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Home My WebLink About2022-07-21 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, July 21, 2022 7:30 AM Watch the m eeting on cable TV or at EdinaMN.gov/LiveMeeting s or Facebook.com /EdinaMN. Participate in Comm unity Comm ent Call 888-504-7949 E nter Participant Passcode 422825 Press *1 on your telephone keypad when you would like to get in the queue to speak. An operator will introduce you when it is your turn. I.Call to Ord er II.Roll Call III.Pledge of Allegia n ce IV.Ap p roval of Meetin g Agen d a V.Com m unity Com m en t Du ring "Com m unity Com m en t," th e Edin a Housing and Redevelop m ent Au thority (HRA) will in vite resid ents to sh are new issues or con cern s tha t h aven't been con sid ered in th e p ast 30 da y s b y th e HRA or w h ich a ren't slated for fu ture consideration . Individ u als m u st lim it their com m ents to three m inutes. Th e Ch air m a y lim it the num ber of sp ea kers on th e sa m e issue in th e interest of tim e a n d topic. Gen era lly sp ea king, item s tha t are elsewhere on tod ay's a genda m a y not b e addressed d u ring Com m unity Com m en t. In d ividua ls sh ould not expect th e Ch air or Com m issioners to resp ond to th eir com m en ts toda y . Instead the Com m issioners m ight refer the m atter to sta. for consideration a t a fu ture m eeting. A.E xecu tive Director's Resp onse to Com m u n ity Com m ents 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 June 30, 2022 Meeting Min u tes B.Approve Paym en t of Cla im s C.Req u est for Purch ase: Profession al Services for Eden Gra n ge Rounda b outs 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.4620 W . 77th St. - Recom m en d ed Term Sh eet for HRA Pu b lic Assista n ce VIII.HRA Com m issioners' Com m en ts IX.Executive Director's Com m ents Th e E d ina Housing a n d Redevelop m ent Au thority wa n ts all pa rticip ants to be com fortable b ein g pa rt of th e p u b lic p rocess. If y ou n ee d a ssista n ce in the w a y of h ea ring am pli>ca tion, a n in terp reter, large-p rint docum en ts or som ethin g else, p lease ca ll 952-927-8861 72 hou rs in advance of the m eeting. X.Ad jou rn m ent Date: July 21, 2022 Agenda Item #: V.A. To:C hair & C ommis s ioners of the Edina HR A Item Type: O ther F rom:Liz O ls on, Administrative S upport S pecialist Item Activity: Subject:Exec utive Director's R espons e to C ommunity C omments 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: None. I N TR O D U C TI O N: Executive Director N eal will respond to questions asked at the previous council meeting. Date: July 21, 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 June 30, 2022 Meeting Minutes Action Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: Approve the minutes from June 30, 2022. I N TR O D U C TI O N: AT TAC HME N T S: Description Draft Minutes from June 30, 2022 Page 1 MINUTES OF THE REGULAR MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY JUNE 30, 2022 7:30 A.M. I. CALL TO ORDER Chair Hovland called the meeting to order at 7:34 a.m. then explained the processes created for public comment. II. ROLLCALL Answering rollcall were Commissioners Anderson, Jackson, Pierce, and Chair Hovland. Absent: Commissioner Staunton. III. PLEDGE OF ALLEGIANCE IV. MEETING AGENDA APPROVED - AS PRESENTED Motion by Commissioner Jackson, seconded by Commissioner Pierce, approving the meeting agenda as presented. Roll call: Ayes: Anderson, Jackson, Pierce, and Hovland Motion carried. V. COMMUNITY COMMENT No one appeared. VA. EXECUTIVE DIRECTOR’S RESPONSE TO COMMUNITY COMMENT None. VI. CONSENT AGENDA ADOPTED - AS AMENDED Member Jackson made a motion, seconded by Member Anderson, approving the consent agenda as amended, removing Item VI.D.: VI.A. Approve Minutes of the Regular Meeting June 2, 2022 VI.B. Approve Payment of Claims for Check Register Pre-List Dated May 2022, totaling $893,140.83 VI.C. Request for Purchase, Grandview Yard Landscape Architectural Services at 5146 Eden Avenue, awarding the bid to the recommended low bidder, Confluence, $58,500 VI.D. Resolution No. 2022-08; Finding that Parcels are Occupied by Structurally Substandard Buildings VI.E. Approve Additional Funding for the Home Rehabilitation Program Rollcall: Ayes: Anderson, Jackson, Pierce, and Hovland Motion carried. ITEMS REMOVED FROM CONSENT AGENDA VI.D. RESOLUTION NO. 2022-08; FINDING THAT PARCELS ARE OCCUPIED BY STRUCTURALLY SUBSTANDARD BUILDINGS - ADOPTED Economic Development Manager Neuendorf shared about the 7200 and 7250 France Avenue parcels and challenges of the site as it was low lying and collected water from surrounding properties. He said the properties were vacant and boarded up and that the condition of two parcels were potentially eligible for future application of Tax Increment Financing (TIF). He said in February 2019, Stantec submitted a report that documented the substandard condition of the parcels when the Minutes/HRA/June 30, 2022 Page 2 Minnesota Statutes for Tax Increment Financing were applied. The HRA approved Resolution 2019- 05 confirming the substandard nature of the parcels and noting the eligibility for creation of a TIF District. Certification of the substandard conditions would have allowed the property owner to demolish the privately-owned building(s) up to three years prior to execution of a TIF District and TIF Redevelopment Agreements. Unfortunately, the vacant buildings have not been redeveloped and continue to deteriorate. Previous efforts to redevelop the site with three mixed-use buildings did not obtain financing, despite zoning approvals and a pledge to use Tax Increment Financing to support public benefits. Mr. Neuendorf said the property had changed ownership since 2019 and the new owners intend to submit a new site plan and pursue a new strategy to redevelop the property. While the merits of TIF have not yet been considered on the future proposal, the substandard nature of the existing buildings may warrant some degree of public financing. He said the HRA's legal counsel had prepared a resolution to confirm the ongoing substandard condition of these two parcels which could be helpful to bring meaningful redevelopment of the site in the future. He said staff expected a new proposal soon with the new ownership but the buildings were currently poor condition and should be confirmed to be substandard which would create an option for TIF for up to three years in the future while ensuring the property was safe. The Commission inquired about the condition and the need to remove the buildings now and requested the item be included on an upcoming Council meeting to quickly address the condition, especially in light of increasing interest rates and supply chain issues. Member Anderson moved to adopt Resolution 2022-08 finding that parcels are occupied by structurally substandard buildings. Member Jackson seconded the motion. Rollcall: Ayes: Anderson, Jackson, Pierce, and Hovland. Motion carried. VII. PUBLIC HEARINGS - Affidavits of Notice presented and ordered placed on file. None. VIII. REPORTS AND RECOMMENDATIONS VIII.A. PILOT PROGRAM: LISC PARTNERSHIP FOR SINGLE FAMILY PRESERVATION PROGRAM - APPROVED Affordable Housing Development Manager Hawkinson stated this item pertained to approval for a $1.2 million forgivable loan and authorization to draft a partnership agreement with Local Initiative Support Corporation Minnesota (LISC) to work with developers of single-family houses to buy and rehabilitate modest homes in Edina where the sellers were motivated to keep the homes affordable and have approached staff after received the “Not for a Teardown” postcard. Once rehabilitated, the homes would be transferred to the West Hennepin Affordable Housing Land Trust (“WHAHLT”) and placed into a Land Trust held by to assure affordability for 99-years. In the first phase, roughly $1.2 million would be forgiven as gap financing to cover the cost of the land held in trust and the rehabilitation work that exceeds the cost needed to maintain affordability. She spoke about homeownership rates and the differences in socioeconomic factors and the trend for teardowns and housing affordability and how affordable housing developers of color were underrepresented and possibly lack access to capital and business relationships with the industry. She spoke about societal context, local context, and role of local government and the average home price in Edina $750,000 and the need to retain affordable housing options and diversity. Ms. Hawkinson spoke about the current program and how government could better work to provide more affordable housing then outlined the proposed program in detail that would serve households within 60-80% median income with two program partners LICS Twin Cities and Homes Within Reach. She reviewed potential policy considerations included affordability period and proposed guiding documents that should be considered. Minutes/HRA/June 30, 2022 Page 3 The Board asked questions and provided feedback. Gretchen Nicholls, LICS, spoke about their work to increase the scope of programs for developers by providing opportunities for capital, equity, consultants, support, and connections to help developers excel and how this program would help address the cost of building new and ensure close work with inspectors and other necessary steps to provide a knowledge base for renovation work. She said they were working to provide more opportunity for more developers and be more available and that learning together during this pilot program would help improve the City. Member Jackson, seconded by Member Pierce, to approve $1.2 Million in a forgivable loan for an Emerging Developer Housing Preservation Pilot Program in partnership with LISC. Rollcall: Ayes: Anderson, Jackson, Pierce, and Hovland Motion carried. VIII.B. TAX INCREMENT FINANCING REDEVELOPMENT AGREEMENTS FOR 7001 FRANCE AVENUE - APPROVED Mr. Neuendorf stated this item pertained to the Tax Increment Financing to be provided to support redevelopment and deliver public benefits at 7001 France Avenue. He said staff had engaged legal and financial advisors to prepare two full redevelopment agreements based on the Term Sheet approved in February 2022. Separate agreements were prepared for Site A and Site B/C and the agreements were also considered and approved by the City Council on June 21, 2022. This was the same meeting that the final zoning/site plan approvals were approved for Site A and Site B/C. He said staff recommended that both Redevelopment Agreements be approved by the HRA then summarized the request for TIF that confirmed the $22 million gap that hindered private redevelopment and that staff negotiated terms by which TIF could be used, which was outlined in the proposed agreements. He spoke about the goals in the Southdale district that would result in the 6-acre parcel being developed into four pads with interior roads for better access, better feel, and relieve traffic from France Avenue. He spoke about the public benefits as part of this project such as structured parking and first new multi-tenant Class A office building in 20 years. The Board asked questions and provided feedback. Member Jackson moved, seconded by Member Pierce, to approve the Tax Increment Financing Redevelopment Agreements for Site A and Site B/C located at 7001 France Avenue. Rollcall: Ayes: Jackson, Pierce, and Hovland Nay: Anderson Motion carried. IX. HRA COMMISSIONERS’ COMMENTS – Received X. EXECUTIVE DIRECTOR’S COMMENTS – Received XI. ADJOURNMENT Motion made by Commissioner Anderson, seconded by Commissioner Pierce, to adjourn the meeting at 9:00 a.m. Roll call: Ayes: Anderson, Jackson, Pierce, and Hovland Motion carried. Minutes/HRA/June 30, 2022 Page 4 Respectfully submitted, Scott Neal, Executive Director Date: July 21, 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 06.2022 T O TAL $1,056,952.97 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 06.2022 TOTAL $1,056,952.97 City of Edina, MN INVOICE LIST BY GL ACCOUNT Report generated: 07/18/2022 12:41 User: STanGeil Program ID: apinvgla Page 1 YEAR/PERIOD: 2022/6 TO 2022/6 ACCOUNT/VENDOR INVOICE PO YEAR/PR TYP S CHECK RUN CHECK DESCRIPTION 26026000 HRA Administration 26026000 6103 HRA Admin - Prof Svrs 100049 EHLERS AND ASSOCIATE 90758 0 2022 6 INV P 2,613.75 20220708 473690 100664 BRAUN INTERTEC CORPO B298407 0 2022 6 INV P 2,093.90 20220715 473877 5146 Eden Enviro & 100730 DORSEY & WHITNEY LLP 3755354 0 2022 6 INV P 29,130.00 20220708 473685 100730 DORSEY & WHITNEY LLP 3755357 0 2022 6 INV P 1,732.50 20220708 473685 Edina West Legal Se 30,862.50 ACCOUNT TOTAL 35,570.15 26026000 6131 HRA Admin - PrfSvLegal 100730 DORSEY & WHITNEY LLP 3755355 0 2022 6 INV P 2,460.00 20220708 473685 ACCOUNT TOTAL 2,460.00 26026000 6136 HRA Admin - PrfSvOther 123129 TIMESAVER OFF SITE S M27393 0 2022 6 INV P 154.00 20220708 473826 HRA Minutes June 2 ACCOUNT TOTAL 154.00 ORG 26026000 TOTAL 38,184.15 26026001 HRA Affordable Housing 26026001 6102 HRA Aff Hs - Contr Svrs 103300 CENTER FOR ENERGY AN 21139 0 2022 6 INV P 9,195.00 20220715 473883 Home Rehab Program ACCOUNT TOTAL 9,195.00 26026001 6103 HRA Aff Hs - Prof Svrs 101503 HENNEPIN COUNTY 3011721220122-2022-1 0 2022 6 INV P 1,622.68 20220506 471724 Property Tax paid b 101503 HENNEPIN COUNTY 3011721220122-2022-2 0 2022 6 INV A 1,622.68 Property Tax paid b 3,245.36 ACCOUNT TOTAL 3,245.36 ORG 26026001 TOTAL 12,440.36 26126104 Pentagon Park TIF 26126104 6103 Pentgn TIF - Prof Svrs 100049 EHLERS AND ASSOCIATE 90760 0 2022 6 INV P 1,147.50 20220708 473690 ACCOUNT TOTAL 1,147.50 ORG 26126104 TOTAL 1,147.50 26126106 Grandview 2 TIF 26126106 6103 Grnd 2 TIF - Prof Svrs 160292 FORECAST PUBLIC ART 2072 0 2022 6 INV P 600.00 20220701 473445 City of Edina, MN INVOICE LIST BY GL ACCOUNT Report generated: 07/18/2022 12:41 User: STanGeil Program ID: apinvgla Page 2 YEAR/PERIOD: 2022/6 TO 2022/6 ACCOUNT/VENDOR INVOICE PO YEAR/PR TYP S CHECK RUN CHECK DESCRIPTION 160357 CRAMER, DIO 06-03-2022 0 2022 6 INV P 2,500.00 20220701 473420 Design Services - G ACCOUNT TOTAL 3,100.00 26126106 6131 Grnd 2 TIF - PrfSvLegal 100730 DORSEY & WHITNEY LLP 3755356 0 2022 6 INV P 4,222.50 20220708 473685 ACCOUNT TOTAL 4,222.50 26126106 6133 Grnd 2 TIF - PrfSvEng 100438 STANTEC CONSULTING S 1926433 0 2022 6 INV P 2,118.36 20220624 473329 ACCOUNT TOTAL 2,118.36 26126106 6715 Grnd 2 TIF - CapInfrast 100664 BRAUN INTERTEC CORPO B295580 0 2022 6 INV P 2,912.00 20220624 473177 ENG 21-6 Eden Ave/B 100858 LOGIS 52273-1 0 2022 6 INV P 16,345.00 20220701 473505 LOGIS 100995 SHORT-ELLIOT-HENDRIC 426531 0 2022 6 INV P 41,955.37 20220701 473587 ENG 21-6 Eden Ave/B 124002 KIMLEY-HORN AND ASSO 160603028-0522 0 2022 6 INV P 34,022.50 20220708 473732 ENG 21-6 Grandview 140989 S M HENTGES & SONS I 07 0 2022 6 INV P 566,495.51 20220624 473319 ENG 21-6 Eden Avenu 141258 PEMBER COMPANIES INC ENG 21-26 #3 0 2022 6 INV P 333,627.22 20220701 473561 ENG 21-6 Grandview ACCOUNT TOTAL 995,357.60 ORG 26126106 TOTAL 1,004,798.46 26126109 44th and France 2 TIF 26126109 6103 44 & F TIF - Prof Svrs 100049 EHLERS AND ASSOCIATE 90757 0 2022 6 INV P 382.50 20220708 473690 ACCOUNT TOTAL 382.50 ORG 26126109 TOTAL 382.50 FUND 2600 Housing & Redvlpmt Authority TOTAL: 1,056,952.97 ** END OF REPORT - Generated by Shirleng Tan Geil ** Date: July 21, 2022 Agenda Item #: VI.C . To:C hair & C ommis s ioners of the Edina HR A Item Type: R equest F or P urc hase F rom:C had A. Millner, P.E., Director of Engineering Item Activity: Subject:R equest for P urc hase: P rofes s ional S ervic es for Eden G range R oundabouts 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: R equest for P urchase: P rofessional S ervices for Eden G range Roundabouts with S hort E lliot Hendrickson for $301,588. I N TR O D U C TI O N: T he H R A accepted T he East G randview Transportation Study associated with the redevelopment of 4917 Eden Avenue (old P erkins site). T hat study identified improvements on E den Avenue, G range Road, and 50th S treet to improve safety of cyclist and pedestrians along with improving traffic safety and operations. T his contract will design and bid the improvements at the intersection of Eden Avenue and Grange R oad. AT TAC HME N T S: Description Request for Purchase: Professional Services for Eden Grange Roundabouts SEH Supplemental Letter Agreement Request for Purchase Contract Number 1 CITY OF EDINA 4801 W 50th St., Edina, MN 55424 www.EdinaMN.gov | 952-927-8861 12200171 Department: Engineering Buyer: Chad Millner Date: 07/14/2022 Requisition Description: Professional Services for Eden Grange Roundabout Vendor: SHORT-ELLIOT-HENDRICKSON INCORPORATED Cost: $301,588.00 REPLACEMENT or NEW: REPLACEMENT PURCHASE SOURCE:SERVIC K - SERVICE CONTRACT DESCRIPTION: The HRA accepted The East Grandview Transportation Study associated with the redevelopment of 4917 Eden Avenue (old Perkins site). That study identified improvements on Eden Avenue, Grange Road, and 50th Street to improve safety of cyclist and pedestrians along with improving traffic safety and operations. This contract will design and bid the improvements at the intersection of Eden Avenue and Grange Road. BUDGET IMPACT: This project is funded by TIF funds collected from the district created with the redevelopment of 4917 Eden Avenue (old Perkins site). This contract is 11.2% of the estimated construction cost of $2.7 million. 