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HomeMy WebLinkAbout2023-08-10 HRA Regular Meeting PacketAg enda E dina H ousing and R edevelopm ent Author ity City of E dina, Minnesota City Hall Council Chambers Thursday, August 10, 2023 7:30 AM Watch the m eeting on cable TV or at EdinaMN.gov/LiveMeeting s or Facebook.com /EdinaMN. To Participate in Comm unity Comm ent Call 786-496-5601 E nter Conference PIN 3147218# Press *1 on your telephone keypad when you would like to get in the queue to speak. An operator will introduce you when it is your turn. I.Call to Ord er II.Roll Call III.Pledge of Allegia n ce IV.Ap p roval of Meetin g Agen d a V.Com m unity Com m en t Du ring "Com m unity Com m en t," th e Edin a Housing and Redevelop m ent Au thority (HRA) will in vite resid ents to sh are new issues or con cern s tha t h aven't been con sid ered in th e p ast 30 da y s b y th e HRA or w h ich a ren't slated for fu ture consideration . Individ u als m u st lim it their com m ents to three m inutes. Th e Ch air m a y lim it the num ber of sp ea kers on th e sa m e issue in th e interest of tim e a n d topic. Gen era lly sp ea king, item s tha t are elsewhere on tod ay's a genda m a y not b e addressed d u ring Com m unity Com m en t. In d ividua ls sh ould not expect th e Ch air or Com m issioners to resp ond to th eir com m en ts toda y . Instead the Com m issioners m ight refer the m atter to sta. for consideration a t a fu ture m eeting. VI.Ad option of Con sen t Agenda All a genda item s listed on the consent a genda a re con sid ered rou tin e and will be en acted by one m otion. There will be no sepa rate d iscussion of such item s unless requested to be rem oved from the Con sen t Agenda by a Com m ission er of the HRA. In su ch ca ses the item w ill b e rem oved from th e Consent Agen d a and con sid ered im m ediately follow ing the a d option of th e Consent Agen d a. (Fa vorable rollcall vote of m a jority of Com m issioners p resent to approve.) A.Dra ft Min u tes of the Regu la r Meetin g Ju n e 8, 2023 and Sp ecia l Meeting June 15, 2023 B.Req u est for Purch ase: Cha n ge Order No. 1: FC22-11 50th and France Pa rking Ra m p Rep airs C.Modify Forgivable Loa n Agreem en t with Edin a Ch am ber of Com m erce D.Am en d Con tra ct for Private Developm en t with Un ited Prop erties Residen tial, LLC E.Subord ina tion Agreem ent to Environ m ental Coven ant a t 3930 a n d 3944 Market Street VII.Reports/Recom m enda tions: (Favora b le vote of m ajority of Com m ission ers p resent to approve excep t where n oted) A.Prepa ration of Loan Agreem ent w ith Ha wkey e Hotels d b a Fifth Sid e Lodgin g, LLC VIII.Executive Director's Com m ents A.Project Up d ate IX.HRA Com m issioners' Com m en ts X.Ad jou rn m ent Th e E d ina Housing a n d Redevelop m ent Au thority wa n ts all pa rticip ants to be com fortable b ein g pa rt of th e p u b lic p rocess. If y ou n ee d a ssista n ce in the w a y of h ea ring am pliBca tion, a n in terp reter, large-p rint docum en ts or som ethin g else, p lease ca ll 952-927-8861 72 hou rs in advance of the m eeting. Date: August 10, 2023 Agenda Item #: VI.A. To:C hair & C ommis s ioners of the Edina HR A Item Type: Minutes F rom:Liz O ls on, Administrative S upport S pecialist Item Activity: Subject:Draft Minutes of the R egular Meeting June 8, 2023 and S pecial Meeting June 15, 2023 Action Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: Approve the draft minutes of the regular meeting J une 8, 2023 and Special M eeting June 15, 2023. I N TR O D U C TI O N: AT TAC HME N T S: Description Draft Minutes of the Regular Meeting June 8, 2023 Draft Minutes of the Special Meeting June 15, 2023 Page 1 MINUTES OF THE REGULAR MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY JUNE 8, 2023 7:30 A.M. I. CALL TO ORDER Chair Hovland called the meeting to order at 7:30 a.m. then explained the processes created for public comment. II. ROLLCALL Answering rollcall were Chair Hovland, Commissioners Jackson, Pierce, and Risser. Absent: Commissioner Agnew. III. PLEDGE OF ALLEGIANCE IV. MEETING AGENDA APPROVED – AS PRESENTED Motion by Commissioner Jackson, seconded by Commissioner Pierce, approving the meeting agenda as presented. Roll call: Ayes: Jackson, Pierce, Risser, and Hovland Motion carried. V. COMMUNITY COMMENT No one appeared. VA. EXECUTIVE DIRECTOR’S RESPONSE TO COMMUNITY COMMENT Executive Director Neal shared response to community comments received. VI. CONSENT AGENDA – ADOPTED Member Pierce made a motion, seconded by Member Jackson, approving the consent agenda as presented: V.A. Draft Minutes of the Special Meeting of May 18, 2023 V.B. Adopt Resolution 2023-06; Authorizing an Interfund Loan in Connection with the Eden/Willson Tax Increment Financing District Rollcall: Ayes: Jackson, Pierce, Risser, and Hovland Motion carried. VII. REPORTS AND RECOMMENDATIONS VII.A. RESOLUTION NO. 2023-05 SUPPORTING AFFORDABLE HOUSING AT 5780 LINCOLN DRIVE – TABLED TO SPECIAL MEETING Affordable Housing Development Manager Hawkinson shared background regarding the affordable housing process versus a market rate project and stated the goal was to have housing affordable to the general worker. She said the State’s goal was to build 300,000 new homes by 2030 across all types, prices, and locations to stabilize prices and meet demand throughout the state. She reviewed the City’s guiding documents for affordable housing and noted public engagement informed the creation of these documents with the City’s goal to create 1,804 new affordable housing units by 2030 and increase the average population per developed acre by 4% by 2030. She spoke about promoting more compact development that reduced sprawl and made walking, biking, and transit more viable and create a strong and growing tax base while being an open and inclusive community. She noted developers were partners in the City’s efforts to meet these goals but added developers bear a lot of risk then shared the definition of affordable housing was the cost did not exceed 30% Minutes/HRA/June 8, 2023 Page 2 of household income. Ms. Hawkinson noted that 45% renters were housing cost burdened and paid over 30% of their income on rent then spoke about the need for public partnership to help fill the gaps in these projects. Ms. Hawkinson shared The Solhem Companies was proposing an 89-unit affordable housing development at 5780 Lincoln Drive that would serve individuals and families. In addition to pursuing site plan approval, they were also applying for financial support from Minnesota Housing, the Metropolitan Council, and Hennepin County. An early demonstration of support from the Edina HRA would help leverage these additional funding sources. The development still needed site plan approval, approval of a term sheet, and approval of a redevelopment agreement prior to any City funding being fully committed. Amol Dixit, The Solhem Companies, shared context regarding the request and how much the $2.5 million and other funding sources meant then said the MFA made it clear that without soft commitment from the City chances for the points needed was slim then added a certain percentage of the total development costs needed to be committed. He said the total was $38 million and they needed 12-13% commitment so almost 50% of the developer fee was being deferred and at risk. Mr. Dixit said they increased the amount of the deferred fee to reach that percentage because they did not receive the Hennepin County award but added no one was interested in being the first money in but reminded the Board of the MFA need to see a commitment. He said without the soft commitment the project had little chance of moving forward at this time and then the project would be put back into the cycle to begin again. The Board asked questions and provided feedback. Motion made by Commissioner Jackson to table consideration of Resolution No. 2023- 05 supporting affordable family housing at 5780 Lincoln Drive for redrafting and consideration at a special HRA meeting to be determined. Seconded by Commissioner Pierce. Roll call: Ayes: Jackson, Pierce, Risser, and Hovland Motion carried. VIII. EXECUTIVE DIRECTOR’S COMMENTS – Received IX. HRA COMMISSIONER COMMENTS – Received X. ADJOURNMENT Motion made by Commissioner Jackson, seconded by Commissioner Pierce, to adjourn the meeting at 8:46 a.m. Roll call: Ayes: Jackson, Pierce, Risser, and Hovland Motion carried. Respectfully submitted, Scott Neal, Executive Director Page 1 MINUTES OF THE SPECIAL MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY JUNE 15, 2023 4:00 P.M. I. CALL TO ORDER Chair Hovland called the meeting to order at 4:00 p.m. then explained the processes created for public comment. II. ROLLCALL Answering rollcall were Chair Hovland, Commissioners Agnew, Jackson, Pierce, and Risser. Absent: None. III. PLEDGE OF ALLEGIANCE IV. MEETING AGENDA APPROVED - AS PRESENTED Motion by Commissioner Jackson, seconded by Commissioner Agnew, approving the meeting agenda as presented. Roll call: Ayes: Agnew, Jackson, Pierce, Risser, and Hovland Motion carried. V. COMMUNITY COMMENT No one appeared. VA. EXECUTIVE DIRECTOR’S RESPONSE TO COMMUNITY COMMENT Executive Director Neal said there were no community comments received at the last meeting. VI. REPORTS AND RECOMMENDATIONS VI.A. RESOLUTION NO. 2023-05 SUPPORTING AFFORDABLE HOUSING AT 5780 LINCOLN DRIVE – ADOPTED AS AMENDED Affordable Housing Development Manager Hawkinson shared background stating Solhem Development, LLC (Solhem) was seeking preliminary approval of $2,500,000 to support their proposed “5780 Lincoln” development located at 5780 Lincoln Drive. This award would leverage financing from Minnesota Housing Finance Agency (MHFA), Hennepin County, and the Metropolitan Council. She said the proposed development would be a 100% affordable rental apartment building for individuals and families earning of the 50% Area Median Income or less ($58,650 for a 4-person household) and would be the first affordable housing development on the far west side of the City, within the Hopkins School District. She noted at the last meeting the resolution, if adopted, would accompany an application to Minnesota Housing for tax credit allocation and that they were clear a resolution as amended would not rise to the level of commitment and would not be accepted. She acknowledged the timing was not ideal but staff was bringing this forward because of other funding partners’ application cycles then noted