Loading...
HomeMy WebLinkAbout2025-10-30 HRA Meeting Packet Meeting location: Edina City Hall Council Chambers 4801 W. 50th St. Edina, MN Housing & Redevelopment Authority Meeting Agenda Thursday, October 30, 2025 7:30 AM Participate in the meeting: Watch the meeting on cable TV or YouTube.com/EdinaTV. Provide feedback during Community Comment by calling 312-535- 8110. Enter access code 2633 719 0085. Password is 5454. Press *3 on your telephone keypad when you would like to get in the queue to speak. A staff member will unmute you when it is your turn to speak. Accessibility Support: The City of Edina wants all residents to be comfortable being part of the public process. If you need assistance in the way of hearing amplification, an interpreter, large-print documents or something else, please call 952-927- 8861 at least 72 hours in advance of the meeting. 1. Call to Order 2. Roll Call 3. Pledge of Allegiance 4. Approval of Meeting Agenda 5. Community Comment During "Community Comment," the Chair will invite residents to share issues or concerns that are not scheduled for a future public hearing. Items that are on tonight's agenda may not be addressed during Community Comment. Individuals must limit their comments to three minutes. The Chair may limit the number of speakers on the same issue in the interest of time and topic. Individuals should not expect the Chair or Commissioners to respond to their comments tonight. The Chair will respond to questions raised during Community Comments at the next meeting. 6. Adoption of Consent Agenda All agenda items listed on the Consent Agenda will be approved by one motion. There will be no separate discussion of items unless requested to be removed by a Commissioner. If removed the item will be considered immediately following the adoption of the Consent Agenda. (Favorable roll call vote of majority of Commissioners present to approve, unless otherwise noted in consent item.) 6.1. September 25, 2025 Regular Meeting and October 16, 2025 Special Work Session Minutes 6.2. Approve Grant Agreement with VEAP for $200,000 in LAHA Funds Page 1 of 87 6.3. Approve Grant Agreement with Mount Olivet Rolling Acres for $93,500 in LAHA Funds 6.4. Approve Form of Grant Agreement with West Hennepin Affordable Housing Land Trust and Twin Cities Habitat for Humanity for a total of $581,881.99 in LAHA Funds. 6.5. Approve Grant Agreement with the Edina Housing Foundation for $1,000,000 for the Heroes Down Payment Assistance Program 7. Reports/Recommendations: (Favorable vote of majority of Commissioners present to approve except where noted) 7.1. Proposed Financing Structure for Public Parking Garage at 7001 France Avenue 8. Executive Director Comments 9. HRA Member Comments 10. Adjournment Page 2 of 87 BOARD & COMMISSION ITEM REPORT Date: October 30, 2025 Item Activity: Approve Meeting: Housing & Redevelopment Authority Agenda Number: 6.1 Prepared By: Liz Olson, Administrative Support Specialist Item Type: Minutes Department: Community Development Item Title: September 25, 2025 Regular Meeting and October 16, 2025 Special Work Session Minutes Action Requested: Approve September 25, 2025 Regular Meeting and October 16, 2025 Special Work Session Minutes. Information/Background: Supporting Documentation: 1. 09-25-2025 Regular Meeting Minutes 2. 10-16-2025 Special Work Session Minutes Page 3 of 87 Page 1 MINUTES OF THE REGULAR MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY SEPTEMBER 25, 2025 7:30 A.M. I. CALL TO ORDER Vice Chair Jackson called the meeting to order at 7:33 a.m. then explained the processes created for public comment. II. ROLLCALL Answering rollcall were Vice Chair Jackson, Commissioners Agnew, Pierce, and Risser. Absent: Chair Hovland III. PLEDGE OF ALLEGIANCE IV. MEETING AGENDA APPROVED – AS PRESENTED Motion by Commissioner Pierce, seconded by Commissioner Agnew, approving the meeting agenda as presented. Ayes: Agnew, Jackson, Pierce, and Risser Motion carried. V. COMMUNITY COMMENT No one appeared. V.A. EXECUTIVE DIRECTOR’S RESPONSE TO COMMUNITY COMMENTS Executive Director Neal responded that there were no past Community Comments. VI. ADOPTION OF CONSENT AGENDA – AS PRESENTED Motion by Commissioner Agnew, seconded by Commissioner Pierce, approving the consent agenda as presented: VI.A. DRAFT MINUTES OF REGULAR MEETING OF AUGUST 28, 2025 VI.B. ADOPT RESOLUTION NO. 2025-07, TO ACCEPT MINNESOTA HOUSING FINANCE AGENCY LOCAL HOUSING TRUST FUND GRANT, DESIGNATE SIGNING AUTHORITY, AND AUTHORIZE EXECUTION OF GRANT AGREEMENT Ayes: Agnew, Jackson, Pierce, and Risser Motion carried. VII. REPORTS AND RECOMMENDATIONS VII.A. RESOLUTION NO. 2025-08; AMENDING THE SPENDING PLAN FOR THE SOUTHDALE 2, PENTAGON PARK, AND 70TH AND CAHILL TAX INCREMENT FINANCING DISTRICTS – ADOPTED Economic Development Manager Neuendorf stated that this item pertains to an amendment of the spending plan that guides the use of funds from 3 existing TIF districts. Mr. Neuendorf presented Page 4 of 87 DRAFTMinutes/HRA/September 25, 2025 Page 2 the background on this item, how funds can be used, how Edina has used funds already, when the funds can be used, alternate outcome if amended spending plan was rejected, recommended process, types of projects to consider, and summary/recommendation. The Board asked questions regarding what happens to the interest, SPARC funds being given to a TIF district, the impact of pledged funds at the end of 2026, restrictions on how money that gets returned to the County is used, if money can go back to the schools, potential for tax relief, impact on levy for 2026, and public hearings for TIF funds. Mr. Neuendorf stated that the interest earnings on TIF dollars are retained in the TIF districts, so if they are not invested in this program, they would go back to the County for distribution. The Board expressed concerns regarding TIF being used on top of TIF, when the $4.8 million will come back to them, and TIF investments and their impact on the levy. Mr. Neuendorf discussed the process of what would happen to the pledged funds if the project did not get completed in the proposed timeline. Mr. Neuendorf discussed the State law mandates for creating TIF districts and what public hearings must be held. Member Agnew introduced and moved adoption of HRA Resolution No. 2025-08, amending a spending plan for the Southdale 2, Pentagon Park, and Wooddale/Valley View Tax Increment Financing Districts. Seconded by Member Pierce. Ayes: Agnew, Jackson, and Pierce Nay: Risser Motion carried. VIII. EXECUTIVE DIRECTOR COMMENTS – Received VIII.A. USING TAX INCREMENT FINANCING TO ACHIEVE COMMUNITY GOALS IX. HRA MEMBER COMMENTS - Received X. ADJOURNMENT Motion made by Commissioner Agnew, seconded by Commissioner Pierce, to adjourn the meeting at 8:54 a.m. Ayes: Agnew, Jackson, Pierce, and Risser Motion carried. Respectfully submitted, Scott Neal, Executive Director Page 5 of 87 Page 1 MINUTES OF THE SPECIAL WORK SESSION MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY OCTOBER 16, 2025 7:30 A.M. I. CALL TO ORDER Chair Hovland called the meeting to order at 7:30 a.m. then explained the processes created for public comment. II. ROLLCALL Answering rollcall were Chair Hovland, Commissioners Agnew, Jackson, Pierce, and Risser. Absent: None. III. MEETING TOPICS III.A. PROVIDE FEEDBACK FOR PREPARATION OF A REQUEST FOR PROPOSALS (RFP) FOR THE OUT-LOT SOUTH OF FIRE STATION 2 AT 4401 76TH STREET WEST FOR RESIDENTIAL USE, INCLUDING AFFORDABLE HOUSING – DISCUSSED City Manager Neal noted that this is a work plan item they would like to get more input from the HRA regarding. Affordable Housing Development Manager Hawkinson stated that this request is to come up with a vision/plan/direction for this site, and they are seeking direction on whether they should move forward with an RFP, and if so, what that RFP would be seeking. Mrs. Hawkinson presented a background on the Fire Station 2 project timeline, timeline for the potential use of the out-lot, why residential development was discussed, guiding framework, guided land use, preliminary concept presented by BKC on March 21, 2023, concept presented by Edina Housing Foundation/LHB on August 7, 2024, criteria to include in RFP, and proposed schedule. The Board asked questions regarding getting legal access to 4.8 acres of land, what this land is worth, terms of the bond on the Fire Station, and if an appraisal can be kept private. The Board gave feedback on casting a wider net on using this asset, looking at ways to stabilize the general levy and stay within 6% as a target, following the access by foot in the land use, and ideas that incorporate a microgrid. The Board discussed thinking about this holistically, affordability issues, and assessments for street reconstruction. The Board expressed concerns regarding access coming through the side lot of the Fire Station. Mrs. Hawkinson stated that there is interest in the valuation of the land, but she has not heard what the next steps would look like. Page 6 of 87 DRAFTMinutes/HRA/October 16, 2025 Page 2 The Board gave feedback on looking at that parcel for industrial or quasi-industrial use, or whether other ideas could be used. The Board discussed the two aspects of monetizing a piece of land: the sale price and tax revenue. Economic Development Manager Neuendorf stated that when putting together an RFP, they try to be as focused as possible, and developers know that they are sincere and will give them a shot. Mr. Neuendorf noted that providing the segment of what they are looking for is the most helpful to get bids that fit with their desires. Mrs. Hawkinson noted that variables such as audience play into the design as well. Mr. Neuendorf stated that they do not just want to entertain a conversation for proposals, but rather get this done. The Board asked questions regarding doing something like an RFI for discussion points, which does not cost the developers $50,000 worth of assessment. The Board gave feedback on casting a wide net in the opinion of value, and then coming back with the ballparks for going down different routes. Mrs. Hawkinson stated that this is the first step, and they can come back and hone in on what they want after they have more information. IV. ADJOURNMENT The meeting was adjourned at 8:42 a.m. Respectfully submitted, Scott Neal, Executive Director Page 7 of 87 d ITEM REPORT Date: October 30, 2025 Item Activity: Approve Meeting: Housing & Redevelopment Authority Agenda Number: 6.2 Prepared By: Stephanie Hawkinson, Affordable Housing Development Manager Item Type: Report & Recommendation Department: Community Development Item Title: Approve Grant Agreement with VEAP for $200,000 in LAHA Funds Action Requested: Approved Grant Agreement Information/Background: On August 28, 2025 the HRA approved a recommendation of $200,000 of the Edina's 2025 allocation of Local Affordable Housing Aid (LAHA) funding be granted to VEAP for their emergency rental assistance program. Staff was authorized to engage an attorney to draft the agreement. VEAP is a basic needs organization whose programs include access to healthy foods, social services, housing stability and supportive services. VEAP is one of the only social service agencies that assist Edina residents with housing advocacy and financial assistance. VEAP supports low-income renters to maintain safe and stable housing by communicating with property management and negotiating payment arrangements, a need which could increase as job hours are cut or job loss occurs. VEAP also provides limited emergency rent assistance to help maintain housing stability and prevent homelessness. Typically rental assistance is available for 3-months within a 12-month period. However, with case management review of the applicants' situation and need, and ability to overcome the financing crisis, assistance may be allowed for up to 6-months. Twenty-five percent of the LAHA award may be used for navigation and service delivery. The grant funds will be distributed on a reimbursement basis. Resources/Financial Impacts: • Budget – $200,000 in LAHA funding that was awarded by the state through a metro area sales tax. Relationship to City Policies: Supporting Emergency Rental Assistance aligns with our Budget pillars: Better Together and Livable City. Supporting Documentation: 1. VEAP LAHA Grant Agreement Page 8 of 87 1 237459v1 GRANT AGREEMENT This Grant Agreement (“Agreement”) is entered into on this ______ day of ___________, 2025, by, between and among the HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA, a body politic and corporate under the laws of the State of Minnesota (“HRA”), and VEAP, INC., a Minnesota nonprofit corporation (“Grantee”). Recitals WHEREAS, Grantee is a nonprofit, community-based program which supports housing stability to low-to-moderate income households and individuals within the City; WHEREAS, Grantee provides limited emergency rent assistance to help maintain housing stability and prevent homeless; WHEREAS, the HRA has received Local Affordable Housing Aid pursuant to Minn. Stat. Section 477A.35, which the HRA is authorized to allocate for qualifying projects as further identified in the statute; and WHEREAS, the HRA desires to provide assistance to the Grantee for emergency rental assistance to individuals as provided under Minn. Stat. 477A.35, subd. 4(a)(1). NOW, THEREFORE, in consideration of the mutual promises and covenants herein, parties do hereby agree as follows: 1. GRANT. The City agrees to grant to Grantee Two Hundred Thousand and No/100 Dollars ($200,000.00) (“Grant Funds”) to be dispensed as stated herein, for the purposes stated herein. 2. ELIGIBILITY CRITERIA. Grant Funds received by Grantee pursuant to this Agreement may only be dispersed to households earning less than 80 percent of area median income as determined by the United States Department of Housing and Urban Development for emergency rental assistance (“Program”). Twenty-five-percent of the Grant (up to $50,000) may be used for the navigation and servicing of this program. Eligible households may receive up to three-months of rental assistance. In extenuating circumstances, as defined by the Grantee, a household may receive up to six-months of rental assistance. 3. DISBURSEMENT OF GRANT PROCEEDS. All Grant Funds shall be paid to Grantee in accordance with the terms and conditions of this Agreement. Notwithstanding anything to the contrary herein, any costs of administering the Program, or any other costs of the Program exceeding the grant amount under this Agreement, shall be the sole responsibility of Grantee. The HRA will disburse grant funds in response to written payment requests submitted by the Grantee and reviewed and approved by the HRA’s authorized agent. Written payment requests shall be made using payment request forms, the form and content of which will be determined by the HRA. Payment request and other reporting forms will be provided to the Grantee by the HRA. Page 9 of 87 2 237459v1 The HRA will disburse grant funds on a reimbursement basis or a “cost incurred” basis. The Grantee must provide with its written payment requests documentation that shows grant-funded Program activities have actually been completed. Subject to verification of each payment request form (and its documentation) and approval for consistency with this Grant Agreement, the HRA will disburse a requested amount to the Grantee within thirty-five (35) days after receipt of a properly completed and verified payment request form. The disbursement of proceeds of the Grant will be made subject to the conditions precedent that prior to or as of the date of disbursement: (i) The City has received from Grantee, without expense to the City, an executed copy of this Agreement; (ii) Grantee provides all documentation required by the HRA for the release of grant funds; (iii) Grantee is in compliance with the terms of this Agreement. 