2 COMMUNITY IMPACT: These projects can meet many of the seven guiding principles such as enhance the district’s economic viability, design for the present and the future by pursuing logical increments of change using key parcels as stepping stones to a more vibrant, walkable, functional, attractive, and life-filled place, organize parking as an effective resource for the district by linking community parking to public and private destinations while also providing parking that is convenient for businesses and customers, improve movement within and access to the district for people of all ages by facilitating multiple modes of transportation, and create an identity and unique sense of place that incorporates natural spaces into a high quality and sustainable development reflecting Edina’s innovative development heritage. ENVIRONMENTAL IMPACT: NA Service Contract Engineers | Architects | Planners | Scientists Short Elliott Hendrickson Inc., 10400 Yellow Circle Drive, Suite 500, Minnetonka, MN 55343-9229 952.912.2600 | 800.734.6757 | 888.908.8166 fax | sehinc.com SEH is 100% employee-owned | Affirmative Action–Equal Opportunity Employer SUPPLEMENTAL LETTER AGREEMENT July 12, 2022 RE: City of Edina Eden Avenue Double Mini Roundabout Preliminary & Final Design Engineering SEH No. EDINA 167971 10.00 Mr. Chad Millner, PE Director of Engineering City of Edina Engineering and Public Works Facility 7450 Metro Boulevard Edina, MN 55439 Dear Chad: Short Elliott Hendrickson Inc. (SEH®) appreciates the opportunity to submit the attached proposal for preliminary and final engineering services relative to the referenced project. Project Understanding/Scope of Services Our scope of work includes a review of the Grandview Yard traffic study, topographic survey, preliminary and final design, preparation of bidding documents, and bidding assistance for the construction of a double mini roundabout at the intersection of Eden Avenue and Grange Road. The scope of work will include roadway reconstruction including a double mini roundabout, analysis and design of a sidewalk extension along Grange Road, wet cast retaining wall design (assumed to be required only in the SE quadrant of Eden Avenue and Willson Road), street level lighting, and landscaping design coordination with the City. We understand public utility improvements will include CIPP lining of the sanitary sewer on the west side of TH 100 (to be included in the City’s upcoming Morningside project), upsizing to 12-inch watermain within the project limits, extension of watermain pipe underneath TH 100 along Vernon Ave/W 50th St via horizontal directional drilling (to be included in project documents as a bid alternate), and replacing storm sewer as needed based on its existing condition coupled with the configuration required for the double mini roundabout and the selected stormwater treatment best management practice (BMP). Extensive coordination with agency stakeholders including MnDOT, Hennepin County, Minnehaha Creek Watershed District, private developers, local schools, private utility companies and other consulting engineers relative to police department security improvements at City Hall will be required to ensure a successful project. It is assumed that the City will enter into a separate agreement with a geotechnical investigation subconsultant and SEH® will coordinate the investigation services with them. Mr. Chad Millner, PE July 12, 2022 Page 2 Schedule Anticipated Project Schedule Item No. Item Description Item Key Milestone Date 1 Receive Approval to Begin Project July 2022 2 Topographic Survey August 2022 3 Traffic Study Review August 2022 4 Complete 30% Design September 2022 5 Complete 60% Design Early November 2022 6 Complete Final Design January 2023 7 Bid Docs Online Late January 2023 8 Open Bids February 2023 Fees, Billing & Estimated Project Costs If accepted, this supplemental letter agreement describes how we will provide these services for a not-to- exceed fee of $301,588.00. This amount is detailed in the attached Task Hour Budget (THB) and includes our reimbursable expenses. We will bill the City monthly for reimbursable expenses and on an hourly basis for labor. We will provide these services in accordance with our Agreement for Professional Engineering Services dated June 4, 2013, herein called the Agreement. Recall that in September 2021, SEH® completed the Grandview East Area Transportation Study. At that time, the proposed project including the double mini roundabout configuration currently proposed, was estimated to cost between $1.1 million - $1.6 million. The extent of public utility improvements for watermain, sanitary sewer and storm sewer were unknown and not included in the estimate. Based on the scope of work proposed, including a better understanding of proposed City utility improvements and other miscellaneous project elements provided herein, we estimate this project to cost approximately $2.7 million (2023 dollars). This pricing is based on recent City and industry average bid pricing for similar infrastructure projects that have experienced higher than historical prices due to inflation, rising labor costs and material supply shortages. For your reference, if we bill the City for this work, our total fee would be approximately 11.2% of the estimated construction cost. This percentage is commensurate with industry standards and aligns with other levels of service provided to the City for professional consulting services on similar infrastructure projects. This Supplemental Letter Agreement, THB, and the Agreement represent the entire understanding between the City of Edina and SEH in respect to the project and may only be modified in writing if signed by both parties. We look forward to working with you and your staff on this project. Please contact me at 952.912.2629 or wbauer@sehinc.com with questions regarding this proposal. Sincerely, SHORT ELLIOTT HENDRICKSON INC. William Bauer, PE (Lic. IA, MN, SD) Project Manager Mr. Chad Millner, PE July 12, 2022 Page 3 Toby Muse, PE (Lic. MN) Client Service Manager Enclosures x:\ae\e\edina\167971\1-genl\10-setup-cont\03-proposal\sla ltr eden ave dbl mini rab rev 7 12 22.docx Accepted on this ___day of________________, 2022 City of Edina, Minnesota By: _________________________________ Name _________________________________ Title PM PE PE PE PE PE PE Sr Tech Sr Tech Survey Crew Chief Admin Tech Reimbursable Expenses (1)Total 1.1 1 1 1 1 4 4 1.2 Virtual Meeting 2 2 4 1 1 1 1 1 1 1 1 1 9 SEH will lead five (5) virtual meetings with private utility companies to discuss existing utilities, review anticipated impacts, and discuss planned facility upgrades within the project limits. Includes creation of graphics. (Predesign/30%/60%/90%/Preconstruction)10 10 15 35 SEH will lead three (3) virtual design meetings with MnDOT staff. Review roundabout layouts and discuss potential trail/sidewalk along the west side of Grange Rd. Discuss HDD under TH100. Identify MnDOT right of way location and coordinate potential easements/turnbacks. Discuss stormwater impacts.6 3 6 6 12 33 One (1) virtual meeting with City staff during preliminary design to review project design issues/constraints/opportunities 2 2 4 Two (2) virtual meetings (60%/90%) with City staff during final design to review project design issues/constraints/opportunities 4 8 12 SEH will prepare graphics for meeting only. City will present.1 4 5 SEH will assist with preparation of presentation and attend the meeting. City will present.4 4 8 Does not include attendance at a HRA meeting SEH will lead one (1) virtual predesign meeting with Minnehaha Creek Watershed District staff to review project improvements, identify stormwater requirements, and brainstorm potential BMP solutions (if required)2 2 2 2 8 SEH will attend in-person meetings. City to present. Includes preparation of graphics for meeting(s).4 8 32 44 SEH to conduct two (2) virtual meetings with private developer to understand project limits, timing, staging, etc. Includes time to prepare graphics.4 8 8 20 Assumes one (1) virtual meeting to discuss construction staging / coordination with Our Lady of Grace, Southview Middle School, and Concord Elementary School 2 4 8 14 One (1) virtual kickoff meeting to coordinate police department security improvements 2 2 4 50 1 1 6 9 1 61 76 1 N/A 206 $8,282.63 $230.20 $215.05 $1,271.79 $1,373.58 $174.88 $8,619.91 $8,909.29 $152.82 $1,194.80 $30,424.94 Final design review meetings Bolton & Menk coordination Assumptions/Notes Public Meetings Meeting with Schools Task Hours Summary Task Fee Summary Contract and General Develop supplemental letter agreement Create project in accounting system SEH Project #167971 Date: July 6, 2022 Billing Title Task #1 - Project Management Client: City of Edina Invoice management Project Name: Eden Avenue Double Mini Roundabout Revision Date: July 12, 2022 Meetings (Notice, Agenda, Materials, Minutes) Kickoff meeting with Client Private utility meetings MnDOT meetings Preliminary design review meeting Transportation Commission Meeting Watershed District Meeting HRA Meeting City Council Meeting Private development meetings - old Perkins site Internal kickoff meeting Page 1 of 8 PM PE PE PE PE PE PE Sr Tech Sr Tech Survey Crew Chief Admin Tech Reimbursable Expenses (1)TotalAssumptions/Notes SEH Project #167971 Date: July 6, 2022 Billing Title Client: City of Edina Project Name: Eden Avenue Double Mini Roundabout Revision Date: July 12, 2022 2.1 Assumes the Grandview Yard traffic study currently being completed by SEH transportation group will be provided and there will be no field traffic count data collection.1 4 5 4 2 6 2 2 2.2 Includes up to two (2), 20' deep infiltration rate soil borings that include permeability testing 1 4 1 6 4 4 Road design criteria shall meet Minnesota Department of Transportation Municipal State Aid design standards 6 6 4 4 Assumes wet cast modular block retaining walls 1 4 4 9 2.3 4 4 4 4 Does not include topographic survey for HDD pits west of Grange Rd. Includes hours for watermain reconfiguration at 49th St/Westbrook Ln, and Vernon Ave/Arcadia Ave.82 82 Includes staking soil boring locations for City's soil boring contractor. 2 2 2.4 2 2 4 1 1 2 2 4 1 1 2 8 22 15 6 92 2 N/A 145 $1,325.22 $3,847.42 $2,119.65 $703.37 $11,442.73 $240.31 $4,741.20 $24,419.89 3.1 6 6 3 3 2 2 1 2 3 Task #3 - Preliminary Civil Design Task Hours Summary Task Fee Summary Coordinate soil boring scope and schedule with independent soil boring contractor. Contract to be with the City. Identify potential retaining wall locations and determine type of wall based on soil types Task #2 - Data Collection and Topographic Survey Assess existing soils conditions Develop road subgrade and typical section recommendations Develop trench excavation and backfill recommendations Data Collection Collect Data from Client (CAD, GIS, Photos, Reports, etc) Utility Coordination Process Conduct Utility Gopher State One Call & Collect Private Utility Maps Geotechnical Investigation Sanitary/storm sewer manhole/catch basin structure survey data Topographic Survey Horizontal Survey Control - City Monuments Vertical Survey Control - Bench Loops Topographic Survey Locate and Record Soil Borings Complete storm sewer structure inventory Review street closure/detour impacts Existing Conditions Photos, Video, etc. Preliminary Street and Utility Design Field Investigation Review existing street condition Observe drainage patterns Reduce survey data into basemap (Create CAD BA file) Incorporate available info into basemap (Utility Maps, Data Collection information, etc.) Develop project existing surface model Determine typical sections Page 2 of 8 PM PE PE PE PE PE PE Sr Tech Sr Tech Survey Crew Chief Admin Tech Reimbursable Expenses (1)TotalAssumptions/Notes SEH Project #167971 Date: July 6, 2022 Billing Title Client: City of Edina Project Name: Eden Avenue Double Mini Roundabout Revision Date: July 12, 2022 10 20 30 2 5 5 10 22 1 4 8 13 15 4 19 4 2 6 Does not include traffic signal modification or addition of push buttons at the intersection of 50th St / Grange Rd. Assumes no MnDOT Layouts will be required. Includes a 30% design, cost estimate, and list of potential impact of installing a walk/trail on the east side of Grange Rd. Realignment of curblines and/or redesign of Grange Rd are not included.2 10 16 28 Includes creating graphics/exhibits 1 2 4 7 1 2 3 Does not include analysis of storm main capacity or catch basin spreads 5 8 13 Review options of proposed construction phasing and/or road closures/detours 4 8 12 SEH to investigate sanitary sewer main lining from the manhole closest to the intersection of Arcadia Ave/Vernon Ave, east to next manhole downstream, then under Vernon Ave to next manhole north. Assumes plans and construction will be added to the City's Morningside project. 1 2 3 2 2 4 Northern limit of watermain upgrade to be Vernon Ave/W 50th St. Assumes concrete pavement restoration width will only be as wide as the trench. 2 4 6 Assumes no drilling pit will be necessary in the middle of TH100. SEH to prepare preliminary plans and cost estimate.4 16 20 SEH to coordinate proposed landscaping with City horticulturist, and prepare preliminary plans and cost estimate.4 16 20 4 16 24 44 2 2 8 12 City Landscaping Coordination Investigate cost of upgrading watermain to 12" Turning Movement Diagrams Drainage/Storm Sewer Design Review storm structure inventory Draft existing and preliminary proposed storm sewer pipe networks Evaluate addition of sidewalk/trail along west or east side of Grange Rd between roundabout and W 50th St Proposed Geometrics Establish proposed alignments (horizontal) and road stationing Horizontal Directional Drill 12" watermain under TH100 Traffic Control/Construction Staging Evaluate future watermain system layout Layout sanitary sewer lining plan and estimate cost Quantity Calculations and Cost Estimating 30% Cost Estimate Water Main Design Bolton & Menk Preliminary Design Coordination Evaluate alignment of roundabouts Proposed Roundabout Geometrics Identify potential public/private utility conflicts Sanitary Sewer Design Page 3 of 8 PM PE PE PE PE PE PE Sr Tech Sr Tech Survey Crew Chief Admin Tech Reimbursable Expenses (1)TotalAssumptions/Notes SEH Project #167971 Date: July 6, 2022 Billing Title Client: City of Edina Project Name: Eden Avenue Double Mini Roundabout Revision Date: July 12, 2022 2 2 8 12 4 6 10 3.2 Design to avoid permanent easements 1 1 2 4 Design to avoid temporary easements if possible, however, City ok if necessary 1 1 2 4 3.3 8 8 4 4 8 8 4.1 Does not include analysis or design of lighting at the Historical Cahill School 2 2 12 12 6 6 12 12 2 2 1 1 Coordination of light pole salvage and reinstall due to HDD under TH 100. Does not include lighting adjacent to on/off ramps at Grange Rd 4 4 4 4 4.2 Removal plan, proposed construction plan, wiring diagrams, detail sheets 40 40 10 10 6 6 4 4 103 N/A 103 $15,739.95 $628.40 $16,368.35 5.1 4 4 Task Hours Summary Task Fee Summary Task #5 - Water Resources Preliminary/Final Design Preliminary Design Voltage drop calculation Task #4 - Lighting Preliminary/Final Design Preliminary Design Quality Control Review Specifications MnDOT/Hennepin Coordination Lighting 60%/90%/100% Cost Estimate Collect and review existing site data, preliminary design, and adjacent developers as-builts Lighting Right of Way/Easements Identify permanent right of way/easement needs Identify temporary right of way/easement needs MnDOT/Hennepin County Photometry Site Visit Internal and external project coordination Conflict Check Traffic Design Volumes - review existing data, compare trip generation from old studies, update trip generation, route volumes onto network, figure Analysis - review operations at two mini roundabouts (no other intersection analysis), use RODEL/Synchro and FHWA information Documentation - draft memorandum documenting changes to the development and operations Final Design 30% Cost Estimate Lighting selection Private Development Preliminary Design Coordination Page 4 of 8 PM PE PE PE PE PE PE Sr Tech Sr Tech Survey Crew Chief Admin Tech Reimbursable Expenses (1)TotalAssumptions/Notes SEH Project #167971 Date: July 6, 2022 Billing Title Client: City of Edina Project Name: Eden Avenue Double Mini Roundabout Revision Date: July 12, 2022 Includes MNDOT, Minnehaha Creek Watershed District (MCWD), and MPCA rules. Hours include meeting with MCWD to clarify rules 4 4 SEH will not be able to utilize the underground stormwater facility in the adjacent mixed-use residential site lot 6 25 31 4 10 14 5.2 5 5 5 20 25 Including, but not limited to, stormwater summary, H&H calculations, and drainage area maps 5 15 20 1 4 5 2 6 8 If required 3 10 13 Assuming two rounds of comments per permit 6 20 26 16 16 37 134 N/A 171 $7,842.71 $20,451.08 $991.80 $29,285.59 6.1 1 1 2 2 5 2 10 19 2 5 10 30 47 2 5 20 50 77 5 5 6 12 18 6 6 6 6 12 12 6 6 5 16 21 Task Fee Summary Final Design Draft final storm sewer design, profiles, and pipe networks Finalize proposed stormwater management design Prepare a final stormwater management report Task Hours Summary Specifications Prepare and submit permit information for MNDOT drainage, MPCA, and MCWD Erosion Control plansheet Delineate drainage basins Calculate design flows Calculate catch basin spacing & roadway spread Size proposed storm sewer system Drainage/Storm Sewer Design Storm Water Pollution Prevention Plan (SWPPP) plansheet Evaluate need for permanent stormwater BMPs and propose alternative BMP locations Prepare a preliminary stormwater management report Identify stormwater management requirements Finalize proposed Geometrics Establish proposed alignments (horizontal) and road stationing Establish proposed profiles and create corridor model Refine corridor models (profiles, assemblies, corridor) Final Street and Utility Design Determine typical sections Task #6 - Civil Final Engineering Private Utility Coordination Identify/coordinate private utility relocation locations and schedule Drainage permit comments and response Draft final storm sewer design, profiles, and pipe networks Page 5 of 8 PM PE PE PE PE PE PE Sr Tech Sr Tech Survey Crew Chief Admin Tech Reimbursable Expenses (1)TotalAssumptions/Notes SEH Project #167971 Date: July 6, 2022 Billing Title Client: City of Edina Project Name: Eden Avenue Double Mini Roundabout Revision Date: July 12, 2022 Assumes full closure of intersection 2 4 6 Plansheet will be added to the City's Morningside project 1 2 8 11 No raw watermain impacts in SE quadrant of Eden Ave/Willson Rd 2 5 7 1 5 10 16 Bid Alternate - SEH to design 12" watermain along Vernon Ave/50th St between Arcadia Ave and Grange Rd via HDD under TH100 2 16 18 20 45 65 Assumes wet cast modular block retaining wall needed in SE quadrant of Eden Ave/Willson Rd adjacent to the golf course. 