HomeMy WebLinkAbout2022-04-07 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, April 7, 2022
7:30 AM
Watch the m eeting on cable TV or at EdinaMN.gov/LiveMeeting s or
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E nter Conference ID 2979000.
Give the operator your nam e, street address and telephone number.
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To provide live testim ony for Com munity Com ment or Public Hearings, you can speak
in person in Council Cham bers, City H all, 4801 50th St. W., E dina, MN 55424
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 Regular Meeting Ma rch 3, 2022
B.Approve Paym en t of Cla im s
C.2021 A.ord able Housing Com plia n ce Rep ort
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.4040 W est 70th Street - Redevelop m ent Agreem en t for Tax Increm en t
Fin ancing
B.Resolution No. 2022-04: Au thorizing Sale of Land to W est Hen n epin
A.orda b le Hou sin g La n d Trust
VIII.HRA Com m issioners' Com m en ts
IX.Executive Director's Com m ents
A.Red evelopm en t Project Upda te
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 pliAca 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: April 7, 2022 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 R egular Meeting Marc h 3, 2022 Action
Edina Housing and Redevelopment
Authority
Established 1974
C ITY O F E D IN A
HO US I NG & R EDEVELO P MENT
AUT HO R I T Y
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
A C TI O N R EQ U ES TED:
Approve the regular minutes of M arch 3, 2022.
I N TR O D U C TI O N:
S ee attached meeting minutes of March 3, 2022.
AT TAC HME N T S:
Description
03-03-22 Draft Regular Minutes
Page 1
MINUTES
OF THE REGULAR MEETING OF THE
EDINA HOUSING AND REDEVELOPMENT AUTHORITY
MARCH 3, 2022
7:30 A.M.
I. CALL TO ORDER
Acting Chair Anderson called the meeting to order at 7:40 a.m. then explained the processes created
for public comment.
II. ROLLCALL
Answering rollcall were Commissioners Jackson, Pierce, Staunton, and Acting Chair Anderson.
Absent: Chair Hovland.
III. PLEDGE OF ALLEGIANCE
IV. MEETING AGENDA APPROVED – AS PRESENTED
Motion by Commissioner Staunton, seconded by Commissioner Jackson, approving the
meeting agenda as presented.
Roll call:
Ayes: Commissioners Jackson, Pierce, Staunton, and Acting Chair Anderson
Motion carried.
V. COMMUNITY COMMENT
No one appeared.
VI. CONSENT AGENDA ADOPTED – AS AMENDED
Member Jackson made a motion, seconded by Member Staunton, approving the
consent agenda as amended, removing VI.D. Resolution 2022-05 Establishing the 70th
and France Tax Increment Financing District and Approving a Tax Increment Financing
Plan Therefor:
VI.A. Approve Minutes of the Regular Meeting February 10, 2022
VI.B. Approve Payment of Claims for HRA Check Registers dated January 2022
totaling $10,221.08 and February 2022 totaling $449,304.80
VI.C. Execute and Record Edina Flats LLC – Certificate of Completion
VI.D. Resolution 2022-05 Establishing the 70th and France Tax Increment Financing
District and Approving a Tax Increment Financing Plan Therefor
VI.E. Approve Edina Market Street, LLC: Subordination Agreement
Rollcall:
Ayes: Commissioners Jackson, Pierce, Staunton, and Acting Chair Anderson
Motion carried.
ITEMS REMOVED FROM THE CONSENT AGENDA
VI.D. RESOLUTION 2022-05 ESTABLISHING THE 70TH AND FRANCE TAX INCREMENT
FINANCING DISTRICT AND APPROVING A TAX INCREMENT FINANCING PLAN
THEREFOR – ADOPTED
The Commission expressed concern about how the project had changed over time and no longer
included an affordability component but instead replaced the potential for affordable housing with a
parking ramp then noted the developer had provided over $3 million to the City’s affordable housing
fund in lieu of constructing affordable housing units.
Minutes/HRA/March 3, 2022
Page 2
Member Jackson made a motion to adopt Resolution 2022-05 Establishing the 70th and
France Tax Increment Financing District and Approving a Tax Increment Financing
Plan Therefor. Member Staunton seconded the motion.
Roll call:
Ayes: Commissioners Jackson, Pierce, Staunton
Nay: Acting Chair Anderson
Motion carried.
VII. PUBLIC HEARINGS - Affidavits of Notice presented and ordered placed on file.
VII.A. RESOLUTION NO. 2022-04 AUTHORIZING THE SALE OF LAND TO WEST
HENNEPIN AFFORDABLE HOUSING LAND TRUST – CONTINUED TO APRIL 7,
2022
Affordable Housing Manager Hawkinson said that in 2021 the HRA acquired 425 Jefferson Avenue
to benefit the neighborhood and potentially provide affordable housing for the community. The
property was acquired because it was a nuisance and was vacant. West Hennepin Affordable Housing
Land Trust ("WHAHLT") submitted a letter of interest to acquire the property for $1.00 and it is
their estimation that the property would need approximately $365,000 worth of rehabilitation if
feasible, otherwise it would need to be demolished and replaced with a modest affordable home. She
said WHAHLT was working to keep their expenses low so they could sell the house to income
eligible home owners and place the land into a land trust to maintain the house as affordable for 99-
years. She reviewed the criteria for this action and said the Planning Commission reviewed the
proposal at their January 26 meeting and deemed that plans to sell the house to WHAHLT was in
compliance with the Comprehensive Plan and was recommended for approval.
Acting Chair Anderson opened the public hearing at 7:51 p.m.
Public Testimony
No one appeared.
The Board asked questions and provided feedback.
Member Jackson made a motion to close the public hearing at noon on March 28, 2022,
and continue action to consider HRA Resolution 2022-04 authorizing sale of land to
West Hennepin Affordable Housing Land Trust to the April 7, 2022, HRA meeting.
Member Pierce seconded the motion.
Roll call:
Ayes: Commissioners Jackson, Pierce, Staunton, and Acting Chair Anderson
Motion carried.
VIII. REPORTS/RECOMMENDATIONS
VIII.A. REDEVELOPMENT AGREEMENT TERM SHEET 4040 WEST 70TH STREET –
APPROVED
Ms. Hawkinson said Cornelia View Apartments, located at 4040 West 70th Street, was a proposed
age-restricted 100% affordable housing project to be developed by Ecumen and Lupe Development
Partners. The need for age restricted affordable housing was confirmed in the 2020 Housing Market
Study completed by Maxfield Research and in City’s Quality of Life surveys. Maxfield estimated that
1,600 new units of senior housing was needed by 2030 largely due to Edina’s and the State’s aging
population. She spoke about the large percentage of calls received from people seeking affordable
housing who were seniors who want to age in the community and that Cornelia View Apartments
would bring 118 affordable units to Edina thus expanding housing choices for seniors. She reviewed
the development funding and proposed term sheet in detail and said the Combined Housing and
Redevelopment Authority Funding Contribution would not exceed $2,839,901. Ms. Hawkinson said
marketing had not yet begun but there was already great interest in the project of which
Minutes/HRA/March 3, 2022
Page 3
approximately 74% were current Edina residents. She shared about the unit mix and the 99 years
of confirmed affordability then reviewed proposed sources of financing that would include a pay-go
note of tax increment financing through Southdale pooled TIF funds. She reviewed the
recommended terms and said development controls gap was for construction costs and not
operational costs then spoke to the public benefits that included the first affordable age-restricted
housing option in Edina in decades.
The Board asked questions and provided feedback.
Nick Anhut, Ehlers and Associates, shared the value of the property would increase to approximately
$20.5 million and noted the site was acquired for $3.6 million.
Steve Minn, Lupe Development, thanked staff for their work on this project and the importance of
a 99-year affordability lease. He said their financing partners were enthusiastic about the project
then shared more about project financing and how 30% of any excess cash flow would return to the
Foundation for ground lease payments towards their contribution of land.
Member Jackson made a motion, seconded by Member Pierce, to approve the term
sheet and authorize staff to work with legal and financial advisors to prepare a binding
redevelopment agreement based on the approved terms for 4040 West 70th Street.
Roll call:
Ayes: Commissioners Jackson, Pierce, Staunton, and Acting Chair Anderson
Motion carried.
VIII.B. MOTION TO CLOSE SESSION – POTENTIAL SALE OF REAL PROPERTY LOCATED
AT 5146 EDEN AVENUE – APPROVED
Acting Chair Anderson said this item pertained to the potential sale of portions of the vacant
property to be used as a senior housing cooperative and restaurant with indoor and outdoor
seating. He said the HRA's land broker, Frauenshuh Companies, would update the HRA Board on
negotiations with United Properties and Jester Concepts and that due to the sensitive nature of real
estate negotiations, this discussion would take place in closed section as permitted by Minnesota
Statute 13D.05 subdivision 3. No action will take place during this closed meeting.
Member Staunton made a motion, seconded by Member Pierce, to move to closed
session as permitted by MS. 13D.05 subdivision 3 to discuss the potential sale of real
property located at 5146 Eden Avenue.
Roll call:
Ayes: Commissioners Jackson, Pierce, Staunton, and Acting Chair Anderson
Motion carried.
VIII.C. MOTION TO MOVE TO OPEN SESSION – APPROVED
Member Staunton made a motion, seconded by Member Pierce, to move to open
session.
Roll call:
Ayes: Commissioners Jackson, Pierce, Staunton, and Acting Chair Anderson
Motion carried.
VIII.D. POTENTIAL SALE OF PROPERTY LOCATED AT 5146 EDEN AVENUE – APPROVED
The Commission summarized discussions from the closed session and directed staff to authorize
staff and the City Attorney to prepare purchase agreements with United Properties and Jester
Concepts consistent with the letters of intent subject to further investigation of data as it might
apply to the sites.
Minutes/HRA/March 3, 2022
Page 4
IX. EXECUTIVE DIRECTOR’S COMMENTS – Received
IX.A. GRANDVIEW PEDESTRIAN BRIDGE – DESIGN UPDATE
X. HRA COMMISSIONERS’ COMMENTS – Received
XI. ADJOURNMENT
Motion made by Commissioner Staunton, seconded by Commissioner Pierce, to
adjourn the meeting at 9:31 a.m.
Roll call:
Commissioners Jackson, Pierce, Staunton, and Acting Chair Anderson
Motion carried.
Respectfully submitted,
Scott Neal, Executive Director
Date: April 7, 2022 Agenda Item #: VI.B.
To:C hair & C ommis s ioners of the Edina HR A Item Type:
C laims
F rom:Alis ha Mc Andrews , F inance Director
Item Activity:
Subject:Approve P ayment of C laims Ac tion
Edina Housing and Redevelopment
Authority
Established 1974
C ITY O F E D IN A
HO US I NG & R EDEVELO P MENT
AUT HO R I T Y
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
A C TI O N R EQ U ES TED:
M otion to approve payment of claims for:
H R A C heck R egister 03.2022 T O TAL $1,171,806.15
I N TR O D U C TI O N:
P ayment of claims are attached.
AT TAC HME N T S:
Description
HRA Check Register 03.2022 TOTAL $1,171,806.15
City of Edina, MNINVOICE LIST BY GL ACCOUNTReport generated: 04/04/2022 14:08User: STanGeilProgram ID: apinvglaPage 1 YEAR/PERIOD: 2022/3 TO 2022/3 ACCOUNT/VENDOR INVOICE PO YEAR/PR TYP S CHECK RUN CHECK DESCRIPTION 26026000 HRA Administration26026000 6103 HRA Admin - Prof Svrs 100049 EHLERS AND ASSOCIATE 89971 0 2022 3 INV A 1,211.25 100730 DORSEY & WHITNEY LLP 3733395 0 2022 3 INV A 5,962.50 4040 Escrow for Leg 100730 DORSEY & WHITNEY LLP 3733396 0 2022 3 INV A 8,587.50 14,550.00 139627 LOUCKS 41695 0 2022 3 INV A 4,879.80 160265 FRAUENSHUH INC 403571 0 2022 3 INV A 6,850.00 5146 Eden managemen ACCOUNT TOTAL 27,491.05 26026000 6131 HRA Admin - PrfSvLegal 100730 DORSEY & WHITNEY LLP 3733392 0 2022 3 INV A 7,545.00 ACCOUNT TOTAL 7,545.00 26026000 6136 HRA Admin - PrfSvOther 123129 TIMESAVER OFF SITE S M27087 0 2022 3 INV P 227.00 20220311 470147 Feb 10 HRA Minutes 123129 TIMESAVER OFF SITE S M27088 0 2022 3 INV A 154.00 Mar 3 HRA Minutes 381.00 ACCOUNT TOTAL 381.00 ORG 26026000 TOTAL 35,417.05 26026001 HRA Affordable Housing26026001 6102 HRA Aff Hs - Contr Svrs 103300 CENTER FOR ENERGY AN 20209 0 2022 3 INV P 63.00 20220325 470383 CEE Housing Rehab P 103300 CENTER FOR ENERGY AN 20809 0 2022 3 INV A 475.00 CEE $1MM Contract o 538.00 ACCOUNT TOTAL 538.00 26026001 6718 HRA Aff Hs - CapLand 101503 HENNEPIN COUNTY 3011721220122-2022-1 0 2022 3 INV A 1,622.68 Property Tax paid b 101503 HENNEPIN COUNTY 3011721220122-2022-2 0 2022 3 INV A 1,622.68 Property Tax paid b 3,245.36 ACCOUNT TOTAL 3,245.36 ORG 26026001 TOTAL 3,783.36 26126103 Southdale 2 TIF26126103 1245 SoDa 2 TIF - Loans Rec 160334 EXECUTIVE TITLE SERV 5004 KENT 0 2022 3 DIR P 436,491.00 20220304 28 Metro HRA program -
City of Edina, MNINVOICE LIST BY GL ACCOUNTReport generated: 04/04/2022 14:08User: STanGeilProgram ID: apinvglaPage 2 YEAR/PERIOD: 2022/3 TO 2022/3 ACCOUNT/VENDOR INVOICE PO YEAR/PR TYP S CHECK RUN CHECK DESCRIPTION 160350 WEST TITLE LLC 220239253 0 2022 3 DIR P 672,856.49 20220330 29 5015-5017 44TH STRE ACCOUNT TOTAL 1,109,347.49 26126103 6103 SoDa 2 TIF - Prof Svrs 100049 EHLERS AND ASSOCIATE 89973 0 2022 3 INV A 2,295.00 ACCOUNT TOTAL 2,295.00 ORG 26126103 TOTAL 1,111,642.49 26126106 Grandview 2 TIF26126106 6136 Grnd 2 TIF - PrfSvOther 160292 FORECAST PUBLIC ART 2040 0 2022 3 INV P 2,400.00 20220325 470413 ACCOUNT TOTAL 2,400.00 26126106 6715 Grnd 2 TIF - CapInfrast 100932 XCEL ENERGY 768828726 0 2022 3 INV P 29.48 20220311 470170 Acct# 51-0013777347 100932 XCEL ENERGY 769326015 0 2022 3 INV P 1.38 20220318 470349 30.86 100995 SHORT-ELLIOT-HENDRIC 421743 0 2022 3 INV P 1,891.74 20220401 470779 ENG 21-6 Eden Ave/B 124002 KIMLEY-HORN AND ASSO 160603028-0222 0 2022 3 INV P 9,145.00 20220401 470702 ENG 21-6 Grandview 124002 KIMLEY-HORN AND ASSO 20863900 0 2022 3 INV P 5,514.11 20220401 470702 Engineering Service 14,659.11 ACCOUNT TOTAL 16,581.71 ORG 26126106 TOTAL 18,981.71 26126107 50th and France 2 TIF26126107 6103 50 & F TIF - Prof Svrs 100049 EHLERS AND ASSOCIATE 89972 0 2022 3 INV A 191.25 ACCOUNT TOTAL 191.25 26126107 6406 50 & F TIF - SupOther 101483 MENARDS INC 57504 0 2022 3 INV A 267.85 Supplies for variou 104020 DALCO ENTERPRISES IN 3906796 0 2022 3 INV A 1,219.12 Ice Melt 106673 TAPCO I720952 0 2022 3 INV P 261.52 20220325 470593 Height Guard North 141960 AMAZON CAPITAL SERVI 1XTW-HP41-DV3H 0 2022 3 INV P 41.80 20220325 470356 ACCOUNT TOTAL 1,790.29
City of Edina, MNINVOICE LIST BY GL ACCOUNTReport generated: 04/04/2022 14:08User: STanGeilProgram ID: apinvglaPage 3 YEAR/PERIOD: 2022/3 TO 2022/3 ACCOUNT/VENDOR INVOICE PO YEAR/PR TYP S CHECK RUN CHECK DESCRIPTION ORG 26126107 TOTAL 1,981.54 FUND 2600 Housing & Redvlpmt Authority TOTAL: 1,171,806.15 ** END OF REPORT - Generated by Shirleng Tan Geil **
Date: April 7, 2022 Agenda Item #: VI.C .
To:C hair & C ommis s ioners of the Edina HR A Item Type:
Advisory C ommunic ation
F rom:S tephanie Hawkinson, Affordable Housing
Development Manager Item Activity:
Subject:2021 Affordable Hous ing C ompliance R eport 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:
R eceive the 2021 Affordable H ousing C ompliance Report prepared in collaboration with Affordable H ousing
C onnections.
I N TR O D U C TI O N:
T he Affordable H ousing P olicy for new multifamily residential developments has been in place since 2015. T he
intent was that affordable units would be included in market rate developments and be rented to income qualified
tenants. T he affordable units would remain affordable for a predetermined period of time, which for some was
15-years and for new developments is now 20-years.
Affordable H ousing C onnections (AH C ) was hired as a compliance consultant to confirm and verify that the
affordable units are affordable and being rented to income eligible tenants. AH C met with the management staff
at Avidor, Aurora, Aria, the L orient, and N olan M ains. T he Millenium with be included in next year's report to
allow them time to become fully leased.
All but Aria are in compliance of renting to income eligible tenants at the determined affordable rent levels.
AT TAC HME N T S:
Description
Staff Report
April 7, 2022
Chair and Members of the Edina Housing and Redevelopment Authority
Stephanie Hawkinson, Affordable Housing Development Manager
2021 Affordable Housing Compliance Report
Information / Background:
In 2015 the City adopted an Affordable Housing Policy that required new multifamily housing developments
asking for a zoning amendment or financial support to either include affordable units in their development or
pay a fee in lieu. Five market rate developments that included affordable units have been completed with
the affordable units fully leased:
Building Owner Management Company
Aria Doran Company Doran Management
Aurora Aurora Investments Ebenezer
Avidor CRP/TCC AA II Edina, LLC Allegro Management Company
Nolan Mains Edina Market Street, LLC Saturday Properties
The Lorient Orion 4500 France, LLC Greco Properties
In December 2018, the City entered into a service contract with Affordable Housing Connections (AHC) to
monitor these five buildings and all new market rate developments that contain affordable units. The
compliance monitoring is to confirm and verify the following:
1. The approved number of units have rents that are deemed affordable per the agreement made with
the City (with rents at the 50% and/or 60% Area Median Income levels); and
2. The affordable units are being rented to households who are income qualified.
STAFF REPORT Page 2
Affordability Requirement Income Limits Rent Limits
50% Area Median Income 1 person – $36,750
2 people - $42,000
3 people - $47,250
Studio – $918
1 Bedroom – $984
2 Bedroom - $1,181
60% Area Median Income 1 person – $44,100
2 people - $50,400
3 people - $56,700
Studio – $1,102
1 Bedroom – $1,181
2 Bedroom - $1,417
Compliance Results
Four of the five developments are in compliance, with Aria remaining non-compliant. These four
developments comply as affordable places to live and serving income qualified tenants. A letter of non-
compliance was sent to Aria in February.
Avidor – 18 files reviewed. Rents comply. Proper paperwork demonstrating that tenants meet
income qualifications is not sufficient. The owner/agent put in a tremendous amount of effort in
making sure the files accurately represent the tenants financial situation.
Aurora – 10 affordable units. Incomes and rents comply. Rents and incomes are certified by the
State as the residents in the affordable units receive Elderly Waiver assistance.
Nolan Mains – 10 files were reviewed. There were “sufficient but Imperfect” findings, and these have
been communicated with the owner and do not constitute noncompliance. Owner/agent was
responsive.
The Lorient – 5 tenant files review (3 qualifying and 2 turn-over). The development complies with
the Affordable Housing Program’s income and rent restrictions. The owner/agent was cooperation
and quickly responded during the review process.
Aria – Tenants are paying the allowable rents, but then are charged utilities, trash fees and other
fees in addition to rent which makes them non-compliant. The rent cap must include all required
fees and a utility allowance otherwise the units are deemed not affordable. Furthermore, some
tenants files lack sufficient information to determine income eligibility.
Every three years AHC will review the tenant files. In the interim, AHC will review new tenant files and the
Property Managers self-certification.
Compliance Expectations
With the early developments (Avidor, Aria and Aurora) there were little written expectations of how the
properties would deliver the affordable units and how the City would confirm that the affordable units were
serving tenants who needed them. Negotiations were made in good faith, yet these initial buildings were
approved prior to the development of the Affordable Housing Policy Guide (“Guide”) which defines
program requirements and how they are achieved. Each development also has a unique regulatory
agreement, making compliance monitoring a challenge. For Aurora, the requirement to provide affordable
units was only stated in the Resolution. With each successive development, the requirements have become
increasing defined in the Development Agreements with the Guide included as an attachment. Yet even
STAFF REPORT Page 3
without the Guide in place at the time of approval, the owners/agents of Avidor and Aurora have worked
diligently to comply with the affordability requirements now in place.
To accurately determined income compliance there are forms and worksheets that need to be completed to
support the 60% eligibility at move-in and annually thereafter. As income can come from multiple sources in
addition to traditional wages, the forms and worksheets are necessary. Resident rent ledgers are reviewed
to determine rent compliance. An annual report is completed to collect the income and rent data.
Aria
All the developments asides from Aria utilize the forms provided and accept the notion that “rent” means
the full cost for living in a unit – rent plus utilities plus any other required fees. This definition of rent was
endorsed at the December 12, 2020 HRA meeting. The City acknowledges Doran Companies willingness
to provide affordable units, and Aria is rent compliant, but the development is not technically affordable as
tenants must pay utilities, trash collection and other fees in addition to rent. Doran is complying with the
written agreement, but not with the intended spirit of the agreement. Doran Companies has informed Staff
that they will no longer submit any worksheet, forms or other documents provided to them regarding
affordability compliance. Rather they will only provide the incomes of the residents at the date of lease
signing and the monthly rental rates. How the incomes are determined is unknown.
As intent cannot be confirmed nor verified, Doran Companies is complying with the form of agreement that
was in place at the time. Nonetheless, the City cannot publicly claim that Aria is affordable to households
with incomes at or below 60% of the Area Median Income and will therefore remove this as an option for
an affordable place to live on our website.
Compliance Support
Since 2019 AHC staff has been meeting with Property Management staff or owners to review expectations
and requirements and has been on-call throughout the year to answer questions as they arise. As renting
affordable units to income qualified tenants requires very different paperwork and oversight than leasing
Market Rate units, AHC spent significant time educating property management staff. Interactions took place
through in person meetings, WebEx meetings, calls, and emails.
Date: April 7, 2022 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:S tephanie Hawkinson, Affordable Housnig
Development Manager Item Activity:
Subject:4040 Wes t 70th S treet - R edevelopment Agreement
for Tax Increment F inancing
Ac tion
Edina Housing and Redevelopment
Authority
Established 1974
C ITY O F E D IN A
HO US I NG & R EDEVELO P MENT
AUT HO R I T Y
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
A C TI O N R EQ U ES TED:
Approve the Redevelopment Agreement
I N TR O D U C TI O N:
T his item pertains to the use of public financing to partially fund private redevelopment at 4040 West 70th Street.
S pecial counsel at Dorsey and W hitney have prepared a complete R edevelopment Agreement based on the Term
S heet that was presented to the E dina H R A in M arch 2022.
T he developer and representatives from D orsey & Whitney and Ehlers Associates will be available to answer any
questions about this proposed Agreement.
T his Agreement will also be presented to the C ity C ouncil for consideration on April 19, 2022.
S taff recommends that this R edevelopment Agreement be approved.
AT TAC HME N T S:
Description
Staff Report
Redevelopment Agreement
April 7, 2022
Chair and Commissioners of the Edina HRA
Stephanie Hawkinson, Affordable Housing Development Manager
Approve Development Agreement for the Affordable Housing Development at 4040 West 70th
Street
Information / Background:
Cornelia View Apartments, located at 4040 West 70th Street, is a proposed age-restricted 100% affordable
housing project to be developed by Ecumen and Lupe Development Partners (“Developer”). The need for
age restricted affordable housing was confirmed in the 2020 Housing Market Study completed by Maxfield
Research and in City’s Quality of Life surveys. Maxfield estimated that 1,600 new units of senior housing is
needed by 2030. This is largely due to Edina’s, and the State’s, aging population: 15% of Edina’s population
are young baby boomers, and seniors aged 75 to 84 years have experience the greatest population growth.
Cornelia View Apartments will bring 118 units to Edina thus expanding housing choices for seniors.
The proposed development has received previous City Council and HRA approvals:
February 13, 2020 - HRA - Forgivable loan to the Edina Housing Foundation to acquire the site.
June 24, 2021 – HRA – Resolution No. 2021-05 Supporting senior affordable housing using TIF.
August 17, 2021 - City Council - Creation of a TIF District.
October 19, 2021- City Council - Site Improvement Plan Agreement.
February 10, 2022 - HRA - Up to $2,000,000 in additional gap financing.
March 3, 2022 – HRA approval of Term Sheet for Redevelopment Agreement.
The Development has been awarded a tax-exempt housing bond allocation from the State of Minnesota and
is planning to close on its financing in June, 2022. The development has also received financing from the
following sources:
Hennepin County
Metropolitan Council
Minnesota Housing – Allocation of Tax Credits.
STAFF REPORT Page 2
The final gap amount of up to $2.84 million in a combination of a deferred loan and TIF pay-go Note was
approved by the HRA, contingent upon final approval of the Redevelopment Agreement. The HRA’s
allocation is to be reduced if additional funds are awarded by Hennepin County and the Minnesota
Department of Employment and Economic Development. Those funding awards will not be announced until
May.
Staff engaged Ehlers Associates and Dorsey & Whitney to review the development proforma, determine
eligibility and need, and to assist in negotiating the terms of the public assistance.
