis, MN 55401612.339.3752www.bkvgroup.com%.9*URXS6+((7180%(56+((77,7/('5$:1%<&+(&.('%<&200,66,21180%(5352-(&77,7/(&2168/7$176&(57,),&$7,21%,0 B (GHQ$YHB (GHQ$YHB$,BUYW $0%0=-'($(;7(5,25(/(9$7,216 ('(1$9($ &2857<$5'6287+(/(9$7,21$ ($67(/(9$7,21$ ($67(/(9$7,21(;7(5,25(/(9$7,21.(<127(6$( 35(),1,6+('0(7$/5$,/,1*$( 35(),1,6+('0(7$/%$/&21<$( 35(),1,6+('0(7$/&$123< %$6,62)'(6,*1 0$3(6 &2/25720$7&+03$( 35(),1,6+('0(7$/&23,1*&2/25720$7&+),%(5&(0(173$1(/$( 0$*,&3$&./289(56&2/25720$7&+$'-$&(17),%(5&(0(173$1(/$( ,168/$7('6(&7,21$/29(5+($'*$5$*('225&2/25720$7&+:,1'2:)5$0($( ),5(75($7('/80%(53(5*2/$$( %5,&.62/',(5&2856,1*$( 35(),1,6+('0(7$/&23,1*&2/25720$7&+%5,&.$( :$//02817('/,*+7),;785($( %5,&.'(7$,/,1*5()(572(1/$5*('(/(9$7,21621$$( ),%(5&(0(17'(7$,/,1*5()(572(1/$5*('(/(9$7,21621$$ 6287+(/(9$7,21-2*$ &2857<$5'6287+(/(9$7,21-2*,668( '$7('(6&5,37,21 6'6(7 '(6,*1'(9(/230(176(7 ),1$/'(9(/230(173/$1 3(50,76(7 C-1 4891-1861-9392\1 Exhibit C TIF Pro Forma [See attached.] 196 Mixed-Income Apts; 3,439 (sf) Commercial Space Debt A: First Mortgage 53,593,545 63.0%273,436 Subtotal 53,593,545 63.0%273,436 Category Equity 26,375,574 31.0%134,569 Equity 5,100,000 6.0%26,020 Subtotal 31,475,574 37.0%160,590 TOTAL SOURCES 85,069,119 100.0% 434,026 Amount % of Cost Per Unit ACQUISITION COSTS 12,000,000 14.1% 61,224 Land Cost $132.53 psf 12,000,000 14.1% 61,224 CONSTRUCTION COSTS 60,307,999 70.9% 307,694 Residential Building 44,685,619 52.5% 227,988 Underground and Surface Parking $44,002 per 277 stall 12,188,680 14.3% 62,187 Tenant Improvements: 1. Comm Space $97.03 psf 333,700 0.4% 1,703 200,000 0.2% 1,020 350,000 0.4% 1,786 Construction Contingency 2,550,000 4.2%13,010 SOIL REMEDIATION / CORRECTION 750,000 0.9% 3,827 750,000 0.9% 3,827 PERMITS/FEES 1,440,140 1.7% 7,348 878,080 1.0% 4,480 487,060 0.6% 2,485 75,000 0.1%383 PROFESSIONAL SERVICES 3,385,000 4.0% 17,270 10,000 0.0%51 1,500,000 1.8% 7,653 500,000 0.6% 2,551 90,000 0.1%459 600,000 0.7% 3,061 300,000 0.4% 1,531 75,000 0.1%383 310,000 0.4% 1,582 FINANCING COSTS 4,290,980 5.0% 21,893 1,200,000 1.4% 6,122 1,665,980 2.0% 8,500 1,400,000 1.6% 7,143 25,000 0.0%128 DEVELOPER FEE 2,895,000 3.4% 14,770 Developer Fee 2,895,000 3.4% 14,770 TOTAL USES 85,069,119 100% 434,026 Exhibit C - TIF Pro Forma Eden Avenue Redevelopment City of Edina Sources and Uses Detail S&UOther Sources Sources Percent Per Unit Percent Per Unit SOURCES AmountDebt USES Amount Site Prep and Plaza Builder's Risk Soil Remediation & Correction Work Appraisals Architectural, Engineering & Design Fees Lender Draw Fees Captial Origination, Closing & Prop Taxes Construction/Lease Up Period Interest Post-Completion Period Interest FF&E Legal - Development Marketing/Leasing Other - TIF Local SAC/WAC Connection Fees Met Council Sewer Access Connection Capital Partner TIF Supported Developer Equity Development Expense - Legal / Partner Eng Soft Cost Contingency Platting & Survey 10/20/2021 Eden Avenue Redevelopment City of Edina Baseline Operating Pro Forma Residential Income Rental Unit Income Monthly Unit Annual Size Rent/ Unit Type Rent Type Rent Count Revenue Sq. Ft.Sq. Ft. Studio Market Rate $1,650 22 $435,600 525 $3.14 Studio Affordable $696 4 $33,408 525 $1.33 1BR Market Rate $2,150 52 $1,341,600 705 $3.05 1BR Affordable $754 10 $90,480 705 $1.07 2BR Market Rate $3,200 63 $2,419,200 1,084 $2.95 2BR Affordable $936 6 $67,392 1,084 $0.86 2BR - Den Market Rate $3,500 30 $1,260,000 1,292 $2.71 Penthouse Market Rate $5,450 9 $588,600 1,470 $3.71 Gross Potential Rent 519,690 196 $6,236,280 184,146 $2.82 Mkt Rate Only: $2.99 Aff Only: $1.02 # of Stalls Annual $ Per Stall Other Residential Income (if available)Revenue Per Month Underground Parking 277 $515,220 $155 $93,100 Total Other Income $608,320 Total Residential Income $6,844,600 Annual Residential Vacancy Percent Loss Gross Potential Rent 5.0%($311,814) Underground Parking 5.0%($25,761) Other 5.0%($4,655) Total Vacancy ($342,230) Net Residential Income $6,502,370 Commercial Income Rent Annual Commercial Space Per Sq/Ft Revenue Sq/Ft $25.00 $85,975 3,439 Total Commercial Rent $85,975 3,439 Total Annual Per Expense on Commercial Space (if applicable)Cost Sq/Ft Property Taxes (Commercial Portion Only)$31,317 9.11 Total Expenses on Commercial Space $31,317 9.11 Net Commercial Income $117,292 $6,619,662 Expenses Apartment Operating Costs Amount Per Unit $333,200 $1,700 $147,000 $750 $98,000 $500 $102,900 $525 $53,900 $275 $81,340 $415 $107,800 $550 Total Operating Costs $924,140 $4,715 Apartment Management, Taxes, & Reserves Amount Per Unit Management Fees 3.10% Res EGI $201,573 $1,028 Property Taxes $838,847 $4,280 Replacement Reserves $58,800 $300 Total Management and Other Costs $1,099,220 $5,608 Total Rental Unit Expenses $2,023,360 $10,323 Commercial Space Amount Per Sf Other:$31,317 $9.11 Total Commercial Space Expenses $31,317 $9.11 $2,054,677 $10,323 Net Operating Income (NOI)$4,564,985 196 Mixed-Income Apts; 3,439 (sf) Commercial Space 1. Comm Space Other Payroll Leasing & Marketing Utilities Effective Gross Income (EGI) Insurance Turnover Maintenance / Repair Other - Common Area Expenses Total Expenses Property Tax Eden Avenue Redevelopment City of Edina 196 Mixed-Income Apts; 3,439 (sf) Commercial Space Stabilized Operating Proforma and Cash-on Cash Return Stabilized Income Year 1 Year 2 Rental Income Gross Potential Rent 6,236,280 6,361,006 Less: 5.0% Stabilized Vacancy (311,814) (318,050) Less: Additional Pre-stabilization Vacancy (35%)(2,182,698) Total Rental Income 3,741,768 6,042,955 Other Residential Income Vacancy Rate Underground Parking 5.0%515,220 525,524 Other 5.0%93,100 94,962 Less: Vacancy (30,416) (31,024) Less: Additional Pre-stabilization Vacancy (35%)(182,496) Total Other Residential Income 395,408 589,462 Net Residential Income (NRI)4,137,176 6,632,417 Commercial Income Every Year @ 85,975 119,638 Less: Commercial Vacancy (34,390)0 Net Commercial Income 51,585 119,638 Effective Gross Income (EGI)4,188,761 6,752,055 Expenses Year 1 Year 2 Rental Unit Expenses Operating Expenses 924,140 942,623 Management Fee: 3.1% Res EGI Fixed to EGI 125,663 209,314 Property Taxes 104,924 838,847 Reserves: $300 Per Unit PY No Inflation 58,800 58,800 Total Rental Unit Expenses 1,213,527 2,049,584 Commercial Space Expenses Total Expenses - Property Taxes 0 31,317 Total Commercial Expenses 0 31,317 Total Expenses 1,213,527 2,080,901 NET OPERATING INCOME 2,975,234 4,671,155 Tax Increment Financing Revenue Inflator:0 458,513 ADJUSTED NET OPERATING INCOME 2,975,234 5,129,668 Returns Analysis Cash on Cost Annual Return 3.50% 6.03% Cash on Cost Annual Return (w/o TIF assistance)3.50%5.49% Total Development Cost: 85,069,119 6.03% Market Return Rate (Cash on Cost) Target: 5,129,668 Stabilized Net Operating Income (NOI): 4,671,155 A) Annual NOI Financing Gap: 458,513 B) Max TIF Available (70%): 486,543 Annual TIF Payment (Lesser of A or B): 458,513 D-1 4831-9538-0988\5 Exhibit D Form of Go-Ahead Letter [EDEN AVENUE GROUP LETTERHEAD] [Date] City Manager/City of Edina Executive Director/ Housing and Redevelopment Authority of Edina, MN 4801 West 50th Street Edina, Minnesota 55424 Dear [______]: This letter is submitted pursuant to Section 4.5 of that certain Redevelopment Agreement by and among the CITY OF EDINA, MINNESOTA, a Minnesota statutory city (the “City”); the HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the “Authority”); and EDEN AVENUE GROUP, LLC, a Delaware limited liability company (the “Developer”), dated as of November 3, 2021 (the “Redevelopment Agreement”), and is provided as the “Go-Ahead Letter” thereunder. Capitalized terms used in this letter and not defined herein have the meaning given to them in the Redevelopment Agreement. In accordance with Section 4.5 of the Redevelopment Agreement, Developer hereby represents, warrants, and certifies to the City and the Authority that: (i) the debt and equity Financing Commitments have been received by Developer and true and correct copies of the same are attached hereto as Exhibit A; (ii) the organizational chart of Developer attached hereto as Exhibit B includes the identity (including name, city and state of each) of all equity sources with greater than a 10% direct or indirect investment in the Project and the identity (including name, city and state of each) of all individuals and entities with direct or indirect management control of Developer; (iii) true and correct copies of the final purchase agreement and other land acquisition documents related to Developer’s acquisition of the Project Area are attached hereto as Exhibit C, and (iv) Developer is prepared to proceed with the construction of the Minimum Improvements, in accordance with the Redevelopment Agreement. Sincerely, EDEN AVENUE GROUP, LLC, a Delaware limited liability company By: Eden Avenue Partners, LLC, its Manager By: _________________________________________ Name: _______________________________________ Its: __________________________________________ D-2 4831-9538-0988\5 Exhibit A Financing Commitments (See attached) D-3 4831-9538-0988\5 Exhibit B Organizational Chart of Developer (See attached) D-4 4831-9538-0988\5 Exhibit C Final Purchase Agreement and Land Acquisition Documents (See attached) E-1 4847-9479-0397\3 Exhibit E Form of Certificate of Completion with Completion Checklist CERTIFICATE OF COMPLETION (4917 Eden Avenue) A. EDEN AVENUE GROUP, LLC, a Delaware limited liability company (“Developer”), pursuant to the Redevelopment Agreement by and among the CITY OF EDINA, MINNESOTA, a Minnesota statutory city (the “City”), the HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA (the “Authority”) and Developer dated effective as of November 3, 2021 (as the same may be amended or supplemented from time to time, the “Redevelopment Agreement”), which Redevelopment Agreement is evidenced of record by that certain Memorandum of Redevelopment Agreement dated ____________, 2021 and recorded on ________________, 2021 in the office of the Registrar of Titles for Hennepin County, Minnesota as Document No. ____________, has agreed to complete the Project, as defined in and in accordance with the Redevelopment Agreement, on that certain real property (the “Property”) located in Hennepin County, Minnesota, described on the attached Exhibit A. B. As of the date hereof, Developer has completed construction of the Minimum Improvements in accordance with the Redevelopment Agreement. C. The issuance of this Certificate of Completion by the City and the Authority is not intended nor shall it be construed to be a warranty or representation by the City or the Authority as to the structural soundness of the Minimum Improvements, including, but not limited to, the quality of materials, workmanship or the fitness of the Minimum Improvements for their proposed use. NOW THEREFORE, this is to certify that all construction and other physical improvements specified to be done and made by Developer with regard to the Minimum Improvements have been completed, and the provisions of the Redevelopment Agreement imposing obligations on Developer to construct the Minimum Improvements, are hereby satisfied and terminated, and the Registrar of Titles in and for the County of Hennepin, Minnesota is hereby authorized to record this instrument to be a conclusive determination of the satisfactory termination of said provisions of the Redevelopment Agreement. Dated: ______________, 20___ [Remainder of page intentionally left blank; signature pages follow] E-2 [Signature Page to Certificate of Completion] 4847-9479-0397\3 CITY OF EDINA, MINNESOTA By _______________________________________ _____________________, Mayor By _______________________________________ _____________________, City Manager STATE OF MINNESOTA ) )ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _____________, 202___, by ___________ and ___________, the Mayor and City Manager, respectively, of the City of Edina, Minnesota, on behalf of the City of Edina. Notary Public E-3 [Signature Page to Certificate of Completion] 4847-9479-0397\3 HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA By _______________________________________ _____________________, Chair By _______________________________________ _____________________, Secretary STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _____________, 20___, by ___________ and ___________, the Chair and Secretary, respectively, of the Housing and Redevelopment Authority of Edina, Minnesota, on behalf of said Authority. Notary Public THIS DOCUMENT WAS DRAFTED BY: Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402-1498 E-4 [Exhibit A to Certificate of Completion] 4847-9479-0397\3 Exhibit A Legal Description of the Property Tracts A and C, Registered Land Survey No. 1501, Hennepin County, Minnesota E-5 4847-9479-0397\3 Certificate of Completion Checklist (4917 Eden Avenue) This is a summary of the deliverable requirements of the Redevelopment Agreement (4917 Eden Avenue) dated November 3, 2021. This sheet is intended to be completed in connection with Developer’s request for a Certificate of Completion and prior to the issuance of the TIF Note. This sheet is provided for convenience and does not modify the terms of the Redevelopment Agreement. PART ONE Description of Required Minimum Improvements Satisfactorily Completed (yes or no) Notes A. Completion* of 2 levels of below-grade parking B. Completion* of 7-story mixed-use building at 4917 Eden Ave. with approximately 176 market rate units, 20 affordable units and 3,400 square feet of commercial space C. Completion * of surface Public Parking D. Completion** of all site work E. Completion ** of Sidewalks and Streetscapes *As evidenced by CO or TCO by Building Department **As evidenced by acceptance of site and street improvements by Engineering and/or Community Development Departments PART TWO Description of Required Public Benefits Satisfactorily Completed (yes or no) Notes A. Public Access Easement for Sidewalks and Streetscapes* B. Permanent easement and acquisition right for Future City Land* C. Parking Easement for Public Parking areas* D. Equity and Diversity Report E. Restrictive Covenant for Affordable Housing* F. First Right of Purchase (Affordable Units)* *Documents must be executed and recorded CONTINUED ON NEXT PAGE E-6 4847-9479-0397\3 PART THREE Description of Final Costs Incurred and Gap Analysis Confirmed Amounts Notes A. Confirmation that no Default remains uncured. Yes or No B. Confirmation that Developer has submitted final TIF Pro Forma to reflect actual costs Yes or No C. Total Amount of Qualified Costs (see 3.2(a)) confirmed as expended $ Estimated to be $____ D. Total Development Costs of Minimum Improvements $ Estimated to be $85,069,119 E. Total Amount grant funds received $ F. Final financial gap to provide Market Return $ NTE 6.03% G. Principle Amount of Original TIF Note $ NTE lowest of $5.1 million or 6.10% of Total Development Cost Certificate of Completion Checklist – 4917 Eden Avenue Prepared by: ________________________________________ ___________________ Signature and Title Date Approved by: ________________________________________ ___________________ Signature, Date Edina City Manager / HRA Executive Director F-1 4842-1088-0764\1 Exhibit F Form of Memorandum of Redevelopment Agreement Memorandum of Redevelopment Agreement This Memorandum of Redevelopment Agreement (this “Memorandum”) is entered into as of November 3, 2021, by and among the City of Edina Minnesota, a Minnesota statutory city (the “City”), the Housing and Redevelopment Authority of Edina, Minnesota, a public body corporate and politic organized and existing under the laws of the State of Minnesota (“Authority”), and Eden Avenue Group, LLC, a Delaware limited liability company (“Developer”). RECITALS: A. The City, Authority, and Developer (collectively, the “Parties”) have entered into a certain Redevelopment Agreement dated as of November 3, 2021 (as the same may be amended, modified, and/or supplemented from time to time, the “Redevelopment Agreement”), whereby the parties have agreed to various aspects of the redevelopment of certain real property more particularly described on the attached Exhibit A, together with all improvements, tenements, easements, rights and appurtenances pertaining to such real property, lying and being in Hennepin County, Minnesota (the “Property”). B. The parties wish to give notice of the existence of the Redevelopment Agreement. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. The above recitals are incorporated by reference as if fully set forth herein. 2. Capitalized terms, when not defined herein, shall have the meanings ascribed to them in the Redevelopment Agreement. 3. The Parties have entered into the Redevelopment Agreement to set forth the terms and provisions governing the redevelopment of the Property. 4. This Memorandum has been executed and delivered by the Parties for the purpose of recording and giving notice that a contractual relationship for the redevelopment of the Property has been created between the Parties in accordance with the terms, covenants, and conditions of the Agreement. The Parties intend, declare and covenant, on behalf of themselves and all future owners and operators of the Property, that the Redevelopment Agreement and the covenants and restrictions set forth therein regulating and restricting the use, occupancy and transfer of the Property (a) shall be and are covenants running with the Property, encumbering the Property, binding upon the Parties’ successors in title and all subsequent owners and operators of the Property; (b) are not merely personal covenants of the Parties; and (c) shall bind the Parties and their respective successors and assigns. 5. The terms and conditions of the Agreement are incorporated by reference into this Memorandum as if fully set forth herein. 6. This Memorandum may be executed separately in counterparts which, when taken together, shall constitute one and the same instrument. [Remainder of page left blank intentionally; signature pages follow] F-2 [Signature Page to Memorandum of Redevelopment Agreement (4917 Eden Avenue)] 4842-1088-0764\1 IN WITNESS WHEREOF, the Parties have executed this Memorandum as of the date first written above. CITY OF EDINA, MINNESOTA By: __________________________________ James B. Hovland, Mayor By: __________________________________ Scott H. Neal, City Manager STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _____________, 2021, by James B. Hovland and Scott H. Neal, the Mayor and City Manager, respectively, of the City of Edina, Minnesota, on behalf of the City of Edina. ____________________________________________ Notary Public F-3 [Signature Page to Memorandum of Redevelopment Agreement (4917 Eden Avenue)] 4842-1088-0764\1 HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA By: ______________________________ James B. Hovland, Chair By: ______________________________ James Pierce, Secretary STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _______________, 2021, by James B. Hovland and James Pierce, the Chair and Secretary, respectively, of the Housing and Redevelopment Authority of Edina, Minnesota, on behalf of said Authority. ____________________________________________ Notary Public F-4 [Signature Page to Memorandum of Redevelopment Agreement (4917 Eden Avenue)] 4842-1088-0764\1 EDEN AVENUE GROUP, LLC By: Eden Avenue Partners, LLC, its Manager By: _________________________________________ Name: Nicholas Walton Its: Manager STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___ day of ________________, 2021, by Nicholas Walton, the Manager of Eden Avenue Partners, LLC, a Minnesota limited liability company, the Manager of Eden Avenue Group, LLC, a Delaware limited liability company, on behalf of the company. ____________________________________________ Notary Public THIS DOCUMENT WAS DRAFTED BY: Dorsey & Whitney LLP 50 South Sixth Street Suite 1500 Minneapolis, MN 55402-1498 F-5 [Exhibit A to Memorandum of Redevelopment Agreement (4917 Eden Avenue)] 4842-1088-0764\1 Exhibit A Legal Description Tracts A and C, Registered Land Survey No. 1501, Hennepin County, Minnesota G-1 4838-6280-7804\4 Exhibit G Form of TIF Note LIMITED REVENUE TAXABLE TAX INCREMENT NOTE (4917 Eden Avenue) No. R-_____ $[__________] UNITED STATES OF AMERICA STATE OF MINNESOTA CITY OF EDINA HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA LIMITED REVENUE TAXABLE TAX INCREMENT NOTE The HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA (the “Authority”) acknowledges itself to be indebted and, for value received, promises to pay to the order of EDEN AVENUE GROUP, LLC, a Delaware limited liability company, or its assigns (“Developer”), solely from the source, to the extent and in the manner hereinafter provided, up to the principal amount of this Limited Revenue Taxable Tax Increment Note (this “Note”) as provided herein, together with simple interest thereon accrued on the unpaid principal balance hereof from the date hereof, at the rate of interest of [________________] percent ([____]%) per annum, on the Payment Dates (as hereinafter defined). This Note is executed and delivered in accordance with the terms and conditions of that certain Redevelopment Agreement dated as of November 3, 2021, by and among the City of Edina, Minnesota (the “City”), the Authority and Developer (as the same may be amended, modified, and/or supplemented from time to time, the “Redevelopment Agreement”), and is subject to the terms, conditions, and limitations on payment set forth therein, including, without limitation, the provisions of Section 3.4 (TIF Assistance and Potential Adjustment) of the Redevelopment Agreement. Capitalized terms used herein and not otherwise defined herein shall have the meaning given to them in the Redevelopment Agreement. Each payment on this Note is payable in any coin or currency of the United States of America which on the date of such payment is legal tender for public and private debts and shall be made by check or draft made payable to Developer and mailed to Developer at its postal address within the United States which shall be designated from time to time by Developer. This Note is a special and limited obligation and not a general obligation of the Authority, which has been issued by the Authority pursuant to, and in full conformity with, the Constitution and the laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 through 469.1794 (the “TIF Act”), and the terms and conditions of the Redevelopment Agreement and a resolution of the Board of the Authority, to aid in financing a “project” (as defined in Minnesota Statutes, Section 469.174, subdivision 8) of the Authority within the Eden / Willson Tax Increment Financing District established by the Authority pursuant to Resolution No. 2021-12 (the “TIF District”). G-2 4838-6280-7804\4 The maximum principal amount of this Note attributable to Qualified Redevelopment Costs shall not exceed $[_________________]. Subject to Section 3.4 of the Redevelopment Agreement, if the Updated TIF Pro Forma demonstrates a return on the Minimum Improvements exceeding the Market Return Rate, Developer shall surrender this Note upon the issuance of a new TIF Note. Subject to the terms of the Redevelopment Agreement, principal of and interest on this Note shall be payable solely from and in the amount of Available Tax Increments (as hereinafter defined) on each February 1 and August 1 commencing on the first February 1 or August 1 immediately following the date hereof (the “Payment Dates”). On each Payment Date, the Authority shall apply Available Tax Increments to the payment of principal of and interest on this Note in an amount not to exceed the amount necessary to provide the Market Return Rate (the “Payment Amount”); provided, however, that in the event that Available Tax Increments is not sufficient to pay when due the Payment Amount, the failure of the Authority to pay the Payment Amount on any Payment Date shall not constitute a default under this Note as long as the Authority pays the Payment Amount to the extent of Available Tax Increments. To the extent that the Authority is unable to pay the total principal and interest due on this Note at or prior to [_________] 1, 20[__] [to be the Payment Date immediately preceding the 15th anniversary of the Authority’s first receipt of Tax Increments] (the “Maturity Date”) hereof as a result of its having received as of such date insufficient Available Tax Increments, such failure shall not constitute a default under this Note and the Authority shall have no further obligation to pay unpaid balance of principal or accrued interest that may remain after such Maturity Date. All payments made by the Authority on this Note shall be applied first to accrued interest and then to the principal amount of this Note. Interest shall be computed on the basis of a year of 360 days and charged for actual days principal is unpaid. “Available Tax Increments” means up to 70% of the Tax Increments generated from the Project Area received and retained by the Authority from the County of Hennepin, Minnesota, pursuant to the TIF Act, for the six months before each Payment Date. EXCEPT AS TO THE OBLIGATION TO MAKE PAYMENTS FROM THE AVAILABLE TAX INCREMENTS, THIS NOTE IS NOT A DEBT OF THE AUTHORITY, THE CITY, OR THE STATE OF MINNESOTA (THE “STATE”), AND NEITHER THE AUTHORITY, THE CITY, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THIS NOTE, NOR SHALL THIS NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX INCREMENTS. Upon an Event of Default by Developer under the Redevelopment Agreement, the Authority may exercise the remedies with respect to this Note described in the Redevelopment Agreement, the terms of which are incorporated herein by reference, including, without limitation, the suspension or termination of the Authority’s obligation to make any payments under this Note. For avoidance of doubt, the terms of Redevelopment Agreement incorporated herein by the foregoing reference, shall, for purposes of this Note, survive any termination of the Redevelopment Agreement occurring after the issuance of this Note. The principal sum and all accrued interest payable under this Note is prepayable in whole or in part at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Note. G-3 4838-6280-7804\4 The outstanding principal balance due under this Note shall be subject to redemption and prepayment, in whole or in part, at the option of the Authority and, if redemption is in part, installments of principal shall be applied to reduce the principal to become due on this Note in inverse order of maturity, or, at the written direction of the Authority, pro rata from each maturity. Developer shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or the City or any other public body, and neither the Authority nor the City nor any director, commissioner, council member, board member, officer, employee or agent of the Authority or the City, nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. THE AUTHORITY MAKES NO REPRESENTATION, COVENANT, OR WARRANTY, EXPRESS OR IMPLIED, THAT THE AVAILABLE TAX INCREMENTS WILL BE SUFFICIENT TO PAY, IN WHOLE OR IN PART, THE PRINCIPAL OF AND INTEREST ON THIS NOTE. NO HOLDER OF THIS NOTE SHALL HAVE RIGHTS AGAINST THE AUTHORITY EXCEPT FOR DISTRIBUTION OF AVAILABLE TAX INCREMENTS. Except as otherwise provided in the Redevelopment Agreement, this Note shall not be assignable or transferable without the prior written consent of the Authority; provided, however, that such consent shall not be unreasonably withheld. Any assignee or transferee must execute and deliver to the Authority a certificate, in form and substance reasonably satisfactory to the Authority, pursuant to which, among other things, such assignee or transferee acknowledges and represents: (a) the assignee or transferee delivers to the Authority a written instrument acknowledging the limited nature of the Authority’s payment obligations under this Note, and (b) the assignee or transferee executes and delivers to the Authority a certificate, in form and substance reasonably satisfactory to the Authority, pursuant to which, among other things, such assignee or transferee represents (i) that this Note is being acquired for investment for such assignee’s or transferee’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, (ii) that the assignee or transferee has no present intention of selling, granting any participation in, or otherwise distributing the same, (iii) that the assignee or transferee is an “accredited investor” within the meaning of Rule 501 of the Regulation D under the Securities Act of 1933, as amended, (iv) that the assignee or transferee, either alone or with such assignee’s or transferee’s representatives, has knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of the prospective investment in this Note and the assignee or transferee is able to bear the economic consequences thereof, (v) that in making its decision to acquire this Note, the assignee or transferee has relied upon independent investigations made by the assignee or transferee and, to the extent believed by such assignee or transferee to be appropriate, the assignee’s or transferee’s representatives, including its own professional, tax and other advisors, and has not relied upon any representation or warranty from the Authority, or any of its officers, employees, agents, affiliates or representatives, with respect to the value of this Note, (vi) that the Authority has not made any warranty, acknowledgment or covenant, in writing or otherwise, to the assignee or transferee regarding the tax consequences, if any, of the acquisition and investment in this Note, (vii) that the assignee or transferee or its representatives have been given a full opportunity to examine all documents and to ask questions of, and to receive answers from, the Authority and its representatives concerning the terms of this Note and such other information as the assignee or transferee desires in order to evaluate the acquisition of and investment in this Note, and all such questions have been answered to the full satisfaction of the assignee or transferee, (viii) that the assignee or transferee has evaluated the merits and risks of investment in this Note and has determined that this Note is a suitable investment for the assignee or transferee in light of such party’s overall financial condition and prospects, (ix) that this Note will be characterized as “restricted securities” under the federal securities laws because this Note is being acquired in a transaction not involving a public offering and that under such laws and applicable regulations such securities may not be resold without registration under the Securities Act of 1933, as G-4 4838-6280-7804\4 amended, except in certain limited circumstances, and (x) that no market for this Note exists and no market for this Note is intended to be developed. This Note is issued pursuant to the Resolution of the Board of the Authority and is entitled to the benefits thereof, which Resolution is incorporated herein by reference. 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 have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority or the City outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority or the City to exceed any constitutional or statutory limitation thereon. [Remainder of this page intentionally left blank; signatures on following page] G-5 4838-6280-7804\4 IN WITNESS WHEREOF, the Board of the Housing and Redevelopment Authority of Edina, Minnesota, has caused this Note to be executed by the manual signatures of the Chair and the Secretary of the Authority, and has caused this Note to be dated as of the date of original issue specified above. Chair Secretary H-1 4891-1861-9392\1 Exhibit H Sample IRR Calculations and Project TIF Adjustment Calculation [See attached.] EXHIBIT H - Sample IRR Calculations and Project TIF Adjustment Calculations Eden Avenue Redevelopment 2026 2027 2028 2029 2030 2031 2032 2033 SALE ANALYSIS END OF YEAR Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Net Operating Income End of Year 5,241,670 5,355,913 5,472,440 5,591,298 5,712,533 5,836,192 5,962,325 6,090,981 Divided By Cap Rate 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Gross Sale Price 104,833,402 107,118,250 109,448,796 111,825,952 114,250,652 116,723,845 119,246,502 121,819,613 Minus Debt A: First Mortgage 52,678,727 51,724,938 50,730,518 49,693,735 48,612,786 47,485,789 46,310,781 45,085,719 Net Sale Amount 52,154,675 55,393,313 58,718,278 62,132,217 65,637,866 69,238,057 72,935,721 76,733,894 Sales Expense 1.50% (1,572,501) (1,606,774) (1,641,732) (1,677,389) (1,713,760) (1,750,858) (1,788,698) (1,827,294) SALES PROCEEDS 50,582,174 53,786,539 57,076,546 60,454,828 63,924,106 67,487,199 71,147,024 74,906,600 2026 2027 2028 2029 2030 2031 2032 2033 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Sales Cash Cash Cash Cash Cash Cash Cash Cash Year Proceeds Flow Flow Flow Flow Flow Flow Flow Flow Initial Investment (31,475,574) (31,475,574) (31,475,574) (31,475,574) (31,475,574) (31,475,574) (31,475,574) (31,475,574) 2023 00000000 2024 735,560 735,560 735,560 735,560 735,560 735,560 735,560 735,560 2025 2,889,993 2,889,993 2,889,993 2,889,993 2,889,993 2,889,993 2,889,993 2,889,993 2026 50,582,174 52,686,742 2,104,568 2,104,568 2,104,568 2,104,568 2,104,568 2,104,568 2,104,568 2027 53,786,539 0 56,005,349 2,218,810 2,218,810 2,218,810 2,218,810 2,218,810 2,218,810 2028 57,076,546 0 0 59,411,884 2,335,338 2,335,338 2,335,338 2,335,338 2,335,338 2029 60,454,828 0 0 0 62,909,023 2,454,196 2,454,196 2,454,196 2,454,196 2030 63,924,106 0 0 0 0 66,499,536 2,575,431 2,575,431 2,575,431 2031 67,487,199 0 0 0 0 0 70,186,289 2,699,090 2,699,090 2032 71,147,024 0 0 0 0 0 0 73,972,247 2,825,223 2033 74,906,600 0 0 0 0 0 0 0 77,860,478 2034 78,769,053 0 0 0 0 0 0 0 0 2035 82,737,622 0 0 0 0 0 0 0 0 2036 74,906,600 0 0 0 0 0 0 0 0 2037 78,769,053 0 0 0 0 0 0 0 0 2038 82,737,622 0 0 0 0 0 0 0 0 Total 24,836,721 30,259,897 35,885,242 41,717,719 47,762,428 54,024,611 60,509,658 67,223,113 INTERNAL RATE OF RETURN 16.02% 15.02% 14.32% 13.80% 13.38% 13.04% 12.76% 12.51% Section 3.4(e) IRR TARGET 22.00% 20.00% 20.00% 20.00% 18.00% 18.00% 18.00% 16.00% PROJECT RETURN EXCEEDED?No No No No No No No No PROJECT EXCESS RETURN 0 0 0 0 0 0 0 0 Credit: Remaining TIF Note Balance (4,575,499) (4,297,251) (4,007,761) (3,706,577) (3,393,224) (3,067,213) (2,728,030) (2,375,144) A) Remaining Excess Return 0 0 0 0 0 0 0 0 B) Cum. TIF Note P&I Payments: 917,026 1,375,539 1,834,052 2,292,565 2,751,078 3,209,591 3,668,104 4,126,617 TIF Adjustment Due (Lesser A or B):0 0 0 0 0 0 0 0 Notes: Cap Rate: 5.00%Stabilized TIF Note: $5,100,000 Sales Expense: 1.50%TIF Note Rate: 4.00% Development Cost: $85,069,119 Annual TIF P&I: $458,513 Equity Investment: $31,475,574 Initial First Mortgage: $53,593,545 Additional Debt: $0 Analaysis of potential Internal Rate of Return of TIF proforma project cashflows and potential sales through year 10. Sales proceeds assume onetime sale of the Minimum Improvements using valuation based on TIF pro forma Net Operating Income. Annual cash flows include Net Operating Income less annual debt service and reserve allowance. Potential sales are hypothetical and provided solely for purposes of providing an example of the Sale Lookback provisions. Assumptions: City of Edina Sales and Cashflow Analysis for Sample IRR Calculations IRR ANALYSIS END OF YEAR 196 Mixed-Income Apts; 3,439 (sf) Commercial Space I-1 4891-1861-9392\1 Exhibit I Concept Plan for Future City Transportation Infrastructure Project [See attached.] FILE NO. DATE: 9/9/2021 PHASE 1 POTENTIAL TIF-FUNDED ROADWAY IMPROVEMENTS J-1 4891-1861-9392\1 Exhibit J Inclusionary Housing Policy Program Guide [See attached.] March 2020 Page 1 of 31 Affordable Housing Program Policy Guide March 2020 March 2020 Page 2 of 31 Table of Contents Introduction to the Affordable Multi-Family Housing Program (AHP) ..............................................................................................4 Chapter 1 – Overview of Affordable Housing Program Policy ...........5 1.01 Period of Affordability (POA) ................................................................................................................. 5 1.02 Affordable Dwelling Units (ADUs) ........................................................................................................ 5 Affordability Standards – Rental Projects ........................................................................................................... 5 Affordability Standards – For Sale Projects ......................................................................................................... 6 1.03 Student Households ............................................................................................................................... 6 1.04 New Multi-Family Affordable Housing Program (AHP) Rent Limits ..................................................... 6 1.05 Rental Assistance .................................................................................................................................. 7 1.06 Allowable Fees and Charges .................................................................................................................. 7 1.07 Fixed or Floating Affordable Dwelling Units .......................................................................................... 8 1.08 Rent Increases ....................................................................................................................................... 8 1.09 Utility Allowances ................................................................................................................................. 8 1.10 Record Retention ................................................................................................................................ 10 1.11 Leases .................................................................................................................................................. 10 1.12 Income Certification ............................................................................................................................ 11 1.13 Increases in Income ............................................................................................................................ 11 1.14 Property Standards ............................................................................................................................. 11 1.15 Affirmative Fair Housing Marketing Plan ........................................................................................... 12 1.16 Fair Lease and Grievance Procedures .................................................................................................. 12 Chapter 2 – Maintaining the Unit Mix ............................................ 12 2.01 Fixed Affordable Dwelling Units .......................................................................................................... 13 2.02 Floating Affordable Dwelling Units .................................................................................................... 