20 20 2 4 6 12 2 4 6 12 2 6 8 5 8 5 18 6.2 1 1 2 4 1 1 2 4 Assumes up to 2 temporary easements are necessary 8 2 16 26 6.3 1 2 3 4 4 8 4 4 8 2 3 5 4 8 12 2 2 4 2 8 10 2 2 4 8 2 4 6 1 4 20 25 2 4 20 26 2 6 32 40 2 4 4 16 26 1 4 4 20 29 MnDOT/Hennepin County Retaining Wall Design Water Main Design Traffic Control/Construction Staging Sanitary Sewer Design Prepare sanitary sewer lining and manhole rehabilitation plans Quality Control Review Create plansheets/specifications for HDD Create water main layout Create pipe/pressure pipe network Right of Way/Easements Identify permanent right of way/easement needs Identify temporary right of way/easement needs Prepare right of way/easement graphics and legal descriptions Existing Conditions/Removals Plan and Profile Sheets - sanitary sewer and water Develop Construction Plans Title Sheet Estimated Quantities, Notes, Standard Plates General Layout General Notes Tabulations Construction details Typical Sections Sequence of Operations/Phasing Alignment Tabulation and Survey Control Plan and Profile Sheets - street and storm sewer Roundabout Details Retaining Wall Plans/Profiles Design HDD under TH100 Private Development Final Design Coordination Bolton & Menk Final Design Coordination Page 6 of 8 PM PE PE PE PE PE PE Sr Tech Sr Tech Survey Crew Chief Admin Tech Reimbursable Expenses (1)TotalAssumptions/Notes SEH Project #167971 Date: July 6, 2022 Billing Title Client: City of Edina Project Name: Eden Avenue Double Mini Roundabout Revision Date: July 12, 2022 1 4 12 17 2 3 16 21 4 4 16 24 4 4 16 24 3 8 11 4 10 32 46 4 12 16 5 8 13 3 5 8 2 2 4 1 2 3 6.4 1 1 4 6 1 1 2 4 2 2 2 2 2 2 1 1 2 4 6 8 4 24 3 45 1 2 2 5 1 1 2 6.5 1 12 24 37 1 8 16 25 1 4 8 13 6.6 1 1 2 1 1 2 2 2 4 4 6 10 Includes MnDOT ROW permit and utility accommodation permits 4 6 10 Permit to be obtained by Contractor prior to construction 6.7 2 2 4 8 12 12 24 1 1 2 1 4 5 140 40 28 358 463 28 N/A 1,057 $23,191.35 $9,207.90 $4,896.71 $50,588.98 $54,276.33 $3,364.27 $6,162.32 $151,687.86 Quality control review Constructability Review Traffic Control Pavement Markings/Signing RRFB (Conduit only) Agency Review and Approval - Hennepin County Attend bid opening Prepare and review tabulation of bid and award recommendation letter Bidding Prepare ad for bid & electronic bid docs Respond to bid questions & prepare addenda Conditions of the contract Supplementary conditions Special provisions Technical specifications Quality control review Sidewalk/Ped Ramp details Cross Sections Project site walkthrough plan review Front end documents Bidding requirements Geotechnical data Contract forms Landscaping Bolton & Menk coordination/plans/specifications Storm Sewer lead profiles Task Hours Summary Task Fee Summary 90% Opinion of Probable Cost NPDES Opinion of Probable Cost 60% Opinion of Probable Cost Department of Health Agency Review and Approval - MnDOT Agency Reviews & Permits 60% Owner Review 90% Owner Review 100% Opinion of Probable Cost Project Manual Page 7 of 8 PM PE PE PE PE PE PE Sr Tech Sr Tech Survey Crew Chief Admin Tech Reimbursable Expenses (1)TotalAssumptions/Notes SEH Project #167971 Date: July 6, 2022 Billing Title Client: City of Edina Project Name: Eden Avenue Double Mini Roundabout Revision Date: July 12, 2022 50 1 1 6 9 1 61 76 1 N/A 206 $8,282.63 $230.20 $215.05 $1,271.79 $1,373.58 $174.88 $8,619.91 $8,909.29 $152.82 $1,194.80 $30,424.94 8 22 15 6 92 2 N/A 145 $1,325.22 $3,847.42 $2,119.65 $703.37 $11,442.73 $240.31 $4,741.20 $24,419.89 38 24 20 115 129 N/A 326 $6,294.80 $5,524.74 $4,301.05 $16,250.65 $15,122.35 $1,907.80 $49,401.38 103 N/A 103 $15,739.95 $628.40 $16,368.35 37 134 N/A 171 $7,842.71 $20,451.08 $991.80 $29,285.59 140 40 28 358 463 28 N/A 1,057 $23,191.35 $9,207.90 $4,896.71 $50,588.98 $54,276.33 $3,364.27 $6,162.32 $151,687.86 236 65 21 43 143 51 549 674 104 92 30 N/A 2,008 $39,093.99 $14,962.84 $4,516.10 $9,114.50 $21,824.66 $8,919.01 $77,579.19 $79,011.34 $15,892.76 $11,442.73 $3,604.58 $15,626.32 $301,588.00 Notes: (1) Task #5 - Water Resources Preliminary/Final Design Task Hours Summary Task Fee Summary Task #4 - Lighting Preliminary/Final Design Task Hours Summary Task Fee Summary Project Hours Summary Project Fee Summary Includes employee mileage, reproductions, vehicle, survey equipment, computer/technology costs, and utility potholing subcontractor fees Task Hours Summary Task Fee Summary Task #6 - Civil Final Design Task Hours Summary Task Fee Summary Project Summary Task Hours Summary Task Fee Summary Task #2 - Data Collection and Topographic Survey Task Hours Summary Task Fee Summary Task #3 - Preliminary Civil Design Task #1 - Project Management Page 8 of 8 Date: July 21, 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 Housing Development Manager Item Activity: Subject:4620 W. 77th S t. - R ec ommended Term S heet for HR A P ublic As s is tance 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 Term S heet for the Fred I I and authorize staff to work with financial and legal advisors to work towards a Redevelopment Agreement. I N TR O D U C TI O N: T he Solhem Companies is proposing a 276-unit multi-family development located at 4620 W. 77th S t. called the F red I I . To develop this new housing, the developers have identified a gap of up to $9,351,000. Financial assistance is being requested due to the extraordinary soil conditions caused by a high-water table, public access to the Fred R ichards P ark, the inclusion of affordable and “attainable” housing, and costs associated with recent passage of S ustainability G uidelines. T he identified funding sources are T I F pooled funds from the P entagon P ark R edevelopment T I F District and S PAR C . AT TAC HME N T S: Description Staff Report Fred II Term Sheet Staff Pres entation July 21, 2022 Chair and Commissioners of Edina Housing & Redevelopment Authority Stephanie Hawkinson, Affordable Housing Development Manager 4620 West 77th Street – Recommended Term Sheet for HRA Public Assistance Information / Background: The Solhem Companies is proposing a 276-unit multi-family development located at 4620 W. 77th St. (the “Site”) called the Fred II. To develop this new housing, the developers have identified a gap of up to $9,351,000. Financial assistance is being requested due to the extraordinary soil conditions caused by a high-water table, public access to the Fred Richards Park, the inclusion of affordable and “attainable” housing, and costs associated with recent passage of Sustainability Guidelines. The amount of debt that can be leveraged is limited as this is not intended to be a luxury building, but rather 100% of the units are planned to be affordable to the general workforce: ten percent (10%) of units (28 units) will be affordable to households with incomes at or below 50% of the Area Median Income (AMI), and additional 40% of the units (110 units) will have rents restricted not to exceed 120% of AMI. The remaining 50% of the units are intended to have rents not to exceed 120% of AMI but could increase in response to increasing expenditures. Initially, 100% of the anticipated rents will be below 120% of AMI with the vast majority affordable to households with incomes at or below 80% of AMI ($75,120 for a household of 2). The Site is within the Greater Southdale Area and has excellent proximity to schools, parks, trails, transit, access to employment, and to goods and services. Currently the Site is occupied by a 3-story office building and associate cracked asphalt surface parking lot. The Site is underdeveloped given the proximity of superior amenities. The developers are seeking site plan approval this summer, beginning with presentation at the July 27 Planning Commission meeting. Together with legal and financial advisors from Ehlers Associates and Dorsey & Whitney, staff has met with the developer to scrutinize the financial pro forma and prepare terms and conditions by which Pentagon Park TIF Pooled funds and SPARC funds could be used to support the redevelopment of this Site. While these advisors work for the City/HRA, the cost of this work has been borne by the developers. Housing and Redevelopment Authority Established 1974 STAFF REPORT – 7001 France - Recommended TIF Term Sheet Page 2 Ehlers has reviewed the financial pro forma for proposed development and determined that the financial gap is approximately $9.35 million. Ehlers also confirmed the “but for” test was met as required to use the TIF pooled funds. Dorsey has prepared a Term Sheet that abides by applicable Minnesota Statutes that govern Tax Increment Financing pooled funds and the use of SPARC funds. These terms also follow the spirit of Edina’s TIF policy and practice which is typically more limited than allowed by Minnesota Statute. The negotiation of this Term Sheet contains some flexibility to allow for uncertainty in the financial marketplace. Like other recently reviewed developments, the Fred II faces many challenges:  The construction industry is hindered by ongoing supply chain issues and rapid escalation of commodity and material prices.  The continued labor shortage also tends to drive up costs and extend schedules.  Increasing interest rates limit the principle that can be borrowed. City staff supports this new investment as it will provide critical connection to Fred Richards Park by way of a road for vehicular traffic and a plaza designed for pedestrians. It also provides new residential units, 10% of which will be affordable to households with income at or below 50% of AMI with the remaining units having rents lower than what is seen in other new multifamily developments. The proposed development also aligns with the intersection of City values, particularly race and equity, sustainability, community engagement and health. A Term Sheet has been prepared to articulate the fundamental structure of public financing for the Fred II. The developers and City staff are mutually supportive of the terms and conditions expressed in this Term Sheet. The Term Sheet follows the general format and strategic approach typically used by Edina for redevelopment projects focus on market rate housing with an affordability component together with wide variety of public benefits. Budget Implications Sources: The Developer is seeking approximately $9.35 million in gap financing. Together with Ehlers, staff has identified two sources to fill this gap: $7.35 million in pooled TIF funds from the Pentagon Park Redevelopment TIF district and $2 million in SPARC funds. The TIF District was approved in February 2014 to incentivize multi-phase development in the area, including multifamily residential apartments. A large portion of the pooled increment is being generated by the Fred I and the Fred II. The funds would be provided as a pay-go Note to reimburse defined elements of the development. The SPARC funds are a pool of unobligated increment that through legislative action can be used to assist development. The use of these funds to support Fred II, specifically the connection to Fred Richards Park, complies with the SPARC spending plan adopted November 16, 2021. STAFF REPORT – 7001 France - Recommended TIF Term Sheet Page 3 SPARC Funds Estimated Balance Requests Estimated Starting Capacity $8,465,662 Edina Theater ($300,000) Commercial Rehab Program ($600,000) 50th and France Pavers ($99,658) 50th France S. Parking Ramp ($64,200) Fred II ($2,000,000) Future Funding Capacity $5,401,804 The structure of the terms has most of the financial risk with the developer. Uses:  TIF Pooled Loan ($7.35 million): Pooled TIF will be used to reimburse the project for pre- determined eligible costs after Fred II is successfully completed. The developer will provide up front financing. The Note will be structured as a “pay-go” note so payments will be made over time, after the increment is collected. A look-back provision is included to assure that the TIF pooled funds provided are what are necessary to complete the development.  SPARC Funds ($2 million): This source will be allocated towards access to Fred Richards Park from West 77th Street. Payments will be made during the construction period as various components are completed. Staff will review the construction draws and approve if the obligations are met. The loan will be forgiven upon issuance of the Certificate of Occupancy. Adherence to City Policies  Southdale Design Experience Guidelines. The developer has received input via the City’s “sketch plan” review process. This was taken into consideration when the developer prepared a full proposal to rezone and redevelop the site.  New Multifamily Affordable Housing Policy: Fred II will provide 10% of the units (28 units) affordable to households with incomes at or below 50% of AMI. The remaining units will serve households with incomes that are not currently served by new multifamily market rate developments. Of these, 40% of the units (110 units) will offer rents not to exceed the levels set for 120% AMI households for the term of the Note.  Sustainability Guidelines: The new project will include extensive installation of new native vegetation, plantings, and trailways to produce a resilient urban environment that has greater vegetative diversity. An existing grove of mature trees in the northwestern corner of the site will be preserved. Organics recycling and regular recycling will be available to all residents. Bike parking and EV charging stalls are part of the existing design. The developer will work with Xcel’s Energy Design Assistance Program to foster the most cost-effective and energy minimizing design for long term building operations. STAFF REPORT – 7001 France - Recommended TIF Term Sheet Page 4  Policy for the Use of Unobligated TIF Funds: Pursuant to the TIF Act, the purpose of these expenditures is to spur construction of commercial buildings and support infrastructure within the City’s commercial and industrial districts so as to stimulate private investment among other things. Using these funds to provide gap financing on a large commercial building that includes pedestrian and vehicular connections to Fred Richards Park aligns with this purpose. Recommended Action: 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. # # # Final for HRA Review on July 21, 2022 4867-4219-3193\2 4620 West 77th Street Redevelopment Proposed Term Sheet CITY/HRA DRAFT 7-15-22 1) Purpose and Scope a. This Term Sheet identifies basic business points that establish the framework of the potential use of public financing to support the private redevelopment of underutilized property as a 276 unit multi-family residential project (the “Project”) within the City of Edina (the “City”) and to provide certain public benefits. This document is intended to serve as the general framework for a definitive redevelopment agreement (“Redevelopment Agreement”) to be executed by Developer (or Developer’s approved assignees), the City and the Edina Housing and Redevelopment Authority (the “HRA”). b. This document is intended for discussion purposes with the Board of the HRA. Based on the response and direction provided by the HRA Board, the City staff is prepared to engage third-party legal and finance professionals to assist with the drafting and negotiation of the Redevelopment Agreement, related documents, and related assistance for the Project. c. City and HRA Out of Pocket Costs – Developer has completed the City’s application for local public financial assistance and agreed to pay for the City’s staff and out-of-pocket costs in evaluating this request. The City has engaged Dorsey & Whitney and Ehlers Associates (together, “Third Party Consultants”) to provide assistance in preparing the necessary studies and evaluations. Developer has submitted $40,000 in advance to be held in escrow by the City. These funds will be used to pay the Third-Party Consultants. Any excess / un-used funds will be returned to Developer. City agrees to provide copies of expenses paid from the escrowed funds upon request by Developer. 2) Developer; Project Ownership a. The Developer for the Project is Solhem Development, LLC, or a special purpose entity to be formed by Solhem (“Developer”). Developer is in the process of negotiating a purchase agreement with Pentagon North, LLC (“Pentagon North”) for the purchase of the approximately 60% of Tract B Registered Land Survey 1218 (“Tract B”) sufficient in size to construct and operate the Project. Pentagon North will own the remaining portion of Tract B. The Redevelopment Agreement will be entered into by Developer or an affiliate approved by the HRA. Developer will provide reasonable information to the HRA regarding the organizational and ownership of any such affiliate. 3) Project Description a. Location – The Project site is located at 4620 W 77th Street and will be comprised of a parcel of land to be legally described in the Redevelopment Agreement. b. Existing Conditions – The Project site is currently improved with a three-level office building, and associated surface parking. The Project site is within the existing Pentagon Park Redevelopment TIF District (“TIF District”) established by the HRA on February 18, 2014, to incent multi-phase redevelopment of the area. 4620 West 77th Street DRAFT July 15, 2022 Proposed TIF Term Sheet Page 2 4867-4219-3193\2 c. Project – The overall Project is described in the planning documents submitted to the City of Edina on June 27, 2022, is generally depicted on the attached site plan, and consists of a single, seven-story building with (1) 248 workforce apartment units and (2) 28 affordable rental apartment units (affordable at 50 percent of area median income) (the “Minimum Improvements”). The Project has not yet been received final reviews from the Planning Commission or the City Council and the Redevelopment Agreement will reflect the Project as finally approved (the “City Approvals”). The Project will require and support additional City public infrastructure improvements as described below. Any material change to the Project shall require review of the Project financials. If the public benefits are reduced, the HRA is entitled to reconsider public financial assistance. d. Public Benefits – The Minimum Improvements may be eligible for public financial assistance in accordance with this Term Sheet and the Redevelopment Agreement. Any assistance is conditioned on Developer’s completion of the portion of the Minimum Improvements as specified in the Redevelopment Agreement and TIF Note (as defined below), and delivery of Public Benefits, including: i. Construct a market rate and affordable housing development whose scale and mass is consistent with the City Approvals. ii. Provide public right of way, including; (i) an active pedestrian plaza with bike, pedestrian and vehicular access to the future FRED City Park (“Park”), (ii) fire truck road and a vehicular park access road in the form of a public road easement in form and substance agreed to between the Developer, City and Pentagon North, and (iii) signage, monument(s) and/or wayfinding from 77th to the Park. iii. Improve storm water conditions on the site and for the public amenities. iv. Provide certified building in support of City’s sustainability policy. v. Enable affordable housing, as more particularly described below. 