1. Development Funding Overview
Multifamily Affordable Housing typically requires multiple funding sources. To this end the Developer
successfully secured financing through multiple competitive application processes, many of which will remain
in progress until closing:
Sources
Debt Financing $ 16,597,000 Awarded by Minnesota Management and Budget
TIF Pay-Go Note $ 1,503,000
Maximizing TIF contribution (95%)
Used to leverage additional debt
Tax Credit Equity $ 10,529,124 Unsecured equity contributed by investor
Sales Tax Rebate $ 436,380 Rebate at end of construction period
Energy Rebate $ 30,000 Rebate at end of construction period
Metropolitan Council – LCDA $ 661,500 Pass thru forgivable loan
Metropolitan Council - LHIA $ 712,714 Pass thru forgivable loan
Hennepin County $ 665,000 Forgivable loan
Deferred Developer Fee $ 500,000 Paid from cash flow after debt payment
GAP* $ 1,336,901
Second position, Deferred, 2% simple interest,
Coterminus with first mortgage amortization
Sub-Total $ 32,971,619
EHF Land $ 3,650,000 Forgivable loan to Edina Housing Foundation
TOTAL $ 36,621,619
*If Hennepin County's loan is greater than City's, they may request being in 2nd position.
The loan documents for all sources would be executed at the financial closing with the disbursement of
funds regulated by the Master Disbursement Agreement (“MDA”). The MDA will be drafted in
collaboration with the first mortgage lender, tax credit investor, Hennepin County and Edina HRA. None of
the listed funding sources will be accessable to the Developer prior to financial closing.
2. Redevelopment Agreement – Highlights
A. TIF Assistance and Deferred Loan – Total not to exceed $2,839,901
“Gap” Financing Loan Structure – Not to exceed $1,336,901
Second position, subordinate to first mortgage financing;
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2% simple interest, deferred;
Coterminous with First Mortgage financing; and
Secured with Mortgage and Note.
TIF Pay-Go Note – Not to exceed $1,503,000
Note executed upon completion of the development.
Sized based on remitting 95% of future TIF generated from the project.
Interest rate of 4.0%.
Tax increment will be available commencing in tax year 2025.
In addition to the Pay-Go TIF Note, the recommended source of the gap financing is Southdale 2 TIF
“Special Legislative” pooled funds, of which $1,183,000 remains uncommitted and must be used to further
affordable housing at previously approved locations, including 4040 West 70th Street. Any uncommitted
amount not applied to this project will need to be returned as excess TIF to be redistributed to the general
taxing districts and no longer accessible for affordable housing.
The combined source of funding requested of the HRA is $2,839,901. The Redevelopment Agreement
establishes that any additional funds coming from future funding awards will be used to reduce the HRA’s
committed amount, inclusive of TIF and GAP. This reduction will be balanced against the Maximum
Guaranteed Price of the construction contract that will be provided by June 1. If supply chain issues and
other escalating factors cause the construction contract pricing to vary from a preconstruction estimate of
$23,936,188 provided prior to the March 3 Term Sheet, the HRA funds may be used to fill the added gap, or
be reduced if the construction budget is lower than expected, but not to exceed $2,839,901.
Once the HRA’s deferred loan contribution is reduced to $1,182,902, additional reductions will be applied
against the Deferred Developer Fee (“DDF”) until that reaches $400,000. This is to incentivize the
Developer to actively pursue additional funding. Once the DDF is reduced to $400,000, any additional
dollars contributed to the development will again serve to reduce the HRA’s contribution.
B. Affordability
All rents within the building will range from serving households with incomes at 30% of Area Median Income
(“AMI”) to 80% of AMI. This equates with monthly rents ranging from $754 to $1,775 including utilities.
The allowed incomes range from very low-income requiring rental assistance to $67,000 for a two-person
household. This rent and income range aligns with various Policies previously adopted by the HRA and City
Council:
o New Multifamily Affordable Housing Policy: This policy states that Developers/Owners cannot
discriminate against tenant based rental assistance, including by not limited to Housing Choice Voucher
holders (Section 8) and Housing Support. The inclusion of units at Cornelia View that have tenants
supported with Housing Support rental assistance aligns with the City policy.
o Fair Housing Policy: In 2018 The City Council approved a Fair Housing Policy. It states, “It is the policy
and commitment of the City of Edina to ensure that fair and equal housing opportunities are available to
all persons in all housing opportunities and development activities funded by the City regardless of race,
STAFF REPORT Page 4
color, religion, sex, sexual orientation, marital status, status with regard to public assistance, creed,
familial status, national origin, or disability.”
o 2040 Comprehensive Plan: In the Housing Chapter of the Comprehensive Plan includes a goal of 1,804
new affordable housing units, of which 751 will have rents to serve households with incomes at or
below 30% of the Area Median Income.
o Comprehensive Plan Housing Goal Tally:
Forecasted Need Proposed/Approved % of Need Remaining
Total
Units 1804 330 18.3% 1474
<30% AMI 751 22 2.9% 729
31-50%
AMI 480 127 26.5% 353
51-80%
AMI 573 181 31.6% 392
Various funding partners award financing based on application criteria, including providing housing to serve
very low-income households and households at risk of homelessness. As restricted rents limit the amount
of debt that can be borrowed, $18,521,619 of Cornelia View’s development costs need to come from public
sources, including Hennepin County, Metropolitan Council, and Minnesota Housing (tax credits). Hennepin
County, for example, awards funding to development where a portion of the units (6 at Cornelia View) are
set aside to serve County clients. A person could be in the Hennepin County system because they are
leaving the hospital but cannot move into a place with stairs, leaving an abusive situation, or seeking
assistance for simply adjusting to being a senior. Six other units are set aside for households at risk of
homelessness as the Metropolitan Council refers to 30% units as serving people at risk of homelessness.
Without the units, it is likely those residents will be homeless. For age restricted housing, the County and
State define these for people aged 55 or older who have experienced homelessness. They will receive
Housing Support rental assistance and services from Simpson Housing. The other 112 units (95%) do not
have homeless requirements. Every tenant for the 118 units will be screened through a rigorous Tenant
Selection Screening process.
The income and rent range is not unique to Cornelia View. Rather this is a standard situation for past and
future 100% affordable developments.
C. Other Requirements
Subject to HRA approval, the financial closing will occur on or about June 24, 2022 with
construction commencing soon thereafter.
Developer must provide a final planning pro forma by June 1, 2022 to verify the project cost and
final HRA funding amounts. Any additional funding amounts received in the interim will be utilized
to offset certified project construction cost increases and also the HRA’s final funding amounts.
The Redevelopment Agreement is secured by a Declaration of Covenants and Restrictions that will
be in place for 99-years.
A Ground Lease from the Edina Affordable Housing Foundation will be executed and also secure
affordability for 99-years.
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A Land Use Restriction Agreement will be recorded to restrict the use of the property for
affordable housing. The LURA will be in place for 40-years.
Development must be completed by December 31, 2023.
The Development must be constructed in accordance with the Site Improvement Plan Agreement.
100% of the units must be affordable: Six units affordable to households with incomes at or below
30% of Area Median Income (AMI); 49 units affordable to households with incomes at or below 50%
of AMI; 46 units affordable to households with incomes at or below 60% of AMI; and 17 units will be
affordable to households with incomes at or below 80% of AMI.
Developer will execute a Minimum Assessment Agreement.
4040 West 70th Street Apartments LP may assign their rights and obligations under the
Redevelopment Agreement to R4, the construction lender.
The Limited Partner has the right to step in to cure any defaults.
3. Age Restricted Housing
Cornelia View will be an age restricted building. Fair Housing regulations state that to have the exemption
for age restricted housing means that 80% of a units must have at least one occupant that is age 55 or
older. This allows the owner to decline tenancy to people younger than aged 55. The Developer is
complying with Fair Housing Laws by marketing the building so that 100% of the units are for people aged 55
or older. The Developer must advertise and publish policies and procedures for 55+ housing and adhere to
them. If they do not adhere to the policies restricting to 55+ they would not be in compliance with Fair
Housing’s exemption that allows for age restrictions. In addition, the Developer must seek verification of
the tenant applicants’ age(s). Per Fair Housing laws there could be a younger spouse or a child living in the
building. Nonetheless, traditionally age restricted housing is very strict about age – it is an intentional living
community with people making the choice to live with other seniors and not in a building with
children. Ecumen has vast experience with managing age restricted living environments.
Recommended Action
Approve the Redevelopment Agreement providing the minimum local financial assistance necessary to fund
the project.
Execution Draft
Redevelopment Agreement (Cornelia View)
4856-3825-8707\6
Redevelopment Agreement
by and between
Housing and Redevelopment Authority of Edina, Minnesota,
and
4040 West 70th Street Apartments, LP
Dated as of
_______________, 2022
THIS DOCUMENT WAS DRAFTED BY:
Dorsey & Whitney LLP
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402-1498
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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 ............................................................. 6
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 ....................................................................................................................... 8
3.4 Assignment of Note ...................................................................................................... 9
3.5 Minimum Assessment Agreement ............................................................................. 10
3.6 Deferred HRA Loan ................................................................................................... 10
3.7 Conditions Precedent to Deferred HRA Loan Closing ................................................. 10
3.8 Financial Assistance Adjustment ............................................................................... 11
3.9 Deferred Developer Fee Cap and Adjustment ............................................................ 11
Article IV Project Requirements ................................................................................................................ 12
4.1 Commencement and Completion of Project............................................................... 12
4.2 Zoning and Land Use Approvals ................................................................................ 12
4.3 Building and Construction Permits ............................................................................ 12
4.4 Restrictions on Development ..................................................................................... 12
4.5 Project Financing ........................................................................................................ 12
4.6 Effect of Delay ........................................................................................................... 13
4.7 Additional Responsibilities of Developer. ................................................................. 13
4.8 Certificate of Completion ........................................................................................... 13
Article V Affordable Housing .................................................................................................................... 14
5.1 Use Restriction ........................................................................................................... 14
5.2 Affordable Housing Requirements ............................................................................. 14
5.3 Restrictive Covenant .................................................................................................. 16
5.4 Consents and Subordination ....................................................................................... 16
Article VI Encumbrance of the Property ................................................................................................... 17
6.1 Mortgage of the Project Area ..................................................................................... 17
6.2 Copy of Notice of Default to Mortgagee and Limited Partner ................................... 17
6.3 Mortgagee’s and Limited Partner’s Option to Cure Events of Default ...................... 17
6.4 Rights of a Foreclosing Mortgagee ............................................................................ 17
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6.5 Events of Default Under Mortgage ............................................................................ 18
Article VII Insurance and Indemnification ................................................................................................ 18
7.1 Insurance .................................................................................................................... 18
7.2 Indemnification .......................................................................................................... 19
Article VIII Other Developer Covenants ................................................................................................... 19
8.1 Developer Reimbursement Obligations ..................................................................... 19
8.2 Maintenance and Operation of the Project ................................................................. 20
8.3 Cooperation with Litigation ....................................................................................... 20
8.4 Condemnation, Damage, or Destruction .................................................................... 20
8.5 Business Subsidy Agreement ..................................................................................... 20
8.6 Developer/Authority Grant Applications ................................................................... 20
8.7 Project Information .................................................................................................... 21
Article IX Transfer Limitations ................................................................................................................. 21
9.1 Representation as to the Project ................................................................................. 21
9.2 Limitation on Transfers .............................................................................................. 21
9.3 Collateral Assignment to Mortgage Holder ............................................................... 23
Article X Events of Default and Remedies ................................................................................................ 23
10.1 Events of Default Defined .......................................................................................... 23
10.2 Developer Events of Default ...................................................................................... 23
10.3 Authority Events of Default ....................................................................................... 23
10.4 Cure Rights ................................................................................................................. 24
10.5 Authority Remedies on Developer Events of Default ................................................ 24
10.6 Developer Remedies on Authority Events of Default ................................................ 24
10.7 No Remedy Exclusive ................................................................................................ 25
10.8 No Additional Waiver Implied by One Waiver ......................................................... 25
10.9 Reimbursement of Attorneys’ Fees ............................................................................ 25
Article XI Additional Provisions ............................................................................................................... 25
11.1 Conflicts of Interest .................................................................................................... 25
11.2 Titles of Articles and Sections .................................................................................... 25
11.3 Notices and Demands ................................................................................................. 25
11.4 Governing Law, Jurisdiction, Venue and Waiver of Trial by Jury ............................ 26
11.5 Severability ................................................................................................................. 26
11.6 Consents and Approvals ............................................................................................. 27
11.7 Additional Documents ................................................................................................ 27
11.8 Limitation ................................................................................................................... 27
11.9 Authority Approval; Representatives ......................................................................... 27
11.10 Superseding Effect ..................................................................................................... 27
11.11 Relationship of Parties................................................................................................ 27
11.12 Survival of Terms ....................................................................................................... 27
11.13 Data Practices Act ...................................................................................................... 27
11.14 No Waiver of Governmental Immunity and Limitations on Liability ........................ 27
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11.15 City and Authority Regulatory Authority................................................................... 28
11.16 Memorandum of Agreement ...................................................................................... 28
11.17 Conflicts Between this Agreement and the Site Improvement Agreement ................ 28
11.18 Limited Liability ........................................................................................................ 28
11.19 Time is of the Essence ................................................................................................ 28
11.20 Counterparts ............................................................................................................... 28
11.21 Amendments ............................................................................................................... 28
11.22 Term ........................................................................................................................... 28
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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 Form of Minimum Assessment Agreement
Exhibit F Form of Deferred HRA Loan Agreement
Exhibit G Form of Project Funding Certificate
Exhibit H RESERVED
Exhibit I Form of Affordable Housing Restrictive Covenant
Exhibit J Memorandum of Redevelopment Agreement
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Redevelopment Agreement
(Cornelia View)
This Redevelopment Agreement (this “Agreement”) is made and entered into _______________,
2022 (“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 4040 West 70th Street Apartments, LP, 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. 2021-06, adopted July 29, 2021, and City Council
Resolution 2021-60 adopted August 17, 2021 (collectively, the “Authorizing Resolutions”), the Authority
and the City adopted a Tax Increment Financing Plan (the “TIF Plan”) for the establishment of the 4040
West 70th 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 4040 West 70th Street, Edina
Minnesota and legally described on the attached Exhibit A (the “Property”).
F. The Property is owned by the East Edina Housing Foundation dba Edina Housing
Foundation (“EHF”), who received a forgivable loan from the Authority in the amount of $3,650,000 to
acquire the Property for affordable housing purposes (the “Acquisition Loan”). EHF then entered into an
Affordable Housing Development and Ground Lease Option Agreement with Developer on November 4,
2020 (the “Option Agreement”) with respect to the Property.
G. Pursuant to the terms of the Option Agreement, if Developer secures all necessary Project
funding and all Project site plan approvals, EHF and Developer shall enter into a Ground Lease for the
Property for a term of 99 years (the “Ground Lease”) whereby the Project shall remain 100% affordable.
H. Developer has proposed a project to redevelop and improve the Property with a 118-unit,
100% age restricted affordable housing community, known as “Cornelia View” (as more particularly
described in this Agreement and the City Approvals, the “Project”).
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I. Pursuant to City Council Resolution 2021-96, adopted October 19, 2021, the City approved
the final rezoning, final plat, and final development plan for the Project.
J. 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 TIF Note in the maximum principal amount of
$1,503,000.00 and (ii) provide a deferred loan to Developer in the maximum principal amount of
$1,336,901.00, all upon the terms and conditions of this Agreement.
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. Unless the context otherwise specifies or requires, the following terms have
the following definitions. Certain other capitalized terms are defined elsewhere in this Agreement. All
defined terms may be used in the singular or the plural, as the context requires.
“Acquisition Loan” has the meaning set forth in Recital F.
“Affordable Housing Restrictive Covenant” has the meaning set forth in 5.3.
“Affordable Units” has the meaning set forth in Article V.
“Agreement” means this Redevelopment Agreement, as the same may be from time to time
modified, amended or supplemented.
“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” means the tax increments derived from the Property (including the
Project) which have been received and retained by the Authority from the County during any applicable
time frame in accordance with the provisions of the TIF Act, including without limitation Minnesota
Statutes, Section 469.177, less the amount of such 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.
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“Board” means the Board of Commissioners of the Authority.
“Certificate of Completion” means a certificate in substantially the form attached as Exhibit B,
signed by the Authorized Representative for the Authority, to be issued by the Authority pursuant to the
terms of Section 4.8.
“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, and all other approvals, permits, licenses, and
agreements issued by or entered into with the City, the Authority, or other governmental authority relating
to the Property and Developer’s improvement thereof.
“City Consultants” means the financial, engineering, legal, TIF eligibility and other similar advisors
to the City and the Authority.
“City Council” means the City Council of the City.
“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.
“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.
“DEED” means the Minnesota Department of Employment and Economic Development.
“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 HRA Loan” has the meaning set forth in Section 3.6.
“Developer” means 4040 West 70th Street Apartments, LP, a Minnesota limited partnership, its
permitted successors and/or assigns.
“EHF” means Edina Housing Foundation.
“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
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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.
“Ground Lease” has the meaning set forth in Recital H.
“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.
“HRA Loan Agreement” as the meaning set forth in Section 3.6.
“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.
“LCDA” means the Metropolitan Council Livable Communities Demonstration Account.
“LHIA” means the Metropolitan Council Local Housing Incentives Account.
“LURA” has the meaning set forth in Section 5.2.
“Master Disbursement Agreement” means the agreement by and among Developer, the Authority,
other funding sources shown in the TIF Pro Forma, pursuant to which the Project funds will be disbursed
for the construction of the Project, including the proceeds from the Deferred HRA Loan, in a form
reasonable acceptable to the Authority.
“Memorandum of Agreement” means the document described in 11.16Section 11.16 and
substantially in the form shown in Exhibit J.
“Minimum Assessment Agreement” means the Minimum Assessment Agreement establishing a
Minimum Market Value of the Project substantially in the form attached hereto as Exhibit E.
“Mortgage” has the meaning set forth in Section 6.1(a).
“Option Agreement” has the meaning set forth in Recital F.
“Pledged Tax Increments” means 95.0% of the Available Tax Increments.
“Project” means the construction and development of a 118-unit, 100% age restricted affordable
housing community, known as “Cornelia View” 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. 2021-96.
“Project Funding Certificate” means the certificate (in the form attached hereto as Exhibit G)
required to be delivered by Developer to the Authority in accordance with Section 4.5.
“Property” means the land legally described on the attached Exhibit A.
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“PUD Ordinance” means City Ordinance No. 2021-05.
“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.
“Site Improvement Contract” means that certain Site Improvement Performance Agreement dated
October 19, 2021 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.
“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.
“TIF District” has the meaning set forth in Recital D.
“TIF Note” has the meaning set forth in Section 3.3(a).
“TIF Plan” has the meaning set forth in Recital D.
“TIF Pro Forma” means a detailed financial pro forma for the Project, including total Project costs,
sources and uses of Project financing, return calculations based on Project income and expenses, in
substantially the form attached hereto as Exhibit C, and all as updated by Developer from time to time in
accordance with this Agreement based on actual and/or projected Project information, as the same becomes
available during the development of the Project.
“Unavoidable Delays” means actual delays, 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,
global 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, as of the date hereof:
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(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, as
of the date hereof:
(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 Option Agreement is in full force and effect and Developer is not in default
thereunder. Developer holds a valid contract right to enter into the Ground Lease for the Property.
(c) The execution and delivery of this Agreement and the consummation of the
transactions contemplated thereby, and the fulfillment of the terms and conditions thereof do not
and will not conflict with or result in a breach of any material terms or conditions of Developer’s
organizational documents, any restriction or any agreement or instrument to which Developer is
now a party or by which it is bound or to which any property of Developer is subject, and do not
and will not constitute a default under any of the foregoing or to the best of Developer’s knowledge
be a violation of any order, decree, statute, rule or regulation of any court or of any state or Federal
regulatory body having jurisdiction over Developer or its properties, including its interest in the
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.
(d) To the best of Developer’s knowledge and belief, the execution and delivery of
this Agreement will not create a conflict of interest prohibited by Minnesota Statutes, Section
469.009, as amended.
(e) 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.
(f) Developer shall reasonably cooperate with the City and 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.
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(g) There are no pending or to the best of Developer’s knowledge, threatened legal
proceedings, of which Developer has notice, contemplating the liquidation or dissolution of
Developer or threatening its existence, or seeking to restrain or enjoin the transactions contemplated
by the Agreement, or questioning the authority of Developer to execute and deliver this Agreement
or the validity of this Agreement.
(h) Developer is not currently delinquent in the payment of any business, occupation,
sales, use, gross receipts, rental, real and personal property and other similar taxes imposed with
respect to any real property owned or leased by any of such parties in the State.
(i) Developer has not received any notice from any local, state or federal official that
the activities of Developer or the Authority with respect to the 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.
(j) 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.
(k) 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.
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 Available Tax Increments will be available commencing in the tax year 2025. Developer
acknowledges and agrees that the Authority and the City may take appropriate steps to modify the TIF
District in the future, including, without limitation, incorporating additional land into the TIF District.
Developer shall cooperate with the Authority and the City with any such future modification, including to
execute and deliver any supplements or modifications to this Agreement that are reasonably required in
connection therewith, provided that no such modification or supplement shall (a) increase any obligation
of Developer hereunder or (b) adversely affect any right of or benefit of Developer hereunder.
3.2 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”).
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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 $1,503,000.00, subject to adjustment
pursuant to Section 3.8. The TIF Note shall bear simple interest on the unpaid principal balance
thereof at a fixed rate equal to 4.0% per annum. Semi-annual payments upon and accrual of interest
on the unpaid principal balance of the TIF Note will commence upon the Authority’s issuance of
the TIF Note, all in accordance with the terms and conditions of the TIF Note.
(b) Condition of Issuance. The Authority’s obligation to issue the TIF Note to
Developer is subject to the Developer’s satisfactions of each of the following conditions (and to
the extent the Authority’s approval is required for any of the following conditions, such approval
will not be unreasonably withheld, conditioned or delayed):
(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 caused Completion of the Project;
(iii) Developer shall have provided an updated TIF Pro Forma to the Authority,
certified by Developer as true and correct and updated to reflect actual Project funding
sources, uses, costs, and then-current projected cash flows and returns;
(iv) Developer shall have submitted documentation necessary to secure all
grant payments as well as other documents to administer the closing of all grant
agreements;
(v) Developer shall have executed the Minimum Assessment Agreement and
caused the same to be recorded against the Property;
(vi) Developer shall have executed the Memorandum of Agreement and
caused the same to be recorded against the Property;
(vii) Developer shall have executed the Affordable Housing Restrictive
Covenant and caused the same to be recorded against the Property;
(viii) No Developer Default or Developer Event of Default have occurred and
be ongoing under this Agreement and no Developer default shall exist under any of the
City Approvals, subject, in all events, to applicable notice and cure periods; and
(ix) the Certificate of Completion for the Project shall have been issued by the
Authority in accordance with the terms and conditions of this Agreement.
(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
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amount of money which Developer will receive as a reimbursement, such amount being payable
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 Assignment of Note. The TIF Note shall not be assignable or transferable without the prior
written consent of the Authority; provided, however, the Authority will not unreasonably withhold, delay,
or condition its consent to (a) the collateral assignment of 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. 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
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
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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.
3.5 Minimum Assessment Agreement.
(a) Developer shall execute a minimum assessment agreement in substantially the
form attached to this Agreement as Exhibit E (the “Minimum Assessment Agreement”),
establishing the minimum assessed value for the Property for the duration of the TIF District (the
“Minimum Assessed Value”). Developer shall be responsible for obtaining the certification of the
Hennepin County Assessor (the “County Assessor”) to the Minimum Assessment Agreement and
for recording the Minimum Assessment Agreement against the Property.
(b) Nothing in the Minimum Assessment Agreement shall limit the discretion of the
County Assessor to assign an estimated market value to the Property in excess of the Minimum
Assessed Value or prohibit Developer from seeking through the exercise of legal or administrative
remedies a reduction in such market values for property tax purposes; provided, however,
Developer shall not seek a reduction of such estimated market value below the Minimum Assessed
Value.
(c) The Minimum Assessment Agreement must be certified by the County Assessor,
as provided in Minnesota Statutes, Section 469.177, Subdivision 8, upon a finding by the County
Assessor that the Minimum Assessed Value is reasonable. Pursuant to Minnesota Statutes, Section
469.177, Subdivision 8, the filing by Developer of the Minimum Assessment Agreement, shall
constitute notice to any subsequent encumbrancer or purchaser of the Property (or any part thereof),
whether voluntary or involuntary, and such Minimum Assessment Agreement shall be binding and
enforceable in its entirety against any such subsequent purchaser or encumbrancer, including the
holder of or mortgagee under any mortgage.
(d) Developer shall cause the Minimum Assessment Agreement to be recorded against
the Property before the issuance of the TIF Note.
3.6 Deferred HRA Loan. In consideration of Developer’s fulfillment of its obligations under
this Agreement, and subject the conditions precedent to closing set forth in Section 3.7 and in the HRA Loan
Agreement (defined below) and subject to adjustment of the loan amount pursuant to Section 3.8, the Authority
agrees to make a loan (the “Deferred HRA Loan”) to Developer in the maximum original principal amount of
$1,336,901.00, pursuant to the terms and conditions of a loan agreement in substantially the form attached
as Exhibit F (the “HRA Loan Agreement”). The proceeds of Deferred HRA Loan shall be disbursed
pursuant to the Master Disbursement Agreement.
3.7 Conditions Precedent to Deferred HRA Loan Closing. The Authority shall not be obligated to
close on the Deferred HRA Loan pursuant to the HRA Loan Agreement until the following conditions
precedent have been satisfied:
(a) Developer shall have executed the Ground Lease and caused the same to be
recorded against the Property;
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(b) Developer shall have executed the Memorandum of Agreement and caused the
same to be recorded against the Property;
(c) Developer shall have executed the Minimum Assessment Agreement and caused
the same to be recorded against the Property;
(d) Developer shall have executed the Affordable Housing Restrictive Covenant and
caused the same to be recorded against the Property
(e) Developer shall have delivered the Project Funding Certificate to the Authority,
and the Authority approves the same in accordance with Section 4.5;
(f) Developer shall have provided the updated TIF Pro Forma to the Authority in
accordance with Section 4.5, and the Authority shall have completed their review, analysis, and
audit of the same as necessary to determine the original principal amount of the Deferred HRA
Loan in accordance with Section 3.8;
(g) The Master Disbursement Agreement shall have been executed by all the parties
thereto;
(h) No Developer Default or Developer Event of Default have occurred and be
ongoing under this Agreement and no Developer default shall exist beyond any applicable cure
periods under any of the City Approvals.
