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HomeMy WebLinkAbout2021 08-23 EDAPE conomic Development Authority V I RT UA L meeting being conducted by electronic means in accordance with Minnesota S tatutes, section 13D.021 P ublic portion available for connection via telephone Dial: 1-312-626- 6799 Meeting I D: 86505454202# Passcode: 830981## A ugust 23, 2021 AGE NDA 1.Call to Order The City Council requests that attendees turn off cell phones and pagers during the meeting. A copy of the full C ity Counc il packet, including E D A (E conomic Development Authority ), is available to the public. The packet ring binder is located at the entrance of the council chambers. 2.Roll Call 3.Approval of Consent Agenda The following items are considered to be routine by the Economic Development Authority (E D A) and will been acted by one motion. There will be no separate disc ussion of these items unless a Commissioner so requests, in whic h event the item will be removed from the c onsent agenda and considered at the end of Commission Consideration I tems. a.Approval of Minutes - Approve the minutes from the July 26, 2021, meeting 4.Commission Consideration Items a.Resolution A pproving the A cquisition of Certain P roperty L ocated at: 6200 Brooklyn B oulevard - Motion to approve the resolution approving the acquisition of certain property located at 6200 Brooklyn Boulevard, Brooklyn Center, MN. 5.Adjournment Economic Development Authority DAT E:8/23/2021 TO :C ity C ouncil F R O M:D r. Reggie Edwards, City Manager T H R O U G H :N/A BY:Barb S uciu, C ity C lerk S U B J E C T:A pproval of Minutes Requested Council A con: - A pprove the minutes from the J uly 26, 2021, meeng B ackground: I n accordance with M innesota S tate S tatute 15.17, the official records of all mee6ngs must be documented and approved by the governing body. B udget I ssues: - None I nclusive C ommunity Engagement: N/A A nracist/Equity Policy Effect: N/A S trategic Priories and Values: O pera6onal Excellence AT TA C H M E N TS : D escrip6on U pload D ate Type 7.26.21 8/19/2021 Backup M aterial 07/26/21 -1- DRAFT MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION JULY 26, 2021 VIA ZOOM 1. CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in Regular Session called to order by President Mike Elliott at 9:11 p.m. 2. ROLL CALL President Mike Elliott and Commissioners Marquita Butler, Kris Lawrence-Anderson, and Dan Ryan. Commissioner April Graves was excused. Also present were Executive Director Reggie Edwards, Economic Development Coordinator Vong Thao, Community Development Director Meg Beekman, City Attorney Troy Gilchrist, and City Clerk Barb Suciu. 3. APPROVAL OF AGENDA AND CONSENT AGENDA Commissioner Ryan moved and Commissioner Lawrence-Anderson seconded to approve the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES 1. July 12, 2021 – Regular Session 3b. EDA RESOLUTION NO. 2021-XX APPROVING THE CERTIFICATE OF COMPLETION OF PROJECT (SONDER POINT) 3c. EDA RESOLUTION NO. 2021-XX APPROVING A RIGHT OF ENTRY AGREEMENT WITH LENNIE CHISM FOR USE OF 6100 SHINGLE CREEK PARWKAY (FORMER TARGET SITE) Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. EDA RESOLUTION NO. 2021-XX AUTHORIZING A BROOKLYN CENTER ICRO-LOAN PROGRAM Dr. Edwards introduced the item and invited Mr. Thao to present the staff report. 07/26/21 -2- DRAFT Economic Development Coordinator Vong Thao provided a PowerPoint presentation on the Brooklyn Center Micro Loan Program. He explained the 2021 EDA budget identified $50,000 for a micro-loan program for small businesses, particularly BIPOC-owned businesses, who have a hard time accessing capital. The program is flexible in the uses of the funds to help businesses get back on their feet post-COVID and civil unrest. The City noticed it is a tough time for banks to finance businesses that have a not-so-strong cash flow so help is needed due to inventory and operational expenses that businesses may incur. Mr. Thao explained that the Liberian Business Association (LIBA) will charge a 10% administrative fee on the fund and an additional 6% spread to the sub-borrowers on loans to cover management costs. LIBA is a non-profit group in Brooklyn Center that supports a lot of small businesses and plays a big role in helping them. Mr. Thao stated the purpose of this program is to access capital for non-traditional borrowers who cannot get a loan through a bank. This will increase Brooklyn Center’s small business’ financial acumen and readiness for traditional financing in the future from traditional financial institutions. LIBA is looking to borrow $100,000 from the City of Brooklyn Center with a 0% interest and 24- month term. The loans would be from a $1,000 minimum to a $5,000 maximum to sub-borrowers. Mr. Thao reviewed eligibilities are an annual revenue of less than $250,000, the business must be located in the City of Brooklyn Center, and they must take LIBA’s financial education class. This will help small businesses be bank ready in the future. Eligible uses will be for inventory acquisition, purchase of goods, advertising and marketing branding, financial management tools such as QuickBooks, helping with credit repair, payment of accountant and bookkeeping services, and access to capital preparation. The goal is to make these funds easily