4. GRANTEE RESPONSIBILITIES. Grantee shall be responsible for all costs in excess of $50,000 associated with the navigation and servicing of the Program. Prior to issuing any of the Grant Funds for emergency rent assistance, Grantee shall be responsible for ensuring that all recipients of Grant Funds are eligible for emergency rent assistance support in accordance with this Agreement and Minn. Stat. 477A.35. Grantee shall manage all Program applications and determine eligibility and available funding. 5. REPORTING. Grantee shall provide appropriate records to the HRA regarding the recipients and the disbursement of Grant Funds to verify compliance with this Agreement on a quarterly basis. Grantee shall prepare and submit to the HRA, at its own expense, a report including: A. The total number of applications to the Program submitted, approved, denied, or outstanding, B. Documentation establishing that the applicant for emergency rent assistance is qualified to receive funding under Minn. Stat. 477A.35, subd. 4(a)(1), C. The total amount of financial support provided by the Program that year and since Grantee received the Grant, D. An accounting of all Grant money expended by the Program, and E. The amount of remaining Grant funding. F. Any additional information requested by the HRA necessary to determine compliance with this Agreement. 6. REIMBURSEMENT. Grantee shall reimburse to the HRA the full amount of any Grant Funds spent for any purpose other than as allowed by this Agreement or Minn. Stat. 477A.35. Grantee shall reimburse to the HRA the full amount of any Grant proceeds for which Grantee is unable to provide a satisfactory accounting. Page 10 of 87 3 237459v1 7. TERM. The term of this Agreement shall commence on January 1, 2026 and terminate on December 31, 2028. In order to ensure that all funds are drawn prior to the Grant Agreement term end date, all payment requests from the Grantee must be received by the City at least thirty (30) days prior to December 31, 2028. The City is not obligated to provide funds for any reimbursement requests that do not comply with this Paragraph. 8. MISCELLANEOUS. A. Warranty. Grantee warrants that it is duly authorized and empowered to execute, deliver, and perform this Agreement and to receive the Grant from the HRA, and that the performance by Grantee of its obligations under this Agreement does not and will not materially violate or conflict with any applicable provision of state or federal law and does not and will not materially violate or conflict with, or cause any default or event of default to occur under, any material agreement binding upon Grantee. B. Notice. All notices to be given by either party to the other hereunder shall be in writing and deemed to have been given when delivered personally or when deposited in the United State mail, registered or certified and postage prepaid, addressed as follows: To the HRA at: Housing and Redevelopment Authority of Edina, Minnesota Attn: Affordable Housing Development Manager 4801 W. 50th St. Edina, MN 55424 With a copy to: Edina City Attorney Campbell Knutson, P.A. 860 Blue Gentian Rd. Suite 290 Eagan, MN 55121 To Grantee at: Veap, Inc. Attn: Kari Thompson 8600 Aldrich Avenue South Bloomington, MN 55420 C. Assignment. Grantee may neither assign nor transfer any rights or obligations under this Agreement without the prior consent of the HRA and a fully executed Assignment Agreement, executed and approved by the same parties who executed and approved this Agreement, or their successors in office. D. Amendments. Any amendment to this Agreement must be in writing and will not be effective until it has been executed and approved by the same parties who executed and approved the original Agreement, or their successors in office. Page 11 of 87 4 237459v1 E. Waiver. The performance or observance of any promise or condition set forth in this Agreement may be waived, amended, or modified only by a writing signed by Grantee and the HRA. No delay in the exercise of any power, right, or remedy operates as a waiver thereof, nor shall any single or partial exercise of any other power, right, or remedy. F. Liability and Indemnification. Grantee releases from and covenants and agrees that the HRA and its governing body members, officers, agents, including the independent contractors, consultants and legal counsel, servants and employees thereof (collectively the “Indemnified Parties”) shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss claims or causes of action, including attorney’s fees, arising from the performance of this Agreement or any of the actions specified herein. G. No Joint Venture. Nothing in this Agreement is intended nor should be construed as creating or establishing the relationship of a partnership or a joint venture between the parties or as constituting Grantee as the agent, representative, or employee of the HRA for any purpose. H. Government Data Practices. Grantee must comply with the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, as it applies to all data provided by the HRA under this Agreement, and as it applies to all data created, collected, received, stored, used, maintained, or disseminated by Grantee under this Agreement. The civil remedies of Minn. Stat. § 13.08 apply to the release of the data referred to in this clause by either the City or Grantee. If Grantee receives a request to release the data referred to in this clause, Grantee must immediately notify the City. The HRA will give Grantee instructions concerning the release of the data to the requesting party before the data is released. I. Audits. Pursuant to Minn. Stat. Section 16C.05, subd. 5, the Grantee’s books, records, documents, and accounting procedures and practices that are relevant to this Agreement, are subject to examination by the HRA and either the Legislative Auditor or the State Auditor for a minimum of six years from the end of this Agreement. Grantee shall keep and maintain all such accounts and records for a period of six (6) years from the last date of expenditure of Grant proceeds. J. Governing Law, Jurisdiction, and Venue. Minnesota law, without regard to its choice-of-law provisions, governs this Agreement. Venue for all legal proceedings out of this Agreement, or its breach, must be in the appropriate state or federal court with competent jurisdiction in Hennepin County, Minnesota. K. Entire Agreement. This Agreement constitutes the complete and exclusive statement of all mutual understandings between the parties with respect to this Agreement, Page 12 of 87 5 237459v1 superseding all prior or contemporaneous proposals, communications, and understandings, whether oral or written, concerning the Grant. L. Headings. The headings appearing at the beginning of the several sections contained in this Agreement have been inserted for identification and reference purposes only and shall not be used in the construction and interpretation of this Agreement. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on the day and year first above written. CITY OF EDINA HOUSING AND REDEVELOPMENT AUTHORITY BY: James Hovland, Its Chair AND Scott Neal, Its Executive Director VEAP, INC. BY: Its Page 13 of 87 d ITEM REPORT Date: October 30, 2025 Item Activity: Approve Meeting: Housing & Redevelopment Authority Agenda Number: 6.3 Prepared By: Stephanie Hawkinson, Affordable Housing Development Manager Item Type: Report & Recommendation Department: Community Development Item Title: Approve Grant Agreement with Mount Olivet Rolling Acres for $93,500 in LAHA Funds Action Requested: Approve Grant Agreement with Mount Olivet Rolling Acres for $93,500 in LAHA funds. Information/Background: On August 28, 2025 the HRA approved a grant of $93,500 to Mount Olivet Rolling Acres (MORA) from the City's 2025 allocation of Local Affordable Housing Aid. Mora will use the funding to rehabilitate two group homes in Edina serving people with disabilities. MORA’s mission is to “…enhance personal growth for people with disabilities by offering unique services supported by a caring, dedicated and knowledgeable team.” They began in 1953 as a camp for children with disabilities but expanded “to include children, adults and seniors with disabilities, mental health diagnoses, brain injury and other needs.” One service is owning and managing two residential homes in Edina that have 24/7 staffing, serving 3-4 residents each. The homes serve very low-income people with disabilities and are in need of rehabilitation to address safety and accessibility concerns. The scope of work includes improving the safety and accessibility of a 4-season porch; repairing garage floor to remove tripping hazards; painting; replacing a deck; updating landscaping; removing dead trees; and creating parking pad. The grant funds will be disbursed on a reimbursement basis. Resources/Financial Impacts: • Budget – Grant will be funded with the City's 2025 allocation of LAHA funds. Relationship to City Policies: This action aligns with the Comprehensive Plan. Supporting Documentation: 1. MORA LAHA Grant Agreement Page 14 of 87 1 237460v1 GRANT AGREEMENT This Grant Agreement (“Agreement”) is entered into on this ______ day of ___________, 2025, by, between and among the HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA, a body politic and corporate under the laws of the State of Minnesota (“HRA”), and MOUNT OLIVET ROLLING ACRES, INC., a Minnesota nonprofit corporation (“Grantee”). Recitals WHEREAS, Grantee is a nonprofit, community-based program which supports children, adults and seniors with disabilities, mental health diagnoses, brain injury and other needs; WHEREAS, Grantee owns and manages two residential homes in the City of Edina that have 24/7 staffing, serving 3-4 very low-income residents with disabilities each, located at: Address: 5313 West 56th Street, Edina, MN 55436 “Edina” Address:_6432 Sherwood Avenue, Edina, MN 55435 “Sherwood” (“Project Sites”); WHEREAS, the homes located at the Project Sites are in need of rehabilitation to address safety and accessibility concerns (“Projects”); WHEREAS, the HRA has received Local Affordable Housing Aid pursuant to Minn. Stat. Section 477A.35, which the HRA is authorized to allocate for qualifying projects as further identified in the statute; and WHEREAS, the HRA desires to provide assistance to the Grantee for the Projects as provided under Minn. Stat. 477A.35, subd. 4(a)(1). NOW, THEREFORE, in consideration of the mutual promises and covenants herein, parties do hereby agree as follows: Page 15 of 87 Page 16 of 87 Page 17 of 87 Page 18 of 87 Page 19 of 87 d ITEM REPORT Date: October 30, 2025 Item Activity: Approve Meeting: Housing & Redevelopment Authority Agenda Number: 6.4 Prepared By: Stephanie Hawkinson, Affordable Housing Development Manager Item Type: Report & Recommendation Department: Community Development Item Title: Approve Form of Grant Agreement with West Hennepin Affordable Housing Land Trust and Twin Cities Habitat for Humanity for a total of $581,881.99 in LAHA Funds. Action Requested: Approve form of Grant Agreement with West Hennepin Affordable Housing Land Trust and Twin Cities Habitat for Humanity for a total of $581,881.99 in LAHA Funds. and authorize the Chair and Executive Director to execute final grant agreements. Information/Background: On August 28, 2025 the HRA approved a grant of $581,881.99 for the Affordable Ownership Preservation Program implemented by West Hennepin Affordable Housing Land Trust (dba Homes Within Reach) and Twin Cities Habitat for Humanity. The funding will come from the City's 2025 allocation of LAHA funds. West Hennepin Affordable Housing Land Trust/Homes Within Reach: Since 2001 HWR has helped over 200 workforce families achieve homeownership throughout 14 west Hennepin suburban communities. Just shy of 30 of their land trust homes are in Edina. Twin Cities Habitat for Humanity: Since 1985 Habitat has partnered with more than 1900 families in the Twin Cities achieve homeownership. They have acquired 6 houses in Edina, of which 3 have been sold to homeowners with the land placed in the Land Trust. Homes Within Reach and TC Habitat for Humanity (combined "Partners") have their own list of potential home buyers that they attract through their marketing efforts. The partners individually vet and work with through the approval process. As the land beneath the homes with be placed into the Community Land Trust with HWR, the TC Habitat buyers must also comply with the HWR requirements. City staff will inform our Partners of a potential house. Our partners will inspect, negotiate an offer, and buy the home. Whichever organization buys the house will prepare a scope of work, engage their contractors and complete the work scope. The first priorities are health, safety and code issues. The second layer is increasing energy efficiency and complying with the Green Communities requirements. When the house is selected and documents submitted, a grant agreement will be executed for funding to purchase and renovation the selected house. More than one grant agreement may be executed for the expenditure of these awarded funds. Resources/Financial Impacts: • Budget – There is no impact on the City budget as the funding source is the City's LAHA allocation from the State. The grant funds will be wired to the Title company to help with the purchase of a house. Relationship to City Policies: Page 20 of 87 This program aligns with the Comprehensive Plan by creating affordable ownership opportunities. Supporting Documentation: 1. Form of Grant Agreement Page 21 of 87 237468v1 1 GRANT AGREEMENT THIS GRANT AGREEMENT (“Agreement”) is entered into on this ______ day of ___________, 2025, by, between and among the HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA, a body politic and corporate under the laws of the State of Minnesota (“HRA”), and [Either West Hennepin Affordable Housing Land Trust or Twin Cities Habitat for Humanity, Inc.], a Minnesota non-profit corporation (“Grantee”). Recitals WHEREAS, Grantee is a nonprofit, community-based program which supports affordable homeownership to low-to-moderate income households and individuals within the City; WHEREAS, (Twin Cities Habitat for Humanity, Inc. (“TCHFH”) or West Hennepin Affordable Housing Land Trust (“WHAHLT”), is a nonprofit organization which is an affordable housing provider and aims to provide long-term affordable housing opportunities for lower-income families and operates a community land trust which allows qualified buyers to purchase a home and lease the land at a nominal fee (“Community Land Trust Program”); (In TCHFH’s case, “shall partner with a community land trust…”) WHEREAS, the HRA has received Local Affordable Housing Aid pursuant to Minn. Stat. Section 477A.35, which the HRA is authorized to allocate for qualifying projects as further identified in the statute; WHEREAS, the HRA desires to provide assistance to the Grantee for financial support in their mission to provide safe, dignified, affordable and supportive housing (“Program”) as provided under Minn. Stat. 477A.35, subd. 4(a)(3) and as further delineated under Paragraph 3 of this Agreement; and WHEREAS, the HRA has allocated a total of $581,881.00 to fund acquisition of properties within the City of Edina for its Affordable Ownership Preservation Program (“AOPP”); WHEREAS, WHAHLT and Twin Cities Habitat for Humanity, Inc. (“TCHFH”) will collaborate on acquiring properties that meet the AOPP requirements and either may request grant funds under the AOPP as Grantee; WHEREAS, the property selected for assistance as part of the Program will be subject to the WHAHLT Program requirements. NOW, THEREFORE, in consideration of the mutual promises and covenants herein, parties do hereby agree as follows: 1. GRANT. The City agrees to grant to Grantee _____________ and No/100 Dollars ($_______________) (“Grant Funds”) to be dispensed as stated herein, for the purposes stated herein. Page 22 of 87 237468v1 2 2. DISBURSEMENT OF GRANT PROCEEDS. All Grant Funds shall be paid to Grantee in accordance with the terms and conditions of this Agreement. Notwithstanding anything to the contrary herein, any costs of administering the Program, or any other costs of the Program exceeding the grant amount under this Agreement, shall be the sole responsibility of Grantee. All Grant Funds shall be disbursed to Grantee in accordance with the terms of this Agreement. The disbursement of proceeds of the Grant will be made subject to the conditions precedent that prior to or as of the date of disbursement: (i) The City has received from Grantee an executed copy of this Agreement; (ii) Grantee is in compliance with the terms of this Agreement. 