4) Minimum Improvements Timeline a. This timeline identifies the general timeframe envisioned for the Minimum Improvements. Deadlines will be included in the Redevelopment Agreement(s), subject to extension for force majeure events. Failure to meet the ‘no later than’ deadlines will be considered a default of the Redevelopment Agreement, subject to notice and cure rights of the Developer set forth in the Redevelopment Agreement. Completion will be evidenced by the HRA issuing a “Certificate of Completion” to Developer for the Project. Description of Work Commencement Date Completion Date Anticipated No Later Than Anticipated No Later Than Final Zoning Approvals 10/1/22 4/1/23 Real Estate Acquisition Closing 10/1/22 4/1/23 4620 West 77th Street DRAFT July 15, 2022 Proposed TIF Term Sheet Page 3 4867-4219-3193\2 Description of Work Commencement Date Completion Date Anticipated No Later Than Anticipated No Later Than Demolition 10/1/22 4/1/23 1/1/23 5/1/23 Site Remediation 11/1/22 5/1/23 2/1/23 6/1/23 Site Preparation 12/1/22 6/1/23 4/1/23 8/1/23 Financial Closing 10/1/22 4/1/23 Foundation 2/1/23 8/1/23 7/1/23 11/1/23 Core Construction 5/1/23 11/1/23 7/1/24 11/1/24 Certificate of Occupancy* NA NA 8/1/24 2/1/25 5) Minimum Improvements Budget a. The Minimum Improvements are currently estimated to cost approximately $85,303,000, including land assembly, soft costs and hard costs. b. Preliminary estimates of sources and uses for the Minimum Improvements are attached. 6) Minimum Improvements Financing a. A firm commitment from equity partner(s) are pending. Information will be provided to the HRA when available. b. Firm commitments for construction loans are pending. Information will be provided to the HRA when available. c. Appropriate grants will be pursued by the City and the Developer, and any such grants received will reduce the amount of available HRA public assistance. d. HRA public assistance for the Minimum Improvements is being considered as described in this Term Sheet. 7) Public Assistance a. Generally i. Public assistance is conditioned upon the Minimum Improvements as a whole demonstrating satisfaction of the “but for” TIF test. Developer will provide all required information necessary to demonstrate that the Minimum Improvements satisfies the “but for” test in Minnesota Statute. ii. Any public assistance issued will be in accordance with the City’s local public finance assistance policy, as reflected in the definitive Redevelopment Agreement(s). iii. Public assistance provided shall comply with all applicable Minnesota Statutes. b. Public Assistance Sources. 4620 West 77th Street DRAFT July 15, 2022 Proposed TIF Term Sheet Page 4 4867-4219-3193\2 i. For the Minimum Improvements, the City and HRA will consider use of tax increment (“TIF”) from two appropriate sources. First, “pooled tax increment” from the existing TIF District and existing funds from the City’s SPARC fund (as authorized by Minnesota Statutes Section 469.176, Subd. 4n). c. Reimbursable Costs i. Based on the initial pro forma for the Minimum Improvements, Project costs eligible for reimbursement are approximately $11,639,000. However, based on financial analysis to-date, the appropriate level of reimbursement should not exceed $9,351,000 in principal amount. As further described below, that reimbursement would occur through a pay-as-you-go TIF Note in the principal amount not to exceed $7,351,000 and reimbursement through SPARC funds in a maximum amount of $2 million. The following items associated with the Minimum Improvements are intended to be reimbursable from TIF and the specific reimbursement amounts will be stated in the Redevelopment Agreement. Pooled TIF Reimbursable Costs for Project Approx. Cost 1 Stormwater for public amenities not constructed within the pedestrian plaza $250,000 2 Sustainability certification $851,000 3 Increased costs related to unfavorable soil conditions: a) Grouted pilings & soil corrections for building b) Excavation, load transfer platform & footings c) Added podium concrete structure d) Podium landscaping, access & water retention e) Added building utility length, soil corrections & structure $1,800,000 $1,200,000 $3,600,000 $ 800,000 $ 450,000 4 5 Site preparation, foundation, demolition and abatement of existing office building $250,000 5 Fire truck road, including related soil corrections & and added ADA office access $250,000 6 Reimbursement of HRA’s professional costs and Developer legal costs related to preparation of Redevelopment Agreement $180,000 Total = $9,631,000 SPARC Reimbursable Costs for Project Approx. Cost 1 Pedestrian plaza and related improvements, including streetscape and landscape. $414,000 2 Signage, wayfinding and monument related to the Park. $80,000 4620 West 77th Street DRAFT July 15, 2022 Proposed TIF Term Sheet Page 5 4867-4219-3193\2 SPARC Reimbursable Costs for Project Approx. Cost 3 Improvements for vehicular access via permanent easement on Pentagon North property. $1,000,000 4 Area stormwater management and treatment (tanks will be within the public plaza) $214,000 5 Soil corrections & utilities for all public areas $300,000 Total = $2,008,000 d. Forgivable Loan. The SPARC funding will be detailed in a forgivable loan agreement to be included as an exhibit to the Redevelopment Agreement. SPARC funds, in a maximum amount of $ 2 million, will be provided to the Developer on a draw basis as actual costs are incurred and proven. The total amount of all draws (up to the maximum amount shown above) will be forgiven, pursuant to the loan agreement, following issuance of the Certificate of Completion. Costs eligible for SPARC reimbursement which exceed the maximum amount of available SPARC funds are also eligible for reimbursement through the TIF Note (up to the maximum principal amount). e. TIF Notes – A single TIF note will be issued (subject to statutory procedural requirements) with the following terms and conditions: i. The “TIF Note” in the aggregate principal amount of up to $7,351,000 million will be issued by the HRA upon issuance of a Certificate of Completion. The TIF Note shall be subject to a future lookback/clawback based on Developer achieving a return in excess of the Market Return (defined below). This future lookback/clawback will occur upon stabilization of the Project rentals (as determined by the HRA) after the final Certificate of Completion for the Minimum Improvements. The Redevelopment Agreement will contain a detailed description of the lookback and an example of calculation of the lookback. ii. The TIF Note will be issued upon the satisfaction of the following conditions: 1. Developer demonstrating to the HRA, by updated pro forma for the Minimum Improvements (consistent with the attached form of pro forma), that the return on cost for the Minimum Improvements does not exceed a reasonable market return (which is currently predicted to be 6.0%, with the final return on cost determined in the Redevelopment Agreement) (“Market Return”). If any such updated pro forma demonstrates a return on cost in excess of the Market Return, then the HRA shall reduce the principal amount of such TIF Note being issued to only the amount necessary to assist the Minimum Improvements to achieve a Market Return (the “ Lookback”). 2. In addition, upon any sale by the Developer of the Minimum Improvements prior to receipt of the full principal amount of the TIF 4620 West 77th Street DRAFT July 15, 2022 Proposed TIF Term Sheet Page 6 4867-4219-3193\2 Note, the Developer shall supply the HRA with the actual internal rate of return (“IRR” -- defined as the internal rate of return as calculated in the TIF Pro Forma to be incorporated in the Agreement, where the IRR is calculated as the annual rate of return on the cash flow not to exceed a reasonable market level, as will be specified in the Redevelopment Agreement).An IRR greater than this amount will result in termination of the TIF Note at the HRA’s discretion. 3. Principal value of the TIF Note not to exceed 10% of the actual development costs. 4. Certificate of Completion is issued by the HRA for all of the Minimum Improvements. 5. Developer has entered into a permanent access easement in form acceptable to the City, Developer and Pentagon North. 6. Developer has provided the HRA with access sufficient for HRA staff to confirm the actual Project costs and returns and confirm satisfaction of the “but for” test. 7. Review of final development costs, including line item detail on how contingency funds have been used (with understanding that Development may move line items with contingency funds as required for Project completion). 8. Confirmation via lien waiver or similar that all parties have been paid for work that is subject to reimbursement from TIF or grants. 9. Developer has executed and delivered all public easements and the acceptance of all public improvements required by the City approvals and the Redevelopment Agreement(s). 10. Developer has delivered to the HRA a final report and certificate detailing and certifying as to the Developer’s activities and final outcomes of Developer’s efforts to achieve the Equity and Inclusion goals under the Redevelopment Agreement(s). 11. Developer has satisfied all terms and conditions of the Redevelopment Agreement(s) and is not in default under the Redevelopment Agreement(s), the City approvals, or any other agreement pertaining to the Project beyond any applicable notice and cure periods. iii. The TIF Note shall bear simple, non-compounding interest at a rate equal to the actual rate on the Developer’s permanent first mortgage for the Minimum Improvements. iv. Payments on the TIF notes will be made over a period from issuance of the TIF Note through 2043 with two annual payments from pooled increment within the TIF District. Such pooled increment is limited, by statute, to 25 percent of the 4620 West 77th Street DRAFT July 15, 2022 Proposed TIF Term Sheet Page 7 4867-4219-3193\2 annual increment generated within the TIF District, less the HRA’s TIF District administrative costs. v. Developer shall have no rights to increment collected after the principal amount of the TIF Note is paid. vi. Any estimate of TIF cash flow projected by the City or HRA is hypothetical and there are no guarantees that such TIF proceeds will be available. 8) Other Terms and Conditions a. Affordable Housing i. The Project will comply with all City affordable housing policies and will contain at least 28 affordable housing units (affordable at 50 percent of area median income) (or 10 percent of the total final number of residential units) for at least 20 years following the occupancy of all 28units by income-eligible tenants. The City’s current affordable housing compliance procedures are attached. ii. In addition, upon Project rent stabilization, the Developer shall in January of each year provide the HRA with a certification of rent rolls for the prior year show that at least 110 of the units (excluding the affordable units described above) have rents that are affordable at 120 percent of area median income. b. Equity and Inclusion – In order to meet the condition to TIF Note issuance regarding Equity and Inclusion goals, Developer shall use good faith efforts as defined by the Minnesota Department of Human Rights to achieve the goals in the following area (as reasonably agreed by Developer and City). The Developer must provide the HRA with periodic reporting on the status of achieving these goals in form and content required by the HRA. The Redevelopment Agreement will not include a requirement that Developer’s contractor meet or exceed such goals, but will use good faith efforts to achieve such goals. c. Other Easements and Property Rights. i. Developer will grant a permanent, public easement for access and use of the perimeter, sidewalks, the public plaza and streetscape areas by the public, subject to reasonable, nondiscriminatory limitations, rules and regulations governing its use adopted by Developer and subject to the approval of the City Manager or its designee. ii. Developer agrees to grant future Easements for future mass transit (bus) stops adjacent to the Project site at no cost to City or transit, subject to the responsible transit agency being responsible for maintenance of the surface improvements in any future easement area. 9) Grants – Developer must make good faith effort to pursue grants for the Project as selected by Developer and the City. The City/HRA agrees to sponsor grant applications that provide financial support for the Projects. Costs of preparing the grant applications 4620 West 77th Street DRAFT July 15, 2022 Proposed TIF Term Sheet Page 8 4867-4219-3193\2 shall be borne by Developer. City staff shall have the final authority to review and submit the grant applications to Metropolitan Council, Minnesota Department of Employment and Economic Development and Hennepin County per the terms of the grant programs. Any grants received for the Project will be included within the Project pro forma for determining the net impact on the Project’s return on cost, the maximum principal amount of the TIF Note, the lookback/clawback, and for determining satisfaction of the “but for” TIF test. Following is the list of grants which may be applied for by City or Developer (as required by the particular grant program): a. Hennepin County Environmental Response Fund (ERF); b. Met. Council Tax Base Revitalization Account (TBRA); c. Met Council Livable Communities Demonstration Account (LCDA); d. DEED Contamination Cleanup Grant; and e. DEED Redevelopment Grant. 10) City and HRA Approval of Significant Changes – Changes to the Project that impact scope or design are subject to City review using the typical City procedure. 11) Performance Bonds – Bonds or other security will be required for work in public rights of way and for the elements with a public easement. 12) Default and Cure – Standard default provisions will apply. Each default will have a notice and cure period, subject to extension for force majeure delays. 4620 West 77th Street Redevelopment DRAFT July 8, 2022 Proposed TIF Term Sheet 4867-4219-3193\2 Project Site Plan 4620 West 77th Street Redevelopment DRAFT July 8, 2022 Proposed TIF Term Sheet 4867-4219-3193\2 Project Sources and Uses 4620 West 77th Street Redevelopment DRAFT July 8, 2022 Proposed TIF Term Sheet 4867-4219-3193\2 Pro Forma 70th and France Redevelopment DRAFT June 15, 2021 Proposed TIF Term Sheet 4867-4219-3193\2 Public Benefit 1. Addition of Affordable Housing. 2. Unique opportunity for addition of 110 mid-market work force housing providing housing options with rents affordable to families with incomes below 120 percent of area median income, which are generally not available in the market place and below the rents for the new neighboring project constructed by the Developer’s affiliate. 3. Eliminates existing 60’s era office building and surface parking in return for a high-density residential use much more compatible with the Park. 4. Creation of a residential ‘neighborhood’ with neighboring project, along the southern boundary of the Park. 5. Opportunity to integrate the Project with the Park. 6. Meeting sustainability goals. 7. Creation of a network of connections to the Park, including an active pedestrian connection to the Park. 8. Generational opportunity, with Pentagon North’s cooperation to provide a new main vehicular access to the Park. 9. Modern storm-water best management practices, resulting in improved water quality on site and as runoff impacts the Park. 10. Installation of extensive new native vegetation, plantings and trailways, producing a resilient urban environment which also allows or accommodation of greater density and vegetive diversity. 11. Bicycle parking and EV charging stalls. 12. Working with Xcel’s Energy Design Assistance Program to foster cost-efficient design and long-term operation. 4620 West 77th Street Redevelopment DRAFT July 8, 2022 Proposed TIF Term Sheet 4867-4219-3193\2 City Affordable Housing Compliance Procedures Affordable Housing Program Policy Guide March 2022 Table of Contents Introduction to the Affordable Multi-Family Housing Program (AHP)................ 4 Chapter 1 – Overview of Affordable Housing Program Policy ............5 1.1 Period of Affordability (POA) .................................................................................................................... 5 1.2 Affordable Dwelling Units (ADUs) ............................................................................................................ 5 Affordability Standards – Rental Projects ............................................................................................................ 5 Affordability Standards – For Sale Projects ......................................................................................................... 5 1.3 Student Households ................................................................................................................................. 6 1.4 New Multi-Family Affordable Housing Program (AHP) Rent Limits .......................................................... 6 1.5 Rental Assistance ..................................................................................................................................... 6 1.6 Allowable Fees and Charges ..................................................................................................................... 7 1.7 Fixed or Floating Affordable Dwelling Units ............................................................................................. 7 1.8 Rent Increases .......................................................................................................................................... 7 1.9 Utility Allowances ..................................................................................................................................... 7 1.10 Record Retention ...................................................................................................................................... 9 1.11 Leases ....................................................................................................................................................... 9 1.12 Income Certification ............................................................................................................................... 10 1.13 Increases in Income ................................................................................................................................ 10 1.14 Property Standards ................................................................................................................................ 10 1.15 Affirmative Fair Housing Marketing Plan ............................................................................................... 10 1.16 Fair Lease and Grievance Procedures ..................................................................................................... 10 Chapter 2 – Maintaining the Unit Mix ............................................ 11 2.1 Fixed Affordable Dwelling Units ............................................................................................................. 