HomeMy WebLinkAbout2022-12-08 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, Decem ber 8, 2022
7:30 AM
Watch the meeting on cable TV or at EdinaMN.gov/LiveMeetings or Facebook.com/EdinaMN.
To Participate in Comm unity Comm ent
Call 786-496-5601
E nter Conference PIN 5221053#
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 Min u tes of Regular Meeting Novem ber 17, 2022
B.Approve 2023 Calenda r of Meetin g a n d Religiou s Observance Dates
C.Approve E n tering into a Ma ster Services Agreem en t with Th e Fina n cial
Services Consu lting Group
D.Req u est for Purch ase: Cha n ge Order #1 E d en Aven u e Landsca p ing
E.Req u est for Purch ase: Cha n ge Order #1 E d en Aven u e Im provem ents
F.Req u est for Purch ase: Cha n ge Order #1 Gra n d view Pedestria n Brid ge
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.Approva l of Redevelop m ent Agreem en t for Multifam ily Housing at 4620 W est
77th Street
B.Approve Am en d m ents to New Multifam ily A.ord able Housing Policy
VIII.Executive Director's Com m ents
IX.HRA Com m issioners' Com m en ts
X.Ad jou rn m ent
Th e E d ina Housing a n d Redevelop m ent Au thority wa n ts all pa rticip ants to be
com fortable b ein g pa rt of th e p u b lic p rocess. If y ou n ee d a ssista n ce in the w a y of
h ea ring am pli@ca tion, a n in terp reter, large-p rint docum en ts or som ethin g else,
p lease ca ll 952-927-8861 72 hou rs in advance of the m eeting.
Date: December 8, 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 H R A meeting.
Date: December 8, 2022 Agenda Item #: VI.A.
To:C hair & C ommis s ioners of the Edina HR A Item Type:
F rom:
Item Activity:
Subject:Draft Minutes of R egular Meeting November 17,
2022
Action
Edina Housing and Redevelopment
Authority
Established 1974
C ITY O F E D IN A
HO US I NG & R EDEVELO P MENT
AUT HO R I T Y
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
A C TI O N R EQ U ES TED:
Approve the draft minutes of regular H R A meeting November 17, 2022
I N TR O D U C TI O N:
AT TAC HME N T S:
Description
Draft Minutes of Regular Meeting November 17, 2022
Page 1
MINUTES
OF THE REGULAR MEETING OF THE
EDINA HOUSING AND REDEVELOPMENT AUTHORITY
NOVEMBER 17, 2022
7:30 A.M.
I. CALL TO ORDER
Chair Hovland called the meeting to order at 7:32 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.
VI. CONSENT AGENDA ADOPTED - AS PRESENTED
Member Jackson made a motion, seconded by Member Pierce, approving the consent
agenda as presented:
V.A. Approve Draft Minutes of the Regular Meeting of October 13, 2022
V.B. 4040 W. 70th Acquisition Loan Forgiveness
V.C. Certificate of Completion – Brainerd Enterprises LLC dba Mann Theaters
Rollcall:
Ayes: Anderson, Jackson, Pierce, and Hovland
Motion carried.
VII. REPORTS AND RECOMMENDATIONS
VII.A. LOAN AGREEMENT WITH EDINA CHAMBER OF COMMERCE - APPROVED
Economic Development Manager Neuendorf said this item pertained to funding to support
renovation and re-occupancy of a portion of vacant commercial property. This type of funding was
possible using the SPARC program. He shared the objectives and SPARC outcomes that included
support of entrepreneurial economy and small businesses, occupancy of a vacant office building, job
creation, and established revolving loan fund for future HRA projects. He shared a brief description
of the Lab with an $800,000 construction budget and anticipated loan amount of $650,000 to
$725,000 then noted they were unable to secure traditional debt financing. Mr. Neuendorf
summarized the loan terms of seven-year minimum with construction to be completed by June 2023
and repayment to begin June 2023 then reviewed a summary of loan forgiveness in detail. He said
when completed, the space would host a small business development facility that included the Edina
Innovation Lab and would be operated by the Edina Chamber of Commerce.
Lori Syverson, Edina Chamber of Commerce, thanked the Council for the opportunity to share
more on the proposed loan agreement. She shared their work with Edina Public Schools to
formulate an entrepreneurial program for students and their intent to work with the HRA planning
Minutes/HRA/November 17, 2022
Page 2
The Lab based on their goals and those of the City. She said they intended to offer The Lab to Edina
businesses but would be open to HRA’s input and said they had $105,000 pledged to date. Ms.
Syverson spoke about the impacts to businesses from COVID-19 and how things have changed
which resulted in ways to innovate and required strategic action from business leaders because
survival of businesses was at stake. She reviewed their revenue and expenses and said the pilot
program has been successful and was needed then shared what other cities were doing in the area
to build for the future.
Paul Moody, Edina Chamber of Commerce, presented more details on the proposal and the
importance of giving back to the community and being a partner with the community through an
organization that was believed in. He said Edina had a strong and healthy business community and
that The Lab would be a critical economic development tool.
Annette Wildenaur, Edina Chamber of Commerce, said she loved to watch businesses innovate and
grow and would work to create a roadmap to grow businesses to the next level. She said they had
people on a waiting list and would be governed under the Chamber and would include ownership
and leadership in any sector. She outlined the proposed curriculum that would be experiential
learning and include finance, marketing, human resources, strategic thinking, and more and said The
Lab would fill a need, was sustainable, and provided an ability to pivot.
The Council asked questions and provided feedback.
Motion by Commissioner Jackson, seconded by Commissioner Pierce, to approve loan
agreement with Edina Chamber of Commerce to establish the Edina Innovation Lab at
7201 Metro Avenue as presented.
Roll call:
Ayes: Anderson, Jackson, Pierce, and Hovland
Motion carried.
VII.B. UPDATED TAX INCREMENT FINANCING POLICY - APPROVED
Mr. Neuendorf stated his item pertained to the future use of Tax Increment Financing in Edina and
noted the policy was last updated in 2011. He reviewed the objectives of the updated policy which
would clarify the intent and purpose for when TIF could be used, clarified the review process, set
expectations, identified parameters, clarified minimum expectations for developers, and established
clear financial guidelines. He said the policy defined the public benefit for transformational change
which required a huge investment and included reporting for transparency. Mr. Neuendorf said the
parameters for a new district would limit the size and scope of a district and include community
engagement and early de-certification when possible. He outlined minimum expectations such as
public parking but not exclusively private parking and would include clear financial guidelines. He
said staff recommended the policy be updated to reflect current practice of using TIF only when
necessary to deliver public benefits and if approved would be forwarded to the City Council for
formal adoption.
The Council asked questions and provided feedback.
Motion by Commissioner Jackson, seconded by Commissioner Pierce, to approve the
updated policy to be followed when considering the use of Tax Increment Financing as
presented.
Roll call:
Ayes: Anderson, Jackson, Pierce, and Hovland
Motion carried.
VIII. EXECUTIVE DIRECTOR’S COMMENTS – Received
Minutes/HRA/November 17, 2022
Page 3
VIII.A. POTENTIAL PROGRAMS FOR SPARC FUND
VIII.B. HRA PROJECT STATUS UPDATE
VIII.C. PENTAGON VILLAGE LOT 4 UPDATE
VIII.D. STATUS REPORT ON IMPLEMENTING HOUSING STRATEGY TASK FORCE
RECOMMENDATIONS
IX. HRA COMMISSIONER COMMENTS – Received
IX.A. OPEN TO BUSINESS MID-YEAR REPORT
X. ADJOURNMENT
Motion made by Commissioner Pierce, seconded by Commissioner Jackson, to adjourn
the meeting at 9:07 a.m.
Roll call:
Ayes: Anderson, Jackson, Pierce, and Hovland
Motion carried.
Respectfully submitted,
Scott Neal, Executive Director
Date: December 8, 2022 Agenda Item #: VI.B.
To:C hair & C ommis s ioners of the Edina HR A Item Type:
R eport / R ecommendation
F rom:Liz O ls on, Administrative S upport S pecialist
Item Activity:
Subject:Approve 2023 C alendar of Meeting and R eligious
O bservanc e Dates
Ac tion
Edina Housing and Redevelopment
Authority
Established 1974
C ITY O F E D IN A
HO US I NG & R EDEVELO P MENT
AUT HO R I T Y
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
A C TI O N R EQ U ES TED:
Approve the 2023 calendar of meetings for the C ity C ouncil, C ommissions, and days of religious observance.
I N TR O D U C TI O N:
H R A B ylaws requires designation of a fixed place and determination of dates for regular meetings. M eeting
location and dates are:
M ost regular meeting location is in the C ouncil Chambers, City H all, 7:30-9 a.m.
M eetings dates for 2023 are:
Jan 5 and 19
F eb 2 and 16
M arch 9 and 23
April 13 and 27
M ay 18
June 8 and 22
July 20
Aug 10 and 24
S ept 14 and 28
Oct 12 and 26
Nov 16 and 30
Dec 14
Work S ession meetings are scheduled as needed and meeting location is the C ommunity R oom, C ity Hall,
7:30-8:15 a.m., generally. T he work session adjourns in the C ommunity R oom and the regular meeting
begins in the Council C hambers.
AT TAC HME N T S:
Description
2023 Meeting Calendar
JANUARY
Jan. 1 New Year’s Day
Jan. 2 New Year’s Day (observed)
Jan. 3 City Council
Jan. 5 Housing & Redevelopment Authority
Jan. 9 Community Health Commission
Heritage Preservation Commission
Jan. 10 Parks & Recreation Commission
Jan. 11 Planning Commission
Jan. 12 Energy & Environment Commission
Jan. 16 Martin Luther King Jr. Day
Jan. 17 City Council
Jan. 19 Housing & Redevelopment Authority
Transportation Commission
Jan. 24 Human Rights & Relations Commission
Jan. 25 Planning Commission
Jan. 26 Arts & Culture Commission
FEBRUARY
Feb. 2 Housing & Redevelopment Authority
Feb. 7 City Council
Feb. 8 Planning Commission
Feb. 9 Energy & Environment Commission
Feb. 13 Community Health Commission
Heritage Preservation Commission
Feb. 14 Parks & Recreation Commission
Feb. 16 Housing & Redevelopment Authority
Transportation Commission
Feb. 20 Presidents’ Day
Feb. 21 City Council
Feb. 22 Planning Commission
Feb. 23 Arts & Culture Commission
Feb. 28 Human Rights & Relations Commission
MARCH
March 7 City Council
March 9 Energy & Environment Commission
Housing & Redevelopment Authority
March 13 Community Health Commission
March 14 Heritage Preservation Commission
Parks & Recreation Commission
March 15 Planning Commission
March 16 Transportation Commission
March 21 City Council
March 23 Housing & Redevelopment Authority
March 28 Human Rights & Relations Commission
March 29 Planning Commission
March 30 Arts & Culture Commission
APRIL
April 4 City Council
April 5-7 Passover (Jewish)
April 7 Good Friday (Christian)
April 10 Community Health Commission
April 11 Heritage Preservation Commission
Parks & Recreation Commission
April 12 Planning Commission
April 13 Housing & Redevelopment Authority
Energy & Environment Commission
April 18 City Council
April 20 Transportation Commission
Board of Appeal and Equalization
April 22 Eid al Fitr (Muslim)
April 25 Human Rights & Relations Commission
April 26 Planning Commission
April 27 Arts & Culture Commission
Housing & Redevelopment Authority
MAY
May 2 City Council
May 4 Board of Appeal and Equalization
May 9 Heritage Preservation Commission
Parks & Recreation Commission
May 10 Planning Commission
May 11 Energy & Environment Commission
May 15 Community Health Commission
May 16 City Council
May 18 Housing & Redevelopment Authority
Transportation Commission
May 23 Human Rights & Relations Commission
May 24 Planning Commission
May 25 Arts & Culture Commission
May 29 Memorial Day
JUNE
June 6 City Council
June 8 Energy & Environment Commission
Housing & Redevelopment Authority
June 12 Community Health Commission
June 13 Heritage Preservation Commission
Parks & Recreation Commission
June 14 Planning Commission
June 15 Transportation Commission
June 19 Juneteenth
June 20 City Council
June 22 Arts & Culture Commission
Housing & Redevelopment Authority
June 27 Human Rights & Relations Commission
June 28 Planning Commission
June 29 Eid al-Adha (Muslim)
2023 Meeting Calendar Religious
Observance*Holiday City Council or Housing
& Redevelopment
Authority Meeting
Board or
Commission
Meeting(s)
Election Day**
Su Mo Tu We Th Fr Sa
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 20 21
22 23 24 25 26 27 28
29 30 31
19
Su Mo Tu We Th Fr Sa
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 17 18
19 20 21 22 23 24 25
26 27 28
16
Su Mo Tu We Th Fr Sa
1 2 3 4
5 6 7 8 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31
9
Su Mo Tu We Th Fr Sa
1
2 3 4 5 6 7 8
9 10 11 12 14 15
16 17 18 19 20 21 22
23 24 25 26 28 29
30
13
27
Su Mo Tu We Th Fr Sa
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 19 20
21 22 23 24 25 26 27
28 29 30 31
18
Su Mo Tu We Th Fr Sa
1 2 3
4 5 6 7 9 10
11 12 13 14 15 16 17
18 19 20 21 23 24
25 26 27 28 29 30
22
8
* No public meetings held. **No public meetings after 6 p.m.
2023 Meeting Calendar Religious
Observance*Holiday City Council or Housing
& Redevelopment
Authority Meeting
Board or
Commission
Meeting(s)
Election Day**
* No public meetings held. **No public meetings after 6 p.m.
JULY
July 4 Independence Day
July 10 Community Health Commission
July 11 Heritage Preservation Commission
Parks & Recreation Commission
July 12 Planning Commission
July 13 Energy & Environment Commission
July 18 City Council
July 20 Housing & Redevelopment Authority
Transportation Commission
July 25 Human Rights & Relations Commission
July 26 Planning Commission
July 27 Arts & Culture Commission
AUGUST
Aug. 1 Night to Unite
Aug. 2 City Council
Aug. 8 Heritage Preservation Commission
Parks & Recreation Commission
Aug. 10 Housing & Redevelopment Authority
Energy & Environment Commission
Aug. 14 Community Health Commission
Aug. 15 City Council
Aug. 16 Planning Commission
Aug. 17 Transportation Commission
Aug. 22 Human Rights & Relations Commission
Aug. 24 Arts & Culture Commission
Housing & Redevelopment Authority
Aug. 30 Planning Commission
SEPTEMBER
Sept. 4 Labor Day
Sept. 5 City Council
Sept. 11 Community Health Commission
Sept. 12 Heritage Preservation Commission
Parks & Recreation Commission
Sept. 13 Planning Commission
Sept. 14 Energy & Environment Commission
Housing & Redevelopment Authority
Sept. 16-17 Rosh Hashanah (Jewish)
Sept. 19 City Council
Sept. 21 Transportation Commission
Sept. 25 Yom Kippur (Jewish)
Sept. 26 Human Rights & Relations Commission
Sept. 27 Planning Commission
Sept. 28 Housing & Redevelopment Authority
Arts & Culture Commission
OCTOBER
Oct. 3 City Council
Oct. 9 Community Health Commission
Oct. 10 Heritage Preservation Commission
Parks & Recreation Commission
Oct. 11 Planning Commission
Oct. 12 Housing & Redevelopment Authority
Energy & Environment Commission
Oct. 17 City Council
Oct. 24 Human Rights & Relations Commission
Oct. 25 Planning Commission
Oct. 26 Housing & Redevelopment Authority
Arts & Culture Commission
Transportation Commission
NOVEMBER
Nov. 7 Election Day (School District)
Nov. 8 City Council
Nov. 9 Energy & Environment Commission
Nov. 10 Veterans Day (observed)
Nov. 11 Veterans Day
Nov. 13 Community Health Commission
Heritage Preservation Commission
Parks & Recreation Commission
Nov. 14 Diwali (Hindu)
Nov. 15 Planning Commission
Nov. 16 Housing & Redevelopment Authority
Arts & Culture Commission
Transportation Commission
Nov. 21 City Council
Human Rights & Relations Commission
Nov. 23 Thanksgiving
Nov. 24 Day after Thanksgiving
Nov. 30 Housing & Redevelopment Authority
DECEMBER
Dec. 5 City Council
Human Rights & Relations Commission
Dec. 11 City Council
Dec. 12 Heritage Preservation Commission
Parks & Recreation Commission
Dec. 13 Community Health Commission
Planning Commission
Dec. 14 Housing & Redevelopment Authority
Arts & Culture Commission
Energy & Environment Commission
Dec. 19 City Council
Dec. 21 Transportation Commission
Dec. 22 Christmas Eve (observed)
Dec. 24 Christmas Eve (Christian)
Dec. 25 Christmas (Christian)
Su Mo Tu We Th Fr Sa
1 2
3 4 6 7 8 9
10 11 12 13 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31
5
14
Su Mo Tu We Th Fr Sa
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 17 18
19 20 22 23 24 25
26 27 28 29 30
21
16
Su Mo Tu We Th Fr Sa
1 2 3 4 5 6 7
8 9 10 11 13 14
15 16 17 18 19 20 21
22 23 24 25 27 28
29 30 31
12
26
Su Mo Tu We Th Fr Sa
1 2
3 4 5 6 7 8 9
10 11 12 13 15 16
17 18 19 20 21 22 23
24 25 26 27 29 3028
14
Su Mo Tu We Th Fr Sa
1 2 3 4 5
6 7 8 9 11 12
13 14 15 16 17 18 19
20 21 22 23 25 26
27 28 29 30 31
10
24
Su Mo Tu We Th Fr Sa
1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 21 22
23 24 25 26 27 28 29
30 31
20
Date: December 8, 2022 Agenda Item #: VI.C .
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:Approve Entering into a Mas ter S ervic es Agreement
with T he F inanc ial S ervices C onsulting G roup
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 engaging T he F inancial S ervices C onsulting Group and authorize attorney to finalize the M aster S ervice
Agreement for execution.
I N TR O D U C TI O N:
S taff engaged with T he Financial Services Consulting G roup (T F S C G ) to assist the C ity with assessing the
current state of the our single-family and multi-family affordable housing strategies and near-term and longer-term
opportunities, bench-marking these against best practices and recent innovative solutions, developing alternative
strategies for addressing any “gaps” (including the development of high-level implementation roadmaps), and
facilitating the selection strategies moving forward.
S taff is seeking allocation of up to $35,000, approval of the Statement of Work and authorization for the C ity
Attorney to work with T he Financial Services G roup on finalizing the you on finalizing the M aster S ervices
Agreement for execution.
AT TAC HME N T S:
Description
Staff Report
Statement of Work
Project Proposal
Pres entation
December 8, 2022
Chair and Commissioners of the Edina Housing and Redevelopment Authority
Stephanie Hawkinson, Affordable Housing Development Manager
Approve Entering into a Master Services Agreement with The Financial Services Consulting
Group
Information / Background:
Staff has been seeking a more sustainable fund for financing affordable housing across the spectrum of single
family to multifamily, new construction and preservation, and ownership and rental, that are discussed in the
Comprehensive Plan and the Housing Strategy Task Force Implementation Plan. To fulfill the Plans’
objectives requires financial resources. Our funding mechanisms are currently reliant on Buy-In funds,
pooled TIF, the creation of new TIF districts, and commitments from funding partners, such as Hennepin
County, the Metropolitan Council and Minnesota Housing – all of whom experience a demand that far
exceeds the supply of funds. Existing City funding sources ebb and flow with no great predictability on
future availability resulting in every funding approval carrying a risk of insufficient funding for future,
unknown, developments. As expressed at previous HRA meetings, a more secure and reliable source of
funding is desirable.
The Financial Services Consulting Group (TFSCG) is a locally based consulting firm that works nationwide in
a wide variety of arenas, including assisting municipalities and nonprofits on affordable housing financing.
Most recognizably, TFSCG helped with the creation of the Greater Minnesota Housing Fund. Council
Member Pierce and Staff met with them to discuss assisting the City with assessing the current state of the
our single-family and multi-family affordable housing strategies and near-term and longer-term opportunities,
benchmarking these against best practices and recent innovative solutions (including the affordable housing
preservation program with Bremer Bank and others, and including the engagement of additional
representative programs within the region and other select regions nationally to share various programmatic
best practices), developing alternative strategies for addressing any “gaps” (including the development of
high-level implementation roadmaps), and facilitating the selection of strategies moving forward.
Budget: Hourly fee, aggregate not to exceed $35,000.
Source: ARPA as included in the 2023 budget and approved on December 6, 2022.
Recommendation: Staff seeks approval of engaging The Financial Services Consulting Group per their
Statement of Work and authorizing the City Attorney to finalize the Mater Services Agreement for
execution in an amount not to exceed $35,000.
CONFIDENTIAL PAGE 1 OF 6 MASTER SERVICES AGREEMENT
STATEMENT OF WORK
GENERAL SCOPE
CITY OF EDINA
AFFORDABLE HOUSING STRATEGIES & ALTERNATIVES CURRENT STATE ASSESSMENT AND ROADMAP (PHASE I)
This Statement of Work (“SOW”) is issued to detail the Deliverables and/or Services to be performed in accordance
with the terms and conditions of the Master Services Agreement (“Agreement”), dated ___________________,
between THE FINANCIAL SERVICES CONSULTING GROUP, LLC, having an office at 100 South Fifth Street, Suite 1900,
Minneapolis MN 55402 (“Consultant”), and CITY OF EDINA HOUSING AND REDEVELOPMENT AUTHORITY, a
Minnesota public corporation (“HRA”), having an office at 4801 West 50th Street, Edina, MN 55424 (“Customer”).
To assist in this initiative, THE FINANCIAL SERVICES CONSULTING GROUP (TFSCG), a Minneapolis-based
management consulting firm with a strong history in supporting the financial services and non-profit sectors has been
retained to support this effort. This effort will be led by the teams from THE FINANCIAL SERVICES CONSULTING GROUP
(TFSCG) in support of the overall City OF EDINA sponsors and working team, with involvement from the various
corporate areas and functional business lines. Further, it is anticipated that this effort will utilize an iterative approach,
and its team will actively engage and provide thought partnership with the CITY OF EDINA leadership.
The first phase and related goals of the Affordable Housing Strategies - Assessment & Roadmap effort are to (a)
establish the baseline and solutions alternatives through collaboration with the City of Edina teams, and to (b) ensure
an implementable go-forward strategy is determined to support the City’s growth goals. The proposed approach for
this initiative is outlined as follows, and which may be revised based on findings and stakeholder direction as the
effort progresses.
Project Kickoff and Planning // The planning phase is designed to:
i) finalize the goals, objectives, and scope of the initiative,
ii) finalize the internal and external staffing of the project team,
iii) develop the project plan and related project management documents,
iv) finalize the project budget, and establish the project steering, oversight and management process.
These activities are envisioned to be accomplished through a combination of facilitated working sessions and
offline preparation. Due to the nature of this initiative, it is assumed this will be an accelerated process and that
assessment activities will begin during this phase as well.
City of Edina staff and sponsor engagement is anticipated to include participation in a facilitated working session,
and periodic reviews as the effort progresses.
Part I. Baseline Assessment and Leveraging Community Practices // A preliminary baseline of the current
single-family and multi-family affordable housing strategies and environment in the City of Edina will be
performed and documented.
Deliverable 1. Baseline Assessment. This assessment will benchmark against various community best practices
based upon the goals and objectives established in the planning phase, confirming potential limiting factors of
currently deployed funding strategies.
The baseline assessment will be created to develop alternative strategies for best practices in single-family and
multi-family affordable housing programs and strategies and ultimately to an implementation roadmap.
Additionally, it leverages experience with communities across the country in addressing systemic challenges to
affordable housing including:
CONFIDENTIAL PAGE 2 OF 6 MASTER SERVICES AGREEMENT
i) accessing access to capital, including leading various local and national community lending and
capital structuring efforts,
ii) identifying the potential impact of non-profit community development organizations and financial
intermediaries for affordable housing providers, and
iii) evaluating financial institutions, that serve cities and local government as well as philanthropic
foundations, that work with public and private organizations that invest in impact areas.
City of Edina staff and sponsor engagement is anticipated to include participation in targeted and facilitated
working sessions, including active input into the baseline assessment, and active input and review of the draft
findings. Additional stakeholders may be identified for participation in these as appropriate, based on the nature
of the programs currently in place.
Deliverable 2. Leveraging Community Practices. As referenced above, framing the baseline assessment
against various best practices and recent innovative solutions in single-family and multi-family affordable housing
programs and strategies is an important component to creating an executable implementation roadmap.
This includes representation or engagement of initiatives such as:
(i) innovative and nationally recognized affordable housing programs from leading organizations locally
(e.g. Bremer Bank, Aeon, Sunrise Banks, Greater Minnesota Housing Fund, City of Lakes Community
Land Trust / Homes Within Reach, Twin Cities Habitat for Humanity, etc.)
(ii) leading organizations from other regions and including national intermediaries (e.g. Atlanta
Neighborhood Development Partnership (ANDP), Housing Partnership Network (HPN), Homewise,
Community Reinvestment Fund, LISC, Community Housing Capital (CHC), NeighborWorks America,
BlueHub Capital, Capital Impact Partners, LIIF, Mercy Housing, etc.) and others in the non-profit arena
(iii) additional representative mission-aligned private developers.
Together, these provide an invaluable foundation of learning to establish a baseline assessment of the current
state, better understand the challenges and opportunities involved, and ultimately create the highest likelihood of
programmatic success.
City of Edina staff and sponsor engagement is anticipated to include a facilitated working session including active
input and review of a draft list of organizations / programs for engagement, optional participation in any select
discussions with targeted organizations / programs, a facilitated working session active input and review of
highlighted efforts for alignment with City of Edina objectives and potential leverage.
Part II. Execution Alternatives // Alternative execution strategies will be created and documented that
benchmark desired outcomes against the current baseline (leaving as-is).
Deliverable 3. Execution Alternatives. Each alternative will define and plan for different scenarios that again
leverage best practices for community-based affordable housing initiatives.
The execution alternatives will examine an extensive set of merits and considerations that includes programmatic
objectives (e.g. access, racial equity, etc.), risk and cost considerations, community goodwill, access to capital,
infrastructure and tax attributes as well as many other factors.
Community best practices as well as critical learnings and risks of different approaches will be documented in
each of the alternatives and including quadrant analysis. Decision-making criteria will be developed across key
CONFIDENTIAL PAGE 3 OF 6 MASTER SERVICES AGREEMENT
stakeholders to help define optimal execution strategies for further assessment, refinement, and implementation
aligned to affordable housing desired outcomes.
Decision makers will have a detailed set of considerations, including practical learnings from other initiatives, to
aid in assessing which of the various alternatives best aligns with the goals and objectives of the City of Edina.
Each alternative will document scope and critical dependencies on execution as any approach to impact affordable
housing in a community involves complex and interrelated public and private stakeholders that often struggle to
find near and long-term alignment.
City of Edina staff and sponsor engagement is anticipated to include a facilitated working session including active
input and review of a preliminary draft of execution alternatives, co-development of the decision-making
framework, and a facilitated working session including active input and review of final recommended execution
alternatives for alignment with City of Edina objectives.
Part III. Implementation Roadmap // A series of planning assumptions integrated with preliminary pro-forma
will be developed across these alternatives and provide core input to an implementation roadmap.
Deliverable 4. Implementation Roadmap. The implementation roadmap will provide the blueprint to execute
upon the goals and objectives set forth in the planning phase. This includes key planning assumptions, key
decisions, ideal stakeholders, steps required to create and optimally manage the funding programs.
As discussed in the execution alternatives, to be successful, affordable housing programs must deeply understand
the role that city plays in relation to the other key public and private stakeholders and have a set of strategies to
adapt and adjust to attain and maintain alignment to shared affordable housing objectives. A critical component
is understanding the complexities of capital flows and how to structure public and private investment criteria into
an action plan with specific goals and milestones that tie interdependent stakeholders to the same outcomes.
City of Edina staff and sponsor engagement is anticipated to include a facilitated working session including active
input and review of a preliminary draft of execution alternatives, co-development of the decision-making
framework, and a facilitated working session including active input and review of final recommended execution
alternatives for alignment with City of Edina objectives.
Detailed scope documents will be developed as required for each of these areas during the planning and
implementation modeling phase of this initiative.
Acceptance Criteria:
To be determined during the completion and turnover phase of the project.
CONFIDENTIAL PAGE 4 OF 6 MASTER SERVICES AGREEMENT
THE FINANCIAL SERVICES CONSULTING GROUP
(for use with Master Services Agreement dated January 2023)
AFFORDABLE HOUSING STRATEGIES & ALTERNATIVES CURRENT STATE ASSESSMENT AND ROADMAP (PHASE I)
BUDGET AND TERMS
Term/Period of Performance:
Start Date: 3 January 2023
End Date: 15 March 2023 (est.)
Statement of Work Type:
Time & Materials (No Ceiling)
Statement of Work Value:
No Stated Value. Billed Per Rates Below
Time & Materials Rate Schedule:
For any time spent from the project launch through the completion of the work for this first phase as outlined in the
Statement of Work, the following fee schedule will apply.
ROLE RESOURCE EST.
UTILIZATION
DAILY
RATE
ADJUSTED
RATE
ENGAGEMENT LEAD DONOVAN WALSH ½ -1 DAY /
WEEK $ 2,360 / DAY $ 2,000 / DAY
MANAGEMENT
CONSULTANT
DAN BRYANT ½ - 2½ DAYS /
WEEK $1,760 / DAY $1,480 / DAY
SR. BUSINESS AND
FINANCIAL ANALYSTS
MARY HERFURTH
DAN QUINN (AD HOC) $1,560 / DAY
$1,000 / DAY
$1,120 / DAY
$720 / DAY
Daily rates assume an eight-hour day for any time spent through the completion of the work as outlined in the
Statement of Work.
Any reimbursable expenses (typical travel-related and other business-related expenses) will be included on these
invoices, and will not be subject to an administrative mark-up. Significant expenses will be pre-approved with the
customer as appropriate.
The initial projection for Milestone 1 and Milestone 2, completing the baseline analysis and developing execution
alternatives is estimated between $20,000 and $30,000, and is largely dependent on the complexity of underlying
requirements and stakeholder guidance, and depth of analysis suitable to develop the recommendations. The initial
projection for Milestone 3, which will develop the implementation roadmap based on the strategy path(s) determined,
is estimated at around $5,000, and which will be revised based on findings and stakeholder direction.
Together, the initial projection for Phase I across these milestones, is estimated at between $25,000 and $35,000.
These initial estimates are comparable to similar projects undertaken by the teams from THE FINANCIAL SERVICES
CONSULTING GROUP.
CONFIDENTIAL PAGE 5 OF 6 MASTER SERVICES AGREEMENT
Customer Information:
Name: City of Edina
Work Location: Various locations, including on customer premises, traveling, and both TFSCG
and TFSCG subcontractor premises.
Contact Name: Stephanie Hawkinson
Phone: (952) 833-9578
Consultant Provided Third Party Technology:
Yes
Includes software related to project management and project communications, including: Microsoft Project,
Microsoft Excel, Microsoft Word, Microsoft PowerPoint, and e-mail. Also includes additional technologies
as appropriate, such as web-conferencing and online collaboration tools. If additional project-related third
party technology is required above and beyond a standard engagement, consultant will review requirements
with customer and determine appropriate course of action.
Customer Provided Third Party Technology:
TBD
May include additional technologies as appropriate, including conference call bridges, etc.
Customer Provided Equipment:
Yes
While working onsite, includes network access for consultant-provided laptops / personal computers, office
phones, FAX machines, printers, copiers, etc.
Consultant Provided Equipment:
Yes
Consultants will provide own laptops / personal computers, office / mobile phones, FAX machines, printers,
copiers, etc. as appropriate. Customer may be invoiced for project-related expenses as appropriate (e.g.
photocopies, preparation of marketing materials, etc.). If additional project-related equipment is required
above and beyond a standard engagement, consultant will review requirements with customer and determine
appropriate course of action.
Payment Schedule:
Invoices will be submitted to Customer from Consultant on a monthly basis for all work performed and actual
reimbursable expenses incurred to-date.
Customer Invoice Address:
City of Edina
Attn: Stephanie Hawkinson
4801 West 50th Street
Edina, MN 55424
Consultant Primary Contact:
Contact Name: Donovan Walsh
Phone: (612) 564-0001
Customer Primary Contact:
Contact Name: Stephanie Hawkinson
Phone: (952) 833-9578
CONFIDENTIAL PAGE 6 OF 6 MASTER SERVICES AGREEMENT
Additional Terms:
Customer acknowledges that under this Agreement it is not requesting and that Consultant and its affiliates are not
providing the following services or advice, including but not limited to, accounting, valuation, tax or legal. In addition,
Customer understands and agrees that Consultant is not acting as a financial advisor or fiduciary agent but, instead, is
solely providing advice in the capacity of an arm’s-length contractual counterparty to Customer. Accordingly, any
estimates and analysis provided by Consultant are for preliminary discussion purposes only and will not be considered
by Customer as investment advice or any form of recommendation to buy, sell or participate in any transactions.
Customer agrees it will not rely on Consultant provided estimates and analysis but will either consult professionals
licensed in the respective area of inquiry or subject matter and/or make its own determination regarding matters such
as valuations and/or corresponding entries reflected on Customer's books and records, or for any other purpose.
This Statement of Work will be effective and become an integral part of the Agreement upon signature of an authorized
representative of both parties. This Statement of Work supersedes any and all previous or contemporaneous
agreements and understandings with respect to the subject matter of this Statement of Work (provided that the
Agreement remains in full force and effect). This Statement of Work performs the same function as a purchase order.
CONFIDENTIAL PAGE 1 OF 20
CITY OF EDINA
AFFORDABLE HOUSING STRATEGIES & ALTERNATIVES
CURRENT STATE ASSESSMENT AND ROADMAP
(PHASE I)
DISCUSSION DRAFT / PROPOSED APPROACH
10 NOVEMBER 2022
PROVIDED BY
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 2 OF 20
EXECUTIVE SUMMARY
THE FINANCIAL SERVICES CONSULTING GROUP (TFSCG) is pleased to provide this proposed approach to assist
the CITY OF EDINA with assessing the current state of the City’s single-family and multi-family affordable
housing strategies and near-term and longer-term opportunities, benchmarking these against best practices
and recent innovative solutions (including the affordable housing preservation program with Bremer Bank
and others, and including the engagement of additional representative programs within the region and other
select regions nationally to share various programmatic best practices), developing alternative strategies for
addressing any “gaps” (including the development of high-level implementation roadmaps), and facilitating
the selection of go-forward strategies.
THE FINANCIAL SERVICES CONSULTING GROUP (TFSCG) is a management consulting firm specializing in managing
business and market transitions. We help our clients realize opportunities presented by change. These
include new business and product launches, mergers and acquisitions, market changes, international
expansion, and corporate restructuring. THE FINANCIAL SERVICES CONSULTING GROUP (TFSCG) has both an
industry-leading financial services practice focused on providing solutions to the nation's leading financial
institutions, and a nationally recognized practice in the areas of community development, small business
lending, affordable housing, and neighborhood stabilization.
In addition to having an extensive background in banking, capital markets, and product development, in
related efforts, the teams from THE FINANCIAL SERVICES CONSULTING GROUP (TFSCG) have been assisting
communities across the country in successfully addressing challenges in accessing capital, including leading
various local and national community lending and capital structuring efforts, for non-profit community
development organizations and financial intermediaries, for affordable housing providers, for financial
institutions, for cities and local governments, for philanthropic foundations, and within the private and
institutional impact investing areas. This includes national, regional and local efforts, including work with
NeighborWorks America, The Housing Partnership Network, LISC, Capital Impact Partners / Momentus
Capital, Community Reinvestment Fund, The Kresge Foundation, and numerous national financial
institutions, regional and community-based financial institutions, and with other financial services providers.
Further, the teams worked with the leading national non-profit housing intermediaries to develop and launch
the National Community Stabilization Trust. This effort also included leading the creation of an industry-
wide consortium of financial institutions, government and non-profit providers, focused on stabilizing at-risk
communities and preserving affordable housing in hundreds of communities across the nation.
EXPERTS IN FINANCIAL SERVICES WITH A PASSION FOR SUPPORTING OUR COMMUNITIES
In short, we recognize and understand the complex nature of the CITY OF EDINA and its sponsors, funders,
and community partners and constituents, and have both depth and expertise in the financial services
environment, and in the arenas of community development and affordable housing, small business
development and jobs creation, and environmental sustainability. THE FINANCIAL SERVICES CONSULTING GROUP
(TFSCG) brings the experience necessary to work effectively with this complexity and to help develop
solutions that work.
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 3 OF 20
SOLUTIONS COMPONENTS AND APPROACH
The first phase and related goals of the Affordable Housing Strategies - Assessment & Roadmap effort are
to (a) establish the baseline and solutions alternatives through collaboration with the CITY OF EDINA teams,
and to (b) ensure an implementable go-forward strategy is determined to support the City’s growth goals.
Additional detail on these efforts is outlined as follows.
Baseline Assessment // This includes undertaking a preliminary baseline of the current single-family
and multi-family affordable housing strategies and near-term and longer-term opportunities, and
outlining stakeholder and constituent expectations (strategic plans, city council, neighborhood feedback,
business / workforce housing objectives, etc.). These are then benchmarked against various industry
best practices, confirming potential limiting factors of currently deployed funding strategies, developing
alternative strategies for addressing any “gaps” or areas to consider strengthening that are aligned to
the goals and objectives of the City of Edina.
Leveraging Community Practices // This includes engagement and framing various best practices and
recent innovative solutions, and demonstrate how these models and strategies could help address
current limiting factors. This includes the engagement of additional representative programs within the
region and other select regions nationally to share programmatic best practices in single-family and
multi-family affordable housing programs and strategies. This further includes the affordable housing
preservation program with Bremer Bank and others, and targeting engagement of leading organizations
locally (e.g. Aeon, Greater Minnesota Housing Fund, City of Lakes Community Land Trust / Homes
Within Reach, Twin Cities Habitat for Humanity, etc.) and from other regions and including national
intermediaries (e.g. Atlanta Neighborhood Development Partnership (ANDP), Housing Partnership
Network (HPN), Homewise, Community Reinvestment Fund, LISC, Community Housing Capital (CHC),
NeighborWorks America, BlueHub Capital, Capital Impact Partners, LIFF, Mercy Housing, etc.) and
others in the non-profit arena, with additional representative mission-aligned private developers.
Execution Alternatives // A set of execution strategies will then be assessed from the baseline
assessment (leaving as-is), based upon levels of investment, scope, and impact. Execution alternatives
will leverage experience with community programs across the country to evaluate the pros and cons of
different approaches as well as mitigation best practices to manage downside risk and maximize
programmatic impact, and including quadrant analysis. The execution alternatives create a gap analysis
between the baseline assessment and community best practices that enable a set of options to be
created and evaluated by decision makers.
Implementation Roadmap // With this, a series of planning assumptions integrated with preliminary
pro-forma will be developed across the execution alternatives. Key decision-making criteria will be
determined across the stakeholders to help determine optimal execution strategies for further
assessment, refinement, and implementation. The implementation roadmap will build upon the learning
and application of proven models and frameworks for low-income housing in other communities
supported by the baseline assessment of the City of Edina. The roadmap will define incremental phases
that enable evaluation against objectives and allows for adaptation and adjustment based upon
implementation learnings.
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 4 OF 20
Additional subsequent activities could include the following major components, and will be planned for
separately as the initiative progresses:
- Expanding this pilot implementation of the program with select participants in targeted markets,
for the purposes of testing key planning assumptions in advance of a full rollout.
- Revising the rollout framework based on lessons-learned from the pilot implementations.
- Undertaking the full rollout leading and coordinating with regional and nationwide implementations
of the program as this effort continues to engage key implementation partners and capital providers.
The planning and execution objectives used in developing this approach include:
- managing the initiative to minimize the range of alternatives to focus on leading options in the initial
phase of assessment, and selectively undertaking any “deep dives” where necessary, while
simultaneously maximizing the qualitative aspects of the resulting analysis and recommendations to
ensure a directionally representative analysis and recommendation, and
- providing a clear and concise status of the initiative throughout to both the CITY OF EDINA leadership
team and the respective stakeholders of the working groups.
These goals and objectives will be updated during the inception of the project.
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 5 OF 20
PROJECT RESOURCES
To assist in this initiative, THE FINANCIAL SERVICES CONSULTING GROUP (TFSCG), a Minneapolis-based
management consulting firm with a strong history in supporting the financial services and non-profit sectors
has been retained to support this effort. This effort will be led by the teams from THE FINANCIAL SERVICES
CONSULTING GROUP (TFSCG) in support of the overall City OF EDINA sponsors and working team, with
involvement from the various corporate areas and functional business lines. Further, it is anticipated that
this effort will utilize an iterative approach, and its team will actively engage and provide thought partnership
with the CITY OF EDINA leadership.
Leading the teams for the initiative, Donovan Walsh, with an extensive background in banking, capital
markets, mergers and acquisitions, and leading strategic change management efforts, will serve as the
Engagement Manager from THE FINANCIAL SERVICES CONSULTING GROUP (TFSCG) and will be responsible for:
- establishing management, steering and oversight for the initiative
- leading the overall initiative, and setting and managing the scope of work,
- ensuring the initiative is staffed appropriately with both internal and external resources
- assisting with the development of organizational alternatives and implementation scenarios, and
- serving as subject-matter expert across multiple areas.
Further supporting the program design and structured finance elements of the initiative on an ad hoc basis
is Dan Bryant, a Senior Management Consultant with THE FINANCIAL SERVICES CONSULTING GROUP (TFSCG)
with over twenty-five years in structured finance, investment banking and financial services, has deployed
structured finance solutions within complex ecosystems.
- coordinating and facilitating related community engagement efforts,
- developing current state and future state analysis deliverables,
- performing major components of the work outlined for the initiative, and
- providing additional subject-matter expertise on an as-needed basis.
Further supporting the modeling elements of this initiative are Mary Herfurth and Dan Quinn, Senior Financial
Analysts and Business Process Consultants from THE FINANCIAL SERVICES CONSULTING GROUP (TFSCG), with a
strong background in community development, financial and process modeling, capital markets and
structured finance, and financial institution regulatory compliance, and who will be responsible for the
business analysis and financial analysis of the project team, including:
- developing integrated financial models and other financial analysis deliverables,
- performing major components of the work outlined for the initiative, and
- providing additional subject-matter expertise on an as-needed basis.
The above are the core project roles provided by the team from THE FINANCIAL SERVICES CONSULTING GROUP
(TFSCG). The scope and actual workload will naturally be dependent on availability of the requisite teams
within the CITY OF EDINA. Additionally, it is noted that there is a proposed interim milestone with the
completion of the planning phase that would determine resource requirements for the remainder of the first
phase based on resources available with the CITY OF EDINA and opportunities to supplement the project team.
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 6 OF 20
The project team from THE FINANCIAL SERVICES CONSULTING GROUP (TFSCG) will coordinate all activities related
to planning, designing and execution of this phase, coordinating with the CITY OF EDINA management teams
and other stakeholders as appropriate. The full project team will consist of several cross-functional teams
with representation and key contributors from each of the CITY OF EDINA support areas / departments.
Additionally, some of these areas may manage detailed activities required specifically for their tasks and
milestones in coordination with the overall initiative. For this, the project team from THE FINANCIAL SERVICES
CONSULTING GROUP (TFSCG) may also work with various legal, tax and regulatory advisors as required. Any
related third-party budget estimates will be developed as the initiative progresses.
To the extent additional subject matter expertise is required as a “deep dive” on an ad hoc basis, the project
team from THE FINANCIAL SERVICES CONSULTING GROUP (TFSCG) will coordinate with extended team members
specializing in these areas.
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 7 OF 20
ESTIMATED TIMELINE AND EFFORT
The proposed approach for this initiative is outlined as follows, and many activities are intended to run
concurrently. Estimated durations are included for planning purposes. For Phase I, it is assumed that the
project will start in Q1 2023.
MILESTONE (1) :: Project aligned with City objectives and scoped
MILESTONE (2) :: Execution alternatives framed and selected
MILESTONE (3) :: Implementation plan drafted
Additional detail on these efforts is outlined below, and which leverages the framework utilized in the
successful establishment and operation of affordable housing funding programs nationally and locally (an
excerpt of this framework is included in the appendix).
Project Kickoff and Planning // The planning phase is designed to: i) finalize the goals, objectives, and
scope of the initiative, ii) finalize the internal and external staffing of the project team, iii) develop the
project plan and related project management documents, (iv) finalize the project budget, and establish
the project steering, oversight and management process.
These activities are envisioned to be accomplished through a combination of facilitated working sessions
and offline preparation. Due to the nature of this initiative, it is assumed this will be an accelerated
process and that assessment activities will begin during this phase as well.
City of Edina staff and sponsor engagement is anticipated to include participation in a facilitated working
session, and periodic reviews as the effort progresses.
Part I. Baseline Assessment and Leveraging Community Practices // A preliminary baseline of the
current single-family and multi-family affordable housing strategies and environment in the City of Edina
will be performed and documented.