accessible. Mr. Thao stated the approval process involves review of the application by the LIBA to assure they are complete and decide whether the business is eligible to move forward in the application process. He noted the action requested of the EDA is to approve LIBA for $100,000 to be used in the Micro-Loan Program. This program will be structured in accordance with the provisions contained in the proposal from LIBA that was presented to the EDA. EDA staff will be authorized and make modifications to the loan program that do not materially alter the substance of the loan program as presented to the EDA. He stated EDA staff will closely monitor the funds and assure LIBA runs a successful program and will assist where needed. Commissioner Lawrence-Anderson asked if the EDA is offering a total of $100,000 made up of individual loans of up to $5,000 and through repayment, the money will return to the EDA for general use. Mr. Thao stated the $100,000 would be borrowed to LIBA and those funds will return in the form of monthly payments back to the EDA. Commissioner Lawrence-Anderson asked who exactly the loan would be made to and how does the EDA know it will be repaid. Mr. Thao stated the loan would be made to LIBA and their sub- borrowers would be the borrowers from LIBA. There will be a loan agreement in place and City staff will closely monitor this program as well to make sure it is successful. 07/26/21 -3- DRAFT Commissioner Lawrence-Anderson noted LIBA would be charging 10% to oversee the program plus an additional 6% on loans to cover the costs of managing payments. She stated the EDA would be charging 0% interest and asked to whom would LIBA be charging the 16% interest. Mr. Thao explained that 10% is what LIBA would take off the top of the $100,000 to provide one-on- one business education with business owners; that is their administrative fee. LIBA will make 6% off the sub-borrowers that will borrow from them to cover portfolio management time. Community Development Director Meg Beekman explained, from a context standpoint, that a year ago, when all were going through the pandemic, the City received CARES dollars from the federal government that were utilized to support residents and businesses that were suffering from the effects of the pandemic and economic fallout that came along with it. The City, at that time, contracted with a number of agencies such as Patio Consulting, ACER, and LIBA. Each of the programs was designed a little differently but geared to support small businesses in impactful and specific ways. LIBA designed a program at that time to take 30 businesses, provide technical assistance training classes, provide a laptop computer, QuickBooks and other software to run their business, and training in the software. When the business owners completed the training, they received a $1,200 grant to use towards operating their business. This program was designed to fill the need around a specific gap of small businesses that were struggling to pivot their business model to on-line or more of a post-COVID reality. These small businesses may not have had that technical knowhow or equipment. Ms. Beekman reported that program was very successful and 30 businesses completed that program. In talking with LIBA, City staff recognized the continuing gap for small businesses to receive additional private lending and access to capital, which is critical now as businesses are reopening. It is difficult for small businesses, particularly migrant owned, that may not have a credit history or be bank ready. What happens is that these small businesses have to rely on family and friends to borrow money, fall prey to predatory lending, or they don’t get access to the capital they need. In recognizing that need, staff carved out with LIBA this particular program as a jumping off point to the program of last year. She noted it has a similar concept with 25-30 businesses being identified in need of working capital and becoming bank ready. They would be put through this mentoring program, report out to credit agencies as they are repaying their loan, and once the loan is paid off, the business will be ready to have access to traditional lending from a private bank. Ms. Beekman stated Mr. Thao has done a terrific job of connection with Old National Bank who is interested in this program and participating on the underwriting committee to get to know these businesses, build a relationship, and provide technical assistance throughout the process. She stated she is particularly proud of this program that Mr. Thao has designed with LIBA. Commissioner Lawrence-Anderson asked how many Brooklyn Center entrepreneurial businesses will be assisted with the $100,000. Ms. Beekman estimated 20 to 30 depending on the loan amounts. Commissioner Lawrence-Anderson asked if LIBA will charge loan recipients 10% and 6%. Mr. Thao corrected that LIBA will charge the loan recipients 6% and the 10% will come off the 07/26/21 -4- DRAFT $100,000, meaning this program will cost the City $10,000. He felt it was a phenomenal program to provide 25-30 businesses with needed technical assistance and capital. Commissioner Lawrence-Anderson stated she supports the program and asked if there is any risk to the City if there is a default from one of the loan recipients. Mr. Thao