11 2.2 Floating Affordable Dwelling Units ........................................................................................................ 11 Chapter 3 – General Occupancy Guidelines .................................... 13 3.1 Qualification of Applicants ..................................................................................................................... 13 3.2 Eligibility Determination ......................................................................................................................... 14 3.3 Change in Household Composition ......................................................................................................... 14 3.4 Minimum Lease Requirements ............................................................................................................... 14 3.5 House Rules ............................................................................................................................................ 15 3.6 Number of Persons Per Unit ................................................................................................................... 15 3.7 Tenant Selection Plan ............................................................................................................................. 15 3.8 Government Data Practices Act Disclosure Statement Form ................................................................. 15 3.9 Income Verification ................................................................................................................................ 16 3.10 Gross Annual Household Income ............................................................................................................ 16 3.11 Factors that Affect Household Size ......................................................................................................... 17 3.12 General Income Verification Requirements ............................................................................................ 18 3.13 Corrections to Documents ...................................................................................................................... 20 3.14 Effective Term of Verifications ............................................................................................................... 20 3.15 Over Income Households ........................................................................................................................ 20 3.16 Annual Recertification ............................................................................................................................ 20 3.17 Tenant Files ............................................................................................................................................ 21 Chapter 4 – Reporting Requirements ............................................. 22 4.1 Annual Owner/Agent Certifications ....................................................................................................... 22 4.2 Compliance Reports ............................................................................................................................... 22 4.3 Utility Allowance Source Document ....................................................................................................... 22 Chapter 5 – Compliance Inspections .............................................. 23 5.1 Physical Inspections ................................................................................................................................ 23 5.2 Review of Tenant Files and Property Records......................................................................................... 23 Chapter 6 – Correction and Consequences of Non-Compliance ....... 24 6.1 Notice to Owner/Agent .......................................................................................................................... 24 6.2 Correction Period.................................................................................................................................... 24 6.3 Owner’s/Agent’s Response ..................................................................................................................... 24 Chapter 7 – Requests for Action .................................................... 25 7.01 Sale or Transfer ...................................................................................................................................... 25 4 Introduction to the Affordable Multi-Family Housing Program (AHP) Properties developed using financing from the City of Edina, or because of our policy for New Multi-Family Affordable Housing, are subject to specific rules designed to ensure that affordability pledges made by owners and developers remain available to very low and low income tenants (30% to 60% of Area Median Income) throughout the required Period of Affordability (the POA). This Guide is designed to assist owners and their agents with planning and maintaining compliance with the local requirements associated with these rental properties that include affordable units. This guide does not pertain to the Market Rate units. It is the responsibility of City of Edina Housing and Redevelopment Authority (hereafter the “HRA”) to monitor the continuing compliance of affordable units in accordance with local policy and governing agreements throughout the POA. The following procedures apply to all rental properties that received funds or a Planned Unit Development (PUD) under the local policy on New Multi-Family Affordable Housing (AHP). Any violation of the AHP requirements could constitute a covenant default of the governing agreement(s) and imposition of all local government rights and remedies. While successful operation of an affordable property is management intensive, the owner/agent is responsible for ensuring that the governing agreement requirements are properly administered. Thorough understanding of requirements and compliance monitoring procedures requires training of owners/agents. The owner/agent should ensure that it knows and understands the requirements of the affordable housing policy and the compliance requirements since failure to comply may have very serious consequences. The HRA recommends that owners, management agents and site managers (collectively referred to as “owner/agent” throughout this document) receive compliance training before certifying or leasing any affordable units. At a minimum, training should cover key compliance terms, determination of rents, household eligibility, file documentation, procedures for maintaining the required unit mix and reporting. Record retention and property condition standards are also key to maintaining compliance. Attending educational opportunities as offered is strongly recommended to keep up with any procedural changes to the AHP. Should the AHP assisted property also receive an allocation of Section 42 tax credits (Low Income Housing Tax Credits or LIHTC), and the property is found to be compliant with the tax credit program, then the HRA will consider the property compliant with the AHP. Owners/Agents of AHP assisted properties must annually certify to the HRA that the property is compliant with the Low Income Housing Tax Credit program. The HRA’s determination to monitor the project for compliance with requirements of the AHP does not make it liable for an owner’s/agent's noncompliance. This Guide will be made available to the owner/agent at project financial closing and will be posted on the City’s website. The HRA, in its sole discretion, may delegate its compliance reporting and monitoring responsibilities to a third-party. AHP assisted properties will have a compliance review of all assisted units at initial lease up and every third (3rd) year thereafter. However, the HRA reserves the right to conduct a compliance review annually. Annual reviews may be conducted for new move-ins at turnover. During the compliance review, the HRA or third-party monitoring agent, will ensure compliance against City Agreements by inspecting records of residential student status, income and asset documentation, and rent record for each resident household for all project’s AHP assisted units. The first review for new projects will occur no later than the end of the second year of the period of affordability. 5 Chapter 1 – Overview of Affordable Housing Program Policy The following is an overview the Affordable Housing Policy. It is not intended to be detailed or comprehensive. The requirements of the AHP apply to market rate residential developments that receive a PUD approval from the City of Edina and/or financial assistance from the HRA. This includes new developments and mixed-used developments that create twenty (20) or more multi-family dwelling units and/or any change in use of all or part of an existing building from a non-residential use to a residential use that includes at least twenty (20) dwelling units. 1.1 Period of Affordability (POA) Affordable units created under the Affordable Housing Policy (AHP) are rent and income controlled for a minimum of 20 years with a maximum established by the funding source and reflected in the binding agreement. This term is referred to as the Period of Affordability or POA. Owners/agents should refer to the property’s governing agreements, at project commitment, to determine the specific terms and conditions that govern the property, as the affordability period was increased from 15 years to 20 years in March 2019. Project Commitment is a schedule of commitments within the project’s Financing Agreement(s) between the parties hereto, such as the authorizing Resolution, Development Agreement and/or Loan Documents, dated as of the Execution Date and their related agreements. 1.2 Affordable Dwelling Units (ADUs) At least ten percent (10%) to twenty percent (20%) of the total number of dwelling units in a development receiving a PUD and/or assisted with local funds under the AHP will be designated as Affordable Dwelling Units (ADUs). The percentage applied is based on the affordability standard of the development. Affordability Standards – Rental Projects If an AHP property also is assisted with Low Income Housing Tax Credits (LIHTC), the AHP Affordability Standard is based on the LIHTC election (Income Averaging, 20/50 or 40/60 set aside). If an AHP property is NOT assisted with LIHTC, then the HRA together with the owner will determine which affordability standard applies. The legal document executed with the HRA determines the standard. 10% at 50%: At least ten percent (10%) of total units developed shall be occupied by households at or below fifty percent (50%) of the MTSP (Multifamily Tax Subsidy Income Limits, i.e., tax credit income limits). 20% at 60%: At least twenty percent (20%) of total units developed shall be occupied by households at or below sixty percent (60%) of the MTSP. Affordability Standards – For Sale Projects At least ten percent (10%) of total units developed shall be affordable for households as follows: 1-2 person household $100,000* 3+ person household $115,000* *Adjusted annually by Minnesota Housing as posted on their website. 6 1.3 Student Households AHP adopted the Section 8 Housing Choice Voucher program restrictions on student participation found at 24 CFR 5.612 and excludes any individual that: 1. Is enrolled in a higher education institution; AND 2. Is under the age of 24; and 3. Is not a veteran of the US Military; and 4. Is not married*; and 5. Does not have a dependent child(ren); and 6. Is not a person with disabilities; and 7. Is not otherwise individually eligible, or has parents who, individually or jointly, are not eligible on the basis of income * Effective August 1, 2013, same-sex marriages are recognized as marriages for student eligibility purposes. 1.4 New Multi-Family Affordable Housing Program (AHP) Rent Limits Every ADU is subject to maximum allowable rents based on bedroom size for the area in which the property is located. These maximum rents are referred to as the AHP rents. These limits represent the maximum that owners/agents can charge for rent, including an allowance for tenant paid utilities, and other non-optional charges (i.e., parking, required renter’s insurance, etc.). The U.S. Department of Housing and Urban Development annually publishes median income amounts for all Minnesota counties. Minnesota Housing uses these amounts to calculate the maximum allowable rents and tenant incomes. Minnesota Housing publishes the LIHTC income and rent limits tables on its website and notifies owners/agents of the updated limits as they become available. According to AHP, the date the final Certificate of Occupancy is issued to a building will determine which rent and income limits table the project uses. The HRA will notify owner/agent of published limits and will provide guidance on limits table to be used by the project. To avoid noncompliance, be sure you are using the correct limits table. In the event AHP rent limits decrease for an area, or utility allowances increase, an owner/agent may be required to reduce the rent charged but will not be required to lower rents below those in effect at the time when the Development Agreement was signed by the City. 1.5 Rental Assistance Tenant Based Section 8 Housing Choice Vouchers: Tenants receiving rental assistance, including Section 8 subsidy, must not be refused tenancy in an ADU based solely on the fact that they receive rental assistance. For eligibility purposes, the tenant selection plan must indicate that household income does not need to equal at least two times the unit rent (or any variation thereof) as long as the published Payment Standard subsidy can cover the project’s intended rent. The HRA annually publishes Payment Standards (a rent limit for using a Section 8 Housing Choice Voucher). Payment standards are set by each housing authority. They differ for bedroom size and property location. Project Based Rental Assistance: If rental assistance is project based, ADUs may be allowed to collect a contract rent that exceeds the applicable rent limit if certain conditions are met; the household’s annual income is at or below 50% AMI AND the total housing payment (tenant portion + UA + non-optional charges) is no more than 30% of its monthly adjusted income. 7 1.6 Allowable Fees and Charges Fees considered reasonable and customary may be charged, such as application fee, if such fees are customary for rental housing in the neighborhood. Fees for parking or services such as bus transportation or meals can only be charged if the services are voluntary and are not a condition of occupancy. An eligible tenant cannot be charged a fee for the owner or manager’s work involved in completing the additional forms or documentation required for the AHP, such as the Resident Income Certification. Down payment fees/rent deposit for the ADU should not exceed one month’s rent. 1.7 Fixed or Floating Affordable Dwelling Units ADUs may be “Fixed” or “Floating” and are designated on a property-by-property basis. The enforcement agreement must contain Fixed or Floating unit designations. Fixed Units – The ADUs are identified by unit number and never change. Development Agreements may outline a specific quantity of bedroom sizes and square footage, including minimum floor space, when considering the placement of ADUs within the project. Units in properties where all units are ADUs automatically are considered fixed. If units throughout a project are not comparable (as defined by the HRA) or are in several scattered sites, the ADU unit designation must be fixed. Floating Units – The ADUs may change over time as long as the total number of ADUs and specific quantity of bedroom sizes or ADU total square footage in the property remains compliant with the original Development Agreement. If a property’s enforcement agreement does not specify floating units, then the units that were initially designated as ADUs at project completion will be used to determine comparable floating units. See Chapter 2, Maintaining the Unit Mix, for more information. 1.8 Rent Increases If ADU rents remain below the maximum allowed, an owner/agent may impose a rent increase as allowed by the enforcement agreement no earlier than one year from the date the project started its restriction period (date the building Certificate of Occupancy was issued) and no more frequently than once a year thereafter. If an owner/agent wishes to increase rents, the request must be within reasonable limits to cover increases in expenses such as real estate taxes or operating expenses. At no time can proposed rent increases exceed the current MTSP (LIHTC rents) rent limits for that development. If the owner/agent increases rents as provided above, tenants must be given a written notice 90 days in advance or in accordance with lease provisions before implementation. 1.9 Utility Allowances The AHP requires that an allowance for tenant paid utilities be considered as a housing cost to the tenant and be factored in when determining rent for an ADU. The HRA approved the use of Metro HRA’s Utility Allowance Schedule (effective 2/1/18 and amended annually) as the document to use to determine an ADU’s utility allowance. Utility allowance schedules are usually updated annually. It is the owner’s/agent’s responsibility to obtain an updated utility allowance and retain it in the property records. Changes in utility allowances must be implemented within 90 days of the publication effective date. If an increase in the utility allowance causes the ADU rent to exceed the applicable AHP rent limit, the unit rent must be adjusted (lowered) to bring the gross rent of the unit into compliance with the AHP rent limits. However, at no time will the ADU rent be adjusted to an amount lower than the ADU rent in place at project commitment. 