Affordable Housing - Phase I
1 2 3 4 5 6 7 8
Kickoff
Part I - Baseline Assessment
Baseline Current Strategies
Stakeholder Reviews
Benchmark Best Practices
Part II - Execution Alternatives
Develop Execution Alternatives
Stakeholder Reviews
Recommendations and Next Steps
Part III - Implementation Roadmap
Interim Drafting / Development
Stakeholder Reviews
Finalize Implementation Roadmap
January February
1
2
3
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 8 OF 20
Deliverable 1. Baseline Assessment. This assessment will benchmark against various community best
practices based upon the goals and objectives established in the planning phase, confirming potential
limiting factors of currently deployed funding strategies.
The baseline assessment will be created to develop alternative strategies for best practices in single-
family and multi-family affordable housing programs and strategies and ultimately to an implementation
roadmap.
Additionally, it leverages experience with communities across the country in addressing systemic
challenges to affordable housing including: i) accessing access to capital, including leading various local
and national community lending and capital structuring efforts, ii) identifying the potential impact of non-
profit community development organizations and financial intermediaries for affordable housing
providers, and iii) evaluating financial institutions, that serve cities and local government as well as
philanthropic foundations, that work with public and private organizations that invest in impact areas.
City of Edina staff and sponsor engagement is anticipated to include participation in targeted and
facilitated working sessions, including active input into the baseline assessment, and active input and
review of the draft findings. Additional stakeholders may be identified for participation in these as
appropriate, based on the nature of the programs currently in place.
Deliverable 2. Leveraging Community Practices. As referenced above, framing the baseline
assessment against various best practices and recent innovative solutions in single-family and multi-
family affordable housing programs and strategies is an important component to creating an executable
implementation roadmap.
This includes representation or engagement of initiatives such as:
(i) innovative and nationally recognized affordable housing programs from leading organizations
locally (e.g. Bremer Bank, Aeon, Sunrise Banks, Greater Minnesota Housing Fund, City of Lakes
Community Land Trust / Homes Within Reach, Twin Cities Habitat for Humanity, etc.), and
(ii) leading organizations from other regions and including national intermediaries (e.g. Atlanta
Neighborhood Development Partnership (ANDP), Housing Partnership Network (HPN),
Homewise, Community Reinvestment Fund, LISC, Community Housing Capital (CHC),
NeighborWorks America, BlueHub Capital, Capital Impact Partners, LIFF, Mercy Housing, etc.)
and others in the non-profit arena, with
(iii) additional representative mission-aligned private developers.
Together, these provide an invaluable foundation of learning to establish a baseline assessment of the
current state, better understand the challenges and opportunities involved, and ultimately create the
highest likelihood of programmatic success.
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 9 OF 20
City of Edina staff and sponsor engagement is anticipated to include a facilitated working session
including active input and review of a draft list of organizations / programs for engagement, optional
participation in any select discussions with targeted organizations / programs, a facilitated working
session active input and review of highlighted efforts for alignment with City of Edina objectives and
potential leverage.
Part II. Execution Alternatives // Alternative execution strategies will be created and documented that
benchmark desired outcomes against the current baseline (leaving as-is).
Deliverable 3. Execution Alternatives. Each alternative will define and plan for different scenarios that
again leverage best practices for community-based affordable housing initiatives.
The execution alternatives will examine an extensive set of merits and considerations that includes
programmatic objectives (e.g. access, racial equity, etc.), risk and cost considerations, community
goodwill, access to capital, infrastructure and tax attributes as well as many other factors.
Community best practices as well as critical learnings and risks of different approaches will be
documented in each of the alternatives and including quadrant analysis. Decision-making criteria will
be developed across key stakeholders to help define optimal execution strategies for further
assessment, refinement, and implementation aligned to affordable housing desired outcomes.
Decision makers will have a detailed set of considerations, including practical learnings from other
initiatives, to aid in assessing which of the various alternatives best aligns with the goals and objectives
of the City of Edina.
Each alternative will document scope and critical dependencies on execution as any approach to impact
affordable housing in a community involves complex and interrelated public and private stakeholders
that often struggle to find near and long-term alignment.
City of Edina staff and sponsor engagement is anticipated to include a facilitated working session
including active input and review of a preliminary draft of execution alternatives, co-development of the
decision-making framework, and a facilitated working session including active input and review of final
recommended execution alternatives for alignment with City of Edina objectives.
Part III. Implementation Roadmap // A series of planning assumptions integrated with preliminary pro-
forma will be developed across these alternatives and provide core input to an implementation roadmap.
Deliverable 4. Implementation Roadmap. The implementation roadmap will provide the blueprint to
execute upon the goals and objectives set forth in the planning phase. This includes key planning
assumptions, key decisions, ideal stakeholders, steps required to create and optimally manage the
funding programs.
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 10 OF 20
As discussed in the execution alternatives, to be successful, affordable housing programs must deeply
understand the role that city plays in relation to the other key public and private stakeholders and have
a set of strategies to adapt and adjust to attain and maintain alignment to shared affordable housing
objectives. A critical component is understanding the complexities of capital flows and how to structure
public and private investment criteria into an action plan with specific goals and milestones that tie
interdependent stakeholders to the same outcomes.
City of Edina staff and sponsor engagement is anticipated to include a facilitated working session
including active input and review of a preliminary draft of execution alternatives, co-development of the
decision-making framework, and a facilitated working session including active input and review of final
recommended execution alternatives for alignment with City of Edina objectives.
Additional support may be provided in future phases based on the implementation strategy or strategies
selected, which may include supporting the group through a business change management effort or
providing additional support around the development of policies and procedures, organizational and
governance matters, systems and controls, or platforms and reporting. Estimates for these additional efforts
will be prepared as the effort progresses.
For context as part of the broader business change management framework utilized by the teams, the
current efforts under Phase I would be largely captured with “Analysis” in the summary as follows.
Detailed scope documents will be developed as required for each of these areas during the planning and
implementation modeling phase of this initiative.
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 11 OF 20
SOLUTIONS PRICING AND AVAILABILITY
This expected launch of the initiative will be [January 2023]. All resources identified in the project team
from THE FINANCIAL SERVICES CONSULTING GROUP are available to start as soon as required. For Phase I,
estimated costs for this initiative will be refined, if necessary, during the initial planning phase, depending
on findings and feedback from the stakeholder and revised throughout the lifecycle of the project.
The initial projection for Milestone 1 and Milestone 2, completing the baseline analysis and developing
execution alternatives is estimated between $20,000 and $30,000, and is largely dependent on the
complexity of underlying requirements and stakeholder guidance, and depth of analysis suitable to develop
the recommendations. The initial projection for Milestone 3, which will develop the implementation roadmap
based on the strategy path(s) determined, is estimated at around $5,000, and which will be revised based
on findings and stakeholder direction. Together, the initial projection for Phase I across these milestones,
is estimated at between $25,000 and $35,000. These initial estimates are comparable to similar projects
undertaken by the teams from THE FINANCIAL SERVICES CONSULTING GROUP.
These initial projections factor in using the project team from THE FINANCIAL SERVICES CONSULTING GROUP as
outlined below. Daily rates assume an eight-hour day and are billable in ¼ hour increments, and do not
include travel or other related business expenses. Note for Phase I, several in-person working sessions
would ordinarily be envisioned, and which can be estimated separately, noting as a practical matter these
are not currently anticipated at the same level due to social distancing practices in place and instead will
leverage virtual working sessions. This fee schedule is further inclusive of a non-profit / public client
discount of approximately 20%-25% plus per resource.
ROLE RESOURCE EST. UTILIZATION DAILY RATE ADJUSTED RATE
ENGAGEMENT LEAD DONOVAN WALSH ½ -1 DAY / WEEK $ 2,360 / DAY $ 2,000 / DAY
MANAGEMENT CONSULTANT DAN BRYANT ½ -2½ DAYS / WEEK $1,760 / DAY $1,480 / DAY
SR. BUSINESS AND
FINANCIAL ANALYSTS
MARY HERFURTH (AD HOC) $1,560 / DAY $1,120 / DAY
DAN QUINN $1,000 / DAY $ 720 / DAY
Additional support may be provided in future phases based on the implementation strategy or strategies
selected. Estimates for these additional efforts will be prepared as the effort progresses.
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 12 OF 20
NEXT STEPS
Assuming approval of the project, a kickoff working session will serve to launch the initiative and begin the
initial phase. Additional stakeholders from the CITY OF EDINA and working team members from across the
organization will be identified during the project inception.
We look forward to supporting the CITY OF EDINA on this important initiative.
Very truly yours,
Donovan Walsh
THE FINANCIAL SERVICES CONSULTING GROUP
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 13 OF 20
APPENDIX. ABOUT THE FIRM AND REPRESENTATIVE ENGAGEMENTS
Donovan Walsh (THE FINANCIAL SERVICES CONSULTING GROUP) – Founded the firm in 2005 and is currently
serving as both its President and as an executive management consultant to clients. Recent engagements
include leading a series of post-acquisition integrations for various clients domestically and internationally,
managing the global reorganization for a multinational corporation, managing the regulatory approval and
launch of a number of European banks for leading financial institutions, leading various organizational
alignment efforts, managing several de novo business launches and international expansion efforts, and
launching a national non-profit assisting hundreds of communities across the nation with their foreclosure-
related neighborhood stabilization efforts through the establishment of a consortium of the leading financial
institutions. Prior experience includes various executive and management roles in the financial services
industry, including managing domestic and international integration efforts, launching new business lines
and non-profit organizations, and managing the international expansion for the financial services division of
a large (Fortune 5) company.
Representative engagements across community lending and investment include:
- Managing the launch of an innovative capital solution for affordable housing equity purposed for
supporting the preservation of at-risk naturally occurring affordable housing (NOAH), through a wholly
owned special purpose Community Development Corporation (CDC) subsidiary of a national bank and
Community Development Financial Institution (CDFI). Efforts included leading the working group
internally within the bank and across non-profit and public community partners, establishing funding
solutions to address the equity capital needs at the property level, incorporating both impact capital
(leveraged as bank regulatory capital) and guaranty support through philanthropic participants, and
structuring the program to meet bank internal requirements and regulatory requirements, the needs of
the participants, and overall goals of the program. This program was designed and established as a
national model, to be leveraged by other financial institutions across affordable housing, small business,
and other areas of community lending and investment.
References: David Reiling, Chief Executive Officer, Sunrise Banks
Alan Arthur, Chief Executive Officer, Aeon
R.T. Rybak, President and CEO, The Minneapolis Foundation
Eric Jolly, President and CEO, St. Paul and Minnesota Foundation
James Frey, President and CEO, Frey Foundation of Minnesota
Barry Wides, Deputy Comptroller, Office of the Comptroller of the Currency (OCC)
- Managing the launch of an affordable housing equi ty fund purposed for supporting the preservation
of at-risk naturally occurring affordable housing (NOAH). Efforts included leading the working group of
local non-profit and public community partners, establishing capital solutions to address the equity
needs required at the property level, raising capital through public, philanthropic and socially-
responsible private participants, and structuring the fund to meet the needs of the participants and goals
of the program. This is the first of two planned local funds (of $32mm each), and pilot for expansion
to a national program.
References: Warren Hanson, Chief Executive Officer, Greater Minnesota Housing Fund
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 14 OF 20
Mary Tingerthal, Commissioner (ret.), Minnesota Housing Finance Agency
Elizabeth McGeveran, Director of Investments, McKnight Foundation
Mitch Bleske, Chief Financial Officer, Bremer Bank
Michael Morrell, Senior Vice President, Sunrise Banks
- Supporting the launch of an impact investment mutual fund for retail and institutional impact investors,
structured as a co-investment interval fund for a leading portfolio lender to church and community
facilities. Efforts included leading operational readiness efforts for loan origination and servicing
including policy and procedures design and development, supporting the design and development of
the risk management and governance framework, supporting the development of the offering materials
and disclosures, and leading the impact investment market activities (including both in-house
distribution and external). This is the first of various planned impact investment themed mutual funds.
References: (available upon request)
- Validation and design of a national guarantee facility to support access to capital for housing, small
business and environmental efforts with The Kresge Foundation. The teams from The Financial Services
Consulting Group (TFSCG) and organized a collaboration of philanthropic foundations, community
development organizations and financial institutions to validate the need for and design the Community
Investment Guarantee Facility (CIGF). The program supports community development organizations in
accessing capital (either where they would be unable to but for the guarantee support, or on more
favorable terms due to the guarantee support). Additionally, the program supports this new and
innovative method of leveraging the philanthropic community for increased impact.
References: Aaron Seybert, Managing Director of Social Investments, The Kresge Foundation
Kimberlee Cornett, Director of Impact Investments, Robert Wood Johnson Foundation
Barry Wides, Deputy Comptroller, Office of the Comptroller of the Currency (OCC)
(various foundation, community and financial services stakeholders also available)
- Design and launch of fund to provide access to capital for underserved communities with the Detroit
Home Mortgage program. The teams from THE FINANCIAL SERVICES CONSULTING GROUP (TFSCG) and
Community Reinvestment Fund (CRF) organized a collaboration among regional banks securing
$150mm in capital to originate first mortgages based on a home’s appraised value and second
mortgages to cover costs above appraised value (e.g. for renovation, appraisal gap, etc.). The program
enables homeowners to invest in home improvements and raise property values while protecting them
from economic losses due to hardship events. The effort brought together the lending expertise and
capital of banks, the education capabilities of homebuyer counseling, the social investment of a major
foundation, and support from the state housing finance agency and federal government.
References: Rip Rapson, President, Kresge Foundation
Gary Torgow, Chairman, TCF Bank
Steve Steinour, Chairman, President and CEO, Huntington Bank
Sandro DiNello, President and CEO, Flagstar Bank
Barry Wides, Deputy Comptroller, Office of the Comptroller of the Currency (OCC)
Frank Altman, Chief Executive Officer, Community Reinvestment Fund (CRF USA)
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 15 OF 20
- Managing the launch of a recovery loan fund purposed for complementing neighborhood stabilization
activities by increasing home ownership in distressed neighborhoods. Efforts included leading the
working group of local non-profit and public community partners, establishing scalable underwriting and
servicing operations, raising capital through public, philanthropic and socially-responsible private
participants, and structuring the fund to meet the needs of the participants and goals of the program.
This was the first of several planned local funds, and the first pilot for expansion to a national program
with NeighborWorks America and a companion program with the Housing Partnership Network, and
which also includes Michigan, South Florida, Pennsylvania, Georgia, and Wisconsin.
References: Mary Tingerthal, Commissioner (ret.), Minnesota Housing Finance Agency
Tom Fulton, Executive Director (ret.), Family Housing Fund
Chuck Wehrwein, Chief Operating Officer (fmr.), NeighborWorks® America
Becky Regan, President of Capital Markets Companies, Housing Partnership Network
- Leading a program development effort for distressed mortgage purchases purposed for both
complimenting neighborhood stabilization activities, and as a means of preserving existing homeowners
and tenants through re-underwriting. Efforts included: program development, analysis and design,
coordinating with various other local non-profit and public community partners, pilot preparations, and
planning for the rollout of the program at a national level.
References: (available upon request)
- Leading the development and launch of the National Community Stabilization Trust purposed for
supporting neighborhood stabilization activities. Efforts included working with Enterprise, LISC,
NeighborWorks America, The Housing Partnership Network and other leading national non-profit
housing intermediaries and local collaboratives to develop and launch the national non-profit
intermediary. This effort also included leading the creation of an industry-wide consortium of financial
institutions, government and non-profit providers locally and nationally, focused on stabilizing at-risk
communities and preserving affordable housing in hundreds of communities across the nation.
References: Craig Nickerson, Executive Director (ret.), National Community Stabilization Trust
Tom Bledsoe, Chief Executive Officer, The Housing Partnership Network
Eileen Fitzgerald, former Chief Executive Officer (fmr.), NeighborWorks® America
Barry Wides, Deputy Comptroller, Office of the Comptroller of the Currency (OCC)
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 16 OF 20
APPENDIX: SOLUTIONS APPROACH DETAIL
Funding sources and programs, using various debt and equity structures, will be incorporated in overall
funding solutions, and may include:
- partnerships with a portfolio lender on an indirect or referral basis
- product customization and risk-sharing with a portfolio lender on a brokered / correspondent basis
- product customization and risk-sharing with secondary markets on a brokered / correspondent basis
- product customization and risk-sharing with a portfolio lender(s) and participant(s) on a pool basis
A summary of the overall framework that will be used with this City of Edina Affordable Housing Strategies
effort has been included as follows, and as applicable for single-family and multifamily affordable housing
objectives. This framework will be used for determining what solutions may be best suited to support this
effort, and consists of: (1) framing the approach, (2) optimizing the solutions, and then ultimately (3)
executing on these solutions.
FRAMING THE APPROACH
The first step in this process is framing the approach. This includes understanding “what” is being targeted
to be solved for (e.g. interim recovery financing vs. permanent financing, borrower / tenant affordability,
neighborhood stabilization, program sustainability, scale of impact, etc.) and subsequently the various
impacts these will have on the financing products (e.g. rate, term, eligibility criteria, etc.).
Additionally, it includes assessing the various alternative solutions options that may be considered to meet
these needs, including: product customization with portfolio lenders (a referral, broker, or correspondent
lending basis), establishing a risk-sharing structure with the portfolio lenders, establishing a fund, hybrid
structures, or other alternatives. There are many models that can be leveraged, adapted or developed to
meet these needs – and each bring with them different benefits, costs and implications to be considered.
Having not only an understanding of the current capacity of the community development organization(s)
and key local and national partners, but understanding the future capacity that would be required for these
various alternatives is important for the assessment of the “gap”. Options for how to close this gap (e.g.
build, partner, outsource, etc.) can be incorporated against each of alternative solutions options. In addition
to the practical aspects of capacity, it is also important to consider the perceived credibility the participants
may hold.
Further, it is also critical to identify the stakeholders in the future program, including the sponsor, borrowers
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 17 OF 20
/ tenants and their community, the community development organization and their collaborative, and the
various types of participants in the future program as it is important to assess the various options from each
of these perspectives individually and collectively.
The last key step in framing the approach involves identifying the high-likelihood and potential participants
for the various types of capital that will be needed for the program, including both (1) the “senior” funds
that will likely comprise the majority required, and (2) the at-risk “subordinated” funds, and credit
enhancement providers that will likely be required to secure the senior funds.
KEY CONSIDERATIONS IN STRUCTURING SOLUTIONS
As a part of optimizing the approach, various structures will be considered and assessed to determine what
is most appropriate, including:
- Partnerships on an indirect or referral basis with a lender
- Partnerships on a brokered or correspondent lending basis with a lender(s)
- Product customization and risk-sharing on a correspondent lending basis with a lender(s)
- Product customization and risk-sharing on a mini-pool basis with a lender(s)
- Product customization and risk-sharing in a pool with multiple participants
Key considerations in structuring include:
- ensuring the fundamental economics are understood, modeled and explicitly tied to the underlying
assets (see next section: Key Considerations with the Underlying Assets)
- including production volume projections over time and by asset type, and any supporting
components as appropriate (e.g. warehouse line, etc.)
- assessing various credit enhancement options, including: cash, loan loss reserve, loan loss
guaranty, spread-funded reserve, etc.
- assessing various cashflows and structures, including simple participations, tranched structures
and waterfalls (principal and/or interest), etc.
- assessing servicing considerations (released / retained), alignment with risk sharing, and impact to
performance considerations
- including necessary third-party expenses (e.g. loan servicing, loan counseling, fund administration,
deal distribution, investor reporting, tax, etc.) and indirect revenues and value (e.g. interest income
on reserves, balances and float, etc.) and indirect costs (e.g. unfilled commitments, etc.)
- understanding and factoring in the resulting impacts to risk, maturity, expected and actual rates of
return (and on a cash basis, adjusted risk-adjusted capital basis, etc.)
- establishing a conservative base case and stress testing these against various performance
scenarios (financial performance and program impact)
Lastly, optimization of the structure from the perspectives of stakeholders in the future program (e.g.
homeowner, neighborhood, community development organization and collaborative, and the various
participants) is important.
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 18 OF 20
KEY CONSIDERATIONS WITH THE UNDERLYING ASSETS
As another key part of optimizing the approach, various types of underlying assets will be considered and
assessed to determine what is most appropriate, including:
- not only the loans to the borrowers (homeowners in single-family, owner / operators in multifamily),
but also
- the expected performance characteristics of these loans (including borrower considerations in
single-family, and underlying tenant considerations in multifamily),
- the underlying properties serving as collateral for these loans, and
- expected net recoveries in the event of default.
Key considerations with the underlying assets include:
- ensuring the fundamental economics are understood, modeled and explicitly tied to the supporting
funding structure (see previous section: Key Considerations in Structuring Solutions)
- determine lending terms, including: interest rate (risk adjusted / subsidized), maturity, purpose
(purchase, purchase / rehab, situational refinance, etc.)
- determine the lending / investment instrument used (mortgage / contract for deed, community land
trust, equity / shared equity, etc.)
- explicit incorporation of responsible practices – “classic” loan underwriting, pre-purchase
counseling , post-purchase counseling, loan modifications, tenant support, etc.
- explicit inclusion of community perspective as required in either the loan origination or loan
servicing practices
- understanding expected performance – conservatively, including: delinquencies, defaults, pre-
payments, structured recoveries, modifications, etc.
- understanding expected loan loss severity – conservatively, including recovery time, costs, and net
realizable value of asset
- establishing a conservative base case, and stress testing this against various performance scenarios
(financial performance and program impact)
Lastly, assessing the underlying assets from the perspectives of stakeholders in the future program (e.g.
homeowner, neighborhood, community development organization and collaborative, and the various
participants) is important.
RISK, COMPLIANCE, LEGAL, REGULATORY, ACCOUNTING AND TAX CONSIDERATIONS
As the final part of optimizing the approach, various types of additional program design elements will need
to be considered and assessed to determine what is most appropriate, including:
- risk assessment and ownership (credit performance, operational, etc.),
- compliance with applicable regulations, laws and industry “best practices”,
- legal entities and relationships between the parties, and
- tax and accounting considerations.
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 19 OF 20
Key considerations with the program design include:
- assessing the roles and structures of entities, including consideration for project LLC’s – partial
and true bankruptcy remoteness, etc.
- ensuring the team can identify and assess new requirements that may be introduced, including:
broker / dealer considerations, securities considerations, investor reporting, etc.
- assessing various tax and accounting implications considerations including: UBIT/tax-exempt status
impact, TMP / REMIC, non-qualifying publicly traded partnership, GAAP loan accounting, etc.
- understanding the types of risk (credit performance, operational, etc.) and ownership of these by
the different roles, participants and entities,
- agreements between the parties (e.g. loan sale agreement, pooling and participation agreement,
loan servicing or sub-servicing agreement, etc.)
- ensuring systemic compliance with applicable regulations, laws and industry “best practices” (Fair
Lending, TRID / RESPA - TILA, Reg. Z, etc.) – through both quality assurance and quality control
Lastly, assessing these various types of additional program design elements from the perspectives of
stakeholders in the future program (e.g. homeowner, neighborhood, community development organization
and collaborative, and the various participants) is important.
EXECUTING THE PROGRAM
The final step in the process is execution – and generally consists of the following key sets of activities prior
to the launch:
- engaging participants for participation in the program,
- refining and adapting the program from negotiations / collaborations, and
- program launch preparations with the local collaborative and participants.
Key considerations prior to the launch include:
- engaging the participants from each of their respective perspectives (e.g. for bank participants,
consider including loan accounting methods and returns based on cash and regulatory capital,
impact on CRA, etc.)
- understanding the specific drivers for the various participants (e.g. distinguishing “no” from “not
this way, but maybe another way”)
- refining and adapting the various program elements based on feedback, and being mindful of the
interdependencies
- finalizing agreements between the parties (e.g. loan sale agreement, pooling and participation
agreement, etc.)
- preparations for the various operational element required for loan production and servicing as
appropriate, including: sourcing / channels, loan origination (loan officer, processor, underwriter,
funder, post-closing, etc.), loan servicing, default management, asset disposition, pre-purchase /
post-purchase counseling, program marketing, etc.
PROPOSED PROJECT APPROACH AND STATEMENT OF WORK
CITY OF EDINA // AFFORDABLE HOUSING STRATEGIES - ASSESSMENT & ROADMAP (PHASE I)
UPDATED: 10 NOVEMBER 2022
CONFIDENTIAL PAGE 20 OF 20
- preparations for the various operational element required for program management as appropriate,
including: participant reporting and relationship management, secondary marketing (pricing,
locking, hedging, selling), fund administration, deal closing and funding, deal distribution /
participant payments, document custodian, etc.
As a part of and after the launch, additional activities generally include,
- the commitment of debt and equity (e.g. NMTC, etc.) funding and closing on the program,
- the origination and servicing of the loans,
- the refinement of origination guideline and/or servicing practices based on agreed changes to the
program (e.g. due to performance, market, etc.)
- the start, ongoing operation and eventual conclusion of the program, and
- participant reporting and relationship management.
Affordable Housing Strategies
December Update
Affordable Housing Strategies
•Develop a creative sustainable funding model that would allow the City to
accelerate the achievement of its affordable housing goals.
•Baseline. Build on the solid foundation undertaken by the city
•Engage. Additional representative programs within the region and
nationally to share various programmatic best practices
•Benchmark. Assess these best practices / innovative solutions
•Alternatives.Develop additional strategies for addressing “gaps”
(including high-level implementation roadmaps, risk management)
•Supported by: THE FINANCIAL SERVICES CONSULTING GROUP
EdinaMN.gov 2
About the Firm
•THE FINANCIAL SERVICES CONSULTING GROUP (TFSCG) is a management
consulting firm specializing in managing business and market transitions. We have both
an industry-leading financial services practice focused on providing solutions to the
nation's leading financial institutions, and a nationally recognized practice in the areas
of community development, small business lending, and affordable housing.
•In addition to having an extensive background in banking, capital markets, and product
development, in related efforts, our teams have been assisting communities across the
country in successfully addressing challenges in accessing capital, including leading
various local and national community lending and capital structuring efforts, for non-
profit community development organizations and financial intermediaries, for
affordable housing providers, for financial institutions, cities and local governments,
philanthropic foundations, and within private and institutional impact investing areas.
•EXPERTS IN FINANCIAL SERVICES WITH A PASSION FOR SUPPORTING OUR COMMUNITIES
EdinaMN.gov 3
Approach and Target Timing
EdinaMN.gov 4
Affordable Housing - Phase I
1 2 3 4 5 6 7 8
Kickoff
Part I - Baseline Assessment
Baseline Current Strategies
Stakeholder Reviews
Benchmark Best Practices
Part II - Execution Alternatives
Develop Execution Alternatives
Stakeholder Reviews
Recommendations and Next Steps
Part III - Implementation Roadmap
Interim Drafting / Development
Stakeholder Reviews
Finalize Implementation Roadmap
January February
Example engagement includes:
(i) the affordable housing preservation
program with Bremer Bank and others,
(ii) engagement of leading organizations
locally (e.g. Aeon, Greater Minnesota
Housing Fund, City of Lakes Community
Land Trust / Homes Within Reach, Twin
Cities Habitat for Humanity, etc.)
(iii) engagement from other regions and
including national intermediaries (e.g.
Atlanta Neighborhood Development
Partnership (ANDP), Housing Partnership
Network (HPN), Homewise, Community
Reinvestment Fund, LISC, Community
Housing Capital (CHC), NeighborWorks
America, BlueHub Capital, Capital Impact
Partners, LIIF, Mercy Housing, etc.) and
others in the non-profit arena,
(iv) additional representative mission-
aligned private developers.
Date: December 8, 2022 Agenda Item #: VI.D.
To:C hair & C ommis s ioners of the Edina HR A Item Type:
F rom:C had A. Millner, P.E., Director of Engineering
Item Activity:
Subject:R equest for P urc hase: C hange O rder #1 Eden Avenue
Landsc aping
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: C hange Order #1 E den Avenue Landscaping with P eterson Companies to change the
substantial completion date to June 1, 2023.
I N TR O D U C TI O N:
T he project was delayed due to C R R ail permitting and private utility issues. T his change order will extend the
contract date so the contractor can finish the work without any delay penalties.
AT TAC HME N T S:
Description
Request for Purchase: Change Order #1 Eden Avenue Lands caping
CONTRACT CHANGE ORDER NO.1
Contract No: ENG 21-6 Contract Date: May 27, 2021
Type of Work: Landscaping
Location: Eden Ave and Brookside Ave
Contractor: Peterson Companies, Inc.
Address: 8326 Wyoming Trail, Chisago City, MN 55013
Description of Change: Adjustment of Substantial Completion Date
ITEM DESCRIPTION UNIT QTY PRICE TOTAL
1 7.5 months substantial contract completion date extension to
June 1, 2023 $0.00
TOTAL CHANGE ORDER NO.1 $0.00
IN ACCORDANCE WITH THE CONTRACT AND SPECIFICATIONS, THE CONTRACT AMOUNT SHALL BE ADJUSTED IN
THE AMOUNT OF $0.00, AND EXTENSION OF 0.0 MONTHS SHALL BE ALLOWED FOR COMPLETION OF THE PROJECT.
THERE IS A CHANGE TO THE SUBSTANIAL COMPLETION DATE TO A June 1, 2023 SUBSTANIAL COMPLETION DATE
FROM OCTOBER 14, 2022 SUBSTANIAL COMPLETION DATE.
Amount of Original
Contract Total Additions Total Deductions Amount of Adjusted
Contract
$93,624.30 $0.00 $0.00 $93,624.30
ITEM #1: Substantial Completion Contract Extension.
The extension is warranted because the project team worked with CP Rail prior to the creation of this contract to secure the
appropriate permits to work next to the railroad tracks. Permits have now been secured but it has impacted the contract
completion date.
Approved
Contractor: City of Edina:
By: By:
Title: Title:
Date: Date:
G:\ENG\CONST\CONTRACTS\2021\ENG 21-6 (21004) Eden & Brookside Improvements\21004 Grandview TIF Improvements\ADMIN\LEGAL\Contracts\Landscaping\Eden Ave Landscaping_Change
Order_1 Contract Date.doc
Project Manager
12/2/2022
Date: December 8, 2022 Agenda Item #: VI.E.
To:C hair & C ommis s ioners of the Edina HR A Item Type:
R eques t F or P urchas e
F rom:C had A. Millner, P.E., Director of Engineering
Item Activity:
Subject:R equest for P urc hase: C hange O rder #1 Eden Avenue
Improvements
Ac tion
Edina Housing and Redevelopment
Authority
Established 1974
C ITY O F E D IN A
HO US I NG & R EDEVELO P MENT
AUT HO R I T Y
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
A C TI O N R EQ U ES TED:
Approve R equest for P urchase: C hange Order #1 E den Avenue I mprovements with S .M . H entges and S ons to
extend the contract completion date to July 28, 2023.
I N TR O D U C TI O N:
T he project was delayed due to C R R ail permitting and private utility issues. T his change order will extend the
contract date so the contractor can finish the work without any delay penalties.
AT TAC HME N T S:
Description
Request for Purchase: Change Order #1 Eden Avenue Improvements
CONTRACT CHANGE ORDER NO.1
Contract No: ENG 21-6 Contract Date: May 27, 2021
Type of Work: Street and Utility Improvements
Location: Eden Ave and Brookside Ave
Contractor: S.M. Hentges and Sons
Address: 650 Quaker Avenue, Jordan, MN 55352
Description of Change: Adjustment of Completion Date
ITEM DESCRIPTION UNIT QTY PRICE TOTAL
1 6-week contract completion date extension to July 28, 2023 $0.00
TOTAL CHANGE ORDER NO.1 $0.00
IN ACCORDANCE WITH THE CONTRACT AND SPECIFICATIONS, THE CONTRACT AMOUNT SHALL BE ADJUSTED IN
THE AMOUNT OF $0.00, AND EXTENSION OF 6 WEEKS SHALL BE ALLOWED FOR COMPLETION OF THE PROJECT.
THERE IS A CHANGE TO A July 28, 2023 COMPLETION DATE FROM June 16, 2023.
Amount of Original
Contract Total Additions Total Deductions Amount of Adjusted
Contract
$4,193,498.55 $0.00 $0.00 $4,193,498.55
ITEM #1: Contract Extension.
The extension is warranted because the project team worked with CP Rail prior to the creation of this contract to secure the
appropriate permits to work next to the railroad tracks. Permits have now been secured but it has impacted the contract
completion date.
Approved
Contractor: City of Edina:
By: By:
Title: Title:
Date: Date:
G:\ENG\CONST\CONTRACTS\2021\ENG 21-6 (21004) Eden & Brookside Improvements\21004 Grandview TIF Improvements\ADMIN\LEGAL\Contracts\Eden Avenue_Change Order_1 Contract Date.doc
Thomas A. Soucek
Digitally signed by Thomas A. Soucek
DN: C=US, E=tom.soucek@smhentges.com, O="SM
Hentges & Sons, Inc", CN=Thomas A. Soucek
Date: 2022.12.02 12:19:32-06'00'
Project Manager
December 2, 2022
Date: December 8, 2022 Agenda Item #: VI.F.
To:C hair & C ommis s ioners of the Edina HR A Item Type:
R eques t F or P urchas e
F rom:C had A. Millner, P.E., Director of Engineering
Item Activity:
Subject:R equest for P urc hase: C hange O rder #1 G randview
P edes trian Bridge
Ac tion
Edina Housing and Redevelopment
Authority
Established 1974
C ITY O F E D IN A
HO US I NG & R EDEVELO P MENT
AUT HO R I T Y
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
A C TI O N R EQ U ES TED:
Approve R equest for P urchase: C hange Order #1 G randview P edestrian Bridge with P ember C ompanies to
extend the contract completion date to July 28, 2023.
I N TR O D U C TI O N:
T he project was delayed due to C R R ail permitting and private utility issues. T his change order will extend the
contract date so the contractor can finish the work.
AT TAC HME N T S:
Description
Request for Purchase: Change Order #1 Grandview Pedes trian Bridge
CONTRACT CHANGE ORDER NO.1
Contract No: ENG 21-6 Contract Date: June 24, 2021
Type of Work: Grandview Pedestrian Bridge
Location: Grandview Parking Ramp / 5146 Eden Ave
Contractor: Pember Companies
Address: N4449 469th Street, Menomonie, WI 54751
Description of Change: Adjustment of Completion Date
ITEM DESCRIPTION UNIT QTY PRICE TOTAL
1 7-month contract completion date extension to July 28, 2023 $0.00
TOTAL CHANGE ORDER NO.1 $0.00
IN ACCORDANCE WITH THE CONTRACT AND SPECIFICATIONS, THE CONTRACT AMOUNT SHALL BE ADJUSTED IN
THE AMOUNT OF $0.00, AND EXTENSION OF 7 months SHALL BE ALLOWED FOR COMPLETION OF THE PROJECT.
THERE IS A CHANGE TO A July 28, 2023 COMPLETION DATE FROM November 20, 2022.
Amount of Original
Contract Total Additions Total Deductions Amount of Adjusted
Contract
$1,947,168.90 $0.00 $0.00 $1,947,168.90
ITEM #1: Contract Extension.
The extension is warranted because the project team worked with CP Rail prior to the creation of this contract to secure the
appropriate permits to work next to the railroad tracks. Permits have now been secured but it has impacted the contract
completion date.
Approved
Contractor: City of Edina:
By: By:
Title: Title:
Date: Date:
G:\ENG\CONST\CONTRACTS\2021\ENG 21-6 (21004) Eden & Brookside Improvements\21004 Grandview TIF Improvements\ADMIN\LEGAL\Contracts\Grandview Ped Bridge_Change Order_1 Contract
Date.doc
Date: December 8, 2022 Agenda Item #: VI I.A.
To:C hair & C ommis s ioners of the Edina HR A Item Type:
F rom:S tephanie Hawkinson, Affordable Housing
Development Manager Item Activity:
Subject:Approval of R edevelopment Agreement for
Multifamily Hous ing at 4620 West 77th S treet
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:
Approval of R edevelopment Agreement
I N TR O D U C TI O N:
T his item pertains to the use of public financing to partially fund private redevelopment at 4620 West 77th Street.
S pecial counsel at Dorsey and W hitney have prepared a complete R edevelopment Agreement based on the Term
S heet that was presented to the E dina H R A on J uly 15, 2022.
T he developer and representatives from D orsey & Whitney and Ehlers Associates will be available to answer any
questions about this proposed Agreement.
T his Agreement will also be presented to the C ity C ouncil for consideration on December 20, 2022.
S taff recommends that this R edevelopment Agreement be approved.
AT TAC HME N T S:
Description
Staff Report
Redevelopment Agreemenet
Sustainabile Building Policy Checklis t
Values View Finder Memo
December 8, 2022
Chair and Commissioners of the Edina Housing and Redevelopment Authority
Stephanie Hawkinson, Affordable Housing Development Manager
Approval of Redevelopment Agreement for Multifamily Housing at 4620 W. 77th St.
Information / Background:
The Solhem Companies is proposing a 276-unit multi-family development located at 4620 W. 77th St. (the
“Site”). 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 Sustainable Building Policy. 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 an 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 100% of AMI ($93,900 for a household of 2) and over half with rents affordable to households
with incomes less than 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 associated cracked asphalt surface parking lot. The Site is underdeveloped given the proximity of
superior amenities.
The City Council approved the final rezoning, final development plan, and site improvement plan for the
proposed project on October 6th, 2022.
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 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 Redevelopment Agreement that abides by applicable Minnesota Statutes that govern
Tax Increment Financing pooled funds and the use of SPaRC funds. The required qualifying costs also follow
the spirit of Edina’s TIF policy and practice which is typically more limited than allowed by Minnesota
Statute. This includes that the TIF Note for the pooled funds that will not exceed 10% of the actual
documented costs of the improvements.
The negotiation of this Redevelopment Agreement contains some flexibility to allow for uncertainty in the
financial marketplace that could occur between the time of financial closing and construction completion.
Like other recently reviewed developments, this development faces many challenges:
The construction industry is hindered by ongoing supply chain issues and fluctuations in 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 and create additional developer
risk.
To allow for some flexibility the pay-go TIF note for the pooled funds will be used to reduce the initial
equity invested and combined with the net operating income allow for a 7% cash on cost return. The
limiting factor is the aggregate Note payments will not exceed $7,351,000. This return is .07% higher than a
deal that closed a year ago, in part to account for increased interest rates and a higher percentage of units
that have restricted rents.
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, and additional 110 units with
rents restricted to below market rate, with all units initially 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.
The Redevelopment Agreement follows the general format and strategic approach typically used by Edina
for redevelopment projects focused on market rate housing with an affordability component together with
wide variety of public benefits.
STAFF REPORT Page 3
Sources and Uses
Sources Uses
Debt Financing $ 65,400,000 77% Acquisition $ 5,186,000 $18,790 per door
Equity $ 10,210,186 12% Hard Costs $ 63,703,318 TIF Supported
Equity $ 7,310,000 9% "Green" Elements $ 905,000 1.10% TDC
SPaRC Loan $ 2,000,000 2% Soft Costs $ 5,638,097
TOTAL $ 84,920,186 City Fees $ 2,937,030
Developer Fee $ 3,100,166 3.80% TDC
Financing Fees $ 3,450,575
TOTAL $ 84,920,186
$307,682 per unit
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.
No new TIF District is being created for this development. Rather the Pentagon Park 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 this
development itself. 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 this development, specifically the connection
to Fred Richards Park, complies with the SPaRC spending plan adopted November 16, 2021.
The structure of the terms has most of the financial risk with the developer.
Uses
Pentagon Park TIF Pooled Loan ($7.35 million): Pooled TIF will be used to reimburse the project
for pre-determined eligible costs after this proposed development is successfully completed. The
eligible costs include:
o Stormwater systems
o Sustainability features
o Construction related to soil conditions
o Site preparation
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.
STAFF REPORT Page 4
COVID Related Special Legislation 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.
Public Benefits
In addition to providing 28 units affordable to households with incomes at or below 50% of the Area Median
Income and an additional 110 units that will be rent restricted to not exceed 120% of AMI, the proposed
development aligns with multiple City approved plans, policies, and stated values.
Approved Plans and Policies
1. 2040 Comprehensive Plan
The proposed use as multi-family residential with a café is consistent with the Comprehensive Plan. The
project would provide 28 units of affordable housing, meet the City’s sustainability policy, and provide
significant upgrades to pedestrian, vehicular and bike connections to Fred Richards Park and the Regional
Trail. For example, the proposed development aligns with the following Comprehensive Plan Goals, among
others:
a. Chapter 4, Goal 1: The design of the proposed development acknowledges the
interrelationship between land use, transportation, and is housing in an area accessible to a
range of transportation options including bicycle, pedestrian and mass transit. The
proposed development also addresses climate change through higher density development
that helps reduce vehicle emissions.
b. Chapter 4, Goal 2: The proposed development broadens the range of housing options
affordable to residents at all income levels and life stages.
c. Chapter 6, Goal 3: The proposed development support the Fred Richards Park Master Plan.
2. 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.
3. New Multifamily Affordable Housing Policy
The proposed development will provide 10% of the units (28 units) affordable to households with incomes
at or below 50% of AMI. These units will be affordable for 20-years and secured by a Declaration of
Restriction Covenants recorded against the site. 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.
4. Sustainable Buildings Policy (“SBP”)
STAFF REPORT Page 5
Solhem will pursue the National Green Building Standard at the Silver level, to comply with the SBP. This
standard is specific to home construction, and in many aspects comparable to LEED silver. The project will
follow the MN B3 guidelines for predicted greenhouse gas emissions, including a lifecycle analysis of
materials emissions to inform emissions reduction during construction. The proposed development will
follow SB2030 requirements to meet the energy efficiency requirements, which seeks to cost-effectively (12
year payback) construct buildings that are 80% more energy efficient than a standard building built in 2005 in
Minnesota. The development will comply with EV charging requirements. Finally, it will comply with the B3
bird safe path articulated in the SBP.
5. TIF Policy
Ehlers confirmed the “but for” test was met as required to use the TIF pooled funds. Additionally, Dorsey
has prepared a Term Sheet and Redevelopment Agreement that abides by applicable Minnesota Statutes that
govern Tax Increment Financing pooled funds and the use of SPARC funds. The proposed project helps
accomplish the City’s goals as described in the Comprehensive Plan, Housing Strategy Task Force Report,
and Climate Action Plan by stimulating desirable redevelopment of an aging building, providing affordable and
attainable housing units, providing critical connections to Fred Richards Park, and resulting in a new building
that complies with the Sustainable Building Policy.
6. Policy for the Use of Unobligated TIF Funds (SPaRC)
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 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.
7. Housing Strategy Task Force Implementation Plan
The proposed project contributes to numerous goals and strategies in the Housing Strategy Task Force
Implementation Plan, including the following:
Add 28 of the 992 affordable rental units and 138 of the 900 market rate rental housing units for
general occupancy
Promote affordable and attainable housing for low- and moderate-income households
Encourage sustainable design and technology in new housing
Attract new residents by expanding housing options for low- and moderate-income households
Support the development and preservation of affordable housing throughout Edina where there is
access to transit
City Values
The Development proposal was reviewed using the Value View Finder Tool to determine the process for
awarding financing. Staff highlighted overlapping opportunities in the areas of Health in all Policies, Race and
Equity, Community Engagement and Sustainability. Staff highlighted overlapping opportunities, including the
following:
STAFF REPORT Page 6
Affordable housing with access to green space;
A location that has access to green forms of transportation; and
Increased neighborhood activation.
They also identified some tradeoffs:
Perceived privatization of the park although this is an improvement over the commercial offices that
currently align the park; and
Increase number of park users without corresponding park maintenance fee being charged.
A memo of the full description of the findings are attached.
