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HomeMy WebLinkAbout2010 02-22 EDAP • EDA MEETING City of Brooklyn Center February 22, 2010 AGENDA 1. Call to Order —The EDA requests that attendees turn off cell phones and pagers during the meeting. A copy of the full City Council packet, including EDA (Economic Development Authority), is available to the public. The packet ring binder is located at the front of the Council Chambers by the Secretary. 2. Roll Call 3. Approval of Agenda and Consent Agenda —The following items are considered to be routine by the Economic Development Authority (EDA) and will be enacted by one motion. There will be no separate discussion of these items unless a Commissioner so requests, in which event the item will be removed from the consent agenda and considered at the end of Commission Consideration Items. a. Approval of Minutes 1. February 8, 2010 — Regular Session • 2. Resolution Authorizing the Executive Director to Write Off Uncollectible Accounts Receivable 4. Commission Consideration Items a. First Amendment to the Development Agreement, FBI Regional Field Office Project 1. Resolution Authorizing Execution of a First Amendment to Development Agreement Requested Commission Action: — Motion to adopt resolution. b. Resolution Authorizing the Acquisition of Property to Facilitate Neighborhood Improvements and Redevelopment Opportunities within the Brooklyn Boulevard Corridor (4800 71 st Avenue North) Requested Commission Action: — Motion to adopt resolution. 5. Adjournment • EDA Agenda Item No. 3a MINUTES OF THE PROCEEDINGS OF THE t ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION FEBRUARY 8, 2010 CITY HALL — COUNCIL CHAMBERS 1. CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in Regular Session called to order by President Tim Willson at 8:26 p.m. 2. ROLL CALL President Tim Willson and Commissioners Tim Roche, Dan Ryan, and Mark Yelich. Commissioner Kay Lasman was absent and excused. Also present were Executive Director Curt Boganey, Director of Business and Development Gary Eitel, Community Development Specialist Tom Bublitz, Assistant City Manager/Director of Building and Community Standards Vickie Schleuning, City Attorney Charlie LeFevere, and Carol Hamer, Timesaver Off Site Secretarial, Inc. • 3. APPROVAL OF AGENDA AND CONSENT AGENDA Commissioner Ryan moved and Commissioner Yelich seconded approval of the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES 1. January 11, 2010 — Regular Session Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. EDA RESOLUTION NO. 2009 -02 AGREEING TO UNDERTAKE THE DUTIES OF THE CITY UNDER THE NATIONAL STABILIZATION PROGRAM AND AUTHORIZING THE EDA STAFF TO ACQUIRE CERTAIN FORECLOSED HOMES WITHIN THE CITY AND TO EXECUTE ALL INSTRUMENTS AND CONTRACTS RELATED THERETO Director of Business and Development Gary Eitel and Community Development Specialist Tom Bublitz provided a PowerPoint presentation on the National Stabilization Program (NSP) and the process under the NSP for the purchase /rehab of foreclosed/vacant property. The presentation 02/08/10 -1- DRAFT also included an overview of the following agreements the EDA is requested to authorize: 1) NSP 1 Developer Agreement with Greater Metropolitan Housing Corporation (GMHC); 2) First • Look Program Acquisition Agreement (NSP 1); 3) Access and Indemnification Agreement with Twin Cities Community Land Bank (TCCLB). It was noted that participation in NSP 1 will provide an opportunity to put money into homes in the City that otherwise would not be economically feasible to do. Discussion ensued on the NSP 1 income groups: 1) households earning at or below 120% of Area Median Income (AMI); 2) households at 50% AMI. NSP 1 requires that at least 25% of NSP 1 funds must be expended on the 50% AMI group. It was noted that the study session included a discussion on criteria for individuals to qualify for mortgages with this program. Mr. Bublitz stated that the criteria for buyers will be similar to those included in the City's Renew Loan Program. There was discussion on the option included in the NSP 1 Developer Agreement of using the West Hennepin Area Land Trust (WHALT) to meet the 50% AMI requirement. Ms. Carolyn Olson, President of GMHC, provided information on GMHC's experience working with WHALT. She stated the experience has been that these houses are in good repair because WHALT is responsible for the land in the long term. She reported that GHMC goes "green" with all of the houses they work with. Commissioner Roche moved and Commissioner Ryan seconded adoption of EDA RESOLUTION NO. 2010 -02 Agreeing to Undertake the Duties of the City Under the National • Stabilization Program and Authorizing the EDA Staff to Acquire Certain Foreclosed Homes within the City and to Execute All Instruments and Contracts Related Thereto. Commissioner Yelich stated that while he supports this agreement because of the goal to improve homes in the City, he has concern with these types of HUD programs redlining their City. He stated his support of the limited scope of the program. Commissioner Ryan noted that the Study Session addressed this issue, noting that the 50% AMI requirement is limited to two of the eight properties. Motion passed unanimously. 5. ADJOURNMENT Commissioner Roche moved and Commissioner Ryan seconded adjournment of the Economic Development Authority meeting at 9:08 p.m. Motion passed unanimously. s 02/08/10 -2- DRAFT EDA ITEM MEMORANDUM • DATE: February 11, 2010 TO: Curt Boganey, City Manager FROM: Jim Glasoe, Director of Community Activities, Recreation and Services SUBJECT: Resolution Authorizing the Executive Director to Write Off Uncollectible Accounts Receivable Recommendation: It is recommended that the Economic Development Authority consider writing off uncollectable accounts and removing them from the active accounts receivable list. Background: Per the attached summary, staff is recommending that the following accounts be removed from the active accounts receivable list. These accounts were established between 2007 and 2009. All staff collection efforts for these accounts have been exhausted and all have been sent to collections agencies, with no success. Collection efforts will continue where feasible. However, as there is little reasonable expectation of payment, staff recommends that they be removed from the active accounts receivable list. Kernan/Maasch $485.33 • On June 9, 2007, the Kernan/Maasch wedding reception was held at Earle Brown. The event invoice total was $8,648.67, of which $8,163.34 was paid prior to the event. The balance was the result of higher than expected bar services the night of the event. Although the couple indicated they would cover the overage, no check was forthcoming. Staff collection efforts were unsuccessful. This account was sent to our collection agency, whose efforts were also unsuccessful. Minnesota Senior Federation $11,693.45 The Minnesota Senior Federation held their annual conference at Earle Brown on October 20, 2008, with a total invoice cost of $12,570.69. Additionally, $872.76 in interest charges has been added to the amount due. To date only $1,750 has been collected. In several phone conversations with the Director of the Minnesota Senior Federation, he indicated the group was waiting for an expected grant and would be paying shortly thereafter. This grant did not come through and the company has subsequently gone out of business. Our collections agency has indicated no funds are available for recovery. Vang /Sullivan $246.22 The Vang /Sullivan wedding was held at Earle Brown on September 19, 2009. The total event invoice was $5,537.53. To date, collections efforts have yielded $5,291.31. Additional collection efforts have proved unsuccessful. • rltission: !'nsuring an attractive, clean, safe conunnnitp that enhances the duality of life and preserves the public trust i EDA ITEM MEMORANDUM Budget Issues: The active Accounts Receivable list would be amended accordingly. • • - Mission: Ensuring an attractive, clean, safe community that enhances the qualio� of life and preserves the public trust Commissioner introduced the following resolution and • moved its adoption: EDA RESOLUTION NO. RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR TO WRITE OFF UNCOLLECTIBLE ACCOUNTS RECEIVABLE WHEREAS, the Executive Director has reported the following Earle Brown Heritage Center accounts receivable are not expected to be collected. Staff efforts have been exhausted and accounts had been turned over to a collection agency and a collection attorney who have indicated that the accounts are not collectible. They need to be removed from the receivable records and charged off as uncollectible accounts. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of Brooklyn Center that the Executive Director is authorized to write off from the EDA's records as uncollectible the following accounts receivable: Convention Center Kernan/Maasch $ 485.33 MN Senior Federation $11,693.45 Vang/Sullivan $ 246.22 • February 22, 2010 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. i EDA Agenda Item No. 4a COUNCIL ITEM MEMORANDUM • DATE: February 17, 2010 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business and Development SUBJECT: First Amendment Agreement, FBI Regional Field Office Project Recommendation: It is recommended that the City PP P Council consider a roval/ado tion of the Resolution Authorizing Execution of a First Amendment to Development Agreement (FBI Regional Field Office Project) Background: On October 20, 2009, the City Council adopted Resolution No. 2009 -18, Authorizing the Execution of a Third Amendment to Real Estate Option Agreement. This amendment provided technical corrections and procedural revisions to the draft Development Agreement that was attached to the initial Option Agreement with the GSA, dated March 19, 2008. The Development Agreement provided for Barry Minneapolis, LLC to close on the property within 120 days from the execution of the agreement, to commence construction no later than . Y May 31, 2010 and to complete the minimum improvements no later than October 12, 2011. Attached for your reference is a copy of the October 20, 2009 staff memo. First Amendment to the Development Agreement: Attached are copies of the following: • A letter from Barry Real Estate requesting an extension of the February 13, 2010 closing date to April 29, 2010 and adjustments to the commencement of construction and completion dates that are included in the development agreement. • The First Amendment to the Development Agreement identified the plans of Barry Real Estate to assign their developer's right, title and interests in and to the lease with the GSA and the development agreement for this FBI Regional Field Office Project to PH, LLC. The commencement of construction dates is proposed to be extended from May 31, 2010 to July 31, 2010 and the completion date is proposed to be extended from October 1, 2011 to December 31, 2011. Budget Issues: There are no budget issues to consider. Council Goals: Strategic Goal #2: Aggressively proceed with implementation of City's redevelopment plans. Ongoing Goal #3: Moving towards maintaining or lowering the level of City property taxes. Mission: Ensuring alt attractive, clean, safe community that enhances the quality of life and preserves the public trust REAL ESTATE COMPANIES CHRISTIAN B. SCHOEN CHIEF EXECUTIVE OFFICER • February 11, 2010 Via Overnight Mail Economic Development Authority of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, Minnesota 55430 -2199 Attention: Executive Director Re: Development Agreement by and between the Economic Development Authority of Brooklyn Center and Barry Minneapolis, LLC dated October 16, 2009 (the "Development Agreement ") Sir/Madam: Pursuant to Section 3.9(a) of the Development Agreement, Closing of the Development Property shall take place on February 13, 2010, or such other date as the parties mutually agree. • On behalf of Barry Minneapolis, LLC, this letter constitutes our request for an extension of the Closing to April 29, 2010. Furthermore, the delay in Closing will affect the commencement and completion of construction of the Minimum Improvements. We also request that Section 4.3 of the Development Agreement be amended to provide that construction of the Minimum Improvements shall commence no later than July 31, 2010, and construction of the Minimum Improvements shall be completed no later than December 1, 2011. If the extended dates for Closing and commencement and completion of construction are acceptable, please acknowledge your agreement by execution below and return a copy to my attention. Sincere , Chris Schoen Acknowledged and agreed to this day of February, 2010. B Name: Title: • 30 IVAN ALLEN JR BOULEVARD/ SUITE 900/ATLANTA, GA 30308/ Offt(C: 404.601 .0880 / faX: 404.601 .0881 www. barryrottiptittie.i. com . EXTRACT OF MINUTES OF MEETING OF THE BOARD OF COMMISSIONERS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER, MINNESOTA HELD: February 22, 2010 Pursuant to due call and notice thereof, a meeting of the Board of Commissioners of the Economic Development Authority of the City of Brooklyn Center, Hennein County, Minnesota, was duly called and held at the City Hall in said City on Monday, the 22 day of February, 2010, at o'clock .m. The following members were present: and the following were absent: Member introduced the following resolution and moved its adoption: • RESOLUTION AUTHORIZING EXECUTION OF A FIRST AMENDMENT TO DEVELOPMENT AGREEMENT A. WHEREAS, the Economic Development Authority of the City of Brooklyn Center, Minnesota (the "Authority ") and the United States of America, acting by and through the U.S. General Services Administration (the "GSA") have heretofore entered into a Real Estate Option Agreement (as amended, the "Option Agreement ") providing for the Authority's conveyance of certain real property to GSA for the purpose of constructing office space containing approximately 162,000 square feet of rentable space with a future onsite parking facility structure having a minimum of 200 spaces (the "Project ") within the City of Brooklyn Center, Minnesota (the "City'). B. WHEREAS, by that certain Assignment of Option Agreement dated effective as of June 19 2009, the GSA assigned its rights under Option Agreement to Barry Minneapolis, LLC (the "Developer "). C. WHEREAS, the Developer exercised the option granted in the Option Agreement by delivering to the Authority, inter alia, that certain Development Agreement dated October 16, 2009 (the "Development Agreement"). D. WHEREAS, the Authority and the Developer desire to amend the Development Agreement pursuant to a First Amendment to Development Agreement (the "Amendment ") to • revise the timing of the Closing Date set forth in the Development Agreement, together with 2460860x2 corresponding revisions to the dates set forth for commencement and completion of the i construction of the Minimum Improvements (as set forth in the Development Agreement). NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Authority of Brooklyn Center, Minnesota, as follows: 1. The Board of Commissioners hereby approves the Amendment in substantially the form submitted, and the Executive Director is hereby authorized and directed to execute the Amendment on behalf of the Authority. 2. The approval hereby given to the Amendment includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the Authority officials authorized by this resolution to execute the Amendment. The execution of the Amendment by the appropriate officer or officers of the Authority shall be conclusive evidence of the approval of the Amendment in accordance with the terms hereof. The motion for adoption of the foregoing resolution was duly seconded by member and, after full discussion thereof, and upon a vote being taken thereof, the following voted in favor thereof: and the following voted against same: • 2460860v2 2 • STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF BROOKLYN CENTER I, the undersigned, being the duly qualified and acting Secretary of the Economic Development Authority of the City of Brooklyn Center, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes with the original minutes of a meeting of the Board of Commissioners of the City held on the date therein indicated, which are on file and of record in my office, and the same is a full, true and complete transcript therefrom insofar as the same relates to a Resolution Authorizing Execution of a First Amendment to Development Agreement. WITNESS my hand as such Secretary of the Board of Commissioners of the Economic Development Authority of the City of Brooklyn Center, Minnesota this day of February, • 2010. Secretary 2460860x2 3 FIRST AMENDMENT TO DEVELOPMENT AGREEMENT • THIS FIRST AMENDMENT TO DEVELOPMENT AGREEMENT (this "Amendment ") is entered into effective as of February _, 2010, by and between the ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the "Authority "), and BARRY MINNEAPOLIS, LLC, a Georgia limited liability company (the "Developer "). RECITALS WHEREAS, the Authority and the UNITED STATES OF AMERICA, ACTING BY AND THROUGH THE U.S. GENERAL SERVICES ADMINISTRATION (the "GSA ") entered into that certain Real Estate Option Agreement dated effective as of March 19, 2008 (as