13 Chapter 3 – General Occupancy Guidelines .................................... 15 3.01 Qualification of Applicants ................................................................................................................. 15 3.02 Eligibility Determination ..................................................................................................................... 16 3.03 Change in Household Composition ...................................................................................................... 16 3.04 Minimum Lease Requirements ............................................................................................................ 17 3.05 House Rules ......................................................................................................................................... 17 3.06 Number of Persons Per Unit ............................................................................................................... 17 3.07 Tenant Selection Plan ......................................................................................................................... 18 March 2020 Page 3 of 31 3.08 Government Data Practices Act Disclosure Statement Form ............................................................. 18 3.09 Income Verification ............................................................................................................................. 19 3.10 Gross Annual Household Income ........................................................................................................ 19 3.11 Factors that Affect Household Size ..................................................................................................... 20 3.12 General Income Verification Requirements ......................................................................................... 21 3.13 Corrections to Documents ................................................................................................................... 24 3.14 Effective Term of Verifications ............................................................................................................ 24 3.15 Over Income Households ..................................................................................................................... 24 3.16 Annual Recertification ........................................................................................................................ 24 3.17 Tenant Files ......................................................................................................................................... 25 Chapter 4 – Reporting Requirements ............................................. 27 4.01 Annual Owner/Agent Certifications .................................................................................................... 27 4.02 Compliance Reports ............................................................................................................................. 27 4.03 Utility Allowance Source Document ................................................................................................... 27 Chapter 5 – Compliance Inspections .............................................. 28 5.01 Physical Inspections ............................................................................................................................ 28 5.02 Review of Tenant Files and Property Records ..................................................................................... 28 Chapter 6 – Correction and Consequences of Non-Compliance ...... 29 6.01 Notice to Owner/Agent ....................................................................................................................... 29 6.02 Correction Period ................................................................................................................................ 29 6.03 Owner’s/Agent’s Response .................................................................................................................. 29 Chapter 7 – Requests for Action .................................................... 31 7.01 Sale or Transfer ................................................................................................................................... 31 March 2020 Page 4 of 31 Introduction to the Affordable Multi-Family Housing Program (AHP) Properties developed using financing from the City of Edina, or because of our policy for New Multi-Family Affordable Housing, are subject to specific rules designed to ensure that affordability pledges made by owners and developers remain available to very low and low income tenants (30% to 60% of Area Median Income) throughout the required Period of Affordability (the POA). This Guide is designed to assist owners and their agents with planning and maintaining compliance with the local requirements associated with these rental properties that include affordable units. This guide does not pertain to the Market Rate units. It is the responsibility of City of Edina Housing and Redevelopment Authority (hereafter the “HRA”) to monitor the continuing compliance of affordable units in accordance with local policy and governing agreements throughout the POA. The following procedures apply to all rental properties that received funds or a Planned Unit Development (PUD) under the local policy on New Multi-Family Affordable Housing (AHP). Any violation of the AHP requirements could constitute a covenant default of the governing agreement(s) and imposition of all local government rights and remedies. While successful operation of an affordable property is management intensive, the owner/agent is responsible for ensuring that the governing agreement requirements are properly administered. Thorough understanding of requirements and compliance monitoring procedures requires training of owners/agents. The owner/agent should ensure that it knows and understands the requirements of the affordable housing policy and the compliance requirements since failure to comply may have very serious consequences. The HRA recommends that owners, management agents and site managers (collectively referred to as “owner/agent” throughout this document) receive compliance training before certifying or leasing any affordable units. At a minimum, training should cover key compliance terms, determination of rents, household eligibility, file documentation, procedures for maintaining the required unit mix and reporting. Record retention and property condition standards are also key to maintaining compliance. Attending educational opportunities as offered is strongly recommended to keep up with any procedural changes to the AHP. Should the AHP assisted property also receive an allocation of Section 42 tax credits (Low Income Housing Tax Credits or LIHTC), and the property is found to be compliant with the tax credit program, then the HRA will consider the property compliant with the AHP. Owners/Agents of AHP assisted properties must annually certify to the HRA that the property is compliant with the Low Income Housing Tax Credit program. The HRA’s determination to monitor the project for compliance with requirements of the AHP does not make it liable for an owner’s/agent's noncompliance. This Guide will be made available to the owner/agent at project financial closing and will be posted on the City’s website. The HRA, in its sole discretion, may delegate its compliance reporting and monitoring responsibilities to a third-party. AHP assisted properties will have a compliance review at initial lease up and every third (3rd) year thereafter. However, the HRA reserves the right to conduct a March 2020 Page 5 of 31 compliance review annually. During the compliance review, the HRA or third-party monitoring agent, will ensure compliance against City Agreements by inspecting records of residential student status, income and asset documentation, and rent record for each resident household for all project’s AHP assisted units. The first review for new projects will occur no later than the end of the second year of the period of affordability. Chapter 1 – Overview of Affordable Housing Program Policy The following is an overview the Affordable Housing Policy. It is not intended to be detailed or comprehensive. The requirements of the AHP apply to market rate residential developments that receive a PUD approval from the City of Edina and/or financial assistance from the HRA. This includes new developments and mixed-used developments that create twenty (20) or more multi-family dwelling units and/or any change in use of all or part of an existing building from a non-residential use to a residential use that includes at least twenty (20) dwelling units. 1.01 Period of Affordability (POA) Affordable units created under the Affordable Housing Policy (AHP) are rent and income controlled for a minimum of 20 years with a maximum established by the funding source and reflected in the binding agreement. This term is referred to as the Period of Affordability or POA. Owners/agents should refer to the property’s governing agreements, at project commitment, to determine the specific terms and conditions that govern the property, as the affordability period was increased from 15 years to 20 years in March 2019. Project Commitment is a schedule of commitments within the project’s Financing Agreement(s) between the parties hereto, such as the authorizing Resolution, Development Agreement and/or Loan Documents, dated as of the Execution Date and their related agreements. 1.02 Affordable Dwelling Units (ADUs) At least ten percent (10%) to twenty percent (20%) of the total number of dwelling units in a development receiving a PUD and/or assisted with local funds under the AHP will be designated as Affordable Dwelling Units (ADUs). The percentage applied is based on the affordability standard of the development. Affordability Standards – Rental Projects If an AHP property also is assisted with Low Income Housing Tax Credits (LIHTC), the AHP Affordability Standard is based on the LIHTC election (Income Averaging, 20/50 or 40/60 set aside). If an AHP property is NOT assisted with LIHTC, then the HRA together with the owner will determine which affordability standard applies. The legal document executed with the HRA determines the standard. March 2020 Page 6 of 31 10% at 50% At least ten percent (10%) of total units developed shall be occupied by households at or below fifty percent (50%) of the MTSP (Multifamily Tax Subsidy Income Limits, i.e. tax credit income limits). 20% at 60% At least twenty percent (20%) of total units developed shall be occupied by households at or below sixty percent (60%) of the MTSP. Affordability Standards – For Sale Projects At least ten percent (10%) of total units developed shall be affordable for households as follows: 1-2 person household $100,000 3+ person household $115,000 Adjusted annually by Minnesota Housing as posted on their website. 1.03 Student Households AHP adopted the Section 8 Housing Choice Voucher program restrictions on student participation found at 24 CFR 5.612 and excludes any individual that: 1. Is enrolled in a higher education institution; AND 2. Is under the age of 24; and 3. Is not a veteran of the US Military; and 4. Is not married*; and 5. Does not have a dependent child(ren); and 6. Is not a person with disabilities; and 7. Is not otherwise individually eligible, or has parents who, individually or jointly, are not eligible on the basis of income * Effective August 1, 2013 same-sex marriages are recognized as marriages for student eligibility purposes. 1.04 New Multi-Family Affordable Housing Program (AHP) Rent Limits Every ADU is subject to maximum allowable rents based on bedroom size for the area in which the property is located. These maximum rents are referred to as the AHP rents. These limits represent the maximum that owners/agents can charge for rent, including an allowance for March 2020 Page 7 of 31 tenant paid utilities, and other non-optional charges (i.e. parking, required renter’s insurance, etc.). AHP will utilize the U.S. Department of Housing and Urban Development annually published median income amounts for all Minnesota counties. Minnesota Housing uses these amounts to calculate the maximum allowable rents and tenant income. Minnesota Housing publishes the LIHTC income and rent limits on its website and notifies owners/agents of the updated limits as they become available. According to AHP, the date a Certificate of Occupancy is issued to a building will determine which rent and income limits to use. Minnesota Housing provides different tables (Table A, B, C, etc.) of income and rent limits based on your Certificate of Occupancy dates and updates these tables annually. To avoid noncompliance, be sure you are using the correct limits table. In the event AHP rent limits decrease for an area, or utility allowances increase, an owner/agent may be required to reduce the rent charged but will not be required to lower rents below those in effect at the time when the Development Agreement was signed by the City. 1.05 Rental Assistance Tenant Based Section 8 Housing Choice Vouchers. Tenants with Section 8 vouchers, or similar state or federal tenant based rental assistance (TBRA) subsidies tied to a tenant and not a unit, may be charged rent that exceeds the applicable AHP rent for the unit to an extent allowed by HUD, Metro HRA, and/or the most restrictive funding source. ADUs layered with tenant or project based rental assistance qualify households using the Very Low-Income limits (<50%) and the household pays no more than 30% of its monthly adjusted income for rent; ADU rent therefore remains affordable. Tenants receiving rental assistance, including Section 8 subsidy, must not be refused tenancy in an ADU based solely on the fact that they receive rental assistance. For eligibility purposes, the tenant selection plan must indicate that household income does not need to equal at least two times the unit rent (or any variation thereof) as long as the published Payment Standard subsidy can cover the project’s intended rent. The HRA annually publishes Payment Standards (a rent limit for using a Section 8 Housing Choice Voucher. Payment standards are set by each housing authority. They differ for bedroom size and property location). 1.06 Allowable Fees and Charges Fees considered reasonable and customary may be charged, such as application fee, if such fees are customary for rental housing in the neighborhood. Fees for parking or services such as bus transportation or meals can only be charged if the services are voluntary and are not a condition of occupancy. An eligible tenant cannot be charged a fee for the owner or manager’s work involved in completing the additional forms or documentation required for the AHP, such as the Resident Income Certification. Down payment fees/rent deposit for the ADU should not exceed one month’s rent. March 2020 Page 8 of 31 1.07 Fixed or Floating Affordable Dwelling Units ADUs may be “fixed” or “floating” and are designated on a property-by-property basis. The enforcement agreement must contain fixed or floating unit designations. Fixed Units – The ADUs are identified by unit number and never change. Development Agreements may outline a specific quantity of bedroom sizes and square footage, including minimum floor space, when considering the placement of ADUs within the project. Units in properties where all units are ADUs automatically are considered fixed. If units throughout a project are not comparable (as defined by the HRA) or are in several scattered sites, the ADU unit designation must be fixed. Floating Units – The ADUs may change over time as long as the total number of ADUs and specific quantity of bedroom sizes or ADU total square footage in the property remains compliant with the original Development Agreement. If a property’s enforcement agreement does not specify floating units, then the units that were initially designated as ADUs at project completion will be used to determine comparable floating units. See Chapter 2, Maintaining the Unit Mix, for more information. 1.08 Rent Increases If ADU rents remain below the maximum allowed, an owner/agent may impose a rent increase as allowed by the enforcement agreement no earlier than one year from the date the project was completed (date the building Certificate of Occupancy was issued) and no more frequently than once a year thereafter. If an owner/agent wishes to increase rents, the request must be within reasonable limits to cover increases in expenses such as real estate taxes or operating expenses. At no time can proposed rent increases exceed the current MTSP (LIHTC rents) rent limits for that development. If the owner/agent increases rents as provided above, tenants must be given a written notice 90 days in advance or in accordance with lease provisions before implementation. 1.09 Utility Allowances The AHP requires that an allowance for tenant paid utilities be considered as a housing cost to the tenant and be factored in when determining rent for an ADU. The HRA approved the use of Metro HRA’s Utility Allowance Schedule (effective 2/1/18 and amended annually) as the document to use to determine an ADU’s utility allowance. Utility allowance schedules are usually updated annually. It is the owner’s/agent’s responsibility to obtain an updated utility allowance and retain it in the property records. Changes in utility allowances must be implemented within 90 days of the publication effective date. If an increase in the utility allowance causes the ADU rent to exceed the applicable AHP rent limit, the unit rent must be adjusted (lowered) to bring the gross rent of the unit into compliance with the AHP rent limits. However, at no time will the ADU rent be adjusted to an amount lower than the ADU rent in place at project commitment. March 2020 Page 9 of 31 An alternative estimate for utility payments may be used, as allowed by Section 42 and approved by the City. Utility allowance methodology change requests and all supporting documentation must be emailed to the Affordable Housing Development Manager at the City for approval. Requests for a change in the property's established utility allowance methodology, to one of the approved utility allowance methodologies should reflect savings from energy efficiency improvements in a manner that is fair to tenants, financially feasible for owners and reduces long-term public subsidy expenditures. General Submission Requirements Each request for a change in utility allowance methodology must include: 1. Cover letter with the current utility allowance and proposed utility methodology 2. A current utility allowance schedule (i.e. local Metro HRA Utility chart) completed with tenant paid utilities 3. Copy of 90-day Notice to the resident including new Utility Allowance and Tenant Rent 4. Utility Allowance Certification, signed and dated 5. Supporting documentation as required (estimate from a properly licensed engineer for example) Allowable Utility Allowance Methodologies The property owner may request to use one or more of the following utility allowance methodologies that meets the AHP requirements. If the project has multiple funding sources, the rents must comply with the program gross rent limits for each program. If the project also has Section 8 Project Based Assistance, the PBA administrator determines the UA schedule for the unit. PHA Utility Method: The local PHA utility allowance for the voucher program. This is the typical current method of establishing Utility Allowances used by most Section 42 LIHTC projects. Owners may request consideration of a different utility allowance methodology from the following alternatives: 1. HUD Utility Schedule Model (HUSM): An estimate calculated via HUD’s online Utility Schedule Model, using recent utility rates. The HUSM enables users to calculate utility schedules using a project specific methodology by entering the property housing type, and utility rate information (tariffs) for the property location. This model is based on climate and survey information from the U. S. Energy Information Administration of the Department of Energy and it incorporates energy efficiency and Energy Star data. The HUSM (web based and Excel format) and use instructions can be accessed on the HUD Exchange website User at: https://www.hudexchange.info/trainings/courses/hud- utility-schedule-model-calculating-utilityallowances-for-home-webinar1/ 2. Utility Company Estimate (UCE): An estimate from a local utility company providing the estimated cost of utilities for a unit of similar size and construction for the project or from the geographic area where the project is located. 3. Energy Consumption or Engineered Model (ECM): An estimate from a properly licensed engineer, or qualified professional, using an energy consumption model that takes into March 2020 Page 10 of 31 account the unit size, building orientation, design and materials, mechanical systems, appliances and characteristics of the building location. If the ECM report is completed by a qualified professional that is not a properly licensed engineer, the request must include additional information to support the qualifications and experience of the qualified professional in providing energy consumption utility allowance reports. The engineer or qualified professional must be licensed in Minnesota. If the property is regulated by HUD, or another form of project-based subsidy, the program- approved utility allowance may be used. 1.10 Record Retention Owners/agents must retain each household’s initial application forms including household income and asset documentation and lease and leasing agreements/addenda for three (3) years after the tenant’s move out effective date. Owners/agents must maintain applicant and tenant information in a way to ensure confidentiality. Any applicant or tenant affected by negligent disclosure or improper use of information may bring a civil action for damages against the owner/agent and seek other relief, as appropriate. Owners/agents must dispose of records in a manner that will prevent any unauthorized access to personal information, e.g., burn, pulverize, shred, etc. 1.11 Leases Each lease must include the legal name(s) of the parties to the agreement and all other occupants, a description of the unit to be rented (address), the term of the lease, the rental amount, the use of the premises, and the rights and obligations of each party. The lease shall also inform the tenant that fraudulent statements and information are grounds for eviction and that the tenant could become subject to penalties available under federal law. Initial leases for ADUs must be for 12 months unless another term is agreed to mutually by owner/agent and tenant. If tenant agrees to a shorter term, that agreement must be in writing and kept in the tenant’s file. At no time can a lease term be for less than 30 days. ADU leases must contain language that the owner/agent reserves the right to adjust tenant rents in accordance with the AHP rent limits and/or in the event a tenant’s income increases above the income limits of the AHP. The lease also must contain a provision that the owner/agent retains the right to recertify the tenant’s income and household composition on an annual basis. The tenant’s failure to cooperate with the annual recertification constitutes a violation of the lease. If the lease used for the ADU unit does not contain any of the required provisions and/or contains any prohibited provisions, an AHP Lease Addendum must be signed by the tenant and March 2020 Page 11 of 31 kept in the tenant’s file. If a new lease is executed, a new AHP Lease Addendum also must be executed. Prohibited lease terms are defined in the AHP Lease Addendum (see Appendix B). Owner/Agent may not evict or terminate resident (including refusal to renew a lease) without good cause. Good cause is (a) serious or repeated violation(s) of the material terms and conditions of the Resident Lease. Use of the AHP Lease Addendum including the AHP Lease Rider outlining provisions on evictions and terminations is mandatory. During the final year of the POA, new leases for the Affordable Units must be for a term of no less than six months, and such newly leased Affordable Units will be subject to all the Affordable Housing Requirements until the expiration of such new leases. An AHP Lease Addendum is not required when the HUD model lease for subsidized housing is used. 1.12 Income Certification The owner/agent must verify and certify tenant income eligibility and student status at move in and recertify at least annually thereafter. At initial move in, or when first being determined eligible for an ADU and in every 3rd year of the affordability period (not tenancy), household composition, income and income from assets must be verified via third-party verification or other forms of supporting documentation and kept in the tenant’s file. In other years, tenants must, at a minimum, self-certify to their anticipated income (including income from assets), family size, and composition. As part of the monitoring process, tenant files will be reviewed at initial occupancy of the project and every 3rd year thereafter. 1.13 Increases in Income The owner/agent must ensure that any household whose anticipated gross income exceeds 140% of the maximum income limit at recertification pays not less than the market or similar rent as the other non-ADUs in the development. A minimum notice of 60 days is required for increases to tenant rent. The unit must be marketed to eligible tenants when vacated. If the units are floating, the rent is increased, and the next available unit must be rented at affordable rates to an income eligible tenant. Conversely, the tenant whose income increase to above 140% of AMI could be relocated to a Market Rate unit if the affordable units are fixed. For units assisted with both AHP funds and Low Income Housing Tax Credits (LIHTC), a tenant is not considered over income until income exceeds the applicable 140% LIHTC limit. When a tenant’s income exceeds the 140% LIHTC limit, the tenant’s rent is adjusted to the LIHTC rent limit if the project is 100% LIHTC or, if the project is mixed income, to the market rent for similar non-ADUs in the property. 1.14 Property Standards March 2020 Page 12 of 31 The owner/agent must keep all units in compliance with local codes and other applicable state and local building codes to ensure the units are decent, safe, and sanitary at all times. 1.15 Affirmative Fair Housing Marketing Plan Owners/agents must adhere to Equal Opportunity, Affirmative Marketing, and Fair Housing practices in all marketing efforts, eligibility determinations and other transactions. The Equal Housing Opportunity logo or statement must be used in all advertising of vacant units (We do business in accordance with the Federal Fair Housing Law. It is illegal to discriminate against any person because of race, color, religion, sex, handicap, familial status, or national origin). In addition to the federal protections mentioned above, the Minnesota Human Rights Act makes it illegal to discriminate against any person with respect to housing and real property, because of race, color, creed, religion, national origin, sex, marital status, disability, status with regard to public assistance, sexual orientation or familial status. A file must be maintained with all marketing efforts related to the property including newspaper ads, social service contacts, photos of signs posted, etc. Records will be reviewed during on site monitoring to ensure that all efforts follow federal requirements and are being adequately documented. 1.16 Fair Lease and Grievance Procedures Fair lease and grievance procedures should be objective. They should clearly state: • To whom a tenant should direct a complaint; • Who will investigate and/or respond to the complaint; and • By when the tenant should expect to receive a response. Chapter 2 – Maintaining the Unit Mix March 2020 Page 13 of 31 Chapter 2 – Maintaining the Unit Mix 2.01 Fixed Affordable Dwelling Units Properties with units that are not comparable in terms of size, amenities and features must have fixed ADUs. Fixed ADUs means specific units are designated as the ADUs for the duration of the affordability period. Owner/Agent must maintain these specific units as the ADUs. Maintaining the required number of ADUs, is called complying with the unit mix requirements. At no time will non-ADUs be subject to AHP rent and income requirements when the ADUs are fixed. When an owner/agent recertifies a tenant’s income, the tenant’s income may have increased. A tenant is considered “over income” in the AHP when: • The tenant occupies an ADU and the tenant income increases to 140% of the current income limit for that family size; or • For ADUs that are also LIHTC units, a tenant is considered “over income” when its income goes over 140% of the qualifying tax credit election (Average Income, 50% or 60%) for that unit. When a tenant is over income, the unit that the tenant occupies is considered temporarily out of compliance with the AHP’s occupancy and unit mix requirements. Temporary noncompliance due to an increase in an existing tenant’s income is permissible if the owner/agent takes specific steps to restore the correct unit mix in the property as soon as possible. When the tenant’s income exceeds the AHP’s income limit (140%), the unit rent also must be adjusted. The owner/agent cannot terminate the lease immediately if the tenant’s income has increased above the AHP income limit. Instead, the owner/agent may extend /renew the lease for up to six months. If the tenant remains over income at the time of the next recertification, a 60-day notice to vacate may be issued to the tenant. If the tenant is determined to be under the AHP income limit at the time of recertification, the unit is considered back in compliance. 2.02 Floating Affordable Dwelling Units Properties with units that are comparable in terms of size, amenities and features can have floating ADUs. Properties with floating ADUs must maintain the required number of ADUs throughout the POA; however, the initial ADUs do not have to remain as ADUs throughout the POA. When ADUs float, the specific units that carry the ADU designation may change, or float, among assisted and non-assisted units during the POA. If/when an initial ADU goes out of compliance due to a tenant’s income going over the AHP (or LIHTC) income limit, a non-ADU can replace the out of compliance ADU if the tenant income and unit rent of the non-ADU meet the ADU requirements. In other words, the ADU designation “floats” to another unit. March 2020 Page 14 of 31 For example, if a property has an over-income tenant in an ADU, when the next non-ADU comparable unit becomes available, it will be designated as an ADU and rented to an income eligible tenant. The unit occupied by the over income tenant is redesignated as a market rate unit. Maintaining the required number of comparable ADUs is called complying with the unit mix requirements. When recertifying a tenant’s income, an owner/agent may find that the tenant’s income has increased. A tenant is considered “over income” when: • The tenant occupies an ADU and the tenant income increases over the current AHP income limit (140% AMI) for that family size; or • In ADUs that are also LIHTC units, a tenant is considered “over income” when its income increases to 140% or more of the qualifying tax credit election (50% or 60%) for that unit. When a tenant is over income, the unit that the tenant occupies is considered temporarily out of compliance with the AHP’s unit mix requirements. Temporary noncompliance due to an increase in an existing tenant’s income is permissible if the owner/agent takes specific steps to restore the required unit mix in the property. The rents of the over income tenants can be adjusted. When redesignating units in a property with floating ADUs, owner/agent can choose to substitute a unit that is equal or “greater” than the original ADU, but generally they cannot substitute one that is “lesser”. A lesser unit can be substituted only when doing so preserves the original unit mix. A greater unit is one that might be considered preferable because of larger size or additional bedrooms. The goal is to maintain the same number and type of ADUs as were designated originally. Therefore, if an owner/agent makes a substitution that is “greater,” it later can substitute an available unit that is “lesser” to restore the original unit mix. Once a comparable non-ADU unit is designated as the new ADU, the unit with the over income tenant is redesignated as a non-ADU or market rate unit. At this point, the owner/agent may adjust the tenant’s rent without regard to the AHP rent requirements (although requirements from other funding sources still may apply). Rent increases are subject to the terms of the lease. Note, a tenant in a floating ADU whose income exceeds AHP income limit is not required to pay more than the market rent for a comparable, unassisted unit in the property. The owner/agent cannot terminate the lease based on the tenant’s increase in income. March 2020 Page 15 of 31 Chapter 3 – General Occupancy Guidelines 3.01 Qualification of Applicants Applicants for ADUs shall be advised early in their initial visit to the property that there are maximum income limits that apply to these units. They also will be made aware that the anticipated income of all persons expecting to occupy the unit must be verified and included on a Resident Income Certification form prior to occupancy, and that tenant income and student status will be reviewed annually. If an individual is enrolled as a student at an institution of higher education, is under the age of 24, is not a veteran, is not married, is not a person with disabilities, and does not have a dependent child, in order to be eligible for a ADU, the student must be individually income eligible and the student’s parents (the parents individually or jointly) must be income eligible unless the student can demonstrate his or her independence from parents. AHP has adopted the section 8 Housing Choice Voucher program restrictions on student participation found at 24 CFR 5.612, which exclude any student that: 1. Is enrolled in a higher education institution. 2. Is under the age of 24. 3. Is not a veteran of the US Military. 4. Is not married**. 5. Does not have a dependent child(ren). 6. Is not a person with disabilities. 7. Is not otherwise individually eligible, or has parents who, individually or jointly, are not eligible on the basis of income. **Effective August 23, 2013, same-sex marriages are recognized as marriages for student eligibility purposes. To determine a student’s independence from his or her parents, the owner should consider all of the following: 1. The individual must be of legal contract age under state law; and 2. The individual must have established a household separate from parents or legal guardians for at least one year prior to application for occupancy, or the individual must meet the U.S. Department of Education’s definition of an independent student; and 3. The individual must not be claimed as a dependent by parents or legal guardians pursuant to IRS regulations; and 4. The individual must obtain a certification of the amount of financial assistance that will be provided by parents, signed by the individual/s providing the support. This certification is required even if no assistance will be provided. March 2020 Page 16 of 31 To document a student’s independence from parents: 1. Review and verify previous address information to determine evidence of a separate household, or verify the student meets the U.S. Department of Education’s definition of “independent student”; and 2. Review prior year income tax returns to verify if a parent or guardian has claimed the student as a dependent (except if the student meets the Department of Education’s definition of “independent student”); and 3. Verify income provided by a parent by requiring a written certification from the individual providing the support. Certification is also required if the parent/s is providing no support to the student. Financial assistance that is provided by persons not living in the unit is part of annual income. Verification of student eligibility must be maintained in the tenant file along with the income certification. 3.02 Eligibility Determination A fully completed Household Questionnaire is critical to an accurate determination of eligibility. The information furnished on the application should be used as a tool to determine all sources of anticipated income and assets. After the tenant completes the Household Questionnaire, the owner/agent must have all income verified by obtaining source documentation (award letters, offers of employment, W- 2’s, check stubs (not paycheck), bank statements, investment records, etc.) or by a third-party (public agency, employer, financial institution). If total cash value of assets is less than $50,000, assets can be self-certified using the Under $50,000 Certification. Assets exceeding $50,000 must be third-party verified. The application, income and asset verifications, and lease are to be executed prior to move in. All occupants in an ADU must be certified and have a valid lease on file. All household members age 18 and over must sign all required documents. 3.03 Change in Household Composition If a tenant in an ADU (no LIHTC) wishes to have an additional person move into the unit within the first 6 months of occupancy, the following steps must be taken: 1. The prospective tenant must complete a Household Questionnaire and allow time for verification of income and assets as required of the initial tenant; and 2. The prospective tenant's income must be added to the current tenant's certification and a determination made as to whether the new household is still within the AHP income guidelines. If the new household income exceeds the guidelines, then once proper notice is given, the tenant must pay the market rate. If the ADU is floating, the ADU designation must be floated to another eligible unit. The new rent of the now over income household cannot exceed market rent for a comparable unassisted unit. The tenant file shall also be documented when any household member vacates the unit. March 2020 Page 17 of 31 3.04 Minimum Lease Requirements Initial tenant leases, including a signed and dated AHP lease addendum (if applicable), must be on file and must specify a term of at least 12 months. Subsequent leases may have a shorter term, with written mutual agreement. Leases must not contain any of the prohibited lease terms. Any non-renewal or termination of leases must be in accordance with the lease and/or AHP lease addendum. Owners/agents must comply with the lease requirements found in Section 601 of the Violence Against Women Reauthorization Act (VAWA) of 2013. HRA highly encourages owners/agents to use the VAWA Lease Addendum, form HUD-91067 or its successor VAWA Lease Addendum form. In general, owner/agent may not construe an incident of actual or threatened domestic violence, dating violence, sexual assault, or stalking as a serious or repeated violation of a lease term by the victim, or threatened victim, as good cause for terminating tenancy. However, in accordance with VAWA 2013, owner/agent may bifurcate a lease to terminate the tenancy of an individual who is a tenant or lawful occupant and engages in criminal activity directly relating to domestic violence, dating violence, sexual assault, or stalking against another lawful occupant living in the unit or other affiliated individual as defined in the VAWA 2013. Owner/Agent should include a copy of HUD-5382 form with each tenancy termination or eviction notice to allow an individual to certify that he or she is a victim of domestic violence, dating violence, sexual assault or stalking. The form is to be completed and submitted to owner/agent within 14 business days or an agreed upon extension date for the individual to receive protection under the VAWA. 3.05 House Rules Developing a set of house rules is a good practice. The decision about whether to develop house rules for a property rests solely with the owner/agent. If house rules are listed in the lease as an attachment, then they must be attached to the lease. By identifying allowable and prohibited activities in housing units and common areas, the owner/agent provides a structure for treating tenants equitably and for making sure tenants treat each other with consideration. House rules also are beneficial in keeping properties safe and clean and making them more appealing and livable for the tenants. They also are extremely beneficial if it becomes necessary to evict a tenant for inappropriate behavior. For more information on House Rules, refer to Chapter 6-9 of the HUD 4350.3 REV 1, Change 4 Handbook. 