3. GRANTEE RESPONSIBILITIES. As a condition for receipt of the Grant Funds, Grantee agrees to the following: A Purchase. Grantee will select a property located in the City of Edina and Grantee will extend an offer to purchase the property. If the offer is accepted, at least 15-days prior to closing Grantee will submit a payment request form to the HRA for a distribution of Grant Funds to assist with the purchase price and estimated closing fees. This payment request form must also include the property’s address, legal description, estimated value based upon the most recent Hennepin County tax assessment or appraisal, a preliminary sources and uses, and a preliminary scope of rehabilitation work needed. After the payment request form is emailed to the HRA, an authorized agent of the HRA will determine whether the request will be approved or denied within three business days of the receipt of the submission and notify Grantee via email. If approved, the HRA will transfer funds to the closing Title Company at least three business days prior to the closing date. Grantee shall instruct the title company in charge of the closing to immediately record all relevant documents against the title to the property on the closing date. Grantee will send the HRA final documentation regarding the purchase of the house. B. Rehabilitation. Grantee will select a General Contractor and enter into a Home Improvement Contract attached as Exhibit B. This contract establishes the plans and specifications of improvements, repairs, or alterations of the purchased home. C. Sale. The sale of the home on the selected property for grant assistance must be included in the Community Land Trust Program. Grantee will select a qualified applicant as buyer, as per the Community Land Trust Program requirements and in compliance with Minn. Stat. 477A.35, subd. 4(a)(3), as the purchaser of the home. If the Grantee is not WHAHLT, Grantee must submit the proposed buyer to WHAHLT for a determination that the buyer meets the requirements of the Community Land Trust Program prior to Grantee entering into a Purchase Agreement. The Grantee shall inform the HRA of the sale price, sale date, and the buyer’s profile. A critical aspect of keeping these homes affordable is the Ground Lease required as part of the Community Land Trust Program which allows Grantee to continue owning the land the home is on. Grantee must execute or obtain execution of the Community Land Trust Program Ground Lease with the buyer as a part of the home sale process and record the Ground Lease against the selected property. Ten (10) working days after home sale, Grantee must deliver 50% of proceeds Page 23 of 87 237468v1 3 of that sale to the HRA, if in excess to the value of the ground lease. After approximately 60-90 days from the sale of the home, when all project costs are paid, any remaining balance is sent to the HRA to be returned to the Program. Grantee will make repayments to the Program after the home is sold to a qualified applicant. The HRA will receive the sale price of the house minus the value of the land, rehabilitation costs, and project costs after the sale. Grantee shall instruct the title company in charge of the closing to immediately record all relevant documents against the title to the property on the closing date. Grantee will send the HRA final documentation regarding the purchase of the house. Grantee shall be responsible for all costs associated with the administration of the Program. Grantee shall manage all Program applications and determine eligibility requirements under this Paragraph 3. 4. REPORTING. Grantee shall provide appropriate records to the HRA regarding the recipients and the disbursement of Grant Funds to verify compliance with this Agreement on a quarterly basis, except as otherwise provided under Paragraph 3 of this Agreement. Grantee shall prepare and submit to the HRA, at its own expense, a report including: A. Purchase Agreement of house(s) being acquired. B. Copy of deed to property. C. Estimated Scope of Work and rehabilitation expenses. D. Ground Lease with end-buyer(s). E. An accounting of all Grant money expended by the Program. F. Final project costs, funding sources and excess grant funding. G. Closing Settlement Statements: for acquisition of home by Grantee and sale of home to end-buyer. H. . Any additional information required by the HRA to determine compliance with this Agreement. 5. REIMBURSEMENT. Grantee shall reimburse to the HRA the sales proceeds from the sale of the house in excess of reimbursement owed to Grantee and WHAHLT’s administration fee. The Grantee will owe the full amount of any Grant Funds spent for any purpose other than as allowed by this Agreement or Minn. Stat. 477A.35. Grantee shall reimburse to the HRA the full amount of any Grant Funds for which Grantee is unable to provide a satisfactory accounting. 6. TERM. The term of this Agreement shall commence on November 1, 2025 and terminate on December 31, 2028. In order to ensure that all funds are drawn prior to the Grant Agreement term end date, all payment requests from the Grantee must be received by the HRA at least thirty (30) days prior to December 31, 2028. The City is not obligated to provide funds for any reimbursement requests that do not comply with this Paragraph. Any funds owing to the HRA as required under this Agreement are subject to collection after the term end date. 7. MISCELLANEOUS. Page 24 of 87 237468v1 4 A. Warranty. Grantee warrants that it is duly authorized and empowered to execute, deliver, and perform this Agreement and to receive the Grant from the HRA, and that the performance by Grantee of its obligations under this Agreement does not and will not materially violate or conflict with any applicable provision of state or federal law and does not and will not materially violate or conflict with, or cause any default or event of default to occur under, any material agreement binding upon Grantee. B. Notice. All notices to be given by either party to the other hereunder shall be in writing and deemed to have been given when delivered personally or when deposited in the United State mail, registered or certified and postage prepaid, addressed as follows: To the HRA at: Housing and Redevelopment Authority of Edina, Minnesota Attn: Affordable Housing Development Manager 4801 W. 50th St. Edina, MN 55424 With a copy to: Edina City Attorney Campbell Knutson, P.A. 860 Blue Gentian Rd. Suite 290 Eagan, MN 55121 To Grantee at: West Hennepin Affordable Housing Land Trust dba Homes Within Reach Attn: Executive Director 5101 Thimsen Ave #202 Minnetonka, MN 55345 Or Twin Cities Habitat for Humanity Attn: Real Estate Development Manager 1954 University Ave W St. Paul, MN 55104 C. Assignment. Grantee may neither assign nor transfer any rights or obligations under this Agreement without the prior consent of the HRA and a fully executed Assignment Agreement, executed and approved by the same parties who executed and approved this Agreement, or their successors in office. D. Amendments. Any amendment to this Agreement must be in writing and will not be effective until it has been executed and approved by the same parties who executed and approved the original Agreement, or their successors in office. E. Waiver. The performance or observance of any promise or condition set forth in this Agreement may be waived, amended, or modified only by a writing signed by Page 25 of 87 237468v1 5 Grantee and the HRA. No delay in the exercise of any power, right, or remedy operates as a waiver thereof, nor shall any single or partial exercise of any other power, right, or remedy. F. Liability and Indemnification. Grantee releases from and covenants and agrees that the HRA and its governing body members, officers, agents, including the independent contractors, consultants and legal counsel, servants and employees thereof (collectively the “Indemnified Parties”) shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss claims or causes of action, including attorney’s fees, arising from the performance of this Agreement or any of the actions specified herein. G. No Joint Venture. Nothing in this Agreement is intended nor should be construed as creating or establishing the relationship of a partnership or a joint venture between the parties or as constituting Grantee as the agent, representative, or employee of the HRA for any purpose. H. Government Data Practices. Grantee must comply with the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, as it applies to all data provided by the HRA under this Agreement, and as it applies to all data created, collected, received, stored, used, maintained, or disseminated by Grantee under this Agreement. The civil remedies of Minn. Stat. § 13.08 apply to the release of the data referred to in this clause by either the City or Grantee. If Grantee receives a request to release the data referred to in this clause, Grantee must immediately notify the City. The HRA will give Grantee instructions concerning the release of the data to the requesting party before the data is released. I. Audits. Pursuant to Minn. Stat. Section 16C.05, subd. 5, the Grantee’s books, records, documents, and accounting procedures and practices that are relevant to this Agreement, are subject to examination by the HRA and either the Legislative Auditor or the State Auditor for a minimum of six years from the end of this Agreement. Grantee shall keep and maintain all such accounts and records for a period of six (6) years from the last date of expenditure of Grant proceeds. J. Governing Law, Jurisdiction, and Venue. Minnesota law, without regard to its choice-of-law provisions, governs this Agreement. Venue for all legal proceedings out of this Agreement, or its breach, must be in the appropriate state or federal court with competent jurisdiction in Hennepin County, Minnesota. K. Entire Agreement. This Agreement constitutes the complete and exclusive statement of all mutual understandings between the parties with respect to this Agreement, superseding all prior or contemporaneous proposals, communications, and understandings, whether oral or written, concerning the Grant. Page 26 of 87 237468v1 6 L. Headings. The headings appearing at the beginning of the several sections contained in this Agreement have been inserted for identification and reference purposes only and shall not be used in the construction and interpretation of this Agreement. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on the day and year first above written. CITY OF EDINA HOUSING AND REDEVELOPMENT AUTHORITY BY: James Hovland, Its Chair AND Scott Neal, Its Executive Director Page 27 of 87 237468v1 7 [WEST HENNEPIN AFFORDABLE HOUSING LAND TRUST DBA HOMES WITHIN REACH BY: Brenda C. Lano-Wolke, Executive Director TWIN CITIES HABITAT FOR HUMANITY, Inc. BY: ______________________________________ Noah Keller, Real Estate Development Manager] Page 28 of 87 d ITEM REPORT Date: October 30, 2025 Item Activity: Approve Meeting: Housing & Redevelopment Authority Agenda Number: 6.5 Prepared By: Stephanie Hawkinson, Affordable Housing Development Manager Item Type: Report & Recommendation Department: Community Development Item Title: Approve Grant Agreement with the Edina Housing Foundation for $1,000,000 for the Heroes Down Payment Assistance Program Action Requested: Approve Grant Agreement with the Edina Housing Foundation for $1,000,000 for the Heroes Down Payment Assistance Program Information/Background: On August 28, 2025 the HRA approved $1,000,000 in Southdale 2 TIF pooled funds to be granted to the Edina Housing Foundation ("EHF") for a "Heroes" down payment assistance program. This program would be structured similarly to the Come Home 2 Edina program that has been suspended due to lack of funds. The main difference is an applicant must work within the City in a position that qualifies as a "hero": health care professional, in education, including support staff and childcare, or as a municipal employee such as a firefighter, paramedic, police officer/cadet, etc. For qualified applicants, EHF will provide 25% of the purchase price in down payment assistance (not to exceed $100,000). The funding will be secured by a Note and Mortgage recorded against the property. The loan term will be the same as for the first mortgage. The applicant can choose whether to structure the Heroes loan as interest only with the principal due at term or when the borrower sells the homes, or as Shared Appreciation with the principal and a percentage of the appreciation due. The EHF will hold both the Mortgage and the Note. First generation home buyers may also qualify for a $20,000 forgivable loan. The EHF will review and underwrite the applications. Upon approval, they will prepare the Mortgage and Note and finance the loan. Upon closing, EHF will submit a reimbursement request to the City for the Mortgage amount. Therefore the $1,000,000 will be disbursed on a reimbursement basis rather than funded upfront. Resources/Financial Impacts: • Budget – $1,000,000 in Southdale II pooled TIF to be disbursed based on reimbursement requests as individual loans are financed. • Implementation – This is a grant to the Edina Housing Foundation who will implement and own the program. Relationship to City Policies: This program complies with the Comprehensive Plan by making homeownership possible for Page 29 of 87 moderate-income buyers. Budget Pillar: Livable City Values Impact: Health Affordable housing is a social determinant for health outcomes. The Heroes program reduces the amount of the first mortgage by deferring up to 25% (not to exceed $100,000) until the buyer seeks the home in the future and can repay from sales proceeds. Sustainability The Heroes program makes it possible for people who work in the City to live closer to their jobs. This serves to reduce the time driving to work and therefore reduces green house gas emissions. Equity The Heroes program makes homeownership possible for moderate income workers. Supporting Documentation: 1. Grant Agreement 2. Heroes Program Guidelines Page 30 of 87 1 4930-9652-7209\4 GRANT AGREEMENT Edina “Heroes” Down-Payment Assistance Program This Grant Agreement (this “Agreement”) is entered into between the Edina Housing and Redevelopment Authority (the “Authority”) and Edina Housing Foundation (the “Foundation,” and together with the Authority, the “Parties”) as of the ___ day of ____________, 2025 (the “Effective Date”). WHEREAS, Minnesota Statutes, Section 469.012, subdivision 13 permits housing and redevelopment authorities to develop and administer a down payment assistance loan and grant programs; and WHEREAS, the Authority desires to have the Foundation own and operate a down- payment assistance program (the “Foundation’s Program”) for hospital/health workers, educators and school district employees, police, fire fighters, and other City employees that work in the City of Edina (the “City”); and WHEREAS, the Authority has available funds from its Southdale 2 Tax Increment Financing District (the “TIF Funds”) to fund the Foundation’s Program; and WHEREAS, the Authority wishes to provide this grant (the “Grant”) of TIF Funds in an amount up to one million dollars ($1,000,000) (the “Maximum Grant Amount”) to the Foundation to provide funding for the Foundation’s Program; and WHEREAS, with the Grant the Foundation intends to reimburse itself for loans it agrees to provide as part of the Foundation’s Program (the “Loans”). NOW THEREFORE, the parties hereto agree, as follows: 1. Foundation’s Covenants and Obligations a. Administration. The Foundation agrees to own and operate the Foundation’s Program. The Foundation will own any mortgages relating to Loans made in connection with the Foundation’s Program and administer the Foundation’s Program in accordance with the following criteria: i. Loan Size: Loans shall be no greater than $100,000 per household. In addition to the aforementioned maximum amount, no Loan shall be more than 25% of home value and no Loan shall be more than 25% of the gross income applied by the applicant to principal, interest, taxes and insurance. ii. Terms; Principle, Interest: Any Loan shall run co-terminus with an applicant’s first mortgage, with principal on the Loan deferred until the term of said mortgage or sale of the home. Loans shall be shared appreciation or interest only. iii. Income Limitations: For households of 1-2 persons, the income limit for any applicant shall be 100% of the Area Median Income (“AMI”). For Page 31 of 87 2 4930-9652-7209\4 households of 3 or more persons, the income limit for any applicant shall be 115% of the AMI. iv. Maximum Home Value: The maximum home value for any Loan applicant shall be $600,000. v. Proof of Employment: Loan applicants must provide proof of employment within the City at the time of the Loan. vi. Additional Amount for First Generation Buyers: An additional $20,000 may be made available to first generation buyers, and such additional amount shall be structured as a forgivable loan. vii. Permitted Applicants: Applicants must work in the City and fall under one of the below categories of employment: 1. Municipal Employees: a. Firefighters and EMS: All ranks of active full-time firefighters and volunteer fire fighters, paramedics, AEMTs and EMTs. b. Law Enforcement: All ranks of federal and state law enforcement (officed in the City) or local law enforcement; active police officers, troopers, correctional officers, and 911 dispatchers/operators. c. Other public employees: Public Works, Parks and Recreation, Public Health, etc. 2. Healthcare Professionals: All active nurses, doctors, surgeons, specialists, technicians, assistants, educators, trainers, receptionists, and other medical healthcare workers. 