HomeMy WebLinkAbout2020-09-10 HRA Regular Meeting PacketAgenda
Edina Housing and Redevelopment Authority
City of Edina, Minnesota
VIRTUAL MEETING
Thursday, September 10, 2020
7:30 AMTo make live testimony:800-374-0221, the conference ID number is
4823889. Watch meeting: https://www.edinamn.gov/746/Watch-a-City-Meeting or
Facebook Live at https://www.facebook.com/edinamn/.
I.Call to Order
II.Roll Call
III.Pledge of Allegiance
IV.Approval of Meeting Agenda
V.Community Comment
During "Community Comment," the Edina Housing and Redevelopment
Authority (HRA) will invite residents to share new issues or concerns that
haven't been considered in the past 30 days by the HRA or which aren't
slated for future consideration. Individuals must limit their comments to
three minutes. The Chair may limit the number of speakers on the same
issue in the interest of time and topic. Generally speaking, items that are
elsewhere on today's agenda may not be addressed during Community
Comment. Individuals should not expect the Chair or Commissioners to
respond to their comments today. Instead the Commissioners might refer
the matter to sta. for consideration at a future meeting.
VI.Adoption of Consent Agenda
All agenda items listed on the consent agenda are considered routine and
will be enacted by one motion. There will be no separate discussion of such
items unless requested to be removed from the Consent Agenda by a
Commissioner of the HRA. In such cases the item will be removed from the
Consent Agenda and considered immediately following the adoption of the
Consent Agenda. (Favorable rollcall vote of majority of Commissioners
present to approve.)
A.Draft Minutes of Regular Meeting July 30, 2020
B.Amendment to Pentagon Village Tax Increment Financing Redevelopment
Agreement
VII.Public Hearings
During "Public Hearings," the Chair will ask for public testimony after City
sta. members make their presentations. If you wish to testify on the topic,
you are welcome to do so as long as your testimony is relevant to the
discussion. To ensure fairness to all speakers and to allow the e5cient
conduct of a public hearing, speakers must observe the following guidelines:
Individuals must limit their testimony to three minutes. The Chair may
modify times, as deemed necessary. Try not to repeat remarks or points of
view made by prior speakers and limit testimony to the matter under
consideration.
In order to maintain a respectful environment for all those in attendance, the
use of signs, clapping, cheering, booing, or any other form of verbal or
nonverbal communication is not allowed.
A.PUBLIC HEARING: Resolution 2020-04 Authorizing the Sale of Land to The
Sound on 76th Limited Partnership and Approve Redevelopment Agreement
VIII.Reports/Recommendations: (Favorable vote of majority of Commissioners
present to approve except where noted)
A.Resolution No. 2020-05 Adopting the Proposed Budget and Establishing the
Proposed Tax Levy Payable in 2021
IX.Correspondence
A.Correspondence
X.HRA Commissioners' Comments
XI.Executive Director's Comments
XII.Adjournment
The Edina Housing and Redevelopment Authority wants all participants to be
comfortable being part of the public process. If you need assistance in the way of
hearing ampliDcation, an interpreter, large-print documents or something else,
please call 952-927-8861 72 hours in advance of the meeting.
Date: September 10, 2020 Agenda Item #: VI.A.
To:Chair & Commissioners of the Edina HRA Item Type:
Minutes
From:Liz Olson, Administrative Support Specialist
Item Activity:
Subject:Draft Minutes of Regular Meeting July 30, 2020 Action
Edina Housing and Redevelopment
Authority
Established 1974
CITY OF EDINA
HOUSING & REDEVELOPMENT
AUTHORITY
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
ACTION REQUESTED:
Approve the regular minutes of July 30, 2020.
INTRODUCTION:
See attached meeting minutes of July 30, 2020.
ATTACHMENTS:
Description
Minutes: Draft Minutes of Regular Meeting July 30, 2020
Page 1
MINUTES
OF THE REGULAR MEETING OF THE
EDINA HOUSING AND REDEVELOPMENT AUTHORITY
JULY 30, 2020
7:30 A.M.
I. CALL TO ORDER
Chair Hovland called the meeting to order at 7:30 a.m. and noted the meeting was being held virtually
to comply with the Governor’s Stay at Home Order due to the COVID-19 pandemic then explained
the processes created for public comment.
II. ROLLCALL
Answering roll call were Commissioners Anderson, Fischer, Staunton, and Chair Hovland.
Absent: Commissioner Brindle.
III. PLEDGE OF ALLEGIANCE
IV. MEETING AGENDA APPROVED - AS PRESENTED
Motion by Commissioner Fischer, seconded by Commissioner Anderson, approving the
meeting agenda as presented.
Roll call:
Ayes: Anderson, Fischer, Staunton, and Hovland
Motion carried.
V. COMMUNITY COMMENT
No one appeared.
VI. APPROVAL OF CONSENT AGENDA – AS PRESENTED
VI.A. Approve minutes of June 25, 2020, Regular meeting
VI.B. Request for Purchase; awarding the bid to the recommended low bidder,
Grandview Preliminary Engineering Services.
Approve Payment of Claims for HRA Check Register from June 25-July 23, 2020,
totaling $15,913.91.
VI.C. Request for Purchase; awarding the bid to the recommended low bidder,
Grandview 2 TIF District, Preliminary Engineering Services, SEH, Barr
Engineering, and Kimley-Horn totaling $216,174.
Motion by Commissioner Fischer, seconded by Commissioner Anderson, approving the
consent agenda as presented.
Rollcall:
Ayes: Anderson, Fischer, Staunton, and Hovland
Motion carried.
VII. REPORTS/RECOMMENDATIONS
VII.A. RECOMMENDATION PERTAINING TO AMUNDSON AVENUE TIF DISTRICT
INCREMENT – RECEIVED
Affordable Housing Development Manager Hawkinson shared that on December 12, 2019 the City
Council approved the creation of the Amundson Avenue TIF District as required in order to use
Southdale 2 "Special Legislation" pooling for the acquisition of 7075-7079 Amundson Avenue. The
proposed affordable housing development did not require the captured increment to complete the
construction of the apartment therefore the HRA could decide to either decertify the District early
or capture the increment to fund future affordable housing developments. She shared an example
of potential funding available and anticipated the Amundson increment balance would be
approximately $317,000 after 5 years and $650,000 at ten years and that staff recommended
Minutes/HRA/July 30, 2020
Page 2
retaining the use of increment from the Amundson District to use it for project related expenses,
such as the bike path, and the remainder to help facilitate additional affordable housing development.
The Commission asked questions regarding if funds would go away, past expenses, and if an
easement would be granted and any compensation and asked for caution using this tool in the
current economic climate. Ms. Hawkinson explained the sunset period for funds to be returned for
distribution and negotiations occurring on the land easement.
Nick Anhut, Ehlers and Associates, spoke about the direction of whether or not to pursue
opportunities on this site and retaining the tool to provide affordable housing here or elsewhere
then noted the project would hit tax base in 2022 and potentially last for 20 years if no termination
action was taken. He explained the district could be utilized to assist the development of the
Amundson site as long as it maintained its affordability but referred to the sunset of 2021.
Motion by Commissioner Fischer, seconded by Commissioner Staunton, Extending the
Amundson TIF District for the purpose of pooling funds for potential future use at the
Amundson site or other future sites.
Rollcall:
Ayes: Anderson, Fischer, Staunton, and Hovland
Motion carried.
VII.B. APPROVE A REVOLVING LINE OF CREDIT AGREEMENT WITH WEST HENEPIN
AFFORDABLE HOUSING LAND TRUST – APPROVED
Ms. Hawkinson shared this item would approve a revolving line of credit with West Hennepin
Affordable Housing Land Trust (WHAHLT) for the expansion of their Homes Within Reach
program in Edina. She shared background on the program that included a $1,300,000 line of credit
loan for the acquisition and rehabilitation of three houses placed into a land trust and that of these
funds, approximately $840,000 would permanently be placed with the homes and function as a grant.
She said the program was designed to remove funding limitations through the creation of an Edina
Revolving Loan program (ERLP) and explained how Edina was confronted with the fact entry-level
properties were overpriced for most work-force households and how the program expanded
homeownership opportunities and brought younger households into a community.
The Commission confirmed funds in Item VII.A were eligible for this source and asked about other
tools for the Southdale II District fund. Ms. Hawkinson said she was unaware of other tools then
explained the Southdale II or TIF funds could not be used because this was a home ownership
program and not a rental housing program but noted the Affordable Housing Trust Fund had a
balance of $1.9 million.
Motion by Commissioner Staunton, seconded by Commissioner Fischer, approving a
revolving line of credit agreement with HRA and WAHLT to expand the Land Trust
Program as presented.
Rollcall:
Ayes: Anderson, Fischer, Staunton, and Hovland
Motion carried.
VIII. CORRESPONDENCE
VIII.A. CORRESPONDENCE - RECEIVED
Chair Hovland acknowledged the Council’s receipt of various correspondence.
IX. HRA COMMISSIONERS’ COMMENTS – Received
X. EXECUTIVE DIRECTOR’S COMMENTS – Received
Minutes/HRA/July 30, 2020
Page 3
XA. 6600-6800 FRANCE - PROJECT UPDATE – Received
XB. PENTAGON VILLAGE - PROJECT UPDATE – Received
XI. ADJOURNMENT
Motion made by Commissioner Anderson, seconded by Commissioner Fischer, to
adjourn the meeting at 8:20 a.m.
Roll call:
Ayes: Anderson, Brindle, Fischer, Staunton, and Hovland
Motion carried.
Respectfully submitted,
Scott Neal, Executive Director
Date: September 10, 2020 Agenda Item #: VI.B.
To:Chair & Commissioners of the Edina HRA Item Type:
Report / Recommendation
From:Bill Neuendorf, Economic Development Manager
Item Activity:
Subject:Amendment to Pentagon Village Tax Increment
Financing Redevelopment Agreement
Action
Edina Housing and Redevelopment
Authority
Established 1974
CITY OF EDINA
HOUSING & REDEVELOPMENT
AUTHORITY
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
ACTION REQUESTED:
Approve Amendment #2 to the Pentagon Village Tax Increment Financing Redevelopment Agreement.
INTRODUCTION:
The Amendment to the TIF Redevelopment Agreement pertains to start and completion dates for upcoming
phases at the site. The two anticipated hotels have been delayed due in large part to the economic decline related
to the COVID-19 pandemic. This Amendment only addresses the deadlines for upcoming phases. It is possible
that additional amendments are necessary depending on the pace of the economic recovery.
The Amendment was prepared by special legal counsel Dorsey & Whitney and is agreeable to the developer.
This Amendment was also approved by the Edina City Council at their September 1, 2020 meeting.
Staff recommends approval of the Amendment to the TIF Redevelopment Agreement.
ATTACHMENTS:
Description
TIF Amendment #2
4823-2325-0886\4
SECOND AMENDMENT
to
REDEVELOPMENT AGREEMENT
by and among
CITY OF EDINA, MINNESOTA,
HOUSING AND REDEVELOPMENT AUTHORITY
OF EDINA, MINNESOTA,
and
PENTAGON VILLAGE, LLC
Dated as of
September 1, 2020
THIS DOCUMENT WAS DRAFTED BY:
Dorsey & Whitney LLP
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402-1498
1
SECOND AMENDMENT TO
REDEVELOPMENT AGREEMENT
(Pentagon South)
THIS SECOND AMENDMENT TO REDEVELOPMENT AGREEMENT (“Amendment”) is
made and entered into as of September 1, 2020 (the “Second Amendment 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 PENTAGON
VILLAGE, LLC, a Delaware limited liability company (“Redeveloper”).
RECITALS
A. The City, the Authority, and Redeveloper are parties to a Redevelopment Agreement dated
October 16, 2018 (the “Original Agreement”), as amended by that certain First Amendment to
Redevelopment Agreement dated February 5, 2019 (the “First Amendment”, together the Original
Agreement, collectively with the, the “Existing Agreement”).
B. Upon the terms and conditions set forth in the Existing Agreement, the Authority agreed
to provide Redeveloper with certain TIF Assistance in connection with Redeveloper’s redevelopment of
certain property located within in the City’s Pentagon Park Tax Increment Financing District, as such
property more particularly described in the Agreement.
C. As set forth in the Original Agreement, in order for the Authority to provide Redeveloper
with TIF Assistance, Redeveloper must construct certain Minimum Improvements on or before
corresponding Completion dates and satisfy other conditions, all as set forth in the Existing Agreement.
D. As of the date hereof, Redeveloper has completed the Retail Element, the Plaza Element,
the Project Site Work, and the Initial Parking Element, each in accordance with the Existing Agreement,
but due to current economic conditions, Redeveloper is unable to meet other required Completion dates and
other conditions to the Authority’s TIF Assistance set forth in the Existing Agreement.
E. Upon the terms and conditions set forth in this Amendment, the Authority and the City
have agreed to extend certain Completion dates and otherwise modify certain conditions to the Authority’s
TIF Assistance set forth in the Existing Agreement, and otherwise amend the Existing Agreement as set
forth herein.
NOW, THEREFORE, in consideration of the promises and the mutual obligations of the parties
hereto, each of them does hereby covenant and agree with the other as follows:
1. Recitals; Definitions. The Recitals are true and correct statements of fact and are
incorporated into this Amendment 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 Existing Agreement. The “Agreement” is the Existing Agreement as amended
by this Amendment.
2. Commencement and Completion of Minimum Improvements. Section 6.1 of the Original
Agreement, as amended and restated in the First Amendment, is hereby deleted in its entirety and replaced
as set forth below in this Section 2. Further, the parties acknowledge and agree that Redeveloper has (subject
to receipt of a Certificate of Completion) achieved Completion of the Minimum Improvements associated
with the Commencement and Completion dates noted as “COMPLETED” in the table set forth below,
2
each in accordance with the terms and conditions of the Agreement.
“Section 6.1 Commencement and Completion of Minimum Improvements.
The chart below is Redeveloper’s current anticipated timeline for the Commencement and
Completion of the Minimum Improvements and the remaining Projected Phase 2
Improvements. The Commencement and Completion dates for the Minimum
Improvements shall be substantially in accordance with the below timeline, and failure to
meet such dates shall be a Default as described in Section 6.2. The actual completion of
the remaining Phase 2 Minimum Improvements will be driven by market conditions and
failure to meet the below dates for the remaining Projected Phase 2 Minimum
Improvements will not be a Default under this Agreement. Redeveloper shall notify the
Authority of material changes to the following Commencement and Completion dates.
Redeveloper shall periodically provide the Authority with written notification related to
meeting proposed construction benchmarks.
Minimum Improvements Timeline
Minimum Improvements Commencement Completion
Phase 1A Retail Element No later than July 31, 2019 No later than December 31, 2020
COMPLETED
Plaza Element No later than March 1, 2019 No later than 12 months following
Completion of the Project Site
Work
COMPLETED
Project Site Work No later than December 1, 2018 No later than December 31, 2019
COMPLETED
Phase 1B Second Element
(Hotel Element 1
anticipated)
No later than July 1, 2023 No later than June 30, 2024
Phase 1C Initial Parking
Element
No later than April 15, 2019 No later than July 31, 2020
COMPLETED
Third Element
(Hotel Element 2
anticipated)
No later than July 1, 2023 No later than December 31, 2024
Phase 2 Fourth Element No later than October 1, 2024 No later than October 1, 2026
Projected Phase 2
Improvements Commencement Completion
Fifth Element No later than October 1, 2025 N/A
Expansion Parking
Element
No later than October 1, 2025 N/A
3
Sixth Element No later than October 1, 2025 N/A
Notwithstanding anything to the contrary set forth in the foregoing Minimum
Improvements timeline, the following Completion dates shall apply to those certain
portions of the Project Site Work described in clauses (a) through (c) below (collectively,
the “Future Project Site Work”):
(a) Redeveloper has completed the following aspects of the Project Site
Work:
(i) any item of Project Site Work identified on the Final Civil Plans
as “future” work, including the Public Infrastructure Improvements on W. 77th
Street and Computer Avenue, the sidewalk improvements and trees adjacent to the
retail buildings on W. 77th Street (i.e., the Retail Element), and the curb, sidewalks
and trees adjacent to the Plaza Element and the surface parking lot; and
(ii) rough-grading and seeding (without any perimeter landscaping or
sidewalk) for that portion of Lot 5 that will contain the Phase 2 Minimum
Improvements (expected to be the first office Element).
(b) Redeveloper shall cause the Completion of the installation of the perimeter
sidewalk and trees along Computer Avenue and Viking Drive to occur by the later of (i)
60 days after the Completion of an Element of Minimum Improvements on either Lot 3 or
Lot 4 or (ii) June 30th of the year after said improvements are completed.
(c) Redeveloper shall cause the Completion of the installation of the Perimeter
sidewalk and trees along Normandale Road to occur by the later of (i) 60 days after the
Completion of an Element of Minimum Improvements on that portion of Lot 5 (or formerly
described as Lot 5) adjoining Normandale Road or (ii) June 30th of the year after said
improvements are completed.”
(d) Redeveloper shall cause the Completion of the installation of the perimeter
sidewalk improvements and trees adjacent to the Element of Minimum Improvements
projected to be an approximately 19,000 square foot retail/office Element with
associated parking located at the intersection of West 77th and Computer Avenue
as shown on the Project Area Map to occur by the later of (i) 60 days after the
Completion of such an Element of Minimum Improvements on Lot 4 or (ii) June 30th of
the year after said improvements are completed.”
3. Accrual of Interest under TIF Note A. Notwithstanding any provision in the Agreement to
the contrary, accrual of interest on the unpaid principal balance of TIF Note A (but not payments to
Redeveloper of Available Tax Increment) shall commence on August 1, 2020; provided, however, if
Redeveloper fails to deliver to the Authority a final, updated TIF Pro Forma (with all final costs and no
estimated costs for work completed on or prior to August 1, 2020) by Friday, November 6, 2020, then the
Authority may suspend accrual of interest under TIF Note A until such final, updated TIF Pro Forma and
supporting documentation required by the Agreement are delivered to the Authority.
4. Preconditions to Payments under TIF Note A. Notwithstanding any provision in the
Agreement to the contrary, commencement of payment of Available Tax Increment under TIF Note A is
4
subject to Redeveloper’s satisfaction of each of the following conditions:
(a) Redeveloper is not in Default under the terms of this Agreement;
(b) Redeveloper has issued any applicable Go-Ahead Letter with respect to
any additional Element and/or Phase to be constructed;
(c) Redeveloper has not allowed a Material Deviation (as such term is defined
below) from the Pentagon South Final Development Plan which remains uncured. A
“Material Deviation” for purposes of this clause (b) equates to an objective deviation from
the Pentagon South Final Development Plan, and not a subjective determination that the
intent of the Pentagon South Final Development Plan is not met or there are minor
variations to the final architecture or the color of building materials, excluding any
deviation or amendment to the Pentagon South Final Development Plan that is approved
by the City;
(d) Completion of the Project Site Work, but excluding the Future Project Site
Work, all in accordance with the Pentagon South City Approvals (including, specifically,
the Final Civil Plans); provided, however, Redeveloper shall cause the Completion of the
Future Project Site Work to occur by no later than the dates set forth in Section 6.1(a)
through (c); and further provided that if Completion of the Future Project Site Work as
provided above has not occurred by such applicable Completion dates, it shall be an
automatic Event of Default until the timely Completion of the applicable Future Project
Site Work, and, notwithstanding anything to the contrary regarding the remedies afforded
to the Authority following an Event of Default, the Authority’s sole remedy for the failure
to meet the applicable Completion Dates for the Future Project Site Work shall be the
suspension of payments and accrual of interest under TIF Note A until such Event of
Default is so cured; and
(e) if, by the date on which the conditions set forth in Sections 4(a) through
(d) of this Amendment have been satisfied, the improvements to the Project Area which
have reached completion have not, collectively, increased the Market Value of the Project
Area to the Minimum Valuation as demonstrated by an updated TIF Pro Forma, then, as a
final condition to commencement of payment of Available Tax Increment under TIF Note
A, Redeveloper must enter into one or more Minimum Assessment Agreements in
accordance with Section 8.3 of the Original Agreement until such time as the Minimum
Valuation is achieved by additional improvements to the Project Area.
5. Redeveloper Events of Default. Section 13.2 of the Original Agreement, as amended and
restated in the First Amendment, is hereby deleted in its entirety and replaced as set forth below in this
Section 5.
“Section 13.2 Redeveloper Events of Default. The following shall be Events of Default for
Redeveloper:
(a) subject to Unavoidable Delays and Cure Rights, Redeveloper’s failure to achieve
Commencement and Completion of any the Phase 1 Minimum Improvements by the applicable
dates set forth in accordance with Section 6.1;
(b) if Redeveloper is obligated to convey the Plaza Easement and/or Parking Facilities Easement
to the City in accordance with this Agreement, failure by Redeveloper to so convey the Plaza
Easement and/or Parking Facilities Easement to the City for a period of 10 business days after
5
written notice of such failure from the City or the Authority;
(c) subject to Cure Rights, failure by Redeveloper to observe or perform any other 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;
(d) prior to the delivery of a Certificate of Completion with respect to any Element or Phase of the
Minimum Improvements owned by Redeveloper, Redeveloper 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 Redeveloper, 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 Redeveloper, or of the Minimum Improvements, or part
thereof, shall be appointed in any proceeding brought against Redeveloper, and shall not be
discharged within 90 days after such appointed, or if Redeveloper shall consent to or acquiesce
in such appointment; and
(e) Redeveloper’s failure to maintain the Project Site Work in a safe and secure way in compliance
with Section 11.1, and said failure is not cured within thirty (30) days after receipt of written
notice from the City specifying in detail such failure.
6. Authority Remedies on Redeveloper Events of Default. Section 13.5 of the Original
Agreement, as amended and restated in the First Amendment, is hereby deleted in its entirety and replaced
as set forth below in this Section 6.
“Section 13.5 Authority Remedies on Redeveloper Events of Default. Whenever any Event of
Default occurs by Redeveloper, the Authority may take any one or more of the following
actions:terminate this Agreement (but not any previously issued TIF Note, as regards that Element
or Phase), except the Authority will have no right to terminate this Agreement as a result of a
default under Sections 4.6 and 11.1, except as otherwise provided herein;
(b) exercise its rights under Section 8.2(a)(ii)(3), Section 8.2(a)(iii)(3), and/or Section
8.4 of this Agreement regarding Redeveloper’s TIF eligibility;
(c) suspend performance under this Agreement until it receives assurances from
Redeveloper, deemed adequate by the Authority, that Redeveloper will cure the
Event of Default and continue its performance under this Agreement, withhold the
Certificate of Completion for any Element or Phase of the Minimum
Improvements not yet delivered, and 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 Redeveloper under this Agreement;
(d) with regard to an Event of Default under Section 13.2(e), the Authority may, in
addition to any other rights afforded it, suspend the accrual of interest under TIF
Note A until the Default is cured; and
6
(e) the Authority shall have all remedies normally available at law and in equity to
enforce performance of this Agreement including a right to specific performance.
7. Ratification. Except as specifically modified by this Amendment, the terms and provisions
of the Existing Agreement shall remain in full force and effect.
8. Binding Effect. This Amendment amends and supplements the Agreement. If there is a
conflict between the provisions of the Existing Agreement and this Amendment, the provisions of this
Amendment shall control. This Amendment shall be binding upon and inure to the benefit of the City, the
Authority, Redeveloper, and their respective successors and assigns.
9. Counterparts. This Amendment may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute one and
the same instrument. Facsimile or email copies shall be deemed originals.
[Remainder of page intentionally left blank; signature pages follow]
[Signature Page to Second Amendment to Redevelopment Agreement (Pentagon South)]
IN WITNESS WHEREOF, the City, the Authority and Redeveloper have caused this Amendment
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 _______________, 2020,
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
[Signature Page to Second Amendment to Redevelopment Agreement (Pentagon South)]
HOUSING AND REDEVELOPMENT
AUTHORITY OF EDINA, MINNESOTA
By: ______________________________
James B. Hovland, Chair
By: ______________________________
Michael Fischer, Secretary
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of _______________, 2020,
by James B. Hovland and Michael Fischer, the Chair and Secretary, respectively, of the Housing and
Redevelopment Authority of Edina, Minnesota, on behalf of said Authority.
Notary Public
[Signature Page to Second Amendment to Redevelopment Agreement (Pentagon South)]
PENTAGON VILLAGE, LLC
a Minnesota limited liability company
By: ________________________________________
Name: ______________________________________
Its: ________________________________________
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ___ day of _______________, 2020,
by __________________, the _______________________ of PENTAGON VILLAGE, LLC, a Minnesota
limited liability company, on behalf of the limited liability company.
Notary Public
Date: September 10, 2020 Agenda Item #: VII.A.
To:Chair & Commissioners of the Edina HRA Item Type:
Report / Recommendation
From:Stephanie Hawkinson, Affordable Housing
Development Manager Item Activity:
Subject:PUBLIC HEARING: Resolution 2020-04
Authorizing the Sale of Land to The Sound on 76th
Limited Partnership and Approve Redevelopment
Agreement
Action
Edina Housing and Redevelopment
Authority
Established 1974
CITY OF EDINA
HOUSING & REDEVELOPMENT
AUTHORITY
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
ACTION REQUESTED:
Adopt Resolution 2020-04 and approve Redevelopment Agreement.
INTRODUCTION:
On August 29, 2019 the Edina HRA bought 4100 W. 76th Street and entered into a Purchase Agreement with
4100 Edina, LLC for sale of the property once all necessary financing was secured. The HRA agreed to sell the
property for $2,900,000.
Since that time, Aeon, as the sole member of 4100 Edina LLC, has secured financing and site plan approval to
complete this development. Rather than conveying the property to 4100 Edina LLC, the property will be
conveyed to The Sounds on 76th, Limited Partnership, of which 4100 Edina LLC is the General Partner.
The Redevelopment Agreement spells out the requirements that the land will be developed into 70 units of
affordable housing that will remain affordable for 40 years. There is a Right of reversion of the property is not
developed.
The Staff Report, Resolution, and Redevelopment Agreement are attached.
ATTACHMENTS:
Description
Staff Report
Resolution 2020-04
Redevelopment Agreement
106 Review Final Determination
September 10, 2020
Chair and Commissioners of the Edina HRA
Stephanie Hawkinson, Affordable Housing Development Manager
PUBLIC HEARING: Resolution No. 2020-04 Authorizing Sale of Land to The Sound on 76th,
LP and Approve Redevelopment Agreement
Information / Background:
On November 29, 2018 the Edina Housing and Redevelopment Authority authorized Staff to work with
outside counsel to prepare legal documents for the acquisition and future conveyance of 4100 West 76th
Street (the “Parcel”). The HRA acquired the Parcel on August 30, 2019 and entered into a Purchase
Agreement with 4100 Edina, LLC, (“General Partner”) of which Aeon is the sole Member.
Aeon is proposing a 100% workforce housing development containing 70 units with a combination of 1-, 2-
and 3-bedrooms to serve households with incomes ranging from less than 30% of Area Median Income
(AMI) to at or below 60% of AMI. Parking for residents and guests would be provided on site.
The HRA acquired the Parcel for $2,900,000 and initially agreed to sell it to the General Partner for
$500,000. The difference ($2.4M) being the HRA’s contribution to the development. Now however, due
to Minnesota Housing’s funding system and Metropolitan Council requirements, it is better if the HRA
conveys the Parcel for the full $2,900,000 and separately enter into a Redevelopment Agreement for
$2,400,000 plus the previously approved $798,000 TIF award.
Aeon was awarded full funding in April and is working towards an autumn financial closing. Weather
permitting, construction will start soon thereafter.
Sale of 4100 West 76th Street
With financing and land use approvals secured, Aeon is seeking to acquire the property. Resolution 2020-04
authorizes the sale of 4100 W. 76th St. to The Sound on 76th, Limited Partnership, of which Aeon is the sole
member of the General Partner.
Low Income Housing Tax Credit developments are structured whereby a Limited Partnership is formed that
will own the development. The Tax Credit investor, in this case US Bank, becomes the Limited Partner and
Aeon is a member of the General Partner, 4100 Edina, LLC. The sale of the land will be to the Limited
Partnership.