3.8 Financial Assistance Adjustment. The financial assistance to Developer under this
Agreement is based on certain assumptions regarding anticipated costs and expenses associated with
constructing the Project. Specifically, the maximum aggregate principal amount of the TIF Note and the
Deferred HRA Loan has been determined based on the amount of assistance needed to make the Project
financially feasible, as shown in the Developer’s Project budget as of the date hereof and reflected in the
initial TIF Pro Forma attached hereto as Exhibit C, and which will be updated on or before June 1, 2022
based on the actual Project construction cost reflected in a final guaranteed maximum price construction
contract for the Project (the “June 1 TDC”). The Authority and Developer agree that those assumptions will
be reviewed (a) as and when additional Project funds may be received by Developer or otherwise committed
to the Project prior to the Project construction loan closing and (b) in connection with Developer’s delivery
of the June 1 TDC as part of the updated TIF Pro Forma and Project Funding Certificate in accordance with
Section 4.5. The principal amount of the TIF Note and/or the Deferred HRA Loan may be reduced based
on the actual TIF Assistance and Deferred HRA Loan necessary for the Project to be financially feasible
based on any such additional Project funds reflected in the updated TIF Pro Forma. Any such reduction
shall be applied to the TIF Note and Deferred HRA Loan as follows: (i) first, the principal amount of the
Deferred HRA Loan will be reduced to no less than $1,183,000, and (ii) second, any additional reduction
shall be applied to reduce the principal amount of the TIF Note to $0.00, and (iii) third, any further reduction
shall be applied to reduce the principal amount of the Deferred HRA Loan to $0.00. For avoidance of doubt,
if additional funds for the Project are awarded from the County, DEED, or other funding sources prior to
the Project construction loan closing, and/or if the tax credit pricing exceeds $0.90 per credit thereby
increasing the available equity contribution to the Project, then the Authority’s contribution to the Project
will be decreased in the amount of such additional Project funds secured by Developer in accordance with
this Section 3.8.
3.9 Deferred Developer Fee Cap and Adjustment. The Developer’s fee shall not exceed 10%
of final total Project development costs, as reflected in the TIF Proforma. Developer shall defer not less
than $500,000 of said developer fee for payment after Completion in accordance and to be set forth in the
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final, Authority-approved TIF Proforma; provided, however, if Developer is successful in securing such
additional funding that the Authority’s aggregate contribution to the Project under the TIF Note and
Deferred HRA Loan is $2,600,000 or less, then such maximum deferred developer fee required by the
Authority hereunder shall be $400,000.
Article IV
Project Requirements
4.1 Commencement and Completion of Project. Developer shall cause the Commencement of
the Project no later than July 31, 2022 and Completion of the Project by no later than December 31, 2023.
4.2 Zoning and Land Use Approvals. Nothing in this Agreement shall limit the authority of the
City with respect to zoning and land use approvals. Subject to the foregoing, the staff of the Authority shall
cooperate with Developer and assist Developer in the processing and obtaining of zoning and land use
approvals. Developer shall be responsible for applying for and obtaining all land use and zoning approvals
necessary for the Project, including, without limitation, any conditions contained in the City Approvals. All
zoning and land use approvals shall be by the City Council or the City Planning Commission in accordance
with the ordinances of the City. Notwithstanding the foregoing and for avoidance of doubt, in addition to
the Authority’s other rights and remedies hereunder, the Authority’s consent shall be required for any
changes to the Project, specifically including, without limitation, changes to the scale, massing or exterior
finish materials set forth in the original City Approvals that could reduce the taxable value of the Project,
any such Authority consent not to be unreasonably withheld.
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 a footing and foundation permit prior to Commencement of construction, and all
building permits within 90 days after Commencement of 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 executes and records the Site Improvement Contract against the
Property, and causes any lien holder affecting any of the property to subject its interest as provided
in this Agreement and in the Site Improvement Contract;
(b) Developer satisfies of the conditions set forth in Section 3.7;
(c) Developer satisfies all of the conditions precedent to construction of the Project
established by the City in the City Approvals;
4.5 Project Financing. By no later than June 1, 2022, Developer shall deliver a final, updated
TIF Pro Forma to the Authority, certified by Developer as true and correct and certifying to the Authority
that all Project funding sources sufficient to successfully complete the Project and identified in said updated
TIF Pro Forma have been committed to (or otherwise remain available to) Developer by delivering to the
Authority a Project Funding Certificate (and in the form of Exhibit G). 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 4.5 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
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Authority rejects the evidence of financing as inadequate, it shall do so in writing specifying the basis for
the rejection and Developer shall have 15 days thereafter to submit evidence of commitment(s) for
additional or alternate financing acceptable to the Authority. Notwithstanding the forgoing, the Authority
acknowledges and agrees that any sales tax rebate and energy rebate the Developer anticipates receiving as
part of its financing for the Project will not be available until on or after Completion of the Project. 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 4.5, such failure being a Default hereunder. In
accordance with Section 3.8, the principal amounts of the TIF Note and Deferred HRA Loan may be
adjusted based on the updated, final TIF Proforma provided under this section.
4.6 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,
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.
4.7 Additional Responsibilities of Developer.
(a) Developer shall remain in good standing under the Option Agreement and not
default thereunder beyond applicable notice and cure periods until the Ground Lease is entered
into, and shall timely close on the Ground Lease in accordance with the Option Agreement.
(b) 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).
(c) 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.
(d) 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.
(e) Prior to delivery of a Certificate of Completion to Developer, upon the request of
the Authority, Developer shall, after reasonable advance notice from the Authority, provide the
Authority and the City with reasonable access to the Property to inspect the Project for compliance
with this Agreement.
(f) Prior to delivery of the Certificate of Completion, Developer shall deliver monthly
progress reports to the Authority. The progress reports shall include: summary of progress to date,
percent construction completion, identification of any Unavoidable Delays, and projected
occupancy date.
(g) Developer shall comply and cause its contractors to comply with all applicable
Environmental Law as it relates to the Project Area and the Project.
4.8 Certificate of Completion. Developer may notify the Authority and request a Certificate of
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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 99th 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
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 six 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”);
(ii) approximately 49 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”);
(iii) approximately 46 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”); and
(iv) no more than 17 of the Affordable Units will be reserved for households
who have a combined gross annual income which does not exceed 80% of AMI (each an
“80% Unit”).
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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 studio
efficiencies (which will be no less than 610 square feet in size), one-bedroom units (which will be
no less than 610 square feet in size), and two-bedroom units (which will be no less than 930 square
feet in size). There will be six studio efficiencies, 90 one-bedroom units, and 22 two-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
Minnesota Housing Finance Agency (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 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. Notwithstanding the
forgoing, a change in the utility allowance shall not constitute a change in rental rates.
(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 a form reasonably
approved by the Authority (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.
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(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) 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. Such monitoring shall be based on a sampling of ten percent (10%) of the
units in the Project in addition to the files of new tenants, and shall be limited to an
inspection of the files related to such units and physical inspection of such units only. The
expenses related to such monitoring shall be standard, reasonable and not materially
different that those expenses charged to other similar affordable housing projects on a per-
unit basis.
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 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 not be
subordinated or junior to any Mortgage on the Project, and if any Mortgage exists at the time the
Affordable Housing Restrictive Covenant is to be recorded, Developer shall cause the mortgagee
under such Mortgage to subordinates the Mortgage and the lien thereof to the Affordable Housing
Restrictive Covenant.
(b) LURA. The Authority acknowledges that the Property will be encumbered by one
or more LURAs 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”) and/or tax-exempt
multifamily housing revenue bonds obtained by Developer for the Project (“Housing Bonds”),
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 and/or Housing Bonds. For so long as any such LURA encumbers the Property,
to the extent of any conflict or inconsistency between the terms of any such LURA and the terms
of the Affordable Housing Restrictive Covenant, the terms of any such LURA shall prevail and
such prevailing terms shall be deemed to modify and replace the applicable terms of the Affordable
Housing Restrictive Covenant. If all LURAs are terminated prior to the expiration of the Qualified
Project Period, then the requirements of this Article V and the Affordable Housing Restrictive
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Covenant will continue in full force and effect in accordance with their original terms until the
expiration of the Qualified Project Period. Other than any LURA(s), 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 Mortgage of the Project Area.
(a) Until the Completion of the Project, Developer shall not engage in any financing
or any other transaction creating any mortgage or other security interest in or lien upon the Project, or
portion thereof, whether by express agreement or operation of law (a “Mortgage”), or suffer any Mortgage
to be made on or attach to the Project Area except for the purpose of obtaining funds necessary for acquiring
and constructing the Project and paying the costs set forth in the TIF Pro Forma.
(b) This restriction on encumbrance shall terminate upon Completion of the Project.
Developer or any successor in interest to the Project or portion thereof, may sell or engage in financing or
any other transaction creating a mortgage or encumbrance or lien on the Project or portion thereof after the
Certificate of Completion has been obtained with respect to the Project, without obtaining the prior written
approval of the Authority.
(c) Notwithstanding anything in this Agreement to the contrary, Developer is
authorized, without the approval of the Authority, to obtain acquisition and construction financing to cover
the costs of acquisition and construction of the Project and the costs set forth in the TIF Pro Forma and to
mortgage the Project Area to provide security for acquisition and construction financing.
6.2 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 6.2, the Authority shall deliver any
notice or demand delivered to Developer’s limited partner, R4 CVMN Acquisition LLC, a Delaware limited
liability company, its successors and/or assigns (the “Limited Partner”), Developer’s construction lender,
(the “Construction Lender”), and Developer’s permanent lender (the “Permanent Lender”) at the addresses
set forth in Section 11.3 of this Agreement.
6.3 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 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.
6.4 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:
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(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.
6.5 Events of Default Under Mortgage. Developer shall use commercially reasonable efforts
to obtain an agreement from any mortgagee under a Mortgage that in the event Developer is in default
under any Mortgage, the mortgagee will use commercially reasonable efforts, within 30 days after it
becomes aware of any such default and prior to exercising any remedy available to it due to such default,
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.
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:
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(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 $2,000,000 for each occurrence, and $5,000,000 in the aggreate (to accomplish the
above-required limits, an umbrella excess liability policy or surplus lines may be used).
(iii) Workers compensation insurance, for employees of Developer if and to
the extent required by Law.
(b) All insurance required in this Article shall be obtained and continuously
maintained by responsible insurance companies selected by Developer which are authorized under
the laws of the State to assume the risks covered by such policies. If available on commercially
reasonable terms, each policy must contain a provision that the insurer will not cancel nor modify
the policy without giving written notice to the insured at least 30 days before the cancellation or
modification becomes effective. Not less than 15 days prior to the expiration of any policy,
Developer must renew the existing policy or replace the policy with another policy conforming to
the provisions of this Article. In lieu of separate policies, Developer may maintain a single policy,
blanket or umbrella policies, or a combination thereof, having the coverage required herein.
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 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 claims, demands, suits, costs, expenses (including reasonable
attorney’s fees), actions or other proceedings whatsoever by any person or entity whatsoever arising
or purportedly arising from the actions or inactions of Developer (or other persons under its
direction or control) under this Agreement, or the transactions contemplated hereby or the
acquisition, construction, installation, ownership, and operation of the 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
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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 damage or taking, as applicable. Upon receipt of any
condemnation award or insurance proceeds Developer shall elect to either: (a) use the entire condemnation
award or insurance proceeds to reconstruct the Project (or, in the event only a part of the Project has been
taken or damaged, then to reconstruct such part) upon the remaining Property to the extent necessary to
maintain and continue operations of Project for its intended purpose; or (b) in the event that the
condemnation affects or taking or damage or destruction affects the Property but not the Project
improvements thereon, retain, for the account of Developer, all of the condemnation award or insurance
proceeds.
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
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 and other funding to undertake the Project, including but not limited
to grants and other funds from the County, 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 3.8. Developer shall reasonably cooperate with the
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City and the Authority with respect to the administration of any grants received from the County,
Metropolitan Council, or State of Minnesota to support the construction of the Project.
8.7 Project Information.
(a) Project Ownership. Developer shall provide the Authority with the final
organizational structure for the ownership of the Project, and the identity of all parties with a beneficial
interest in the Project. Developer shall confirm such organizational and ownership information at the time
Developer submits the Project Funding Certificate, and periodically thereafter in accordance with clause
(b) below. The Authority acknowledges and agrees that the sole member of the Managing General Partner
of Developer is a 501(c)(3) entity, and that it is the intent of the General Partners and the Developer that
the Developer is entitled to receives a sales tax exemption and rebates under Minnesota Statutes Section
297A.71, Subd. 23.
(b) Other Information. In addition to the other Project information required to be
provided by Developer hereunder, Developer shall provide to the Authority such information regarding
Developer and the Project as the Authority may reasonably request in writing from time to time in order
for the Authority to monitor Developer’s progress on the Project, the prospects of the Project, and/or the
status of Developer’s obligations hereunder, including without limitation the follow: (i) market studies
and/or market data used by Developer to make decision regarding the financing, design, and development
of the Project promptly upon request in writing and in no event later than two business days following such
request and (ii) the status of Project ownership, organizational structure, financing, leasing, and sales, no
more frequently than monthly, but otherwise promptly upon request in writing and in no event later than
two business days following such request. The Authority will endeavor to treat all such information which
Developer deems to be proprietary or trade secret information as nonpublic data under and in accordance
with the Minnesota Data Practices Act, Minnesota Statutes chapter 13.
Article 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
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 shall
not sell, assign, convey, lease or transfer in any other mode or manner any of its right, title, and
interest in and to this Agreement, all or any part of the 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 VI
hereof;
(ii) leasing the Project in the normal course of business in a manner consistent
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with this Agreement and the City Approvals;
(iii) A collateral assignment to a Mortgage holder pursuant to Section 9.3; or
(iv) transfer to a Related Party, provided such Related Party, upon request of
the Authority, executes an agreement in a form reasonably approved by the Authority
pursuant to which such Related Party assumes and agrees to perform the obligations of
Developer under this Agreement.
(b) If the Authority’s consent to a transfer is required pursuant to this 9.2, the
Authority shall be entitled to require, as conditions to its approval of any sale, assignment,
conveyance, use or transfer of any rights, title, and interest in and to this Agreement, the Property
or the Project that:
(i) Any proposed transferee shall not be exempt from the payment of real
estate taxes and shall have the qualifications and financial responsibility, as determined by
the Authority, necessary and adequate to fulfill the obligations undertaken in this
Agreement by Developer;
(ii) Any proposed transferee, by instrument in writing satisfactory to the
Authority and in form recordable among the land records shall, for itself and its successors
and assigns, and expressly for the benefit of the Authority have expressly assumed all of
the obligations of Developer (or such obligations of Developer as are applicable to the
portion of the 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 documents
involved in effecting transfer to the Authority;
(iv) Developer and the transferee must comply with such other conditions as
the Authority may find desirable in order to achieve and safeguard the purposes of the HRA
Act and TIF Act, this Agreement, and the Project; and
(v) Developer and the transferee must demonstrate, in a manner satisfactory
to the Authority, its ability to perform all assumed obligations in this Agreement.
(c) In the absence of specific written agreement by the 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 managing general partner of Developer,
Ecumen Edina Affordable Housing, LLC (the “Managing General Partner”) and/or the co-general
partner of Developer, Edina Affordable Housing, LLC (the “Co-General Partner”; the Managing
General Partner and the Co-General Partner may each be referred to as a “General Partner” and
collectively as the “General Partners”), pursuant to the terms of that certain Amended and Restated
Agreement of Limited Partnership of Developer to be effective on or about the date of closing on
the Ground Lease and other Project financing, by and between the Limited Partner and the General
Partners, 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
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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.
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 Ground Lease, the Minimum Assessment Agreement, the
HRA Loan Agreement, any other HRA Loan Documents (as defined in the HRA 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;
(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
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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 Sections 10.2(a) through (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 6.2
hereof, Limited Partner 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 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 shall have an additional period of time thereafter, not to exceed 90 days,
to cure the Default so long as Limited Partner is diligently pursuing the same.
10.5 Authority Remedies on Developer Events of Default. Whenever any Event of Default
occurs by Developer, the Authority may take any one or more of the following actions:
(a) terminate this Agreement;
(b) the Authority may suspend interest accrual and/or withhold payments due under
the TIF Note until Developer has cured the Default which gave rise to the Event of Default;
(c) suspend performance under this Agreement until it receives assurances from
Developer or the holder of any Mortgage, deemed adequate by the Authority, that Developer or the
holder of any Mortgage will cure the Event of Default and continue its performance under this
Agreement;
(d) withhold the Certificate of Completion where such Event of Default relates to
Completion of the 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 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 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
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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.
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: 4040 West 70th Street Apartments, LP
1801 County Road B West, Suite 211
Roseville, Minnesota 55113
with a copy to: Winthrop & Weinstine, P.A.
Attention: Norm Jones
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225 South Sixth Street, Suite 3500
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: Alex Sellke
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402
Construction Lender _____________________
_____________________
_____________________
_____________________
Permanent Lender _____________________
_____________________
_____________________
_____________________
Limited Partner R4 CVMN Acquisition LLC
780 Third Avenue, 16th Floor
New York, NY 10017
Attention: Marc D. Schnitzer
with a copy to: Holland & Knight LLP
31 West 52nd Street
New York, NY 10019
Attention: Alan S. Cohen
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.
27
Redevelopment Agreement (Cornelia View)
4856-3825-8707\6
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.
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 10.8
[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.
28
Redevelopment Agreement (Cornelia View)
4856-3825-8707\6
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
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.
11.22 Term. The term of this Agreement shall be effective from the Effective Date above written
until the earlier of (a) the date of this Agreement is terminated pursuant to the terms and conditions hereof,
(b) payment in full of the TIF Note, or (c) the repayment in full of the Deferred HRA Loan. Upon
termination, the parties agree to executed and record a document terminating this Agreement and providing
for the release of the obligations under this Agreement.
[Remainder of page intentionally left blank; signatures on following page(s)]
[Signature Page to Redevelopment Agreement (Cornelia View)]
4856-3825-8707\6
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: _________________________________________
James Pierce, Secretary
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of ______________, 2022,
by James B. Hovland and James Pierce, the Chair and Secretary, respectively, of the Housing and
Redevelopment Authority of Edina, Minnesota, on behalf of said Authority.
Notary Public
[Signature Page to Redevelopment Agreement (Cornelia View)]
4856-3825-8707\6
4040 West 70th Street Apartments, LP,
a Minnesota limited partnership
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of _________________,
2022 by ______________________________, the ______________________ of 4040 West 70th Street
Apartments, LP, a Minnesota limited partnership, on behalf of the limited partnership.
____________________________________________
Notary Public
23611726v5
A-1
4892-9909-5578\1
Exhibit A
Legal Description of the Property
Tract C, Registered Land Survey No. 1365, Hennepin County, Minnesota
Torrens Property
B-1
4872-9555-4838\1
Exhibit B
Form of Certificate of Completion
CERTIFICATE OF COMPLETION
(Cornelia View)
A. 4040 WEST 70TH STREET APARTMENTS, LP, 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 _______________, 2022 (as the same may be amended or supplemented from time to time,
the “Redevelopment Agreement”), which Redevelopment Agreement is evidenced of record by that certain
Memorandum of Redevelopment Agreement dated _______________, 2022 and recorded on
_______________, 2022 in the office of the Registrar of Titles for Hennepin County, Minnesota as
Document No. ____________, has agreed to complete the Project, as defined in and in accordance with the
Redevelopment Agreement, on that certain real property (the “Property”) located in Hennepin County,
Minnesota, described on the attached Exhibit A.
B. As of the date hereof, Developer has completed construction of the Project in accordance
with the Redevelopment Agreement.
C. The issuance of this Certificate of Completion by the Authority is not intended nor shall it
be construed to be a warranty or representation by the Authority as to the structural soundness of the Project,
including, but not limited to, the quality of materials, workmanship or the fitness of the Project 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 Redevelopment Agreement imposing obligations on Developer to construct the Project,
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 Redevelopment Agreement.
Dated: ______________, 20___
[Remainder of page intentionally left blank; signature pages follow]
B-2
[Signature Page to Certificate of Completion]
4872-9555-4838\1
HOUSING AND REDEVELOPMENT AUTHORITY
OF EDINA, MINNESOTA
By: _________________________________________
James B. Hovland, Chair
By: _________________________________________
James Pierce, Secretary
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of ______________, 2022,
by James B. Hovland and James Pierce, the Chair and Secretary, respectively, of the Housing and
Redevelopment Authority of Edina, Minnesota, on behalf of said Authority.
Notary Public
THIS DOCUMENT WAS DRAFTED BY:
Dorsey & Whitney LLP
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402-1498
B-3
[Exhibit A to Certificate of Completion]
4872-9555-4838\1
Exhibit A
Legal Description of the Property
Tract C, Registered Land Survey No. 1365, Hennepin County, Minnesota
Torrens Property
C-1
4878-2361-8074\1
Exhibit C
Initial TIF Pro Forma
[See attached.]
Workbook rvisions - new Redevelopment Agreement Term SheetV2 SHa.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
Ecumen
Ecumen/Lupe Development
Management Co Ecumen
Tax Exempt Bond Request
TYPE ISSUER
SRO with Kitchen
3BR
4BR
HIB Sr Program
UNIT SUMMARIES
Architect Pope Architects
1,336,901
DEVELOPMENT TEAM
5BR
Tax Exempt Bonds - Short Term
DEMOGRAPHICS
118 Senior
Owner 4040 West 70th Street Apartments, LP People with Disabilities
Rippley Richard Real Estate Development Services, LLC
Developer
6
Service Provider
Processing Agent
First Mortgage/Deferred Loan Request
TYPE AMOUNT
Minnesota Housing First Mortgage
General Contractor Frana Companies
Tax Exempt Bonds - Long Term
AMOUNT
Deferred Loan(s)
County Hennepin
6BR Rent Assistance
TOTAL UNITS
SUMMARY
ACTIVITY TYPE
Cornelia View
Edina
55405
4040 W. 70th Street
New ConstructionDevelopment Name
Primary Address
City
Zip Code
Version Date
Property Number (D#)
Project Number (M#)
HTC #
D8386
118
1BR
2BR
Subsidy Funding Request
# Units
# Units
0BR/Eff
Program Type
HOME
NHTF6
AmountName of Source
6
Operating Subsidy
Sponsor/Parent Company Ecumen
HPH 6
PWD
Market Rate
91
21
Unit Type # Units
SRO no Kitchen HTC 118
Common Space
M18770
# Units Description
Permanent Supportive Housing
1,170,020
Workbook Summary - Page 1 of 3 4/4/2022 8:33 AM
Workbook rvisions - new Redevelopment Agreement Term SheetV2 SHa.xlsm
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
Description
Acquisition or Refinance
New Construction
Rehabilitation
Contractor Fees
Contingency
Environmental Abatement
Professional Fees
Developer Fees
Syndicator Fees
Financing Costs
TOTAL MORTGAGEABLE
Reserves and Non-Mortgageable
TOTAL DEVELOPMENT COST
Subsidy Funding Sources
Name of Source
TOTAL OF SUBSIDY FUNDING
0BR/Eff 6 610
Program Type
6,040
7.00%Cap Rate
712,714
5,636
Per Unit
10,529,124 89,230
AmountSource
First Mortgage
5.0%
18,100,000
Energy Rebates
Sales Tax Rebate
Hennepin County AHIF 2021
Metropolitan Council - LHIA
1,336,901
30,000
661,500
665,000
11,330
153,390
Deferred Loan Request
Federal Historic Proceeds
State Historic Proceeds
Syndication Proceeds
General Partner Cash
Metropolitan Council - LCDA
436,380 3,698
Source
Construction Sources
Deferred Developer Fee 500,000
TOTAL PERMANENT FINANCING
Per Unit Committed
FUNDING GAP REMAINING
Amount # UnitAmount
15,795,275
0 0
32,971,619 279,420
Construction Bridge
Construction Bonds
8,423,299 71,384
1,024,872 8,685 3%
Secured or
Applied for
133,858
4,237
2,148,550 18,208
9%
5,606 45,000 381 0%
254 3,000,000 25,424
7%
1,480,200 12,544 4%
66%21,845,472 185,131
140,000 1,186
4%1,196,809 10,142
Loan Rate
3.00%Parking Vacancy
1.10
1.35Expense Inflator
Residential Vacancy 5.0%Income Inflator
118 1,617,060
Commercial Vacancy
2BR 17 930 1,741 1,775 80% MTSP80% MTSP
50% MTSP
1,768,860
60% MTSP 71,992
60% MTSP 91,293
15,00030% MTSP72675430% MTSP
1BR 43
136,800Monthly
Contract
Rent
Monthly
Gross
Rent Rent Limit Income Limit HTCHOMEHPHPWDHIB SeniorRent Asst1,617,060
Op Subs956
Permanent Capital Funding Sources
2.00%
Unit Type
# of
Units
2BR 4 930 1,383
1BR 6
1BR 1,153
610 956
42 610
610
1,417
50% MTSP
Approx Sq
Ft
60% MTSP
50% MTSP
INCOME & EXPENSE
DCR Year 1
Committed
1,749,559
DCR Year 15
Amount Per Unit
984
1,181 60% MTSP
984 50% MTSP
4.000%
39%
1,383
MIP
591,982
2,500
171,000
5,017
5,834
1,061,097
115,000
40,000
41,300
96,480
688,462
6%
0%
31,946,747 270,735 97%
32,971,619 279,421 100%
2,090,716 17,718NHTF % of Total
222,182
Workbook Summary - Page 2 of 3 4/4/2022 8:33 AM
Workbook rvisions - new Redevelopment Agreement Term SheetV2 SHa.xlsm
SUMMARY
TOTAL OF CONSTRUCTION FINANCING 24,218,574 205,242
Workbook Summary - Page 3 of 3 4/4/2022 8:33 AM
D-1
4884-8169-0646\4
Exhibit D
Form of TIF Note
LIMITED REVENUE TAXABLE TAX INCREMENT NOTE
(Cornelia View)
No. R-_____ $[1,503,000.00]
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
4040 WEST 70TH STREET APARTMENTS, LP, a Minnesota limited partnership, or its permitted
assigns (“Developer”), solely from the source, to the extent and in the manner hereinafter provided, up to
the principal amount of this Limited Revenue Taxable Tax Increment Note (this “Note”) as provided
herein, together with simple interest thereon accrued on the unpaid principal balance hereof from the date
hereof, at the rate of interest of Four and 0/100 percent (4.0%) per annum, on the Payment Dates (as
hereinafter defined). This Note is executed and delivered in accordance with the terms and conditions of
that certain Redevelopment Agreement dated as of ____________, 2022, between the Authority and
Developer (as the same may be amended, modified, and/or supplemented from time to time, the
“Redevelopment Agreement”), and is subject to the terms, conditions, and limitations on payment set
forth therein, including, without limitation, the provisions of Section 3.8 (Financial Assistance
Adjustment) of the Redevelopment Agreement. Capitalized terms used herein and not otherwise defined
herein shall have the meaning given to them in the Redevelopment Agreement.
Each payment on this Note is payable in any coin or currency of the United States of America
which on the date of such payment is legal tender for public and private debts and shall be made by check
or draft made payable to Developer and mailed to Developer at its postal address within the United States
which shall be designated from time to time by Developer.
This Note is a special and limited obligation and not a general obligation of the Authority, which
has been issued by the Authority pursuant to, and in full conformity with, the Constitution and the laws of
the State of Minnesota, including Minnesota Statutes, Sections 469.174 through 469.1794 (the “TIF
Act”), and the terms and conditions of the Redevelopment Agreement and a resolution of the Board of the
Authority, to aid in financing a “project” (as defined in Minnesota Statutes, Section 469.174, subdivision
8) of the Authority within the 4040 West 70th Street Tax Increment Financing District established by the
Authority pursuant to Resolution No. 2021-06 (the “TIF District”).