3.06 Number of Persons Per Unit There is no federal regulation governing the number of persons allowed to occupy a unit based on size; however, at initial occupancy ADUs will have a minimum requirement of at least one person per bedroom. It is important, though, to be consistent when accepting or rejecting applications. It is required that the owner/agent determine the minimum and maximum number of people that will be allowed to occupy each size unit and put that formula in writing as part of the Tenant Selection Plan and submit the Plan to the HRA or designated agent for approval. The owner/agent may refer to the HUD Handbook 4350.3 REV 1, Change 4, Chapter March 2020 Page 18 of 31 3-23, regarding occupancy standards. By following the standards described, owners/agents can ensure that applicants and tenants are housed in appropriately sized units in a fair and consistent manner. 3.07 Tenant Selection Plan Owner/Agent must develop a formal written policy that clearly states the procedures and criteria the owner/agent will consistently apply in drawing applicants from the waiting list, screening for suitability for tenancy, and implementing income targeting requirements. The Tenant Selection Plan must state if there is an elderly restriction (“seniors only” building). In accordance with the VAWA of 2013, the selection criteria cannot deny admission on the basis that the applicant has been a victim of domestic violence, dating violence, sexual assault or stalking. Owner/Agent should provide to each applicant/tenant HUD form 5382or its successor form to allow the applicant/tenant to provide information regarding his or her status as a victim of domestic violence, dating violence or stalking. Owners/agents may refer to the HUD Handbook 4350.3 REV 1, Change 4, Chapter 4, when developing a tenant selection plan. HRA will review the Tenant Selection Plan as part of its monitoring process. 3.08 Government Data Practices Act Disclosure Statement Form In working with applicants and tenants, the owner/agent warrants compliance with applicable data privacy laws and regulations including the Minnesota Government Data Practices Act, which sets policies on the information that can be obtained, stored and/or released in connection with public programs. To comply with this law, the AHP Government Data Practices Act Statement form must be kept in each tenant's permanent file. Note that this is not a release authorization for verification of income and assets and must not be used as such. Each adult household member’s name must be printed clearly at the top in the box provided. An unsigned and/or undated form is not valid and will be noted as insufficient at time of file inspection. 1. The form is to be signed one time and is valid as long as the resident lives at the property and participates in the program(s) identified in item #2 on page 1 of the form. If a resident moves from one unit to another, the original signed and dated form should be moved to the file for the new unit. A copy should be kept in the move out file for the old unit. 2. A valid form must include all relevant attachments. Some properties or units within a property may require 2 or more attachments for multiple programs. 3. Only one form is needed per unit as long as the head of household, spouse, co-head, and all household members over the age of 18 have signed and dated the form. 4. If an adult is added to the household or a minor reaches age 18, they must be added to, sign, and date the original form. It is not necessary to complete a new form. 5. A copy of the form should be made available to the applicant/tenant. It is acceptable to give them an unsigned copy. 6. For new residents, the form should be completed at the time of initial application. March 2020 Page 19 of 31 A Government Data Practices Act Disclosure form that can be used for all ADUs is available on the HRA website. 3.09 Income Verification At initial occupancy, owner/agent must determine whether prospective tenant(s) of ADUs qualify as low income households. Income eligibility is based on anticipated income as defined at 24 CFR 5.609 (Section 8). When collecting income verification documentation, owner/agent must consider any likely changes in income. Owner/Agent must follow appropriate steps in determining whether households are eligible prior to admittance. Minnesota Housing provides sample verifications and other forms to assist owners/agents in qualifying eligible tenants. The release of information (at top of form) must be completed and signed by the person who is the subject of the verification prior to sending the form to an employer or other income source. Completed and returned verifications are used to calculate and document income. An Income and Asset Calculation Worksheet form also is available and can be used to assist in showing the individual calculations of income and asset income. This is highly recommended and will assist an inspector during a file review. This form should be dated and signed by the owner/agent. 3.10 Gross Annual Household Income Gross annual income for households living in ADUs shall be determined in a manner consistent with Section 8 of the U.S. Housing Act of 1937. Note that the information below only provides a summary. Owners and managers must use current circumstances to project income, unless verification forms or other verifiable documentation indicate that an imminent change will occur. For guidance in this section and in determination of tenant income, the HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, is used and is recommended as a reference guide. The HUD Handbook 4350.3 and HUD notices can be obtained by visiting HUD’s website: http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handboo ks/h sgh/4350.3. The determination of annual income must include all types of income in the amount anticipated to be received by the tenant in the 12 months following certification/ recertification. Owner/Agent should use current circumstances to project income, unless verification forms or other verifiable documentation indicate that a change will occur (increase/decrease in rate of pay and/or hours). However, if the owner/agent is unable to determine annual income using current information because the family reports little to no income, or because income fluctuates, the owner/agent may average past actual income received or earned within the last 12 months before the certification date to calculate annual income. March 2020 Page 20 of 31 3.11 Factors that Affect Household Size When determining family size for occupancy, the owner/agent must include the following individuals who currently are not living in the unit: • Children temporarily absent due to placement in a foster home; • Children in joint custody arrangements who are present in the household 50% or more of the time; • Children who are away at school but who live with the family during school recesses; • Unborn children of pregnant women. When a pregnant woman is an applicant, the unborn child is included in the size of the household and is included for purposes of determining the maximum allowable income. The rental application should ask the following question: “Will there be any changes in household composition within the next 12-month period?” If an applicant answers that a child is expected (birth, foster or adoption), the owner/agent should explain to the applicant this is an additional household member and use the corresponding income limit, and self-certification of additional member should be used as documentation within the initial certification. • Children who are in the process of being adopted; • Temporarily absent family members who still are considered family members. For example, the owner/agent may consider a family member who is working in another state on assignment to be temporarily absent. Persons on active military duty are considered temporarily absent (except if the person is not the head, co-head or spouse or has no dependents living in the unit). If the person on active military duty is the head, co-head, or spouse, or if the spouse or dependents of the person on active military duty resides in the unit, that person’s income must be counted in full; • Family members in the hospital or rehabilitation facility for periods of limited or fixed duration. These persons are temporarily absent as defined above. Persons permanently confined to a hospital or nursing home are not considered household members. When determining family size for establishing income eligibility, the owner/agent must include all persons living in the unit except the following: • Live-in aides • Children of live-in aides o A live-in aide/attendant is a person who resides with one or more elderly persons, near-elderly persons, or persons with disabilities, and who: Is determined to be essential to the care and well-being of the person(s); Is not obligated for the support of the person(s); and Would not be living in the unit except to provide the necessary supportive services. While a relative may be a live-in aide/attendant, s/he must meet the above requirements, especially the last. The live-in aide qualifies for occupancy only if the individual needing supportive services requires the aide’s services and remains a tenant. The live-in aide may not March 2020 Page 21 of 31 qualify for continued occupancy as a remaining family member. The owner/agent must obtain verification from the person’s physician, psychiatrist or other medical practitioner or health care provider that the live-in aide is needed to provide the necessary supportive services essential to the care and well-being of the person and should not add the attendant to the lease. The owner/agent may not require applicants or tenants to provide access to confidential medical records or to submit to a physical examination. Some households may include other persons who are considered family members for the purposes of determining household size and income eligibility, including: • Foster adults • Foster children Please see Appendix A for more detail on whose income is counted, what is counted as income and what is not, and how to account for income generated by assets. 3.12 General Income Verification Requirements All income and asset sources must be disclosed on the eligibility application and verified. A properly completed application must be used as the basis for determining what verifications will be necessary. The application, along with all supporting documentation and the Resident Income Certification, will be reviewed by HRA staff or its agent during a tenant file review. The following describes the types of third-party verification in order of acceptability: 1. Third-party verification from source (written): a. An original or authentic document generated by a third-party source that is dated within six months from the date of receipt by the owner/agent. Documents may be in possession of the tenant (or applicant), and commonly are referred to as tenant provided documents. These documents are considered third-party verification because they originated from a third-party source. Examples of tenant provided documentation that may be used include, but are not limited to: pay stubs, payroll summary report, employer notice/letter of hire/termination, SSA benefit letter, bank statements, child support payment stubs, welfare benefit letters and/or printouts, and unemployment monetary benefit notices. Owner/Agent must consider the following when using tenant provided documentation: i. Is the document current? Documentation of public assistance may be inaccurate if it is not recent and does not show any changes in the family’s benefits or work and training activities. ii. Is the documentation complete? Owner/Agent may accept pay stubs to document employment income only if the applicant or tenant provides the most recent two months of consecutive pay stubs to illustrate variations in hours worked. Actual paychecks or copies of paychecks March 2020 Page 22 of 31 should never be used to document income because deductions are not shown on the paycheck. iii. Is the document an unaltered original? The greatest shortcoming of tenant provided documents as a verification source is their susceptibility to undetectable change through the use of high quality copying equipment. Documents with original signatures are the most reliable. Photocopied documents generally cannot be assumed to be reliable. 2. Written documentation sent directly to the third-party source by mail or electronically by fax, email or internet. Verification forms must contain a release authorization signed by the applicant/tenant. Do not use a blanket release authorization as this entitles the owner/agent to obtain information to which it is not entitled or needed for eligibility determination. The Data Practices Act Disclosure Statement is not a verification release. Applicants should be asked to sign two copies of each verification form. The second copy may be used if the first request has not been returned in a timely manner. Income verification requests must be sent directly to and from the source. They are never given to the tenant to obtain signatures. If the returned verifications do not contain complete information, owner/agent must follow up with the source to obtain complete information. Typical examples include failure to indicate interest rates, dates of anticipated raises, amounts of anticipated raises, etc. All pertinent information must be documented in the file and must also include the name, phone number and title of the contact, the name of the person accepting the information, and the date. The single form AHP Eligibility Verification may be used to document income and asset eligibility in lieu of separate verification(s) for each separate income or asset source, if the sole source of income is Housing Support. The AHP Eligibility Verification confirms receipt of Housing Support (formally known as GRH) since it identifies that the applicant is in fact qualified for income-based Medical Assistance (MA) through Minnesota’s Department of Human Services. (Housing Support recipients must have MA prior to obtaining housing grant funding). MA eligibility documents AHP eligibility because the Federal Poverty Guidelines (FPG) are significantly less than the LIHTC income limits. NCCP.org (NCCP.org/tools/converter/) defines poverty as a family income less than 100 percent of the federal poverty threshold, as determined by the U.S. Census Bureau; Low Income is defined as family income less than 200 percent of the poverty threshold. 3. Third-party verification from source (verbal). When clarifying information over the telephone, it is important to be certain that the person on the telephone is the party he or she claims to be. Generally, it is best to telephone the verification source rather than to accept verification from a source calling the property management office. Verbal verification must be documented in the file. When verifying information by phone, the owner/agent must record and include in the tenant’s file the following information: March 2020 Page 23 of 31 a. Third-party’s name, position, and contact information; b. Information reported by the third-party; c. Name of the person who conducted the telephone interview; and d. Date and time of the telephone call. 4. Self Certification An owner/agent may accept a tenant’s notarized statement or signed affidavit regarding the veracity of information submitted only if the information cannot be verified by another acceptable verification method. In these instances, the owner/agent must document the file why third-party verification was not available. The owner/agent may witness the tenant signature(s) in lieu of a notarized statement or affidavit. The following describes use of electronic information when used as third-party verification. Electronic Verification. The owner/agent may obtain accurate third-party written verification by facsimile, email, or Internet, if adequate effort is made to ensure that the sender is a valid third-party source. a. Facsimile. Information sent by fax is most reliable if the owner/agent and the verification source agree to use this method in advance during a telephone conversation. The fax should include the company name and fax number of the verification source. b. Email. Similar to faxed information, information verified by email is more reliable when preceded by a telephone conversation and/or when the email address includes the name of an appropriate individual and firm. c. Internet. Information verified on the Internet is considered third-party verification if the owner/agent is able to view web-based information from a reputable source on the computer screen. Use of a printout from the Internet may also be adequate verification in many instances. Steps used to obtain written verification as described in 1, 2 and 3 above must be documented to show just cause for using other types of verification. The owner/agent must include the following documents in the tenant file: 1. A written note explaining why third-party verification is not possible, signed and dated by the applicant/resident. 2. A copy of the date-stamped original request that was sent to the third-party. 3. Written notes or documentation indicating follow up efforts to reach the third-party to obtain verification. 4. A written note indicating the request has been outstanding without a response from the third-party. Note: If a tenant is employed by a business owned by the tenant's family or is employed by the property owner/agent or the management company, a copy of a recent pay stub verifying year- to- date earnings also is required. March 2020 Page 24 of 31 Upon receipt of all verifications, owner/agent must determine if the resident is qualified for participation in the AHP. All verifications should be reviewed, and calculations made as necessary. 3.13 Corrections to Documents Sometimes it is necessary to make corrections or changes to documents. A document that has been altered with correction fluid or "white out" will not be accepted by HRA. When a change is needed on a document, the person making the correction must draw a line through the incorrect information, write or type the correct wording or number, and have all parties initial and date the change. 3.14 Effective Term of Verifications Verifications of any kind are valid for 6 months prior to an ADU tenant’s move in date or recertification date. 3.15 Over Income Households When determining eligibility to occupy an ADU, the household's gross income must always be considered. However, if a tenant goes over the income guidelines of 140% of household income at recertification, the owner/agent must raise the over income tenant’s rent to reflect Fair Market Rent, or relocate tenant to a Market Rate Unit, as soon as the lease permits in accordance with the terms of the lease (see Chapter 2). The AHP does not require interim rent adjustments. 3.16 Annual Recertification All households occupying an ADU must be recertified at least annually from the date of occupancy. Annual recertifications must be effective on or before the occupancy anniversary date of the previous certification. Owner/Agent may align recertification dates with other program certifications or so that all units in the property are recertified at one time during the year. However, if a period of twelve (12) months passes without a recertification being completed for any ADU, the unit is considered out of compliance. Owner/Management may request an annual schedule whereby all tenants are recertified during the same month however before making changes to schedule, an email request must be made, and approved by the City first. The requirement to recertify is included in an ADU lease or addendum, tenant refusal to comply can be considered a violation of the lease and is grounds for termination. Income must be third-party verified in every 3rd year of the affordability period, not tenancy. Example: Every Third Year Full Certification Property ABC received Certificate of Occupancy on 11/1/2019 Period of Affordability (POA) for Property ABC will be a total of 15 years starting on 11/1/2019 and ending on 11/1/2034 March 2020 Page 25 of 31 Amanda Johnson Moved onto Property ABC on 12/1/2019 In 2019 (POA Year One): Management verifies income using SSA Benefits Award Letter, a copy of Amanda’s current PERA Benefit Letter (Pension Public Employees Retirement Association of Minnesota) and Under $50,000 Asset Verification to determine eligibility at Move In. All items must be third-party verified using source documents. In 2020 (POA Year Two): Amanda Johnson needs to complete her Annual Recertification but in POA Year Two for Property ABC, only a self-certification of income and asset, signed by all adult household members is needed. Use of the AHP Self-Certification of Income & Asset form can be used instead of third-party verifications during this non-3rd year. Note: Move In certifications for eligibility must always third-party verify using source documents. In 2021 (POA Year Three): Amanda Johnson needs to complete her Annual Recertification but in POA Year Three for Property ABC, only a self-certification of income and asset, signed by all adult household members is needed. Use of the AHP Self-Certification of Income & Asset form can be used instead of third-party verifications during this non-3rd year. Note: Move In certifications for eligibility must always third-party verify using source documents. In 2022 (Year Four): The Annual Recertification requirement for this POA year at Property ABC states all income and assets reported by a household must be third-party verified using source documents. The AHP Self-Certification of Income & Asset is not eligible for use for any ADU at Property ABC. 3.17 Tenant Files Owner/Agent must maintain a tenant file for each ADU. All permanent documents must be kept together so they are accessible at each compliance review (income certification and supporting documentation, lease/AHP addendum, etc.). Annual recertification information, including the tenant questionnaires, release forms, verifications, and annual inspection reports must be grouped together by year, with the most recent year on top for review. The tenant files must contain the following: • HRA Government Data Practices Act Statement • Household Questionnaire • Acceptable verifications of income and assets • Verification of student eligibility if applicable • Resident Income Certification (Initial Certification and Annual Recertifications) • Signed lease agreement and AHP addendum (if needed) • Lead based paint acknowledgements (rental rehabilitation only; built pre-1978) All move out files should also contain the following: • Written 30-day (or greater) notice to vacate (if not available – document in file) March 2020 Page 26 of 31 • Security deposit refund (check number and date) or letter of intent to withhold security deposit within 14 days of move out Tenant records, including income verifications and development rents must be retained for the most recent three year period after the tenant moves out. March 2020 Page 27 of 31 Chapter 4 – Reporting Requirements The owner/agent must maintain a report of all tenants residing in each ADU at the time of application through the end of the affordability period and must submit annual reports to HRA in a form and manner requested by HRA. Annual compliance reports are due to HRA by March 1 or as otherwise specified by HRA, of each year during the affordability period. If the due date falls on a weekend or a holiday, reports are due the following business day. Reports and other required documents must be submitted as directed by HRA on an annual basis. 4.01 Annual Owner/Agent Certifications Complete the Owner/Agent Certification to certify compliance with AHP requirements for the preceding calendar year. Owner/Agent Certifications must be printed, signed and dated by the authorized Owner/Agent Representative, then scanned and submitted as directed by HRA. 4.02 Compliance Reports HRA or designated agents will monitor AHP compliance by reviewing annual Owner/Agent Certifications and analyzing compliance information submitted by the owner/agent. Failure to submit the Owner/Agent Certification and/or update the report on all units and their related activity by the due date will constitute noncompliance with the AHP and the related loan documents. 4.03 Utility Allowance Source Document Owners/Agents must submit the utility allowance source documents applicable to the reporting period. Multiple utility allowance source documents may apply to one reporting period. March 2020 Page 28 of 31 Chapter 5 – Compliance Inspections Compliance inspections (file reviews) will be conducted every 3 years. Inspections may be conducted more frequently if HRA determines it to be necessary based on concerns raised during a previous review or other information. The compliance inspection includes, but is not limited to, an inspection of at least 20%, but up to 50%, of the ADU tenant files (with a minimum of four (4) units). HRA will contact the owner/agent in advance to schedule the tenant file review. The property inspection and tenant file review may be conducted at the same time or may be conducted separately by different HRA staff. 5.01 Physical Inspections This program does not mandate inspections. Rental Licensing requires inspections every three years. 5.02 Review of Tenant Files and Property Records During the tenant file review, HRA staff will review Resident Income Certifications, third-party verifications or other forms of income documentation, leases, lead based paint disclosure forms, and other management information for selected units. HRA staff will also review the following property information: • Utility Allowances and supporting documentation • Current written tenant selection plan, occupancy policy and/or house rules if changes were made since the last review • Current lease and lease addenda/agreement(s) • Affirmative Fair Housing Marketing Plan/Marketing Plans • Advertising • Equal Housing Opportunity posters, logos • Correspondence • Tenant ledgers for all units inspected March 2020 Page 29 of 31 Chapter 6 – Correction and Consequences of Non-Compliance If HRA does not receive the required certifications and/or compliance reports when due, or discovers by audit, inspection, or review, or in some other manner, that the property is not in compliance with the requirements of the AHP, or with the property’s loan documents, including the enforcement agreement, the HRA will notify the owner/agent as soon as possible. 6.01 Notice to Owner/Agent HRA or its designated agent will provide prompt written notice to the owner/agent of an AHP property if HRA does not receive the annual Owner/Agent Certification and income and occupancy report by the required due date. HRA or its designated agent also will notify the owner/agent if it does not receive or is not permitted to inspect the Resident Income Certifications, supporting documentation, and rent records, or discovers by inspection, review, or in some other manner, that the property is not in compliance with the requirements of the AHP or with the property’s loan documents, including the enforcement agreement. 6.02 Correction Period The correction period of 30-days will be set forth in a Notice of Noncompliance to the owner and its agent. HRA may extend the correction period if HRA determines there is good cause for granting the extension. Requests for an extension must be in writing from the owner/agent, must be received by HRA no later than the last day of the correction period identified on the Notice of Noncompliance, and must include an explanation of the efforts to correct the noncompliance and the reason the extension is needed. 6.03 Owner’s/Agent’s Response HRA will review the owner’s/agent’s response and supporting documentation, if any, to determine whether the noncompliance has been clarified, corrected or remains out of compliance. Clarified noncompliance is, for example, where income eligibility was not properly documented and the inspector cannot make a reasonable determination that the unit is in compliance but the owner/agent conducts a retroactive (re)certification which completely and clearly documents the sources of income and assets that were in place at the time the certification should have been effective, and applies income and rent limits that were in effect on that date. If documentation is complete and supports that the tenant was eligible as of the effective date, the file is considered clarified. Corrected noncompliance is when a violation is observed and there is a period of time during which the unit is out of compliance but the unit is brought back into compliance. For example, a late certification or re-certification is out of compliance on the certification due date, and back in compliance as of the date the last household member signs a retroactive Income Certification. March 2020 Page 30 of 31 Uncorrected noncompliance is a violation that is not corrected or clarified by the end of the correction period. Failure to correct all noncompliance could result in extension of the end of the POA, loss of Tax Increment Financing, or LURC tax treatment or other legal remedies. Persistent noncompliance also may impact the owner’s/agent’s eligibility for financing from the HRA under any or all its programs. March 2020 Page 31 of 31 Chapter 7 – Requests for Action 7.01 Sale or Transfer Any property owner must provide prior written notice to the HRA before sale or transfer of the property. The notice will provide that the new owner/agent acknowledges that the terms and conditions of the Affordable Housing Program as set forth in the governing documents recorded against the property remain in place. Attachments: •Current Rent Income Table •AFHMP Template – Pages 1-5 without HUD Signature •AHC Checklist •AHC Forms Attachments 05/03/2019Minnesota Housing Finance Agency Income Limits And Maximum Rents TAX_CREDIT_INCOME_LIMIT.RDF Date Run: Table L: Projects Placed in Service on or after 4/24/2019 Page 14 of 44 04/24/2019 04/24/2019 Hennepin Houston 20% 30% 40% 50% 60% 70% 80% 20% 30% 40% 50% 60% 70% 80% 14,000 21,000 28,000 35,000 42,000 49,000 56,000 11,020 16,530 22,040 27,550 33,060 38,570 44,080 16,000 24,000 32,000 40,000 48,000 56,000 64,000 12,580 18,870 25,160 31,450 37,740 44,030 50,320 18,000 27,000 36,000 45,000 54,000 63,000 72,000 14,160 21,240 28,320 35,400 42,480 49,560 56,640 20,000 30,000 40,000 50,000 60,000 70,000 80,000 15,720 23,580 31,440 39,300 47,160 55,020 62,880 21,600 32,400 43,200 54,000 64,800 75,600 86,400 16,980 25,470 33,960 42,450 50,940 59,430 67,920 23,200 34,800 46,400 58,000 69,600 81,200 92,800 18,240 27,360 36,480 45,600 54,720 63,840 72,960 24,800 37,200 49,600 62,000 74,400 86,800 99,200 19,500 29,250 39,000 48,750 58,500 68,250 78,000 26,400 39,600 52,800 66,000 79,200 92,400 105,600 20,760 31,140 41,520 51,900 62,280 72,660 83,040 20% 30% 40% 50% 60% 70% 80% 20% 30% 40% 50% 60% 70% 80% 350 525 700 875 1,050 1,225 1,400 275 413 551 688 826 964 1,102 375 562 750 937 1,125 1,312 1,500 295 442 590 737 885 1,032 1,180 450 675 900 1,125 1,350 1,575 1,800 354 531 708 885 1,062 1,239 1,416 520 780 1,040 1,300 1,560 1,820 2,080 408 613 817 1,021 1,226 1,430 1,635 580 870 1,160 1,450 1,740 2,030 2,320 456 684 912 1,140 1,368 1,596 1,824 640 960 1,280 1,600 1,920 2,240 2,560 503 754 1,006 1,258 1,509 1,761 2,013 700 1,050 1,400 1,750 2,100 2,450 2,800 550 825 1,100 1,375 1,650 1,925 2,200 County: County: Effective Date: Effective Date: 1 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8 0 0 1 1 2 2 3 3 4 4 5 5 6 6 ---------- Income Limits By Household Size ---------- ---------- Income Limits By Household Size ---------- ---- Maximum Gross Rents By Bedroom Size(Post 1989) ---- ---- Maximum Gross Rents By Bedroom Size(Post 1989) ---- Note to all applicants/respondents: This form was developed with Nuance, the official HUD software for the creation of HUD forms. HUD has made available instructions for downloading a free installation of a Nuance reader that allows the user to fill-in and save this form in Nuance. Please see http://portal.hud.gov/hudportal/documents/huddoc?id=nuancereaderinstall.pdf for the instructions. Using Nuance software is the only means of completing this form. Affirmative Fair Housing Marketing Plan (AFHMP) - Multifamily Housing U.S. DepartmentofHousing andUrban Development OfficeofFairHousingandEqualOpportunity OMB Approval No. 25290013 (exp.12/31/2016) Previous editions are obsolete Page 1 of 8 Form HUD-935.2A (12/2011) 1a. Project Name & Address (including City, County, State & Zip Code)1b. Project Contract Number 1c. No. of Units 1d. Census Tract 1e. Housing/Expanded Housing Market Area 1f. Managing Agent Name, Address (including City, County, State & Zip Code), Telephone Number & Email Address 1g. Application/Owner/Developer Name, Address (including City, County, State & Zip Code), Telephone Number & Email Address 1h. Entity Responsible for Marketing (check all that apply) Owner Agent Other (specify) Position, Name (if known), Address ( including City, County, State & Zip Code), Telephone Number & Email Address 1i. To whom should approval and other correspondence concerning this AFHMP be sent? Indicate Name, Address (including City, State & Zip Code), Telephone Number & E-Mail Address. 2a. Affirmative Fair Housing Marketing Plan Plan Type Date of the First Approved AFHMP: Reason(s) for current update: 2b. HUD-Approved Occupancy of the Project (check all that apply) Elderly Family Mixed (Elderly/Disabled)Disabled 2c. Date of Initial Occupancy 2d. Advertising Start Date Advertising must begin at least 90 days prior to initial or renewed occupancy for new construction and substantial rehabilitation projects. Date advertising began or will begin For existing projects, select below the reason advertising will be used: To fill existing unit vacancies To place applicants on a waiting list (which currently has individuals) To reopen a closed waiting list (which currently has individuals) Housing Market Area: Expanded Housing Market Area: Please Select Plan Type Previous editions are obsolete Page 2 of 8 Form HUD-935.2A (12/2011) 3a. DemographicsofProjectand Housing Market AreaComplete and submit Worksheet 1. 3b.Targeted Marketing Activity Based on your completedWorksheet 1, indicate which demographic group(s) in the housing market area is/are least likely to apply for the housing without special outreach efforts. (check all that apply) White AmericanIndianorAlaskaNative Asian Black or African American Native Hawaiian or Other Pacific Islander Hispanic or Latino Persons with Disabilities FamilieswithChildren Other ethnic group, religion, etc. (specify) 4a.Residency Preference Is the owner requesting a residency preference? If yes, complete questions 1 through 5. If no, proceed to Block 4b. (1) Type (2) Is the residency preference area: The same as the AFHMP housing/expanded housing market area as identified in Block 1e? The same as the residency preference area of the local PHA in whose jurisdiction the project is located? (3) What is the geographic area for the residency preference? (4) What is the reason for having a residency preference? (5) How do you plan to periodically evaluate your residency preference to ensure that it is in accordance with the non-discrimination and equal opportunity requirements in 24 CFR 5.105(a)? Complete and submit Worksheet 2 when requesting a residency preference (see also 24 CFR 5.655(c)(1)) for residency preference requirements. The requirements in 24 CFR 5.655(c)(1) will be used by HUD as guidelines for evaluating residency preferences consistent with the applicable HUD program requirements. See also HUD Occupancy Handbook (4350.3) Chapter 4, Section 4.6 for additional guidance on preferences. 4b.Proposed Marketing Activities: Community Contacts CompleteandsubmitWorksheet3 to describeyour use of community contacts to market the project to those least likely to apply. 4c.Proposed Marketing Activities: Methods of Advertising Complete and submit Worksheet 4 to describe your proposed methods of advertising that will be used to market to those least likely to apply. Attach copies of advertisements, radio and television scripts, Internet advertisements, websites, and brochures, etc. Please Select Yes or No Please Select Type Please Select Yes or No Please Select Yes or No Previous editions are obsolete Page 3 of 8 Form HUD-935.2A(12/2011) 5a. Fair Housing Poster The Fair Housing Poster must be prominently displayed in all offices in which sale or rental activity takes place (24 CFR 200.620(e)). Check below all locations where the Poster will be displayed. Rental Office RealEstate Office Model Unit Other (specify) 5b.Affirmative Fair Housing Marketing Plan The AFHMP must be available for public inspection at the sales or rental office (24 CFR 200.625). Check below all locations where the AFHMP will be made available. Rental Office RealEstateOffice Model Unit Other (specify) 5c. Project Site Sign Project Site Signs, if any, must display in a conspicuous position the HUD approved Equal Housing Opportunity logo, slogan, or statement (24 CFR 200.620(f)). Check below all locations where the Project Site Sign will be displayed. Please submit photos of Project signs. RentalOffice RealEstate Office Model Unit EntrancetoProject Other (specify) The size of the Project Site Sign will be x The Equal Housing Opportunity logo or slogan or statement will be x 6. Evaluation of Marketing Activities Explain the evaluation process you will use to determine whether your marketing activities have been successful in attracting individuals least likely to apply, how often you will make this determination, and how you will make decisions about future marketing based on the evaluation process. Previous editions are obsolete Page 4 of 8 Form HUD-935.2A (12/2011) 7a.Marketing Staff What staff positions are/will be responsible for affirmative marketing? 