Execution
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
Redevelopment Agreement
(4620 W. 77th Street)
by and among
City of Edina, Minnesota,
Housing and Redevelopment Authority of Edina, Minnesota,
and
4620 LLC
Dated as of
December 20, 2022
THIS DOCUMENT WAS DRAFTED BY:
Dorsey & Whitney LLP
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402-1498
Execution
-i-
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
TABLE OF CONTENTS
Page
Article I Recitals; Exhibits, Definitions ..................................................................................................... 3
1.1 Recitals ......................................................................................................................... 3
1.2 Exhibits......................................................................................................................... 3
1.3 Definitions .................................................................................................................... 3
Article II Representations and Warranties .............................................................................................. 7
2.1 Representations and Warranties of the City ................................................................. 7
2.2 Representations and Warranties of the Authority ........................................................ 8
2.3 Representations and Warranties of Developer ............................................................. 8
Article III Public Assistance....................................................................................................................... 9
3.1 Pooled TIF Qualified Costs .......................................................................................... 9
3.2 TIF Note ..................................................................................................................... 10
3.3 TIF Assistance and Potential Adjustment .................................................................. 12
3.4 Assignment of Note .................................................................................................... 14
3.5 SPaRC Fund Forgivable Loan .................................................................................... 16
3.6 Conditions Precedent to SPaRC Fund Forgivable Loan Closing ............................... 16
3.7 Action to Reduce Taxes ............................................................................................. 17
Article IV Requirements for Minimum Improvements ........................................................................ 17
4.1 Commencement and Completion of Minimum Improvements .................................. 17
4.2 Zoning and Land Use Approvals ................................................................................ 18
4.3 Building and Construction Permits ............................................................................ 18
4.4 Restrictions on Development ..................................................................................... 18
4.5 Submission and Approval of Evidence of Financing ................................................. 18
4.6 Affordable Housing and Workforce Housing ............................................................ 19
4.7 Public Easements ........................................................................................................ 20
4.8 Environmental Sustainability ..................................................................................... 21
4.9 Equity and Inclusion ................................................................................................... 21
4.10 Effect of Delay ........................................................................................................... 24
4.11 Additional Responsibilities of Developer .................................................................. 24
4.12 Certificate of Completion ........................................................................................... 24
4.13 Public Art ................................................................................................................... 25
Article V Encumbrance of the Project Area .......................................................................................... 25
5.1 Mortgage of the Minimum Improvements Area ........................................................ 25
5.2 Copy of Notice of Default to Mortgagee .................................................................... 25
5.3 Mortgagee’s Option to Cure Events of Default .......................................................... 25
5.4 Rights of a Foreclosing Mortgagee ............................................................................ 25
5.5 Events of Default Under Mortgage ............................................................................ 26
5.6 Subordination of Agreement ...................................................................................... 26
Execution
-ii-
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
Article VI Insurance and Indemnification .............................................................................................. 27
6.1 Insurance .................................................................................................................... 27
6.2 Indemnification .......................................................................................................... 28
Article VII Other Developer Covenants ................................................................................................. 28
7.1 Developer Reimbursement Obligations ..................................................................... 28
7.2 Maintenance and Operation of the Improvements ..................................................... 28
7.3 Cooperation with Litigation ....................................................................................... 29
7.4 Condemnation, Damage, or Destruction .................................................................... 29
7.5 Business Subsidy Agreement ..................................................................................... 29
7.6 Developer/Authority Grant Applications ................................................................... 29
7.7 Mitigation of Construction Disruption ....................................................................... 29
7.8 Project Information..................................................................................................... 30
7.9 Project Naming ........................................................................................................... 30
Article VIII Transfer Limitations ........................................................................................................... 30
8.1 Representation as to the Minimum Improvements ..................................................... 30
8.2 Limitation on Transfers .............................................................................................. 30
Article IX Events of Default and Remedies ............................................................................................ 32
9.1 Events of Default Defined .......................................................................................... 32
9.2 Developer Events of Default ...................................................................................... 32
9.3 City and Authority Events of Default ......................................................................... 32
9.4 Cure Rights ................................................................................................................. 32
9.5 Authority Remedies on Developer Events of Default ................................................ 33
9.6 City Remedies on Developer Events of Default ......................................................... 33
9.7 Developer Remedies on City or Authority Events of Default .................................... 33
9.8 No Remedy Exclusive ................................................................................................ 33
9.9 No Additional Waiver Implied by One Waiver ......................................................... 34
9.10 Reimbursement of Attorneys’ Fees ............................................................................ 34
Article X Additional Provisions ............................................................................................................... 34
10.1 Conflicts of Interest .................................................................................................... 34
10.2 Titles of Articles and Sections .................................................................................... 34
10.3 Notices and Demands ................................................................................................. 34
10.4 Governing Law, Jurisdiction, Venue and Waiver of Trial by Jury ............................ 35
10.5 Severability ................................................................................................................. 35
10.6 Consents and Approvals ............................................................................................. 35
10.7 Additional Documents ................................................................................................ 35
10.8 Limitation ................................................................................................................... 35
10.9 City/Authority Approval ............................................................................................ 36
10.10 Superseding Effect ..................................................................................................... 36
10.11 Relationship of Parties................................................................................................ 36
10.12 Survival of Terms ....................................................................................................... 36
10.13 Data Practices Act ...................................................................................................... 36
10.14 No Waiver of Governmental Immunity and Limitations on Liability ........................ 36
Execution
-iii-
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
10.15 City and Authority Regulatory Authority .................................................................. 36
10.16 Memorandum of Agreement ...................................................................................... 36
10.17 Limited Liability ........................................................................................................ 36
10.18 Time is of the Essence ................................................................................................ 37
10.19 Counterparts ............................................................................................................... 37
10.20 Amendments ............................................................................................................... 37
10.21 TIF District ................................................................................................................. 37
10.22 Term ........................................................................................................................... 37
10.23 Estoppel Certificate .................................................................................................... 37
Execution
-iv-
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
LIST OF EXHIBITS
Exhibit A Legal Description of the Project Area
Exhibit B Project Site Plan
Exhibit C Final Development Plan
Exhibit D Initial TIF Pro Forma
Exhibit E Form of Go-Ahead Letter
Exhibit F Form of Certificate of Completion with Completion Checklist
Exhibit G Memorandum of Redevelopment Agreement
Exhibit H Form of TIF Note
Exhibit I Form of SPaRC Fund Forgivable Loan Agreement
Exhibit J Sample IRR Calculations and TIF Adjustment Calculation
Exhibit K Inclusionary Housing Policy Program Guide
Exhibit L Form of Housing Restrictive Covenant
Exhibit M Equity and Inclusion Community Engagement Plan
Execution
1
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
REDEVELOPMENT AGREEMENT
(4620 W. 77th Street)
THIS REDEVELOPMENT AGREEMENT (this “Agreement”) is made and entered into
December 20, 2022 (“Effective Date”), by and among the City of Edina, Minnesota, a Minnesota statutory
city (the “City”), the Housing and Redevelopment Authority of Edina, Minnesota, a public body
corporate and politic organized and existing under the laws of the State of Minnesota (the “Authority”), and
4620 LLC, a Minnesota limited liability company (“Developer”).
RECITALS
A. Pursuant to and in accordance with Minnesota Statutes, Sections 469.174 to 469.1794, as
amended (the “TIF Act”), the Authority is authorized to finance certain eligible redevelopment costs of
redevelopment projects with tax increment revenues derived from a tax increment financing district
established in accordance with the TIF Act.
B. In 2014, the City and the Authority established the “Pentagon Park Tax Increment
Financing District” (a redevelopment district) (the “TIF District”) pursuant to Sections 469.001 through
469.047, inclusive, of the TIF Act, in an effort to encourage the development and redevelopment of such
designated area within the City (the “Redevelopment Area”).
C. More than five (5) years has passed since the certification of the TIF District, so new
activity within the TIF District, including, without limitation, the Minimum Improvements (as defined
below), are subject to the “five-year rule” under Section 469.1763, Subd. 3 of the TIF Act and the
corresponding provisions of Section 469.1763, Subd. 2 of the TIF Act, which requires that not more than
25 percent of the total revenue derived from tax increment (as defined in the TIF Act) paid by properties in
the TIF District (collectively, “Pooled Tax Increments”) may be expended on qualified activities in the
project area that (i) are outside the geographic boundaries of the TIF District; or (ii) inside the TIF District
but occurring after the initial five-year period, like the Minimum Improvements.
D. Pursuant to the temporary authority for use of tax increments granted by Section 469.176,
subdivision 4n of the TIF Act, on October 28, 2021, the Authority adopted, and on November 16, 2021, the
City approved, a written spending plan for unobligated tax increment monies for the TIF District and other
previously established tax increment financing districts in the City (the “Spending Plan”) and established
the Special Projects and Redevelopment Capital Fund (the “SPaRC Fund”) to encourage and incentivize
new private investment in the City’s commercial and industrial districts by providing loans, grants and/or
equity for development projects in accordance with the Spending Plan.
E. Developer is under contract to purchase that certain land within the Redevelopment Area
located at 4620 W. 77th Street, as such land is legally described on the attached Exhibit A (the “Project
Area”) from Pentagon North, LLC, a Minnesota limited liability company (“Pentagon North”), the current
owner of the Project Area.
F. Developer has requested, and the City has approved, pursuant to the City Approvals (as
defined herein), rezoning of the Project Area to a Planned Unit Development and a final development plan
for the redevelopment of Project Area.
G. The Project Area is to be redeveloped by demolition of the existing three-level office
building and related parking and improvements located within the Project Area and the phased development
and construction of the buildings and other improvements generally described below (as well as those
improvements, which benefit the Project on adjacent property owned by Pentagon North for access, ingress
Execution
2
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
and other improvements required to complete the Minimum Improvements), as such Minimum
Improvements are generally depicted on the Project Site Plan attached as Exhibit B as approved in the PUD
Ordinance and incorporated into the Development Contract (collectively, the “Minimum Improvements”),
and all to be constructed in accordance with the City Approvals and at the general scale and massing using
the architectural quality, exterior finish materials and landscaping as shown in the Final Development Plan
(as defined herein):
(i) A single, seven-story building with approximately 276 apartment units (including
at least (A) 110 workforce apartment units and (B) 28 affordable rental apartment
units;
(ii) the public plaza, sidewalk and streetscape improvements and amenities (the “Plaza
and Streetscapes”) connecting 77th Street to Fred Richards Park and adjoining the
Minimum Improvements, as required under the terms of the City Approvals and in
the areas generally depicted on the Project Plans attached as Exhibit C, which
Plaza and Streetscapes will be subject to the Public Access Easement (as defined
herein);
(iii) the fire truck road and vehicular park access road (the “Public Road”) located
between the 4600 and 4570 W. 77th Street buildings and connecting 77th Street to
Fred Richards Park, as required under the terms of the City Approvals and in the
areas generally depicted on the Project Plans attached as Exhibit C, which Public
Road will be subject to the Public Road Easement (as defined herein); and
(iv) such other improvements required under the terms of the City Approvals.
H. Upon completion, the Minimum Improvements are anticipated to deliver many benefits to
the general public. In addition to the redevelopment of an underutilized building and long-term increase in
the property tax base, this project will deliver additional public benefits including: creation of new
affordable housing units, stormwater improvements, environmental remediation, streetscape
improvements, public parking, and dedication of land for future roadway. Upon completion, this project
will also enable several improvements to the local transportation network including improvements for
pedestrians, bicyclists, and motorists. These improvements are intended to benefit this project, the
surrounding neighborhoods and the general public who travel to and through this area.
I. The Authority and the City have determined that (i) the redevelopment to occur through
the proposed Minimum Improvements would not occur solely through private investment within the
reasonably foreseeable future, (ii) that the proposed Minimum Improvements conform to the general plan
for the development or redevelopment of the City as a whole, and (iii) that the proposed Minimum
Improvements afford maximum opportunity consistent with the sound needs of the City as a whole, for the
development or redevelopment of the TIF District by private enterprise, and, accordingly, the City and
Authority believes the Minimum Improvements are in the best interest of the City and desire to assist in
providing financial support for the Minimum Improvements from Pooled Tax Increments and the SPaRC
Fund in accordance with this Agreement.
NOW, THEREFORE, in consideration of foregoing Recitals, which are incorporated into the
provisions of this Agreement by this reference, and the mutual obligations of the parties hereto, each of
them does hereby covenant and agree with the others as follows:
Execution
3
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
Article I
Recitals; Exhibits, Definitions
1.1 Recitals. The foregoing Recitals are incorporated into this Agreement by this reference,
including the definitions set forth therein.
1.2 Exhibits. All Exhibits referred to in and attached to this Agreement upon execution are
incorporated in and form a part of this Agreement as if fully set forth herein.
1.3 Definitions. Unless the context otherwise specifies or requires, the following terms have
the following definitions. Certain other capitalized terms are defined elsewhere in this Agreement. All
defined terms may be used in the singular or the plural, as the context requires.
“Affordable Housing Requirements” has the meaning set forth in Section 4.6(a).
“Affordable Units” has the meaning set forth in Section 4.6(a).
“Agreement” means this Redevelopment Agreement, as the same may be from time to time
modified, amended or supplemented.
“Authority” means the Housing and Redevelopment Authority of Edina, Minnesota.
“Authorized Representative” means, with respect to the Authority, the Executive Director of the
Authority or its designee, and, with respect to the City, the City Manager or its designee.
“Available Tax Increments” means Pooled Tax Increments that is Unobligated Increment and
which have been actually received and retained by the Authority from the County during any applicable
time frame, in accordance with the provisions of the TIF Act, including without limitation Minnesota
Statutes, Section 469.177, less any administrative expenses incurred by the City and/or the Authority
relating to the TIF District to the extent permitted by the TIF Act and to the extent that such expenses have
not been paid or reimbursed to the City and/or the Authority, as applicable, by Developer.
“Board” means the Board of Commissioners of the Authority.
“Certificate of Completion” means a certificate in substantially the form attached as Exhibit F,
signed by the Authorized Representative for the Authority, to be issued pursuant to the terms of
Section 4.12.
“City” means the City of Edina, Minnesota.
“City Approvals” means, collectively, the PUD Ordinance, the Project Approval Resolution, the
Final Development Plan, and the Development Contract, and all other approvals, permits, licenses, and
agreements issued by or entered into with the City, the Authority, or other governmental authority relating
to the Minimum Improvements, the Project Area and/or Developer.
“City Consultants” means the financial, engineering, legal, TIF eligibility and other similar advisors
to the City and the Authority.
“City Council” means the City Council of the City.
“City Easement(s)” has the meaning set forth in Section 4.7(a).
Execution
4
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
“City Parties” means the City and the Authority, and their respective governing body members and
elected officials, officers, employees, agents, independent contractors and attorneys.
“Commencement” means (i) with respect to pre-construction activities necessary for
Commencement of the vertical construction of the Minimum Improvements (e.g., demolition,
environmental remediation and site preparation), the date on which actual physical activity related to such
pre-construction activity occurs and (ii) with respect to vertical construction of the Minimum
Improvements, the date on which actual physical construction of the building foundation begins.
“Completion” means (i) with respect to the Minimum Improvements, Developer’s receipt of the
Certificate of Completion from the Authority for the housing component and (ii) with respect to the
individual aspects of the Minimum Improvements described in the Minimum Improvements timeline set
forth in Section 4.1, substantial completion of such aspect or element such that Developer can proceed with
Commencement of the next aspect or element in a manner consistent with normal construction practices
“County” means the County of Hennepin, Minnesota.
“Cure Rights” means the rights to cure a Default as specified in Section 9.4 before such Default is
deemed to be an Event of Default.
“Default” means an act or omission by the City, the Authority or Developer which becomes an
Event of Default under this Agreement if it is not cured following notice thereof from the other party
pursuant to any applicable Cure Rights.
“Default Date” has the meaning set forth in Section 4.1(a).
“Developer” means 4620 LLC, a Minnesota limited liability company, and its permitted successors
and assigns in accordance with this Agreement.
“Development Contract” means that certain Site Improvement Performance Agreement approved
by the City on October 6, 2022, by and between the City and Developer, and recorded against Project Area.
“Effective Date” means the date of this Agreement set forth in the preamble above.
“Environmental Law” means any federal, state or local law, rule, regulation, ordinance, or other
legal requirement relating to (a) a release or threatened release of any Hazardous Material, (b) pollution or
protection of public health or the environment or (c) the manufacture, handling, transport, use, treatment,
storage, or disposal of any Hazardous Material.
“Event of Default” means any of the events by the City, the Authority or Developer described in
Article IX.
“Final Development Plan” means the final development plans for the Minimum Improvements as
approved by the City pursuant to the Project Approval Resolution and the PUD Ordinance, and attached
hereto as Exhibit C.
“Financing Commitments” means financing commitments, binding term sheets and/or other
evidence of Project financing commitments from debt and equity sources sufficient, with all other available
sources of funding, to fund all costs to construct the Minimum Improvements, all in a form reasonably
satisfactory to the Authority and disclosing (i) the identity of the mortgage lender(s), (ii) mortgage rate and
terms, and (iii) an organizational chart of Developer with the identity of all equity sources with greater than
Execution
5
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
a 10% direct ownership investment in the Project with management control, and the identify of any other
investors that have direct management control of the Developer (a “Beneficial Interest”).
“Go-Ahead Letter” means Developer’s letter to the City and the Authority, substantially in the form
attached as Exhibit E, and including the Financing Commitments and stating that Developer is prepared to
close on the acquisition of the Project Area and the financing for the construction of the Minimum
Improvements, and is prepared to proceed with the construction of the Minimum Improvements.
“Hazardous Material” means petroleum, asbestos-containing materials, and any substance, waste,
pollutant, contaminant or material that is defined as hazardous or toxic in any Environmental Law.
“Housing Restrictive Covenant” has the meaning set forth in Section 4.6(e).
“Law” means federal, state, or local governmental or quasi-governmental laws, ordinances, rules,
codes, regulations, directives, orders and/or requirements.
“Market Return Rate” has the meaning set forth in Section 3.3(c)(i).
“Memorandum of Agreement” means the document described in Section 10.16 and substantially
in the form shown in Exhibit G.
“Minimum Improvements” has the meaning set forth in Recital G.
“Mortgage” has the meaning set forth in Section 5.1(a).
“Obligated Increment” means the Tax Increment that is required and committed for payment of
Outstanding Obligations.
“Outstanding Obligations” means outstanding bonds, binding contracts, and other outstanding
financial obligations of the TIF District (as such terms are defined in the TIF Act) issued prior to the date
of this Agreement to which Tax Increment is pledged.
“Pentagon North” means Pentagon North, LLC, a Minnesota limited liability company.
“Plaza and Streetscapes” has the meaning set forth in Recital G.
“Pooled Tax Increments” has the meaning set forth in Recital C.
“Pooled TIF Qualified Costs” has the meaning set forth in Section 3.1(a).
“Project” means the construction and development of the Minimum Improvements within the
Project Area in accordance with the City Approvals and this Agreement.
“Project Approval Resolution” means City Council Resolution No. 2022-92.
“Project Area” has the meaning set forth in Recital E.
“Project Site Plan” means the site plan for the Minimum Improvements attached as Exhibit B.
“Public Access Easement” has the meaning set forth in Section 4.7(a)(ii).
Execution
6
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
“Public Road” has the set forth in Recital G.
“Public Road Easement” has the meaning set forth in Section 4.7(a)(ii).
“PUD Ordinance” means City Ordinance No. 2022-08.
“Qualified Redevelopment Costs” means, collectively, the Pooled TIF Qualified Costs and the
SPaRC Fund Qualified Costs.
“Redevelopment Area” has the meaning set forth in Recital B.
“Related Party” means with respect to any person or entity (i) any other person or entity controlling,
controlled by or under common control with such person or entity; or (ii) any other person or other entity
in which the majority equity interest of such other person or entity is owned by the same parties that have
a majority equity interest in the first person or entity.
“SPaRC Fund” has the meaning set forth in Recital D.
“SPaRC Forgivable Loan” has the meaning given in Section 3.5.
“SPaRC Fund Qualified Costs” has the meaning set forth in Section 3.5.
“Spending Plan” has the meaning set forth in Recital D.
“State” means the state of Minnesota.
“Tax Increment” means that portion of the real property taxes which is paid with respect to the TIF
District and which is actually remitted to the Authority as tax increment of the TIF District pursuant to the
TIF Act. The term Tax Increment does not include any amounts retained by or payable to the State auditor
under Section 469.177, subdivision 11 of the TIF Act.
“TIF” means tax increment financing pursuant to the TIF Act.
“TIF Act ” has the meaning set forth in Recital A.
“TIF Assistance” means reimbursement of Pooled TIF Qualified Costs through payments from the
Authority to Developer of Available Tax Increments under the TIF Note, pursuant to the terms and
conditions of Article III of this Agreement, the TIF Note, and the TIF Act.
“TIF District” has the meaning set forth in Recital B.
“TIF Note” has the meaning set forth in Section 3.3(a).
“TIF Pro Forma” means a detailed financial pro forma for the Minimum Improvements, including
total Minimum Improvements costs, sources and uses of financing, return calculations based on projected
and/or actual (as applicable) income and expenses for the Minimum Improvements, in substantially the
form attached hereto as Exhibit D, and all as updated by Developer from time to time in accordance with
this Agreement based on actual and/or projected Minimum Improvements information, as the same
becomes available during the development of the Minimum Improvements.
“Unavoidable Delays” means actual delays in the Commencement and Completion of the
Minimum Improvements or any element thereof, outside the reasonable control of Developer, to extent
Execution
7
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
such actual delays are a result of (i) unusually severe or prolonged bad weather, (ii) acts of God, acts of
war, civil unrest, terrorism, criminal conduct of third parties, fire or other casualty to the Minimum
Improvements, (iii) litigation commenced by third parties, (iv) actions or inactions of any federal, State, or
local government unit which directly result in delays, including, but not limited to, a declared emergency
under Minnesota Statutes, Chapter 12 or due to pandemic or quarantine restrictions imposed by applicable
Law, (v) strikes, or other labor trouble, industry-wide material shortages and delays in delivery, labor
shortages; (vi) concealed or unknown site conditions not revealed and not reasonably anticipated prior to
the Effective Date; (vii) pandemic and outbreaks of Covid-19 and variants thereof; and/or (viii) other events
beyond Developer’s reasonable control which Developer could not reasonably foresee would occur and
which Developer would have been reasonably expected to take measures to avoid or minimize, in each
case, not resulting from the act or omission of Developer (or its contractors, subcontractors, agents, or
employees), and in each instance to the extent Developer gives written notice to the Authority and City
within ten (10) business days after either the occurrence of such event giving rise to each Unavoidable
Delay or Developer’s reasonable realization that the occurrence will cause an Unavoidable Delay.
“Unobligated Increment” means any Tax Increment not required for payment of Outstanding
Obligations due during the six months following the transfer of Tax Increment for Outstanding Obligations.
“Workforce Housing Requirements” has the meaning set forth in Section 4.6(c).
“Workforce Units” has the meaning set forth in Section 4.6(c).
Article II
Representations and Warranties
2.1 Representations and Warranties of the City. The City makes the following representations
and warranties:
(a) The City is a Minnesota municipal corporation and has the power to enter into this
Agreement and carry out its obligations hereunder. The City has duly authorized the execution, delivery and
performance of this Agreement.
(b) There is not pending, nor to the best of the City’s knowledge is there threatened,
any suit, action or proceeding against the City before any court, arbitrator, administrative agency or other
governmental authority that may materially and adversely affect the validity of any of the transactions
contemplated hereby, the ability of the City to perform its obligations hereunder or as contemplated hereby,
or the validity or enforceability of this Agreement.
(c) To the best of the City’s knowledge and belief, no member of the City Council or
officer of the City, has either a direct or indirect financial interest in this Agreement, nor will any City
Councilmember or officer of the City, benefit financially from this Agreement within the meaning of
Minnesota Statutes, Section 469.009, as amended.
(d) The execution, delivery and performance of this Agreement, and any other
documents, instruments or actions required or contemplated pursuant to this Agreement by the City does
not, and consummation of the transactions contemplated therein and the fulfillment of the terms thereof will
not conflict with or constitute on the part of the City a breach of or default under any existing agreement or
instrument to which the City is a party or violate any law, charter or other proceeding or action establishing
or relating to the establishment and powers of the City or its officers, officials or resolutions.
Execution
8
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
2.2 Representations and Warranties of the Authority. The Authority makes the following
representations and warranties:
(a) The Authority is a public body corporate and politic and a governmental
subdivision of the State, duly organized and existing under State law and the Authority has the authority to
enter into this Agreement and carry out its obligations hereunder.
(b) Except as provided in this Agreement, and provided that the Authority will fund
fiscal disparities from within the TIF District, in accordance with Minnesota Statutes, Section 469.177,
subdivision 3, the Authority agrees to retain all of the captured net tax capacity of the Project Area to finance
the Pooled TIF Qualified Costs as provided in this Agreement, and will elect that the duration of the TIF
District will be the maximum duration permitted by the TIF Act. The Authority will not voluntarily take any
action to reduce the amount of captured tax capacity retained to finance the Pooled TIF Qualified Costs or
to further reduce the duration of the District until the amount paid to Developer from Available Tax
Increments reaches the maximum amount specified in Article III.
(c) The execution, delivery and performance of this Agreement and any other
documents or instruments required pursuant to this Agreement by the Authority does not, and consummation
of the transactions contemplated therein and the fulfillment of the terms thereof will not, conflict with or
constitute on the part of the Authority a breach of or default under any existing (i) indenture, mortgage, deed
of trust or other agreement or instrument to which the Authority is a party or by which the Authority or any
of its property is or may be bound, (ii) legislative act, constitution or other proceeding establishing or relating
to the establishment of the Authority or its officers or its resolutions, or (iii) any Minnesota statute or any
provisions of any bond, debenture, loan agreement, regulation or order of the United States of America or
the State, or any agency or political subdivisions thereof or any court order or judgment in any proceeding
to which the Authority is or was a party by which it is bound.
(d) There is not pending, nor to the best of the Authority’s knowledge is there
threatened, any suit, action or proceeding against the Authority before any court, arbitrator, administrative
agency or other governmental authority that may materially and adversely affect the validity of any of the
transactions contemplated hereby, the ability of the Authority to perform its obligations hereunder or as
contemplated hereby, or the validity or enforceability of this Agreement.
(e) To the best of the Authority’s knowledge and belief, no member of the Board of
the Authority or officer of the Authority, has either a direct or indirect financial interest in this Agreement,
nor will any Commissioner of the Authority or officer of the Authority, benefit financially from this
Agreement within the meaning of Minnesota Statutes, Section 469.009, as amended.
2.3 Representations and Warranties of Developer. Developer represents and warrants that:
(a) Developer is a limited liability company organized and in good standing under the
laws of the state of Minnesota, is not in violation of any provisions of its operating agreement or other
organizational documents or the laws of the State, has power to enter into this Agreement and has duly
authorized the execution, delivery and performance of this Agreement by proper action of its members.
(b) Developer holds a valid purchase contract to acquire the Project Area at a market
price that is reflective of current regional market for redevelopment projects of the size and quality of the
Minimum Improvements. The transaction contemplated by such purchase contract, as the same may be
amended, is an arm’s length transaction and the buyer and seller have no other business relationship with
respect to the Minimum Improvements.
Execution
9
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
(c) The execution and delivery of this Agreement and the consummation of the
transactions contemplated thereby, and the fulfillment of the terms and conditions thereof do not and will
not conflict with or result in a breach of any material terms or conditions of Developer’s organizational
documents, any restriction or any agreement or instrument to which Developer is now a party or by which
it is bound or to which any property of Developer is subject, and do not and will not constitute a default
under any of the foregoing or to the best of Developer’s knowledge be a violation of any order, decree,
statute, rule or regulation of any court or of any state or Federal regulatory body having jurisdiction over
Developer or its properties, including its interest in the Minimum Improvements, and do not and will not
result in the creation or imposition of any lien, charge or encumbrance of any nature upon any of the property
or assets of Developer contrary to the terms of any instrument or agreement to which Developer is a party
or by which it is bound.
(d) To the best of Developer’s knowledge and belief, the execution and delivery of
this Agreement will not create a conflict of interest prohibited by Minnesota Statutes, Section 469.009, as
amended.
(e) Developer would not construct the Minimum Improvements, but for the execution
of this Agreement and the TIF Assistance for the Qualified Redevelopment Costs and other public assistance
contemplated to be made available hereunder.
(f) There are no pending or to the best of Developer’s knowledge, threatened legal
proceedings, of which Developer has notice, contemplating the liquidation or dissolution of Developer or
threatening its existence, or seeking to restrain or enjoin the transactions contemplated by the Agreement, or
questioning the authority of Developer to execute and deliver this Agreement or the validity of this
Agreement.
(g) Neither Developer nor any Related Party of Developer is currently delinquent in
the payment of any business, occupation, sales, use, gross receipts, rental, real and personal property and
other similar taxes imposed with respect to any real property owned or leased by any of such parties in the
State.
(h) Developer has not received any notice from any local, state or federal official that
the activities of Developer or the Authority with respect to the Project Area may or will be in violation of
any Environmental Law, except as has been identified in any report, audit, inspection or survey, undertaken
by or provided to the City and the Authority. Developer represents that to the best of Developer’s knowledge:
(i) it is not aware of any state or federal claim filed or planned to be filed by any party relating to any violation
of any local, state or federal Environmental Law, regulation or review procedure, and (ii) it is not aware of
any violation of any local, state or federal law, regulation or review procedure which would give any person
a valid claim under any Environmental Law, including the Minnesota Environmental Rights Act or the
Minnesota Environmental Policy Act.
(i) Developer reasonably expects that it will be able to obtain private financing in an
amount sufficient, together with funds provided by the Authority and any other public agencies, to enable
Developer to successfully construct the Minimum Improvements, as provided herein.
Article III
Public Assistance
3.1 Pooled TIF Qualified Costs.
Execution
10
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
(a) Costs and expense for the items described below, initially paid by Developer from
Developer’s own sources and incurred in furtherance of the construction and development of the Minimum
Improvements, shall be eligible for TIF Assistance under the terms and conditions of this Agreement
(collectively, “Pooled TIF Qualified Costs”):
Pooled TIF Qualified Costs Approx. Cost
Stormwater for public amenities not constructed within the pedestrian
plaza $250,000
Sustainability certification (see Section 4.8) $851,000
Increased costs related to unfavorable soil conditions:
a) Grouted pilings and soil corrections for building
b) Excavation, load transfer platform and footings
c) Added podium concrete structure
d) Podium landscaping, access and water retention
e) Added building utility length, soil corrections and structure
a) $1,800,000
b) $1,200,000
c) $3,600,000
d) $800,000
e) $450,000
Site preparation, foundation, demolition and abatement of existing office
building $250,000
The Public Road, including related soil corrections and added ADA
office access $250,000
Reimbursement of the City’s and the Authority’s professional costs and
Developer legal costs related to preparation of this Agreement $180,000
Total $9,631,000
(b) The actual amount of Pooled TIF Qualified Costs within each of the foregoing
categories may be allocated among such categories (in amounts that differ from these set forth in the table
above), subject to reasonable review and approval by the Authority, and provided that Developer must
provide reasonable evidence of the actual amounts of Qualified Redevelopment Cost actually incurred or
committed in each such category.
3.2 TIF Note.
(a) TIF Note. In order for Developer to obtain the TIF Assistance contemplated by
this Agreement, the Authority shall issue, subject to the terms and conditions of this Agreement, one “pay-
as-you-go” TIF note (“TIF Note”) in substantially the form attached as Exhibit H, with a maximum term
expiring in the year 2044, and in the aggregate maximum principal amount of not to exceed $7,351,000.00,
subject to adjustment pursuant to Section 3.3, and in no event shall the principal amount of the TIF Note
exceed 10% of the actual, documented costs of the Minimum Improvements as shown in the updated TIF
Pro Forma provided by Developer pursuant to Section 3.3(c).
Execution
11
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
(b) Interest. The TIF Note shall bear simple interest on the unpaid principal balance
thereof at a fixed rate equal to 6.0%.
(c) Payments and Interest. Semi-annual payments on the TIF Note from Available Tax
Increment and accrual of interest on the unpaid principal balance of the TIF Note will commence upon the
Authority’s issuance of the TIF Note, all in accordance with terms and condition set forth in the TIF Note.
(d) Condition of Issuance. The Authority’s obligation to issue the TIF Note to
Developer is subject to satisfaction of each of the following conditions:
(i) Developer shall have provided evidence satisfactory to the Authority that
Developer has actually incurred (A) Pooled TIF Qualified Costs in an amount equal to at
least the amount of the requested TIF Note and (B) total Minimum Improvements costs
corresponding to the line item detail (subject to the use of Developer’s contingencies as
provided in Section 3.3(c)(ii)) shown in the initial TIF Pro Forma attached as Exhibit D;
(ii) Developer shall have provided evidence satisfactory to the Authority that
all parties have been paid for work related to the completion of the Minimum
Improvements (e.g., lien waivers or similar);
(iii) Developer shall have provided the updated TIF Pro Forma to the
Authority, and the Authority shall have completed their review, analysis, and audit of the
same as necessary to determine the original principal amount of the TIF Note in accordance
with Section 3.3(c);
(iv) Developer shall have submitted documentation necessary to secure all
grant payments as well as other documents to administer the closing of all grant
agreements.
(v) Developer shall have granted, and/or shall have caused the then-current
owner of the applicable portion of Project Area to grant, to the City and/or the Authority,
as applicable, each of the City Easements and the Housing Restrictive Covenant; Developer
shall have obtained all applicable mortgagee consents to such City Easements and the
Housing Restrictive Covenant; and each of the City Easements and the Housing Restrictive
Covenant, the respective mortgagee consents shall have been recorded;
(vi) Developer shall have satisfied the Environmental Sustainability
requirements set forth in Section 4.8 and Developer has delivered such reasonable and
relevant information and documentation as the Authority requires in order to confirm the
same;
(vii) Developer has delivered to the Authority a final report and certificate
detailing and certifying as to Developer’s activities and final outcomes of Developer’s
efforts to achieve the Equity and Inclusion goals under Section 4.9 of this Agreement;
(viii) No Developer Default or Developer Event of Default exist under this
Agreement and no Developer default shall exist under any of the City Approvals, City
Easements, or any other agreement pertaining to the Minimum Improvements;
(ix) Developer has met all requirements of the City corresponding to the
Development Contract for the Minimum Improvements; and
Execution
12
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
(x) the Certificate of Completion for the Minimum Improvements shall have
been issued by the Authority in accordance with the terms and conditions of this
Agreement.
(e) No Representation or Warranty. Payments of principal and interest under the TIF
Note shall be payable solely from Available Tax Increments. The Authority does not represent or warrant
the amounts of Available Tax Increments that will be available for payment principal and interest under the
TIF Note. The Authority will not reimburse Developer for Pooled TIF Qualified Costs from Authority
revenues, other than from Available Tax Increments, nor guaranty the amount of money which Developer
will receive as a reimbursement, such amount being payable solely from the Available Tax Increments in
accordance with this section, unless the Authority elects, in its sole and absolute discretion, with no
obligation to do so, to pay down the TIF Note from other funds.
3.3 TIF Assistance and Potential Adjustment.
(a) Generally. The financial assistance to Developer under this Agreement is based on
certain assumptions regarding anticipated costs and expenses associated with constructing the Minimum
Improvements. Specifically, the maximum aggregate principal amount of the TIF Note has been determined
based on the amount of assistance needed to make the Minimum Improvements financially feasible, as
shown in the initial TIF Pro Forma attached as Exhibit D. The Authority and Developer agree that those
assumptions will be reviewed at the times described in this section, and that the amount of TIF Assistance
provided herein shall be adjusted in accordance with this Section 3.3.
(b) Definitions. For the purposes of this section, the following terms have the
following meanings:
(i) “Cash Flow” means Net Operating Income less debt service (principal and
interest) with respect to the Mortgage loan(s) encumbering the Minimum Improvements.
(ii) “Cash-on-Cost Return” means Net Operating Income divided by the sum
of the total actual cost of the Minimum Improvements (less any grants, forgivable loans
(including the SPaRC Fund Forgivable Loan), or City, Authority, federal or State funds
received by Developer) as set forth in an updated TIF Pro Forma. For purposes of clarity,
an example calculation of the Cash-On-Cost Return is included in the initial TIF Pro Forma
attached as Exhibit D.
(iii) “IRR” means the internal rate of return for the Minimum Improvements,
where the IRR is calculated as the annualized return of the annual cash flow over the
applicable period on Developer’s actual utilization of equity for Minimum Improvements
costs. For purposes of clarity, example calculations of IRR are attached hereto in Exhibit J.
(iv) “Net Operating Income” means total income and other Project-derived
revenue, including payments under the TIF Note, less Operating Expenses.
(v) “Operating Expenses” means reasonable and customary expenses incurred
in operating the Minimum Improvements, as well as any costs shared with the adjacent
property owner arising out of any private easements required to access and operate the
Minimum Improvements, including, but not limited to all management and related
expenses, all real estate taxes and special assessments for the Project Area.
Execution
13
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
(c) Confirmation of TIF Assistance Upon Completion.
(i) Market Rate Return. After substantial completion of the Minimum
Improvements, but before, and as a condition to, issuance of the Certificate of Completion
and issuance of the TIF Note, Developer shall provide to the Authority an updated TIF Pro
Forma based on actual, documented costs of the Minimum Improvements and any
reasonable and relevant information and documentation as the Authority requires in order
to calculate the reasonably anticipated Cash-on-Cost Return for the Minimum
Improvements and to otherwise confirm that the “but for” finding adopted by the City and
the Authority continues to be satisfied. The Authority may retain a financial advisor,
accountant, and/or other professional with similar expertise to audit the submitted updated
TIF Pro Forma, at Developer’s cost. If the updated TIF Pro Forma demonstrates that the
Cash-on-Cost Return for the Minimum Improvements (based on the forecasted stabilized
operations in the updated TIF Pro Forma) exceeds 7.00% (the “Market Return Rate”), then
the amount of TIF Assistance provided herein, as reflected in the principal amount of the
TIF Note, shall be reduced based on the actual TIF Assistance that is sufficient to assist the
Minimum Improvements to achieve the Market Return Rate based on the updated TIF Pro
Forma.
(ii) Contingency Funds and Allowances. The maximum principal amount of
the TIF Note is currently calculated based on the initial TIF Pro Forma attached as
Exhibit D, including Developer’s use of the contingency funds and escalation allowances.
Developer shall provide the Authority documentation identifying the actual use of all
contingency funds and escalation allowances and the same shall be identified in detail in
the updated TIF Pro Forma delivered in accordance with Section 3.3(c)(i). For purposes of
the TIF Assistance provided herein and the final principal amount of the TIF Note, all
contingency funds and escalation allowances shall be used only for costs related to actual,
documented increased costs for the Minimum Improvements, and the principal amount of
the TIF Note may be reduced if any such contingency funds and/or escalation allowances
have been used by Developer (A) for material changes to the Minimum Improvements not
approved by the Authority hereunder, (B) in a manner that enhances the residential
amenities and private spaces of the Minimum Improvements with no benefit to the public,
and/or (C) for costs or expenses unrelated to the Minimum Improvements. The Authority
shall not unreasonably withhold material changes to the Minimum Improvements that
provide benefit to the public.
(d) Determination of Project Excess Returns upon sale of the Minimum
Improvements.
(i) No later than 30 days after each sale of all or part of the Minimum
Improvements to any party other than a Related Party occurring prior to the date upon
which the TIF Note is paid in full or terminated hereunder, Developer shall submit to the
Authority an updated TIF Pro Forma and any other reasonable and relevant information
and documentation as the Authority requires in order to calculate the IRR for such sale,
including, without limitation, a certified cost and revenue analysis for such sale prepared
in accordance with generally accepted accounting principles (“Sale Pro Forma”). This
analysis will include, without limitation, all acquisition costs, Qualified Redevelopment
Costs, and all other improvement and redevelopment costs incurred by Developer for the
Minimum Improvements, as well as historical Net Operating Income, debt service, and TIF
Note payments. The Authority may retain a financial advisor, accountant, and/or other
Execution
14
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
professional with similar expertise to audit the submitted Sale Pro Forma, at Developer’s
cost.
(ii) The Sale Pro Forma and related information shall be used by the Authority
to determine whether the sale yields a “Project Excess Return” to Developer. The IRR shall
be used to measure any Project Excess Return in accordance with the following sliding
scale:
Period of Sale IRR beyond which Project Excess
Return is created
Before three (3) years after Completion 22.0 %
From three (3) years to five (5) years after
Completion
20.0 %
From six (6) years to nine (9) years after
Completion
18.0 %
More than nine (9) years after Completion 16.0 %
Should the Developer’s proceeds of such sale of the Minimum Improvements, or a part
thereof, exceed the applicable IRR (i.e., the Project Excess Return), payments on the TIF
Note shall cease, the outstanding balance forgiven, and the TIF Note shall automatically
terminate. The termination of the TIF Note shall be the sole consequence if there is a
Project Excess Return and the Developer shall not be required to pay the Authority any
amount in which the Project Excess Return exceeds the then outstanding principal balance
of the TIF Note.
(iii) If the sale does not result in Excess Returns to Developer, then payments
on the TIF Note shall continue pursuant to the terms of the existing TIF Note. In addition,
if the sale does not result in Excess Returns to Developer, Developer shall require the
purchaser to (1) accept assignment of the TIF Note (unless the TIF Note has previously
been assigned pursuant to Section 8.2) and (2) assume Developer’s obligations under this
Agreement; and (3) provide written evidence of the same to the Authority.
3.4 Assignment of Note. Subject to Developer’s compliance with the terms and conditions of
this Section 3.4, the TIF Note will transfer to Developer’s successor at the time of any assignment of this
Agreement by Developer made in accordance with Section 8.2. Except for such assignments, the TIF Note
shall not be assignable or transferable without the prior written consent of the Authority, which consent
shall not be unreasonably withheld (subject to, without limitation, the provisions of Section 8.2(b));
provided, however, Developer may, without the City’s or the Authority’s consent, but upon prior written
notice to the Authority (a) assign the TIF Note, together with Developer’s rights and obligations under this
Agreement to a Related Party pursuant to Section 8.2(a)(iv) hereof and/or (b) collaterally assign
Developer’s rights and obligations under this Agreement and the TIF Note to the holder of any Mortgage
that is permitted under the terms of Section 5.1. Notwithstanding anything herein to the contrary, as a
condition to any transfer or assignment of the TIF Note, any assignee or transferee must execute and
deliver to the Authority a certificate, in form and substance reasonably satisfactory to the Authority,
pursuant to which, among other things, such assignee or transferee acknowledges and represents:
Execution
15
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
(i) the limited nature of the Authority’s payment obligations under the TIF
Note;
(ii) that the TIF Note is being acquired for investment for such assignee’s or
transferee’s own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof;
(iii) that the assignee or transferee has no present intention of selling, granting
any participation in, or otherwise distributing the same;
(iv) that the assignee or transferee, either alone or with such assignee’s or
transferee’s representatives, has knowledge and experience in financial and business
matters and is capable of evaluating the merits and risks of the prospective investment in
the TIF Note and the assignee or transferee is able to bear the economic consequences
thereof;
(v) that in making its decision to acquire the TIF Note, the assignee or
transferee has relied upon independent investigations made by the assignee or transferee
and, to the extent believed by such assignee or transferee to be appropriate, the assignee’s
or transferee’s representatives, including its own professional, tax and other advisors, and
has not relied upon any representation or warranty from the Authority, or any of its officers,
employees, agents, affiliates or representatives, with respect to the value of the TIF Note;
(vi) that the Authority has not made any warranty, acknowledgment or
covenant, in writing or otherwise, to the assignee or transferee regarding the tax
consequences, if any, of the acquisition and investment in the TIF Note;
(vii) that the assignee or transferee or its representatives have been given a full
opportunity to examine all documents and to ask questions of, and to receive answers from,
the Authority and its representatives concerning the terms of the TIF Note and such other
information as the assignee or transferee desires in order to evaluate the acquisition of and
investment in the TIF Note, and all such questions have been answered to the full
satisfaction of the assignee or transferee;
(viii) that the assignee or transferee has evaluated the merits and risks of
investment in the TIF Note and has determined that the TIF Note is a suitable investment
for the assignee or transferee in light of such party’s overall financial condition and
prospects;
(ix) that the TIF Note will be characterized as “restricted securities” under the
federal securities laws because the TIF Note is being acquired in a transaction not involving
a public offering and that under such laws and applicable regulations such securities may
not be resold without registration under the Securities Act of 1933, as amended, except in
certain limited circumstances; and
(x) for purposes of federal securities laws, that no market for the TIF Note
exists and no market for the TIF Note is intended to be developed.
Subject to the terms and conditions of this Section 3.4, the holder of the TIF Note may be different than the
owner of the Project Area or the party responsible for the obligations of Developer under the
Execution
16
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
Redevelopment Agreement, provided, however, that such holder will be subject to all limitations and
conditions to payments under the TIF Note set forth herein.
3.5 SPaRC Fund Forgivable Loan. In consideration of Developer’s fulfillment of its
obligations under this Agreement, and subject the conditions precedent to closing set forth in Section 3.6
and in the SPaRC Fund Forgivable Loan Agreement (defined below), the Authority agrees to provide
Developer a forgivable loan funded through the SPaRC Fund (the “SPaRC Fund Forgivable Loan”) to
Developer in the maximum principal amount of $2,000,000.00, pursuant to the terms and conditions of a
loan agreement in substantially the form attached as Exhibit I (the “SPaRC Fund Forgivable Loan
Agreement”). Costs and expense for the items included within the Minimum Improvements described
below necessary for the operation of the Project, shall be eligible for reimbursement from the SPaRC Fund
under the terms and conditions of the SPaRC Fund Forgivable Loan Agreement (collectively, “SPaRC
Fund Qualified Costs”):
SPaRC Fund Qualified Costs Approx. Cost
Pedestrian plaza and related improvements, including streetscape and
landscape $414,000
Signage, wayfinding and monument related to the Park $80,000
Improvements for vehicular access via permanent easement on Pentagon
North property $1,000,000
Area stormwater management and treatment (tanks will be within the
public plaza) $214,000
Soil corrections and utilities for all public areas $300,000
Total $2,008,000
The actual amount of SPaRC Fund Qualified Costs within each of the foregoing categories may be allocated
among such categories (in amounts that differ from these set forth in the table above), subject to reasonable
review and approval by the Authority, and provided that Developer must provide reasonable evidence of
the actual amounts of SPaRC Fund Qualified Costs actually incurred or committed in each such category.
All SPaRC Fund Qualified Costs must be expended by the Developer prior to November 15, 2025, and
reasonable evidence of such expenditures provided to the Authority by the same date.