D-2
4884-8169-0646\4
The maximum principal amount of this Note attributable to Eligible Reimbursable Expenses shall
not exceed $[1,503,000.00].
Subject to the terms of the Redevelopment Agreement, principal of and interest on this Note shall
be payable solely from and in the amount of 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 (the “Payment Amount”);
provided, however, that in the event that Pledged Tax Increments are not sufficient to pay when due the
Payment Amount, the failure of the Authority to pay the Payment Amount on any Payment Date shall not
constitute a default under this Note as long as the Authority pays the Payment Amount to the extent of
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, 2046 (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:
“Available Tax Increments” means the tax increments derived from the Property (including the
Project) which have been received and retained by the Authority from the County during any applicable
time frame in accordance with the provisions of the TIF Act, including without limitation Minnesota
Statutes, Section 469.177, less the amount of such 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.
“Pledged Tax Increments” means 95.0% of the Available Tax Increments, for the six months
before each Payment Date
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 and continuance of
such Event of Default beyond any applicable cure periods, the Authority may exercise the remedies with
respect to this Note described in the Redevelopment Agreement, the terms of which are incorporated
herein by reference, including, without limitation, the suspension or termination of the Authority’s
obligation to make any payments under this Note. For avoidance of doubt, the terms of the
Redevelopment Agreement incorporated herein by the foregoing reference, shall, for purposes of this
Note, survive any termination of the Redevelopment Agreement occurring after the issuance of this Note.
D-3
4884-8169-0646\4
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.
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. Any assignee or transferee must execute
and deliver to the Authority a certificate, in form and substance reasonably satisfactory to the Authority,
pursuant to which, among other things, such assignee or transferee acknowledges and represents: (a) the
assignee or transferee delivers to the Authority a written instrument acknowledging the limited nature of
the Authority’s payment obligations under this Note, and (b) the assignee or transferee executes and
delivers to the Authority a certificate, in form and substance reasonably satisfactory to the Authority,
pursuant to which, among other things, such assignee or transferee represents (i) that this Note is being
acquired for investment for such assignee’s or transferee’s own account, not as a nominee or agent, and
not with a view to the resale or distribution of any part thereof, (ii) that the assignee or transferee has no
present intention of selling, granting any participation in, or otherwise distributing the same, (iii) that the
assignee or transferee is an “accredited investor” within the meaning of Rule 501 of the Regulation D
under the Securities Act of 1933, as amended, (iv) that the assignee or transferee, either alone or with
such assignee’s or transferee’s representatives, has knowledge and experience in financial and business
matters and is capable of evaluating the merits and risks of the prospective investment in this Note and the
assignee or transferee is able to bear the economic consequences thereof, (v) that in making its decision to
acquire this Note, the assignee or transferee has relied upon independent investigations made by the
assignee or transferee and, to the extent believed by such assignee or transferee to be appropriate, the
assignee’s or transferee’s representatives, including its own professional, tax and other advisors, and has
not relied upon any representation or warranty from the Authority, or any of its officers, employees,
agents, affiliates or representatives, with respect to the value of this Note, (vi) that the Authority has not
made any warranty, acknowledgment or covenant, in writing or otherwise, to the assignee or transferee
regarding the tax consequences, if any, of the acquisition and investment in this Note, (vii) that the
assignee or transferee or its representatives have been given a full opportunity to examine all documents
and to ask questions of, and to receive answers from, the Authority and its representatives concerning the
terms of this Note and such other information as the assignee or transferee desires in order to evaluate the
acquisition of and investment in this Note, and all such questions have been answered to the full
satisfaction of the assignee or transferee, (viii) that the assignee or transferee has evaluated the merits and
risks of investment in this Note and has determined that this Note is a suitable investment for the assignee
or transferee in light of such party’s overall financial condition and prospects, (ix) that this Note will be
D-4
4884-8169-0646\4
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
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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4884-8169-0646\4
IN WITNESS WHEREOF, the Board of the Housing and Redevelopment Authority of Edina,
Minnesota, has caused this Note to be executed by the manual signatures of the Chair and the Secretary of
the Authority, and has caused this Note to be dated as of the date of original issue specified above.
Chair Secretary
23726138v1
E-1
Exhibit E
Form of Minimum Assessment Agreement
ASSESSMENT AGREEMENT
THIS ASSESSMENT AGREEMENT is dated as of ________________, 2022 and is 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 4040 West 70th
Street Apartments, LP, a Minnesota limited partnership (the “Developer”).
IN CONSIDERATION OF the mutual covenants and benefits herein described, the
Authority and the Developer recite and agree as follows:
Section 1. Recitals.
1.01. Redevelopment District; Redevelopment Plan. The Authority has heretofore
undertaken certain development activities, which is a “project” as defined in Minnesota Statutes,
Section 469.174, subdivision 8, known as the 4040 West 70th Street Tax Increment Financing District (the
“Project Area”) pursuant to a Project Plan for the Project Area.
1.02. Tax Increment Financing District; Project. Pursuant to the Minnesota Tax Increment
Financing Act, Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the “TIF Act”), the
Authority and the City of Edina, Minnesota (the “City’) approved a tax increment financing plan (the
“Financing Plan”), which is the proposed method for financing the development activities currently
proposed to be undertaken pursuant to the Project Plan and established a portion of the Project Area as a
tax increment financing district (“Tax Increment District”). The Financing Plan proposes to finance the cost
of certain improvements related to the construction of a 118-unit, 100% age restricted affordable housing
community, known as “Cornelia View” (the “Project”).
1.03. Implementation. The Authority has authorized and directed its officers to take all
actions necessary to implement and carry out the Project Plan and the Financing Plan. The Project Plan and
the Financing Plan propose that the Authority finance certain costs of or related to the Project, payable from
tax increment (as defined in the TIF Act) derived from the District (“Tax Increment”).
1.04. Redevelopment Agreement. The Authority and the Developer have entered into a
Redevelopment Agreement, dated as of _______________, 2022 (the “Redevelopment Agreement”),
which provides that the Developer will improve the real property described in Exhibit A hereto (the
“Land”) by the construction of the Project located thereon. The Redevelopment Agreement provides that
upon the execution and delivery of the Redevelopment Agreement, the Authority and Developer are to enter
into this Assessment Agreement.
Section 2. Minimum Market Value.
2.01. Agreed Upon Minimum. The Developer agrees that the minimum market value of
the Land and the portion of the Project located thereon for ad valorem tax purposes for the assessment made
as of January 2, 2024 shall be not less than $18,450,000.00, and shall not be reduced by any action taken
by the Developer (other than a deed in lieu of, or under threat of, condemnation by the Authority, the City,
Hennepin County or other condemning authority), to less than the said amount, and that during the term of
E-2
this Assessment Agreement no reduction of the market value therefor below said minimum market value
shall be sought by the Developer or granted by any public official or court except in accordance with
Minnesota Statutes, Section 469.177, subdivision 8. This minimum market value shall apply only to the
Land, the portion of the Project located thereon and any other facilities situated on the Land. In the event
of involuntary conversion of the Land and the portion of the Project located thereon for any reason (other
than condemnation by a public entity), the minimum market value shall not be reduced to an amount less
than said minimum market value.
The Developer acknowledges and agrees that the Land and the portion of the Project located
thereon are subject to ad valorem property taxation and that such property taxes constitute taxes on “real
property” (as provided in Section 469.174 of the TIF Act) and, to the extent reflecting net tax capacity rates
of taxing jurisdictions levied against the captured net tax capacity of the District, tax increment.
2.02. Higher Market Value. Nothing in this Assessment Agreement shall limit the
discretion of the assessor of the City, Hennepin County, or any other public official or body having the duty
to determine the market value of the Land, the portion of the Project located thereon and other facilities on
the Land for ad valorem tax purposes, to assign to the Land, the portion of the Project located thereon or to
any other improvements constructed on the Land, on a nondiscriminatory basis and treated fairly and
equally with all other property so classified in the respective counties, a market value in excess of the
minimum market value specified in Section 2.01. The Developer shall have the normal remedies available
under the law to contest any estimated assessor’s estimated value in excess of said minimum market values,
but only to the extent of the excess.
2.03. Substantial Completion. For purposes of this Assessment Agreement and the
determination of the market value of the Land and the portion of the Project located thereon for ad valorem
tax purposes, the Developer agrees that the portion of the Project located thereon shall be deemed to be
completed in accordance with the Redevelopment Agreement as of December 31, 2023 (the required date
of completion), whether in fact completed or not.
Section 3. Filing and Certification.
3.01. Assessor Certification. The Authority shall present this Assessment Agreement to the
assessor of the City and request such assessor to execute the certification attached hereto as Exhibit C. The
Developer shall provide to the assessor all information relating to the Land and the portion of the Project
located thereon requested by the assessor for the purposes of discharging the assessor’s duties with respect
to the certification.
3.02. Filing. Prior to the recording of any mortgage, security agreement or other instrument
creating a lien on the Land, the Developer shall cause this Assessment Agreement and a copy of Minnesota
Statutes, Section 469.177, subdivision 8, attached hereto as Exhibit B, to be recorded in the office of the
County Recorder or Registrar of Titles of Hennepin County, and shall pay all costs of such recording.
Section 4. Relation to Redevelopment Agreement. The covenants and agreements made by
the Developer in this Assessment Agreement are separate from and in addition to the covenants and
agreements made by the Developer in the Redevelopment Agreement and nothing contained herein shall in
any way alter, diminish or supersede the duties and obligations of the Developer under the Redevelopment
Agreement.
Section 5. Miscellaneous Provisions.
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5.01. Binding Effect. This Assessment Agreement shall inure to the benefit of and shall be
binding upon the Authority and the Developer and their respective successors and assigns, and upon all
subsequent owners of the Land and the portion of the Project located thereon.
5.02. Severability. In the event any provision of this Assessment Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
5.03. Amendments, Changes and Modifications. Except as provided in Section 5.04, this
Assessment Agreement may be amended or any of its terms modified only by written amendment
authorized and executed by the Authority and the Developer and otherwise in compliance with
Section 469.177, subdivision 8, of the Act.
5.04. Further Assurances and Corrective Instruments. The Authority and the Developer
agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed,
acknowledged or delivered, such supplements hereto and such further instruments as may reasonably be
required for correcting any inadequate or incorrect description of the Land or the portion of the Project
located thereon, or for carrying out the expressed intention of this Assessment Agreement.
5.05. Execution Counterparts. This Assessment Agreement may be simultaneously
executed in several counterparts, each of which shall be an original and all of which shall constitute but one
and the same instrument.
5.06. Applicable Law. This Assessment Agreement shall be governed by and construed in
accordance with the internal laws of the State of Minnesota.
5.07. Captions. The captions or headings in this Assessment Agreement are for
convenience only and in no way define, limit or describe the scope or intent of any provisions or Sections
of this Assessment Agreement.
5.08. Effective Date. This Assessment Agreement shall be effective as of
_______________, 2022.
5.09. Termination Date. This Assessment Agreement shall terminate upon the earlier of
termination of the TIF Note and termination of the District in accordance with Minnesota Statutes,
Section 469.176, subdivision 1.
5.10. Definitions. Terms used with initial capital letters but not defined herein shall have
the meanings given such terms in the Redevelopment Agreement, unless the context hereof clearly requires
otherwise.
[remainder of page intentionally left blank; signature pages follow]
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[Signature Page to Assessment Agreement]
IN WITNESS WHEREOF, the Authority has caused this Assessment Agreement to be executed in
its name by its duly authorized officers and the Developer has caused this Assessment Agreement to be
executed in its corporate name.
HOUSING AND REDEVELOPMENT AUTHORITY
OF EDINA, MINNESOTA
By: _________________________________________
James B. Hovland, Chair
By: _________________________________________
James Pierce, Secretary
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of ______________, 2022, by James
B. Hovland and James Pierce, the Chair and Secretary, respectively, of the Housing and Redevelopment
Authority of Edina, Minnesota, on behalf of said Authority.
Notary Public
E-5
[Signature Page to Assessment Agreement]
4040 WEST 70TH STREET APARTMENTS, LP,
a Minnesota limited partnership
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of _________________,
2022 by ______________________________, the ______________________ of 4040 West 70th Street
Apartments, LP, a Minnesota limited partnership, on behalf of the limited partnership.
__________________________________________
Notary Public
E-6
[Exhibit A to Assessment Agreement]
EXHIBIT A
DESCRIPTION OF LAND
Tract C, Registered Land Survey No. 1365, Hennepin County, Minnesota
Torrens Property
E-7
[Exhibit B to Assessment Agreement]
EXHIBIT B
COPY OF MINNESOTA STATUTES, SECTION 469.177, SUBDIVISION 8
Assessment agreements. An authority may enter into a written assessment agreement with any person
establishing a minimum market value of land, existing improvements, or improvements to be constructed
in a district, if the property is owned or will be owned by the person. The minimum market value established
by an assessment agreement may be fixed, or increase or decrease in later years from the initial minimum
market value. If an agreement is fully executed before July 1 of an assessment year, the market value as
provided under the agreement must be used by the county or local assessor as the taxable market value of
the property for that assessment. Agreements executed on or after July 1 of an assessment year become
effective for assessment purposes in the following assessment year. An assessment agreement terminates
on the earliest of the date on which conditions in the assessment agreement for termination are satisfied,
the termination date specified in the agreement, or the date when tax increment is no longer paid to the
authority under section 469.176, subdivision 1. The assessment agreement shall be presented to the county
assessor, or city assessor having the powers of the county assessor, of the jurisdiction in which the tax
increment financing district and the property that is the subject of the agreement is located. The assessor
shall review the plans and specifications for the improvements to be constructed, review the market value
previously assigned to the land upon which the improvements are to be constructed and, so long as the
minimum market value contained in the assessment agreement appears, in the judgment of the assessor, to
be a reasonable estimate, shall execute the following certification upon the agreement:
The undersigned assessor, being legally responsible for the assessment of the above
described property, certifies that the market values assigned to the land and improvements
are reasonable
The assessment agreement shall be filed for record and recorded in the office of the county recorder or the
registrar of titles of each county where the real estate or any part thereof is situated. After the agreement
becomes effective for assessment purposes, the assessor shall value the property under section 273.11,
except that the market value assigned shall not be less than the minimum market value established by the
assessment agreement. The assessor may assign a market value to the property in excess of the minimum
market value established by the assessment agreement. The owner of the property may seek, through the
exercise of administrative and legal remedies, a reduction in market value for property tax purposes, but no
city assessor, county assessor, county auditor, board of review, board of equalization, commissioner of
revenue, or court of this state shall grant a reduction of the market value below the minimum market value
established by the assessment agreement during the term of the agreement filed of record regardless of
actual market values which may result from incomplete construction of improvements, destruction, or
diminution by any cause, insured or uninsured, except in the case of acquisition or reacquisition of the
property by a public entity. Recording an assessment agreement constitutes notice of the agreement to
anyone who acquires any interest in the land or improvements that is subject to the assessment agreement,
and the agreement is binding upon them.
An assessment agreement may be modified or terminated by mutual consent of the current parties to the
agreement. Modification or termination of an assessment agreement must be approved by the governing
body of the municipality. If the estimated market value for the property for the most recently available
assessment is less than the minimum market value established by the assessment agreement for that or any
later year and if bond counsel does not conclude that termination of the agreement is necessary to preserve
the tax exempt status of outstanding bonds or refunding bonds to be issued, the modification or termination
of the assessment agreement also must be approved by the governing bodies of the county and the school
district. A document modifying or terminating an agreement, including records of the municipality, county,
and school district approval, must be filed for record. The assessor's review and certification is not required
E-8
[Exhibit B to Assessment Agreement]
if the document terminates an agreement. A change to an agreement not fully executed before July 1 of an
assessment year is not effective for assessment purposes for that assessment year. If an assessment
agreement has been modified or prematurely terminated, a person may seek a reduction in market value or
tax through the exercise of any administrative or legal remedy. The remedy may not provide for reduction
of the market value below the minimum provided under a modified assessment agreement that remains in
effect. In no event may a reduction be sought for a year other than the current taxes payable year.
E-9
[Exhibit C to Assessment Agreement]
EXHIBIT C
ASSESSOR’S CERTIFICATE
The undersigned, being the duly qualified and acting assessor of the City of Edina,
Minnesota, hereby certifies that.
1. I am the assessor responsible for the assessment of the Land described in the foregoing
Exhibit A;
2. I have read the foregoing Assessment Agreement dated as of _______________, 2022;
3. I have received and read a duplicate original of the Redevelopment Agreement referred
to in the Assessment Agreement;
4. I have received and reviewed the architectural and engineering plans and specifications
for the portion of the Project agreed to be constructed on the Land pursuant to the Redevelopment
Agreement;
5. I have received and reviewed an estimate prepared by the Developer of the cost of the
Land and the portion of the Project to be constructed thereon;
6. I have reviewed the market value previously assigned to the Land on which the
applicable portion of the Project is to be constructed, and the minimum market value to be assigned to the
Land and the portion of the Project located thereon by the Assessment Agreement is a reasonable estimate;
and
7. I hereby certify that the market value assigned to the Land and the portion of the Project
located thereon described on the foregoing Exhibit A by the Assessment Agreement is reasonable and the
market value assigned to the Land and the portion of the Project located thereon for the assessment made
as of January 2, 2024 and continuing throughout the term of the Assessment Agreement shall be not less
than $18,450,000.00.
Dated: ____________, 2022.
City Assessor, City of Edina, Minnesota
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4891-6946-5878\3
Exhibit F
Form of Deferred HRA Loan Agreement
Loan Agreement
By and Between
Housing and Redevelopment Authority of Edina, Minnesota
And
4040 West 70th Street Apartments, LP
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4891-6946-5878\3
TABLE OF CONTENTS
Page
Definitions ..................................................................................................................................... 4
Section 1.01. Definitions ................................................................................................................. 4
The Deferred HRA 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 ................................................................................................ 9
Section 3.01. Conditions Precedent to Disbursement ...................................................................... 9
Section 3.02. Disbursement of Deferred HRA 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 Deferred HRA Loan Proceeds ..................................................................... 11
Section 4.06. Performance ............................................................................................................. 11
Section 4.07. Additional Documents ............................................................................................. 11
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 ........................................................................................... 12
Section 4.13. Evidence of Insurance ............................................................................................. 12
Section 4.14. Hazardous Waste ..................................................................................................... 12
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 ................................................................................................................ 13
Section 5.01. Events of Default ..................................................................................................... 13
Section 5.02. Notice of Default ..................................................................................................... 13
Section 5.03. Remedies ................................................................................................................. 14
Section 5.04. Remedies Not Exclusive .......................................................................................... 14
Section 5.05. Waiver; Forbearance ............................................................................................... 14
Section 5.06. Attorneys’ Fees ........................................................................................................ 15
Additional Provisions .................................................................................................................. 15
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Section 6.01. Indemnification by Borrower .................................................................................. 15
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 the Lender ....................................................................................... 15
Section 6.06. Conflict of Interests/Code of Ethics; Authority Representatives Not
Individually Liable ............................................................................................................ 16
Section 6.07. Equal Employment Opportunity .............................................................................. 16
Section 6.08. Prohibited Activity .................................................................................................. 16
Miscellaneous .............................................................................................................................. 17
Section 7.01. Notices ..................................................................................................................... 17
Section 7.02. Delay and Non-Waiver of Rights ............................................................................. 17
Section 7.03. Survival of Warranties ............................................................................................. 17
Section 7.04. Governing Law ........................................................................................................ 18
Section 7.05. Counterparts ............................................................................................................ 18
Section 7.06. Time ......................................................................................................................... 18
Section 7.07. Entire Agreement ..................................................................................................... 18
Section 7.08. Severability .............................................................................................................. 18
Section 7.09. Signs; Public Events ................................................................................................ 18
Section 7.10. No Joint Venture ...................................................................................................... 18
Section 7.11. Limitation on Authority Liability ............................................................................ 19
Section 7.12. Authority Approval; Representatives ...................................................................... 19
List of Exhibits
Exhibit A Legal Description
Exhibit B Permitted Encumbrances
Exhibit C Deferred HRA Loan Note
Exhibit D Deferred HRA Loan Mortgage
Exhibit E Disbursement Agreement
Exhibit F Form for Request for Notice of Foreclosure
Exhibit G Other Project Financing
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4891-6946-5878\3
Deferred HRA Loan Agreement
This Deferred HRA Loan Agreement (this “Agreement”) is made and entered into as of this ___
day of ____________, 2022 by and between 4040 West 70th Street Apartments, LP, a Minnesota 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 118 housing units on the real property located at 4040 West 70th
Street, Edina, Minnesota, and legally described on Exhibit A (the “Project”).
B. The Project is located within the “4040 West 70th Street Tax Increment Financing 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. East Edina Housing Foundation dba Edina Housing Foundation (“EHF”), as ground lessor,
and, Developer, as ground lessee, have entered into that certain Ground Lease Agreement dated
____________, 2022, whereby Developer leases the Land from EHF for the Project (the “Ground Lease”).
D. The Authority and Developer have entered into that certain Redevelopment Agreement
dated _______________, 2022 (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”).
E. 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 $[1,336,901.00] (the “Deferred HRA Loan”)
to finance Borrower’s construction of the Project, which Deferred HRA Loan will be funded from certain
tax increment generated from the existing Southdale 2 TIF District in accordance with the Special TIF
Housing Legislation and other available pooled tax increment.
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 I, to be executed by Borrower and recorded
against the Project as provided in the Redevelopment Agreement.
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4891-6946-5878\3
“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
pursuant to the Redevelopment Agreement, which date shall be on or before December 31, 2023, 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 entered into the Ground Lease in form and substance approved by the Lender and
recorded a memorandum thereof in the appropriate land records, 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.
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“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,
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 July 31, 2022.
“Date of Closing” shall mean the date on which the Deferred HRA 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 July 9, 2022.
“Deferred HRA Loan” means the loan in the amount of $[1,336,901.00] loaned to Borrower for the
Project by the Lender and the loan made pursuant to this Agreement.
“Deferred HRA Loan Documents” shall mean this Agreement, the Deferred HRA Loan Note, the
Deferred HRA Loan Mortgage and the request for notice of foreclosure in the form of Exhibit F for the
benefit of Lender.
“Deferred HRA Loan Mortgage” shall mean the mortgage made by Borrower in favor of Lender
and securing the Deferred HRA Loan Note, substantially in the form of Exhibit D attached hereto.
“Deferred HRA Loan Note” shall mean the promissory note of Borrower evidencing the Deferred
HRA Loan dated as of the Date of Closing in the original principal amount of $[1,336,901.00], payable to
Lender and described in Exhibit C attached hereto.
“Deferred HRA Loan Proceeds” shall mean the funds available from the Deferred HRA Loan to be
disbursed through this Agreement and used to pay Eligible Project Costs.
“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 Deferred HRA Loan
Proceeds, and described in Exhibit E attached hereto.
“Eligible Project Costs” means the total of all Construction Costs.
“First Mortgage Loan” means the Other Project Financing secured by a first mortgage lien on the
Project in accordance with the Master Subordination Agreement.
“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.
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4891-6946-5878\3
“Minimum Assessment Agreement” means the assessment agreement in substantially the form
attached to the Redevelopment Agreement as Exhibit E, to be executed by Borrower and recorded against
the Project as provided in the Redevelopment Agreement.
“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 G.
“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 Borrower’s interest in the Land and the Project Improvements.
“Project Improvements” shall mean new construction on the Land to provide an 118-unit, 100%
age restricted affordable housing community, known as “Cornelia View”, and related improvements
comprising the Project, all in accordance with the TIF Project Documents.
“TIF Project Agreements” means the Redevelopment Agreement, the Affordable Housing
Restrictive Covenant, and the Minimum Assessment Agreement.
“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 Deferred HRA Loan
Section 2.01. Loan. The Deferred HRA Loan Proceeds are being loaned by Lender to Borrower
pursuant to the terms of this Agreement. Borrower accepts the Deferred HRA Loan as a loan pursuant to
the terms of this Agreement.
Section 2.02. Authorized Use of Loan Proceeds. The Deferred HRA Loan Proceeds shall be used
to pay Eligible Project Costs actually incurred for the Project. If Deferred HRA Loan Proceeds are used to
pay for any costs other than Eligible Project Costs, Borrower shall promptly repay Lender the amount of
Deferred HRA 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 Deferred HRA Loan shall be evidenced by the Deferred HRA Loan
Note, secured by the Deferred HRA Loan Mortgage and repaid with interest as follows:
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(1) Interest shall accrue on the outstanding principal balance of the Deferred HRA Loan at the rate of
two percent (2%) interest per annum.
(2) As of the earlier of (i) the 40-year anniversary of the Date of Closing and (ii) the earlier repayment
of refinancing of the First Mortgage Loan (other than refinancing of the initial First Mortgage Loan
from R4 Capital Funding LLC), the entire outstanding principal balance of the Deferred HRA Loan,
if not previously paid, shall be due and payable in full.
(3) At any time prior to the full repayment of the Deferred HRA Loan, the entire unpaid principal
balance of the Deferred HRA Loan shall be immediately due and payable upon the occurrence of
the earliest of the following Events of Default:
(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 Deferred HRA 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
Deferred HRA Loan. The limited partners of the Borrower and the lenders of the Other Project
Financing 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 Deferred HRA 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.
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Conditions Precedent to Advances
Section 3.01. Conditions Precedent to Disbursement. The obligation of the Lender to authorize
the disbursement of Deferred HRA 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 Deferred HRA Loan Documents.
(b) Borrower shall be in compliance with the Ground Lease.
(c) Borrower shall have delivered, without expense to the Lender, the Deferred HRA
Loan Documents and the Construction and Other Documents.
(d) Borrower shall have deposited in escrow with Title or otherwise have committed
to the satisfaction of Lender one hundred percent (100%) of all equity, loan proceeds or other
project funds, including the Other Project Financing, sufficient, together with the Deferred HRA
Loan, to pay all unpaid Eligible Project Costs.
(e) 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.
(f) Construction Plans relating to the Project shall have been approved in writing by
the City and Lender.
(g) 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 Deferred HRA Loan Proceeds.
(h) No Deferred HRA Loan Proceeds shall be disbursed prior to the Date of Closing.
(i) 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.
(j) No determination shall have been made by Lender or Title that the undisbursed
amount of the Deferred HRA 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.
(k) The disbursement requirements hereof and of Title set forth in the Disbursement
Agreement and any master disbursement agreement for the Project have been satisfied.
(l) Borrower shall have provided to Lender such evidence of compliance with all of
the provisions of this Agreement as Lender may reasonably request.
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(m) 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.
(n) 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.
(o) Borrower is prepared to commence construction of the Project promptly after the
Date of Closing in accordance with the Construction Plans.
(p) Lender shall have received evidence that all requisite permits and other approvals
have been issued.
(q) 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.