stated LIBA is guaranteeing on the loan. Commissioner Ryan stated Ms. Beekman and Mr. Thao did a good job outlining the program. He noted there is certainly some risk to the City as there may be some borrowers who are not able to perform. But that is a kind of risk he thinks the City wants our values directives to go in; then you have to accept some of that risk. He stated if venturing a great deal more of the City’s money unsupported, then he would have questions but he thinks the scale and design of this program is appropriate. President Elliott stated it was mentioned LIBA would guarantee to pay back the loan. Mr. Thao answered in the affirmative and explained it would be a loan to the organization. President Elliott asked about the terms of the City monitoring the loan and lending and if the City is involved in the underwriting process. Mr. Thao stated the City would review the underwriting process and provide guidance, where necessary, to assure the program is run successfully. LIBA would have the underwriting criteria and the City will receive a quarterly report from LIBA on the number of businesses that were funded and received technical assistance through that program. President Elliott referred to the question of Commissioner Lawrence-Anderson related to the rates. He stated the City is lending the money at 0% to LIBA and the micro loans will have a rate of 6%. He asked how that rate was determined. Mr. Thao stated the 6% was a proposal that LIBA provided and staff felt 6% was favorable in comparison to what non-profit organizations and lending institutions are charging. In addition, when you look at giving out a $1,000 to $5,000 loan, a 6% interest rate is not much to pay when it includes receiving one-on-one technical assistance. President Elliott stated the loans at $5,000 are not huge and he thinks the rates the Small Business Administration (SBA) lends starts at 3.75% or 3% and then it goes up and the average business loan is between 3% and 7%. He is wondering whether 6% is too high of a lending rate for presumably businesses that are already at risk. Mr. Beekman stated that is a fair point about the interest rate, noting the average loan amount at the SBA or other business loans are much higher than $5,000 and this recognizes there is a cost to administer the repayment of those loans which is not always an easy or small task. She noted the City has housing rehabilitation loans and the company that services those loans on behalf of the City charges a flat fee per loan from $500 to $1,000, depending on the size of the loan. She stated to extract that kind of fee on a $5,000 loan is not feasible so staff was seeking a middle ground to cover the administrative cost of administering the loans and not be overly burdensome to the business owners. Commissioner Ryan stated a couple factors to consider are that first of all, these are unsecured loans to people who are just starting out and have limited assets so a number of the loans will not 07/26/21 -5- DRAFT perform. He noted if a business gets $1,000, at 6% it is a $60 charge per annum. Mr. Thao stated that is correct. Commissioner Ryan stated on a $5,000 loan, at 6% it is a $300 charge per annum. He stated let’s not forget that the interest rate people pay on loans is always factored against the rate of default in a given loan category and set of borrowers. While he would like to just give people the money, that is not feasible and as there are costs to administer the loan and audit the program, he felt 6% was entirely reasonable. In addition, banks don’t like to loan to people just starting out and expect people to get started on their own by whatever means. Banks like to loan to businesses that are up and running and the EDA needs to consider those factors. Mr. Thao stated the long-term strategy of this program is that if 25-30 businesses can be helped to understand how the process works to borrow money. Then, in the future when they go to traditional institutions, they will be more financially prepared to answer questions the banks may have. He stated that would be a success for businesses in Brooklyn Center. President Elliott stated he hopes the City will continue to do these types of programs and monitor the effectiveness. He asked what is the staff plan for understanding, from the micro-loan recipients, the impact of the program, design of the program, and its effectiveness. Mr. Thao stated staff will monitor that closely and at a minimum, if 20-30 loans are given out, it would be 20-30 Brooklyn Center businesses that receive business technical assistance. At a minimum, that will be what the City gets as the outcome. President Elliott stated he would like the City to have a focus group of people who have received the loans and to understand from them about the effectiveness of the program. Mr. Thao stated staff could factor that in with the LIBA loan, to do a pre- and post-loan survey of borrowers, which would help us understand the changed difference of small business owners from the beginning of the loan to the end of the loan. President Elliott stated he supports this program but would like the EDA action to include, as a condition, language around having that pre- and post-loan feedback. President Elliott moved and Commissioner Lawrence-Anderson seconded to adopt EDA RESOLUTION NO. 2021-__ Authorizing a Brooklyn Center Micro-Loan Program, as amended to require a pre- and post-loan survey from borrowers relating to the effectiveness of this program. Motion passed unanimously. 