timing of previous resolutions of support for 100% affordable housing developments. She said in this case the development complied with the guided land use for the Comprehensive Plan, Transportation Plan, and the Climate Action Plan and was brought forth based on public comment feeding into the Cornelia Elementary School. She referred to community pushback on housing in this area and if not approved staff was seeking guidance on where affordable housing could be located in the City. Assistant Planner Aaker commented about the underlying zoning and guided and potential use of PUD in this project and said the site was guided Office Residential and explained how the Comprehensive Plan was the guiding document over the Zoning Ordinance and how the City was Minutes/HRA/June 15, 2023 Page 2 obligated to zone in accordance with the Comp Plan. She said in 2008 the area was reguided to Office Residential and when rezoned would be brought compliance with the Comp Plan with the underlying zoning district that would support the amendment. She spoke about the give-to-get policy which resulted in a PUD process for more flexibility and allowed the City to achieve a more beneficial outcome for both parties and for affordable housing to remain affordable longer through conditions. Assistant Planner Bodecker stated the PUD allowed for more flexibility for both to be more flexible and would ultimately be approved by Council and confirmed the underlying zoning was PID Industrial and the Comp Plan would not require any amendment because it was already guided as Office Residential. She said staff supported this location as a potential site for affordable housing from both a zoning and land use standpoint. City Attorney Kendall said he reviewed the proposed development contract and deferred to staff on how MFHA would review the application and confirmed the City did not have an adopted policy surrounding applications for affordable housing. Economic Development Manager Neuendorf said in late 2022 the City’s TIF policy was updated and it did address the issue in general terms but not this particulate document and said there were provisions defined and clarified for future funding agreements. He noted staff recommended following the policy but could update the policy in the future. Strike “potential” and use shall provide and will not or would instead and delete the next Whereas that referenced agreement with developer with Dignity and Respect. Ms. Hawkinson and look at letter and agreement on how we can incorporate into a final development agreement. The Board asked questions and provided feedback. Motion Commissioner Agnew introduced and moved adoption of Resolution No. 2023- 05 supporting affordable family housing at 5780 Lincoln Drive for as amended to include the word “Project” in the second Wheras; to strike “potential” on Page 2 and include “will” and delete the paragraph regarding Building Dignity and Respect Program and to enforce the terms of the Building Dignity and Respect Code of Conduct for the Project. Seconded by Commissioner Risser. Roll call: Ayes: Agnew, Jackson, and Hovland Nay: Pierce Abstain: Risser Motion carried. Motion by Member Jackson, seconded by Agnew, to amend Resolution No. 2023-05 to include as a condition of City financial support the developer/builder agreeing to sign an agreement to participate in the Building Dignity and Respect Program and to enforce the terms of the Building Dignity and Respect Code of Conduct for the Project. Roll call: Ayes: Jackson Nay: Agnew, Pierce, Risser, and Hovland Motion failed. VII. EXECUTIVE DIRECTOR’S COMMENTS – Received VII. HRA COMMISSIONER COMMENTS – Received IX. ADJOURNMENT Minutes/HRA/June 15, 2023 Page 3 Motion made by Commissioner Jackson, seconded by Commissioner Agnew, to adjourn the meeting at 5:35 p.m. Roll call: Ayes: Agnew, Jackson, Pierce, Risser, and Hovland Motion carried. Respectfully submitted, Scott Neal, Executive Director Date: August 10, 2023 Agenda Item #: VI.B. To:C hair & C ommis s ioners of the Edina HR A Item Type: R eques t F or P urchas e F rom:Jon Dars ow, F acility S upervis or Item Activity: Subject:R equest for P urc hase: C hange O rder No. 1: F C 22-11 50th and F rance P arking R amp R epairs Ac tion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: Approve R equest for P urchase: C hange Order for 50th & F rance P arking R amp Repairs with Ram Construction for $405,998.00 I N TR O D U C TI O N: T he original contract for repairs started in late April and due to more significant deterioration to five (5) lower- level columns, a change in the contract is required. After the initial removal of deteriorated concrete on columns occurred, the contractor and the city’s structural engineer identified additional repairs that would be required to maintain a safe parking structure. T hese additional repairs required more shoring to support the structure during the repairs. Due to the timely natural of this work and the expectations of the businesses in the 50th and France B usiness District, this work has already started. T he ramp has been closed to the public to ensure safe working conditions for the contractor. Approximately half the columns have been repaired and a portion of the lower level of the parking ramp will open to the public soon. AT TAC HME N T S: Description Request for Purchase: Change Order No. 1: FC22-11 50th and France Parking Ramp Repairs 1 BUDGET IMPACT: Original Contract Amount = $220,969.00 Change Order #1 = $405,998.00 Revised Contract Amount = $626,967.00 These repairs are being funded through SPARC, Centennial Lakes Park TIF, and 50th and France Maintenance District assessed back to the property owners. CITY OF EDINA 4801 W 50th St., Edina, MN 55424 www.EdinaMN.gov | 952-927-8861 Requisition Number 12200233 Department: Engineering Buyer: Jon Darsow Date: 07/11/2023 Request for Purchase Requisition Description: Change Order: 50th and France Parking Ramp Repairs Vendor: RAM CONSTRUCTION SERVICES Cost: $405,998.00 REPLACEMENT or NEW: REPLACEM - REPLACEMENT PURCHASE SOURCE: QUOTE/BD - QUOTE/BID DESCRIPTION: The original contract for repairs started in late April and due to more significant deterioration to five (5) lower-level columns, a change in the contract is required. After the initial removal of deteriorated concrete on columns occurred, the contractor and the city’s structural engineer identified additional repairs that would be required to maintain a safe parking structure. These additional repairs required more shoring to support the structure during the repairs. Due to the timely natural of this work and the expectations of the businesses in the 50th and France Business District, this work has already started. The ramp has been closed to the public to ensure safe working conditions for the contractor. Approximately half the columns have been repaired and a portion of the lower level of the parking ramp will open to the public soon. 2 COMMUNITY IMPACT: Required yearly inspections identified repairs needed in the short term to continue safe operations of the parking ramps. This project completes the required repairs to extend the life of the ramps. ENVIRONMENTAL IMPACT: N/A Date: August 10, 2023 Agenda Item #: VI.C . To:C hair & C ommis s ioners of the Edina HR A Item Type: R eport / R ecommendation F rom:Bill Neuendorf, Economic Development Manager Item Activity: Subject:Modify F orgivable Loan Agreement with Edina C hamber of C ommerc e Ac tion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: Approve the modification to the Forgivable Loan Agreement with Edina Chamber of Commerce I N TR O D U C TI O N: T his item pertains to the partially forgivable construction loan provided to the E dina C hamber of C ommerce for the E dina I nnovation L ab. T he hard construction is substantially complete, but the work has taken slightly longer than initially anticipated. T he City Attorney has prepared a modification to the Agreement to reflect the actual start up date. T he C hamber is agreeable to this modification. S taff recommends approval of this modification. AT TAC HME N T S: Description Modification to Edina Chamber Loan Agreement FIRST AMENDMENT TO DRAW-DOWN LOAN AGREEMENT Between EDINA HOUSING AND REDEVELOPMENT AUTHORITY And EDINA CHAMBER OF COMMERCE ASSOCIATION, INC. D/B/A EDINA INNOVATION LAB for the EDINA INNOVATION LAB PROJECT AT 7201 METRO BOULEVARD ________________________ Dated as of August 10, 2023 ________________________ This Document Was Drafted By: DORSEY & WHITNEY LLP (GIT) Suite 1500 50 South Sixth Street Minneapolis, Minnesota 55402 FIRST AMENDMENT TO DRAW-DOWN LOAN AGREEMENT THIS First Amendment to Draw-Down Loan Agreement (this “Amendment”), made and entered into as of this 10th day of August, 2023, is between the Edina Housing and Redevelopment Authority, a political subdivision of the State of Minnesota (the “HRA”), and Edina Chamber of Commerce Association, Inc., a Minnesota nonprofit corporation, d/b/a Edina Innovation Lab (the “Borrower”), and amends that Draw-Down Loan Agreement between the HRA and the Borrower dated November 17, 2022 (the “Original Agreement”). WITNESSETH: WHEREAS, pursuant to the temporary authority for use of increment granted by Minnesota Statutes, Section 469.176, subdivision 4n (the “Act”), on October 28, 2021, the HRA adopted, and on November 16, 2021, the City approved a written spending plan for unobligated tax increment monies for the Southdale 2 TIF District, Pentagon Park TIF District, and 70th and Cahill TIF District (the “Spending Plan”); WHEREAS, pursuant to the Act and the Original Agreement, the HRA provided a draw- down loan of unobligated tax increment revenue to the Borrower to assist in financing the Project (as defined in the Original Agreement); WHEREAS, pursuant to the Act and the Original Agreement, the HRA provided a draw- down loan of unobligated tax increment revenue to the Borrower to assist in financing the Project (as defined in the Original Agreement); WHEREAS, as of July 30, 2023, the HRA has disbursed $275,545.96 of the $800,000 maximum loan proceeds under the Original Agreement; WHEREAS, as permitted under the Original Agreement, on June 28, 2023, the Executive Director of the HRA authorized 90-day extensions of the commencement, completion and occupancy dates described in the Original Agreement; WHEREAS, the parties desire to amend the Original Agreement to reflect, among other things, (i) extensions to the commencement, completion and occupancy dates included in the Original Agreement; and (ii) modification of the terms of the Note. NOW, THEREFORE, in consideration of the foregoing premises and the mutual obligations set forth in this Agreement, the parties hereto hereby agree as follows: 1 ARTICLE 1 Definitions and Construction 1.01. Definitions. In this Amendment, unless otherwise defined herein, all capitalized terms shall have the meanings given them in the Original Agreement. 