8 An alternative estimate for utility payments may be used, as allowed by Section 42 and approved by the City. Utility allowance methodology change requests and all supporting documentation must be emailed to the Affordable Housing Development Manager at the City for approval. Requests for a change in the property's established utility allowance methodology, to one of the approved utility allowance methodologies should reflect savings from energy efficiency improvements in a manner that is fair to tenants, financially feasible for owners and reduces long-term public subsidy expenditures. General Submission Requirements Each request for a change in utility allowance methodology must include: 1. Cover letter with the current utility allowance and proposed utility methodology 2. A current utility allowance schedule (i.e. local Metro HRA Utility chart) completed with tenant paid utilities 3. Copy of 90-day Notice to the resident including new Utility Allowance and Tenant Rent 4. Utility Allowance Certification, signed and dated 5. Supporting documentation as required (estimate from a properly licensed engineer for example) Allowable Utility Allowance Methodologies The property owner may request to use one or more of the following utility allowance methodologies that meets the AHP requirements. If the project has multiple funding sources, the rents must comply with the program gross rent limits for each program. If the project also has Section 8 Project Based Assistance, the PBA administrator determines the UA schedule for the unit. 1. PHA Utility Method: The local PHA utility allowance for the voucher program. This is the typical current method of establishing Utility Allowances used by most Section 42 LIHTC projects. Owners may request consideration of a different utility allowance methodology from the following alternatives: 2. HUD Utility Schedule Model (HUSM): An estimate calculated via HUD’s online Utility Schedule Model, using recent utility rates. The HUSM enables users to calculate utility schedules using a project specific methodology by entering the property housing type, and utility rate information (tariffs) for the property location. This model is based on climate and survey information from the U. S. Energy Information Administration of the Department of Energy and it incorporates energy efficiency and Energy Star data. The HUSM (web based and Excel format) and use instructions can be accessed on HUD’s Website. 3. Utility Company Estimate (UCE): An estimate from a local utility company providing the estimated cost of utilities for a unit of similar size and construction for the project or from the geographic area where the project is located. 4. Energy Consumption or Engineered Model (ECM): An estimate from a properly licensed engineer, or qualified professional, using an energy consumption model that takes into account the unit size, building orientation, design and materials, mechanical systems, appliances and characteristics of the building location. If the ECM report is completed by a qualified professional that is not a properly licensed engineer, the request must include additional information to support the qualifications and experience of the qualified professional in providing energy consumption utility allowance reports. The engineer or qualified professional must be licensed in Minnesota. If the property is regulated by HUD, or another form of project-based subsidy, the program-approved utility allowance may be used. 9 1.10 Record Retention Owners/agents must retain each household’s initial application forms including household income and asset documentation and lease and leasing agreements/addenda for three (3) years after the tenant’s move out effective date. Owners/agents must maintain applicant and tenant information in a way to ensure confidentiality. Any applicant or tenant affected by negligent disclosure or improper use of information may bring a civil action for damages against the owner/agent and seek other relief, as appropriate. Owners/agents must dispose of records in a manner that will prevent any unauthorized access to personal information, e.g., burn, pulverize, shred, etc. 1.11 Leases Each lease must include the legal name(s) of the parties to the agreement and all other occupants, a description of the unit to be rented (address), the term of the lease, the rental amount, the use of the premises, and the rights and obligations of each party. The lease shall also inform the tenant that fraudulent statements and information are grounds for eviction and that the tenant could become subject to penalties available under federal law. Initial leases for ADUs must be for 12 months unless another term is agreed to mutually by owner/agent and tenant. If tenant agrees to a shorter term, that agreement must be in writing and kept in the tenant’s file. At no time can a lease term be for less than 30 days. ADU leases must contain language that the owner/agent reserves the right to adjust tenant rents in accordance with the AHP rent limits and/or in the event a tenant’s income increases above the income limits of the AHP. The lease also must contain a provision that the owner/agent retains the right to recertify the tenant’s income and household composition on an annual basis. The tenant’s failure to cooperate with the annual recertification constitutes a violation of the lease. If the lease used for the ADU unit does not contain any of the required provisions and/or contains any prohibited provisions, an AHP Lease Addendum must be signed by the tenant and kept in the tenant’s file. If a new lease is executed, a new AHP Lease Addendum also must be executed. Prohibited lease terms are defined in the AHP Lease Addendum. Owner/Agent may not evict or terminate resident (including refusal to renew a lease) without good cause. Good cause is (a) serious or repeated violation(s) of the material terms and conditions of the Resident Lease. Use of the AHP Lease Addendum including the AHP Lease Rider outlining provisions on evictions and terminations is mandatory. During the final year of the POA, new leases for the Affordable Units must be for a term of no less than six months, and such newly leased Affordable Units will be subject to all the Affordable Housing Requirements until the expiration of such new leases. An AHP Lease Addendum is not required when the HUD model lease for subsidized housing is used. 10 1.12 Income Certification The owner/agent must verify and certify tenant income eligibility and student status at move in and recertify at least annually thereafter. At initial move in, or when first being determined eligible for an ADU and in every 3rd year of the affordability period (not tenancy), household composition, income and income from assets must be verified via third- party verification or other forms of supporting documentation and kept in the tenant’s file. In other years, tenants must, at a minimum, self-certify to their anticipated income (including income from assets), family size, and composition. As part of the monitoring process, all tenant files will be reviewed at initial occupancy of the project and every 3rd year thereafter. In between, ADU tenant files shall be reviewed for initial tenancy and/or unit turnover or when requested by the City. 1.13 Increases in Income The owner/agent must ensure that any household whose anticipated gross income exceeds 140% of the maximum income limit at recertification pays not less than the market or similar rent as the other non-ADUs in the development. A minimum notice of 60 days is required for increases to tenant rent. The unit must be marketed to eligible tenants when vacated. If the units are floating, the rent is increased, and the next available unit must be rented at affordable rates to an income eligible tenant. Conversely, the tenant whose income increase to above 140% of AMI could be relocated to a Market Rate unit if the affordable units are fixed. For units assisted with both AHP funds and Low Income Housing Tax Credits (LIHTC), a tenant is not considered over income until income exceeds the applicable 140% LIHTC limit. When a tenant’s income exceeds the 140% LIHTC limit, the tenant’s rent is adjusted to the LIHTC rent limit if the project is 100% LIHTC or, if the project is mixed income, to the market rent for similar non-ADUs in the property. 1.14 Property Standards The owner/agent must keep all units in compliance with local codes and other applicable state and local building codes to ensure the units are decent, safe, and sanitary at all times. 1.15 Affirmative Fair Housing Marketing Plan Owners/agents must adhere to Equal Opportunity, Affirmative Marketing, and Fair Housing practices in all marketing efforts, eligibility determinations and other transactions. The Equal Housing Opportunity logo or statement must be used in all advertising of vacant units (We do business in accordance with the Federal Fair Housing Law. It is illegal to discriminate against any person because of race, color, religion, sex, handicap, familial status, or national origin). In addition to the federal protections mentioned above, the Minnesota Human Rights Act makes it illegal to discriminate against any person with respect to housing and real property, because of race, color, creed, religion, national origin, sex, marital status, disability, status with regard to public assistance, sexual orientation or familial status. A file must be maintained with all marketing efforts related to the property including newspaper ads, social service contacts, photos of signs posted, etc. Records will be reviewed during on site monitoring to ensure that all efforts follow federal requirements and are being adequately documented. 1.16 Fair Lease and Grievance Procedures Fair lease and grievance procedures should be objective. They should clearly state: • To whom a tenant should direct a complaint; • Who will investigate and/or respond to the complaint; and • By when the tenant should expect to receive a response. 11 Chapter 2 – Maintaining the Unit Mix 2.1 Fixed Affordable Dwelling Units Properties with units that are not comparable in terms of size, amenities and features must have Fixed ADUs. Fixed ADUs means specific units are designated as the ADUs for the duration of the affordability period. Owner/Agent must maintain these specific units as the ADUs. Maintaining the required number of ADUs, is called complying with the unit mix requirements. At no time will non-ADUs be subject to AHP rent and income requirements when the ADUs are fixed. When an owner/agent recertifies a tenant’s income, the tenant’s income may have increased. A tenant is considered “over income” in the AHP when: • The tenant occupies an ADU and the tenant income increases to 140% of the current income limit for that family size; or • For ADUs that are also LIHTC units, a tenant is considered “over income” when its income goes over 140% of the qualifying tax credit election (Average Income, 50% or 60%) for that unit. When a tenant is over income, the unit that the tenant occupies is considered temporarily out of compliance with the AHP’s occupancy and unit mix requirements. Temporary noncompliance due to an increase in an existing tenant’s income is permissible if the owner/agent takes specific steps to restore the correct unit mix in the property as soon as possible. When the tenant’s income exceeds the AHP’s income limit (140%), the unit rent also must be adjusted. The owner/agent cannot terminate the lease immediately if the tenant’s income has increased above the AHP income limit. Instead, the owner/agent may extend /renew the lease for up to six months. If the tenant remains over income at the time of the next recertification, a 60-day notice to vacate may be issued to the tenant. If the tenant is determined to be under the AHP income limit at the time of recertification, the unit is considered back in compliance. 2.2 Floating Affordable Dwelling Units Properties with units that are comparable in terms of size, amenities and features can have Floating ADUs. Properties with floating ADUs must maintain the required number of ADUs throughout the POA; however, the initial ADUs do not have to remain as ADUs throughout the POA. When ADUs float, the specific units that carry the ADU designation may change, or float, among assisted and non-assisted units during the POA. If/when an initial ADU goes out of compliance due to a tenant’s income going over the AHP (or LIHTC) income limit, a non-ADU can replace the out of compliance ADU if the tenant income and unit rent of the non- ADU meet the ADU requirements. In other words, the ADU designation “floats” to another unit. For example, if a property has an over-income tenant in an ADU, when the next non-ADU comparable unit becomes available, it will be designated as an ADU and rented to an income eligible tenant. The unit occupied by the over income tenant is redesignated as a market rate unit. Maintaining the required number of comparable ADUs is called complying with the unit mix requirements. 12 When recertifying a tenant’s income, an owner/agent may find that the tenant’s income has increased. A tenant is considered “over income” when: • The tenant occupies an ADU and the tenant income increases over the current AHP income limit (140% AMI) for that family size; or • In ADUs that are also LIHTC units, a tenant is considered “over income” when its income increases to 140% or more of the qualifying tax credit election (50% or 60%) for that unit. When a tenant is over income, the unit that the tenant occupies is considered temporarily out of compliance with the AHP’s unit mix requirements. Temporary noncompliance due to an increase in an existing tenant’s income is permissible if the owner/agent takes specific steps to restore the required unit mix in the property. The rents of the over income tenants can be adjusted. When redesignating units in a property with floating ADUs, owner/agent can choose to substitute a unit that is equal or “greater” than the original ADU, but generally they cannot substitute one that is “lesser”. A lesser unit can be substituted only when doing so preserves the original unit mix. A greater unit is one that might be considered preferable because of larger size or additional bedrooms. The goal is to maintain the same number and type of ADUs as were designated originally. Therefore, if an owner/agent makes a substitution that is “greater,” it later can substitute an available unit that is “lesser” to restore the original unit mix. Once a comparable non-ADU unit is designated as the new ADU, the unit with the over income tenant is redesignated as a non-ADU or market rate unit. At this point, the owner/agent may adjust the tenant’s rent without regard to the AHP rent requirements (although requirements from other funding sources still may apply). Rent increases are subject to the terms of the lease. Note, a tenant in a floating ADU whose income exceeds AHP income limit is not required to pay more than the market rent for a comparable, unassisted unit in the property. The owner/agent cannot terminate the lease based on the tenant’s increase in income. 13 Chapter 3 – General Occupancy Guidelines 3.1 Qualification of Applicants Applicants for ADUs shall be advised early in their initial visit to the property that there are maximum income limits that apply to these units. They also will be made aware that the anticipated income of all persons expecting to occupy the unit must be verified and included on a Resident Income Certification form prior to occupancy, and that tenant income and student status will be reviewed annually. If an individual is enrolled as a student at an institution of higher education, is under the age of 24, is not a veteran, is not married, is not a person with disabilities, and does not have a dependent child, in order to be eligible for a ADU, the student must be individually income eligible and the student’s parents (the parents individually or jointly) must be income eligible unless the student can demonstrate his or her independence from parents. AHP has adopted the Section 8 Housing Choice Voucher program restrictions on student participation found at 24 CFR 5.612, which exclude any student that: 1. Is enrolled in a higher education institution. 2. Is under the age of 24. 3. Is not a veteran of the US Military. 4. Is not married**. 5. Does not have a dependent child(ren). 6. Is not a person with disabilities. 7. Is not otherwise individually eligible, or has parents who, individually or jointly, are not eligible on the basis of income. **Effective August 23, 2013, same-sex marriages are recognized as marriages for student eligibility purposes. To determine a student’s independence from his or her parents, the owner should consider all of the following: 1. The individual must be of legal contract age under state law; and 2. The individual must have established a household separate from parents or legal guardians for at least one year prior to application for occupancy, or the individual must meet the U.S. Department of Education’s definition of an independent student; and 3. The individual must not be claimed as a dependent by parents or legal guardians pursuant to IRS regulations; and 4. The individual must obtain a certification of the amount of financial assistance that will be provided by parents, signed by the individual/s providing the support. This certification is required even if no assistance will be provided. To document a student’s independence from parents: 1. Review and verify previous address information to determine evidence of a separate household, or verify the student meets the U.S. Department of Education’s definition of “independent student”; and 2. Review prior year income tax returns to verify if a parent or guardian has claimed the student as a dependent (except if the student meets the Department of Education’s definition of “independent student”); and 3. Verify income provided by a parent by requiring a written certification from the individual providing the support. Certification is also required if the parent/s is providing no support to the student. Financial assistance that is provided by persons not living in the unit is part of annual income. Verification of student eligibility must be maintained in the tenant file along with the income certification. 14 3.2 Eligibility Determination A fully completed Household Questionnaire is critical to an accurate determination of eligibility. The information furnished on the application should be used as a tool to determine all sources of anticipated income and assets. After the tenant completes the Household Questionnaire, the owner/agent must have all income verified by obtaining source documentation (award letters, offers of employment, W- 2’s, check stubs (not paycheck), bank statements, investment records, etc.) or by a third-party (public agency, employer, financial institution). If total cash value of assets is less than $50,000, assets can be self-certified using the Under $50,000 Certification. Assets exceeding $50,000 must be third-party verified. The application, income and asset verifications, and lease are to be executed prior to move in. All occupants in an ADU must be certified and have a valid lease on file. All household members age 18 and over must sign all required documents. 