amended, the "Option Agreement "), pursuant to which the Authority granted to the GSA an option to purchase certain property located in Brooklyn Center, Minnesota (the "Property ") for the purpose of constructing an approximately 162,000 square foot federal office facility and related parking facility. WHEREAS, pursuant to that certain Assignment of Option Agreement dated effective as of June 19, 2009, the GSA assigned its rights under the Option Agreement to Developer. Developer exercised the option to purchase granted in the Option Agreement by delivering to the Authority, inter alia, that certain Development Agreement dated October 16, 2009 (the • "Development Agreement "), which Development Agreement sets forth the terms and conditions of the sale of real property from the Authority to the Developer and the development of said property by Developer. WHEREAS, the Development Agreement provides for a Closing Date of February 13, 2010, One Hundred Twenty days after the date of the Development Agreement, or such other date as the parties may agree. WHEREAS, Developer and PH LLC, a Nevada limited liability company, are under contract for the assignment of Developer's right, title and interest in and to a lease with the GSA and the Development Agreement to PH LLC ( "Purchase Agreement "). WHEREAS, the closing under the Purchase Agreement shall occur prior to, or simultaneously with, PH LLC's closing on the financing of the design and construction of the Minimum Improvements and the Development Agreement. WHEREAS, the terms of the Development Agreement provide that Developer's obligation to close the transaction contemplated by the Development Agreement on the Closing Date is conditioned on Developer having closed on financing for Developer's design and construction of the Minimum Improvements. WHEREAS, the Authority has agreed to Developer's request to amend the Development Agreement to permit Developer additional time to close the Purchase Agreement and PH LLC's subsequent financing. 24585550 • WHEREAS, the parties now desire to amend the terms of the Development Agreement to reflect the above described agreement. WHEREAS, the parties have agreed to amend the Development Agreement on the terms and conditions set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Definitions. Capitalized terms not otherwise defined or amended in this Amendment shall have the meaning(s) as set forth in the Development Agreement. 2. Closing Date. Sections 3.9(a) of the Development Agreement is hereby deleted and replaced with the following: "(a) Time and Place. Subject to the terms and conditions of this Agreement, the Closing on the purchase and sale of the Development Property shall take place on or before April 29, 2010, or such other date as the parties may mutually agree. If Developer desires to close prior to April 29, 2010, Developer shall provide five (5) business days written notice of such earlier Closing Date to the Authority. • The Closing shall take place at the Minneapolis offices of Briggs and Morgan, P.A. or such other place which is mutually acceptable to the parties. The Authority shall deliver possession of the Development Property to the Developer on the Closing Date." 3. Commencement and Completion of Construction. The first sentence of Section 4.3 of the Development Agreement is hereby deleted and replaced with the following: "Subject to the terms and conditions of this Agreement and to Unavoidable Delays, the Developer will commence construction of the Minimum Improvements no later than July 31, 2010, and will complete construction of the Minimum Improvements no later than December 1, 2011." 4. No Further Modification of Agreements: Ratification. Except to the extent modified herein, all other terms and provisions of the Development Agreement shall remain in full force and effect. Except to the extent modified herein, the Development Agreement is hereby ratified and affirmed in all respects by the Authority and Developer. If any conflict exists between the terms and conditions of the Development Agreement and the terms and conditions of this Amendment, the terms and conditions of this Amendment shall control. 5. Governing Law. This Amendment shall be construed and enforced in accordance with the laws of the State of Minnesota. • 2458555x3 -2- 6. Counterparts. This Amendment may be executed in any number of • counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [Signature page(s) follow.] • • 2458555v3 -3- • IN WITNESS WHEREOF, the parties have executed this Amendment to be effective as of the day and year first above written. Authority: Developer: ECONOMIC DEVELOPMENT BARRY MINNEAPOLIS, LLC, AUTHORITY OF BROOKLYN a Georgia limited liability company CENTER, a public body corporate and politic organized and existing under the laws of the By: State of Minnesota Name: Its: By: Name: Its: 24585550 -4- EDA COUNCIL ITEM MEMORANDUM DATE: October 20, 2009 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business and Development +� SUBJECT: Resolution Authorizing the Execution of a Third Amendment to Real Estate Option Agreement (FBI Regional Field Office) COUNCIL ACTION REQUESTED: Motion to adopt Resolution Authorizing the Execution of a Third Amendment to Real Estate Option Agreement. BACKGROUND: �_.. On February 25, 2008, the EDA moved to adopt Resolution No. 2008 -02, which authorized the s execution of an assignable option purchase agreement with the General Service Administration i (GSA) for a parcel of land not to exceed 8.57 acres in area that included the following properties: Tract A, RLS No. 1477 (the former Days Inn Site) and the northern portion of Lot 2, Block 1 Richardson Park rd Addition ( the former Cracker Barrel Site) . The option agreement was executed on March 19, 2008 and included an effective period of 15 months (expiration date June 17, 2009). On April 30, 2009, the GSA publicly announced that Barry Real Estate Company had been selected to be the developer for the design, build, and leasing of the FBI Regional Field Office. On June 8, 2009, the EDA moved to adopt Resolution No. 2009 -10, " A Resolution Authorizing Execution of a First Amendment to Restate Option Agreement ", which acknowledged the assignment from the GSA to Barry Minneapolis, LLC (Barry Real Estate Companies) and extended the term of the option agreement until September 17, 2009. On September 14, 2009, the EDA moved to adopt Resolution No. 2009 -15 "A Resolution Authorizing Execution of a Second Amendment to Restate Option Agreement" which provided an extension of the Term of the Option to October 16, 2009. The additional time allowed the vacation of old drainage and utility easements and the opportunity to resolve title issues associated with the previous subdivisions of Richardson Park Industrial Park and Richardson Park 2 » d Addition. i Real Estate Option Agreement: The Third Amendment to the Real Estate Option Agreement provides technical corrections and procedural revisions to the draft Development Agreement attached to the March 19, 2008 Option Agreement. Additionally, it includes changes to the Development Agreement that respond to issues the developer has experienced in securing financing for this project: - The recitals includes a statement that the GSA has indicated that pursuant to its intended use of the Development Property following development, at least 280 full-time employee positions will be provided by the development contemplated hereunder, - The term sublessee has been included to identify the Ferderal Bureau of Investigation (FBI) Minneapolis Field Office, an agency of the United States Government. - Business Subsidy Provisions of Section 4.9 have been revised form 280 to 200 full time equivalent permanent employee positions within two years of the benefit date for Purposes of complying with the Job Goals of the Business Subsidy Act. Also, language has been added to clarify the reporting and satisfaction of this State requirement. - Language has been added relating to the right of reversion and position of the Authority/EDA in the event of a foreclosure. Attached are copies of the following documents submitted by Barry Minneapolis, LLC: - October 16, 2008 letter providing written notice of the Optionee's election to exercise the Option. - Executed copy of the Third Amendment to the Real Estate Option Agreement. - Executed copy of the revised Development Agreement. The Development Agreement provides for Barry Minneapolis LLC to close on the property within 120 days from the execution of the agreement, to commence construction no later than May 31, 2010 and to complete the minimum improvements no later than October 1, 2011. Budget Issues: There are no budget issues with this action. r` REAL ESTATE COMPANIES • CHRISTIAN B. SCHOEN 404 -601 -0843 CHIEF EXECUTIVE OFFICER CSCHOEN(0)MARRYCOMPANIES.COM October 16, 2009 Via, Electronic Mail and Overnieht Delivery Economic Development Authority of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, Minnesota 55430 Attention: Executive Director Re: Real Estate Option Agreement dated March 19, 2008 (as amended the "Option Agreement') by and between the Economic Development Authority of Brooklyn Center ("Optionor') and Barry Minneapolis, LLC ( "Optionee ") Sir/Madam: On behalf of Optionee and in accordance with Section 3(a) of the Option Agreement, this letter shall serve as written notice of Optionee's election to exercise the Option. Transmitted simultaneously herewith is the executed Third Amendment to Real Estate Option Agreement and two (2) original counterparts of the Development Agreement. We look forward to closing on the property for the development of the FBI facilities. Sincerely Christian B. Schoen • 30 IVAN ALLEN JR BOULEVARD/ SUITE 900/ATLANTA, GA 30308 / OBkW 404.601 .0880 / fa= 404.601.0881 W W W.krrywnpRTLk&coM ... Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION AUTHORIZING EXECUTION OF A THIRD AMENDMENT TO REAL ESTATE OPTION AGREEMENT (FBI REGIONAL FIELD OFFICE) WHEREAS, the Economic Development Authority of the City of Brooklyn Center, Minnesota (the "Authority") and the United States of America, acting by and through the U.S. General Services Administration (the "GSA') have heretofore entered into a Real Estate Option Agreement (the "Option Agreement') providing for the Authority's conveyance of certain real property to GSA for the purpose of constructing office space containing approximately 162,000 square feet of rentable space with a future onsite parking facility structure having a minimum of 200 spaces (the "Project ") within the City of Brooklyn Center, Minnesota (the "City"); and WHEREAS, a proposed. form of Development Agreement in connection with the Project is attached as an exhibit to the Option Agreement (the "Development Agreement "); and WHEREAS, by that certain Assignment of Option Agreement dated effective as of June 19, 2009, the GSA assigned its rights under Option Agreement to Barry Minneapolis, LLC (the "Developer'; and WHEREAS, the Authority and the Developer previously entered into that certain First Amendment to Real Estate Option Agreement dated effective as of June 19, 2009 for the purpose of extending the term of the option granted in the Option Agreement; and WHEREAS, the Authority and GSA previously entered into that certain Second Amendment to Real Estate Option Agreement dated effective as of September 17, 2009 for the purpose of further extending the term of the option granted in the Option Agreement; and WHEREAS, the Authority and GSA desire to further amend the Option Agreement, and the form of Development Agreement attached thereto, pursuant to a Third Amendment to Real Estate Option Agreement (the "Amendment ") to revise the timing and manner of the exercise of the option and related title and survey review and to make certain amendments to the form of Development Agreement to be entered into by the parties upon exercise of the option contained in the Option Agreement. NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Authority of Brooklyn Center, Minnesota, as follows: 1. The Board of Commissioners hereby approves the Amendment in substantially the form submitted, and the Executive Director is hereby authorized and directed to execute the Amendment on behalf of the Authority. s EDA RESOLUTION NO. 2. The approval hereby given to the Amendment includes approval of such additional details therein as may be necessary and wrr..,i,,rate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the Authority officials authorized by this resolution to execute the Amendment. The execution of the Amendment b the appropriate y officer or officers of the Authority t3' shall be conclusive evidence of the approval of the Amendment in accordance with the terms hereof. October 26. 2009 Date President The motion for the adoption of the foregoing resolution was duly seconded by commissioner I 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. I I .�- There was discussion on the guideline requiring that the purchase price cannot be more than 65% of Hennepin County's latest estimated Market Value for the property, and could not exceed $80,000. Mr. Boganey clarified that the goal in expediting staff s ability to make these acquisition options is not to compete with the private sector. Staff will be looking for properties that have previously been identified in a Council policy or plan to be a strategic benefit to the community, such as properties on Brooklyn Boulevard where the Council established policy is to remove some of the uses along that corridor so that the corridor can ultimately be redeveloped. It was noted that the properties referred to are identified in the.Comprehensive Plan and are part of a long standing policy. Commissioner Lasman moved and Commissioner Ryan seconded adoption of EDA RESOLUTION NO. 2009-17 Authorizing Authority Staff to Acquire Certain Foreclosed Homes within the City and to Execute all Instruments and Contracts Related Thereto. President Willson commended staff for the procedure being followed and noted the benefit this provides to the City. — Motion passed unanimously. 4b. RESOLUTION NO. 2009 -18 AUTHORIZING THE EXECUTION OF A TEMW AMENDMENT TO REAL ESTATE OPTION AGREEMENT (FBI REGIONAL FIELD OFFICE) Mr. Eitel introduced the item, discussed the history, stated the purpose of the proposed resolution, and provided an overview of the Third Amendment to Real Estate Agreement (FBI Regional Field Office). Mr. Jim Irwin, Barry Real Estate Companies, addressed the City Council and stressed that the number of jobs planned with the subject developmelat will not change from what was proposed in the original agreement. The purpose of the proposed amendment is to reduce risks associated with financing. There was discussion on language added to the agreement relating to the right of reversion and position of the Authority/EDA in the event of a foreclosure. Commissioner Roche moved and Commissioner Lasman seconded adoption of EDA RESOLUTION NO. 2009 -18 Authorizing the Execution of a Third Amendment to Real Estate Option Agreement (FBI Regional Field Office). Motion passed unanimously. 5. ADJOURNMENT Commissioner Lasman moved and Commissioner Ryan seconded adjournment of the Economic Development Authority meeting at 8:23 p.m. . Motion passed unanimously. 10/26/09 -2- DRAFT THIRD AMENDMENT TO REAL ESTATE OPTION AGREEMENT • THIS THIRD AMENDMENT TO REAL ESTATE OPTION AGREEMENT (this "Amendment ") is entered into effective as of October 1*1 2009 by and between the ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the "Authority "), and BARRY NIINNEAPOLIS, LLC, a Georgia limited liability company (the "Developer "). RECITALS WHEREAS, the Authority and the UNITED STATES OF AMERICA, ACTING BY AND THROUGH THE U.S. GENERAL SERVICES ADMINISTRATION (the "GSA ") entered into that certain Real Estate Option Agreement dated effective as of March 19, 2008, pursuant to which the Authority granted to the GSA an option to purchase certain property located in Brooklyn Center, Minnesota for the purpose of constructing an approximately 162,000 square foot federal office facility and related parking facility. WHEREAS, pursuant to that certain Assignment of Option Agreement dated effective as of June 19, 2009, the GSA assigned its rights under the Option Agreement to Developer, who is to exercise the option to purchase granted therein by delivering to the Authority, inter alia, a certain Development Agreement in the form attached to the Option Agreement (the "Development Agreement "), which Development Agreement sets forth the terms and • conditions of the sale of real property from the Authority to the Developer. WHEREAS, the Authority and the Developer entered into that certain First Amendment to Real Estate Option Agreement dated effective as of June 19, 2009, and that certain Second Amendment to Real Estate Option Agreement dated effective as of September 17, 2009, pursuant to each of which the original term of the option was extended (together with the original Real Estate Option Agreement described above, the "Option Agreement "). WHEREAS, pursuant to the terms of the Option Agreement, the GSA was to deliver to the Authority an ALTA/ACSM Land Title Survey depicting and describing the Development Property to be purchased (the "Survey "), and the Authority was to