1.02. Construction. Strikethrough text (strikethrough text) herein shall represent language deleted from the Original Agreement and underlined text (underlined text) herein shall represent added or replacement language. ARTICLE 2 Representations and Warranties 2.01. Representations. The parties hereby reaffirm their respective representations and warranties as stated in the Original Agreement. ARTICLE 3 Amendments 3.01. Amendment of Section 3.01 of the Original Agreement. Paragraphs (a) and (b) of Section 3.01 of the Original Agreement are hereby amended as follows: 3.01. Timing; Scope of Work and Renovation Plans. At the HRA’s request, the Borrower shall make available to the HRA for review Renovation Plans for the Project. (a) Time is of the essence for completion of the Project and occupancy of the Facility. It is anticipated that the Borrower will enter into construction contracts for the Project by December 31, 2022; substantially complete construction of the project by May 31, 2023; and move in and occupy the Facility by June 30, 2023 September 28, 2023. (b) Subject to Unavoidable Delay, Borrower shall cause the construction to be initiated by January 2, 2023 April 2, 2023 and the Project to be completed and the Facility to be occupied in accordance with the terms of the Scope of Work described in Exhibit D and this Agreement by June 30, 2023 September 28, 2023. The executive director of the HRA is hereby authorized to, in his or her discretion, provide an extension in writing of up to ninety (90) days of the (i) construction commencement date or the (ii) completion and occupancy date provided in this paragraph. 3.02. Amendment of Section 3.02 of the Original Agreement. Paragraph (a) of Section 3.02 of the Original Agreement are hereby amended as follows: 3.02. Certificate of Completion. (a) Upon the Borrower’s request following the HRA’s certification that the Project has secured its final inspections and is fit for occupancy and the Project is completed to the reasonable satisfaction of the HRA, the HRA will furnish the 2 Borrower with a Certificate of Completion for the Project, in substantially the form attached hereto as Exhibit E, as conclusive evidence of satisfaction and termination of the agreements and covenants of this Agreement with respect to the obligations of the Borrower to complete the construction of the Project and to occupy the suite. The Borrower shall not delay in requesting the Certificate of Completion . The furnishing by the HRA of such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Borrower or Owner to any Mortgagee. Such Certificate of Completion shall not serve as conclusive evidence of satisfaction and termination of the Loan. 3.03. Amendment of Section 3.03 of the Original Agreement. Section 3.03 of the Original Agreement is hereby amended as follows: 3.03. Progress Reports. Until the Certificate of Completion is issued for the Project, the Borrower shall provide to the HRA by the end of each month a written report as to the actual progress of construction, which report shall, at minimum, (i) summarize the work completed by narrative description; (ii) provide an approximate percentage of the Project completed; and (iii) identify any challenges jeopardizing occupancy of the Facility by June 30, 2023 September 28, 2023. 3.04. Amendment of Section 5.01 of the Original Agreement. Section 5.01 of the Original Agreement is hereby amended as follows: 5.01. Development Costs. The Borrower has agreed to and shall be responsible to pay all of its respective costs of the Project, as herein provided. However, the HRA, in order to encourage the Borrower to proceed with the Project, and to assist the Borrower in paying the costs thereof, is willing to provide the Loan for reimbursement of Qualified Costs, as permitted by the Act, that the Borrower has incurred for the Project. The Borrower shall submit Pay Requests to the HRA as soon as possible after receipt of invoices. The Borrower shall submit the final pay request to the HRA no later than 60 days after occupancy. 3 3.05. Amendment of Section 5.02 of the Original Agreement. Paragraphs (c) and (e) of Section 5.02 of the Original Agreement are hereby amended as follows: 5.02. Terms of the Loan; Loan for Qualified Costs. The HRA agrees to loan the Borrower unobligated incremental property taxes for the Borrower to reimburse Qualified Costs the Borrower has incurred for Project. The Loan shall be evidenced by the execution by the Borrower of the Note and delivery to the HRA. The Loan is subject to the following terms and conditions. … (c) Loan payments shall occur at least twice annually on July 1 and January 2 of each year, commencing January 2, 2024, until the Loan is paid in full. … (e) The Loan shall bear interest at a per annum rate equal to two percent (2.00%) and shall accrue on the principal amount of the Loan disbursed pursuant to one or more Notes or Disbursement Notes starting on the date that is the earlier of (i) the date when the Certificate of Completion is delivered to the Borrower by the HRA; or (ii) June 30, 2023, and such interest shall be payable on the “Payment Dates” specified in the Note. 3.06. Amendment and Restatement of Exhibit H – Form of Master Note. The Master Note dated as of December 22, 2022, and currently held by the HRA is hereby canceled. An Amended and Restated Master Note, substantially in the form of Exhibit A attached hereto, shall be issued. Exhibit B attached hereto shows the amendments to the Master Note. 4 ARTICLE 4 General Provisions 4.01. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of this Amendment are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. 4.02. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall constitute one and the same instrument. 4.03. Severability. In the event any provision of this Amendment shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 4.04. Captions. The captions or headings in this Amendment are for convenience only and in no way define, limit or describe the scope of intent of any provisions or Sections of this Amendment. 4.05. Applicable Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Minnesota without giving effect to the conflicts-of-laws principles thereof. S-1 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above written. EDINA HOUSING AND REDEVELOPMENT AUTHORITY By James B. Hovland, Chair And James Pierce, Secretary STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me on this ____ day of ______________, 2023, by James B. Hovland, the Chair, and James Pierce, the Secretary, of the Edina Housing and Redevelopment Authority, a Minnesota municipal corporation, on behalf of the corporation. IN WITNESS WHEREOF, I have set my hand and my official seal this ____ day of _____________, 2023. Notary Public S-2 EDINA CHAMBER OF COMMERCE ASSOCIATION, INC., A MINNESOTA NON- PROFIT CORPORATION, D/B/A EDINA INNOVATION LAB By: Signature Its: Title STATE OF __________ ) ) ss. COUNTY OF __________ ) The foregoing instrument was acknowledged before me on this ___ day of ___________, 2022, by __________________, the ____________________ of Edina Chamber of Commerce Association, Inc., a Minnesota Non-profit corporation, d/b/a Edina Innovation Lab. IN WITNESS WHEREOF, I have set my hand and my official seal this ___ day of __________, 2022. Notary Public A-1 EXHIBIT A FORM OF AMENDED AND RESTATED MASTER NOTE No. R-1 $800,000 UNITED STATES OF AMERICA STATE OF MINNESOTA (EDINA INNOVATION LAB PROJECT) PRINCIPAL AMOUNT: EIGHT HUNDRED THOUSAND DOLLARS This Note is issued pursuant to the provisions of that certain Draw-Down Loan Agreement, dated as of November 17, 2022, as amended by that First Amendment to Draw-Down Loan Agreement dated August 10, 2023, as the same may be amended from time to time (the “Loan Agreement”), between the Edina Housing and Development Authority (the “Owner”) and Edina Chamber of Commerce Association, Inc., a Minnesota non-profit corporation, d/b/a Edina Innovation Lab (the “Borrower”). Terms used herein but not otherwise defined, shall have the meaning attributed to them in the Loan Agreement. The Borrower for value received, promises to pay, to the extent and in the manner hereinafter provided, to the Owner, the principal sum of eight hundred thousand dollars ($800,000), or so much thereof as may have been disbursed less the principal portion of the Loan that has been forgiven (if any), in semi-annual installments payable on each July 1st and January 2nd (each being a “Scheduled Payment Date”), commencing the January 2, 2024, and to pay interest on each Scheduled Payment Date on so much of the principal amount of the debt as (i) may be disbursed from time to time as provided in the Loan Agreement and (ii) remains unpaid , until the principal amount hereof is paid or has been provided for. Interest shall accrue at the rate of two percent (2.0%) per annum (calculated on the basis of a 360-day year of twelve thirty-day months). The repayment schedule amortizes the principal over the seven year term of the Lease. Principal and Interest Payments. Interest shall accrue only on the aggregate amount of this Master Note which has been disbursed under the Loan Agreement and shall begin accruing on the date when the Certificate of Completion is delivered to the Borrower by the Owner. Disbursements of the proceeds of this Master Note shall be made in accordance with the Loan Agreement by the execution by the Borrower of one or more Disbursement Notes in the form attached hereto as Appendix A. Principal, interest and any premium due under this Master Note will be paid on a Scheduled Payment Date by wire payment, or by check or draft mailed the last business day prior to the payment date to the person in whose name this Master Note is registered, in any coin or currency of the United States of America which at the time of payment is legal tender for public and private debts. Installment payments shall be applied first to interest and then to a reduction of outstanding principal. A-2 Prepayment. This Master