3.6 Conditions Precedent to SPaRC Fund Forgivable Loan Closing. The Authority shall not be
obligated to close on the SPaRC Fund Forgivable Loan pursuant to the Forgivable Loan Agreement until
the following conditions precedent have been satisfied:
(a) Developer shall have executed and delivered to the Authority the SPaRC Fund
Forgivable Loan Agreement and all additional instruments and security instruments required under
the SPaRC Fund Forgivable Loan Agreement and, as applicable, caused the same to be recorded
against the Project Area;
(b) Developer shall have satisfied all conditions precedent set forth in the Forgivable
Loan Agreement and delivery of the City Easements as required in the Development Contract.
Execution
17
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
3.7 Action to Reduce Taxes. Throughout the term of this Agreement, Developer shall take no
action, and suffer no circumstances to exist or action to be taken by others (to the extent Developer may
prevent the same), the effect of which would be to render the Project Area or any portion thereof to be no
longer generally subject to real property taxation. Before the expiration or termination of this Agreement,
Developer shall not:
(a) seek administrative review or judicial review of the applicability of any tax statute
relating to the taxation of the Project Area determined by any tax official to be applicable or raise the
inapplicability of any such tax statute as a defense in any proceedings, including delinquent tax proceedings;
(b) seek administrative review or judicial review of the constitutionality of any tax
statute relating to the taxation of the Project Area determined by any tax official, or raise the
unconstitutionality of any such tax statute as a defense in any proceedings, including delinquent tax
proceedings; or
(c) seek any tax deferral or abatement, either presently or prospectively authorized
under any state or federal law, of the taxation of the Project Area.
Article IV
Requirements for Minimum Improvements
4.1 Commencement and Completion of Minimum Improvements.
(a) Minimum Improvements Timeline. The timeline for the Commencement and
Completion of the Minimum Improvements is identified in this Section 4.1. Following Commencement,
construction or other activity must continue in a sequence consistent with normal redevelopment and
construction practices, subject to Unavoidable Delays. Failure to meet any of the dates identified as “Default
Date” shall be considered a Default, unless mutually determined to be the result of Unavoidable Delay. The
Commencement and Completion timeline for the Minimum Improvements is as follow:
Description of Work
Commencement Date Completion Date
Anticipated Default Date Anticipated Default Date
Final City Approvals 10/6/2022 Not Applicable Not applicable Not applicable
Real Estate Acquisition Closing 3/1/2023 6/1/2025 Not applicable Not applicable
Demolition 4/1/2023 7/1/2025 6/1/2023 10/1/2025
Site Remediation 6/1/2023 8/1/2025 7/1/2023 11/1/2025
Site Preparation 9/1/2023 9/1/2025 10/1/2023 12/1/2025
Financial Closing 3/1/2023 12/1/2025 Not applicable Not applicable
Foundation 10/1/2023 10/1/2025 10/1/2023 6/1/2026
Execution
18
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
Core Construction 12/1/2023 12/1/2025 9/1/2025 8/1/2027
Certificate of Occupancy* Not applicable Not applicable 9/1/2025 9/1/2027
*While the final certificate of occupancy is preferred, temporary certificate of occupancy will be acceptable
and will not result in a Default provided that all of the residential floors are capable of being occupied and
that all of the commercial areas are capable of being occupied, subject to the completion of commercial
tenant improvement(s), build-out and leasing.
(b) Anticipated Market Value of Minimum Improvements. It is anticipated that upon
completion, the total market value of the Minimum Improvements will be approximately $85,303,000.
4.2 Zoning and Land Use Approvals. Nothing in this Agreement shall limit the authority of the
City with respect to zoning and land use approvals. Subject to the foregoing, the staff of the Authority
shall cooperate with Developer and assist Developer in the processing and obtaining of zoning and land
use approvals. Developer shall be responsible for applying for and obtaining all land use and zoning
approvals necessary for the Minimum Improvements, including, without limitation, any conditions
contained in the City Approvals. All zoning and land use approvals shall be by the City Council or the
City Planning Commission in accordance with the ordinances of the City. Notwithstanding the foregoing
and for avoidance of doubt, in addition to the Authority’s other rights and remedies hereunder, the
Authority’s consent shall be required for any material changes to the Minimum Improvements, specifically
including, without limitation, changes to the scale, massing or exterior finish materials set forth in the
original City Approvals that could materially reduce the taxable value of the Project Area.
4.3 Building and Construction Permits. Nothing in this Agreement shall limit the governmental
authority of the City with respect to its building and construction permitting process for the Minimum
Improvements. Developer shall comply with all applicable City building codes and construction
requirements and shall be responsible for obtaining all building permits prior to construction.
4.4 Restrictions on Development. Developer may not construct or permit construction of any
of the Minimum Improvements until Developer satisfies the following conditions:
(a) The Project Area is properly subdivided in accordance with applicable Law.
(b) Developer executes and records the Development Contract against the Project
Area, and causes any lien holder affecting any of the property to subject its interest as provided in this
Agreement and in the Development Contract;
(c) Developer satisfies all of the conditions precedent to construction of the Minimum
Improvements established by the City in the City Approvals; and
(d) Developer executes and records a Memorandum of Agreement in accordance with
Section 10.16 hereof.
4.5 Submission and Approval of Evidence of Financing . No later than the issuance of the
applicable construction or building permit for the Minimum Improvements (but excluding demolition
permits), Developer shall provide the Authority with the Go-Ahead Letter, including the Financing
Commitments for both debt and equity. If Developer fails to submit the Go-Ahead Letter and the foregoing
information acceptable to the Authority within said period of time or any additional period to which the
Execution
19
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
Authority may agree, the Authority may notify Developer of its failure to comply with the requirement of
this Section 4.5, such failure being a Default hereunder.
4.6 Affordable Housing and Workforce Housing.
(a) Affordable Housing Requirements. Developer covenants that at least 10% of the
residential units within the Minimum Improvements, but in no event fewer than 28 of such residential units
(the “Affordable Units”) will be leased at rates (inclusive of utilities and mandatory fees) that are considered
affordable to individuals or households earning less than 50% of the U.S. Department of Housing and Urban
Development’s Area Median Income for the Minneapolis-Saint Paul-Bloomington Metropolitan Statistical
Area for a period of 20 years commencing on the date that all the Affordable Units are first occupied by
qualified households (the “Affordable Housing Requirements”).
(b) The Affordable Housing Requirements shall also incorporate and include the
following conditions and requirements:
(i) no security deposit shall be required in excess of the amount of one month
of rent in connection with any Affordable Unit;
(ii) during the final year of the affordability period, new leases for the
Affordable Units must be for a term of no less than six months, and such newly leased
Affordable Units will be subject to all the Affordable Housing Requirements until the
expiration of such new leases;
(iii) Developer shall affirmatively market the Affordable Units to one or more
traditionally underserved populations as affordable at the rates required hereunder;
(iv) prior to Commencement of the Minimum Improvements, Developer shall
notify the Authority of Developer’s initial determination as to whether the Affordable Units
will be “fixed” to particular housing units within the Minimum Improvements or floating
among various housing units with the Minimum Improvements. If the Affordable Units are
to be fixed, Developer shall provide the Authority with the unit numbers of such fixed
Affordable Units;
(v) the two-bedroom units must be leased to households consisting of at least
two members;
(vi) During the affordability period, Developer will not refuse to lease an
Affordable Unit to the holder of a voucher or certificate of eligibility under Section 8 of
the United States Housing Act of 1937, or any other housing assistance program, solely
because of the status of the prospective tenant as such a holder.
(vii) the Affordable Units shall be subject to the terms and condition of the
Inclusionary Housing Policy Program Guide (“Policy Guide”), a current version of which
is attached as Exhibit K, provided, however, the Affordable Housing Requirements
hereunder shall not include changes in the Policy Guide adopted by the City which differ
from the Policy Guide attached as Exhibit K; and
(viii) Developer shall, upon annual invoicing, reimburse the City (or such
subdivision of the City administrating the Affordable Housing Requirements) for third-
party expenses related to monitoring of Developer’s compliance with the Affordable
Execution
20
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
Housing Requirements, which such costs shall initially not exceed $2,700 per year (plus
any additional costs necessitated by re-inspections for noncompliance with the Affordable
Housing Requirements) and thereafter be subject to reasonable adjustment from time to
time.
(ix) The Affordable Units shall consist of at least, twenty (20) one bedroom
units, and eight (8) two bedroom units. Any change in the foregoing distribution of units
shall require the prior written approval of the Authority, which such consent will not be
unreasonably conditioned, delayed or withheld. Any change in the unit distribution shall
be accounted for in any updated TIF Pro Forma.
(x) of the affordable units shall have the same access to building amenities as
residents of the market-rate units. The level of finish within the affordable units must be
consistent with the level of finish within new construction, affordable apartments in the
Twin Cities metropolitan area.
(xi) On or about the date which is one year before the original expiration of the
Affordable Housing Requirements, the Authority and Developer shall negotiate in good
faith the terms and conditions of an extension of initial 20-year term of the Affordable
Housing Requirements. All parties agree to negotiate in good faith but without binding
either party to a particular outcome, including binding the Developer to an extension of the
20-year term, if the parties are unable to agree upon terms and conditions acceptable to
Developer.
(c) Workforce Housing Requirements. Developer covenants that at least 110 of the
residential units within the Minimum Improvements (excluding the Affordable Units) (the “Workforce
Units”) will be leased at rates (inclusive of utilities and mandatory fees) that are considered affordable to
individuals or households earning less than 120% of the U.S. Department of Housing and Urban
Development’s Area Median Income for the Minneapolis-Saint Paul-Bloomington Metropolitan Statistical
Area for the duration of the TIF Note payments (the “Workforce Housing Requirements”). At least 30 days
prior to each semi-annual TIF Note payment, Developer shall provide the Authority with a certification of
rent rolls for the previous six-month period, which show that the Workforce Units are rented in accordance
with this Section.
(d) Compliance with Affordable Housing Requirements and Workforce Housing
Requirements. For avoidance of doubt, any failure by Developer to comply with the Affordable Housing
Requirements and Workforce Housing Requirements will be a Default under this Agreement and, if such
Default is not cured within any applicable notice and cure period hereunder, it shall be an Event of Default,
during which, in addition to the City’s and Authority’s other rights and remedies hereunder, payments and
accrual of interest on the TIF Note shall be suspended.
(e) Restrictive Covenant. The Affordable Housing Requirements and the Workforce
Housing Requirements will be set forth in a restrictive covenant in substantially the form shown in the
attached Exhibit L and to be recorded against the Project Area prior to, and as a condition to, the issuance
of the TIF Note (the “Housing Restrictive Covenant”). The Housing Restrictive Covenant shall not be
subordinated or junior to any Mortgage on the Minimum Improvements, and if any Mortgage exists at the
time the Housing Restrictive Covenant is to be recorded, Developer shall cause the mortgagee under such
Mortgage to subordinates the Mortgage and the lien thereof to the Housing Restrictive Covenant.
4.7 Public Easements
Execution
21
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
(a) Prior to the issuance of the Certificate of Completion and as a condition to issuance
of the TIF Note, Developer shall grant, and/or shall have caused the then-current owner of the applicable
portion of Project Area to grant, to the City or the Authority (at City and Authority’s discretion) the following
easement with respect to the Minimum Improvements (each a “City Easement”, and collectively the “City
Easements”):
(i) A permanent, public easement for access and use of the Plaza and
Streetscapes (the “Public Access Easement”), subject to reasonable, nondiscriminatory
limitations, rules and regulations governing its use adopted by Developer and subject to
the approval of the City Manager or its designee. The Public Access Easement shall be
granted pursuant to easement agreements in the form as required in the Development
Contract.
(ii) A permanent, public easement for access and use of the Public Road (the
“Public Road Easement”), subject to reasonable, nondiscriminatory limitations, rules and
regulations governing its use adopted by Developer and subject to the approval of the City
Manager or its designee, and Pentagon North. The Public Road Easement shall be granted
pursuant to easement agreements in the form as required in the Development Contract.
(b) Other Terms of the City Easements. Neither the City nor the Authority will pay an
acquisition cost to Developer for any of the City Easements. Each City Easement must be recorded by
Developer as a condition to issuance of the TIF Note. Developer shall, at Developer’s sole cost and expense,
cause a licensed surveyor to determine the final, actual legal description of the Plaza and Streetscapes and
the Public Road for the purpose of the granting the City Easements with respect to such elements. Such legal
descriptions will be consistent with the areas and boundaries of such areas as described and depicted in the
City Approvals and the exhibits to this Agreement.
(c) Future Transit Easements. Developer agrees to grant on terms reasonably agreed
to by Developer, future easements for future mass transit (e.g., bus) stops in open areas of the Project Area
adjoining public rights-of-way and the Public Access Easement area at no cost to the City, the Authority, or
the responsible transit agency(ies), subject only to the responsible transit agency(ies) being responsible for
initial construction, maintenance, repair, and replacement of the surface improvements in any future
easement area.
4.8 Environmental Sustainability.
(a) The Minimum Improvements must be designed and certified with appropriate
standards that provide a greater degree of sustainability than Minnesota building code, all in accordance
with, and subject to the terms and conditions of, the City Approvals.
4.9 Equity and Inclusion.
(a) Generally; Workforce Goals. Developer shall, and shall cause its general
contractor to, use good faith efforts as defined by Minnesota Department of Human Rights to include
businesses that are majority owned by under-represented groups including minorities, women, veterans and
people with disabilities in the development and construction of the Minimum Improvements. Developer
shall, and shall cause its general contractor to, use, good faith efforts to employ under-represented people on
the construction site for the Minimum Improvements. Developer commits to use good faith efforts to try to
maximize participation opportunities for the local workforce, including women and minorities and will cause
its general contractor to deliver, as a condition to issuance of any Certificate of Completion, a certification
Execution
22
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
that the general contractor has, in completion of the Project, taken the “good faith efforts” specified in
Section 4.9(b).
(b) Good Faith Efforts. For the purpose of this section, “good faith efforts” shall be
defined by compliance with the following:
(i) At the Project Area
• Post EEO policy and anti-harassment policies prominently on
employee bulletin boards and job sites. Update at least once a year
with new contact information and signature of the contractor’s
chief executive officer.
• Post all government-mandated posters (Minnesota, federal, local)
in areas available to employees and applicants and on all job sites.
• All job sites to the extent possible should be accessible to people
with disabilities, specifically people with mobility impairments
(restrooms, break-rooms, etc.). If all restrooms are not accessible,
provide comparable facilities for people with disabilities.
• Check employee locker rooms, break rooms, restrooms, and work
areas (job sites) for potentially offensive cartoons, etc.
(ii) Recruiting
• All personnel involved in hiring, selection, promotion,
disciplinary and related processes should be trained to ensure the
elimination of bias (implicit bias training) in personnel actions.
• Include an EEO tagline or similar statement in all want ads or
other external job announcements. If you post jobs on your web
site, include an EEO tagline.
• Communicate to any union to ensure that such union accepts
people for membership in a nondiscriminatory way and that they
refer people to jobs fairly.
• Make formal and informal contact with community organizations,
apprenticeship training organizations, and unions, and other
recruitment organizations (specifically those organizations that
focus on women, people of color, Indigenous people, and people
with disabilities) that may be able to refer qualified applicants for
jobs you have available.
• Provide training, preparation and workplace accommodations so
that people with disabilities can have rewarding careers.
• Contact the Department of Employment and Economic
Development (DEED) Vocational Rehabilitation Services unit for
the purpose of forming partnerships to help prepare people with
disabilities for meaningful employment opportunities.
Execution
23
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
• Participate in construction community job fairs or other
construction-related events.
• When using paid advertising, include news media or websites
geared toward women, communities of color, and/or people with
disabilities.
(iii) Selection and Hiring
• Review your application form and remove any questions that are
not job-related. Include an EEO statement on the form itself.
Review the application to make sure no illegal/potentially illegal
information is requested.
• Review EEO/Applicant tracking surveys: they should ask for
necessary tracking information only and should be clearly marked
as voluntary. Remove the forms from the application itself before
the selection process begins.
• Make sure supervisors are using legal criteria in their hiring
decisions.
• If you use any pre-employment tests (math tests, typing tests, skill
tests, “personality” or “integrity” tests), these tests should directly
relate to the jobs for which they’re used.
(iv) Termination of Employment
• Develop a written termination policy and/or progressive discipline
policy. All supervisors should implement your process
consistently.
• If appropriate, conduct exit interviews or administer exit surveys.
(v) Other
• Conduct training for all employees of your EEO and anti-
harassment policies in safety meetings at the beginning of each
project and additionally throughout the year for new hires.
Emphasize reporting procedures.
• Make reasonable efforts to solicit people of color, Indigenous, and
female-owned businesses to participate in subcontracts or vendor
contracts.
(c) Developer shall use good faith efforts to cause its general contractor to implement
the equity and inclusion community engagement plan attached as Exhibit M, (the “Community Engagement
Plan”) as may be modified with the Authority’s prior written consent, which consent shall not be
unreasonably withheld or delayed.
Execution
24
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
4.10 Effect of Delay. Developer acknowledges that if construction of the Minimum
Improvements is delayed due to Unavoidable Delays or for any other reason, this could affect the amount
of Available Tax Increments and thus the total amount which may be available to pay the TIF Note.
Developer acknowledges that if the Completion of the Minimum Improvements is delayed due to
Unavoidable Delays or for any other reason, there will be no compensation to Developer or any other party
for any reduction in the amount available to pay or refund the TIF Note.
4.11 Additional Responsibilities of Developer. Developer shall cause the Minimum
Improvements to be constructed, operated and maintained in substantial accordance with the terms of this
Agreement, the Final Development Plans and Development Contract, and all applicable Law (including,
without limitation, zoning, building code and public health laws and regulations).
(a) Developer shall obtain, in a timely manner, all required permits, licenses, and
approvals, and will meet, in a timely manner, all requirements of all applicable Law that must be
obtained or met before the Minimum Improvements may be lawfully constructed.
(b) Developer shall not construct any building or other structures on, over, or within
the boundary lines of any public utility easement unless such construction is provided for in such
easement, approved by the utility involved, or approved by the City if no utility is then utilizing the
easement area.
(c) Prior to delivery of a Certificate of Completion to Developer, upon the request of
the Authority, Developer shall, after reasonable advance notice from the Authority, provide the
Authority and the City with reasonable access to the Property to inspect the Minimum
Improvements for compliance with this Agreement.
(d) Prior to delivery of the Certificate of Completion, upon the request of the Authority
from time to time, Developer shall deliver monthly progress reports to the Authority. The progress
reports shall include: summary of progress to date, estimated percent construction completion,
identification of any Unavoidable Delays, and projected occupancy date.
(e) Developer shall comply with and cause its Related Parties, and pursuant to
applicable third-party contracts, cause each of their respective contractors and subcontractors to
comply with all applicable Law (including, without limitation, labor and wage laws).
(f) Developer shall comply and use commercially reasonable efforts to cause its
contractors to comply with all applicable Environmental Law as it relates to the Project Area and
the Minimum Improvements.
4.12 Certificate of Completion. Developer may notify the Authority and request a Certificate of
Completion in accordance with this section. Developer may request a Certificate of Completion for the
Minimum Improvements at any time after substantial completion of the Minimum Improvements and
delivery of a Certificate of Occupancy. Within 30 days after receipt of such request, the Authority shall
inspect the Minimum Improvements to determine if such Minimum Improvements have been completed
in accordance with the terms and conditions of this Agreement. An example of the Authority’s Completion
checklist is included as part of the form of Certificate of Completion attached as Exhibit F. Following
such inspection the Authority shall either furnish Developer with (a) an appropriate, recordable Certificate
of Completion or (b) a written statement, indicating in adequate detail in what respects Developer has
failed to complete the relevant portion of the Minimum Improvements and what measures or acts will be
necessary, in the opinion of the Authority, for Developer to take or perform in order to obtain such
certification. If the Authority issues a written statement in accordance with clause (b) above, Developer
Execution
25
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
shall thereafter take such actions necessary to cure such deficiencies in the applicable Minimum
Improvements. After such deficiencies have been cured, Developer shall notify the Authority and the
Authority will re-inspect the applicable Minimum Improvements and take one of the actions described in
clauses (a) and (b) hereof, and such process will continue until the Authority issues the applicable
recordable Certificate of Completion. Issuance of a Certificate of Completion by the Authority shall be a
conclusive determination of satisfaction and termination of the agreements and covenants in this
Agreement with respect to the obligations of Developer to construct, or cause to be constructed, the
Minimum Improvements.
4.13 Public Art. The Project shall include public art in a manner reasonably approved by the
Authority. Such public art shall be a permanent sculpture or similar art installation. Developer shall at all
times maintain the public art in good, first-class condition, at no cost to the City or the Authority.
Article V
Encumbrance of the Project Area
5.1 Mortgage of the Minimum Improvements Area.
(a) Until the Completion of the Minimum Improvements, Developer shall not engage
in any financing or any other transaction creating any mortgage or other security interest in or lien upon
Project Area, or portion thereof, whether by express agreement or operation of law (a “Mortgage”), or suffer
any Mortgage to be made on or attach to the Project Area except for the purpose of obtaining funds necessary
for acquiring and constructing the Minimum Improvements and paying other costs of the Minimum
Improvements whether or not set forth in the TIF Pro Forma.
(b) This restriction on encumbrance shall terminate upon Completion of the Minimum
Improvements. Developer or any successor in interest to the Minimum Improvements or portion thereof,
may sell or engage in financing or any other transaction creating a mortgage or encumbrance or lien on the
Minimum Improvements or portion thereof after the Certificate of Completion has been obtained with
respect to the Minimum Improvements, without obtaining the prior written approval of the Authority.
(c) Notwithstanding anything in this Agreement to the contrary, Developer is
authorized, without the approval of the Authority, to obtain acquisition and construction financing to cover
the costs of acquisition and construction of the Minimum Improvements and other costs of the Minimum
Improvements whether or not set forth in the TIF Pro Forma and to mortgage the Project Area to provide
security for acquisition and construction financing.
5.2 Copy of Notice of Default to Mortgagee. If the City or the Authority delivers any notice or
demand to Developer with respect to any Default under this Agreement, the City or the Authority, as
applicable, will use its reasonable efforts to also deliver a copy of such notice or demand to the mortgagee
of any Mortgage at the address of such mortgagee provided in the recorded Mortgage or any other address
thereafter provided to the Authority in a written notice from Developer or the mortgagee, provided that
failure of the City or the Authority to give any such notice shall not limit the City’s or the Authority’s
ability to exercise any of its remedies hereunder.
5.3 Mortgagee’s Option to Cure Events of Default. Upon the occurrence of an Event of
Default, the mortgagee under any Mortgage will have the right at its option, to cure or remedy such Event
of Default within the cure periods set forth herein.
5.4 Rights of a Foreclosing Mortgagee. Except as provided in Section 5.6, an individual or
entity who acquires title to all or a portion of the Minimum Improvements through the foreclosure of a
Execution
26
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
mortgage or deed in lieu of foreclosure on such portion of the Project Area remains subject to each of the
restrictions set forth in this Agreement and remains subject to all of the obligations of Developer, or any
successor in interest to Developer, under the terms of this Agreement, but neither the purchaser at a
foreclosure sale, the grantee under a deed in lieu of foreclosure, nor any subsequent transferee from a
mortgagee shall have any personal liability for a breach of such obligations under this Agreement so long
as:
(a) The party acquiring title through foreclosure or deed in lieu of foreclosure observes
all of the restrictions set forth in the Agreement;
(b) The party who acquired title through foreclosure or deed in lieu of foreclosure does
not undertake or permit any other party to undertake any Minimum Improvements on the portion of the
Project Area it owns;
(c) The City has no obligation to approve any plans for Minimum Improvements or a
portion of the Minimum Improvements the foreclosing mortgagee (or mortgagee obtaining a deed in lieu of
foreclosure) owns or to issue any related building permits.
The purpose of this section is to permit a foreclosing lender (or mortgagee or purchaser obtaining a deed in
lieu of foreclosure or a subsequent transferee) to hold title to the portion of the Project Area it acquires
through foreclosure or deed in lieu of foreclosure, subject to, but without personal liability for the
obligations under this Agreement, until it can sell the portion it holds to a third party who will assume the
obligations of Developer under the terms of this Agreement and proceed with the construction of the
Minimum Improvements pursuant to the terms of this Agreement. If, rather than passively holding title to
the portion of the Project Area it acquires through foreclosure or deed in lieu of foreclosure, the foreclosing
lender (or mortgagee obtaining a deed in lieu of foreclosure or subsequent transferee) or other purchaser at
a foreclosure sale desires to construct the Minimum Improvements, the purchaser at the foreclosure sale
must assume and perform each of the obligations of Developer, or the applicable successor to the interest
of Developer, under this Agreement as to the portion of the Minimum Improvements subject to foreclosure.
This section does not restrict the authority of the Authority to pursue its rights under any outstanding
security, exercise remedies otherwise available under this Agreement or suspend the performance of the
obligations of the Authority or Developer under this Agreement as otherwise allowed. The Authority agrees
to reasonably cooperate with any foreclosing lender (or mortgagee obtaining a deed in lieu of foreclosure)
or other purchaser at a foreclosure sale in pursuing the Minimum Improvements in accordance with this
Agreement. Unless acting other than passively holding title as described above in this section, a lender or
an independent third party that purchases at a foreclosure sale will have no liability for breach under this
Agreement.
5.5 Events of Default Under Mortgage. Developer shall use commercially reasonable efforts
to obtain an agreement from any mortgagee under a Mortgage that in the event Developer is in default
under any Mortgage, the mortgagee will use commercially reasonable efforts, within 30 days after it
becomes aware of any such default and prior to exercising any remedy available to it due to such default,
to notify the Authority in writing of (i) the fact of default; (ii) the elements of default; and (iii) the actions
required to cure the default. Developer shall use its commercially reasonable efforts to obtain an agreement
in any such Mortgage, that if, within the time period required by the Mortgage, the Authority cures any
default under the Mortgage, the mortgagee will pursue none of its remedies under the Mortgage based on
such default, provided that failure of Developer to obtain such an agreement from any such mortgagee
shall not constitute a breach of this Agreement.
5.6 Subordination of Agreement. The City and the Authority will, upon the request of the
holder of a Mortgage, execute and record a subordination agreement pursuant to which the City and the
Execution
27
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
Authority agree that, upon a default by Developer under a Mortgage, the holder of the Mortgage may elect,
in an instrument to be recorded in the Hennepin County land records and delivered to the City and the
Authority before the commencement of proceedings to foreclose the Mortgage, to either (1) treat this
Agreement as being subordinate to the lien of the Mortgage such that the foreclosure of the Mortgage and
the failure to redeem from such foreclosure will extinguish and terminate this Agreement and the TIF Note
will automatically be cancelled and rescinded; or (2) to treat this Agreement as having priority over the
Mortgage in which case this Agreement and the TIF Note will survive the foreclosure of the Mortgage and
this Agreement will be binding upon the holder of the Sheriff's Certificate issued in conjunction with the
foreclosure of the Mortgage, subject to the terms and conditions of Section 5.4. If the holder of the
Mortgage fails to notify the City and the Authority of its election under this Section 5.6 on or before the
commencement of foreclosure proceedings, the holder of the Mortgage shall be deemed to have elected to
treat this Agreement as being subordinate to the lien of the Mortgage such that the foreclosure of the
Mortgage and the failure to redeem from such foreclosure will extinguish and terminate this Agreement
and the TIF Note will automatically terminate. The City and Authority each further agree that if the holder
of a Mortgage elects to treat this Agreement as having priority over the Mortgage, the City and Authority,
upon the completion of the foreclosure without redemption, agree that the time for the completion of the
Minimum Improvements is extended to a date 12 months following the expiration of all applicable
redemption periods or such later date the City and Authority approve in writing.
Article VI
Insurance and Indemnification
6.1 Insurance.
(a) Developer shall obtain and continuously maintain insurance on the Minimum
Improvements and, from time to time at the request of the Authority, furnish proof to the Authority that the
premiums for such insurance have been paid and the insurance is in effect. The insurance coverage described
below is the minimum insurance coverage that Developer must obtain and continuously maintain, provided
that Developer shall obtain the insurance described in clause (i) below with respect to the Minimum
Improvements prior to the Commencement of construction thereof and is only obligated to maintain the
insurance described in clause (i) until Developer receives a Certificate of Completion:
(i) Builder’s risk insurance, written on the so-called “Builder’s Risk-
Completed Value Basis,” in an amount equal to 100% of the insurable value of the
Minimum Improvements at the date of Completion, and with coverage available in non-
reporting form on the so-called “all risk” form of policy.
(ii) Comprehensive general liability insurance (including operations,
contingent liability, operations of subcontractors, completed operations and contractual
liability insurance) together with an Owner’s/Contractor’s Policy naming the Authority,
and the City as an additional insured, with limits against bodily injury and property damage
of not less than $2,500,000 for each occurrence (to accomplish the above-required limits,
an umbrella excess liability policy may be used), written on an occurrence basis.
(iii) Workers compensation insurance, for employees of Developer if and to
the extent required by Law.
(b) All insurance required in this Article shall be obtained and continuously
maintained by responsible insurance companies selected by Developer which are authorized under the laws
of the State to assume the risks covered by such policies. If available on commercially reasonable terms,
each policy must contain a provision that the insurer will not cancel nor modify the policy without giving
Execution
28
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
written notice to the insured at least 30 days before the cancellation or modification becomes effective. Not
less than 15 days prior to the expiration of any policy, Developer must renew the existing policy or replace
the policy with another policy conforming to the provisions of this Article. In lieu of separate policies,
Developer may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the
coverage required herein.
6.2 Indemnification.
(a) Developer releases and covenants and agrees that the City Parties shall not be liable
for and agrees to indemnify and hold harmless the City Parties against any loss or damage to property or any
injury to or death of any person occurring at or about, or resulting from any defect in the Minimum
Improvements constructed by Developer, except to the extent attributable to the negligence or intentional
misconduct of any City Party.
(b) Except to the extent of the negligence or intentional misconduct of any City Party,
Developer shall indemnify the City Parties, now and forever, and further agrees to hold the aforesaid
harmless from any claims, demands, suits, costs, expenses (including reasonable attorney’s fees), actions or
other proceedings whatsoever by any person or entity whatsoever arising or purportedly arising from the
actions or inactions of Developer, or any of its owners, agents, contractors, or employees, under this
Agreement or the transactions contemplated hereby, including, without limitation, the acquisition,
construction, installation, ownership, and/or operation of the Minimum Improvements.
Article VII
Other Developer Covenants
7.1 Developer Reimbursement Obligations. Developer shall pay all reasonable out of pocket
costs of the City and the Authority in connection with the Minimum Improvements, the TIF Assistance
and the SPaRC Fund Forgivable Loan provided to Developer, including, but not limited, the costs and
expenses of the City Consultants, the costs of the development and negotiation of this Agreement and any
amendments or modifications to this Agreement, fiscal analysis, legal fees, and all other costs and expenses
related thereto. Sufficient monies must be provided to the Authority along with the request for TIF
Assistance. These monies shall be held in escrow. Any unused monies shall be returned to Developer.
These monies shall not bear interest. After the escrowed monies have been used, Developer shall pay such
costs monthly upon presentation of invoices and other documentation of such costs, not more than 30 days
after the request for payment is delivered to Developer. All such costs will be Qualified Redevelopment
Costs pursuant to the TIF Pro Forma.
7.2 Maintenance and Operation of the Improvements. Developer shall, at all times during the
term of this Agreement, maintain and operate the Minimum Improvements in a safe and secure way and
in compliance with this Agreement and applicable Law. Developer shall pay all of the reasonable and
necessary expenses of the operation and maintenance of the Minimum Improvements, including all
premiums for insurance insuring against loss or damage thereto and adequate insurance against liability
for injury to persons or property arising from the construction of the Minimum Improvements as required
pursuant to this Agreement. During construction of the Minimum Improvements, Developer shall not
knowingly cause any person working in or attending the Minimum Improvements for any purpose, or any
tenant of the Minimum Improvements, to be exposed to any hazardous or unsafe condition; provided that
such party shall not be in Default hereunder if it has required the contractors employed to perform work
on the Minimum Improvements to take such precautions as may be available to protect the persons in and
around the Minimum Improvements from hazards arising from the work, and has further required each
such contractor to obtain and maintain liability insurance protecting against liability to persons for injury
Execution
29
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
arising from the work. The expenses of operation and maintenance of the Minimum Improvements shall
be borne solely by Developer.
7.3 Cooperation with Litigation. Developer shall reasonably cooperate with the Authority with
respect to any litigation commenced by third parties with respect to the Project Area and/or the Minimum
Improvements; however, this provision does not obligate Developer to incur costs, except as otherwise
provided in this Agreement or elsewhere.
7.4 Condemnation, Damage, or Destruction. In the event that title to and possession of the
Minimum Improvements or any material part thereof shall be taken in condemnation or by the exercise of
the power of eminent domain by any governmental body or other person (except the Authority or the City)
or the Minimum Improvements is damaged or destroyed, Developer shall, with reasonable promptness
after such taking or casualty, notify the Authority as to the nature and extent of such damage or taking, as
applicable. Upon receipt of any condemnation award or insurance proceeds Developer shall elect to either:
(a) use the entire condemnation award or insurance proceeds to reconstruct the Minimum Improvements
(or, in the event only a part of the Minimum Improvements has been taken or damaged, then to reconstruct
such part) upon the remaining property to the extent necessary to maintain and continue operations of
Minimum Improvements for its intended purpose; or (b) in the event that the condemnation affects or
taking or damage or destruction affects the Project Area but not the Minimum Improvements thereon,
retain, for the account of Developer, all of the condemnation award or insurance proceeds.
7.5 Business Subsidy Agreement. The Authority and Developer have determined that a
business subsidy agreement within the meaning of the Minnesota Business Subsidy Act, Minnesota
Statutes, Sections 116J.993 through 116J.995 is not required in accordance with the exception contained
in the Minnesota Business Subsidy Act, Minnesota Statutes, Section 116J.993, subd. 3(17), because
Developer’s investment in the purchase of the Minimum Improvements Area and site preparation thereon
is 70% or more of the assessor’s current year’s estimated market value for the Minimum Improvements
Area.
7.6 Developer/Authority Grant Applications. Developer and the Authority will cooperate in
efforts to obtain available public grant funding to undertake the Minimum Improvements, including but
not limited to grants from the Hennepin County Environmental Response Fund (ERF), Hennepin County
Transit Oriented Development (TOD), Met Council Tax Base Revitalization Account (TBRA), Met
Council Livable Communities Demonstration Account (LCDA), DEED Contamination Cleanup Grant,
DEED Redevelopment Grant, and any other funding from metropolitan, state, county, and federal sources
identified by the Authority or Developer as reasonably available. Costs of preparing the grant applications
and preparing required reports shall be borne by Developer. City staff shall have the final authority to
review and submit the grant applications to the applicable agency. To the extent additional grant funds not
reflected in the TIF Pro Forma are obtained, any such amounts shall be taken into consideration by the
Authority when the Authority reviews the updated TIF Pro Formas and other information under Article
III prior to issuing the TIF Note. Developer shall reasonably cooperate with the City and the Authority
with respect to the administration of any grants received from Hennepin County, Metropolitan Council, or
State of Minnesota to support the construction of the Minimum Improvements.
7.7 Mitigation of Construction Disruption. Developer shall comply with directions set and
regulations enforced by the City Engineering and Building Inspection Departments regarding on site
construction activities pursuant to the Development Contract, including hours for construction work on
the Minimum Improvements and deliveries to and from the jobsite. Heavy trucks must follow routes
established by the City. Developer shall make best efforts to mitigate construction disruption to
surrounding properties.
Execution
30
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
7.8 Project Information.
(a) Project Ownership. Developer shall provide the City and Authority with the final
organizational structure for the ownership of the Project Area and the Minimum Improvements, and the
identity of all parties with a Beneficial Interest as required to be disclosed in the Financing Commitments.
Developer shall confirm such organizational and ownership information at the time Developer submits the
Go-Ahead Letter, and periodically thereafter in accordance with clause (b) below. Prior to delivery of
information regarding firm financing commitment or delivery of a Go Ahead Letter, Developer will provide
additional financing updates as requested by the Authority, whether by oral or written request, within a
reasonable period of time.
(b) Other Information. In addition to the other Project information required to be
provided by Developer hereunder, Developer shall provide or make available for review at Developer’s
offices to the City and/or Authority such information regarding Developer and the Minimum Improvements
as the City and/or Authority may reasonably request in writing from time to time in order for the City and
Authority to monitor Developer’s progress on the Minimum Improvements and/or the status of Developer’s
obligations hereunder, including without limitation the status of Minimum Improvements ownership,
organizational structure, financing, leasing, and sales, no more frequently than monthly, but otherwise
promptly upon request in writing and in no event later than five business days following such request. The
City and Authority will treat all such information which Developer includes a caption stating that the same
is proprietary or trade secret information as nonpublic data under and in accordance with the Minnesota Data
Practices Act, Minnesota Statutes chapter 13.
7.9 Project Naming. Developer acknowledges that the City has an interest in the name of the
adjacent Fred Richards park and agrees not to utilize the park name, or any derivation thereof, in the name
of the Project whether for internal or external purposes.
Article VIII
Transfer Limitations
8.1 Representation as to the Minimum Improvements. Developer represents to the City and the
Authority that its undertakings under this Agreement are for the purpose of developing the Minimum
Improvements and not for the purpose of speculation in land holding. Developer acknowledges that, in
view of the importance of the Minimum Improvements to the general welfare of the City and the Authority,
and the substantial financing and other public aids that have been made available by the City and the
Authority for the purpose of making such Minimum Improvements possible, the qualifications and identity
of Developer are of particular concern to the Authority. Developer further acknowledges that the City and
the Authority are willing to enter into this Agreement with Developer because of the qualifications and
identity of Developer.
8.2 Limitation on Transfers.
(a) Until the Authority’s issuance of the Certificate of Completion, Developer shall
not sell, assign, convey, lease or transfer in any other mode or manner any of its right, title, and interest in
and to this Agreement, all or any part of the Project Area, or the Minimum Improvements, without the
express written approval of the Authority, provided that the consent of the Authority shall not be required
for any of the following:
(i) granting of a mortgage or other security interests in the Project Area and/or
the Minimum Improvements as provided in Article V hereof;
Execution
31
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
(ii) collaterally assigning Developer’s rights and obligations under this
Agreement and the TIF Note to the holder of any Mortgage that is permitted under the
terms of Section 5.1;
(iii) leasing the Minimum Improvements in the normal course of business in a
manner consistent with this Agreement and the City Approvals; or
(iv) assigning this Agreement (in full, but not in part) to a Related Party of
Developer; provided (1) such permitted assignee party executes an agreement in a form
reasonably approved by the Authority pursuant to which such permitted assignee party, as
applicable, assumes and agrees to perform the obligations of Developer under this
Agreement, and (2) Developer provides the Authority with such information and
documentation required by the Authority to confirm the completion of such transfer and
that the such transfer meets the requirements of this subsection.
(b) If the Authority’s consent to a transfer of the TIF Note or this Agreement, pursuant
to Section 3.4 and/or Section 8.2, as applicable, is required, then the Authority shall be entitled to require,
as conditions to its approval of any sale, assignment, conveyance, use or transfer of any rights, title, and
interest in and to this Agreement, the TIF Note, the Project Area or the Minimum Improvements that:
(i) Any proposed transferee shall not be exempt from the payment of real
estate taxes and shall have the qualifications and financial responsibility, as determined by
the Authority, necessary and adequate to fulfill the obligations undertaken in this
Agreement by Developer;
(ii) Any proposed transferee, by instrument in writing satisfactory to the
Authority and in form recordable among the land records shall, for itself and its successors
and assigns, and expressly for the benefit of the Authority have expressly assumed all of
the obligations of Developer (or such obligations of Developer as are applicable to the
portion of the Minimum Improvements acquired) under this Agreement and agree to be
subject to all the conditions and restrictions to which Developer is subject;
(iii) Developer must submit all instruments and other legal documents
involved in effecting transfer to the Authority; and
(iv) Developer and the transferee must comply with such other reasonable
conditions as the Authority may find desirable in order to achieve and safeguard the
purposes of the TIF Act, the Authority, this Agreement, and/or the Minimum
Improvements; and
(v) The transferee must demonstrate, in a manner satisfactory to the Authority,
its ability to perform all assumed obligations in this Agreement.
(c) In the absence of specific written agreement by the City and the Authority to the
contrary, neither the transfer of the Minimum Improvements, or any portion thereof, prior to the issuance of
the Certificate of Completion for the Minimum Improvements or the City’s or the Authority’s consent to
such a transfer will relieve Developer of its obligations under this Agreement.
Execution
32
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
Article IX
Events of Default and Remedies
9.1 Events of Default Defined. “Events of Default” under this Agreement include any one or
more of the events listed in Sections 9.2 and 9.3.
9.2 Developer Events of Default. The following shall be Events of Default for Developer:
(a) subject to Unavoidable Delays and Cure Rights, Developer’s failure to achieve
Commencement and Completion of any aspect of the Minimum Improvements by the applicable “Default
Date” set forth in Section 4.1;
(b) subject to Unavoidable Delays and Cure Rights, Developer shall Default in its
obligations with respect to the construction of the Minimum Improvements (including the date for
completion of the various ‘Descriptions of Work’ on or before the Default Dates set forth in Section 4.1(a)),
or shall abandon or substantially suspend construction work on the Minimum Improvements, and any such
Default, violation, abandonment or suspension is not cured, ended or remedied within 30 days after written
notice to do so;
(c) there is, in violation of this Agreement, any conveyance or other transfer of Project
Area and/or the Minimum Improvements or any part thereof, and such violation is not cured within 30 days
after written notice to do so;
(d) subject to Unavoidable Delay and Cure Rights, failure by Developer to observe or
perform any other covenant, condition, obligation or agreement on its part to be observed or performed under
this Agreement or, any of the City Easements, the Housing Restrictive Covenant or the City Approvals, and
the continuation of such failure for a period of 30 days after written notice of such failure from any party
hereto;
(e) if, prior to the delivery of the Certificate of Completion, Developer shall (i) file
any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under the United States Bankruptcy Act of 1978, as amended or under any
similar federal or State law; or (ii) make an assignment for the benefit of its creditors; or (iii) become
insolvent or adjudicated a bankrupt; or if a petition or answer proposing the adjudication of Developer, as a
bankrupt or its reorganization under any present or future Federal bankruptcy act or any similar Federal or
State law shall be filed in any court and such petition or answer shall not be discharged or denied within 90
days after the filing thereof; or a receiver, trustee or liquidator of Developer, or of the Minimum
Improvements, or part thereof, shall be appointed in any proceeding brought against Developer, and shall
not be discharged within 90 days after such appointed, or if Developer shall consent to or acquiesce in such
appointment.
9.3 City and Authority Events of Default. Subject to Cure Rights and events beyond the City’s
and/or the Authority’s control, the failure of the City or the Authority to observe or perform any covenant,
condition, obligation or agreement on its part to be observed or performed under this Agreement, and the
continuation of such failure for a period of 30 days after written notice of such failure from any party
hereto shall be an Event of Default for the City or the Authority.
9.4 Cure Rights. If a Default occurs under this Agreement which reasonably requires more
than 30 days to cure, such Default shall not constitute an Event of Default (including any default under
any of the City Easements, the Housing Restrictive Covenant or the City Approvals, notwithstanding
shorter cure periods therein), provided that the curing of the Default is promptly commenced upon receipt
Execution
33
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
by the defaulting party of the written notice of the Default, and with due diligence is thereafter
continuously prosecuted to completion and is completed within a reasonable period of time, and provided
that the defaulting party keeps the non-defaulting party informed at all times of its progress in curing the
Default; provided, however in no event shall such additional cure period for any Default extend beyond
90 days.
9.5 Authority Remedies on Developer Events of Default. Whenever any Event of Default
occurs by Developer, the Authority, subject to Cure Rights, may take any one or more of the following
actions:
(a) terminate this Agreement , except that the Authority shall not have the right to
terminate this Agreement as a result of a default under Section 7.2 ;
(b) suspend interest accrual and/or withhold payments due under the TIF Note until
Developer has cured any Default which gave rise to such Event of Default;
(c) suspend performance under this Agreement until it receives assurances from
Developer or the holder of any Mortgage, deemed adequate by the Authority, that Developer or the holder
of any Mortgage will cure the Event of Default and continue its performance under this Agreement,
(d) withhold the Certificate of Completion where such Event of Default relates to
Completion of the Minimum Improvements or the issuance of the Certificate of Completion;
(e) take whatever action at law or in equity may appear necessary or desirable to the
Authority to collect any payments due under this Agreement, or to enforce performance and observance of
any obligation, agreement, or covenant of Developer under this Agreement; and
(f) the Authority shall have all remedies available at law and in equity to enforce
performance of this Agreement including a right to specific performance.
9.6 City Remedies on Developer Events of Default. Whenever any Event of Default of
Developer occurs, the City may suspend performance of its obligations under this Agreement and take
whatever action at law or in equity may appear necessary or desirable to the City to enforce performance
and observance of any obligation, agreement, or covenant of Developer under this Agreement, including
an action for specific performance.
9.7 Developer Remedies on City or Authority Events of Default. Whenever any Event of
Default of the City or the Authority occurs, Developer, may take whatever action at law or in equity may
appear necessary or desirable to enforce performance and observance of any obligation, agreement, or
covenant of the City or the Authority under this Agreement, including, without limitation, an action for
specific performance.