3. Teachers and Educators: All active teachers, educators, professors, special education, assistants, counselors, librarians, lunchroom/cafeteria, custodial staff, bus drivers, and administrators. b. Reimbursement. The Foundation shall initially fund the Loans from the Foundation’s own funds and shall seek reimbursement of such funds from the Authority’s Grant. The Foundation agrees to apply Grant amounts solely to the reimbursement of the Loans provided and shall request from the Authority, from time to time, Grant funds by submitting a Disbursement Request in substantially the form attached hereto as Exhibit A (the “Disbursement Request”). c. Record Keeping. The Foundation agrees to keep such records with respect to the Loans and the utilization of the Grant funds as are kept in the normal course of Page 32 of 87 3 4930-9652-7209\4 business. The Authority shall have reasonable access to such records and may examine such records upon reasonable prior notice during normal business hours. 2. Authority’s Covenants and Obligations a. Review of Disbursement Request. The Authority staff will review Disbursement Requests upon receipt from the Foundation. If the Authority determines the costs set forth in the Disbursement Request are costs properly incurred as part of the Foundation’s Program (i.e., costs of Loans provided as part of the Foundation’s Program) the Authority shall disburse Grant funds (the “Disbursements”) in accordance with paragraph b. below and record a summary of the Disbursements on the Summary of Disbursements attached hereto as Exhibit B. Such summary shall be the official record of the Disbursements for purposes of tracking the Maximum Grant Amount. b. Grant Disbursements. The Authority hereby agrees to fund the Grant up to the Maximum Grant Amount; provided costs totaling the Maximum Grant Amount are incurred and proven by the Foundation. Upon receipt and review of any Disbursement Request (provided the review has determined the costs were properly incurred), the Authority agrees to disburse Grant funds to the Foundation within five (5) business days. The Foundation shall specify the account for receiving Disbursements. The Executive Director of the Authority or any designee of the Executive Director is hereby authorized to approve Disbursement Requests. c. No Obligation to Operate Foundation’s Program. Except for its obligation to review Disbursement Requests and provide Grant disbursements from time to time, the Authority shall have to obligation to operate the Foundation’s Program and the Authority will not own any mortgages or other property relating to the Foundation’s Program. 3. Default Provision a. Event of Default. The following shall be the “Events of Default” under this Agreement, and the term “Event of Default” shall mean, whenever it is used in this Agreement (unless otherwise provided), the following: Failure by either Party to observe or perform any other material covenant on its part, to be observed or performed hereunder. b. Notice and Remedies. Whenever an Event of Default occurs, the non-defaulting Party shall provide written notice to the defaulting Party describing the cause of the default and the steps that must be taken to cure the default. The defaulting Party shall have thirty (30) days after receipt of the notice to cure the default or to provide assurances satisfactory to non-defaulting Party that the default will be cured as soon as reasonably possible. If the defaulting Party fails to cure the default or provide assurances, the non-defaulting Party shall then have the right to: i. Pursue any action available to it, at law or in equity, to enforce the terms of this Agreement. Page 33 of 87 4 4930-9652-7209\4 ii. If the Authority is the non-defaulting Party: withhold the disbursement of Grant Funds. iii. If the Authority is the non-defaulting Party: recover an amount equal to the full amount of the Grant made to the Foundation. The Authority may take any action, including any legal action it deems necessary, to recover such amount from the Foundation. c. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or to the Foundation 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 Foundation 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. d. 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. Legal and Administrative Expenses. The Parties agrees to pay all their own respective Legal and Administrative Expenses that are incurred in connection with the negotiation, approval and documentation of this Agreement or any amendments hereto. 5. Administrative Provisions a. Not a Business Subsidy. The Grant to be provided by the Authority is not a “business subsidy,” as defined in Minnesota Statutes, Section 116J.993-.994 (the “Business Subsidy Act”), as the Grant being provided by the Authority constitutes financial assistance for housing. As such, this Agreement does not constitute, and the Parties are not required to enter into, a “Subsidy Agreement” as defined in the Business Subsidy Act. b. Notice. Any and all notices, or other communications required or permitted under this Agreement, shall be in writing and delivered by hand or mailed postage prepaid, or by other reputable overnight delivery service, to the Parties at the following addresses or furnished from time to time in writing hereafter by one party to the other party: i. in the case of the Authority, addressed or delivered personally to: Page 34 of 87 5 4930-9652-7209\4 Edina Housing and Redevelopment Authority 4801 W 50th Street Edina, MN 55424 Attention: Scott Neal, Executive Director ii. in the case of the Foundation, addressed or delivered personally to: Edina Housing Foundation 4801 W 50th Street Edina, MN 55424 Attention: President The Authority and the Foundation, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications should be sent. c. Amendment and Assignment. Neither party may cause this Agreement to be amended, assigned, assumed, sold or otherwise transferred without the prior written consent of the other party. The Chair and Secretary of the Authority are authorized to execute and deliver amendments and any documents related to this Agreement on behalf of the Authority without further council approval. d. Successors. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. e. Severability. If any term or condition of this Agreement or any application thereof shall to any extent be held invalid, illegal or unenforceable by a court of competent jurisdiction, that portion shall be deemed severable from this Agreement and the remainder of this Agreement shall remain in full force and effect and be construed to fulfill the intention of the Parties. f. Term. This Agreement shall commence on the Effective Date and shall remain in full force and effect until all obligations of the parties set forth herein have been fully performed and satisfied, unless earlier terminated by mutual written agreement of the parties. g. Choice of Law. This Agreement shall be deemed to be a contract made under the laws of the State of Minnesota and for all purposes shall be governed by and construed in accordance with laws of the State of Minnesota. h. Counterparts, Electronic Signatures, and Complete Agreement. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one document. Facsimile and electronic signatures shall have the same legal effect as original signatures. This Agreement constitutes the entire agreement of Parties with respect to the subject matter of this Agreement, and supersedes any other instruments purporting to be an agreement of the Parties relating to that subject matter. Page 35 of 87 A-1 4930-9652-7209\4 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first above written. EDINA HOUSING AND REDEVELOPMENT AUTHORITY By James B. Hovland, Chair And James Pierce, Secretary EDINA HOUSING FOUNDATION By Ann P. Swenson, President And Mary Kay McNee, Vice President SIGNATURE PAGE TO GRANT AGREEMENT Edina “Heroes” Down-Payment Assistance Program Page 36 of 87 A-2 4930-9652-7209\4 EXHIBIT A FORM OF DISBURSEMENT REQUEST Request #: _________________ Date submitted: Amount Requested: Total of Disbursements Requested: Loan Description • Loan Amount: • Applicant Name: • Applicant’s Address: • Applicant’s Employer & Occupation: *Attach proof of employment • Address of office/location where Applicant is Employed: • Home Value: • First Generation Buyer? Yes | No I, the undersigned hereby certify that the costs incurred are proper costs incurred in connection with the Foundation’s Program. EDINA HOUSING FOUNDATION _______________________________ Reviewed and accepted by the Edina Housing and Redevelopment Authority this _____ day of ____________, 20__. By: _______________________________ Page 37 of 87 A-3 4930-9652-7209\4 Executive Director Page 38 of 87 B-1 4930-9652-7209\4 EXHIBIT B SUMMARY OF DISBURSEMENTS Request # Amount of Disbursement Date Disbursed Total Disbursements Page 39 of 87 08.22.23 EDINA HEROES PROGRAM Purpose: To provide down payment assistance to Edina “heroes” who work within the City limits and are looking to buy a home in Edina. Applicant Eligibility: • Healthcare Professionals: All active nurses, doctors, surgeons, specialists, technicians, assistants, educators, trainers and other medical healthcare workers. • Teachers and Educators: All active teachers, educators, professors, special education, assistants, counselors, childcare, librarians, school food service workers, school custodians and administrators. • Municipal Employees: Firefighters and EMS, Law Enforcement, and other public employees Income Eligibility : Household Size Household Income Level* (as of 9/1/25) 1 – 2 persons $106,000 3+persons $137,080 *As established by TIF regulations (subject to change) Asset Eligibility: 1. For borrowers younger than age 50-years, household assets shall not be more than $50,000 after closing, excluding retirement accounts (i.e. 401(k), 503(b), IRA, SEP, etc.). 2. For borrowers aged 50-years and older, house household assets shall not be more than $100,000 after closing, excluding retirement accounts (i.e. 401(k), 503(b), IRA, SEP, etc.). 3. For all age groups, aggregate retirement accounts shall not be more that $1-million. Maximum Loan Amount: • A maximum 25% of the purchase price, not to exceed $100,000. • The loan will be sized assuming the borrower contributes at least 25% of gross monthly qualifying income toward monthly payments for PITI, association dues, and/or land trust fees before Edina Housing Foundation’s assistance can be used. 1. For Land Trust Properties: Maximum loan amount is 25% of appraised value (house and land), not to exceed $100,000. 2. First Generation Program: An additional $20,000 forgivable loan is available for first time home-buyers whose parents or guardians never owned a home. Note: This loan must be layered with the Edina Heroes Down Payment Assistance Program and may not be layered with other First Generation loans. Page 40 of 87 08.22.23 Purchase Price: Not more than $600,000. Term: Co-terminus with the first mortgage loan (No FHA). Choose a Payment Option: 1. Interest Option: a. Same interest rate as the first mortgage or 5% whichever is less. b. Monthly payments of interest only. Principal due upon sale, refinance with cash out, or maturity of the 1st mortgage. 2. Shared Appreciation Option: All payments deferred – Upon sale of the home, a refinance with cash out, or maturity of the first mortgage loan, the borrower will pay the principal balance plus an amount equal to the appreciated value of the home multiplied by a percentage of the loan to appraisal at the time of purchase (never to exceed an amount equal to 5% per year accrued simple interest). Security: The loan will be secured by a subordinate mortgage on the property. Assumability: The subordinate loan is assumable with the approval of the East Edina Housing Foundation. Downpayment: Borrower shall pay not less than $1,000 towards down payment, closing costs and/or prepaid expenses. Escrow Requirements: Property taxes and insurance. Co-Signers: Non-occupying co-signers may be allowed on a case-by-case basis in alignment with Minnesota Housing’s policy. Disclaimer: This document is provided for informational purposes only. For the most current program guidelines, contact Stephanie Hawkinson at shawkinson@edinamn.gov. Page 41 of 87 d ITEM REPORT Date: October 30, 2025 Item Activity: Discussion Meeting: Housing & Redevelopment Authority Agenda Number: 7.1 Prepared By: Bill Neuendorf, Economic Dev Mgr Item Type: Report & Recommendation Department: Community Development Item Title: Proposed Financing Structure for Public Parking Garage at 7001 France Avenue Action Requested: No binding action is required at this time. However, staff seeks direction regarding whether or not to engage advisors at Dorsey & Whitney and Ehlers Associates to prepare an amended Redevelopment Agreement that stimulates construction of the Site B office/retail building at 7001 France Avenue, with consideration of that amendment at a future meeting. Information/Background: This item pertains to a potential amendment to the June 30, 2022 redevelopment agreement with MDI France Avenue, LLC. Today's discussion is a follow up from the March 27, 2025 discussion. At that time, no conclusion was reached. This additional discussion was deferred to include the outcome of the 2025 State Legislative session which approved changes to the laws that govern the use of Tax Increment Financing (TIF). The potential amendment would create a new financing strategy that separates the financial and ownership responsibilities pertaining to the future parking structure on Site C and the future office building at Site B. If the HRA/City provides funding for a public parking structure, the developer is anticipated to secure private funding for the proposed office building. The developer has provided market data that reflects the current office market in the Twin Cities. An outline of the proposed strategy is attached for review and discussion. This new strategy is anticipated to stimulate private sector financing of the office building but presents a financial risk to the HRA. This risk might impact the future credit rating of the HRA and City and could expose the HRA and City to future debt payments. Staff will present an overview of the proposal and the developers with Orion Investments and Mortenson Development will be available to answer questions. No binding action is required at this time. However, the developer has paused work on this site until they better understand the HRA's general position regarding this proposed strategy. Resources/Financial Impacts: No impact. Staff can prepare this work as part of their regular duties. Costs of third party advisors are paid for by the developer. Relationship to City Policies: Tax Increment Financing Policy; Comprehensive Plan, Greater Southdale Area Plan Supporting Documentation: 1. 