STAFF REPORT Page 2
Redevelopment Agreement Highlights
To secure the intent of the land-sale for the development of affordable housing, Staff is also seeking approval
of a Redevelopment Agreement between the HRA and The Sound on 76th LP. The complete
Redevelopment Agreement is attached with a summary of key terms below.
• The development will provide 70 units of affordable housing.
• The HRA will sell the Parcel to The Sound on 76th LP for $2,900,000.
• The HRA will provide $2,400,000 as a 40-year deferred loan using Southdale 2 Special Legislation
TIF pooled funds.
• The HRA will provide $798,000 in TIF secured through a Pay-Go Note.
• TIF expenditures will be reviewed after completion with the option to reduce based on actually TIF
expenditures needed.
• The Redevelopment Agreement is secured by a Declaration of Covenants and Restrictions that will
be in place for 40-years.
• A Right of Reverter clause is included whereby if construction does not commence by May 1, 2021,
the HRA may require that the property be transferred back to the HRA.
• Development must be completed by July 1, 2022.
• 100% of the units must be affordable: Eight units affordable to households with incomes at or below
30% of Area Median Income (AMI); 35 units affordable to households with incomes at or below 50%
of AMI; and 27 units affordable to households with incomes at or below 60% of AMI.
• The Sound on 76th LP may assign their rights and obligations under the Redevelopment Agreement
to US Bank, the construction lender.
• The Limited Partner has the right to cure any defaults.
Section 106 Review
Due to the use of HUD funds for this project, a Section 106 review was required to determine if there were
any historical significance to the building that would make it eligible to be placed on the National Registry of
Historic Places. An analysis was completed and submitted to Aeon on February 1, 2019 determining that
the building did not meet the criteria to be listed on the National Registry. On February 21, 2020, the
State Historic Preservation Office (SHPO) informed Minnesota Housing that they concurred with the
findings allowing for the building to be demolished. This determination was brought into question in August,
causing the file to be re-opened. After a second review by HUD and SHPO, the earlier determination
stands, and the development may proceed.
Approved Budget Action
Special Legislation TIF Estimated Balance Requests Repayments
Starting Pooling Capacity $7,485,831
4100 Edina ($2,400,000)
Amundson Flats ($1,300,000) $600,000
Future Funding Capacity $4,385,831
STAFF REPORT Page 3
Previous Approvals
• HRA Resolution No. 2018-03, up to $925,000 in tax increment financing to facilitate the financing of
Aeon’s proposed affordable housing development (of this, only $798,000 is needed).
• HRA Resolution No. 2018-04, the HRA approved $2,400,000 in financing the development.
• Planning Commission Resolution No. 2018-02 finding that the proposed development plans for the
affordable housing project proposed by Aeon is consistent with the Comprehensive Plan.
• HRA Resolution No. 2018-11 establishing West 76th Street Tax Increment Financing District and
Modify Southdale 2 Tax Increment Financing Plan.
• City Council Resolution No. 2020-20 authorized Metropolitan Council LCDA and LHIA Grant
Agreements.
• March 4, 2020 City Council approved final rezoning and final Development Plan.
• June 2, 2020 City Council approved Site Plan Improvement Agreement.
Public Purpose/Comprehensive Plan Conformance
The Greater Southdale District Plan calls for additional infill development of a similar or higher intensity.
The presence of jobs, retail and services, transit, and public amenities means this area contains the elements
for a complete community, which can leverage these advantages for a convenient and accessible lifestyle for
a range of household types.
Affordable housing is a necessary component of the housing mix. This is especially true given the
demographic future of Greater Southdale. The expected growth in the senior population and the desire to
attract young workers and families both point to the need to have more affordable housing, including
options for those that might choose to move here from other parts of the community. Supporting the vision
of an Edina where residents can find housing options at all life stages will require a deliberate approach to
affordability.
The proposed Aeon development also complies with Land Use Goal #4, which states: “Provide for housing
choices (housing and unit types, rental and ownership, and costs) to accommodate a wide range of
individuals, including youth, singles, couples, families with children, seniors, and people with special needs.”
The proposed project fulfills many of the aspirations and visions found within the Greater Southdale District
Plan and the Greater Southdale Design Guidelines. Not only will this project allow lower-income residents
to take advantage of a redeveloping area, it will add pedestrian and community amenities that will contribute
to making these plans a reality. This includes the following:
• Creating public spaces and activating the public realm, which this project would accomplish through
the public plaza.
• Encouraging multi-modal transportation through the creation of the North-South trail usable by
both pedestrians and bicyclists, the enhanced, integrated bus stop and bike racks.
Staff Recommendation
Approve Resolution No. 2020-04 Authorizing Sale of Land to The Sound on 76th, LP and Approve
Redevelopment Agreement
HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA
HENNEPIN COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 2020-04
RESOLUTION AUTHORIZING SALE OF LAND TO
THE SOUND ON 76TH, LIMITED PARTNERSHIP
WHEREAS, the Board of Commissioners (the “Board”) of the Housing and Redevelopment Authority of
Edina, Minnesota (the “HRA”), after proper public notice, held a hearing at approximately 7:30 A.M. on
September 10, 2020 with regard to the sale of the following parcels of land (the “Land”):
Tract J, Registered Land Survey No. 1129, Hennepin County, Minnesota. Torrens Property
WHEREAS, the HRA has approved entering into a Purchase Agreement (the “Purchase Agreement”),
pursuant to which the HRA will sell the Land to The Sound on 76th Limited Partnership, a Minnesota
limited partnership (“The Sound”); and
WHEREAS, the HRA has approved entering into a Redevelopment Agreement with The Sound, pursuant
to which the HRA will provide certain financial assistance in connection with The Sound’s redevelopment
of the Land with a four-story, 70-unit, 100% affordable, “workforce” housing community, known as “The
Sound on 76th” (the “Redevelopment Agreement”); and
WHEREAS, the Purchase Agreement and the Redevelopment Agreement (collectively, the “Agreements”)
include all the relevant terms regarding the sale of the Land; and
WHEREAS, the HRA hereby concludes that all the requirements of Minnesota Statutes, Section 469.029
regarding the sale of the Land have been satisfied.
NOW, THEREFORE, BE IT RESOLVED by the Board as follows:
The HRA authorizes the sale of the Land to The Sound under the terms and conditions of the Agreements
and the Chair and Executive Director are authorized to execute the documents required to complete the
sale.
RESOLUTION NO. ________________
Approved by the Board on September 10, 2020.
_________________________________
James B. Hovland, Chair
ATTEST:
_________________________________
Michael Fischer, 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 Housing and Redevelopment
Authority of Edina, Minnesota, do hereby certify that the attached and foregoing Resolution is a true and
correct copy of the Resolution duly adopted by the Housing and Redevelopment Authority of Edina,
Minnesota at its Meeting of September 10, 2020, and as recorded in the Minutes of said Meeting.
WITNESS my hand and seal of said City this _______day of September, 2020.
_________________________________
Scott Neal, Executive Director
Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
Redevelopment Agreement
by and between
Housing and Redevelopment Authority of Edina, Minnesota,
and
The Sound on 76th Limited Partnership
Dated as of
September 10, 2020
THIS DOCUMENT WAS DRAFTED BY: Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402-1498
-i- Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
Table of Contents
Page
Article I Recitals; Exhibits, Definitions ....................................................................................................... 2
1.1 Recitals ......................................................................................................................... 2 1.2 Exhibits......................................................................................................................... 2
1.3 Definitions .................................................................................................................... 2
Article II Representations and Warranties ................................................................................................... 5
2.1 Representations and Warranties of the Authority ........................................................ 5 2.2 Representations and Warranties of Developer ............................................................. 5
Article III TIF Assistance; Deferred Loan ................................................................................................... 7
3.1 Creation of TIF District; Certification .......................................................................... 7 3.2 Eligible Reimbursable Expenses .................................................................................. 7 3.3 TIF Note ....................................................................................................................... 7
3.4 TIF Assistance Adjustment .......................................................................................... 8 3.5 Assignment of Note ...................................................................................................... 8 3.6 Intentionally Omitted ................................................................................................... 9
3.7 Deferred TIF Loan........................................................................................................ 9 3.8 Conditions Precedent to Deferred TIF Loan Closing ..................................................... 9 3.9 Right of Reverter ........................................................................................................ 10
3.10 Agreements of the Authority ...................................................................................... 10
Article IV Project Requirements ................................................................................................................ 11
4.1 Commencement and Completion of Project............................................................... 11 4.2 Zoning and Land Use Approvals ................................................................................ 11 4.3 Building and Construction Permits ............................................................................ 11 4.4 Restrictions on Development ..................................................................................... 11 4.5 Demolition .................................................................................................................. 11 4.6 Project Financing ........................................................................................................ 11 4.7 Effect of Delay ........................................................................................................... 11 4.8 Additional Responsibilities of Developer. ................................................................. 12 4.9 Certificate of Completion ........................................................................................... 12
Article V Affordable Housing .................................................................................................................... 12
5.1 Use Restriction ........................................................................................................... 12 5.2 Affordable Housing Requirements ............................................................................. 12
5.3 Restrictive Covenant .................................................................................................. 14 5.4 Consents and Subordination ....................................................................................... 15
Article VI Encumbrance of the Property ................................................................................................... 15
6.1 Copy of Notice of Default to Mortgagee and Limited Partner ................................... 15 6.2 Mortgagee’s and Limited Partner’s Option to Cure Events of Default ...................... 15
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6.3 Rights of a Foreclosing Mortgagee ............................................................................ 16 6.4 Events of Default Under Mortgage ............................................................................ 16
Article VII Insurance and Indemnification ................................................................................................ 17
7.1 Insurance .................................................................................................................... 17 7.2 Indemnification .......................................................................................................... 17
Article VIII Other Developer Covenants ................................................................................................... 18
8.1 Developer Reimbursement Obligations ..................................................................... 18 8.2 Maintenance and Operation of the Project ................................................................. 18 8.3 Cooperation with Litigation ....................................................................................... 18 8.4 Condemnation, Damage, or Destruction .................................................................... 18 8.5 Business Subsidy Agreement ..................................................................................... 18 8.6 Developer/Authority Grant Applications ................................................................... 19 8.7 Artwork ...................................................................................................................... 19
Article IX Transfer Limitations ................................................................................................................. 19
9.1 Representation as to the Project ................................................................................. 19 9.2 Limitation on Transfers .............................................................................................. 20
9.3 Collateral Assignment to Mortgage Holder ............................................................... 21
Article X Events of Default and Remedies ................................................................................................ 21
10.1 Events of Default Defined .......................................................................................... 21
10.2 Developer Events of Default ...................................................................................... 21 10.3 Authority Events of Default ....................................................................................... 22 10.4 Cure Rights ................................................................................................................. 22 10.5 Authority Remedies on Developer Events of Default ................................................ 22 10.6 Developer Remedies on Authority Events of Default ................................................ 23 10.7 No Remedy Exclusive ................................................................................................ 23 10.8 No Additional Waiver Implied by One Waiver ......................................................... 23 10.9 Reimbursement of Attorneys’ Fees ............................................................................ 23
Article XI Additional Provisions ............................................................................................................... 23
11.1 Conflicts of Interest .................................................................................................... 23 11.2 Titles of Articles and Sections .................................................................................... 24 11.3 Notices and Demands ................................................................................................. 24 11.4 Governing Law, Jurisdiction, Venue and Waiver of Trial by Jury ............................ 25 11.5 Severability ................................................................................................................. 25
11.6 Consents and Approvals ............................................................................................. 25 11.7 Additional Documents ................................................................................................ 25 11.8 Limitation ................................................................................................................... 25
11.9 Authority Approval; Representatives ......................................................................... 25 11.10 Superseding Effect ..................................................................................................... 25 11.11 Relationship of Parties................................................................................................ 25 11.12 Survival of Terms ....................................................................................................... 26 11.13 Data Practices Act ...................................................................................................... 26
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11.14 No Waiver of Governmental Immunity and Limitations on Liability ........................ 26 11.15 City and Authority Regulatory Authority .................................................................. 26
11.16 Memorandum of Agreement ...................................................................................... 26 11.17 Conflicts Between this Agreement and the Site Improvement Agreement ................ 26 11.18 Limited Liability ........................................................................................................ 26 11.19 Time is of the Essence ................................................................................................ 26 11.20 Counterparts ............................................................................................................... 27 11.21 Amendments ............................................................................................................... 27
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List of Exhibits
Exhibit A Legal Description of the Property
Exhibit B Form of Certificate of Completion
Exhibit C Initial TIF Pro Forma
Exhibit D Form of TIF Note
Exhibit E Eligibility Certification
Exhibit F Form of TIF Loan Agreement
Exhibit G Form of Release of Reverter
Exhibit H Form of Project Funding Certificate
Exhibit I Form of Affordable Housing Restrictive Covenant
Exhibit J Memorandum of Redevelopment Agreement
1 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
Redevelopment Agreement (The Sound on 76th)
This Redevelopment Agreement (this “Agreement”) is made and entered into September 10, 2020 (“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 THE SOUND ON 76TH LIMITED PARTNERSHIP, a Minnesota limited partnership, (“Developer”).
RECITALS
A. Pursuant to Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.174 to 469.1794, inclusive, as amended (the “TIF Act”), the City of Edina, Minnesota, a Minnesota statutory city (the “City”) and the Authority previously established the “Southeast Edina Redevelopment Plan” for the “Southeast Edina Redevelopment Project Area” in order to encourage the development and redevelopment of such designated area within the City, including increasing the availability of affordable housing.
B. To further support the creation of new affordable housing in the City, the Authority and the City secured special modifications to the TIF Act from the Minnesota Legislature, set forth in Minnesota Session Laws 2014, Chapter 308, Article 6, Section 8, as amended by Minnesota Session Laws 2017, First
Special Session Chapter 1, Article 6, Sections 11 and 16 and Minnesota Session Laws 2019, First Special Session Chapter 6, Article 7, Section 3 (the “Special TIF Housing Legislation”).
C. In accordance with the Special TIF Housing Legislation, the City and the Authority may
create new housing tax increment financing (TIF) districts within the Southeast Edina Redevelopment Project Area and use the new tax increment and/or the tax increment generated from the existing Southdale 2 TIF District to support the creation of new affordable housing in the City.
D. Pursuant to Authority Resolution No. 2018-11, adopted November 15, 2018, and City Council Resolution 2019-120 adopted November 20, 2018 (collectively, the “Authorizing Resolutions”), the Authority and the City adopted a Tax Increment Financing Plan (the “TIF Plan”) for the establishment of the West 76th Street Tax Increment Financing District (the “TIF District”), a housing TIF district pursuant to and in conformity with the TIF Act and the Special TIF Housing Legislation.
E. The TIF District encompasses that certain property located at 4100 West 76th Street, Edina Minnesota and legally described on the attached Exhibit A (the “Property”).
F. Developer has proposed a project to redevelop and improve the Property with a four-story, 70-unit, 100% affordable, housing community, known as “The Sound on 76th” (as more particularly described in this Agreement, the “Project”).
G. Pursuant to City Council Resolution 2020-32, adopted March 4, 2020, the City approved
the final rezoning, final plat, and final development plan for the Project.
H. In order to facilitate the construction of the Project and development of new affordable housing in accordance with the Authorizing Resolutions and the TIF Plan, the Authority is willing to (i)
provide TIF Assistance to Developer by issuance of a TIF Note in the maximum principal amount of $798,000.00 and (ii) provide a $2,400,000 deferred loan, all upon the terms and conditions of this Agreement.
2 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties to this Agreement, 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. All capitalized terms used and not otherwise defined herein shall have the following meanings unless a different meaning clearly appears from the context:
“Affordable Housing Restrictive Covenant” has the meaning set forth in 5.3.
“Affordable Units” has the meaning set forth in Article V.
“AMI” means the Area Median Income for the Minneapolis-Saint Paul-Bloomington Metropolitan
Statistical Area (including adjustments for household size), as determined by the U.S. Department of Housing and Urban Development.
“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 their designee.
“Available Tax Increments” are the Tax Increments received by the Authority less the amount of
Tax Increments, if any, which the Authority must pay to the school district, the City, the County and the State pursuant to the TIF Act, including without limitation Minnesota Statutes, Sections 469.177, Subds. 9 and 11; 469.176, Subd. 4h; and 469.175, Subd. 1a, as the same may be amended from time to time.
“Board” means the Board of Commissioners of the Authority.
“Certificate of Completion” means a certificate in substantially the form attached as Exhibit B, to be issued by the Authority pursuant to the terms of 4.9.
“City” means the City of Edina, Minnesota.
“City Approvals” means, collectively, the PUD Ordinance, the Project Approval Resolution, the Final Development Plan, and the Site Improvement Contract.
“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.
“City Parties or City Party” means the City and the Authority, and their respective governing body members and elected officials, officers, employees, agents, independent contractors and attorneys.
3 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
“Commencement” means actual physical construction of the first visible improvement to the Property made in furtherance of the construction of the Project, specifically including pouring footings and
foundations, but specifically excluding demolition of and environmental remediation related to the improvements on the Property existing of the Effective Date.
“Completion” means Developer’s receipt of the Certificate of Completion from the Authority.
“County” means the County of Hennepin, Minnesota.
“Cure Rights” means the rights to cure a Default as specified in 10.4 before such Default is deemed to be an Event of Default.
“Default” means an act or omission by the Authority or Developer that 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.
“Deferred TIF Loan” has the meaning set forth in Section 3.7.
“Developer” means The Sound on 76th Limited Partnership, its permitted successors and/or
assigns.
“Effective Date” means the date first set forth above.
“Eligible Reimbursable Expenses” has the meaning set forth in Section 3.2.
“Environmental Law” means any federal, state or local law, rule, regulation, ordinance, or other legal requirement relating to (i) a release or threatened release of any Hazardous Material, (ii) pollution or protection of public health or the environment, or (iii) the manufacture, handling, transport, use, treatment,
storage, or disposal of any Hazardous Material.
“Event of Default” means any of the events by the Authority or Developer described in Article X.
“Final Development Plan” means the final development plan for the Project as approved by the
City pursuant to the Project Approval Resolution.
“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, including, without limitation, the TIF Act and the Special TIF Housing Legislation.
“LURA” has the meaning set forth in Section 5.2.
“Master Disbursement Agreement” means the agreement by and among Developer, the Authority, Guaranty Title, and the lenders of the Other Project Financing (as defined in the TIF Loan Agreement), pursuant to which the Project funds will be disbursed for the construction of the Project, including the proceeds from the Deferred TIF Loan, in a form reasonable acceptable to the Authority.
“Memorandum of Agreement” means the document described in 11.16 and substantially in the form shown in Exhibit J.
4 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
“MHFA” means the Minnesota Housing Finance Agency.
“Mortgage” means any mortgage or other security interest in or lien upon any portion of the
Property securing any loan made to Developer for the purpose of obtaining funds necessary for Developer’s acquisition of the Property and constructing the Project, as the same may be amended, supplemented, restated or renewed from time to time.
“Pledged Tax Increments” means 90.0% of the Available Tax Increments.
“Policy Guide” has the meaning set forth in Section 5.2(f)(iv).
“Project” means the construction and development of a four-story, 70-unit, 100% affordable, housing community, known as “The Sound on 76th” on the Property, in accordance with and as the same is more particularly described in the City Approvals.
“Project Approval Resolution” means City Council Resolution No. 2020-32.
“Project Funding Certificate” means the certificate (in the form attached hereto as Exhibit H) required to be delivered by Developer to the Authority in accordance with 4.1.
“Property” means the land legally described on the attached Exhibit A.
“PUD Ordinance” means City Ordinance No. 2019-17.
“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.
“Reverter Closing Date” has the meaning set forth in Section 3.9(b).
“Reverter Deed” has the meaning set forth in Section 3.9(b).
“Site Improvement Contract” means that certain Site Improvement Performance Agreement dated
June 2, 2020, entered into by and between the City and Developer, and recorded against the Property.
“Special TIF Housing Legislation” has the meaning set forth in Recital B.
“State” means the state of Minnesota.
“Tax Increments” means the tax increments derived from the TIF District 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 and the Special TIF Housing Legislation.
“TIF Act” has the meaning set forth in Recital A.
“TIF Assistance” means reimbursement of Eligible Reimbursable Expenses through payments from the Authority to Developer of Pledged Tax Increments pursuant to the terms and conditions of the TIF
Note and applicable Law.
5 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
“TIF District” has the meaning set forth in Recital D.
“TIF Note” has the meaning set forth in Section 3.3(a).
“TIF Loan Agreement” as the meaning set forth in Section 3.7.
“TIF Plan” has the meaning set forth in Recital D.
“TIF Pro Forma” means a detailed sources and uses pro forma for the Project, in the form attached
as Exhibit C.
“Unavoidable Delays” means actual delays, outside the control of the party claiming its occurrence, to extent such actual delays are a result of (a) unusually severe or prolonged bad weather, (b) acts of God, acts of war, civil unrest, terrorism, criminal conduct of third parties, fire or other casualty to the Project, pandemics (including the global pandemic of COVID-19, commonly known as the coronavirus) (c) litigation commenced by third parties, (d) 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 (e) strikes, or other labor
trouble, and in each instance to the extent the delayed party gives written notice to the other party(ies) within 10 days after either the occurrence of such event giving rise to each Unavoidable Delay or such party’s reasonable realization that the occurrence will cause an Unavoidable Delay.
Article II Representations and Warranties
2.1 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) 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, (i) conflict with or constitute on the part of the Authority a breach of or default under any existing 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, or (ii) violate any applicable Law, constitution, or other proceeding establishing or relating to the establishment of the Authority or its officers or its resolutions.
2.2 Representations and Warranties of Developer. Developer represents and warrants that:
(a) Developer is a limited partnership organized and in good standing under the Laws
of the state of Minnesota, 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) 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
6 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
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 Project, 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.
(c) 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.
(d) The construction of the Project would not have been undertaken by Developer, and
in the opinion of Developer would not be economically feasible within the reasonably foreseeable future, but for the execution of this Agreement and the TIF Assistance for the Eligible Reimbursable Expenses and other public assistance contemplated to be made available hereunder.
(e) Other than the items disclosed by Developer to the City and the Authority, 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.
(f) 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.
(g) 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 Property 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.
(h) Developer reasonably expects that it will be able to obtain financing in the amount shown on the TIF Pro Forma attached as Exhibit C, which amounts will be sufficient, together with funds provided by the Authority and any other public agencies, to enable Developer to
construct the Project, as provided herein.
(i) No more than twenty percent of the square footage of the Project will consist of commercial, retail, or other nonresidential uses, pursuant to Minnesota Statutes § 469.1761, subd.
1(a)(2), as amended.
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Article III TIF Assistance; Deferred Loan
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, which as of the date hereof encompasses the entire Property, has been created and established as a “housing” district under the TIF Act and the Special TIF Housing Legislation. The Authority has caused the TIF District to be certified, such that Tax Increment will be available commencing in the tax year 2022.
3.2 Eligible Reimbursable Expenses. Costs and expense initially paid by Developer from Developer’s own sources and incurred in furtherance of the construction and development of the Project that are eligible for reimbursement from Pledged Tax Increment under the TIF Act for a “housing district”, shall be eligible for TIF Assistance under the terms and conditions of this Agreement (collectively, “Eligible Reimbursable Expenses”).
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 D and in
the aggregate maximum principal amount of not to exceed $798,000.00, subject to adjustment pursuant to Section 3.4. The TIF Note shall bear simple interest on the unpaid principal balance thereof at a fixed rate equal to 4.25% per annum. 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. The TIF Note shall not be funded with tax-exempt bonds.
(b) Condition of Issuance. Upon satisfaction of the conditions set forth below, the
Authority will issue the TIF Note to Developer in accordance with this Agreement:
(i) Developer shall have provided evidence satisfactory to the Authority that Developer has actually incurred Eligible Reimbursable Expenses in an amount equal to at
least the amount of the requested TIF Note;
(ii) Developer shall have provided an updated TIF Pro Forma sufficient to demonstrate that the “but for” finding adopted by the Authority, continues to be satisfied;
(iii) No Developer Default or Event of Default exists under this Agreement or any of the City Approvals; that has not been cured pursuant to Cure Rights;
(iv) the Certificate of Completion for the Project shall have been issued by the Authority in accordance with the terms and conditions of this Agreement; and
(v) the Affordable Housing Restrictive Covenant (as defined in Section 5.3
below) shall have been and recorded against the Property.
(c) No Representation or Warranty. Payments of principal and interest under the TIF Note shall be payable solely from Pledged Tax Increment. The Authority does not represent or
warrant the amounts of Pledged Tax Increment that will be available for payment principal and interest under the TIF Note. The Authority will not reimburse Developer for Eligible Reimbursable Expenses from Authority revenues, other than from Pledged Tax Increment, nor guaranty the
amount of money which Developer will receive as a reimbursement, such amount being payable
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solely from the Pledged Tax Increment 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.
3.4 TIF Assistance Adjustment. The financial assistance to Developer under this Agreement is based on certain assumptions regarding likely costs and expenses associated with constructing the Project. Specifically, the maximum aggregate principal amount of the TIF Note has been determined based on the amount of assistance needed to make the Projects financially feasible, as shown in the TIF Pro Forma as of the Effective Date. The Authority and Developer agree that those assumptions will be reviewed at after Completion of the Project, but prior to the issuance of the Certificate of Completion, and that the amount of TIF Assistance provided herein, as reflected in the final principal amount of the TIF Note, may be reduced based on the actual TIF Assistance necessary for the Project based on an updated TIF Pro Forma provided by Developer to the Authority after Completion of the Project; provided that the updated TIF Pro Forma shall reflect any payment of any deferred developer fee to the extent possible and any reduction in
funding from other lenders to the Project.
3.5 Assignment of Note. Developer may, without the Authority’s consent (a) 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 Article VI and/or (b) transfer the TIF Note to a Related Party. Except as set forth in clauses (a) and (b) above, the TIF Note shall not be assignable nor transferable without the prior written consent of the Authority. Any assignee or transferee of the TIF Note 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 limited nature of the Authority’s payment obligations under the TIF Note;
(b) 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;
(c) that the assignee or transferee has no present intention of selling, granting any participation in, or otherwise distributing the same;
(d) 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;
(e) 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;
(f) 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;
(g) 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
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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;
(h) 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;
(i) 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
(j) 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 3.1(d), the holder of the TIF Note may be different than the owner of the Property 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 Intentionally Omitted.
3.7 Deferred TIF Loan. In consideration of Developer’s fulfillment of its obligations under this Agreement, and subject the conditions precedent to closing set forth in Section 3.8 and in the TIF Loan Agreement (defined below), the Authority agrees to make a loan (the “Deferred TIF Loan”) to Developer in the original principal amount of $2,400,000.00, pursuant to the terms and conditions of a loan agreement in substantially the form attached as Exhibit F (the “TIF Loan Agreement”). The Deferred TIF Loan will be funded from tax increment generated from the existing Southdale 2 TIF District. The proceeds of Deferred
TIF Loan shall be disbursed pursuant to the Master Disbursement Agreement.
3.8 Conditions Precedent to Deferred TIF Loan Closing. The Authority shall not be obligated to close on the Deferred TIF Loan pursuant to the TIF Loan Agreement until the following conditions precedent have been satisfied:
(a) Developer shall have executed the Memorandum of Agreement and recorded the same against the Property;
(b) Developer shall have executed the Affordable Housing Restrictive Covenant and recorded the same against the Property;
(c) Developer shall have delivered the Project Funding Certificate to the Authority, and the Authority approves the same in accordance with Section 4.6;
(d) The Master Disbursement Agreement shall have been executed by all the parties
thereto;
(e) No Developer Default or Event of Default exists under this Agreement or any of the City Approvals; that has not been cured pursuant to the Cure Rights.
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3.9 Right of Reverter.