9.8 No Remedy Exclusive. No remedy herein conferred upon or reserved to the City, the
Authority or Developer is intended to be exclusive of any other available remedy or remedies unless
otherwise expressly stated, but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Agreement or now or hereafter existing at law or in equity or by
statute. No delay or omission to exercise any right or power accruing upon any Default shall impair any
such right or power or shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority,
the City or Developer to exercise any remedy reserved to it, it shall not be necessary to give notice, other
than such notice as may be required in this Article IX.
Execution
34
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
9.9 No Additional Waiver Implied by One Waiver. If any agreement contained in this
Agreement should be breached by any party and thereafter waived by another party, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous
or subsequent breach hereunder.
9.10 Reimbursement of Attorneys’ Fees. Whenever a Default occurs and the non-defaulting
party shall employ attorneys or incur other expenses for the collection of payments due or to become due
or for the enforcement of performance or observance of any obligation or agreement under this Agreement,
the defaulting party shall, within 10 days of written demand by the non-defaulting party pay to such non-
defaulting party the reasonable fees of such attorneys and such other expenses so incurred by the non-
defaulting party. In the event of any enforcement action hereunder following a Default, the prevailing
party, in addition to other relief, shall be entitled to an award of attorney’s fees and costs. The City,
Authority and Developer waive their right to a jury trial on the issues of who is the prevailing party and
the reasonable amount of attorneys’ fees and costs to be awarded to the prevailing party. Those issues will
be decided by the trial judge upon motion by one or both parties, such motion to be decided based on the
record as of the end of the jury trial augmented only by the testimony and/or affidavits from the attorneys
and their staff. The parties agree that, subject to the trial judge’s discretion, the intent of this clause is to
have all issues related to the award of attorneys’ fees and costs decided by the trial judge as quickly as
practicable.
Article X
Additional Provisions
10.1 Conflicts of Interest. No member of the Board or other official of the Authority shall have
any financial interest, direct or indirect, in this Agreement, the TIF District or the Minimum Improvements,
or any contract, agreement or other transaction contemplated to occur or be undertaken thereunder or with
respect thereto, nor shall any such member of the governing body or other official participate in any
decision relating to the Agreement which affects his or her personal interests or the interests of any
corporation, partnership or association in which he or she is directly or indirectly interested. No member,
official or employee of the City or the Authority shall be personally liable to the City or the Authority in
the event of any Default or breach by Developer of any obligations under the terms of this Agreement.
10.2 Titles of Articles and Sections. Any titles of the several parts, Articles and Sections of the
Agreement are inserted for convenience of reference only and shall be disregarded in construing or
interpreting any of its provisions.
10.3 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice,
demand or other communication under this Agreement by any party to any other shall be in writing and
shall be sufficiently given or delivered if it is dispatched by reputable overnight courier, sent registered or
certified mail, postage prepaid, return receipt requested, or delivered personally, and addressed to:
Developer at: c/o Solhem Development, LLC
Attn: Curt Gunsbury
724 N First Street, Suite 500
Minneapolis, MN 55401
with a copy to: Anthony J. Gleekel
Siegel Brill P.A.
100 Washington Avenue South, Suite 1300
Minneapolis, MN 55401
Execution
35
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
The Authority at: Housing and Redevelopment Authority of Edina, Minnesota
Attention: Executive Director
4801 West 50th Street
Edina, MN 55424
with a copy to: Dorsey & Whitney LLP
Attention: Jay R. Lindgren
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402
The City at: City of Edina
Attention: City Manager
4801 West 50th Street
Edina, MN 55424
with a copy to: Dorsey & Whitney LLP
Attention: Jay R. Lindgren
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402
or at such other address with respect to any such party as that party may, from time to time, designate in
writing and forward to the other, as provided in this section.
10.4 Governing Law, Jurisdiction, Venue and Waiver of Trial by Jury. All matters, whether
sounding in tort or in contract, relating to the validity, construction, performance, or enforcement of this
Agreement shall be controlled by, interpreted and determined in accordance with the laws of the state of
Minnesota without regard to its conflict and choice of law provisions. Any litigation arising out of this
Agreement shall be venued exclusively in Hennepin County District Court, Fourth Judicial District, state
of Minnesota and shall not be removed therefrom to any other federal or state court. The Authority and
Developer hereby consent to personal jurisdiction and venue in the foregoing court. The Authority and
Developer hereby waive trial by jury for any litigation arising out of this Agreement.
10.5 Severability. If any term or provision of this Agreement is determined to be invalid or
unenforceable under applicable Law, the remainder of this Agreement shall not be affected thereby, and
each remaining term or provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by applicable Law.
10.6 Consents and Approvals. Whenever the terms “consent,” “approve,” or “approval” are used
herein, they shall mean consent or approvals which shall not be unreasonably conditioned or delayed,
unless specifically provided otherwise. All consents or approvals must be delivered in writing in order to
be effective.
10.7 Additional Documents. When reasonably requested to do so by another party, each party
shall execute or cause to be executed any further documents as may be reasonably necessary or expedient
and within their lawful obligation in order to consummate the transactions provided for in, and to carry
out the purpose and intent of, this Agreement.
10.8 Limitation. All covenants, stipulations, promises, agreements and obligations of the
Authority or Developer contained in this Agreement shall be deemed to be the covenants, stipulations,
promises, agreements and obligations of the Authority and Developer, and not of any governing body
Execution
36
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
member, officer, agent, servant, manager or employee of the Authority or Developer in the individual
capacity thereof.
10.9 City/Authority Approval. Unless the City Council or the Board, as applicable, determines
otherwise in its discretion, all approvals and other actions required of or taken by the Authority or the City
shall be effective upon action by the Authorized Representative of the Authority or City, as applicable (or
in either case his/her designee), unless (a) this Agreement explicitly provides for approval by the City
Council or the Board of the Authority, (b) approval by the Council or Board is required by law or (c) the
approval, in the opinion of the City Manager or the Executive Director, would result in a material change
in the terms of this Agreement.
10.10 Superseding Effect. This Agreement reflects the entire agreement of the parties with
respect to the items covered by this Agreement, and supersedes in all respects all prior agreements of the
parties, whether written or otherwise, with respect to the items covered by this Agreement.
10.11 Relationship of Parties. Nothing in this Agreement is intended, or shall be construed, to
create a partnership or joint venture among or between the parties hereto, and the rights and remedies of
the parties hereto shall be strictly as set forth in this Agreement.
10.12 Survival of Terms. The following Sections will survive the expiration or earlier termination
of this Agreement: Section 6.1 [Insurance]; Section 6.2 [Indemnification]; Section 7.1 [Developer
Reimbursement Obligations]; Sections 9.5 through 9.10 [Remedies on Default, etc.] to the extent of any
Event of Default arising prior to such termination or expiration; Section 10.3 [Notices and Demands];
Section 10.4 [Governing Law, Jurisdiction, Venue and Waiver of Trial by Jury]; Section 10.14 [No Waiver
of Governmental Immunity and Limitations on Liability]; and Section 10.17 [Limited Liability].
10.13 Data Practices Act. Developer acknowledges that all of the data created, collected,
received, stored, used, maintained, or disseminated by Developer with regard to the performance of its
duties under this Agreement are subject to the requirements of Chapter 13, Minnesota Statutes.
10.14 No Waiver of Governmental Immunity and Limitations on Liability. Nothing in this
Agreement shall in any way affect or impair the City’s or Authority’s immunity or the immunity of the
City’s and Authority’s employees, consultants and contractors, whether on account of official immunity,
legislative immunity, statutory immunity, discretionary immunity or otherwise. Nothing in this Agreement
shall in any way affect or impair the limitations on the City’s or Authority’s liability or the liability of the
City’s and Authority’s employees, consultants and independent contractors. By entering into this
Agreement, the Authority does not waive any rights, protections, or limitations as provided under law and
equity for the Authority, or of their respective employees, consultants and contractors.
10.15 City and Authority Regulatory Authority. Nothing in this Agreement shall be construed to
limit or modify the City’s or Authority’s regulatory authority.
10.16 Memorandum of Agreement. Neither party shall cause this Agreement to be recorded or
filed in the real estate records of the County. However, Developer shall cause a memorandum of this
Agreement to be so recorded or filed in the form attached as Exhibit G, and hereby incorporated herein
by reference upon execution of this Agreement upon that portion of the Project Area owned by Developer.
At the time of execution of this Agreement the parties hereto will also execute and acknowledge the
Memorandum of Agreement.
10.17 Limited Liability. Notwithstanding anything to contrary provided in this Agreement, it is
specifically understood and agreed, such agreement being the primary consideration for the execution of
Execution
37
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
this Agreement by Developer, that (a) there should be absolutely no personal liability on the part of any
director, officer, manager, member, employee or agent of Developer or the City or Authority with respect
to any terms, covenants and conditions in this Agreement; (b) Developer and the Authority waive all
claims, demands and causes of action against the other parties’ directors, officers, managers, members,
employees and agents in any Event of Default, by either party, as the case may be, of any of the terms,
covenants and conditions of this Agreement to be performed by either party; and (c) Developer and the
Authority, as the case may be, shall look solely to the assets of the other party for the satisfaction of each
and every applicable remedy in the Event of Default by any party, as the case may be, of any of the terms,
covenants and conditions of this Agreement such exculpation of liability to be absolute and without any
exception whatsoever.
10.18 Time is of the Essence. Time is of the essence of this Agreement and each and every term
and condition hereof; provided, however, that if any date herein set forth for the performance of any
obligations by Developer or the Authority or for the delivery of any instrument or notice as herein provided
should not be on a business day, the compliance with such obligations or delivery shall be deemed
acceptable on the next following business day.
10.19 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall constitute one and the same instrument.
10.20 Amendments. This Agreement shall not be amended unless in writing and executed by the
parties hereto. Developer shall be responsible for obtaining any necessary consent to an amendment to this
Agreement from the Construction Lender or Permanent Lender, as applicable.
10.21 TIF District. Developer acknowledges and agrees that the Authority and the City may take
appropriate steps to modify the TIF District in the future, including, without limitation, incorporating
additional land into the TIF District. Developer shall cooperate with the Authority and the City with any
such future modification, including to execute and deliver any supplements or modifications to this
Agreement that are reasonably required in connection therewith, provided that no such modification or
supplement shall (a) increase any obligation of Developer hereunder or (b) adversely affect any right of or
benefit of Developer hereunder.
10.22 Term. The term of this Agreement shall be effective from the Effective Date above written
until the earlier of (a) the date this Agreement is terminated pursuant to the terms and conditions hereof,
(b) payment in full of the TIF Note, or (c) the date of termination of the TIF District. Upon termination,
the parties agree to execute and record a document terminating this Agreement and providing for the
release of the obligations under this Agreement.
10.23 Estoppel Certificate. Each party, respectively, agrees that at any time and from time to time
within 10 business days after receipt of a written request by the other party, to execute, acknowledge and
deliver to such party a statement in writing and in such form as will enable it to be recorded in the proper
office for the recordation of deeds and other instruments certifying: (a) that this Agreement is unmodified
and in full force and effect or, if there have been modifications, that the same are in full force and effect
as modified and identifying the modifications; (b) that no party is in default under any provisions of this
Agreement or, if there has been a default, the nature of such default; (c) that all work to be performed,
under this Agreement or any related agreement has been performed or, if not so performed, specifying the
work to be performed; and (d) as to any other matter that the requesting party, a prospective purchaser or
assignee or a prospective mortgagee or other lender shall reasonably request. It is intended that any such
statement may be relied upon by any person, prospective mortgagee of, or assignee of any mortgage, upon
such interest. Any such statement on behalf of the City may be executed by the City Manager without City
Execution
38
Redevelopment Agreement (4620 W. 77th Street)
4853-6591-5695\11
Council approval and any such statement on behalf of the Authority may be executed by the Executive
Director without Authority Board approval.
[SIGNATURES APPEAR ON FOLLOWING PAGES]
Execution
[Signature Page to Redevelopment Agreement (4620 W. 77th Street]
4853-6591-5695\11
IN WITNESS WHEREOF, the City, the Authority and Developer have caused this Agreement to
be duly executed in their names and on their behalf, all on or as of the date first above written.
City of Edina, Minnesota
By: _________________________________________
James B. Hovland, Mayor
By: _________________________________________
Scott H. Neal, City Manager
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of __________, 2022, by
James B. Hovland and Scott H. Neal, the Mayor and City Manager, respectively, of the City of Edina,
Minnesota, on behalf of the City of Edina.
______________________________________
Notary Public
Execution
[Signature Page to Redevelopment Agreement (4620 W. 77th Street]
4853-6591-5695\11
Housing and Redevelopment Authority of
Edina, Minnesota
By: ______________________________
James B. Hovland, Chair
By: ______________________________
James Pierce, Secretary
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of __________, 2022, by James B.
Hovland and James Pierce, the Chair and Secretary, respectively, of the Housing and Redevelopment
Authority of Edina, Minnesota, on behalf of said Authority.
______________________________________
Notary Public
Execution
[Signature Page to Redevelopment Agreement (4620 W. 77th Street]
4853-6591-5695\11
4620 LLC,
a Minnesota limited liability company
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
STATE OF _______________ )
) ss.
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this ___ day of __________, 2022, by
____________________, the _______________ of 4620 LLC, a Minnesota limited liability company, on
behalf of the company.
Notary Public
A-1
4893-8005-0493\1
Exhibit A
Legal Description
That part of Tract B, Registered Land Survey No. 1218, files of the Registrar of Titles, Hennepin County,
Minnesota, lying westerly of a line described as commencing at the northwest corner of said Tract B; thence
on an assumed bearing of North 89 degrees 47 minutes 30 seconds East, along the north line of said Tract
B, a distance of 286.31 feet to the point of beginning of the line to be described; thence South 0 degrees 12
minutes 31 seconds East 473.90 feet to the south line of said Tract B and said line there terminating.
B-1
4885-9152-1341\1
Exhibit B
Project Site Plan
020(1780'(6,*1*5283//&3ULRU$YHQXH1RUWK$6W3DXO0LQQHVRWD ^, d/E y͗ϰϲϮϬƉĂƌƚŵĞŶƚƐ ĚŝŶĂ͕DŝŶŶĞƐŽƚĂ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y,//dͲWZK: dW>E^
:(7/$1'7<3(3(0%:(70($'2:$&'(/,1($7('6
: $3$570(176:7+67(',1$011),5676768,7(0,11($32/,60162/+(0&203$1,(6352-(&735(/,0,1$5< 127)25&216758&7,21,668(68%0,77$/6800$5<'$7('(6&5,37,21352-(&7180%(5 &21&(376(7 ),1$/5(=21,1*$33/,&$7,21 3/$11,1*&200,66,21$33/,&$7,21'5$:1%< 5(9,(:('%< 5/-/ 5/&23<5,*+7&,9,/6,7(*5283,1&FFLYLOVLWHJURXSFRP5(9,6,216800$5<'$7('(6&5,37,21&7,7/(6+((7$3$570(176(',1$0,11(627$6+((7,1'(;6+((7180%(5 6+((77,7/(& 7,7/(6+((76,7(/2&$7,216,7(/2&$7,210$31,668(')25 ),1$/5(=21,1*$33/,&$7,21'(9(/23(53523(57<2:1(5 (1*,1((5/$1'6&$3($5&+,7(&7 &,9,/6,7(*5283*/(1:22'$9(*2/'(19$//(<01&217$&7 52%%,(/$77$6859(<25 *(27(&+1,&$/(1*,1((5 & 29(5$//6,7(3/$1Know what's57%'/5(6,'(17,$//$1'6&$3(3/$1$5&+,7(&7 020(1780'(6,*1*5283135,25$9(1$673$8/01&217$&7 &5$,*+$570$1&5$,*#0'*$5&+,7(&76&20 62/+(0&203$1,(61),5676768,7(0,11($32/,601&217$&7 &857*816%85<&857#62/+(0&2029(5$//*5$',1*3/$1&29(5$//87,/,7<3/$1&7+()5('&6*352-(&73+$6(,,5(6,'(17,$/38%/,&675((7(;,67,1*%8,/',1*6725(0$,1681'(/$1'6859(<,1* ($67%/220,1*721)5((:$< ,: 68,7(%/220,1*72101&217$&7 /(21$5'&$5/621
81'(5*5281'($6(0(173(5'2&12 87,/,7<($6(0(173(5'2&12 87,/,7<($6(0(173(5'2&12 WK6WUHHW:([LVWLQJ%XLOGLQJ([LVW3,' 3,' 2ZQHU 3HQ3,' 2ZQHU &LW\RI(GLQD6
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now what's5
:(7/$1'7<3(3(0%:(70($'2:$&'(/,1($7('5'2&81'(5*5281'($6(0(173(5'2&12 87,/,7<($6(0(173(5'2&12 87,/,7<($6(0(173(5'2&12 WK6WUHHW:([LVWLQJ%XLOGLQJWK6WUHHW:([LVWLQJ%XLOGLQJ3,' 3,' 2ZQHU 3HQWDJRQ1RUWK//&3,' 2ZQHU &LW\RI(GLQD3DUNODZQ$YH3,' 2ZQHU 9LORI(GLQD8QDVVLJQHG$GGUHVV6
: 6WDLUV%LWXPLQRXV6XUIDFHFH%LWXPLQRXV6XUIDFH%LWXPLQRXV6XUIDFH%LWXPLQRXV6XUIDFH6WDLUV(DVW/LQH7UDFW%'HOLQHDWHG:HWODQG'HOLQHDWHG:HWODQG&RUQHUVIDOOLQZDWHU1R0RQXPHQWV)RXQGRU6HW(GJHRI:DWHU$3$570(176:7+67(',1$011),5676768,7(0,11($32/,60162/+(0&203$1,(6352-(&735(/,0,1$5< 127)25&216758&7,21,668(68%0,77$/6800$5<'$7('(6&5,37,21352-(&7180%(5 &21&(376(7 ),1$/5(=21,1*$33/,&$7,21 3/$11,1*&200,66,21$33/,&$7,21'5$:1%< 5(9,(:('%< 5/-/ 5/&23<5,*+7&,9,/6,7(*5283,1&FFLYLOVLWHJURXSFRP5(9,6,216800$5<'$7('(6&5,37,21&29(5$//*5$',1*3/$1' E Z>'Z/E'EKd ^͗*5$',1*3/$1/(*(1' *5281':$7(5,1)250$7,21 &,7<2)(',1$*5$',1*127(6 6:6:(526,21&21752/127(6 1Know what's5(2)
:(7/$1'7<3(3(0%:(70($'2:$&'(/,1($7(''2&81'(5*5281'($6(0(173(5'2&12 87,/,7<($6(0(173(5'2&12 87,/,7<($6(0(173(5'2&12 WK6WUHHW:([LVWLQJ%XLOGLQJWK6WUHHW:([LVWLQJ%XLOGLQJ3,' 3,' 2ZQHU 3HQWDJRQ1RUWK//&3,' 2ZQHU &LW\RI(GLQD3DUNODZQ$YH3,' 2ZQHU 9LORI(GLQD8QDVVLJQHG$GGUHVV6
: 6WDLUV%LWXPLQRXV6XUIDFHH%LWXPLQRXV6XUIDFH%LWXPLQRXV6XUIDFH%LWXPLQRXV6XUIDFH6WDLUV(DVW/LQH7UDFW%'HOLQHDWHG:HWODQG'HOLQHDWHG:HWODQG&RUQHUVIDOOLQZDWHU1R0RQXPHQWV)RXQGRU6HW(GJHRI:DWHU352326('81'(5*5281':(7321'$1'&036721(%$6(,19(57 6721(%$6(,19(57 727$/)22735,17
;
,1&/8'(66,'($1'(1'6721( 3(50$1(17 '($' 6725$*( &))/22' /,9( 6725$*( &):5$36<67(0:,7+0,/,03(50($%/(/,1(5:,7+6($/('6($06)(6,( 5$,1:$7(55(86(&,67(51'85$0$;;3,3()22735,17
;
6721(%$6(,( 352326('&20%,1(''20(67,&$1'),5(68335(66,21:$7(56(59,&(352326('+<'5$17/($'/)39&6'56$1,7$5<6(59,&(#$3$570(176:7+67(',1$011),5676768,7(0,11($32/,60162/+(0&203$1,(6352-(&735(/,0,1$5< 127)25&216758&7,21,668(68%0,77$/6800$5<'$7('(6&5,37,21352-(&7180%(5 &21&(376(7 ),1$/5(=21,1*$33/,&$7,21 3/$11,1*&200,66,21$33/,&$7,21'5$:1%< 5(9,(:('%< 5/-/ 5/&23<5,*+7&,9,/6,7(*5283,1&FFLYLOVLWHJURXSFRP5(9,6,216800$5<'$7('(6&5,37,21&29(5$//87,/,7<3/$1' E Z>hd/>/dzEKd ^͗87,/,7</(*(1' &,7<2)(',1$87,/,7<127(6 1Know what's5
81'(5*5281'($6(0(173(5'2&12 87,/,7<($6(0(173(5'2&12 87,/,7<($6(0(173(5'2&12 WK6WUHHW:([LVWLQJ%XLOGLQJ3,' 2ZQHU &LW\RI(GLQD6
: 6WDLUV%LWXPLQRXV6XUIDFH%LWXPLQRXV6XUIDFH6WDLUV(DVW/LQH7UDFW%1R0RQX)RXQGRU5(9,6,216800$5<'$7('(6&5,37,21/5(6,'(17,$//$1'6&$3(3/$1$3$570(176:7+67(',1$011),5676768,7(0,11($32/,60162/+(0&203$1,(6352-(&735(/,0,1$5< 127)25&216758&7,21,668(68%0,77$/6800$5<'$7('(6&5,37,21352-(&7180%(5 &21&(376(7 ),1$/5(=21,1*$33/,&$7,21 3/$11,1*&200,66,21$33/,&$7,21'5$:1%< 5(9,(:('%< 5/-/ 5/&23<5,*+7&,9,/6,7(*5283,1&FFLYLOVLWHJURXSFRP1Know what's5352326('3(5(11,$/3/$176<0%2/66((3/$176&+('8/($1'3/$1)2563(&,(6$1'3/$17,1*6,=(6352326(''(&,'8286$1'(9(5*5((16+58%6<0%2/66((3/$176&+('8/($1'3/$1)2563(&,(6$1'3/$17,1*6,=(6352326('251$0(17$/75((6<0%2/66((3/$176&+('8/($1'3/$1)2563(&,(6$1'3/$17,1*6,=(6352326('(9(5*5((175((6<0%2/66((3/$176&+('8/($1'3/$1)2563(&,(6$1'3/$17,1*6,=(6352326('&$123<75((6<0%2/66((3/$176&+('8/($1'3/$1)2563(&,(6$1'3/$17,1*6,=(6('*,1*'(&25$7,9(%28/'(56 5281'(' %/2&.67</( ',$>E^W EKd ^͗
020(1780'(6,*1*5283//&3URMHFW1XPEHU3ULRU$YHQXH1RUWK$6W3DXO0LQQHVRWD 6ROKHP&RPSDQLHV1VW6WUHHW6XLWH0LQQHDSROLV01ϰϲϮϬƉĂƌƚŵĞŶƚƐ ĚŝŶĂ͕DŝŶŶĞƐŽƚĂX01.1(;7(5,253(563(&7,9( ([WHULRU3HUVSHFWLYH
020(1780'(6,*1*5283//&3URMHFW1XPEHU3ULRU$YHQXH1RUWK$6W3DXO0LQQHVRWD 6ROKHP&RPSDQLHV1VW6WUHHW6XLWH0LQQHDSROLV01ϰϲϮϬƉĂƌƚŵĞŶƚƐ ĚŝŶĂ͕DŝŶŶĞƐŽƚĂX01.2675((79,(:3(563(&7,9(6 3DUN3HGHVWULDQ$FFHVV3DUN9HKLFXODU$FFHVV,OOXVWUDWLYH&RQFHSW'HVLJQ7%'LQ&ROODERUDWLRQZLWK&LW\5HYLHZDQG$SSURYHGE\$OO3DUWLHV,OOXVWUDWLYH&RQFHSW'HVLJQ7%'LQ&ROODERUDWLRQZLWK&LW\5HYLHZDQG$SSURYHGE\$OO3DUWLHV
N020(1780'(6,*1*5283//&3URMHFW1XPEHU3ULRU$YHQXH1RUWK$6W3DXO0LQQHVRWD 6ROKHP&RPSDQLHV1VW6WUHHW6XLWH0LQQHDSROLV01ϰϲϮϬƉĂƌƚŵĞŶƚƐ ĚŝŶĂ͕DŝŶŶĞƐŽƚĂX02(;,67,1*&217(;7 9,(:9,(:9,(:9,(:9,(:9,(:9,(:9,(:9,(:/(*(1')LQDO6LWH3ODQ5HYLHZ
::::758666$16)$//6,1:$7(50$7&+/,1($75$&7&75$&7:03/(9*(9*$&.$6+63&*63&*63&*63&*03/03/63&*63&*63&*$5%&5$%&5$%&5$%03/03/&276$16$1
(/,1(2)75$&7% 81'(5*5281'3(5'2&12 6
(:22')(1&()7&+$,1/,1.)(1&(6721(:$//&21&5(7(67$,5:(//7((//%,780,1286&21&5(7(&21&7<3,&$/6(('(7$,/7<3,&$/6(('(7$,7<3,&$/6(('(7$,/29(5+$1*0(7$*/$67<3,&(175</(9(/35(&$6&21&5(7(2)),%8,/',1*:7+675%8,/',1*)22735 64)7(175<(175</(9(/35(&$67&21&5(7(2)),&(%8,/',1*:7+675((7%8,/',1*)22735,17 64)77<3,&$/6(('(7$,/&,3:&,3:::*$6*$6*$6$%$1*$6$%$1*$66$166$16 &/$<6$166$168*& 3 8*( 3 8*( 3 8*( 3 8*( 3 8*( 3 8*( 3 [[[[&2/&2/+&6+&6+&67&67&6:970+(0+/3/(0+'**0$&+<'$&*3*3*3*3*3 8383
6)CAFE 6)COMMON AREAENTEREXITGARAGE$3352;,0$7((1'2)),5($&&(6652$'213+$6(,/2&$7,212)3$667+528*+$%29(67(3683723/$=$$%29(ONE WAYWEST 77TH STREET75$16)250(5ENTRANCE
COVERED ACTIVITY AREA6)COMMON AREA7:2:$<EXISTING BUILDINGEXISTING BUILDING
EXISTING PARKING LOT (EAST)EXISTING PARKING LOT,1'225322/
ONE WAY
EXISTING BUILDING (UNDER CONSTRUCTION)ENTRANCE%8,/',1*6(7%$&.%8,/',1*6(7%$&.%8,/',1*6(7%$&.DOG PARKPATIOPATIOWOONERF PEDESTRIAN PLAZANEW PUBLIC STREET VEHICULAR CONNECTIONNPEDESTRIAN PARK ACCESS3$9(56BICYCLE PARK ACCESSBIKE SHOP%2&&(&285767(3683723/$=$$%29(VEHICULAR PARK ACCESSNEW ACCESS DRIVE(TWO WAY)PROPERTY LINEEXISTING PARKING LOT (NORTH) 5(675,3('7267$//6 02180(176,*1$&&(6672),5(/$1(63(('7$%/($7&5266:$/. 75$)),&&$/0,1* 67236,*16$7,17(56(&7,21 75$)),&&$/0,1* 75$6+$5($ 5(675,3('7267$//6 FDCELECTRICALWATER*5$9(/%8))(5$5281'),5(/$1(3$9(5602180(176,*1020(1780'(6,*1*5283//&3URMHFW1XPEHU3ULRU$YHQXH1RUWK$6W3DXO0LQQHVRWD 6ROKHP&RPSDQLHV1VW6WUHHW6XLWH0LQQHDSROLV01ϰϲϮϬƉĂƌƚŵĞŶƚƐ ĚŝŶĂ͕DŝŶŶĞƐŽƚĂX036,7(3/$1),567)/225 DEVELOPMENT SUMMARY:LOT INFORMATION:7+675((7:(67 3,1 ZONING:(;7(1'('38')5203+$6(,PROPOSED USE:08/7,)$0,/<0,;('86(APPROXIMATE LOT AREA:6) $&5(6 29(5$//HEIGHT:6725,(6
SETBACKS 35(6&5,%(' :)5217<$5' )76,'(<$5' )75($5<$5' )7GROSS BUILDING AREA BY FLOOR67)/225 6)1')/225 6)5')/225 6)7+)/225 6)7+)/225 6)7+)/225 6)7+)/225 6)727$/ 6)GARAGE PARKING67)/225&203$&7 67$1'$5' 1')/225&203$&7 67$1'$5' 727$/3$5.,1* UNIT COUNT (APPROXIMATE)5')/225%(' %(''(1 %(' $))%(' $))%(' 7+)/225%(' %(''(1 %(' $))%(' $))%(' 7+)/225%(' %(''(1 %(' $))%(' $))%(' 7+)/225%(' %(''(1 %(' %(''(1 $))%(' $))%(' 7+)/225%(' %(''(1 %(' %(''(1 $))%(' 727$/ F.A.R. SITE AREA 136,368 SF (3.13 ACRES)*5266$5($(;&/8',1**$5$*(6 )$56)
SITE / FIRST FLOOR PLAN)LQDO6LWH3ODQ5HYLHZ
&$)(%(/2: 23(1 GARAGE6)COMMON AREA&20021$5($%(/2: 23(1 6)COMMON AREA '123(172%(/2:(*5(66&2857(*5(66&2857522)%(/2:522)%(/2:522)%(/2:B10-IZD4C10D1C1C1C1B2B2B2D2D3B3D9-IZ D10B10-IZC2C2B4B4C2C2B3D10B10-IZD5C8D6B3B3D6D9-IZD5C3B7B7C4C4C5C11B8D8B9D7B10-IZD7B9D8B8B8C5C4C4B7B7C3B5C8B4C1NB9B9B8C11B7B7 C4C4C5C5C4C4 B7B7B8B8B3 B3B10-IZD9-IZB4B3B3B2 B2 B2 C1 C1C10B10-IZC1B5B10-IZB10-IZC2C2 C2C2C3C8C3D4D1D2D3D9-IZ D10B4D10D5 D5D6D6D7D8D7 D8B4C1C8522)%(/2:522)%(/2:522)'(&.D12D6 D6D12C8D5B10-IZD10C7B4B4B3B10-IZC2C2 C2C2D4B10-IZD10C7B3D3D2 B2 B2 B2 C1 C1 C1D1C10D5 B5B10-IZF3C8C1B4C10C1C1B2B2B3B10-IZB3B4B4B7B7C11B8C5C4C4 C4C4C5B8B8B7B7B9B9B3 B3B10-IZB5B10-IZB10-IZC1C2C2 C2C2C3C8C3D8 D7D7 D8D5D9-IZD10D5D6D6D2D3D9-IZ D10D4D1C8B2 C1B4D1D4C10C1C1C1B2B2B2D2D3B3 D9-IZ D10B10-IZB10-IZC2C2B4B4C2C2B3D9-IZ D10B10-IZB5D5D5C8C3D6D6C3B7B7C4C4D11B8C9B10-IZF2 F1F1 F2D11C4C4B7B7C11C952207<3(/(*(1'%('%(''(1%('%(''(1$))%('$))%('&,5&8/$7,2181,76725$*(9(57,&$/&,5&8/$7,21F3C8B4C1020(1780'(6,*1*5283//&3URMHFW1XPEHU3ULRU$YHQXH1RUWK$6W3DXO0LQQHVRWD 6ROKHP&RPSDQLHV1VW6WUHHW6XLWH0LQQHDSROLV01ϰϲϮϬƉĂƌƚŵĞŶƚƐ ĚŝŶĂ͕DŝŶŶĞƐŽƚĂX04)/2253/$16
2ND FLOOR PLAN
3RD FLOOR PLAN
4TH FLOOR PLAN
7TH FLOOR PLAN
5TH FLOOR PLAN
6TH FLOOR PLAN)LQDO6LWH3ODQ5HYLHZ
67)/225
833(5522)
1')/225
5')/225
7+)/225
7+)/225
7+)/225
7+)/225
*$5$*((175<$/80,1806725()521767$1',1*6($00(7$/$:1,1*$/80,180%$/&21<9,1</:,1'2:6*/$66 $/80,180*8$5'5$,/9,1</6/,',1*'2250(7$/3$5$3(7&$3$1*/('7,0%(53(5*2/$67$,5725')/2257+2528*+)$5(0$7(5,$/0$7(5,$/0$7(5,$/0$7(5,$/0$7(5,$/0$7(5,$/0$7(5,$/0$7(5,$/&21&5(7(&2/8016$1*/('7,0%(53(5*2/$67)/225
833(5522)
1')/225
5')/225
7+)/225
7+)/225
7+)/225
7+)/225
$/80,180%$/&21<:*/$66 $/80,180*8$5'5$,/69,1</:,1'2:69,1</6/,',1*'225*/$66 $/80,180*8$5'5$,/&21&5(7(&2/8010$7(5,$/0$7(5,$/0$7(5,$/0$7(5,$/0$7(5,$/0$7(5,$/$1*/('7,0%(53(5*2/$67)/225
833(5522)
1')/225
5')/225
7+)/225
7+)/225
7+)/225
7+)/225
$/80,180%$/&21<9,1</:,1'2:69,1</6/,',1*'2250$7(5,$/0$7(5,$/0$7(5,$/0$7(5,$/67$1',1*6($00(7$/$:1,1*$/80,1806725()5217 %,.(6725$*((175<0$7(5,$/$1*/('7,0%(53(5*2/$$/80,1806725()5217$/80,1806725()5217 0$,1%8,/',1*(175<0$7(5,$/67)/225
833(5522)
1')/225
5')/225
7+)/225
7+)/225
7+)/225
7+)/225
0$7(5,$/0$7(5,$/0$7(5,$/0$7(5,$/0$7(5,$/0$7(5,$/0$7(5,$/0$7(5,$/$/80,180 */$66*8$5'5$,/67$,5725')/2257+2528*+)$5(9,1</:,1'2:6$/80,180%$/&21<67$,5$&&(669,1</6/,',1*'22575$16)250(53/$17(5%2;(60$7(5,$/EXTERIOR FINISH KEYMATERIAL #1:%$6,62)'(6,*1 3$77(51 &2/25 7,17('35(&$67:$//3$1(/+$1'+(:1+(0/2&.%52:1MATERIAL #2:%$6,62)'(6,*1 67</( &2/25 %5,&.0$6215<87,/,7<5811,1*%21'&+$5&2$/MATERIAL #3:%$6,62)'(6,*1 67</( &2/25 0(7$/3$1(/)/86+5(9($/:$50*5$<25,(17$7,21 9(57,&$/MATERIAL #4:%$6,62)'(6,*1 67</( &2/25 /$36,',1*(;32685(/,*+7*5$< 60227+25,(17$7,21 +25,=217$/67)/225
833(5522)
1')/225
5')/225
7+)/225
7+)/225
7+)/225
7+)/225
$/80,180%$/&21<9,1</:,1'2:69,1</6/,',1*'2250(7$/3$5$3(7&$3$1*/('7,0%(53(5*2/$0$7(5,$/0$7(5,$/0$7(5,$/5')/225(;7(5,25&211(&7,2167)/225
833(5522)
1')/225
5')/225
7+)/225
7+)/225
7+)/225
7+)/225
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ϰϲϮϬƉĂƌƚŵĞŶƚƐ ĚŝŶĂ͕DŝŶŶĞƐŽƚĂX05(;7(5,25(/(9$7,216 6&$/(
1EAST ELEVATION6&$/(
2NORTH ELEVATION (COLOR)6&$/(
4SOUTH ELEVATION6&$/(
5WEST ELEVATION6&$/(
6COURTYARD EAST ELEVATION6&$/(
3COURTYARD WEST ELEVATION6&$/(
7SIGNAGE A6&$/(
8SIGNAGE B)LQDO6LWH3ODQ5HYLHZ
7,17('35(&$67:$//3$1(/87,/,7<%5,&.9(1((59(57,&$/0(7$/3$1(//$36,',1*9,1</6/,',1*'2259,1</:,1'2:),;('$:1,1*$/80,180%$/&21<*/$663$1(/6$/80,180%$/&21<3,&.(75$,/,1*020(1780'(6,*1*5283//&3URMHFW1XPEHU3ULRU$YHQXH1RUWK$6W3DXO0LQQHVRWD 6ROKHP&RPSDQLHV1VW6WUHHW6XLWH0LQQHDSROLV01ϰϲϮϬƉĂƌƚŵĞŶƚƐ ĚŝŶĂ͕DŝŶŶĞƐŽƚĂX06(;7(5,250$7(5,$/6 )LQDO6LWH3ODQ5HYLHZ
020(1780'(6,*1*5283//&3URMHFW1XPEHU3ULRU$YHQXH1RUWK$6W3DXO0LQQHVRWD 6ROKHP&RPSDQLHV1VW6WUHHW6XLWH0LQQHDSROLV01ϰϲϮϬƉĂƌƚŵĞŶƚƐ ĚŝŶĂ͕DŝŶŶĞƐŽƚĂX076+$'2:678',(6 DECEMBER 21, 3 PMDECEMBER 21, 9 AMDECEMBER 21, NOONJUNE 21, 9 AMJUNE 21, NOONJUNE 21, 3 PMMARCH & SEPTEMBER 21, 9 AMMARCH & SEPTEMBER 21, NOONMARCH & SEPTEMBER 21, 3 PM)LQDO6LWH3ODQ5HYLHZ
Debt A: First Mortgage 65,400,000 77.0%236,957
Subtotal 65,400,000 77.0%236,957
Category
Equity 17,512,186 20.6%63,450
Local_Grant 2,008,000 2.4%7,275
Subtotal 19,520,186 23.0%70,725
TOTAL SOURCES 84,920,186 100.0% 307,682
Amount % of Cost Per Unit
ACQUISITION COSTS 5,186,000 6.1% 18,790
Land Cost $21.95 psf 5,186,000 6.1% 18,790
CONSTRUCTION COSTS 64,003,318 75.4% 231,896
Residential Building and Site Costs 60,703,318 71.5%219,940
Green Certification Contingency $870 per 277 stall 300,000 0.4%1,087
Construction Contingency 3,000,000 4.7%10,870
SOIL REMEDIATION / CORRECTION 350,000 0.4% 1,268
350,000 0.4%1,268
PERMITS/FEES 2,937,030 3.5% 10,641
617,033 0.7%2,236
242,000 0.3%877
2,077,997 2.4%7,529
PROFESSIONAL SERVICES 5,893,097 6.9% 21,352
1,228,000 1.4%4,449
255,000 0.3%924
1,042,725 1.2%3,778
909,000 1.1%3,293
269,700 0.3%977
2,013,672 2.4%7,296
175,000 0.2%634
FINANCING COSTS 3,450,575 4.1% 12,502
824,802 1.0%2,988
2,625,773 3.1%9,514
DEVELOPER FEE 3,100,166 3.7% 11,232
Developer Fee 3,100,166 3.7% 11,232
TOTAL USES 84,920,186 100% 307,682
Exhibit D - Initial TIF Pro Forma
4620 W. 77th Street Redevelopment
City of Edina
Sources and Uses
276 Mixed-Income Apts
Detail
S&UOther Sources
Sources Percent Per Unit
Percent Per Unit
SOURCES
AmountDebt
USES
Amount
Soil Remediation & Correction Work
Architectural, Engineering & Design Fees
Title, Closing & Mort. Registration
Construction/Lease Up Period Interest
Environmental Engineering and Green Cred
Common Areas and Finishes
FF&E / Signage / Streetlights
Legal and Accounting
Other Soft Costs / Contruction Ptax
City Permits / Approvals
Studies and Neighborhood Costs
Local SAC/WAC & Met SAC
Developer Cash
SPaRC Loan
Soft Cost Contingency
11/8/2022
4620 W. 77th Street Redevelopment
City of Edina
276 Mixed-Income Apts
Estimated Operating Costs and Return Calcs
Stabilized
Income Year 1
Rental Income
Gross Potential Rent 7,051,764
Less: 5.0% Stabilized Vacancy (352,588)
Total Rental Income 6,699,176
Indoor Parking 1.5%517,500
Pets 1.5%52,992
Commercial 1.5%24,000
Storage 1.5%30,000
Internet 1.5%99,360
Utilities 1.5%414,000
Less: Vacancy (17,068)
Total Other Residential Income 1,120,784
Effective Gross Income (EGI)7,819,960
Expenses Year 1
Rental Unit Expenses
Operating Expenses 1,182,737
Management Fee: 4.0% EGI Fixed to EGI 312,798
Property Taxes 1,137,838
Total Rental Unit Expenses 2,633,373
Total Expenses 2,633,373
STABILIZED NET OPERATING INCOME 5,186,587
Tax Increment Financing Pooling Revenue Inflator:756,662
ADJUSTED NET OPERATING INCOME 5,943,249
2025
Debt Service Debt Terms Year 1
Debt A: First Mortgage 30 yr amortization @ 4,960,470
Debt B: Other Loan 0
Total Debt Service 4,960,470
Debt Coverage Debt A & B 120%
Debt Coverage w/o Tax Increment Financing Debt A & B 105%
CASH FLOW 982,779
Returns Analysis
Net Cash to Developer 982,779
Net Cash to Developer (w/o assistance) 226,117
Cash on Cash Annual Return 5.6%
Cash on Cash Annual Return (w/o TIF assistance)1.3%
Cash on Cost Annual Return 7.00%
Cash on Cost Annual Return (w/o TIF assistance)6.11%
Total Development Cost: 84,920,186
7.00% Market Return Rate (Cash-on-Cost) Target: 5,944,413
Less: Stabilized Net Operating Income (NOI): 5,186,587
A)Stabilized NOI Financing Gap: 757,826
B)Pooling TIF Available for TIF Assistance: 756,662
Annual TIF Note Payment (Lesser of A or B): 756,662
E-1
4857-0656-8240\2
Exhibit E
Form of Go-Ahead Letter
[DEVELOPER LETTERHEAD]
[Date]
City Manager/City of Edina
Executive Director/ Housing and Redevelopment Authority of Edina, MN
4801 West 50th Street
Edina, Minnesota 55424
Dear [______]:
This letter is submitted pursuant to Section 4.5 of that certain Redevelopment Agreement by and among
the CITY OF EDINA, MINNESOTA, a Minnesota statutory city (the “City”); the HOUSING AND
REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA, a public body corporate and politic
organized and existing under the laws of the State of Minnesota (the “Authority”); and 4620 LLC (the
“Developer”), dated as of _______________, 2022 (the “Redevelopment Agreement”), and is provided as
the “Go-Ahead Letter” thereunder. Capitalized terms used in this letter and not defined herein have the
meaning given to them in the Redevelopment Agreement.
In accordance with Section 4.5 of the Redevelopment Agreement, Developer hereby represents, warrants,
and certifies to the City and the Authority that:
(i) the debt and equity Financing Commitments have been received by Developer and true and correct
copies of the same are attached hereto as Exhibit A;
(ii) the organizational chart of Developer attached hereto as Exhibit B includes the identity (including
name, city and state of each) the identity of all parties with a Beneficial Interest in Developer;
(iii) true and correct copies of the final purchase agreement and other land acquisition documents related
to Developer’s acquisition of the Project Area are attached hereto as Exhibit C, and
(iv) the updated TIF Pro Forma attached hereto as Exhibit D is true and correct in all material respects
as of the date hereof; and
(v) Developer is prepared to close on all financing required for the Minimum Improvements and
commence construction of the Minimum Improvements, in accordance with the Redevelopment
Agreement.
Sincerely,
4620 LLC
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
E-2
4857-0656-8240\2
Exhibit A
Financing Commitments
(See attached)
E-3
4857-0656-8240\2
Exhibit B
Organizational Chart of Developer
(See attached)
E-4
4857-0656-8240\2
Exhibit C
Final Purchase Agreement and Land Acquisition Documents
(See attached)
E-5
4857-0656-8240\2
Exhibit D
Updated TIF Proforma
(See attached)
F-1
4867-7401-9632\3
Exhibit F
Form of Certificate of Completion with Completion Checklist
CERTIFICATE OF COMPLETION
(4620 W. 77th Street)
A. 4620 LLC (“Developer”), pursuant to the Redevelopment Agreement by and among the
CITY OF EDINA, MINNESOTA, a Minnesota statutory city (the “City”), the HOUSING AND
REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA (the “Authority”) and Developer dated
effective as of _______________, 2022 (as the same may be amended or supplemented from time to time,
the “Redevelopment Agreement”), which Redevelopment Agreement is evidenced of record by that certain
Memorandum of Redevelopment Agreement dated ____________, 2022 and recorded on
________________, 2022 in the office of the Registrar of Titles for Hennepin County, Minnesota as
Document No. ____________, has agreed to complete the Project, as defined in and in accordance with the
Redevelopment Agreement, on that certain real property (the “Property”) located in Hennepin County,
Minnesota, described on the attached Exhibit A.
B. As of the date hereof, Developer has completed construction of the Minimum
Improvements in accordance with the Redevelopment Agreement.