7b.Staff Training and Assessment: AFHMP (1) Has staff been trained on the AFHMP? (2) Has staff been instructed in writing and orally on nondiscrimination and fair housing policies as required by 24 CFR 200.620(c)? (3) If yes, who provides instruction on the AFHMP and Fair Housing Act, and how frequently ? (4) Do you periodically assess staff skills on the use of the AFHMP and the application of the Fair Housing Act? (5)If yes, how and how often? 7c.Tenant Selection Training/Staff (1) Has staff been trained on tenant selection in accordance with the project’s occupancy policy, including any residency preferences? (2) What staff positions are/will be responsible for tenant selection? 7d.Staff Instruction/Training: Describe AFHM/Fair Housing Act staff training,already provided or to be provided, to whom it was/will be provided,content of training, and the dates of past and anticipated training.Please include copies of any AFHM/Fair Housing staff training materials. Please Select Yes or No Please Select Yes or No Please Select Yes or No Please Select Yes or No Previous editions are obsolete Page 5 of 8 Form HUD-935.2A (12/2011) 8. Additional Considerations: I s there anything else you would like to tell us about your AFHMP to help ensure that your program is marketed to those least likely to apply for housing in your project? Please attach additional sheets, as n eeded. 9. Review and Update By signing this form, the applicant/respondent agrees to implement its AFHMP, and to review and update its AFHMP in accordance with the instructions to item 9 of this form in order to ensure continued compliance with HUD’s Affirmative Fair H ousing Marketing Regulations (see 24 CFR Part 200, Subpart M). I hereby certify that all the information stated herein, as well as any information provided in the accompaniment herewith, is true and accurate. Warning: HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties. (See 18 U.S.C. 1001, 1010, 1012; 31 U.S.C. 3729, 3802). Signature of person submitting this P lan &Date of S ubmission (mm/dd/yyyy) Name (type or print) Title & Name of Company For HUD-Office of Housing Use Only Reviewing Official: For HUD-Office of Fair Housing and Equal Opportunity Use Only Approval Disapproval Signature & Date (mm/dd/yyyy)Signature & Date (mm/dd/yyyy) Name(typeor print) Title Name(typeor print) Title Head of Household Demographic Information Head of Household Demographics 1 of 1 AHP 02/2020 Instructions: This form is to be completed by the head of household only after occupancy has been approved. Your approval for occupancy will not be affected if you choose not to respond. The owner will submit this information to The City of Edina for assessment of households being served by its financing programs. Your cooperation is much appreciated. Housing Information (this section to be completed by owner/agent) Property Name Minnesota Housing D# Building Address Unit # Head of Household Information Name Date of birth (month/day/year) / / Ethnicity Hispanic or Latino Not Hispanic or Latino I choose not to respond Gender Female Male I choose not to respond Race (check all that apply) American Indian/Alaska Native Asian Black/African American Native Hawaiian/ Other Pacific Islander White I choose not to respond Number of household members Adults (including head of household) Children under age 18 residing in unit Is any household member mobility impaired requiring features of an accessible unit? Yes No I choose not to respond Is any household member a person with a disability other than mobility impairment? Yes No I choose not to respond Main source of household income (check only one) Salary/wages Self-employment Social Security Retirement /pension/annuity Alimony/child support Interest/dividends/rental income Unemployment/disability Public assistance No income Previous editions are obsolete form HUD-928.1 (6/2011) U. S. Department of Housing and Urban Development EQUAL HOUSING OPPORTUNITY We Do Business in Accordance With the Federal Fair Housing Law (The Fair Housing Amendments Act of 1988) It is illegal to Discriminate Against Any Person Because of Race, Color, Religion, Sex,Handicap, Familial Status, or National Origin In the sale or rental of housing or residential lots In advertising the sale or rental of housing In the financing of housing In the provision of real estate brokerage services In the appraisal of housing Blockbusting is also illegal Anyone who feels he or she has been discriminated against may file a complaint of housing discrimination: 1-800-669-9777 (Toll Free) 1-800-927-9275 (TTY) www.hud.gov/fairhousing U.S. Department of Housing and Urban Development Assistant Secretary for Fair Housing and Equal Opportunity Washington, D.C. 20410 AHP 02/2020 Attachment Affordable Housing Program (AHP) Part A (Required to determine eligibility) 1. Information regarding the household composition including the name(s) and age(s) of all members in the household. 2. Student status. 3. The amount and source of all earned and unearned income of all household members. 4. The type, value and income derived from all household assets. 5. The type, value and income derived from all household assets disposed of for less than fair market value within the past 2 years. 6. Current and/or previous housing history (for program eligibility, if applicable). Part B 1. Race 2. Ethnicity 3. Gender of head of household 4. Receipt of Public Assistance and Type of Assistance (MFIP, Section 8, GRH, etc.) 5. Homeless Household 6. Disabled Status 7. Household Type (single, elderly, disabled, etc.) AHP 02/2020 Verification of Eligibility – Affordable Housing Program TO: (Name and Address of Housing Support Division) FROM: (Name & Address of Owner/Management Agent) RE:________________________________ Email: ________________________________ Applicant/Tenant Full Name Contact: _______________at ( )___________ ___________________ Unit Number (Optional) Thank you for your prompt response. All information is confidential. PERMISSION FOR RELEASE OF INFORMATION Release: I hereby authorize the release of requested information. Information obtained under this consent is limited to information that is no older than 12 months. There are circumstances which would require the owner to verify information that is up to 5 years old, which would be authorized by me on a separate consent with explanation, attached to a copy of this consent. Signature of Applicant/Tenant Date MN-DHS Housing Supports and Services Division, please fill in all blanks. Does the above Applicant/Tenant receive benefits under one of these two income-based Housing Programs outlined below? If Yes, what type of benefit program does s/he participate in? and/or Effective date of benefits: Additional remarks: Housing Support and Services Provider: Print Your Name: Title: Signature: Date: Telephone #: Fax #: Email: THIS SECTION TO BE COMPLETED BY HOUSING SUPPORT & SERVICES DIVISION Yes No Housing Support Minnesota Supplemental Aid (MSA Housing Assistance) AHP 02/2020 Government Data Practices Act Disclosure Statement Print name(s) of Household Members signing this form: The City of (“City”) that provided the funding for the development of the property listed below is asking for this private information that relates to your application to occupy, or continue to occupy, a unit in the following property (“Property”). Property Name: Some of the information you are being asked to provide may be considered private or confidential under the Minnesota Government Data Practices Act (MGDPA), Minnesota Statutes Chapter 13. Section 13.04(2) of this law requires that you be notified of the matters included in this Disclosure Statement before you are asked to provide that information. The owner/agent of the Property may also ask you to supply information that relates to your application. The owner’s/agent’s request for information is not governed by the Minnesota Government Data Practices Act. 1. The City of Edina, Minnesota for the Affordable Housing Program (AHP) is asking for information necessary for the administration and management of a local program to provide housing for low income families. Some of the information may be used to establish your eligibility to initially occupy, or to continue to occupy, a unit in the Property. Other information may be used to assist the City in the evaluation and management of some of the programs it operates. 2. As part of your application, you are asked to supply the information contained in the following attachment. Attachment 1 – Inclusionary Housing Program The Attachment has two parts: Part A and Part B 3. The information asked for under Part A of the attachment may be used by the City and/or owner/agent to establish your eligibility to participate in the Inclusionary Housing Program or occupy an affordable dwelling unit in the Property. If you refuse to supply any portion of the information asked for under Part A, you may not qualify for initial or continued occupancy of a unit in the Property. 4. The information asked for under Part B will help the City in the evaluation and management of some of the programs it operates and your supplying of this information will be helpful to the City. AHP 02/2020 Failure to provide any of the information asked for under Part B will NOT affect whether or not you qualify for initial or continued occupancy of a unit in the Property. 5. The owner/agent may also ask for information to determine whether or not it will rent a unit in the Property to you. If you supply, or refuse to supply, any information requested by the owner/agent, it will NOT affect a decision by the City, but could affect the owner’s/agent’s decision to rent a unit to you. The determination by the owner/agent is separate from the City’s determination and the City does not participate, in any way, in the owner’s/agent’s decision. 6. All of the information that you supply will be accessible to staff of the City (and its agents) and may be made available to staff of the Office of the Minnesota Attorney General, the United States Department of Housing and Urban Development (HUD), the United States Internal Revenue Service (IRS) and other persons and/or governmental entities who may have statutory authority to review the information, investigate specific conduct, and/or take appropriate legal action including but not limited to law enforcement agencies, courts and other regulatory agencies. The information may also be provided by the City to the owner’s management agents of the Property. 7. This Disclosure Statement remains in effect for as long as you occupy a unit in the Property and are a participant in the program(s) identified above. I was (We were) supplied with a copy of and have read this Government Data Practices Act Disclosure Statement and the Attachment identified above. Head of Household, Spouse, Co-Head and all household members age 18 or older must sign and date: Applicant/Tenant signature Date Applicant/Tenant signature Date Applicant/Tenant signature Date Applicant/Tenant signature Date Applicant/Tenant signature Date AHP 02/2020 AFFORDABLE HOUSING PROGRAM (AHP) LEASE ADDENDUM Resident Name: Address: Lease Date: The Property in which you are leasing received funding from the Affordable Housing Program. This program is designed to provide housing to low income individuals and families. This addendum will be in effect for the duration of your occupancy. By signing this Agreement, you and all adult household members acknowledge that you have read, understand and agree to the following provisions: 1. Affordable Housing Program. The Unit must comply with the Affordable Housing Program. Resident's rights under the Lease are subject to Program requirements. 2. Unit Occupancy. Only the residents named on the Lease are permitted to occupy the unit. 3. Income Certification. Resident has executed an Income Certification Form prior to moving into the Unit, and Resident shall complete and execute further Income Certification Forms at Management's request not less than annually hereafter. Upon Management’s request, Resident shall certify Resident’s household income and/or assets to Management or any governmental or quasi-governmental agency in a manner satisfactory to Management. 4. Recertified Income. Resident acknowledges that the annual recertification of Resident's household income must meet the limitations imposed by the Program. (Resident’s initials) ________ 5. Information Supplied. Resident certifies that the information supplied by Resident to determine Resident's qualifications to rent the Unit, including Resident's Application and Income Certification, is accurate, complete, and true in all respects. Submission of inaccurate, incomplete, or false information at any time is a breach of lease for which Resident can be evicted. 6. Increased Income. If, upon annual recertification, Resident's household income exceeds 140% of the applicable Program limit, Management may meet with Resident to review the status of the household’s qualification under the Program. If the household no longer qualifies, Management may terminate Resident’s lease. 7. Certain Changes. Resident shall notify Management immediately in writing if Resident's household size changes, anyone in Resident’s household becomes a full-time student, or Resident begins to receive HUD assistance. Management may immediately terminate this Lease if Resident’s student status disqualifies the Unit under the Program. Management may adjust Resident's rent and/or utility allowance if Resident begins to receive HUD assistance. (Resident’s initials) _________ 8. Student Eligibility. AHP adopted the Section 8 Housing Choice Voucher program restrictions on student participation found at 24 CFR 5.612 and excludes any individual that: AHP 02/2020 1. Is enrolled in a higher education institution; AND 2. Is under the age of 24; and 3. Is not a veteran of the US Military; and 4. Is not married*; and 5. Does not have a dependent child(ren); and 6. Is not a person with disabilities; and 7. Is not otherwise individually eligible, or has parents who, individually or jointly, are not eligible on the basis of income * Effective August 1, 2013 same-sex marriages are recognized as marriages for student eligibility purposes. ALL RESIDENTS MUST IMMEDIATELY REPORT TO MANAGEMENT ANY CHANGE IN STUDENT STATUS. (Resident’s initials) __________ 9. Cooperation with Management. Resident shall cooperate with Management so that Management complies with the Program. Resident will timely respond to Management requests related to Program documents, verifications, and certifications. This includes but is not limited to timely attending meetings, signing verifications, and providing requested information. Resident agrees to sign a new lease upon the completion of annual certifications, if requested or required by Management. 10. Termination/Non-Renewal. Management may terminate or refuse to renew the Lease or file an eviction action for the following reasons: Serious or repeated violation of the Lease. This includes but is not limited to Resident’s violation of this Agreement. (Resident’s initials) _______ Violation of applicable federal, state, or local law. (Resident’s initials) _______ Refusal/Failure to complete paperwork required by the Program. (Resident’s initials) _______ Other good cause, including if Resident’s continued occupancy of the Unit violates Program requirements. (Resident’s initials) _______ I have read and agree to the provisions above and understand that failure to comply with these provisions constitutes material non-compliance with this lease and establishes good cause for termination, nonrenewal of the lease, or eviction action. ________________________________________________ __________________________ Resident’s Signature Date ________________________________________________ __________________________ Resident’s Signature Date ________________________________________________ __________________________ Management’s Signature Date AHP 02/2020 AHP Rental Application Applicant Information Name: Date of birth: SSN: Phone: Current address: City: State: ZIP Code: Own Rent (Please circle) Monthly payment or rent: How long? Previous address: City: State: ZIP Code: Owned Rented (Please circle) Monthly payment or rent: How long? Co-applicant Information Name: Date of birth: SSN: Phone: Current address: City: State: ZIP Code: Own Rent (Please circle) Monthly payment or rent: How long? Previous address: City: State: ZIP Code: Owned Rented (Please circle) Monthly payment or rent: How long? Income and Asset Total Monthly Income (Include all family gross income): $ Income Sources (check all that apply) Wages/Self-Employment SSI/SSA Pension/Annuity Child Support Investment/Interest Income Workers Compensation TANF/Public Assistance Other________________ Value of Family Assets (Assets include all bank accounts, investment accounts, and real estate): $ Emergency Contact Name of a person not residing with you: Address: City: State: ZIP Code: Phone: References Name: Address: Phone: I authorize the verification of the information provided on this form as to my credit and source/s of income. Signature of applicant: Date: Signature of co-applicant: Date: AHP 02/2020 RESIDENT INCOME CERTIFICATION For use by eligible Affordable Housing Program (AHP) properties only Property Name: ____________________________ Effective Date: _________________ Household Composition: Anticipated Gross Household Income (Annual Amounts): Household Member Name Wages/Salaries/Self- Employment Benefits/Pensions TANF/Public Assistance Other Income Annual Gross Income: $ $ $ $ Total Annual Gross Income: $ Household Asset and Asset Income: Household Member Name Asset Description Current Cash Value of Asset Actual Income from Assets Total Cash Value: Total Income from Assets: $ (A)$ Enter Total Cash Value if over $50,000 $______________ Passbook Rate: X .06% = (B)$_____________ Imputed Income Enter the greater of the Total Income from Assets (A) OR Imputed Income (B): This will be the Total Income from Assets: $________________ Total Annual Income Annual Income (total of all actual income and income from assets): $________________ Head of Household Name Leased Address Total Number of Occupants AHP 02/2020 Rent Amounts: Leased Rent Amount: $________________ Monthly Utility Allowance: $________________ Gross Monthly Rent: (Leased Rent + Utility Allowance) $________________ Student Status: Are any household members, a student at an institution of higher education? Yes No If Yes, enter # as shown on the student form AHP Student Self-Certification 1. FT Student 2. Disabled 3. At least 24 years of age 4. Veteran of United States Military 5. Married 6. Dependent 7. Living Independently from Parents 8. Graduate or Professional Student 9. Orphan or Ward of the Court 10. Vulnerable Youth 11. Independent via unusual circumstances #_________________ After all verifications of income and/or assets have been received and calculated, each household member age 18 or older must sign and date the Resident Income Certification. For move-in, it is recommended that the Resident Income Certification be signed no earlier than 5 days prior to the effective date of the certification. I/we hereby affirm that the foregoing information is true and complete to the best of my/our knowledge and authorize the Landlord to make inquires to verify the statements herein. I/we further understand that any intentional misrepresentation in this self-certification might result in a default in the rental agreement and/or eviction of the household. If any of the aforementioned changes, I/we agree to notify the Landlord immediately. All household members age 18 or older must sign and date below: Signature: ______________________________________________ Date: _________________________________ Signature: ______________________________________________ Date: _________________________________ Signature: ______________________________________________ Date: _________________________________ Signature and Date of Owner/Representative: Signature: ______________________________________________ Date: _________________________________ Affordable Housing Program (AHP) RESIDENT NOTIFICATION LETTER As a resident of (name of property), a property funded by the CITY OF EDINA, MINNESOTA, a Minnesota statutory city, and the HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF EDINA, MINNESOTA, you have certain rights stated in your lease and the attached Lease Rider. Your landlord must follow city and state rules for the Affordable Housing Program. One of the important protections provided by federal law is that you cannot be evicted from your home or have your tenancy terminated without good reason or “good cause.” Your landlord may not evict you or terminate your tenancy (including refusing to renew your lease) without good cause. Good cause is (a) serious or repeated violation(s) of the material terms and conditions of your lease. The landlord must state, in writing, the good cause in any eviction, lease non-renewal or termination of tenancy notice. If you did not do what your landlord claims in the notice, or if you think it was not serious enough for your lease to be terminated or not renewed, you can ask the landlord if there is an appeal process. If there is no appeal process, you may request that the termination be retracted and discuss your reasons why. If you receive a notice of eviction, you have a right to contest the eviction in court by explaining to the judge why you disagree with the reasons for terminating your lease. Visit www.lawhelpmn.org to see if you qualify for free or low-cost legal assistance. In addition, your landlord may not increase the amount of rent stated on your lease more than once annually. The attached Lease Rider should already be signed by your landlord. You and all members of your household age 18 or older must also sign the Lease Rider in order to make it part of your lease. The Lease Rider needs to be signed each time you sign a new lease. If at any time additional adult household members enter the unit or a child who lives in that unit turns 18, they should add their signature to the existing Lease Rider with the current date. Your landlord also has a legal obligation to comply with the statutory requirements found in Section 601 of the Violence Against Women Reauthorization Act of 2013 (VAWA). Under VAWA, you may not be denied admission, denied assistance, terminated from participation, or evicted on the basis that you are or have been a victim of domestic violence, dating violence, sexual assault or stalking, if you otherwise qualify for admission, assistance, participation or occupancy. You should have received the following when you were approved for occupancy or at some time during your occupancy: •HUD Form 5380 – Notice of Occupancy Rights under the Violence Against Women Act; and •HUD Form 5382 – Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking, and Alternate Documentation. The landlord must also include these documents with any notice of eviction, lease non-renewal or termination of tenancy. You may also have signed a VAWA Lease Addendum. If you have any questions concerning this matter, please contact your resident manager, , or your landlord at (phone and email). Sincerely , Property Representative Name (print and sign) Date AHP 02/2020 Affordable Housing Program LEASE RIDER (attach to resident lease) Property Name: Building/Unit #: Head of Household Name: The Lease dated is hereby amended by adding the following provisions: 1. Owner/Landlord may not evict or terminate the tenancy (including refusing to renew this Lease) except for good cause. Good cause means (a) serious or repeated violation(s) of the material terms and conditions of the Lease. Any eviction, lease non-renewal or termination of tenancy notice must be in writing and must state the specific violation(s). The notice must comply with all requirements of Minnesota law and other applicable programs. 2. Owner/Landlord may not increase the lease rent more than once annually, regardless of the term of the Lease. To the extent that any terms contained in the Lease or any other agreement between the owner and the tenant contradict the terms of this Lease Rider, the provisions of this Lease Rider shall control. By signing below, I indicate my consent to this Lease Rider: Property Representative Name (print) (signature) Date ************************************************************************************* By signing below, I indicate my consent to this Lease Rider. I/we have been given a copy of this Lease Rider. Resident Name (print) (signature) Date Resident Name (print) (signature) Date Resident Name (print) (signature) Date Resident Name (print) (signature) Date AHP 02/2020 AHP 02/2020 Self-Certification of Household Annual Income For use by eligible Affordable Housing Program (only to be used in-between the 3rd year requirement of a full certification) Property Name: __________________ Unit Number: ______________ Recertification Date: _____________ 1. Enter all household member’s names, relationship to the head of household and student status below: Last Name First Name Relationship to Head of Household Has This Person Been a Student During the Past Year and/or Will This Person Be a Student in the Upcoming Year? 2. Enter all household members’ gross annual income (income before taxes). Types of income include but are not limited employment wages, military pay, public assistance, Social Security/SSI benefits, Pension, VA benefits, child support, regular gifts, unemployment, and some types of financial aid. Household Member’s Name Source of Income Gross Annual Income Total Gross Annual Income from Column: $ AHP 02/2020 3. Types of income from assets include but are not limited to interest and dividends earned from checking accounts, savings accounts, retirement accounts, certificates of deposit, money market, 401Ks and real estate. Total Cash Value: (total of Current Cash Value of Asset Colum) Total Actual Income from Assets: (total of Actual Income from Assets Column) $ $ Total Annual Income ANNUAL (GROSS) INCOME (TOTAL OF ALL HOUSEHOLD MEMBERS): $_______________________ I/we hereby affirm that the foregoing information is true and complete to the best of my/our knowledge and authorize the Owner/Manager to make inquires to verify the statements herein. I/we further understand that any intentional misrepresentation in this self-certification might result in a default in the rental agreement and/or eviction of the household. If any of the aforementioned changes, I/we agree to notify the Owner/Manager immediately. All household members age 18 or older must sign and date below: Signature: ______________________________________________ Date: _________________________________ Signature: ______________________________________________ Date: _________________________________ Signature: ______________________________________________ Date: _________________________________ Signature: ______________________________________________ Date: _________________________________ Household Member’s Name Type of Asset & Source Current Cash Value of Asset Actual Income From Assets 11/2019 Property Address: ____________________ Affordable Housing Program (AHP) STUDENT STATUS SELF-CERTIFICATION FIRST NAME: TO BE COMPLETED BY APPLICANT / RESIDENT: A.Are you student at an institution of higher education?_____ Yes _____ No “Institution of higher education” includes post-secondary vocational institutions, “proprietary institutions of higher education” which prepare students for “gainful employment in a recognized occupation,” and accredited post-secondary colleges and universities. If you are not sure, please mark “yes” and we will verify the status of your institution. If you have answered no, please skip the following questions in (B) and sign below in (C). B.If you answered yes, please complete the following questions and sign below in (C): Yes No 1. Are you a full-time student?_____ ____ 2. Are you disabled?_____ ____ If yes, were you receiving Section 8 assistance as of November 30, 2005? _____ ____ 3. Are you at least 24 years of age? _____ ____ If no, please list birth date:________________ 4. Are you a veteran of the United States military?_____ ____ 5. Are you married?_____ ____ 6. Do you have a dependent other than a spouse (e.g. dependent child) _____ ____ 7. Will you be living with your parents?_____ ____ If no: a. Are your parents receiving or eligible to receive Section 8?_____ ____ b. Are you claimed as a dependent on your parent’s tax return? _____ ____ c. Have you maintained a household separate from your parents or guardians for at least 1 year?_____ ____ 8. Are you a graduate or professional student?_____ ____ 9. Were you an orphan or a ward of the court through the age of 18?_____ ____ 10. Are you classified as a Vulnerable Youth?_____ ____ 11. Are you a student for whom a financial aid administrator makes a documented determination of independence by reason of other unusual circumstances?_____ ____ C. ________________________________ __________________________________ Signature Print Name ________________________________ Date LAST NAME: AHP 02/2020 UNDER $50,000 ASSET CERTIFICATION for use with HRA's Affordable Housing Program Only For households whose combined net assets do not exceed $50,000. Complete only one form per household; include assets of children. Household Name: Unit No. Development Name: City: Complete all that apply for 1 through 4: 1.My/our assets include (enter n/a in (A) if you do not own the respective asset): (A) Cash Value* (B) Int. Rate (A*B) Annual Income Source (A) Cash Value* (B) Int. Rate (A*B) Annual Income Source $ $ Savings Account(s) $ $ Checking Account(s) $ $ Include online accounts such as GoFundMe, Fundly, etc. Cash on Hand $ $ Cash cards used to receive government benefits or other income $ $ Certificates of Deposit $ $ Money market funds $ $ Stocks $ $ Bonds $ $ IRA Account(s) $ $ 401K Account(s) $ $ Keogh Account(s) $ $ Trust Funds $ $ Equity in real estate $ $ Land Contracts $ $ Lump Sum Receipts $ $ Capital investments $ $ Life Insurance Policies (excluding Term) $ $ Other Retirement/Pension Funds not named above: $ $ Personal property held as an investment** : $ $ Other (list): PLEASE NOTE: Certain funds (e.g., Retirement, Pension, Trust) may or may not be (fully) accessible to you. Include only those amounts which are. *Cash value is defined as market value minus the cost of converting the asset to cash, such as broker's fees, settlement costs, outstanding loans, early withdrawal penalties, etc. **Personal property held as an investment may include, but is not limited to, gem or coin collections, art, antique cars, etc. Do not include necessary personal property such as, but not necessarily limited to, household furniture, daily-use autos, clothing, assets of an active business, or special equipment for use by the disabled. 2.Within the past two (2) years, I/we have sold or given away assets (including cash, real estate, etc.) for more than $1,000 below fair market value (FMV). Those amounts equal a total of: $ (enter the difference between FMV and the amount you received). 3.I/we have not sold or given away assets (including cash, real estate, etc.) for less than fair market value during the past two (2) years. 4.I/we do not have any assets at this time (do not check this box if you have entered any numbers in section 1, above). The net family assets (as defined in 24 CFR 813.102) above do not exceed $50,000 and the annual income from the net family assets is $ (enter the total of all (A*B) Annual Income in section 1 above). This amount is included in total gross annual income. Under penalty of perjury, I/we certify that the information presented in this certification is true and accurate to the best of my/our knowledge. The undersigned further understand(s) that providing false representations herein constitutes an act of fraud. False, misleading or incomplete information may result in the termination of a lease agreement. Applicant/Tenant Under $50,000 Asset Certification Date Applicant/Tenant Date K-1 4822-3850-8796\5 Exhibit K Form of Affordable Housing Restrictive Covenant DECLARATION OF COVENANTS AND RESTRICTIONS (Affordable Housing) THIS DECLARATION OF COVENANTS AND RESTRICTIONS (this “Declaration”) is made as of the _____ day of ______________, 20___, by Eden Avenue Group, LLC, a Delaware limited liability company (“Declarant”). Recitals A. Declarant is the owner of certain real property situated in the City of Edina, Hennepin County, Minnesota, located at 4917 Eden Avenue and legally described in the attached Exhibit A (the “Property”). B. Declarant; the Housing and Redevelopment Authority of Edina, Minnesota, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the “Authority”); and the City of Edina Minnesota, a Minnesota statutory city (the “City”) are parties to that certain Redevelopment Agreement dated November 3, 2021 (as the same may be amended, modified, and/or supplemented from time to time, the “Redevelopment Agreement”). C. The Redevelopment Agreement provides for the redevelopment of the Property by Declarant with the cooperation and assistance of the Authority and the City and provides for the expenditure of certain public funds to assist in such redevelopment of the Property and construction of certain improvements thereon, including [196] rental housing units (the “Project”). D. The City, by Resolution No. 21-[_________], dated November 3, 2021, approved Declarant’s final rezoning, planned unit development ordinance, and final development plan for the Project. E. Pursuant to the Redevelopment Agreement, Declarant has agreed to impose certain restrictive covenants upon the Property to ensure that [20] [Prior to execution insert final number of Affordable Units per the Redevelopment Contract, to be a 10% of the residential units within the Minimum Improvements, but in no event fewer than 20 units] of the housing units within the Project will remain affordable to certain low-income persons and households (“Affordable Units”). F. Declarant, under this Declaration, intends, declares, and covenants that the restrictive covenants set forth herein governing the use, occupancy, and transfer of the Project shall be and are covenants running with the Property for the Term stated herein and binding upon all subsequent owners of the Property for such Term, and are not merely personal covenants of Declarant. NOW, THEREFORE, Declarant makes the following Declaration, hereby specifying that said Declaration shall constitute covenants to run with the land and shall be binding on all parties in interest and their respective successors and assigns: 1. Recitals; Definitions. The Recitals are true and correct statements of fact and are incorporated into this Declaration by this reference, including the definitions set forth therein. Each K-2 4822-3850-8796\5 capitalized term used herein and the Recitals, unless otherwise defined, shall have the respective meaning ascribed to such term in the Redevelopment Agreement. 2. Term. This Declaration, and the covenants and restrictions contained herein, shall continue in full force and effect for a period commencing on the date hereof and ending on the 21-year anniversary of the date that all the Affordable Units are first occupied by Qualifying Tenants (the “Term”); provided, however, Declarant’s obligations hereunder with respect to reporting, City auditing, and compliance with the terms of Affordable Unit leases, and the City’s enforcement remedies with respect to the same, shall survive until the expiration of the last of the leases with a Qualifying Tenant for an Affordable Unit. Without the execution or recording of any additional documents, this Declaration shall automatically cease to be of any force or effect upon the expiration of the Term. Declarant’s obligation to operate the Project subject to this Declaration for the Term is independent of the existence and continuance of any tax increment financing and/or other public assistance contemplated or given by the Authority or the City to Declarant under the Redevelopment Agreement, or otherwise (“Public Assistance”). The provisions of this Declaration are intended to survive the termination or extinguishment of any Public Assistance, any mortgage securing the same, and any other security instruments placed of record in connection with the Public Assistance and to survive the termination of any subsequent financing or security instruments placed of record by other lenders. 