3.3 Change in Household Composition If a tenant in an ADU (no LIHTC) wishes to have an additional person move into the unit within the first 6 months of occupancy, the following steps must be taken: 1. The prospective tenant must complete a Household Questionnaire and allow time for verification of income and assets as required of the initial tenant; and 2. The prospective tenant's income must be added to the current tenant's certification and a determination made as to whether the new household is still within the AHP income guidelines. If the new household income exceeds the guidelines, then once proper notice is given, the tenant must pay the market rate. If the ADU is floating, the ADU designation must be floated to another eligible unit. The new rent of the now over income household cannot exceed market rent for a comparable unassisted unit. The tenant file shall also be documented when any household member vacates the unit. 3.4 Minimum Lease Requirements Initial tenant leases, including a signed and dated AHP lease addendum (if applicable), must be on file and must specify a term of at least 12 months. Subsequent leases may have a shorter term, with written mutual agreement. Leases must not contain any of the prohibited lease terms. Any non-renewal or termination of leases must be in accordance with the lease and/or AHP lease addendum. Owners/agents must comply with the lease requirements found in Section 601 of the Violence Against Women Reauthorization Act (VAWA) of 2013. HRA highly encourages owners/agents to use the VAWA Lease Addendum, form HUD-91067 or its successor VAWA Lease Addendum form. In general, owner/agent may not construe an incident of actual or threatened domestic violence, dating violence, sexual assault, or stalking as a serious or repeated violation of a lease term by the victim, or threatened victim, as good cause for terminating tenancy. However, in accordance with VAWA 2013, owner/agent may bifurcate a lease to terminate the tenancy of an individual who is a tenant or lawful occupant and engages in criminal activity directly relating to domestic violence, dating violence, sexual assault, or stalking against another lawful occupant living in the unit or other affiliated individual as defined in the VAWA 2013. Owner/Agent should include a copy of HUD-5382 form with each tenancy termination or eviction notice to allow an individual to certify that he or she is a victim of domestic violence, dating violence, sexual assault or stalking. The form is to be completed and submitted to owner/agent within 14 business days or an agreed upon extension date for the individual to receive protection under the VAWA. 15 3.5 House Rules Developing a set of house rules is a good practice. The decision about whether to develop house rules for a property rests solely with the owner/agent. If house rules are listed in the lease as an attachment, then they must be attached to the lease. By identifying allowable and prohibited activities in housing units and common areas, the owner/agent provides a structure for treating tenants equitably and for making sure tenants treat each other with consideration. House rules also are beneficial in keeping properties safe and clean and making them more appealing and livable for the tenants. They also are extremely beneficial if it becomes necessary to evict a tenant for inappropriate behavior. For more information on House Rules, refer to Chapter 6-9 of the HUD 4350.3 REV 1, Change 4 Handbook. 3.6 Number of Persons Per Unit There is no federal regulation governing the number of persons allowed to occupy a unit based on size; however, at initial occupancy ADUs will have a minimum requirement of at least one person per bedroom. It is important, though, to be consistent when accepting or rejecting applications. It is required that the owner/agent determine the minimum and maximum number of people that will be allowed to occupy each size unit and put that formula in writing as part of the Tenant Selection Plan and submit the Plan to the HRA or designated agent for approval. The owner/agent may refer to the HUD Handbook 4350.3 REV 1, Change 4, Chapter 3-23, regarding occupancy standards. By following the standards described, owners/agents can ensure that applicants and tenants are housed in appropriately sized units in a fair and consistent manner. 3.7 Tenant Selection Plan Owner/Agent must develop a formal written policy that clearly states the procedures and criteria the owner/agent will consistently apply in drawing applicants from the waiting list, screening for suitability for tenancy, and implementing income targeting requirements. The Tenant Selection Plan must state if there is an elderly restriction (“seniors only” building). In accordance with the VAWA of 2013, the selection criteria cannot deny admission on the basis that the applicant has been a victim of domestic violence, dating violence, sexual assault or stalking. Owner/Agent should provide to each applicant/tenant HUD form 5382or its successor form to allow the applicant/tenant to provide information regarding his or her status as a victim of domestic violence, dating violence or stalking. Owners/agents may refer to the HUD Handbook 4350.3 REV 1, Change 4, Chapter 4, when developing a tenant selection plan. HRA will review the Tenant Selection Plan as part of its monitoring process. 3.8 Government Data Practices Act Disclosure Statement Form In working with applicants and tenants, the owner/agent warrants compliance with applicable data privacy laws and regulations including the Minnesota Government Data Practices Act, which sets policies on the information that can be obtained, stored and/or released in connection with public programs. To comply with this law, the AHP Government Data Practices Act Statement form must be kept in each tenant's permanent file. Note that this is not a release authorization for verification of income and assets and must not be used as such. Each adult household member’s name must be printed clearly at the top in the box provided. An unsigned and/or undated form is not valid and will be noted as insufficient at time of file inspection. 1. The form is to be signed one time and is valid as long as the resident lives at the property and participates in the program(s) identified in item #2 on page 1 of the form. If a resident moves from one unit to another, the original signed and dated form should be moved to the file for the new unit. A copy should be kept in the move out file for the old unit. 2. A valid form must include all relevant attachments. Some properties or units within a property may require 2 or more attachments for multiple programs. 16 3. Only one form is needed per unit as long as the head of household, spouse, co-head, and all household members over the age of 18 have signed and dated the form. 4. If an adult is added to the household or a minor reaches age 18, they must be added to, sign, and date the original form. It is not necessary to complete a new form. 5. A copy of the form should be made available to the applicant/tenant. It is acceptable to give them an unsigned copy. 6. For new residents, the form should be completed at the time of initial application. A Government Data Practices Act Disclosure form that can be used for all ADUs is available on the HRA website. 3.9 Income Verification At initial occupancy, owner/agent must determine whether prospective tenant(s) of ADUs qualify as low income households. Income eligibility is based on anticipated income as defined at 24 CFR 5.609 (Section 8). When collecting income verification documentation, owner/agent must consider any likely changes in income. Owner/Agent must follow appropriate steps in determining whether households are eligible prior to admittance. Minnesota Housing provides sample verifications and other forms to assist owners/agents in qualifying eligible tenants. The release of information (at top of form) must be completed and signed by the person who is the subject of the verification prior to sending the form to an employer or other income source. Completed and returned verifications are used to calculate and document income. An Income and Asset Calculation Worksheet form also is available and can be used to assist in showing the individual calculations of income and asset income. This is highly recommended and will assist an inspector during a file review. This form should be dated and signed by the owner/agent. 3.10 Gross Annual Household Income Gross annual income for households living in ADUs shall be determined in a manner consistent with Section 8 of the U.S. Housing Act of 1937, also known as Part 5 Definition of Income. Note that the information below only provides a summary. Owners and managers must use current circumstances to project income, unless verification forms or other verifiable documentation indicate that an imminent change will occur. For guidance in this section and in determination of tenant income, the HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, is used and is recommended as a reference guide. The HUD Handbook 4350.3 and HUD notices can be obtained by visiting HUD’s website. The determination of annual income must include all types of income in the amount anticipated to be received by the tenant in the 12 months following certification/recertification. Owner/Agent should use current circumstances to project income, unless verification forms or other verifiable documentation indicate that a change will occur (increase/decrease in rate of pay and/or hours). However, if the owner/agent is unable to determine annual income using current information because the family reports little to no income, or because income fluctuates, the owner/agent may average past actual income received or earned within the last 12 months before the certification date to calculate annual income. 17 3.11 Factors that Affect Household Size When determining family size for occupancy, the owner/agent must include the following individuals who currently are not living in the unit: • Children temporarily absent due to placement in a foster home; • Children in joint custody arrangements who are present in the household 50% or more of the time; • Children who are away at school but who live with the family during school recesses; • Unborn children of pregnant women. When a pregnant woman is an applicant, the unborn child is included in the size of the household and is included for purposes of determining the maximum allowable income. The rental application should ask the following question: “Will there be any changes in household composition within the next 12-month period?” If an applicant answers that a child is expected (birth, foster or adoption), the owner/agent should explain to the applicant this is an additional household member and use the corresponding income limit, and self-certification of additional member should be used as documentation within the initial certification. • Children who are in the process of being adopted; • Temporarily absent family members who still are considered family members. For example, the owner/agent may consider a family member who is working in another state on assignment to be temporarily absent. Persons on active military duty are considered temporarily absent (except if the person is not the head, co-head or spouse or has no dependents living in the unit). If the person on active military duty is the head, co-head, or spouse, or if the spouse or dependents of the person on active military duty resides in the unit, that person’s income must be counted in full; • Family members in the hospital or rehabilitation facility for periods of limited or fixed duration. These persons are temporarily absent as defined above. Persons permanently confined to a hospital or nursing home are not considered household members. When determining family size for establishing income eligibility, the owner/agent must include all persons living in the unit except the following: • Live-in aides • Children of live-in aides A live-in aide/attendant is a person who resides with one or more elderly persons, near-elderly persons, or persons with disabilities, and who: • Is determined to be essential to the care and well-being of the person(s); • Is not obligated for the support of the person(s); and • Would not be living in the unit except to provide the necessary supportive services. While a relative may be a live-in aide/attendant, s/he must meet the above requirements, especially the last. The live- in aide qualifies for occupancy only if the individual needing supportive services requires the aide’s services and remains a tenant. The live-in aide may not qualify for continued occupancy as a remaining family member. The owner/agent must obtain verification from the person’s physician, psychiatrist or other medical practitioner or health care provider that the live-in aide is needed to provide the necessary supportive services essential to the care and well-being of the person and should not add the attendant to the lease. The owner/agent may not require applicants or tenants to provide access to confidential medical records or to submit to a physical examination. Some households may include other persons who are considered family members for the purposes of determining household size and income eligibility, including: • Foster adults • Foster children Chapter 5 of HUD’s Occupancy Handbook has more detail on whose income is counted, what is counted as income and 18 what is not, and how to account for income generated by assets. 3.12 General Income Verification Requirements All income and asset sources must be disclosed on the eligibility application and verified. A properly completed application must be used as the basis for determining what verifications will be necessary. The application, along with all supporting documentation and the Resident Income Certification, will be reviewed by HRA staff or its agent during a tenant file review. The following describes the types of third-party verification in order of acceptability: 1. Third-party verification from source (written): An original or authentic document generated by a third-party source that is dated within six months from the date of receipt by the owner/agent. Documents may be in possession of the tenant (or applicant), and commonly are referred to as tenant provided documents. These documents are considered third-party verification because they originated from a third-party source. Examples of tenant provided documentation that may be used include, but are not limited to paystubs, payroll summary report, employer notice/letter of hire/termination, SSA benefit letter, bank statements, child support payment stubs, welfare benefit letters and/or printouts, and unemployment monetary benefit notices. Owner/Agent must consider the following when using tenant provided documentation: i. Is the document current? Documentation of public assistance may be inaccurate if it is not recent and does not show any changes in the family’s benefits or work and training activities. ii. Is the documentation complete? Owner/Agent may accept pay stubs to document employment income only if the applicant or tenant provides the most recent two months of consecutive pay stubs to illustrate variations in hours worked. Actual paychecks or copies of paychecks should never be used to document income because deductions are not shown on the paycheck. iii. Is the document an unaltered original? The greatest shortcoming of tenant provided documents as a verification source is their susceptibility to undetectable change through the use of high quality copying equipment. Documents with original signatures are the most reliable. Photocopied documents generally cannot be assumed to be reliable. 2. Written documentation sent directly to the third-party source by mail or electronically by fax, email or internet. Verification forms must contain a release authorization signed by the applicant/tenant. Do not use a blanket release authorization as this entitles the owner/agent to obtain information to which it is not entitled or needed for eligibility determination. The Data Practices Act Disclosure Statement is not a verification release. Applicants should be asked to sign two copies of each verification form. The second copy may be used if the first request has not been returned in a timely manner. Income verification requests must be sent directly to and from the source. They are never given to the tenant to obtain signatures. If the returned verifications do not contain complete information, owner/agent must follow up with the source to obtain complete information. Typical examples include failure to indicate interest rates, dates of anticipated raises, amounts of anticipated raises, etc. All pertinent information must be documented in the file and must also include the name, phone number and title of the contact, the name of the person accepting the information, and the date. The single form AHP Eligibility Verification may be used to document income and asset eligibility in lieu of separate verification(s) for each separate income or asset source if the sole source of income is Housing Support. The AHP Eligibility Verification confirms receipt of Housing Support (formally known as GRH) since it identifies that the applicant is in fact qualified for income-based Medical Assistance (MA) through Minnesota’s Department of Human Services. (Housing Support recipients must have MA prior to obtaining housing grant funding). MA eligibility documents AHP eligibility because the Federal Poverty Guidelines (FPG) are significantly less than the LIHTC income limits. NCCP.org (NCCP.org/tools/converter/) defines poverty as a family income less than 100 percent of the federal poverty 19 threshold, as determined by the U.S. Census Bureau; Low Income is defined as family income less than 200 percent of the poverty threshold. 