5. ADJOURNMENT Commissioner Ryan moved and Commissioner Butler seconded adjournment of the Economic Development Authority meeting at 9:42 p.m. Motion passed unanimously. Economic Development Authority DAT E:8/23/2021 TO :C ity C ouncil F R O M:D r. Reggie Edwards, City Manager T H R O U G H :N/A BY:M eg Beekman, C ommunity D evelopment D irector S U B J E C T:Res olu/on A pproving the A cquisi/on of Certain P roperty L ocated at: 6200 Brooklyn Boulevard Requested Council A con: - Moon to approve the resoluon approving the acquision of certain property located at 6200 Brookly n Boulevard, Brookly n C enter, M N. B ackground: The property, 6200 Brooklyn Boulevard, is a res iden/al property with a total size of 0.2 acres. I t is located at the corner of B rooklyn B oulevard and 62nd Avenue N , and is accessed from 62nd Avenue N . T he property is currently zoned is currently zoned R -1: O ne Family Residence, and is guided under the 2040 C omprehensive Plan with a Future L and U se of L ow D ensity Residen/al, though is within the B rooklyn B oulevard overlay which calls for higher intensity uses along the corridor. T he property has been u/lized as a single-family residence with the primary home being constructed in 1955. T he property had a 2020 assessed market value of $156,000 and a 2021 assess market value of $165,000. The property is currently owned by H ayder A lbatushi. A s part of the outreach related to the Brooklyn Boulevard reconstruc/on and the acquis i/on of certain cons truc/on eas ements related to it, the property ow ner inquired about the City's level of interes t in acquiring his en/re property. M r. A lbatushi was referred to the C ommunity D evelopment D epartment, w here discussions ens ued. T he C ity provided a dra? purchase agreement to indicate the terms of a sale. A purchase price was nego/ated based on a 2020 appraisal of the property, conducted by the C ity, which iden/fied a value of $205,000. A?er discussion with the property owner an agreed upon purchase price of $210,000 was reached. T he total cost to the E DA associated with the acquisi/on of the property would be $215,000. T his amount includes the purchase price of the property of $210,000 and moving expenses to the homeowner of $5,000. T he purchase agreement allows for the property owner to remove any fixtures within the home under the condi/on it does not affect the safety or security of the structure. T he purchase agreement allows the C ity to inspect the property, which would occur to determine the cost of demoli/on. U pon closing on the property, the C ity would demolish the structure on the property, which is es/mated to cost around $20,000. The E DA currently owns one other parcel on this block, but would not have con/guous ow ners hip w ith this acquisi/on. O ne remaining property at 6206 Brooklyn Boulevard would need to be acquired in the future to assemble the land to accommodate a redevelopment. The E DA has had a policy of acquiring and as s embling single family proper/es along Brooklyn Boulevard for many years. W ith the reconstruc/on of Brooklyn Boulevard and the upcoming land use s tudy and crea/on of an overlay dis trict it is an/cipated that the corridor w ill trans i/on to higher intensity land uses over /me. A cquiring proper/es as they become available is a strategy for targeted redevelopment. B udget I ssues: T I F #3 F unds w ill be used for the acquisi/on of the property. I nclusive C ommunity Engagement: A nracist/Equity Policy Effect: S trategic Priories and Values: Targeted Redevelopment AT TA C H M E N TS : D escrip/on U pload D ate Type A rial and Loca/on M ap 8/17/2021 Backup M aterial P urchas e A greement 8/17/2021 Backup M aterial Res olu/on 8/18/2021 Resolu/on LeFer Location Map –6200 Brooklyn Boulevard Aerial Map –6200 Brooklyn Boulevard 1 621725v1BR291-10 PURCHASE AGREEMENT 1. PARTIES. This Purchase Agreement (“Purchase Agreement”) is entered into this ___ day of _______________, 2021, by and between Hayder Albatushi (“Seller”) and the Economic Development Authority of Brooklyn Center, Minnesota, a Minnesota municipal corporation (“Buyer”). 2. SALE OF PROPERTY. Seller is the owner of that certain real estate (“Property”) located at 6200 Brooklyn Boulevard, Brooklyn Center, PID 03-119-21-43-0030, legally described as follows: Lot 003, Block 002, Lawnridge Ex Road, according to the recorded plat thereof, County of Hennepin, State of Minnesota. 3. OFFER/ACCEPTANCE. In consideration of the mutual agreements herein contained, Buyer offers and agrees to purchase and Seller agrees to sell and hereby grants to Buyer the exclusive right to purchase the Property and all buildings, improvements, and fixtures thereon, together with all appurtenances, including, but not limited to, plant, shrubs, trees, and grass. 