C. The issuance of this Certificate of Completion by the City and the Authority is not intended
nor shall it be construed to be a warranty or representation by the City or the Authority as to the structural
soundness of the Minimum Improvements, including, but not limited to, the quality of materials,
workmanship or the fitness of the Minimum Improvements for their proposed use.
NOW THEREFORE, this is to certify that all construction and other physical improvements
specified to be done and made by Developer with regard to the Minimum Improvements have been
completed, and the provisions of the Redevelopment Agreement imposing obligations on Developer to
construct the Minimum Improvements, are hereby satisfied and terminated, and the Registrar of Titles in
and for the County of Hennepin, Minnesota is hereby authorized to record this instrument to be a conclusive
determination of the satisfactory termination of said provisions of the Redevelopment Agreement.
Dated: ______________, 20___
[Remainder of page intentionally left blank; signature pages follow]
F-2
[Signature Page to Certificate of Completion]
4867-7401-9632\3
CITY OF EDINA, MINNESOTA
By _______________________________________
_____________________, Mayor
By _______________________________________
_____________________, City Manager
STATE OF MINNESOTA )
)ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of _____________, 202___,
by ___________ and ___________, the Mayor and City Manager, respectively, of the City of Edina,
Minnesota, on behalf of the City of Edina.
Notary Public
F-3
[Signature Page to Certificate of Completion]
4867-7401-9632\3
HOUSING AND REDEVELOPMENT
AUTHORITY OF EDINA, MINNESOTA
By _______________________________________
_____________________, Chair
By _______________________________________
_____________________, Secretary
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of _____________, 20___,
by ___________ and ___________, the Chair and Secretary, respectively, of the Housing and
Redevelopment Authority of Edina, Minnesota, on behalf of said Authority.
Notary Public
THIS DOCUMENT WAS DRAFTED BY:
Dorsey & Whitney LLP
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402-1498
F-4
[Exhibit A to Certificate of Completion]
4867-7401-9632\3
Exhibit A
Legal Description of the Property
That part of Tract B, Registered Land Survey No. 1218, files of the Registrar of Titles, Hennepin
County, Minnesota, lying westerly of a line described as commencing at the northwest corner of
said Tract B; thence on an assumed bearing of North 89 degrees 47 minutes 30 seconds East,
along the north line of said Tract B, a distance of 286.31 feet to the point of beginning of the line
to be described; thence South 0 degrees 12 minutes 31 seconds East 473.90 feet to the south line
of said Tract B and said line there terminating.
F-5
4867-7401-9632\3
Certificate of Completion Checklist
(4620 W. 77th Street)
This is a summary of the deliverable requirements of the Redevelopment Agreement (4620 W. 77th Street)
dated _______________, 2022. This sheet is intended to be completed in connection with Developer’s
request for a Certificate of Completion and prior to the issuance of the TIF Note. This sheet is provided for
convenience and does not modify the terms of the Redevelopment Agreement. PART ONE Description of Required Minimum
Improvements
Satisfactorily
Completed
(yes or no)
Notes
A.
Completion*of the Minimum Improvements
of the 7-story residential building at 4620 W.
77th Street with approximately 276
apartment units (including at least 110
workforce units and at least 28 affordable
units)
B. Confirmation of Environmental
Sustainability Requirements
C. Completion ** of Public Road
D. Completion ** of Plaza and Streetscapes
(woonerf)
E. Completion ** of Public Art
*As evidenced by CO or TCO by Building Department
**As evidenced by acceptance of site and street improvements by Engineering and/or Community
Development Departments
PART TWO Description of Required Public Benefits
Satisfactorily
Completed
(yes or no)
Notes
A. Public Access Easement for Plaza and
Streetscapes*
B. Public Road Easement for Public Road*
C. Satisfaction Equity and Diversity Report as
required in the Redevelopment Agreement
D. Delivery of the Housing Restrictive
Covenant
*Documents must be executed and recorded
CONTINUED ON NEXT PAGE
F-6
4867-7401-9632\3
PART THREE Description of Final Costs Incurred and Gap Analysis Confirmed
Amounts Notes
A. Confirmation that no Default remains uncured. Yes or No
B. Reimbursement for City’s out of pocket costs related
to TIF Agreement Yes or No
C. Confirmation that Developer has submitted final TIF
Pro Forma to reflect actual costs Yes or No
D. Total Amount of Qualified Redevelopment Costs
confirmed as expended $ Estimated to be
$____
E. Total Development Costs of Minimum
Improvements $ Estimated to be
$____
F. Confirmation that contingency funds used as
required. Yes or No
G. Total Amount grant funds received $
H. Final financial gap to provide Market Return $
I. Principal Amount of Original TIF Note $
NTE lowest of
$7.351 million
or 10% of Total
Development
Cost
Certificate of Completion Checklist – 4620 W. 77th Street
Prepared by: ________________________________________ ___________________
Signature and Title Date
Approved by: ________________________________________ ___________________
Signature, Date
Edina City Manager / HRA Executive Director
G-1
4869-3641-8096\2
Exhibit G
Form of Memorandum of Redevelopment Agreement
MEMORANDUM OF REDEVELOPMENT AGREEMENT
This Memorandum of Redevelopment Agreement (this “Memorandum”) is entered into as of
______________________, 2022, by and among the City of Edina Minnesota, a Minnesota statutory city
(the “City”), the Housing and Redevelopment Authority of Edina, Minnesota, a public body corporate
and politic organized and existing under the laws of the State of Minnesota (“Authority”), 4620 LLC, a
Minnesota limited liability company (“Developer”).
RECITALS:
A. The City, Authority, and Developer (collectively, the “Parties”) have entered into a certain
Redevelopment Agreement dated as of _______________, 2022 (as the same may be amended, modified,
and/or supplemented from time to time, the “Redevelopment Agreement”), whereby the parties have agreed
to various aspects of the redevelopment of certain real property more particularly described on the attached
Exhibit A, together with all improvements, tenements, easements, rights and appurtenances pertaining to
such real property, lying and being in Hennepin County, Minnesota (the “Property”).
B. The parties wish to give notice of the existence of the Redevelopment Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. The above recitals are incorporated by reference as if fully set forth herein.
2. Capitalized terms, when not defined herein, shall have the meanings ascribed to them in
the Redevelopment Agreement.
3. The Parties have entered into the Redevelopment Agreement to set forth the terms and
provisions governing the redevelopment of the Property.
4. This Memorandum has been executed and delivered by the Parties for the purpose of
recording and giving notice that a contractual relationship for the redevelopment of the Property has been
created between the Parties in accordance with the terms, covenants, and conditions of the Agreement. The
Parties intend, declare and covenant, on behalf of themselves and all future owners and operators of the
Property, that the Redevelopment Agreement and the covenants and restrictions set forth therein regulating
and restricting the use, occupancy and transfer of the Property (a) shall be and are covenants running with
the Property, encumbering the Property, binding upon the Parties’ successors in title and all subsequent
owners and operators of the Property; (b) are not merely personal covenants of the Parties; and (c) shall
bind the Parties and their respective successors and assigns.
5. The terms and conditions of the Agreement are incorporated by reference into this
Memorandum as if fully set forth herein.
6. This Memorandum may be executed separately in counterparts which, when taken
together, shall constitute one and the same instrument.
[Remainder of page left blank intentionally; signature pages follow]
G-2
[Signature Page to Memorandum of Redevelopment Agreement (4620 W. 77th Street)]
4869-3641-8096\2
IN WITNESS WHEREOF, the Parties have executed this Memorandum as of the date first written
above.
CITY OF EDINA, MINNESOTA
By: __________________________________
James B. Hovland, Mayor
By: __________________________________
Scott H. Neal, City Manager
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of _____________, 2022,
by James B. Hovland and Scott H. Neal, the Mayor and City Manager, respectively, of the City of Edina,
Minnesota, on behalf of the City of Edina.
____________________________________________
Notary Public
G-3
[Signature Page to Memorandum of Redevelopment Agreement (4620 W. 77th Street)]
4869-3641-8096\2
HOUSING AND REDEVELOPMENT
AUTHORITY OF EDINA, MINNESOTA
By: ______________________________
James B. Hovland, Chair
By: ______________________________
James Pierce, Secretary
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of
_______________, 2022, by James B. Hovland and James Pierce, the Chair and Secretary, respectively, of
the Housing and Redevelopment Authority of Edina, Minnesota, on behalf of said Authority.
____________________________________________
Notary Public
G-4
[Signature Page to Memorandum of Redevelopment Agreement (4620 W. 77th Street)]
4869-3641-8096\2
4620 LLC,
a Minnesota limited liability company
By: _________________________________________
Name: _______________________________________
Its: _________________________________________
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ___ day of ________________, 2022, by
_______________, the _______________ of 4620 LLC, a Minnesota limited liability company, on behalf
of the company.
____________________________________________
Notary Public
THIS DOCUMENT WAS DRAFTED BY:
Dorsey & Whitney LLP
50 South Sixth Street
Suite 1500
Minneapolis, MN 55402-1498
G-5
[Exhibit A to Memorandum of Redevelopment Agreement (4620 W. 77th Street)]
4869-3641-8096\2
Exhibit A
Legal Description
That part of Tract B, Registered Land Survey No. 1218, files of the Registrar of Titles, Hennepin County,
Minnesota, lying westerly of a line described as commencing at the northwest corner of said Tract B; thence
on an assumed bearing of North 89 degrees 47 minutes 30 seconds East, along the north line of said Tract
B, a distance of 286.31 feet to the point of beginning of the line to be described; thence South 0 degrees 12
minutes 31 seconds East 473.90 feet to the south line of said Tract B and said line there terminating.
H-1
4861-0280-0944\3
Exhibit H
Form of TIF Note
LIMITED REVENUE TAXABLE TAX INCREMENT NOTE
(4620 W. 77th Street)
No. R-_____ $[__________]
UNITED STATES OF AMERICA
STATE OF MINNESOTA
CITY OF EDINA
HOUSING AND REDEVELOPMENT AUTHORITY
OF EDINA, MINNESOTA
LIMITED REVENUE TAXABLE TAX INCREMENT NOTE
The HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA (the
“Authority”) acknowledges itself to be indebted and, for value received, promises to pay to the order of
4620 LLC (“Developer”), solely from the source, to the extent and in the manner hereinafter provided, up
to the principal amount of this Limited Revenue Taxable Tax Increment Note (this “Note”) as provided
herein, together with simple interest thereon accrued on the unpaid principal balance hereof from the date
hereof, at the rate of interest of six percent (6%) per annum , on the Payment Dates (as hereinafter defined).
This Note is executed and delivered in accordance with the terms and conditions of that certain
Redevelopment Agreement dated as of _______________, 2022, by and among the City of Edina,
Minnesota (the “City”), the Authority and Developer (as the same may be amended, modified, and/or
supplemented from time to time, the “Redevelopment Agreement”). Capitalized terms used herein and not
otherwise defined herein shall have the meaning given to them in the Redevelopment Agreement.
This Note is a special and limited obligation and not a general obligation of the Authority, which
has been issued by the Authority pursuant to, and in full conformity with, the Constitution and the laws of
the State of Minnesota, including Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the
“TIF Act”), and the terms and conditions of the Redevelopment Agreement and a resolution of the Board
of the Authority, to aid in financing a “project” (as defined in Minnesota Statutes, Section 469.174,
subdivision 8) of the Authority within the Pentagon Park Tax Increment Financing District established by
the Authority pursuant to Resolution No. 2014-02 (the “TIF District”).
This Note is subject to the terms, conditions, and limitations set forth in the Redevelopment
Agreement and in the TIF Act, including, without limitation, (a) the provisions of Section 3.3 (TIF
Assistance and Potential Adjustment) of the Redevelopment Agreement and (b) the provisions of Section
469.1763, Subd. 2 of the TIF Act, which requires that not more than 25 percent of the total revenue derived
from tax increment (as defined in the TIF Act) paid by properties in the TIF District (collectively, “Pooled
Tax Increments”) may be expended on qualified activities in the project area that (i) are outside the
geographic boundaries of the TIF District; or (ii) inside the TIF District but occurring after the initial five-
year period after the certification of the TIF District, such as the Minimum Improvements.
H-2
4861-0280-0944\3
Each payment on this Note is payable in any coin or currency of the United States of America
which on the date of such payment is legal tender for public and private debts and shall be made by check
or draft made payable to Developer and mailed to Developer at its postal address within the United States
which shall be designated from time to time by Developer.
Subject to the terms of the Redevelopment Agreement, principal of and interest on this Note shall
be payable solely from and in the amount of Available Tax Increments (as hereinafter defined) on each
February 1 and August 1 commencing on the first February 1 or August 1 immediately following the date
hereof (the “Payment Dates”). On each Payment Date, the Authority shall apply Available Tax Increments
to the payment of principal of and interest on this Note.
To the extent that the Authority is unable to pay the total principal and interest due on this Note at
or prior to February 1, 2044 (the “Maturity Date”) as a result of its having received as of such date
insufficient Available Tax Increments, such failure shall not constitute a default under this Note and the
Authority shall have no further obligation to pay unpaid balance of principal or accrued interest that may
remain after such Maturity Date.
All payments made by the Authority on this Note shall be applied first to accrued interest and then
to the principal amount of this Note. If Available Tax Increment is insufficient to pay any accrued interest
due, such unpaid interest shall be carried forward without interest. Interest shall be computed on the basis
of a year of 360 days and charged for actual days principal is unpaid.
“Available Tax Increments” means Pooled Tax Increments that is Unobligated Increment and
which have been actually received and retained by the Authority from the County of Hennepin, Minnesota,
pursuant to the TIF Act, for the six (6) months before each Payment Date, less any administrative expenses
incurred by the City and/or the Authority relating to the TIF District to the extent permitted by the TIF Act
and the Redevelopment Agreement and to the extent that such expenses have not been paid or reimbursed
to the City and/or the Authority, as applicable, by Developer.
“Outstanding Obligations” means outstanding bonds, binding contracts, and other outstanding
financial obligations of the TIF District (as such terms are defined in the TIF Act) issued prior to the date
of this Agreement to which Tax Increment is pledged.
“Unobligated Increment” means any Tax Increment not required for payment of Outstanding
Obligations due during the six months following the transfer of Tax Increment for Outstanding Obligations.
EXCEPT AS TO THE OBLIGATION TO MAKE PAYMENTS FROM THE AVAILABLE TAX
INCREMENTS, THIS NOTE IS NOT A DEBT OF THE AUTHORITY, THE CITY, OR THE STATE
OF MINNESOTA (THE “STATE”), AND NEITHER THE AUTHORITY, THE CITY, THE STATE NOR
ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THIS NOTE, NOR SHALL
THIS NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE
TAX INCREMENTS.
Upon an Event of Default by Developer under the Redevelopment Agreement, the Authority may
exercise the remedies with respect to this Note described in the Redevelopment Agreement, the terms of
which are incorporated herein by reference, including, without limitation, the suspension or termination of
the Authority’s obligation to make any payments under this Note. For avoidance of doubt, the terms of
Redevelopment Agreement incorporated herein by the foregoing reference, shall, for purposes of this Note,
survive any termination of the Redevelopment Agreement occurring after the issuance of this Note.
H-3
4861-0280-0944\3
The principal sum and all accrued interest payable under this Note is prepayable in whole or in part
at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount or
timing of any other regular payment otherwise required to be made under this Note.
Developer shall never have or be deemed to have the right to compel any exercise of any taxing
power of the Authority or the City or any other public body, and neither the Authority nor the City nor any
director, commissioner, council member, board member, officer, employee or agent of the Authority or the
City, nor any person executing or registering this Note shall be liable personally hereon by reason of the
issuance or registration hereof or otherwise.
THE AUTHORITY MAKES NO REPRESENTATION, COVENANT, OR WARRANTY,
EXPRESS OR IMPLIED, THAT THE AVAILABLE TAX INCREMENTS WILL BE SUFFICIENT TO
PAY, IN WHOLE OR IN PART, THE PRINCIPAL OF AND INTEREST ON THIS NOTE. NO HOLDER
OF THIS NOTE SHALL HAVE RIGHTS AGAINST THE AUTHORITY EXCEPT FOR
DISTRIBUTION OF AVAILABLE TAX INCREMENTS.
Except as otherwise provided in the Redevelopment Agreement, this Note shall not be assignable
or transferable without the prior written consent of the Authority. Any assignee or transferee must execute
and deliver to the Authority a certificate, in form and substance reasonably satisfactory to the Authority,
pursuant to which, among other things, such assignee or transferee acknowledges and represents: (i) the
limited nature of the Authority’s payment obligations under this Note, (ii) that this Note is being acquired
for investment for such assignee’s or transferee’s own account, not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof, (iii) that the assignee or transferee has no present
intention of selling, granting any participation in, or otherwise distributing the same, (iv) that the assignee
or transferee is an “accredited investor” within the meaning of Rule 501 of the Regulation D under the
Securities Act of 1933, as amended, (v) that the assignee or transferee, either alone or with such assignee’s
or transferee’s representatives, has knowledge and experience in financial and business matters and is
capable of evaluating the merits and risks of the prospective investment in this Note and the assignee or
transferee is able to bear the economic consequences thereof, (vi) that in making its decision to acquire this
Note, the assignee or transferee has relied upon independent investigations made by the assignee or
transferee and, to the extent believed by such assignee or transferee to be appropriate, the assignee’s or
transferee’s representatives, including its own professional, tax and other advisors, and has not relied upon
any representation or warranty from the Authority, or any of its officers, employees, agents, affiliates or
representatives, with respect to the value of this Note, (vii) that the Authority has not made any warranty,
acknowledgment or covenant, in writing or otherwise, to the assignee or transferee regarding the tax
consequences, if any, of the acquisition and investment in this Note, (viii) that the assignee or transferee or
its representatives have been given a full opportunity to examine all documents and to ask questions of, and
to receive answers from, the Authority and its representatives concerning the terms of this Note and such
other information as the assignee or transferee desires in order to evaluate the acquisition of and investment
in this Note, and all such questions have been answered to the full satisfaction of the assignee or transferee,
(ix) that the assignee or transferee has evaluated the merits and risks of investment in this Note and has
determined that this Note is a suitable investment for the assignee or transferee in light of such party’s
overall financial condition and prospects, (x) that this Note will be characterized as “restricted securities”
under the federal securities laws because this Note is being acquired in a transaction not involving a public
offering and that under such laws and applicable regulations such securities may not be resold without
registration under the Securities Act of 1933, as amended, except in certain limited circumstances, and (xi)
that no market for this Note exists and no market for this Note is intended to be developed.
This Note is issued pursuant to the Redevelopment Agreement and resolutions of the Board of the
Authority and is entitled to the benefits thereof, which Redevelopment Agreement and resolutions are
incorporated herein by reference.
H-4
4861-0280-0944\3
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the
Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed
precedent to and in the issuance of this Note have been done, have happened, and have been performed in
regular and due form, time, and manner as required by law; and that this Note, together with all other
indebtedness of the Authority or the City outstanding on the date hereof and on the date of its actual issuance
and delivery, does not cause the indebtedness of the Authority or the City to exceed any constitutional or
statutory limitation thereon.
[Remainder of this page intentionally left blank; signatures on following page]
H-5
4861-0280-0944\3
IN WITNESS WHEREOF, the Board of the Housing and Redevelopment Authority of Edina,
Minnesota, has caused this Note to be executed by the manual signatures of the Chair and the Secretary of
the Authority, and has caused this Note to be dated as of the date of original issue specified above.
Chair Secretary
I-1
Exhibit I
Form of SPaRC Fund Forgivable Loan Agreement
Forgivable Loan Agreement
(Edina SPaRC Fund)
This Forgivable Loan Agreement (Edina SPaRC Fund) (this “Agreement”), made and entered into
as of this ____ day of ____________, 2022, between the Housing and Redevelopment Authority of
Edina, Minnesota, a public body corporate and politic organized and existing under the laws of the State
of Minnesota (the “Authority”), and 4620 LLC (“Borrower”).
Recitals:
A. Borrower is the owner of that certain land located at 4620 W. 77th Street, Edina,
Minnesota, as legally described on Exhibit A (the “Project Area”).
B. Borrower, the Authority, and the City of Edina, Minnesota (the “City) are parties to that
certain Redevelopment Agreement, dated ______________, 2022 (the “Redevelopment Agreement”),
pursuant to which the Authority and the City have agreed to provide certain financial support to Borrower
in connection with Borrower’s redevelopment of the Project Area by demolition of an existing three-level
office building and related parking and improvements located within the Project Area and the development
and construction of the following “Project”, all as more particularly described in the Redevelopment
Agreement:
(i) a single, seven-story building with 276 apartment units, including at least 110
workforce rental apartment units and 28 affordable rental apartment units;
(ii) the public plaza, sidewalk and streetscape improvements and amenities connecting
77th Street to Fred Richards Park and adjoining the Project, as required under the
terms of the City Approvals;
(iii) the fire truck road and vehicular park access road located between the 4600 and
4570 W. 77th Street buildings and connecting 77th Street to Fred Richards Park,
as required under the terms of the City Approvals; and
(iv) such other improvements required under the terms of the City Approvals.
C. Upon completion, the Project is anticipated to deliver many benefits to the general public.
In addition to the redevelopment of an underutilized building and long-term increase in the property tax
base, this project will deliver additional public benefits including, without limitation, creation of new
affordable housing units, stormwater improvements, environmental remediation, streetscape
improvements, and dedication of land for future roadway.
D. Pursuant to the temporary authority for use of increment granted by Minnesota Statutes,
Section 469.176, subdivision 4n (the “Act”), on October 28, 2021 the Authority adopted, and on November
16, 2021, the City approved a written spending plan for unobligated tax increment monies for the Pentagon
Park Tax Increment Financing District (the “Spending Plan”) and established the Special Projects and
Redevelopment Capital Fund (the “SPaRC Fund”) to encourage and incentivize new private investment in
I-2
the City’s commercial and industrial districts by providing loans, grants and/or equity for development
projects in accordance with the Spending Plan.
E. As set forth in the Redevelopment Agreement, pursuant to the Act and the Spending Plan,
and subject to the terms and conditions of this Agreement, the Authority, believing that the Project is in the
best interest of the City, desires provide a forgivable loan of unobligated tax increment revenue to Borrower
from the SPaRC Fund in the maximum principal amount of $2,000,000 (the “Loan”) to assist in financing
the Project, such Loan being referred to in the Redevelopment Agreement as the “SPaRC Forgivable Loan”.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and in consideration of the mutual covenants and agreements hereinafter contained,
the parties hereto hereby agree as follows:
ARTICLE 1
Recitals; Exhibits, Definitions
1.01. Recitals. The foregoing Recitals are true and correct statements of fact and are incorporated
into this Agreement by this reference, including the definitions set forth therein.
1.02. Exhibits. All Exhibits referred to in and attached to this Agreement upon execution are
incorporated in and form a part of this Agreement as if fully set forth herein.
1.03. Definitions. Unless the context otherwise specifies or requires, the following terms have
the following definitions. Certain other capitalized terms are defined elsewhere in this Agreement. Unless
otherwise defined herein or unless context requires otherwise, undefined terms used herein shall have the
meanings set forth in the Redevelopment Agreement. All defined terms may be used in the singular or the
plural, as the context requires.
ARTICLE 2
Representations and Warranties
2.01. Authority Representations. The Authority makes the following representations to
Borrower:
(a) The Authority is a public body corporate and politic and a governmental
subdivision of the state of Minnesota, duly organized and existing under State law and the Authority
has the authority to enter into this Agreement and carry out its obligations hereunder.
(b) The Authority has the power under applicable state law to enter into this
Agreement and carry out its obligations hereunder.
2.02. Borrower Representations. Borrower makes the following representations to the Authority:
(a) Borrower is a limited liability company under the laws of the State of Minnesota
and has power to enter into this Agreement and has duly authorized, by all necessary corporate
action, the execution and delivery of this Agreement.
(b) Neither the execution or delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement is prevented by, limited by, conflicts with, or results in a breach of,
I-3
any restriction, agreement or instrument to which Borrower is now a party or by which Borrower
is bound.
(c) There is no legal or regulatory proceeding or investigation pending or, to the
knowledge of Borrower, threatened (or any basis therefor) against Borrower or the Project, which,
when and however decided, could have a material adverse affect on the condition or business of
Borrower or its ability to perform its obligations under this Agreement.
(d) Borrower has no actual knowledge that any member of the Board of the Authority,
or any other officer of the Authority or the City has any direct or indirect financial interest in
Borrower, the Project Area, or the Project.
(e) Borrower would not undertake the Project without the financial assistance to be
provided by the Authority pursuant to this Agreement.
The foregoing representations and warranties, as well as the facts contained in the Recitals, shall be
continuing in nature and shall be true and correct as of the date made, at the date of the initial advance and
at the dates of all subsequent advances of the proceeds of the Loan.
ARTICLE 3
SPaRC Fund Loan
3.01. Loan for Qualified Costs. The Authority agrees to make the Loan to Borrower subject to
the following terms and conditions, and the other terms, conditions, and restrictions of this Agreement:
(a) The maximum principal amount of the Loan will be $2,000,000.
(b) The Loan funds may be used only to pay for those costs incurred by Borrower in
connection with the Project which are shown on Exhibit B (collectively, “Qualified Costs”),
provided such Qualified Cost are eligible for reimbursement pursuant to the Act.
(c) The Loan shall be evidenced by a note to be executed by Borrower and delivered
to the Authority, the form of which is attached hereto as Exhibit C (the “Note”).
(d) Upon the occurrence and during the continuance of an Event of Default, the unpaid
principal of the Loan shall bear interest at the rate described in the Note.
(e) No Disbursement Request (defined below) may be submitted to the Authority later
than November 15, 2025 (“Disbursement Request Deadline”) in order for the Authority to make
all Loan advances and pay the corresponding Qualified Costs before the SPaRC Expiration Date
(as defined below), and, notwithstanding anything herein to the contrary, the Authority shall have
no obligation to accept any Disbursement Request or to make any Loan advances after the SPaRC
Expiration Date.
3.02. Loan Disbursement; Disbursement Request. The Authority will make Loan advances from
time to time to an escrow agent (to be mutually agreed upon by the Authority and Borrower) (the “Escrow
Agent”) to be disbursed to pay Qualified Costs pursuant to the terms of this Agreement upon review and
approval of disbursement requests as provided herein. Requests for disbursement of portions of the Loan
shall be originated by Borrower by delivering to the Authority and the Escrow Agent a disbursement request
in the form attached hereto as Exhibit D (the “Disbursement Request”) and AIA Documents G702 and 703
(along with written evidence reasonably satisfactory to the Authority that Qualified Costs in the amount to
I-4
be disbursed have been incurred for the Project as demonstrated by invoices from each provider of service
to be paid and a certification from the Borrower’s architect). Within 10 working days after receipt of the
Disbursement Request, the Authority shall approve or disapprove the Disbursement Request, and if
approved, shall forward the Disbursement Request and a sufficient amount of the Loan to pay said
Disbursement Request to Escrow Agent, subject to the condition that, before disbursing such Loan advance,
Escrow Agent must obtain partial and/or full lien waivers, lien releases or lien satisfactions, in the
customary form from the general contractor and all subcontractors and material suppliers with whom the
general contractor has contracted with in connection with the Qualified Costs of the Project. If the Escrow
Agent is unable to obtain such waivers, releases and/or satisfactions with respect to any Disbursement
Request, the Authority shall be entitled, but not obligated, to revoke its approval of such Disbursement
Request. Borrower hereby agrees to indemnify, defend and hold harmless the Authority and Escrow Agent
from any and all claims, demands or costs associated with the disbursement of the Loan, including
reasonable attorney’s fees arising therefrom. The foregoing notwithstanding, upon the consent of the
Authority, which shall not be unreasonably withheld, conditioned or delayed, the disbursement process set
forth in this Section may be modified if required by the lender that funds Borrower’s loan funding of
construction of the Project (the “Borrower’s Lender”).
3.03. Satisfaction of Conditions Precedent. Notwithstanding anything to the contrary contained
herein, the Authority’s obligation to advance any portion of the Loan shall be subject to satisfaction, or
waiver in writing by the Authority, of all of the following conditions precedent:
(a) Borrower shall have executed and delivered the Note to the Authority.
(b) There shall then be no uncured Event of Default and no act, event, condition or
omission shall have occurred which, with the giving of notice or lapse of time or both, would
constitute an Event of Default hereunder or under the Redevelopment Agreement, and the
Authority shall have received a certificate to that effect dated the date of each such advance and
signed by Borrower.
(c) The representations of Borrower set forth in Section 2.02 shall continue be true
and correct in all material respects as of the date of such advance.
3.04. Loan Forgiveness . So long there is then no uncured Event of Default, upon the Authority’s
issuance of the Certificate of Completion in accordance with the Redevelopment Agreement, the Authority
shall forgive the Loan by furnishing Borrower with a certification in the form attached hereto in Exhibit E
(the “Certificate of Forgiveness”) reasonably promptly after Borrower’s request. If the Authority shall
refuse or fail to provide a Certificate of Forgiveness within 30 days following Borrower’s request, the
Authority shall provide Borrower with a written statement specifying in what respects Borrower has failed
to comply with the Agreement, the Loan, or is otherwise in default, and what measures or acts will be
necessary, in the reasonable opinion of the Authority, for Borrower to obtain the Certificate of Forgiveness.
Notwithstanding herein to the contrary, subject to Unavoidable Delays, in no event and under no
circumstances will the Authority be obligated to forgive the Loan, if Borrower has not obtained the
Certificate of Completion in accordance with the Redevelopment Agreement by September 1, 2027
(“Completion Deadline”).
3.05. Nature of Edina SPaRC Fund. The authority for the Authority to transfer or loan
unobligated incremental property taxes under the Act (as the same have been allocated to the SPaRC Fund)
expires on December 31, 2025 (the “SPaRC Expiration Date”) and all such transferred increments must be
spent by such SPaRC Expiration Date. As such, to minimize the amount of increment that the Authority
would be require to “return” under the Act, if the Loan is not fully forgiven as provided herein, any amounts
I-5
paid or repaid to the Authority by Borrower shall be from sources of funds of Borrower other than the
loaned unobligated incremental property taxes from the SPaRC Fund.
ARTICLE 4
Defaults and Remedies
4.01. Borrower Events of Default. Subject to Unavoidable Delay, the following shall be “Events
of Default” under this Agreement and the term “Event of Default” shall mean, whenever it is used in this
Agreement (unless the context otherwise provides), any one or more of the following events
(a) Subject to Unavoidable Delays the failure by Borrower to obtain the Certificate of
Completion in accordance with the Redevelopment Agreement by the Completion Deadline.
(b) Failure of Borrower to timely pay to the Authority any amounts required to be paid
by Borrower hereunder.
(c) Subject to Unavoidable Delay, and except as provided in Sections 4.01(a) through
(b) hereof, failure by Borrower to observe or perform any other covenant, condition, obligation or
agreement on its part to be observed or performed under this Agreement, and the continuation of
such failure for a period of 30 days after written notice of such failure from the Authority; provided,
however, if any such failure reasonably requires more than 30 days to cure, such failure shall not
constitute an Event of Default, provided Borrower promptly commenced such cure upon receipt by
Borrower of the written notice of the default, and with due diligence is thereafter continuously
prosecutes such cure to completion and is completed within a reasonable period of time, and
provided that Borrower keeps the Authority informed at all times of its progress in curing the
default, provided that in no event shall such additional cure period for any default extend beyond
90 days.
(d) The occurrence of an Event of Default under the Redevelopment Agreement.
4.02. Authority Remedies on Borrower Default. Upon the occurrence of an Event of Default, the
Authority may take any one or more of the following actions:
(a) Suspend its performance under this Agreement (including, without limitation,
refraining from making any Loan advance under this Agreement) until it receives assurances from
Borrower deemed reasonably adequate by the Authority, that Borrower will cure the Event of
Default and continue its performance under this Agreement, but Lender may make Loan advances
after the happening of any such event without hereby waiving the right to refrain from making other
or further Loan advances or to exercise any of the other rights Lender may have.
(b) In the case of a material default that is not cured within a reasonable period of time,
terminate all rights of Borrower under this Agreement.
(c) Withhold the Certificate of Completion under the Redevelopment Agreement.
(d) Withhold the Certificate of Forgiveness.
(e) To declare the entire unpaid principal of the Loan and all accrued interest thereon
immediately due and payable without further notice.
I-6
(f) Take whatever action at law or in equity may appear necessary or desirable to the
Authority to enforce performance and observance of any obligation, agreement, or covenant of
Borrower under this Agreement.
4.03. Authority Default; Remedies Upon Authority Default. In the event the Authority should
fail to observe or perform any covenant, agreement or obligation of the Authority on its part to be observed
and performed under this Agreement and such failure continues for more than 30 days after written notice
by Borrower to the Authority of such failure, Borrower may take any one or more of the following actions:
(a) Suspend its performance under this Agreement until it receives assurances from
the Authority deemed adequate by Borrower, that the Authority will cure its default and continue
its performance under this Agreement.
(b) In the case of a material default that is not cured within a reasonable period of time,
terminate all rights of the Authority under this Agreement.
(c) Take whatever action at law or in equity may appear necessary or desirable to
Borrower to enforce performance and observance of any obligation, agreement, or covenant of the
Authority under this Agreement.
4.04. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority, or
to Borrower is intended to be exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or
now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or
power accruing upon any default shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Authority, or Borrower to exercise any remedy reserved to them, it shall
not be necessary to give notice, other than such notice as may be required under this Agreement.
4.05. Waivers. All waivers by any party to this Agreement shall be in writing. If any provision
of this Agreement is breached by any party and thereafter waived by another party, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous
or subsequent breach hereunder.
4.06. Agreement to Pay Costs and Attorneys’ Fees. Whenever any Event of Default occurs and
the non-defaulting party shall employ attorneys or incur any other costs or expenses for the collection of
payments due or to become due or for the enforcement or performance or observance of any obligation or
agreement on the part of the defaulting party herein contained, the defaulting party agrees that it shall, on
demand therefor, pay to the Authority the reasonable fees of such attorneys and such other expenses so
incurred by the non-defaulting party, together with interest thereon at the rate of interest for the Loan set
forth in the Note.
ARTICLE 5
Insurance; Indemnification
5.01. Insurance. Borrower will, at its expense, carry such type and amount of insurance
concerning the contents of the Project Area as is required under the Redevelopment Agreement.
I-7
5.02. Indemnification.
(a) Borrower releases and covenants and agrees that the Authority, and its respective
governing body members and elected officials, officers, employees, agents, independent
contractors and attorneys (collectively the “Indemnified Parties”), shall not be liable for and agrees
to indemnify, defend, and hold harmless the Indemnified Parties against any loss or damage to
property or any injury to or death of any person occurring at or about, or resulting from any defect
in the Project constructed by Borrower, except to the extent attributable to the negligence or
intentional misconduct of any Indemnified Party.
(b) Except to the extent of the negligence or intentional misconduct of any
Indemnified Party, Borrower shall indemnify and defend the Indemnified Parties, now and forever,
and further agrees to hold the aforesaid harmless from any claims, demands, suits, costs, expenses
(including reasonable attorney’s fees), actions or other proceedings whatsoever by any person or
entity whatsoever arising or purportedly arising from the actions or inactions of Borrower, or any
of its owners, agents, contractors, or employees, under this Agreement or the transactions
contemplated hereby, including, without limitation, the acquisition, construction, installation,
ownership, and/or operation of the Project.
ARTICLE 6
Prohibitions Against Assignment and Transfer
6.01. Except as permitted under the Redevelopment Agreement, Borrower shall not sell, assign,
convey, lease or transfer in any other mode or manner any of its right, title, and interest in and to all or any
part of the Project Area or this Agreement without the express written approval of the Authority. For
avoidance of doubt, Borrower may assign this Agreement simultaneously with any assignment of the
Redevelopment Agreement and to the same assignee of the Redevelopment, subject to the same terms,
conditions, and requirements applicable to an assignment of the Redevelopment Agreement set forth in the
Redevelopment Agreement.In the absence of specific written agreement by the Authority to the contrary,
neither the transfer of the Project Area nor the assignment of this Agreement, or any portion thereof, prior
to the issuance of the Certificate of Forgiveness will relieve Borrower of its obligations under this
Agreement and the Note.
ARTICLE 7
Additional Provisions
7.01. Term of Agreement. This Agreement shall terminate on the earlier of the date (a) a
Certificate of Forgiveness is provided to Borrower from the Authority, or (ii) the date this Agreement is
terminated or rescinded in accordance with its terms (the “Termination Date”).
7.02. Damage or Destruction. Upon any damage or destruction of the Project Area, or any
portion thereof, by fire or other casualty, before the Termination Date, should Borrower commence or cause
to be commenced the process required to repair, reconstruct and restore the damaged or destroyed Project
Area, or portion thereof, the Authority shall continue to provide the Loan contemplated herein. If, upon
such damage or destruction of the Project Area, Borrower decides not to repair, reconstruct or restore the
damaged or destroyed Project Area, the Authority shall not be required to provide the Loan contemplated
herein.
7.03. Equal Employment Opportunity. Borrower, for itself and its successors and assigns, agrees
that during the construction of the Project it will comply with any applicable affirmative action and
nondiscrimination laws or regulations.
I-8
7.04. Restrictions on Use. Borrower agrees for itself, and its successors and assigns, and every
successor in interest to the Project Area, or any part thereof, that Borrower, and such successors and assigns,
shall devote the Project Area to, and only to and in accordance with, the uses specified in this Agreement
and other agreements entered into between Borrower and the Authority, and shall not discriminate upon the
basis of race, color, creed, religion, national origin, sex, marital status, disability, status with regard to public
assistance, sexual orientation, and familial status in the sale, lease, or rental or in the use or occupancy of
the Project Area or any improvements erected or to be erected thereon, or any part thereof.
7.05. Legal and Administrative Expenses. Borrower agrees to pay all fees and expenses incurred
by the Authority in connection with review and analysis of the development proposed under this Agreement
and the negotiating, approval and documentation of this Agreement, but not limited to, attorney and
municipal advisor fees and expenses.
7.06. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice,
demand or other communication under this Agreement by any party to any other shall be in writing and
shall be sufficiently given or delivered if it is dispatched by reputable overnight courier, sent registered or
certified mail, postage prepaid, return receipt requested, or delivered personally, and addressed to:
Borrower at: c/o 4620 LLC
Attn: Curt Gunsbury
724 N First Street, Suite 500
Minneapolis, MN 55401
with a copy to: Anthony J. Gleekel
Siegel Brill P.A.
100 Washington Avenue South, Suite 1300
Minneapolis, MN 55401
The Authority at: Housing and Redevelopment Authority of Edina, Minnesota
Attention: Executive Director
4801 West 50th Street
Edina, MN 55424
with a copy to: Dorsey & Whitney LLP
Attention: Jay R. Lindgren
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402
or at such other address with respect to any such party as that party may, from time to time, designate in
writing and forward to the other, as provided in this section.
7.07. Governing Law, Jurisdiction, Venue and Waiver of Trial by Jury. All matters, whether
sounding in tort or in contract, relating to the validity, construction, performance, or enforcement of this
Agreement shall be controlled by, interpreted and determined in accordance with the laws of the state of
Minnesota without regard to its conflict and choice of law provisions. Any litigation arising out of this
Agreement shall be venued exclusively in Hennepin County District Court, Fourth Judicial District, state
of Minnesota and shall not be removed therefrom to any other federal or state court. The Authority and
Borrower hereby consent to personal jurisdiction and venue in the foregoing court. The Authority and
Borrower hereby waive trial by jury for any litigation arising out of this Agreement.
I-9
7.08. Severability. If any term or provision of this Agreement is determined to be invalid or
unenforceable under applicable Law, the remainder of this Agreement shall not be affected thereby, and
each remaining term or provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by applicable Law.
7.09. Consents and Approvals. Whenever the terms “consent,” “approve,” or “approval” are used
herein, they shall mean consent or approvals which shall not be unreasonably conditioned or delayed, unless
specifically provided otherwise. All consents or approvals must be delivered in writing in order to be
effective.
7.10. Additional Documents. When reasonably requested to do so by another party, each party
shall execute or cause to be executed any further documents as may be reasonably necessary or expedient
and within their lawful obligation in order to consummate the transactions provided for in, and to carry out
the purpose and intent of, this Agreement.
7.11. Limitation. All covenants, stipulations, promises, agreements and obligations of the
Authority or Borrower contained in this Agreement shall be deemed to be the covenants, stipulations,
promises, agreements and obligations of the Authority and Borrower, and not of any governing body
member, officer, agent, servant, manager or employee of the Authority or Borrower in the individual
capacity thereof.
7.12. Authority Approval. Unless the Board, as applicable, determines otherwise in its discretion,
all approvals and other actions required of or taken by the Authority shall be effective upon action by the
Authorized Representative of the Authority, as applicable (or in either case his/her designee), unless (a) this
Agreement explicitly provides for approval by the Board of the Authority, (b) approval by the Board is
required by law or (c) the approval, in the opinion of the Executive Director, would result in a material
change in the terms of this Agreement.
7.13. Superseding Effect. This Agreement reflects the entire agreement of the parties with
respect to the items covered by this Agreement, and supersedes in all respects all prior agreements of the
parties, whether written or otherwise, with respect to the items covered by this Agreement.
7.14. Relationship of Parties. Nothing in this Agreement is intended, or shall be construed, to
create a partnership or joint venture among or between the parties hereto, and the rights and remedies of
the parties hereto shall be strictly as set forth in this Agreement.
7.15. Survival of Terms. The following Sections will survive the expiration or earlier termination
of this Agreement: Section 4.02 through 4.06 [Remedies on Default, etc.] to the extent of any Event of
Default arising prior to such termination or expiration; Section 5.01 [Insurance]; Section 5.02
[Indemnification]; Section 7.06 [Notices and Demands]; Section 7.07 [Governing Law, Jurisdiction, Venue
and Waiver of Trial by Jury]; Section 7.11 [Limitation]; Section 7.17 [No Waiver of Governmental
Immunity and Limitations on Liability]; and Section 7.18 [Limited Liability].
7.16. Data Practices Act. Borrower acknowledges that all of the data created, collected, received,
stored, used, maintained, or disseminated by Borrower with regard to the performance of its duties under
this Agreement are subject to the requirements of Chapter 13, Minnesota Statutes.
7.17. No Waiver of Governmental Immunity and Limitations on Liability. Nothing in this
Agreement shall in any way affect or impair the Authority’s immunity or the immunity of the Authority’s
employees, consultants and contractors, whether on account of official immunity, legislative immunity,
statutory immunity, discretionary immunity or otherwise. Nothing in this Agreement shall in any way affect
I-10
or impair the limitations on the Authority’s liability or the liability of the Authority’s employees,
consultants and independent contractors. By entering into this Agreement, the Authority does not waive
any rights, protections, or limitations as provided under law and equity for the Authority, or of their
respective employees, consultants and contractors.
7.18. Limited Liability. Notwithstanding anything to contrary provided in this Agreement, it is
specifically understood and agreed, such agreement being the primary consideration for the execution of
this Agreement by Borrower, that (a) there should be absolutely no personal liability on the part of any
director, officer, manager, member, employee or agent of Borrower or the Authority with respect to any
terms, covenants and conditions in this Agreement; (b) Borrower and the Authority waive all claims,
demands and causes of action against the other parties’ directors, officers, managers, members, employees
and agents in any Event of Default, by either party, as the case may be, of any of the terms, covenants and
conditions of this Agreement to be performed by either party; and (c) Borrower and the Authority, as the
case may be, shall look solely to the assets of the other party for the satisfaction of each and every applicable
remedy in the Event of Default by any party, as the case may be, of any of the terms, covenants and
conditions of this Agreement such exculpation of liability to be absolute and without any exception
whatsoever.
7.19. Time is of the Essence. Time is of the essence of this Agreement and each and every term
and condition hereof; provided, however, that if any date herein set forth for the performance of any
obligations by Borrower or the Authority or for the delivery of any instrument or notice as herein provided
should not be on a business day, the compliance with such obligations or delivery shall be deemed
acceptable on the next following business day.
7.20. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, and all of such counterparts shall constitute one document. To
facilitate execution of this Agreement, the parties may execute and exchange signature pages via DocuSign,
Tagged Image File Format (“TIFF”) or via electronic mail (*.pdf or similar file types). The parties further
agree that counterparts of this Agreement may be signed electronically via Adobe Sign, DocuSign protocol
or another electronic platform. All such signatures may be used in the place of original “wet ink” signatures
to this Agreement and shall have the same legal effect as the physical delivery of an original signature.
7.21. Amendments. This Agreement shall not be amended unless in writing and executed by the
parties hereto..
7.22. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of this
Agreement are inserted for convenience of reference only and shall be disregarded in construing or
interpreting any of its provisions.
7.23. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the
Authority and Borrower and their respective successors and assigns.
[SIGNATURES APPEAR ON FOLLOWING PAGES]
I-11
[Signature Page to Forgivable Loan Agreement (Edina SPaRC Fund)]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
date first above written.