(a) Subject to an Unavoidable Delay and Cure Rights, if Developer fails to cause the
Commencement of construction of the Project by May 1, 2021, then the Authority may, in addition to such other rights and remedies that are available to the Authority hereunder, require that the Property be transferred back to the Authority. The Authority may, but shall not be obligated to, cause Developer to reconvey the Property and all improvements thereon to the Authority by giving Developer notice of the Authority’s exercise of its right of reverter pursuant to this section. The right of reverter under this section for the Property shall terminate and no longer be of any force and effect upon the Commencement of the Project. The Authority agrees to execute and deliver to Developer a recordable release of its right of reverter, in form attached hereto as Exhibit G upon Developer’s receipt of a building permit and closing on all of the financing described in the Master Disbursement Agreement, which shall be held in escrow by Developer pending Commencement of the Project, after which the same may be recorded. The Authority will agree to subordinate such
right of reverter to any Mortgages securing loans the proceeds of which are used to finance Developer’s acquisition of the Property, construction of the Project, or both.
(b) Within 15 days following Developer’s receipt of Authority’s notice exercising its
right of reverter (the “Reverter Closing Date”), Developer will convey fee title to the Property and all improvements thereon to the Authority by deed (the “Reverter Deed”), as follows:
(i) The Authority will pay Developer $1.00 as consideration for receiving the
Reverter Deed;
(ii) Developer will convey the Property and any improvements thereon to the Authority free and clear of all encumbrances other than encumbrances that existed when the Authority conveyed the Property to Developer and easements or other encumbrances which the Authority has previously approved in writing;
(iii) Upon Developer’s delivery of the Reverter Deed to the Authority, this Agreement shall terminate, Developer shall have no further rights to the Property or any improvements thereon, and neither the Authority nor Developer will have any rights or obligations under this Agreement other than obligations which, by the express terms of this Agreement, expressly survive a termination of this Agreement;
(iv) On or before the Reverter Closing Date, Developer will execute and deliver to the Authority a Minnesota Uniform Conveyancing Blank Form 50.3.1 Affidavit Regarding Business Entity confirming that there has been no labor or materials provided to the Property since the Authority’s conveyance of the Property to Developer for which
payment has not been made; and
(v) Developer shall deliver an updated title insurance commitment to the Authority evidencing the status of title to the Property.
3.10 Agreements of the Authority. The Authority hereby covenants that, as long as any portion of the TIF Note remains outstanding the Authority shall take no action to terminate or dissolve the TIF District prior to the current expiration date of the TIF District. As shown in the TIF Plan, the Property is
the only parcel in the TIF District.
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Article IV Project Requirements
4.1 Commencement and Completion of Project. Developer shall cause the Commencement of the Project no later than May 1, 2021 and Completion of the Project by no later than July 1, 2022.
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.
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. Subject to Section 4.3, Developer may not construct or
permit construction of any of the Project until Developer satisfies the following conditions:
(a) Developer satisfies of the conditions set forth in Section 3.8;
(b) Developer satisfies all of the conditions precedent to construction of the Project
established by the City in the City Approvals;
4.5 Demolition . The plans for demolition of the existing building as set forth in the plans and specifications prepared by the Architect for the Project.
4.6 Project Financing. Developer shall certify to the Authority no later than December 31, 2020, that all Project funding sources identified in the TIF Pro Forma attached as Exhibit D (and in amounts in substantial compliance with Exhibit H and, in any event, sufficient to complete the Project) have been committed to (or otherwise remain available to) Developer by delivering the Project Funding Certificate to the Authority. Promptly following the Authority’s request, Developer agrees to submit to the Authority evidence of commitment(s) for financing which is adequate, in the Authority’s reasonable discretion, for the construction of the Project. If the Authority reasonably finds that the financing complies with the terms of this Section 4.6 and is sufficiently committed and adequate in amount, to provide for the construction of the Project, the Authority shall notify Developer in writing of its approval, such approval shall not be unreasonably defined, conditioned, or delayed. If the Authority rejects the evidence of financing as inadequate, it shall do so in writing specifying the basis for the rejection and Developer shall have 30 days
thereafter to submit evidence of commitment(s) for additional or alternate financing acceptable to the Authority. If Developer fails to submit such commitment(s) for financing 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 4.6, such failure being a Default hereunder.
4.7 Effect of Delay. Developer acknowledges that if construction of the Project is delayed due
to Unavoidable Delays or for any other reason, this could affect the amount of Available Tax Increment and thus the total amount which may be available to pay the TIF Note. Developer acknowledges that if the Completion of the construction of the Project is delayed due to Unavoidable Delays or for any other reason,
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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.
4.8 Additional Responsibilities of Developer.
(a) Developer shall cause the Project to be constructed, operated, and maintained in substantial accordance with the terms of this Agreement, the City Approvals, and all applicable
Law (including, but not limited to 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. Prior to
delivery of the Certificate of Completion, Developer shall delivery monthly progress reports to the Authority.
4.9 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 Project after the City has issued a final certificate of occupancy covering all elements of the Project. Within 30 days after receipt of each such request, 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 Project and what measures or acts will be necessary, in the reasonable 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 Project. After such deficiencies have been cured, Developer shall notify the Authority and the Authority will re-inspect the applicable Project 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 Project covered by such Certificate of Completion.
Article V Affordable Housing
5.1 Use Restriction. The Property shall not be used for any purpose other than a multi-family
rental housing facility and related activities meeting the requirements set forth in this Article V, without the prior written approval of the City and the Authority during the period commencing on the date hereof and until no earlier than the 40th anniversary of the date the Certificate of Completion is issued (the “Qualified
Project Period”).
5.2 Affordable Housing Requirements. Subject to the terms and conditions of Section 5.4(b) relating to any land use restriction agreement (the “LURA”) encumbering the Property, the covenants and
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restrictions set forth in this Section 5.2 and contained in the Affordable Housing Restrictive Covenant shall apply during the Qualified Project Period.
(a) Affordable Units. Developer covenants that 100% of the residential units within the Project (the “Affordable Units”) will be leased at certain rates specified below (inclusive of utilities and mandatory fees) which are considered affordable to certain low- and moderate-income
households. The Affordable Units will consist of the following mix of affordability levels:
(i) at least eight (8) of the Affordable Units will be reserved for households who have a combined gross annual income which does not exceed 30% of AMI (each a “30% Unit”), four (4) of which of which will be set aside for High Priority Homeless (the “HPH Units”) and four (4) of which will be given preference to persons with disabilities. If any subsidy or housing support in connection with the 30% Units is withdrawn or otherwise no longer available, the 30% Units shall be reserved for households who have a combined gross annual income which does not exceed 60% of AMI for the 30% Units;
(ii) at least 35 of the Affordable Units will be reserved for households who have a combined gross annual income which does not exceed 50% of AMI (each a “50% Unit”); and
(iii) at least 27 of the Affordable Units will be reserved for households who have a combined gross annual income which does not exceed 60% of AMI (each a “60% Unit”).
Any changes in the affordability levels of the Affordable Units set forth herein shall require the prior written approval of the Authority, which such consent will not be unreasonably conditioned, delayed, or withheld. For avoidance of doubt, it will be deemed reasonable if the Authority withholds its consent to any proposed change in affordability levels that does not comply with applicable Law.
(b) Affordable Unit Mix. The Affordable Units shall be distributed among one-bedroom units (which will be no less than approximately 641 square feet in size), two-bedroom units (which will be no less than approximately 930 square feet in size) and three-bedroom units (which will be no less than approximately 1,221 square feet in size). There will be 17 one-bedroom units, 35 two-bedroom units, and 18 three-bedroom units. Changes in the distribution of Affordable Units set forth herein shall require the prior written approval of the Authority, which such consent will not be unreasonably conditioned, delayed, or withheld.
(c) Qualifying Tenants. Each Affordable Unit shall be leased to and occupied (or held vacant and available for occupancy) for the duration of the Qualified Project Period only by a
household who, at initial occupancy, has a combined gross annual income which does not exceed the respective AMI threshold for each type of Affordable Unit (each a “Qualifying Tenant”) (e.g., each 30% Unit may only be leased to and occupied by a Qualifying Tenant whose gross annual
income does not exceed 30% of AMI, etc.). Each subsequent tenant of the Affordable Unit must be a Qualifying Tenant.
(d) Rental Rates. Each Affordable Unit shall bear annual rents not greater than the
rental rate limits for the applicable Qualifying Tenant (adjusted for bedroom count, and including utilities) as determined and announced from time to time by HUD and as published annually by the MHFA (or any successor agency(ies) administrating government affordable housing programs). During the Qualified Project Period, the form of lease to be utilized by Developer in renting
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Affordable Units will provide that rental rates charged to any tenant of an Affordable Unit cannot be increased more than once in any 12-month period.
(e) Certification of Tenant Eligibility. No tenant household shall be approved by Developer for initial occupancy of an Affordable Unit unless and until Developer has determined (through verification of income, assets, expenses, and deductions) whether such tenant household is a Qualifying Tenant for the applicable Affordable Unit. 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 Developer a “Certification of Tenant Eligibility” in the form reasonably attached hereto as Exhibit E (the “Eligibility Certification”), in which the prospective tenant certifies as to qualifying as an applicable 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 to substantiate the Eligibility
Certification. Eligibility Certifications will be maintained on file by Developer 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 Qualified Project Period. Developer must re-examine and verify the income of each
tenant household living in an Affordable Unit annually unless, during such year, no Affordable Unit is occupied by a new tenant household whose income exceeds the applicable income limit for Qualifying Tenants. In addition, no re-certification shall be required if a Qualifying Tenant moves
to a different Affordable Unit.
(f) Additional Affordable Housing 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 requirements of this Article V 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) [deleted]
(v) Developer shall, upon annual invoicing, reimburse the City (or such subdivision of the City administrating affordable housing requirements) for third-party expenses related to monitoring of Developer’s compliance with this Article V and the
Affordable Housing Restrictive Covenant (plus any additional costs necessitated by re-inspections for noncompliance) and thereafter be subject to reasonable adjustment from time to time. Notwithstanding the foregoing, the Authority will not engage a third-party
compliance monitor or require reimbursement of any such costs so long as Developer provides the Authority with reasonable evidence of Developer’s compliance with this Article V obtained from a third-party compliance monitor required under the LURA or
otherwise in connection with the Other Project Financing (as defined in the TIF Loan Agreement).
5.3 Restrictive Covenant. The requirements of this Article V will be set forth in a separate
restrictive covenant in substantially the form attached to this Agreement as Exhibit
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I (the “Affordable Housing Restrictive Covenant”) and recorded against the Redevelopment Property.
5.4 Consents and Subordination.
(a) Mortgage Financing. Notwithstanding anything herein to the contrary, the requirements of this Article V and the Affordable Housing Restrictive Covenant shall be subordinated or junior to any Mortgage on the Project only with the Authority’s written consent, and if any Mortgage exists at the time the Affordable Housing Restrictive Covenant is to be recorded, Developer shall use commercially reasonable efforts to cause the mortgagee under such Mortgage to subordinate the Mortgage and the lien thereof to the Affordable Housing Restrictive Covenant.
(b) LIHTC LURA. The Authority acknowledges that the Property will be encumbered by the LURA in connection with low income housing tax credits obtained by Developer for the Project in accordance with Section 42 of the Internal Revenue Code (“LIHTC”), restricting the use
of the Property to affordable housing in accordance with LIHTC requirements. The Authority will subordinate and/or modify the requirements of this Article V and the Affordable Housing Restrictive Covenant as reasonably necessary in order to enable Developer to obtain such LIHTC
financing. For so long as the LURA encumbers the Property, to the extent of any conflict or inconsistency between the terms of the LURA and the terms of the Affordable Housing Restrictive Covenant, the terms of the LURA shall prevail and such prevailing terms shall be deemed to modify
and replace the applicable terms of the Affordable Housing Restrictive Covenant. If the LURA is terminated prior to the expiration of the Qualified Project Period, then the requirements of this Article V and the Affordable Housing Restrictive Covenant will continue in full force and effect in accordance with their original terms until the expiration of the Qualified Project Period. Other than the LURA, Developer has not and will not without the prior written consent of the Authority, 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.
Article VI Encumbrance of the Property
6.1 Copy of Notice of Default to Mortgagee and Limited Partner. If the Authority delivers any notice or demand to Developer with respect to any Default under this Agreement, the Authority will also deliver a copy of such notice or demand to the mortgagee of any Mortgage at the address of such mortgagee
provided to the Authority in writing. In conformity with this Section 6.1, the Authority shall deliver any notice or demand delivered to Developer’s limited partner, U.S. Bancorp Community Development Corporation, 1307 Washington Avenue, Suite 300, Mail Code SL MO RMCD, St. Louis, MO 63103, USB
Project No. 26977, Attn: Project Manager, its successors and/or assigns (the “Limited Partner”), Developer’s construction lender, U.S. Bank National Association, BC-MN H03A, 800 Nicollet Mall, 3rd Floor, Minneapolis, MN 55402 (the “Construction Lender”), and Developer’s permanent lender, Minnesota
Housing Finance Agency, 400 Wabasha Street North, Suite 400, St. Paul, MN 55102 (the “Permanent Lender”) at the addresses set forth in Section 11.3 of this Agreement.
6.2 Mortgagee’s and Limited Partner’s Option to Cure Events of Default. Upon the occurrence of an Event of Default, the Limited Partner, the Construction Lender, the Permanent Lender or any mortgagee under any Mortgage who has provided its notice address to the Authority in accordance with
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this section, will have the right at its option, to cure or remedy such Event of Default within the cure periods set forth herein and the Authority shall accept such cure or remedy as though it was made by Developer.
6.3 Rights of a Foreclosing Mortgagee. Any individual or entity who acquires title to all or a portion of the Project through the foreclosure of any Mortgage or deed in lieu of foreclosure 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; and
(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 Project on the portion of the Property it
owns.
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 Property 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 Project
pursuant to the terms of this Agreement. If, rather than passively holding title to the portion of the Property 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 Project, 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 Project 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 Project 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.
6.4 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,
to notify the Authority in writing of (a) the fact of default; (b) the elements of default; and (c) 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.
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Article VII Insurance and Indemnification
7.1 Insurance.
(a) Developer shall obtain and continuously maintain insurance on the Project 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 Project 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 Project 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, 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.
(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 in a manner that would adversely impact coverage 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.
7.2 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 claims by third parties, 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 Project 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 third party claims, demands, suits, costs, expenses (including reasonable attorney’s fees), actions or other proceedings whatsoever by any person or entity
18 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
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 Project.
Article VIII Other Developer Covenants
8.1 Developer Reimbursement Obligations. Developer shall pay all reasonably incurred out of pocket costs of the City and the Authority for the City Consultants in connection with the Project, including but not limited to costs of the development and negotiation of this Agreement, the TIF Plan, the creation of the TIF District, the Final Development Plan, the Site Improvement Contract, fiscal analysis, legal fees and all costs and expenses related thereto. 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. Alternatively, upon the Authority’s request, Developer shall deposit with the Authority funds in amount necessary to pay such costs and expenses, in an amount reasonably determined by the Authority,
which such funds will be held in escrow by the Authority until applied by the Authority for payment of such costs and expenses. The Authority will return excess escrowed funds, if any, to Developer. All such costs will be Eligible Reimbursable Expenses.
8.2 Maintenance and Operation of the Project. Developer shall, at all times during the term of this Agreement, maintain and operate the Project 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 Project, 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 Project as required pursuant to this Agreement. During construction of the Project, Developer shall not knowingly cause any person working in or attending the Project for any purpose, or any tenant of the Project, 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 Project to take such precautions as may be available to protect the persons in and around the Project 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 Project shall be borne solely by Developer.
8.3 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.
8.4 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 taking. 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, 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.
8.5 Business Subsidy Agreement. The Authority and Developer agree that the Project is exempt from the requirement for entering into a business subsidy agreement within the meaning of the
19 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
Minnesota Business Subsidy Act, Minnesota Statutes, Sections 116J.993 through 116J. 995, because the TIF Assistance provides assistance for housing within the meaning of Minnesota Statutes, Section
116J.993, subd. 3(7).
8.6 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 Metropolitan Council, Department of Employment and Economic Development, 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 Forma pursuant to Section 3.3(b)(ii) prior to issuing the TIF Note.
8.7 Artwork. The Authority has removed artwork (the “Art”) originally created by Ta-Coumba
T. Aiken (the “Artist”) from the ceiling of the existing building on the Property. The Authority has paid for the restoration of the Art (the “Restoration Costs”) and is paying for climate-controlled storage of the Art (the “Storage Costs”). Developer shall reimburse the Authority for the Restoration Costs and to the extent
not already paid, Developer shall pay the Authority the Storage Costs, in each case, promptly following demand for such reimbursement.
(a) To the extent Developer commits to install the same in the Project, the Authority agrees to
transfer the Art to Developer, subject to any rights of the Artist.
(b) Developer agrees to install the Art in the ceiling of the lobby of the Project. If Developer does not install all of the Art in the ceiling, Developer shall transfer any portion not installed to the
Authority, subject to any rights of the Artist.
(c) Developer intends to enter into an agreement with the Artist to pay certain consulting fees and to assist with the installation of the Art.
(d) If Developer removes the Art from the Project, it shall promptly transfer it back to the Authority, subject to any rights of the Artist.
(e) Developer shall not use the Art for any purpose other than displaying the same at the Project in accordance with this section.
Article IX Transfer Limitations
9.1 Representation as to the Project. Developer represents to the Authority that its undertakings under this Agreement are for the purpose of developing the Project and not for the purpose of speculation
in land holding. Developer acknowledges that, in view of the importance of the Project 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 Project possible, the
qualifications and identity of Developer are of particular concern to the Authority. Developer further
20 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
acknowledges that the Authority is willing to enter into this Agreement with Developer because of the qualifications and identity of Developer.
9.2 Limitation on Transfers.
(a)Until the Authority’s issuance of the Certificate of Completion, Developer shallnot 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 Property or the Project, 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 in the Property, subject to the terms of Article VIhereof;
(ii)leasing the Project in the normal course of business in a manner consistentwith this Agreement and the City Approvals;
(iii)A transfer to a Mortgage holder pursuant to Section 9.3; or
(iv)transfer to a Related Party, provided such Related Party, upon request ofthe 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 9.2, theAuthority 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 Property or the Project that:
(i)Any proposed transferee shall not be exempt from the payment of realestate 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 theAuthority 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 Project 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 documentsinvolved in effecting transfer to the Authority;
(iv)Developer and the transferee must comply with such other conditions asthe 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)Developer and the transferee must demonstrate, in a manner satisfactoryto the Authority, its ability to perform all assumed obligations in this Agreement.
21 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
(c) In the absence of specific written agreement by the Authority to the contrary, neither the transfer of the Project, or any portion thereof, prior to the issuance of the Certificate of
Completion for the Project or the Authority’s consent to such a transfer will relieve Developer of its obligations under this Agreement. Notwithstanding anything in this Agreement to the contrary, the withdrawal, removal, transfer or replacement of the general partner of Developer, 4100 Edina LLC (the “General Partner”), pursuant to the terms of that certain Amended and Restated Agreement of Limited Partnership of Developer, by and between the Limited Partner and the General Partner, shall be permitted under this Agreement at no cost to Developer and shall not require the prior written consent of the Authority and shall not constitute an Event of Default under this Agreement; provided, however, that Developer agrees to notify the Authority of any proposed replacement general partner prior to replacement and, upon replacement, shall notify the Authority of the name and contact information of the replacement general partner with reasonable promptness. Further notwithstanding anything in this Agreement to the contrary, the interests of
Limited Partner shall be freely transferable to any affiliate(s) of the Limited Partner without the consent or approval of the Authority.
9.3 Collateral Assignment to Mortgage Holder. Developer may collaterally assign Developer’s
rights and obligations under this Agreement to the holder of a Mortgage only pursuant to collateral assignment agreement in a form reasonably acceptable to the Authority provided that the Authority acknowledges that Developer has collaterally assigned its rights under this Agreement to Construction
Lender pursuant to the Mortgage executed by Developer in favor of Construction Lender.
Article X Events of Default and Remedies
10.1 Events of Default Defined. “Events of Default” under this Agreement include any one or more of the events listed in Sections 10.2 and 10.3.
10.2 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 the Project by the applicable dates set forth in Section 4.1.
(b) Subject to Unavoidable Delays and Cure Rights, Developer shall Default in its obligations with respect to the construction of the Project (including the nature and the date for the completion of the various elements thereof), or shall abandon or substantially suspend construction work on the Project, and any such Default, violation, abandonment or suspension is not cured, ended or remedied within 30 days after written notice to do so or such longer amount of time if previously agreed to by the Board in writing;
(c) there is, in violation of this Agreement, any conveyance, encumbrance or other transfer of the Property 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, the TIF Loan Agreement, any other TIF Loan Documents (as
defined in the TIF Loan Agreement), or any Affordable Housing Restrictive Covenant, and the continuation of such failure for a period of 30 days after written notice of such failure from any party hereto;
22 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
(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 Project, 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.
10.3 Authority Events of Default. Subject to Cure Rights and Unavoidable Delays, the failure of 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 Authority.
10.4 Cure Rights.
(a) If a Default occurs under Section 10.2(a), (b) or (d) or under Section 10.3 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 90 days.
(b) Prior to exercise any remedies in connection with an Event of Default, the Authority must first comply with the provisions of this Section 10.4(b). Notwithstanding anything in this Agreement to the contrary, upon receipt of written notice in accordance with Section 6.1 hereof, Limited Partner and Construction Lender shall have the right, but not the obligation, to cure any default of Developer hereunder and such cure shall be deemed to have been made by Developer hereunder. Independent of any cure period afforded to Developer, Limited Partner and Construction Lender shall 30 days upon receipt of such written notice to effectuate a cure of the Default, or, if said Default cannot reasonably be cured within such time, then Limited Partner and Construction Lender shall have an additional period of time thereafter, not to exceed 90 days, to cure the Default
so long as Limited Partner or Construction Lender is diligently pursuing the same.
10.5 Authority Remedies on Developer Events of Default. Except as otherwise set forth in Section 10.6 below, 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) withhold payments due under the TIF Note until Developer has cured the Default
which gave rise to the Event of Default, but the Authority may not terminate the TIF Note once issued as a result of a Developer Event of Default;
(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
23 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
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 Project or issuance of a 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) exercise any remedies normally available at law and in equity to enforce performance of this Agreement, including a right to specific performance.
10.6 Developer Remedies on Authority Events of Default. Whenever any unremedied Event of Default of the Authority occurs, Developer’s sole other legal and equitable remedy is an action to compel performance by the Authority. Developer shall have no right to assert any claim for monetary or other compensatory damages against the City or Authority and will not be entitled to recover damages of any
kind, including lost profits and direct, indirect, incidental, consequential, or punitive damages.
10.7 No Remedy Exclusive. No remedy herein conferred upon or reserved to 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 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.
10.8 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.
10.9 Reimbursement of Attorneys’ Fees. If Developer shall default under any of the provisions of this Agreement, and the Authority shall employ attorneys or incur other reasonable expenses for the enforcement of performance or observance of any obligation or agreement of Developer contained in this Agreement, the Authority in such action or enforcement shall be entitled to payment of its reasonable attorneys’ fees and costs incurred therein.
Article XI
Additional Provisions
11.1 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 Project, 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.
24 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
11.2 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.
11.3 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: The Sound on 76th Limited Partnership Attn: Asset Management c/o Aeon 901 North Third Street, Suite 150 Minneapolis, MN 55401
with copies to: Faegre Drinker Biddle & Reath LLP
Attention: Angela M. Christy, Esq 90 South Seventh Street 2200 Wells Fargo Center
Minneapolis, MN 55402
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
Limited Partner and Construction Lender: U.S. Bancorp Community Development Corporation 1307 Washington Avenue, Suite 300 Mail Code: SL MO RMCD St. Louis, MO 63103 Attn.: Director of LIHTC Asset Management USB Project No.: 26977
With a copy to:
Kutak Rock LLP 1650 Farnam Street
Omaha, Nebraska 68102 Attn: Jill Goldstein
and
Kutak Rock LLP 8601 N. Scottsdale Road, Suite 300 Scottsdale, Arizona 85253
25 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
Attn: Heather Aeschleman
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.
11.4 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.
11.5 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.
11.6 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.
11.7 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.
11.8 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.
11.9 Authority Approval; Representatives. Unless Board determines otherwise in its discretion, whenever this Agreement provides for approval by the Authority, such approval shall be given by and effective upon action, respectively, by the Authorized Representative of the Authority, as applicable (or in either case their designee), unless (a) this Agreement explicitly provides for approval by the Board, (b) approval by the Board is required by applicable Law, or (c) the approval, in the opinion of the Executive Director, would result in a material change in the terms of this Agreement. All actions required of or taken
by Developer shall be effective upon action by a duly authorized officer, partner, member, or manager, as applicable.
11.10 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.
11.11 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.
26 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
11.12 Survival of Terms. The following section will survive the expiration or earlier termination of this Agreement: Section 7.1 [Insurance]; Section 7.2 [Indemnification]; Sections 10.5 through 10.7
[Remedies on Default] to the extent of any Event of Default arising prior to such termination or expiration; Section 11.3 [Notices and Demands]; Section 11.4 [Governing Law, Jurisdiction, Venue and Waiver of Trial by Jury]; and Section 11.18 [Limited Liability].
11.13 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.
11.14 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.
11.15 City and Authority Regulatory Authority. Nothing in this Agreement shall be construed to limit or modify the City’s or Authority’s regulatory authority.
11.16 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 J, 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.
11.17 Conflicts Between this Agreement and the Site Improvement Agreement. In the event of any inconsistency or conflict between the requirements of this Agreement and the Site Improvement Agreement, the provisions of the Site Improvement Agreement shall control; provided, however, that for the purposes of this Agreement regarding Events of Default that authorize the Authority to withhold payments on any TIF Assistance, this Agreement controls. Except with respect for such inconsistent provisions, neither agreement is intended to amend or supersede the other agreement.
11.18 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.
11.19 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
27 Redevelopment Agreement (The Sound on 76th) 4837-6283-4880\4
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.
11.20 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument.
11.21 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.
[Remainder of page intentionally left blank; signatures on following page(s)]
[Signature Page to Redevelopment Agreement (The Sound on 76th)]
IN WITNESS WHEREOF, 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.
HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA
By: _________________________________________ James B. Hovland, Chair
By: _________________________________________ Scott H. Neal, Executive Director
STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of ______________, 2020, by James B. Hovland and Scott H. Neal, the Chair and Executive Director, respectively, of the Housing and Redevelopment Authority of Edina, Minnesota, on behalf of said Authority.
Notary Public
B-1 4837-6283-4880\4
THE SOUND ON 76TH LIMITED PARTNERSHIP, a Minnesota limited partnership
By: 4100 Edina LLC, a Minnesota limited liability
company, its General Partner
By: __________________________________
Name: ________________________________
Its: __________________________________
STATE OF MINNESOTA ) ) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of _________________,
2020 by ______________________________, the ______________________ of 4100 Edina LLC, a Minnesota limited liability company, General Partner of The Sound on 76th Limited Partnership, a Minnesota limited partnership, on behalf of the limited liability company and limited partnership.
____________________________________________ Notary Public
US.128822224.02
E-2[Signature Page to Certificate of Completion]
4837-6283-4880\4
Exhibit A
Legal Description of the Property
Tract J, Registered Land Survey No. 1129, Hennepin County, Minnesota. Torrens Property
US.128822224.02
E-3[Signature Page to Certificate of Completion]
4837-6283-4880\4
Exhibit B
Form of Certificate of Completion
Certificate of Completion
A.THE SOUND ON 76TH LIMITED PARTNERSHIP, a Minnesota limited partnership(“Developer”), pursuant to the Redevelopment Agreement by and between the HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA (the “Authority”) and Developer dated
effective as of September 10, 2020 (as the same may be amended or supplemented from time to time, the “Agreement”), which Agreement is evidenced of record by that certain Memorandum of Redevelopment Agreement dated ____________, 2020 and recorded on ________________, 2020 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 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 substantially completed construction of the Project.
C.The issuance of this Certificate of Completion by the Authority is not intended nor shall itbe construed to be a warranty or representation by the City or the Authority as to the structural soundness of the applicable Project improvements, including, but not limited to, the quality of materials, workmanship or the fitness of the applicable Project 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 Project have been completed, and the provisions of the Agreement imposing obligations on Developer to construct such Project improvements,
are hereby satisfied and terminated, and the County Recorder 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 Agreement.