4. NO PERSONAL PROPERTY INCLUDED IN SALE: There are no items of personal property or fixtures owned by Seller and currently located on the Property included in the Purchase Price for purposes of this sale. Seller may remove the following fixtures from the Property provided the Property is left secure: 5. PURCHASE PRICE AND TERMS: A. PURCHASE PRICE: The total Purchase Price (“Purchase Price”) for the Property is Two Hundred Ten Thousand and No/100ths Dollars ($210,000.00). B. MOVING EXPENSES: The sum of Five Thousand Dollars ($5,000.00) to reimburse Seller for Seller’s moving expenses (“Moving Expenses”) shall be paid by Buyer to Seller at Closing. C. EARNEST MONEY. Earnest money of Five Thousand and No/100th Dollars ($5,000.00) shall be deposited by Buyer with a title company upon execution of the Agreement by both parties. The earnest money shall be applied to the Purchase Price at closing. C. TERMS: (1) BALANCE DUE SELLER: Buyer agrees to pay the Purchase Price, less the earnest money to Seller by check or wire transfer on the Closing Date (“Closing”). 2 621725v1BR291-10 (2) DEED/MARKETABLE TITLE: Subject to performance by Buyer, Seller agrees to execute and deliver a Warranty Deed conveying marketable title to the Property to Buyer, subject only to the following exceptions: a. Building and zoning laws, ordinances, and state and federal regulations. b. Reservation of minerals or mineral rights to the State of Minnesota, if any. c. Public utility and drainage easements of record which will not interfere with Buyer’s intended use of the Property. d. Title defects waived by Buyer pursuant to paragraph 6 below. 6. CONTINGENCIES. A. Notwithstanding any other provision in this Agreement to the contrary, the parties agree that the purchase of the Property is subject to the following contingencies, which must be accepted or waived before the expiration of the Due Diligence Period hereafter defined, unless a shorter period is expressly provided herein: (1) Title to the Property shall be acceptable to Buyer, in its sole discretion. (2) The Property’s environmental condition must be acceptable to Buyer, in its sole discretion. (3) Buyer shall have the right during the Due Diligence Period to conduct such soil tests/geotechnical analyses, inspections, reviews, examinations, storm water/drainage requirement analyses, pre-demolition assessments, and surveys, if any, as Buyer deems necessary at Buyer’s expense. The results of the same shall be satisfactory to Buyer in its sole discretion. B. Buyer shall satisfy or waive the above contingencies on or before the expiration of the Due Diligence Period. On or before the expiration of the Due Diligence Period, Buyer shall, by giving written notice to Seller, either: (1) Terminate this Agreement if any one or more of the contingencies above have not been satisfied to the satisfaction of Buyer; or (2) Waive the contingencies listed above and proceed to closing. If Buyer elects to terminate this Agreement under paragraph (B)(1) above, then upon, Seller’s receipt of Buyer’s written notice of termination, this Purchase Agreement shall be null and void and neither party shall have any further obligation to the other. 3 621725v1BR291-10 If Buyer elects to waive the contingencies and proceed under paragraph (B)(2) above, the parties shall proceed to closing as provided in this Purchase Agreement. 7. DOCUMENTS TO BE DELIVERED AT CLOSING BY SELLER. A. Warranty Deed free and clear of encumbrances subject only to the exceptions stated in paragraphs 5 (C) (2) (a), (b), (c), and (d) of this Purchase Agreement. B. Standard form Affidavit of Seller. C. Well disclosure certificate, if required. D. Waiver of Relocation Benefits in the form attached hereto as Exhibit A. E. Such other documents as may be reasonably required by Buyer’s title examiner or title insurance company. 8. CLOSING DATE/DUE DILIGENCE PERIOD. For a maximum of 30 days after the mutual execution of the Purchase Agreement (the “Due Diligence Period”), Buyer shall have the right, but not the obligation, to conduct an investigation of the Property as described in paragraph 6 (A) of this Purchase Agreement. The closing of the sale of the Property shall take place within 30 days following the end of the Due Diligence Period. The closing shall take place at City Hall, 6301 Shingle Creek Parkway, Brooklyn Center, MN 55430 (or at such other location as the parties shall agree). 9. DELIVERY OF DOCUMENTS. Within seven business days of signing the Purchase Agreement, Seller shall have provided Buyer with copies of all relevant material in Seller’s possession relating to the Property, including but not limited to, title reports, soil reports, environmental studies, surveys, environmental reports, agreements with governmental authorities, or other records of the Property that Seller has in Seller’s possession (collectively, the “Documents”). 10. INSPECTION OF PROPERTY. During the Due Diligence Period, Seller shall allow Buyer and Buyer’s agents access to the Property without charge and at all reasonable times for Buyer’s inspection of the Property. This includes the right of Buyer and its agents to take soil borings of the Property. Buyer shall pay all costs and expenses of such inspections and any testing carried out in connection therewith and shall hold Seller and the Property harmless from all costs and liabilities relating to Buyer’s activities. Buyer shall not damage, encumber, or permit a lien or claim to result from its activities, or alter the Property in any way. Buyer shall not have the right to do any intrusive testing without the prior written authorization of Seller. Buyer shall repair and restore any damage to the Property caused by or occurring during Buyer’s inspection and testing and return the Property to substantially the same condition as existed prior to such entry. Buyer’s obligations under this paragraph shall survive termination of this Agreement. 