7001 France Ave - Staff Report 10-30-2025 2. 7001 France Proposed Financing for Public Parking staff presentation 10-30-2025 Page 42 of 87 3. 7001 France - proposed financing structure for discussion 10-30-2025 4. 7001 France - Fall 2025 office update packet Page 43 of 87 City of Edina • 4801 W. 50th St. • Edina, MN 55424 Summary: Mortenson Development and Orion Investments request that the HRA consider alternative public financing strategies to stimulate the construction of the privately financed office building. The proposed strategy would have the HRA/City take ownership and financial responsibility for the public parking structure on Site C. While this strategy will deliver benefits to the community, it will also introduce new financial risks to the HRA/City. Information / Background: In June 2022, the HRA and City entered into TIF Redevelopment Agreements with Orion Investments and Mortenson Development dba MDI France Ave, LLC to redevelop the aging commercial buildings at 7001 France Avenue. This 5.8-acre site was previously occupied by an outdated branch bank and outdated office building. Although the initial relocation of the US Bank facility was completed successfully, the subsequent development of Site A (new residential high rise) and Sites B/C (new office and new parking garage), has been delayed due to post- pandemic hesitancy in the capital markets that typically provide financing for these types of large scale complex projects. After the new branch bank was opened for business, the developers continued to move forward and cleared the site to remove the obsolete and vacant buildings. Despite their efforts, construction of Sites A-B-C has not yet begun. Date: October 30, 2025 To: Chair and Members of the Edina Housing & Redevelopment Authority From: Bill Neuendorf, Economic Development Manager Subject: Proposed Financing Structure for Public Parking at 7001 France Avenue Page 44 of 87 7001 France Avenue Staff Report 10-30-2025 Page 2 Changes in State Law This year, the state legislature approved laws pertaining in the use of Tax Increment Financing (TIF) in eleven municipalities, including Edina. The new laws allow Edina to extend the deadline to obligate TIF monies for specific public or private purposes from 5 to 10 years. The new laws also allow Edina to potentially extend the period during which incremental property taxes are collected, potentially from 15 to 25 years of tax collection for TIF eligible expenses. These new laws are helpful to promote private investment and redevelopment of challenging sites in Edina. An Alternative Strategy to Move Forward City staff met with the developers to better understand the challenges and to discuss possible strategies that the HRA and City might consider to ‘jump start’ the next phase of construction at this highly visible commercial intersection. The most obvious strategy would be for the City/HRA to take a more active role in the financing and/or construction of the public parking garage on Site C. This facility was initially intended to be built and owned by the Site B office developer and subject to a permanent public parking easement. Although the facility has been sized to accommodate a fully occupied office/retail building, it is also designed to provide general public parking during the daytime hours as well as during evenings and weekends. The parking stalls would be available on a first-come, first-served basis and would likely include a 2-3 hour time restriction to manage the public use of the facility. Considering its public use, the facility could qualify for taxable or tax-exempt bond financing. This in turn could create more attractive financing conditions for the Site B office building. A shift in the financing structure is anticipated to be sufficient to restore momentum at this site. Past Examples in Edina Construction of structured parking is very expensive. It is not unusual for the up-front construction cost to hinder desirable investments. Since the 1970s, the City of Edina has supported private investment, a vibrant local economy and a strong property tax base by working in partnership with local businesses to provide financing mechanisms for public parking. Examples include the three parking structures at 50th & France and the Grandview Parking Structure located behind Jerry’s Foods on Vernon Ave. The City also played a critical financing role in the structured parking of Centennial Lakes office buildings and Edinborough Park office building. Parking costs are not unique to Edina. These costs create challenges for many projects in Minnesota. As a potential solution, parking costs are specifically identified in Minnesota Statute as being eligible for TIF financing. Page 45 of 87 7001 France Avenue Staff Report 10-30-2025 Page 3 Rationale to Consider Alternative Approaches At this point in time, neither Site A (residential) or Site B (office) are able to secure private financing. Due to the anticipated demand for Class A office space at this location, Site B (office) is likely to be built first. The developer has provided current market data pertaining to the office market in the Twin Cities. But burdened with approximately $25 million in debt related to the Site C public parking structure, the tax generating commercial building on Site B is unable to proceed. Separating the long term debt of the office building and the public parking structure is anticipated to achieve the following: - Create conditions where Site B office can be privately financed and constructed - Attract approximately $100 million in private investment to Site B - Attract and retain high profile professional companies in Edina - Attract new restaurants and/or retail businesses to Edina - Create professional jobs and service industry jobs - Remove a vacant lot from a highly visible commercial intersection - Apply the planning and design principles adopted in the Greater Southdale Design Guidelines - Increase the property tax base – both the base tax level and the incremental tax level - Increase the sales tax base in Edina - Create conditions to attract future investors and residents to Site A (residential) Overview of Public Financing Proposal A detailed overview of the proposed financing strategy is attached. Key elements include: • Construct the parking garage in two phases to reduce initial costs • Consider the shared use of Site C parking garage by users of both Sites A and B to ‘right size’ parking in future • Consider the creation of a Special Purpose Entity to guide the financial partnership between the HRA/City and Developer B • Rely on the HRA or City’s credit or lease commitment to issue taxable or tax-exempt lease- revenue bonds (or similar) in lieu of a traditional construction loan or mortgage • Eliminate the $17 million TIF Note for Site B developer and use incremental property taxes to pay for the public debt incurred to construct the public parking structure • Contractual agreements between the City, HRA and developer could mitigate financial risk to the City/HRA in case there is a shortfall in the amount of incremental taxes generated on the site. Page 46 of 87 7001 France Avenue Staff Report 10-30-2025 Page 4 • Operating agreements between the City, HRA and developer could ensure that day-to-day costs of operating the parking garage are paid by the Site B owner. • Application of Chapter 459 (or 429) special assessments could be applied to the nearby properties that use the public parking garage in the future when large-scale repairs or improvements are necessary. Potential Risks to the HRA and City The elimination of the Pay-as-you-go TIF Note and issuance of public debt shifts the financial risk to the HRA and/or City. This revised strategy should be fully evaluated to limit risks to the City/HRA and taxpayers. Potential areas of risk include: 1) Stimulate New Office - Is there sufficient demand for users of new professional office and retail/restaurant space at this location? And can private funding be secured for Site B office? 2) Stimulate New Residential - Will the new office stimulate further construction of the proposed residential building? 3) Attractiveness of Debt Issue without faith and credit of HRA/City - Will the public debt be attractive to bond holders if the TIF revenue stream is not enhanced with a pledge from the developer or the City/HRA? 4) Impact to Credit Rating - Will issuance of approximately $17 million in debt for public parking have a negative impact to the credit rating of the City? The City has recently issued public debt for new Fire Station #2 and intends to issue public debt for other new projects like Fire Station #3 and road reconstruction in the future The issuance of additional public debt supported by an unsecured source would likely create negative consequences to the City/HRA financial position. This debt issuance might reduce the credit rating of the City/HRA which in turn would raise the borrowing costs to the City/HRA in the future. If incremental tax collection falls short of the debt payments, the City or HRA may bear the responsibility to increase the tax levy or identify a different solution to pay the debt in full. These negative consequences are likely to exceed the short-term benefits delivered by a new office building. Staff urges cautious consideration of this proposal. At this time, staff does not recommend up- front financing for a public parking garage at this location. Next Steps: While no formal action is requested at this time, general direction is requested so that the developers can make a strategic decision about how to proceed with the vacant site. Page 47 of 87 7001 France Avenue Staff Report 10-30-2025 Page 5 Question to Consider: Is the HRA willing to use its financing abilities to stimulate $250+ million multi- phase redevelopment project at 70th and France? OPTION 1 – Authorize staff to fully engage legal and financial advisors to amend the 2022 TIF Agreements in a manner consistent with the attached outline. This will enable the developers to pursue new tenants, equity investors and full funding of the office building. As the developer proceeds, they will need to renew and amend the zoning and site plans that govern the site. If so directed, staff will return to the HRA Board and City Council in the future with a fully vetted Amendment to the TIF Agreements that include a commitment for the City/HRA to fund the public parking garage. OPTION 2 – Do NOT authorize this strategy and instead follow the HRA’s typical policy where the developer incurs financial risk. This will signal to the developer that they should continue to “pause” the project. It might also suggest to the developer that they reconsider the proposal for the site to be more reflective of market conditions. # # # Page 48 of 87 7001 France Avenue Proposed Financing Structure for Public Parking Garage For Discussion Presentation to HRA Board Bill Neuendorf, Econ Development March 27, 2025 Revised October 30, 2025 Page 49 of 87 Overview 1)Background 2)Financial Challenges 3)Proposed Modification for Public Financing 4)Potential Risks to Consider 5)Discussion For Discussion: Is the HRA willing to use its financing abilities to stimulate $250+ million redevelopment project at 70th & France? This is follow up to March 27, 2025 HRA discussion. No conclusion was reached at that time. Additional discussion was deferred based on the outcome of the 2025 legislative session pertaining to the use of Tax Increment Financing. 2 Page 50 of 87 1) Background - Location Map 3 Page 51 of 87 1) Background - Approved Site Plan Site B Office Site A Residential Site C ParkingCOMPL E T E D 4 Page 52 of 87 1) Background - Rendering looking Southeast 5 Page 53 of 87 1) Background – Rendering looking Northeast Site C Parking Site A Residential Site B Office 6 Page 54 of 87 1) Background – Renderings of Parking Garage North Face East Face South Face 7 Page 55 of 87 1) Background – Long Term Vision for Shared rather than Private Parking To promote more efficient use of land, the 2018 Greater Southdale Plan recommends a shift to “District” or shared parking instead of multiple redundant private parking lots Source: Greater Southdale Plan, pages 112-1138 Page 56 of 87 2) Financial Challenges – Interest Rates, Inflation & Market Hesitancy Economic Conditions in 2022 TIF Pay Go Notes approved to reimburse developer for costs of site infrastructure and parking a)Total funding gap of $22 M -Anticipated 4.25% interest rate -50% of tax increment from Site A solved a $5 M funding gap -90% of tax increment from Site B and 40% tax increment from Site A solved a $17 M funding gap Economic Conditions in Fall 2025 a)Same incremental taxes collected from Sites A & B only fund $17.3 M -Interest rate increased to 6.50% -$4.7 M funding shortfall b)Costs escalated faster than rent projections c)Capital markets continue to delay investments in large scale complex projects 9 Page 57 of 87 2) Financial Challenges – New Strategy to resolve Financing Gap Impacts to Site A Residential -Reduction in TIF value is real but minor compared to other components of capital stack -Site A not ready to proceed for another 2+ years Impacts to Site B Office -Developer is actively pursuing debt and equity -Alterative use of tax increment for the parking structure is proposed to stimulate private financing for office 10 Page 58 of 87 3) Proposed Modification – 2025 Legislative Changes •At the conclusion of the 2025 Legislative Session, laws were passed pertaining to the use of Tax Increment Financing (TIF) in 11 communities, including Edina •TIF laws typically allows a 5-year window of time to complete the project and limit the period of TIF tax collection from 8 to 25 years depending on the project •New law allows the Developer and City/HRA more time and (potentially) access to more money •TIME: Typical 5-year rule extended 5 years (deadline moved from 2027 to 2032) •MONEY: TIF tax collection period extended10 years (increased from 15 years to 25 years total) subject to consent of City, School, County •The City has recognized these new laws. •The School and County will consider recognition in the near future. 