Dated: ______________, 20___
[Remainder of page intentionally left blank; signature pages follow]
B-4 [Signature Page to Certificate of Completion] 4837-6283-4880\4
HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA
By _________________________________ Executive Director
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of
_____________, 20___, by ___________, the Executive Director 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
[Signature Page to Redevelopment Agreement (The Sound on 76th)]
Exhibit A
Description of Property
Tract J, Registered Land Survey No. 1129, Hennepin County, Minnesota
Torrens Property
MHFA Rnd 2 Final Selection 2019RFP_2020HTC_Workbook 9%_6.24.20.xlsm
Housing Tax Credit Request
Type of Tax Credits requested from Minnesota Housing:
Housing Tax Credits - 4%
Housing Tax Credits - 9%
Dual Application
HTC Request Amount:
Request Status
Basis Boost Reservation
Carryover
Tax Credit Pool 8609
Metro Qualified Contact
Greater MN 42 M1 Letter
Tax Credit Request Type Tax Credit Set-Aside
First Request Non Profit
Supplemental Rural Development
Repeat Request - not selected
Application to suballocator
Previously Awarded Tax Credits:
Allocator Amount
Allocator Amount
Allocator Amount
Hennepin
8
Service Provider Haven Housing
Aeon
Management Co Aeon Management LLC
Tax Exempt Bond Request
TYPE ISSUER
SRO with Kitchen
3BR 18
4BR
HIB Sr Program
UNIT SUMMARIES
Architect Urbanworks
DEVELOPMENT TEAM
5BR
Tax Exempt Bonds - Short Term
DEMOGRAPHICS
Senior
Owner TBD Limited Partnership 4 People with Disabilities
N/A
Developer
County
Permanent Supportive Housing
Processing Agent
First Mortgage/Deferred Loan Request
TYPE AMOUNT
6,585,000
Deferred Loan(s)
Minnesota Housing First Mortgage
General Contractor Flannery Construction
Minnesota Housin
327,722Tax Exempt Bonds - Long Term
AMOUNT
Name of Source # Units Amount
1BR
2BR
6BR Rent Assistance
TOTAL UNITS 70
SUMMARY
ACTIVITY TYPE
4100 Apartments
Edina
New Construction55435
Demolition4100 West 76th Street
Rental Subsidy
AcquisitionDevelopment Name
Primary Address
City
Zip Code
17
35
Unit Type # Units
SRO no Kitchen HTC 70
0BR/Eff
Program Type
HOME
NHTF
# Units
PWD
Market Rate
4
8
Operating Subsidy
Common Space
Sponsor/Parent Company Aeon
HPH 4
Subsidy Funding Request
Version Date
Property Number (D#)
Project Number (M#)
HTC #
D8111
M18183
887,011
# Units Description
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SUMMARY
RENT GRID
Income Amount
Housing Income
Covered Parking
Surface Parking
Commercial
TIF
Gross Potential Rent
Total Other Income
Total Rental Loss
Net Rental Income
Expense Amount
Administrative
Maintenance
Utilities
Unique Operating Expenses
Insurance
Agency M & O Adjustment
Total M & O
Reserves & Escrows
Effective Gross Expense
Net Operating Income Amount
NOI
EXPENSE SUMMARY
Total expense per Unit($)
TOTALS Total Expense as % of Revenue
M & O Per Room
M & O/Unit/Year
UNDERWRITING ASSUMPTIONS
SOURCES AND USES
Uses
DescriptionAcquisition or RefinanceNew ConstructionRehabilitationContractor FeesContingencyEnvironmental AbatementProfessional FeesDeveloper FeesSyndicator FeesFinancing CostsTOTAL MORTGAGEABLEReserves and Non-MortgageableTOTAL DEVELOPMENT COST
Subsidy Funding Sources
Name of Source
Housing Support
TOTAL OF SUBSIDY FUNDING
Program Type
Energy RebatesSales Tax Rebate
City of Edina TIF
GP Loan - PhilanthropicHennepin County Loan - HOME Funds
35,0002,400,000
214,418 3,063
Minnesota Housing First Mortgage
500,000
500,000 7,143
94,071
Deferred Loan RequestFederal Historic ProceedsState Historic ProceedsSyndication ProceedsGeneral Partner Cash
GP Loan - Met Council LHIA
City of Edina Loan
316,500 4,521
FUNDING GAP REMAINING 0 0
MN Hsg Loan - EDHC 888,634 12,695GP Loan - Met Council LCDA 493,950 7,056
23,435,489 334,793
Source
Construction Sources
Deferred Developer Fee
Secured or Applied for
184,233
TOTAL PERMANENT FINANCING
Per Unit Committed Amount # UnitAmount
12,896,326Construction Loan
63,264 8
63,264 8 Secured
23,435,490 334,793 100%206,000 2,943 497,831 7,112 2%
Amount Per UnitAmount
7,143 22,937,659 327,681 98%949,294 13,561
5%34,286500 1,100,000 15,714
0%753,495 10,764
1,392,306 19,890 6%
3,622,674 51,752 15%61%14,284,016 204,057
50,000 714
0.125%
7.00%
MIP
70 955,452
DCR Year 1510.0%
Loan Rate 4.250%
3.00%Parking Vacancy
63%
1,410
1.15
1.29Expense Inflator
Cap Rate
Per Unit
DCR Year 1Residential Vacancy 7.0%Income Inflator
1BR 4 676 659 737 30% MTSP
1BR 5 676 892 970 50% MTSP
2BR 30 960 1,068 1,163 50% MTSP 50% MTSP
50% MTSP 1,013,855
60% MTSP
1,012,152
66,164
60% MTSP 8,700
73,161
56,700Monthly
Contract Rent Monthly Gross Rent Rent Limit Income Limit HTCHOMEHPHPWDHIB SeniorRent Asst955,452
Op SubsUnit Type
4 676 659 737 30% MTSP1BR
Permanent Capital Funding Sources
2.00%
1
Commercial Vacancy
CommittedSource
# of Units Approx Sq Ft
2BR 5
1BR
3BR 1,500
4 676 1,086
960 1,301
18 1,215
1,396
1,613 60% MTSP
1,164 60% MTSP
173,880
INCOME & EXPENSE
60% MTSP NHTF60% MTSP
11,295,887 161,370
6,585,000100
30% MTSP
30% MTSP
3%3%785,874 11,227
458,252
177,300
4%
6,546
8,472
354,654
63,150
43,922
134,785
593,037
% of Total
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SUMMARY
TOTAL OF CONSTRUCTION FINANCING 12,896,326 184,233
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Minnesota Housing First Mortgage
Request Amount Issuer
Tax Exempt Bonds - Long Term
Tax Exempt Bonds - Short Term
Type of Tax Credits requested from Minnesota Housing Tax Credit Pool
Housing Tax Credits - 4%Metro Reservation
Housing Tax Credits - 9%Greater MN Carryover
This is part of dual 4% / 9% application 8609
Qualified Contract
Tax Credit Request Type Tax Credit Set-Aside 42(m)(1)(D)
Nonprofit
Rural Development
Previously Awarded Tax Credit
Allocator Amount
Allocator Amount
Allocator Amount
RENTAL ASSISTANCE REQUEST
Metro HRA Project Based Vouchers
St. Paul PHA Project Based Vouchers
Other
OPERATING SUBSIDY REQUEST
NHTF Operating Subsidy
Supplemental Request
Repeat Request - not selected
First Request
Request Status
Minnesota Housing 887,011
The following types of Rental Assistance are available through the Multifamily Consolidated RFP. In order to be considered for project based vouchers you must make a
selection below. Be sure to complete the 'New or Additional Rental Assistance or Operating Subsidy Funding' section on the Sources tab where you will indicate the
source of assistance, term, number of units and amount of subsidy requested, if applicable.
Refer to Request for Proposals information on Minnesota Housing's Website. Be sure to complete the 'New or Additional Rental Assistance or Operating Subsidy
Funding' section on the Sources tab where you will indicate the operating subsidy funding use type, number of units and amount of subsidy requested.
If yes, select Suballocator: Are you applying to a Suballocator for Tax Credits?
FUNDING REQUEST
Indicate the type(s) of funding you are requesting by placing a checkmark next to the desired funding type(s) and entering the request amount(s).
FIRST MORTGAGE / DEFERRED LOAN REQUEST
6,585,000
Request Amount
TAX EXEMPT BOND REQUEST
If "Other" Issuer selected enter
Issuer Name below
Issuance Date
Deferred Loan(s) (includes Minnesota Housing,Greater Minnesota Housing Fund and Metropolitan
Council resources)
HOUSING TAX CREDIT REQUEST
4%9%
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Version Date
Version
Property Number (D#):
Project Number (M#):Only enter one Project Number.
HTC #
Development Name Year Built
Primary Address
City
Zip Code
County
Latitude Enter the property's latitude.
Longitude Enter the property's longitude.
Other:
Other:
# Units
4
8
D8111
M18183
DEVELOPMENT LOCATION
Conversion/Adaptive Re-use
New Construction
Refinance
-93.331490
ACTIVITY TYPE (Check all that apply)
Acquisition
Enter Primary Address above. Enter aditional buildings on
Buildings tab.
Check if multiple buildings44.866190
Edina
4100 West 76th Street
4100 Apartments
55435
Hennepin
Permanent Supportive Housing
Rehabilitation Stabilization
Historic Pres/Renovation Scattered Site Development
Demolition
Rental Subsidy
DEMOGRAPHICS (Enter number of units for each applicable demographic)
People with Disabilities
Senior
PROJECT DESCRIPTION
Application Date 1/31/2020 MINNESOTA HOUSING USE ONLY:
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SITE DESCRIPTION
Acres 2.00 Project located in qualified census tract:
Total Site Area Sq. Footage 87,120 Tract Number:024003
Density (units/acre)35.00
BUILDING DESCRIPTION
Type of Building
Number of
Residential
Buildings
Number of
Stories
Number of
Units
Gross Sq
Feet
Elevator 1 4 70 85,583
1 4 70 85,583
Type
Number of Parking Spaces Number Parking Spaces / Unit Gross Square Feet
Underground 63 0.90 22,956
12 0.17
75 1.07 22,956
Gross Sq Ft
5,649
5,649
DEVELOPMENTS INVOLVING ACQUISITION
Will the property be acquired from a related party?
Has the property been acquired from a related party?If yes, date:Sale price:
Has the property been acquired from an unrelated party in the last three years?If yes, date:Sale price:
Existing Indebtedness on the Property/Building
Original Loan Amount Interest Rate Term (Yrs)Unpaid Balance
Date of Unpaid Balance Date of Maturity
Number of Restricted Units
Restricted to Special Popula-tions?
Loan Will be Paid Off in this Transaction?Income Limits (%)Rent Limits (%)
Existing Federal Subsidies
# of Units Exp. Date
Existing State and Local Subsidies
Subsidy Type # of Units Exp. Date
Name of Lender(s) of Existing Loans, Subsidies and
Grants (secured and unsecured)
Total Non-Housing gross square feet
Other
Commercial Kitchen or Food Service Space
(for supportive or senior housing)
Community Space
Swimming Pool
Community Service Facility
Office
State or Local Subsidy Describe if Other
Total
Federal Subsidy Are the existing federally assisted units at risk of loss?
Non-Housing Space
Administration/Programmatic
Commercial
Storage Lockers
Lobby/Mgmt Office/Amenity Spaces
Describe
PROPERTY INFORMATION
Totals
Housing Space
New Construction
Totals
Parking
Covered Parking
Surface Parking
Enter the 6 digit tract number for the site. (If applicable, include leading and/or
trailing zeros and exclude the decimal). If scattered site, enter the tract number for
the primary building site.
Yes
Yes
Yes
No
No
No
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Utility Type SRO no Kitchen SRO with Kitchen 0BR/Eff 1BR 2BR 3BR 4BR
Natural Gas 34 38 43
Electric 7 10 13
37 47 57
78 95 113
Source
UNIT / RENT GRID
Program Type
Unit Type
# of
Bath-
rooms # of Units
Unit
Sq Ft
Monthly
Contract
Rent
Total Annual
Contract
Rent
Tenant
Paid
Utilities
Monthly
Gross Rent HTCHOMENHTFHPHPWDHIB SeniorRent AsstOp SubsRooms
Per
Unit
Total
Rooms Source of Rental Assistance or Operating Subsidy
*Rents updated to limits effective 4/1/2020
1BR 1.00 4 676 1,086 52,128 78 1,164 60% MTSP 60% MTSP 3.5 14.0
2BR 1.00 5 960 1,301 78,060 95 1,396 60% MTSP 60% MTSP 4.5 22.5
3BR 2.00 18 1,215 1,500 324,000 113 1,613 60% MTSP 60% MTSP 6.0 108.0
1BR 1.00 5 676 892 53,520 78 970 50% MTSP 50% MTSP 3.5 17.5
2BR 1.00 30 960 1,068 384,480 95 1,163 50% MTSP 50% MTSP 4.5 135.0
1BR 1.00 4 676 659 31,632 78 737 30% MTSP 30% MTSP 3.5 14.0 HSH/GRH
1BR 1.00 4 676 659 31,632 78 737 30% MTSP 30% MTSP 3.5 14.0 HSH/GRH
70 955,452 Total Rooms 325
Total # Bathrooms in Units 84
Income Average 51.57%NOTE: Income Average is based on number of HTC units with MTSP Income Limit
Rent Limit/Income Limit Key:
Option
30/30 MMALW
80>S/AMI
6BR
80% of the greater of SMI or AMI
Effective Date
Rental Hsg
PotentialTotal Units
Equals
30% of 30% Metro Median
Affordable to the Local Workforce
Metro HRA 1/1/2020
Income LimitRent Limit
Total Tenant Paid
A/C
Water/Sewer
Service Fee
Other
HOUSING INCOME
Electric
Utility
Heating
Cooking
Water Heating
TENANT PAID UTILITY ALLOWANCE
5BR
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Total Per Unit Per Room
Rental Housing Potential 955,452 13,649 2,940
Parking / Garage Rent Potential
Covered Parking # of spaces 63 Mo Fee 75 56,700 810 174
Surface Parking # of spaces 12 Mo Fee
Commercial Rent Potential
Gross Potential Rent 1,012,152 14,459 3,114
Tenant Fees 4,000 57 12
Laundry Equipment 3,000 43 9
Other 1,700 24 5
Other
Forfeited Security Deposits
Interest Income
Total Other Income 8,700 124 27
7.0%67,491 964 208
10.0%5,670 81 17
Other
Other
73,161 1,045 225
Net Rental Income / Total Revenue 947,691 13,538 2,916
Total Per Unit Per Room Comments
Advertising and Marketing 3,430 49 11
% Revenue $/Unit/Mo 49,560 708 152
Percent of Total Revenue (OR)
Per Unit Per Month 5.2%$59.00
Professional Fees (Specify in Comments)11,976 171 37
Applicant Screening/Collection Expense
Site Office Expense (Specify in Comments)15,827 226 49
On-Site Management Payroll (Specify in Comments)78,253 1,118 241
14,834 212 46
Administrative Subtotal 173,880 2,484 535
Elevator Maintenance/Contract 3,430 49 11
Security 3,200 46 10
Rubbish Removal 12,544 179 39
Other Contract Services (Includes Exterminating)15,974 228 49
Maintenance/Janitor Supplies 13,230 189 41
Grounds Maintenance 8,330 119 26
Snow Removal 5,880 84 18
Heat & A/C Repair Services 3,528 50 11
General Repair Services 15,000 214 46
Painting/Decorating Materials 6,860 98 21
83,986 1,200 258
Other Maintenance and Operating (Specify in Comments)5,338 76 16
Maintenance Subtotal 177,300 2,533 546
Electricity 21,500 307 66
Water & Sewer 30,000 429 92
Gas and Oil 11,650 166 36
UTILITIES
Maintenance/Janitor Payroll (Specify in Comments).75 FTE MT + 2 PT CT
MAINTENANCE
turn cleaning; exterminating; turn carp
Fire & Security - Light Bulbs - Repair
Contract for 7 months
Total Rental Loss
NET RENTAL INCOME
MANAGEMENT & OPERATING EXPENSES (M&O)
ADMINISTRATIVE
Property Management Fee
Legal - IT - Audit/tax
Inc in Advertising & Marketing
Supplies - Equipment - Software - Posta
1 FTE SM, Compliance, Leasing Call Cen
Other Administration (Specify in Comments)LIHTC fees - Partnership fee - Mileage -
RENTAL LOSS
Rental Housing Vacancy
Parking / Garage Vacancy
Commercial Vacancy
Vacancy Rate
Vacancy Rate
Vacancy Rate
INCOME
Comments
GROSS POTENTIAL RENT
OTHER INCOME FROM OPERATIONS (excluding TIF)
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INCOME
Utilities Subtotal 63,150 902 194
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INCOME
Property and Liability Insurance Expense 43,922 627 135
AGENCY MANAGEMENT AND OPERATING ADJUSTMENT
Agency Management and Operating Adjustment
Total Management and Operating 458,252 6,546 1,410
Real Estate Taxes 103,285 1,476 318
31,500 450 97
Miscellaneous Reserves
Reserves & Escrows Subtotal 134,785 1,926 415
Effective Gross Expense 593,037 8,472 1,825
Net Operating Income 354,654 5,066 1,091
TEMPORARY INCOME (i.e., TIF, IRP, etc)# Years
21 66,164 945 204
Total Temporary Income 66,164 945 204
TIF
Specify
Specify
City of Edina Average annual amt per Ehlers
TOTAL MANAGEMENT AND OPERATING
REAL ESTATE TAXES AND RESERVES
Replacement Reserve
EFFECTIVE GROSS EXPENSE
NET OPERATING INCOME
SUPPORTIVE HOUSING
Unique Operating Expenses (Specify in comments)
INSURANCE
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Year 1 Year 15
Net Operating Income Income Inflator 2.00%354,654 369,583
Expense Inflator 3.00%
Income Available for Debt Service 354,654 369,583
Lender/Loan
Total Subordinated Debt Payments
Income Available after Subordinated Debt 354,654 369,583
Minimum Debt Coverage Ratio 1.1500 1.1500
Net Income Available for Debt Service 308,395 321,376
Lowest Income Available for Debt Service 308,395
Term (Years)40
Amortization (Years)40
Interest Rate 4.250%
Mortgage Insurance Premium (MIP)0.125%
Debt Service Constant (including MIP)0.053284424
Maximum Calculated Mortgage 5,787,710
Maximum NOI Supported Mortgage (rounded)5,787,000
Actual Mortgage if not Maximum Supported
Annual TIF Payment 66,164
Minimum Debt Coverage Ratio 1.1500
Available TIF for Debt Service 57,534
Amortization (Years)21
Total Permanent Note Rate 4.250%
Mortgage Insurance Premium (MIP)
Debt Service Constant (including MIP)0.072067708
Maximum Calculated TIF Mortgage 798,331
Maximum TIF Supported Mortgage (rounded)798,000
Actual TIF Mortgage if not Maximum Supported 798,000
FIRST MORTGAGE CALCULATION
TIF MORTGAGE CALCULATION
Debt Service
Year 1
Debt Service
Year 15
Check if
MN Hsg Principal Rate
Term
(Years)
Amort
(Years)
MORTGAGE CALCULATION
INCOME AVAILABLE FOR DEBT SERVICE
Change on the Cash Flow tab:
Temporary Income (excluding TIF)
SUBORDINATED DEBT PAYMENTS
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Development Name 4100 Apartments
# Units Rent # Units Rent # Units Rent # Units Rent # Units Rent
Total Units 70
Cap Rate 7.00%4 1,086 5 892 4 659
Vacancy Rate / Credit Allowance 7.0%5 1,301 30 1,068 4 659Income Inflator 2.00%18 1,500
Expense Inflator 3.00%
Initial Inflator Future Inflator Begin in Year
Actuals
Two Years Ago
Actuals
One Year Ago
Actuals
Current Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Rental Income 2.00%955,452 974,561 994,052 1,013,933 1,034,212 1,054,896 1,075,994 1,097,514 1,119,464 1,141,854 1,164,691 1,187,984 1,211,744 1,235,979 1,260,699
Parking Income 2.00%56,700 57,834 58,991 60,170 61,374 62,601 63,853 65,130 66,433 67,762 69,117 70,499 71,909 73,347 74,814
Commercial Income 2.00%
Gross Potential Rent 1,012,152 1,032,395 1,053,043 1,074,104 1,095,586 1,117,498 1,139,848 1,162,644 1,185,897 1,209,615 1,233,808 1,258,484 1,283,653 1,309,327 1,335,513
Other Income from Operations (incl Laundry)2.00%8,700 8,874 9,051 9,233 9,417 9,606 9,798 9,994 10,193 10,397 10,605 10,817 11,034 11,254 11,479
Other Other
OtherTotal Other Income 8,700 8,874 9,051 9,233 9,417 9,606 9,798 9,994 10,193 10,397 10,605 10,817 11,034 11,254 11,479
Rental Vacancy 7.0%2.00%67,491 68,840 70,217 71,622 73,054 74,515 76,005 77,526 79,076 80,658 82,271 83,916 85,594 87,306 89,052
Parking Vacancy 10.0%2.00%5,670 5,783 5,899 6,017 6,137 6,260 6,385 6,513 6,643 6,776 6,912 7,050 7,191 7,335 7,481
Commercial Vacancy 2.00%
Other 2.00%
Other 2.00%
Total Rental Loss 73,161 74,624 76,116 77,639 79,191 80,775 82,391 84,039 85,719 87,434 89,182 90,966 92,785 94,641 96,534
Net Rental Income 947,691 966,645 985,978 1,005,698 1,025,812 1,046,328 1,067,254 1,088,599 1,110,371 1,132,579 1,155,230 1,178,335 1,201,902 1,225,940 1,250,459
Property Management Fee 5.23%3.00%49,560 51,047 52,578 54,156 55,780 57,454 59,177 60,953 62,781 64,665 66,604 68,603 70,661 72,781 74,964
Administrative Expenses (less Prop Mgmt Fee)3.00%124,320 128,050 131,891 135,848 139,923 144,121 148,445 152,898 157,485 162,209 167,076 172,088 177,251 182,568 188,045
Maintenance Expenses 3.00%177,300 182,619 188,098 193,740 199,553 205,539 211,705 218,057 224,598 231,336 238,276 245,425 252,787 260,371 268,182
Utilities 3.00%63,150 65,045 66,996 69,006 71,076 73,208 75,404 77,667 79,997 82,396 84,868 87,414 90,037 92,738 95,520
Unique Operating Expenses 3.00%
Insurance M&O/DU/Mo:$546 3.00%43,922 45,240 46,597 47,995 49,435 50,918 52,446 54,019 55,640 57,309 59,028 60,799 62,623 64,502 66,437
Agency M&O Adjustment 3.00%
Real Estate Taxes 3.00%103,285 106,384 109,575 112,862 116,248 119,736 123,328 127,028 130,838 134,763 138,806 142,971 147,260 151,678 156,228
Reserves Reserves/Unit:$450 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500Effective Gross Expense 62.58%593,037 609,884 627,235 645,107 663,515 682,476 702,005 722,120 742,839 764,179 786,159 808,799 832,118 856,137 880,876
Net Operating Income 354,654 356,762 358,743 360,591 362,296 363,852 365,249 366,479 367,533 368,400 369,071 369,536 369,784 369,803 369,583
Temporary Income
Temporary Income - TIF 66,164 68,149 70,193 72,299 74,468 76,702 79,003 81,373 83,815 86,329 88,919 91,586 94,334 97,164 100,079
420,818 424,911 428,936 432,890 436,764 440,554 444,253 447,853 451,347 454,729 457,990 461,122 464,118 466,967 469,662
301,123 301,123 301,123 301,123 301,123 301,123 301,123 301,123 301,123 301,123 301,123 301,123 301,123 301,123 301,12357,510 57,510 57,510 57,510 57,510 57,510 57,510 57,510 57,510 57,510 57,510 57,510 57,510 57,510 57,510
8,177 8,074 7,967 7,855 7,739 7,617 7,490 7,357 7,219 7,075 6,924 6,767 6,603 6,433 6,254
Other
Other
366,810 366,708 366,601 366,489 366,372 366,250 366,123 365,991 365,852 365,708 365,558 365,401 365,237 365,066 364,887
1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 1.24 1.25 1.26 1.27 1.28 1.29
54,008 58,203 62,336 66,401 70,393 74,304 78,129 81,862 85,495 89,021 92,432 95,722 98,881 101,902 104,774
54,008 58,203 62,336 66,401 70,393 74,304 78,129 81,862 85,495 89,021 92,432 95,722 98,881 101,902 104,7741.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 1.24 1.25 1.26 1.27 1.28 1.29
Amount Rate
7,000 7,000 7,000 7,000 7,000 7,700 7,700 7,700 7,700 7,700 8,470 8,470 8,470 8,470 8,470 9,317
214,418 47,008 51,203 55,336 59,401 1,470
Deferred Loans Rate
61,222 66,604 70,429 74,162 77,795 80,551 83,962 87,252 90,411 93,432 95,457
Floor Plan
Net Cash Flow
Investor Fee$7K indexed 10% every 5 years
Deferred Developer Fee
Minnesota Housing Cash Flow Note
Expenses to be paid from Available Cash
Total Debt Service
Total Debt Service Coverage
Cash Flow
Funds from Debt Services Reserve Enter this amt in Dev Costs, Reserves
Adjusted Cash FlowAdjusted Debt Service Coverage
1BR
EXPENSES
Total Income for Debt Service
DEBT SERVICE
MN Housing 1st MortgageTIF Supported Mortgage
MIP
1BR
Floor Plan
CASH FLOW
INCOME
Floor Plan
1BR
2BR
3BR
Floor Plan
1BR
2BR
Floor Plan
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Deferred Developer Fee Payments
Beginning Balance 214,418 167,410 116,207 60,871 1,470
Interest
Payment (47,008)(51,203)(55,336)(59,401)(1,470)
Ending Balance 167,410 116,207 60,871 1,470
Cash Flow Loans
Beginning Balance
Interest
PaymentEnding Balance
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MHFA Rnd 2 Final Selection 2019RFP_2020HTC_Workbook 9%_6.24.20.xlsm
Total Costs Per Unit
4%
Credit Basis
9%
Credit Basis
Historic
Credits Basis
Inter-
med.
Costs Comments
ACQUISITION or REFINANCE EXISTING DEBT
Land 2,900,000 41,429
Existing Structures
Demolition 177,372 2,534 Breakout of Demo from Cons
3,077,372 43,962
Special Assessments
Other
Other 70,702 1,010
Holding Costs 432,600 6,180 Interest + Mgmt Costs - 21 m
Holding Costs 42,000 600 21 months of interest on pre
Acquisition/Refinance Total 3,622,674 51,752
CONSTRUCTION
New Construction
Residential 12,663,728 180,910 12,663,728 *Construction numbers TBD
Garages $ per stall:1,260,000 18,000 945,000
Accessory Structures
On Site Work
Off Site Work
Other 87,395 1,249 87,395
Other 272,893 3,898 272,893
New Construction Subtotal 14,284,016 204,057 13,969,016
Rehabilitation
Residential
Garages $ per stall
Accessory Structures
On Site Work
Off Site Work
Other
Other
Rehabilitation Subtotal
New and Rehabilitation Subtotal 14,284,016 204,057 13,969,016
General Requirements 2.04%291,367 4,162 291,367
Contractor's Overhead 1.40%200,320 2,862 200,320
Contractor's Profit 2.06%294,187 4,203 294,187
Construction Contract Amount 15,069,890 215,284 14,754,890
Construction Contingency 5.00%753,495 10,764 753,495
Total Construction Costs 15,823,385 226,048 15,508,385
ENVIRONMENTAL ABATEMENT
Soil Abatement
Lead Abatement
Asbestos Abatement 50,000 714 50,000
Other
Abatement Contingency (Agency determined)
Abatement Total 50,000 714 50,000
DEVELOPMENT COSTS
Acquisition/Refinance Subtotal
Land Bank Fees
Land Bank Holding Costs
Interest on pre-development costs
Payment and Performance Bonds
Permit
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MHFA Rnd 2 Final Selection 2019RFP_2020HTC_Workbook 9%_6.24.20.xlsm
Total Costs Per Unit
4%
Credit Basis
9%
Credit Basis
Historic
Credits Basis
Inter-
med.