Section 3.02. Disbursement of Deferred HRA Loan Proceeds. The Deferred HRA Loan
Proceeds shall be disbursed in accordance with disbursement procedures approved by Lender. Lender will
authorize disbursements of Deferred HRA Loan Proceeds only for Eligible Project Costs, and only after
Lender has inspected the Project and approved Borrower’s Disbursement Request. Portions of the Deferred
HRA 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 has a good and marketable leasehold interest in the Land and
has possession of the Land pursuant to and subject to the Ground Lease.
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
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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 Deferred HRA Loan Proceeds. All Deferred HRA 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.
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 $25,000.00 in any one subcontract or in excess of $100,000.00
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,
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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,
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
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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 Deferred HRA 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 Deferred HRA 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 Deferred HRA Loan
Documents, Ground Lease, 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 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
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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 Deferred HRA Loan and appropriate legal action, that may include
foreclosure of the Deferred HRA Loan Mortgage. The limited partners of Borrower and the lenders of the
Other Project Financing 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 Deferred HRA Loan Documents
or the Construction and Other Documents;
(c) To cancel this Agreement;
(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 Deferred HRA 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 Deferred HRA Loan Proceeds during the
continuance of the Event of Default; or
(h) To foreclose the Deferred HRA Loan Note and Deferred HRA Loan Mortgage, or
realize upon any other security securing the Deferred HRA 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.
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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
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 Deferred HRA 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 Deferred HRA Loan pursuant to the Master Subordination Agreement, then to repay
the Deferred HRA Loan, then to repay the Other Project Financing that is subordinate to the Deferred HRA
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 the Lender. 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
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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:
(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 (3) 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 Deferred HRA 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.
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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: 4040 West 70th Street Apartments, LP
1801 County Road B West, Suite 211
Roseville, MN 55113
with a copy to: Winthrop & Weinstine, P.A.
Attention: Norm Jones
225 South Sixth Street, Suite 3500
Minneapolis, MN 55402
and R4 CVMN Acquisition LLC
780 Third Avenue, 16th Floor
New York, NY 10017
Attention: Marc D. Schnitzer
and Holland & Knight LLP
31 West 52nd Street
New York, NY 10019
Attention: Alan S. Cohen
If to Lender: Housing and Redevelopment Authority of Edina, Minnesota
4801 West 50th Street
Edina, MN 55424
Attention: Executive Director
If to Title: Guaranty Commercial Title, Inc.
465 Nicollet Mall, Suite 230
Minneapolis, MN 55402
Phone: (612) 746-0412
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 Deferred HRA Loan Documents, and shall
F-18
4891-6946-5878\3
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
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, EDINA HOUSING FOUNDATION, 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” and
the “Edina Housing Foundation” 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.
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4891-6946-5878\3
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 Deferred HRA 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.
(Signature pages follow.)
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[Signature Page to Deferred HRA Loan Agreement]
4891-6946-5878\3
IN FURTHERANCE WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
BORROWER:
4040 WEST 70TH STREET APARTMENTS, LP,
a Minnesota limited partnership
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
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[Signature Page to Deferred HRA Loan Agreement]
4891-6946-5878\3
LENDER:
HOUSING AND REDEVELOPMENT
AUTHORITY OF EDINA, MINNESOTA
By: _________________________________________
James B. Hovland, Chair
By: _________________________________________
James Pierce, Secretary
F-22
[Exhibit A to Deferred HRA Loan Agreement]
4891-6946-5878\3
EXHIBIT A
LEGAL DESCRIPTION
Tract C, Registered Land Survey No. 1365, Hennepin County, Minnesota
Torrens Property
F-23
[Exhibit B to Deferred HRA Loan Agreement]
4891-6946-5878\3
EXHIBIT B
PERMITTED ENCUMBRANCES
1. The Ground Lease
2. Liens for taxes and special assessments not then delinquent, or delinquent but being contested by
the Borrower.
3. 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.
4. 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
contested in accordance with the Loan Documents.
5. 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.
6. Other encumbrances agreed to by Lender as listed on Lender’s pro-forma Title Policy as of the
Date of Closing or the Master Subordination Agreement.
.
F-24
[Exhibit C to Deferred HRA Loan Agreement]
4891-6946-5878\3
EXHIBIT C
FORM OF DEFERRED HRA LOAN NOTE
PROMISSORY NOTE
$[1,336,901.00] Edina, Minnesota
________________ _____, 2022
FOR VALUE RECEIVED, the undersigned (herein called the “Borrower”), promises to pay to
the order 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 (herein called the “Lender”), or its
assigns, the sum of $[1,336,901.00] (herein called the “Loan Funds”), at the rate of two percent (2%) interest
per annum. Said sum was made available to the Borrower by that certain Deferred HRA Loan Agreement
dated __________________, 2022 (the “Deferred HRA Loan Agreement”), between the Lender and the
Borrower to redevelop the property located at 4040 West 70th Street, Edina, Minnesota (herein called the
“Project”), and legally described in the Deferred HRA Loan Mortgage (define below). Unless otherwise set
forth herein, all capitalized terms used but not defined herein shall have the meanings ascribed to them
under the Deferred HRA Loan Agreement.
The entire principal amount of this Note and accrued interest thereon shall be due and payable on
or before the earlier of (i) the 40-year anniversary of the Date of Closing and (ii) the earlier repayment of
refinancing of the First Mortgage Loan (other than refinancing of the initial First Mortgage Loan from R4
Capital Funding LLC); provided, however, that at any time prior to the full repayment of the Deferred HRA
Loan, the entire outstanding principal balance will be immediately due and payable upon the occurrence of
any one of the following events of default:
(a) The sale, assignment, conveyance, transfer, lease, lien, encumbrance, or refinancing of the
Project by the Borrower without the Lender’s prior written consent, except a lease to a
tenant of the Project in the ordinary course of business or transfers of limited partnership
interests in the Borrower pursuant to Borrower’s partnership agreement or the replacement
of the general partner or Borrower pursuant to Borrower’s partnership agreement with the
reasonable approval of the replacement general partner by the Lender; or
(b) Termination of use of the Project as a low and moderate income housing project as required
by the Deferred HRA Loan Agreement or 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 pursuing all
reasonable actions to prohibit such illegal activities.
(d) Default by the Borrower in the performance of any other covenant, term or condition of
this Promissory Note, the Deferred HRA Loan Mortgage, the Deferred HRA Loan
Agreement, any of the TIF Project Agreements, or any other agreement or mortgage
relating to or encumbering the Project.
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[Exhibit C to Deferred HRA Loan Agreement]
4891-6946-5878\3
Upon the occurrence of one of the events specified above, the Lender shall mail notice to the
Borrower specifying: (1) the event of default; (2) the action required to cure such event; (3) a date not less
than thirty (30) days from the date the notice is mailed to the Borrower by which date such default must be
cured; and (4) that failure to cure such default on or before the dates specified in the notice may result in
acceleration of the Deferred HRA Loan. The limited partners of Borrower and the lenders of the Other
Project Financing shall have the right, but not the obligation to cure any event of default during the
applicable cure period.
If suit is instituted by Lender, its successors or assigns to recover on this Note, the undersigned
agrees to pay all costs of such collection including reasonable attorney’s fees and court costs.
Demand, protest and notice of demand and protest are hereby waived and the undersigned waives,
to the extent authorized by law, any and all homestead and other exemption rights which otherwise would
apply to the debt evidenced by this Note.
This Note is secured by a mortgage (“Deferred HRA Loan Mortgage”) of the real property
described in Exhibit A attached hereto of even date herewith and duly filed for record in the office of the
County Recorder and/or Registrar of Titles in and for Hennepin County in the State of Minnesota, and
reference is made to the Deferred HRA Loan Mortgage for the rights of the Lender as to the acceleration
of the indebtedness evidenced by this Note.
Notwithstanding anything in this Note to the contrary, and except for fraud or willful misconduct,
no recourse shall be had for the payment of the principal of, or interest in, against the Borrower or any
partner, legal representative, heir, estate, successor or assign of any thereof. The Lender agrees to look
solely to the collateral given as security for payment of this Note.
This Note shall be governed by and construed in accordance with the laws of the State of Minnesota.
IN WITNESS WHEREOF, this Note has been duly executed by the undersigned, as of the day
and year above first written.
BORROWER:
4040 WEST 70TH STREET APARTMENTS, LP,
a Minnesota limited partnership
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
F-26
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
EXHIBIT D
FORM OF DEFERRED HRA LOAN MORTGAGE
THIS INSTRUMENT IS EXEMPT FROM REGISTRATION TAX UNDER MINN. STAT.
§287.04(f)
COMBINATION LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT, AND FIXTURE FINANCING STATEMENT
THIS INDENTURE (this “Mortgage”), is made this ____ day of ____________, 2022, by 4040 WEST
70TH STREET APARTMENTS, LP, a Minnesota limited partnership (“Mortgagor,” regardless of
whether one or more persons or entities), for the benefit of HOUSING AND REDEVELOPMENT
AUTHORITY OF EDINA, MINNESOTA, a public body corporate and politic organized and existing
under the laws of the State of Minnesota (“Mortgagee”).
WITNESSETH, that Mortgagor, in accordance with the terms of the Loan Agreement by and
between Mortgagor, as borrower, and Mortgagee, as lender, dated as of even date herewith (the “Loan
Agreement”) and in consideration of the advances to be made under the Promissory Note (the “Note”)
executed by Mortgagor and payable to the order of Mortgagee dated as of even date herewith and due
__________________, 2062 (or such earlier date set forth in the Loan Agreement) (the “Maturity Date”)
of a principal indebtedness of $[1,336,901.00], does hereby mortgage, grant, bargain, sell, and convey unto
Mortgagee, its successors and assigns, forever, the following (all of the following being hereinafter
collectively referred to as the “Premises”):
A. REAL PROPERTY
All of Mortgagor’s right, title and interest in and to the tracts or parcels of real property, as more
fully described in Exhibit “A” attached hereto and made a part hereof, together with all the estates and
rights in and to the real property and in and to lands lying in streets, alleys, and roads adjoining the real
property and all buildings, structures, improvements, fixtures, and annexations, access rights, easements,
rights-of-way or use, servitudes, licenses, tenements, hereditaments, and appurtenances now or hereafter
belonging or pertaining to the real property; and
B. PERSONAL PROPERTY
Together with all buildings, equipment, fixtures, building supplies and materials, and personal
property now or hereafter owned by Mortgagor, attached to, placed in and necessary to the use of the
improvements on the Premises, including, but without being limited to, all machinery, fittings, fixtures,
apparatus, equipment, or articles used to supply heating, gas, electricity, air conditioning, water, light, waste
disposal, power, refrigeration, ventilation, and fire and sprinkler protection, as well as all elevators,
escalators, overhead cranes, hoists, and assists, and the like, supplies, awnings, blinds and shades, draperies
and curtains, stoves and ranges, maintenance and repair equipment, floor coverings, screen and storm
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[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
windows, shrubbery and plants (it being understood that the enumeration of any specific articles of property
shall in no way be held to exclude any items of property not specifically enumerated), as well as renewals,
replacements, proceeds, additions, accessories, increases, parts, fittings, and substitutes thereof, together
with all interest of Mortgagor in any such items hereafter acquired, all of which personal property
mentioned herein shall be deemed fixtures and accessory to the freehold and a part of the realty and not
severable in whole or in part without material injury to the Premises, but excluding therefrom the trade
fixtures, inventory, and removable personal property of any tenant or licensee of the Premises; and
C. RENTS. LEASES, AND PROFITS
Together with all rents and profits now due or which may hereafter become due under or by virtue
of and together with all right, title and interest of Mortgagor under the Ground Lease (defined below) and
in and to any lease, license, sublease, or agreement, whether written or verbal, for the use or occupancy of
the Premises or any part thereof; and
D. GROUND LEASE
All of Mortgagor’s interests in and derived from that certain Ground Lease Agreement between the East
Edina Housing Foundation dba Edina Housing Foundation (together with its successors and assigns,
collectively, the “Ground Lessor”) and Mortgagor dated _______________, 2022 (as amended from time
to time, collectively, the “Ground Lease”), together with all of Mortgagor’s rights thereunder, including
without limitation all options for extension, expansion, contraction or termination of the Ground Lease, and
all purchase or other options and rights of first refusal and other rights under the Ground Lease and all
extensions, renewals and replacements thereof.
E. JUDGMENTS AND AWARDS
Together with any and all awards or compensation made by any governmental or other lawful
authorities for the taking or damaging by eminent domain or the whole or any part of the Premises, including
any awards for a temporary taking, change of grade of streets, or taking of access.
AND MORTGAGOR does covenant with Mortgagee, its successors and assigns, that Mortgagor
is lawfully seized of the Premises and has good right to sell and convey the same; that Mortgagee, its
successors and assigns, shall quietly enjoy and possess the Premises; that Mortgagor will warrant and
defend the title to the same against all lawful claims not specifically set forth as permitted encumbrances in
Exhibit “B” (the “Permitted Encumbrances”) attached hereto and made a part hereof; and that all buildings,
improvements, and fixtures now or hereafter located on the Premises are, or will be, located entirely within
the boundaries of the Premises.
TO HAVE AND TO HOLD THE SAME, together with the possession and right of possession
of the Premises, unto Mortgagee, its successors and assigns, forever.
PROVIDED, NEVERTHELESS, that if Mortgagor strictly observes and performs all of the
covenants, agreements, and provisions of this Mortgage, the Loan Agreement, the Note, and any other
Deferred HRA Loan Documents, or if Mortgagor shall pay or cause to be paid all the indebtedness, plus
accrued interest, secured by this Mortgage, including any renewals or extensions thereof, following or due
to default by Mortgagor on said covenants, agreements, and provisions, then this Mortgage and the estate,
right, and interest of Mortgagee in the Premises shall become null and void; otherwise this Mortgage shall
be and remain in full force and effect.
AND IT IS FURTHER COVENANTED AND AGREED AS FOLLOWS:
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[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
ARTICLE 1
GENERAL COVENANTS, AGREEMENT, WARRANTIES
Section 1.1 DEFINITIONS. Unless otherwise set forth herein, all capitalized terms used but not
defined herein shall have the meanings ascribed to them under the Loan Agreement. In the event of a
conflict or inconsistency between the provisions contained in the Loan Agreement and this Mortgage, the
provisions of the Loan Agreement shall prevail.
Section 1.2 OBSERVANCE OF COVENANTS. Mortgagor will duly and punctually perform and
observe all of the covenants, agreements, and provisions contained herein, in the Note, the Loan
Documents, and any other instrument given as security for the payment of the Note.
Section 1.3 USE OF PREMISES. Mortgagor will not permit or suffer the use of any of the
Premises for any purpose other than the use for which the same is intended at the time of execution of this
Mortgage. Mortgagor will keep the buildings and other improvements now or hereafter erected on the land
in good repair and condition, ordinary wear, tear and depreciation excepted. Mortgagor will not commit or
permit waste, will not alter the design or structural character of any building now or hereafter erected on
the land without the prior written consent of Mortgagee except the construction to be performed in
accordance with the plans approved by Mortgagee, will not do any act or thing which would unduly impair
or depreciate the value of the Premises, and will not vacate or abandon the Premises. Mortgagor will not
remove from the Premises any fixtures or personal property included in the Premises unless the same is
immediately replaced with like property, subject to the lien and security interest of this Mortgage, of at least
equal value and utility.
Section 1.4 COMPLIANCE WITH LAWS. The improvements made and to be made upon the
Premises and all plans and specifications shall comply with all municipal ordinances and regulations made
or promulgated by lawful authority, and the same will, upon completion, comply with all such municipal
ordinances and regulations and all applicable federal regulations, and with all rules of the applicable fire
rating or inspection organization, bureau, association, or office, which are now or may hereafter become
applicable.
Section 1.5 LIENS. Mortgagor will keep the Premises free from all liens, other than the Permitted
Encumbrances, such as those presented in the activity budget prior to loan closing, whether superior or
subordinate to this Mortgage, and upon written demand of Mortgagee, will promptly pay and procure the
release of any lien other than Permitted Encumbrances, whether arising prior or subsequent to the execution
of this Mortgage, which in any way, in the judgment of Mortgagee, may impair the security of this
Mortgage; but Mortgagor need not discharge any such lien so long as Mortgagor shall agree to pay the
obligation secured by such lien in a manner acceptable to Mortgagee, or shall in good faith contest such
lien by appropriate legal proceedings which shall operate to prevent the enforcement of the lien and the loss
of any of the Premises.
Section 1.6 MORTGAGOR’S DUTY TO PAY TAXES. Mortgagor will pay, before a fine or
penalty might attach for nonpayment thereof, all taxes and assessments and all other charges whatsoever
levied upon or assessed, placed, or made against the Premises; provided, however, that Mortgagor need not
discharge any such taxes or assessments so long as Mortgagor shall agree to pay them in a manner
acceptable to Mortgagee, or shall in good faith contest them by appropriate legal proceedings which shall
operate to prevent the enforcement of any lien in connection therewith and the loss of any of the Premises.
Mortgagor, upon request by Mortgagee, will promptly deliver to Mortgagee any receipts for the payment
of such charges. Mortgagor likewise will pay all taxes, assessments and other charges, levied upon or
assessed, placed or measured by, this Mortgage, or the recordation hereof, or the indebtedness secured
hereby.
F-29
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
Section 1.7 MORTGAGEE’S OPTION TO PAY. In the event of Mortgagor’s failure to pay any
governmental or municipal charge, Mortgagee may, but shall not be required to, pay any such levy, lien, or
charge before the same becomes delinquent or subject to interest or penalties and in default thereof if, in
the reasonable opinion of Mortgagee, the Premises shall be in jeopardy or in danger of being forfeited or
foreclosed.
Section 1.8 MORTGAGOR’S DUTY TO PAY UTILITIES. Mortgagor will pay all charges
made by utility companies, public or private, for electricity, gas, heat, water, or sewer furnished to or used
in connection with the Premises or any part thereof (other than utilities separately metered to individual
tenant at the Premises) and, upon request by Mortgagee, will promptly deliver to Mortgagee receipts for
the payment of such charges.
Section 1.9 PROTECTION OF SECURITY. Mortgagor agrees to promptly notify Mortgagee of
and appear in and defend any suit, action, or proceeding that affects the value of the Premises, the
indebtedness secured hereby, or the rights or interest of Mortgagee hereunder. Mortgagee may elect to
appear in or defend any such action or proceeding, including, without limitation, if Mortgagor fails to
perform any obligation on its part to be performed under the Ground Lease, and Mortgagor agrees to
indemnify and reimburse Mortgagee for any and all loss, damage, reasonable expense, or cost arising out
of or incurred in connection with any such suit, action, or proceeding, including costs of evidence of title
and reasonable attorney’s fees. Mortgagee, at its option, shall be subrogated to any encumbrance, lien,
claim, or demand, and to all the rights and securities for the payment thereof, paid, or discharged with the
principal sum secured hereby, or by Mortgagee under the provisions hereof, and any such subrogation rights
shall be additional and cumulative security for this Mortgage.
Section 1.10 ADDITIONAL ASSURANCES. Mortgagor agrees, upon reasonable request by
Mortgagee, to execute and deliver such further instruments, financing statements under the Uniform
Commercial Code, and assurances and to do such further acts as may be necessary or proper to carry out
more effectively the purposes of this Mortgage, and, without limiting the foregoing, to make subject to the
lien hereof any property agreed to be subjected hereto or covered by the granting clause hereof, or intended
so to be. Mortgagor agrees to pay any recording fees, filing fees, stamp taxes or other charges arising out
of or incident to the filing or recording of the Mortgage, such further assurances and instruments, and the
issuance and delivery of the Note.
Section 1.11 RESTRICTIONS ON TRANSFER OF TITLE. Mortgagor shall not cause, enable,
or permit a transfer of its leasehold interest in the Premises, or any part thereof, without first obtaining
Mortgagee’s written consent, which consent will not be unreasonably, withheld or delayed. If such transfer
occurs, Mortgagee shall have the right, at its option, to declare the unpaid principal balance of the Note,
together with all sums advanced hereunder, immediately due and payable without notice. If such a transfer
occurs, Mortgagee is hereby authorized and empowered to deal with any such buyer, transferee, or lessee
with reference to the Premises or the indebtedness secured hereby, or with reference to any of the terms and
conditions hereof, as fully and to the same extent as it might deal with the original parties hereto, without
in any way releasing or discharging any of the liabilities or undertakings hereunder, and without giving
notice to any person, firm, or corporation. This restriction on transfer of title does not apply to the ordinary
leasing of individual units. Furthermore, this Section 1.11 shall not prevent or restrict transfers of
partnership interests in the Mortgagor (or transfers of beneficial interests in the limited partner of
Mortgagor), or the appointment of a substitute or additional general partner of Mortgagor, in accordance
with Section 8.3 of this Mortgage.
Section 1.12 NO JUNIOR FINANCING. Mortgagor will not, without the prior written consent
of Mortgagee, grant or create any mortgage lien or consensual security interest on the Premises other than
F-30
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
the lien and security interest of this Mortgage, and in the Permitted Encumbrances set forth on Exhibit “B”;
however, such consent will not be unreasonably withheld or delayed.
Section 1.13 GROUND LEASE.
(a) Performance of Tenant Obligations.
The Mortgagor shall pay when due all rent payable under the Ground Lease and shall diligently
and timely perform and observe all of the terms, covenants and conditions of the Ground Lease to
be performed or observed by the Mortgagor as tenant, and shall do all things necessary to preserve
and to keep unimpaired its rights under the Ground Lease, shall not waive, excuse or discharge any
of the obligations of the Ground Lessor without the Mortgagee’s prior written consent in each
instance, and shall diligently and continuously enforce the obligations of the Ground Lessor.
(b) Notices of Default.
The Mortgagor shall promptly deliver to the Mortgagee a true and complete copy of any notice
given by the Ground Lessor to the Mortgagor of any default by the Mortgagor in the performance
or observance of any of the terms, covenants and conditions of the Ground Lease to be performed
by Mortgagor, and shall promptly advise the Mortgagee in writing of any default under the Ground
Lease on the part of the Ground Lessor.
(c) Cure by the Mortgagee.
In the event of a default by the Mortgagor in the performance of any of its obligations under the
Ground Lease, including, without limitation, any default in the payment of any sums payable
thereunder, then, in each and every case, the Mortgagee may, at its option, cause the default or
defaults to be remedied and otherwise exercise any and all of the rights of the Mortgagor thereunder
in the name of and on behalf of the Mortgagor. The Mortgagor shall, on demand, reimburse the
Mortgagee for all advances made and expenses incurred by the Mortgagee in curing any such
default (including, without limitation, reasonable attorneys’ fees and disbursements), together with
interest thereon computed at the Default Rate from the date that such advance is made to and
including the date the same is paid to the Mortgagee.
(d) Options to Renew or Extend the Ground Lease.
The Mortgagor shall duly exercise any renewal or extension option with respect to the Ground
Lease. If the Mortgagor does not renew or extend the term of the Ground Lease, the Mortgagee
may, at its option, exercise the option to renew or extend in the name of and on behalf of the
Mortgagor. The Mortgagor hereby irrevocably appoints the Mortgagee as its attorney-in-fact,
coupled with an interest, to execute and deliver, for and in the name of the Mortgagor, all
instruments and agreements necessary under the Ground Lease or otherwise to cause any renewal
or extension of the Ground Lease.
(e) Information Concerning the Status of the Ground Lease.
The Mortgagor shall promptly obtain and deliver to the Mortgagee in writing any information the
Mortgagee may reasonably request concerning the performance by the Mortgagor of its obligations
under the Ground Lease.
(f) Assignment/Actions Requiring the Mortgagee’s Consent.
F-31
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
The Mortgagor hereby assigns to the Mortgagee, as security for the payment and performance of
the Indebtedness secured by this Security Instrument and for the performance and observance of
the terms, covenants and conditions of this Security Instrument, all of the rights of the Mortgagor
as tenant under the Ground Lease. Accordingly, the Mortgagee’s advance written consent shall be
required for the surrender of the leasehold estate created by the Ground Lease, for any waiver of
any obligation or default of Ground Lessor under the Ground Lease, for any sublease not expressly
permitted by this Security Instrument, for the termination or cancellation of the Ground Lease, and
for the assignment, encumbrance, subordination, modification, change, supplementation, alteration
or amendment of the Ground Lease in any respect. Any such action taken without such consent
shall be voidable by the Mortgagee.
(g) Prohibition on Rejection of the Ground Lease in Bankruptcy.
The Mortgagor shall not, without the Mortgagee’s prior written consent, elect to treat the Ground
Lease or the leasehold estate created thereby as terminated under Subsection 365(h)(1) of the
Bankruptcy Code after rejection or disaffirmance of the Ground Lease by the Ground Lessor
thereunder or by any trustee of such party, and any such election made without such consent shall
be void and ineffective. In any such circumstance, Mortgagor shall take all such actions and make
all such filings as required to assume the Ground Lease, shall elect to remain in possession of the
Premises and shall take all other steps in a manner acceptable to Mortgagee as may be necessary to
preserve Mortgagor’s right to assume the Ground Lease as well as those necessary to pursue
Mortgagor’s right to adequate protection of its leasehold estate. Such additional steps shall include
filing all pleadings required to assert that Mortgagor’s possessory rights override a proposed sale
of the Ground Lessor’s assets free and clear of the Mortgagor’s or the Mortgagee’s interest in the
Premises. Mortgagor hereby appoints Mortgagee as its attorney-in-fact to act on behalf of
Mortgagor in connection with all matters relating to or arising out of the assumption, termination
or rejection of the Ground Lease, and acknowledges that such power of attorney is coupled with an
interest.
(h) Assignment of Rejection Rights.
As security for the secured obligations, the Mortgagor hereby unconditionally assigns, transfers
and sets over to the Mortgagee all of the Mortgagor’s claims and rights to elect to cancel, reject,
terminate or disaffirm the Ground Lease and to the payment of damages that may hereafter arise as
a result of any rejection or disaffirmance of the Ground Lease by the Ground Lessor thereunder or
by any trustee of the Ground Lessor under the Bankruptcy Code. The Mortgagee shall have and is
hereby granted the right to proceed in its own name or in the name of the Mortgagor with respect
to any claim, suit, action or proceeding relating to the Ground Lease or the rejection or
disaffirmance of the Ground Lease (including, without limitation, the right to file and prosecute, to
the exclusion of the Mortgagor, any proofs of claim, complaints, motions, application, notices and
other documents) in any case with respect to the Ground Lessor under the Bankruptcy Code. This
assignment constitutes an irrevocable and unconditional assignment of the foregoing claims, rights
and remedies, and shall continue in effect until all of the secured obligations have been satisfied
and discharged. Any amounts received by the Mortgagee as damages arising out of any such
rejection of the Ground Lease shall be applied first, to all reasonable costs and expenses of the
Mortgagee (including, without limitation, reasonable legal fees) in connection with the exercise of
its rights under this paragraph, and then, in such manner as the Mortgagee shall determine, to the
reduction and payment of the Indebtedness secured by this Security Instrument, and thereafter any
balance shall be remitted to the Mortgagor.