11 Page 59 of 87 3) Proposed Modification – Fundamentals to Consider •Developer foresees strong leasing interest for professional & retail space at this location •City & HRA have strong borrowing power and ability to borrow money at favorable rates •AAA rating from Standard and Poors •Aaa from Moody’s •City & HRA or Special Purpose Entity can borrow at tax-exempt rates for public uses •Lower interest rates also secured if City or HRA pledges guaranteed repayment stream instead of relying solely on incremental property taxesCombination of tax-exempt financing supported by repayment pledge from City/HRA would lower the cost of capital closer to levels that solve the original financing gap. 12 Page 60 of 87 3) Proposed Modification – Outline of Proposed Strategy Construct parking garage in two phases to reduce initial costs Consider the shared use of Site C parking garage by users of both Sites A and B to ‘right size’ parking in future Consider the creation of a Special Purpose Entity to guide the financial partnership between the HRA/City and Developer B Rely on the HRA or City’s credit or lease commitment to issue taxable or tax-exempt lease-revenue bonds (or similar) in lieu of a traditional construction loan or mortgage Eliminate the $17 million TIF Note for Site B developer and use incremental property taxes to pay the debt incurred for the parking structure Contractual agreements between the City, HRA and developer could mitigate financial risk to the City/HRA in case there is a shortfall in the amount of incremental taxes generated on the site. Operating agreements between the City, HRA and developer could ensure that day-to-day costs of operating the parking garage are paid by the Site B owner. Application of Chapter 459 (or 429) special assessments could be applied to the nearby properties that use the public parking garage in the future when large-scale repairs or improvements are necessary. More comprehensive outline of strategy is included in the packet. 13 Page 61 of 87 4) Potential Risks to Consider – How will Private Investors Respond? 1)Is there sufficient demand for users of new Class A office and retail/restaurant space at this location? And can developer secure private funding for Site B office? 2)Will the new office further stimulate construction of the new residential building? 3)Will the City/HRA debt be attractive to bond holders if the TIF revenue stream is not enhanced with a pledge from the developer or the City/HRA? 4)Will additional debt have a negative impact on the City/HRA budget and credit rating? With this strategy, the original financing gap could be resolved, but that is no guarantee that private investors will finance the project immediately. Timing of City/HRA investment would be staggered in response to market conditions. No complex project is easy. Success takes time and involves risk. 14 Page 62 of 87 4) Potential Risks to Consider – Impact to City’s Overall Finances With this strategy, some financial risk will shift to the HRA/City. 1)Actions can be taken by City and Developer to minimize and mitigate risks. But potential risks do exist: 2)Issuance of approximately $17 million debt for public parking might have a negative impact on the credit rating of the City/HRA considering other anticipated debt obligations. •Debt or lease are considered long-term debt obligation, the same for streets, parks & fire stations •Reduced credit rating will raise the financing costs of future projects •Incremental property taxes created by the project are the primary source of repayment but additional sources might be necessary. But if property taxes from the project fall short, the City’s or HRA’s general tax levy will need to satisfy the debt payments Fred Richards Park Braemar Arena New Fire Station(s) Roads and Utilities15 Page 63 of 87 4) Potential Risks to Consider – Mitigating Risk to the City/HRA Mitigation strategies could be pursued to reduce or eliminate fiscal impacts to the City/HRA, including: •Conservative estimates of future tax generation •Identifying alternative revenue sources to supplement debt payment: •parking revenues •special assessments by owner or tenants •TIF pooling •Minimum assessment agreements on Site B and Site A •Personal guarantees from developer •Letter of credit from developer 16 Page 64 of 87 4) Potential Risks to Consider – In conclusion Developer is not asking for additional TIF monies beyond that approved in 2022 Developer is asking to use a full funding commitment from the City/HRA to reduce borrowing costs for the parking garage and stimulate the office building This funding commitment is anticipated to deliver major benefits to the City -New public parking garage -Large scale redevelopment consistent with the Greater Southdale Plan and Guidelines But there are also financial risks to the CityStaff is concerned that additional public debt at this time, with an unsecure revenue source would likely create negative consequences to the City/HRA’s financial position that exceed the short-term benefits delivered by the office building. Cautious consideration is needed. Staff does not recommend up-front financing for a public parking garage at this location at this time.17 Page 65 of 87 5) Discussion - Is the HRA willing to use its financing abilities to stimulate $250+ million multi-phase redevelopment project at 70 th & France? General direction is requested so that the developer knows how to proceed with this site. OPTION 1 - Authorize staff to fully engage legal and financial advisors to amend the 2022 TIF Agreement in a manner consistent with the attached outline. This will enable the developer to pursue tenants and full funding of the office building. Staff will return in the future with an amended TIF Agreement that includes a commitment for the City/HRA to fund the parking garage. OPTION 2 - Do not authorize this strategy and follow the HRA’s typical policy where the developer incurs financial risk. This will signal to developer that they should continue to ‘pause’ the project and consider preparation of new plans for the site that are more consistent with the current market conditions. 18 Page 66 of 87 7001 France – Proposed Financing Strategy for Structured Public Parking For Discussion October 30, 2025 Page 1 Stimulating Investment at 7001 France Avenue Proposed Financing Strategy for Structured Public Parking Background and Financial Challenge Brief summary of four phase redevelopment project including financing challenges due to the economic environment and recent legislative changes • Property sold and 4-phase mixed-use site plan approved 2022 o Upon completion, this project will create many benefits to the community • Site plan is not financeable under current economic conditions, even with existing TIF pledge o $254 million total development cost (2022 estimate) o $22 million in TIF reimbursement pledged ▪ Site A (residential): $5 million of costs reimbursed through interest-bearing TIF Note ▪ Site B/C (office/parking): $17 million reimbursed through interest-bearing TIF Note ▪ Eligible TIF costs include overall site improvements and Site C parking ramp • Site B Office is anticipated to be completed before Site A Residential o Site A residential is not financeable at this time; construction may not begin for 2+ years o Site B office has demand among professional businesses seeking a modern Class A space in a top tier location but unable to finance both Site B office & Site C parking simultaneously Site C Parking Site A Residential Site B Office Page 67 of 87 7001 France – Proposed Financing Strategy for Structured Public Parking For Discussion October 30, 2025 Page 2 • New State Legislation approved in 2025 provides additional flexibility regarding the use of TIF to address financing challenges o Deadline to construct and incur debt extended from 5-years to 10-years o Duration of increment collection extended from 15-years to 25-years (max), subject to approval by City, School District and County Proposed Strategy to overcome Financial Challenge - Overview The developers at Orion Investments and Mortenson Development request that the City and HRA consider taking an active financing role to stimulate additional private investment on this site. City staff prepared this overview based on input from the HRA’s legal advisors at Dorsey & Whitney and financial advisors at Ehlers Associates. • Public private partnership proposed to separate the financing of Sites A, B & C and take advantage of tax-exempt financing that may be available for the HRA, City or a Special Purpose Entity (SPE). In this situation, the financial roles of the City and HRA are interchangeable. o Create a special purpose entity (“SPE”) in partnership with HRA, City and Developer B to serve as landlord of the parking garage during the lease term. o SPE or HRA to own property and build Site C parking structure in two phases o City to lease parking structure from SPE or HRA o City to acquire ownership of property and completed parking structure after expiration of lease for nominal amount (eg $1 dollar) o Developer B to be responsible for operating and maintenance costs • Eliminate the anticipated $17 million pay-as-you-go TIF Note for Site B/C o Utilize tax increment revenues for lease payments on Parking Debt instead • No changes anticipated to $5 million TIF Note for Site A infrastructure Proposed Lease Structure • Owner and Lessor: SPE, likely a tax-exempt partnership between Developer B and the HRA • Lessee: City of Edina • Lease Guarantor: City of Edina • Term of Lease: 15 to 30 years TBD • Leased Premises: Site C parking structure to be constructed in two phases; number of stalls in Phase 1 sized by the parking need of Site B office and projected tax increment collected from Site B office Page 68 of 87 7001 France – Proposed Financing Strategy for Structured Public Parking For Discussion October 30, 2025 Page 3 • Use of Leased Premises: Site C parking structure will be general public parking with time restrictions (2-3 hour limit and no overnight parking, for example); some of the parking stalls will be available to tenants, clients and customers of Site A office (with no time restrictions) provided that 50% of the parking remains available for the general public and provided that such parking arrangements do not violate the qualifications for tax-exempt financing • Rent, Phase 1 parking structure: Annual rent payment limited to received incremental property taxes from Site B office less any necessary administrative expenses o Estimated to be $940,000 annually o Assuming 20-year term, this will fund approximately $12.4 million in project costs • Rent, Phase 2 parking structure: Annual rent payment limited to received incremental property taxes from Site B (less administrative costs) plus approximately 40% to 90% of received incremental property taxes from Site A with actual amount determined based on future payment structure of TIF Note for Site A; total rent paid for parking structure limited to an agreed upon amount defined in the lease o Estimated to be $940,000 from Site B plus up to $1,160,000 from Site A for total of $2,100,000 annually • Rent Payment Dates: paid approximately 60 days after incremental taxes received by the City; payments anticipated February 1st and August 1st • Rent Increases: None • Rent Commencement: Beginning the following February 1st or August 1st after completion of each phase of Site C parking improvements and receipt of incremental property taxes from Site B and/or Site A • Site C Construction Commencement: Contingent on financial closing and construction commencement of Site B office • Improvement Ownership Long-term: At the end of lease term, Site C improvements conveyed to City for the nominal amount (eg $1 dollar) Proposed Financing and Debt Repayment Strategy 1) HRA issues public debt secured by the City lease of Site C parking structure a. SPE or HRA acquires Site C land AFTER Office Building has broken ground to ensure the office project is moving forward. b. Site C property converted to tax-exempt status c. Pursue tax-exempt debt financing, if able to accommodate qualifications Page 69 of 87 7001 France – Proposed Financing Strategy for Structured Public Parking For Discussion October 30, 2025 Page 4 d. To secure favorable borrowing terms, City/HRA may need to pledge additional payments in case incremental taxes fall below projections i. CAUTION: this may impact the City/HRA future credit rating and future property tax levy e. To avoid impact to City /HRA property tax levy and credit rating, lease payments could be limited to available tax increment collected with no recourse to the City or HRA for any shortfall i. Shortfall agreement and minimum assessment agreement with developer are possible but debt would lose tax-exempt status and increase the total cost of the project ii. Note that taxable financing with the City/HRA credit rating still achieves more favorable terms than private financing f. HRA issues Debt to construct Parking Garage C AFTER Office Building has broken ground and is moving toward completion with completion of Site B & Site C to be completed simultaneously 2) City uses incremental taxes received from Sites A & B to make lease payments 3) The lease repayment should not exceed $17 million (the estimated principal amount of the original TIF Note for Sites B/C END OF FINANCING SUMMARY Page 70 of 87 7001 France – Proposed Financing Strategy for Structured Public Parking For Discussion October 30, 2025 Page 5 Strategies for Phased Construction and Future Operations After an agreeable financing structure is identified, there are many other details to be addressed to deliver successful projects on each portion of the site. After each phase is constructed, strategies must also be implemented to ensure the completed facilities are properly managed. The following information is included to document several of the construction and operational strategies that will need to be fine tuned in the future. Definitions City – the City of Edina, the anticipated lessee of the parking garage CM-AR – A form of construction where the owner competitively bids and hires a Construction Manager using the “at risk” format; the selected Construction Manager provides a firm maximum price and holds the risk if actual costs exceed the price quoted Developer A – the real estate developer and owner for the proposed residential building on Site A, presumed to be Mortenson Development or related entity Developer B – the real estate developer and owner of the proposed office building on Site B, presumed to be Orion Investments or related entity HRA – the Edina Housing and Redevelopment Authority, the anticipated property owner and lessor of the parking garage Site A – the 2.0 acre site on the northeast corner of the property intended to be a residential building with commercial tenants on portions of the first floor Site B – the 2.0 acre site on the northwest corner of the property intended to be a commercial office building with retail and restaurant tenants on portions of the first floor Site C – the 0.9 acre site on the southeast corner of the property intended to be a public parking facility with parking stalls shared by employees, clients and customers of Sites A and B as well as the general public SPE – a Special Purpose Entity that is established for a defined business purpose (in this case to serve as the owner, debt-holder and landlord of the parking garage) and capable of accessing tax-exemption on forms of financing Page 71 of 87 7001 France – Proposed Financing Strategy for Structured Public Parking For Discussion October 30, 2025 Page 6 Anticipated Site Plan Proposed Phased Delivery of Public Parking • Site C parking garage to be built in two phases to manage cost and limit debt o Sized based on projected TIF cash flow and parking needs of Site B office • First phase includes approximately 340-440 structured parking stalls over 4-5 levels on Site C o 100-200 temporary surface parking stalls also built by Developer on Site A o Approximately 128 underground parking stalls built by Developer B on Site B Page 72 of 87 7001 France – Proposed Financing Strategy for Structured Public Parking For Discussion October 30, 2025 Page 7 • Second phase of parking garage would add approximately 100-200 structured parking stalls constructed with additional 2-3 levels on Site C for a total of 540 stalls o Actual number of stalls could be adjusted if parking demand changes over time o Surface parking on Site A removed after the Site C structure is complete • An