11. ENVIRONMENTAL INSPECTION. Seller, prior to vacation of the Property, shall remove all substances that, under state or federal law, must be disposed of at an approved disposal 4 621725v1BR291-10 facility. This requirement does not apply to hazardous substances integrated into the building improvements (e.g., asbestos) or soil but applies only to movable equipment, supplies and materials that are located or stored on the Property. Buyer and Seller will conduct a joint inspection of the Property at a time to be mutually agreed upon prior to closing for the purpose of identifying materials that must be removed by Seller. 12. LEAD. If the dwelling structure on the Property was constructed prior to 1978, a lead paint disclosure accompanies this Agreement. 13. REAL ESTATE TAXES. A. Seller will pay at or prior to closing all real estate taxes due and payable in 2020 and prior years on the Property, including any delinquent real estate taxes. B. Real estate taxes due and payable in 2021 shall be prorated as of the date of closing between Buyer and Seller. If the amount of real estate taxes due and payable in 2021 is not available on the date of closing, the pro-rated taxes will be based on the amount of real estate taxes due and payable in 2020. 14. SPECIAL ASSESSMENTS. A. Seller shall pay on or prior to closing the balance of all special assessments levied for payment in 2021 and prior years. Buyer shall pay all special assessments pending or levied for payment with real estate taxes payable in 2022. B. Seller shall pay any deferred real estate taxes or special assessments, payment of which is required as a result of the Closing of this sale. C. As of the date of this Purchase Agreement, Seller has not received a notice of hearing for a new public improvement project from any governmental assessing authority, the costs of which project may be assessed against the Property. D. Notwithstanding any other provision of this Agreement, Seller shall at all times be responsible to pay special assessments, if any, for delinquent sewer or water bills, removal of diseased trees prior to the date of this Purchase Agreement, snow removal, or other current services provided to the Property by the assessing authority while Seller is in possession of the Property. 15. MARKETABILITY OF TITLE. Buyer shall, within a reasonable time after execution of this Purchase Agreement by both parties, obtain a commitment for title insurance or other evidence satisfactory to Buyer (“Title Evidence”) for the Property. Buyer shall have ten (10) business days after receipt of a fully executed purchase agreement and the Title Evidence to examine the same and to deliver written objections to title, if any, to Seller. Seller shall have until the expiration of the Due Diligence Period (or such later date as the parties may agree upon) to make title marketable, at Seller’s expense. In the event that title to the Property cannot be made marketable or is not made marketable by Seller by the expiration of the Due Diligence Period, 5 621725v1BR291-10 then, at the option of Buyer, Buyer may terminate this Purchase Agreement in accordance with paragraph 6 (B)(1) of this Purchase Agreement. 16. CLOSING COSTS AND RELATED ITEMS. Seller will pay: (a) any deed transfer taxes and conservation fees and recording fees for all instruments required to establish marketable title in Seller; (b) any deed transfer taxes and conservation fees required to enable Buyer to record its deed from Seller under this Purchase Agreement; (c) the cost of the title commitment, title search, name searches, and exam fees; and (d) one-half of the closing fee charged by the title insurance or other closing agent, if any, utilized to close the transaction contemplated by this Purchase Agreement. Buyer shall be responsible for the payment of the following costs: (a) recording fees for deed from Seller under this Purchase Agreement; (b) the title insurance premium, and endorsements, if any; (c) the cost to seal and/or abandon the well on the Property; and (d) one-half of the closing fee charged by the title insurance or other closing agent, if any, utilized to close the transaction contemplated by this Purchase Agreement. Each party shall be responsible for its own attorneys’ fees and costs. 17. DISCLOSURE; INDIVIDUAL SEWAGE TREATMENT SYSTEM. Seller discloses that there is not an individual sewage treatment system on or serving the Property. If there is an individual sewage treatment system on or serving the Property, Seller discloses that the system is not in use. In the event there is a sewage treatment system, a map of said location of the system is attached. 18. WELL DISCLOSURE. Seller discloses that there is a well on the Property. 