subsequently deliver to the GSA a title insurance commitment for the Development Property (the "Commitment "). WHEREAS, pursuant to the terms of the Option Agreement, the GSA was to review the Commitment and related documents and make any title objections to the Authority within certain time frames established in the Option Agreement; all such objections are to be resolved between the parties prior to exercise of the option and all permitted encumbrances are to be described on Exhibit D of the Development Agreement at the time of delivery thereof to the Authority in connection with the option exercise. WHEREAS, the GSA requested that the Developer perform the review of the Commitment and Survey subsequent to the assignment of the GSA's rights under the Option Agreement but prior to the execution and delivery of this Amendment and the Development • Agreement such that the Developer and Authority may determine the Permitted Encumbrances, 23400050 • and the Authority has agreed to amend the Option Agreement and Development Agreement to permit such review by Developer. WHEREAS, the Survey and Commitment, as updated and/or revised pursuant to dialogue between the Authority, the GSA and the Developer, have been delivered to the Authority, GSA and Developer prior to the date hereof. WHEREAS, the Developer has reviewed the Commitment, Survey and related documents and the parties are in the process of performing certain curative acts and establishing the Permitted Exceptions. WHEREAS, the parties now desire to amend the terms of the Option Agreement and the form of Development Agreement to reflect the above described revisions and the revised requirements for Developer's exercise of the option. WHEREAS, the parties have agreed to amend the Option Agreement and the form of Development Agreement on the terms and conditions set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: • 1. - Definitions. Capitalized terms not otherwise defined or amended in this Amendment shall have the meaning(s) as set forth in the Option Agreement and Development Agreement, as applicable. 2. Form of Development Agreement. The form of Development Agreement attached as Exhibit B to the Option Agreement is hereby deleted in its entirety and replaced with the form of Development Agreement attached as Exhibit B hereto. 3. Exercise of Option. Sections 3(b), 3(c), 3(d), 3(e) and 3(g) of the Option Agreement are hereby deleted in their entirety. Section 3(f) of the Option Agreement is hereby deleted and replaced with the following: "Confirm (and complete, if necessary) the information and statements made in Sections 4.9(f) and (g) of the Development Agreement." Section 3(h) of the Option Agreement is hereby deleted and replaced with the following: "Confirm the legal description contained in Exhibit A of the Development Agreement conforms with the legal description of the portion of the Property Developer intends to acquire (the "Development Property "), as depicted and described on the Survey and Commitment." • 23400050 -2- Section 3(i) of the Option Agreement is hereby deleted and replaced with the • following: "Complete Exhibit D of the Development Agreement pursuant to Section 3.6 of the Development Agreement; and" 4. Title and Survev. Section 6 and Section 7 of the Option Agreement are hereby amended such that the expiration of the periods described in Section 6 and Section 7 for the GSA's review of title and survey matters are hereby waived; the review of the Commitment, Survey and related title matters, and resolution thereof, shall be performed as provided in Section 3.6 of the Development Agreement. 5. No Further Modification of Agreements; Ratification. Except to the extent modified herein, all other terms and provisions of the Option Agreement shall remain in full force and effect. Except to the extent modified herein, the Option Agreement is hereby ratified and affirmed in all respects by the Authority, the GSA, and Developer. If any conflict exists between the terms and conditions of the Option Agreement and the terms and conditions of this Amendment or the form of Development Agreement attached hereto, the terms and conditions of this Amendment shall control. 6. Governing Law. This Amendment shall be construed and enforced in accordance with the laws of the State of Minnesota. 7. Counterparts. This Amendment may be executed in any number of ., counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. • 23400050 -3- • IN WITNESS WHEREOF, the parties have executed this Amendment to be effective as of the day and year first above written. Authority: Developer: ECONOMIC DEVELOPMENT BARRY MINNEAPOLIS, LLC, AUTHORITY OF BROOKLYN a Georgia limite liab' ity company CENTER, a public body corporate and politic organized and existing under the laws of the By: State of Minnesota Name: Its: min By: / Its: • • 23400050 -4- EXHIBIT B • DEVELOPMENT AGREEMENT BY AND BETWEEN ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER AND BARRY NIINNEAPOLIS, LLC [See attached.] • • 23400050 DEVELOPMENT AGREEMENT BY AND BETWEEN ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER AND BARRY MINNEAPOLIS, LLC 2009 • 2083895v11 EDA Agenda Item No. 4b II� COUNCIL ITEM MEMORANDUM DATE: February 17, 2010 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business and Development ,��-' SUBJECT: Resolution Authorizing the Acquisition of Property to Facilitate Neighborhood Improvements and Redevelopment Opportunities within the Brooklyn Boulevard Corridor (4800 71 Avenue North) Recommendation: It is recommended that the City Council consider approval/adoption of the Resolution Authorizing the Acquisition of Property to Facilitate Neighborhood Improvements and Redevelopment Opportunities within the Brooklyn Boulevard Corridor (4800 71" Avenue North) Background: 4800 71" Avenue North is a 9,525 sq. ft. corner residential lot that was developed in 1957. The existing residence is located approximately 11 feet from the curb line of Brooklyn Boulevard and the driveway is located approximately 20 ft. from the intersection of 71 Avenue and Brooklyn Boulevard. • The City's Assessor records indicate the last real estate sales to the present owner in 2005 in the amount of $184,900. The 2009 assessed valuation of this property is $150,800, a 13% reduction from the 2008 assessed valuation of $172,300. The 1994 Brooklyn Boulevard Streetscape Amenities Study specifically studied the 71" Avenue area, referencing traffic issues and close proximity of this residence to Brooklyn Boulevard. This study also recognized that the visual environment along Brooklyn Boulevard should help project a positive image for the Corridor and the City. "The Corridor should serve aesthetic as well as functional needs. An enhanced Brooklyn Boulevard image and appearance will not only help improve the business environment along the Corridor; it will also make the City a more enjoyable place in which to live and do business in." Attached for your reference is a copy of the 71" Avenue Area Special Study. The proposal provides for a voluntary sale of the property at 4800 71s' Avenue North and provides an opportunity to both the homeowner to find a new residence and to the EDA to continue to implement the recommendations of the Brooklyn Boulevard Studies and elements of the City's Comprehensive Plan. Additionally, this acquisition provides the opportunity for the EDA to coordinate the removal of • this residence and complete streetscape improvements to enhance the Brooklyn Boulevard 1Vlission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust COUNCIL ITEM MEMORANDUM Corridor and the entrance to this neighborhood as part of the planned improvements by CEAP to • proceed with the Phase H of the Community Education Building, located in the southwest quadrant of the 71" Avenue and Brooklyn Boulevard intersection. The attached purchase agreement provides for an acquisition cost not to exceed $206,000 and provides for the EDA to pay off the existing mortgages estimated at $194,573 plus $10,000 to assist the owner in finding/relocating to a new residence. The purchase agreement provides for a March 8, 2010 closing date, or ten days following receipt by buyer of title evidence and current payoff statement for the mortgages, whichever is later, provides the homeowner an escrow and occupancy agreement to occupy the residence one week following possession of a replacement home or September 1, 2020, whichever comes first. Budget Issues: The costs for the acquisition and removal are proposed to to be funded by the Tax Increment District #3 Housing Fund as part of a neighborhood stabilization project and acquisition of the blighted single family housing Council Goals: Strategic: 1. We will aggressively proceed with implementation of City's redevelopment plans • 2. We will stabilize and improve residential neighborhoods Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust LOGISMap Output Page Page 1 of 1 r 72ND AVEN i_..