Costs Comments
DEVELOPMENT COSTS
PROFESSIONAL FEES
Architect's Fee Total 451,200 3.0%
Architect's Fee - Design 76%342,720 4,896 342,720
Architect's Fee - Supervision 24%108,480 1,550 108,480
Architect's Reimburseables 12,000 171
Marketing 70,000 1,000 6 month lease-up period. Inc
Surveys 15,000 214 15,000 Initial survey + Foundation Su
Soil Borings 13,000 186
Payment & Performance Bond Premium In GC Fees
Building Permit(s)In GC Fees
Sewer-Water Access Charge 331,506 4,736 331,506
Other Local Fees 80,000 1,143
Appraisal Fee 10,000 143
Energy Audit
Energy Consultant 15,000 214
Environmental Assessment 15,000 214 10,000
Cost Certification/Audit 50,000 714 20,000
Market Study 8,500 121
Tax Credit Fees (% of credits)84,000 1,200
Compliance Fees (1st year)2,100 30
Furnishings and Equipment 90,000 1,286 90,000
Legal Fees 100,000 1,429 85,000
Relocation Costs
Other Fees 30,000 429
Other Fees 15,000 214
Other Fees
Other Fees
Professional Fees Total 1,392,306 19,890 1,002,706DEVELOPER FEE
Developer Fee 1,100,000 15,714 1,100,000
Processing Agent
Owner's Construction Representative
Other Consultant Fees
Other
Developer Fee Total 4.9%1,100,000 15,714 1,100,000SYNDICATOR/INVESTOR FEES
Organization Fees
Bridge Loan
Tax Opinion
Due Diligence Fees
Other Fees
Syndicator/Investor Fees Total
Soft Cost Contigency
Construction Testing
City Application + City Consultant Fees
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MHFA Rnd 2 Final Selection 2019RFP_2020HTC_Workbook 9%_6.24.20.xlsm
Total Costs Per Unit
4%
Credit Basis
9%
Credit Basis
Historic
Credits Basis
Inter-
med.
Costs Comments
DEVELOPMENT COSTS
FINANCING COSTS
Construction Period Costs
Hazard and Liability Insurance 44,000 629
Construction Interest at:4.900%14 468,563 6,694 382,500 Adjusted by EC
Builder's Risk Insurance 64,000 914 64,000
Taxes During Construction 55,000 786 55,000
Minnesota Housing Bridge Loan Origination Fee
Construction Loan Origination Fee 96,722 1,382 50,000
Minnesota Housing Construction Oversight Fee 37,675 538 20,000
Other Inspection Fee
Permanent Financing Costs
Minnesota Housing 1st Mortgage Application Fee 250 4
Minnesota Housing 1st Mortgage Origination Fee 115,850 1,655
HUD/FHA MIP
HUD/FHA Exam Fee
HUD/FHA Inspection Fee
Other Permanent Origination Fee
Mortgage Insurance Premium 7,234 103
Bond Counsel
Underwriter Counsel
Trustee Fee
Rating Agency
Other Bond Fees
Title and Recording 60,000 857 20,000
Financing Costs Total 949,294 13,561 591,500
TOTAL MORTGAGEABLE COSTS 22,937,659 327,681 18,252,591RESERVES AND NON-MORTGAGEABLE COSTS
466,331 6,662 6 mos of M&O + 6 mos of DS
31,500 450
Difference between average
Non-Mortgageable Costs Total 497,831 7,112
TOTAL DEVELOPMENT COST
Total Development Costs 23,435,490 334,793
Total Basis for Tax Credits 18,252,591
Total Intermediary Costs % of total 14.57%3,413,396
Operating Reserve
Replacement Reserve
Other
Other
Bond Issuance Fee
Other
Other
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MHFA Rnd 2 Final Selection 2019RFP_2020HTC_Workbook 9%_6.24.20.xlsm
Total Development Cost from Development Costs tab:$23,435,490
Term
(Months)Rate Amount Per Unit Committed
18 4.900%12,896,326 184,233
0
0
0
0
Total Construction Financing 12,896,326 184,233
Term
(Years)Rate Amount Per Unit Committed
Include in
HTC Gap End Loan
40 4.250%6,585,000 94,071
100 1
11,295,887 161,370
0
0
0
316,500 4,521
35,000 500
40 1.000%2,400,000 34,286
0
40 1.000%500,000 7,143
40 0.000%206,000 2,943
40 0.000%500,000 7,143
40 1.000%888,634 12,695
40 0.000%493,950 7,056
0
0
0
0
0
214,418 3,063
Total Permanent Financing 23,435,489 334,793
0 0
OS Funding Use Term (Years)# of Units Annual Amount
Secured or
Applied for
Revenue Shortfall 1 8 63,264 Secured
Total Proposed Rental Assistance or Operating Subsidy Funding 8 63,264
Minnesota Housing 1st Mortgage Escrow Requirements Amount
197,550
Insurance Escrow
Tax Escrow
Other
Other
0
0
0
Explain:
MAXIMUM ALLOWABLE RETURN ON EQUITY
Developments with syndication proceeds
Developments with no syndication proceeds
Developments with de minimus amount of syndication proceeds
Manual Entry
0
7,908
ADDITIONAL COSTS NOT INCLUDED IN TOTAL DEVELOPMENT COST
Operating Deficit Escrow
0
0
FUNDING GAP REMAINING
NEW OR ADDITIONAL RENTAL ASSISTANCE OR OPERATING SUBSIDY FUNDING
Type of Source Name of Source Per Unit
Rental Assistance Housing Support 7,908
Deferred Developer Fee
MN Hsg Loan - EDHC
GP Loan - Met Council LCDA Acqusition and Stormwater
Hennepin County Loan - HOME Funds
GP Loan - Philanthropic
GP Loan - Met Council LHIA
Energy Rebates
City of Edina Loan
City of Edina TIF Committed, in 1st Mortgage
Federal Historic Proceeds
Deferred Loan Request
Sales Tax Rebate
General Partner Cash
Syndication Proceeds
State Historic Proceeds
Name of Source
Notes
(Enter info about status and estimated timing of funding)
Minnesota Housing First Mortgage
SOURCES
CONSTRUCTION SOURCES
Name of Source Notes
Construction Loan
PERMANENT CAPITAL SOURCES OF FUNDING
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MHFA Rnd 2 Final Selection 2019RFP_2020HTC_Workbook 9%_6.24.20.xlsm
Amount During Const End of Const Stabilization Cash Flow Comment
12,896,326 12,896,326 (12,896,326)
0
0
0
0
Amount During Const End of Const Stabilization Cash Flow Comment
6,585,000 6,193,000
100
11,295,887 8,419,396 617,314
0
0
0
316,500 305,500
35,000 35,000
2,400,000
0
500,000
206,000
500,000 67,528
888,634 888,634
493,950 140,000
0
0
0
0
0
214,418 275,241
12,896,326 12,896,326 (12,896,326)0 0
23,435,489 1,096,162 14,952,896 617,314 275,241
36,331,815 13,992,488 2,056,570 617,314 275,241
Amount During Const End of Const Stabilization Cash Flow Comment
3,622,674
14,284,016 12,855,614 1,428,402
0
785,874 628,699 78,587
753,495 678,145 75,349
50,000 50,000
1,392,306 155,455 123,006
1,100,000 311,658 85,101 275,241
0
949,294 142,294 94,929
497,831 497,831
23,435,490 14,510,207 2,111,932 582,932 275,241
(517,719)(55,362)34,382 0
Professional Fees (Soft Costs)1,113,845
Developer Fee 428,000
Contingency
Environmental Abatement
Reserves
Total Uses 5,936,235
Difference 19,465
Syndication Fees
Financing Fees 712,071
Rehab
Contractor Fees 78,587
Acquisition 3,603,732
New Construction
Total Perm Sources 5,955,699
Total All Sources 5,955,699
USES Closing
Total Construction Sources 0
Deferred Developer Fee
GP Loan - Met Council LCDA 353,950
GP Loan - Met Council LHIA 432,472
MN Hsg Loan - EDHC
Hennepin County Loan - HOME F 500,000
GP Loan - Philanthropic 10,000
City of Edina Loan 2,400,000
Sales Tax Rebate
Energy Rebates
Syndication Proceeds 2,259,177
Minnesota Housing First Mortga
General Partner Cash 100
PERMANENT SOURCES Closing
Construction Loan
Name of Source Closing
CONSTRUCTION SOURCES
In each column of the Flow of Funds, Total All Sources and Total Uses must be equal.
FLOW OF FUNDS
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MHFA Rnd 2 Final Selection 2019RFP_2020HTC_Workbook 9%_6.24.20.xlsm
Credit Type (Check all that apply)Project Located in:
Newly constructed and not federally subsidized Difficult Development Area
Newly constructed and federally subsidized State Designated Basis Boost
Rehabilitation expenditures not federally subsidized
Rehabilitation expenditures federally subsidized
Existing Building
Allocation subject to non profit set aside under sec. 42(h)(5)
20% of the units serving households at 50% MTSP
40% of the units serving households at 60% MTSP
40% of units serving households at an average of 60% MTSP (Income Average is based on number of HTC units with
MTSP Income Limits located on the Housing Income tab.)
TENANT FACILITIES / AMENITIES
Common Space - Non Unit Sq Ft Fee
Basis?
Parking / Garages 22,956 75
Storage Lockers
Community Space
Swimming Pool
Community Service Facility
Office
Other
OTHER BASIS CONSIDERATIONS
Will any of the project financing be treated as or considered to be a Federal Grant or Tax-Exempt obligation
(Code Sec. 103)?Yes No
If yes, provide the following information
Source of Funds
Amount
Select one of the following:Select one of the following:
4% credit 4% credit
Subtract from basis Subtract from basis
TAX EXEMPT BOND FINANCING
Are tax exempt bonds to be issued?Yes No
If yes, complete the following:
Total Aggregate Basis
Total Tax Exempt Bonds
Name of Bond Issuer
Date of allocation of bond volume cap
ACQUISITION/REHABILITATION
Total Rehabilitation Expense
Lowest average rehabilitation attributable qualified basis per low income unit/building
Average rehabilitation expense per low income unit per project
Adjusted basis x 20% =
HOUSING TAX CREDIT INFORMATION
Commercial Kitchen or Food Service Space (for supportive or senior
housing)
Minimum Set-Aside (Please select one of the minimum set aside requirements stated by Section 42 IRS Code. The choice of minimum set-aside also establishes
the income limit and rent limit applicable to all HTC units in the project. Note: An election of 20% at 50% MTSP means that the 50% limit is applicable to all
HTC units in the building.)
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MHFA Rnd 2 Final Selection 2019RFP_2020HTC_Workbook 9%_6.24.20.xlsm
HOUSING TAX CREDIT INFORMATION
BUILDING GRID Column 2 Column 3 Column 4 Column 5 Column 6 Column 7 Column 8
Date of Substantial Rehab by Seller
Date of Acquisition by Seller
Date of Original Certificate of Occupancy
Actual / Proposed Date of Rehab by Applicant
Number of Years Between Placed in Service (later of column 2, 3 or 4) and Rehab
Is 10 year rule violated for this project?
Average rehabilitation attributable qualified basis per low income unit for this buidling
Total Buildings 1
If less than 10 years since last placed in service, is the project eligible for:
Exemption under 42(d)(2)(D)Exemptions for certain transfers, including but not limited to buildings placed in
service by government or nonprofit, or buildings acquired through foreclosure.
Exemption under 42(d)(6)(A)Exemption for state- or federally-assisted building.
Waiver under 42(d)(6)(B)Waiver for buildings acquired from insured depository instuitions in default.
If eligible for waiver, what is actual or proposed waiver date?
Please refer to IRS section 42 for complete details about eligibility under these rules.
4100 West 76th Street
Address of Building (list all buildings separately)
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MHFA Rnd 2 Final Selection 2019RFP_2020HTC_Workbook 9%_6.24.20.xlsm
Type of Residential Rental Units # of Units Sq Ft
70 66,962
70 66,962
100.00%100.00%
70 66,962
State Federal
Total Historic Basis
Rebates
Qualified Rehabilitation Expenditures
Applicable Percentage 20%20%
Historic Tax Credits
Investor Ownership Percentage
Investor Tax Credits
Equity Factor
Historic Credit Syndication Proceeds
4%9%Total
Total Basis 18,252,591 18,252,591
Less federal grant(s) used to finance qualifying development costs
Less amount of nonqualifying nonrecourse financing
Less nonqualifying excess portion of higher quality units
Less Historic Tax Credit (Residential Portion Only)
Less Rebates 316,500 316,500
Portion not elig for High Cost Adj:
Total Eligible Basis 4%9%17,936,091 17,936,091
Total Eligible Basis Adjusted for the High Cost 17,936,091 17,936,091
Applicable Fraction 1.0000 1.0000
Total Qualified Basis 17,936,091 17,936,091
Applicable Percentage 9.00%
Tax Credit Potential For Project 1,614,248
Annual Tax Credits From Basis Calculation
Applicable Sources will populate from the Capital Sources of Funding Grid
Amount
6,585,000
316,500
35,000
2,400,000
500,000
206,000
500,000
888,634
493,950
Employee / Common Space Units
Total Number and Square Feet of Units
HTC Low Income Units
Market Rate Units / Non-HTC Units
Total # HTC Low Income + Market Rate
Unit and Area Fractions
Applicable Fraction (Lesser of Unit or Area Fraction)
Sales Tax Rebate
City of Edina TIF
Hennepin County Loan - HOME Funds
GP Loan - Philanthropic
GP Loan - Met Council LHIA
MN Hsg Loan - EDHC
GP Loan - Met Council LCDA
High Cost Adjustment
DETERMINATION OF CREDIT
PROJECT APPLICABLE FRACTION
100.00%
HISTORIC CREDITS
TAX CREDIT BASIS CALCULATION
City of Edina Loan
1,614,248
TAX CREDIT EQUITY GAP CALCULATION
Source
Minnesota Housing First Mortgage
State Historic Proceeds
Federal Historic Proceeds
Deferred Loan Request
Energy Rebates
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MHFA Rnd 2 Final Selection 2019RFP_2020HTC_Workbook 9%_6.24.20.xlsm
DETERMINATION OF CREDIT
Total Sources of Funds from above 11,925,084
Total Development Costs 23,435,490
Funding Gap 11,510,406
Equity Factor/Syndication Rate 0.9300
10 Year Credit Gap 12,376,780
Annual Credit Gap 1,237,678
Annual Basis Credit 1,614,248
Maximum Tax Credit Allowed 1,237,678
MN Housing Approved Maximum Tax Credit 1,237,678
Credit Amount Previously Allocated and/or Reserved 887,011
Maximum Credit Requested at this time 327,722
Total Calculated Credit Allocation 1,214,733
Manual Credits Requested at this time 327,722
Ten Year Gross Tax Credits 12,147,330
Equity Factor 0.9300
Investor Ownership Percentage 99.99%
Gross Syndication Proceeds 11,295,887
Manual Syndication Proceeds
If individual, attach a description explaining how the tax benefits will be used.
Type of Offering:Syndicated
Individual/Private Placement
Pay-In
Amount
% of Pro-
ceeds
Anticipated
Date of Pay-In
Required Reserve
Amounts
Developer Fee
Amount
2,259,177 20.00%5/1/2020 428,000
8,419,396 74.54%6/1/2021 311,658
540,381 4.78%12/1/2021 497,831 42,551
42,551 0.38%12/1/2021 42,551
214,418
11,261,505 99.70%497,831 1,039,177
Pay-In
Amount
% of Pro-
ceeds
Anticipated
Date of Pay-In
Required Reserve
Amounts
Developer Fee
Amount
Permanent CO
TAX CREDIT SYNDICATION
Housing Tax Credits
Describe Milestones
Admission, closing const loans
Requesting waiver
of limit per
development
Stabilization, 3 mos 1.15x DSCR
Receipt of 8609
Deferred Fee
Historic Tax Credits
Describe Milestones
Workbook Determination of Credit - Page 2 of 2 9/3/2020 4:41 PM
D-14839-7163-2842\3
Exhibit D
Form of TIF Note
LIMITED REVENUE TAXABLE TAX INCREMENT NOTE
(The Sound on 76th)
No. R-_____ $798,000.00
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 THE SOUND ON 76TH LIMITED PARTNERSHIP, a Minnesota limited partnership, 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 a fixed rate equal 4.25% per annum, on the Payment Dates (as hereinafter defined). This Note is executed and delivered in accordance with the terms and conditions of a Redevelopment Agreement dated as of September 10, 2020, by and between the Authority and Developer (the “Redevelopment Agreement”), and is subject to the terms, conditions, and limitations on payment set forth therein and 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 West 76th Street Tax Increment Financing District established by theAuthority pursuant to Resolution No. 2018-11 (the “TIF District”). Capitalized terms used herein and not
otherwise defined herein shall have the meaning given to them in the Redevelopment Agreement.
The maximum principal amount of this Note attributable to Eligible Reimbursable Expenses shall not exceed $798,000.00.
D-2 4839-7163-2842\3
Principal of and interest on this Note shall be payable solely from and in the amount of Pledged 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 Pledged Tax Increments to the payment of principal of and interest on this Note then due; provided, however, that in the event that Pledged Tax Increments are not sufficient to pay when due the principal of and interest on this Note, the failure of the Authority to pay the entire amount of principal or interest on this Note on any Payment Date shall not constitute a default under this Note as long as the Authority pays the principal of and interest on this Note to the extent of Pledged 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 February 1, 2043 (the “Maturity Date”) hereof as a result of its having received as of such date insufficient Pledged 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.
The following terms have the following definitions for purposes of this Note:
“Tax Increments” means the tax increments derived from the TIF District 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.
“Pledged Tax Increments” means 90% of the Tax Increments received by the Authority less the amount of Tax Increments, if any, which the Authority must pay to the school district, the City, the County and the State pursuant to the TIF Act, including without limitation Minnesota Statutes, Sections 469.177, Subds. 9 and 11; 469.176, Subd. 4h; and 469.175, Subd. 1a, as the same may be amended from time to time.
EXCEPT AS TO THE OBLIGATION TO MAKE PAYMENTS FROM PLEDGED TAX INCREMENTS, THIS NOTE IS NOT A DEBT OF THE AUTHORITY, THE CITY OF EDINA, MINNESOTA (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 PLEDGED 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.
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.
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.
D-3 4839-7163-2842\3
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 PLEDGED 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 PLEDGED 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 or delayed if: (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 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
D-4 4839-7163-2842\3
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]
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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 Executive
Director of the Authority, and has caused this Note to be dated as of the date of original issue specified above.
Chair Secretary
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TENANT INCOME CERTIFICATION
Initial Certification Recertification
Other ___________________________
Effective Date: _____________________
Move-in Date: _____________________
(YYYY-MM-DD)
PART I - DEVELOPMENT DATA
Property Name: County: BIN #: PISD:
BIN Address: City: Zip:
Unit Number: # Bedrooms: Square Footage:
PART II. HOUSEHOLD COMPOSITION (DEMOGRAPHIC INFORMATION IS FOR LIHTC/HMMF ONLY)
HH
Mbr# Last Name First Name Middle
Initial
Relationship to
Head of
Household
Date of Birth
(MM/DD/YY)
F/T
Student?
SS#
Last 4 Digits Race Ethnic Disabled?
1 HEAD
2
3
4
5
6
7
PART III. GROSS ANNUAL INCOME (USE ANNUAL AMOUNTS)
HH
Mbr #
(A)
Employment or Wages
(B)
Soc. Security/Pensions
(C)
Public Assistance
(D)
Other Income
TOTALS $ $ $ $
Add totals from (A) through (D), above TOTAL INCOME (E): $
PART IV. INCOME FROM ASSETS
Hshld
Mbr #
(F)
Type of Asset
(G)
C/I
(H)
Cash Value of Asset
(I)
Annual Income from Asset
TOTALS: $ $
Enter Column (H) Total Passbook Rate
If over $5,000 $_____________ X .06% = (J) Imputed Income $
Enter the greater of the total of column I, or J: imputed income TOTAL INCOME FROM ASSETS (K) $
(L) Total Annual Household Income from all Sources [Add (E) + (K)]
$
HOUSEHOLD CERTIFICATION & SIGNATURES
The information on this form will be used to determine maximum income eligibility. I/we have provided for each person(s) set forth in Part II acceptable verification of
current anticipated annual income. I/we agree to notify the landlord immediately upon any member of the household moving out of the unit or any new member moving
in. I/we agree to notify the landlord immediately upon any member becoming a full time student.
Under penalties of perjury, I/we certify that the information presented in this Certification is true and accurate to the best of my/our knowledge and belief. The
undersigned further understands that providing false representations herein constitutes an act of fraud. False, misleading or incomplete information may result in the
termination of the lease agreement.
Signature (Date) Signature (Date)
Signature (Date) Signature (Date)
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PART V. DETERMINATION OF INCOME ELIGIBILITY
RECERTIFICATION ONLY:
TOTAL ANNUAL HOUSEHOLD INCOME
FROM ALL SOURCES:
From item (L) on page 1
$ Household Meets
Income Restriction at:
Current Income Limit x 140%
$
Current LIHTC Income Limit per Family Size
for the federal 50% or 60% set aside: $
H\hold Income at LIHTC Qualification Date: $
60% 50%
40% 30%
_____%
Household Income exceeds 140% at
recertification:
Yes No
H\hold Size at LIHTC Qualification Date:
PART VI. RENT
Tenant Paid Rent $ Federal Rent Assistance Amount: $________ *Source: _____
Utility Allowance $ Non-Federal Rent Assistance Amount: $________ (*1-8)
Other non-optional charges: $ TOTAL RENT ASSISTANCE: $________
GROSS RENT FOR UNIT:
(Tenant paid rent plus Utility Allowance &
other non-optional charges)
$
Maximum Rent Limit for this unit: $
Unit Meets Rent Restriction at:
60% 50%
40% 30%
_____%
* Source of Federal Assistance
1 **HUD Multi-Family Project-Based Rental Assistance (PBRA)
2 Section 8 Moderate Rehabilitation
3 Public Housing Operating Subsidy
4 HOME Rental Assistance
5 HUD Housing Choice Voucher (HCV), tenant-based
6 HUD Project-Based Voucher (PBV)
7 USDA Section 521 Rental Assistance Program
8 Other Federal Rental Assistance
** (PBRA) Includes: Section 8 New Construction/Substantial Rehabilitation;
Section 8 Loan Management; Section 8 Property Disposition;
Section 202 Project Rental Assistance Contracts (PRAC)
PART VII. STUDENT STATUS
ARE ALL OCCUPANTS FULL TIME STUDENTS?
If yes, Enter student explanation*
(also attach documentation)
Yes No *Enter 1-6: ______
*Student Explanation:
1 TANF assistance
2 Job Training Program
3 Single parent/dependent child
4 Married/joint return
5 Formerly in foster care
6 Extended-Use Period
PART VIII. PROGRAM TYPE
Mark the program(s) listed below (a. through e.) for which this household’s unit will be counted toward the property’s occupancy requirements.
Under each program marked, indicate the household’s income status as established by this certification/recertification.
a. Tax Credit
See Part V above.
b. HOME
Income Status
50% AMGI
60% AMGI
80% AMGI
OI**
c. Tax Exempt
Income Status
50% AMGI
60% AMGI
80% AMGI
OI**
d. AHDP
Income Status
50% AMGI
80% AMGI
OI**
e.
(Name of Program)
Income Status
__________
__________
OI**
**Upon recertification, household was determined over-income (OI) according to eligibility requirements of the program(s) marked above.
SIGNATURE OF OWNER/REPRESENTATIVE
Based on the representations herein and upon the proofs and documentation required to be submitted, the individual(s) named in Part II of this
Tenant Income Certification is/are eligible under the provisions of Section 42 of the Internal Revenue Code, as amended, and the Land Use
Restriction Agreement (if applicable), to live in a unit in this Project.
SIGNATURE OF OWNER/REPRESENTATIVE DATE
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INSTRUCTIONS FOR COMPLETING
TENANT INCOME CERTIFICATION
This form is to be completed by the owner or an authorized representative.
Part I - Development Data
Check the appropriate box for Initial Certification (move-in), Recertification (annual recertification), or Other. If Other, designate the
purpose of the recertification (i.e., a unit transfer, a change in household composition, or other state-required recertification).
Effective Date Enter the effective date of the certification. For move-in, this should be the move-in date. For annual
recertification, this effective date should be no later than one year from the effective date of the previous
(re)certification.
Move-in Date Enter the date the tenant has or will take occupancy of the unit. (This date should reflect the most recent
Initial Certification Date when the tenant was certified for occupancy of a tax credit unit.)
Property Name Enter the name of the development.
County Enter the county (or equivalent) in which the building is located.
BIN # Enter the Building Identification Number (BIN) assigned to the building (from IRS Form 8609).
This is expected to be in the following format:
ME-87-00001, ME-87-00002, ME-87-00003, etc.
Where
- ME is the state allocating agency's two character state designation. In this case Maine.
- 87 is the last two digits of the BIN's year of allocation (1987)
- 00001, 00002, 00003 is a 5 digit serial number usually sequential.
Address Enter the street address, city and zip code of the building.
Unit Number Enter the unit number.
# Bedrooms Enter the number of bedrooms in the unit.
Square Footage Enter the square footage of the unit.
Part II - Household Composition
List all occupants of the unit. State each household member’s relationship to the head of household by using one of the following
coded definitions:
H Head of Household S Spouse
A Co-Head (Adult co-tenant) O Other family member
C Child F Foster Child/Adult
L Live-in caretaker N None of the above
Enter the date of birth, student status, and last four numbers of each household member’s social security number or alien registration
number. Enter 0000 (4 zeros) if the household member does not have a security number or alien registration number.
Race: Enter each household member’s race by using at least one of the following coded definitions: 1 – White; 2 – Black/African American; 3 –
American Indian/Alaska Native; 4 – Asian (4a – Asian India; 4b – Chinese; 4c – Filipino; 4d – Japanese; 4e – Korean; 4f –Vietnamese;
4g – Other Asian); 5 – Native Hawaiian/Other Pacific Islander (5a – Native Hawaiian; 5b – Guamanian or Chamorro; 5c –Samoan; 5d – Other Pacific
Islander); 6 – Other; or 8 – Tenant did not respond.
Ethnicity: Enter each household member’s ethnicity by using one of the following coded definitions: 1 – Hispanic or Latino; 2 – not
Hispanic or Latino or 3 – Tenant did not respond.
Disabled?: Enter 1 - (Yes) if the household member is disabled according to Fair Housing Act definition for handicap (disability)
Enter 2 - (No) if the household member is not disabled.
Enter 3 - Tenant Did Not Respond
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Fair Housing Act definition for handicap (disability)
A physical or mental impairment which substantially limits one or more major life activities; a record of such an
impairment, or being regarded as having such an impairment. For a definition of “physical or mental impairment” and
other terms used in this definition, please see 24 CFR 100.201, available at
http://www.fairhousing.com/index.cfm?method=page.display&pagename=regs_fhu_100-201.
“Handicap” does not include current, illegal use of or addiction to a controlled substance.
An individual shall not be considered to have a handicap solely because that individual is a transvestite.
The housing credit agency administering its low-income housing credit program must, to the best of its ability, provide this
disability status information, pursuant to 42 U.S.C. 1437z-8. However, it is the tenant’s voluntary choice whether to provide such
information, and questions to the tenant requesting the information must so state. If the tenant declines to provide the information,
the housing credit agency shall use its best efforts to provide the information, such as by noting the appearance of a physical
disability that is readily apparent and obvious, or by relying on a past year’s information. For purposes of gathering this
information, no questions with respect to the nature or severity of the disability are appropriate.
If there are more than 7 occupants, use an additional sheet of paper to list the remaining household members and attach it to the
certification.
Part III - Annual Income
See HUD Handbook 4350.3 for complete instructions on verifying and calculating income, including acceptable forms of
verification.
From the third party verification forms obtained from each income source, enter the gross amount anticipated to be received for the
twelve months from the effective date of the (re)certification. Complete a separate line for each income-earning member. List the
respective household member number from Part II.
Column (A) Enter the annual amount of wages, salaries, tips, commissions, bonuses, and other income from employment;
distributed profits and/or net income from a business.