Housing and Redevelopment Authority of
Edina, Minnesota
By: ______________________________
James B. Hovland, Chair
By: ______________________________
James Pierce, Secretary
I-12
[Signature Page to Forgivable Loan Agreement (Edina SPaRC Fund)]
4620 LLC
By:
Name: Curt Gunsbury
Its: CEO
I-13
[Exhibit A to Forgivable Loan Agreement (Edina SPaRC Fund)]
Exhibit A
Legal Description
That part of Tract B, Registered Land Survey No. 1218, files of the Registrar of Titles, Hennepin County,
Minnesota, lying westerly of a line described as commencing at the northwest corner of said Tract B;
thence on an assumed bearing of North 89 degrees 47 minutes 30 seconds East, along the north line of
said Tract B, a distance of 286.31 feet to the point of beginning of the line to be described; thence South 0
degrees 12 minutes 31 seconds East 473.90 feet to the south line of said Tract B and said line there
terminating.
I-14
[Exhibit B to Forgivable Loan Agreement (Edina SPaRC Fund)]
Exhibit B
Qualified Costs
Pedestrian plaza and related improvements, including
streetscape and landscape
$414,000
Signage, wayfinding and monument related to the Park $80,000
Improvements for vehicular access via permanent easement on
Pentagon North property
$1,000,000
Area stormwater management and treatment (tanks will be
within the public plaza)
$214,000
Soil corrections and utilities for all public areas $300,000
Estimated Total $2,008,000*
The actual amount of Qualified Costs within each of the foregoing categories may be allocated among such
categories (in amounts that differ from these set forth in the table above), subject to reasonable review and
approval by the Authority, and provided that Borrower must provide reasonable evidence of the actual
amounts of Qualified Costs actually incurred or committed in each such category.
The total principal amount of the Loan to disburse to Borrower for Qualified Costs of the Project will not
exceed $2,000,000.
I-15
[Exhibit C to Forgivable Loan Agreement (Edina SPaRC Fund)]
Exhibit C
Form of Note
No. R-1 $2,000,000
UNITED STATES OF AMERICA
STATE OF MINNESOTA
FORGIVABLE NOTE
FOR VALUE RECEIVED, the undersigned, 4620 LLC, a Minnesota limited liability company
(“Borrower”), promises to pay to the order of the Housing and Redevelopment Authority of Edina,
Minnesota, a public body corporate and politic organized and existing under the laws of the State of
Minnesota (the “Lender”), on or before September 1, 2027 (the “Maturity Date”, such date being the
Completion Deadline under the Loan Agreement), the sum of $2,000,000.00, or so much as is advanced by
Lender to, or for the benefit of, Borrower pursuant to that certain Forgivable Loan Agreement (Edina
SPaRC Fund), dated of even date herewith, as the same may be amended from time to time (the “Loan
Agreement”), together with interest on the unpaid principal balance from time to time outstanding from the
date of this Forgivable Note (this “Note”). Terms used herein but not otherwise defined, shall have the
meaning attributed to them in the Loan Agreement.
1. This Note is subject to forgiveness by Lender subject to the terms and conditions of the
Loan Agreement. If, as of the Maturity Date, Lender has not issued a Certificate of Forgiveness in
accordance with the Loan Agreement, the unpaid principal balance of this Note, together with any accrued
but unpaid interest, shall be immediately due and payable in full on the Maturity Date.
2. After maturity, whether by acceleration, the passage of time or otherwise, and during the
continuance of an Event of Default under the Loan Agreement, the outstanding principal balance of this
Note and accrued, unpaid interest shall bear interest at the rate which is six percent (6.0%) per annum until
paid in full. Interest shall be calculated based on the actual number of days in a month over a year of 360
days.
3. All such interest and principal payments shall be made by Borrower in immediately
available funds and without notice, demand or offset. Each payment on this Note is payable in any coin or
currency of the United States of America which on the date of such payment is legal tender for public and
private debts and shall be made by check or draft made payable to Lender and mailed to Lender at the postal
address within the United States designated from time to time by Lender.
4. The principal balance of this Note may from time to time be prepaid, at the option of
Borrower, in whole or in part without penalty under this Note.
5. All payments and prepayments, at the option to Lender, shall be applied first to any costs
of collection, second to any late charges, third to accrued interest on this Note, and lastly to principal.
6. The occurrence of an Event of Default, as defined in the Loan Agreement, shall constitute
an Event of Default hereunder (hereinafter referred to as an “Event of Default”). Upon the occurrence of
an Event of Default, Lender may take exercise all of its rights and remedies under the Loan Agreement,
including, without limitation, declaring the outstanding unpaid principal balance of this Note, the accrued
I-16
[Exhibit C to Forgivable Loan Agreement (Edina SPaRC Fund)]
and unpaid interest thereon, and all other obligations of Borrower to Lender to be forthwith due and payable.
Failure to exercise any right or remedy provided for or referenced herein shall not constitute a waiver of
the right to exercise the same in connection with the applicable Event of Default or any subsequent Event
of Default.
7. Borrower and all others who may become liable for the payment of all or any part of the
debt under this Note do hereby severally waive presentment and demand for payment, notice of dishonor,
notice of intention to accelerate, notice of acceleration, protest and notice of protest and non-payment and
all other notices of any kind. No release of any security for this Note or extension of time for payment of
this Note or any installment hereof, and no alteration, amendment or waiver of any provision of this Note
or the Loan Agreement made by agreement between Lender or any other person shall release, modify,
amend, waive, extend, change, discharge, terminate or affect the liability of Borrower or any other person
who may become liable for the payment of all or any part of the debt under this Note or the Loan Agreement.
No notice to or demand on Borrower shall be deemed to be a waiver of the obligation of Borrower or of the
right of Lender to take further action without further notice or demand as provided for in this Note or the
Loan Agreement.
8. Borrower agrees that if, and as often as, this Note is placed in the hands of an attorney for
collection or to defend or enforce any of Lender’s rights hereunder or under the Loan, Borrower will pay
to Lender its attorneys’ fees and all court costs (including attorneys’ fees and court costs prior to trial, at
trial and on appeal, or in any bankruptcy proceeding) and other expenses incurred in connection therewith.
9. This Note shall be governed by and construed in accordance with the laws of the State of
Minnesota, without giving effect to the choice of law provisions thereof.
10. The authority for Lender to transfer or loan unobligated incremental property taxes under
the Act (as the same have been allocated to the SPaRC Fund) expires on December 31, 2025 (the “SPaRC
Expiration Date”) and all such transferred increments must be spent by such SPaRC Expiration Date. As
such, as provided in the Loan Agreement (a) no Disbursement Request may be submitted to the Authority
later than November 15, 2025 in order for the Authority to make all Loan advances and pay the
corresponding Qualified Costs before the SPaRC Expiration Date and (b) to minimize the amount of
increment that Lender would be require to “return” under the Act, if the Loan is not fully forgiven as
provided in the Loan Agreement, any amounts paid or repaid to Lender by Borrower shall be from sources
of funds of Borrower other than the loaned unobligated incremental property taxes from the SPaRC Fund.
IN WITNESS WHEREOF, Borrower has caused this Note to be executed by the manual signatures
of the ________________ of Borrower and has caused this Note to be dated as of _________________,
2022.
4620 LLC,
a Minnesota limited liability company
By:
Its:
I-17
[Exhibit D to Forgivable Loan Agreement (Edina SPaRC Fund)]
Exhibit D
Disbursement Request
Number ____________
Date: ___________, 2022
The Undersigned, pursuant to that certain Forgivable Loan Agreement (Edina SPaRC Fund), dated
as of ______________, 2022 (the “Loan Agreement”), by and among the Housing and Redevelopment
Authority of Edina, Minnesota (the “Lender”), _______________ (“Escrow Agent”), and 4620 LLC, a
Minnesota limited liability company (the “Borrower”), hereby certifies and requests as follows:
1. Borrower requests that the following amounts be paid by Lender and forwarded to Escrow Agent
for payment to the following payees from the Loan as described in the Loan Agreement:
Name and Address of Payee Amount Requested to be Paid
2. Attached hereto are invoices with respect to each item for which payment is requested pursuant to
Paragraph 1 hereof and a certificate from the Borrower’s architect.
3. Borrower certifies that the disbursements are for Qualified Costs as defined in the Loan Agreement.
4. Borrower hereby requests Lender to approve this Disbursement Request and forward it to Escrow
Agent for payment of the amounts listed in Paragraph 1 hereof.
4620 LLC,
a Minnesota limited liability company
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
I-18
[Exhibit D to Forgivable Loan Agreement (Edina SPaRC Fund)]
APPROVAL
This Disbursement Request is hereby approved by ____________
Dated: _______________, 2022 By ______________________________
I-19
[Exhibit E to Forgivable Loan Agreement (Edina SPaRC Fund)]
Exhibit E
Certificate of Forgiveness
WHEREAS, 4620 LLC, a Minnesota limited liability company (the “Borrower”), is the owner of
property in the County of Hennepin and State of Minnesota described on Exhibit A hereto and made a part
hereof (the “Property”); and
WHEREAS, the Property (shown in Exhibit A) is subject to the provisions of a certain Forgivable
Loan Agreement (Edina SPaRC Fund) (the “Agreement”), dated as of _______________, 2022, between
Borrower and the Housing and Redevelopment Authority of Edina, Minnesota (the “Authority”); and
WHEREAS, pursuant the Agreement, the Authority provided a Loan to Borrower evidenced by a
certain Note (as such terms are defined in the Agreement); and
WHEREAS, Borrower has fully and duly performed all of the covenants and conditions of
Borrower under the Agreement with respect to the Project and the Loan.
NOW, THEREFORE, it is hereby certified that all requirements of Borrower under the Agreement
with respect to the Project and Loan have been completed and duly and fully performed, and this instrument
is to be conclusive evidence of the satisfactory termination of the covenants and conditions of the
Agreement as they relate to the Loan, and the Loan is hereby fully forgiven and satisfied.
Dated this ____ day of ____________, 20__.
Housing and Redevelopment Authority of
Edina, Minnesota
By: __________________________________
Chair
By: __________________________________
Secretary
I-20
[Exhibit E to Forgivable Loan Agreement (Edina SPaRC Fund)]
Exhibit A
Legal Description
That part of Tract B, Registered Land Survey No. 1218, files of the Registrar of Titles, Hennepin County,
Minnesota, lying westerly of a line described as commencing at the northwest corner of said Tract B;
thence on an assumed bearing of North 89 degrees 47 minutes 30 seconds East, along the north line of
said Tract B, a distance of 286.31 feet to the point of beginning of the line to be described; thence South 0
degrees 12 minutes 31 seconds East 473.90 feet to the south line of said Tract B and said line there
terminating.
2027 2028 2029 2030 2031 2032 2033 2034
SALE ANALYSIS END OF YEAR Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Net Operating Income End of Year 5,442,093 5,573,692 5,707,923 5,844,838 5,984,491 6,126,938 6,272,233 6,420,435
Divided By Cap Rate 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% 5.50%
Gross Sale Price 98,947,152 101,339,855 103,780,411 106,269,778 108,808,933 111,398,871 114,040,608 116,735,179
Minus Debt A: First Mortgage 63,056,876 62,168,960 61,221,579 60,210,750 59,132,224 57,981,467 56,753,642 55,443,587
Net Sale Amount 35,890,276 39,170,894 42,558,832 46,059,028 49,676,709 53,417,404 57,286,966 61,291,593
Sales Expense 2.00% (1,978,943) (2,026,797) (2,075,608) (2,125,396) (2,176,179) (2,227,977) (2,280,812) (2,334,704)
NET SALES PROCEEDS 33,911,333 37,144,097 40,483,223 43,933,633 47,500,531 51,189,427 55,006,154 58,956,889
2027 2028 2029 2030 2031 2032 2033 2034
Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Net Sales Cash Cash Cash Cash Cash Cash Cash Cash
Year Proceeds Flow Flow Flow Flow Flow Flow Flow Flow
Net Investment (17,520,186) (17,520,186) (17,520,186) (17,520,186) (17,520,186) (17,520,186) (17,520,186) (17,520,186)
2024 00000000
2025 982,779 982,779 982,779 982,779 982,779 982,779 982,779 982,779
2026 1,109,267 1,109,267 1,109,267 1,109,267 1,109,267 1,109,267 1,109,267 1,109,267
2027 33,911,333 35,149,619 1,238,286 1,238,286 1,238,286 1,238,286 1,238,286 1,238,286 1,238,286
2028 37,144,097 0 38,513,981 1,369,884 1,369,884 1,369,884 1,369,884 1,369,884 1,369,884
2029 40,483,223 0 0 41,987,338 1,504,115 1,504,115 1,504,115 1,504,115 1,504,115
2030 43,933,633 0 0 0 45,574,663 1,641,030 1,641,030 1,641,030 1,641,030
2031 47,500,531 0 0 0 0 49,281,214 1,780,683 1,780,683 1,780,683
2032 51,189,427 0 0 0 0 0 53,112,557 1,923,130 1,923,130
2033 55,006,154 0 0 0 0 0 0 57,074,580 2,068,426
2034 58,956,889 0 0 0 0 0 0 0 61,173,516
Total 19,721,479 24,324,127 29,167,368 34,258,807 39,606,388 45,218,415 51,103,568 57,270,930
INTERNAL RATE OF RETURN 21.31% 19.83% 18.77% 17.96% 17.32% 16.78% 16.33% 15.95%
Section 3.4(d) IRR TARGET 22.00% 20.00% 20.00% 18.00% 18.00% 18.00% 18.00% 16.00%
PROJECT RETURN EXCEEDED?No No No No No No No No
Notes:
Cap Rate: 5.50%Stabilized TIF Note: $7,351,000
Sales Expense: 2.00%TIF Note Rate: 6.00%
Development Cost: $84,920,186 Annual TIF Assistance: $756,662
Net Equity Investment:$17,520,186 Annual Rent and Expense Inflator: 2.00%
Initial First Mortgage:$65,400,000
Additional Debt: $0
Analaysis of potential Internal Rate of Return of TIF proforma project cashflows and potential sales through year 10. Sales proceeds assume onetime sale of the Minimum Improvements using
valuation based on TIF pro forma Stabilized Net Operating Income. Annual cash flows include Net Operating Income (incuding TIF Assistance) less annual debt service and reserve allowance.
Potential sales are hypothetical and provided solely for purposes of providing an example of the Sale Lookback provisions.
Assumptions:
IRR ANALYSIS END OF YEAR
EXHIBIT J - Sample IRR Calculations and TIF Adjustment Calculations
4620 W. 77th Street Redevelopment
City of Edina
276 Mixed-Income Apts
Annualized Sales and Cashflow Analysis for Sample IRR Calculations
Affordable Housing Program
Policy Guide
March 2022
Exhibit K
Inclusionary Housing Policy Program Guide
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.
L-1
4876-1524-2800\3
Exhibit L
Form of Housing Restrictive Covenant
DECLARATION OF COVENANTS AND RESTRICTIONS
(Affordable Housing)
THIS DECLARATION OF COVENANTS AND RESTRICTIONS (this “Declaration”) is made
as of the _____ day of ______________, 20___, by 4620 LLC, a Minnesota limited liability company
(“Declarant”).
Recitals
A. Declarant is the owner of certain real property situated in the City of Edina, Hennepin
County, Minnesota, located at 4620 W. 77th Street and legally described in the attached Exhibit A (the
“Property”).
B. Declarant; the Housing and Redevelopment Authority of Edina, Minnesota, a public body
corporate and politic organized and existing under the laws of the State of Minnesota (the “Authority”);
and the City of Edina Minnesota, a Minnesota statutory city (the “City”) are parties to that certain
Redevelopment Agreement dated _______________, 2022 (as the same may be amended, modified,
and/or supplemented from time to time, the “Redevelopment Agreement”).
C. The Redevelopment Agreement provides for the redevelopment of the Property by
Declarant with the cooperation and assistance of the Authority and the City and provides for the
expenditure of certain public funds to assist in such redevelopment of the Property and construction of
certain improvements thereon, including 276 rental housing units (the “Project”).
D. The City, by Resolution No. 2022-92, dated October 6, 2022, approved Declarant’s final
rezoning, planned unit development ordinance, and final development plan for the Project.
E. Pursuant to the Redevelopment Agreement, Declarant has agreed to impose certain
restrictive covenants upon the Property to ensure that at least 28 of the housing units within the Project
will be leased at rates considered affordable to certain individuals or households whose gross annual
income does not exceed 50% of the area median income, as more particularly described herein (the
“Affordable Units”).
F. In addition to the Affordable Units, pursuant to the Redevelopment Agreement, Declarant
has agreed to impose restrictive covenants upon the Property to ensure that at least 110 of the housing
units within the Project will be leased at rates considered affordable to certain individuals or households
whose gross annual income does not exceed 120% of the area median income, as more particularly
described herein (the “Workforce Units”).
G. Declarant, under this Declaration, intends, declares, and covenants that the restrictive
covenants set forth herein governing the use, occupancy, and transfer of the Project shall be and are
covenants running with the Property for the Term stated herein and binding upon all subsequent owners
of the Property for such Term, and are not merely personal covenants of Declarant.
L-2
4876-1524-2800\3
NOW, THEREFORE, Declarant makes the following Declaration, hereby specifying that said
Declaration shall constitute covenants to run with the land and shall be binding on all parties in interest and
their respective successors and assigns:
1. Recitals; Definitions. The Recitals are true and correct statements of fact and are
incorporated into this Declaration by this reference, including the definitions set forth therein. Each
capitalized term used herein and the Recitals, unless otherwise defined, shall have the respective meaning
ascribed to such term in the Redevelopment Agreement.
2. Term; Termination.
(a) Generally. Subject to the terms and conditions of Sections 2(b) and 2(c) below,
this Declaration, and the covenants and restrictions contained herein, shall continue in full force
and effect for a period commencing on the date hereof and ending on the 20-year anniversary of
the date that all Affordable Units are first occupied by Affordable Unit Qualifying Tenants (defined
below) (the “Term”). Without the execution or recording of any additional documents, this
Declaration shall automatically cease to be of any force or effect upon the expiration of the Term.
Declarant’s obligation to operate the Project subject to this Declaration for the Term is independent
of the existence and continuance of any tax increment financing and/or other public assistance
contemplated or given by the Authority or the City to Declarant under the Redevelopment
Agreement, or otherwise (“Public Assistance”). Except as otherwise provided herein, the
provisions of this Declaration are intended to survive the termination or extinguishment of any
Public Assistance, any mortgage securing the same, and any other security instruments placed of
record in connection with the Public Assistance and to survive the termination of any subsequent
financing or security instruments placed of record by other lenders.
(b) Earlier Termination of Workforce Unit Restrictions. Notwithstanding the
foregoing, the covenants and restrictions hereunder with respect to the Workforce Units, including,
without limitation, the Workforce Rent Roll Verification (as defined below) shall automatically
terminate upon full satisfaction of the TIF Note (the “Workforce Unit Term”).
(c) Survival of Reporting Obligations. Notwithstanding any the earlier termination of
this Declaration or any covenants or restrictions hereunder, any of Declarant’s obligations
hereunder with respect to reporting, City auditing, and compliance with the terms of Affordable
Unit leases, and the City’s enforcement remedies with respect to the same, shall survive until the
expiration of the last of the leases with an Affordable Unit Qualifying Tenant.
3. Occupancy Requirements and Restrictions.
(a) Affordable Unit Qualifying Tenants. During the Term, the Affordable Units shall
be leased and occupied (or held vacant and available for occupancy) only by Affordable Unit
Qualifying Tenants. “Affordable Unit Qualifying Tenants” means individuals or households who,
at initial occupancy, have a combined gross annual income which does not exceed 50% of the area
median income (including adjustments for family size), as determined by the U.S. Department of
Housing and Urban Development’s (“HUD”) Area Median Income for the Minneapolis-Saint Paul-
Bloomington Metropolitan Statistical Area (“AMI”).
(b) Workforce Unit Qualifying Tenants. During the Workforce Unit Term, the
Workforce Units shall be leased and occupied (or held vacant and available for occupancy) at rates
(inclusive of utilities and mandatory fees, such as parking) at initial occupancy, that are considered
affordable to individuals or households that have a combined gross annual income which does not
L-3
4876-1524-2800\3
exceed 120% of the area median income (including adjustments for family size), as determined
and announced from time to time by HUD and as published annually by the Minnesota Housing
Finance Agency (or any successor agency(ies) administrating government affordable housing
programs), and if such agency ceases to publish and update such rates during the Term, such annual
rents for the Workforce Units shall not be not greater than 30% of 120% of AMI (“Workforce Unit
Rents”).
(c) Rental Rates.
(i) Affordable Units. The Affordable Units shall bear annual rents not greater
than the rental rate limits for such Affordable Unit Qualifying Tenants (adjusted for
bedroom count, and including utilities and mandatory fees, such as parking) as determined
and announced from time to time by HUD and as published annually by the Minnesota
Housing Finance Agency (or any successor agency(ies) administrating government
affordable housing programs), and if such agency ceases to publish and update such rates
during the Term, such annual rents for the Affordable Units shall not be not greater than
30% of 50% of AMI.
(ii) Workforce Units. The Workforce Units shall bear annual rents not greater
than the Workforce Unit Rents.
(d) Certification of Tenant Eligibility. No tenant household shall be approved by
Declarant for initial occupancy of an Affordable Unit, unless and until Declarant has determined
(through verification of income, assets, expenses, and deductions) whether such tenant household
is an Affordable Unit Qualifying. Each person who is intended to be an Affordable Unit Qualifying
Tenant, will be required at the commencement of the initial lease of the applicable unit to sign and
deliver to Declarant a “Certification of Tenant Eligibility” substantially in the form attached as
Exhibit B, or in any other form as may be approved in writing by the Executive Director of the
Authority or the City Manager of the City (the “Eligibility Certification”), in which the prospective
tenant certifies as to qualifying as an Affordable Unit Qualifying Tenant. Eligibility Certifications
may be obtained no more than 120 days before an Affordable Unit Qualifying Tenant occupies a
corresponding unit. In addition, the person will be required to provide whatever other information,
documents, or certifications are deemed reasonably necessary by the Authority or the City to
substantiate the Eligibility Certification. Eligibility Certifications will be maintained on file by
Declarant for a period of 10 years following the end of the Term. Declarant must re-examine and
verify the income of each tenant household living in an Affordable Unit annually.
(e) Leases. The Affordable Units and Workforce Units shall be rented pursuant to a
written lease, and the term of each such lease shall be least 12 months, except that during the final
year of the Term, new leases for the Affordable Units and Workforce Units may be for a term of
no less than six months, and such newly leased Affordable Units or Workforce Units shall be
subject to the terms and conditions of this Declaration until the expiration of such new leases.
(f) Additional Requirements for Affordable Units. In addition, each lease utilized by
Declarant in renting any Affordable Unit to any person who is intended to be an Affordable Unit
Qualifying Tenant shall:
(i) not require a security deposit in excess of the amount of one month of rent
in connection with any Affordable Unit;
L-4
4876-1524-2800\3
(ii) provide that rental rates charged to any Affordable Unit Qualifying Tenant
of an Affordable Unit cannot be increased more than once in any 12-month period;
(iii) provide for termination of the lease and consent by the person to eviction
for failure to qualify as an Affordable Unit Qualifying Tenant as a result of any material
misrepresentation made by the person with respect to the Eligibility Certification;
(iv) include a clause wherein each individual tenant or tenant certifies the
accuracy of the statements made in its application and Eligibility Certification; and
(v) include a clause wherein each individual tenant or tenant certifies that the
family income at the time the lease is executed will be deemed substantial and material
obligation of the tenant’s tenancy; that the tenant will comply promptly with all requests
for income and other information relevant to determining low or moderate income status
from Declarant, the Authority, or the City, and that the tenant’s failure or refusal to comply
with a request for information with respect thereto will be deemed a violation of a
substantial obligation of the tenant’s tenancy of its Affordable Unit.
(g) Affordable Unit Mix. The Affordable Units shall consist of at least twenty (20)
one-bedroom units, and eight (8) two bedroom units, and each as specifically identified in the table
below [Affordable Units will be fixed; prior to execution, insert final Affordable Units below].
The two-bedroom units must be leased to Affordable Units Qualified Tenants consisting of
households of at least two members. Any change in the foregoing distribution and below
identification of Affordable Units shall require the prior written approval of the Executive Director
of the Authority and City Manager of the City, which such consent will not be unreasonably
conditioned, delayed or withheld.
Affordable Units
Type of Unit Unit No. Floor Square Feet
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
L-5
4876-1524-2800\3
21.
22.
23.
24.
25.
26.
27.
28.
4. Enforcement of Covenants and Restrictions.
(a) Annual Affordable Units Certification. Declarant shall prepare and submit to the
Authority and the City, annually for approval on the basis of compliance with this Declaration, a
certificate substantially in the form of the attached Exhibit C, executed by Declarant, (i) identifying
the tenancies and the dates of occupancy (or vacancy) for all Affordable Unit Qualifying Tenants,
including the percentage of the dwelling units of the Project which were occupied by Affordable
Unit Qualifying Tenants (or held vacant and available for occupancy by Affordable Unit Qualifying
Tenants) at all times during the year preceding the date of the certificate; (ii) describing all transfers
or other changes in ownership of the Project or any interest therein; and (iii) stating that all
Affordable Units were rented or available for rental on a continuous basis during the year to
Affordable Unit Qualifying Tenants and that Declarant was not otherwise in default under this
Declaration during the year. The initial deadline for submission of such certification is three months
following the date that all the Affordable Units are first occupied by Affordable Unit Qualifying
Tenants and thereafter an annual deadline for submission of January 31.
(b) Semi-Annual Workforce Units Certification. At least 30 days prior to each semi-
annual TIF Note payment, Declarant shall provide the Authority with a certification of rent rolls
for the previous six-month period, which show the Workforce Unit Rents are in accordance with
the terms of this Declaration and the Redevelopment Agreement.
(c) Books and Records. Declarant shall permit, during normal business hours and upon
reasonable written notice, any duly authorized representative of the Authority or City, to inspect
any books and records of Declarant regarding the Project with respect to the incomes of tenant
households of Affordable Units and the rents charged for Affordable Units and Workforce Units to
ensure compliance with the requirements of this Declaration. At the City’s or Authority’s request,
Declarant will submit any other information, documents or certifications that Declarant, in its
reasonable discretion, deems necessary to substantiate Declarant’s compliance with the
requirements of this Declaration.
(d) Delegation; Third-Party Monitoring. Each of the Authority and the City may, in
their reasonable discretion, delegate their obligations hereunder and responsibilities for monitoring
and enforcement of this Declaration to a separate subdivision of the City and/or one or more
designated contractors, subcontractors, or agents. Declarant shall, upon annual invoicing,
reimburse the Authority and the City for third-party expenses related to monitoring of Declarant’s
compliance with this Declaration, which such costs shall initially not exceed $2,700 per year (plus
any additional costs necessitated by re-inspections for noncompliance with this Declaration) and
thereafter be subject to reasonable adjustment from time to time.
(e) City Affordable Housing Policy. The Project and the Affordable Units shall be
subject to the terms and condition of the City’s Inclusionary Housing Policy Program, as may be
amended from time to time.
L-6
4876-1524-2800\3
(f) Notice of Non-Compliance. Declarant shall immediately notify the Authority and
the City if at any time during the term of this Declaration the dwelling units in the Project are not
occupied or available for occupancy as required by the terms of this Declaration.
5. Additional Covenants, Representations, and Warranties of Declarant.
(a) Extension of Affordable Housing Requirements. On or about the date which is one
(1) year before the expiration of the Term, the Authority and Declarant shall negotiate in good faith
the terms and conditions of an extension of initial 20-year Term hereof as to the Affordable Units.
Both parties agree to negotiate in good faith but without binding either party to a particular
outcome, including binding the Developer to an extension of the 20-year term if the parties are
unable to agree upon terms and conditions acceptable to Developer.
(b) Legal Compliance. Declarant shall construct and maintain the Affordable Units,
the Workforce Units, and the Project in compliance with all requirements of the Redevelopment
Agreement (including, without limitation, the level of finishes and amenities described in the
Redevelopment Agreement), the City Approvals, any requirements of any lender whose loan is
secured by a mortgage to which Declarant is a party or by which it or the Project is bound, and all
applicable ordinances, building and use restrictions, code-required building permits, and any
requirements with respect to licenses, permits, and agreements necessary for the lawful use and
operation of the Project.
(c) No Violation. The execution and performance of this Declaration by Declarant (i)
will not violate or, as applicable, have not violated any provision of law, rule or regulation, or any
order of any court or other agency or governmental body, and (ii) will not violate or, as applicable,
have not violated any provision of any indenture, agreement, mortgage, mortgage note, or other
instrument to which Declarant is a party or by which it or the Project is bound, and (iii) will not
result in the creation or imposition of any prohibited encumbrance of any nature.
(d) Section 8 Housing. Declarant shall accept tenants who are (i) recipients of federal
certificates for rent subsidies pursuant to the existing program under Section 8 of the United States
Housing Act of 1937, as amended, codified as 42 U.S.C. Sections 1401 et seq., or its successor, or
(ii) any other housing assistance program. Declarant shall not adopt any policies specifically
excluding rental to tenants holding Section 8 certificate/voucher or who are recipients any other
housing assistance program solely because of the status of the prospective tenant as such a holder
or recipient.
(e) Underserved Populations. Declarant shall affirmatively market the Affordable
Units and the Workforce Units to one or more traditionally underserved populations as affordable
at the rates required hereunder.
(f) Consents and Subordination. Declarant shall obtain the consent to this Declaration
of any prior recorded lien-holder for the Property and shall cause such liens to be subordinated to
this Declaration. Declarant has not and will not execute any other agreement with provisions
contradictory to, or in opposition to, the provisions hereof and that, in any event, the requirements
of this Declaration are paramount and controlling as to the rights and obligations set forth herein
and supersede any other document’s provisions in conflict herewith.
(g) Transfer Restrictions. Subject to the terms and conditions of the Redevelopment
Agreement and the City Approvals, Declarant may sell, transfer or exchange the Project, the
Property or any portion thereof, but Declarant shall notify the Authority and the City in writing at
L-7
4876-1524-2800\3
least 30 days prior to such sale, transfer or exchange, and use commercially reasonable efforts to
obtain the acknowledgment of any buyer or successor or other person acquiring the Project or any
interest therein that such acquisition is subject to the covenants and restrictions of this Declaration
(and to the requirements of the Redevelopment Agreement incorporated herein). Failure by
Declarant to obtain such acknowledgment shall not be deemed to impair the covenants and
restrictions of this Declaration.
(h) Alterations; Use. Declarant shall not demolish any part of the Project or
substantially subtract from any real or personal property of the Project or permit the use of any
residential unit for any purpose other than rental housing during the Term of this Declaration unless
required by law. Affordable Unit Qualifying Tenants and Workforce Unit Qualifying Tenants shall
have the same access to the Project amenities as residents of the market-rate units.
(i) Condemnation, Damage, or Destruction. In the event that title to and possession of
the Project or any material part thereof shall be taken in condemnation or by the exercise of the
power of eminent domain by any governmental body or other person (except the Authority or the
City) or the Project is damaged or destroyed, Declarant shall, with reasonable promptness after
such taking, notify the Authority as to the nature and extent of such damage or taking, as applicable.
Upon receipt of any condemnation award or insurance proceeds Declarant shall elect to either: (a)
use the entire condemnation award or insurance proceeds to reconstruct the Project (or, in the event
only a part of the Project has been taken or damaged, then to reconstruct such part) upon the
remaining Property to the extent necessary to maintain and continue operations of Project for its
intended purpose; or (b) in the event that the condemnation affects or taking or damage or
destruction affects the Property but not the Project improvements thereon, retain, for the account
of Declarant, all of the condemnation award or insurance proceeds. The foregoing notwithstanding,
the use of condemnation or insurance proceeds shall be subject to the Declarant’s Lender’s
requirements and approval.
6. Remedies; Enforceability. In the event of a violation or attempted violation of any of the
covenants, conditions or restrictions herein contained that is not cured, ended or remedied within 30 days
after written notice to do so, the City or the Authority may institute and prosecute any proceeding at law or
in equity to abate, prevent or enjoin any such violation, or enforce specific performance by Declarant of the
covenants, obligations, conditions and/or restrictions set forth herein, or to recover monetary damages
caused by such violation or attempted violation; provided, however, if any such violation occurs under this
Declaration which reasonably requires more than 30 days to cure, the City and the Authority will delay
exercising the foregoing remedies, provided that the curing of such violation is promptly commenced upon
receipt of the written notice of violation, and with due diligence is thereafter continuously prosecuted to
completion and is completed within a reasonable period of time, and provided that the Declarant keeps the
City and the Authority informed at all times of its progress in curing the violation; provided, however in no
event shall such additional cure period for any violation extend beyond 90 days. Declarant specifically
acknowledges that the City and the Authority cannot be adequately compensated by monetary damages in
the event of any default hereunder. Unless terminated as provided herein, the provisions hereof are imposed
upon and made applicable to the Project, and shall be enforceable against Declarant, each purchaser,
grantee, owner or tenant of the Project and the respective heirs, legal representatives, successors and assigns
of each. No delay in enforcing the provisions of said covenants, conditions and restrictions as to any breach
or violation shall impair, damage or waive the right to enforce the same or to obtain relief against or recover
for the continuation or repetition of such breach or violation or any similar breach or violation thereof at
any later time or times. In addition to any remedy set forth herein for failure to comply with the restrictions
set forth in this Declaration, any such failure shall be a Default under the Redevelopment Agreement and
the City or the Authority may exercise any remedy available to it under the Redevelopment Agreement if
such Default becomes an Event of Default.
L-8
4876-1524-2800\3
7. Indemnification. Declarant hereby indemnifies, and agrees to defend and hold harmless,
the Authority, the City, and their respective officers, officials, employees, and agents, from and against all
liabilities, losses, damages, costs, expenses (including attorneys’ fees and expenses), causes of action, suits,
allegations, claims, demands, and judgments of any nature arising from the consequences of a legal or
administrative proceeding or action brought against them, or any of them, on account of any failure by
Declarant to comply with the terms of this Declaration, or on account of any representation or warranty of
Declarant contained herein being untrue.
8. Covenants Running With the Land. Declarant intends, declares and covenants, on behalf
of itself and all future owners and operators of the Property and the Project during the Term, that this
Declaration and the covenants and restrictions set forth in this Declaration regulating and restricting the
use, occupancy and transfer of the Property and the Project (a) shall be and are covenants running with the
Property and the Project, encumbering the Property and the Project for the Term, binding upon Declarant’s
successors in title and all subsequent owners and operators of the Property and the Project; (b) are not
merely personal covenants of Declarant; and (c) shall bind Declarant (and the benefits shall inure to the
Authority and the City) and its respective successors and assigns during the Term or the Workforce Unit
Term, where applicable. Declarant hereby agrees that any and all requirements of the laws of the State of
Minnesota to be satisfied in order for the provisions of this Declaration to constitute deed restrictions and
covenants running with the land shall be deemed to be satisfied in full and that any requirements of
privileges of estate are intended to be satisfied, or in the alternate, that an equitable servitude has been
created to insure that these restrictions run with the land. For the Term, each and every contract, deed or
other instrument hereafter executed conveying the Property and the Project or portion thereof shall
expressly provide that such conveyance is subject to this Declaration; provided, however, that the covenants
contained herein shall survive and be effective regardless of whether such contract, deed or other instrument
hereafter executed conveying the Property and the Project or portion thereof provides that such conveyance
is subject to this Declaration.
9. Waiver. The waiver by the Authority of any breach or default of any provisions anywhere
contained in this Declaration shall not be deemed to be a waiver of any subsequent breach or default thereof.
No provision of this Declaration shall be deemed to have been waived by any party hereto or party benefited
hereby unless such waiver is in writing and signed by the party charged with any such waiver.
10. Notices. Any notice, approval, consent, payment, demand, communication, authorization,
delegation, recommendation, agreement, offer, report, statement, certification or disclosure required or
permitted to be given or made under this Declaration, whether or not expressly so stated, shall not be
effective unless and until given or made in writing and shall be deemed to have been duly given or made
as of the following date: (a) if delivered personally by courier or otherwise, then as of the date delivered or
if delivery is refused, then as of the date presented; or (b) if sent or mailed by certified U.S. mail, return
receipt requested, or by Federal Express, Express Mail or other mail or overnight courier service, then as
of the date received. All such communications shall be addressed as follows (which address(es) for a party
may be changed by that party from time to time by notice to the other parties). No such communications to
a party shall be effective unless and until deemed received at all address(es) for such party:
Declarant at: c/o 4620 LLC
Attn: Curt Gunsbury
724 N First Street, Suite 500
Minneapolis, MN 55401
with a copy to: Anthony J. Gleekel
Siegel Brill P.A.
L-9
4876-1524-2800\3
100 Washington Avenue South, Suite 1300
Minneapolis, MN 55401
The Authority at: Housing and Redevelopment Authority of Edina, Minnesota
Attention: Executive Director
4801 West 50th Street
Edina, MN 55424
with a copy to: Dorsey & Whitney LLP
Attention: Jay R. Lindgren
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402
The City at: City of Edina
Attention: City Manager
4801 W. 50th Street
Edina, MN 55424
with a copy to: Dorsey & Whitney LLP
Attention: Jay R. Lindgren
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402
or at such other address with respect to any such party as that party may, from time to time,
designate in writing and forward to the other, as provided in this Section.
11. Joinder; Permitted Encumbrance. Except for the mortgagee consent attached hereto, this
Declaration does not require the joinder or approval of any other person and each of the parties respectfully
has the full, unrestricted and exclusive legal right and power to enter into this Declaration for the term and
upon the provisions herein recited and for the use and purposes hereinabove set forth. This Declaration
shall constitute a permitted encumbrance under any loan agreement heretofore or hereafter entered into
between Declarant and any construction lender or permanent lender.
12. Amendment. The provisions of this Declaration shall not be amended, terminated or
deleted during the Term hereof, except by an instrument in writing duly executed by the Authority, the
City, and Declarant, their respective successors and assigns.
13. Attorneys’ Fees. In case any action at law or in equity, including an action for declaratory
relief, is brought against Declarant to enforce the provisions of this Declaration, Declarant agrees to pay
the reasonable attorneys’ fees and other reasonable expenses paid or incurred by the City and/or the
Authority in connection with the action.
14. Governing Law. This Declaration is governed by the laws of the state of Minnesota and,
where applicable, the laws of the United States of America.
15. Severability. If any provisions hereof shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining portions shall not in any way be affected or impaired.
[Remainder of page intentionally left blank; signature page follows]
L-10
[Signature Page to Declaration of Covenants and Restrictions]
4876-1524-2800\3
IN WITNESS WHEREOF, Declarant has caused this Declaration to be executed as of the date first
written above
4620 LLC,
a Minnesota limited liability company
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ___ day of ________________, 2022, by
_______________, the _______________ of 4620 LLC, a Minnesota limited liability company, on behalf
of the company.
Notary Public
THIS DOCUMENT WAS DRAFTED BY:
Dorsey & Whitney LLP
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402-1498
L-11
[Exhibit A to Declaration of Covenants and Restrictions]
4876-1524-2800\3
Exhibit A
Legal Description of the Property
That part of Tract B, Registered Land Survey No. 1218, files of the Registrar of Titles, Hennepin County,
Minnesota, lying westerly of a line described as commencing at the northwest corner of said Tract B;
thence on an assumed bearing of North 89 degrees 47 minutes 30 seconds East, along the north line of
said Tract B, a distance of 286.31 feet to the point of beginning of the line to be described; thence South 0
degrees 12 minutes 31 seconds East 473.90 feet to the south line of said Tract B and said line there
terminating.
L-12
[Exhibit B to Declaration of Covenants and Restrictions]
4876-1524-2800\3
Exhibit B
Form of Certification of Tenant Eligibility
L-13
[Exhibit B to Declaration of Covenants and Restrictions]
4876-1524-2800\3
L-14
[Exhibit C to Declaration of Covenants and Restrictions]
4876-1524-2800\3
Exhibit C
Form of Certificate of Continuing Program Compliance
Certificate of
Continuing Program Compliance
Date: ___________________
The following information with respect to the Project located at 4620 W. 77th Street, Edina,
Minnesota (the “Project”), is being provided by 4620 LLC (“Declarant”) to the City of Edina, Minnesota,
a Minnesota statutory city (the “City”) and the Housing and Redevelopment Authority of Edina,
Minnesota, a public body corporate and politic organized and existing under the laws of the State of
Minnesota (the “Authority”), pursuant to that certain Declaration of Covenants and Restrictions (Affordable
Housing) dated ________________ ___, 2022 (the “Declaration”), with respect to the Project:
(A) The total number of Affordable Units which are available for occupancy is 28. The
total number of these units occupied is _________________.
(B) The following Affordable Units (identified by unit number) are currently occupied
by “Affordable Unit Qualifying Tenants,” as the term is defined in the Declaration (for a total of
28 units):
Unit
Number
Name of Tenant
Number of
Persons
Residing in
the Unit
Number of
Bedrooms
Total Adjusted
Gross Income
Date of Initial
Occupancy
Rent
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
L-15
[Exhibit C to Declaration of Covenants and Restrictions]
4876-1524-2800\3
(C) Declarant has obtained a “Certification of Tenant Eligibility,” in the form provided
as Exhibit B to the Declaration, from each Tenant named in (B) above, and each such Certificate
is being maintained by Declarant in its records with respect to the Project. Attached hereto is the
most recent “Certification of Tenant Eligibility” for each Tenant named in (B) above who signed
such a Certification since ______________, _____, the date on which the last “Certificate of
Continuing Program Compliance” was filed with the Authority and the City by Declarant.
(D) In renting the residential units in the Project, Declarant has not given preference to
any particular group or class of persons (except for persons who qualify as Affordable Unit
Qualifying Tenants); and none of the units listed in (B) above have been rented for occupancy
entirely by students, no one of which is entitled to file a joint return for federal income tax purposes.
All of the residential units in the Project have been rented pursuant to a written lease, and the term
of each lease is at least twelve (12) months.
(E) The information provided in this “Certificate of Continuing Program Compliance”
is accurate and complete, and no matters have, to the best knowledge of Declarant, come to the
attention of Declarant which would indicate that any of the information provided herein, or in any
“Certification of Tenant Eligibility” obtained from the Tenants named herein, is inaccurate or
incomplete in any respect.
(F) The Project is in continuing compliance with the Declaration.
(G) Declarant certifies that as of the date hereof at least 28 of the residential dwelling
units in the Project are occupied or held open for occupancy by Affordable Unit Qualifying Tenants,
as defined and provided in the Declaration.
(H) The rental levels for each Affordable Unit Qualifying Tenant comply with the
maximum permitted under the Declaration.
IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of Declarant, on
____________________, 20___.
4620, LLC
By: _________________________________________
Name: _______________________________________
Its: __________________________________________
L-16
4876-1524-2800\3
CONSENT AND SUBORDINATION
The undersigned, ___________________, a ___________________, holder of that certain
[Mortgage] executed by 4620 LLC, dated ________________, 20___, filed ________________, 20____,
as Document No. ___________, in the office of the County Recorder in and for Hennepin County,
Minnesota, and filed ________________, 20____, as Document No. ___________, in the office of the
Registrar of Titles in and for Hennepin County, Minnesota, in favor of ________________ (the
“Mortgage”), hereby consents to the foregoing Declaration of Covenants and Restrictions (Affordable
Housing) (the “Declaration”), and hereby subordinates the Mortgage and all of its right, title and interest in
the Property to the Declaration.
___________________________________,
a ___________________
By: _________________________________________
Printed Name: ________________________________
Title: ________________________________________
STATE OF ______________ )
) ss.
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this ____ day of ____________, 20___,
by ____________________, the _________________ of ___________________, a
___________________, on behalf of the ___________________.
(Signature of Person Taking Acknowledgment)
THIS DOCUMENT WAS DRAFTED BY:
Dorsey & Whitney LLP
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402-1498
M-1
4858-5265-6449\1
Exhibit M
Equity and Inclusion Community Engagement Plan
The General Contractor will utilize the following strategies when working with local, small, and
underutilized businesses to pursue good faith efforts for Minority, Woman Owned Business and Workforce
goals, including:
o hold a career fair/hiring event specific to this project as it relates to encouraging M/WBE
participation from both a company/small business perspective as well as an individual
perspective; include potential partnership with the City of Edina for the event.
o put in place an invitation and bidding assistance process for less experienced
subcontractors and suppliers
o team up with business and workforce goal consultants
o make plans and specifications available in online plan rooms and via organizations that
assist with getting participation from targeted participants
o use joint venture arrangements where possible
o seek referrals for sub-subcontractors
o hold pre-construction meetings for targeted subcontractor participant groups
o engage in on-going work with the subcontractors after contract award to ensure that the
provided workforce will help meet the goals
SUSTAINABLE BUILDING POLICY COMPLIANCE CHECKLIST
At each phase, submit to the City appropriate documentation verifying the completion of each requirement.
Pre-design Submittal
Completion of this phase is required prior to Council approval of project.
Date completed
by project
team:
Requirements Reviewed by
1/26/22 Submit a sketch plan as part of a potential application for Planning
Commission review and comment
City staff -
planning
8/8/22 Read the Sustainable Building Policy. n/a
9/23/22 Identify a policy compliance lead for the development team:
Name_____Craig Hartman____________________________
Email_____craig@mdgarchitects.com__________________
Phone_____651-253-2981____________________________
City staff -
sustainability
8/8/22 Participate in an introductory meeting coordinated by City’s Sustainability
Manager to review policy requirements. At a minimum, project team
attendees shall include owner, policy compliance lead, architect, & general
contractor (if known).