Note is subject to prepayment in whole at any time at the option of the Borrower without penalty. Late Fees. The Borrower shall pay to the Owner on each Scheduled Payment Date all amounts necessary to pay principal and interest then due and any past due installment. If a necessary principal and interest payment is not made by the Borrower to the Owner within fifteen (15) calendar days of a specified Scheduled Payment Date, a late fee of 5% of the outstanding balance (but not to exceed the maximum late charge allowed b y law) shall be charged to the Borrower. Forgiveness. This Note is subject to partial principal forgiveness by the Edina Housing and Development Authority (the “Owner”) pursuant to the terms of the Loan Agreement. IN WITNESS WHEREOF, the Borrower has caused this Note to be executed by the manual signatures of the ________________ of the Borrower and has caused this Note to be dated as of _________________, 2023. EDINA CHAMBER OF COMMERCE ASSOCIATION, INC., A MINNESOTA NONPROFIT CORPORATION, D/B/A EDINA INNOVATION LAB By: Signature Its: _ Title A-3 Appendix A to Exhibit A (AMENDED AND RESTATED MASTER NOTE) DISBURSEMENT NOTE (EDINA INNOVATION LAB PROJECT) No. ______________ $____________ For value received, Edina Chamber of Commerce Association, Inc, a Minnesota nonprofit corporation, d/b/a Edina Innovation Lab (the “Borrower”), and pursuant to the $800,000 Amended and Restated Master Note (Edina Innovation Lab Project), dated ____________, 2023 (the “Master Note”), requests from the Edina Housing and Development Authority (the “HRA), the disbursement of $_________________, which when added to the previous disbursements made pursuant to the Master Note represents a total disbursement made as of the date of this Disbursement Addendum to Master Note (the “Disbursement Addendum”) in the sum of $____________________. The Borrower hereby acknowledges itself indebted to and promises to pay to the order of the HRA on the amount disbursed hereunder and any other amounts disbursed under the Master Note, on or before the date of maturity of the Master Note, with interest payable on the amount disbursed hereunder from the date of this Disbursement Note at the rate set forth in the Master Note. This Disbursement Note shall be subject to the terms and provisions of the Master Note. IN WITNESS WHEREOF, the Borrower, has caused this Disbursement Addendum to be executed by the _________________________ of said Borrower on the date of this Disbursement Addendum, which is ________________________. By Title B-1 EXHIBIT B AMENDMENTS TO MASTER NOTE No. R-1 $800,000 UNITED STATES OF AMERICA STATE OF MINNESOTA (EDINA INNOVATION LAB PROJECT) PRINCIPAL AMOUNT: EIGHT HUNDRED THOUSAND DOLLARS This Note is issued pursuant to the provisions of that certain Draw-Down Loan Agreement, dated as of November 17, 2022, as amended by that First Amendment to Draw-Down Loan Agreement dated August 10, 2023, as the same may be amended from time to time (the “Loan Agreement”), between the Edina Housing and Development Authority (the “Owner”) and Edina Chamber of Commerce Association, Inc., a Minnesota non-profit corporation, d/b/a Edina Innovation Lab (the “Borrower”). Terms used herein but not otherwise defined, shall have the meaning attributed to them in the Loan Agreement. The Borrower for value received, promises to pay, to the extent and in the manner hereinafter provided, to the Owner, the principal sum of eight hundred thousand dollars ($800,000), or so much thereof as may have been disbursed less the principal portion of the Loan that has been forgiven (if any), in semi-annual installments payable on each July 1st and January 2nd (each being a “Scheduled Payment Date”), commencing the July 1, 2023 January 2, 2024, and to pay interest on each Scheduled Payment Date on so much of the principal amount of the debt as (i) may be disbursed from time to time as provided in the Loan Agreement and (ii) remains unpaid, until the principal amount hereof is paid or has been provided for. Interest shall accrue at the rate of two percent (2.0%) per annum (calculated on the basis of a 360-day year of twelve thirty-day months). The repayment schedule amortizes the principal over the seven year term of the Lease. Principal and Interest Payments. Interest shall accrue only on the aggregate amount of this Master Note which has been disbursed under the Loan Agreement and shall begin accruing on the date that is the earlier of (i) the date when the Certificate of Completion is delivered to the Borrower by the Owner; or (ii) June 30, 2023. Disbursements of the proceeds of this Master Note shall be made in accordance with the Loan Agreement by the execution by the Borrower of one or more Disbursement Notes in the form attached hereto as Appendix A. Principal, interest and any premium due under this Master Note will be paid on a Scheduled Payment Date by wire payment, or by check or draft mailed the last business day prior to the payment date to the person in whose name this Master Note is registered, in any coin or currency of the United States of America which at the time of payment is legal tender for public and private debts. Installment payments shall be applied first to interest and then to a reduction of outstanding principal. B-2 Prepayment. This Master Note is subject to prepayment in whole at any time at the option of the Borrower without penalty. Late Fees. The Borrower shall pay to the Owner on each Scheduled Payment Date all amounts necessary to pay principal and interest then due and any past due installment. If a necessary principal and interest payment is not made by the Borrower to the Owner within fifteen (15) calendar days of a specified Scheduled Payment Date, a late fee of 5% of the outstanding balance (but not to exceed the maximum late charge allowed by law) shall be charged to the Borrower. Forgiveness. This Note is subject to partial principal forgiveness by the Edina Housing and Development Authority (the “Owner”) pursuant to the terms of the Loan Agreement. IN WITNESS WHEREOF, the Borrower has caused this Note to be executed by the manual signatures of the ________________ of the Borrower and has caused this Note to be dated as of _________________, 2023. EDINA CHAMBER OF COMMERCE ASSOCIATION, INC., A MINNESOTA NONPROFIT CORPORATION, D/B/A EDINA INNOVATION LAB By: Signature Its: _ Title B-3 Appendix A to Exhibit A DISBURSEMENT NOTE (EDINA INNOVATION LAB PROJECT) No. ______________ $____________ For value received, Edina Chamber of Commerce Association, Inc, a Minnesota nonprofit corporation, d/b/a Edina Innovation Lab (the “Borrower”), and pursuant to the $800,000 Amended and Restated Master Note (Edina Innovation Lab Project), dated November 17, 2022 __________, 2023 (the “Master Note”), requests from the Edina Housing and Development Authority (the “HRA), the disbursement of $_________________, which when added to the previous disbursements made pursuant to the Master Note represents a total disbursement made as of the date of this Disbursement Addendum to Master Note (the “Disbursement Addendum”) in the sum of $____________________. The Borrower hereby acknowledges itself indebted to and promises to pay to the order of the HRA on the amount disbursed hereunder and any other amounts disbursed under the Master Note, on or before the date of maturity of the Master Note, with interest payable on the amount disbursed hereunder from the date of this Disbursement Note at the rate set forth in the Master Note. This Disbursement Note shall be subject to the terms and provisions of the Master Note. IN WITNESS WHEREOF, the Borrower, has caused this Disbursement Addendum to be executed by the _________________________ of said Borrower on the date of this Disbursement Addendum, which is ________________________. By Title _______________________________ Date: August 10, 2023 Agenda Item #: VI.D. To:C hair & C ommis s ioners of the Edina HR A Item Type: R eport / R ecommendation F rom:Bill Neuendorf, Economic Development Manager Item Activity: Subject:Amend C ontract for P rivate Development with United P roperties R es idential, LLC Ac tion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: Approve the First Amendment to the C ontract for P rivate D evelopment with U nited P roperties R esidential, L L C . I N TR O D U C TI O N: T his item pertains to the sale of real estate at 5146 E den Avenue for redevelopment as a senior housing cooperative. T he pre-development work for this project has taken longer than initially expected. T he extra time is due to the complexities working collaboratively with two other parties (the C ity and J ester R estaurants) to ensure that all the goals of the parties are achieved. P ursuit of H U D financing in a frequently changing economic environment also contributed to the delay. S taff recommends approval of the F irst Amendment to the Contract. AT TAC HME N T S: Description First Amendment for United Properties DMFIRM #408744966 v1 (reserved for recording information) FIRST AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT UNITED PROPERTIES SENIOR HOUSING COOPERATIVE AT GRANDVIEW YARD THIS FIRST AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT, (the “Amendment”) made on or as of the ___day of August, 2023 (“Effective Date”), by and between the EDINA HOUSING AND REDEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of the State of Minnesota (the “HRA”) and UNITED PROPERTIES RESIDENTIAL LLC, a Minnesota limited liability company (the “Developer”). WITNESSETH: WHEREAS, HRA and Developer are parties to that certain Contract for Private Development dated June 2, 2022 (the “Contract”), with respect to the “HRA Property” as defined in the Development Contract and legally described on Exhibit A attached hereto; and WHEREAS, HRA and Developer desire to update t he Contract and amend certain provisions therein as set forth below; and NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other to update and amend the Contract as follows: ARTICLE I. AMENDMENTS TO DEFINITIONS In addition to the current definitions in the Contract, the following definitions are added: DMFIRM #408744966 v1 2 “Declaration of Restrictions” means the Declaration of Restrictions to be executed on the Closing Date, in recordable form affecting the Sale Property, the Restaurant Lot and the Park Lot. “Declaration of Restrictive Covenants (Housing)” means that certain Declaration of Restrictive Covenants between HRA, Developer and