- __...._— ...__.. —.._.. • l ���`��� 'lt` 1 h. 1, ,! \.— .___.`."' 4 ` • ,`�` , � t ;° +, .::�'� if " � G i y VV :� ,_..'� ..�-- -• 1... te r' � i 1 AWE Lj t : i M1aX . i i Vllllow lane Park i i t t 70TH AVE M i • htta: / /F-is.logis.org/LOGIS ArcMS /ims ?ServiceName =bc LOGISMap_OV &ClientVersio... 2/17/2010 IX. REDEVELOPMENT PROGRAM • The City should work with developers to achieve a plan which incorporates the characteristics represented by Concept B, yet is feasible to achieve in today's market environment. 71st Avenue Area Special Study The third special study area is located along 71st Avenue west of Brooklyn Boulevard. This area consists of a small residential "pocket ", consisting of eleven single - family homes located between the medium - density housing complex to the north and west and Willow Lane School to the south. Forces /Issues Following is a description of the Forces /Issues (Figure 39), which impact this area: • Through Traffic. The through traffic on 71st Avenue /Perry Avenue is a negative impact on this single- family residential area. The City has considered various alternatives for discouraging through traffic. • Underutilized Sites. The area has a number of vacant parcels including • the two parcels at the corner of Brooklyn Boulevard and 71st Avenue. In addition, the corner of the Willow Lane School site adjacent to Brooklyn Boulevard is underutilized and could be used for development. However, if this corner of the School site is developed, it may have to be replaced, in kind, somewhere else. • Incompatible Use. The single - family residence adjacent to Brooklyn Boulevard is too close to a high - traffic artery and should be removed: • Higher - Density Housing Potential. A close examination of the medium - density housing complex to the north reveals that there are two dead -end streets which are inconsitent with the rest of the development pattern. Itappears that the original plan must have included a loop extension to the south with additional units located along the school property. Redevelopment Concepts Concept A Concept A (Figure 40) represents a plan where the single- family residen- tial pocket is converted to medium - density housing. The medium-density • Brooklyn Boulevard Streetscape Amenities Study e7 i IX. REDEVELOPMENT PROGRAM housing complex would gain a second access point at the 71st Avenue intersection and the circulation within the complex would be vastly improved, due to the completion of the loop system. Perry Avenuewould be terminated in a cul -de -sac at the edge of the Willow Lane School property. The Willow Lane School property would remain as is. This option resolves most of the issues and replaces a low- density residential develop- ment with a higher - density residential development that is much more compatible with the Brooklyn Boulevard environment. Concept B Concept B (Figure 41) also replaces all the single- family houses, except one, with higher - density developments. This option adds fewer medium - density housing units, but it maximizes the opportunities along Brooklyn Boulevard by creating a new, two- and -a- half -acre commercial parcel just south of the 71st Avenue intersection. This plan takes advantage of the underutilized corner of the Willow Lane School site b trading g it for asame -size site on the north edge of the School property, which creates a better parcel configuration for the School. Y !F I'. This option also resolves most of the site development forces and issues and it takes better advantage of the Brooklyn Boulevard frontage and exposure. !c Both options present reasonable redevelopment choices. A key issue for the 71st Avenue area is the question of funding and what process should be used to acquire the properties and redevelop the sites. Redevelopment Plan ;! The potential redevelopment parcels, and their staging is illustrated in Figure 42: Corridor Redevelopment Plan. The recommended redevelopment staging P g riorities g P are based on current City plans and on Y P the anticipated needs in the Corridor and are as follows: Brooklyn Boulevard Streetscape Amenities Study 83 I�, I haxlmlryb hmW)'p tlunlRVd ur..uWl'n lluulcraN _ .._, ` •1194w �•••• • lkluwl Figure 39: 71st Avenue Area Special Study - Forces / Issues yx . ►` ,.. r.. • • _t Figure 40: 71st Avenue Area Special Study - Concept A ° �.. \ p �. Figure. 41: 71st Avenue Area Special Study Concept B ' Brooklyn Boulevard Streetscape amenities Study 92 Residential PURCHASE AGREEMENT 1. PARTIES. This Purchase Agreement is made this day of , 2010 by and between Edith Hernandez Franco, a single person ( "Seller ") and the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, ( "Buyer "). 2. SALE OF PROPERTY. Seller is the owner of that certain real estate (the "Property ") located at 4800 71 Avenue North in the City of Brooklyn Center, Hennepin County, Minnesota and legally described as follows: Lot 1, except that part thereof which lies Northeasterly of the following described line: Beginning at a point on the Northwest line of said Lot 1, distant 9.82 feet Southwesterly of the most Northerly corner thereof; thence run Southeasterly to a point on the Southeasterly line of said Lot 1, distant 9.91 feet Southwesterly of the most Easterly corner thereof and there terminating; and except a triangular piece adjoining and Southwesterly of the above excepted strip and Southeasterly of the following described line: • Beginning at a point on the southwesterly boundary of the above excepted strip, distant 20 feet Northwesterly of its intersection with the Northwesterly boundary of 71" Avenue North; thence run Southwesterly to a point on said Northwesterly boundary, distant 20 feet Southwesterly of said intersection; Block 1, Lang Addition. 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 improvements thereon, together with all appurtenances, including, but not limited to, plant, shrubs, trees, and grass. 4. PERSONAL PROPERTY INCLUDED IN SALE: There are no items of personal property or fixtures owned by Seller and currently located on the Property for purposes of this sale. 5. PURCHASE PRICE AND TERMS: A. PURCHASE PRICE: The total Purchase Price for the real estate included in this sale is an amount equal to the sums necessary to satisfy in full . those certain mortgages in favor of Argent Mortgage Company, LLC, a Delaware limited liability company, both filed July 22, 2005 as Document Nos. 4139195 3633890 CBR BR305 -92 and 4139196 (the "Mortgages ") which Seller represents are the only mortgages or liens encumbering the Property, plus the additional sum of ten thousand and No /100ths Dollars; provided that the total Purchase Price shall not exceed $206,000.00. B. TERMS: (1): EARNEST MONEY. The sum of Dollars ($ .00) Earnest Money paid by the Buyer to the Seller, the receipt of which is hereby acknowledged. (2): BALANCE DUE SELLER: Buyer agrees to pay by check or wire transfer on the Closing Date any remaining Balance Due according to the terms of this Purchase Agreement. (3): 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, 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. (5) DOCUMENTS TO BE DELIVERED AT CLOSING BY SELLER. In addition to the Warranty Deed required at paragraph 5B(4) above, Seller shall deliver to the Buyer: a. Standard form Affidavit of Seller. b. Abstract of title, if available. c. Certificate that Seller is not a foreign national. d. Well disclosure certificate, if required, or, if there is no well on the Subject Property, the Warranty Deed given pursuant to subparagraph a. above must include the following statement: "The Seller certifies that the seller does not know of any wells on the described real property." • 363389v3 CBR BR305 -92 2 e. Such other documents as may be reasonably required by Buyer's title examiner or title insurance company. 6. CONTINGENCIES. Buyer's obligation to buy is contingent upon the following: a. Buyer's determination of marketable title pursuant to paragraph 11 of this Agreement; and b. Approval of this Agreement by Buyer's governing board within 20 days of the date of this Agreement. 7. CLOSING DATE. The closing of the sale of the Property shall take place on or before March 8, 2010, or 10 business days following receipt by Buyer of title evidence and current payoff statements for the Mortgages, whichever is later. The closing shall take place at a location as mutually agreed upon by the parties. 