Column (B) Enter the annual amount of Social Security, Supplemental Security Income, pensions, military retirement,
etc.
Column (C) Enter the annual amount of income received from public assistance (i.e., TANF, general assistance,
disability, etc.).
Column (D) Enter the annual amount of alimony, child support, unemployment benefits, or any other income regularly
received by the household.
Row (E) Add the totals from columns (A) through (D), above. Enter this amount.
Part IV - Income from Assets
See HUD Handbook 4350.3 for complete instructions on verifying and calculating income from assets, including acceptable
forms of verification.
From the third party verification forms obtained from each asset source, list the gross amount anticipated to be received during the
twelve months from the effective date of the certification. List the respective household member number from Part II and complete a
separate line for each member.
Column (F) List the type of asset (i.e., checking account, savings account, etc.)
Column (G) Enter C (for current, if the family currently owns or holds the asset), or I (for imputed, if the family has
disposed of the asset for less than fair market value within two years of the effective date of
(re)certification).
Column (H) Enter the cash value of the respective asset.
Column (I) Enter the anticipated annual income from the asset (i.e., savings account balance multiplied by the annual
interest rate).
TOTALS Add the total of Column (H) and Column (I), respectively.
If the total in Column (H) is greater than $5,000, you must do an imputed calculation of asset income. Enter the Total Cash Value,
multiply by 2% and enter the amount in (J), Imputed Income.
Row (K) Enter the greater of the total in Column (I) or (J)
Row (L) Total Annual Household Income From all Sources Add (E) and (K) and enter the total
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HOUSEHOLD CERTIFICATION AND SIGNATURES
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 Tenant Income Certification. For move-in, it is recommended that the Tenant Income Certification be signed no earlier
than 5 days prior to the effective date of the certification.
Part V – Determination of Income Eligibility
Total Annual Household Income
from all Sources
Enter the number from item (L).
Current Income Limit per Family
Size
Enter the Current Move-in Income Limit for the household size.
Household Income at LIHTC
Qualification Date
Effective Date of LIHTC Income Certification: If the current Tenant Income
Certification (TIC) did not update the tenant’s income information and the TIC is
reporting previous income, enter the effective date of the income qualification
corresponding to the total annual household income.
If income certification is not required annually, this may be different from the effective
date listed in Part I.
Household Size at LIHTC
Qualification Date
If the current Tenant Income Certification (TIC) did not update the tenant’s household
size information and the TIC is reporting previous information, enter the number of
tenants corresponding to the total annual household income entered in Box L.
If income certification is not required annually, this may be different from the number of
tenants listed in Part II.
Household Meets Income
Restriction
Check the appropriate box for the income restriction that the household meets according
to what is required by the set-aside(s) for the project.
Current Income Limit x 140% For re-certifications only. Multiply the Current Maximum Move-in Income Limit by
140% and enter the total. Below, indicate whether the household income exceeds that
total. If the Gross Annual Income at recertification is greater than 140% of the current
income limit, then the available unit rule must be followed.
Part VI - Rent
Tenant Paid Rent Enter the amount the tenant pays toward rent (not including rent assistance payments
such as Section 8).
Rent Assistance Enter both the Federal and Non-Federal amount of rent assistance, if any. Be sure to
enter separate amounts for each source.
Source Enter the source of the Federal rental assistance
Utility Allowance Enter the utility allowance. If the owner pays all utilities, enter zero.
Other non-optional charges Enter the amount of non-optional charges, such as mandatory garage rent, storage
lockers, charges for services provided by the development, etc.
Gross Rent for Unit Enter the total of Tenant Paid Rent plus Utility Allowance and other non-optional
charges.
Maximum Rent Limit for this unit Enter the maximum allowable gross rent for the unit.
Unit Meets Rent Restriction at Check the appropriate rent restriction that the unit meets according to what is required
by the set-aside(s) for the project.
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Part VII - Student Status
If all household members are full time* students, check “yes”. If at least one household member is not a full time student, check “no”.
If “yes” is checked, the appropriate exemption must be listed in the box to the right. If none of the exemptions apply, the household is
ineligible to rent the unit.
*Full time is determined by the school the student attends.
Part VIII – Program Type
Mark the program(s) for which this household’s unit will be counted toward the property’s occupancy requirements. Under each
program marked, indicate the household’s income status as established by this certification/recertification. If the property does not
participate in the HOME, Tax-Exempt Bond, Affordable Housing Disposition, or other housing program, leave those sections blank.
Tax Credit See Part V above.
HOME If the property participates in the HOME program and the unit this household will occupy will count
towards the HOME program set-asides, mark the appropriate box indicting the household’s designation.
Tax Exempt If the property participates in the Tax Exempt Bond program, mark the appropriate box indicating the
household’s designation.
AHDP If the property participates in the Affordable Housing Disposition Program (AHDP), and this household’s
unit will count towards the set-aside requirements, mark the appropriate box indicting the household’s
designation.
Other If the property participates in any other affordable housing program, complete the information as
appropriate.
SIGNATURE OF OWNER/REPRESENTATIVE
It is the responsibility of the owner or the owner’s representative to sign and date this document immediately following execution by
the resident(s).
The responsibility of documenting and determining eligibility (including completing and signing the Tenant Income Certification form)
and ensuring such documentation is kept in the tenant file is extremely important and should be conducted by someone well trained in
tax credit compliance.
These instructions should not be considered a complete guide on tax credit compliance. The responsibility for compliance with federal
program regulations lies with the owner of the building(s) for which the credit is allowable.
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Loan Agreement
By and Between
Housing and Redevelopment Authority of Edina, Minnesota
And
The Sound on 76th Limited Partnership
F-2 4819-3883-7706\3
TABLE OF CONTENTS
Page
Definitions ..................................................................................................................................... 4
Section 1.01. Definitions ................................................................................................................. 4
The TIF Loan ................................................................................................................................ 7
Section 2.01. Loan ........................................................................................................................... 7 Section 2.02. Authorized Use of Loan Proceeds ............................................................................. 7 Section 2.03. Repayment ................................................................................................................. 7 Section 2.04. Prepayment ................................................................................................................ 8
Conditions Precedent to Advances ................................................................................................ 8
Section 3.01. Conditions Precedent to Disbursement ...................................................................... 8 Section 3.02. Disbursement of TIF Loan Proceeds ....................................................................... 10
Covenants, Warranties, Representations and Agreements of Borrower ..................................... 10
Section 4.01. Enforceable Documents ........................................................................................... 10 Section 4.02. Ownership................................................................................................................ 10 Section 4.03. Financial Statements ................................................................................................ 10 Section 4.04. Project Construction ................................................................................................ 10 Section 4.05. Use of TIF Loan Proceeds ....................................................................................... 10 Section 4.06. Performance ............................................................................................................. 10 Section 4.07. Additional Documents ............................................................................................. 10 Section 4.08. No Prior Liens ......................................................................................................... 11 Section 4.09. Books and Records .................................................................................................. 11 Section 4.10. Changes in the Work ............................................................................................... 11 Section 4.11. Taxes and Assessments ........................................................................................... 11 Section 4.12. Expenses of the Project............................................................................................ 11 Section 4.13. Evidence of Insurance ............................................................................................. 11 Section 4.14. Hazardous Waste ..................................................................................................... 11 Section 4.15. Hours and Wages ..................................................................................................... 12 Section 4.16. Commencement and Completion of Construction .................................................. 12 Section 4.17. Stormwater Discharge and Water Management Plan Requirements ....................... 12
Defaults and Remedies ................................................................................................................ 12
Section 5.01. Events of Default ..................................................................................................... 12 Section 5.02. Notice of Default ..................................................................................................... 13 Section 5.03. Remedies ................................................................................................................. 13 Section 5.04. Remedies Not Exclusive .......................................................................................... 14 Section 5.05. Waiver; Forbearance ............................................................................................... 14
Section 5.06. Attorneys’ Fees ........................................................................................................ 14
Additional Provisions .................................................................................................................. 14
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Section 6.01. Indemnification by Borrower .................................................................................. 14 Section 6.02. Damage, Destruction and Condemnation ................................................................ 15 Section 6.03. Application of Net Proceeds .................................................................................... 15 Section 6.04. Insufficiency of Net Proceeds .................................................................................. 15 Section 6.05. Cooperation of City ................................................................................................. 15 Section 6.06. Conflict of Interests/Code of Ethics; Authority Representatives Not Individually Liable ............................................................................................................ 15 Section 6.07. Equal Employment Opportunity .............................................................................. 15 Section 6.08. Prohibited Activity .................................................................................................. 16
Miscellaneous .............................................................................................................................. 16
Section 7.01. Notices ..................................................................................................................... 16 Section 7.02. Delay and Non-Waiver of Rights ............................................................................ 17 Section 7.03. Survival of Warranties ............................................................................................. 17 Section 7.04. Governing Law ........................................................................................................ 17 Section 7.05. Counterparts ............................................................................................................ 17 Section 7.06. Time ......................................................................................................................... 17 Section 7.07. Entire Agreement ..................................................................................................... 17 Section 7.08. Severability .............................................................................................................. 17 Section 7.09. Signs; Public Events ................................................................................................ 17 Section 7.10. No Joint Venture ...................................................................................................... 18 Section 7.11. Limitation on Authority Liability ............................................................................ 18 Section 7.12. Authority Approval; Representatives ...................................................................... 18 Section 7.13. Rider ........................................................................................................................ 18
List of Exhibits Exhibit A Legal Description of Land Exhibit B Permitted Encumbrances Exhibit C Loan Rider (TIF) Exhibit D Funding Sources
F-4 4819-3883-7706\3
TIF Loan Agreement
This TIF Loan Agreement (this “Agreement”) is made and entered into as of this ___ day of
________________, 2020 by and between The Sound on 76th Limited Partnership, (“Developer” or “Borrower”), 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” or
“Lender”).
A. Developer has submitted a proposal to the City of Edina, Minnesota (the “City”) for the new construction of a building to provide 70 housing units on the real property located at 4100 76th Street West, Edina, Minnesota, and legally described on Exhibit A (the “Project”).
B. The Project is located within the “West 76th Street TIF District” (the “TIF District”), a housing tax increment financing (“TIF”) district created by the Authority and the City pursuant to and in conformity with Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.174 to 469.1794, inclusive, as amended (the “TIF Act”) and special modifications to the TIF Act secured by the Authority
and the City to support the creation of new affordable housing in the City as set forth in Minnesota Session Laws 2014, Chapter 308, Article 6, Section 8, as amended by Minnesota Session Laws 2017, First Special Session Chapter 1, Article 6, Sections 11 and 16 and Minnesota Session Laws 2019, First Special Session
Chapter 6, Article 7, Section 3 (the “Special TIF Housing Legislation”).
C. The Authority and Developer have entered into that certain Redevelopment Agreement dated September 10, 2020 (as amended, the “Redevelopment Agreement”), pursuant to which the Authority
has agreed to provide certain financial assistance to Developer to support the construction of the Project and development of new affordable housing in accordance with the TIF plan for the TIF District (the “TIF Plan”).
D. In accordance with the Redevelopment Agreement and the TIF Plan, the Authority, as Lender, has agreed to loan, and Developer, as Borrower, has agreed to borrow, upon the terms and conditions of this Agreement, the aggregate amount of up to $2,400,000.00 (the “TIF Loan”) to finance Borrower’s construction of the Project, which TIF Loan will be funded from certain tax increment generated from the existing Southdale 2 TIF District in accordance with the Special TIF Housing Legislation.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in consideration of the mutual covenants and agreements hereinafter contained, the parties hereto hereby agree as follows:
Definitions
Section 1.01. Definitions. For the purposes of this Agreement, the following terms shall have the
following meanings:
“Affordable Housing Restrictive Covenant” means the restrictive covenant in substantially the form attached to the Redevelopment Agreement as Exhibit J, to be executed by Borrower and recorded
against the Project as provided in the Redevelopment Agreement.
“City” shall mean the City of Edina, a Minnesota municipal corporation.
“Completion Date” shall mean the date when development of the Project and related activities upon
the Premises have been completed and a Certificate of Completion has been issued by the Authority
F-5 4819-3883-7706\3
pursuant to the Redevelopment Agreement, which date shall be on or before July 1, 2022, subject to Unavoidable Delays and any extensions granted by the Lender.
“Construction and Other Documents” shall mean the following documents, all of which shall be in form and substance acceptable to Lender:
(a) Evidence satisfactory to the Lender showing that the Borrower by the Date of Closing will have title in fee simple and site control of the Land, subject only to Permitted Encumbrances.
(b) A signed, itemized and sworn construction cost statement.
(c) A total project cost statement sworn to by the Borrower to be a true, complete and accurate account of all costs actually incurred and a reasonable estimate of costs to be incurred for the Project.
(d) One copy of the Construction Plans.
(e) One copy of a recent survey of the Land prepared by a registered land surveyor dated within
120 days of the Date of Closing describing and showing the Land and the location of the Improvements thereon, disclosing easements (both appurtenant and encumbrances upon the Land, giving appropriate ownership and recording data), encroachments, if any, and
disclosing all unsatisfactory survey conditions, if any (the “Survey”). The Survey shall bear a proper surveyor’s certificate, including the legal description of the Land, the legal description of all easements both appurtenant and encumbrances and shall state that the
survey and certificate run to the benefit of Lender and Title. The Survey shall specifically show the following matters to the extent possible at the time of the Survey:
(i) dimensions and total square footage area of the Land surveyed with acreage
designation to three decimal points; and
(ii) the location and names of adjoining public roads and streets.
(f) Copies of the Other Project Financing Documents, the Master Subordination Agreement, the master disbursement agreement, and the documents providing for all additional funds necessary to pay all Construction Costs.
(g) Borrower’s organizational documents, including all relevant partnership agreements, articles of incorporation, bylaws, authorizing resolutions, certificates of good standing, and 501(c)(3) certifications.
“Construction Costs” shall mean all costs paid to complete construction of the Project Improvements, including, but not limited to, site preparation costs, architectural fees, engineering fees, surveying charges, contractor fees, bond fees, insurance costs, legal fees, and all costs of labor, material
and services paid or incurred by Borrower, as shown on a sworn construction cost statement approved by Lender.
“Construction Plans” shall mean the written plans and specifications for the Project, which shall be
approved in writing by the Lender prior to the advances disbursed pursuant to Article 3 and which are hereby made a part hereof, along with other drawings and related documents on the construction work to be performed by Borrower or its contractor on the Premises, which (a) shall be as detailed as the plans,
F-6 4819-3883-7706\3
specifications, drawings and related documents which are submitted to the building inspector of the City; and (b) shall include at least the following: (1) site plan; (2) basement plans, if applicable; (3) floor plan for
each floor; (4) landscape plan; and (5) signage as described in Section 7.09. Borrower agrees that all work items within the plans and specifications pertaining to mechanical, electrical or structural work shall have been reviewed, approved and/or certified by the appropriate licensed or registered professional engineer or
architect as required by law and necessary to ensure health and safety.
“Construction Start Date” shall mean the date on which the construction of the Project Improvements begins, which shall be no later than 30 days after the Date of Closing.
“Date of Closing” shall mean the date on which the TIF Loan Documents are delivered, the Article 3 “Conditions Precedent to Advances” are met, and the Project status is satisfactory to Lender, which date shall be on or before May 1, 2021.
“Disbursement Agreement” shall mean that certain disbursement agreement dated as of the date of this Agreement by and between Lender, Borrower and Title for disbursement of the TIF Loan Proceeds, to
be in a form reasonably acceptable to Lender, Borrower and Title.
“Eligible Project Costs” means the total of all Construction Costs.
“Land” shall mean the real property comprising the Project, located in the County of Hennepin,
State of Minnesota, legally described on Exhibit A attached hereto and hereby made a part hereof.
“Master Subordination Agreement” means the master subordination agreement to be entered into by any among the Lender and each of the lenders of the Other Project Financing.
“Net Proceeds” shall mean, when used with respect to any insurance or condemnation award, the gross proceeds from the insurance or condemnation award remaining after payment of all expenses incurred to collect such award.
“Other Project Financing” shall mean the funding sources listed on Exhibit D.
“Other Project Financing Documents” shall mean the documents creating, evidencing or securing the Other Project Financing.
“Permitted Encumbrances” shall mean those matters set forth on Exhibit B attached hereto.
“Project” shall mean the Land and the Project Improvements.
“Project Improvements” shall mean new construction on the Land to provide 70 rental housing units for low or moderate income tenants, and related improvements comprising the Project, all in accordance with the TIF Project Documents.
“TIF Loan” means the loan in the amount of $2,400,000.00 loaned to Borrower for the Project by the Lender and the loan made pursuant to this Agreement.
“TIF Loan Documents” shall mean this Agreement, the TIF Loan Note, the TIF Loan Mortgage
and a request for notice of foreclosure for the benefit of Lender.
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“TIF Loan Mortgage” shall mean a mortgage, security agreement and fixture financing statement made by Borrower in favor of Lender and securing the TIF Loan Note, to be in a form reasonably acceptable
to Lender.
“TIF Loan Note” shall mean the promissory note of Borrower evidencing the TIF Loan dated as of the Date of Closing in the original principal amount of $2,400,000.00, payable to Lender and in a form
reasonably acceptable to Lender.
“TIF Loan Proceeds” shall mean the funds available from the TIF Loan to be disbursed through this Agreement and used to pay Eligible Project Costs.
“TIF Project Agreements” means the Redevelopment Agreement and the Affordable Housing Restrictive Covenant.
“Title” shall mean Guaranty Commercial Title, Inc., a Minnesota corporation.
“Unavoidable Delays” shall mean delays in the performance of obligations for construction of the Project Improvements hereunder due to unforeseeable causes beyond the control of Borrower and without
its fault or negligence, including but not limited to acts of God, acts of public enemy, the direct result of strikes, other labor troubles, fire, floods, epidemics, quarantines, restrictions, unavailability of power, unavailability of materials, acts of governmental entities including legislative or administrative action,
unusually severe weather or delays of subcontractors due to such causes, or other casualty to the improvements and litigation commenced by third parties which by injunction or other similar judicial action directly results in delays and other events beyond the control of Borrower.
The TIF Loan
Section 2.01. Loan. The TIF Loan Proceeds are being loaned by Lender to Borrower pursuant to the terms of this Agreement. Borrower accepts the TIF Loan as a loan pursuant to the terms of this Agreement.
Section 2.02. Authorized Use of Loan Proceeds. The TIF Loan Proceeds shall be used to pay Eligible Project Costs actually incurred for the Project. If TIF Loan Proceeds are used to pay for any costs other than Eligible Project Costs, Borrower shall promptly repay Lender the amount of TIF Loan Proceeds used to pay such costs other than Eligible Project Costs. Lender shall not be responsible for any cost overrun which may be incurred by Borrower or others in undertaking the Project or the Project Improvements.
Section 2.03. Repayment. The TIF Loan shall be evidenced by the TIF Loan Note, secured by the TIF Loan Mortgage and repaid with interest as follows:
(1) No interest shall accrue on the outstanding principal balance of the TIF Loan.
(2) As of the fortieth (40th) anniversary of the Completion Date, the entire outstanding principal
balance of the TIF Loan, if not previously paid, shall be due and payable in full.
(3) At any time prior to the full repayment of the TIF Loan, the entire unpaid principal balance of the TIF Loan shall be immediately due and payable upon the occurrence of the earliest of the following
Events of Default:
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(a) The sale, assignment, conveyance, transfer, lease, lien, encumbrance, or refinancing of the Project by Borrower without the Lender’s prior written consent, except for leases to tenants
in the ordinary course of business and the transfer of limited partnership interests in the Borrower pursuant to the Borrower’s Partnership Agreement; or
(b) Termination of use of the Project as rental housing for low or moderate income tenants prior to full repayment of the TIF Loan as required herein or by the TIF Project Agreements; or
(c) Any use of the Project or a portion of the Project which violates any federal, state or local law, statute, or ordinance, which includes illegal discrimination, pornography, gambling or drug related activities; provided, however, that Borrower shall not be in default as a result of illegal activities at the Project by tenants of the Project if Borrower is diligently pursuing all reasonable actions to prohibit such illegal activities; or
(d) Default by Borrower in the performance of any other covenant, term or condition of this
Agreement; the Note; the Mortgage; or any other agreement or mortgage relating to or encumbering the Project.
(4) Upon the occurrence of one of the Events of Default specified above, Lender shall give written
notice to Borrower as provided in Section 7.01 of this Agreement, specifying: (i) the event of default; (ii) the action required to cure the event; (iii) a date not less than thirty (30) days from the date the notice is mailed to Borrower by which such default must be cured; and (iv) that failure to
cure such default on or before the date specified in the notice may result in acceleration of the TIF Loan. The limited partners of the Borrower shall have the right but not the obligation to cure an Event of Default during the applicable cure period as required herein and such cure shall be
accepted or rejected by Lender as though such cure had been performed by Borrower.
Section 2.04. Prepayment. Borrower shall have the right, but not the obligation, to prepay without penalty the TIF Loan, or any portion thereof at any time, and from time to time, prior to the date on which the same become due, as herein provided. Any such prepayment shall be applied first to interest due thereon and the remainder, if any, to principal.
Conditions Precedent to Advances
Section 3.01. Conditions Precedent to Disbursement. The obligation of the Lender to authorize the disbursement of TIF Loan Proceeds shall be subject to the conditions precedent that Borrower shall be in compliance with the terms of this Agreement and the following conditions:
(a) Borrower shall be in compliance with the TIF Loan Documents.
(b) Borrower shall have delivered, without expense to the Lender, the TIF Loan Documents and the Construction and Other Documents.
(c) Borrower shall have deposited in escrow with Title or otherwise have committed
to the satisfaction of Lender 100% of all equity, loan proceeds or other project funds, including the Other Project Financing, sufficient, together with the TIF Loan, to pay all unpaid Eligible Project Costs.
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(d) All filing and permit fees, charges, expenses and taxes shall have been paid by Borrower; and all required insurance policies shall be in appropriate amounts, name all insureds,
and be in full force and effect as evidenced by the certificates of insurance.
(e) Construction Plans relating to the Project shall have been approved in writing by the City and Lender.
(f) Evidence satisfactory to Lender that Borrower has established a separate account ledgering system within the Project’s line-item budgeting for the exclusive purpose of recording the receipt and expenditure of the TIF Loan Proceeds.
(g) No TIF Loan Proceeds shall be disbursed prior to the Construction Start Date.
(h) No Event of Default as defined in Section 5.01 or event which would constitute such an Event of Default but for the requirement that notice be given or that a period of grace or time elapse, shall have occurred and be continuing and all representations and warranties made by Borrower in Article 4 shall continue to be true and correct as of the date of such disbursement.
(i) No determination shall have been made by Lender or Title that the undisbursed amount of the TIF Loan Proceeds and the other financing committed to the Project, including Lender Loans and the Other Project Financing are less than the amount required to pay all costs
and expenses of any kind which reasonably may be anticipated in connection with the completion of the Project, including Projects Costs; or if such a determination has been made and notice thereof sent to Borrower, Borrower has deposited the necessary funds with Title in accordance with the
Disbursement Agreement.
(j) The disbursement requirements hereof and of Title set forth in the Disbursement Agreement and any master disbursement agreement for the Project have been satisfied.
(k) Borrower shall have provided to Lender such evidence of compliance with all of the provisions of this Agreement as Lender may reasonably request.
(l) If required by the Lender or Title, Lender and Title shall be furnished with a statement of Borrower and of Contractor, in form and substance required by Lender or Title, setting forth the names, addresses and amounts due or to become due as well as the amounts previously paid to every contractor, subcontractor, person, firm or corporation furnishing materials or performing labor for the construction of the Project.
(m) No license or permit necessary for the environment remediation of the Project shall
have been revoked or the issuance thereof subjected to challenge before any court or other governmental authority having or asserting jurisdiction thereover.
(n) Construction of the Project Improvements has begun by the Construction Start
Date and is being or has been completed in accordance with the Construction Plans.
(o) Lender shall have received evidence that all requisite permits and other approvals have been issued.
(p) Title shall have received or shall simultaneously receive a lien waiver from each contractor, subcontractor or materials supplier for all work done and for all materials furnished by it for the Project covered by the requested disbursement.
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Section 3.02. Disbursement of TIF Loan Proceeds. Subject to Section 6.10 of this Agreement, the TIF Loan Proceeds shall be disbursed in accordance with disbursement procedures approved by Lender.
Lender will authorize disbursements of TIF Loan Proceeds only for Eligible Project Costs, and only after Lender has inspected the Project and approved Borrower’s Disbursement Request. Portions of the TIF Loan Proceeds will be paid by Lender from time to time, and only in the amounts as sufficient to pay Borrower’s approved Disbursement Request, or portions thereof, to Title to be disbursed to Borrower only as required by this Agreement and specifically by the terms of the Disbursement Agreement.
Covenants, Warranties, Representations and Agreements of Borrower
Borrower covenants, warrants, represents and agrees throughout the term of this Agreement:
Section 4.01. Enforceable Documents. Borrower is a limited partnership duly organized and in good standing under the laws of the State of Minnesota, is lawfully authorized to acquire, construct, equip,
operate and maintain the Project and has full power and authority to enter into this Agreement and the Construction and Other Documents. That this Agreement and the Construction and Other Documents have all been duly executed and delivered, and assuming due execution and delivery by the other parties thereto,
such documents constitute the legally binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms.
Section 4.02. Ownership. Borrower is the fee owner and has possession of the Land.
Section 4.03. Financial Statements. The financial statements of Borrower previously or hereafter delivered to the Lender have been prepared in accordance with generally accepted accounting principles and accurately present Borrower’s financial condition as of the date of such statements.
Section 4.04. Project Construction. The construction of the Project Improvements will be undertaken strictly in accordance with the Construction Plans. To the best of Borrower’s knowledge, the construction of the Project Improvements, both during the work and at the time of completion, will not violate any applicable federal, state or local environmental laws, ordinances, regulations, permits, zoning, subdivision, or use statute, ordinance, building code, rule or regulation, or any covenant or agreement of record.
Section 4.05. Use of TIF Loan Proceeds. All TIF Loan Proceeds shall be used solely to pay Eligible Project Costs actually incurred by Borrower.
Section 4.06. Performance. Borrower will (i) keep, perform, enforce and maintain in full force and effect all of the terms, covenants, conditions and requirements of this Agreement and the Construction and Other Documents; (ii) not amend, cancel, change, terminate, supplement or waive any of the terms,
covenants or conditions of the Construction and Other Documents, except as herein provided, without the consent of the Lender, which consent will not be unreasonably withheld; and (iii) execute such amendments, modifications and extensions of the Construction and Other Documents as may be requested
by the Lender.
Section 4.07. Additional Documents. Borrower will, upon the demand of the Lender, from time to time and at any time, deliver to the Lender updated and recertified copies of the Construction and Other
Documents.
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Section 4.08. No Prior Liens. Borrower will not grant a security interest in, or create, permit to be created or allow to exist any liens, charges or encumbrances on the Project other than the Permitted
Encumbrances as described on Exhibit B and other loans as described and permitted in any master disbursement agreement for the Project.
Section 4.09. Books and Records. Borrower will establish and maintain accurate and complete books, accounts and records pertaining to the Project in manner acceptable to the Lender and Title. The Lender and Title, and their representatives, shall have the right but not the obligation, at all reasonable times to inspect, examine and copy all books and records of Borrower relating to the Project and to inspect all work done, labor performed and material furnished in or about the Project. Notwithstanding the foregoing, Borrower shall be responsible for making inspections to the Project during the course of construction and shall determine to its own satisfaction that the work done or materials supplied by all contractors have been properly supplied in accordance with the applicable contract. Borrower will hold the Lender harmless and the Lender shall have and has no liability or obligation of any kind to Borrower or creditors of Borrower,
in connection with any defective, improper or inadequate workmanship or material brought in or related to the Project, or any mechanic’s liens arising as a result of such workmanship or materials.