(i) Offset of Rejection Damages against Ground Rent.
F-32
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
If, pursuant to Subsection 365(h)(1)(B) of the Bankruptcy Code, the Mortgagor seeks to offset
against the ground rent the amount of any damages caused by the nonperformance by the Ground
Lessor of its obligations under the Ground Lease after rejection or disaffirmance thereof under the
Bankruptcy Code, the Mortgagor shall, prior to effecting such offset, notify the Mortgagee of the
Mortgagor’s intent to do so, setting forth the amounts proposed to be so offset and the basis therefor.
The Mortgagee shall have the right to object to all or any part of such offset and, in the event of
such objection, the Mortgagor shall not affect any offset of the amounts so objected to by the
Mortgagee. If the Mortgagee shall have failed to object within ten (10) days after such notice, the
Mortgagor may proceed to effect such offset in the amounts set forth in such notice. The
Mortgagee’s failure to object to such offset shall not constitute an approval by the Mortgagee of
any such offset. The Mortgagor shall defend, indemnify and hold the Mortgagee harmless from and
against any and all claims, demands, actions, suits, proceedings, damages, losses, costs and
expenses of every nature whatsoever (including, without limitation, reasonable legal fees) arising
from or relating to any such offset by the Mortgagor, except and to the extent the same are caused
by the gross negligence or willful misconduct of the Mortgagee.
(j) Ground Lease Litigation.
If any action, proceeding, motion or notice is commenced or filed with respect to the Ground Lease
or the Premises or any part thereof under the Bankruptcy Code or otherwise, the Mortgagee shall
have, and is hereby granted, the option, to the exclusion of the Mortgagor, exercisable upon notice
from the Mortgagee to the Mortgagor, to conduct and control any such litigation with counsel of
the Mortgagee’s choice. The Mortgagee may proceed in its own name or in the name of the
Mortgagor in connection with any such litigation, and the Mortgagor agrees to execute any and all
powers, authorizations, consents and other documents reasonably required by the Mortgagee in
connection therewith and to provide to Mortgagee adequate protection of its interests in the Ground
Lease and the Premises. The Mortgagor shall, upon demand, pay to the Mortgagee all reasonable
costs and expenses (including, without limitation, reasonable legal fees) paid or incurred by the
Mortgagee in connection with the prosecution or conduct of any such proceedings and, to the extent
permitted by law, such costs and expenses shall be added to the Indebtedness secured by this
Security Instrument. The Mortgagor shall not, without the prior written consent of the Mortgagee
(which consent shall not be unreasonably withheld), commence any action, suit, proceeding or case,
or file any application or make any motion, in respect of the Ground Lease in any such case under
the Bankruptcy Code or otherwise.
(k) Right to Assume Ground Lease Prior to the Mortgagor’s Rejection.
If a petition under the Bankruptcy Code is filed by or against the Mortgagor, and the Mortgagor or
any trustee of the Mortgagor shall decide to terminate or reject the Ground Lease pursuant to
Section 365(1) of the Bankruptcy Code, the Mortgagor shall give the Mortgagee at least ten (10)
days’ prior written notice of the date on which application shall be made to the court for authority
to reject the Ground Lease. The Mortgagee shall have the right, but not the obligation, to serve
upon the Mortgagor or such trustee within such ten (10) day period a notice stating that (A) the
Mortgagee demands that the Mortgagor or such trustee assume and assign the Ground Lease to the
Mortgagee or its nominee pursuant to Section 365 of the Bankruptcy Code, and (B) the Mortgagee
covenants to cure, or provide adequate assurance of the prompt cure of, all defaults and to provide
adequate assurance of future performance under the Ground Lease. If the Mortgagee serves such
notice upon the Mortgagor or such trustee, neither the Mortgagor nor such trustee shall seek to
reject the Ground Lease, and the Mortgagor and such trustee shall comply with such demand within
thirty (30) days after such notice is given.
F-33
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
(l) Right to Assume Ground Lease if the Mortgagor Fails to Act.
If a petition under the Bankruptcy Code is filed by or against the Mortgagor, and if within thirty
(30) days after the date of filing of such petition neither the Mortgagor nor any trustee of the
Mortgagor takes any action to assume or reject the Ground Lease pursuant to Subsection 365(a) of
the Bankruptcy Code, the Mortgagee shall have the right, but not the obligation, to serve upon the
Mortgagor or such trustee a notice stating that (A) the Mortgagee demands that the Mortgagor or
such trustee assume and assign the Ground Lease to the Mortgagee pursuant to Section 365 of the
Bankruptcy Code, and (B) the Mortgagee covenants to cure, or provide adequate assurance of the
prompt cure of, all defaults and to provide adequate assurance of future performance under the
Ground Lease. If the Mortgagee serves such notice upon the Mortgagor or such trustee, neither the
Mortgagor nor such trustee will seek to reject the Ground Lease, and the Mortgagor and such trustee
shall comply with such demand within fifteen (15) days after such notice is given.
(m) Assignment of Certain Extension Rights.
The Mortgagor hereby assigns, transfers and sets over to the Mortgagee a nonexclusive right to
apply to the Bankruptcy Court under Subsection 365(d)(4) of the Bankruptcy Code for an order
extending the period during which the Ground Lease may be rejected or assumed after the entry of
any order for relief in respect to the Mortgagor under Chapter 7 or Chapter 11 of the Bankruptcy
Code.
(n) No Merger.
It is hereby agreed that leasehold estate created by the Ground Lease and the fee title underlying
such leasehold estate shall not merge but shall always be kept separate and distinct, notwithstanding
the union of said estates in either the Ground Lessor, the Mortgagor or a third party, whether by
purchase or otherwise. If the Mortgagor shall acquire fee title underlying the leasehold estate
created by the Ground Lease or any other estate, title or interest in the Premises, the underlying fee
interest, or any portion of either of the foregoing, then, immediately upon the Mortgagor’s
acquisition thereof, this Security Instrument automatically shall spread to cover the Mortgagor’s
interest in such leased property on the same terms, covenants and conditions as set forth herein. It
is the intention of the Mortgagor and the Mortgagee that no documents, instruments or agreements
shall be necessary to confirm the foregoing spread of this Security Instrument to cover the
Mortgagor’s interest in such leased property, as aforesaid, and that such spreading shall occur
automatically upon the consummation of the Mortgagor’s acquisition of such estate, title or interest
to such leased property. Notwithstanding the foregoing, the Mortgagor shall make, execute,
acknowledge and deliver to the Mortgagee or so cause to be made, executed, acknowledged and
delivered to the Mortgagee, in form satisfactory to the Mortgagee, all such further or other
documents, instruments, agreements or assurances as may be required by the Mortgagee to confirm
the foregoing spread of this Security Instrument to cover the Mortgagor’s interest in such leased
property. The Mortgagor shall pay all reasonable expenses incurred by the Mortgagee in connection
with the preparation, execution, acknowledgment, delivery and/or recording of any such
documents, including, without limitation, all filing, registration and recording fees and charges,
documentary stamps, mortgage taxes, intangible taxes, and reasonable attorneys' fees, costs and
disbursements.
F-34
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
ARTICLE 2
ASSIGNMENT OF LEASES AND RENTS
Section 2.1 PERFORMANCE OF LEASES. Mortgagor, at Mortgagor’s own cost and expense,
will perform, comply with, and discharge all of the obligations of Mortgagor under any leases (including
the Ground Lease) or agreements for the use of the Premises in all material respects and use Mortgagor’s
best efforts to enforce or secure the performance of each obligation and undertaking of the respective tenants
under any such leases and will appear in and defend, at Mortgagor’s own cost and expense, any action or
proceeding arising out of or in any manner connected with Mortgagor’s interest in any leases of the
Premises. Mortgagor will observe and comply with all provisions of law applicable to the operation and
ownership of the Premises, including, without limitation, all applicable provisions of Minn. Stat. §504B.178
with respect to any security deposits received by it and all covenants required of it by provisions of Minn.
Stat. §504.B.161. Mortgagor shall permit no assignment of any of said leases, unless the right to assign is
expressly reserved under the lease. Mortgagor shall not collect or accept any installment of rent for more
than one month in advance of its due date.
Section 2.2 PROTECTION OF SECURITY OF THIS MORTGAGE. If Mortgagor fails to
perform or observe any material covenant or agreement contained in this Mortgage, then Mortgagee, but
without obligation to do so and without releasing Mortgagor from any obligation hereunder, subject to the
rights of senior lienholders, may make or do the same in such manner and to such extent as Mortgagee may
deem appropriate to protect the security hereof, including, specifically, without limiting its general powers,
the right to appear in and defend any action or proceeding purporting to affect the security hereof or the
rights or powers of Mortgagee, and also the right to perform and discharge each and every obligation,
covenant, and agreement of Mortgagor contained in the leases and in exercising any such powers to pay
necessary costs and expenses, employ counsel, and pay reasonable attorneys’ fees. Mortgagor will pay
immediately upon demand all sums expended by Mortgagee under the authority of this Mortgage, together
with interest thereon as provided in the Note, and the same shall be added to said indebtedness and shall be
secured by this Mortgage.
Section 2.3 PRESENT ASSIGNMENT. Subject to the rights of senior lien holders, this Mortgage
shall constitute a perfected, absolute, and present assignment, provided that Mortgagor shall have the right
to collect, but not prior to accrual, all of the rents, and to retain, use, and enjoy the same unless and until an
Event of Default shall occur under this Mortgage. Subject to the rights of senior lien holders, any rents
which accrue prior to an Event of Default under this Mortgage but are paid thereafter shall be paid to
Mortgagee.
Section 2.4 DEFAULT AND REMEDIES. Upon the occurrence of any Event of Default specified
in this Mortgage, Mortgagee, at its option, at any time, subject to applicable cure periods and the rights of
senior lien holders:
(a) May, in the name, place, and stead of Mortgagor, (i) enter upon, manage, and operate the
Premises, or retain the services of one or more independent contractors to manage and
operate all or part of the Premises; (ii) make, enforce, modify, and accept surrender of the
leases; (iii) obtain or evict tenants; collect, sue for, fix, or modify the rents; and enforce all
rights of Mortgagor under the leases; and (iv) perform any and all other acts that may be
necessary or proper to protect the security of this Mortgage.
(b) May, with or without exercising the rights set forth in subparagraph (a) above, give, or
require Mortgagor to give, notice to any or all tenants under the leases authorizing and
directing the tenants to pay all rents under the lease directly to Mortgagee.
F-35
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
(c) May, without regard to waste, adequacy of the security, or solvency of Mortgagor, apply
for, and Mortgagor hereby consents to, the appointment of a receiver of the Premises,
whether or not foreclosure proceedings have been commenced under this Mortgage, and if
such proceedings have been commenced, whether or not a foreclosure sale has occurred.
The exercise of any of the foregoing rights or remedies and the application of the rents, profits, and income
pursuant this Article, shall not cure or waive any Event of Default (or notice of default) under this Mortgage
nor invalidate any act done pursuant to such notice.
Section 2.5 APPLICATION OF RENTS, PROFITS, AND INCOME. After an Event of Default
which is not cured within the applicable cure period under the Loan Agreement, all rents collected by
Mortgagee or the receiver each month shall be applied as follows:
(a) To payment of all reasonable fees of the receiver approved by the court;
(b) To payment of all tenant security deposits then owing to tenants under any of the Leases
pursuant to the provision of Minn. Stat. §504B.178;
(c) To payment of all prior or current real estate taxes and special assessments with respect to
the Premises;
(d) To payment of all premiums then due for the insurance required by the provisions of this
Mortgage;
(e) To payment of expenses incurred for normal maintenance of the Premises;
(f) If received prior to any foreclosure sale of the Premises, to Mortgagee for payment of the
indebtedness secured by this Mortgage, but no such payment made after acceleration of the
indebtedness shall affect such acceleration; and
(g) If received during, or with respect to, the period of redemption after a foreclosure sale of
the Premises:
(1) If the purchaser at the foreclosure sale is not Mortgagee, first to Mortgagee to the
extent of any deficiency of the sale proceeds to repay the indebtedness secured by this
Mortgage, second to the purchaser as a credit to the redemption price, but if the Premises
is not redeemed, then to the purchaser of the Premises; and
(2) If the purchaser at the foreclosure sale is Mortgagee, to Mortgagee to the extent of
any deficiency of the sale proceeds to repay the indebtedness secured by this Mortgage,
and the balance to be retained by Mortgagee as a credit to the redemption price, but if the
Premises is not redeemed, then to Mortgagee whether or not any such deficiency exists.
Section 2.6 SURVIVAL OF RIGHTS AND OBLIGATIONS. The entering upon and taking
possession of the Premises, the collection of such rents and profits, and the application thereof as aforesaid
shall not cure or waive any default under this Mortgage nor in any way operate to prevent Mortgagee from
pursuing any other remedy which it may now or hereafter have under the terms of this Mortgage, nor shall
it in any way be deemed to constitute the Mortgagee a mortgagee-in-possession. The rights and powers of
Mortgagee hereunder shall remain in full force and effect, both prior to and after any foreclosure of this
Mortgage and any sale pursuant thereto, and until expiration of the period of redemption from said sale,
regardless of whether a deficiency remains from said sale. The rights contained herein are in addition to
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[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
and shall be cumulative with the rights given in this Mortgage and in any separate instrument, if any,
assigning any leases, rents, and profits of the Premises and shall not amend or modify the rights in any such
separate agreement.
Section 2.7 NO LIABILITY FOR MORTGAGEE. Mortgagee shall not be obligated to perform
or discharge, nor does it hereby undertake to perform or discharge, any obligation, duty, or liability of
Mortgagor under the leases. This Mortgage shall not operate to place upon Mortgagee responsibility for the
control, care, management, or repair of the Premises, or for the carrying out of any of the terms and
conditions of the leases. Mortgagee shall not be responsible or liable for any waste committed on the
Premises, for any dangerous or defective condition of the Premises, for any gross negligence in the
management, upkeep, repair, or control of the Premises, or for failure to collect the rents.
Section 2.8 MORTGAGOR’S INDEMNIFICATION. Mortgagor shall and does hereby agree to
indemnify and to hold Mortgagee harmless of and from any and all claims, demands, liability, loss, or
damage (including all costs, expenses, and reasonable attorney’s fees in the defense thereof) asserted
against, imposed on, or incurred by Mortgagee in connection with or as a result of this Mortgage, or the
exercise of any rights or remedies under this Mortgage or under the leases, or by reason of any alleged
obligations or undertakings of Mortgagee to perform or discharge any of the terms, covenants, or
agreements contained in the leases, unless due to the willful misconduct of Mortgagee. If Mortgagee bears
any such liability, the amount thereof, together with interest thereon as provided in the Note, shall be
secured hereby and by the Mortgage, and Mortgagor shall reimburse Mortgagee therefor immediately upon
demand. Notwithstanding the foregoing, Mortgagor shall not be responsible for any liabilities, costs or
expenses incurred by the Mortgagee, its officers, officials, or employees due solely because of negligence
or willful misconduct of such parties.
Section 2.9 AUTHORIZATION TO TENANT. Upon notice from Mortgagee that it is exercising
the remedy set forth in Section 2.4(b) herein, the tenants under the leases are hereby irrevocably authorized
and directed to pay to Mortgagee all sums due under the leases, and Mortgagor hereby consents and directs
that said sums shall be paid to Mortgagee without the necessity for a judicial determination that a default
has occurred under this Mortgage or that Mortgagee is entitled to exercise its rights hereunder, and to the
extent such sums are paid to Mortgagee, Mortgagor agrees that the tenant shall have no further liability to
Mortgagor for the same. The signature of Mortgagee alone shall be sufficient for the exercise of any rights
under this Mortgage, and the receipt of Mortgagee alone for any sums received shall be a full discharge and
release therefor to any such tenant or occupant of the Premises. Checks for all or any part of the rents
collected under this Mortgage, upon notice from Mortgagee, shall be drawn to the exclusive order of
Mortgagee.
Section 2.10 MORTGAGEE AN ATTORNEY-IN-FACT. Mortgagor hereby irrevocably
appoints Mortgagee and its successors and assigns as its agent and attorney-in-fact, which appointment is
coupled with an interest with the right but not the duty to exercise any rights or remedies hereunder upon
an Event of Default, and to execute and deliver during the term of this Mortgage such instruments as
Mortgagee may deem appropriate to make this Mortgage and any further assignment effective including,
without limiting the generality of the foregoing, the right to endorse on behalf and in the name of Mortgagor
all checks from tenants in payment of rents that are made payable to Mortgagor.
Section 2.11 SATISFACTION. Upon the payment in full of all indebtedness secured hereby as
evidenced by a recorded satisfaction of this Mortgage executed by Mortgagee, this Mortgage, without the
need for any further satisfaction or release, shall become null and void and be of no further effect.
F-37
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
ARTICLE 3
UNIFORM COMMERCIAL CODE
Section 3.1 SECURITY AGREEMENT. This Mortgage shall constitute a security agreement, as
defined in the Uniform Commercial Code (“Code”), and Mortgagor hereby grants to Mortgagee a security
interest within the meaning of the Code in favor of Mortgagee on the personal property and rents, leases
and profits (“Collateral”) included in the Premises.
Section 3.2 FINANCING STATEMENT. This instrument may serve as a financing statement
covering all of the Collateral, as defined in Section 3.1 herein, and for this purpose, the following
information is set forth:
Name and address 4040 West 70th Street Apartments, LP
of debtor: 1801 County Road B West, Suite 211
Roseville, Minnesota 55113
Fed. ID # or State Filing No.: 1226401200026
Name and address of Housing and Redevelopment Authority of Edina, Minnesota
secured party: 4801 West 50th Street
Edina, MN 55424
Attention: Executive Director
Description of the type Collateral, as defined
(or items) of property in Section 3.1 herein.
covered by this
financing statement:
Description of real estate Real estate as legally described
to which Collateral is in Exhibit “A” attached hereto.
attached or upon which
it is located:
Some of the above Collateral are or are to become fixtures upon the above described real estate, and this
security agreement is to serve as a fixture financing statement to be filed for record with the real estate
records. Mortgagor agrees to execute and deliver all financing and continuation statements which may be
further required and pay all filing fees.
ARTICLE 4
INSURANCE
Section 4.1 INSURANCE. Mortgagor shall obtain and keep in full force and effect during the term
of this Mortgage, at Mortgagor's sole cost and expense, insurance upon the following terms:
(a) Insurance against loss by fire, lightning, flood (if the Premises are in an officially
designated flood hazard area) and risk customarily covered by standard extended coverage
endorsement, including the cost of debris removal, together with a vandalism and malicious
mischief endorsement, all in amounts of not less than the full insurable value or full
replacement cost of the improvements on the Premises, whichever is greater. Such
insurance policies shall name as the insured parties Mortgagor and Mortgagee as their
interests may appear, shall be in amounts sufficient to prevent Mortgagor from becoming
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[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
a co-insurer of any loss thereunder, and shall bear a satisfactory mortgagee clause in favor
of Mortgagee, with loss proceeds under any such policies to be made payable to Mortgagee,
subject to the rights of holders of all prior mortgages listed as Permitted Encumbrances.
(b) Mortgagor shall obtain and keep in full force and effect during the term of this Mortgage
comprehensive general public liability insurance covering the legal liability of Mortgagor
against claims for bodily injury, death, or property damage occurring on, in, or about the
Premises, in such minimal amounts and with minimal limits as Mortgagee may require.
(c) All required policies of insurance or acceptable certificates thereof, together with evidence
of the payment of current premiums therefor, shall be delivered to Mortgagee. Mortgagor
shall, within thirty (30) days prior to the expiration of any such policy, deliver other original
policies or certificates of the insurer evidencing the renewal of such insurance, together
with evidence of the payment of current premiums therefor.
(d) In the event of a foreclosure of this Mortgage or any acquisition of the Premises by
Mortgagee, all such policies and any proceeds payable therefrom, whether payable before
or after a foreclosure sale, or during the period allowed for redemption from foreclosure
sale, if any, shall become the absolute property of Mortgagee, to be utilized at its discretion.
In the event of foreclosure or the failure to obtain and keep any required insurance,
Mortgagor empowers Mortgagee to effect insurance upon the Premises, at Mortgagor’s
expense, and for the benefit of Mortgagee, in the amounts and types aforesaid, for a period
of time covering the time allowed for redemption, and, if necessary therefor, to cancel any
or all existing insurance policies.
(e) If the terms of any lease of the Premises require the lessee to maintain insurance policies
in the types, in the amounts, and meeting the requirements of this section, Mortgagee agrees
to accept such policies in lieu of Mortgagor furnishing the same hereunder, provided, if the
lessee fails to keep and maintain such policies, Mortgagor shall immediately obtain such
policies and, provided, the failure of the lessee to keep and maintain such policies shall not
operate to relieve or reduce Mortgagor’s obligations hereunder.
ARTICLE 5
APPLICATION OF INSURANCE AND AWARDS
Section 5.1 DAMAGE OR DESTRUCTION OF THE PREMISES. Subject to the rights of the
holders of all prior mortgages listed as Permitted Encumbrances, Mortgagor hereby assigns to Mortgagee
all proceeds from any insurance policies on the Premises, and Mortgagee is hereby authorized to collect
and receive the proceeds from any such policy or policies. Each insurance company is hereby authorized
and directed to make payment for all such losses to Mortgagor and Mortgagee jointly. After deducting from
such insurance proceeds any expenses incurred by Mortgagee in the collection or handling of such funds,
Mortgagee shall apply the net proceeds toward restoring the improvements and if such proceeds are
insufficient therefore, as a reduction of any portion of the indebtedness and other sums secured hereby,
whether then matured or to mature in the future, or at the option of Mortgagee such sums either wholly or
in part may be paid over to Mortgagor to be used to repair such improvements or to build new improvements
in their place or for any other purpose or object satisfactory to Mortgagee, without affecting the lien of this
Mortgage for the full amount secured hereby before such payment took place. Mortgagee shall not be
responsible for any failure to collect any insurance proceeds due under the terms of any policy regardless
of the cause of such failure. Notwithstanding the foregoing, if the improvements are damaged or destroyed
prior to the Maturity Date, the net proceeds from the insurance policies will be made available for repair
and reconstruction of the improvements so long as such funds, together with any other funds deposited with
F-39
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
Mortgagee, are sufficient to pay the costs thereof. Mortgagee specifically reserves the right to approve any
settlement by Mortgagor of any claim under such insurance policies, which approval shall not be
unreasonably withheld.
Section 5.2 CONDEMNATION. If the Premises, or any part thereof, or any interest therein, or
any rights appurtenant thereto, including, but not limited to, access, light, air, and view, are condemned
under any power of eminent domain or acquired for any public use or quasi-public use, subject to the rights
of the holders of all prior Mortgages listed as Permitted Encumbrances, the damages, proceeds, and
consideration for such condemnation or acquisition to the extent of the full amount of indebtedness upon
this Mortgage and obligations secured hereby remaining unpaid, are hereby assigned by Mortgagor to
Mortgagee, its successors, or assigns, as its interest may appear. All such damages, proceeds, and
considerations shall be paid to Mortgagee and applied by Mortgagee, at its option, after deduction of all its
expenses (including reasonable attorneys’ fees) incurred in obtaining such damages, proceeds, and
consideration, to the reduction of the indebtedness secured hereby or to any other indebtedness secured
hereby, whether or not then due and payable; any surplus remaining after payment of all indebtedness
secured hereby shall be paid over to Mortgagor. Mortgagor shall immediately furnish to Mortgagee true
and correct copies of any process papers or documents delivered to or served upon Mortgagor in connection
with any such eminent domain proceedings. Notwithstanding the foregoing, if the improvements are
condemned prior to the Maturity Date, the net proceeds from the condemnation will be made available for
repair and reconstruction of the improvements so long as such funds, together with any funds deposited
with Mortgagee, are sufficient to pay the costs thereof.
ARTICLE 6
RIGHTS OF MORTGAGEE
Section 6.1 RIGHT TO CURE DEFAULT. If Mortgagor shall fail to comply with any of the
covenants or obligations of this Mortgage, Mortgagee may, after ninety (90) days written notice from
Mortgagee of such failure with a copy to the Mortgagor’s Limited Partner, but shall not be obligated to and
without waiving or releasing Mortgagor from any obligation herein, remedy such failure, and Mortgagor
agrees to repay, upon demand, all reasonable sums incurred by Mortgagee in remedying any such failure,
together with interest as provided in the Note. All such sums shall become so much additional indebtedness
secured hereby, but no such advance shall be deemed to relieve Mortgagor from any failure hereunder. The
Mortgagor’s Limited Partner shall have the right, but not the obligation to cure defaults hereunder in the
same manner as the Mortgagor.
Section 6.2 NO CLAIM AGAINST MORTGAGEE. Nothing contained in this Mortgage shall
constitute any consent or request by Mortgagee, express or implied, for the performance of any labor or
services or for the furnishing of any materials or other property in respect of the Premises, or any part
thereof, nor as giving Mortgagor or any party in interest with Mortgagor any right, power, or authority to
contract for or permit the performance of any labor or services or the furnishing of any materials or other
property in such fashion as would create any personal liability against Mortgagee in respect thereof or
would permit the making of any claim that any lien based on the performance of such labor or services or
the furnishing of any such materials or other property is prior to the lien of this Mortgage.
Section 6.3 INSPECTION. Mortgagor will permit Mortgagee’s authorized representatives to enter
the Premises at all reasonable times and with reasonable notice for the purpose of inspecting the same;
provided, that Mortgagee shall have no duty to make such inspections and shall not incur any liability or
obligation for making any such inspections. Further, Mortgagor acknowledges and agrees that this right of
inspection allows Mortgagee, or the Mortgagee’s agents, to enter the Premises at reasonable times to
conduct environmental tests to establish the presence or absence of hazardous substances or pollutants upon
the Premises.
F-40
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
Section 6.4 BOOKS AND RECORDS. Mortgagor shall keep and maintain at all times complete,
true, and accurate books of accounts and records reflecting the results of the operation of the Premises.
Section 6.5 WAIVER OF APPRAISEMENT; HOMESTEAD; MARSHALING. Mortgagor
hereby waives, to the full extent lawfully allowed, the benefit of any homestead, appraisement, evaluation,
stay, and extension laws now or hereinafter in force. Mortgagor hereby waives any rights available with
respect to marshaling of assets so as to require the separate sale of any portion of the Premises, or as to
require Mortgagee to exhaust its remedies against a specific portion of the Premises before proceeding
against the other and does hereby expressly consent to and authorize the sale of the Premises, or any part
thereof, as a single unit or parcel if this Mortgage is foreclosed.
Section 6.6 OTHER RIGHTS. Mortgagee may at any time, and from time to time without notice,
release any person liable for the payment of any indebtedness, extend the time or agree to alter the terms of
payment of any indebtedness, release any property securing any indebtedness, consent to the making of any
plat or map of the Premises, or the creation of any easement thereon, or any covenants restricting use or
occupancy thereof, or agree to alter or amend the terms of this Mortgage (except as it covers any part of the
Premises so released). Any personal property remaining upon the Premises after the Premises has been
possessed or occupied by Mortgagee or its agent following foreclosure of this Mortgage, or under any deed
in lieu of foreclosure, shall be conclusively presumed to have been abandoned by Mortgagor.