3. Occupancy Requirements and Restrictions. (a) Qualifying Tenants. During the Term, the Affordable Units shall be leased and occupied (or held vacant and available for occupancy) only by Qualifying Tenants. “Qualifying Tenants” means individuals or households who, at initial occupancy, have a combined gross annual income which does not exceed 50% of the area median income (including adjustments for family size), as determined by the U.S. Department of Housing and Urban Development’s (“HUD”) Area Median Income for the Minneapolis-Saint Paul-Bloomington Metropolitan Statistical Area (“AMI”). (b) Rental Rates. The Affordable Units shall bear annual rents not greater than the rental rate limits for such Qualifying Tenants (adjusted for bedroom count, and including utilities and mandatory fees, such as parking) as determined and announced from time to time by HUD and as published annually by the Minnesota Housing Finance Agency (or any successor agency(ies) administrating government affordable housing programs), and if such agency ceases to publish and update such rates during the Term, such annual rents for the Affordable Units shall not be not greater than 30% of 50% of AMI. (c) Certification of Tenant Eligibility. No tenant household shall be approved by Declarant for initial occupancy of an Affordable Unit unless and until Declarant has determined (through verification of income, assets, expenses, and deductions) whether such tenant household is a Qualifying Tenant. Each person who is intended to be a Qualifying Tenant will be required at the commencement of the initial lease of an Affordable Unit to sign and deliver to Declarant a “Certification of Tenant Eligibility” substantially in the form attached as Exhibit B, or in any other form as may be approved in writing by the Executive Director of the Authority or the City Manager of the City (the “Eligibility Certification”), in which the prospective tenant certifies as to qualifying as a Qualifying Tenant. Eligibility Certifications may be obtained no more than 120 days before a Qualifying Tenant occupies an Affordable Unit. In addition, the person will be required to provide whatever other information, documents, or certifications are deemed reasonably necessary by the Authority or the City to substantiate the Eligibility Certification. Eligibility Certifications will be maintained on file by Declarant with respect to each Qualifying Tenant who resides or resided in an Affordable Unit for a period of 10 years following the end of the Term. Declarant must re- K-3 4822-3850-8796\5 examine and verify the income of each tenant household living in an Affordable Unit annually unless, during such year, all of the Affordable Units are occupied by Qualifying Tenants during the calendar year. In addition, no re-certification shall be required if a Qualifying Tenant moves to a different Affordable Unit. (d) Leases. The Affordable Units shall be rented pursuant to a written lease, and the term of each such lease shall be least 12 months, except that during the final year of the Term, new leases for the Affordable Units may be for a term of no less than six months, and such newly leased Affordable Units shall be subject to the terms and conditions of this Declaration until the expiration of such new leases. In addition, each lease utilized by Declarant in renting any Affordable Unit to any person who is intended to be a Qualifying Tenant shall: (i) not require a security deposit in excess of the amount of one month of rent in connection with any Affordable Unit; (ii) provide that rental rates charged to any Qualifying Tenant of an Affordable Unit cannot be increased more than once in any 12-month period; (iii) provide for termination of the lease and consent by the person to eviction for failure to qualify as a Qualifying Tenant as a result of any material misrepresentation made by the person with respect to the Eligibility Certification; (iv) include a clause wherein each individual tenant or tenant certifies the accuracy of the statements made in its application and Eligibility Certification; and (v) include a clause wherein each individual tenant or tenant certifies that the family income at the time the lease is executed will be deemed substantial and material obligation of the tenant’s tenancy; that the tenant will comply promptly with all requests for income and other information relevant to determining low or moderate income status from Declarant, the Authority, or the City, and that the tenant’s failure or refusal to comply with a request for information with respect thereto will be deemed a violation of a substantial obligation of the tenant’s tenancy of its Affordable Unit. (e) Affordable Unit Mix. The Affordable Units shall consist of [four (4)] studio units (each of which shall be no smaller than 500 square feet in size), [ten (10)] one-bedroom units (each of which shall be no smaller than 700 square feet in size), and [six (6)] two-bedroom units (each of which shall be no smaller than 1,000 square feet in size), and each as specifically identified in the table below [Affordable Units will be fixed; prior to execution, insert final Affordable Units below]. The two-bedroom units must be leased to Qualified Tenants consisting of households of at least two members. Any change in the foregoing distribution and below identification of Affordable Units shall require the prior written approval of the Executive Director of the Authority and City Manager of the City, which such consent will not be unreasonably conditioned, delayed or withheld. Affordable Units Type of Unit Unit No. Floor Square Feet 1. Studio 2. Studio 3. Studio K-4 4822-3850-8796\5 4. Studio 5. 1-bedroom 6. 1-bedroom 7. 1-bedroom 8. 1-bedroom 9. 1-bedroom 10. 1-bedroom 11. 2-bedroom 12. 2-bedroom 13. 2-bedroom 14. 2-bedroom 15. 2-bedroom 16. 2-bedroom 17. 2-bedroom 18. 2-bedroom 19. 2-bedroom 20. 2-bedroom 4. Enforcement of Covenants and Restrictions. (a) Annual Certification. Declarant shall prepare and submit to the Authority and the City, annually for approval on the basis of compliance with this Declaration, a certificate substantially in the form of the attached Exhibit C, executed by Declarant, (i) identifying the tenancies and the dates of occupancy (or vacancy) for all Qualifying Tenants, including the percentage of the dwelling units of the Project which were occupied by Qualifying Tenants (or held vacant and available for occupancy by Qualifying Tenants) at all times during the year preceding the date of the certificate; (ii) describing all transfers or other changes in ownership of the Project or any interest therein; and (iii) stating that all Affordable Units were rented or available for rental on a continuous basis during the year to Qualifying Tenants and that Declarant was not otherwise in default under this Declaration during the year. The initial deadline for submission of such certification is three months following the date that all the Affordable Units are first occupied by Qualifying Tenants and thereafter an annual deadline for submission of January 31. (b) Books and Records. Declarant shall permit, during normal business hours and upon reasonable notice, any duly authorized representative of the Authority or City, to inspect any books and records of Declarant regarding the Project with respect to the incomes of tenant households of Affordable Units and the rents charged for Affordable Units to ensure compliance with the requirements of this Declaration. At the City’s or Authority’s request, Declarant will submit any other information, documents or certifications that Declarant, in its reasonable discretion, deems necessary to substantiate Declarant’s compliance with the requirements of this Declaration. (c) Delegation; Third-Party Monitoring. Each of the Authority and the City may, in their reasonable discretion, delegate their obligations hereunder and responsibilities for monitoring and enforcement of this Declaration to a separate subdivision of the City and/or one or more designated contractors, subcontractors, or agents. Declarant shall, upon annual invoicing, reimburse the Authority and the City for third-party expenses related to monitoring of Declarant’s compliance with this Declaration, which such costs shall initially not exceed $2,700 per year (plus any additional costs necessitated by re-inspections for noncompliance with this Declaration) and thereafter be subject to reasonable adjustment from time to time. K-5 4822-3850-8796\5 (d) City Affordable Housing Policy. The Project and the Affordable Units shall be subject to the terms and condition of the City’s Inclusionary Housing Policy Program, as may be amended from time to time. (e) Notice of Non-Compliance. Declarant shall immediately notify the Authority and the City if at any time during the term of this Declaration the dwelling units in the Project are not occupied or available for occupancy as required by the terms of this Declaration. 5. Additional Covenants, Representations, and Warranties of Declarant. (a) Legal Compliance. Declarant shall construction and maintain the Affordable Units and the Project in compliance with all requirements of the Redevelopment Agreement (including, without limitation, the level of finishes and amenities described in the Redevelopment Agreement), the City Approvals, any requirements of any lender whose loan is secured by a mortgage to which Declarant is a party or by which it or the Project is bound, and all applicable ordinances, building and use restrictions, code-required building permits, and any requirements with respect to licenses, permits, and agreements necessary for the lawful use and operation of the Project. (b) No Violation. The execution and performance of this Declaration by Declarant (i) will not violate or, as applicable, have not violated any provision of law, rule or regulation, or any order of any court or other agency or governmental body, and (ii) will not violate or, as applicable, have not violated any provision of any indenture, agreement, mortgage, mortgage note, or other instrument to which Declarant is a party or by which it or the Project is bound, and (iii) will not result in the creation or imposition of any prohibited encumbrance of any nature. (c) Section 8 Housing. Declarant shall accept tenants who are recipients of federal certificates for rent subsidies pursuant to the existing program under Section 8 of the United States Housing Act of 1937, as amended, codified as 42 U.S.C. Sections 1401 et seq., or its successor. Declarant shall not adopt any policies specifically excluding rental to tenants holding Section 8 certificate/voucher holders solely because of the status of the prospective tenant as such a holder. (d) Underserved Populations. Declarant shall affirmatively market the Affordable Units to one or more traditionally underserved populations as affordable at the rates required hereunder. (e) Consents and Subordination. Declarant shall obtain the consent to this Declaration of any prior recorded lien-holder for the Property and shall cause such liens to be subordinated to this Declaration. Declarant has not and will not execute any other agreement with provisions contradictory to, or in opposition to, the provisions hereof and that, in any event, the requirements of this Declaration are paramount and controlling as to the rights and obligations set forth herein and supersede any other document’s provisions in conflict herewith. (f) Transfer Restrictions. Subject to the terms and conditions of the Redevelopment Agreement and the City Approvals, Declarant may sell, transfer or exchange the Project, the Property or any portion thereof, but Declarant shall notify the Authority and the City in writing at least 60 days prior to such sale, transfer or exchange, and use commercially reasonable efforts to obtain the acknowledgment of any buyer or successor or other person acquiring the Project or any interest therein that such acquisition is subject to the covenants and restrictions of this Declaration (and to the requirements of the Redevelopment Agreement incorporated herein). Failure by Declarant to obtain such acknowledgment shall not be deemed to impair the covenants and restrictions of this Declaration. K-6 4822-3850-8796\5 (g) Alterations; Use. Declarant shall not demolish any part of the Project or substantially subtract from any real or personal property of the Project or permit the use of any residential unit for any purpose other than rental housing during the Term of this Declaration unless required by law. Qualifying Tenants shall have the same access to the Project amenities as residents of the market-rate units. (h) Condemnation, Damage, or Destruction. In the event that title to and possession of the Project or any material part thereof shall be taken in condemnation or by the exercise of the power of eminent domain by any governmental body or other person (except the Authority or the City) or the Project is damaged or destroyed, Declarant shall, with reasonable promptness after such taking, notify the Authority as to the nature and extent of such damage or taking, as applicable. Upon receipt of any condemnation award or insurance proceeds Declarant shall elect to either: (a) use the entire condemnation award or insurance proceeds to reconstruct the Project (or, in the event only a part of the Project has been taken or damaged, then to reconstruct such part) upon the remaining Property to the extent necessary to maintain and continue operations of Project for its intended purpose; or (b) in the event that the condemnation affects or taking or damage or destruction affects the Property but not the Project improvements thereon, retain, for the account of Declarant, all of the condemnation award or insurance proceeds. 6. Remedies; Enforceability. In the event of a violation or attempted violation of any of the covenants, conditions or restrictions herein contained, the City or the Authority may institute and prosecute any proceeding at law or in equity to abate, prevent or enjoin any such violation, or enforce specific performance by Declarant of the covenants, obligations, conditions and/or restrictions set forth herein, or to recover monetary damages caused by such violation or attempted violation. Declarant specifically acknowledges that the City and the Authority cannot be adequately compensated by monetary damages in the event of any default hereunder. Unless terminated as provided herein, the provisions hereof are imposed upon and made applicable to the Project, and shall be enforceable against Declarant, each purchaser, grantee, owner or tenant of the Project and the respective heirs, legal representatives, successors and assigns of each. No delay in enforcing the provisions of said covenants, conditions and restrictions as to any breach or violation shall impair, damage or waive the right to enforce the same or to obtain relief against or recover for the continuation or repetition of such breach or violation or any similar breach or violation thereof at any later time or times. In addition to any remedy set forth herein for failure to comply with the restrictions set forth in this Declaration, any such failure shall be a Default under the Redevelopment Agreement and the City or the Authority may exercise any remedy available to it under the Redevelopment Agreement if such Default becomes an Event of Default. 7. Indemnification. Declarant hereby indemnifies, and agrees to defend and hold harmless, the Authority, the City, and their respective officers, officials, employees, and agents, from and against all liabilities, losses, damages, costs, expenses (including attorneys’ fees and expenses), causes of action, suits, allegations, claims, demands, and judgments of any nature arising from the consequences of a legal or administrative proceeding or action brought against them, or any of them, on account of any failure by Declarant to comply with the terms of this Declaration, or on account of any representation or warranty of Declarant contained herein being untrue. 8. Covenants Running With the Land. Declarant intends, declares and covenants, on behalf of itself and all future owners and operators of the Property and the Project during the Term, that this Declaration and the covenants and restrictions set forth in this Declaration regulating and restricting the use, occupancy and transfer of the Property and the Project (a) shall be and are covenants running with the Property and the Project, encumbering the Property and the Project for the Term, binding upon Declarant’s successors in title and all subsequent owners and operators of the Property and the Project; (b) are not merely personal covenants of Declarant; and (c) shall bind Declarant (and the benefits shall inure to the K-7 4822-3850-8796\5 Authority and the City) and its respective successors and assigns during the Term. Declarant hereby agrees that any and all requirements of the laws of the State of Minnesota to be satisfied in order for the provisions of this Declaration to constitute deed restrictions and covenants running with the land shall be deemed to be satisfied in full and that any requirements of privileges of estate are intended to be satisfied, or in the alternate, that an equitable servitude has been created to insure that these restrictions run with the land. For the Term, each and every contract, deed or other instrument hereafter executed conveying the Property and the Project or portion thereof shall expressly provide that such conveyance is subject to this Declaration; provided, however, that the covenants contained herein shall survive and be effective regardless of whether such contract, deed or other instrument hereafter executed conveying the Property and the Project or portion thereof provides that such conveyance is subject to this Declaration. 9. Waiver. The waiver by the Authority of any breach or default of any provisions anywhere contained in this Declaration shall not be deemed to be a waiver of any subsequent breach or default thereof. No provision of this Declaration shall be deemed to have been waived by any party hereto or party benefited hereby unless such waiver is in writing and signed by the party charged with any such waiver. 10. Notices. Any notice, approval, consent, payment, demand, communication, authorization, delegation, recommendation, agreement, offer, report, statement, certification or disclosure required or permitted to be given or made under this Declaration, whether or not expressly so stated, shall not be effective unless and until given or made in writing and shall be deemed to have been duly given or made as of the following date: (a) if delivered personally by courier or otherwise, then as of the date delivered or if delivery is refused, then as of the date presented; or (b) if sent or mailed by certified U.S. mail, return receipt requested, or by Federal Express, Express Mail or other mail or overnight courier service, then as of the date received. All such communications shall be addressed as follows (which address(es) for a party may be changed by that party from time to time by notice to the other parties). No such communications to a party shall be effective unless and until deemed received at all address(es) for such party: Declarant at: c/o Reuter Walton Development, LLC Attn: Nicholas Walton 4450 Excelsior Boulevard, Suite 400 St. Louis Park, MN 55416 with a copy to: The Northwestern Mutual Life Insurance Company Attention: Real Estate Investment Department 720 East Wisconsin Avenue Milwaukee, WI 53202 The Authority at: Housing and Redevelopment Authority of Edina, Minnesota Attention: Executive Director 4801 West 50th Street Edina, MN 55424 with a copy to: Dorsey & Whitney LLP Attention: Jay R. Lindgren 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402 The City at: City of Edina Attention: City Manager 4801 W. 50th Street Edina, MN 55424 K-8 4822-3850-8796\5 with a copy to: Dorsey & Whitney LLP Attention: Jay R. Lindgren 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402 or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other, as provided in this Section. 11. Joinder; Permitted Encumbrance. Except for the mortgagee consent attached hereto, this Declaration does not require the joinder or approval of any other person and each of the parties respectfully has the full, unrestricted and exclusive legal right and power to enter into this Declaration for the term and upon the provisions herein recited and for the use and purposes hereinabove set forth. This Declaration shall constitute a permitted encumbrance under any loan agreement heretofore or hereafter entered into between Owner and any construction lender or permanent lender. 12. Amendment. The provisions of this Declaration shall not be amended, terminated or deleted during the Term hereof, except by an instrument in writing duly executed by the Authority, the City, and Declarant, their respective successors and assigns. 13. Attorneys’ Fees. In case any action at law or in equity, including an action for declaratory relief, is brought against Declarant to enforce the provisions of this Declaration, Declarant agrees to pay the reasonable attorneys’ fees and other reasonable expenses paid or incurred by the City and/or the Authority in connection with the action. 14. Governing Law. This Declaration is governed by the laws of the state of Minnesota and, where applicable, the laws of the United States of America. 15. Severability. If any provisions hereof shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions shall not in any way be affected or impaired. [Remainder of page intentionally left blank; signature page follows] K-9 [Signature Page to Declaration of Covenants and Restrictions] 4822-3850-8796\5 IN WITNESS WHEREOF, Declarant has caused this Declaration to be executed as of the date first written above EDEN AVENUE GROUP, LLC By: Eden Avenue Partners, LLC, its Manager By: _________________________________________ Name: Nicholas Walton Its: Manager STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___ day of ________________, 2021, by Nicholas Walton, the Manager of Eden Avenue Partners, LLC, a Minnesota limited liability company, the Manager of Eden Avenue Group, LLC, a Delaware limited liability company, on behalf of the company. Notary Public THIS DOCUMENT WAS DRAFTED BY: Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402-1498 K-10 [Exhibit A to Declaration of Covenants and Restrictions] 4822-3850-8796\5 Exhibit A Legal Description of the Property Tracts A and C, Registered Land Survey No. 1501, Hennepin County, Minnesota K-11 [Exhibit B to Declaration of Covenants and Restrictions] 4822-3850-8796\5 Exhibit B Form of Certification of Tenant Eligibility K-12 [Exhibit B to Declaration of Covenants and Restrictions] 4822-3850-8796\5 K-13 [Exhibit C to Declaration of Covenants and Restrictions] 4822-3850-8796\5 Exhibit C Form of Certificate of Continuing Program Compliance Certificate of Continuing Program Compliance Date: ___________________ The following information with respect to the Project located at 4917 Eden Avenue, Edina, Minnesota (the “Project”), is being provided by Eden Avenue Group, LLC, a Delaware limited liability company (“Declarant”) to the City of Edina, Minnesota, a Minnesota statutory city (the “City”) and the Housing and Redevelopment Authority of Edina, Minnesota, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the “Authority”), pursuant to that certain Declaration of Covenants and Restrictions (Affordable Housing) dated ________________ ___, 2021 (the “Declaration”), with respect to the Project: (A) The total number of Affordable Units which are available for occupancy is [20]. The total number of these units occupied is _________________. (B) The following Affordable Units (identified by unit number) are currently occupied by “Qualifying Tenants,” as the term is defined in the Declaration (for a total of [20] units): Unit Number Name of Tenant Number of Persons Residing in the Unit Number of Bedrooms Total Adjusted Gross Income Date of Initial Occupancy Rent 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 K-14 [Exhibit C to Declaration of Covenants and Restrictions] 4822-3850-8796\5 (C) Declarant has obtained a “Certification of Tenant Eligibility,” in the form provided as Exhibit B to the Declaration, from each Tenant named in (B) above, and each such Certificate is being maintained by Declarant in its records with respect to the Project. Attached hereto is the most recent “Certification of Tenant Eligibility” for each Tenant named in (B) above who signed such a Certification since ______________, _____, the date on which the last “Certificate of Continuing Program Compliance” was filed with the Authority and the City by Declarant. (D) In renting the residential units in the Project, Declarant has not given preference to any particular group or class of persons (except for persons who qualify as Qualifying Tenants); and none of the units listed in (B) above have been rented for occupancy entirely by students, no one of which is entitled to file a joint return for federal income tax purposes. All of the residential units in the Project have been rented pursuant to a written lease, and the term of each lease is at least twelve (12) months. (E) The information provided in this “Certificate of Continuing Program Compliance” is accurate and complete, and no matters have come to the attention of Declarant which would indicate that any of the information provided herein, or in any “Certification of Tenant Eligibility” obtained from the Tenants named herein, is inaccurate or incomplete in any respect. (F) The Project is in continuing compliance with the Declaration. (G) Declarant certifies that as of the date hereof at least [20] of the residential dwelling units in the Project are occupied or held open for occupancy by Qualifying Tenants, as defined and provided in the Declaration. (H) The rental levels for each Qualifying Tenant comply with the maximum permitted under the Declaration. IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of Declarant, on ____________________, 20___. EDEN AVENUE GROUP, LLC By: Eden Avenue Partners, LLC, its Manager By: _________________________________________ Name: Nicholas Walton Its: Manager K-15 4822-3850-8796\5 CONSENT AND SUBORDINATION The undersigned, ___________________, a ___________________, holder of that certain [Mortgage] executed by Eden Avenue Group, LLC, a Delaware limited liability company, dated ________________, 20___, filed ________________, 20____, as Document No. ___________, in the office of the County Recorder in and for Hennepin County, Minnesota, and filed ________________, 20____, as Document No. ___________, in the office of the Registrar of Titles in and for Hennepin County, Minnesota, in favor of ________________ (the “Mortgage”), hereby consents to the foregoing Declaration of Covenants and Restrictions (Affordable Housing) (the “Declaration”), and hereby subordinates the Mortgage and all of its right, title and interest in the Property to the Declaration. ___________________________________, a ___________________ By: _________________________________________ Printed Name: ________________________________ Title: ________________________________________ STATE OF ______________ ) ) ss. COUNTY OF ______________ ) The foregoing instrument was acknowledged before me this ____ day of ____________, 20___, by ____________________, the _________________ of ___________________, a ___________________, on behalf of the ___________________. (Signature of Person Taking Acknowledgment) THIS DOCUMENT WAS DRAFTED BY: Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402-1498 L-1 4820-3049-8044\4 Exhibit L Form of Right of First Purchase Option Agreement RIGHT OF FIRST PURCHASE OPTION AGREEMENT (4917 Eden Avenue) THIS RIGHT OF FIRST PURCHASE OPTION AGREEMENT (this “Agreement”) is made and entered into this ___ day of ____________, 202__ (“Effective Date”), by and between the Housing and Redevelopment Authority of Edina, Minnesota, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the “Authority”), and Eden Avenue Group, LLC, a Delaware limited liability company (“Owner”). RECITALS: A. The City of Edina, Minnesota, a Minnesota statutory city (the “City”), the Authority, and Owner, as “Developer”, are parties to that certain Redevelopment Agreement dated November 3, 2021 (the “Redevelopment Agreement”). B. The Redevelopment Agreement provides for the redevelopment by Owner of certain real property legally described on the attached Exhibit A (the “Project Area”) and located within the Eden / Willson Tax Incremental Financing District, established by the Authority pursuant to Resolution No. 2021- 12 (as the same may be modified from time-to-time, the “TIF District”), in coordination with the Authority and with the cooperation and assistance of the City. C. The Redevelopment Agreement provides for the expenditure of certain public funds to assist in the redevelopment of the Project Area with certain “Minimum Improvements” consisting generally of a seven-story, mixed-use building, including, approximately 196 rental apartment units, an approximately 3,400 square-foot restaurant, 277 stalls of structured parking, and related site improvements. D. The Redevelopment Agreement requires that [20] of such residential units (the “Affordable Units”) will be leased at rates that are considered affordable to individuals or households earning less than 50% of the U.S. Department of Housing and Urban Development’s Area Median Income (“AMI”) for the Minneapolis-Saint Paul-Bloomington Metropolitan Statistical Area and that the Affordable Units be subject to that certain Declaration of Covenants and Restrictions (Affordable Housing) dated as of an even date herewith by Developer in favor of the City and Authority (the “Affordable Housing Declaration”). E. The Authority and Owner have agreed in the Redevelopment Agreement that Owner shall grant the Authority the first right to purchase one or more of the Affordable Units (the “Purchase Right”) in the event the Affordable Units are converted from rental units to for-sale units, as more particularly set forth herein. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the others as follows: 1. Recitals; Definitions. The Recitals are true and correct statements of fact and are incorporated into this Agreement by this reference, including the definitions set forth therein. Each capitalized term used herein and the Recitals, unless otherwise defined, shall have the respective meaning ascribed to such term in the Redevelopment Agreement. L-2 4820-3049-8044\4 2. Right to Purchase. Upon and subject to the terms hereinafter set forth, Owner hereby grants to the Authority, and the Authority hereby accepts, an option to purchase (“Purchase Option”) one or more of the Affordable Units, together with an undivided interest in all common elements, all easements and rights benefiting or appurtenant to the Affordable Units (collectively, the “Property”) upon the occurrence of a For-Sale Conversion (as defined below). The Purchase Option shall terminate only upon the occurrence of any of the following: (a) the Authority issues a Rejection Notice or fails to timely issue an Election Notice, as set forth in Section 4 below; (b) the execution of a written termination by the then-fee title owner of the Property and the Authority; or (c) the date of termination of the TIF District (the “Term”). 3. For-Sale Conversion. In the event Owner elects to convert (a “For-Sale Conversion”) all or part of the apartment component of the Minimum Improvements, including the Affordable Units, from rental units into condominium units, cooperative units, or otherwise subdivide such units into separately transferable and taxable housing units (“Separate Units”), then Owner shall give the Authority prompt notice of Owner’s election to proceed with a For-Sale Conversion and the Owner shall give the Authority notice of the date (the “Conversion Date”) on which Owner causes the operative documents effectuating the For-Sale Conversion to be recorded in the office of the County Recorder in and for Hennepin County, Minnesota and/or the office of the Registrar of Titles in and for Hennepin County, Minnesota, as applicable (e.g., recording of the common interest community declaration and plat, registered land survey, etc.), which such notice shall be delivered to the Authority no later than two (2) business days after the Conversion Date. Notwithstanding anything herein to the contrary, Owner shall not be required to include the individual Affordable Units in a For-Sale Conversion (such that each Affordable Unit is also converted into a Separate Unit) and, instead, Owner may cause all the Affordable Units to be collectively subdivided into a single “Separate Unit”, lot, or tract as part of a subdivision process that would otherwise be considered a For-Sale Conversion (the “Affordable Tract”), in which event, the Purchase Option shall not apply to the Affordable Tract and the Affordable Tract shall remain subject to the Affordable Housing Declaration in accordance with its terms. 4. Offer to Transfer of Affordable Units. If at any time following such Conversion, Owner desires to sell, convey, transfer or otherwise dispose of any interest in and to any of the Affordable Units (“Transfer”), then Owner shall provide written notice to the Authority that Owner desires to so Transfer such Affordable Units and shall offer to so Transfer the Affordable Units to the Authority upon the terms and conditions set forth herein (“Offer”). 5. Election Period. The Authority shall have 120 days after the date of its receipt of the Offer (the “Offer Date”) to notify Owner of the Authority’s desire, in its sole discretion, and subject to approval by the Authority’s board of commissioners, to purchase one or more of the Affordable Units and related Property subject to the terms and conditions of the Agreement and the Offer (the “Election Period”). Prior to the expiration of the Election Period, the Authority shall notify Owner that the Authority either (a) elects to so purchase one or more of the Affordable Units (“Election Notice”) (which such Election Notice will specify which Affordable Units the Authority elects to purchase) or (b) waives it right to purchase one or more of the Affordable Units (“Rejection Notice”). In the event the Authority issues a Rejection Notice or fails to timely issue an Election Notice, then the Purchase Option shall be deemed terminated and of no further force or effect, and Owner shall be free to sell the Affordable Units on terms and conditions acceptable to Owner in its sole discretion. 6. Documents; Inspection. Within 10 days after the Offer Date, Owner shall either make available to the Authority copies of all documents, reports, studies, tests, drawings, surveys, agreements, contracts, and all other documentation relating to the Property in Owner’s possession or control or to which Owner has knowledge or access (“Property Documents”). During the Election Period (or until the Authority issues a Rejection Notice), the Authority may examine the Property Documents and Owner shall allow the Authority, and the Authority’s employees, agents, and contractors, access to the Property upon reasonable L-3 4820-3049-8044\4 notice from the Authority without charge and for the purpose of the Authority’s reasonable inspection, investigation and testing of the same. 7. Title Examination. Within 15 days after the Offer Date, Owner shall deliver to the Authority a current commitment (the “Commitment”) for an ALTA Form Owner’s Policy of Title Insurance insuring title to the Property in the amount of the Purchase Price issued by a reputable title company (the “Title Company”), legible copies of all documents cited, raised as exceptions or noted in the title commitment and Owner’s most recent survey of the Property (provided, the Authority may elect to obtain a new survey at its sole cost and expense) (collectively [including the new survey if so obtained], the “Title Evidence”). During the Election Period, the Authority may make written objections (“Objections”) to the Title Evidence. All matter shown by the Title Evidence and not objected to by the Authority shall be a “Permitted Encumbrance” hereunder. Owner shall not have any obligation to cure or attempt to cure any Objections which cannot be cured solely by the payment of money, however Owner shall use commercially reasonable efforts to cure the Objections. 8. Purchase Terms. The following provisions are applicable to the Purchase Option: (a) Purchase Price. The purchase price per each Affordable Unit (and related Property) (the “Purchase Price”) purchased by the Authority pursuant to the Purchase Option shall be the “Fair Market Value” of such Affordable Unit(s), which shall mean the fair market value of the Affordable Unit(s) that an independent third party would be willing to pay for the Affordable Unit(s) in an arm’s length transaction without any compulsion to proceed, which shall be determined as follows: if the parties are unable to agree on the purchase price within 30 days after the Offer Date, then the Authority and Owner shall each select a qualified MAI appraiser to determine the Fair Market Value for the Affordable Unit(s) within 10 days after said 30-day period. If Owner fails to give notice identifying an appraiser within the time provided, Owner has waived the right to identify an appraiser and the decision of the Authority’s appraiser controls. If two (2) appraisers are selected, they must within 15 days after the selection of the second agree to a third appraiser. If the two (2) appraisers fail to identify the third appraiser within such 15-day period, the either the Authority or Owner may petition the district court (or its equivalent) having jurisdiction over the Property for the appointment of the third appraiser. The three appraisers must each, within 30 days after the appointment of the third appraiser, simultaneously deliver to the Authority and Owner their expert opinions of the Fair Market Value in question. The Fair Market Value is the average of the three appraisals unless one appraisal is more than ten percent (10%) greater or lesser than the average of the other two (2) appraisals, in which case that appraisal is disregarded, and the average of the remaining appraisals is the Fair Market Value. Each party must pay the cost of the appraiser selected by it and one-half of the cost of the third appraiser. All appraisers must be disinterested and must have the designation, MAI, SRA or equivalent and must have not less than five years’ experience appraising real estate in the business market wherein the Property is located. The appraisers may, but need not, present formal written appraisals supporting their opinion but must, in any event, certify that the report was conducted in accordance with professional standards. The decision of this appraisal process is binding upon the parties and must not be subject to appeal to a court or other body except based upon fraud. The Fair Market Value shall specifically take into account, without limitation, the encumbrance of the Affordable Units by the Affordable Housing Declaration, the reduced rents required under the Affordable Housing Declaration, and the remaining term of the Affordable Housing Declaration at the time Fair Market Value is being determined. (b) Closing. The closing of the purchase and sale pursuant to the Purchase Option (the “Closing”) shall occur no later than 30 days after the Authority issues its Election Notice (the L-4 4820-3049-8044\4 “Closing Date”). Owner agrees to deliver possession of the Property to the Authority on the Closing Date. (c) Owner’s Closing Deliveries. On the Closing Date, Owner shall execute and deliver to the Authority the following, all in form and content reasonably satisfactory to the Authority: (i) a limited warranty deed (the “Deed”) conveying the applicable Property specified in the Election Notice to the Authority subject only to the Permitted Encumbrances; (ii) a non-foreign affidavit, properly executed, containing such information as is required by Internal Revenue Code Section 1445(b)(2) and its regulations; and (iii) such affidavits, certificates or other documents as may be reasonably required by Title Company in order to record the Deed and issue an ALTA Form Owner’s Policy of Title Insurance insuring title to the Property in the amount of the Purchase Price subject only to the Permitted Encumbrances (the “Title Policy”). (d) The Authority’s Closing Deliveries. On the Closing Date, the Authority will execute and/or deliver to Owner the following: (i) Purchase Price; and (ii) such affidavits, certificates or other documents as may be reasonably required by Title Company in order to record the Deed and issue the Title Policy. (e) Prorations. If the Authority issues its Election Notice, Owner and the Authority agree to the following prorations and allocation of costs regarding this Agreement and Property purchased by the Authority: (i) Title Charges and Closing Fee. Owner will pay all costs for the Commitment. The Authority will pay all title insurance premiums required for the issuance of the Title Policy, including the cost of all additional endorsements thereto. Owner and the Authority will each pay one-half of any closing fee or charge imposed by Title Company. (ii) Taxes. Owner shall pay all state deed tax or transfer tax or fee payable in connection with this transaction. Special assessments, if any, shall be paid in full by Owner on or before the Closing Date. Real estate taxes shall be prorated as of the Closing Date. Accordingly, Owner shall pay all real estate taxes due and payable up to the Closing Date and the Authority shall pay all real estate taxes due and payable on and after the Closing Date. (iii) Other Income and Expenses. All income (including, without limitation, rents) and other expenses shall be prorated and adjusted as of the Closing Date. (iv) Attorney’s Fees. Each of the parties will pay its own attorney’s fees. (f) Warranties and Representations by Owner. Owner warrants and represents to the Authority as follows: (i) Owner has the requisite power and authority (including all necessary approvals and authorizations) to enter into and perform this Agreement and those closing documents to be signed by it; such documents have been duly authorized by all necessary action on the part of Owner and have been or will be duly executed and delivered; such execution, delivery and performance by Owner of such documents does not and will not conflict with or result in a violation of any judgment, order, or decree of any court or arbiter to which Owner is a party, or any law, statute, rule or regulation by which Owner is bound; L-5 4820-3049-8044\4 such documents are and will be valid and binding obligations of Owner, and are and will be enforceable in accordance with their terms. (ii) As of the Closing Date, the Property is not subject to any leases or possessory rights of any party other than Owner and residential tenants. (g) As-Is. Except as herein expressly stated, the Authority is purchasing the Property (or the applicable part thereof) based upon its own investigation and inquiry and is not relying on any warranty or representation of Owner or any other person and is agreeing to accept and purchase the Property “as is, where is” subject to the conditions of examination herein set forth and the express warranties and representations herein contained. (h) Condemnation; Casualty. If eminent domain proceedings are commenced against all or a part of the Property, or if all or a substantial part of the property is damaged by fire or other casualty, on or before the Closing Date, Owner shall immediately give written notice to the Authority, and the Authority shall have the right to terminate any exercised Purchase Option by giving written notice of such termination to Owner within 30 days after Owner’s notice of such proceedings is given to the Authority. If the Authority shall fail to give such notice, then the parties shall proceed to Closing, and Owner shall assign to the Authority all rights to appear in and receive any award from such proceedings. (i) Broker’s Commission. Owner and the Authority warrant and represent to each other that they have dealt with no brokers, finders or the like in connection with this transaction, and agree to indemnify and hold each other harmless from all claims, damages, costs or expenses of or for any fees or commissions owing to any brokers, finders or the like resulting from their actions or agreements regarding the execution or performance of this Agreement, and will pay all costs of defending any action or lawsuit brought to recover any such fees or commissions incurred by the other party, including reasonable attorneys’ fees. (j) Remedies. If the Authority defaults in performance of its obligations under this Agreement, Owner shall have the right to terminate this Agreement in the manner provided by Minn. Stat. Sec. 559.21 (inclusive of a minimum 30-day notice and right to cure) as its sole and exclusive remedy. If Owner defaults in performance of its obligations under this Agreement, the Authority will provide written notice thereof to Owner. If Owner fails to cure such default within 30 days after such notice, the Authority shall have the right, in addition to all other rights under applicable law, including the right to seek and obtain specific performance of this this Agreement. 