19. SELLER’S WARRANTIES. Seller warrants that buildings, if any, are entirely within the boundary lines of the Property. Seller warrants that there is a right of access to the Property from a public right-of-way. Seller warrants that there has been no labor or materials furnished to the Property for which payment has not been made. Seller warrants that there are no present violations of any restrictions relating to the use or improvement of the Property. Seller represents that Seller has good and marketable simple title interest to the Property and no consents or approvals from any third parties are required. Seller represents that there are no tenants or third parties in possession of the Property, or any part thereof; and that there are no leases, oral, or written, affecting the Property or any part thereof. Seller agrees that Seller will not enter into a lease for the Property after the date of this Purchase Agreement. Seller agrees to pay all charges for sewer, water, electric, gas, rubbish removal, Internet, cable/satellite television, and any other utility charges incurred prior to closing. These warranties shall survive the Closing of this transaction. 20. RELOCATION BENEFITS. Seller acknowledges that Seller initiated negotiations with Buyer for the transaction contemplated by this Purchase Agreement, and that this transaction is not made under threat of condemnation by Buyer. Seller agrees to waive any and all relocation benefits, assistance and services to which Seller might otherwise be eligible. Seller agrees to provide to Buyer at closing an executed waiver of relocation benefits in substantially the form of the attached Exhibit A. 6 621725v1BR291-10 21. NO MERGER OF REPRESENTATIONS, WARRANTIES. All representations and warranties contained in this Purchase Agreement shall not be merged into any instruments or conveyance delivered at closing, and the parties shall be bound accordingly. 22. ENTIRE AGREEMENT; AMENDMENTS. This Purchase Agreement constitutes the entire agreement between the parties, and no other agreement prior to this Purchase Agreement or contemporaneous herewith shall be effective except as expressly set forth or incorporated herein. Any purported amendment to this Purchase Agreement shall not be effective unless it shall be set forth in writing and executed by both parties or their respective successors or assigns. 23. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, administrators, successors, and assigns. Buyer shall not assign its rights and interest hereunder without notice to Seller. 24. NOTICE. Any notice, demand, request or other communication which may or shall be given or served by the parties shall be deemed to have been given or served on the date the same is deposited in the United States Mail, registered or certified, postage prepaid and addressed as follows: SELLER: Hayder Albatushi 6200 Brooklyn Boulevard Brooklyn Center, MN 55429 BUYER: Economic Development Authority of Brooklyn Center Attn: City Manager 6301 Shingle Creek Parkway Brooklyn Center, MN 55430-2113 AGENT: Kennedy & Graven, Chartered Attn: Sarah Sonsalla 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 25. BROKER COMMISSIONS. Buyer and Seller each represent and warrant to the other that there is no broker involved in this transaction with whom either has negotiated or to whom the representing party has agreed to pay a broker commission or finder’s fee in connection with negotiations for purchase or sale of the Property. Buyer and Seller agree to indemnify, defend, and hold the other party harmless against any and all claims of brokers, finders, or the like, and against the claims of all third parties, claiming any right to commission or compensation by or through acts of the indemnifying party or its partners, agents, or affiliates in connection with this Purchase Agreement. The indemnifying party’s indemnity obligations shall include all damages, losses, costs, liabilities, and expenses, including reasonable attorneys’ fees and litigation costs, which may be incurred by the other party. 26. METHAMPHETAMINE DISCLOSURE. To the best of Seller’s knowledge, methamphetamine production has not occurred on the Property. 7 621725v1BR291-10 27. SPECIFIC PERFORMANCE. This Purchase Agreement may be specifically enforced by the parties, provided that any action for specific enforcement is brought within six months after the date of the alleged breach. This paragraph is not intended to create an exclusive remedy for breach of this agreement; the parties reserve all other remedies available at law or in equity. 28. REMOVAL OF FIXTURES AND MATERIALS. The Seller shall have the opportunity to salvage any fixtures or materials from the buildings on the Property provided that the buildings are left secure and provided that removal does not create any hazardous conditions. Any fixtures or materials which remain on the Property after Seller’s occupancy has been terminated shall be deemed to have been abandoned and shall become the exclusive property of Buyer. Seller assumes all risk in undertaking any salvage operations. Seller shall not permit the attachment of any lien or encumbrance on the Property as a result of this or other work thereof. 