Notwithstanding any other provision herein to the contrary, any foreclosure on the Project must
comply with the provisions of Section 42(h)(6)(E) of the Internal Revenue Code pertaining to limitations
on right to evict and increase rent for the three years following foreclosure. This Mortgage is expressly
subordinate to this provision.
Section 6.7 RIGHTS CUMULATIVE. Each right, power, or remedy herein conferred upon
Mortgagee is cumulative and in addition to every other right, power, or remedy, express or implied, now or
hereafter arising, available to Mortgagee, at law or in equity, or under the Code, or under any other
agreement, and each and every right, power, and remedy herein set forth or otherwise so existing may be
exercised from time to time as may be deemed expedient by Mortgagee and shall not be a waiver of the
right to exercise at any time thereafter any other right, power, or remedy. No delay or omission by
Mortgagee in the exercise of any right, power, or remedy arising hereunder or arising otherwise shall impair
any such right, power, or remedy or the right of Mortgagee to resort thereto at a later date or be construed
to be a waiver of any default or Event of Default.
ARTICLE 7
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 EVENTS OF DEFAULT. An “Event of Default” shall exist under this Mortgage
upon the occurrence of an Event of Default as defined in the Loan Agreement.
Section 7.2 ACCELERATION. If any Event of Default shall occur and remain uncured following
applicable notice and cure right set forth in the Loan Agreement, then, in any such case, Mortgagee may
declare the principal of the Note, including any interest which may be due upon default according to the
terms of the Note, together with all other indebtedness secured hereby, to be forthwith due and payable
without presentment, demand, or further notice of any kind.
Section 7.3 FORECLOSURE. If any Event of Default shall occur and remain uncured following
applicable notice and cure right set forth in the Loan Agreement, Mortgagee is hereby authorized and
empowered to foreclose this Mortgage by action or by advertisement, in accordance with and in the manner
prescribed by law, with full authority to sell the Premises at public auction and convey the same to the
F-41
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
purchaser in fee simple, and out of the proceeds arising from such sale, to pay all indebtedness secured
hereby with interest, if any, and all legal costs and charges of such foreclosure, and the maximum attorneys’
fees permitted by law, which costs, charges, and fees Mortgagor agrees to pay.
Section 7.4 RECEIVER. If any Event of Default shall occur and remain uncured following
applicable notice and cure right set forth herein, Mortgagee shall be entitled, as a matter of right, without
notice and without giving bond and without regard to the solvency or insolvency of Mortgagor, the waste
of the Premises, or adequacy of the security of the Premises, to apply for the appointment of a receiver in
accordance with the statutes and law made and provided for, who shall collect the rents and all other income
of any kind; manage the Premises so as to prevent waste; execute leases within or beyond the period of
receivership; pay all expenses for normal maintenance of the Premises; and perform the terms of this
Mortgage and apply the rents, issues, and profits as provided in Section 2.5 herein.
Section 7.5 RIGHTS UNDER ASSIGNMENT OF RENTS. If any Event of Default shall occur
and remain uncured following applicable notice and cure right set forth herein, Mortgagee may exercise all
rights and remedies available to it under the Assignment of Leases and Rents made herein.
Section 7.6 RIGHTS UNDER UNIFORM COMMERCIAL CODE. If any Event of Default
shall occur and remain uncured following applicable notice and cure right set forth herein, Mortgagee shall
have and may exercise, with respect to all personal property and fixtures which are part of the Premises, all
the rights and remedies accorded upon default to a secured party under the Uniform Commercial Code, as
in effect in the State of Minnesota. If notice to Mortgagor of intended disposition of such property is
required by law in a particular instance, such notice shall be deemed commercially reasonable if given at
least Ten (10) calendar days prior to the date of intended disposition.
Section 7.7 RIGHT TO DISCONTINUE PROCEEDING. In the event Mortgagee shall have
proceeded to invoke any right, remedy, or recourse permitted under this Mortgage and shall thereafter elect
to discontinue or abandon the same for any reason, Mortgagee shall have the unqualified right to do so,
and, in such event, Mortgagor and Mortgagee shall be restored to their former positions with respect to the
indebtedness secured hereby. This Mortgage, the Premises, and all rights, remedies, and recourse of
Mortgagee shall continue as if the same had not been invoked.
Section 7.8 ACKNOWLEDGMENT OF WAIVER OF HEARING BEFORE SALE.
Mortgagor understands and agrees upon the occurrence of an Event of Default, Mortgagee has the right,
inter alia, to foreclose this Mortgage by advertisement, pursuant to Minnesota Statutes Chapter 580, as
hereafter amended, or pursuant to any similar or replacement statute hereafter enacted; that if Mortgagee
elects to foreclose by advertisement, it may cause the Premises, or any part thereof, to be sold at public
auction; that notice of such sale must be published for six (6) successive weeks at least once a week in a
newspaper of general circulation, and that no personal notice is required to be served upon Mortgagor.
Mortgagor further understands that in the event of such default, Mortgagee may also elect its rights under
the Code and take possession of any of the personal property which are part of the Premises and dispose of
the same, by sale or otherwise, in one or more parcels, provided that at least ten (10) days prior notice of
such disposition must be given, all as provided for by the Code, as hereafter amended, or by any similar or
replacement statute enacted. Mortgagor further understands that, under the Constitution of the United States
and the Constitution of the State of Minnesota, Mortgagor may have the right to notice and hearing before
the Premises may be sold and that the procedure for foreclosure by advertisement described above does not
insure that notice will be given to Mortgagor, and neither said procedure for foreclosure by advertisement
nor the Code requires any hearing or other judicial proceeding. Mortgagor hereby relinquishes, waives, and
gives up any constitutional rights Mortgagor may have to notice and hearing before sale of the Premises
and expressly consents and agrees that the Premises may be foreclosed by advertisement and that the
personal property may be disposed of pursuant to the Code, all as described above. MORTGAGOR
F-42
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
ACKNOWLEDGES THAT MORTGAGOR IS REPRESENTED BY LEGAL COUNSEL; THAT
BEFORE SIGNING THIS DOCUMENT, THIS SECTION AND MORTGAGOR’S CONSTITUTIONAL
RIGHTS WERE FULLY EXPLAINED BY SUCH COUNSEL; AND THAT MORTGAGOR
UNDERSTANDS THE NATURE AND EXTENT OF THE RIGHTS WAIVED HEREBY AND THE
EFFECT OF SUCH WAIVER.
Section 7.9 NONRECOURSE. This Mortgage is nonrecourse to the Mortgagor and its partners,
employees, and agents except as provided in the Note or the other Deferred HRA Loan Documents.
Section 7.10 MSA. Notwithstanding anything to the contrary herein, Mortgagee’s rights under this
Mortgage shall be limited as set forth in that certain Master Subordination Agreement dated even herewith
by and among Mortgagor, Mortgagee, and other parties.
ARTICLE 8
MISCELLANEOUS PROVISIONS
Section 8.1 PRINCIPAL AMOUNT. The maximum principal amount of indebtedness secured by
this Mortgage is $[1,336,901.00].
Section 8.2 GOVERNING LAW; SEVERABILITY. This Mortgage shall be governed by the
laws of the State of Minnesota. The unenforceability or invalidity of any provision hereof shall not render
any other provision herein contained unenforceable or invalid, and to this end the provisions of this
Mortgage are declared to be severable.
Section 8.3 CHANGE OF OWNERSHIP. Mortgagor shall give immediate written notice to
Mortgagee of any conveyance, transfer, or change of ownership of the Premises, but this Section shall not
constitute the consent of Mortgagee to any such conveyance, transfer, or change where such consent is
required by this Mortgage. Transfers of partnership interests in Mortgagor (or transfers of beneficial
interests in the limited partner of Mortgagor) shall be permitted without notice to or the consent or approval
of Mortgagee. Notwithstanding anything to the contrary in this Mortgage or the other Deferred HRA Loan
Documents, the limited partners of the Mortgagor (“Limited Partner”) shall have the right to (a) remove the
general partner of the Mortgagor under the Mortgagor’s Amended and Restated Agreement of Limited
Partnership dated even herewith (as may be amended, the “Partnership Agreement”) and/or any pledge and
security agreement in favor of the Limited Partner, and (b) appoint additional or substitute general partners
of the Mortgagor in accordance with the Partnership Agreement, in each case without the Mortgagee’s
consent.
Section 8.4 HAZARDOUS SUBSTANCES. Except as disclosed in environmental reports
delivered to Mortgagee prior to the date hereof. Mortgagor warrants, covenants, and represents to
Mortgagor’s actual knowledge there does not exist in or under the Premises any pollutant, toxic, or
hazardous waste or substance, or any other material the release or disposal of which is regulated by any
law, regulation, ordinance, or code, and that no part of the Premises was ever used for any industrial or
manufacturing purpose or as a dump, sanitary landfill, or gasoline service station, and that there exists on
the Premises no electrical transformers or other equipment containing PCBs or material amounts of
asbestos. Mortgagor represents that it has received no summons, citations, directives, letters, or other
communications, written or oral, from any federal, state, or local agency or department concerning the
storing, releasing, pumping, pouring, emitting, emptying, or dumping of any pollutant, toxic, or hazardous
waste or substance on the Premises.
Mortgagor covenants and agrees that, except as permitted by Section 4.14 of the Loan Agreement, it shall
not, nor shall it permit others to, use the Premises for the business of generating, transporting, storing,
F-43
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
treating, or disposing of any pollutant, toxic, or hazardous substance, nor shall it either take or fail to take
any action which may result in a release of any hazardous substance from or onto the Premises.
Mortgagor agrees to indemnify and to hold Mortgagee harmless from any and all claims, causes of action,
damages, penalties, and costs (including, but not limited to, reasonable attorneys’ fees, consultants’ fees,
and related expenses) which may be asserted against, or incurred by, Mortgagee resulting from or due to
release of any hazardous substance or waste on the Premises or arising out of any injury to human health
or the environment by reason of the condition of the Premises, except to the extent caused by willful
misconduct of Mortgagee. Mortgagor’s duty to indemnify and hold harmless includes, but is not limited to,
proceedings or actions commenced by any person (including, but not limited to, any federal, state, or local
governmental agency or entity) before any court or administrative agency. Mortgagor further agrees that,
pursuant to its duty to indemnify under this Section, Mortgagor shall indemnify Mortgagee against all
expenses incurred by Mortgagee as they become due and not waiting for the ultimate outcome of the
litigation or administrative proceeding. Mortgagor’s obligation to indemnify and hold Mortgagee harmless
hereunder shall survive satisfaction or foreclosure of this Mortgage.
Section 8.5 SUCCESSORS AND ASSIGNS BOUND; NUMBER; GENDER; JOINT AND
SEVERAL LIABILITY; CAPTIONS. The covenants and agreements contained herein shall bind, and
the rights conferred hereby shall inure to, the respective heirs, legal representatives, successors, and assigns
of Mortgagee and Mortgagor. Wherever used, the singular number shall include the plural, and the plural
the singular. The use of any gender shall apply to all genders. All covenants and agreements of Mortgagor
shall be joint and several. The captions and headings of the articles, sections, and paragraphs of this
Mortgage are for convenience only and are not to be used to interpret or define the provisions hereof.
Section 8.6 NOTICES. All notices provided for herein shall be in writing and shall be deemed to
have been given when delivered personally or deposited with a reputable overnight carrier or in the regular
United States mail, registered or certified, postage prepaid, and addressed as follows:
To Mortgagor: 4040 West 70th Street Apartments, LP
1801 County Road B West, Suite 211
Roseville, MN 55113
with a copy to: Winthrop & Weinstine, P.A.
Attention: Norm Jones
225 South Sixth Street, Suite 3500
Minneapolis, MN 55402
and R4 CVMN Acquisition LLC
780 Third Avenue, 16th Floor
New York, NY 10017
Attention: Marc D. Schnitzer
and Holland & Knight LLP
31 West 52nd Street
New York, NY 10019
Attention: Alan S. Cohen
To Mortgagee: Housing and Redevelopment Authority of Edina, Minnesota
4801 West 50th Street
Edina, MN 55424
Attention: Executive Director
F-44
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
or addressed to any such party at such other address as such party shall hereafter furnish by notice to the
other party. All notices to Mortgagor relating to any Event of Default under this Mortgage or the other
Deferred HRA Loan Documents shall be given contemporaneously to the Limited Partner of Mortgagor in
writing delivered to the address and in the manner set forth above, and any grace period or cure period
which may be provided to Mortgagor shall not be deemed to have commenced until Limited Partner shall
also have received such notice. Limited Partner shall have the right, but not the obligation, to remedy or
cure any Event of Default within the same cure period provided to Mortgagor.
[Signature page follows.]
F-45
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
IN WITNESS WHEREOF, Mortgagor has duly executed this Mortgage the day and year first
above written.
MORTGAGOR:
4040 WEST 70TH STREET APARTMENTS, LP,
a Minnesota limited partnership
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
STATE OF MINNESOTA )
)ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of _________________,
2022 by ______________________________, the ______________________ of 4040 West 70th Street
Apartments, LP, a Minnesota limited partnership, on behalf of the limited partnership.
____________________________________________
Notary Public
This document was drafted by:
Dorsey & Whitney LLP
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402-1498
F-46
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
EXHIBIT A
LEGAL DESCRIPTION
Tract C, Registered Land Survey No. 1365, Hennepin County, Minnesota
Torrens Property
F-47
[Exhibit D to Deferred HRA Loan Agreement]
4891-6946-5878\3
EXHIBIT B
PERMITTED ENCUMBRANCES
The following are permitted encumbrances, but the listing of a permitted encumbrance herein does not
change or override the Order of Lien Priority or any other agreements as to the priority of security agreed
to in the Loan Agreement, the Master Subordination Agreement, or any other applicable agreement:
1. The Ground Lease
2. Liens for taxes and special assessments not then delinquent, or delinquent but being contested by
the Borrower.
3. 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.
4. 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
contested in accordance with the Loan Documents.
5. 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.
6. Other encumbrances agreed to by Lender as listed on Lender’s pro-forma Title Policy as of the
Date of Closing or the Master Subordination Agreement.
F-48
[Exhibit E to Deferred HRA Loan Agreement]
4891-6946-5878\3
EXHIBIT E
FORM OF DISBURSEMENT AGREEMENT
DISBURSEMENT AGREEMENT
THIS AGREEMENT, made this ____ day of ____________, 2022, by and among 4040 WEST
70TH STREET APARTMENTS, LP, a Minnesota limited partnership (“Borrower”); GUARANTY
COMMERCIAL TITLE, INC., a Minnesota corporation (“Title”); 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 “Lender”).
WHEREAS, pursuant to the Deferred HRA Loan Agreement between the Lender and Borrower
dated ________________, 2022 (the “Loan Agreement”), the Lender is this day making a loan to Borrower
in the amount of $[1,336,901.00] (the “Deferred HRA Loan”), as described in the Loan Agreement; and
WHEREAS, the Lender requires that the proceeds of the Deferred HRA Loan (“Loan Proceeds”)
be used exclusively to pay only the actual Eligible Project Costs as defined in the Loan Agreement and
directly relating to the construction of Project Improvements, as approved by the Lender, at the property
located at 4040 West 70th Street, Edina, Minnesota (hereinafter referred to as “Permitted Uses”); and
WHEREAS, Title will serve as disbursing agent for the Loan Proceeds:
NOW, THEREFORE, it is agreed by and among the parties as follows:
1. Portions of the Loan Proceeds of up to $[1,336,901.00] will be paid from time to time by
the Lender to Title to be disbursed pursuant to the terms of the Loan Agreement and this
Agreement upon review and approval of disbursement requests as provided herein. No
Loan Proceeds shall be disbursed prior to the Construction Start Date.
2. Title shall disburse the Loan Proceeds to pay Eligible Project Costs as described in the
Loan Agreement. Title shall not disburse any Loan Proceeds or other funds for any
developer/contractor fees, consultant fees, overhead and interim operating costs
reimbursement or any other fee until all other Eligible Project Costs as defined in the Loan
Agreement and as approved by the Lender and Title have been paid. The Lender is the final
arbiter of what costs are eligible for reimbursement under the Deferred HRA Loan
Agreement.
3. Requests for disbursement of the Loan Proceeds shall be originated by Borrower by
delivering to the Lender a Disbursement Request in the form attached hereto as Exhibit A
and AIA Documents G702 and 703, (along with an invoice from each provider of service
to be paid). Within ten (10) working days after receipt of the Disbursement Request, the
Lender shall approve or disapprove the request, and if approved, shall forward the
Disbursement Request and a sufficient amount of the Loan Proceeds to pay said
Disbursement Request to Title. In the event the Lender fails to approve or disapprove the
disbursement Request within ten (10) working days of receipt thereof, the Lender shall be
deemed to have approved such Disbursement Request.
F-49
[Exhibit E to Deferred HRA Loan Agreement]
4891-6946-5878\3
4. Upon receipt of an approved Disbursement Request, specified in Paragraph 2, Exhibit A,
and a sufficient amount of Loan Proceeds to pay said Disbursement Request, Title shall
obtain partial and/or full lien waivers, lien releases or lien satisfactions, in the customary
form from the general contractor and all subcontractors and material suppliers with whom
the general contractor has contracted with in connection with the property. Title shall
promptly notify the Lender of its inability with respect to any Disbursement Request to
obtain waivers, releases or satisfactions. Upon receipt of any such notice, the Lender shall
be entitled, but not obligated, to revoke its approval of such Disbursement Request.
5. Title agrees to act as the disbursing agent under this Agreement, and shall account for all
funds deposited with it and shall immediately return to the Lender all undisbursed Loan
Proceeds from each Disbursement Request. Title agrees not to use, invest or collect interest
on any Loan Proceeds held by Title.
6. If at any time during the course of construction, the total of the unpaid disclosed Eligible
Project Costs, as indicated by the column totals on the sworn Project Cost statement
presented to Title, exceeds the amount of the aggregate undisbursed Loan Proceeds and the
Other Project Financing, as calculated by subtracting the total amount of liability on the
Project Cost Statement as described in the Loan Agreement from the amount of such grants
and loans, Title shall not make further disbursements of the Loan Proceeds under the terms
of this Agreement until Borrower has deposited with Title the sum necessary to make the
available funds equal to the unpaid disclosed cost of construction, or unless specifically
directed to do so by the Lender.
7. Title may rely on the statements made by Borrower, the Lender or others in any documents
submitted to it under this Agreement and shall not be required to verify the accuracy of
such statements and shall not be liable for any disbursements of funds made in reliance on
any such statement, unless Title is negligent with respect thereto.
8. Borrower agrees to indemnify and hold harmless Title and the Lender from any and all
claims, demands or costs associated with the disbursement of the Loan Proceeds, including
reasonable attorney’s fees arising therefrom.
9. The functions and duties of Title include only those set forth in this Agreement and it is
not entitled to act and shall not act, except in accordance with the terms and conditions of
this Agreement. Title does not insure that the improvements will be completed, nor does it
insure that the improvements will be in accordance with plans and specifications, nor does
it make any certifications of the Inspecting Architect its own, nor does it assume any
liability for same other than procurement as one of the conditions precedent to each
disbursement, Title has no liability for loss caused by an error in the certifications furnished
it hereunder as to work in place. Title shall not be responsible for any loss of documents or
funds while such documents or funds are not in its custody. Documents or funds that are
deposited in the United States mail shall not be construed as being in the custody of Title.
10. This Disbursement Agreement shall be in full force and effect, from the date of this
Agreement and shall remain in effect until all of the Loan Proceeds shall have been
disbursed in accordance with the terms hereof; provided, however, that in the event the
Loan Agreement is terminated, this Agreement is thereby terminated and Title shall return
to the Lender any Loan Proceeds it holds, upon notification by the Lender of such
termination.
F-50
[Exhibit E to Deferred HRA Loan Agreement]
4891-6946-5878\3
11. This Agreement shall inure to the benefit of and be binding upon the parties and their
respective successors and permitted assigns.
12. This Agreement shall be governed by and construed in accordance with the laws of the
State of Minnesota.
F-51
[Exhibit E to Deferred HRA Loan Agreement]
4891-6946-5878\3
IN WITNESS WHEREFORE, the parties have set their hands on the day and year first above
written.
LENDER:
HOUSING AND REDEVELOPMENT
AUTHORITY OF EDINA, MINNESOTA
By: _________________________________________
James B. Hovland, Chair
By: _________________________________________
James Pierce, Secretary
F-52
[Exhibit E to Deferred HRA Loan Agreement]
4891-6946-5878\3
BORROWER:
4040 WEST 70TH STREET APARTMENTS, LP,
a Minnesota limited partnership
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
F-53
[Exhibit E to Deferred HRA Loan Agreement]
4891-6946-5878\3
TITLE:
GUARANTY COMMERCIAL TITLE, INC.
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
F-54
[Exhibit E to Deferred HRA Loan Agreement]
4891-6946-5878\3
EXHIBIT A TO
DEFERRED HRA LOAN AGREEMENT DISBURSEMENT AGREEMENT
DISBURSEMENT REQUEST
Number ____________
Date: ___________, 2022
The Undersigned, pursuant to that certain Disbursement Agreement dated ____________, 2022,
by and among the Housing and Redevelopment Authority of Edina, Minnesota (the “Lender”), Guaranty
Commercial Title, Inc. (“Title”), and 4040 West 70th Street Apartments, LP (“Borrower”), hereby certifies
and requests as follows:
1. Borrower requests that the following amounts be paid by the Lender and forwarded to Title for
payment to the following payees from the Loan Proceeds as described in the Disbursement
Agreement:
Name and Address of Payee Amount Requested to be Paid
2. Attached hereto are invoices with respect to each item for which payment is requested pursuant to
Paragraph 1 hereof.
3. Borrower certifies that the disbursements are for Permitted Uses as defined in the Disbursement
Agreement and the Loan Agreement.
4. Borrower hereby requests the Lender to approve this Disbursement Request and forward it to Title
for payment of the amounts listed in Paragraph 1 hereof.
4040 WEST 70TH STREET APARTMENTS, LP,
a Minnesota limited partnership
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
F-55
[Exhibit E to Deferred HRA Loan Agreement]
4891-6946-5878\3
APPROVAL
This Disbursement Request is hereby approved by ____________
Dated: _______________, 2022 By __________________________
F-56
[Exhibit F to Deferred HRA Loan Agreement]
4891-6946-5878\3
EXHIBIT F
FORM OF REQUEST FOR NOTICE OF FORECLOSURE
FORM OF REQUEST FOR NOTICE OF FORECLOSURE
REQUEST FOR NOTICE OF FORECLOSURE
Pursuant to Minnesota Statutes § 580.032 and § 582.32
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”), hereby requests
notice of any foreclosure by advertisement or any voluntary foreclosure with respect to land (the “Land”)
located in Hennepin County, Minnesota, and legally described as follows:
See Exhibit A attached hereto.
The Authority holds a mortgage lien interest in the Land pursuant to a Mortgage dated
_______________ and recorded on _______________ as Document _______________ in the office of the
County Recorder of Hennepin County, Minnesota, and recorded on _______________ as Document
_______________ in the Office of the Registrar of Titles of Hennepin County, Minnesota.
All notices of foreclosure should be provided to: Housing and Redevelopment Authority of Edina,
Minnesota, Attn: Executive Director, 4801 West 50th Street, Edina, MN 55424.
IN WITNESS WHEREOF, the Authority has executed this Request as of the ____ day of
______________, 2022.
HOUSING AND REDEVELOPMENT
AUTHORITY OF EDINA, MINNESOTA
By: _________________________________________
James B. Hovland, Chair
By: _________________________________________
James Pierce, Secretary
F-57
[Exhibit F to Deferred HRA Loan Agreement]
4891-6946-5878\3
EXHIBIT A TO
REQUEST FOR NOTICE OF FORECLOSURE
LEGAL DESCRIPTION
Tract C, Registered Land Survey No. 1365, Hennepin County, Minnesota
Torrens Property
F-58
[Exhibit G to Deferred HRA Loan Agreement]
4891-6946-5878\3
EXHIBIT G
OTHER PROJECT FINANCING
LENDER SOURCE AMOUNT
G-1
4872-3440-9750\1
Exhibit G
Form of Project Funding Certificate
Project Funding Certificate
(Cornelia View)
4040 WEST 70TH STREET APARTMENTS, LP, 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 ___________________,
2022 (the “Redevelopment Agreement”).
In accordance with Section 4.5 of the Redevelopment Agreement, Developer hereby represents, warrants,
and certifies to the City and the Authority that the funding sources identified in the updated TIF Pro Forma,
attached hereto as Exhibit A, have been fully committed and available to Developer for the construction of
the Project and the Project information set forth on said Exhibit A is otherwise true and correct in all
material respects.
Dated: __________________
DEVELOPER:
4040 WEST 70TH STREET APARTMENTS, LP,
a Minnesota limited partnership
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
G-2
4872-3440-9750\1
Exhibit A
to
Project Funding Certificate
TIF Pro Forma
H-1
4886-9681-9738\1
Exhibit H
RESERVED
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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
__________, 2022, by 4040 WEST 70TH STREET APARTMENTS, LP, a Minnesota limited
partnership (“Declarant”).
Recitals
A. Declarant is the owner of a leasehold interest in certain real property situated in the City
of Edina (the “City”), county of Hennepin, state of Minnesota, located at 4040 West 70th Street, Edina
Minnesota and legally described in the attached Exhibit A (the “Property”) pursuant to a Ground Lease
Agreement between East Edina Housing Foundation dba Edina Housing Foundation (“EHF”), as ground
lessor, and Declarant, as ground lessee, for a term of 99 years (the “Ground Lease”).
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 ____________, 2022 (as may be
amended from time to time, the “Redevelopment Agreement”).
C. The Redevelopment Agreement provides for the redevelopment of the Property by
Declarant with the cooperation and assistance of the Authority and provides for the expenditure of certain
public funds to assist in such redevelopment of the Property and construction thereon of a 118-unit, 100%
age restricted affordable housing community, known as “Cornelia View” (the “Project”).
D. The City, by Resolution No 2021-96, adopted October 19, 2021, approved Declarant’s
final rezoning, 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, Declarant
has 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 restrictive
covenants set forth herein governing the use, occupancy, and transfer of the Project shall be and are
covenants running with the Property for the Term stated herein and binding upon all subsequent owners
of the Property for such Term, and are not merely personal covenants of Declarant.
G. Capitalized terms in this Declaration have the meaning provided in the Redevelopment
Agreement unless otherwise defined herein.