City staff -
sustainability
9/23/22 Indicate the project’s intended Sustainable Building Rating System:
□ LEED BD+C (Certification at Silver, Gold, or Platinum)
□ State of Minnesota B3 Guidelines (Compliant)
□ Enterprise Green Communities (Certified)
□ GBCI’s Parksmart (Certification at Silver or Gold)
□ Alternative approved by the Sustainability Division (NGBS – Silver)
City staff -
sustainability
9/23/22 Submit the completed pre-design response in the
Greenhouse Gas Emissions Worksheet.
Technical
Advisor
9/23/22 Submit the completed pre-design response in the
Electric Vehicle Charging Worksheet.
Technical
Advisor
9/23/22 Submit the completed pre-design response in the
Energy Efficiency Standard Worksheet.
Technical
Advisor
9/23/22 Submit the completed pre-design response in the
Bird-safe Glazing Worksheet.
Technical
Advisor
9/23/22 Submit a site plan/PUD application/HRA review City staff -
planning
30% Progress Submittal
Date completed
by project
team:
Requirements Reviewed by
Register project with Sustainable Building Rating System and submit proof
of registration (i.e., Screenshot or email confirmation)
City staff -
sustainability
Submit a checklist of the planned credits to be achieved in the selected
Sustainable Building Rating System.
City staff -
sustainability
Submit a Case Study Worksheet including major strategies being
designed to achieve elected certification path.
City staff -
sustainability
Submit the completed 30% progress response in the
Electric Vehicle Charging Worksheet.
Technical Advisor
Submit the completed 30% progress response in the
Energy Efficiency Standard Worksheet
Technical Advisor
For residential projects with 1-4 units: submit documentation of a
project partner registered with the US DOE Zero Energy Ready Homes
OR
For all other commercial and residential projects: contact CSBR
to register for SB2030 and provide proof of payment (details TBD by
CSBR)
City staff -
sustainability
Submit the completed 30% progress response in the
Bird-safe Glazing Worksheet and indicate path below:
□ Projects seeking LEED: achieve bird collision deterrence point
□ All other projects: follow B3 Guideline S.9: Bird-Safe Building
Technical Advisor
60% Progress Submittal
Date
completed by
project team:
Requirements Reviewed by
Submit an updated checklist of the planned credits to be achieved in the
selected Sustainable Building Rating System.
City staff -
sustainability
Submit an updated Case Study Worksheet including major strategies being
designed to achieve elected certification path.
City staff -
sustainability
Submit the completed 60% progress response in the
Greenhouse Gas Emissions Worksheet.
Technical Advisor
Submit the completed 60% progress response in the
Electric Vehicle Charging Worksheet.
Technical Advisor
Submit the completed 60% progress response in the
Energy Efficiency Standard Worksheet
Technical Advisor
Submit the completed 60% progress response in the
Bird-safe Glazing Worksheet.
Technical Advisor
90% Progress Submittal
Date
completed by
project team:
Requirements Reviewed by
Submit an updated checklist of the planned credits to be achieved in the
selected Sustainable Building Rating System.
City staff -
sustainability
Submit an updated Case Study Worksheet including major strategies being
designed to achieve elected certification path.
City staff -
sustainability
Submit the completed 90% progress response in the
Greenhouse Gas Emissions Worksheet.
Technical Advisor
Submit the completed 90% progress response in the
Electric Vehicle Charging Worksheet.
Technical Advisor
Submit the completed 90% progress response in the
Energy Efficiency Standard Worksheet
Technical Advisor
Submit the completed 90% progress response in the
Bird-safe Glazing Worksheet.
Technical Advisor
Re-submit documentation during construction if changes impact overlay compliance.
Closeout
Completion of this phase is required prior to certificate of occupancy.
Date
completed by
project team:
Requirements Reviewed by
Submit documentation showing the purchase of EV chargers as calculated on
the Electric Vehicle Charging Worksheet
Technical
Advisor
Submit photos of installed bird safety strategies as described on the Bird Safe
Glazing Worksheet
Technical
Advisor
Submit the Case Study Worksheet with the final narrative of the project
(including key achievements, key challenges, certification anticipated, and any
variances required).
Technical
Advisor
Schedule 12-month check-in with Sustainability Manager. City staff -
sustainability
Occupancy
Date
completed by
project team:
Requirements Reviewed by
Complete Sustainable Building Rating System documentation. Submit
documentation reporting the certification level and credits/guidelines achieved
prior to the 12-month check in.
City staff -
sustainability
Participate in 12-month check-in with Sustainability Manager. City staff -
sustainability
Comply with Edina Benchmarking Ordinance by submitting building
performance information to Energy Star Portfolio Manager. Additionally, for B3
projects, link to B3 Benchmarking.
City staff -
sustainability
If verification of Bird Safe Building is included in TIF or other agreement:
· Submit documentation of verification of first year monitoring of Bird-
safe glass. As described in B3 Guideline S.9F. AND
· Submit documentation showing verification of adherence to Lights Out
management program (annually for ten years). As described in B3
Guideline S.9E.
City staff -
sustainability
Rev. 08/08/2022
SUSTAINABLE BUILDINGS POLICY
GREENHOUSE GAS WORKSHEET
At each phase, complete the worksheet and submit along with the Sustainable Building Policy checklist.
The intention of this is tracking of greenhouse gas emission predictions to encourage project teams to consider emissions reductions through an
analysis of the embodied carbon of the materials used in construction. This requires conducting a whole building life cycle analysis (LCA) and
reporting the results. There are two accepted methodologies for doing this calculation (LEED v4.1 Building Life-Cycle Impact Reduction, Option
2 - Path 1 and B3 Guidelines v3.2 M.1A, Part 2 - Whole-Building LCA Model).
Pre-design Submittal
Question Answer
What methodology is being referenced (LEED or B3)? B3
What whole building life cycle analysis tool is being used? Whole Building LCA
All other phases (provide LCA report) – optional at 30%, draft at 60%, final at 90%
Question Optional:
Reference Building (B3) or
Baseline Building (LEED)
Required:
Design
Building
Total Global Warming Potential (GWP) (kg CO2e)
Total Global Warming Potential per Square foot (kg CO2e /sf)
(typical range for B3 projects is 13-40)
At minimum, the LCA report should include breakdowns as
required by the compliance path. Indicate which of the following
breakdowns are included in the report.
GWP by assembly type (if following B3 protocol) Y / N Y / N
GWP by lifecycle stage (if following LEED protocol) Y / N Y / N
At closeout, submit updated worksheet and LCA report if changed from the 90% submittal.
Rev. 08/08/2022
SUSTAINABLE BUILDINGS POLICY
ENERGY EFFICIENCY WORKSHEET
At each phase, complete the worksheet and submit along with the Sustainable Building Policy checklist.
Pre-design Submittal
Question Answer
What is the intended pathway for the project?
(DOE Zero Energy Ready Homes or SB2030) SB2030
All other phases – DOE ZERH pathway only
Question Answer (draft at 60%, final at 90%)
HERS Target Score
HERS Index Score
All other phases – SB2030 pathway only
Provide the SB2030 Standard at 30% review, a draft of Design values at 60%, final submittal at 90%)
Question Energy Carbon Emissions
Design Consumption,
not including renewables kBtu/yr lbs CO2/yr
On-site renewables (E2A21D or E2A31D) kBtu/yr lbs CO2/yr
Design Net Consumption
= Consumption – on-site renewables
(E1A7) kBtu/yr lbs CO2/yr
Design Net Consumption per Square Foot
(E1A6. Design Net Energy Use per SF)
kBtu/sf/yr
(E1A8M. Design Net Carbon Emissions per SF)
lbs CO2/sf/yr
SB2030 Standard (E1A5K) kBtu/sf/yr (E1A8E) lbs CO2/yr
Off-site renewables or RECs kBtu/yr lbs CO2/yr
Off-site renewables or RECs per Square Foot kBtu/sf/yr lbs CO2/sf/yr
Off-site renewables or RECs should be greater or equal to the difference between the Design Net Consumption and the SB2030 Standard.
Optional – all paths
Proposed design energy use and cost should be easy to obtain from LEED, SB2030 or other energy model. Many energy models will also show
similar values for a code level building and a breakdown of electric and gas.
Question Answer
What code baseline is being used? (ASHRAE 90.1-2016 Appendix G, ASHRAE
90.1-2016 ECBM, IECC 2019, other)
Measure Code Baseline Proposed Design
Annual energy use (MMBtu)
Electric energy use (kWh)
Gas energy use (therms)
Annual energy cost ($)
Electric energy cost ($)
Gas energy cost ($)
Please submit documentation with similar details if additional energy sources are expected, such as district energy.
Rev. 08/08/2022
SUSTAINABLE BUILDINGS POLICY
ELECTRIC VEHICLE PARKING WORKSHEET
At each phase, complete the worksheet and submit along with the Sustainable Building Policy checklist. For multi-family, consider HOURCAR pilot
to help meet requirement.
Pre-design Submittal
Question Answer
Is on-site parking planned for this project? Yes
All other phases (provide site plan)
Question Answer
Is on-site parking planned for this project?
Number of on-site parking spots
Number of wheelchair accessible parking spots
Number of EV chargers, Level 2 or higher
Number of parking spots served by Level 2 or higher EV chargers
(minimum 5%)
Number of “EV ready” parking spots with conduit for Level 2 or higher
charging (installed and “ready” parking must total at least 15%)
Number of accessible “EV ready” parking spots (information only, no
current requirement)
At closeout, submit documentation showing the purchase of EV chargers.
Rev. 08/08/2022
SUSTAINABLE BUILDINGS POLICY
BIRD SAFE GLAZING WORKSHEET
At each phase, complete the worksheet and submit along with the Sustainable Building Policy checklist.
Pre-design Submittal
Question Answer
What is the expected compliance path?
· LEED: bird collision deterrence point
· All other projects: follow B3 Guideline S.9: Bird-Safe Building
Compliance shall follow the revised
compliance path using B3 tools as
indicated.
What is the ecological context of the project?
(habitat on property/in area, wildlife presence, attractants including water
and feeding/nesting)
Local habitat includes Fred Richards Park
to the north, local landscaping on site.
What is the history of bird-window problems in area or building (if a
renovation)?
N/A
All other phases
Indicate which of the following conditions are present in the project and provide a narrative of how bird safety will be addressed. See the B3
Guidelines and the Bird Friendly Design Guide for strategy details.
Condition Present in
project?
Bird safety strategy
Glass/Plexiglass (transparent) railings
Glass/Plexiglass-sided walkways
Any glazed surface that offers a see-through
situation that is 20 feet or less across, such as
a small atrium, or glass corners.
And the following if they total more than 15%
of the surface area: -------- -------
A surface within 50 feet or less of attractants
such as trees, shrubs, prairie, grassland, or
open water (including green roofs with this
type of vegetation)
A surface in a see-through situation greater
than 20 feet across (such as atriums,
gathering spaces/lobbies, etc.)
At closeout, submit photos of installed bird safe glazing strategies. Rev. 08/08/2022
SUSTAINABLE BUILDINGS POLICY
CASE STUDY WORKSHEET
At each review, complete the worksheet and submit along with the Sustainable Building Policy checklist.
All phases
Question Answer
Project Name 4620 Apartments
Project Address 4620 W 77th Street
Project Site Area (GSF) 136,368 sf
Project Building Area (GSF) 385,710 sf
Building Use Type Multi-Family Mixed Use
Project Owner Solhem Development
Design Team Momentum Design Group
Construction Team TBD
Construction Completion
Date
TBD
Certification Anticipated National Green Building Standard - Silver
Key Challenges
Key Achievements and
Strategies
Variances Required
Rev. 08/08/2022
City of Edina • 4801 W. 50th St. • Edina, MN 55424
Community Engagement, Race and Equity, Health, Sustainability Divisions
Phone 952-927-8861 • Fax 952-826-0390 • EdinaMN.gov
Date: October 18, 2022
To: Stephanie Hawkinson, Affordable Housing Development Manager
From: MJ Lamon, Community Engagement Manager; Heidi Lee, Race and Equity Manager; Jeff
Brown, Public Health Administrator; Grace Hancock, Sustainability Manager
Subject:
4620 Apartments Funding
Introduction to Values Viewfinder
The goal of the Values Viewfinder is to incorporate City Council values in City decision-making processes.
The Values Viewfinder team developed a tool to help decision-makers understand, assess, and
communicate the impact, opportunities and trade-offs of a given decision using the lens of public health,
race and equity, community engagement and sustainability. The four disciplines collectively achieve
community well-being.
The Values Viewfinder tool includes three steps: (1) a Framing section to orient the user to common terms
and to set a baseline understanding of the initiative, key stakeholders, and considerations, (2) a community
well-being matrix questionnaire to identify opportunities and tradeoffs, and (3) an Evaluation section to
understand early in an initiative how to manage success and track metrics.
Purpose and scope of this process
The purpose of using the Values Viewfinder tool in the 4620 apartment funding question is to support how
funding may be awarded in a way that considers community-wellbeing. The Values Viewfinder tool was
used to support the process for awarding funding, not identifying a preferred funding level itself.
Page 2
City of Edina • 4801 W. 50th St. • Edina, MN 55424
The scope of the process included an understanding of inputs for the 4620
apartment funding decision in each section of the tool through an interview with
Community Development staff. Information gathered and discussed included:
Framing: Community Development staff identified drivers behind why this
decision must be made, stakeholders who should be involved, key decision-points throughout the
decision-making process, and decision goals.
o Driver: Illustrate how funding may be awarded to this project in a way that supports
community well-being.
o Stakeholders: Public – park access changes, City Council – decision makers, Community
Development, Parks, Engineering staff – project aligning with City goals and objectives.
Questionnaire: Community Development staff brainstormed how this decision relates to the following
questions from the perspective of community well-being:
o Benefits & Access: What are the potential positive benefits/access opportunities created by this
action? Who will benefit?
o Barriers & Impacts: What are the potential negative impacts/consequences/barriers created by
this action? Who will be affected by these?
o How can this action be adjusted to help advance City goals/values?
o Are there other factors to consider? (Aesthetics, cost, time, etc.?)
Evaluation: Community Development staff agreed that the best way to identify success for this
decision-point is to be able to succinctly identify and communicate the most significant opportunities
and trade-offs related to a funding award.
Findings from utilizing the tool
The following findings were identified and can be utilized as part of the staff recommendation put forth in
this report for the City Council decision-making process. When looking at a potential funding award, the
benefits/access are weighed against the barriers/impact. The aim is to achieve the most benefits and access
and reduce the barriers and impacts.
FINDINGS Health-in-all-Policies Community
Engagement
Race & Equity Sustainability
Benefits & Access
(What are potential positive
benefits/access opportunities
created by this action?)
Provides
stable/affordable
housing
Close to new Fire
Station
o Residents have more
access to Community
Health Programs
Provides life cycle
housing for seniors to
downsize
Better public access to
park
o Kids in a good school
district
Coffee Shop/Curb
Appeal
Fulfills access
portion of park
master plan
Provides funding
mechanism for
park access
programming,
who lives there,
farmers
market/city
enhancement)
Affordable units
adjacent to great
park amenity
Stable affordable
housing
Expands housing
options
Expands affordable
housing outside
immediate
Southdale area
Increase in
diversity and
housing for people
who may not
traditional be able
Complies with CAP
Increase green
space
Access to green
space
Addition of trees)
Transforms
underutilized
building and surface
parking lot
Page 3
City of Edina • 4801 W. 50th St. • Edina, MN 55424
o Location has access
and creates access to
park
Better access to
regional bike trail
o Walkability to
businesses
o Access to walking and
bike trails and transit
o Walkable to
shops/restaurants,
less vehicle trips
to afford to live in
Edina.
Barriers & Impact
(What are potential negative
impacts/consequences/barriers
created by this action?)
Privatizing the park,
somewhat
Walking access to
health food options –
Trader Joe’s likely
closest
Public Hearing for
site plan, but not
for allocation
these dollars
Perceived
opportunity cost,
but actually self-
generating
funding?
Could lead to
mistrust if not
strictly following
our policy
(Turnover in CC)
Lack of
knowledge by
potential renters,
i.e. live in a
different city and
didn’t know
about the
project. (BTE,
Lease-up time,
owner)
Not 100%
affordable
Development
resistant
School district
concerns about 1
school with lower
income students
(Cornelia)
Lack of
hiring/construction
goals related to
R/E
o Diverse
construction pool
has barriers –
programs and
reporting
requirements
Building is in
bird migratory
flight path
Other considerations Additional Park users without paying park dedication fees
Page 4
City of Edina • 4801 W. 50th St. • Edina, MN 55424
Evaluation
In any decision-making process, there should be an assessment step to evaluate if
the goals and strategies of the decision are met. The definition of success looks
different for all decisions; however, it is necessary for the decision makers and
stakeholders to define success and the evaluation or data points that support success or unpack gaps in the
strategies. The group was guided back to the overall goal in the Framing section, which was to “explore
justification to support the funding of 4620 apartment funding” and the group was asked what does success
look like. The feedback provided was:
Referendum passing, support from the Edina Housing Foundation,
Receiving a Green Building certification,
Providing a connection to the park,
Diversifying housing options, having 138 affordable units for residents within compliance,
Community accepting of new community members and no high-volume increase of complaints
The answers above provide a foundation to dig deeper of what qualitative and quantitative data can be
collected. For example, qualitative data can be feedback, a story, narrative from community members such
as asking if there are received individual benefits because there is easy accessibility to the park to be
outdoors; this data is from the respondents’ perspective. Quantitative data is numerical value that is
collected such as the demographic diversity in the residents. The table below provides some examples of
numerical and narrative data that can be collected through each lens to that could support the overall goal
of the park.
Value What are you measuring?
Type of data
(stories or
numbers)
Data source (database/ software)
Health-in-
all-Policies
Accessibility to health
programs
Providing lifecycle housing for
seniors
Public access to park and
education for walkability/bike
Availability to food stores
Stories &
numbers
Registration of offered programs at
Community Health & Safety Center
Housing units offered and occupied by
seniors
Park & Recreation programming enrollment
Bike/pedestrian count clicker
Race &
Equity
Providing stable affordable
housing
Workforce and contracting
diversity
Resident diversity such as race,
age, socioeconomics
Stories &
numbers
Diversity of activity/programming
before & after implementation
Demographic information such as
income, age, etc
Community
Engagement
Programming opportunities
such as farmers market, city
enhancements
Access and use of building
shops
Fulfillment of Fred Richards
Park Master Plan
Gap on input from potential
renters
Stories &
numbers
Review of Fred Richards Master Plan
Collection of implemented programs in area
Input from current residents on connection
to building, area, community, city
enhancements
Sustainability Accessibility to green space
Tree canopies
Stories &
numbers
Data collection of tree canopy and plant
inventory through GIS information
Water shed permits
Page 5
City of Edina • 4801 W. 50th St. • Edina, MN 55424
Conclusion- Stacked Benefits vs Trades-Offs
One key result of this tool exercise is to identify overlapping opportunities and
tradeoffs between these values.
Through conversation, staff highlighted the following overlapping opportunities:
Affordable units, and affordable units with greenspace/park access.
o This development not only increases the number of affordable units in Edina, but increases
the number of affordable units near greenspace. (values optimized: Race and Equity, Health
in All Policies, Sustainability).
Access to green transportation and reduction in impervious parking spaces.
o This development increases access to walking and bicycling trails, while also discouraging
additional car trips by removing underutilized structure like the existing surface parking lot
(values optimized: Health in All Policies, Sustainability).
Increased neighborhood activation through programming and amenities proximity.
o This development makes city amenities more available to a diversity of users, including the
new Fire Station, local small businesses and the park. This increased access can influence
culturally aware programming and inform creative solutions to challenges such as distance
from grocery stores (i.e. a pop-up park farmers market) (values optimized: Health in All
Policies, Engagement).
Identified site selection tradeoffs include:
Private park access
o Current development plans include sidewalk infrastructure that preferences park access
from the apartment building, creating a sense that the park may only be accessed by private
users. While park access is critical, a perception that only apartment dwellers are welcome
impacts who in the community is able to engage with this public amenity. (values tradeoffs:
a site with new park access achieves Health in All Policy goals, but private access creates
barriers to achieving Engagement or Race and Equity goals).
Greenspace use for needed stormwater storage and landscaping, while adding park users without
assessing park dedication fees
o This development necessitates stormwater management, which impacts available
greenspace for other activities. Right now the development is not paying park dedication
fees, despite likely increasing the number of users (values tradeoffs: Sustainability, Race and
Equity)
In conclusion, this process identified the top opportunities to maximize the expression of City values in this
decision. It also identified the top tradeoffs that Council must consider when determining whether or not
to award funding. Finally, this tool’s findings lay the foundation for the next decision-point in the 4620
apartment project, and how to incorporate community well-being throughout.
Alignment of Climate Action
Plan
Green certification through City
Date: December 8, 2022 Agenda Item #: VI I.B.
To:C hair & C ommis s ioners of the Edina HR A Item Type:
R eport / R ecommendation
F rom:S tephanie Hawkinson, Affordable Housing
Development Manager Item Activity:
Subject:Approve Amendments to New Multifamily Affordable
Housing P olicy
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 proposed amendments to New M ultifamily Affordable H ousing P olicy
I N TR O D U C TI O N:
B ased on the ever changing housing market and after reviewing recent housing proposals, Staff proposes three
changes to the New M ulti-Family Affordable Housing P olicy:
· I ncrease the Buy-in from $125,000 per unit to $175,000 per unit.
· R equire the inclusion of affordable units if the top half of the density range is requested.
· R equire cooperation with the C ity designated compliance officer.
AT TAC HME N T S:
Description
Staff Report
New Multifamily Affordable Housing Policy 2022
Pres entation
December 8, 2022
Chair and Commissioners of the Edina Housing and Redevelopment Authority
Stephanie Hawkinson, Affordable Housing Development Manager
Proposed Amendments to the New Multi-Family Affordable Housing Policy
Information / Background:
In 2015 the Edina Housing Foundation proposed an Affordable Housing Policy (“Policy”) that requires new
residential development with greater than 20-units to include affordable housing units equaling 10% of the
combined units’ square footage. In subsequent years the Policy was amended to include a Buy-In option,
change the percentage based on the number of units verses square feet, a proportionality provision, and a
requirement for non-discrimination of Housing Choice vouchers among other things. The Policy is
periodically reviewed to determine if there are gaps in coverage, confusing elements, for ease in
understanding, and to make sure the goal of creating affordable housing opportunities is met.
Staff is now proposing three primary amendments:
• Increase the Buy-in from $125,000 per unit to $175,000 per unit.
• Require the inclusion of affordable units if the developer is seeking a density in the top half of the
range.
• Require cooperation with the City designated compliance officer.
Increasing the Buy-In
In March 2021 the Buy-in amount was increased from $100,000 to $125,000 to address the increasing
disparities between the cost of developing affordable housing and the cost to Buy-In. $125,000 was agreed
upon as it aligned with the policies in Cities similar in size and demographics. However, in the heels of
COVID the need for affordable housing has increased as have construction costs. The cost disparities
continue to grow. Electing to Buy-In versus including affordable units is becoming an increasingly easier
option, as indicated by the following:
1. Based on recent proposals, the cost of an affordable unit, including land, is roughly $330,000 per unit
where the cost to construct a Market Rate housing unit is over $500,000 per unit.
STAFF REPORT Page 2
2. For affordable housing, debt financing based on Net Operating Income account for between 30%
and 70% of the Total Development cost. Therefore between 30% and 70% of the financing comes
from tax credits and other public sources. Based on recent proposals the Buy-in amount of
$125,000 is 38% of the cost to construct a unit and therefore does not cover the gap financing
needed.
3. In looking at the rent levels of affordable units compared to market rate units over a 20-year period
(using recent proposals as examples), a developer makes more than $326,000 on the market rate
unit than on an affordable unit.
4. Since 2015, 118 affordable units were included in Market Rate developments compared to 142 units
that were not included in favor of paying the Buy-In fee.
Although the cost differential is roughly $326,000 per unit, Staff believes that that high amount would not
only be a disincentive to selecting the Buy-In option but could also be a disincentive to residential
development generally. As of now there is no defined amount for Buy-in that will dissuade developers from
wanting to develop in Edina. We do not know the threshold that will cause developers to turn away
because of the fee or not wanting to include the affordable units. Therefore, Staff proposes increasing the
Buy-In to $175,000 per unit. This increase was reviewed and is supported by the Edina Housing Foundation.
Inclusion Requirement
The Land Use Chapter of the Comprehensive Plan (“Plan”) provides density ranges for housing units that
can be built per acre. For example, in a High-Density Residential area between 12 and 60 housing units per
acre are allowed. In Greater Southdale District Residential between 50 to 100 housing units per acre are
allowed. Based on recently site plan applications, developers most frequently request maximizing the
number of units allowed.
The Comprehensive Plan does not indicate that the higher end of the range is deemed a “bonus” tied to
affordable housing. Rather the Plan states that denser land use categories allow for the creation of
affordable housing. Yet the Policy includes language that states that density bonuses can be used to make
including affordable housing units within a market rate development financially feasible. The inclusion of the
bonus language in the Policy reflects Staff’s intent that developments seeking the greatest density would
include the affordable units within the development. An amendment to the Policy provides clarity to that
intention.
Staff is proposing a two-tiered system:
• Mixed Use Developments: Developments that are 50% or greater of the maximum within the
density range must include affordable units within the development. Conversely, developments that
are less than 50% the maximum density allowed in a range can choose to include the units or pay
the Buy-in fee.
• All Residential Developments: Developments that are 75% or greater of the maximum density
within the range must include affordable units within the development. Conversely, developments
STAFF REPORT Page 3
that are less than 75% the maximum density allowed can choose to include the units or pay the Buy-
in fee.
Compliance Cooperation
It would seem self-evident that the developers who include affordable units within their development would
recognize that the City would need to confirm and verify the following:
1. Affordable units were included;
2. The rents on affordable units fall within the published affordable ranges; and
3. Tenants dwelling in affordable units are income qualified.
Nonetheless some owners have resisted cooperating with the City’s compliance consultant and we have
little recourse when no funding is involved. Staff believe it is important to make developers and owners
aware before the development is approved that the City will confirm and verify that the included affordable
units comply with the Policy.
Alignment with the 2040 Comprehensive Plan and Race & Equity Initiative
1. Comprehensive Plan
The New Multi-Family Affordable Housing Policy is the City’s primary mechanism for creating affordable
housing. Since its passage, the City has made great strides in creating more housing opportunities. The
passages below are sections of the 2040 Comprehensive Plan that support the proposed changes to the Policy.
Goal 1: Accommodate all planned residential growth in the city based on planned infrastructure investments
and other community goals and assets.
1. Seek to accommodate the total new households projected to locate in the city by the year 2040.
3. Recognize that successfully reaching affordable housing goals assists the city in achieving related
community goals, including:
f. Addressing climate change through higher density development patterns that help reduce
vehicle emissions (see Energy and Environment Chapter)
Goal 2: Encourage the development and maintenance of a range of housing options affordable to residents at
all income levels and life stages.
1. Encourage the production of additional affordable housing units and retention of existing affordable
housing units to meet the city’s housing needs and its Metropolitan Council affordable housing need
allocation of 1,804 units.
4. Revisit height and density zoning requirements if needed to make the development of affordable
housing financially feasible in areas guided for redevelopment.
Goal 4: Support the development of a wide range of housing options to meet the diverse needs and
preferences of the existing and future Edina community.
3. Promote affordable and workforce housing that includes a range of housing prices and options, based
on the principle that those who contribute to the community should have the opportunity to live
here.
7. Support the development of both mixed income and 100% affordable housing throughout Edina where
there is access to transit.
STAFF REPORT Page 4
Status on Achieving 2040 Affordable Housing Goal
Forecasted Need Approved % of Need Remaining
Total Units 1804 341 18.9% 1463
<30% AMI 751 22 2.9% 729
31-50% AMI 480 178 37.1% 302
51-80% AMI 573 141 24.6% 432
2. Race & Equity Initiative
Periodically reviewing an updating the Policy aligns with Goal 16 of the 2018 Race & Equity Initiative Final
Report and Recommendations. The report calls for the City to “Review policy with a race and equity lens
to include language relating housing to equity and disparities” (page 42). The recommendation goes further
by requesting the consideration of removing the Buy-In option. Staff does support collecting some Buy-in
funds as they make possible different types of affordable housing programs that are not financed through
traditional means. However, increasing the Buy-In amount addresses the concern raised by the Race &
Equity Task Force by incentivizing the inclusion of the affordable units.
☐City Council Approved: 11/1/2015
☒City-Wide Revised: 3/25/2021
☐Department
City of Edina Policy
NEW MULTI-FAMILY AFFORDABLE HOUSING
The City and Housing and Redevelopment Authority recognize the need to provide a range of affordable
housing choices for those who live or work in the City. Since the land appropriate for new multi-family
residential development is limited, it is essential that a reasonable proportion of such land be developed
into affordable housing units. As such, the City of Edina adopts the following New Multi-Family
Affordable Housing Policy.
FOR THE PURPOSES OF THIS POLICY:
1. “Unit” means either a for-sale dwelling or a rental dwelling in which a lease is signed prior to
occupancy.
2. “Financial Assistance” provided the City includes but is not limited to tax increment financing,
land write downs, pass-through funding for purposes other than environmental remediation and
other forms of direct subsidy.
3. Any specific projects requesting exemptions to the affordable housing requirements of this
policy must seek recommendation from the Edina HRA and approval from the Edina City
Council based on alternative public purpose.
4. All new multi-family developments of 20 units or more must adhere to this policy and must be
zoned PUD Planned Unit Development.
5. Affordable Rental Housing Income and Rents are defined as both gross incomes (adjusted for
family size) and gross rental rates (adjusted for bedroom count and include utility allowance and
any fees that are a requirement of occupancy as per Section 42 of the Internal Revenue Service
Code.) that are updated annually by the Minnesota Housing Finance Agency (MHFA) and
published at www.mnhousing.gov. 2020 income and rental limits can be found at the end of this
policy.
6. Affordable Ownership Housing Income and Sales Price are affordable to and initially sold to
persons whose income is at or below 80% of Area median Income.
THIS POLICY APPLIES TO ALL NEW MULTI-FAMILY DEVELOPMENTS THAT:
1. Include 20 units of more.
2. Require rezoning or a Comprehensive Plan Amendment.
3. Receive financial assistance from the City of Edina and/or the Edina Housing and Redevelopment
Authority.
4. Are developed on property purchased from the City of Edina even if no financial assistance is
being provided by the City unless the waiver is recommended by the Edina HRA and approved
by the Edina City Council.
Page | 2
THE POLICY
1. New rental multi-family developments subject to this policy shall provide a minimum of 10%
residential units at 50% affordable rental rates or 20% residential units at 60% affordable rental
rates as defined below. The units shall be occupied by households at or below 60% of the Multi-
Family Tax Subsidy Income Limits (MTSP).
2. New for-sale developments shall provide a minimum of 10% of residential units at affordable
sales prices as defined below.
3. The affordable unit mix must be approximately proportional to the market rate unit mix.
4. Rental and for-sale/owner occupied affordable units shall provide the following:
a. on-site parking (either surface or enclosed) for affordable units and the cost related to
parking must be included affordable sales price or affordable rental rate. At least one
enclosed parking space shall be included in the purchase price of a for-sale unit in the
same manner offered to buyers of market rate units.
b. Affordable and market rate residents will have equal access to all entries, lobbies,
elevators, parking and amenities. Examples of amenities include storage lockers,
balconies, roof decks, outdoor patios, pools, fitness facilities, and similar unit and project
features.
c. Exterior appearance of affordable units shall be visually comparable with market rate
units in the development.
5. New rental housing will remain affordable for a minimum of 20 years if seeking a PUD and
zoning amendment without City financing or 30-years if City financing is approved. and this This
requirement will be memorialized by a Land Use Restrictive Covenant.
6. New for-sale or owner-occupied developments will remain affordable for a minimum of 30
years and this requirement will be memorialized by a Land Use Restrictive Covenant. The Land
Use Restrictive Covenant will contain a provision providing the Housing and Redevelopment
Authority or Edina Housing Foundation the right of first refusal to purchase affordable units.
7. The developers and/or owners of multi-family rental housing projects subject to this Policy by
receiving financial assistance shall accept tenant-based rental housing assistance including but not
limited to Section 8 Housing Choice Vouchers, HOME tenant-based assistance and Housing
Support. Tenants with rental assistance may occupy an affordable dwelling unit with the rent
charged not exceeding the maximum allowed by Metro HRA or the assistance provider.
Furthermore, the rent charged may not exceed the maximum allowed by the most restrictive
funding sourced. This requirement will be enforced through a contract between the City of the
project owner pursuant to which the owner will be required to adopt business practices that
promote fair housing and provide documentation of compliance with these requirements to the
City. This requirement will be further enforced through the City’s monitoring policies and
procedures.
8. Owners of City-assisted housing projects shall affirmatively market affordable housing
opportunities. All multi-family housing providers subject to this policy must submit an
Affirmative Fair Housing Marketing Plan (AFHMP) at lease every 5 years and a Survey and
Certification regarding AFHMP outcomes annually. Owners must advertise housing
opportunities on HousingLink or another medium acceptable to the City concurrent with any
other public or private advertising.
9. Recognizing that affordable housing is created through a partnership between the City and
developers, the City and/or Housing and Redevelopment Authority will consider the following
incentives for developments that provide affordable housing:
a. Density bonuses
b. Parking requirement reductions
c. Tax increment financing for projects that exceed the minimum requirement
Page | 3
d. Deferred low interest loans from the Housing and Redevelopment Authority and/or
Edina Housing Foundation
e. Property Tax Abatement
10. It is the strong preference of the City that each new qualifying development provide its
proportionate share of affordable housing on site. However, the City recognizes that it may not
be economically feasible or practical in all circumstances to do so. As such, the City reserves the
right to waive this policy (only if circumstances so dictate, as determined by the City). In lieu of
providing affordable housing in each new qualifying development, the City may consider the
following:
a. Dedication of existing units in Edina to 110% of what would have been provided in a
proposed new development. These units would need to be of an equivalent quality
within the determination of the City.
b. Financial risk and participation in the construction of affordable dwelling units of an
equivalent quality by another developer on a different site within the City.
c. An alternative proposed by a developer that directly or indirectly provides or enables
provision of an equivalent amount of affordable housing within the city. An alternative
could be payment of a Total Buy In (TBI) fee, a cash payment to the City in lieu of
providing affordable housing units. The TBI shall be equal to $125,000 $175,000 per unit
rounding up to the next whole unit. The TBI would be due in cash or certified funds in
full to the City at the time of issuance of the building permit. A building permit will not
be issued unless the TBI is paid in full. The City Council may allow the housing
developer to pre-pay the TBI to satisfy a future Affordable Housing Opportunity on a
case-by-case basis. TBI will be deposited into the Affordable Housing Trust Fund to be
used for the development and preservation of affordable housing.
11. As allowing maximum density was intended to serve as a density bonus for the inclusion of
affordable units, for mixed use developments that have densities 50% or greater of the
maximum allowed density, affordable units must be included in the development. For residential
developments with densities 75% of the maximum allowed density, affordable units must be
included in the development. For example:
a. If zoning allows between 50-100 units per acre, and the residential development is 50-87
units per acre, the developer/owner may elect to include the affordable units into the
development, pay the TBI fee, or an approved alternative.
b. If the proposed development is 88-100 units per acre, the development must include
affordable units within the building.
12. The owners and their agents of multi-family rental and ownership properties subject to this
policy must cooperate with the City’s compliance officer during the affordability period. Non-
compliance may be grounds for suspension of the rental license.
13. Guidelines for implementing this Affordable Housing Policy can be found in the Inclusionary
Housing Policy Program Guide.
202022 INCOME AND RENTAL LIMITS
Please refer to the income and rent tables published on www.mnhousing.gov.
201822 OWNERSHIP HOUSING INCOME AND SALES PRICE
GROSS INCOMES GROSS RENTS
60% 50% 60% 50%
1 Person
$43,440$49,320
$36,200
$41,100
Studio $1,086
$1,233
$905 $1,027
Page | 4
2 Persons $49,680
$56,340
$41,400
$46,950
1 Bedroom $1,164
$1,320
$970$1,100
3 Persons $55,860
$63,360
$46,550
$52,800
2 Bedroom $1,396
$1,584
$1,163$1,320
4 Person $62,040
$70,380
$51,700
$58,650
3 Bedroom $1,613
$1,830
$1,344$1,525
5 Persons $67,020
$76,020
$55,850
$63,350
4 Bedroom $1,800$2,041 $1,500$1,701
Acquisition Limit in this policy definition: $293,500$355,000
20202 income limits as published on the Metropolitan Council website are as follows: 80% of AMI
($78,500$89,400)
Income limits and maximum sales prices are updated annually. See www.mnhousing.gov and
https://metrocouncil.org/Communities/Services/Livable-Communities-Grants/Ownership-and-Rent-
Affordability-Limits.aspx
Originally adopted: November 1, 2015
Income/Rent Limits Adjusted: April 13, 2016
As amended: February 7, 2018
As amended: April 3, 2018
As amended: October 2, 2018
As amended: March 5, 2019
Income/Rent Limits Adjusted: December 10, 2020
As amended: March 25, 2021
As Amended:
Proposed Revisions to
Affordable Housing Policy
December 8, 2022
Background Information
•2015 Policy initially approved
•2018 (winter) Buy-In option was
added
•2018 (Autumn) Affirmative Fair
Marketing and Non-
discrimination of Housing
Choice Vouchers added
•2019 Affordable Housing Trust
Fund Created
•Rents and incomes adjusted
annually
EdinaMN.gov 2
Proposed: $175,000
Construction costs have increased
Development costs range from
$300,000 to $515,000 per unit
(affordable to luxury).
Increase fee to incentivize
including units
Current: $125,000
Increased March 2021
Based on other Communities
Change #1: Buy-In Fee
EdinaMN.gov 3
It is much more Cost Efficient
for the Developer to Buy-In
rather than to include an
affordable unit:
Over a 20 -year period a
developer’s revenue is
significantly greater than
$125,000 per unit in a 100%
Market Rate Development.
Conclusion:
Over a 20-year period a100%
Market Rate development has
revenues $6,500,000 greater than
an inclusionary development. This
equates to $327,000 per unit that
was not affordable (10% or 20
units).
$125,000 is only 38% of the difference.
•200 unit building with a mix of 1
and 2 bedroom units
•Income escalator of 2%
•20-year affordability Period
•Comparing all market rate
apartments to one that includes
10% of units at 50% AMI rents.
•Market rate rents based on recent
proposals.
Basic Analysis
EdinaMN.gov 4
Inclusion:
•4917 Eden –20 units
•4977 77th Street –20 units
•Lorient –3 units
•Avidor –18 units
•Aria –8 units (4.3%)
•Millenium –11 units (4.8%)
•Nolan Mains –10 units
•Fred II –28 units
TOTAL: 118 units
Buy-In:
•Fred 1 –in lieu of 41 units
•Bower –in lieu of 19 units
•7001 France –In lieu 27 units
•Lorient –In lieu of 2 units
•4425 Valley View –In lieu of 3 units
•The Loden –in lieu of 25 units
•The Onyx –25 units
TOTAL: In lieu of 142 units
Inclusion vs. Buy–in Comparison
EdinaMN.gov 5
Affordable Housing
Goal
Affordable Housing Units
Approved %Remaining
Total Units 1804 341 18.9%1463
<30% AMI 751 22 2.9%729
31-50% AMI 480 178 37.1%302
51-80% AMI 573 141 24.6%432
Affordable Housing Goals
EdinaMN.gov 6
•Edina has goal of creating 994 to 1804
new units of affordable housing.
•Increases disincentive to Buy-In.
•Construction costs are increasing
--Buy-In fee does not go as far;
--Increasingly less expensive to
-Buy-In than to include units.
•In 2018 Race & Equity Task Force
proposed to Eliminate Buy-in option
•No evidence that Buy-In fee is
thwarting Developers from wanting to
build in Edina
Keep Buy-In Option –But increase
EdinaMN.gov 7
Importance of Buy-In: Flexibility
EdinaMN.gov 8
Affordable Housing Trust Fund Estimated Balance Requests
Beginning Balance*$ 8,460,000
Market Street (2019)($750,000)
4d Pilot Program 2018 -NO TAKERS ($160,000)
4d Pilot Program -2019 ($50,000)
Single Family Ownership Program (2020)($840,000)
Home Rehabilitation Program (Pilot)($250,000)
425 Jefferson ($152,717)
Single Family Ownership Program (2021)($1,500,000)
Home Rehabilitation Program (Aug. 2021)($750,000)
LISC Single Family Partnership Program ($1,260,000)
Home Rehabilitation Program (2022)($500,000)
First Generation Grant ($150,000)
Ending Balance $ 2,402,717
•Making loans at interest rates below or at market rates.
•Guaranteeing of loans.
•Providing gap financing for affordable housing developments.
•Financing the acquisition, demolition, and disposition of property for
affordable housing projects.
•Financing the rehabilitation, remodeling, or new construction of affordable
housing.
•Funding to facilitate affordable homeownership opportunities including down
payment assistance, second mortgages, closing costs, etc.
•Interim financing of public costs for affordable housing projects in anticipation
of a permanent financing source (i.e.construction financing, bond sale, etc.)
•Other uses as permitted by law and approved by the city council.
Affordable Housing Trust Fund
EdinaMN.gov 9
Policy Language:
Recognizing that affordable housing is created
through a partnership between the City and
developers, the City and/or Housing and
Redevelopment Authority will consider the
following incentives for developments that
provide affordable housing:
•Density bonuses
•Parking requirement reductions
Etc.
Change #2: Regarding Density
“Bonuses”
EdinaMN.gov 10
Type of Zoning Density Range Mixed Use Residential Only
High Density Residential 12-60 >= 36 units >= 48 units
Greater Southdale Residential 50-100 >= 75 units >= 88 units
Neighborhood Node 10-60 >= 35 units >= 48 units
Office Residential 20-75 >= 48 units >= 61 units
Mixed Use Center 12-100 >= 56 units >= 78 units
Community Activity Center 90-150 >= 120 units >= 135 units
Regional Medical Center 50-100 >=75 units >= 88 units
Inclusion Required
EdinaMN.gov 11
> 50% Max > 75% Max
Example 1:
•Density range 50-100 units per acre
•Proposal is 95 units/acre (90% of Max)
Requirement: Development must include
affordable units.
Example 2:
•Density range 50-100 units/acre
•Proposal is 70 units/acre (40% of max)
Requirement:Either Buy-In, inclusion or
blend.
Density Level May Require
Inclusion
EdinaMN.gov 12
Project Project Density Comp. Plan % of Density
Onyx –240 units (0 affordable)53 units/acre 75 units/acre 71%
Lorient –46 units (3 affordable)50 units/acre 60 units/acre 83%
Nolan Mains –100 units (10 aff.)74 units/acre 75 units/acre 99%
The Loden –246 units (0 affordable)10 units/acre 30 units/acre 33%
Pentagon Village–200 units (20 aff.)16 units/acre 75 units/acre 21%
70th and France –267 units 46 units/acre 150 units/acre 31%
Approved Density: Mixed Use
EdinaMN.gov 13
Project Project Density Comp. Plan % of Density
Aria –185 units (8 affordable)93 units/acre 100 units/acre 93%
Millennium –375 units (11 aff.)66 units/acre 105 units/acre 63%
Avidor –166 units (16 aff.)95 units/acre 100 units/acre 95%
Sound on 76th –70 units (all aff.)35 units/acre 40 units/acre 75%
Edina Flats–18 units (0 aff.)14 units/acre 30 units/acre 47%
Amundson Flats–62 units (all aff.)50 units/acre 50 units/acre 100%
Hazelton Road Apts. –186 units 149 units/acre 150 units/acre 99%
4040 70th Street –118 aff.75 units/acre 75 units/acre 100%
Perkins Site –196 units (20 aff.)94 units/acre 100 units/acre 94%
Approved Density: Residential
EdinaMN.gov 14
Add:
•The owners and their agents of multi-
family rental and ownership properties
subject to this policy must cooperate with
the City’s compliance officer during the
affordability period. Non-compliance may
be grounds for suspension of the rental
license.
•Amend rent, sales price, and income limits
Change #3: Cooperation
EdinaMN.gov 15
City Comparisons
City # Units to Trigger Affordability Requirements
Term of
Affordability Buy-In
Edina 20 10% @ 50% AMI or 20% @ 60% AMI 20-years $125,000*10%
Minnetonka 10 10% @60% with Minimum of 5% @ 50% AMI.
If City $: 20% @ 50% AMI or 40% @ 60% AMI.30-years NA
St. Louis Park 10 5% @ 30% AMI; 10% @ 50% AMI; 20% @ 60%
AMI 25-years Ownership Only
Eden Prairie 15 5% @30% AMI, or 10% at 50% AMI, or 15% @
60% AMI in perpetuity NA
Richfield 5 20% @ 60% AMI 10-years
15% NPV of Tax
increment pledged
for 10-years
Golden Valley 10 10% @50% AMI or 15% @60% AMI 20-years NA
EdinaMN.gov 16
EdinaMN.gov 17
Location of
Affordable
Housing
EdinaMN.gov 18
Questions?