amendment to the PUD (to allow temporary surface parking on Site A) will need to be considered separately. This amendment would include a phased construction strategy that includes temporary surface parking Proposed Construction Strategy 1) No binding financial commitments made by the HRA/City until the financial closing, permit issuance and groundbreaking of Site B 2) Developer B and HRA create business partnership to deliver Site C parking, including the preparation of construction documents for the parking garage 3) Developer B transfers Site C land to HRA or SPE for nominal amount AFTER the Site B office building is under construction 4) HRA issues RFP to bid and select Construction Manager At Risk (CM-AR) 5) HRA hires CM-AR 6) CM-AR hires contractor(s), vendors and suppliers to build Site C parking 7) CM-AR, SPE, HRA/City & Developer B determine how to most efficiently construct parking facility in two separate phases 8) HRA (or SPE, if beneficial) provides initial construction-term financing a. Current estimates to build complete Site C parking garage is approximately $25 million b. Need to clarify cost to build Phase 1 and the process to determine when to build Phase 2 c. Need to establish maximum cost to build Phase 1 and Phase 2 and determine whether City or Developer B is responsible for cost of Phase 2 d. Tax-exempt debt is anticipated 9) Upon completion, SPE will lease Site C parking to City for 15-30 years with guaranteed rent payments with lease details determined when costs and timing are better understood Page 73 of 87 7001 France – Proposed Financing Strategy for Structured Public Parking For Discussion October 30, 2025 Page 8 Proposed Short Term Operational and Maintenance Strategy 1) Developer B, SPE and HRA/City enter into operations and maintenance agreement for the duration of the lease term (15-30 years) or longer 2) Tenants or employees may need to obtain parking permits to allow for effective parking management and generate additional cash flow to support debt repayment provided however that any such arrangements must not violate the qualifications of the tax-exempt financing status 3) Developer B responsible to schedule, deliver and pay for operational costs during term of lease including but not limited to utilities, security, maintenance/repairs, cleaning and management a. Subject to industry best practice and City oversight Proposed Long Term Operational and Maintenance Strategy 1) Developer B, SPE and HRA/City enter into long-term operation and maintenance agreement a. Developer A may also be included, if Site A is reliant on Site C parking 2) Developer B responsible for costs of day-to-day operations, repairs and management, possibly through the creation of a Special Service District or other contractual mechanism 3) HRA/City responsible to schedule, deliver and manage the public parking facility 4) Developer B and any other surrounding property owner that benefits from public parking to bear cost of future improvements and major repairs to the Site C parking facility via the typical procedures identified in Chapter 429/459 of Minnesota Statutes # # # Page 74 of 87 Fall 2025 Market Update: Office Through Q2 and Q3 of 2025, office capital markets show signs of gradual stabilization nationally, despite continued negative absorption and high vacancy rates. While demand remains inconsistent across different regions, a strong "flight-to-quality" trend is supporting high-end assets. The Federal Reserve's interest rate cuts in late 2024 and September 2025 could improve market liquidity and boost investment activity. Institutional capital continues to seek shelter in high quality assets within the Sunbelt states. Nationally, this is where migration trends continue to accelerate and there is less bureaucratic oversight. Key Trends • Absorption and leasing: o Net absorption was negative in the first and second quarters of 2025, but the trend is improving. o In Q2 2025, over a third of U.S. markets recorded positive absorption, with high-quality (Class A) properties performing better. o Many markets saw increased leasing activity, with the total national leasing volume slightly higher than the prior year's quarterly average. o All metrics remain significantly depressed from pre-Covid highs. o Trophy assets in prime locations command record high lease rates. • Performance of assets: o A significant "flight-to-quality" trend persists, with strong demand for high-end, amenitized office spaces. For example, a new premier office property in Dallas was acquired for a high price, reflecting investor confidence in top-tier assets. o Conversely, older, lower-quality assets continue to struggle with lower prices and higher vacancies. • Interest rates and lending: o The Federal Reserve implemented a quarter-point rate cut in September 2025, following a previous cut in December 2024, to support an economy showing signs of slowing growth. o Market liquidity is improving, driven by alternative lenders, debt funds, and insurance companies. While bank lending remains cautious, origination volumes were up in early 2025 compared to the previous year. o Lenders, while very cautious, are now willing to entertain lending on high quality office assets, with heightened scrutiny on both Tenancy and sponsorship. • Capital flow: o Equity capital transaction volume in Q2 2025 was the strongest since 2022, especially for smaller deals under $100 million. o Institutional investors, while still net sellers of office space, significantly increased their acquisition volume year-to-date compared to 2024. o Private capital continues to be one of the only avenues for new construction, as Institutional investors continue to clean up their distressed asset Page 75 of 87 • Vacancy rates: o The national office vacancy rate remains high at just over 20% in Q1 2025, though it was largely stable quarter-over-quarter. It represents a 30-basis-point increase year-over-year. o Brand new, Class A “trophy” offices have strong leasing demand. o As leases expire, the right sizing of space will trigger a likely upgrade of tenant space. o Demand for new Class A offices is also reflective of the “return to work” policies that most major employers have implemented. • Construction and supply: o The construction pipeline is shrinking, approaching historic lows. This reduced new supply is helping to stabilize market fundamentals over time. o The limited new construction is primarily focused on trophy assets, which could drive future rent growth in that segment. o While many headlines suggest there is a new market for Class B & Class C office conversions to multi-family, opportunities are scarce. Construction types, code regulations and mechanical considerations are all significant conversion hurdles. Looking Forward • Continued recovery: The ongoing improvement in rolling absorption figures and shrinking construction pipeline suggests the office market is on a path toward gradual recovery. Although the pace will likely be slow and uneven across different asset classes and locations. • Regional performance: Market performance will continue to vary regionally, with some areas experiencing gains while others will lag. The Southern market possesses a large portion of the active construction pipeline, much of which is scheduled for delivery by the end of 2025. For example, Dallas has the largest pro-rata office pipeline in the USA. New construction in the Miami region is also very strong, as that market capitalizes on the exodus from New York City. That exodus was mainly spurred by firms seeking business friendly environments where they can attract talent. This trend continues throughout the country. • Impact of rates: While the Fed has started cutting rates, the market's full recovery is dependent on sustained job growth and the resolution of long-term uncertainties regarding hybrid work. • Capital markets stabilization: With financing conditions improving and investment activity increasing, especially for high-quality properties, while far from 2019 highs, the capital markets for office assets appear to be on a firmer footing than in previous years. References: - JLL Office Insights Q2 2025 - Colliers US Office Markets update Q2 2025 - CBRE Q2 2025 Office Update - Cushman Americas MarketBeat Office Q2 2025 - NAIOP Office Demand forecast Page 76 of 87 1 CBRE RESEARCH © 2025 CBRE, INC. FIGURES | MINNEAPOLIS/ST. PAUL OFFICE | Q2 2025 Note: Arrows indicate change from previous quarter. -The Minneapolis/St. Paul office market experienced its third consecutive quarter of positive absorption with 208k sq. ft. absorbed in Q2, an increase of 141% year-over-year. Suburban markets led again this quarter, contributing 289k sq. ft. of positive absorption. -The direct vacancy rate trended down with a 20 bps decrease from the previous quarter and 50 bps decrease from its peak in Q3 2024. Suburban markets and Class A offices remained below the market average. -There was 1.3M sq. ft. of leasing activity in Q2, driven predominantly by Class A product (45% of activity), new leases (69%), and deals sized smaller than 10,000 sq. ft. (50%). -Construction of new office space remained consistent with the previous quarter. Office redevelopment activity remains active against the reduced construction pipeline, with two projects anticipated for demolition next quarter. -Office Sales totaled over $138 million this quarter, up 12.7% from the previous year. Investment sales contributed 72% of the quarter’s volume, up 59% quarter-over-quarter. Minneapolis office fundamentals remain stable for third consecutive quarter 23.7%208,289 0 137,998 FIGURE 1: Historical Absorption, Deliveries, and Vacancy Source: CBRE Research, Q2 2025 $29.13 18 19 20 21 22 23 24 25 26 (1.2) (1.0) (0.8) (0.6) (0.4) (0.2) 0.0 0.2 0.4 0.6 Vacancy %Sq. Ft. millions Net Absorption Deliveries Vacancy Rate FIGURES | MINNEAPOLIS/ST. PAUL OFFICE | Q2 2025 Direct Vacancy Rate SF Net Absorption SF Construction Delivered SF Under Construction FSG/YR Lease Rate MARKET OVERVIEW Page 77 of 87 2 CBRE RESEARCH © 2025 CBRE, INC. FIGURES | MINNEAPOLIS/ST. PAUL OFFICE | Q2 2025 The Minneapolis/St. Paul Office market experienced another stable quarter in Q2, with a net absorption of 208,289 sq. ft. This marks the third consecutive quarter of positive absorption in market, representing a 141% year-over-year increase. Recovering suburban markets were the driving force behind this growth, contributing 289,390 sq. ft. of positive net absorption. Negative absorption persisted for downtown markets, with a net (81,101) sq. ft. in the first quarter. The 494 submarket experienced the highest volume of absorption for the second consecutive quarter with 219,396 sq. ft absorbed. This was largely driven by the relocation of TKDA into a new headquarters location in Bloomington. The Minneapolis CBD had the lowest absorption volume in Q2 with a net loss of (36,114) sq. ft. While still negative, this figure represents an overall increase in absorption by 67% from the previous quarter and 77% year-over-year. FIGURE 2: Net Absorption Trend Source: CBRE Research, Q2 2025 FIGURE 3: Construction Activity Source: CBRE Research, Q2 2025 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 Sq. Ft. millions Under Construction Deliveries Construction activity was unchanged in Q2, with just one building underway: The Craftsman in Edina. Preleasing at this location has remained steady in Q2 with availability remaining at 41%. Office redevelopment activity remained active against a slower construction pipeline. One of the top sales of the quarter, Eden 100 in Edina, sold to Opus Group with the intent to redevelop and pursue as a new headquarters location. Opus plans to demolish the existing office building and replace with 112k sq. ft. of Class A office space, of which 70% would be available for multi-tenant leasing. Groundbreaking is anticipated in Q3 2025. In Q2 the St. Louis Park city council approved project plans by Hempel to redevelop the West End One office building. The concept plans for Terasă propose a 6-story mixed use building with ground level retail and 223 apartment units. Demolition on the existing office structure is expected to start in July 2025. (1.2) (1.0) (0.8) (0.6) (0.4) (0.2) 0.0 0.2 0.4 0.6 Sq. Ft. millions Class A Class B Rolling 4Q Avg. Net Absorption Construction Activity Page 78 of 87 3 CBRE RESEARCH © 2025 CBRE, INC. FIGURES | MINNEAPOLIS/ST. PAUL OFFICE | Q2 2025 In Q2, the direct office vacancy rate remained relatively stable at 23.7%, reflecting a slight decrease from the 23.9% observed in Q1. This quarter marks the third consecutive period of declining total vacancy, with rates reaching their peak in Q3 2024 at 24.1%, 50 bps above the current rate. Class A office space stabilized 100 bps below the overall office market average at 22.7% in Q2. In contrast, Class B sustained a higher vacancy rate of 25.4%, 170 bps above the market average. The suburban vacancy maintained a lower rate in Q2, 400 bps below the market average. At 19.7%, suburban vacancy reduced from 20.2% the previous quarter. Downtown office vacancy was 29.1% in Q2, 540 bps higher than the market average and in increase from 28.8% the previous quarter. FIGURE 4: Vacancy Rates by Class Source: CBRE Research, Q2 2025 FIGURE 5: Avg. Direct Asking Rate (FSG/YR) by Class Source: CBRE Research, Q2 2025 The Minneapolis office rental market has seen relatively minimal change in asking rents over the past three years, with the average gross asking rate increasing slightly to $29.13, 51 bps higher than the previous year. Class A properties in both suburban and downtown locations maintained higher rents across the market, with the highest gross rates in North Loop with an average of $44.71. in Q2, largely driven by the availability of new construction. The lowest rates are found in the Suburban St. Paul market at $25.71 this quarter. In Q2, Class A product had gross asking rates 11.5% higher than the overall market average, reflecting a second consecutive quarter of increasing rates in both suburban and downtown office markets. The Downtown market saw rents exceeding suburban rates by more than $2.00, again influenced by the North Loop submarket, where Class A rates are 53.5% above the overall market average. 