9. Notices. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by any party to any other shall be sufficiently given or delivered if it is (a) dispatched by registered or certified mail, postage prepaid, return receipt requested, (b) sent by recognized overnight courier (such as Federal Express), or (c) delivered personally, as follows: In the case of Owner: At the address of record for real property tax assessment notices with respect to the applicable Parcel, or at such other address as either party shall have specified by written notice delivered in accordance with this section. with a copy to (so long The Northwestern Mutual Life Insurance Company as Eden Avenue Group, Attention: Real Estate Investment Department LLC is the Owner): 720 East Wisconsin Avenue Milwaukee, WI 53202 L-6 4820-3049-8044\4 In the case of the Authority: Housing and Redevelopment Authority of Edina, Minnesota Attention: Executive Director 4801 West 50th Street Edina, MN 55424 with a copy to: Dorsey & Whitney LLP Attn: Jay Lindgren 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402 or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other, as provided in this Section. 10. Successors and Assigns. This Agreement and the purchase options set forth herein shall inure to the benefit of the Authority and its successors and assigns and be binding upon Owner and the heirs, personal representatives, successors and assigns of Owner, and upon any individual or entity acquiring the Property or any portion thereof, or any interest therein, whether by operation of law or otherwise. 11. Waiver. The waiver by any party hereto of any breach or default of any provisions anywhere contained in this Agreement shall not be deemed to be a waiver of any subsequent breach or default thereof. No provision of this Agreement shall be deemed to have been waived by any party hereto unless such waiver is in writing and signed by the party charged with any such waiver. 12. Joinder; Permitted Encumbrance. Except for the mortgagee consent attached hereto, this Agreement does not require the joinder or approval of any other person and each of the parties respectfully has the full, unrestricted and exclusive legal right and power to enter into this Agreement for the term and upon the provisions herein recited and for the use and purposes hereinabove set forth. This Agreement shall constitute a permitted encumbrance under any loan agreement heretofore or hereafter entered into between Owner and any construction lender or permanent lender. 13. Amendments. Except as otherwise herein provided, and not otherwise, no subsequent alteration, amendment, change, waiver, discharge, termination, deletion, or addition to this Agreement shall be binding upon either party unless in writing and signed by both parties. 14. Attorneys’ Fees. In case any action at law or in equity, including an action for declaratory relief, is brought against Owner to enforce the provisions of this Agreement, Owner agrees to pay the reasonable attorneys’ fees and other reasonable expenses paid or incurred by the Authority in connection with the action. 15. Governing Law. This Agreement is governed by the laws of the state of Minnesota and, where applicable, the laws of the United States of America. 16. Severability. If any provisions hereof shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions shall not in any way be affected or impaired. 17. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. L-7 4820-3049-8044\4 [Remainder of page intentionally left blank; signature pages follow] L-8 [Signature Page to Right of First Purchase Option Agreement (4917 Eden Avenue)] 4820-3049-8044\4 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. AUTHORITY: HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA By: _________________________________________ ___________________, Chair By: _________________________________________ ___________________, Secretary STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of ____________, 20__, by ___________________ and ___________________, the Chair and Secretary respectively, of the Housing and Redevelopment Authority of Edina, Minnesota, on behalf of said Authority. ____________________________________________ Notary Public L-9 [Signature Page to Right of First Purchase Option Agreement (4917 Eden Avenue)] 4820-3049-8044\4 OWNER: EDEN AVENUE GROUP, LLC, a Delaware limited liability company By: Eden Avenue Partners, LLC, its Manager By: _________________________________________ Name: Nicholas Walton Its: Manager STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___ day of ______, 202___, by Nicholas Walton, the Manager of Eden Avenue Partners, LLC, Manager of Eden Avenue Group, LLC, a Delaware limited liability company, on behalf of the limited liability company. Notary Public THIS DOCUMENT WAS DRAFTED BY: Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402-1498 L-10 [Exhibit A to Right of First Purchase Option Agreement (4917 Eden Avenue)] 4820-3049-8044\4 Exhibit A Legal Description of the Property Tracts A and C, Registered Land Survey No. 1501, Hennepin County, Minnesota L-11 4820-3049-8044\4 CONSENT AND SUBORDINATION The undersigned, ___________________, a ___________________, holder of that certain [Mortgage] executed by Eden Avenue Group, LLC, a Delaware limited liability company, dated ________________, 20____, filed ________________, 201__, as Document No. ___________, in the office of the County Recorder in and for Hennepin County, Minnesota, and filed ________________, 20____, as Document No. ___________, in the office of the Registrar of Titles in and for Hennepin County, Minnesota, in favor of ________________ (the “Mortgage”), hereby consents to the foregoing Right of First Purchase Option Agreement (4917 Eden Avenue) (the “Purchase Option Agreement”), and hereby subjects and subordinates the Mortgage and all of its right, title and interest in and to the Purchase Option Agreement. ___________________________________, a ___________________ By: _________________________________________ Name: _______________________________________ Title: ________________________________________ STATE OF ______________ ) ) ss. COUNTY OF ______________ ) The foregoing instrument was acknowledged before me this ____ day of ____________, 20______, by ____________________, the _________________ of ___________________, a ___________________, on behalf of the ___________________. ____________________________________________ Notary Public THIS DOCUMENT WAS DRAFTED BY: Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402-1498 M-1 4828-9419-6988\3 Exhibit M Form of Parking Easement Agreement PARKING EASEMENT AGREEMENT (4917 Eden Avenue) THIS PARKING EASEMENT AGREEMENT (this “Agreement”) is made and entered into this ___ day of ____________, 202__ (“Effective Date”), by and between the City of Edina, Minnesota, a Minnesota statutory city (the “City”), and Eden Avenue Group, LLC, a Delaware limited liability company (“Owner”). RECITALS: A. The Housing and Redevelopment Authority of Edina, Minnesota, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the “Authority”), the City, and Owner, as “Developer”, are parties to that certain Redevelopment Agreement dated November 3, 2021 (the “Redevelopment Agreement”). B. The Redevelopment Agreement provides for the redevelopment by Owner of certain real property located at 4917 Eden Avenue, as legally described on the attached Exhibit A (the “Property”) C. The Property is located within the Eden / Willson Tax Incremental Financing District, established by the Authority pursuant to Resolution No. 2021-12, in coordination with the Authority and with the cooperation and assistance of the City. D. The Redevelopment Agreement provides for the expenditure of certain public funds to assist in the redevelopment of the Property with certain “Minimum Improvements” consisting generally of a 7-story, mixed-use building, collectively including, without limitation, approximately 196 housing units, a 3,400 square feet restaurant, 277 stalls of structured parking, and related site improvements. E. The Minimum Improvements also includes a total of 29 at-grade public parking stalls (the “Public Parking”), which such Public Parking is located on that portion of the Property legally described and depicted on the attached Exhibit B (the “Parking Premises”). F. The City and Owner have agreed in the Redevelopment Agreement that Owner shall grant an easement to the City pursuant to which the Public Parking will be permanently open and accessible to the general public for parking purposes pursuant to the terms and conditions of this Agreement. G. Owner has agreed to own, operate, manage, and maintain the Public Parking pursuant and subject to the terms and conditions of the Redevelopment Agreement and this Agreement. H. The City and Owner deem it to be in their interests and in furtherance of the economic development and redevelopment plan for the Property reflected in the Redevelopment Agreement to enter into this Agreement. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the others as follows: M-2 4828-9419-6988\3 ARTICLE I GRANT OF EASEMENTS 1.1 Grant of Parking Easement. Owner hereby grants and conveys to the City, for the benefit of the City and the general public: (a) a non-exclusive, perpetual public easement over, across, upon and through the Public Premises, for the purpose of the general public utilizing the Public Parking for vehicular parking and utilizing such ancillary amenities, if any, all in accordance with and subject to the terms and conditions of this Agreement; and (b) a non-exclusive, perpetual public easement over, across, upon and through all means of pedestrian and vehicular access to and from public rights of way, streets, alleys, public spaces, and easements appurtenant and/or used in connection with the Parking Premises located on the Property and adjoining or contiguous to the Parking Premises, all as depicted on the attached Exhibit B (collectively, the “Access Premises”, and together with the Parking Premises, collectively the “Easement Premises”), all in accordance with and subject to the terms and conditions of this Agreement. ARTICLE II TERM 2.1 Term. The easements granted hereby, and each reservation, covenant, condition and restriction contained in this Agreement, shall be effective as of the date hereof, shall be perpetual, and shall remain in effect until affirmatively released by the City. Such release shall be evidenced by the recording of a release or termination of this Agreement in the real estate records of Hennepin County, Minnesota, at which time this Agreement shall terminate, and the Public Parking and any other areas of the Easement Premises shall thereafter belong to and be under the sole control of Owner. ARTICLE III USE OF EASEMENT PREMISES 3.1 Operation and Control of Easement Premises. During the term of this Agreement, Owner shall operate the Easement Premises in accordance with this Agreement and all applicable governmental laws, ordinances, regulations and orders, at Owner’s sole cost and expense. Subject to the terms of this Agreement, Owner has full authority and control over the management, operation, and use of the Easement Premises; provided, however, parking within the Public Parking shall be free of charge and Owner shall not charge any fee for the use of the Public Parking. 3.2 Signage. Owner shall install and maintain a prominent, permanent “Public Parking” sign at or near each vehicular entrance to the Public Parking areas, which such signage shall be subject to the City Manager’s prior written approval, not to be unreasonably, or delayed. 3.3 Waste, Nuisance, Damage, Disfigurement or Injury to Easement Premises. Neither the City nor Owner shall knowingly or willfully commit or suffer to be committed any waste or damage in or upon the Easement Premises, or any disfigurement or injury to any improvements hereafter erected or located upon the Easement Premises, or any part thereof, or the fixtures and/or equipment thereof. Owner, in its use and occupancy of the Easement Premises, shall not knowingly and willfully commit or suffer to be M-3 4828-9419-6988\3 committed any act or thing which constitutes a nuisance. Usual and normal wear and tear, damage by the elements, unavoidable casualty or depreciation and diminution over time shall not be considered “waste,” “nuisance,” “damage, “disfigurement,” or “injury.” 3.4 Owner’s Reservation of Certain Rights. The City’s easement rights under this Agreement shall be subject to the following reservations, as well as the other applicable provisions contained in this Agreement: (a) Owner reserves the right to close-off any portion of the Easement Premises for such reasonable period of time as may be legally necessary, in the opinion of Owner’s counsel, to prevent the acquisition of prescriptive rights by anyone; provided, however, that prior to closing- off any portion of the Easement Premises, Owner shall give as much written notice as reasonably practicable of its intention to do so. (b) Owner reserves the right at any time and from time to time to exclude and restrain any private party from access to the Public Parking for cause and on a non-discriminatory basis. (c) Owner reserves the right to temporarily erect or place barriers in and around areas on the Easement Premises which are being constructed and/or repaired in order to ensure either safety of persons or protection of property. (d) Owner reserves the right to adopt and enforce reasonable rules and regulations for the safe, efficient, and orderly use and operation of the Easement Premises, so long as such rules and regulations are applied on a non-discriminatory basis, do not adversely impact the City’s or the public’s rights to use of the Easement Premises as set forth in this Agreement, and are approved by the City Manager or its designee. ARTICLE IV MAINTENANCE OF THE EASEMENT PREMISES 4.1 Maintenance. At all times during the term hereof, Owner, at its cost and expense, shall keep and maintain the Easement Premises and the other Minimum Improvements in good condition and repair in a first-class manner, similar to that of other surface parking facilities located within other first-class, multi-use projects in the Minneapolis-Saint Paul metropolitan area, which such maintenance shall include, without limitation, the following: (a) all repairs, replacements, renewals, alterations, additions and betterments thereto, interior and exterior, structural and non-structural, ordinary and extraordinary, and foreseen and unforeseen, all as may be necessary to keep the Easement Premises and the other Minimum Improvements in the condition and repair required by this Agreement, and which are consistent with the requirements of the City Approvals and the Redevelopment Agreement, and which do not adversely impact the City’s or the public’s rights to use of the Easement Premises as set forth in this Agreement; (b) maintaining all drive and parking surfaces in a smooth and evenly-covered condition, which maintenance work shall include cleaning, sweeping, restriping, repairing and resurfacing the same; (c) maintaining in good working order (including cleaning and painting as necessary), repairing, and replacing as necessary the Access Premises; M-4 4828-9419-6988\3 (d) maintaining in good working order, repairing, and replacing as necessary all domestic water, sewer, storm water, gas, electricity, power, heat, telephone, other communications service, commercially reasonable security and life safety systems, and any and all other utility or similar services used, rendered, or supplied, upon, at, from, or in connection with the Easement Premises; (e) periodic removal of all papers, debris, filth, refuse, ice and snow, provided all sweeping shall be at appropriate intervals during such times as shall not unreasonably interfere with the use of the Easement Premises; (f) placing, keeping in repair, replacing and repainting any appropriate directional signs or markers, within or associated with the Easement Premises; (g) operating, keeping in repair, cleaning and replacing when necessary such Easement Premises lighting facilities as may be reasonably required, including without limitation all lighting necessary or appropriate for security of the Easement Premises; 4.2 No Obligation of the City to Repair or Maintain. The City shall have no obligation of any kind, expressed or implied, to repair, rebuild, restore, reconstruct, modify, alter, replace, or maintain the Easement Premises or any part thereof. ARTICLE V TAXES AND ASSESSMENTS 5.1 Payment of Taxes and Assessments. Owner shall pay, or cause to be paid, before becoming delinquent, all real estate taxes, charges, assessments, and levies, assessed and levied by any governmental taxing authority during the term of this Agreement against the Easement Premises and the other Minimum Improvements. Subject to the terms of the Redevelopment Agreement, Owner shall have the right and option, at any time but solely at Owner’s expense, to pay any real estate taxes or assessments in installments or under protest or in a similar manner, or to contest the levy or amount of the same in appropriate legal or administrative proceedings. ARTICLE VI INDEMNIFICATION, INSURANCE 6.1 Indemnification of the City. Except to the extent caused by the willful misconduct or gross negligence of the City, its employees or agents, or the general public, or arising out of the default by the City and its officers, employees or agents, of obligations made pursuant to a contract with Owner, including this Agreement, Owner hereby covenants and agrees to assume and to permanently indemnify and save harmless the City and its employees and agents from and against any and all claims, demands, actions, damages, costs, expenses, reasonable attorneys’ fees, and liability in connection with the loss of life, personal injury and/or damage to property, to the extent arising from or out of the design or initial construction, maintenance and operation of the Easement Premises, or in connection with the use or occupancy of the Easement Premises, or any part thereof, by Owner, or to the extent arising out of the breach of Owner’s obligations hereunder. 6.2 Property Insurance. At all times during the term hereof, Owner, at its sole cost and expense, shall keep the Easement Premises and the other Minimum Improvements, and all alterations, extensions, and improvements thereto and replacements thereof, insured, in the amount of the full replacement cost M-5 4828-9419-6988\3 thereof and with such deductibles as Owner deems appropriate, against loss or damage by fire and against those casualties covered by extended coverage insurance and against vandalism and malicious mischief and against such other risks, of a similar or dissimilar nature, as are customarily covered with respect to improvements similar in construction, general location, use, and occupancy to such improvements. 6.3 Personal Property. All property of every kind and character which Owner may keep or store in, at, upon, or about the Easement Premises shall be kept and stored at the sole risk, cost, and expense of Owner. 6.4 Liability Insurance. During the term of this Agreement, Owner shall procure and maintain continuously in effect (or shall cause the same to occur), the following policies of insurance of the kind and minimum amounts as are customarily maintained with respect to facilities and improvements similar to those located on the Easement Premises, at commercially reasonable coverage levels, to be reviewed from time to time by Owner: (a) insurance against liability (including passenger elevator liability) for injuries to or death of any person or damage to or loss of property arising out of or in any way relating to the use, occupancy, or condition of the Easement Premises, or any part thereof, including insuring the indemnification obligations set forth in Section 6.1 above, which such insurance shall provide that the City is an additional insured; (b) garage keepers’ liability insurance including coverage for: (i) Fire and explosion; (ii) Theft (of entire vehicle); and (iii) Riot, civil commotion, malicious mischief, and vandalism. 6.5 General Insurance Requirement. All insurance required in this Agreement shall be placed with financially sound and reputable insurers licensed to transact business in the State of Minnesota. Owner shall promptly following the City’s request therefor, furnish the City with copies of policies evidencing all such insurance or a certificate or certificates of the respective insurers stating that such insurance is in force and effect. Each policy of insurance herein required shall contain a provision that the insurer shall not cancel it without giving written notice to the City at least 10 days before the cancellation becomes effective. The insurance coverage herein required may be provided by a blanket insurance policy or policies. 6.6 No Obligation of the City for Insurance. At no time and under no circumstances shall the City be required to take out, maintain in force and effect, or pay for any type of insurance coverage with reference to the protection of and/or ownership of and/or occupancy of and/or a suit relating to the Easement Premises and/or any improvements hereafter located thereon. ARTICLE VII ASSIGNMENT 7.1 Assignment by the City. During the term of this Agreement, the City may not assign or transfer its interest under this Agreement without the prior written consent of Owner. 7.2 Assignment by Owner. Owner may assign or otherwise transfer its interest under this Agreement in connection with any sale or transfer of the Minimum Improvements subject to the terms and M-6 4828-9419-6988\3 conditions of the Redevelopment Agreement. The City shall recognize and approve any successors or assigns of Owner. ARTICLE VIII CASUALTY 8.1 Destruction. In the event that all or any part of the Easement Premises and/or other portions of the Minimum Improvements are destroyed by fire or other casualty, and subject to a determination by the relevant mortgage lender, Owner shall promptly rebuild, reconstruct and/or restore the same to the extent insurance proceeds are available or, in the event insurance proceeds are not sufficient to reconstruct and/or restore the same, to the extent insurance proceeds combined with any contributions by Owner toward reconstruction are available. ARTICLE IX EMINENT DOMAIN 9.1 Major Condemnation. If all of the Easement Premises is taken, acquired, or condemned by eminent domain for any public or quasi-public use or purpose, this Agreement shall terminate as of the date of vesting of title in the condemning authority. Each party shall make its own claim in the condemnation proceeding based upon the value of its respective interest in the Easement Premises. ARTICLE X DEFAULT AND REMEDIES 10.1 Default By Owner. If Owner fails to perform any of its obligations under this Agreement, and fails to cure such default after 30 days’ written notice of such failure or, if such failure cannot reasonably be cured within such 30 days, fails to commence curative action and thereafter diligently complete the same, then, in such case, the City may pursue all available remedies at law and in equity, and the City may, but shall not be obligated to, cure such failure on behalf of Owner and Owner shall pay to the City all sums due and owing on account thereof. The City shall submit a statement to Owner evidencing the costs incurred to cure such failure. If Owner has failed to make payment in accordance with the statement within 60 days after receipt thereof, the City shall have the right to assess the costs incurred by the City to all or any portion of the Property as a service charge pursuant to Minnesota Statutes, Section 429.101, or any successor statute. ARTICLE XI MISCELLANEOUS 11.1 Notices. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by any party to any other shall be sufficiently given or delivered if it is (a) dispatched by registered or certified mail, postage prepaid, return receipt requested, (b) sent by recognized overnight courier (such as Federal Express), or (c) delivered personally, as follows: In the case of Owner: At the address of record for real property tax assessment notices with respect to the applicable Parcel, or at such other address as either party shall have specified by written M-7 4828-9419-6988\3 notice delivered in accordance with this section. with a copy to (so long The Northwestern Mutual Life Insurance Company as Eden Avenue Group, Attention: Real Estate Investment Department LLC is the Owner): 720 East Wisconsin Avenue Milwaukee, WI 53202 In the case of the City: City of Edina Attn: City Manager 4801 West 50th Street Edina, MN 55424 with a copy to: Dorsey & Whitney LLP Attn: Jay Lindgren 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402 or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other, as provided in this Section. 11.2 Survival. The easements granted hereby and each reservation, covenant, condition and restriction contained in this Agreement will run with the land and will be binding upon, and inure to the benefit of, as the case may be, Owner and the City and their respective successors and assigns. 11.3 Dedication. Nothing contained in this Agreement will be deemed to be a gift or dedication of any portion of the Easement Premises to the general public, except as explicitly set forth in this Agreement. 11.4 Waiver. The waiver by any party hereto of any breach or default of any provisions anywhere contained in this Agreement shall not be deemed to be a waiver of any subsequent breach or default thereof. No provision of this Agreement shall be deemed to have been waived by any party hereto unless such waiver is in writing and signed by the party charged with any such waiver. 11.5 Joinder; Permitted Encumbrance. Except for the mortgagee consent attached hereto, this Agreement does not require the joinder or approval of any other person and each of the parties respectfully has the full, unrestricted and exclusive legal right and power to enter into this Agreement for the term and upon the provisions herein recited and for the use and purposes hereinabove set forth. This Agreement shall constitute a permitted encumbrance under any loan agreement heretofore or hereafter entered into between Owner and any construction lender or permanent lender. 11.6 Amendments. Except as otherwise herein provided, and not otherwise, no subsequent alteration, amendment, change, waiver, discharge, termination, deletion, or addition to this Agreement shall be binding upon either party unless in writing and signed by both parties. 11.7 Attorneys’ Fees. In case any action at law or in equity, including an action for declaratory relief, is brought against Owner to enforce the provisions of this Agreement, Owner agrees to pay the reasonable attorneys’ fees and other reasonable expenses paid or incurred by the Authority in connection with the action. 11.8 Governing Law. This Agreement is governed by the laws of the state of Minnesota and, M-8 4828-9419-6988\3 where applicable, the laws of the United States of America. 11.9 Severability. If any provisions hereof shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions shall not in any way be affected or impaired. 11.10 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument [Remainder of page intentionally left blank; signature pages follow] M-9 [Signature Page to Parking Easement Agreement (4917 Eden Avenue)] 4828-9419-6988\3 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. CITY: CITY OF EDINA, MINNESOTA By: ______________________________________ ___________________, Mayor By: ______________________________________ ___________________, City Manager STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _____________, 20___, by ____________ and ____________, the Mayor and City Manager respectively, of the City of Edina, Minnesota, on behalf of the City. __________________________________________ Notary Public M-10 [Signature Page to Parking Easement Agreement (4917 Eden Avenue)] 4828-9419-6988\3 OWNER: EDEN AVENUE GROUP, LLC, a Delaware limited liability company By: Eden Avenue Partners, LLC, its Manager By: _________________________________________ Name: Nicholas Walton Its: Manager STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___ day of ______, 2021, by Nicholas Walton, the Manager of Eden Avenue Partners, LLC, Manager of Eden Avenue Group, LLC, a Delaware limited liability company, on behalf of the limited liability company. Notary Public THIS DOCUMENT WAS DRAFTED BY: Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402-1498 M-11 [Exhibit A to Parking Easement Agreement (4917 Eden Avenue)] 4828-9419-6988\3 Exhibit A Legal Description of the Property Tracts A and C, Registered Land Survey No. 1501, Hennepin County, Minnesota M-12 [Exhibit B to Parking Easement Agreement (4917 Eden Avenue)] 4828-9419-6988\3 Exhibit B Legal Description and Depiction of the Parking Premises and the Access Premises [Depiction for illustrative purposes; final exhibit to be updated based on final plans/construction prior to easement execution.] M-13 4828-9419-6988\3 CONSENT AND SUBORDINATION The undersigned, ___________________, a ___________________, holder of that certain [Mortgage] executed by Eden Avenue Group, LLC, a Delaware limited liability company, dated ________________, 20____, filed ________________, 20____, as Document No. ___________, in the office of the County Recorder in and for Hennepin County, Minnesota, and filed ________________, 20____, as Document No. ___________, in the office of the Registrar of Titles in and for Hennepin County, Minnesota, in favor of ________________ (the “Mortgage”), hereby consents to the foregoing Parking Easement Agreement (4917 Eden Avenue) (the “Easement Agreement”), and hereby subjects and subordinates the Mortgage and all of its right, title and interest in and to the Easement Agreement. ___________________________________, a ___________________ By: _________________________________________ Name: _______________________________________ Title: ________________________________________ STATE OF ______________ ) ) ss. COUNTY OF ______________ ) The foregoing instrument was acknowledged before me this ____ day of ____________, 20______, by ____________________, the _________________ of ___________________, a ___________________, on behalf of the ___________________. ____________________________________________ Notary Public N-1 4891-1861-9392\1 Exhibit N Intentionally omitted. O-1 4817-4255-3597\3 Exhibit O Form of Future Land Agreement PUBLIC EASEMENT & ACQUISITION AGREEMENT (4917 Eden Avenue) THIS PUBLIC EASEMENT & ACQUISITION AGREEMENT (this “Agreement”) is made and entered into this ___ day of ____________, 202___ (“Effective Date”), by and among the City of Edina, Minnesota, a Minnesota statutory city (the “City”), and Eden Avenue Group, LLC, a Delaware limited liability company (“Owner”). RECITALS: A. The City, the Housing and Redevelopment Authority of Edina, Minnesota, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the “Authority”), and Owner, as “Developer”, are parties to that certain Redevelopment Agreement dated November 3, 2021 (the “Redevelopment Agreement”). B. The Redevelopment Agreement provides for the redevelopment by Owner of certain real property legally described on the attached Exhibit A (referred to herein and in the Redevelopment Agreement as the “Project Area”) and located within the Eden / Willson Tax Incremental Financing District, established by the Authority pursuant to Resolution No. 2021-12, in coordination with the Authority and with the cooperation and assistance of the City. C. The Redevelopment Agreement provides for the expenditure of certain public funds to assist in the redevelopment of the Project Area with certain “Minimum Improvements” consisting generally of a seven-story, mixed-use building, including, approximately 196 rental apartment units, an approximately 3,400 square-foot restaurant, 277 stalls of structured parking, and related site improvements. D. The City, Authority and Owner have agreed in the Redevelopment Agreement that Owner shall grant an easement to the City pursuant to which the City shall have to use that portion of the Project Area legally described on Exhibit B-1 and generally depicted and designated on Exhibit B-2 attached hereto (the “Public Land”) for any public use, as further described herein (the “Public Easement”). E. The City, Authority and Owner have further agreed in the Redevelopment Agreement that the City (or the Authority) shall have a future right to convert its interest in the Public Land from an easement to fee title for payment of $1.00. F. As provided herein, Owner shall also grant certain temporary construction easements over that portion of the Project Area legally described and/or generally depicted on the attached Exhibit C (the “Temporary Easement Area”) for the purpose of access and construction activities related to any public improvements to be constructed on the Public Land (the “Future Public Improvements”). NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the others as follows: O-2 4817-4255-3597\3 1. Recitals; Definitions. The Recitals are true and correct statements of fact and are incorporated into this Agreement by this reference, including the definitions set forth therein. Each capitalized term used herein and the Recitals, unless otherwise defined, shall have the respective meaning ascribed to such term in the Redevelopment Agreement. 2. Public Easement. Owner hereby grants and conveys to the City, for the benefit of the City, its agents, contractors, employees, and permitted assigns, an exclusive, perpetual easement over, across, upon and through the Public Land, for the purpose of utilizing the Public Land for any public use. For purposes of this Agreement, “public use” shall mean (i) transportation routes and improvements, including, but not limited to: roadways, sidewalks, trails and wayfinding systems, (ii) infrastructure and utility uses and improvements, including but not limited to, water, sewer, stormwater, communication, telecommunication, energy generation and transmission; and including both publicly owned and privately owned utilities, and/or (iii) green or other open space for landscaping, gardening, public art, public gathering and/or similar uses, together with related improvements. 3. Future Right to Acquire Fee Interest. Upon and subject to the terms hereof, Owner hereby grants to the City, and the City hereby accepts, an option (the “Acquisition Option”) to acquire Owner’s fee title interest in the Public Land, together with all easements and other rights benefiting or appurtenant to the Public Land (collectively, the “Property”), for a purchase price of $1.00 (the “Acquisition Price”). The City may exercise the Acquisition Option at any time by the City giving written notice to Owner of the City’s election to exercise the Acquisition Option (the “Election Notice”). 