Applewood Pointe Cooperative, a Minnesota cooperative corporation, to be executed on the Closing Date, in recordable form affecting the Sale Property. ARTICLE II. AMENDMENTS TO REPRESENTATIONS AND WARRANTIES There are no amendments to Article II of the Contract. ARTICLE III. CONVEYANCE OF PROPERTY Article III updated provisions. Article III of the Contract is updated with revisions to Sections 3.6 and 3.7 and the addition of new Section 3.11: Section 3.6. Closing. Section 3.6 is deleted in its entirety and replaced with the following: Section 3.6 Closing. Subject to the terms and conditions of this Agreement, the Closing shall occur on May 1, 2024 or another date as may be agreed upon in writing by HRA and Developer (“Closing Date”). The conveyance contemplated in this Contract will be closed through an escrow arrangement with the Title Company. Section 3.7. Closing Documents. Section 3.7 of the Contract is amended to the extent necessary to include the following: Additional HRA Documents. In addition to the HRA Documents identified in the Section 3.7 (a) of the Contract, at the Closing, the HRA shall also execute and deliver the Declaration of Restrictions and the Declaration of Restrictive Covenants (Housing) Additional Developer Documents. In addition to the Developer Documents identified in the Contract, at the Closing, the Developer shall also have executed, on its behalf and on behalf of the Cooperative the Declaration of Restrictive Covenants (Housing). Section 3.11 Additional Provisions. The Contract is updated with a new Section 3.11. Section 3.11. Additional Provisions. (a) Status of Initial Due Diligence Period. HRA and Developer agree that the Initial Due Diligence Period as identified in Section 3.4 (b) of the Contract has expired. (b) Inspection Rights and Obligations. Notwithstanding the expiration of the Initial Due Diligence Period, Developer shall have to right to continue to: (1) DMFIRM #408744966 v1 3 examine the Property Documents; (2) make physical inspection of the Property; (3) procure financing sources for construction of the Minimum Improvements; (4) determine anticipated phased construction schedule; (5) obtain final land use approvals for the proposed development; and (6) review title to the Property. In this regard, Developer and its authorized employees, agents, contractors and representatives (collectively, “Developer’s Representatives”) shall be entitled to continue to enter upon the Property at all reasonable times up to the Closing Date for the purpose of continuing inspections, investigations, surveys and testing of the Property (collectively, “Inspections”), all upon reasonable prior oral or written notice to the HRA. All Inspections shall occur at reasonable times agreed upon by the HRA and Developer. Developer shall pay all costs and expenses of all Inspections. Notwithstanding anything herein to the contrary, Developer shall not perform soil tests, asbestos or lead tests, or perform tests of a similarly intrusive nature without the prior written consent of HRA, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, Developer shall have the right to complete a Phase I and a Phase II environmental report as part of such Inspections. (c) Responsibilities During the Second Due Diligence Period. During the Second Due Diligence Period (as the same may be further extended by written agreement between the parties), the parties will work in good faith to: (i) confirm the physical delivery condition of the Property at Closing, including, but not limited to, establishing responsibility for maintenance of the public sidewalk serving the Property and establishing any actions necessary to finalize maintenance responsibility. (ii) finalize the terms and forms of agreements to be delivered at Closing for (i) the Restrictive Covenants; (ii) a declaration restricting the height of any building on the Restaurant Lot to no more than three stories for a period of at least 10 years; (iii) the Declaration of Restrictive Covenants (Housing) and (iv) any easements determined by the parties necessary for their intended uses of their respective lots within the Plat including, but not limited to: (a) an easement for the proposed private road serving the lots within the Plat and operation and maintenance of the private road; (b) an easement for access over the westerly 5 feet of the Property and the Restaurant Lot for the benefit of the Restaurant Lot and the Park Lot; and (c) temporary construction easement(s) over the Restaurant Lot and the Park Lot to serve the Property and the Restaurant Lot for staging grounds for the construction of the improvements on the Property and the Restaurant Lot; DMFIRM #408744966 v1 4 (d) Title and Survey. The Developer shall be responsible for performing any and all title and survey examination or due diligence of the Property that the Developer deems prudent, at the Developer’s sole cost and expense, except as otherwise provided in this Agreement. The HRA will provide marketable title to the Property at Closing, but the HRA is otherwise not providing any representations or warranties as to the condition of title and Developer expressly waives any claims the Developer may have against the HRA in connection with any title defects. Notwithstanding the foregoing, the HRA: (i) shall indemnify Developer, its successors and assigns from and against any claim related agrees to reasonably cooperate with Developer to cure any title defects that may exist before Closing. (e) Confirmation of purpose and expiration of Second Due Diligence Period. By Notice from Developer to HRA dated July 26, 2023, Developer extended the Second Due Diligence Period to October 25, 2023. By way of this Amendment, the Second Due Diligence Period is extend to April 1, 2024. In addition to the foregoing provisions in this Amendment, the purpose of the Second Due Diligence Period is to provide a specific time period for Developer to complete the Housing and Urban Development financing required pre-sale of at least 60% of the Senior Cooperative Units (“Pre-Sale Requirements”). Developer shall use commercially reasonable efforts to market the senior cooperative units and complete the Pre-Sale Requirements. The Developer may waive the Second Due Diligence Period upon Developer achieving the Pre-Sale Requirements by written notice to the HRA. . ARTICLE IV. CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 4.2 Section 4.2(a) of the Contract is deleted in its entirety and replaced with the following text: (a) On or before March 1, 2024, the Developer shall submit to the HRA Preliminary Plans (site plan for the Property and schematic plans for the Minimum Improvements) for review and approval by the HRA for general compliance of the Plans with the terms of this Contract. ARTICLE VI. PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; ENCUMBRANCES; AND INDEMNIFICATION Section 6.1 Article VI of the Contract is amended as follows, with the inclusion of new subsection 6.4(g): (g) Notwithstanding any other provision in the Contract or this Amendment to the contrary, HRA shall indemnify and hold Developer, its successors and assigns, harmless from and against any claim, charge, expense, undertaking or obligation with respect to constructing a retaining wall on the Sale Property arising from that certain Warranty Deed dated May 25, 1953 and recorded as document no. 2830879 in Book 1970 DMFIRM #408744966 v1 5 Page 279 in the office of the Registrar of Titles, Hennepin County, Minnesota. Such indemnification obligation shall be memorialized in the Deed. ARTICLE VII. Events of Default There are no amendments to Article VII. ARTICLE VIII. ADDITIONAL PROVISIONS There are no amendments to Article VIII. IN WITNESS WHEREOF, the HRA and Developer have each caused this Amendment to be duly executed in their respective names and behalf, as of the Effective Date. [Remainder of page intentionally left blank] [Signature pages to follow.] DMFIRM #408744966 EDINA HOUSING AND REDEVELOPMENT AUTHORITY By: James B. Hovland Its: President By: James Pierce Its: Secretary Attested By: Scott Neal Its Executive Director STATE OF MINNESOTA ) )ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of ___________, 2023, by James B. Hovland and James Pierce, respectively the President and Secretary of the Edina Housing and Redevelopment Authority, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the public body corporate and politic. Notary Public DMFIRM #408744966 UNITED PROPERTIES RESIDENTIAL LLC By: Name:_______________________________ Its:__________________________________ By: Name:_______________________________ Its:__________________________________ STATE OF MINNESOTA ) )ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of ___________, 2023, by _____________________________and ________________________, the ________________________________and ______________________________ respectively of United Properties Residential LLC, a Minnesota limited liability company, on its behalf. Notary Public DRAFTED BY: Campbell Knutson Professional Association Grand Oak Office Center I 860 Blue Gentian Road, Suite 290 Eagan, Minnesota 55121 Telephone: (651) 452-5000 DMFIRM #408744966 v1 EXHIBIT “A” LEGAL DESCRIPTION OF HRA PROPERTY Lots 2, 3, 4, 5, 6, 7, 8, 9 and 10, and the East 90 feet of Lots 11 to 19 inclusive, all in Block 2, Grandview Heights, Hennepin County, Minnesota according to the recorded plat thereof; And That part of Government Lot 8, Section 28, Township 117, Range 21, lying North of the centerline of Eden Avenue and East of a line drawn parallel to the main track of the Minneapolis, Northfield and Southern Railway from a point on the North line of said Government Lot 8 distant 582 feet East from the Northwest corner of said Government Lot 8. Date: August 10, 2023 Agenda Item #: VI.E. To:C hair & C ommis s ioners of the Edina HR A Item Type: R eport / R ecommendation F rom:Bill Neuendorf, Economic Development Manager Item Activity: Subject:S ubordination Agreement to Environmental C ovenant at 3930 and 3944 Market S treet Ac tion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: Approve the Subordination Agreement regarding environmental covenant at 3930 and 3944 Market Street and authorize staff to execute required documentation. I N TR O D U C TI O N: With full occupancy of the commercial spaces on the street level of the North P arking Ramp, the developer is finalizing the environmental documentation with M innesota P ollution Control Agency (M P C A). As background, two of the former uses on the North P arking Ramp site included dry cleaning operations. T hose previous operations required soil and vapor mitigation to obtain occupancy. T hese conditions were known to the H R A when they purchased the properties from previous owners. T hese conditions were also known to the developers when they purchased the commercial condominium-style spaces from the H R A. T his type of covenant is standard practice for M P C A. While the covenants restricts the site to commercial uses, the covenant could change in the future in the event that the N orth P arking R amp is removed and redeveloped. S taff recommends approval of this Subordination Agreement. AT TAC HME N T S: Description Subordination Agreement 3930-44 Market St 1 EXHIBIT 6 SUBORDINATION OF INTEREST TO ENVIRONMENTAL COVENANT AND EASEMENT 1. The Housing and Redevelopment Authority of Edina, Minnesota (“HRA”) is the holder of an interest in certain real property located at 3930 through 3944 Market Street, Edina, Hennepin County, Minnesota (hereinafter the “Property”), which is legally described as follows: Tracts B and C, Registered Land Survey No. 1872 Hennepin County, Minnesota. 