Section 4.10. Changes in the Work. Borrower shall not permit changes in the Construction Plans
reasonably estimated to cost in excess of $10,000.00 in any one subcontract or in excess of $25,000.00 under the overall Construction Contract without the Lender’s prior written approval, which approval will not be unreasonably withheld. If Borrower desires to make any change in the Construction Plans that alter
or affect the site plan, exterior materials, colors or elevation of the structure, or signage, Borrower shall submit the proposed change to the Lender for its approval. The Lender shall reasonably approve or reject the proposed change and notify Borrower in writing within five (5) days after receipt of the notice of such change. The Lender shall approve any addition to the Project that complies with the requirements for the Construction Plans and the TIF Project Agreements, provided Borrower shall update the Project Budget to account for the change and contribute sufficient additional funds to pay the Construction Costs attributable
to the change.
Section 4.11. Taxes and Assessments. Borrower shall pay and discharge, when due, all taxes, assessments and other government charges upon the Project, as well as claims for labor and materials which, if unpaid, might by law become a lien or charge upon the Project; provided, that any such taxes, assessments, charges or claims need not be paid so long as Borrower is contesting such payment in good faith by appropriate proceedings which avoid foreclosure of liens securing such items. Borrower and the Lender agree that, notwithstanding the foregoing, special assessments on the Premises arising out of improvements made thereon in connection with the development of the same will be paid by Borrower in
annual installments and will be permitted encumbrances so long as the same are not delinquent.
Section 4.12. Expenses of the Project. Borrower shall pay the following costs and expenses in connection with the Project: all hazard and liability insurance premiums, title insurance premiums and
servicing fees, bond premiums, recording and filing fees, mortgage registration taxes and the fees and disbursements of counsel for the Lender in the exercise of any right or remedy available to it under this Agreement or otherwise by law or equity.
Section 4.13. Evidence of Insurance. Borrower shall at all times maintain in effect and furnish the Lender with policies of and proof of payment of premiums on the insurance policies described in Article 1 hereof.
Section 4.14. Hazardous Waste. Borrower has inspected the Project and, other than as previously disclosed to the Lender in writing, is not aware of, nor has discovered on said Project any hazardous substances, hazardous wastes, pollutants, or contaminants as those terms are defined under any Federal,
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State of Minnesota, or local statute, ordinance, code, or regulation, and further warrants that it will not, nor cause to be, nor will allow any other person to deposit, store, dispose of, place, or otherwise locate or allow
to be located on or within the Project, any of the above referenced hazardous substance, except such hazardous substances as are ordinary and necessary for the construction or operation of the Project, provided that such use is in accordance with all applicable laws, and that in the event any such hazardous substances are found on or within the Project, Borrower will indemnify the Lender as provided in Section 6.03 herein.
Section 4.15. Hours and Wages. Borrower will cause all contracts entered into by it or by any Contractor for construction of the Project to comply with the wage and hour standards issued by the United States Secretary of Labor pursuant to the Davis-Bacon Act, 40 U.S.C. Secs. 3141-3147, as amended, and the Contract Work Hours and Safety Standards Act, 40 U.S.C. Secs. 3701 et seq. The appropriate date for the wage decision shall be the earliest of (i) the date of formal bid opening for either the general contractor (if the general contractor was competitively procured) or for the subcontractor (if the general contractor
was not competitively procured) provided the Construction Contract is awarded within 90 days; (ii) the start of construction; and (iii) the date of the Construction Contract where complete construction specifications are included; with such wage decision modified and updated as required by federal labor
standards. Borrower shall cause its Contractor and all subcontractors with employment hours to submit certified payroll into Lender’s Department of Civil Rights’ on-line database by the 10th of each month following any month in which labor was performed.
Section 4.16. Commencement and Completion of Construction. Borrower shall commence construction of the Project Improvements by the Construction Start Date, and shall diligently prosecute completion of the Project by the Completion Date, subject to Unavoidable Delays.
Section 4.17. Stormwater Discharge and Water Management Plan Requirements. Borrower shall meet all applicable requirements of Federal and state laws relating to stormwater discharges, including, without limitation, any applicable requirements of Code of Federal Regulations, title 40, parts
122 and 123; and
Defaults and Remedies
Section 5.01. Events of Default. Any of the following events shall constitute an “Event of Default” under this Agreement if such event shall occur anytime between the date of this Agreement and the date the TIF Loan is fully repaid and satisfied:
(a) Borrower shall default in the performance or observance of any agreements or conditions required to be performed or observed by Borrower under the terms of this Agreement;
(b) The occurrence of one of the Events of Default specified Section 2.03(3);
(c) Any representation or warranty made by Borrower in this Agreement, the TIF Project Agreements, the TIF Loan Documents or in any of the Construction and Other Documents
shall prove untrue in any material respect or materially misleading as of the time such representation or warranty was made;
(d) Borrower shall be in default under the terms of the TIF Loan Documents,
Construction and Other Documents, the TIF Project Agreements, the Other Project Financing Documents, and any conditions governing the payment of any other funds necessary for development of the Project, and such default shall not be cured by Borrower or waived by the
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appropriate lender within the period of grace, if any, applicable to such default under the terms of such instruments;
(e) Construction of the Project Improvements shall be abandoned, or shall be unreasonably delayed or discontinued for a period of thirty (30) consecutive days or more, for reasons other than Unavoidable Delays;
(f) Borrower shall become unable to pay its debts as the same become due, or shall make an assignment for the benefit of creditors or shall be adjudicated a bankrupt; or shall file a voluntary petition in bankruptcy or to effect a plan or other arrangement with creditors, or to liquidate assets under court supervision; or shall have applied for or permitted the appointment of a receiver or trustee or custodian for any of the property or assets of Borrower or a trustee, receiver or custodian shall have been appointed for any property or assets of Borrower who shall not have been discharged within sixty (60) days after the date of such appointment, or shall have made application to a court of competent jurisdiction to become dissolved;
(g) Execution shall have been levied against the Project or any lien creditor’s suit to enforce a judgment against the Project shall have been brought and (in either case) shall continue unstayed and in effect for a period of more than sixty (60) days; or
(h) The Project is materially damaged or destroyed by fire or other casualty and the loss is not adequately covered by insurance proceeds actually collected or in the process of collection, or other funds of Borrower.
Section 5.02. Notice of Default. Upon the occurrence of one of the Events of Default as defined in Section 5.01 hereof, the Lender shall give written notice to Borrower as provided in Section 7.01 of this Agreement, specifying: (i) the Event of Default; (ii) the action required to cure the Event of Default; (iii) a date not less than thirty (30) days from the date the notice is mailed to Borrower by which such Event of Default must be cured (except with respect to Section 5.01(d) for which any applicable cure periods shall have already expired); and (iv) that failure to cure such Event of Default on or before the date specified in the notice (except with respect to Section 5.01(d) for which any applicable cure periods shall have already expired) may result in acceleration of the TIF Loan and appropriate legal action, that may include foreclosure of the TIF Loan Mortgage. The limited partners of Borrower shall have the right but not the obligation to cure any Event of Default during the applicable cure period and such cure shall be accepted by Borrower as though such cure had been performed by Borrower.
Section 5.03. Remedies. Upon the occurrence of any Event of Default as defined in Section 5.01 hereof, and notice as provided in Section 5.02, the Lender, at its option, in addition to any other remedies to which it might by law be entitled to, shall have the right to do one or more of the following:
(a) To enter into possession of the Project and perform any and all work and labor necessary to complete all or any part of the Project, at the cost and expense of Borrower, to operate and manage the Project, and to do all things necessary or incidental thereto; provided, however,
that the Lender shall not be obligated in any way to complete the Project or to pay for costs thereof;
(b) To perform such other acts or deeds which may be necessary to cure any default existing under this Agreement, the TIF Project Agreements, the TIF Loan Documents or the
Construction and Other Documents;
(c) To cancel this Agreement;
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(d) To bring appropriate action to enforce such performance and the correction of such failure or default;
(e) To demand Borrower to repay the amount disbursed from the TIF Loan Proceeds, together with all other sums payable hereunder, immediately due and payable without presentment, demand, protest, notice of dishonor or any other notice;
(f) To suspend its performance under this Agreement during the continuance of the Event of Default; or
(g) To suspend disbursement of the TIF Loan Proceeds during the continuance of the Event of Default; or
(h) To foreclose the TIF Loan Note and TIF Loan Mortgage, or realize upon any other security securing the TIF Loan.
Section 5.04. Remedies Not Exclusive. No right or remedy by this Agreement or by any document or instrument delivered by Borrower pursuant hereto, conferred upon or reserved to the Lender shall be or
is intended to be exclusive of any other right or remedy, and each and every right and remedy shall be cumulative and in addition to any other right or remedy now or hereafter existing at law or in equity or by statute.
Section 5.05. Waiver; Forbearance. Except as the Lender may hereafter otherwise agree in writing, no waiver by the Lender of any breach or default of Borrower, of any of its obligations, agreements or covenants under this Agreement shall be deemed to be a waiver of any subsequent breach of the same,
or any other obligation, agreement or covenants under this Agreement, nor shall any forbearance by the Lender to seek a remedy for such breach be deemed a waiver of its rights and remedies with respect to such breach, nor shall the Lender be deemed to have waived any of its rights and remedies unless it be in writing
and executed with the same formality as this Agreement.
Section 5.06. Attorneys’ Fees. In the event either the Borrower or the Lender commences a legal action to enforce the provisions of this Agreement, the prevailing party in such action shall be entitled, as
a part of said action, to recover all its costs and expenses, including reasonable attorneys' fees.
Additional Provisions
Notwithstanding any provisions of this Agreement, which may be construed to be apparently to the contrary, the following provisions shall apply:
Section 6.01. Indemnification by Borrower. Borrower will defend, protect, indemnify and save the Lender, its agents, officers and employees harmless from and against any and all liabilities, losses, damages, costs and expenses, whether personal, property, or contractual, including reasonable attorney’s
fees, arising out of, or related to, the use, non-use, ownership, or occupancy of the Project and the construction, condition or maintenance of the Project, and from any act or negligence of Borrower, its officers, employees, servants, agents or contractors; provided, however, that nothing herein shall be
construed to obligate Borrower to protect, indemnify, and save the Lender and its officers and employees harmless from and against liabilities, losses, damages, costs, expenses (including attorney’s fees) arising from the negligent or tortious acts of the Lender, or any of its agents, employees or officers. Borrower’s
liability hereunder shall not be limited to the extent of insurance carried by or provided by Borrower or
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subject to any exclusions from coverage in any insurance policy. The obligations of Borrower under this Section shall survive the termination of this Agreement.
Section 6.02. Damage, Destruction and Condemnation. If, (i) the Project or any portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty or (ii) title to or any interest in, or the temporary use of, the Project or any part thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority, and Borrower is unable to complete the Project due to fire or other casualty or condemnation, the Lender shall not be obligated to continue to disburse any TIF Loan Proceeds and may, at the Lender’s option, terminate this Agreement.
Section 6.03. Application of Net Proceeds. All Net Proceeds shall be applied in one or more of the following ways as shall be elected by Borrower in a written notice to the Lender: To the prompt repair, restoration, modification or improvement of the Project by Borrower. Any balance of the Net Proceeds remaining after such work has been completed shall be used first to repay the Other Project Financing that
has priority over the TIF Loan pursuant to the Master Subordination Agreement, then to repay the TIF Loan, then to repay the Other Project Financing that is subordinate to the TIF Loan pursuant to the Master Subordination Agreement.
Section 6.04. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvement referred to in Section 6.03 hereof, Borrower will elect in a written notice to the Lender to (a) terminate this Agreement, or (b) complete the work and
pay any cost in excess of the amount of the Net Proceeds. Borrower agrees that if by reason of any such insufficiency of the Net Proceeds, Borrower shall make any payments pursuant to the provisions of this Section, Borrower shall not be entitled to any reimbursement therefore from the Lender, nor shall Borrower
be entitled to any diminution of the amounts payable under Section 2.02 hereof.
Section 6.05. Cooperation of City. The Lender shall cooperate fully with Borrower at the expense of Borrower in filing any proof of loss with respect to any insurance policy covering the casualties described in Section 6.03 hereof and in the prosecution or defense of any prospective or pending condemnation proceeding with respect to the Project or any part thereof or any property of Borrower in connection with which the Project is used and will, to the extent it may lawfully do so, permit Borrower to litigate in any proceeding resulting therefrom in the name and behalf of the Lender. In no event will the Lender voluntarily settle, or consent to the settlement of, any proceeding arising out of any insurance claim or any prospective or pending condemnation proceeding with respect to the Project or any part thereof without the written consent of Borrower so long as there has not occurred and is continuing an Event of Default hereunder.
Section 6.06. Conflict of Interests/Code of Ethics; Authority Representatives Not Individually
Liable.
(a) No member, official, or employee of the Authority or the City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official, or
employee participate in any decision relating to this Agreement which affects his personal interests or the interest of any corporation, partnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the Authority or the City shall be personally liable
to Borrower or any successor in interest, in the event of any default or breach by the Authority or for any amount which may become due to Borrower or successor or on any obligations under the terms of this Agreement.
Section 6.07. Equal Employment Opportunity. Borrower agrees for itself and its successors and assigns, that:
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(a) Borrower will comply with applicable federal, state and local laws, rules and regulations regarding equal employment opportunities, including nondiscrimination provisions
contained in Chapter 181, Minnesota Statutes, the Americans with Disabilities Act of 1990 (as amended), Section 109 of the Housing and Community Development Act of 1974 (as amended), the Age Discrimination Act of 1975 (as amended) and Executive Order 11246, as amended by
Executive Order 12086.
(b) Borrower is committed to the concept of equal opportunity in both participation by women and minority business enterprises and employment of women and minorities, and agrees that the affirmative action program of Borrower is binding on Borrower.
(c) For three years from the date of this Agreement or up through the Completion Date, whichever is later, Borrower will include the provisions of this Section in every contract or purchase order, and will require the inclusion of these provisions in every subcontract entered into by any of its contractors for the Project, so that such provisions will be binding upon each such
contractor, subcontractor, or vendor, as the case may be. Borrower will take such action with respect to any construction contract, subcontract, or purchase order as City may direct as a means of enforcing such provisions, including sanctions for noncompliance.
(d) In the event of the Borrower’s noncompliance with these nondiscrimination clauses, the contract may be cancelled, terminated, or suspended, in whole or in part,.
Section 6.08. Prohibited Activity. Borrower and its successors and assigns agree that they are
prohibited from using TIF Loan Proceeds provided herein or personnel employed in the administration of the activities funded hereunder for political activities, sectarian, religious, or antireligious activities, lobbying, political patronage, nepotism, unionization or antiunionization activities. Borrower may not force
any employees to be placed into or remain working in any position that is affected by a labor dispute.
Miscellaneous
Section 7.01. Notices. All notices provided for herein shall be in writing and shall be deemed to have been given when delivered personally or when deposited in the United States mail, registered or certified, postage prepaid, addressed as follows:
If to Borrower: The Sound on 76th Limited Partnership c/o Aeon 901 North Third Street, Suite 150 Minneapolis, MN 55401 Attn: Asset Management
With a copy to: Faegre Baker Daniels LLP 90 South Seventh Street 2200 Wells Fargo Center
Minneapolis, MN 55402 Phone: (612) 766-6833 Fax: (612) 766-1600
Attn: Angela M. Christy, Esq
If to Lender: Housing and Redevelopment Authority of Edina, Minnesota 4801 West 50th Street
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Edina, MN 55424 Attention: Executive Director
If to Title: Guaranty Commercial Title, Inc. 465 Nicollet Mall, Suite 230 Minneapolis, MN 55402
Attn: Wendy Ethen
or addressed to any such party at such other address as such party shall hereafter furnish by notice to the other parties as above provided.
Section 7.02. Delay and Non-Waiver of Rights. The provisions of this Agreement shall inure to the benefit of and be binding upon Borrower and the Lender and their respective successors and assigns. No delay on the part of the Lender in exercising any right, power or privilege shall operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege constitute such waiver nor exhaust the same, which shall be continuing. The rights and remedies of the Lender specified in this
Agreement shall be in addition to and not exclusive of any other right and remedies which the Lender, by operation of law, would otherwise have.
Section 7.03. Survival of Warranties. All agreements, representations and warranties made in this
Agreement shall survive its execution, and the execution of the TIF Loan Documents, and shall continue until the Lender receives payment in full for all indebtedness of Borrower incurred under this Agreement, unless this Agreement is terminated as herein provided.
Section 7.04. Governing Law. This Agreement shall be construed and enforced according to and governed by the laws of the State of Minnesota.
Section 7.05. Counterparts. This Agreement may be executed in any number of counterparts, all of which shall constitute a single agreement, any one of which bearing signatures of all parties shall be deemed an original.
Section 7.06. Time. Time is of the essence in the performance of this Agreement.
Section 7.07. Entire Agreement. This Agreement contains the entire agreement of the parties hereto on the matters covered herein. No other agreement, statement or promise made by any party or by any employees, officer, or agent of any party hereto that is not in writing and signed by all the parties to this Agreement shall be binding.
Section 7.08. Severability. If any term, condition or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be held to be invalid or unenforceable, the remainder thereof and the application of such term, provision and condition to persons or circumstances other than those as to whom it shall be held invalid or unenforceable shall not be affected thereby, and this
Agreement and all the terms, provisions and conditions hereof shall, in all other respects, continue to be effective and to be complied with to the full extent permitted by law.
Section 7.09. Signs; Public Events.
(a) Borrower shall, prior to commencement of construction, erect, at its own expense, a sign in a prominent position on the Premises indicating to the general public that the Authority is providing financing for the Project. Borrower agrees that said sign may remain in place throughout
the period of construction and for sixty (60) days beyond completion thereof, after which time it
F-18 4819-3883-7706\3
will be removed by Borrower. With respect to such sign, it is recommended that (i) the primary colors be green lettering on white background with the lettering being of professional quality and
use the Authority or City logo, (ii) weatherproof materials be used, (iii) it shall be of sufficient size, in any event, the minimum size shall be 4’ by 6’ and include the name of the Project, Borrower, the Contractor, the Architect, and the phrase “this Project is being developed with the assistance and cooperation of CITY OF EDINA, the EDINA HOUSING AND REDEVELOPMENT AUTHORITY, and the METROPOLITAN COUNCIL.”
(b) Borrower shall furnish ample notice to the Authority of ground breaking, opening ceremonies and similar events so that the Authority may obtain publicity of and participation in such events. Borrower agrees to assist and cooperate in such publicity and participation. Borrower further agrees that the Authority shall have the right to issue press releases concerning the Project.
(c) Borrower shall identify the “Edina Housing and Redevelopment Authority” on all lists of funders, reports, press releases, etc., created to promote and highlight the Project and permit
the Authority to refer to the project in all literature, press releases, public statements, etc.
Section 7.10. No Joint Venture. The relationship between the Lender and Borrower is solely that of lender and borrower and is not, nor shall it be deemed to create, a partnership or joint venture in the
Project.
Section 7.11. Limitation on Authority Liability. No provisions contained in this Agreement nor any agreement, covenant or undertaking by the Authority contained in any document executed by the
Authority in connection with the Project shall give rise to any pecuniary liability of the Authority or charge against its general credit or taxing powers or shall obligate the Authority financially in any way except with respect to the funding of the TIF Loan Proceeds.
Section 7.12. Authority Approval; Representatives. Unless the Board of the Authority determines otherwise in its discretion, whenever this Agreement provides for approval by or consent of the Authority, such approval or consent shall be given by and effective upon action, respectively, by the Executive Director of the Authority or their designee, unless (a) this Agreement explicitly provides for approval or consent by the Board of the Authority, (b) approval or consent by the Board of the Authority is required by applicable Law, or (c) the approval or consent, in the opinion of the Executive Director, would result in a material change in the terms of this Agreement.
Section 7.13. Rider. The Rider attached hereto as Exhibit C are incorporated herein.
(Signature pages follow.)
F-19
[Signature Page to TIF Loan Agreement] 4819-3883-7706\3
IN FURTHERANCE WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
BORROWER:
THE SOUND ON 76TH LIMITED PARTNERSHIP, a Minnesota limited partnership
By: 4100 Edina LLC, a Minnesota limited liability company, its General Partner
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
F-20
[Signature Page to TIF Loan Agreement] 4819-3883-7706\3
LENDER:
HOUSING AND REDEVELOPMENT AUTHORITY
OF EDINA, MINNESOTA
By: _________________________________________
James B. Hovland, Chair
By: _________________________________________ Scott H. Neal, Executive Director
F-21
[Exhibit A to TIF Loan Agreement] 4819-3883-7706\3
EXHIBIT A LEGAL DESCRIPTION
The Land described in the referenced instrument is located in Hennepin County, Minnesota, and is described as follows:
Tract J, Registered Land Survey No. 1129, Hennepin County, Minnesota.
Torrens Property
F-22
[Exhibit B to TIF Loan Agreement] 4819-3883-7706\3
EXHIBIT B PERMITTED ENCUMBRANCES
1. Liens for taxes and special assessments not then delinquent, or delinquent but being contested by the Borrower.
2. Utility, access and other easements and rights-of-way, restrictions and exceptions that the Borrower certifies will not interfere with or impair the operation of the Project.
3. Any mechanic’s, laborer’s, materialman’s, supplier’s, or vendor’s lien or right in respect thereof if payment is not yet due under the contract in question or if such lien is being properly contested by Borrower.
4. Any building, zoning and subdivision ordinances and any other applicable development, pollution control, water conservation and other laws, regulations, rules and ordinances of the Federal Government and State of Minnesota and respective agencies thereof and the political subdivisions
in which the Project is located.
5. Other encumbrances as agreed to by Lender.
F-23 [Exhibit C to TIF Loan Agreement] 4819-3883-7706\3
EXHIBIT C LOAN RIDER (TIF)
This Loan Rider (the “Rider”) is attached to and made a part of that certain Loan Agreement dated as of _______________, 2020 (the “Loan Agreement”) entered into 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 (“Lender”) and The Sound on 76th Limited Partnership (the “Borrower”), and modifies the Loan Agreement and all of the other documents entered into by Borrower in connection with the Loan (collectively, the “Loan Documents”) respecting that certain $2,400,000 loan from Lender (the “Loan”), all with respect to the development of a 70-unit multifamily residential development, situated in Edina, Minnesota and known as The Sound on 76th (the “Project”). The Borrower and Lender hereto agree that the collateral securing the Loan encumbers Borrower’s leasehold interest in the Project and that the following terms and agreements shall be part of and shall modify or supplement
each of the Loan Documents, and shall prevail in the event of conflict or inconsistency between this Rider and the Loan Documents, or any of them:
1. Non-recourse Obligation. Payment and performance of the obligations set forth in the
Loan Documents shall be non-recourse to Borrower and Borrower’s general and limited partners, and the Lender’s sole recourse with respect to the Loan shall be the right to foreclose under the Combination Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Financing Statement and other
collateral forming part of the Loan Documents; provided that this provision shall not restrict any exceptions to non-recourse liability of Borrower set forth in the Loan Documents, for such matters as fraud, waste and other similar actions and non-actions of the general partner of Borrower, in which cases the Lender has the right to sue Borrower under the Loan Documents for damages. In all events, Borrower’s limited partner shall have no liability under the Loan Documents.
2. General Partner Change. The withdrawal, removal, transfer and/or replacement of the general partner of Borrower pursuant to the terms of the Amended and Restated Agreement of Limited Partnership of Borrower (“Borrower’s Partnership Agreement”) shall not require the consent of Lender nor constitute a default under any of the Loan Documents, and any such actions shall not accelerate the maturity of the Loan; provided that Borrower agrees to notify the Lender of any proposed replacement general partner prior to replacement, and, upon replacement, shall notify the Lender of the name and contact
information of the replacement general partner with reasonable promptness.
3. Transfer of Limited Partner Interests. Nothing in the Loan Documents shall limit or restrict the ability of Borrower’s limited partner, its successors and assigns (the “Limited Partner”) to transfer, sell or assign its ownership interest in Borrower, from time to time, without the consent of or notice to Lender, provided that said Limited Partner remains liable for payment of any then unpaid capital contributions to Borrower, as and when payable, as set forth in Borrower’s Partnership Agreement,
notwithstanding any such transfer, sale or assignment. In particular, Lender hereby consents to any transfers, sales or assignments of limited partnership interests in Borrower to any affiliate of the Limited Partner or any entity in which the Limited Partner, or an affiliate, is the manager, managing member, or
general partner and agrees that such transfers shall not constitute a default under the Loan Documents.
4. Replacement of Management Agent. The Lender acknowledges that Borrower’s Limited Partner has the right, under the Borrower’s Partnership Agreement, to direct the general partner to remove the Project’s property management agent. Borrower agrees to give Lender notice of the proposed replacement property management agent, and the Lender agrees to consent to same, assuming that such replacement property management agent is acceptable to Borrower’s Limited Partner and has experience
F-24 [Exhibit C to TIF Loan Agreement] 4819-3883-7706\3
in managing projects occupied by low-income households pursuant to Section 42 of the Internal Revenue Code.
5. Notice. All notices to Borrower’s Limited Partner shall be sent in accordance with the procedures for delivering notices set forth in the Loan Documents to the following address or such alternate or additional contact names and/or addresses of which Lender is so notified in writing by the Limited
Partner:
U.S. Bancorp Community Development Corporation 1307 Washington Avenue, Suite 300 Mail Code: SL MO RMCD St. Louis, MO 63103 Attn.: Director of LIHTC Asset Management USB Project No.: 25287 Phone: (314) 335-2600
Fax: (314) 335-2601 With a copy to: _____________________________
_____________________________ _____________________________ Attn.: ________________________
Phone: _______________________ Fax: _________________________
6. Notice and Cure Rights. The Lender agrees to give the Limited Partner written notice of any and all defaults by the Borrower under the Loan Documents, and an opportunity, at the Limited Partner’s option, to cause the cure of such default within the cure periods set forth below, prior to exercising any remedies under the Loan Documents. The Lender agrees that the Limited Partner will have ten (10) days after the Limited Partner’s receipt of notice of such default to cure, or cause the cure of a monetary default under the Loan Documents, and thirty (30) days (or such longer period as is set forth in the Loan Documents) after the Limited Partner’s receipt of such notice to cure any non-monetary defaults under the Loan Documents, or, as to non-monetary defaults, such longer period as is reasonably necessary for the Limited Partner to effect a cure, provided that curative action is commenced within the above stated cure
period and diligently prosecuted, including, without limitation, such time as may be necessary to remove Borrower’s general partner, if necessary to effect a cure. The Lender agrees to accept cure by the Limited Partner as if such cure were made by Borrower.
7. Insurance and Condemnation Proceeds. The Lender agrees that insurance and condemnation proceeds shall be used to rebuild or restore the Project; provided that (i) if such proceeds are not reasonably sufficient to so rebuild or repair, sufficient additional funds are provided from other sources
to rebuild or restore the Project and (ii) Lender shall have the right to reasonably approve plans and specifications for any major rebuilding and the right to reasonably approve disbursement of such proceeds under a construction escrow or similar arrangement, subject to the prior rights of any and all senior lenders,
which rights shall prevail in the event of inconsistency or conflict.
8. Partial Subordination to Section 42 Extended Use Agreement. Notwithstanding anything in the Loan Documents to the contrary, if the Lender takes title to the Project through foreclosure or deed in lieu of foreclosure, the Project shall remain subject to the provisions of Section 42(h)(6)(E)(ii) of the Internal Revenue Code of 1986 (“Code”) or any similar successor provision of the Code. This section shall apply notwithstanding the order of recording of any of the Loan Documents and the Extended Use Agreement (as such term is defined in the Borrower’s Partnership Agreement), executed in connection with
F-25 [Exhibit C to TIF Loan Agreement] 4819-3883-7706\3
the allocation of federal low income housing tax credits to the Borrower for the Project pursuant to Section 42 of the Code.
9. Debt Service Coverage Requirements. So long as Borrower is current on all debt service payments payable under the Loan, the failure to meet any debt service coverage requirements at any time or times shall not constitute a default under the Loan, nor prohibit any distribution or payment to Borrower’s
partners or to Affiliates of Borrower or its partners.
10. Force Majeure. There shall be no default under the Loan Documents for construction or rehabilitation delays beyond the reasonable control of the Borrower.