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NOW, THEREFORE, Declarant makes the following Declaration, hereby specifying that said
Declaration shall constitute covenants to run with the land and shall be binding on all parties in interest and
their respective successors and assigns:
1. Use Restriction. The Property shall not be used for any purpose other than a senior age-
restricted 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 later to occur of the (a) 99-
year anniversary of the Commencement Date and (b) expiration of the last of the leases with a Qualifying
Tenant for an Affordable Unit (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 six 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”);
(ii) approximately 49 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”); \
(iii) approximately 46 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”); and
(iv) no more than 17 of the Affordable Units will be reserved for households
who have a combined gross annual income which does not exceed 80% of AMI (each an
“80% 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.
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(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
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).
(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.
(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
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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.
(f) Affordable Unit Mix. The Affordable Units shall be distributed as follows:
(i) six, studio efficiencies (which will be no less than 610 square feet in size);
(ii) 90, one-bedroom units (which will be no less than 610 square feet in size);
and
(iii) 22, two-bedroom units (which will be no less than 930 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. The initial deadline for submission of such
certification is three months following the Commencement Date and thereafter an annual deadline
for submission of January 31.
(b) Books and Records. Declarant shall permit, during normal business hours and upon
reasonable notice, any duly authorized representative of the Authority or City, to inspect any books
and records of Declarant regarding the Project with respect to the incomes of tenant households of
Affordable Units and the rents charged for Affordable Units to ensure compliance with the
requirements of this Declaration. At the City’s or Authority’s request, Declarant will submit any
other information, documents or certifications that Declarant, in its reasonable discretion, deems
necessary to substantiate Declarant’s compliance with the requirements of this Declaration.
(c) Delegation; Third-Party Monitoring. Each of the Authority and the City may, in
their reasonable discretion, delegate their obligations hereunder and responsibilities for monitoring
and enforcement of this Declaration to a separate subdivision of the City and/or one or more
designated contractors, subcontractors, or agents. Declarant shall, upon annual invoicing,
reimburse the Authority and the City for third-party expenses related to monitoring of Declarant’s
compliance with this Declaration (including any additional costs necessitated by re-inspections for
noncompliance with this Declaration) subject to reasonable adjustment from time to time. Such
monitoring shall be based on a sampling of ten percent (10%) of the units in the Project in addition
to the files of new tenants, and shall be limited to an inspection of the files related to such units and
physical inspection of such units only. The expenses related to such monitoring shall be standard,
reasonable and not materially different that those expenses charged to other similar affordable
housing projects on a per-unit basis.
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(d) City Affordable Housing Policy. The Project and the Affordable Units shall be
subject to the terms and condition of the City’s Inclusionary Housing Policy Program, as may be
amended from time to time.
(e) Notice of Non-Compliance. Declarant shall immediately notify the Authority and
the City if at any time during the term of this Declaration the dwelling units in the Project are not
occupied or available for occupancy as required by the terms of this Declaration.
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) LURA. The City and the Authority acknowledge that, upon completion of the
Project, the Declarant’s interest in the Property will be encumbered by one or more land use
restriction agreement (each a “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”)
and/or tax-exempt multifamily housing revenue bonds obtained by Developer for the Project
(“Housing Bonds”), restricting the use of the Property to affordable housing in accordance with
LIHTC and/or Housing Bonds requirements. For so long as any such LURA remains in effect
against the Declarant’s interest in the Property, this Declaration shall be subordinate to the terms
and conditions of any such LURA and to the extent of any conflict or inconsistency between the
terms of any such LURA and the terms of this Declaration, the terms of any such LURA shall
prevail and such prevailing terms shall be deemed to be modify and replace the applicable terms of
this Declaration. If all LURAs are 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. Declarant shall obtain the consent to this Declaration
of any prior recorded lien-holder for the Declarant’s interest in the Property and shall cause such
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liens to be subordinated to this Declaration. Other than the LURAs referenced above, Declarant has
not and will not execute any other agreement with provisions contradictory to, or in opposition to,
the provisions hereof and that, in any event, the requirements of this Declaration are paramount and
controlling as to the rights and obligations set forth herein and supersede any other document's
provisions in conflict herewith.
(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 Declarant’s
interest in 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 Declarant’s interest in 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
substantially subtract from any real or personal property of the Project or permit the use of any
residential unit for any purpose other than rental housing during the Term of this Declaration unless
required by law.
(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), causes of action, suits,
allegations, claims, demands, and judgments of any nature arising from the consequences of a legal or
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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. Covenants Running With the Land. Declarant intends, declares and covenants, on behalf
of itself and all future owners and operators of 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 Declarant’s interest in the Property and the Project (a) shall be and are covenants running
with the Declarant’s interest in the Property and the Project, encumbering the Declarant’s interest in the
Property and the Project for the Term, binding upon Declarant’s successors in title and all subsequent
owners and operators of 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 Declarant’s interest in 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 Declarant’s interest in 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: 4040 West 70th Street Apartments, LP
1801 County Road B West, Suite 211
Roseville, MN 55113
with a copy to: Winthrop & Weinstine, P.A.
Attention: Norm Jones
225 South Sixth Street, Suite 3500
Minneapolis, MN 55402
and R4 CVMN Acquisition LLC
780 Third Avenue, 16th Floor
New York, NY 10017
Attention: Marc D. Schnitzer
and Holland & Knight LLP
31 West 52nd Street
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New York, NY 10019
Attention: Alan S. Cohen
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]
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[Signature Page to Declaration of Covenants and Restrictions]
4876-3483-5734\2
IN WITNESS WHEREOF, Declarant has caused this Declaration to be executed as of the date first
written above
4040 WEST 70TH STREET APARTMENTS, LP,
a Minnesota limited partnership
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of _________________,
2022 by ______________________________, the ______________________ of 4040 West 70th Street
Apartments, LP, a Minnesota limited partnership, on behalf of the limited partnership.
____________________________________________
Notary Public
THIS DOCUMENT WAS DRAFTED BY:
Dorsey & Whitney LLP
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402-1498
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[Exhibit A to Declaration of Covenants and Restrictions]
4876-3483-5734\2
Exhibit A
Legal Description of the Property
Tract C, Registered Land Survey No. 1365, Hennepin County, Minnesota
Torrens Property
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[Exhibit B to Declaration of Covenants and Restrictions]
4876-3483-5734\2
Exhibit B
Form of Certification of Tenant Eligibility
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[Exhibit B to Declaration of Covenants and Restrictions]
4876-3483-5734\2
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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 4040 West 70th Street, Edina,
Minnesota (the “Project”), is being provided by 4040 West 70th Street Apartments, LP, 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 ________________ ___, 2022 (the
“Declaration”), with respect to the Project:
(A) The total number of Affordable Units which are available for occupancy is 118.
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 118 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
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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
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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 118 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___.
4040 WEST 70TH STREET APARTMENTS, LP,
a Minnesota limited partnership
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
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Exhibit J
Form of Memorandum of Redevelopment Agreement
MEMORANDUM OF REDEVELOPMENT AGREEMENT
This Memorandum of Redevelopment Agreement (this “Memorandum”) is entered into as of
______________________, 202____, 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 4040 West 70th Street Apartments, LP, a Minnesota limited partnership
(“Developer”).
RECITALS
A. The Authority and Developer (collectively, the “Parties”) have entered into a certain
Redevelopment Agreement dated as of _______________, 2022 (as the same may be amended, modified,
and/or supplemented from time to time, the “Redevelopment Agreement”), whereby the parties have agreed
to various aspects of the redevelopment of certain real property more particularly described on the attached
Exhibit A, together with all improvements, tenements, easements, rights and appurtenances pertaining to
such real property, lying and being in Hennepin County, Minnesota (the “Property”).
B. The parties wish to give notice of the existence of the Redevelopment Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. The above recitals are incorporated by reference as if fully set forth herein.
2. Capitalized terms, when not defined herein, shall have the meanings ascribed to them in
the Redevelopment Agreement.
3. The Parties have entered into the Redevelopment Agreement to set forth the terms and
provisions governing the redevelopment of the Property.
4. This Memorandum has been executed and delivered by the Parties for the purpose of
recording and giving notice that a contractual relationship for the redevelopment of the Property has been
created between the Parties in accordance with the terms, covenants, and conditions of the Agreement. The
Parties intend, declare and covenant, on behalf of themselves and all future owners and operators of the
Property, that the Redevelopment Agreement and the covenants and restrictions set forth therein regulating
and restricting the use, occupancy and transfer of the Property (a) shall be and are covenants running with
the Property, encumbering the Property, binding upon the Parties’ successors in title and all subsequent
owners and operators of the Property; (b) are not merely personal covenants of the Parties; and (c) shall
bind the Parties and their respective successors and assigns.
J-2
4863-8989-4165\1
5. The terms and conditions of the Agreement are incorporated by reference into this
Memorandum as if fully set forth herein.
6. This Memorandum may be executed separately in counterparts which, when taken
together, shall constitute one and the same instrument.
[Remainder of page left blank intentionally; signature pages follow]
J-3
[Signature Page to Memorandum of Redevelopment Agreement (Cornelia View)]
4863-8989-4165\1
IN WITNESS WHEREOF, the Parties have executed this Memorandum as of the date first written
above.
HOUSING AND REDEVELOPMENT
AUTHORITY OF EDINA, MINNESOTA
By: ______________________________
James B. Hovland, Chair
By: ______________________________
James Pierce, Secretary
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of
_______________, 2022, by James B. Hovland and James Pierce, the Chair and Secretary, respectively, of
the Housing and Redevelopment Authority of Edina, Minnesota, on behalf of said Authority.
____________________________________________
Notary Public
J-4
[Signature Page to Memorandum of Redevelopment Agreement (Cornelia View)]
4863-8989-4165\1
4040 WEST 70TH STREET APARTMENTS, LP,
a Minnesota limited partnership
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of _________________,
2022 by ______________________________, the ______________________ of 4040 West 70th Street
Apartments, LP, a Minnesota limited partnership, on behalf of the limited partnership.
____________________________________________
Notary Public
THIS DOCUMENT WAS DRAFTED BY:
Dorsey & Whitney LLP
50 South Sixth Street
Suite 1500
Minneapolis, MN 55402-1498
J-5
[Exhibit A to Memorandum of Redevelopment Agreement (Cornelia View)]
4863-8989-4165\1
Exhibit A
Legal Description
Tract C, Registered Land Survey No. 1365, Hennepin County, Minnesota
Torrens Property
Date: April 7, 2022 Agenda Item #: VI I.B.
To:C hair & C ommis s ioners of the Edina HR A Item Type:
R eport / R ecommendation
F rom:S tephanie Hawkinson, Affordable Housing
Development Manager Item Activity:
Subject:R es olution No. 2022-04: Authorizing S ale of Land to
West Hennepin Affordable Hous ing Land Trus t
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:
Approved Resolution N o. 2022-04
I N TR O D U C TI O N:
On M arch 3 a P ublic H earing was held regarding the sale of 425 J efferson Avenue to West H ennepin Affordable
Housing L and Trust. T he house will be fully renovated, or if renovation is deemed infeasible the house will be
demolished a replaced with a new one. T he land will be placed into a land trust, and the house sold to an income
eligible homeowner. T he house will remain affordable for 99-years.
425 Jefferson was acquired by the H R A in 2021 because it was a vacant nuisance property. T he intend was to
acquire, address the exterior nuisance conditions and sell for affordable housing.
AT TAC HME N T S:
Description
Staff Report
Resolution 2022-04
Better Together Edina Comment Report
March 3, 2022
Chair and Commissioners of the Edina HRA
Stephanie Hawkinson, Affordable Housing Development Manager
PUBLIC HEARING: Resolution No. 2022-04 Authorizing the Sale of Land to West Hennepin
Affordable Housing Land Trust
Information / Background:
The City of Edina has been supporting the West Hennepin Affordable Housing Land Trust (WHAHLT), dba
Homes Within Reach (HWR), since 2007 through the allocation of the City’s CDBG program funds. Since
that time, 17 houses have been placed into a Land Trust to remain affordable for 99-years.
On February 13, 2020 HRA approved the purchase price negotiated for the acquisition of 425 Jefferson
Avenue (the “Property”) as it was deemed a nuisance property. The house was bought on April 19, 2021
and has been held by the HRA. Resolution 2021-09 states that the Property would be acquired in order to
maintain, and potential provide affordable housing for the community.
HWR submitted a request to acquire the Property for $1.00 to facilitate it getting rehabilitated, or if need be
– demolished and newly constructed, placed into the Land Trust and sold to an income eligible homebuyer.
The property will remain affordable for 99-years.
Description of the Community Land Trust practice
HWR establishes affordability by using the Community Land Trust practice to acquire and retain the
ownership of real property, rehabilitate and then sell the improvement (home) to buyers earning less than
80% Area Median Income (AMI).
The HWR Community Land Trust program removes the land value from the mortgage equation to create
initial affordability. The home costs less than market rate homes because HWR buyers purchase only the
house and enters into a Ground Lease with WHAHLT-HWR to secure the long-term rights and use of the
land. This land trust practice offers long-term affordability, where each affordable home will offer
homeownership to 7-12 families throughout the life of the lease. The homes are made permanently affordable
for work-force homeowners through two contractual provisions embedded in the Ground Lease.
The first is a pricing formula that provides the owner with a fair amount of equity (HWR is 35%),
while ensuring the sale price for subsequent low-to-moderate income households is affordable.
The second requires the homeowner to sell to another low-to-moderate income household. In
addition, the provisions ensure the home continues to be affordable with each sale.
STAFF REPORT Page 2
The Ground Lease allows the homeowner to secure long-term rights to the land. In addition, the homeowners
have full use of the land and are responsible for the property and payment of all real estate taxes on the house
and the parcel of land.
The homeowner may sell his/her home only to an income qualified buyer. The resale price is based on a
formula, which (based on market conditions) allows the seller to recover the original cost of the house plus a
modest profit. Therefore, assuming the house has retained or increased in value, the homeowner who sells
his or her home will get all of their equity plus a percentage (35%) of the home’s appreciation (the amount
that a home has increased in value since it was purchased).
As a result, Community Land Trust homes remain affordable for consecutive generations of homeowners,
because the resale restriction ensures permanent affordability.
Housing is a multiplier, a basic need that impacts every part of life: education, health, economic success. HWR’s
mission is to continue creating affordable homeownership for low-to-moderate income work-force
households, which in turn stabilizes the family unit, adds value to the suburban community and protects the
HRA’ s investment HWR program features of cost, quality and location of its homes has been and continues
to appeal and draw interest from workforce households with low-to-moderate income.
Future Homeowner
425 Jefferson Avenue will be sold to a work-force family who provides essential services to the community
and surrounding suburbs. This family cannot afford to purchase an entry-level home in Edina outside of the
Land Trust model; such as custodians, teachers, municipal workers, retail staff, office personnel, food prep
staff, customer service representatives and many more.
In 2007, Homes Within Reach implemented its program in the City of Edina, creating and preserving affordable
homeownership, using the Community Land Trust practice. To date, HWR has assisted nineteen families
(includes two resales) become Edina homeowners. The target market for Edina is households with 50% - 80%
Area Median Income. Over the past 14 years, HWR has served households between 34% to 76% AMI in the
City of Edina. The program average Area Median Income (AMI) in Edina is 60% and 50% for resales.
What community needs does this activity address
In today’s market, Edina is confronted with the fact entry-level properties are overpriced for most work-force
households who work or live in the City. Increased home values have taken place because of a reduction in
supply and increase in demand, while wages have not increased accordingly and cannot keep pace with
increases in housing costs.
HWR program not only offers value and benefits to the families it has assisted in becoming homeowners; the
program also expands homeownership opportunities, retains community wealth, by making maximum use of
existing properties and the community’s infrastructure with younger households. It also provides a mechanism
to invest in affordable homeownership, which enhances residential stability and the preservation of housing
affordability by recycling funds from owner to owner.
Budget Information
Interim Sources Uses
AHTF $150,000 Acquisition $ 153,200
AHTF/Henn. Co./Met Council $435,750 Soft Costs $ 65,550
Rehabilitation $ 365,000
TOTAL $585,750 TOTAL $585,750
STAFF REPORT Page 3
Permanents Sources
Affordable Housing Trust Fund $150,000
AHTF/Henn. CO/Met Council $235,750
Home Buyers $200,000
TOTAL $585,750
Compliance with City Approved Plans
Continuing to support the partnership between the City of Edina and the Homes Within Reach program is
supported by multiple goals within both the Housing Chapter of the Comprehensive Plan and the Housing
Strategy Task Force report.
2040 Comprehensive Plan
Goal 1: Accommodate all planned residential growth in the city based on planned infrastructure investments
and other community goals and assets.
3. Recognize that successfully reaching affordable housing goals assists the city in achieving related
community goals, including: a. Accommodating housing for families with children in Edina schools.
The Homes Within Reach program preserves entry level and modest Edina homes to makes available for current and
future families who want to raise their children in Edina.
Goal 2: Encourage the development and maintenance of a range of housing options affordable to residents at
all income levels and life stages.
1. Encourage the production of additional affordable housing units and retention of existing affordable
housing units to meet the city’s housing needs and its Metropolitan Council affordable housing need
allocation of 1,804 units.
9. Promote owner-occupied units over rental units when providing affordable housing
The Homes Within Reach program is an affordable single family ownership housing program.
Goal 3: Continue to support high quality design of residences and residential neighborhoods in a way that
furthers sustainability, character, and livability, and maintains long term investment.
4. Maintain some of Edina’s lower square footage housing stock in order to attract new residents and
retain existing residents, including providing affordable options.
The Homes Within Reach program preserves neighborhood based, modest sized housing and provides an affordable
option.
Housing Strategy Task Force Report
A. Promote Affordable and Attainable Housing
3) Attract new residents and retain existing residents by preserving and expanding housing options for
moderate- and low-income households.
The Homes Within Reach program is an affordable housing program for both existing and new residents.
D. Encourage Preservation and Promotion of Diverse Housing Stock
1) Assist neighborhoods in retaining starter housing stock that can accommodate young families.
3) Maintain some of Edina’s single-family, lower square footage housing stock.
The Homes Within Reach program accomplishes these stated goals.
HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA
HENNEPIN COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 2022-04
RESOLUTION AUTHORIZING SALE OF LAND TO
WEST HENNEPIN AFFORDABLE HOUSING LAND TRUST
WHEREAS, the Board of Commissioners (the “Board”) of the Housing and Redevelopment Authority of
Edina, Minnesota (the “HRA”), after proper published notice, held a public hearing at approximately 7:30 A.M. on
April 7, 2022 with regard to the sale of the property at 425 Jefferson Avenue South, Edina, MN 55424, PID 30-
117-21-22-0122, and legal described as:
Lot 15, except the North 32 feet thereof and all of Lot 14, Block 11, “West Minneapolis Heights”, Hennepin
County, Minnesota
(the “Property”)
WHEREAS, the HRA acquired the Property in 2021 with the intent that it would be conveyed for the
purpose of creating affordable housing; and
WHEREAS, the West Hennepin Affordable Housing Land Trust d/b/a Homes Within Reach
(“WHAHLT”), a Minnesota nonprofit corporation has a Mission “to use the Community Land Trust practice to
create and preserve affordable homeownership for families in suburban Hennepin County”; and
WHEREAS, WHAHLT submitted a proposal to acquire the Property for $1.00 to renovate, place the
land into the Land Trust and sell the house to a eligible homeowner; and
WHEREAS, the Board has reviewed any and all materials submitted by HRA staff, including the
proposal from WHAHLT, considered any and all oral and written testimony offered by interested parties;
considered all historical background of the Property and HRA grant programming, and at its March 3, 2022
meeting, considered the matter.
NOW, THEREFORE, BE IT RESOLVED by the Board as follows:
All requirements of Minnesota Statutes, Section 469.029 regarding the sale of the Property have been satisfied.
BE IT FURTHER RESOLVED:
The HRA accept the terms proposed by WHAHLT and authorizes the sale of the Property to WHAHLT
and the Chair and Executive Director are authorized to execute the documents required to complete the sale of
the Property
Approved by the Board on April 7, 2022.
_________________________________
James B. Hovland, Chair
ATTEST:
_________________________________
James Pierce, Secretary
STATE OF MINNESOTA )
COUNTY OF HENNEPIN ) SS
CITY OF EDINA )
CERTIFICATE OF EXECUTIVE DIRECTOR
I, the undersigned duly appointed and acting Executive Director for the 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 April 7, 2022, and as recorded in the Minutes of said
Meeting.
WITNESS my hand and seal of said City this _______day of April, 2022.
_________________________________
Scott Neal, Executive Director
Survey Responses
30 January 2019 - 28 March 2022
Public Hearing Comments-425 Jefferson
Ave
Better Together Edina
Project: Public Hearing: 425 Jefferson Avenue
No Responses
VISITORS
2
CONTRIBUTORS
0
RESPONSES
0
0
Registered
0
Unverified
0
Anonymous
0
Registered
0
Unverified
0
Anonymous
Date: April 7, 2022 Agenda Item #: I X.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:R edevelopment 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 provide a brief update on the status of a variety of pending and anticipated redevelopment projects.
AT TAC HME N T S:
Description
HRA Redevelopment Project Update
Edina Housing and Redevelopment Authority
Redevelopment Project Update
April 7, 2022
Address Project Description Status Grandview District Eden and
Arcadia
Roadwork
Reconstruction of public
roadways and improvements to
Grandview public parking
facility; these public projects
are funded with incremental
taxes generated within the
Grandview 2 TIF District.
The improvements to the parking facility and
the work on Brookside and Eden (west of the
train tracks) was completed in Fall 2021.
The contractor will resume construction
work (east of the train tracks) in Spring 2022.
5146 Eden Ave.
(former PW
site)
Construction of pedestrian
bridge and related sidewalks.
This public infrastructure is
funded with incremental taxes
generated within the
Grandview 2 TIF District.
Construction in progress with completion
anticipated in Fall 2022
The artist has been selected for the
decorative panels. Revised design in progress.
5146 Eden Ave.
(former PW
site)
Redevelopment of vacant 3.3
acre industrial site to
potentially include senior
cooperative housing by United
Properties, a new restaurant by
Jester Concepts and a new
public park
Staff and City Attorney are preparing
Contracts to sell two portions of the site for
redevelopment purposes.
These contracts are anticipated to be
considered by the HRA in April/May 2022.
The developers and HRA anticipate working
together to submit a full proposal to rezone
the site for a mixture of uses. The application
should be submitted Summer 2022.
4917 Eden Ave.
Redevelopment of 2-acre
commercial site with Perkins
restaurant/office building to
facilitate mixed-income housing
with first floor café and public
infrastructure
The developer secured construction funding
for the $85 M project in early 2022. The
restaurant closed in March 2022. The police
and fire departments were able to use the
vacant building for emergency training
operations before it was demolished.
Site work is underway.
After completion, a TIF Note is anticipated to
be issued to reimburse the developer for up
to $5.1 M of eligible expenses.
Edina HRA Project Update
April 7, 2022
Page 2
Address Project Description Status Grandview Eden, Link and
50th Roadwork
Improvements to the road
network east of Highway 100.
These public improvements are
anticipated to be funded with
incremental taxes generated
within the Eden Willson TIF
District.
Preliminary engineering work will begin in
2022-2023 with phased construction
anticipated in 2024-2026. North East Quadrant 3911 W. 50th
St.
Renovation of the vacant Edina
Theater
The property owner has signed a lease with
Mann Theatres. The lease is contingent on
financial support from the City and HRA.
Staff is preparing the funding agreements for
consideration in April/May.
The operator has begun interior demolition
work and is preparing for remodeling. A re-
opening is anticipated in June 2022.
5421 – 5425
France Ave.
Potential redevelopment of 2.2
acre property including
portions of St. Peters Lutheran
Church facility with mixture of
housing types and commercial
uses
The church and a developer have submitted a
sketch plan concept for input from neighbors,
Planning Commission and City Council.
If this concept advances, a mix of private and
public funds are likely needed to finance the
supportive housing units. No funding
application has been received at this time. Greater Southdale Area 7200 and 7250
France Ave.
Redevelopment of 5.2 acre
commercial site occupied by
two office buildings; one
building has been condemned
due to safety concerns and the
second building is vacant
The previous mixed-use proposal (zoning and
TIF approved in 2019) was not able to secure
financing and the property was sold. The TIF
Agreement is in default.
The new owners have submitted a new
concept that includes medical office and
grocery. This concept has been submitted for
sketch plan input from neighbors, Planning
Commission and City Council.
4100 W. 76th
St.
Redevelopment of 2-acre
commercial parcel; demolition
of office building and
construction of the Sound
Apartments - 80-units of
affordable housing by Aeon
The new housing project is nearly complete;
the first tenants began to move in April.
Edina HRA Project Update
April 7, 2022
Page 3
Address Project Description Status Greater Southdale Area 4040 W. 70th
St.
Redevelopment of 1.6 acre
commercial site with vacant
office building; construction of
affordable senior housing
This new housing project is in the final steps
of securing funding for construction.
The HRA will consider the TIF
Redevelopment Agreement in April 2022.
Groundbreaking is anticipated later in 2022.
7001 York
Ave.
Redevelopment of 7.7 acre site
occupied by Hennepin
County’s Southdale Regional
Library
Hennepin County has temporarily put this
project on hold.
7001-7025
France Ave
Redevelopment of the 6-acre
commercial parcel; phased
construction of new US Bank,
new office and new market-
rate housing
After approval of the Term Sheet and
creation of the TIF District, the developer is
securing equity investors for the office and
housing sites.
Site work is anticipated to begin Spring 2022.
The new US Bank branch will be the first
element to be constructed.
Staff anticipates preparation of the TIF
Redevelopment Agreement to begin in Spring
2022. 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 developer has demolished the vacant
4640 and 4660 office buildings and site work
is underway.
Although this project is located in the
Pentagon Park TIF District, the project is
privately financed. There is no TIF funding for
this project.
4620 W. 77th
St.
Potential redevelopment of
portions of 5.4 acre parcel at
Pentagon North; demolition of
vacant 4620 office building and
construction of new housing.
The 4600 office building would
remain in place.
A sketch plan concept was generally well-
received by the Planning Commission and
City Council.
The developer has requested that TIF be used
to reimburse extra-ordinary costs of
providing public improvements and soil
correction.
Staff is currently evaluating this request.
Edina HRA Project Update
April 7, 2022
Page 4
Address Project Description Status Pentagon Park 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.
TIF Notes were issued in 2020. The first
reimbursement payment will be due in 2022
after the developer breaks ground on the
next phase.
The groundbreaking for the new Rise
Apartments is scheduled for April 2022.
The hotel operator has submitted application
to renew their site plan approval for a dual-
branded hotel. This lapsed due to the delays
from the pandemic. Presuming City approvals,
hotel groundbreaking is expected later in
2022.
4701 W. 77th
Street
Redevelopment of 2.3 acre
commercial site with vacant
office building into mixed-
income housing
DJR Architects collected input via the City’s
Sketch Plan review process and intends to
submit a full application to rezone the site for
housing.
The developer has also indicated that they
will request TIF funding to fill a financing gap
in the project. No applications have been
received at this time.
Prepared by Bill Neuendorf