2. The interest in the Property held by the HRA is evidenced by the Declaration of Easements, Restrictions and Covenants dated 10 October, 2019, and filed 14 October, 2019, as Document Number T05652288 in the Office of the Registrar of Titles in and for Hennepin County, Minnesota. 3. This Subordination Agreement is attached as Exhibit 5 to an Environmental Covenant and Easement pursuant to Minn. Stat. ch. 114E which imposes certain Activity and Use Restrictions on the Property. 4. The HRA hereby consents to the foregoing Environmental Covenant, agrees to be bound by the terms thereof, and agrees that its interest in the Property shall be subordinate to the covenants contained therein. 5. In granting this consent, the HRA hereby waives/does not waive the right to consent to any subsequent amendment or modification of the foregoing Environmental Covenant. 6. This Agreement binds the HRA, its heirs, successors, and assigns. 2 THE UNDERSIGNED REPRESENTATIVE OF THE HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA REPRESENTS AND CERTIFIES THAT HE/SHE IS AUTHORIZED TO EXECUTE THIS SUBORDINATION OF INTEREST TO ENVIRONMENTAL COVENANT. IN WITNESS WHEREOF THIS INSTRUMENT HAS BEEN EXECUTED ON THE DATE INDICATED BELOW: HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA By______________________________________ (signature) Scott Neal Executive Director Housing and Redevelopment Authority of Edina, Minnesota State of Minnesota ) ) ss. County of Hennepin ) The foregoing instrument was acknowledged before me on _______________, 2023, by Scott Neal, the Executive Director of the Housing and Redevelopment Authority of Edina, Minnesota on behalf of the Housing and Redevelopment Authority of Edina, Minnesota. ________________________ (signature) Notary Public My Commissioner Expires ___________ Date: August 10, 2023 Agenda Item #: VI I.A. To:C hair & C ommis s ioners of the Edina HR A Item Type: R eport / R ecommendation F rom:Bill Neuendorf, Economic Development Manager Item Activity: Subject:P reparation of Loan Agreement with Hawkeye Hotels dba F ifth S ide Lodging, LLC Ac tion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: Authorize staff to prepare a Loan Agreement with Hawkeye Hotels dba Fifth Side Lodging, L L C for future H R A B oard consideration. I N TR O D U C TI O N: T his item pertains to financing of a new hotel to be constructed at P entagon Village - 4931 West 77th Street. T his project was approved in 2019 and on track for construction in 2020. T he timing was negatively impacted by the Covid-19 pandemic and paused for more than three years while the hospitality industry in the Twin C ities recovered. T he developer is now ready to proceed with construction but impacted by dramatic price increases and reduced access to debt. S taff has confirmed that this project is eligible to participate in E dina's S PAR C financing program. S taff recommends that legal and financial advisors be engaged to assist staff in preparation of a Loan Agreement that enables this project to proceed. Approval of the L oan Agreement will be scheduled for an upcoming H R A B oard meeting. AT TAC HME N T S: Description Staff Report Staff Pres entation August 10, 2023 Chair and Commissioners of Edina Housing & Redevelopment Authority Bill Neuendorf, Economic Development Manager Loan Agreement with Hawkeye Hotels dba Fifth Side Lodging, LLC Information / Background: Bloomington, MN based JR Hospitality and Hawkeye Hotels secured zoning approvals to construct a new dual branded hotel in the Pentagon Village development in 2019. They purchased the Lot 2 parcel from the master developer and prepared to break ground in early 2020. Unfortunately, these plans were disrupted when the Covid-19 pandemic abruptly ended business and leisure travel for several years. The experienced developer and owner/operator are now prepared to move forward with the project as approved by the City Council on May 17, 2022. They have prepared construction documents and have been working with Edina’s Building Department toward a Fall 2023 groundbreaking. Unfortunately, the development cost has increased significantly and the lending environment has changed dramatically since 2019. Prior to the pandemic, the lender was prepared to loan 80% of the development cost with the developer/operator contributing the remaining 20% as equity. In the 2023 economic environment, the lender has reduced their contribution to 75%. This change coupled with the steeply increased construction cost results in a financial gap of approximately $2 million in the $41 million project. Jay Bakta of JR Hospitality and Parth Patel of Hawkeye Hotels alerted staff this this predicament in hopes that the HRA’s SPARC program could provide gap financing so that the project can proceed. The SPARC program was created in 2021 using unallocated TIF monies that were available to the City but at risk of being turned back to Hennepin County. In accordance with State Law, the SPARC program seeks to attract and support private investment that constructs a facility that adds to the property tax base and creates jobs. The SPARC program expires in 2025. Any unused funds will be turned back to Hennepin County at that time. The City’s guiding documents promote a strong and vibrant business community. Edina’s Comprehensive Plan (pages 10-15 and 10-16) sets several goals related to the business development in Edina … Housing and Redevelopment Authority Established 1974 STAFF REPORT – Proposed Financing for Pentagon Village Hotel Page 2  “… create a vibrant and attractive location for corporate headquarters, technology companies and other businesses…”  “Support strong public-private alliances…” Benefit to Community: The financial participation in this privately owned and operated hotel will deliver several benefits to the broad Edina community including the following:  Increase the property tax base  Create 30-40 new permanent jobs  Continue the momentum at this under-utilized development site  Create new construction jobs for 12 months  Create a new lodging option for people visiting Edina and surrounding communities  Increase the lodging taxes collected to support marketing and promotion of Edina  Invest SPARC funds in a repayable interest-earning manner  Continue to grow an HRA fund that can support future projects Structure of Loan Agreement: A loan agreement will be prepared based on terms that allow the developer to construct the new building and the new business to begin operations while providing reasonable assurances that the HRA’s investment will be retained over time with interest. The intention of the HRA’s financial participation is not to maximize the return, as that might hinder the primary lender from providing the debt and might hinder the business from being successful. Instead, the HRA’s intention is to provide gap financing so that the project can deliver the public benefits. The general terms are described below: Borrower: Fifth Side Lodging, LLC – a special purpose entity of Hawkeye Hotels Principal Amount: approx $2,000,000 Location: 4361 W. 77th Street (Pentagon Village, Lot 2) Loan Term: 10 years maximum but intended to align with the term of the mini-perm construction loan provided by the bank Interest Rate: At or below the construction loan rate approximately 4.5% to 6.5% Timing of Funds: deposited into escrow Fall 2023; The loan proceeds shall be issued by the HRA in a single installment but disbursed in multiple draw requests. Subordination: The HRA loan will be subordinate to the primary mortgage STAFF REPORT – Proposed Financing for Pentagon Village Hotel Page 3 Repayment Guarantees: Personal Guarantees of Hawkeye Hotels and JR Hospitality, if structured as a joint venture Collateral: None Loan Payments: interest-only with principal at term, if required by the senior lender, otherwise traditional principal and interest payments Full Repayment: Borrower shall repay the Loan in full upon the sale of the property, refinancing or upon converting the initial construction / mini-perm loan to permanent loan Repayment Funds: Borrower shall repay the loan with any source of business revenues. Pre-Payment: Pre-payment of the loan is encouraged. There shall be no penalty for pre-payment of the loan. Loan Forgiveness: None Origination Fees: estimated to be approximately $30,000 to cover the fees of the HRA’s legal and financial advisors as well as fee to HRA for loan administration Late Fees: Typical late fees shall apply when loan payments are past the due date Eligible Expenses: all construction (material and labor) required to deliver the hotel approved by City Council on May 17, 2022, including foundation, site preparation, utilities, modular unit construction, plumbing, electrical, ventilation; permanent built-in equipment/furnishings or any other part of the permanent construction. Ineligible Expenses: Soft costs, permit fees, fines, penalties, furniture and furnishings, loose equipment, operational expenses, start up expenses Completion of Work: Unless an extension is approved by the Executive Director in advance, the work must be completed and the space must be occupiable no later than March 31, 2025. Evidence of Completion: lien waivers or equivalent waivers required from all vendors and contractors whose goods or services are funded with the HRA loan; a certificate of occupancy or equivalent also required. Conditions of Loan:  All work must be performed in accordance with the applicable construction permits issued by the City of Edina or other governing agency  All work must comply with applicable state and federal laws.  