11. Purchase Rights. The Lender consents to those purchase options, put rights and rights of first refusal in favor of the general partner of Borrower or its designee which are set forth in Borrower’s Partnership Agreement, and agrees that transfer of title to the Project in accordance therewith shall not constitute a default under the Loan Documents; provided that Borrower gives Lender prior written notice of such transfer and contact information for such transferee, and provided that the transferee agrees to
assume the duties and obligations of the Borrower respecting the Loan on the same terms as those imposed on the Borrower.
12. Lender Approvals. Lender agrees that all approvals and consents of the Lender under the
Loan Documents shall not be unreasonably withheld, delayed or conditioned. Further, amendments to Borrower’s Partnership Agreement entered into in order to effect transfers or assignments of the Limited Partner’s or the general partner’s interest pursuant to Sections 2, 3 and 11 above shall not require the consent
or approval of the Lender.
13. Third Party Beneficiary. Borrower’s Limited Partner, and its successors and assigns, is a third party beneficiary of the rights of Borrower under the Loan Documents, as modified by this Rider and
has the right to directly enforce such rights.
14. Prepayment. Borrower shall have the right to prepay the Loan, at any time, in full or in part, without notice or penalty.
F-26 [Exhibit D to TIF Loan Agreement] 4819-3883-7706\3
EXHIBIT D FUNDING SOURCES
LENDER SOURCE AMOUNT
Minnesota Housing Finance Agency $6,193,000
Minnesota Housing Finance Agency EDHC $888,634
Hennepin County $500,000
Hennepin County $500,000
City of Edina LCDA $493,500
Aeon Private $2,400,000
City of Edina HRA TIF $2,400,000
City of Edina LHIA $500,000
G-14840-2196-4490\2
Exhibit G
Form of Release of Right of Reverter
Release of Right of Reverter
Date: __________ ___, 2020
FOR VALUABLE CONSIDERATION, the real property in Hennepin County, Minnesota, legally
described on the attached Exhibit A is hereby released from that certain right of reverter (“Right of Reverter”) owned by the undersigned and described in Section 3.9 of that certain Redevelopment Agreement dated as of September 10, 2020, as evidenced by Memorandum of Redevelopment Agreement,
dated as of _____________, 2020 and recorded on _____________, 2020 in the office of the Registrar of Titles for Hennepin County, Minnesota as Document No. __________________ (collectively, the “Redevelopment Agreement”). Except as set forth in this instrument, all of the terms, covenants, and
conditions of the Redevelopment Agreement remain in full force and effect.
Check here if all or part of the described real property is Registered (Torrens)
HOUSING AND REDEVELOPMENT AUTHORITY
OF EDINA, MINNESOTA
By: ______________________________________ Name: Scott Neal Its: Executive Director
STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of ______________, 2020, by Scott Neal, the Executive Director of the Housing and Redevelopment Authority of Edina, Minnesota, on behalf of said Authority.
Notary Public
DRAFTED BY, AND AFTER RECORDING RETURN TO: Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500
Minneapolis, MN 55402-1498
G-2[Exhibit A to Release of Right of Reverter] 4840-2196-4490\2
Exhibit A
Description of Property
Tract J, Registered Land Survey No. 1129, Hennepin County, Minnesota
Torrens Property
H-14841-2262-7786\2
Exhibit H
Form of Project Funding Certificate
Project Funding Certificate
THE SOUND ON 76TH LIMITED PARTNERSHIP, a Minnesota limited partnership
(“Developer”) has entered into that certain Redevelopment Agreement with the HOUSING AND
REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA (the “Authority”), dated effective as of
July 30, 2020 (the “Agreement”).
Developer hereby certifies to the Authority, pursuant to Section 4.6 of the Agreement, that the funding
sources identified in Exhibit 1, attached hereto, have been fully committed and available to Developer for the construction of the Project.
Dated: __________________
DEVELOPER:
THE SOUND ON 76TH LIMITED PARTNERSHIP,
a Minnesota limited partnership
By: 4100 Edina LLC, a Minnesota limited liability
company, its General Partner
By: ___________________________________
Name:_________________________________
Its: ___________________________________
H-2 4841-2262-7786\2
Exhibit 1 to
Project Funding Certificate (The Sound on 76th)
U.S. Bank National Association (Construction Loan) $14,331,267.00
Minnesota Housing Finance Agency $6,585,000.00
Minnesota Housing Finance Agency (EDHC) $888,634.00
Hennepin County (HOME) $500,000.00
Aeon Loan $206,000.00
U.S. Bancorp Community Development Corporation (Equity) $11,295,887.00
1 4843-0717-7162\3
Exhibit I
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 _____________, 2020, by THE SOUND ON 76TH LIMITED PARTNERSHIP, a Minnesota limited partnership (“Declarant”).
Recitals
A.Declarant is the owner of certain real property situated in the City of Edina (the “City”),county of Hennepin, state of Minnesota, located at 4100 West 76th Street, Edina Minnesota and legally described in the attached Exhibit A (the “Property”).
B.Declarant 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”) are parties to that certain Redevelopment Agreement dated July 30, 2020 (as may be amended from time to time, the “Redevelopment Agreement”).
C.The Redevelopment Agreement provides for the redevelopment of the Property byDeclarant with the cooperation and assistance of the Authority and provides for the expenditure of certain public funds to assist in such redevelopment of the Property and construction thereon of a four-story, 70-
unit, 100% affordable, housing community, known as “The Sound on 76th” (the “Project”).
D.The City, by Resolution No 2020-32, dated March 4, 2020, approved Declarant’s finalrezoning, planned unit development ordinance, and final development plan for the Project (the
“Approvals”).
E.Pursuant to the Redevelopment Agreement and as a condition to the Approvals, Declaranthas agreed to impose certain restrictive covenants upon the Property to ensure that at least 100% 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 restrictivecovenants 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.
G.Capitalized terms in this Declaration have the meaning provided in the RedevelopmentAgreement unless otherwise defined herein.
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:
2 4843-0717-7162\3
1. Use Restriction. The Property shall not be used for any purpose other than a multifamily rental housing facility and related activities meeting the requirements set forth in Section 2 hereof, without
the prior written approval of the City and the Authority during the period commencing on the date hereof (“Commencement Date”) and ending on the 40-year anniversary of the Commencement Date (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 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.
2. Occupancy Requirements and Restrictions.
(a) Affordable Units. The Affordable Units will consist of the following mix of
affordability levels:
(i) at least eight of the Affordable Units will be reserved for households who have a combined gross annual income which does not exceed 30% of AMI (each a “30%
Unit”), four of which will be set aside for High Priority Homeless individuals (the “30% Units”) and four (4) of which will be given preference for persons with disabilities. If any subsidy in connection with the 30% Units is withdrawn or otherwise no longer available,
the 30% Units may be reserved for households who have a combined gross annual income which does not exceed 60% of AMI for the 30% Units;
(ii) at least 35 of the Affordable Units will be reserved for households who have a combined gross annual income which does not exceed 50% of AMI (each a “50% Unit”); and
(iii) at least 27 of the Affordable Units will be reserved for households who have a combined gross annual income which does not exceed 60% of AMI (each a “60% Unit”).
For purposes of this Declaration, “AMI” means the Area Median Income for the Minneapolis-Saint Paul-Bloomington Metropolitan Statistical Area (including adjustments for household size), as determined by the U.S. Department of Housing and Urban Development (“HUD”).
(b) Qualifying Tenants. Each Affordable Unit shall be leased to and occupied (or held vacant and available for occupancy) for the duration of the Term only by a household who, at initial
occupancy, has a combined gross annual income which does not exceed the respective AMI threshold for each type of Affordable Unit (each a “Qualifying Tenant”) (e.g., each 30% Unit may only be leased to and occupied by a Qualifying Tenant whose gross annual income does not exceed
30% of AMI, etc.). Each subsequent tenant of an Affordable Unit must be a Qualifying Tenant.
(c) Rental Rates. Each Affordable Unit shall bear annual rents not greater than the rental rate limits for the applicable Qualifying Tenants (adjusted for bedroom count, and including
utilities and mandatory fees) 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 greater
3 4843-0717-7162\3
than 30% of the respective AMI thresholds listed in Section 2(a) (e.g., annual rents for the 50% Units shall not be greater than 30% of 50% of AMI). Notwithstanding the foregoing, if any subsidy
or housing support in connection with the HPH Units is withdrawn or otherwise not available, the rents for the 30% Units may be increased to 60% of AMI.
(d) 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 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-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.
(e) 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, the form of lease to be 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 tenants 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.
4 4843-0717-7162\3
(f) Affordable Unit Mix. The Affordable Units shall be distributed as follows:
(i) 17, one-bedroom units (which will be no less than 676 square feet in size);
(ii) 35, two-bedroom units (which will be no less than 960 square feet in size); and
(iii) 18, three-bedroom units (which will be no less than 1,215 square feet in
size).
Changes in the distribution of units set forth below shall require the prior written approval of the Executive Director of the Authority and City Manager of the City.
3. 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. Declarant shall not be required to recertify existing tenants if all of the Affordable Units are occupied by Qualifying Tenants during the year. The initial deadline for submission of such certification is three months following the Commencement Date
and thereafter an annual deadline for submission by the last business day of February each year.
(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, including any additional costs necessitated by re-inspections for
noncompliance with this Declaration.
(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.
5 4843-0717-7162\3
(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.
4. Additional Covenants, Representations, and Warranties of Declarant.
(a) Legal Compliance. Declarant shall maintain the Affordable Units and the Project in compliance with all requirements of the Redevelopment Agreement and 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 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 in accordance with the Declarant’s approved Affirmative Fair Housing Marketing Plan as affordable at the rates required hereunder.
(e) LIHTC LURA. The City and the Authority acknowledge that, upon completion of the Project, the Property will be encumbered by a land use restriction agreement (“LURA”) in connection with low income housing tax credits obtained by Declarant for the Project in accordance with Section 42 of the Internal Revenue Code (“LIHTC”), restricting the use of the Property to affordable housing in accordance with LIHTC requirements. For so long as the LURA remains in effect against the Property, this Declaration shall be subordinate to the terms and conditions of the LURA and to the extent of any conflict or inconsistency between the terms of the LURA and the terms of this Declaration, the terms of this LURA shall prevail and such prevailing terms shall be deemed to be modify and replace the applicable terms of this Declaration. If the LURA is
terminated prior to the expiration of the Term, then this Declaration will continue in full force and effect in accordance with its original terms until the expiration of the Term.
(f) Consents and Subordination. Notwithstanding anything herein to the contrary, this
Declaration shall be subordinated or junior to any prior mortgage or other security interest in or lien upon any portion of the Project (a “Mortgage”) only with the Authority’s written consent, and if any Mortgage exists at the time this Declaration is recorded, Declarant shall use commercially
reasonable efforts to cause the mortgagee under such Mortgage to subordinate such Mortgage and the lien thereof to this Declaration. Other than the LURA, except as approved by the Authority, 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
6 4843-0717-7162\3
paramount and controlling as to the rights and obligations set forth herein and supersede any other document's provisions in conflict herewith.
(g) Transfer Restrictions. Subject to the terms and conditions of the Redevelopment Agreement and the 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 Redevelopment Agreement incorporated herein). Such notification shall not be required by any lender foreclosing on the Property. Failure by Declarant to obtain such acknowledgment shall not be deemed to impair the covenants and restrictions of this Declaration.
(h) Alterations; Use. Declarant shall not demolish any part 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.
(i) Casualty. Promptly upon any casualty loss or damage to all or any part of the Project (including subsurface structural support elements), Declarant shall proceed with diligence
to restore the Project to the condition prior to the casualty with the insurance proceeds obtained with respect to the loss or damage to the extent the insurance proceeds recovered allow for such rebuilding; provided, however, Declarant shall not be obligated to rebuild the Project if any of
Declarant’s lenders or loan agreements or governmental requirements (whether executed before or after the date hereof) do not permit such rebuilding or require that insurance amounts recovered with respect to any loss or damage to the Project be paid directly to the lender.
5. 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, the City or the Authority may exercise any remedy available to it under the
Redevelopment Agreement.
6. 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), resulting from third party 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.
7 4843-0717-7162\3
7. 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 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.
8. 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: The Sound on 76th Limited Partnership c/o Aeon Attn: Asset Management 901 North Third Street, Suite 150 Minneapolis, MN 55401
with a copy to: Faegre Drinker Biddle & Reath LLP
Attention: Angela M. Christy, Esq 90 South Seventh Street 2200 Wells Fargo Center
Minneapolis, MN 55402
and:
U.S. Bancorp Community Development
Corporation 1307 Washington Avenue, Suite 300 Mail Code: SL MO RMCD St. Louis, MO 63103
USB Project No: 26977
Attn.: Direct of LIHTC Asset Management
8 4843-0717-7162\3
and
Jill Goldstein, Esq. Kutak Rock LLP 1650 Farnam Street Omaha, NE 68102
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
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.
9. 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.
10. 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.
11. 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.
12. 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 Pages Follows]
[Signature Page to Declaration of Covenants and Restrictions] 4843-0717-7162\3
IN WITNESS WHEREOF, Declarant has caused this Declaration to be executed as of the date first written above
THE SOUND ON 76TH LIMITED PARTNERSHIP, a Minnesota limited partnership
By: 4100 Edina LLC, a Minnesota limited liability
company, its General Partner
By: ___________________________________
Name:_________________________________
Its: ___________________________________
STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of _________________, 2020 by ______________________________, the ______________________ of 4100 Edina LLC, a Minnesota limited liability company, General Partner of The Sound on 76th Limited Partnership, a
Minnesota limited partnership, on behalf of the limited liability company and limited partnership.
____________________________________________
Notary Public
THIS DOCUMENT WAS DRAFTED BY: Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402-1498
[Exhibit A to Declaration of Covenants and Restrictions] 4843-0717-7162\3
Exhibit A
Legal Description of the Property
Tract J, Registered Land Survey No. 1129, Hennepin County, Minnesota
Torrens Property
B-1 [Exhibit B to Declaration of Covenants and Restrictions] 4843-0717-7162\3
Exhibit B
Form of Certification of Tenant Eligibility
B-2 [Exhibit B to Declaration of Covenants and Restrictions] 4843-0717-7162\3
D-3 4843-0717-7162\3
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 4100 West 76th Street, Edina, Minnesota (the “Project”), is being provided by THE SOUND ON 76TH LIMITED PARTNERSHIP, a Minnesota limited partnership (“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 ________________ ___,
20___ (the “Declaration”), with respect to the Project:
(A) The total number of Affordable Units which are available for occupancy is 70. The total number of these units occupied is _________________.
(B) The total number of units occupied by “Qualifying Tenants,” as the term is defined in the Declaration (for a total of 70 units) is ____________ (may use the Table below or attach a rent roll)
___________ _________________ _________________
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
D-4 4843-0717-7162\3
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(C) Declarant has obtained a “Certification of Tenant Eligibility,” in the form provided as Exhibit B to the Declaration, from each Tenant named in above, and each such Certificate is
being maintained by Declarant in its records with respect to the Project. Attached hereto is the most
D-5 4843-0717-7162\3
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, who are not eligible for an exception under Section 42 of the Internal Revenue Code. 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 70 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___.
THE SOUND ON 76TH LIMITED PARTNERSHIP, a Minnesota limited partnership
By: 4100 Edina LLC, a Minnesota limited liability company, its General Partner
By: ___________________________________
Name:_________________________________
Its: ___________________________________
K-14843-9106-3242\3
Exhibit J
Form of Memorandum of Redevelopment Agreement
Memorandum of Redevelopment Agreement
This Memorandum of Redevelopment Agreement (this “Memorandum”) is entered into as of September 10, 2020, 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 (“Authority”), and THE SOUND ON 76TH LIMITED PARTNERSHIP, a Minnesota limited partnership (“Developer”).
RECITALS:
A.The Authority and Developer (collectively, the “Parties”) have entered into a certainRedevelopment Agreement dated as of September 10, 2020 (as the same may be amended or supplemented from time to time, the “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 Agreement.
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 Agreement.
3.The Parties have entered into the 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 ofrecording 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.
5. The terms and conditions of the Agreement are incorporated by reference into thisMemorandum as if fully set forth herein, including, without limitation, specifically the right of reverter of
the Property in favor of the Authority if Developer fails to cause the Commencement of construction of the Project by May 1, 2021.
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]
K-2[Signature Page to Memorandum of Redevelopment Agreement (The Sound on 76th)] 4843-9106-3242\3
IN WITNESS WHEREOF, the Parties have executed this Memorandum as of the date first written above.
HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA, a public body corporate and politic organized and existing under the laws of the State
of Minnesota
By: James B. Hovland, Chair
By: Scott H. Neal, Executive Director
STATE OF MINNESOTA )
) ss. COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of _________________,
2020, by James B. Hovland and Scott H. Neal, the Chair and Executive Director, respectively, of 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, on behalf of said Authority.
Notary Public
K-3[Signature Page to Memorandum of Redevelopment Agreement (The Sound on 76th)] 4843-9106-3242\3
THE SOUND ON 76TH LIMITED PARTNERSHIP, a Minnesota limited partnership
By: 4100 Edina LLC, a Minnesota limited liability company, its General Partner
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of _________________, 2020 by ______________________________, the ______________________ of 4100 Edina LLC, a
Minnesota limited liability company, General Partner of The Sound on 76th Limited Partnership, a Minnesota limited partnership, on behalf of the limited liability company and limited partnership.
____________________________________________ Notary Public
THIS DOCUMENT WAS DRAFTED BY: Dorsey & Whitney LLP 50 South Sixth Street Suite 1500 Minneapolis, MN 55402-1498
K-4[Exhibit A to Memorandum of Redevelopment Agreement (The Sound on 76th)] 4843-9106-3242\3
Exhibit A
Legal Description
Tract J, Registered Land Survey No. 1129, Hennepin County, Minnesota
Torrens Property
MINNESOTA STATE HISTORIC PRESERVATION OFFICE
50 Sherburne Avenue ▪ Administration Building 203 ▪ Saint Paul, Minnesota 55155 ▪ 651-201-3287
mn.gov/admin/shpo ▪ mnshpo@state.mn.us
AN EQUAL OPPORTUNITY AND SERVICE PROVIDER
September 2, 2020 VIA E-MAIL
Ms. Jennifer Wille
Minnesota Housing Finance Agency
400 Wabasha Street North, Suite 400
Saint Paul MN 55012
RE: Demolition of Former Flyte Tyme Studios and Construction of “The Sound on 76th” Apartment
Building at 4100 West 76th Street
Edina, Hennepin County
SHPO Number: 2020-0912
Dear Ms. Wille,
We last wrote to you on February 21, 2020, a letter in which our office provided comments in response
to your agency’s historic property identification efforts, pertaining to the former Flyte Tyme Studios
eligibility for listing in the National Register of Historic Places, and Section 106 finding of effect for the
above-referenced federal undertaking.
As you know, our office reviewed the report titled “Flyte Tyme Studios (formerly Twin City Biscuit Co.)
Building Historic Evaluation, 4100 West 76th Street, Edina, Minnesota” (Summit Envirosolutions, January
2019) which was provided by your agency as part of the Section 106 review. After reviewing the
evaluation report, our office concurred with the consultant’s finding that Flyte Tyme Studios (SHPO
Inventory Number HE-EDC-00661) is ineligible for listing in the National Register of Historic Places
(National Register), despite the property’s likely significance under Criterion A for events contributing to
the broad patterns of the music industry, and likely significance under Criterion B for its association with
James “Jimmy Jam” Harris and Terry Lewis, both of whom have made substantial contributions to the
Minneapolis Sound and the music industry as a whole.
Since there were no other identified historic properties within an assumed area of potential effect, our
office determined that no historic properties would be affected by the proposed federal undertaking.
On August 17-18 and August 24, 2020, our office received via e-mail, several letters and supporting
documentation from individuals and organizations interested in the historic significance of the former
Flyte Tyme Studios building and the proposed demolition as part of this federal undertaking. The
following letters, except for Stonebridge Learning LLC, were addressed to Stephanie Hawkinson, City of
Edina, and Amy Spong, Deputy State Historic Preservation Officer:
• Memorandum dated August 17, 2020 and August 24th follow-up “Jimmy Jam and Terry Lewis,
1988-2003” historic context document from Kristen Zschomler, Sound History LLC;
• Letter dated August 17, 2020 from Barbara Howard, Director of Heritage Preservation,
Stonebridge Learning LLC;
• Memorandum dated August 17, 2020 from Charlene Roise, Historian;
• Letter dated August 18, 2020 from Katherine Haun Schuring, Advocacy Committee Chair,
Preserve Minneapolis; and
• Letter dated August 18, 2020 from Todd Wright, Acting Executive Director, on behalf of the
Rethos: Places Reimagined Staff & Board of Directors.
Most of the letters are from Historians and Architectural Historians who meet the Secretary of the
Interior’s Professional Qualification Standards and provide narrative analyses of the January 2019
Summit Envirosolutions evaluation as well as the individuals’ own historic context documentation and
re-evaluation of Flyte Tyme Studios.
On August 19, 2020 our office provided written notices via email, with courtesy copy to David Nuccio,
U.S. Department of Housing & Urban Development, alerting your agency that our office had received
new information regarding the historic significance of the Flyte Tyme Studios building from credible
interested parties.
As part of our notification to your agency, we forwarded all five letters to you that day as well.
Successive email communications among our office, your agency, and HUD, in the days following,
indicated that our office would proceed with a full evaluation of the new information regarding the
historic significance of Flyte Thyme Studios and provide you with an updated opinion regarding eligibility
for listing in the National Register. Our review and analysis of the new information is complete, and our
comments and conclusion are provided herein.
Evaluation of New Information
Flyte Tyme Studios faces two principal challenges to its listing in the National Register. First, although
Jimmy Jam and Terry Lewis are plainly significant individuals as defined in National Register Bulletin 15:
How to Apply the National Register Criteria for Evaluation, which states that “properties may be eligible
for the National Register if they are associated with the lives of persons significant in our past,” the
bulletin continues:
Properties associated with living persons are usually not eligible for inclusion in the National
Register. Sufficient time must have elapsed to assess both the person’s field of endeavor and
his/her contribution to that field. Generally, the person’s active participation in the endeavor
must be finished for this perspective to emerge.
Both Jimmy Jam and Terry Lewis continue to be a part of the music industry today.
The second challenge to Flyte Tyme Studio’s listing in the National Register is that it has achieved
significance within the last fifty years. Again, National Register Bulletin 15: How to Apply the National
Register Criteria for Evaluation states:
Fifty years is a general estimate of the time needed to evaluate significance. This consideration
guards against the listing of properties of passing contemporary interest and ensures that the
National Register is a list of truly historic places.
The additional documentation on Flyte Tyme Studios submitted to our office August 17-18 and 24, 2020
rightly notes that a property that is less than fifty years old can be determined eligible for listing in the
National Register if it can be demonstrated that the property is “exceptionally significant.” For example,
Sound 80, a studio in south Minneapolis, was recently listed in the National Register. The events that
made Sound 80 historically significant ended in 1981, which is thirty-nine years ago. For Sound 80, both
MN SHPO and the National Park Service concluded that a thirty-nine-year historical perspective was
enough to evaluate Sound 80 as exceptionally significant and worthy of a National Register listing.
The additional documentation recently submitted to our office stresses that Flyte Tyme Studios also
meets the exceptional significance standard. Further, the additional documentation questions the
analysis in the original evaluation study of Flyte Tyme Studios, believing its focus too narrow, based on
research that is lacking, and in some instances is simply incorrect.
While it is true that the additional documentation offers information that was not presented in the
original eligibility study for Flyte Tyme Studios, it is also true that Flyte Tyme Studios still faces the
challenges mentioned above. And unlike Sound 80, where the events that make the property historically
significant ended thirty-nine years ago, the events that make Flyte Tyme Studios historically significant
ended in 2003, only seventeen years ago. It is the very limited historical perspective, coupled with the
convention that properties associated with living persons are usually not listed in the National Register,
that convinces our office that it is unlikely Flyte Tyme Studios would be found exceptionally significant at
this moment in time and placed in the National Register. This belief is reinforced by the National Park
Service, which recently concluded the same regarding Flyte Tyme Studios’ eligibility.
Therefore, based upon our review and consideration of the new information submitted to our office by
qualified parties with an interest in this property and the proposed federal undertaking, it is our opinion
that the February 2020 determination of Flyte Tyme Studios as not eligible for listing in the National
Register remains valid.
Please feel free to contact me at (651) 201-3290 or sarah.beimers@state.mn.us if you would like to
discuss the comments provided in this letter.
Sincerely,
Sarah J. Beimers
Environmental Review Program Manager
Cc via email:
David Nuccio, Field Environmental Officer in MN and WI, HUD
Nancy Boone, Federal Preservation Officer, HUD
Stephanie Hawkinson, Affordable Housing Development Manager, City of Edina
Sarah Harris and Leslie Roering, Aeon
Angela Christy, Faegre Drinker Biddle & Reath LLP
Kristen Zschomler, Sound History LLC
Barbara Howard, Stonebridge Learning LLC
Katherine Haun Schuring, Preserve Minneapolis
Todd Wright, Rethos
Charlene Roise
Date: September 10, 2020 Agenda Item #: VIII.A.
To:Chair & Commissioners of the Edina HRA Item Type:
Report / Recommendation
From:Scott Neal, Executive Director
Item Activity:
Subject:Resolution No. 2020-05 Adopting the Proposed
Budget and Establishing the Proposed Tax Levy
Payable in 2021
Action
Edina Housing and Redevelopment
Authority
Established 1974
CITY OF EDINA
HOUSING & REDEVELOPMENT
AUTHORITY
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
ACTION REQUESTED:
Adopt Resolution No. 2020-05 Adopting the Proposed Budget and Establishing the Proposed Tax Levy Payable
in 2021.
INTRODUCTION:
The HRA is a separate taxing authority formed by the City Council in 1974. The purpose of the levy is to pay a
portion of the administrative expenses and other economic initiatives that are necessary to operate the HRA.
Historically those expenses have been paid using TIF funds. Continuing with the plan to reduce the reliance on
TIF funds, the levy proposed for 2021 shows an increase from $192,000 in 2021 to $230,400.
HRA adoption of this resolution is a required step in the process of establishing an HRA levy for 2021. The final
levy will be considered by the HRA in December.
ATTACHMENTS:
Description
Resolution No. 2020-05
EDINA HOUSING AND REDEVELOPMENT AUTHORITY
RESOLUTION NO. 2020-05
ADOPTING THE PROPOSED BUDGET AND ESTABLISHING THE PROPOSED TAX LEVY PAYABLE
IN 2021
WHEREAS, The Edina Housing and Redevelopment Authority (the “HRA”) has authorities and powers
according to MN Statutes, Sections 469.001 to 469.047. MN Statutes, Section 469.033, subd. 6 grants
the HRA the power to levy and collect taxes subject to a resolution of consent from the Edina City
Council for a set period.
WHEREAS, The Edina City Council passed Resolution 2019-55 consenting to an HRA tax levy payable in
2021.
NOW, THEREFORE, BE IT RESOLVED by the Board as follows:
Section 1: That there is proposed to be levied upon all taxable real and personal property in the
City of Edina, a tax rate sufficient to produce the amount as follows:
HRA GENERAL FUND $230,400
Section 2: That the preliminary budget is as follows:
HRA GENERAL FUND TAX LEVY REVENUES $230,000
HRA GENERAL FUND EXPENDITURES $230,400
Passed and adopted by the Housing and Redevelopment Authority on September 10, 2020.
ATTEST:
Michael A. Fischer, Secretary James B. Hovland, Chair
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 certify that the attached and foregoing Resolution was duly
adopted by the Edina Housing and Redevelopment Authority at its Regular Meeting of September 10,
2020, and as recorded in the Minutes of said Regular Meeting.
WITNESS my hand and seal of said City this ____ day of __________________, 20___.
_________________________________
Executive Director
Date: September 10, 2020 Agenda Item #: IX.A.
To:Chair & Commissioners of the Edina HRA Item Type:
Other
From:Liz Olson, Administrative Support Specialist
Item Activity:
Subject:Correspondence Information
Edina Housing and Redevelopment
Authority
Established 1974
CITY OF EDINA
HOUSING & REDEVELOPMENT
AUTHORITY
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
ACTION REQUESTED:
None.
INTRODUCTION:
There has been no correspondence since the last meeting.