3. Third-party verification from source (verbal). When clarifying information over the telephone, it is important to be certain that the person on the telephone is the party he or she claims to be. Generally, it is best to telephone the verification source rather than to accept verification from a source calling the property management office. Verbal verification must be documented in the file. When verifying information by phone, the owner/agent must record and include in the tenant’s file the following information: a. Third-party’s name, position, and contact information; b. Information reported by the third-party; c. Name of the person who conducted the telephone interview; and d. Date and time of the telephone call. 4. Self-Certification An owner/agent may accept a tenant’s notarized statement or signed affidavit regarding the veracity of information submitted only if the information cannot be verified by another acceptable verification method. In these instances, the owner/agent must document the file why third-party verification was not available. The owner/agent may witness the tenant signature(s) in lieu of a notarized statement or affidavit. The following describes use of electronic information when used as third-party verification. Electronic Verification. The owner/agent may obtain accurate third-party written verification by facsimile, email, or Internet, if adequate effort is made to ensure that the sender is a valid third-party source. a. Facsimile. Information sent by fax is most reliable if the owner/agent and the verification source agree to use this method in advance during a telephone conversation. The fax should include the company name and fax number of the verification source. b. Email. Similar to faxed information, information verified by email is more reliable when preceded by a telephone conversation and/or when the email address includes the name of an appropriate individual and firm. c. Internet. Information verified on the Internet is considered third-party verification if the owner/agent is able to view web-based information from a reputable source on the computer screen. Use of a printout from the Internet may also be adequate verification in many instances. Steps used to obtain written verification as described in 1, 2 and 3 above must be documented to show just cause for using other types of verification. The owner/agent must include the following documents in the tenant file: 1. A written note explaining why third-party verification is not possible, signed and dated by the applicant/resident. 2. A copy of the date-stamped original request that was sent to the third-party. 3. Written notes or documentation indicating follow up efforts to reach the third-party to obtain verification. 4. A written note indicating the request has been outstanding without a response from the third-party. Note: If a tenant is employed by a business owned by the tenant's family or is employed by the property owner/agent or the management company, a copy of a recent pay stub verifying year- to- date earnings also is required. Upon receipt of all verifications, owner/agent must determine if the resident is qualified for participation in the AHP. All verifications should be reviewed, and calculations made as necessary. 20 3.13 Corrections to Documents Sometimes it is necessary to make corrections or changes to documents. A document that has been altered with correction fluid or "white out" will not be accepted by HRA. When a change is needed on a document, the person making the correction must draw a line through the incorrect information, write or type the correct wording or number, and have all parties initial and date the change. 3.14 Effective Term of Verifications Verifications of any kind are valid for 6 months prior to an ADU tenant’s move in date or recertification date. 3.15 Over Income Households When determining eligibility to occupy an ADU, the household's gross income must always be considered. However, if a tenant goes over the income guidelines of 140% of household income at recertification, the owner/agent must raise the over income tenant’s rent to reflect Fair Market Rent or relocate tenant to a Market Rate Unit as soon as the lease permits in accordance with the terms of the lease (see Chapter 2). The AHP does not require interim rent adjustments. 3.16 Annual Recertification All households occupying an ADU must be recertified at least annually from the date of occupancy. Annual recertifications must be effective on or before the occupancy anniversary date of the previous certification. Owner/Agent may align recertification dates with other program certifications or so that all units in the property are recertified at one time during the year. However, if a period of twelve (12) months passes without a recertification being completed for any ADU, the unit is considered out of compliance. Owner/Management may request an annual schedule whereby all tenants are recertified during the same month however before making changes to schedule, an email request must be made, and approved by the City first. The requirement to recertify is included in an ADU lease or addendum, tenant refusal to comply can be considered a violation of the lease and is grounds for termination. Income must be third-party verified in every 3rd year of the project’s affordability period, not tenancy. Example: Every Third Year Full Certification Property ABC received Certificate of Occupancy on 11/1/2019 • Period of Affordability (POA) for Property ABC will be a total of 15 years starting on 11/1/2019 and ending on 11/1/2034 Amanda Johnson Moved onto Property ABC on 12/1/2019 In 2019 (POA Year One): Management verifies income using SSA Benefits Award Letter, a copy of Amanda’s current PERA Benefit Letter (Pension Public Employees Retirement Association of Minnesota) and Under $50,000 Asset Verification to determine eligibility at Move In. All items must be third-party verified using source documents. In 2020 (POA Year Two): Amanda Johnson needs to complete her Annual Recertification. In POA Year Two for Property ABC, a self- certification of income and asset, signed by all adult household members is acceptable during this “non-3rd year”. Note: Move In certifications for eligibility must always third-party verify using source documents. In 2021 (POA Year Three): Amanda Johnson needs to complete her Annual Recertification. In POA Year Three for Property ABC, a self-certification of income and asset, signed by all adult household members is acceptable during this “non-3rd year”. Note: Move In certifications for eligibility must always third-party verify using source documents. In 2022 (POA Year Four): The Annual Recertification requirement for this POA year at Property ABC states all income and assets reported by a household must be third-party verified using source documents. A Self-Certification of Income & Asset is not eligible for use for any ADU at Property ABC 3.17 Tenant Files 21 Owner/Agent must maintain a tenant file for each ADU. All permanent documents must be kept together so they are accessible at each compliance review. Annual recertification information must be grouped together by year, with the most recent year on top for review. Tenant records, including income verifications and development rents must be retained for the most recent three-year period after the tenant moves out. Below is a guide for organizing and preparing tenant files for review Income eligibility documents required for review: ☐ Detailed Calculation Worksheet ☐ Household Questionnaire/Tenant Application ☐ Student Eligibility for each year of occupancy ☐ Income Verifications: 3rd party or source documents (required for initial eligibility and every 3rd year of POA) Self-certification (accepted on “off years”, except initial eligibility) ☐ Asset Verifications: 3rd party, source documents (required for initial eligibility and every 3rd year of POA) or Under 50K Cert Self-certification (accepted on “off years”, except initial eligibility) ☐ PHA Verification (alternative annual income total from PHA, not accepted for initial eligibility) ☐ Documentation of phone conversation or clarification ☐ Correct Government Data Practices Act Form Other documents required for review: ☐ Leases: Initial lease and most recently signed by HH ☐ Lease addendum requiring cooperation with annual recertification process ☐ Notice to HH of rent change ☐ Tenant Ledger (with all charges/payments reflected, including rent assistance (subsidy), non-optional lease charges, fees, etc.) ☐ VAWA Addendum ☐ Lead Based Paint (LBP) disclosures and receipt of LBP pamphlet (for pre-1978 projects only) ☐ AHP Resident Notification/Good Cause Rider ☐ Notes to File (if applicable) Correspondence/special circumstances required for review: ☐ If recert was late, file contains copies of recertification notices to HH and related HH response or correspondence. ☐ If unit is vacant, provide most recent recert from previous HH plus documentation of HH's notice to vacate, or owner's notice to HH of non-renewal/termination of lease for good cause. 22 Chapter 4 – Reporting Requirements The owner/agent must maintain a report of all tenants residing in each ADU at the time of application through the end of the affordability period and must submit annual reports to HRA in a form and manner requested by HRA. Annual compliance reports are due to HRA by March 1 or as otherwise specified by HRA, of each year during the affordability period. If the due date falls on a weekend or a holiday, reports are due the following business day. Reports and other required documents must be submitted as directed by HRA on an annual basis. 4.1 Annual Owner/Agent Certifications Complete the Owner/Agent Certification to certify compliance with AHP requirements for the preceding calendar year. Owner/Agent Certifications must be printed, signed and dated by the authorized Owner/Agent Representative, then scanned and submitted as directed by HRA. 4.2 Compliance Reports HRA or designated agents will monitor AHP compliance by reviewing annual Owner/Agent Certifications and analyzing compliance information submitted by the owner/agent. Failure to submit the Owner/Agent Certification and/or update the report on all units and their related activity by the due date will constitute noncompliance with the AHP and the related loan documents. 4.3 Utility Allowance Source Document Owners/Agents must submit the utility allowance source documents applicable to the reporting period. Multiple utility allowance source documents may apply to one reporting period. 23 Chapter 5 – Compliance Inspections Compliance inspections involve annual review of reports for rent and income compliance and review of tenant files as required (move in and/or turnover). For new projects, an initial review of all ADU tenant files shall be done. After initial review, ADU tenant files shall be reviewed for initial tenancy and/or unit turnover or when requested by the City. Limited off-site technical assistance will be provided and owners/managers will be notified of any changes to compliance requirements e.g. updated income and rent limits and updated utility allowances. 5.1 Physical Inspections The Affordable Housing Program does not mandate inspections. The City’s Inspectors will perform building inspections as stipulated in the Rental Licensing requirements. 5.2 Review of Tenant Files and Property Records During the tenant file review, HRA staff will review Resident Income Certifications, third-party verifications or other forms of income documentation, leases, lead based paint disclosure forms, and other management information for selected units. HRA staff will also review the following property information: • Utility Allowances and supporting documentation • Current written tenant selection plan, occupancy policy and/or house rules if changes were made since the last review • Current lease and lease addenda/agreement(s) • Affirmative Fair Housing Marketing Plan/Marketing Plans • Advertising and marketing materials • Equal Housing Opportunity posters, logos • Correspondence • Resident rent ledgers for all units inspected 24 Chapter 6 – Correction and Consequences of Non-Compliance If HRA does not receive the required certifications and/or compliance reports when due, or discovers by audit, inspection, or review, or in some other manner, that the property is not in compliance with the requirements of the AHP, or with the property’s loan documents, including the enforcement agreement, the HRA will notify the owner/agent as soon as possible. 6.1 Notice to Owner/Agent HRA or its designated agent will provide prompt written notice to the owner/agent of an AHP property if HRA does not receive the annual Owner/Agent Certification and income and occupancy report by the required due date. HRA or its designated agent also will notify the owner/agent if it does not receive or is not permitted to inspect the Resident Income Certifications, supporting documentation, and rent records, or discovers by inspection, review, or in some other manner, that the property is not in compliance with the requirements of the AHP or with the property’s loan documents, including the enforcement agreement. 6.2 Correction Period A correction period of 30 days will be set forth in a Notice of Noncompliance to the owner and its agent. HRA may extend the correction period if HRA determines there is good cause for granting the extension. Requests for an extension must be in writing from the owner/agent, must be received by HRA no later than the last day of the correction period identified on the Notice of Noncompliance, and must include an explanation of the efforts to correct the noncompliance and the reason the extension is needed. 6.3 Owner’s/Agent’s Response HRA will review the owner’s/agent’s response and supporting documentation, if any, to determine whether the noncompliance has been clarified, corrected, or remains out of compliance. Clarified noncompliance is, for example, where income eligibility was not properly documented, and during the initial review a reasonable determination of compliance cannot be made. The owner/agent conducts a retroactive (re)certification which completely and clearly documents the sources of income and assets that were in place at the time the certification should have been effective and applies income and rent limits that were in effect on that date. If documentation is complete and supports that the tenant was eligible as of the effective date, the file is considered clarified. Corrected noncompliance is when a violation is observed and there is a period of time during which the unit is out of compliance, but the unit is brought back into compliance. For example, a late certification or re-certification is out of compliance on the certification due date, and back in compliance as of the date the last household member signs a retroactive Income Certification. Uncorrected noncompliance is a violation that is not corrected or clarified by the end of the correction period. Failure to correct all noncompliance could result in extension of the end of the POA, loss of Tax Increment Financing, or LURC tax treatment or other legal remedies. Persistent noncompliance also may impact the owner’s/agent’s eligibility for future financing from the HRA under any or all its programs. 25 Chapter 7 – Requests for Action 7.1 Sale or Transfer Any property owner must provide prior written notice to the HRA before sale or transfer of the property. The notice will provide that the new owner/agent acknowledges that the terms and conditions of the Affordable Housing Program as set forth in the governing documents recorded against the property remain in place. The CITY ofEDINA Fred II 4620 77th Street West. Term Sheet July 21, 2022 The CITY ofEDINAToday’s Request: EdinaMN.gov 2 1.Up to $9,351,000 in gap financing. 2.Source of the loan: 1.-Pentagon Park pooled TIF funds 2.-SPARC 3.Approve Term Sheet The CITY ofEDINA •Underutilized Site: •60s era office building •Surface parking lot •Adjacent to Fred Richards Park •Within Greater Southdale Area and Pentagon Park Redevelopment District •Along Transit Corridor Current Conditions EdinaMN.gov 3 The CITY ofEDINADevelopment Proposal •276 New Housing Units -28 unit Affordable not to exceed 50% AMI rent levels -110 additional units not to exceed 120% AMI rent levels -Currently all units meet criteria, with many below 80% thresholds •Access to Fred Richards Park EdinaMN.gov 4 The CITY ofEDINA EdinaMN.gov 5 The CITY ofEDINA Sources Equity $14,534,000 17% Debt $61,418,000 72% TIF Pooled $ 7,351,000 9% SPARC $ 2,000,000 2% TOTAL $85,303,000 Uses Land Acquisition $ 5,206,000 Soft Costs $ 4,300,000 Construction Costs $63,553,043 Contingency $ 3,250,000 Developer Fee $ 3,202,988 Financing Fees $ 5,790,569 TOTAL $85,303,000 Estimated Sources and Uses EdinaMN.gov 6 The CITY ofEDINASource 1: Pentagon Park TIF District Pooled Funds Site is within 2014 TIF District established to assist phased redevelopment of the area Up to $7.351 Million –Pay -Go Note •Payable from surplus TIF proceeds not committed to Pentagon South redevelopment agreement •Reimburses the developer’s extraordinary redevelopment costs specific to this site •Soil corrections •Storm water features •Public streets and sidewalks •Demolition and other eligible costs •Complies with Rationale for the TIF District EdinaMN.gov 7 The CITY ofEDINA In 2021, State Legislation enabled transfer of unobligated increment to assist private development •SPARC Fund created: spending plan adopted November 16, 2021 Up to $2 Million –Forgivable Loan •Used to reimburse construction costs of Public Right of Way to Fred Richards Park. •Complies with spending plan. •Funds on hand Source 2: SPARC EdinaMN.gov 8 The CITY ofEDINA •Timeline: Anticipate full site plan approvals by April 2023; construction commencing July 2023, and completion November 2024. •Public Assistance:Must meet “But-for” test; Assistance to come from Pentagon Park TIF pooling and SPARC directed towards eligible costs. •Loan Terms:SPARC used as draw loan for direct reimbursement during construction; Forgivable upon delivery of easement and CoC . •Pay -Go Note:Issued upon CoC and verification of costs and reasonable market returns •-Payable from Pentagon Park TIF pooling capacity only •-Additional lookback/clawback provisions upon any sale Term Sheet Summary EdinaMN.gov 9 The CITY ofEDINA SPARC Funds •Pedestrian Plaza •Monument signage and way finding •Public Access Road to Park •Plaza area Stormwater System •Soil Correction in Public Areas TIF Pooled Funds •Stormwater System •Sustainability Certification •Increased Costs dues to Soil Conditions •Site Preparation •Fire Access Road •HRA Costs Term Sheet: Eligible Expenses* EdinaMN.gov 10 * HRA Assistance amounts will be offset by any grants received on behalf of the project (TBD) The CITY ofEDINATerm Sheet: Public Benefits EdinaMN.gov 11 Adherence to New Multifamily Affordable Housing Policy by providing 10% of units (28 units) to serve households with incomes at or below 50% of AMI. Non “affordable” units are on the lower price end of market rate, thus filling a gap that is not being served by most market rate developments Adherence to new Sustainability Policy including EV sharing stalls and creating a cost effective and energy minimizing design. Includes public access to Fred Richard park through road and plaza. Access to public transit and multi-modal trails. Adherence to Southdale Design Experience Guidelines by dividing the parcel into two separate uses with expanded greenspace and provide vastly improved connections to Fred Richard Park (TBD). The CITY ofEDINA Questions? EdinaMN.gov 12