Property taxes, sales taxes and lodging taxes must be paid in full at the time they are due STAFF REPORT – Proposed Financing for Pentagon Village Hotel Page 4  The owner shall keep the building and site in first class condition from the issuance of the occupancy permit through the term of this loan. Any maintenance or operational deficiencies shall be remedied within 30 days after notice of such from the City.  Guests of the City of Edina and affiliated government entities shall receive the lowest available preferred rate. [subject to attorney review] Default: Standard default provisions shall be included. Business Subsidy Laws: The project shall comply with the State of Minnesota business subsidy laws unless one of the exceptions is applicable. HRA Commitment: Use of unobligated TIF funds is subject to formal action by the Edina HRA at a public meeting. Other Documents to Review: The existing HRA redevelopment agreements with the master developer - Pentagon Village, LLC site will be reviewed by the HRA’s legal advisor to ensure that a Loan Agreement with Hawkeye Hotels does not create a conflict with related agreements with Pentagon Village, LLC. Evaluation: Staff has kept in communication with the hotel developer since the project was approved in 2019. Previous attempts to re-start the project were not tenable during the pandemic years. Staff has been aware of the many challenges this project has faced throughout the past three years including, non-existent demand during the pandemic shut down, slowly returning hospitality volume, construction price increases, labor supply shortages, supply-chain disruption, inflation, increasing interest rates, and declining debt coverage by private banks. Since the darkest days, business and recreational travel volume in the Twin Cities has returned to pre- pandemic rates. Unfortunately, the construction costs have also escalated during this time. Based on the current and projected travel volume, general location in the metro area, proximity of highways and airports, and track record of the owner/operator and developer, HRA investment in this dual- branded hotel project presents a reasonable level of risk to the HRA. The risk is abated by the provision of personal guarantees from the hotel owner/operator. Staff Recommendation: Staff seeks input from the HRA Board members regarding this financial proposal and recommends that the HRA Board approve the preparation of a Loan Agreement based on the general terms described above. The proposed Agreement will be presented for full consideration at a future HRA Board meeting. Preparation of Loan Agreement with Hawkeye Hotels dba Fifth Side Lodging, LLC Presentation to: Edina HRA Board August 10, 2023 Housing & Redevelopment Authority Overview •Experienced hotel developer intends to proceed with a $41 M investment in Edina •Due to changing economic conditions, the project has a financial gap •Edina’s SPARC program is available to provide funds to address this situation •Staff and developer have initiated preliminary negotiations •Direction from the HRA Board is requested before full documents are prepared •Staff seeks authorization to prepare complete Loan Agreement for future consideration Housing & Redevelopment Authority About the Developer and Owner/Operator Housing & Redevelopment Authority Developer - JR Hospitality •Based in Bloomington, MN •Focused in midwest •3 decades experience •Jay Bakta, Managing Partner •www.JRHospitality.com Owner/Operator – Hawkeye Hotels •Based in Coralville, IA •Properties located in 23 states •30+ years experience •Parth Patel, Vice President •www.HawkeyeHotels.com The Project Housing & Redevelopment Authority o 5-stories o 239 guest rooms o Shared parking o Indoor and outdoor guest amenities o Site plan approved by CC 5-17-2022 The Site Housing & Redevelopment Authority The Eddi Apartments Available Fall 2023 Opening Q1 2024 Housing & Redevelopment Authority Building on the Momentum at Pentagon Village The Problem •Construction costs – up 30% •$41 million TDC •Debt – reduced coverage •75% vs 80% •2019 income at 2023 costs •Results in $2 million financing gap Housing & Redevelopment Authority HRA Objectives and SPARC Outcomes •Support new businesses and investment in Edina, especially redevelopment •Increase the property tax base •Create new sources of tax revenue •Create permanent jobs •Establish ‘revolving loan fund’ for future HRA projects Housing & Redevelopment Authority Special Project Fund Available Edina established the SPARC program in 2021. This program uses unallocated TIF monies to assist businesses who are reconstructing commercial and industrial sites and deliver new jobs, stabilized tax base and other public benefits Housing & Redevelopment Authority Summary of Loan Terms •Subordination: HRA loan subordinated to senior debt •Collateral: none •Guarantees: personal guarantees •Eligible Expenses: any labor and material construction expense, including foundation, site prep, utilities, construction items Housing & Redevelopment Authority •Amount: approx. $2,000,000 •Fees: approx. $30,000 to cover HRA costs •Term: 10 -years maximum, to match construction financing •Interest Rate: To be negotiated; at or below construction loan •Timing of Funds: deposited to escrow at closing in Fall 2023 •Disbursement of Funds: incrementally using typical Pay App process •In-eligible expenses: land costs, soft costs, furnishings, operational expenses, start-up costs Summary of Loan Terms, continued •Loan Repayment: traditional principal and interest, unless bank requires interest only •Repayment Funds: any source of business revenue •Forgiveness: none •Full Repayment: upon sale, refinancing or conversion to permanent financing •Late fees: yes •Default conditions: standard Housing & Redevelopment Authority •Completion deadline: estimated to be Spring 2025 •Evidence of Completion: lien waivers, occupancy permits, confirmation of compliance •Loan Conditions: •Comply with construction permits and applicable local, state and federal laws •Taxes paid in full •Maintained in first class condition •Guests of City to obtain lowest available rate Administering the Loan Step 1 – Close on all Debt •Bank provides mortgage •Owner provides equity •HRA provides Note •Begin construction Step 2 – Submit HRA Funds to escrow agent Step 3 – Escrow agent disburses funds •HRA reviews draw requests Housing & Redevelopment Authority Step 4 – Certifying Completion •HRA reviews lien waivers •HRA confirms compliance •HRA confirms occupancy Step 5 – Loan Repayment •Owner makes regular payments Step 6 – Satisfaction of Loan •HRA issues Certificate after loan is repaid in full Next Steps Housing & Redevelopment Authority With authorization by the HRA Board, several steps are required before funding can be provided. Next steps include: •Work cooperatively with developer, owner/operator and bank to create a workable funding arrangement •Review developer pro forma and financial information •Review Pentagon Village, LLC agreements to identify any conflicts •Review Minnesota business subsidy requirements •Prepare full loan agreement •Hold public hearing •HRA Board to consider approval of loan agreement and related documents Staff recommends that the HRA Board authorize preparation of Loan Agreement for consideration at future meeting Discussion or Questions Housing & Redevelopment Authority Date: August 10, 2023 Agenda Item #: VI I I.A. To:C hair & C ommis s ioners of the Edina HR A Item Type: R eport / R ecommendation F rom:Bill Neuendorf, Economic Development Manager Item Activity: Subject:P roject Update Information Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: No action required; for informational purposes only. I N TR O D U C TI O N: S taff will present a status update of housing and redevelopment projects in Edina. T his information was originally on the July 24th agenda, but deferred due to lack of time. AT TAC HME N T S: Description Project Update 7-20-2023 Edina Housing and Redevelopment Authority Redevelopment Project Update July 20, 2023 Address Project Description Status Grandview District (East & West of Hwy 100) Eden and Arcadia Reconstruction of public roadways and new sidewalks These public improvements are funded with incremental taxes generated within the Grandview 2 TIF District Roads were completed in 2022. Sidewalk construction was completed June 2023. 5146 Eden Ave. (former PW site) Construction of pedestrian bridge and sidewalk This public infrastructure is funded with incremental taxes generated within the Grandview 2 TIF District. Construction in progress. Bridge assembly in July with placement in August. Completion anticipated in Fall 2023. 5146 Eden Ave. (former PW site) Redevelopment of vacant 3.3 acre industrial site to include senior cooperative housing, new restaurant and new public park Sales contracts in place with United Properties and Jester Concepts. United Properties has strong list of reservations. Construction pricing is being confirmed. Then the reservations will be converted to sales contracts. At least 60% of units must be under contract to secure HUD loan. Construction anticipated Spring 2024. The restaurant and park construction will follow based on construction schedule for senior co-op. 5100 Eden Ave. (office building) Proposed redevelopment of outdated office building on 1.3 acres Opus submitted proposal to rezone the site for residential use with limited commercial. Currently in the review phase with Public Hearings at Planning Commission and City Council in summer 2023. 