4. Owner Obligations. In connection with the Acquisition Option, Owner shall: (a) within 15 days after receipt of the Election Notice, Owner shall deliver to the City a current commitment (the “Commitment”) for an ALTA Form Owner’s Policy of Title Insurance (“Title Policy”) insuring title to the Property issued by a reputable title company (the “Title Company”), legible copies of all documents cited, raised as exceptions or noted in the title commitment and Owner’s most recent survey of the Property; (b) by no later than the Closing Date (define below), cause the Public Land to be legally subdivided in accordance with applicable legal requirements and make the Public Land a separate legal parcel and a separate tax parcel; (c) at Closing, deliver the Public Land free and clear of all liens, tenancies, encumbrances, and other interests except those approved by the City in its sole and absolute discretion (the “Permitted Encumbrances”) (provided, if necessary, at Closing, the City, the Authority, and Owner, as applicable, shall join in a partial release of the Redevelopment Agreement, the Affordable Housing Restrictive Covenant, and the Right of First Purchase Option). 5. Closing. The closing of the Acquisition Option (the “Closing”) shall occur on a date mutually acceptable to the City and Owner, but no later than 120 days after the City delivers its Election Notice to Owner (the “Closing Date”). Owner agrees to deliver exclusive possession of the Property to the City on the Closing Date, subject only to Permitted Encumbrances. 6. Closing Deliveries. (a) Owner’s Closing Deliveries. On the Closing Date, Owner shall execute and deliver to the City the following, all in form and content reasonably satisfactory to the City: (i) a limited warranty deed (the “Deed”) conveying the Property to the City subject only to the Permitted Encumbrances; (ii) a non-foreign affidavit, properly executed, containing such information as is O-3 4817-4255-3597\3 required by Internal Revenue Code Section 1445(b)(2) and its regulations; and (iii) such affidavits, certificates or other documents as may be reasonably required by the Title Company in order to record the Deed and issue the Title Policy, subject only to Permitted Encumbrances. (b) The City’s Closing Deliveries. On the Closing Date, the City will execute and/or deliver to Owner the following: (i) Acquisition Price; and (ii) such affidavits, certificates or other documents as may be reasonably required by Title Company in order to record the Deed and issue the Title Policy. 7. Prorations. Owner and the City agree to the following prorations and allocation of costs regarding this Agreement and Property acquired by the City: (a) Title Charges and Closing Fee. Owner shall pay the cost of the Title Commitment and removing any title defects or encumbrances which are not Permitted Encumbrances. The City will pay all title insurance premiums required for the issuance of the Title Policy, including the cost of all additional endorsements thereto. Owner will pay any closing fee or charge imposed by Title Company. (b) Taxes. Owner shall pay all state deed tax or transfer tax or fee payable in connection with this transaction. Special assessments, if any, shall be paid in full by Owner on or before the Closing Date. Real estate taxes shall be prorated as of the Closing Date. Accordingly, Owner shall pay all real estate taxes due and payable up to the Closing Date and the City shall pay all real estate taxes due and payable on and after the Closing Date. (c) Other Income and Expenses. All income (including, without limitation, rents) and other expenses shall be prorated and adjusted as of the Closing Date. (d) Attorney’s Fees. Each of the parties will pay its own attorney’s fees. 8. Warranties and Representations by Owner. Owner warrants and represents to the City as follows: (a) Owner has the requisite power and authority (including all necessary approvals and authorizations) to enter into and perform this Agreement and those closing documents to be signed by it; such documents have been duly authorized by all necessary action on the part of Owner and have been or will be duly executed and delivered; such execution, delivery and performance by Owner of such documents does not and will not conflict with or result in a violation of any judgment, order, or decree of any court or arbiter to which Owner is a party, or any law, statute, rule or regulation by which Owner is bound; such documents are and will be valid and binding obligations of Owner, and are and will be enforceable in accordance with their terms. (b) As of the Closing Date, the Property is free and clear of all encumbrances, except the Permitted Encumbrances. 9. Temporary Construction Easement. (a) Grant of Temporary Construction Easements. Owner hereby grants and conveys to the City, for the benefit of the City, its agents, contractors, employees, and permitted assigns, (i) a temporary, non-exclusive easement on, over, across, upon and through the Temporary Easement Area for Construction Activities (defined below) related to any Future Public Improvements and (ii) a temporary, non-exclusive easement over and across the Project Area (subject to any height O-4 4817-4255-3597\3 limitation imposed by any crane permit or applicable law) for the purpose of rotating and operating a crane boom as necessary to facilitate construction of any Future Public Improvements. The City shall give Owner at least 30 days’ prior notice before beginning to exercise any of its easement rights under this Section, which such easement rights may be exercised one or more times as part of any Future Public Improvements on the Public Land. (b) Construction Activities. For purposes of this Agreement, “Construction Activities” are, collectively: (i) the right to perform demolition, excavation, environmental remediation, grading, and re-grading, including, without limitation, the right to maintain a properly engineered slope cut excavation, shoring, sheeting, scaffolding and/or tie-backs; (ii) the right to pass and repass on, over, through and across the Temporary Easement Area, with personnel, vehicles, and equipment; (iii) the right to park, place, store, replace, remove, maintain, repair, use and occupy personnel trailers, vehicles, and equipment; (iv) the right to load, unload, lay down and store materials, debris, excess soil and/or grading materials; (v) the right to enclose, secure and/or patrol any portion of the Temporary Easement Area; (vi) the right to perform the restoration of the Temporary Easement Area pursuant to this Agreement; and (vii) the right to exercise such other rights as are reasonably necessary to facilitate the Construction Activities. (c) Restoration of Temporary Easement Area. Promptly following the completion of any Future Public Improvements, the City shall be responsible for repairing and restoring any portion of the Temporary Easement Area that is damaged or disturbed by Construction Activities to substantially the condition existing prior to such damage at no cost to Owner. 10. Condemnation; Casualty. If eminent domain proceedings are commenced against all or a part of the Property, or if all or a substantial part of the property is damaged by fire or other casualty, on or before the Closing Date, Owner shall immediately give written notice to the City, and the City shall have the right to terminate any exercised Acquisition Option by giving written notice of such termination to Owner within 30 days after Owner’s notice of such proceedings is given to the City. If the City shall fail to give such notice, then the parties shall proceed to Closing, and Owner shall assign to the City all rights to appear in and receive any award from such proceedings and/or any insurance proceeds, as applicable. 11. Remedies. If the City defaults in performance of its obligations under the Acquisition Option, Owner shall have the right to terminate this Agreement in the manner provided by Minn. Stat. Sec. 559.21 (inclusive of a minimum 30-day notice and right to cure) as its sole and exclusive remedy. In no event shall Owner shall have any right to assert any claim for monetary or other compensatory damages against the City with respect to any alleged breach of this Agreement by the City and Owner will not be entitled to recover damages of any kind, including lost profits and direct, indirect, incidental, consequential, or punitive damages arising from any such breach. If Owner defaults in performance of its obligations under this Agreement, the City may take any action, including legal or administrative action, in law or equity, which may appear necessary or desirable to enforce performance and observance of any obligation, agreement or covenant of Owner under this Agreement. 12. Term. The easements, rights, and other interests granted hereby, and each reservation, covenant, condition and restriction contained in this Agreement, shall be effective as of the date hereof, shall be perpetual, and shall remain in effect only if affirmatively released by the City. Such release shall be evidenced by the recording of a release or termination of this Agreement in the real estate records of Hennepin County, Minnesota, at which time this Agreement shall terminate, subject to reconciliation of expenses and obligations incurred through the date of release or termination and the continuation of those provisions that specifically survive termination of this Agreement. O-5 4817-4255-3597\3 13. Notices. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by any party to any other shall be sufficiently given or delivered if it is (a) dispatched by registered or certified mail, postage prepaid, return receipt requested, (b) sent by recognized overnight courier (such as Federal Express), or (c) delivered personally, as follows: In the case of Owner: At the address of record for real property tax assessment notices with respect to the applicable Parcel, or at such other address as either party shall have specified by written notice delivered in accordance with this section. with a copy to (so long as The Northwestern Mutual Life Insurance Company Eden Avenue Group, LLC Attention: Real Estate Investment Department is the Owner): 720 East Wisconsin Avenue Milwaukee, WI 53202 In the case of the Authority: Housing and Redevelopment Authority of Edina, Minnesota Attention: Executive Director 4801 West 50th Street Edina, MN 55424 with a copy to: Dorsey & Whitney LLP Attn: Jay Lindgren 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402 In the case of the City: City of Edina Attn: City Manager 4801 West 50th Street Edina, MN 55424 with a copy to: Dorsey & Whitney LLP Attn: Jay Lindgren 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402 or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other, as provided in this Section. 14. Successors and Assigns. The easements, rights, and other interests granted hereby and each reservation, covenant, condition and restriction contained in this Agreement will run with the land and will be binding upon, and inure to the benefit of, as the case may be, Owner and the City and their respective successors and assigns. The City, its successors and assigns, may assign or otherwise transfer its interest under this Agreement and/or all or a portions of its rights hereunder (e.g., through granting of leases, easements, etc.) hereunder to any other public entity (including, without limitation, the Authority) or any private entity so long as such private entity’s use constitutes a public use hereunder (e.g., a private utility provider) , in each case, without the consent of Owner. Owner may transfer the Land and assign its interest under this Agreement to a transferee subject to the terms and conditions of the Redevelopment Agreement. Except as provided in this Section 13, neither party may assign or otherwise transfer its interest under this Agreement without the other parties’ prior written consent. O-6 4817-4255-3597\3 15. Waiver. The waiver by any party hereto of any breach or default of any provisions anywhere contained in this Agreement shall not be deemed to be a waiver of any subsequent breach or default thereof. No provision of this Agreement shall be deemed to have been waived by any party hereto unless such waiver is in writing and signed by the party charged with any such waiver. 16. Joinder; Permitted Encumbrance. Except for the mortgagee consent attached hereto, this Agreement does not require the joinder or approval of any other person and each of the parties respectfully has the full, unrestricted and exclusive legal right and power to enter into this Agreement for the term and upon the provisions herein recited and for the use and purposes hereinabove set forth. This Agreement shall constitute a permitted encumbrance under any loan agreement heretofore or hereafter entered into between Owner and any construction lender or permanent lender. 17. Amendments. Except as otherwise herein provided, and not otherwise, no subsequent alteration, amendment, change, waiver, discharge, termination, deletion, or addition to this Agreement shall be binding upon either party unless in writing and signed by both parties. 18. Attorneys’ Fees. In case any action at law or in equity, including an action for declaratory relief, is brought against Owner to enforce the provisions of this Agreement, Owner agrees to pay the reasonable attorneys’ fees and other reasonable expenses paid or incurred by the Authority in connection with the action. 19. Governing Law. This Agreement is governed by the laws of the state of Minnesota and, where applicable, the laws of the United States of America. 20. Severability. If any provisions hereof shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions shall not in any way be affected or impaired. 21. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. [Remainder of page intentionally left blank; signature pages follow] O-7 [Signature Page to Public Easement & Acquisition Agreement (4917 Eden Avenue)] 4817-4255-3597\3 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. CITY: CITY OF EDINA, MINNESOTA By: __________________________________ ___________________, Mayor By: ___________________, City Manager STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _____________, 20___, by ____________ and ____________, the Mayor and City Manager respectively, of the City of Edina, Minnesota, on behalf of the City. Notary Public O-8 [Signature Page to Public Easement & Acquisition Agreement (4917 Eden Avenue)] 4817-4255-3597\3 OWNER: EDEN AVENUE GROUP, LLC, a Delaware limited liability company By: Eden Avenue Partners, LLC, its Manager By: __________________________________ Name: Nicholas Walton Its: Manager STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___ day of ______, 202___, by Nicholas Walton, the Manager of Eden Avenue Partners, LLC, Manager of Eden Avenue Group, LLC, a Delaware limited liability company, on behalf of the limited liability company. Notary Public THIS DOCUMENT WAS DRAFTED BY: Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402-1498 O-9 4817-4255-3597\3 Exhibit A Legal Description of the Project Area Tracts A and C, Registered Land Survey No. 1501, Hennepin County, Minnesota O-10 4817-4255-3597\3 Exhibit B-1 Legal Description of the Public Land [To be determined by Owner and updated prior to easement execution.] O-11 4817-4255-3597\3 Exhibit B-2 Depiction of the Public Land [Depiction for illustrative purposes; final exhibit to be updated based on final plans/construction prior to easement execution.] O-12 4817-4255-3597\3 Exhibit C Depiction of Temporary Easement Area [Depiction for illustrative purposes; final exhibit to be updated based on final plans/construction prior to easement execution.] O-13 4817-4255-3597\3 CONSENT AND SUBORDINATION The undersigned, ___________________, a ___________________, holder of that certain [Mortgage] executed by Eden Avenue Group, LLC, a Delaware limited liability company, dated ________________, 20____, filed ________________, 201__, as Document No. ___________, in the office of the County Recorder in and for Hennepin County, Minnesota, and filed ________________, 20____, as Document No. ___________, in the office of the Registrar of Titles in and for Hennepin County, Minnesota, in favor of ________________ (the “Mortgage”), hereby consents to the foregoing Public Easement & Acquisition Agreement (4917 Eden Avenue) (the “Agreement”), and hereby subjects and subordinates the Mortgage and all of its right, title and interest in and to the Agreement. ___________________________________, a ___________________ By: _________________________________________ Name: _______________________________________ Title: ________________________________________ STATE OF ______________ ) ) ss. COUNTY OF ______________ ) The foregoing instrument was acknowledged before me this ____ day of ____________, 20______, by ____________________, the _________________ of ___________________, a ___________________, on behalf of the ___________________. ____________________________________________ Notary Public P-1 4891-1861-9392\1 Exhibit P Equity and Inclusion Outreach Plan [See attached.] An Affirmative Action, Equal Opportunity Employer Frana Companies is familiar with and well versed in the process in working towards the goals set forth by the cities of Minneapolis, St. Paul, and surrounding communities. We employ the following methods, among others, to meet the needs of our projects: • Affirmative Action – Frana Companies has an Affirmative Action Plan that is included as part of this package. • Small and Underutilized Business Program (SUBP) – Frana Companies has established relationships in the multi-family housing industry with the Women Business Enterprise (WBE), Minority Business Enterprise (MBE) and Section 3 subcontractors and material suppliers. We work closely with the subcontractor associations and labor trades, Summit Academy OIC, owners, and subcontractors/material suppliers to strive to meet the goals. Frana Companies works with smaller certified firms to create relationships with larger subcontractors to assist in larger commercial projects. Frana has specifically worked with and continues to partner with a smaller WBE and MBE drywall contractor. We assist this subcontractor with takeoffs, material purchasing power, and meeting cash requirements by paying more frequently than once per month. Frana Companies also works with subcontractors and suppliers to create smaller scopes of work to help gain opportunities for smaller MBE and WBE companies. With our own self-performed carpentry and cleaning crews, we have established a relationship with Summit Academy OIC to hire graduates, thus providing needed opportunities for those looking for a career in the construction industry. Projected goals for 4917 Eden Avenue, Edina, Minnesota: • Contracting Goals: 5% WBE and 4% MBE • Workforce Goals: 5% women hours and 10% people of color and indigenous people hours Based upon the current construction economy, COVID-19, and local workload, it has become increasingly more difficult to meet and or exceed goals. We will review all subcontracting bids for the work and will work towards meetings these goals; however, we have seen a number of contractors remove their bids from the process based upon their current workload, schedule, and availability to complete the work. Frana Companies General Contractors 633 Second Avenue South z Hopkins, Minnesota z 55343 www.frana.com An Affirmative Action, Equal Opportunity Employer AFFIRMATIVE ACTION/EQUAL EMPLOYMENT OPPORTUNITY (AA/EEO) POLICY STATEMENT This statement is to affirm Frana Companies Inc. policy on providing Equal Employment Opportunity (EEO) to all employees and applicants for employment in accordance with all applicable Affirmative Action Equal Employment Opportunity laws, directives, and regulations of federal, state, and local governing bodies or agencies. Frana Companies Inc. will not discriminate against any employee or applicant for employment because of age, ancestry,color, creed,disability,familial status, geneticinformation(genetictesting, familymedical history, and/or genetic services), marital status, national origin, public assistance status, race, religion, retaliation, retaliation by association, retaliation by opposition, sex, pregnancy, sexual or affection orientation. Frana Companies Inc. will maintain zero tolerance for harassment of or by any employee or applicant for employment because age, ancestry, color, disability, familial status, genetic information (genetic testing, family medical history, and/or genetic services), marital status, national origin, public assistance status, race, religion, retaliation, retaliation by association, retaliation by opposition, sex, pregnancy, sexual or affection orientation. We will maintain an internal complaint procedure for complaints of such harassment, and will provide employees with contact information for federal, state, and local enforcement agencies. Frana Companies Inc. will take Affirmative Action (AA) to ensure that all employment practices are free of such discrimination and harassment. Such employment practices include, but are not limited to, the following: hiring, upgrading, demotion, transfer, recruitment or recruitment advertising, selection, layoff, disciplinary action, termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. Frana Companies Inc. fully supports incorporation of non-discrimination and affirmative action rules and regulations into contracts with subcontractors for goods and services. Frana Companies Inc. will commit the necessary time and resources, both financial and human, to achieve the goals of Affirmative Action and Equal Employment Opportunity. 633 Second Avenue S Hopkins, MN 55343 October 20, 2021 An Affirmative Action, Equal Opportunity Employer Page 2 of 5 Frana Companies Inc. will evaluate the performance of its management and supervisory personnel based on their involvement in achieving these Affirmative Action and Equal Employment Opportunity objectives as well as other established criteria. Any employee of this organization, or subcontractors to this employer who do not comply with the Equal Employment Opportunity Policies and Procedures set forth in this Statement and Plan will be subject to disciplinary action. As well, any subcontractor not complying with all applicable Equal Employment Opportunity/Affirmative Action laws, directives and regulations of the federal, state and local governing bodies or agencies thereof, will be subject to appropriate legal sanctions Frana Companies Inc. has appointed Tom Lamberta / Kelly Mahon as AA/EEO Managers to manage the Equal Employment Opportunity Program. Their responsibilities will include monitoring all Equal Employment Opportunity activities and reporting the effectiveness of this Affirmative Action Plan (AAP), as required by federal, state and local agencies. They will be given the necessary top management support and staffing to fulfill their job duties. The President of Frana Companies Inc. will receive and review reports on the progress of the plan. If any employee or applicant for employment believes he/she has been discriminated against, please contact Tom Lamberta / Kelly Mahon at this address: 633 Second Avenue South, Hopkins, MN 55343 Mike Benedict President Signature of President Date Signature of President 10/20/2021 633 Second Avenue S Hopkins, MN 55343 October 20, 2021 An Affirmative Action, Equal Opportunity Employer Page 3 of 5 REASONABLE ACCOMMODATIONS STATEMENT Frana Companies Inc. shall make reasonable accommodations to the physical and/or mental limitations of an employee or applicant unless such accommodations would impose an undue hardship on the function of the business. STATEMENT OF FAIR COMPENSATION In offering employment or promotions to disabled individuals, Frana Companies Inc. shall not reduce the amount of compensation offered because of any disability income, pension, or other benefit the applicant or employee receives from another source. PRE-EMPLOYMENT MEDICAL EXAM Frana Companies Inc. may require a person to undergo a physical examination, which may include a medical history, for the purpose of determining a person’s capability to perform available employment functions, provided that an offer of employment has been made. This offer would be contingent on the condition that the person meets the physical or mental requirements of the job and, that the examination tests only for essential job-related abilities. Information obtained in response to such inquiries or examination shall be kept confidential. Exceptions to the confidentiality rule may be when: (a) supervisors and managers may be informed regarding restrictions on the work or duties of disabled individuals because of reasonable accommodation needs; (b) first aid and safety personnel may be informed where, and to the extent appropriate, if the condition might require emergency treatment; and (c) officials, employees, representatives, or agents of the local, federal and state human rights agencies shall be informed when an investigation of compliance is being conducted in accordance with the local Ordinance or federal and state rights statutes. DISSEMINATION OF AA POLICY AND PLAN Internal Dissemination: The company will permanently and conspicuously display the policy statement in areas such as employee bulletin boards, lunch areas and construction sites. The company, as an equal opportunity employer, should print the policy statement in the company newsletter and other publications. 633 Second Avenue S Hopkins, MN 55343 October 20, 2021 An Affirmative Action, Equal Opportunity Employer Page 4 of 5 The company will provide all employees and contractors a policy statement and notify same of location and availability of the affirmative action plan. This policy will be made available to all employees including part-time, temporary, or seasonal employees. The company’s EEO/AA policies will be included in the policy manual. The company will review their EEO/AA policies with all employees and management at least once a year. The company will also conduct orientation and training sessions to thoroughly inform staff and management of the company's EEO/AA commitment. The company will develop internal communication outlining the company’s obligation to engage in affirmative action efforts to employ qualified disabled individuals, women, and people of color and indigenous people. This will be done in order to foster acceptance, understanding and support between all employees, to include executive level, management, supervisory, administrative and line workers; and to encourage such persons to take the necessary action to aid the company in meeting this obligation. External Dissemination: The company will include non-discrimination clauses in all union agreements and will review all contractual provisions to ensure that they are non-discriminatory. The company will also meet with union officials to advise them of their EEO/AA policies and enlist their cooperation. The company will notify recruitment sources including those in Appendix G, of their EEO/AA policy and encourage them to refer people of color and indigenous people, women, and disabled individuals to assist the company in achieving their affirmative objectives. The company will include the statement, “Equal Opportunity Employer/Contractor” or “Affirmative Action Employer/Contractor” on all company stationery and letterhead, and in advertisements when recruiting employees and subcontractors. RECRUITMENT OF EMPLOYEES A. Frana Companies Inc. uses “protected class” when advertising new openings. Sufficient time is allowed after the publication of the ads to ensure that protected class applicants will have time to reply. 633 Second Avenue S Hopkins, MN 55343 October 20, 2021 An Affirmative Action, Equal Opportunity Employer Page 5 of 5 Ǥ All solicitations or advertisements for employees placed by or on behalf of Frana Companies Inc. or our subcontractors will state that all qualified applicants will receive consideration for employment regardless of their race, color, creed, religion, ancestry, national origin, sex, affectional preference, disability, age (over 40), marital status or status with regard to public assistance. Copies of advertisements for employees must be kept on file for review by enforcement agencies. Ǥ Frana Companies Inc. will contact unions and community organizations to request people of color and indigenous people, women, and disabled employees. When seeking to fill specific openings we will give the agencies a reasonable amount of time to locate and refer applicants to us. Frana Companies Inc. will use the Recruitment Resources List for agencies to locate protected class employees. Ǥ Frana Companies Inc. will encourage our current people of color and indigenous people, women, and disabled employees to recruit other people of color and indigenous people, women, and persons of disability, and, where reasonable, provide after school, summer and vacation employment to people of color and indigenous people, women, and youthful persons of disability, both onsite and in other areas of the workforce. Ǥ Frana Companies Inc. will take appropriate steps to give encouragement to people of color and indigenous people, women, and persons of disability to increase their skills and job potential through participation in available training and educational programs, including supervisory training classes. Ǥ Frana Companies Inc. and our subcontractors will make job opportunity information equally available to potential applicants from both protected and non-protected class groups, unless there is a bona fide occupational requirement for a particular job. We will not indicate, in help-wanted advertisements, any preference, limitation or specification based on gender, unless gender is a bona fide occupational qualification for a particular job involved. Ǥ Active recruitment programs, where applicable, will be carried out at secondary schools, community colleges and colleges with predominantly people of color and indigenous peopleǡ and women enrollments. Recruitment efforts at all schools will incorporate efforts to reach women, people of color and indigenous people, and persons of disability. Ǥ Recruitment brochures pictorially presenting work situations will include people of color and indigenous people, women, and disabled members of the workforce. Ǥ Special efforts should be made to include people of color and indigenous people, women, and disabled employees on personnel/human resources staff. Frana Companies, Inc. will commit the necessary time and resources, both financial and human, to achieve the goals of the Equal Employment Opportunity and Affirmative Action BUSINESS & EMPLOYMENT OUTREACH CHECKLIST EFFORTS TO SOLICIT AND INCLUDE DISADVANTAGED BUSINESSES AND WORKFORCE Solicited to organizations listed below: Builders Exchange Metropolitan Economic Development Association Association of Women Contractors National Association of Minority Contractors Latino Economic Development Finance and Commerce Summit Academy Spokesman Recorder Other: Attempted to break scopes of work down into smaller pieces to facilitate more participation Examples: Paid more in order to facilitate more participation Examples: Negotiated in good faith with all responsive bidders Examples: Rejected a quote from disadvantaged contractors after determining the cost of using the contractor was unreasonable to incur Examples: Qualifications reviewed with all responsive bidders: COVID-19 Supply chain issues Workforce of manufacturers Project timelines Do they have enough workforce to meet project schedule / timing? Contractors current and projected workload Other good faith efforts: Frana Companies General Contractors 633 Second Avenue South z Hopkins, Minnesota z 55343 www.frana.com Q-1 4840-9152-4093\3 Exhibit Q Form of Equity and Inclusion Report Project Name & Address: 4917 Eden Avenue, Edina, Minnesota Developer: Reuter Walton dba Eden Avenue Group, LLC General Contractor: [Frana] Construction Trade Total Hours Worked Hours Worked by Under-Represented Groups % Names of Employers BIPOC Men BIPOC Women Non-BIPOC Women Demolition __% Grading/Excavation __% Carpentry __% Concrete __% Masonry __% Electrical __% Plumbing __% Glass & Glazing __% Painting & Finishes __% Other __% Total __% NA BIPOC includes workers whose ethnicity includes black, indigenous and other people of color Q-2 4840-9152-4093\3 Summary of Certified* Women-Owned Business Enterprises Name of Business (common name and dba) City & State Description of Trade Value of Sub- Contract *Certified means any business entity that is formally recognized as a disadvantaged business entity (typically women-owned or minority-owned) by the State of Minnesota or other Minnesota-based entity. Summary of Certified* Minority-Owned Business Enterprises Name of Business (common name and dba) City & State Description of Trade Value of Sub- Contract *Certified means any business entity that is formally recognized as a disadvantaged business entity (typically women-owned or minority-owned) by the State of Minnesota or other Minnesota-based entity. Total Cost of General Contractor and Subcontracted Work: Total Subcontracted Work awarded to certified MBEs Total Subcontracted Work awarded to certified WBEs Combined total: $ _______ $ _______ $ _______ _______% Q-3 4840-9152-4093\3 Pursuant to and in accordance with Section 10 of that certain Redevelopment Agreement dated November 3, 2021 by and among the City of Edina, Minnesota, a Minnesota statutory city (the “City”), the Housing and Redevelopment Authority of Edina, Minnesota, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the “Authority”), and Eden Avenue Group, LLC, a Delaware limited liability company (“Developer”), Developer hereby represents, warrants, and certifies to the City and the Authority that the information provide in or connection with this report is true and correct in all material respects. EDEN AVENUE GROUP, LLC By: Eden Avenue Partners, LLC, its Manager By: _________________________________________ Name: Nicholas Walton Its: Manager Date: O c tober 28, 2021 Agenda Item #: VI I.B. To:C hair & C ommis s ioners of the Edina HR A Item Type: R eport / R ecommendation F rom:Bill Neuendorf, Economic Development Manager Item Activity: Subject:R es olution 2021-13 Adopting S pending P lan for Unalloc ated Tax Inc rement F unds Ac tion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: Approve R esolution 2021-13 and P olicy for the Use of Unobligated T I F F unds. I N TR O D U C TI O N: T his items pertains to a spending plan for unallocated monies collected in the P entagon P ark, 70th & C ahill and S outhdale 2 Tax Increment F inancing (T I F) D istricts. Recent changes in Minnesota statute allows cities greater flexibility in spending unallocated monies to support redevelopment and housing efforts. A Spending P lan and related P olicy has been prepared for future consideration by the C ity C ouncil, after input has been obtained via a P ublic Hearing. Resolution 2021-13 expresses support for such a Spending P lan subject to the required input and approval procedures. S taff recommends approval of this Resolution and P olicy. AT TAC HME N T S: Description Resolution 2021-13 Staff Report & Pres entation Spending Plan Policy for Spending Plan As s istance RESOLUTION NO. 2021-13 ADOPTING A SPENDING PLAN FOR THE SOUTHDALE 2, PENTAGON PARK, AND WOODDALE/VALLEY VIEW TAX INCREMENT FINANCING DISTRICTS WHEREAS, the Board of Commissioners (the “Board”) of the Edina Housing and Redevelopment Authority (the “HRA”) and the City Council (the “Council”) of the City of Edina, Minnesota (the “City”) established the Southdale 2, Pentagon Park, and 70th and Cahill Tax Increment Financing Districts (the “TIF Districts”), pursuant to, and in accordance with Minnesota Statutes, Section 469.174 to 469.1794, inclusive, as amended (the “Act”); and WHEREAS, the HRA is proposing the adoption of a Spending Plan for the TIF Districts, pursuant to, and in accordance with, Minnesota Statutes, Sections 469.176, Subd. 4n inclusive, as amended in substantially the form submitted to the HRA (the “Spending Plan”) to utilize existing and unobligated tax increment revenues from the TIF Districts in order to stimulate construction or substantial rehabilitation of private development in a way that will also create or retain jobs in the City; and WHEREAS, the Spending Plan includes authorizing the allocation of budgeted expenditures for project costs that will be paid or financed using District funds. The boundaries of the TIF Districts are not being enlarged and the duration of the TIF Districts are not being extended; and WHEREAS, the financing offered by the City or HRA pursuant to the Spending Plan could constitute a business subsidy pursuant to Minnesota Statutes, Section 116J.993 to 116J.995, as amended (the “Business Subsidy Act”) and may be subject to the requirements of the City’s Business Subsidy Policy as applicable. WHEREAS, the HRA has investigated the facts relating to the Spending Plan and has caused the Spending Plan to be prepared; and WHEREAS, the HRA has performed all actions required by law to be performed prior to the adoption of the Spending Plan, including, but not limited to, causing notice of a public hearing to be published and requests that the Council hold a public hearing on the adoption of the Spending Plan. NOW, THEREFORE BE IT RESOLVED by the Board as follows: 1. The HRA hereby reaffirms the original findings for the TIF Districts and finds that the adoption of the proposed Spending Plan conforms in all respects to the requirements of the Act and will result in creation or retention of jobs in the State of Minnesota (the “State”) and help preserve and enhance the tax base of the State and thereby serves a public purpose. 2. The HRA further finds that the Spending Plan will afford maximum opportunity, consistent with the sound needs for the City as a whole, for the development or redevelopment of the Project Area by private enterprise in that the intent is to provide only that public assistance necessary to make the private developments financially feasible. 3. Conditioned upon the approval thereof by the Council following its public hearing thereon, the Spending Plan, as presented to the HRA on this date, is hereby approved, established and adopted and shall be placed on file in the office of the Executive Director of the HRA. HRA Resolution 2021-13 4. Upon approval of the Spending Plan by the Council, the staff, the HRA's advisors and legal counsel are authorized and directed to proceed with the implementation of the Spending Plan and for this purpose to negotiate, draft, prepare and present to this Board for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Approval of the Spending Plan does not constitute approval of any project or a development agreement with any developer. 