20.00 22.00 24.00 26.00 28.00 30.00 32.00 34.00 $ per sq. ft. Overall Class A Class B 12 14 16 18 20 22 24 26 28 Vacancy Rate (%) Overall Class A Class B Vacancy & Availability Rates Asking Rent Page 79 of 87 4 CBRE RESEARCH © 2025 CBRE, INC. FIGURES | MINNEAPOLIS/ST. PAUL OFFICE | Q2 2025 Tenant Sq. Ft. Leased Transaction Type Address Submarket Guy Carpenter 38,599 Renewal 3600 Minnesota Dr 494 Tradition Capital Bank 36,391 Renewal 7601 France Ave S 494 Olsen Thielen & Co., Ltd.32,730 Renewal 2665-2675 Long Lake Rd Suburban St. Paul UC Design Fabrication 32,730 New Lease 1024 Hazel St N Suburban St. Paul FIGURE 6: Leasing Activity Trend – 10,000 sq. ft. and up In Q2 there was over 1.3M sq. ft. of total leasing activity completed, inclusive of all size. This represents a 4% decrease from the previous quarter and a 13% increase year-over-year. In 2025 year-to-date, leasing volume (inclusive of all sizes) exceeded 2.8M sq. ft. transacted, a 19% increase over the five-year average for H1. Of leases signed this quarter, 50% of the total deal volume was from leases smaller than 10,000 sq. ft. Leasing volume on transactions greater than 10,000 sq. ft. accounted for 594k sq. ft., a decrease of 30% from the previous year. Overall, the average deal size was 5,296 sq. ft. this quarter and the average term length was 72 months. Leasing on Class A properties represented 71% of H1 2025 volume for deals larger than 10,000 sq. ft. New leases accounted for 52% of the quarter’s total leasing volume and 57% of deal activity over 20,000 sq. ft. Source: CBRE Research, Q2 2025 0.0 0.5 1.0 1.5 2.0 2.5 Sq. Ft. millions Class A Class B FIGURE 7: Leasing by Submarket – 10,000 sq. ft. and up Source: CBRE Research, Q2 2025 FIGURE 8: Key Lease Transactions Source: CBRE Research, Q2 2025 Leasing Activity 10,498 10,976 11,033 16,853 17,967 74,821 141,447 162,483 208,847 BEA Northeast North Loop Midway St. Paul CBD Suburban St. Paul Minneapolis CBD 394 494 Page 80 of 87 5 CBRE RESEARCH © 2025 CBRE, INC. FIGURES | MINNEAPOLIS/ST. PAUL OFFICE | Q2 2025 Property Location Buyer Sale Price Size (SF)Price Per SF Arbor Lakes Medical Building Maple Grove Remedy Medical Properties $24.8M 89,414 $277 Lincoln Corporate Center Edina Buhl Investors $15.45M 213,000 $73 Minnesota Office Plaza Roseville State of Minnesota $13.4M 200,528 $67 Dupont Office Center Bloomington Bloomington 9801 MP RK7 $10.9M 61,844 $176 Medical Enterprise I Coon Rapids STERIS $8.39M 82,224 $102 *Eden 100 Building Edina The Opus Group $6.8M 38,000 $179 *$115 55 West Financial Center Plymouth DaBella $6.7M 51,821 $130 FIGURE 9: CBD vs. Suburban Office Sales Volume In Minneapolis, office sales volume totaled over $138 million in the second quarter of 2025. Quarterly volume represents an 4.8% increase quarter-over-quarter and a 12.7% increase year- over-year. Suburban transactions represented 99% of the total volume this quarter. However, 51% of suburban sales volume in Q2 was attributed to owner/user (26.3%), redevelopments (11.2%), or medical office sales (13.5%). Investment Sales volume have risen 52% quarter-over-quarter. In Q2 2025, the top five investment purchases averaged over $100 per square foot, a benchmark not seen in the previous three quarters. Of the top office sales transacted this quarter, CBRE participated in the top sale marketing of Arbor Lakes Medical Building. Source: Real Capital Analytics, CoStar, CBRE Research, Q2 2025 FIGURE 10: Key Sale Transactions, Q2 2025 Source: Real Capital Analytics, CoStar, CBRE Research, Q2 2025 FIGURE 11: Investment vs. Owner User Sales Volume *Indicates Future Office Conversion *Price per land SF Source: Real Capital Analytics, CoStar, CBRE Research, Q2 2025 Sales Activity 0% 10% 20% 30% 40% 50% 60% 0 50M 100M 150M 200M 250M 300M 350M 400M 450M 500M Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2020 2021 2022 2023 2024 2025 Volume ($)Investment Owner/User % Owner User 0 100M 200M 300M 400M 500M 600M Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2020 2021 2022 2023 2024 2025 Volume ($)CBD Volume Suburban Volume Page 81 of 87 6 CBRE RESEARCH © 2025 CBRE, INC. FIGURES | MINNEAPOLIS/ST. PAUL OFFICE | Q2 2025 Net Rentable Area Total Vacancy Total Availability Direct Availability Sublease Availability Avg. Direct Asking Rate (FSG/YR) Current Quarter Net Absorption YTD Net Absorption Deliveries Under Construction SUBURBAN Class A 21,300,037 21.3 26.5 22.4 4.1 31.38 309,361 386,585 0 137,998 Class B 19,380,962 18.7 23.0 21.8 1.2 26.15 (17,461)74,893 0 0 Class C 3,844,552 23.7 26.0 24.5 1.4 20.03 (2,510)12,732 0 0 Total 44,525,551 20.3 24.9 22.3 2.6 28.16 289,390 474,210 0 137,998 Market Statistics by Index Net Rentable Area Total Vacancy Total Availability Direct Availability Sublease Availability Avg. Direct Asking Rate (FSG/YR) Current Quarter Net Absorption YTD Net Absorption Deliveries Under Construction DOWNTOWN Class A 18,127,397 25.7 36.0 27.6 8.3 33.54 (105,381)(188,152)0 0 Class B 11,889,770 37.2 41.1 38.1 3.0 27.04 30,488 73,932 0 0 Class C 2,929,603 22.0 24.7 23.0 1.7 23.75 (6,208)(46,006)0 0 Total 32,946,770 29.5 36.8 31.0 5.8 30.08 (81,101)(160,226)0 0 Net Rentable Area Total Vacancy Total Availability Direct Availability Sublease Availability Avg. Direct Asking Rate (FSG/YR) Current Quarter Net Absorption YTD Net Absorption Deliveries Under Construction METRO Class A 39,427,434 23.3 30.8 24.8 6.1 32.47 203,980 198,433 0 137,998 Class B 31,270,732 25.7 29.9 28.0 1.9 26.61 13,027 148,825 0 0 Class C 6,774,155 23.0 25.4 23.9 1.5 21.52 (8,718)(33,274)0 0 Total 77,472,321 24.2 30.0 26.0 4.0 29.13 208,289 313,984 0 137,998 Page 82 of 87 7 CBRE RESEARCH © 2025 CBRE, INC. FIGURES | MINNEAPOLIS/ST. PAUL OFFICE | Q2 2025 Net Rentable Area Total Vacancy Total Availability Direct Availability Sublease Availability Avg. Direct Asking Rate (FSG/YR) Current Quarter Net Absorption YTD Net Absorption Deliveries Under Construction 394 11,947,174 17.7 27.2 23.7 3.5 29.34 151,640 83,315 0 0 494 17,579,250 23.8 28.1 24.5 3.6 29.69 219,396 421,921 0 137,998 BEA 3,280,510 15.5 18.5 18.1 0.4 26.25 (27,986)228 0 0 Midway 2,819,217 12.4 13.8 13.8 0.0 23.91 (27,951)22,205 0 0 Minneapolis CBD 22,636,832 28.4 36.4 29.7 6.8 32.04 (36,114)(144,659)0 0 North Loop 4,447,263 28.3 30.7 24.8 5.9 30.07 (9,943)4,156 0 0 Northeast 2,734,316 12.3 16.6 14.1 2.5 27.63 (18,882)(34,291)0 0 Northwest 1,374,588 24.7 27.1 27.1 0.0 22.59 79 (38,334)0 0 St. Paul CBD 5,862,675 34.7 43.0 41.0 2.0 24.06 (35,044)(19,723)0 0 Suburban St. Paul 4,790,496 25.6 22.6 22.0 0.6 23.09 (6,906)19,166 0 0 Total 77,472,321 24.2 30.0 26.0 4.0 29.13 208,289 313,984 0 137,998 Market Statistics by Submarket Page 83 of 87 8 CBRE RESEARCH © 2025 CBRE, INC. FIGURES | MINNEAPOLIS/ST. PAUL OFFICE | Q2 2025 National Economic Overview Policy announcements and the news cycle—not economic fundamentals— are driving sentiment today. Q2 2025 began with the Liberation Day tariffs and subsequent escalation that caused growth expectations to plummet. But by the top of Q3 2025, both the trade war rhetoric and effective tariff rate have softened. While consumer and business sentiment surveys remain weak, the hard economic data (e.g., jobless claims, CPI, orders) points to a more steady economy. To be sure, it could take time for the costs associated with higher tariffs and global uncertainty to filter through, but in the meantime CBRE has increased its 2025 GDP growth outlook to 1.3% for 2025. Barring further disruptions this provides upside risk for hiring in coming quarters. Commercial real estate markets are taking these changes in stride. On the occupier side, continued growth translates into positive absorption for many sectors and markets, including offices. Regarding capital markets, investment volume is on track to exceed 2023 and 2024 levels. This is supported by credit issuance making a turnaround and credit spreads falling back to pre-April 2 levels. 3.1% Unemployment Rate Note: Arrows indicate month-over-month change. 2.1M Labor Force 459.5k Office Using Jobs 544.1k Industrial Using Jobs 260.8k Retail Using Jobs Minneapolis/St. Paul Employment Update Minneapolis/St. Paul Unemployment Rate and Labor Force Trends Source: US BLS, May 2025 Source: US BLS, May 2025 Employment Change by Sector – Yearly + Monthly Bars indicate yearly trend, arrows indicate monthly trend 0% 2% 4% 6% 8% 10% 12% 14% 1.9M 2.0M 2.1M 2.2M 2019 2020 2021 2022 2023 2024 2025 Labor Force Total Labor Force Unemployment Rate Page 84 of 87 9 CBRE RESEARCH © 2025 CBRE, INC. FIGURES | MINNEAPOLIS/ST. PAUL OFFICE | Q2 2025 Market Area Overview Contacts © 2025 CBRE, Inc. All rights reserved. This information has been obtained from sources believed reliable but has not been verified for accuracy or completeness. CBRE, Inc. makes no guarantee, representation or warranty and accepts no responsibility or liability as to the accuracy, completeness, or reliability of the information contained herein. You should conduct a careful, independent investigation of the property and verify all information. Any reliance on this information is solely at your own risk. CBRE and the CBRE logo are service marks of CBRE, Inc. All other marks displayed on this document are the property of their respective owners, and the use of such marks does not imply any affiliation with or endorsement of CBRE. Photos herein are the property of their respective owners. Use of these images without the express written consent of the owner is prohibited. Definitions •Available Sq. Ft.: Space in a building, ready for occupancy within six months; can be occupied or vacant. •Availability Rate: Total Available Sq. Ft. divided by the total building Area. •Average Asking Lease Rate: A calculated average that includes net and gross lease rate, weighted by their corresponding available square footage. •Building Area: The total floor area sq. ft. of the building, typically taken at the “drip line” of the building. •Gross Activity: All sale and lease transactions completed within a specified time period. Excludes investment sale transactions. •Gross Lease Rate: Rent typically includes real property taxes, building insurance, and major maintenance. •Net Absorption: The change in Occupied Sq. Ft. from one period to the next. •Net Lease Rate: Rent excludes one or more of the ”net” costs (real property taxes, building insurance, and major maintenance) typically included in a Gross Lease Rate. •Occupied Sq. Ft.: Building Area not considered vacant. •Vacancy Rate: Total Vacant Sq. Ft. divided by the total Building Area. •Vacant Sq. Ft.: Space that can be occupied within 30 days. Survey Criteria Includes multitenant office buildings 10,000 sq. ft. and greater in size in the Minneapolis/St. Paul market, excluding single- tenant owner-occupied buildings, government-owned and –occupied buildings, and medical buildings. Buildings which have begun construction as evidenced by site excavation or foundation work. Abigail Knop Research Analyst CBRE | Minneapolis/St. Paul abigail.knop@cbre.com Maggie Parra Research Manager CBRE | North Midwest maggie.parra@cbre.com Page 85 of 87 © 2025 Cushman & Wakefield1© 2025 Cushman & Wakefield -4,000 -3,000 -2,000 -1,000 0 1,000 2019 2020 2021 2022 2023 2024 2025 YTDThousands Net Absorption, SF Construction Completions, SF SPACE DEMAND / DELIVERIES OVERALL VACANCY & ASKING RENT MARKET FUNDAMENTALS ECONOMIC INDICATORS YOY Chg Outlook YOY Chg Outlook 29.0% Vacancy Rate 91K YTD Net Absorption, SF $29.14 Asking Rent, PSF (Overall, All Property Classes) 2.0M Minneapolis Employment 3.1% Minneapolis Unemployment Rate 4.2% U.S. Unemployment Rate Source:BLS 10% 13% 16% 19% 22% 25% 28% $18 $24 $30 2019 2020 2021 2022 2023 2024 2025 Asking Rent, $ PSF Vacancy Rate OFFICE Q2 2025 MINNEAPOLIS ECONOMIC OVERVIEW: The Minneapolis–St. Paul economy remained resilient through Q2 2025, with total employment holding steady near 2.0 million. The region added approximately 12,500 jobs year-over-year (YOY), while the unemployment rate stood at 3.1%, a full 110 basis points (bps) below the national average of 4.2%. SUPPLY: INDICATORS OF MARKET STABILIZATION EMERGING The overall vacancy rate increased 20 bps quarter-over-quarter to 29.0%, though indicators of market stabilization began to emerge. Since year-end 2024, sublease availability has declined by nearly 5.0%, and overall vacancy remained 20 bps lower. The flight-to-quality trend persisted, with tenant demand focused on recently renovated, well-located assets. Quality suburban assets, particularly those backed by landlords able to fund competitive concession packages, continued to outperform the market and attract increased interest. In response to ongoing refinancing and equity challenges, some landlords are evaluating repositioning or deferring capital improvements. DEMAND: OCCUPIERS BECOMING MORE DECISIVE New leasing activity totaled just over 593,000 square feet (sf) in Q2, bringing the year-to-date (YTD) volume to 1.2 million sf. Decision-making among occupiers became more decisive in Q2, particularly in suburban markets where leasing activity held steady, positioning the region for potential growth in the second half of 2025. Tenants continued prioritizing upgraded footprints, favoring limited new construction options, Class A or recently renovated Class B assets. New Class A leasing reached 756,000 sf YTD, marking an 8.3% increase YOY. While interest rates and construction costs remained headwinds, landlords with the financial wherewithal to fund enhanced tenant improvement packages continued to outperform market competition. INVESTMENT SALES: TARGETED ACTIVITY HIGHLIGHTS PRICING RESET Investment activity through Q2 2025 reflected selective buyer interest and a continued recalibration of pricing expectations. Remedy Medical Properties acquired the 62,000 sf Dupont Office Center for $10.9 million, while Buhl Investors purchased the 200,000 sf Lincoln Corporate Center for $15.45 million as part of its Income Fund. Cap rates continued to adjust upward, with investors requiring more attractive pricing to engage in office transactions. While deal flow remained limited, these trades illustrate that well-located, stabilized assets continue to attract interest. Page 86 of 87 © 2025 Cushman & Wakefield2 SUBMARKET INVENTORY (SF) DIRECT VACANT (SF) SUBLET VACANT (SF) OVERALL VACANCY RATE CURRENT QTR OVERALL NET ABSORPTION (SF) YTD OVERALL NET ABSORPTION (SF) YTD LEASING ACTIVITY (SF) UNDER CNSTR (SF) OVERALL AVG ASKING RENT (ALL CLASSES)* OVERALL AVG ASKING RENT (CLASS A)* Minneapolis CBD 28,852,158 8,252,917 1,498,298 33.8%29,473 -30,917 193,811 0 $32.44 $35.36 St. Paul CBD 5,770,654 1,863,225 46,540 33.1%-58,681 -50,953 31,613 0 $22.27 $27.75 Northeast 9,741,189 1,614,723 69,732 17.3%-45,526 24,756 184,824 0 $21.94 $27.63 Northwest 2,204,971 461,622 54,001 23.4%-5,532 -48,475 33,126 0 $21.14 $21.62 South/Airport 6,894,533 2,133,082 96,900 32.3%-7,886 87,874 157,749 0 $24.82 $29.16 Southwest 16,683,221 4,701,502 606,614 31.8%-43,321 138,605 441,216 140,000 $29.76 $32.10 West 10,393,876 1,873,431 91,694 18.9%27,067 -30,344 198,738 0 $33.00 $37.12 MINNEAPOLIS TOTALS 80,540,602 20,900,502 2,463,779 29.0%-104,406 90,546 1,241,077 140,000 $29.14 $33.42 PROPERTY SUBMARKET MAJOR TENANT SF OWNER/DEVELOPER The Craftsman Southwest Adolfson & Peterson Construction 140,000 Orion Investments PROPERTY SUBMARKET SELLER/BUYER SF PRICE / $ PSF Lincoln Corporate Center Southwest The Opus Group/Buhl Investors 213,000 $15.45M / $72.54 Arbor Lakes Medical Building Northwest Olympus Ventures/Remedy Medical Properties 85,000 $24.8M / $291.76 Dupont Office Center Southwest Kraus-Anderson Realty/Remedy Medical Properties 61,842 $10.9M / $176.25 PROPERTY SUBMARKET TENANT SF TYPE 9320 Excelsior Boulevard Southwest Schwans 84,479 New 2410 Stillwater Road East Northeast Sejong Academy of MN 59,363 Renewal* 7250 France Avenue Southwest Human Powered Health 31,240 New 1205 77th Street West South/Airport United Bankers Bank 27,331 New 80 South 8th Street Minneapolis CBD Associated Bank 25,513 New MARKET STATISTICS KEY LEASE TRANSACTIONS Q2 2025 KEY SALES TRANSACTIONS Q2 2025 KEY UNDER CONSTRUCTION PROJECTS Q2 2025 *Renewals not included in leasing statistics JACOB GREENER Research Analyst Tel: +1 952 465 3340 jacob.greener@cushwake.com PATRICK HAMILTON Market Director Tel: +1 952 837 8574 patrick.hamilton@cushwake.com ©2025 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed to be reliable, including reports commissioned by Cushman & Wakefield (“CWK”). This report is for informational purposes only and may contain errors or omissions; the report is presented without any warranty or representations as to its accuracy. Nothing in this report should be construed as an indicator of the future performance of CWK’s securities. You should not purchase or sell securities—of CWK or any other company—based on the views herein. CWK disclaims all liability for securities purchased or sold based on information herein, and by viewing this report, you waive all claims against CWK as well as against CWK’s affiliates, officers, directors, employees, agents, advisers and representatives arising out of the accuracy, completeness, adequacy or your use of the information herein. A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2024, the firm reported revenue of $9.4 billion across its core service lines of Services, Leasing, Capital markets, and Valuation and other. Built around the belief that Better never settles, the firm receives numerous industry and business accolades for its award-winning culture. For additional information, visit www.cushmanwakefield.com. *Rental rates reflect full service asking MINNEAPOLIS OFFICE Q2 2025 CADEN WORKMAN Data Specialist Tel: +1 952 495 2560 caden.workman@cushwake.com Page 87 of 87