4917 Eden Ave. Redevelopment of 2-acre commercial site (formerly Perkins) Construction began summer 2022 and the $85M mixed use project is on track to open in late 2023. A new restaurant will be included on the first floor. Public art will be installed by developer at the Eden/Willson corner. After completion, a TIF Note is anticipated to be issued to reimburse the developer for up to $5.1 M of eligible expenses. Other TIF revenues will be used for City-led roadway projects on Eden, Grange & 50th Edina HRA Project Update July 20, 2023 Page 2 Address Project Description Status Grandview Eden, Link and 50th Roadwork Improvements to the road and sidewalk network east of Highway 100. Several public improvements are anticipated to be funded with incremental taxes generated within the Eden Willson TIF District. Reconstruction of the Eden/Willson/Grange intersection began in June. The intersection will be usable in late August to restore full access to Southview School and nearby properties. Project completion anticipated in Fall 2023. Other roadway improvements anticipated 2024-2026 with schedules coordinated with other road and bridge projects in the area. Northwest Quadrant 5780 Lincoln Drive Preliminary concept for affordable multi- family housing by Solhem Solhem is seeking public financing from Minnesota Housing. Funding awards will be announced in late 2023. If awarded funds, the developer will proceed with submitting a site plan application to the City. 6075-6115 Lincoln Drive Edina West Common Area Improvements Edina West, a 162 condominium development within four buildings, will impose an HIA fee payable by its residents to fund $5,000,000 for the improvements, interest, and fees. The City’s funds will be sourced by issuing General Obligation HIA Revenue Bonds repaid by the $5MM HIA fees adopted through the Fee Resolution. These HIA fees will be imposed over a 20-year term placed on the individual condominiums’ property tax statements. Northeast Quadrant 4050 W. 51st St. Repairs and improvements to South Parking Ramp The South Ramp is temporarily closed so that structural repairs can be made. This work was scheduled in Fall 2022 and is part of the annual repair and maintenance work. Information was distributed to businesses in advance. City staff secured additional off-site parking for employees to use while the parking structure is temporarily closed. The repair work is on schedule. The cost of the work is proposed to be split by the HRA and the 50th/France commercial property owners. Edina HRA Project Update July 20, 2023 Page 3 Address Project Description Status Northeast Quadrant, continued 3930, 3944 and 3945 Market Street Nolan Mains and North Retail This mixed-use public/private project was completed in 2020. The new public parking, public plaza, and public infrastructure were delivered as contemplated in the TIF Agreement. The final commercial space was occupied in May when Cooks of Crocus Hill / Bellecour Bakery opened. The developer has curated a selective combination of local and national commercial tenants. The 50th & France Business Association has sponsored and managed a variety of successful community events in the public plaza including: live music, ballroom dance lessons, pop-up markets, children’s story reading, adult fitness and holiday events too. With full occupancy, the assessed value of the privately owned property is anticipated to increase next year. 3901 Sunnyside / 4500 France Ave Lorient Apartments This mixed-use building was completed in 2020 and delivered the public parking, public plaza and public infrastructure improvements contemplated in the TIF Agreement. The final commercial space was occupied in June. The business tenants include: Yoga Room, Ten Spot salon and Jenny in the City (clothing boutique). With full occupancy, the assessed value is anticipated to increase next year. Greater Southdale Area 7200 and 7250 France Ave. Redevelopment of 5.2 acre commercial site A two-phase site plan was approved in 2022 and the HRA committed to TIF reimbursement for extraordinary costs and elements that deliver permanent public benefit in April 2023. Both vacant buildings were razed in Fall 2022 due to safety concerns. The 7250 office building is pursuing debt financing and will announce ground breaking when private financing is in place. The 7200 site is envisioned as either hotel or multi-family residential. This second phase still needs to obtain final approvals from City Council. Edina HRA Project Update July 20, 2023 Page 4 Address Project Description Status Greater Southdale Area, continued 7235 France Ave. Macy’s Furniture Gallery site - 8 acres Enclave Development has the site under contract and exploring concepts to relocate the Furniture Gallery to a different Edina location and transform the large site into multiple building pads connected by new public realm spaces. The existing bicycle trail is secured by a permanent easement and would remain. The developer has requested that TIF be considered to offset eligible project costs and deliver market returns. Staff has confirmed that the site meets the MN criteria and could potentially be declared a TIF District. Staff has met with the developer and architects to discuss the public realm portions of the future project. The developer continues to explore options for the site. The timeline for a full proposal is unknown. 7200 block of France Ave. Improved Pedestrian Crossing (concept study) With two adjacent sites being redeveloped, this presents a rare opportunity to improve the pedestrian connectivity across France Avenue. LHB, Inc. has been retained to explore connectivity possibilities that could be incorporated into the site plans for the 7200-50 and 7235 sites. A variety of crossings are being explored, including above ground, below grade, and at- grade. Several examples have been identified in the Twin Cities and in other locations. The Edina Chamber of Commerce and nearby business owners are also exploring ideas to re-imagine France Ave. An update and further discussion of options is anticipated in summer/fall 2023. 4040 W. 70th St. Redevelopment of 1.6 acre commercial site affordable senior housing Construction continues on 4040 Flats – new affordable senior housing containing 118 units. Completion and occupancy is anticipated in October 2023. The development was awarded bond financing together with 4% tax credits, TIF, and deferred loan financing from the City of Edina, Hennepin County, and the Metropolitan Council. The City will construct a new bicycle trail across from this new housing in the near future. Edina HRA Project Update July 20, 2023 Page 5 Address Project Description Status Greater Southdale Area, continued 7001 York Ave. Redevelopment of 7.7 acre site occupied by Hennepin County’s Southdale Regional Library Hennepin County is in the site planning process. A new library is anticipated on the corner of 70th and York. Other project details have not been finalized. 7001-7025 France Ave Redevelopment of the 6-acre commercial parcel; phased construction of new US Bank, new office and new market-rate housing The HRA approved TIF reimbursement for public parking and public realm costs in 2022. The initial demolition and construction of a new US Bank branch is complete. The second commercial building was demolished in July. Additional site work will continue over summer/fall 2023. The developer has strong pre-leasing commitments for the new office building and is in the process of securing debt to finance the project. A ground breaking will be scheduled when all capital is in place. 4100 W. 76th St. Sound Apartments The affordable housing building by Aeon is completed and occupied. The Certificate of Completion was issued in May 2023. Tax Increment began to be collected this year. 4401 W. 76th St. Edina Fire Station #2 / Community Health and Fire Safety Center The City’s design team continues to refine the preliminary site plan for this new public facility. Entitlements are anticipated to be pursued in 2023 with construction in 2024- 25. After the Fire Department needs are confirmed, direction should be provided regarding the unused portion of land. There is sufficient space for 1 or 2 additional buildings and new public green space. This land could be retained, sold or leased. Pentagon Park 4640-4660 W. 77th St. Redevelopment of 5.4 acres of vacant Pentagon North office property for market-rate housing by Solhem. The Fred Apartments with 408 market-rate apartments is nearing completion. The first round of tenants moved in May 2023. The final phase of completion will occur by year end 2023. Although this project is located in the Pentagon Park TIF District, the project is privately financed. There is no TIF funding for this project. Edina HRA Project Update July 20, 2023 Page 6 Address Project Description Status Pentagon Park, continued 4620 W. 77th St. Redevelopment of portions of 5.4 acre parcel at Pentagon North for market-rate apartments with limited retail by Solhem This 278 unit apartment will have 28 units affordable at the 50% rent levels with an additional 110 units rent restricted for “attainable” housing not to exceed the 120% rent level. The affordability term is 20-years. The HRA pledged $2MM in a forgivable SPaRC loan for public access to Fred Richards Park and $7.35MM in Pooled TIF Funds. A SIPA and Redevelopment Agreement were approved in 2022. The developer has secured financing for the project and is preparing full construction documents and working through the permit approval process. 4815-4901 W. 77th St. and 7710 Computer Ave. Redevelopment of 12-acres of Pentagon Park South property for retail, hotel and market-driven office/residential uses by Solomon Real Estate & Hillcrest joint venture. The site work, parking garage and public plaza have been completed. The site has been subdivided into 5 lots to accommodate multiple phases of development. TIF Notes were issued in 2020 and the first note payments were issued in 2022. Additional payments will be made after incremental property taxes are collected. Ground breaking for the hotel (Lot 2) has been delayed by the pandemic and is expected in late 2023 or 2024. The developer continues to seek a lead professional tenant for Lot 5. 4901 W. 77th St First Bank & Trust building new facility on Lot 4 Ground breaking on Lot 4 occurred in May 2023 and construction is in full progress. This new bank facility is anticipated to be complete and open in Spring 2024. This project is privately financed. 4901 W. 77th St Eddi Apartments on Lot 3 Construction on the 200 apartments approved for Lot 3 continues. The developer is using a modular construction process to speed delivery of the project. Preleasing is now underway with move-ins expected Fall 2023. This project is privately financed. SW Quadrant 7201 Metro Blvd Edina Innovation Lab The construction of this project is nearing completion. Furnishings are the last items needed before the new facility is completed. Occupancy is anticipated in August 2023. Prepared by Bill Neuendorf and Stephanie Hawkinson July 19, 2023