8. ENVIRONMENTAL INSPECTION. NOT APPLICABLE 9. REAL ESTATE TAXES. A. Seller will pay at or prior to closing all real estate taxes due and payable in 2009 and prior years on the Property. • B. Buyer and Seller shall prorate to date of closing the real estate taxes due and payable in the year of closing on the Property. If the amount of taxes due and payable in 2010 are not available from Hennepin County as of the date of closing, the proration shall be based on the amount of taxes that were due and payable in 2009. 10. SPECIAL ASSESSMENTS. A. Seller shall pay at or prior to closing the balance of all special assessments levied prior to closing, including assessments certified for payment with real estate taxes payable in 2009. B. Sellers shall provide at closing for the payment of all special assessments pending as of the date of this Purchase Agreement by escrowing an amount equal to one and one -half times the estimated amount of said special assessments. C. Sellers shall pay any deferred real estate takes or special assessments, payment of which is required as a result of the closing of this sale. D. As of the date of this Purchase Agreement, Sellers have 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 3633890 CBR BR305 -92 3 I I Property. If a notice of pending special assessment is issued after the date of . this Purchase Agreement and on or before the date of closing, Buyer shall assume payment of all of any such special assessments, and Sellers shall provide for payment on date of closing of none of any such special assessments. E. Notwithstanding any other provision of this Purchase Agreement, Sellers 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 the Sellers are in possession of the Property. 11. MARKETABILITY OF TITLE. Buyer shall, at its expense and within a reasonable time after Seller's acceptance of this agreement, obtain a commitment for title insurance ( "commitment ") for the Subject Property. Buyer shall have ten (10) business days after receipt of the commitment to examine the same and to deliver written objections to title, if any, to Sellers. Sellers shall have until the Closing Date (or such later date as the parties may agree upon) to make title marketable, at the Seller's cost. In the event that title to the Property cannot be made marketable or is not made marketable by the Sellers by the Closing Date, then, at the option of the Buyer, this agreement shall be null and void and all earnest monies will be returned to Buyer. 12. CLOSING COSTS AND RELATED ITEMS. Buyer will pay: (a) the closing fees charged b the title insurance o g y r other closing agent, if any, utilized to close the transaction contemplated by this Agreement; (b) the title search and exam fees, name search fees and other fees incurred in preparation of the commitment for title insurance, including the premium for title insurance policy obtained by the Buyer; (c) any transfer taxes required to enable the Buyer to record its deed from Seller under this Agreement; (d) filing fees for Mortgage satisfactions. Seller shall pay all costs, including transfer taxes and recording fees to make title marketable, except as provided herein. 13. POSSESSION/REMOVAL OF PROPERTY/UTILITIES/ESCROW. (a) Possession. Seller shall transfer possession of the Subject Property and Fixtures to the Buyer 1 week following possession of Seller's replacement home or September 1, 2010, which ever date comes fast. The parties will execute and deliver at closing an Escrow and Occupancy Agreement in the form of the attached Exhibit A. (b) Utilities. Seller agrees to pay all charges for sewer, water, electric, gas, and cable television incurred prior to Seller's transfer of possession of the Subject Property to Buyer. (d) No encumbrances. Seller agrees not to place any liens or encumbrances on the Subject Property after the date of this Purchase Agreement. . i 3633890 CBR BR305 -92 4 • (e) Escrow. Seller agrees that, at closing, the Buyer may retain One Thousand Dollars ($1,000.00) from the purchase price for the Property as an Escrow for payment of personal property removal, disposal charges and utility charges pursuant to the terms of the Escrow and Occupancy Agreement attached here as Exhibit A. (0 The Buyer's ability to deduct amounts due under this paragraph from the retained escrow is not exclusive but is in addition to the Buyer's rights at law and equity to collect such amounts from Seller. The Seller is responsible for the amounts due under this paragraph even if. (i) the Buyer neglects to deduct the amount from escrow; or (ii) the escrowed amount is insufficient to pay all amounts due under this paragraph 13. 14. DISCLOSURE; INDIVIDUAL SEWAGE TREATMENT SYSTEM. Seller discloses that there is not an individual sewage treatment system on or serving the Property. 15. WELL DISCLOSURE. Seller discloses that there ISIS NOT a well on or serving the Property. If a well is present, a well disclosure statement accompanies this agreement. 16. 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 real properly from a public right -of -way. Seller warrants that there has been no labor or material 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. These warranties shall survive the closing of this transaction. 17. 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. 18. 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 shall not be effective unless it shall be set forth in writing and executed by both parties or their respective successors or assigns. 19. BINDING EFFECT; ASSIGNMENT. This Purchase 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. 20. 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: 363389v3 CBR BR305 -92 5 I SELLER: Edith Hernandez Franco • 4800 71" Avenue North Brooklyn Center, MN 55429 BUYER: Gary Eitel Economic Development Authority of Brooklyn Center, Minnesota 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 -2113 AGENT: Kennedy & Graven, Chartered Attn: Corrine Heine 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 21. NO BROKER INVOLVED. The Sellers represent and warrant to Buyer that there is. no broker involved in this transaction with whom Sellers have negotiated or to whom Sellers have agreed to pay a broker commission. The Buyer represents that it has retained the firm of Wilson Development Inc. to assist it in connection with this transaction and agrees to pay all fees of said firm. Buyer agrees to indemnify Sellers for any and all claims for brokerage commissions or finders' fees in connection with negotia- tions for purchase of the Property arising out of any alleged agreement or commitment or O negotiation by Buyer, and Sellers agree to indemnify Buyer for any and all claims for brokerage commissions or finders' fees in connection with negotiations for purchase of the Property arising out of any alleged agreement or commitment or negotiation by Sellers. 22. NO RELOCATION BENEFITS. Seller acknowledges that she has been informed in writing that Seller will not acquire the Subject Property unless the Seller and Buyer reach a voluntary negotiated agreement. The Buyer has informed Seller that Buyer would not exercise its power of eminent domain to acquire the Subject Property if the parties were unable to reach a mutually acceptable agreement. Seller acknowledges that she is not eligible for relocation services or benefits. Seller further acknowledges that Buyer has provided an explanation and summary of the state and federal laws and regulations relating to relocation assistance, and Seller fully understands her rights regarding the same. Seller represents that there are no tenants on the Subject Property or in the residence thereon, and that there are no leases or sub -leases affecting the Subject Property. Seller agrees not to allow any tenants on the Subject Property if she chooses to stay in possession after closing. Seller agrees to indemnify Buyer and hold Buyer harmless from any claims arising out of loss of tenancy, termination of leases or sub - leases, and/or relocation of any tenants from the Subject Property, before or after closing, as a result of Buyer's acquisition of the Subject Property. 22. SPECIFIC PERFORMANCE. This Purchase Agreement may be specifically • enforced by the parties, provided that any action for specific enforcement is brought within 3633890 CBR BR305 -92 6 six months after the date of the alleged breach. This paragraph is not • g intended to create an exclusive remedy for breach of this agreement; the parties reserve all other remedies available at law or in equity. IN WITNESS WHEREOF, the parties have executed this agreement as of the date written above. SELLER By Edith Hernandez Franco BUYER Economic Development Authority of Brooklyn Center, Minnesota . By Its By Its 3633890 CBR BR305 -92 7 EXHIBIT A . ESCROW AND OCCUPANCY AGREEMENT THIS AGREEMENT entered into this day of 2010 by and between Edith Hernandez Franco, a single person ( "Occupant" or "Seller") and the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, ( "Buyer") and KENNEDY & GRAVEN, CHARTERED "Escrow Agent" or "Agent"). ( g gent ). RECITALS A. Occupant and Buyer have entered into a Purchase Agreement dated , 2010 ( "Agreement ") for the sale of property located 4800 71 Avenue North Brooklyn Center, Minnesota and legally described as follows, the ( "Subject Property ") Lot 1, except that part thereof which lies Northeasterly of the following described line: Beginning at a point on the Northwest line of said Lot 1, distant 9.82 feet Southwesterly of the most Northerly corner thereof; thence run Southeasterly to a point on the Southeasterly line of said Lot 1, distant 9.91 feet Southwesterly of the most Easterly corner thereof and there terminating; and except a triangular piece adjoining and Southwesterly of the above excepted strip and Southeasterly of the followin g described line: Beginning at a point on the southwesterly boundary of the above excepted strip, distant 20 feet Northwesterly of its intersection with the Northwesterly boundary of 71 Avenue North; thence run Southwesterly to a point on said Northwesterly boundary, distant 20 feet Southwesterly of said intersection; Block 1, Lang Addition. B. The parties desire to close the sale of the Subject Property on and that Occupant deliver possession to Buyer on or before September 1, 2010. AGREEMENT The parties agree as follows: 1. Delivery of Possession. Occupant shall deliver possession of the Subject p P J Property p rty to .m. on Buyer on or before 11:59 p September tember 1 , 2010. 2.. Rent Occupant may occupy the Subject Property through September 1, 2010 without payment of rent to Buyer. 363389v3 CBR BR305 -92 8 • 3. No Damage. Occupant agrees not to cause damage to the Subject Property or to any structure located on the Subject Property and agrees to deliver possession of the Subject Property to the Buyer in substantially the same condition as existed on the date the parties entered into the Agreement. 4. Utilitv Bills. Occupant agrees to pay for all utility services to the Subject Property through the last day of their occupancy. Utility services include the following: sewer and water, electricity, gas, telephone, garbage collection and cable television. 5. Uninsured Damap-es(Insurance. Occupant is responsible for any and all damages that may occur to the Subject Property before they vacate the property that are not covered by insurance. At all times during their occupancy of the Subject Property Occupant shall maintain a policy of Public liability insurance covering themselves and the Buyer as additional insured, in the amount of at least $100,000 and a policy of insurance covering their personal property. 6. Escrow (a) Upon closing and execution of this Agreement, Seller agrees to deposit into escrow the sum of 1,00 0.00 (the Escrowed Funds") from the purchase price, to be held by Agent in a non - interest bearing account. (b) Within 7 days after requested by Agent, Buyer shall provide to Agent (with copy to Seller) evidence of unpaid rent pursuant to this Agreement, expenses personal property and for payment of utility incurred for the removal and disposal of erso p ym p p p P Y charges for services provided to the Subject Property prior to date of possession, if any. Agent shall reimburse Buyer for the unpaid rent and incurred expenses from the Escrowed Funds within 7 days following receipt of such evidence from Buyer. (c) Agent shall deliver to Seller the balance of the Escrowed Funds on deposit, less deductions provided for in paragraph 6 (b) above, no later than 60 days following vacation of the Subject Property by Occupant. (d) The sole duties of Agent shall be those described herein, and Agent shall be under no obligation to determine whether the other parties hereto are complying with any requirements of law or the terms and conditions of any other agreements among said parties. Agent shall have no duty or liability to verify any amounts deducted from the retained amount and Agent's sole responsibility shall be to act expressly as set forth in this Escrow Agreement. 7. Escrow Agent Liabilitv. The sole duties of Escrow Agent shall be those described herein, and Escrow Agent shall be under no obligation to determine whether the other parties hereto are complying with any requirements of law or the terms and conditions of any other agreements among said parties. Escrow Agent may conclusively rely upon and shall be protected in acting on any notice believed by it to be genuine and • to have been signed or presented by the proper party or parties, consistent with reason- able due p g diligence on Escrow Agent's art. Escrow Agent shall have no duty or liability g g 363389v3 CBR BR305 -92 9 to verify any such notice, and its sole responsibility shall be to act expressly as set forth • in this Escrow and Occupancy Agreement. Seller and Buyer understand that Agent is legal counsel to the Buyer and each consents to Agent's serving as Escrow Agent notwithstanding such representation. In the event Agent determines, in its sole discretion, that it cannot continue to serve as Escrow Agent herein, Agent shall deposit the funds with Old Republic National Title Insurance Company or such other Escrow Agent as is acceptable to Seller and Buyer. Seller consents to Agent's continued representation of Buyer after a deposit is made, and Buyer agrees to pay all escrow fees charged by the substitute Escrow Agent. 8. Notices to be sent to the parties to this Agreement shall be sent by mail or personal delivery to: SELLER: Edith Hernandez Franco 4800 71 Avenue North Brooklyn Center, MN 55429 BUYER: Gary Eitel Economic Development Authority of Brooklyn Center, Minnesota 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 -2113 AGENT: Kennedy & Graven, Chartered • ATTN: Corrine Heine and Catherine B. Rocklitz 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 IN WITNESS WHEREOF, the parties have executed this agreement as of the date written above. SELLER: BUYER: Economic Development Authority of Brooklyn Center, Minnesota By: Edith Hernandez Franco Its And by: Its • 3633890 CBR BR305 -92 10 • ESCROW AGENT: KENNEDY & GRAVEN, CHARTERED By: i i 363389v3 CBR BR305 -92 11 i • Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION AUTHORIZING THE ACQUISITION OF PROPERTY TO FACILITATE NEIGHBORHOOD RAPROVEMENTS AND REDEVELOPMENT OPPORTUNITIES WITHIN THE BROOKLYN BOULEVARD CORRIDOR (4800 71 AVENUE) WHEREAS on January 2009 the Economic Development Authority in and for as3' P Y the City of Brooklyn Center, Minnesota (the "EDA") adopted Resolution No. 2009 -02 establishing housing programs and approving the use of funds from the Tax Increment District No. 3 housing account; and WHEREAS, pursuant to EDA Resolution 2009 -02, one of the housing programs so established was the EDA's Remove and Rebuild Program (the "Program ") to acquire demolished, blighted, distressed, and unmarketable properties to be returned to uses compatible with the neighborhood; and WHEREAS, the EDA has determined the real property located at 4800 71" Avenue North in Brooklyn Center meets the requirements for acquisition under the EDA's Remove and • Rebuild Program; and WHEREAS, real property located at 4800 71 Avenue. (the "Subject Property ") is a voluntary sale by the property owner; and WHEREAS, City staff have negotiated a purchase agreement for the purchase by the EDA of the Subject Property in an amount not to exceed $206,000; and WHEREAS, the EDA has determined that acquisition of the Subject Property on the terms and conditions set forth in the proposed purchase agreement is consistent with the goals and objectives of the Brooklyn Boulevard Streetscape Amenities Study, the City's Comprehensive Plans, and the Tax Increment District No. 3 Housing Program and is in the best interests of the City of Brooklyn Center and its citizens. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of Brooklyn Center, Minnesota, as follows: 1. The purchase agreement for the Subject Property is hereby approved. 2. The President and Secretary of the EDA are authorized and directed to execute the purchase agreement, and the Executive Director is authorized and directed to take all such further steps as are necessary to effect the terms thereof. • • 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 passed and adopted. i