5. Upon approval of the Spending Plan by the Council, the Executive Director of the HRA is authorized and directed to forward a copy of the Spending Plan to the Office of the State Auditor pursuant to Minnesota Statutes 469.176, Subd. 4n. Approved by the Board on October 28, 2021. ATTEST: _______________________________ James B. Hovland, Chair _______________________________ James Pierce, Secretary STATE OF MINNESOTA) COUNTY OF HENNEPIN) SS CITY OF EDINA ) CERTIFICATE OF EXECUTIVE DIRECTOR I, the undersigned duly appointed and acting Executive Director for the Edina Housing and Redevelopment Authority do hereby c ertify that the attached and foregoing Resolution is a true and correct copy of the Resolution duly adopted by the Edina Housing an d Redevelopment Authority at its Regular Meeting of October 28, 2021, and as recorded in the Minutes of said Regular Meeting. WITNESS my hand and seal of said City this ______________ day of October, 2021. Executive Director The CITYofEDINASpending Plan forUnallocated Incremental Tax MoniesEdina Housing and Redevelopment AuthorityOctober 28, 2021www.EdinaMN.gov The CITYofEDINA2Background•New Minnesota Legislation allows cities to use unallocated TIF monies that have not already been obligated•Intended to accelerate the economic recovery after the COVID-19 pandemic•Intended to create new jobs•Intended to promote new private investment The CITYofEDINA3Background•Edina has 3 TIF accounts with unallocated monies that are eligible for this new MN Statute:•- Pentagon Park (approx. $696,100)•- Southdale 2 (approx. $8,584,100)•- 70th& Cahill (approx. $345,000)•-TOTAL approx. $9,625,200 The CITYofEDINA4How can Funds be UsedTIF monies can fill gap in private development projects including:-New construction or substantial rehabilitation of existing-Private improvements or related public improvements-Loan, grant or equity investmentNOT for public buildings or parksNOT for general public improvementsgap The CITYofEDINA5What must be achieved with Funds•Each project MUST deliver new construction or substantial rehabilitation of brick and mortar structures•Each project MUST create jobs, including (at a minimum) construction jobs•Each project MUST be determined to be unable to proceed without public fundinggap The CITYofEDINA6When can Funds be Used•Public Hearing must be conducted•- scheduled for Nov 3rd•Spending Plan must be approved no later than 12/31/2022•Projects must be completed by 12/31/2025•Any unused funds must be returned to the original TIF account OR be redistributed to the County, City and Schools in 2026gap The CITYofEDINA7Recommended Process•Two step process•1st– adopt Spending Plan•2nd- consider qualified projects on case-by-case basis•Be strategic in the type and location of approved projects•Seek to maximize private investment and create strong economic conditions throughout the commercial areas•Comply with applicable State rules and regulations, including reporting The CITYofEDINA8Type of Projects to ConsiderUnder the general terms of the proposed Spending Plan, many different types of projects could be considered in the future. Examples include:•Renovation of vacant commercial buildings•Construction of new commercial or multi-family buildings•Improvements to public roadways, parking facilities and related infrastructure that hinder private investment The CITYofEDINA9Summary2021 Minnesota Statutes enables unallocated TIF monies to be reinvested to pursue private development and create jobsEdina has 3 TIF Districts with $9.6 M of unallocated moniesStaff recommends that the Spending Plan be adopted in 2021Staff further recommends that prospective projects be identified in 2021-2022 so that work can be completed by the 2025 deadline The CITYofEDINA10Questions / Discussion Julie Blaha State Auditor STATE OF MINNESOTA Suite 500 525 Park Street Saint Paul, MN 55103 New: August 2021 Main: (651) 296-2551 Fax: (651) 296-4755 TTY: (800) 627-3529 State.Auditor@ osa.state.mn.us www.osa.state.mn.us An equal opportunity employer Statement of Position Temporary Transfer Authority (2021 Law) Tax increment revenue may be spent only as permitted by the Tax Increment Financing Act (TIF Act).1 In 2021, the Legislature enacted expanded, temporary authority to transfer unobligated tax increments for purposes of assisting private development consisting of the construction or substantial rehabilitation of buildings and ancillary facilities, if doing so will create or retain jobs in the state.2 Proposed amidst the COVID-19 pandemic, the enacted law is narrower than initially proposed and is similar to 2010 legislation that temporarily expanded the use of TIF with the aim of stimulating economic recovery after the Great Recession.3 Authority, Purposes The new law temporarily permits a development authority to elect, by resolution, to transfer unobligated increment for certain specified purposes. The new law does not, however, override requirements to pay bonds to which increments are pledged. Any transfer under this provision must be for the purpose of assisting private development that meets all of the following criteria: (1) it consists of the construction or substantial rehabilitation of buildings and ancillary facilities; (2) it creates or retains jobs in the state, including construction jobs; and (3) construction commences before December 31, 2025, and would not have commenced before that date without the assistance.4 Developments that would already commence construction prior to December 31, 2025, or those that do not add or retain jobs in the state, would not be permitted beneficiaries of the transfer. Transfers must provide the assistance in one or both of the following ways: (1) by providing improvements, loans, interest rate subsidies, or assistance in any form to the private development; or 1 The TIF Act is found at Minn. Stat. §§ 469.174 to 460.1794. 2 Minn. Stat. § 469.176, subd. 4n, as enacted by 2021 Minn. Laws, 1st Spec. Sess., ch. 14, art. 9 sec. 1. 3 The 2021 enacted provision does not include transfers to the general fund, nor more-generalized support for businesses impacted by the pandemic, as was initially entertained. While similar to the 2010 Jobs Stimulus provision, additional details are included. For information about the 2010 provision, see the separate TIF Jobs Stimulus Program statement of position on our website. 4 Minn. Stat. § 469.176, subd. 4n(a). New: August 2021 2 (2) by making an equity or similar investment in a corporation, partnership, or limited liability company that the authority determines is necessary to make construction of a development financially feasible.5 In order to demonstrate compliance with the new provision, an authority may wish to include affirmation of the qualifications in the written resolution electing to make the transfer. The authority also should keep documentation that demonstrates that the development created or retained jobs in the state and that commencement of construction by December 31, 2025, depended on the transfer. Approvals and Spending Plans Prior to approving the use of this temporary transfer authority by resolution, a development authority must also create a written spending plan that authorizes the development authority to provide the assistance or make the investment that makes the development qualify.6 The plan must detail the use of transferred increment.7 The OSA recommends identifying planned expenditures using the same categories identified in TIF plans and TIF reporting (e.g., acquisition, site preparation, financing costs, etc.), except for a category for administrative expenses, because administrative expenses are not included in the permissible uses of the transferred increment in the new law. The municipality (which may or not be the same as the development authority) must also approve the authority’s spending plan after holding a public hearing.8 The municipality must publish notice of the hearing in a newspaper of general circulation in the municipality and on the municipality’s public website at least ten days, but not more than 30 days, prior to the date of the hearing.9 An authority making a transfer under this authority must provide a copy of the spending plan approved and signed by the municipality to the Office of the State Auditor.10 Plans should be emailed to TIF@osa.state.mn.us as soon as possible after their approval. Parameters and Limitations The authority to transfer increments under this provision expires on December 31, 2022.11 Amounts being transferred under this provision must be transferred from the fund or account in which tax increments are segregated and into a separate fund or account by December 31, 2022. Amounts must not be expended directly from the transferring TIF fund or account, and may not be spent after December 31, 2022, if they remain in the TIF district’s fund or account at that time.12 All transfers must be spent by December 31, 2025.13 5 Id. 6 Minn. Stat. § 469.176, subd. 4n(c). 7 Id. 8 Id. A city’s housing and redevelopment authority or economic development authority, for example, may be the development authority while the city itself is the municipality. 9 Id. 10 Minn. Stat. § 469.176, subd. 4n(e). 11 Minn. Stat. § 469.176, subd. 4n(f). 12 Minn. Stat. § 469.177, subd. 5, requires an authority to segregate tax increment received with respect to any district in a special account or accounts on its official books and records. This authority allows transfers out of such accounts as opposed to expenditures from within these accounts. 13 Minn. Stat. § 469.176, subd. 4n(f). New: August 2021 3 Transfers from a TIF district in calendar years 2021 and 2022 are limited to a maximum transfer equal to the excess of the district’s unobligated increment.14 Under the provision, unobligated increment includes any increment not required for payment of obligations due during the six months following the transfer on outstanding bonds, binding contracts, and other outstanding financial obligations of the district to which the district’s increment is pledged.15 Therefore, the transfer of increment for 2021 is limited to the eligible balance of tax increment at the end of 2020, less amounts needed to pay bonds, pay-as-you-go notes, and interfund loans due from January 1, 2021, to June 30, 2021. Similarly, the transfer of increment for 2022 is limited to the eligible balance of tax increment at the end of 2021, less amounts needed to pay bonds, pay-as-you-go notes, and interfund loans due from January 1, 2022, to June 30, 2022. Presumably, receipts of tax increment for the first half taxes in each year would be used to make payments on outstanding obligations due in the second half of each year, but note that this authority does not provide any exception to pay those obligations to which tax increment is pledged, and an authority should not transfer amounts that might impair their ability to make payments on those obligations. Increment that is improperly retained, received, spent, or transferred is not eligible for transfer under this authority.16 Therefore, the 2020 and 2021 balances of tax increment should be carefully evaluated prior to making transfers in 2021 and 2022, respectively. For example, excess increment calculated for 2019 that might remain in the TIF fund after it should have been returned by September 30, 2020, would not be eligible for transfer, nor would any subsequent excess increment be eligible for a transfer after it should have been returned. Likewise, if a district receives tax increment after it should have decertified under the Six-Year Rule, such amounts of increment would also not be eligible for transfer. Unspent Transfers Increment not spent by December 31, 2025, must be returned to the fund(s) of the contributing TIF district(s).17 The distribution of returned amounts need not be proportional to the amount contributed, but the amount returned to each TIF district must not exceed the amount transferred from the district. 14 Minn. Stat. § 469.176, subd. 4n(b). 15 Id. Interfund loans are included in the definition of “bonds” in the TIF Act (see Minn. Stat. § 469.174, subd. 3), so payments on interfund loans should not be foregone to increase a transfer under this authority. 16 Minn. Stat. § 469.176, subd. 4n(d). 17 Minn. Stat. § 469.176, subd. 4n(f). ☒City Council Approved: Click here to enter a date. ☐City-Wide Revised: Click here to enter a date. ☐Department City of Edina Policy Policy for Use of Unobligated Tax Increment Financing (TIF) Funds OVERVIEW The purpose of this Policy is to identify goals and establish guidelines pertaining to the City’s use of its unobligated TIF cash balances for financial assistance to stimulate private construction and rehabilitation projects that create jobs. The use of these unobligated TIF balances is responsive to 2021 Minnesota Statutes, Section 469.176 subdivision 4n. This policy shall be used as a guide for unallocated TIF monies available under the City’s approved Spending Plan and seeks to invest these monies to enable additional private investment that creates jobs and also delivers benefits to the general public. Pursuant to the TIF Act, the purpose of these expenditures is to spur construction, expansion, or rehabilitation of commercial, industrial, or mixed-use buildings and supporting infrastructure within the City’s commercial and industrial districts so as to create or retain local jobs and stimulate additional private investment in the City. This policy is intended to be in effect upon approval and to expire December 31, 2025, unless changed by Minnesota Statute. SPENDING PLAN FOR UNALLOCATED TAX INCREMENT A Spending Plan has been prepared to formalize the use of unobligated incremental property taxes in accordance with the 2021 Minnesota Statutes. This Spending Plan identifies approximately $9,650,000 of unallocated monies generated from three existing TIF Districts located within the Southeast Edina Redevelopment Project Area: Southdale 2, Pentagon Park and 70th/Cahill. Any funds utilized under this provision must be expended by December 31, 2025, unless that date is modified by State Law. CONSIDERATION OF PROJECTS Each project will be evaluated on a case-by-case basis in accordance with the qualifications identified in Minnesota Statute, the Spending Plan and this Policy. The HRA retains the right to evaluate projects under this Program as it sees fit to meet the overall objectives of the TIF Act. This policy outlines how funds will be provided for qualified construction activities. Assistance will be considered upon evidence that construction would not have occurred without such assistance and alternatives for financing are not feasible. DRAFT Policy for Use of Unobligated TIF Funds Page 2 POTENTIAL PROJECTS The types of projects to be funded include but are not limited to the following: renovation of existing buildings and construction of new buildings, including public improvements directly related to the renovations and construction. Examples might include: renovations of theaters and restaurants, construction of new commercial facilities, renovation for business incubators or business accelerators, construction of public parking, public sidewalks or public utilities that serve the private investments. These funds can also be used for housing, if jobs are created. PUBLIC BENEFITS FROM PRIVATE INVESTMENT Projects shall stimulate private investment while also creating benefits to the general public. At a minimum, these public benefits should include: Growth or stabilization of property tax base, Creation of construction jobs and/or permanent jobs Reoccupy a vacant facility (or portion thereof) or construct a new facility for occupancy Funded Projects should also include at least one of the following: Preservation or restoration of historic and culturally significant sites and elements Public improvements that are identified in the City’s Capital Improvement Plan or similar planning document Public easements for non-motorized vehicles or mass transit Conservation easements to protect established trees or wetlands, where applicable Easements for public plazas with combination of landscape, hardscape and public art that is owned and maintained by private owners, or Easements for public parking that is owned and maintained by private owners If applicable to the scope of work, funded Projects should also: Remediate environmental contaminants Apply sustainable design and construction practices to reduce the carbon footprint or to reduce greenhouse gas emissions BUSINESS SUBSIDY All projects approved pursuant to this policy that constitute a business subsidy under Minnesota Statutes, Sections 116J.993 through 116J.995, as amended, will be subject to the City’s Business Subsidy Policy. FINANCIAL REPORTING The expenditure of unallocated tax increment shall be reported as required by Minnesota Law and in the format required by the Minnesota Office of the State Auditor (OSA) and any other required financial audits or reports. Reviewed by Edina HRA: October 28, 2021 Date: O c tober 28, 2021 Agenda Item #: VI I.C . To:C hair & C ommis s ioners of the Edina HR A Item Type: R eport / R ecommendation F rom:Bill Neuendorf, Economic Development Manager Item Activity: Subject:5146 Eden Avenue - R edevelopment P lanning for R es taurant F ac ility Disc ussion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: No action required; for discussion only. I N TR O D U C TI O N: T his item pertains redevelopment of vacant property at 5146 E den Avenue. T he H R A has contracted with F rauenshuh to solicit experienced operators capable of delivering a dining and hospitality amenity. A prospective operator will introduce themselves and their idea to activate the northern portion of the site with a new dining establishment that includes comfortable indoor spaces and activated outdoor spaces. AT TAC HME N T S: Description Staff Report Operator solicitation Jes ter Concepts - interes t letter Jes ter prelim concept Housing & Redevelopment Authority October 28, 2021 Chair Hovland and Commissioners of the Edina Housing and Redevelopment Authority Bill Neuendorf 5146 Eden Avenue - Redevelopment Planning for Restaurant Facility Information / Background: On behalf of the Housing and Redevelopment Authority, representatives from Frauenshuh Company have contacted potential operators of a new restaurant facility that could potentially be located on a portion of the HRA’s property at 5146 Eden Ave. Frauenshuh’s outreach has been targeted to experienced hospitality groups who have successfully opened and operated unique restaurants that deliver an elevated dining experience in an environment that is welcoming to families and groups of friends and colleagues. Jester Concepts has expressed interest in this site and are capable of pursuing a new business opportunity to satisfy the HRA’s timeframe to redevelop this site in conjunction with new housing and new outdoor public space. Mr. Brent Fredrick, Chief Manager will present Jester’s initial concepts for the site and will be available for questions. Input is requested from members of the HRA so that Jester Concepts can better understand the shared goals for the site. If there is mutual interest in advancing, Jester will prepare a full proposal for future consideration by the HRA. Recommended Action: No action is required at this time. This item is for discussion only. REQUEST FOR EXPRESSIONS OF INTEREST RESTAURANT/DINING/HOSPITALITY END-USE/OWNER/OPERATOR 5146 EDEN AVENUE REDEVELOPMENT SEPTEMBER 1, 2021 EDINA, MINNESOTA SITE LOCATION - 5146 Eden Ave S, Edina, MN View from Southwest SITE LOCATION - 5146 Eden Ave S, Edina, MN View from South 1 INTRODUCTION On behalf of the Edina Housing & Redevelopment Authority (“Edina HRA”), this letter is an invitation and request for your expression of interest for the selection of an end-use/owner/operator for a new restaurant/dining/hospitality development at the 5146 Eden Avenue Redevelopment Site in Edina, MN. BACKGROUND The Edina HRA, working in conjunction with Frauenshuh, Inc. (“Frauenshuh”) and United Properties (“United Properties”), is planning the development of the approximately 3.34 acre property (“Site”) at the intersection of Eden Avenue and Arcadia Avenue in the city’s Grandview District. PHYSICAL PLAN CONCEPT The plan under consideration is illustrated as EXHIBIT A, and include the following basic site components: 1. SOUTH PORTION OF THE SITE Approximately 90 unit + Senior Cooperative housing development on the South Portion of the Site (“Senior Cooperative Project”) developed by United Properties. Frauenshuh/United Properties will continue working with the Edina HRA to plan, design and develop this site component. This portion of the Site comprises approximately 2 acres. 2. NORTH PORTION OF THE SITE A to-be-established restaurant/dining/hospitality concept that includes indoor/outdoor activities (approximately 0.67 acres) along with an outdoor green space connecting with the future pedestrian bridge on the North Portion of the Site (approximately 0.67 acres). EXHIBIT B illustrates some of the conceptual potential use elements. The Edina HRA has defined several objectives for the North Portion of the Site, which includes but are not limited to: A. The restaurant/dining/hospitality concept to be an all-seasons format with regular weekday and weekend business hours. The restaurant/dining/hospitality concept size, seating count and format (indoor/outdoor), menu, hospitality design/theme, dine-in/carry-out/ delivery options to be defined by the individual operator concepts. B. The restaurant/dining/hospitality business and operational model will include indoor and outdoor dining experience and activities such as lawn games and other hospitality elements (e.g. indoor/outdoor event space) to be incorporated as core components of the concept. C. The activities and the hospitality theme would aim to draw customers and activity to the area all times of the year, weekdays, evenings and weekends. D. The green space component connected to the future pedestrian bridge could function interactively with the restaurant/dining/hospitality use. E. The green space will be designed to be a vibrant outdoor public space that can accommodate a wide variety of year-round programming such as: neighborhood festivals, art festivals, farmer’s markets, special events, and community gatherings. A variety of landscape and hardscape features that support these activities are anticipated. This space may be retained for public ownership, operation and maintenance or privately owned, operated and maintained, depending on the overall plan. 2 LAND CONTROL AND OWNERSHIP MODEL The Edina HRA owns the Site and would seek to understand the potential ownership structure of the land and improvements that would be delivered to facilitate the development of the concept by a preferred end-use/owner/operator. The potential ownership structures would include: 1. Edina HRA to retain ownership of the land and lease the land to the end-use/owner/operator. The end-use/owner/operator would separately design, finance, construct and own the building and improvements to the Site, under a long-term Land Lease arrangement. 2. Edina HRA to retain ownership of the land and design, finance, construct and own the building and improvements to the Site (build-to-suit), under a long-term Land and Building Lease arrangement with the end-use/owner/operator. 3. Edina HRA to sell the land to the end-use/owner/operator at a pre-determined price and with pre-determined conditions to the sale and purchase. The Edina HRA will seek to understand the options under which the end-use/owner/operator would have an interest in proceeding with the concept, with the Edina HRA’s objective of securing the specific use and operation described herein. Under each of the potential models referenced above, it is the Edina HRA’s objective to reach a fair-market agreement for the level of investment, risk and conditions required of the parties to achieve the development objectives described in this package. 3 TIMING CONSIDERATIONS The Edina HRA is interested in completing the identification and selection of an end-use/owner/ operator in 2021. This includes completing this evaluation of interested parties within the following tentative timeframe: MILESTONE DETAILS 4 ON OR BEFORE DECEMBER 31ST, 2021ON OR BEFORE DECEMBER 31, 2021 Complete Redevelopment Agreement with select group. ON OR BEFORE DECEMBER 31ST, 2021OCTOBER 28, 2021 Edina HRA to consider selection of a preferred group for specific concept development and project negotiation ON OR BEFORE DECEMBER 31ST, 2021OCTOBER 11 - 22, 2021 Edina HRA to interview select groups based on evaluation of concept and criteria ON OR BEFORE DECEMBER 31ST, 2021SEPTEMBER 23 - 30, 2021 Preliminary Interviews with interested groups ON OR BEFORE DECEMBER 31ST, 2021SEPTEMBER 17, 2021 Received expressions of interest from end-use/owner/operator groups This timeline is subject to modification in the sole discretion of the Edina HRA. EXPRESSION OF INTEREST SUBMITTAL REQUEST Given the objectives described above and desire by the Edina HRA to solicit and select an end-use/ owner/operator, please address the following items in your initial response to the Edina HRA. 1. In letter format: A. Please describe your business and operational entity (holding company, group and/or individual restaurant concepts or portfolio under control of principals). Please introduce each of the principals that would be the key investment, capital and operational contributors to the venture. B. Describe one or two of your group’s current concepts that are either similar or would reflect the level of concept, design, quality and/or operating model format that you would bring to this Site. C. Describe in concept through a narrative and (attach separately) any illustrative photos or drawings, the basic concept vision your group would bring to the Site. Using the concept guidelines in Section 2 above, indicate how your concept builds on or enhances these objectives. D. Address the Land Control and Ownership Model considerations described above. Indicate your groups interest in working under one or more of the models. Please provide commentary on any of the considerations that would be important to your group under each of the models you would consider. E. It is anticipated that construction of the Senior Cooperative project could commence as early as Spring of 2023. It is anticipated that the North Portion of the Site development sequence would provide access to begin construction of the restaurant/dining/hospitality development in 2023, with completion an opening of the use in late 2023 or early 2024. Describe your anticipated timeline for development and timing sequence of opening this use contemplating this potential timeline. Please deliver your letter Expression of Interest via email by 5:00 p.m. on or before Friday, September 17, 2021 to David Anderson at (david.anderson@frauenshuh.com) with a copy to Alex Hall (alex.hall@uproperties.com) and Bill Neuendorf at (BNeuendorf@EdinaMN.gov). We invite any questions you have any time prior to the submittal date. The Edina HRA reserves the right to modify, cancel or amend this request at any time without notice. Thank you again for your interest and we look forward to your response! 5 6 EXHIBIT A - OVERALL SITE PLAN CONCEPT The land area allocations are approximate and may change based on final plan concept and design. EXHIBIT B - NORTH PORTION OF THE SITE 7 EXHIBIT B - NORTH PORTION OF THE SITE 8 September 30, 2021 David Anderson Frauenshuh 7101 W 78th St Minneapolis, MN 55439 Via email: david.anderson@frauenshuh.com Re: Letter of Interest – Edina Restaurant – Eden Ave Redevelopment David, This letter is to express our interest in operating/owning the restaurant/dining/hospitality concept on the site at 5146 Eden Avenue redevelopment. Jester Concepts was created in 2008 as a restaurant management company and has grown its affiliated restaurant sales to over $14 million, with 6 locations and 200+ employees. Our concepts include Borough, Parlour Minneapolis, Monello, Constantine, P.S. Steak, Parlour St. Paul and various additional Parlour locations including a food truck and concessions at three of the major sports stadiums here in the Twin Cities. Jester has also recently acquired the Intellectual Property rights including the name and logos for the previously closed Butcher & the Boar. We have signed a new lease for a new location in the North Loop neighborhood and will open that new restaurant in Summer 2022. Jester Concepts sole principal and owner is Brent Frederick. Jester Concepts is the management company for all the restaurants and is the majority owner in each of the business LLC’s. We have provided our structure below. As for this new opportunity, this would be Jester’s first foray into the suburban area and we are excited for the opportunity to take our chef driven cuisine & craft cocktail expertise to Edina. Our company is known for dynamic restaurant experiences that include scratch kitchens, creatively cultivated bar programs and authentic & thoughtful décor. Specific to the site, we propose a restaurant that is fresh and exciting that can welcome the families of Edina as well those looking for a great date night out. We envision a seasonal restaurant concept based around an open-hearth pizza oven with craft cocktails and a fantastic wine list. We see an open flame as a major component inside and possibly out. We see an amazing opportunity to activate the outdoor space all year round and to be a beacon in the community as a go to for families and residents of all ages. Being an Edina resident myself, I would take great pride in creating a concept that best fits the community in which I live in. At this stage of the process, we are very interested in having additional dialogue and are open to a variety of partnership opportunities / ownership structures in order to make this site work. We have also engaged Rokos Advisors to help us navigate the real estate process for this project and we all look forward to learning more during the next steps in the process. My family and my neighborhood have gone without a restaurant on the west side of Edina for far too long and to offer that to my community would be a great honor. Thank you for your consideration. Sincerely, Brent Frederick Chief Manager Jester Concepts, LLC 8636.00 Presented To: City of Edina OCT 26, 2021 Restaurant & Bar, Event Center, & Outdoor Community Event Space 5146 Eden Avenue Redevelopment, Edina, MN RESTAURANT & BAR, EVENT CENTER, & OUTDOOR COMMUNITY EVENT SPACE | JESTER | EDINA, MN OCT 26, 20218636.00 Page 2 The Team: Jester Concepts Jester Concepts was launched in 2008 as a Minnesota owned hospitality company specializing in producing restaurant concepts that deliver an unmatched experience in food, service and atmosphere. We pride ourselves in creating unique restaurant concepts that compliment and are inspired by the location and neighborhood in which they are housed. At Jester Concepts we are driven to educate, elevate and exceed. The education of our staff is our foundation and this focus has built a team with passion and expert knowledge in their craft to deliver a consistent high- quality experience for our guests from start to finish. The elevated experience we strive for begins with the education and experience of our employees. We seek to exceed our teams’ expectations with an employee first approach, providing our teams with the tools they need to enhance the guest experience and enrich their daily lives. RESTAURANT & BAR, EVENT CENTER, & OUTDOOR COMMUNITY EVENT SPACE | JESTER | EDINA, MN OCT 26, 20218636.00 Page 3 Jester Concepts PARLOUR BAR BOROUGH RESTAURANT & BAR, EVENT CENTER, & OUTDOOR COMMUNITY EVENT SPACE | JESTER | EDINA, MN OCT 26, 20218636.00 Page 4 Jester Concepts MONELLO CONSTANTINE RESTAURANT & BAR, EVENT CENTER, & OUTDOOR COMMUNITY EVENT SPACE | JESTER | EDINA, MN OCT 26, 20218636.00 Page 5 The Team: Shea Founded in 1978 serving local, national, and international clients, with acclaimed work in over 40 states. Our philosophy blends the disciplines of architecture, interiors, and marketing to create cohesive brands that extend through physical space. Shea leverages expertise in each of these disciplines to create all-encompassing experiences and successful business solutions in hospitality, restaurant, workplace, and retail. RESTAURANT & BAR, EVENT CENTER, & OUTDOOR COMMUNITY EVENT SPACE | JESTER | EDINA, MN OCT 26, 20218636.00 Page 6 Case Studies BALDAMAR RESTAURANT & BAR, EVENT CENTER, & OUTDOOR COMMUNITY EVENT SPACE | JESTER | EDINA, MN OCT 26, 20218636.00 Page 7 Case Studies THE BRICKHOUSE J. ALEXANDER’S RESTAURANT & BAR, EVENT CENTER, & OUTDOOR COMMUNITY EVENT SPACE | JESTER | EDINA, MN OCT 26, 20218636.00 Page 8 Overview / Local - Elevated - Experience As a resident of western Edina, I am all too familiar with the void of great local eateries to visit. We intend to bring our blend of focused hospitality & unique dining experiences to the City of Edina. So, as a group we believe that an elevated Pizza concept would be warmly welcomed by the city & it’s residents. We would highlight an open hearth for cooking pizzas as well as other small plates, entree’s & seasonal vegetables. We would implement a craft cocktail program that has become a staple within all of our locations. An amazing wine list is essential as well and we would take an esoteric approach while incorporating the recognizable labels for familiarity. We would pair this concept with a secret/ underground bar perfect for a late night old fashioned, a negroni or a slice of pizza. The top floor would boast a private event space for family gatherings & small businesses while being utilized for overflow dining when events are not booked. An expansive outdoor patio would sit adjacent to the restaurant in which we hope to extend the season and welcome guests during the spring & fall. The patio would open up to the outdoor lawn which gives us an opportunity to welcome all residents in a community gathering space. We would activate the lawn all year round in conjunction with the City. Some ideas may include concerts, movies, farmers markets, fall pumpkin festivals and a winter wonderland complete with a skating rink and a candy/hot cocoa stations. Brent Frederick (5108 Blake Rd S, Edina, MN 55436) RESTAURANT & BAR, EVENT CENTER, & OUTDOOR COMMUNITY EVENT SPACE | JESTER | EDINA, MN OCT 26, 20218636.00 Page 9RAILWAYARVADIA AVEEDEN A V E 1/4” = 1’ EVENT LAWN SENIOR LIVING PARKING PARKING RESTAURANT RESTAURANT PATIO ESPLANADE210’ 240’ Site Plan / Vision & Deal Structure We would propose building a two story restaurant with and underground basement. A main level consisting of 4,000-5000 sq ft with matching level below and above. The building would be designed in a modern industrial way as well as the landscaping features and patio. We would suggest adding a few more parking stalls within the alloted space to give us access to 60-80 parking stalls. We would achieve this between the shared parking with the senior living, the allocated restaurant parcel and the parking ramp near Jerry's foods accessible by pathway. We will be offering complimentary valet as well to provoke a feeling of comfortability. Our vision for the restaurant will be multi faceted when determining our customers frequency. We hope to be that go to family spot for dinner, that brunch location for family & friends after church, that date night on the weekend or that watering hole for a mid week cocktail or glass of wine with a friend. Our proposed day parts would be every night for dinner as well as brunch on Saturdays & Sundays. We believe that an elevated concept here at this location would fit well within the assortment of options on the wester edge of Edina. While we believe we would be at the upper echelon in the restaurant scene of western Edina, we do not plan to be unapproachable to any single resident or neighbor and we will go to great lengths to viewed accessible. While we are flexible with any deal we would prefer to own the building and land if possible. We would absolutely entertain any deal that the city would prefer though. We would achieve our financing through 3 different ways including bank financing, outside investors and existing Jester capital. RESTAURANT & BAR, EVENT CENTER, & OUTDOOR COMMUNITY EVENT SPACE | JESTER | EDINA, MN OCT 26, 20218636.00 Page 10 Sensing Images / Restaurant RESTAURANT & BAR, EVENT CENTER, & OUTDOOR COMMUNITY EVENT SPACE | JESTER | EDINA, MN OCT 26, 20218636.00 Page 11 Sensing Images / Restaurant RESTAURANT & BAR, EVENT CENTER, & OUTDOOR COMMUNITY EVENT SPACE | JESTER | EDINA, MN OCT 26, 20218636.00 Page 12 Sensing Images / Restaurant RESTAURANT & BAR, EVENT CENTER, & OUTDOOR COMMUNITY EVENT SPACE | JESTER | EDINA, MN OCT 26, 20218636.00 Page 13 Sensing Images / Restaurant Patio RESTAURANT & BAR, EVENT CENTER, & OUTDOOR COMMUNITY EVENT SPACE | JESTER | EDINA, MN OCT 26, 20218636.00 Page 14 Sensing Images / Secret Underground Bar RESTAURANT & BAR, EVENT CENTER, & OUTDOOR COMMUNITY EVENT SPACE | JESTER | EDINA, MN OCT 26, 20218636.00 Page 15 Sensing Images / Event Lawn RESTAURANT & BAR, EVENT CENTER, & OUTDOOR COMMUNITY EVENT SPACE | JESTER | EDINA, MN OCT 26, 20218636.00 Page 16 Sensing Images / Green Space Date: O c tober 28, 2021 Agenda Item #: VI I I.A. To:C hair & C ommis s ioners of the Edina HR A Item Type: O ther F rom:S cott Neal, Exec utive Director Item Activity: Subject:Draft 2022 HR A Meeting S chedule Disc ussion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: S cott N eal will give an introduction and discuss the 2022 proposed H R A meeting schedule. I N TR O D U C TI O N: 2022 draft H R A meeting schedule is attached. AT TAC HME N T S: Description Draft 2022 HRA Meeting Schedule 2022 CITY OF EDINA COUNCIL AND BOARDS AND COMMISSIONS MEETINGS, HOLIDAYS, DAYS OF RELIGOUS OBSERVANCE AND ELECTION DATE Holidays City Council Nite to Unite Pln Comm Trns Comm Pk & Rec Comm City Council Retreat Indicates a religious holiday's observance Election Day HRA HP Comm Comm Health Human R/R Comm E& E Comm Arts & Culture Comm JANUARY FEBRUARY MARCH S M T W T F S S M T W T F S S M T W T F S 31 1 1 2 3 4 5 1 2 3 4 5 2 3 4 5 6 7 8 6 7 8 9 10 11 12 6 7 8 9 10 11 12 9 10 11 12 13 14 15 13 14 15 16 17 18 19 13 14 15 16 17 18 19 16 17 18 19 20 21 22 20 21 22 23 24 25 26 20 21 22 23 24 25 26 23 24 25 26 27 28 29 27 28 27 28 29 30 31 30 31 S M T W T F S S M T W T F S S M T W T F S 1 2 1 2 3 4 5 6 7 1 2 3 4 3 4 5 6 7 8 9 8 9 10 11 12 13 14 5 6 7 8 9 10 11 10 11 12 13 14 15 16 15 16 17 18 19 20 21 12 13 14 15 16 17 18 17 18 19 20 21 22 23 22 23 24 25 26 27 28 19 20 21 22 23 24 25 24 25 26 27 28 29 30 29 30 31 26 27 28 29 30 S M T W T F S S M T W T F S S M T W T F S 1 2 1 2 3 4 5 6 1 2 3 3 4 5 6 7 8 9 7 8 9 10 11 12 13 4 5 6 7 8 9 10 10 11 12 13 14 15 16 14 15 16 17 18 19 20 11 12 13 14 15 16 17 17 18 19 20 21 22 23 21 22 23 24 25 26 27 18 19 20 21 22 23 24 24 25 26 27 28 29 30 28 29 30 31 25 26 27 28 29 30 31 S M T W T F S S M T W T F S S M T W T F S 1 1 2 3 4 5 1 2 3 2 3 4 5 6 7 8 6 7 8 9 10 11 12 4 5 6 7 8 9 10 9 10 11 12 13 14 15 13 14 15 16 17 18 19 11 12 13 14 15 16 17 16 17 18 19 20 21 22 20 21 22 23 24 25 26 18 19 20 21 22 23 24 23 24 25 26 27 28 29 27 28 29 30 25 26 27 28 29 30 31 30 31 OCTOBER NOVEMBER APRIL MAY JUNE JULY AUGUST SEPTEMBER DECEMBER Adopted City Council Adopted HRA