8 621725v1BR291-10 IN WITNESS WHEREOF, the parties have executed this agreement as of the date written above. SELLER Hayder Albatushi By: Its: Property Owner BUYER Economic Development Authority of Brooklyn Center By: Mike Elliott Its: President By: Reggie Edwards Its: Executive Director 9 621725v1BR291-10 EXHIBIT A FORM OF WAIVER OF RELOCATION BENEFITS The undersigned, acknowledges that I met with a representative of the Economic Development Authority of Brooklyn Center, Minnesota (Authority) on _______________, 2021. The representative, _____________________________, explained that in the event that the Authority acquires my property located at 6200 Brooklyn Boulevard, Brooklyn Center, Minnesota, I may be entitled to certain relocation benefits, in addition to the amount of money being paid to me to acquire my property. These benefits may include: 1. Moving Expenses: a. A payment for actual reasonable moving expenses; or b. A fixed payment determined in accordance with the applicable schedule approved by the Federal Highway Administration. 2. Replacement Housing Payment: A 180-day homeowner is eligible to receive a replacement housing payment to cover the following costs: a. If the homeowner must pay more to buy a comparable replacement home than homeowner receives for the property, then homeowner may be compensated for the difference. b. Homeowners may be entitled to compensation for incidental and closing expenses related to the purchase of a decent, safe, and sanitary replacement home, such as recording fees, title insurance, appraisal, and inspection fees. c. If a homeowner must pay a higher interest rate on a mortgage to finance the purchase of a replacement home than the rate on the mortgage of the property, then homeowner may be entitled to compensation for increased mortgage interest costs. 3. Other Relocation Assistance: This includes referrals and other assistance to help the owner(s) relocate to a comparable decent, safe, and sanitary dwelling. These payments and services are required under the regulations of the Department of Housing and Urban Development (HUD). The owner(s) cannot be required to move from his/her home unless he/she is given reasonable opportunities to relocate to a comparable decent, safe and sanitary dwelling unit that he/she can afford. 10 621725v1BR291-10 Finally, it was explained to me that the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 as amended, entitles me to these relocation benefits; and if I sign this waiver, I will be waiving those relocation benefits. After having these benefits explained to me, I agree to waive them. In signing this waiver, I acknowledge that no threats have been made to me, either expressly or by implication that my property will be taken from me through condemnation. If after signing this waiver, I attempt to collect relocation benefits, I will have to prove that, contrary to what I am agreeing to in this waiver, my waiver of relocation benefits was not entered into voluntarily. This wavier is conditioned upon the Authority purchasing my property for the gross purchase price of $210,000.00. If this commitment to me is not fulfilled, this waiver is null and void. _________________ Date Hayder Albatushi By: Its: Property Owner WITNESS: BR305-1-742403.v1 Commissioner __________ introduced the following resolution and moved its adoption: EDA RESOLUTION NO. 2021- ___ RESOLUTION APPROVING THE PURCHASE AND AGREEMENT AND ACQUISTION OF CERTAIN PROPERTY LOCATED AT: 6200 BROOKLYN BOULEVARD, BROOKLYN CENTER, MN BE IT RESOLVED by the Board of Commissioners (“Board”) of the Economic Development Authority of Brooklyn Center, Minnesota (“Authority”) as follows: Section 1. Recitals. 1.01. The Authority is authorized pursuant to Minnesota Statutes, Sections 469.090 to 469.1081 (the “EDA Act”), to acquire and convey real property and to undertake certain activities to facilitate the development of real property by private enterprise. 1.02. To facilitate development of certain property in the City of Brooklyn Center, Minnesota (the “City”), the Authority proposes to enter into a Purchase Agreement (the “Agreement”) between the Authority and Hayder Albatushi (the “Seller”), under which, among other things, the Seller will convey the property located in the City at: 6200 Brooklyn Boulevard, situated in the State of Minnesota, County of Hennepin, and which is legally described as follows: Lot 3, Block 2, Lawnridge, according to the recorded plat thereof, County of Hennepin, State of Minnesota (the “Property”) to the Authority. 1.03. The Authority finds and determines that the acquisition of the Property is in the public interest and will further the objectives of its general plan of economic development. Section 2. Authority Approval; Further Proceedings. 2.01. The Board hereby approves the Agreement in substantially the form presented to the Board, including the acquisition of the Property by the Authority, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the Agreement by those officials shall be conclusive evidence of their approval. 2.02. Authority staff and officials are authorized to take all actions necessary to perform the Authority’s obligations under the Agreement as a whole, including without limitation execution of any documents to which the Authority is a party referenced in or attached to the Agreement, and other documents necessary to convey the Property to the Authority, all as described in the Agreement. BR305-1-742403.v1 2 August ____, 2021 Date President The motion for the adoption of the foregoing resolution was duly seconded by Commissioner and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted.