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HomeMy WebLinkAbout2014 10-13 EDAPEPA MEETING City of Brooklyn Center October 13, 2014 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. September 22, 2014 4.Public Hearings a. Proposed Sale of Certain Properties Located at 5800 Bryant Avenue North, 5400 Bryant Avenue North, 5338 Logan Avenue North, and 5331 Morgan Avenue North—On September 8, 2014, the EDA called for Public Hearings to be held October 13, 2014; notice was published in the official newspaper on October 2, 2014. 1.Resolution Approving Purchase and Redevelopment Agreement and Conveyance of Certain Property Located at 5800 Bryant Avenue North 2.Resolution Approving Purchase and Redevelopment Agreement and Conveyance of Certain Property Located at 5400 Bryant Avenue North 3.Resolution Approving Purchase and Redevelopment Agreement and Conveyance of Certain Property Located at 5338 Logan Avenue North 4.Resolution Approving Purchase and Redevelopment Agreement and Conveyance of Certain Property Located at 5331 Morgan Avenue North Requested Council Action: —Motion to open Public Hearing. —Take public input. —Motion to close Public Hearing. —Motion to adopt resolutions. EDA AGENDA -2- October 13, 2014 5. Commission Consideration Items a.Resolution Authorizing the Acquisition of Property to Facilitate Neighborhood Improvements and Redevelopment Opportunities within the Brooklyn Boulevard Corridor (6301 Brooklyn Boulevard) Requested Commission Action: —Motion to adopt resolution. b.Consideration of Approval of Grant Applications for Contamination Cleanup of the Former Howe Chemical Site Located at 4821 Xerxes Avenue North in Brooklyn Center Resolution Authorizing the Economic Development Authority of Brooklyn Center, Minnesota, to Apply for a Contamination Cleanup Grant from the Minnesota Department of Employment and Economic Development Requested Commission Action: —Motion to adopt resolution. 2. Resolution Authorizing the Submission of a Grant Application to the Metropolitan Council for the Tax'Base Revitalization Account Requested Commission Action: —Motion to adopt resolution. 5. Adjournment Adjournment to Closed Executive Session - Attorney Client Privilege Under the exceptions to the Opening Meeting Law, the Economic Development Authority may elect to adjourn to closed Executive Session regarding the purchase of real property located at 5939 John Martin Drive, Tract A, RLS 1529 (1.59 acre lot/former Golden Value Foods/Audio King) [Minn. Stat. § 13D.05, subd. 3 (c)]. —Announce that the EDA will adjourn from Executive Session and will not reconvene following the Executive Session. EDA Agenda Item No. 3a 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 SEPTEMBER 22, 2014 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 9:20 p.m. 2.ROLL CALL President Tim Willson and Commissioners Kris Lawrence-Anderson, Lin Myszkowski, and Dan Ryan. Commissioner Carol Kieven was absent and excused. Also present were Executive Director Curt Boganey, Director of Business and Development Gary Eitel, Assistant City Manager/Director of Building and Community Standards Vickie Schleuning, City Attorney Charlie LeFevere, and Mary Mullen, TimeSaver Off Site Secretarial, Inc. 3.APPROVAL OF AGENDA AND CONSENT AGENDA Commissioner Myszkowski moved and Commissioner Lawrence-Anderson seconded approval of the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES September 8, 2014 - Regular Session Motion passed unanimously. 4.COMMISSION CONSIDERATION ITEMS 4a. RESOLUTION NO. 2014-21 APPROVING AND AUTHORIZING THE EXECUTION OF GRANT AND SUB-GRANT AGREEMENTS FOR ENVIRONMENTAL CLEAN-UP (HOWE FERTILIZER SITE) Director of Business and Development Gary Eitel introduced the item, discussed the history, and stated the purpose of the proposed resolution. President Willson thanked Mr. Eitel for his continued efforts on this issue, and keeping the process moving forward despite delays and setbacks. 09/22/14 -1- DRAFT Commissioner Ryan expressed his appreciation for the hard work and efforts of City staff. He thanked USA Recycling for being an important partner to the City, and for their patience with the process. Commissioner Ryan moved and Commissioner Lawrence-Anderson seconded to adopt RESOLUTION NO. 2014-21 Approving and Authorizing the Execution of Grant and Sub-Grant Agreements for Environmental Clean-Up (Howe Fertilizer Site). Motion passed unanimously. 5. ADJOURNMENT Commissioner Lawrence-Anderson moved and Commissioner Myszkowski seconded adjournment of the Economic Development Authority meeting at 9:30 p.m. Motion passed unanimously. 09/22/14 -2- DRAFT EDA Agenda Item No. 4a EDA ITEM MEMORANDUM DATE: October 13, 2014 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business & Development SUBJECT: Resolution Approving Purchase and Redevelopment Agreement and Conveyance of Certain Property Located at 5800 Bryant Avenue North Recommendation: It is recommended that the Economic Development Authority consider approval/adoption of the Resolution Approving Purchase and Redevelopment Agreement and Conveyance of Certain Property Located at 5800 Bryant Avenue North Background: On September 8, 2014, the EDA considered an offer from Novak & Fleck, Inc. to acquire the vacant lot at 5800 Bryant Avenue North for the purpose of constructing a 5-bedroom, 2-bath split entry home with a three car attached garage. The EDA moved to adopt Resolution No. 2014-18, a resolution calling for a public hearing on October 13, 2014 regarding the sale of land located at 5800 Bryant Avenue North. Attached for your reference are copies of the September 8, 2014 staff memorandum. On October 2, 2014, a notice of public hearing regarding this land sale was published in the Official Newspaper. Attached is a copy of the Affidavit of Publication. Attached is a copy of the floor plans, building exterior, and construction specifications provided by Novak-Fleck, Inc. for a 2,172 sq.ft. split entry home that includes the following: o 1058 sq.ft. on the main floor (3 bedrooms, bath, living room, dining room, kitchen, with options for a deck off of the dining area) o 108 sq.ft. foyer with stairway to lower level o 1008 sqf.ft. on the lower lookout level (identified as future 2 bedrooms, bath, family room and mechanical room o a three car garage. Purchase and Redevelopment Agreement The City Attorney has prepared the enclosed Purchase and Redevelopment Agreement, which includes the following components related to the EDA's sales of this vacant lot for an infill development of a new single family residence: The purchase price is $25,000. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public tins! • The buyer agrees that it will construct a new single family dwelling on the Property, intended for sale to a person or persons for residential occupancy (an Owner Occupant). • The minimum improvements shall consist of a house with approximately 2,172 gross square feet, 5-bedrooms and a 3-car attached garage and shall be constructed substantially in accordance with the plans on file in City Hall. • The minimum improvements must be substantially completed by October 15, 2015. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of Brooklyn Center building official. At this time, a Certificate of Completion for the Minimum Improvements will be issued by the EDA. • The Buyer shall convey the Property to an Owner Occupant whose household income does not exceed (a) 100% of median income in the case of one or two person household Owner Occupant, or (b) 115% of the median income in the case of three or more persons household Owner Occupants. The average median income for the seven-county metropolitan area for 2014 is $83,900. • Provisions which provide the EDA with the rights to re-enter and take possession of the property in the event the buyer does not carry out the obligations with respect to the construction of the Minimum Improvements or abandons or substantially suspends construction. Budget Issues: The proceeds from this land sale are considered Tax Increment Revenues and will be placed back into the TIF 3 Housing Fund. Strategic Priorities: • Focused Redevelopment Mission: Ensuring an attractive, clean, safe, inclusive community that enhances time quality of life for all people and preserves the public trust Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO.__________ RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT AGREEMENT AND CONVEYANCE OF CERTAIN PROPERTY LOCATED AT 5800 BRYANT AVENUE NORTH 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 and Redevelopment Agreement (the "Contract") between the Authority and Novak-Fleck Incorporated (the "Buyer"), under which, among other things, the Authority will convey the property located in the City at 5800 Bryant Avenue North and legally described as The West half of Lot 29, "Lyndale Riverside Acres Hennepin County, Minnesota" (the "Property") to the Buyer to construct a new single family dwelling on the Property, intended for sale to an individual or family for residential occupancy. 1.03. The Authority has on this date conducted a duly noticed public hearing regarding the sale of the Property to Buyer, at which all interested persons were given an opportunity to be heard. 1.04. The Authority finds and determines that conveyance of the Property to the Buyer is in the public interest and will further the objectives of its general plan of economic development, because it will provide an opportunity for increased housing opportunities in the City and serve as an impetus for further development. Section 2. Authority Approval Further Proceedings. 2.01. The Board hereby approves the Contract in substantially the form presented to the Board, including conveyance of the Property to Buyer, 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 Contract 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 Contract as a whole, including without limitation execution of any documents to which the Authority is a party referenced in or attached to the Contract, and any deed, mortgage or other documents necessary to convey the Property to Buyer, all as described in the Contract. Approved by the Board of Commissioners of the Economic Development Authority of Brooklyn Center, Minnesota this 11th day of August, 2014. October 13, 2014 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. PURCHASE AND REDEVELOPMENT AGREEMENT 5800 Bryant Avenue North 1.Parties. This Purchase and Redevelopment Agreement is made as of October 13, 2014 between the ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA, a public body corporate and politic under the laws of Minnesota having its office located at 6301 Shingle Creek Parkway, Brooklyn Center, MN (the "Seller"), and NOVAK-FLECK INCORPORATED, a Minnesota corporation (the "Buyer"). 2.Offer/Acceptance. Buyer offers to purchase and Seller agrees to sell real property legally described as follows (the "Property"): The West half of Lot 29, "Lyndale Riverside Acres Hennepin County, Minnesota" 3.Price and Terms. The price for the Property is Twenty-Five Thousand Dollars ($25,000.00) which Buyer shall pay as follows: Earnest money of Five Hundred Dollars ($500.00) by check, receipt of which is hereby acknowledged by Seller, and the balance of Twenty-Four Thousand and Five Hundred Dollars ($24,500.00) to be paid by certified check on the Date of Closing. The "Date of Closing" shall be October 15, 2014, or such other earlier or later date as the parties mutually agree. 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. Deed. Upon performance by Buyer, Seller shall deliver a quit claim deed conveying title to the Property to Buyer, in substantially the form attached as Exhibit A (the "Deed"). 449211v2 BR305-129 6. Real Estate Taxes and Special Assessments. The parties agree and understand that the Property is exempt from real estate taxes for taxes payable in the current year. Seller shall pay on Date of Closing all special assessments levied against the Property as of the date of this agreement, including those certified for payment with taxes due and payable in 2014. Seller represents that there are no special assessments pending as of the date of this agreement. If a special assessment becomes pending after the date of this agreement and before the Date of Closing, Buyer may, at Buyer's option: A.Assume payment of the pending special assessment without adjustment to the purchase agreement price of the Property; or B.Require Seller to pay the pending special assessment and Buyer shall pay a commensurate increase in the purchase price of the Property, which increase shall be the same as the estimated amount of the assessment; or C. Declare this agreement null and void by notice to Seller, and earnest money shall be refunded to Buyer. 7. Closing Costs and Related Items. The Seller shall be responsible for the following costs: (a) recording fees and conservation fees for all instruments required to establish marketable title in Seller; and (b) deed transfer taxes and conservation fees required to be paid in connection with the Deed be given by Seller. Buyer shall be responsible for the payment of the following costs: (c) recording fees required to be paid in connection with this Agreement and the Deed to be given by Seller; (d) the cost of all title evidence, including all search and commitment fees and the premium for an owner's policy of title insurance, and (e) closing fee, if any. Each party shall be responsible for its own attorneys' fees and costs. 8.Sewer and Water. Seller warrants that city sewer and water are available at the Property line. 9.Condition of Property. Buyer acknowledges that it has inspected or has had the opportunity to inspect the Property and agrees to accept the Property "AS IS." Buyer has the right, at its own expense to take soil samples for the purpose of determining if the soil is suitable for construction of the dwelling described in section 14 below. If the soil is determined to be unacceptable the Buyer may rescind this agreement by written notice to the Seller, in which case the agreement shall be null and void and all earnest money paid hereunder shall be refunded to the Buyer. Seller makes no warranties as to the condition of the Property. 10. Marketability of Title. The Buyer may order, in Buyer's sole discretion and at the Buyer's expense, a commitment (the "Title Commitment") issued by any title insurance company acceptable to Buyer ("Title"), for an owner's title insurance policy in the full amount of the Purchase Price, showing fee simple title to the Property in Seller. Buyer shall have fifteen (15) business days after receipt of the Title Commitment to examine the 2 449211v2 BR305-129 same and to deliver written objections to Title, if any, to Seller. Seller shall have the greater of (i) the number of days remaining until the Date of Closing or (ii) thirty (30) days to have such objections removed or satisfied, 11. Title Clearance and Remedies. If Seller shall fail to have title objections timely removed, the Buyer may, at its sole election: (a) terminate this Agreement without any liability on its part; in which event the earnest money shall be promptly refunded in exchange for a quit claim deed to the Property from Buyer; or (b) take title to the Property subject to such objections. If title is marketable, or is made marketable as provided herein, and Buyer defaults in any of the agreements herein, Seller may elect either of the following options, as permitted by law: A.Cancel this contract as provided by statute and retain all payments made hereunder as liquidated damages. The parties acknowledge their intention that any note given pursuant to this contract is a down payment note, and may be presented for payment notwithstanding cancellation; B.Seek specific performance within six months after such right of action arises, including costs and reasonable attorney's fees, as permitted by law. If title is marketable, or is made marketable as provided herein, and Seller defaults in any of the agreements herein, Buyer may, as permitted by law: C.Seek damages from Seller including costs and reasonable attorney's fees; D.Seek specific performance within six months after such right of action arises. 12. Well Disclosure. Seller certifies that Seller does not know of any wells on the Property. 13.Individual Sewage Treatment System Disclosure. Seller certifies that there is no individual sewage treatment system on or serving the Property. 14.Construction and Sale of Dwelling. Buyer agrees that it will construct a new single family dwelling on the Property, intended for sale to a person or persons for residential occupancy (an "Owner Occupant"). This covenant shall survive the delivery of the Deed. A.The single family dwelling described in this Section is referred to as the "Minimum Improvements." B.The Minimum Improvements shall consist of a house with approximately 2,176 gross square feet, 3 bedrooms and 1 bathroom on the upper level, 2 future bedrooms and 1 bath on the lower level, and a 3 car garage and shall be constructed substantially in accordance with the plans on file in City Hall. 3 44921 1v2 BR305-129 Construction of the Minimum Improvements must be substantially completed by October 15, 2015. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of Brooklyn Center building official. C. Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Buyer to construct such Minimum Improvements (including the date for completion thereof), the Seller will furnish the Buyer with a Certificate of Completion for such improvements. Such certification by the Seller shall be (and it shall be so provided in the Deed and in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement and in the Deed with respect to the obligations of the Buyer and its successors and assigns, to construct the Minimum Improvements and the dates for completion thereof. The certificate provided for in this Section of this Agreement shall be in such form as will enable it to be recorded in the proper office for the recordation of deeds and other instruments pertaining to the Property. If the Seller shall refuse or fail to provide any certification in accordance with the provisions of this Section, the Seller shall, within 30 days after written request by the Buyer, provide the Buyer with a written statement, indicating in adequate detail in what respects the Buyer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Seller for the Buyer to take or perform in order to obtain such certification. D. The Buyer represents and agrees that until issuance of the Certificate of Completion for the Minimum Improvements: (1)Except for any sale to an Owner Occupant, the Buyer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a "Transfer"), without the prior written approval of the Seller's Board of Commissioners. The term "Transfer" does not include encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or permanent financing necessary to enable the Buyer or any successor in interest to the Property, or any part thereof, to construct the Minimum Improvements or component thereof. (2)If the Buyer seeks to effect a Transfer to any person or entity other than an Owner Occupant prior to issuance of the Certificate of Completion, the Seller shall be entitled to require as conditions to such Transfer that: in 44921 1v2 BR305-129 (i)any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Seller, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Buyer as to the portion of the Property to be transferred; and (ii)Any proposed transferee, by instrument in writing satisfactory to the Seller and in form recordable in the public land records of Hennepin County, Minnesota, shall, for itself and its successors and assigns, and expressly for the benefit of the Seller, have expressly assumed all of the obligations of the Buyer under this Agreement as to the portion of the Property to be transferred and agreed to be subject to all the conditions and restrictions to which the Buyer is subject as to such portion; provided, however, that the fact that any transferee of or any other successor in interest whatsoever to, the Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the Seller) deprive the Seller of any rights or remedies or controls with respect to the Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit the Seller of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Property that the Seller would have had, had there been no such transfer or change. In the absence of specific written agreement by the Seller to the contrary, no such transfer or approval by the Seller thereof shall be deemed to relieve the Buyer, or any other party bound in any way by this Agreement or otherwise with respect to the Property, from any of its obligations with respect thereto. (iii) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Property governed by this subsection D. shall be in a form reasonably satisfactory to the Seller. (3) If the conditions described in paragraph (2) above are satisfied then the Transfer will be approved and the Buyer shall be released from its obligation under this Agreement, as to the portion of the Property that is transferred, assigned, or otherwise conveyed. The provisions of this paragraph (3) apply to all subsequent transferors. 5 449211v2 BR305-129 (4) Upon issuance of the Certificate of Completion, the Buyer may Transfer the Property and/or the Buyer's rights and obligations under this Agreement with respect to such Property without the prior written consent of the Seller, except to the extent required under paragraph F of this Section. B. The Buyer, and its successors and assigns, agree that they (a) will use the Minimum Improvements only as a single family dwelling, and in the case of an Owner Occupant, will occupy the Property as a residence, (b) will not seek exemption from real estate taxes on the Property under State law, and (c) will not transfer or permit transfer of the Property to any entity whose ownership or operation of the Property would result in the Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City of Brooklyn Center or Seller in accordance with this Agreement). The covenants in this paragraph run with the land, survive both delivery of the Deed and issuance of the Certificate of Completion for the Minimum Improvements, and shall remain in effect for 15 years after the Date of Closing. F. The Buyer shall convey the Property (either before or after issuance of the Certificate of Completion) to an Owner Occupant whose household income does not exceed (a) 100% of median income in the case of one or two person household Owner Occupants, or (b) 115% of median income in the case of three or more person household Owner Occupants. The term "median income" means the median income in the seven-county metropolitan area, or the State as a whole, whichever is greater, using income data available from the Minnesota Housing Finance Agency as of the date of closing on sale to the Owner Occupant. Prior to closing on sale the Property by Buyer to an Owner Occupant, Buyer shall: (1)Notify the Seller in writing that the proposed Owner Occupant will meet the income qualifications under this paragraph; and (2)Submit to Seller evidence of Owner Occupant's income in a form satisfactory to Seller, evidencing compliance with the income limits described above. The covenant in this Section applies only to the first sale of the Property to an Owner Occupant, and does not apply to any subsequent sale by an Owner Occupant to any other person or party. 15. Revesting Title in Seller upon Happening of Event Subsequent to Conveyance to Buyer. In the event that subsequent to conveyance of the Property or any part thereof to the Buyer and prior to receipt by the Buyer of the Certificate of Completion for of the Minimum Improvements, the Buyer, subject to Unavoidable Delays (as hereafter defined), fails to carry out its obligations with respect to the construction of the Minimum Improvements (including the nature and the date for the completion thereof), or abandons or substantially suspends construction work, and any such failure, abandonment, or suspension shall not be cured, ended, or remedied within 30 days after written demand from the Seller to the Buyer to do so, then the Seller shall have the right to re-enter and take possession of the Property on 44921 1v2 BR305-129 and to terminate (and revest in the Seller) the estate conveyed by the Deed to the Buyer, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the Property to the Buyer shall be made upon, and that the Deed shall contain a condition subsequent to the effect that in the event of any default on the part of the Buyer and failure on the part of the Buyer to remedy, end, or abrogate such default within the period and in the manner stated in such subdivisions, the Seller at its option may declare a termination in favor of the Seller of the title, and of all the rights and interests in and to the Property conveyed to the Buyer, and that such title and all rights and interests of the Buyer, and any assigns or successors in interest to and in the Property, shall revert to the Seller, but only if the events stated in this Section have not been cured within the time periods provided above. For the purposes of this Agreement, the term "Unavoidable Delays" means delays beyond the reasonable control of the Buyer as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse weather or acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Seller in exercising its rights under this Agreement) which directly results in delays. Unavoidable Delays shall not include delays in the Buyer's obtaining of permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such construction is required under this section of this Agreement. 16. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the Seller of title to anchor possession of the Property or any part thereof as provided in Section 15, the Seller shall apply the purchase price paid by the Buyer under Section 4 of this Agreement as follows: (a) First, to reimburse the Seller for all costs and expenses incurred by the Seller, including but not limited to proportionate salaries of personnel, in connection with the recapture, management, and resale of the Property or part thereof (but less any income derived by the Seller from the Property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the Property or part thereof (or, in the event the Property is exempt from taxation or assessment or such charge during the period of ownership thereof by the Seller, an amount, if paid, equal to such taxes, assessments, or charges (as determined by the Seller assessing official) as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Property or part thereof at the time of revesting of title thereto in the Seller or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Buyer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the Minimum Improvements or any part thereof on the Property or part thereof; and any amounts otherwise owing the Seller by the Buyer and its successor or transferee; and 7 44921 1v2 BR305-129 (b) Second, to reimburse the Buyer for the balance of the purchase price remaining after the reimbursements specified in paragraph (a) above. Such reimbursement shall be paid to the Buyer upon delivery of an executed, recordable warranty deed to the Property by the Buyer to the Seller. 17.Time is of the essence for all provisions of this contract. 18.Notices. All notices required herein shall be in writing and delivered personally or mailed to the address shown at paragraph 1 above and, if mailed, are effective as of the date of mailing. 19.Minnesota Law. This contract shall be governed by the laws of the State of Minnesota. 20.Specific Performance. This Agreement may be specifically enforced by the parties, provided that an action is brought within one year of the date of alleged breach of this Agreement. 21.No Remedy Exclusive. No remedy herein conferred upon or reserved to the Seller or Buyer is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 22.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. 23. Recording. This Agreement shall be filed of record with the Hennepin County Registrar of Titles. Buyer shall pay all recording costs. 8 44921 1v2 BR305-129 In witness of the foregoing, the parties have executed this agreement on the year and date written above. SELLER: ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By Tim Willson Its President By Curt Boganey Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of______________ 2014, by Tim Willson and Curt Boganey, the President and Executive Director, respectively, of the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the public body corporate and politic. (Stamp) Notary Public 5-1 449211v2 BR305-129 BUYER: NOVAK-FLECK INCORPORATED By: Its: f/DtjJi STATE OF MINNESOTA ) } ss. COUNTY OF HENEPN ) The foregoing was acknowledged before me this day o42W'2014, iiiiKc/ /LjótI the etcIá'eiiL of Novak-Flee Incorporated, Minnesota corporation, on behalf of the corporation. 11 Stamp AJ14L41Lh"' ot Public CANDICE L. JOHNSON , fr 1 )Notary Public Minnesota My mission Expires Jan 31, 2015 U This document drafted by: Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 by 449211v2 BR305-129 S-2 EXHIBIT A to PURCHASE AND REDEVELOPMENT AGREEMENT FORM OF QUIT CLAIM DEED Deed Tax Due: $85.00 ECRV QUIT CLAIM DEED THIS INDENTURE, between the Economic Development Authority of Brooklyn Center, Minnesota, a Minnesota public body corporate and politic (the "Grantor"), and Novak-Fleck Incorporated, a Minnesota corporation (the "Grantee"). WITNESSETH, that Grantor, in consideration of the sum of $25,000 and other good and valuable consideration the receipt whereof is hereby acknowledged, does hereby grant, bargain, quitclaim and convey to the Grantee, its successors and assigns forever, all the tract or parcel of land lying and being in the County of Hennepin and State of Minnesota described as follows, to-wit (such tract or parcel of land is hereinafter referred to as the "Property"): The West half of Lot 29, "Lyndale Riverside Acres Hennepin County, Minnesota" Check here if all or part ofproperty is registered (Torrens) 0 To have and to hold the same, together with all the hereditaments and appurtenances thereunto belonging. SECTION 1. It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and provisions of the Purchase and Redevelopment Agreement recorded herewith, between the Grantor and Grantee, dated as of October 13, 2014 (the "Agreement") and that the Grantee shall not convey this Property, or any part thereof, except as permitted by the Agreement until a certificate of completion releasing the Grantee from certain obligations of said Agreement as to this Property or such part thereof then to be conveyed, has been placed of record. This provision, however, shall in no way prevent the Grantee from mortgaging this Property in order to obtain funds for the purchase of the Property hereby conveyed or for erecting the Minimum Improvements thereon (as defined in the Agreement) in conformity with the Agreement, any applicable development program and applicable provisions of the zoning ordinance of the City of Brooklyn Center, Minnesota, or for the refinancing of the same. A-1 44921 1v2 BR305-129 It is specifically agreed that the Grantee shall promptly begin and diligently prosecute to completion the redevelopment of the Property through the construction of the Minimum Improvements thereon, as provided in the Agreement. Promptly after completion of the Minimum Improvements in accordance with the provisions of the Agreement, the Grantor will furnish the Grantee with an appropriate instrument so certifying. Such certification by the Grantor shall be (and it shall be so provided in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants of the Agreement and of this Deed with respect to the obligation of the Grantee, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion thereof. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Grantee to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance the purchase of the Property hereby conveyed or the Minimum Improvements, or any part thereof. All certifications provided for herein shall be in such form as will enable them to be recorded with the County Recorder, or Registrar of Titles, Hennepin County, Minnesota. If the Grantor shall refuse or fail to provide any such certification in accordance with the provisions of the Agreement and this Deed, the Grantor shall, within thirty (30) days after written request by the Grantee, provide the Grantee with a written statement indicating in adequate detail in what respects the Grantee has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Grantor, for the Grantee to take or perform in order to obtain such certification. SECTION 2. The Grantee's rights and interest in the Property are subject to the terms and conditions of Sections 14 and 15 of the Agreement relating to the Grantor's right to re-enter and revest in Grantor title to the Property under conditions specified therein, including but not limited to the condition subsequent that the Grantee substantially complete construction of the Minimum Improvements by October 15, 2015 and that the Grantee shall transfer or convey the Property and Minimum Improvements thereon only in accordance with Sections 14D and 14F. SECTION 3 The Grantee agrees for itself and its successors and assigns to or of the Property or any part thereof, hereinbefore described, that the Grantee and such successors and assigns shall comply with Section 14E of the Agreement for a period of 15 years after the date hereof. It is intended and agreed that the above and foregoing agreements and covenants shall be covenants running with the land for the respective terms herein provided, and that they shall, in any event, and without regard to technical classification or designation, legal or otherwise, and A-2 44921 1v2 BR305-129 except only as otherwise specifically provided in this Deed, be binding, to the fullest extent permitted by law and equity for the benefit and in favor of, and enforceable by, the Grantor against the Grantee, its successors and assigns, and every successor in interest to the Property, or any part thereof or any interest therein, and any party in possession or occupancy of the Property or any part thereof. In amplification, and not in restriction of, the provisions of the preceding section, it is intended and agreed that the Grantor shall be deemed a beneficiary of the agreements and covenants provided herein, both for and in its own right, and also for the purposes of protecting the interest of the community and the other parties, public or private, in whose favor or for whose benefit these agreements and covenants have been provided. Such agreements and covenants shall run in favor of the Grantor without regard to whether the Grantor has at any time been, remains, or is an owner of any land or interest therein to, or in favor of, which such agreements and covenants relate. The Grantor shall have the right, in the event of any breach of any such agreement or covenant to exercise all the rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant, to which it or any other beneficiaries of such agreement or covenant may be entitled; provided that Grantor shall not have any right to re-enter the Property or revest in the Grantor the estate conveyed by this Deed on grounds of Grantee's failure to comply with its obligations under this Section 3. IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its President and Executive Director this day of 2014. V The Seller certifies that the Seller does not know of any wells on the described real property.o A well disclosure certificate accompanies this document or has been electronically filed. (If electronically filed, insert WDC number:o I am familiar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously filed well disclosure certificate. ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By Tim Willson Its President By Curt Boganey Its Executive Director A-3 449211v2 BR305-129 STATE OF MINNESOTA ) )ss COUNTY OF This instrument was acknowledged before me on this day of by Tim Willson and Curt Boganey, the President and Executive Director, respectively, of the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of Minnesota, on behalf of the public body corporate and politic. (Stamp) Notary Public This instrument was drafted by: Kennedy & Graven, Charted (JSB) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 Tax Statements should be sent to: Novak-Fleck Incorporated 8857 Zealand Avenue North Brooklyn Park, MN 55445 A-4 449211v2 BR305-129 EXHIBIT B TO PURCHASE AND REDEVELOPMENT AGREEMENT FORM OF CERTIFICATE OF COMPLETION WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota, a public body, corporate and politic (the "Grantor"), conveyed land in Hennepin County, Minnesota to Novak-Fleck Incorporated, a Minnesota corporation (the "Grantee"), by a Deed recorded in the Office of the Registrar of Titles in and for the County of Hennepin and State of Minnesota, as Document Number and WHEREAS, said Deed contained certain covenants and restrictions set forth in Sections 1 and 2 of said Deed; and WHEREAS, said Grantee has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to be done and made by the Grantee have been completed and the above covenants and conditions in said Deed and the agreements and covenants in Sections 14 and 15 of the Agreement (as described in said Deed) have been performed by the Grantee therein, and the Office of the Registrar of Titles in and for the County of Hennepin and State of Minnesota is hereby authorized to accept for recording and to record, the filing of this instrument, to be a conclusive determination of the satisfactory termination of the covenants and conditions of Sections 14 and 15 of the Agreement and the covenants and restrictions set forth in Sections 1 and 2 of said Deed; provided that the covenants set forth in Sections 14E of the Agreement, and in Section 3 of the Deed, remain in full force and effect through the period stated thereon. Dated: , 20 ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By Its President By Its Executive Director B-i 449211v2 BR305-129 STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of___ 20, by and , the President and Executive Director, respectively, of the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the public body corporate and politic. Notary Public This document drafted by: KENNEDY & GRAVEN, CHARTERED 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 B-2 44921 1v2 BR305-129 > ' ri * I' Oh -- -------=---IrTlItt-------------- - - _ 1T11II1 k== '/Z2Z2Zi,4W-i4L. • i[TTJiI II iJLL IL Nlovak-FleckJne. Single Family Statidard Features fleral Construction Concrete Foundation 2 X 6 Construedon Floor Truss Construction Drain Tile and sump basket 50 gallon electric water heater Roughin 314 bath in Lower level C Fiberglass single laundry tub 150 amp electrical service Five phone or cable jacks /Media Panel C Bedroom ceiling lights Vinyl patio door C LoE vinyl windows 90 4 natural gas forced air furnace 111W (Heat Recovery VentUation) system C 3 panel White Masonite interior doors C Poplar stained shaker cabinets C Poplar stained railing and I 114 poplar stained spindles • Poplar stained sldriboards • Poplar stained trim and casings MB 17 8use and F156 casings • Polo chrome door knobs/hinges K itchen • Dishwasher & Microwave circuit (WDF3 I OPAAS) • Girbwe Disposal on city Jots • Laminated countertops • Poplar stamen shaker cabinets • 8 Stainless steel dual sink with sprayer Single level Chrome fariect PiectrIc Range and Dryer C Waterline to refrigerator Bath 4 Fiberglass 1 piece shower unit C i'Fiberglass tub and surround One piece vanity mirror C Cultured marble vanity tops (Most Plane) • Single lcvt Chrome faucets • Poplar stained Shaker vanity Insiintjon • Exterior wall R-Value of 22.98 • R14 ceiling insulation • Exterior block walls insulated and damp proofed • Polvwall waterproofing on interior concrete walls Exterior • Vinyl Siding (Napco-Comfort Series) • Architectural Shingles (OAF-Timberline) Asphalt driveway Concrete front step and sidewalk Steel insulated front door Two (2) outdoor faucets 24guage steep panel garage doors House wrap on exterior wails Allowances $2700.00 Appliance Allowance (SXS Package)a 5700 Lighting allowance C $16,00 per yard flooring allowance Warranty RWC - Residential Warranty Corpot don Qth WaIkthru inspection before closing Construction clean prior to occupancy Nak.F1rk. Ii. mmes the dht to a go thoprk. piar pfia, matori at or onttotion -me Lhmi-3 without prior notk-o orob1itioi t-ad rosdor Lt Updated- M 1/2014 10:3 AM 1 843.0 -N 900O0O" W 135.41' e42.e LOT t t II / 843.2 c00 843.0 ---Isç.5 -.. 8434 5.00 42'O 15.000\Y) cot 03 /PROPOSED i/ RESIDENCE /140 • 844.2 // 8 198'15.000 t Z /84504 844.3 cE37 t 843.4 84 lop Iron lo (L844.3 . '8145.4 N 900000 W 13547/ 841.72 841.93 1C IC IC CO 58TH AVENUE N. 27 IC 842.32 ,c1 C) IC HY-LAND SURVEYING,P.A. LAND SURVEYORS 11947 Idaho Ave. N.INVOICE NO. Proposed lop of Block Champlin, Minnesota 55316 F.B. NO. SCALEPHONE (763) 323-1300 Proposed Garage Floor FAX (763) 323-7035 0 Denotes Iron Monument Foundh4andsurvey16qWeSto1uice.flet842.7 Proposed Lowest Floor 0 Denotes Iron Monument Set Ty pe of Building -Surveyors Certificate o Denotes Wood Hub Set SPLIT LEVEL For Excavation Only NOTE: PROPERTY CORNERS x000.O Denotes Existing ElevationSET BY DEVELOPERS SURVEYOR N E Denotes Proposed Elevation Denotes Surface Droinage NOVAK FLECK Property Located In Part Of JLJL4. Sec. j. Twp. 118. R. ..21 WEST 1/2 OF LOT 29, "LYNDALE RIVERSIDE ACRES, HENNEPIN COUNTY, MINNESOTA" This survey is certified only to the shove named person or personsand not tn subsequent owners, mortgages or title insurers. The only easements shown are from pints of record of Information provided by client. All boil ing dimensions and floor elevations roust be verified by client. my direct supervision, and that t em a duty Registered LandI hereby certify that this survey was prepared by me or under Surveyor under the Ioo,s of the State of Minnesota. Signed ._-_-------.----------------- Surveyed by us this 2nd day of OCTOBER 20 14 Milton E. Hyland, Minn. Reg. No. 20262 ii..:.......::.............'...'......... . 5827 5813 5819 I U I 5824 Cl __ -- - 5807 5807 Y.................... ci I ......qlk^ 11 5800 1 8005801 .11 JP - L± -- ----------------------5BT!+,WEN / - o I I I I - 4... f U __ II 5750 I —Legend I I 5737 Storm Sewer U ....Water Services - Water Main I Sanitary Services -> Sanitary Sewer : 5744 - - - - Road Edge ...... - - 5731 - Business & Development i-r 5800 BryantAvenue N. October 2014 Sale to Novak-Fleck, Inc. 0 12.5 25 50 Feet IIIIlII I M I k"A U'A I k'A (I) 1'tI 1IJk I DATE: September 8, 2014 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business & Development SUBJECT: Resolution Calling for a Public Hearing Regarding Sale of Land Located at 5800 Bryant Avenue North. Recommendation: It is recommended that the Economic Development Authority consider approval/adoption of the Resolution Calling for a Public Hearing Regarding Sale of Land Located At 5800 Bryant Avenue North. Background: On August 9, 2010, the City Council considered a request from Hennepin County regarding the sale/conveyance of a tax forfeited property that was located within the City's Neighborhood Stabilization Area and a potential candidate for either the City's Remove & Rebuild Program or as a purchase & rehab for resale. The City Council adopted Resolution No. 2010-112, A Resolution Approving the Request for Nonpublic Sale of the Non-Conservation Tax Forfeited Land at 5800 Ave. North to the City of Brooklyn Center by Hennepin County. In 2010, the property was inspected with Staff from Hennepin County and determined that the home was functionally obsolete and in such a state of deterioration that it should be considered as a property for the City's Remove and Rebuild Program. In 2011, the tax forfeiture process was completed and the County proceeded with a contract to remove all of the debris and possessions within the residence and garage. On March 26, 2012, the EDA adopted Resolution No. 2012-05, Resolution Authoring the Acquisition of Tax Forfeited Property in Connection with the Remove and Rebuild Program (5800 Bryant Avenue) The property was acquired for its appraised value of $15,000 plus the County's conveyance costs of $3,980.40. The demolition of this property was coordinated through the city's housing consultant, Greater Metropolitan Housing Corporation (GMHC) and completed in November, 2012. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of ilfe for all people and preserves the public trust The Remove and Rebuild Program is funded through the Housing Fund of Tax Increment District 93. The resale of nronertv acauired with these funds does have to meet the following affordable income qualifications: • a family of one or two cannot exceed the average household median income for the Metropolitan Area (2014 - $83,900) and • a family of 3 or more cannot exceed 115% of the Metropolitan Average Household Income (2014 - $95,300) Proposed Sales of 5800 Bryant Avenue North: The property is a large corner lot with 118 feet of frontage on Bryant Avenue North and 125 feet of frontage on 58th Ave. N. The 2014 assessed valuation of the adjacent properties are $141,800 to the north and $104,500 to the south. The Assessor records indicate that the home to the north sold for $100,900 in December, 2012. The assessed land value for both lots is identified as $35,900. Novak-Fleck, Inc., an experienced residential builder with infill development of 40+ vacant lots within residential neighborhoods in the City of Crystal, has expressed an interest to acquire 4 lots from the EDA for the purpose of starting construction of 4 spec homes this year that would be sold to owner occupants meeting the City's Tax Increment Affordable Housing Criteria. The proposed purchase price for this lot is $25,000 each and does not involve a real estate fee by the EDA. Additionally, the purchase price recognizes that the builder will have soil correction costs in the area of the former basement. Novak-Fleck, Inc. has provided the attached plans for a split entry home and construction specification. The plans provide for the construction of a 5 bedroom home having a total square footage of 2,172 sq.ft. with a 3 car garage. 1058 sq.ft. on the main floor (3 bedrooms, bath, living room, dining room, kitchen, with options for a deck off of the dining area) 108 sq.ft. foyer with stairway to lower level o 1008 sq.ft. on the lower lookout level (identified as future 2 bedrooms, bath, family room and mechanical room) Note: The building plans illustrate a pad width of 50 feet. The size of this lot can easily meet the two front yard setback standards and accommodate the builder's house plan. The builder has reviewed a copy of the Development and Purchase Agreement prepared by the City Attorney for EDA' s recent sales of the vacant lot at 5919 Xerxes Ave. N. and understands conditions and terms associated with the EDA' s sales of vacant land. The City Attorney has prepared the attached resolution which authorizes the setting of a public hearing for the October 13, 2014 EDA Meeting to consider the sale of this property. Mission: Ensuring (tit directive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust U ak'A UtIak' (I)1II1IJkI Budget Issues: The proceeds from this land sale are considered Tax Increment Revenues and will be placed back into the TIF 3 Housing Fund. Strategic Priorities: e Focused Redevelopment Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust AFFIDAVIT OF PUBLICATION STATE OF MINNESOTA )ss COUNTY OF HENNEPIN ) Charlene Void being duly sworn on an oath, states or affirms that they are the Authorized Agent of the newspaper(s) known as: SP Brooklyn Ctr/Brooklyn Park and has full knowledge of the facts stated below: (A)The newspaper has complied with all of the requirements constituting qualifica- tion as a qualified newspaper as provided by Minn. Stat. §331A.02, §331A.07, and other applicable laws as amended. (B)This Public Notice was printed and pub- lished in said newspaper(s) for 1 succes- sive issues; the first insertion being on 10/02/2014 and the last insertion being on 10/02/2014. By: \/"%_&/.Xk&Y- Authorized Agent Subscribed and sworn to or affirmed before me on 10/02/2014. I20Lt i\ çv\ Notary Public ,ivwVM,M1'N MAcIERSON Notary PUb 0 City of Brooklyn Center (Official Publication)IOTICE OF PUBLIC HEARING REGARDING LAND SALE NOTICE IS HEREBY GIVEN that ie Board of Commissioners of the conomio Development Authority f Brooklyn Center, Minnesota (the EON) will meet at City Hall at 6301 ihingle Creek Parkway, Brooklyn enter. Minnesota (the 'City') at or fter 7:00 p.m. on Monday, October 3, 2014 to conduct a public hear- rig on the proposed sale of certain cal property ('Property") located in he City to Novak-Fleck, Inc. The 'roperty is located in the City at 800 Bryant Avenue North and Ic- jally described as follows: The West one-half (V/_l/2) of Lot 9, Lyndale Riverside Acres Henne- in County, Minnesota. The EDA will meet at the public hearing to determine if the sale is advisable. A copy of the terms and conditions of the proposed sale of the Property will be on file and avail- able for inspection at City Hall dur- ing regular business hours. Any person wishing to express an opinion on the matters to be con- sidered at the public hearing will be heard orally or in writing. BY ORDER OF THE BOARD OF COMMISSIONERS 10/02/14 5800 Bryant Ave N PHN Rate Information: (1) Lowest classified rate paid by commercial users for comparable space: $46.90 per column inch Ad ID 285372 EDA ITEM MEMORANDUM ( DATE: October 13, 2014 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business & Development SUBJECT: Resolution Approving Purchase and Redevelopment Agreement and Conveyance of Certain Property Located at .5400 Bryant Avenue North. Recommendation: It is recommended that the Economic Development Authority consider approval/adoption of a Resolution Approving Purchase and Redevelopment Agreement and Conveyance of Certain Property Located at 5400 Bryant Avenue North. Background: On September 8, 2014, the EDA considered an offer from Novak & Fleck, Inc. to acquire the vacant lot at 5400 Bryant Ave. North for the purpose of constructing a 5-bedroom, 2-bath split entry home with a three car attached garage. The EDA moved to adopt Resolution No. 2014-20, a resolution calling for a public hearing on October 13, 2014 regarding the sale of land located at 5400 Bryant Avenue North. Attached for your reference are copies of the September 8, 2014 staff memorandum. On October 2, 2014, a notice of public hearing regarding this land sale was published in the Official Newspaper. Attached is a copy of the Affidavit of Publication. Attached is a copy of the floor plans, building exterior, and construction specifications provided by Novak-Fleck, Inc. for a 2,172 sq.ft.,split entry home that includes the following: o 1058 sq.ft. on the main floor (3 bedrooms, bath, living room, dining room, kitchen, with options for a deck off of the dining area) o 108 sq.ft. foyer with stairway to lower level o 1008 sqf.ft. on the lower lookout level (identified as future 2 bedrooms, bath, family room and mechanical room o a three car garage. Purchase and Redevelopment Agreement The City Attorney has prepared the enclosed Purchase and Redevelopment Agreement, which includes the following components related to the EDA's sales of this vacant lot for an infill development of a new single family residence: Mission: Ensuring on attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves ii e public trust • The purchase price is $25,000. • The buyer agrees that it will construct a new single family dwelling on the Property, intended for sale to a person or persons for residential occupancy (an Owner Occupant). • The minimum improvements shall consist of a house with approximately 2,172 gross square feet, 5-bedrooms and a 3-car attached garage and shall be constructed substantially in accordance with the plans on file in City Hall. • The minimum improvements must be substantially completed by October 15, 2015. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of Brooklyn Center building official. At this time, a Certificate of Completion for the Minimum Improvements will be issued by the EDA. • The Buyer shall convey the Property to an Owner Occupant whose household income does not exceed (a) 100% of median income in the case of one or two person household Owner Occupant, or (b) 115% of the median income in the case of three or more persons household Owner Occupants. The average median income for the seven-county metropolitan area for 2014 is $83,900. • Provisions which provide the EDA with the rights to re-enter and take possession of the property in the event the buyer does not carry out the obligations with respect to the construction of the Minimum Improvements or abandons or substantially suspends construction. Budget Issues: The proceeds from this land sale are considered Tax Increment Revenues and will be placed back into the TIF 3 Housing Fund. Strategic Priorities: • Vibrant Neighborhoods Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of!fe for al/people and preserves the public trust Commissioner introduced the following resolution and moved its adoption: RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT AGREEMENT AND CONVEYANCE OF CERTAIN PROPERTY LOCATED AT 5400 BRYANT AVENUE NORTH 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 and Redevelopment Agreement (the "Contract") between the Authority and Novak-Fleck Incorporated (the "Buyer"), under which, among other things, the Authority will convey the property located in the City at 5400 Bryant Avenue North and legally described as that part of the South one-half (S '/2) of Lot Sixteen (16), Block Three (3), Beilvue Acres, lying West of the East 150 feet of said Lot Sixteen (16), Hennepin County, Minnesota (the "Property") to the Buyer to construct a new single family dwelling on the Property, intended for sale to an individual or family for residential occupancy. 1.03. The Authority has on this date conducted a duly noticed public hearing regarding the sale of the Property to Buyer, at which all interested persons were given an opportunity to be heard. 1.04. The Authority finds and determines that conveyance of the Property to the Buyer is in the public interest and will further the objectives of its general plan of economic development, because it will provide an opportunity for increased housing opportunities in the City and serve as an impetus for further development. Section 2. Authority Approval: Further Proceedings. 2.01. The Board hereby approves the Contract in substantially the form presented to the Board, including conveyance of the Property to Buyer, 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 Contract 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 Contract as a whole, including without limitation execution of any documents to which the Authority is a party referenced in or attached to the Contract, and any deed, mortgage or other documents necessary to convey the Property to Buyer, all as described in the Contract. Approved by the Board of Commissioners of the Economic Development Authority of Brooklyn Center, Minnesota this 11th day of August, 2014. October 13, 2014 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. PURCHASE AND REDEVELOPMENT AGREEMENT 5400 Bryant Avenue North Parties. This Purchase and Redevelopment Agreement is made as of October 13, 2014 between the ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA, a public body corporate and politic under the laws of Minnesota having its office located at 6301 Shingle Creek Parkway, Brooklyn Center, MN (the "Seller"), and NOVAK-FLECK INCORPORATED, a Minnesota corporation (the "Buyer"). 2.Offer/Acceptance. Buyer offers to purchase and Seller agrees to sell real property legally described as follows (the "Property"): That part of the South one-half (S %) of Lot Sixteen (16), Block Three (3), Bellvue Acres, lying West of the East 150 feet of said Lot Sixteen (16), Hennepin County, Minnesota 3.Price and Terms. The price for the Property is Twenty-Five Thousand Dollars ($25,000.00) which Buyer shall pay as follows: Earnest money of Five Hundred Dollars ($500.00) by check, receipt of which is hereby acknowledged by Seller, and the balance of Twenty-Four Thousand and Five Hundred Dollars ($24,500.00) to be paid by certified check on the Date of Closing. The "Date of Closing" shall be October 15, 2014, or such other earlier or later date as the parties mutually agree. 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. 4492040 BR305-13 1 5.Deed. Upon performance by Buyer, Seller shall deliver a quit claim deed conveying title to the Property to Buyer, in substantially the form attached as Exhibit A (the "Deed"). 6.Real Estate Taxes and Special Assessments. The parties agree and understand that the Property is exempt from real estate taxes for taxes payable in the current year. Seller shall pay on Date of Closing all special assessments levied against the Property as of the date of this agreement, including those certified for payment with taxes due and payable in 2014. Seller represents that there are no special assessments pending as of the date of this agreement. If a special assessment becomes pending after the date of this agreement and before the Date of Closing, Buyer may, at Buyer's option: A.Assume payment of the pending special assessment without adjustment to the purchase agreement price of the Property; or B.Require Seller to pay the pending special assessment and Buyer shall pay a commensurate increase in the purchase price of the Property, which increase shall be the same as the estimated amount of the assessment; or C. Declare this agreement null and void by notice to Seller, and earnest money shall be refunded to Buyer. 7.Closing Costs and Related Items. The Seller shall be responsible for the following costs: (a) recording fees and conservation fees for all instruments required to establish marketable title in Seller; and (b) deed transfer taxes and conservation fees required to be paid in connection with the Deed be given by Seller. Buyer shall be responsible for the payment of the following costs: (c) recording fees required to be paid in connection with this Agreement and the Deed to be given by Seller; (d) the cost of all title evidence, including all search and commitment fees and the premium for an owner's policy of title insurance, and (e) closing fee, if any. Each party shall be responsible for its own attorneys' fees and costs. 8.Sewer and Water. Seller warrants that city sewer and water are available at the Property line. 9.Condition of Property. Buyer acknowledges that it has inspected or has had the opportunity to inspect the Property and agrees to accept the Property "AS IS." Buyer has the right, at its own expense to take soil samples for the purpose of determining if the soil is suitable for construction of the dwelling described in section 14 below. If the soil is determined to be unacceptable the Buyer may rescind this agreement by written notice to the Seller, in which case the agreement shall be null and void and all earnest money paid hereunder shall be refunded to the Buyer. Seller makes no warranties as to the condition of the Property. 10.Marketability of Title. The Buyer may order, in Buyer's sole discretion and at the Buyer's expense, a commitment (the "Title Commitment") issued by any title insurance company acceptable to Buyer ("Title"), for an owner's title insurance policy in the full NA 4492040 BR305-131 amount of the Purchase Price, showing fee simple title to the Property in Seller. Buyer shall have fifteen (15) business days after receipt of the Title Commitment to examine the same and to deliver written objections to Title, if any, to Seller. Seller shall have the greater of (i) the number of days remaining until the Date of Closing or (ii) thirty (30) days to have such objections removed or satisfied. 11. Title Clearance and Remedies. If Seller shall fail to have title objections timely removed, the Buyer may, at its sole election: (a) terminate this Agreement without any liability on its part; in which event the earnest money shall be promptly refunded in exchange for a quit claim deed to the Property from Buyer; or (b) take title to the Property subject to such objections. If title is marketable, or is made marketable as provided herein, and Buyer defaults in any of the agreements herein, Seller may elect either of the following options, as permitted by law: A.Cancel this contract as provided by statute and retain all payments made hereunder as liquidated damages. The parties acknowledge their intention that any note given pursuant to this contract is a down payment note, and may be presented for payment notwithstanding cancellation; B.Seek specific performance within six months after such right of action arises, including costs and reasonable attorney's fees, as permitted by law. If title is marketable, or is made marketable as provided herein, and Seller defaults in any of the agreements herein, Buyer may, as permitted by law: C.Seek damages from Seller including costs and reasonable attorney's fees; D.Seek specific performance within six months after such right of action arises. 12. Well Disclosure. Seller certifies that Seller does not know of any wells on the Property. 13.Individual Sewage Treatment System Disclosure. Seller certifies that there is no individual sewage treatment system on or serving the Property. 14.Construction and Sale of Dwelling. Buyer agrees that it will construct a new single family dwelling on the Property, intended for sale to a person or persons for residential occupancy (an "Owner Occupant"). This covenant shall survive the delivery of the Deed. A.The single family dwelling described in this Section is referred to as the "Minimum Improvements." B.The Minimum Improvements shall consist of a house with approximately 2,176 gross square feet, 3 bedrooms and 1 bathroom on the upper level, 2 future 3 4492040 BR305-131 bedrooms and 1 bath on the lower level, and a 3-car garage and shall be constructed substantially in accordance with the plans on file in City Hall. Construction of the Minimum Improvements must be substantially completed by October 15, 2015. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of Brooklyn Center building official. C. Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Buyer to construct such Minimum Improvements (including the date for completion thereof), the Seller will furnish the Buyer with a Certificate of Completion for such improvements. Such certification by the Seller shall be (and it shall be so provided in the Deed and in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement and in the Deed with respect to the obligations of the Buyer and its successors and assigns, to construct the Minimum Improvements and the dates for completion thereof. The certificate provided for in this Section of this Agreement shall be in such form as will enable it to be recorded in the proper office for the recordation of deeds and other instruments pertaining to the Property. If the Seller shall refuse or fail to provide any certification in accordance with the provisions of this Section, the Seller shall, within 30 days after written request by the Buyer, provide the Buyer with a written statement, indicating in adequate detail in what respects the Buyer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Seller for the Buyer to take or perform in order to obtain such certification. D. The Buyer represents and agrees that until issuance of the Certificate of Completion for the Minimum Improvements: (1) Except for any sale to an Owner Occupant, the Buyer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a "Transfer"), without the prior written approval of the Seller's Board of Commissioners. The term "Transfer" does not include encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or permanent financing necessary to enable the Buyer or any successor in interest to the Property, or any part thereof, to construct the Minimum Improvements or component thereof. 4492040 BR305-131 (2) If the Buyer seeks to effect a Transfer to any person or entity other than an Owner Occupant prior to issuance of the Certificate of Completion, the Seller shall be entitled to require as conditions to such Transfer that: (i)any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Seller, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Buyer as to the portion of the Property to be transferred; and (ii)Any proposed transferee, by instrument in writing satisfactory to the Seller and in form recordable in the public land records of Hennepin County, Minnesota, shall, for itself and its successors and assigns, and expressly for the benefit of the Seller, have expressly assumed all of the obligations of the Buyer under this Agreement as to the portion of the Property to be transferred and agreed to be subject to all the conditions and restrictions to which the Buyer is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the Seller) deprive the Seller of any rights or remedies or controls with respect to the Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit the Seller of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Property that the Seller would have had, had there been no such transfer or change. In the absence of specific written agreement by the Seller to the contrary, no such transfer or approval by the Seller thereof shall be deemed to relieve the Buyer, or any other party bound in any way by this Agreement or otherwise with respect to the Property, from any of its obligations with respect thereto. (iii) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Property governed by this subsection D. shall be in a form reasonably satisfactory to the Seller. (3) If the conditions described in paragraph (2) above are satisfied then the Transfer will be approved and the Buyer shall be released from its obligation 5 4492040 BR305-13 1 under this Agreement, as to the portion of the Property that is transferred, assigned, or otherwise conveyed. The provisions of this paragraph (3) apply to all subsequent transferors. (4) Upon issuance of the Certificate of Completion, the Buyer may Transfer the Property and/or the Buyer's rights and obligations under this Agreement with respect to such Property without the prior written consent of the Seller, except to the extent required under paragraph F of this Section. B. The Buyer, and its successors and assigns, agree that they (a) will use the Minimum Improvements only as a single family dwelling, and in the case of an Owner Occupant, will occupy the Property as a residence, (b) will not seek exemption from real estate taxes on the Property under State law, and (c) will not transfer or permit transfer of the Property to any entity whose ownership or operation of the Property would result in the Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City of Brooklyn Center or Seller in accordance with this Agreement). The covenants in this paragraph run with the land, survive both delivery of the Deed and issuance of the Certificate of Completion for the Minimum Improvements, and shall remain in effect for 15 years after the Date of Closing. F. The Buyer shall convey the Property (either before or after issuance of the Certificate of Completion) to an Owner Occupant whose household income does not exceed (a) 100% of median income in the case of one or two person household Owner Occupants, or (b) 115% of median income in the case of three or more person household Owner Occupants. The term "median income" means the median income in the seven-county metropolitan area, or the State as a whole, whichever is greater, using income data available from the Minnesota Housing Finance Agency as of the date of closing on sale to the Owner Occupant. Prior to closing on sale the Property by Buyer to an Owner Occupant, Buyer shall: (1)Notify the Seller in writing that the proposed Owner Occupant will meet the income qualifications under this paragraph; and (2)Submit to Seller evidence of Owner Occupant's income in a form satisfactory to Seller, evidencing compliance with the income limits described above. The covenant in this Section applies only to the first sale of the Property to an Owner Occupant, and does not apply to any subsequent sale by an Owner Occupant to any other person or party. 15. Revesting Title in Seller upon Happening of Event Subsequent to Conveyance to Buyer. In the event that subsequent to conveyance of the Property or any part thereof to the Buyer and prior to receipt by the Buyer of the Certificate of Completion for of the Minimum Improvements, the Buyer, subject to Unavoidable Delays (as hereafter defined), fails to carry out its obligations with respect to the construction of the Minimum Improvements (including the nature and the date for the completion thereof), or abandons or substantially on 4492040 BR305-131 suspends construction work, and any such failure, abandonment, or suspension shall not be cured, ended, or remedied within 30 days after written demand from the Seller to the Buyer to do so, then the Seller shall have the right to re-enter and take possession of the Property and to terminate (and revest in the Seller) the estate conveyed by the Deed to the Buyer, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the Property to the Buyer shall be made upon, and that the Deed shall contain a condition subsequent to the effect that in the event of any default on the part of the Buyer and failure on the part of the Buyer to remedy, end, or abrogate such default within the period and in the manner stated in such subdivisions, the Seller at its option may declare a termination in favor of the Seller of the title, and of all the rights and interests in and to the Property conveyed to the Buyer, and that such title and all rights and interests of the Buyer, and any assigns or successors in interest to and in the Property, shall revert to the Seller, but only if the events stated in this Section have not been cured within the time periods provided above. For the purposes of this Agreement, the term "Unavoidable Delays" means delays beyond the reasonable control of the Buyer as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse weather or acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Seller in exercising its rights under this Agreement) which directly results in delays. Unavoidable Delays shall not include delays in the Buyer's obtaining of permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such construction is required under this section of this Agreement. 16. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the Seller of title to and/or possession of the Property or any part thereof as provided in Section 15, the Seller shall apply the purchase price paid by the Buyer under Section 4 of this Agreement as follows: (a) First, to reimburse the Seller for all costs and expenses incurred by the Seller, including but not limited to proportionate salaries of personnel, in connection with the recapture, management, and resale of the Property or part thereof (but less any income derived by the Seller from the Property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the Property or part thereof (or, in the event the Property is exempt from taxation or assessment or such charge during the period of ownership thereof by the Seller, an amount, if paid, equal to such taxes, assessments, or charges (as determined by the Seller assessing official) as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Property or part thereof at the time of revesting of title thereto in the Seller or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Buyer, its successors or transferees; any expenditures made 7 4492040 BR305-131 or obligations incurred with respect to the making or completion of the Minimum Improvements or any part thereof on the Property or part thereof; and any amounts otherwise owing the Seller by the Buyer and its successor or transferee; and (b) Second, to reimburse the Buyer for the balance of the purchase price remaining after the reimbursements specified in paragraph (a) above. Such reimbursement shall be paid to the Buyer upon delivery of an executed, recordable warranty deed to the Property by the Buyer to the Seller. 17.Time is of the essence for all provisions of this contract. 18.Notices. All notices required herein shall be in writing and delivered personally or mailed to the address shown at paragraph 1 above and if mailed, are effective as of the date of mailing. 19.Minnesota Law. This contract shall be governed by the laws of the State of Minnesota. 20.Specific Performance. This Agreement may be specifically enforced by the parties, provided that an action is brought within one year of the date of alleged breach of this Agreement. 21.No Remedy Exclusive. No remedy herein conferred upon or reserved to the Seller or Buyer is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 22.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. 23. Recording. This Agreement shall be filed of record with the Hennepin County Recorder. Buyer shall pay all recording costs. 8 4492040 BR305-131 In witness of the foregoing, the parties have executed this agreement on the year and date written above. SELLER: ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By: Tim Willson Its President By: Curt Boganey Its Executive Director STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN This instrument was acknowledged before me on this day of October, 2014, by Tim Willson and Curt Boganey, the President and Executive Director, respectively, of the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of Minnesota, on behalf of the public body corporate and politic. (Stamp) Notary Public S-1 4492040 BR305-13 1 BUYER: NOVAI By: Its: STATE OF MINNESOTA ) } COUNTY OF HENNEPIN ) 1. 101 A The fQr olng was kL^^^4 L^J^fpLJL_' the T anolp be for e me this tiNovak(Imorated, Minnesota corporation, on behalf of the corporation. U V\AAtvJA/VVA/A/fWAA'VVV\CANDICE L. JOHNSON ( ) 1ta, I ,utiic Minnesota i^x piroq Jwi 31, 2015 VAVVJVWVVWAA.WW jttCL@j) Notary Public This document drafted by: , Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street ohs, MN 55402 S-2 4492040 BR305-131 by a EXHIBIT A to PURCHASE AND REDEVELOPMENT AGREEMENT FORM OF QUIT CLAIM DEED Deed Tax Due: $85.00 ECRV QUIT CLAIM DEED THIS INDENTURE, between the Economic Development Authority of Brooklyn Center, Minnesota, a Minnesota public body corporate and politic (the "Grantor"), and Novak-Fleck Incorporated, a Minnesota corporation (the "Grantee"). WITNESSETH, that Grantor, in consideration of the sum of $25,000 and other good and valuable consideration the receipt whereof is hereby acknowledged, does hereby grant, bargain, quitclaim and convey to the Grantee, its successors and assigns forever, all the tract or parcel of land lying and being in the County of Hennepin and State of Minnesota described as follows, to-wit (such tract or parcel of land is hereinafter referred to as the "Property"): That part of the South one-half (S Yz) of Lot Sixteen (16), Block Three (3), Beilvue Acres, lying West of the East 150 feet of said Lot Sixteen (16), Hennepin County, Minnesota Check here if all or part ofproperty is registered (Torrens) £1 To have and to hold the same, together with all the hereditaments and appurtenances thereunto belonging. SECTION 1. It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and provisions of the Purchase and Redevelopment Agreement recorded herewith, between the Grantor and Grantee, dated as of October 13, 2014 (the "Agreement") and that the Grantee shall not convey this Property, or any part thereof, except as permitted by the Agreement until a certificate of completion releasing the Grantee from certain obligations of said Agreement as to this Property or such part thereof then to be conveyed, has been placed of record. This provision, however, shall in no way prevent the Grantee from mortgaging this Property in order to obtain funds for the purchase of the Property hereby conveyed or for erecting the Minimum Improvements thereon (as defined in the Agreement) in conformity with the Agreement, any applicable development program and applicable provisions of the zoning ordinance of the City of Brooklyn Center, Minnesota, or for the refinancing of the same. A-i 4492040 BR305-131 It is specifically agreed that the Grantee shall promptly begin and diligently prosecute to completion the redevelopment of the Property through the construction of the Minimum Improvements thereon, as provided in the Agreement. Promptly after completion of the Minimum Improvements in accordance with the provisions of the Agreement, the Grantor will furnish the Grantee with an appropriate instrument so certifying. Such certification by the Grantor shall be (and it shall be so provided in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants of the Agreement and of this Deed with respect to the obligation of the Grantee, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion thereof. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Grantee to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance the purchase of the Property hereby conveyed or the Minimum Improvements, or any part thereof. All certifications provided for herein shall be in such form as will enable them to be recorded with the County Recorder, or Registrar of Titles, Hennepin County, Minnesota. If the Grantor shall refuse or fail to provide any such certification in accordance with the provisions of the Agreement and this Deed, the Grantor shall, within thirty (30) days after written request by the Grantee, provide the Grantee with a written statement indicating in adequate detail in what respects the Grantee has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Grantor, for the Grantee to take or perform in order to obtain such certification. SECTION 2. The Grantee's rights and interest in the Property are subject to the terms and conditions of Sections 14 and 15 of the Agreement relating to the Grantor's right to re-enter and revest in Grantor title to the Property under conditions specified therein, including but not limited to the condition subsequent that the Grantee substantially complete construction of the Minimum Improvements by October 15, 2015 and that the Grantee shall transfer or convey the Property and Minimum Improvements thereon only in accordance with Sections 14D and 14F. SECTION 3. The Grantee agrees for itself and its successors and assigns to or of the Property or any part thereof, hereinbefore described, that the Grantee and such successors and assigns shall comply with Section 14E of the Agreement for a period of 15 years after the date hereof. It is intended and agreed that the above and foregoing agreements and covenants shall be covenants running with the land for the respective terms herein provided, and that they shall, in any event, and without regard to technical classification or designation, legal or otherwise, and except only as otherwise specifically provided in this Deed, be binding, to the fullest extent permitted by law and equity for the benefit and in favor of, and enforceable by, the Grantor A-2 4492040 BR305-131 against the Grantee, its successors and assigns, and every successor in interest to the Property, or any part thereof or any interest therein, and any party in possession or occupancy of the Property or any part thereof. In amplification, and not in restriction of, the provisions of the preceding section, it is intended and agreed that the Grantor shall be deemed a beneficiary of the agreements and covenants provided herein, both for and in its own right, and also for the purposes of protecting the interest of the community and the other parties, public or private, in whose favor or for whose benefit these agreements and covenants have been provided. Such agreements and covenants shall run in favor of the Grantor without regard to whether the Grantor has at any time been, remains, or is an owner of any land or interest therein to, or in favor of, which such agreements and covenants relate. The Grantor shall have the right, in the event of any breach of any such agreement or covenant to exercise all the rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant, to which it or any other beneficiaries of such agreement or covenant may be entitled; provided that Grantor shall not have any right to re-enter the Property or revest in the Grantor the estate conveyed by this Deed on grounds of Grantee's failure to comply with its obligations under this Section 3. IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its President and Executive Director this V The Seller certifies that the Seller does not know of any wells on the described real property.o A well disclosure certificate accompanies this document or has been electronically filed. (If electronically filed, insert WDC number:o I am familiar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously filed well disclosure certificate. day of ,2014. GRANTOR ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By Tim Willson Its President By Curt Boganey Its Executive Director A-3 4492040 BR305-131 STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) This instrument was acknowledged before me on this day of_________ 2014, by Tim Willson and Curt Boganey, the President and Executive Director, respectively, of the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of Minnesota, on behalf of the public body corporate and politic. (Stamp) Notary Public This instrument was drafted by: Kennedy & Graven, Charted (JSB) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 Tax Statements should be sent to: Novak-Fleck Incorporated 8857 Zealand Avenue North Brooklyn Park, MN 55445 A-4 4492040 BR305-131 EXHIBIT B TO PURCHASE AND REDEVELOPMENT AGREEMENT FORM OF CERTIFICATE OF COMPLETION WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota, a public body, corporate and politic (the "Grantor"), conveyed land in Hennepin County, Minnesota to Novak-Fleck Incorporated, a Minnesota corporation (the "Grantee"), by a Deed recorded in the office of the County Recorder in and for the County of Hennepin and State of Minnesota, as Document Number and WHEREAS, said Deed contained certain covenants and restrictions set forth in Sections 1 and 2 of said Deed; and WHEREAS, said Grantee has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to be done and made by the Grantee have been completed and the above covenants and conditions in said Deed and the agreements and covenants in Sections 14 and 15 of the Agreement (as described in said Deed) have been performed by the Grantee therein, and the County Recorder in and for the County of Hennepin and State of Minnesota is hereby authorized to accept for recording and to record, the filing of this instrument, to be a conclusive determination of the satisfactory termination of the covenants and conditions of Sections 14 and 15 of the Agreement and the covenants and restrictions set forth in Sections 1 and 2 of said Deed; provided that the covenants set forth in Sections 14E of the Agreement, and in Section 3 of the Deed, remain in full force and effect through the period stated thereon. A-S 4492040 BR305-131 Dated: , 20. ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By: Tim Willson Its President By: Curt Boganey Its Executive Director STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN This instrument was acknowledged before me on this -day of by Tim Willson and Curt Boganey, the President and Executive Director, respectively, of the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of Minnesota, on behalf of the public body corporate and politic. (Stamp) Notary Public This document drafted by: KENNEDY & GRAVEN, CHARTERED 470 U.S. Bank Plaza Minneapolis, MN 55402 (612) 337-9300 4492043 BR305-131 6 1 tr. a dM d Illr__r QOc1-- -+i fxuv7zmAcxu ; -- - L rI- ii N if Ila 1!I I4±?tj'z 7fl2?2Z iLr$jfli J1If ___ I I I11I!k -•I iI11! ! —i-- •____ _jT-_____• ---- - _____ - - - ji Novak-H ekJic. Single Family Standard Features General Construction Concrete Foundation 2 X 6 Construction Floor Truss Construction Drain Tile and snuip basket C 50 eallou elcettic water beater Rough-in. 3 14 bath in Lower 1vc1 C Fiberglass single laundry tub 150 amp electrical service C Five phone or cable jacks Media Panel C Bedroom ceiling lights v Vinyl patio door C Lo.E vinyl windows 90 4 natural gas forced air furnace C URV (Heat Recovery Ventilation) system C 3 panel 'White Masonite interior doors u Poplar stained shaker cabinets Poplar stained railing and 1 1/4 poplar stained spindles C Poplar stained sldrthdards C Poplar stained trim and casings M1317 Base and F156 casings ° Polo chrome door keobs/hinges Kitchen°Dishwasher & Microwave circuit (WDF3 10PA-A9) C Girbae Disposal on city lots C Laminated countertops C Poplar stained shaker cabinets C B Stainless steel dual sink with sprayer Single level Chrome faucet C Electric Range and Dryer C Waterline to refrigerator Bath 4 Fbergis 1 piece shower unit ° 5 Fiberglass tub and surround C One piece vanity mirror C Cultured marble vanity tops (Most Plans) C Single lever Chrome fiuteets C Poplar stained Shaker vanity Insijjation C Exterior wail R-Value of 2293 ° R44 ceiling insulation ° Exterior block walls insulated and damp proofed Polywall waterproofing on interior concrete wali Fxtrior Vinyl Siding (Napco-Comfort Series) krchitectural Shingles (OAF-Timberline) Asphalt driveway Concrete front step and sidewalk Steel insulated front door Two (2) outdoor Ihucets * 24guage steep panel garage doors House wrap on exterior walls Allowances $2700M0 Appliance Allowance (SXS Package) 70{) Lighting allowance SI6M{) per yard flooring allowance Warranty RWC Residemi& Warranty Corporation Other • \Vlkthra inspection before closing • Construction clean prior to occupancy Nria, 1i. riv th right the prie, ptam, 5 pnif=60113, matrW r tric- mthd thut prior noi r'r Oblig,Iflkn atrLs L.nUpdat& 811 iJ2014 10:3 AM I5425 1 5424 - 5411 1 I L — 5418 -E- 5405 I 5403 I •.._.: 5406 S. ........ 5401 -I 5400........ L :::::::........ .... . 5327 :.::•:5328 -= - Legend Storm Sewer .....Water Services I 5326 Water Main •T.S . .....Sanitary Services -=--> Sanitary Sewer I /5324 -- - - Road Edge 81?OOKL 5400 Bryant Avenue N. Sale to Novak-Fleck, Inc. ] 22 al Business & Development October 2014 0 15 30 60 Feet I M Vh'4 U I iIk'A 0) 1I I1IJ'kI DATE: September 8, 2014 ( TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business & Development SUBJECT: Resolution Calling for a Public Hearing Regarding Sale of Land Located at 5400 Bryant Avenue North. Recommendation: It is recommended that the Economic Development Authority consider approval/adoption of the Resolution Calling for a Public Hearing Regarding Sale of Land Located At 5400 Bryant Avenue North. Background: 5400 Bryant Ave. N. was a vacant foreclosed single family residence in a blighted condition and determined not to be a candidate for restoration under the Neighborhood Stabilization Program (NSP). The City's Housing Consultant, the Greater Metropolitan Housing Corporation, (GMHC) acquired the property thorough the First Look Program for $18,100 and removed the buildings in August of 2010. On November 8, 2010, the EDA adopted Resolution No. 2010-16, Authorizing the Acquisition of Property in Connection with the Remove and Rebuild Program (5400 Bryant Avenue North). The total acquisition cost was $47,308.17. The Remove and Rebuild Program is funded through the Housing Fund of Tax Increment District #3. The resale of property acquired with these funds does have to meet the following affordable income qualifications: • a family of one or two cannot exceed the average household median income for the Metropolitan Area (2014 - $83,900) and • a family of 3 or more cannot exceed 115% of the Metropolitan Average Household Income (2014 - $95,300) Proposed Sales of 5400 Bryant Avenue North: The property is an interior lot with 63 feet of frontage on Bryant Avenue North and a lot depth of 150 feet, the backs up to Bellvue Park The 2014 assessed valuation of the adjacent properties are $132,500 to the north and $108,800 to the south. The Assessor records indicate that the home to the south sold for $118,000 in September, 2013. The assessed land value for both lots is identified as $37,300. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of ilfe for all people and preserves the public trust Novak-Fleck, Inc., an experienced residential builder with infill development of 40+ vacant lots within residential neighborhoods in the City of Crystal, has expressed an interest to acquire 4 lots from the EDA for the purpose of starting construction of 4 spec homes this year that would be sold to owner occupants meeting the City's Tax Increment Affordable Housing Criteria. The proposed purchase price for this lot is $25,000 each and does not involve a real estate fee by the EDA. Additionally, the purchase price recognizes that the builder will have soil correction costs in the area of the former basement. Novak-Fleck, Inc. has provided the attached plans for a split entry home and construction specification. The plans provide for the construction of a 5 bedroom home having a total square footage of 2,172 sq.ft. with a 3 car garage. • 1058 sq.ft. on the main floor (3 bedrooms, bath, living room, dining room, kitchen, with options for a deck off of the dining area) o 108 sq.ft. foyer with stairway to lower level • 1008 sqf ft. on the lower lookout level (identified as future 2 bedrooms, bath, family room and mechanical room). Note: The building plans illustrate a pad width of 50 feet. The Builder has indicated that they will modify the size of the garage for this lot to meet the City side yard setback requirements of 10 feet and 5 feet from the garage. The builder has reviewed a copy of the Development and Purchase Agreement prepared by the City Attorney for EDA's recent sales of the vacant lot at 5919 Xerxes Ave. N. and understands conditions and terms associated with the EDA's sales of vacant land. The City Attorney has prepared the attached resolution which authorizes the setting of a public hearing for the October 13, 2014 EDA Meeting to consider the sale of this property. Budget Issues: The proceeds from this land sale are considered Tax Increment Revenues and will be placed back into the TIF 3 Housing Fund. Strategic Priorities: o Focused Redevelopment Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust AFFIDAVIT OF PUBLICATION STATE OF MINNESOTA ) ,sCOUNTY OF HENNEPIN ) Charlene Void being duly sworn on an oath, states or affirms that they are the Authorized Agent of the newspaper(s) known as: SF Brooklyn Ctr/Brooklyn Park and has full knowledge of the facts stated below: (A)The newspaper has complied with all of the requirements constituting qualifica- tion as a qualified newspaper as provided by Minn. Stat. §331A.02, §331A.07, and other applicable laws as amended, (B)This Public Notice was printed and pub- lished in said newspaper(s) for 1 succes- sive issues; the first insertion being on 10/02/2014 and the last insertion being on 10/0212014. By: CV \Y&O Authorized AiU Subscribed and sworn to or affirmed before me on 10/02/2014. city of Brooklyn Center (Official Publication) NOTICE OF PUBLIC HEARING REGARDING LAND SALE NOTICE IS HEREBY GIVEN that the Board of Commissioners of the Economic Development Authority of Brooklyn Center, Minnesota (the EDA") will meet at City Hall at 6301 Shingle Creek Pkwy, Brooklyn Cen- ter, Minnesota (the "City") at or after 7:00 p.m. on Monday, October 13, 2014 to conduct a public hearing on the proposed sale of certain real property ("Property") located in the City to Novak-Fleck, Inc. The Prop- erty is located in the City at 5400 Bryant Avenue North and legally described as follows: That part of the South one-half (S 1/2) of Lot Sixteen (16), Block Three (3), Bellvue Acres, lying West of the East 150 feet of said Lot Sixteen (16), Hennepin County, Minnesota. The EDA will meet at the public hearing to determine if the sale is advisable. A copy of the terms and conditions of the proposed sale of the Property will be on file and avail- able for inspection at City Hall dur- ing regular business hours. Any person wishing to express an opinion on the matters to be con- sidered at the public hearing will be heard orally or in writing. BY ORDER OF THEBOARD OF COMMISSIONERS 285365 10102114 5400 Bryant Ave N PHN I W011— El Rate Information: (1) Lowest classified rate paid by commercial users for comparable space: $46.90 per column inch Ad ID 285365 EDA ITEM MEMORANDUM DATE: October 13, 2014 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business & Development * SUBJECT: Resolution Approving Purchase and Redevelopment Agreement and Conveyance of Certain Property Located at 5338 Logan Avenue North. Recommendation: It is recommended that the Economic Development Authority consider approval/adoption of a Resolution Approving Purchase and Redevelopment Agreement and Conveyance of Certain Property Located at 5338 Logan Avenue North. Background: On September 8, 2014, the EDA considered an offer from Novak & Fleck, Inc. to acquire the vacant lot at 5338 Logan Avenue North for the purpose of constructing a 5-bedroom, 2-bath split entry home with a three car attached garage. The EDA moved to adopt Resolution No. 2014-19 a resolution calling for a public hearing on October 13, 2014 regarding the sale of land located at 5338 Logan Avenue North. Attached for your reference are copies of the September 8, 2014 staff memorandum. On October 2, 2014, a notice of public hearing regarding this land sale was published in the Official Newspaper. Attached is a copy of the Affidavit of Publication. Attached is a copy of the floor plans, building exterior, and construction specifications provided by Novak-Fleck, Inc. for a 2,172 sq. ft... split entry home that includes the following: o 1058 sq.ft. on the main floor (3 bedrooms, bath, living room, dining room, kitchen, with options for a deck off of the dining area) o 108 sq.ft. foyer with stairway to lower level o 1008 sq.ft. on the lower lookout level (identified as future 2 bedrooms, bath, family room and mechanical room o a three car garage. Purchase and Redevelopment Agreement The City Attorney has prepared the enclosed Purchase and Redevelopment Agreement, which includes the following components related to the EDA's sales of this vacant lot for an infill development of a new single family residence: The purchase price is $25,000. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the qiii'thty of life for all people and preserves the public trust I 4 I k'A S'A I Dk'A (I) 1II 1 • The buyer agrees that it will construct a new single family dwelling on the Property, intended for sale to a person or persons for residential occupancy (an Owner Occupant). • The minimum improvements shall consist of a house with approximately 2,172 gross square feet, 5-bedrooms and a 3-car attached garage and shall be constructed substantially in accordance with the plans on file in City Hall. • The minimum improvements must be substantially completed by October 15, 2015. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of Brooklyn Center building official. At this time, a Certificate of Completion for the Minimum Improvements will be issued by the EDA. • The Buyer shall convey the Property to an Owner Occupant whose household income does not exceed (a) 100% of median income in the case of one or two person household Owner Occupant, or (b) 115% of the median income in the case of three or more persons household Owner Occupants. The average median income for the seven-county metropolitan area for 2014 is $83,900. • Provisions which provide the EDA with the rights to re-enter and take possession of the property in the event the buyer does not carry out the obligations with respect to the construction of the Minimum Improvements or abandons or substantially suspends construction. Budget Issues: The proceeds from this land sale are considered Tax Increment Revenues and will be placed back into the TIF 3 Housing Fund. Strategic Priorities: o Focused Redevelopment Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for al/people and preserves the public trust Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT AGREEMENT AND CONVEYANCE OF CERTAIN PROPERTY LOCATED AT 5338 LOGAN AVENUE NORTH 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 and Redevelopment Agreement (the "Contract") between the Authority and Novak-Fleck Incorporated (the "Buyer"), under which, among other things, the Authority will convey the property located in the City at 5338 Logan Avenue North and legally described as: Pwe1 F The South 75 feet of the West Half of that part of Lot 46, Auditor's Subdivision No. 218, Hennepin County, Minnesota, described as follows: Commencing at the Southwest corner of said Lot 46; thence North along the West line of said lot a distance of 330; thence East parallel with the South line of said lot a distance of 330 feet; thence South at right angles 330 feet to the South line of said Lot 46; thence West along the South line of said lot to the point of beginning; except the Westerly 30 feet thereof, and except the Easterly 7 feet thereof. [Abstract] Parcel 2: Lot 12, Block 4, "Humbolt Addition", Hennepin County, Minnesota [Torrens] (the "Property") to the Buyer to construct a new single family dwelling on the Property, intended for sale to an individual or family for residential occupancy. 1.03. The Authority has on this date conducted a duly noticed public hearing regarding the sale of the Property to Buyer, at which all interested persons were given an opportunity to be heard. 1.04. The Authority finds and determines that conveyance of the Property to the Buyer is in the public interest and will further the objectives of its general plan of economic development, because it will provide an opportunity for increased housing opportunities in the City and serve as an impetus for further development. Section 2. Authority Approval Further Proceedings. 2.01. The Board hereby approves the Contract in substantially the form presented to the Board, including conveyance of the Property to Buyer, 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 Contract 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 Contract as a whole, including without limitation execution of any documents to which the Authority is a party referenced in or attached to the Contract, and any deed, mortgage or other documents necessary to convey the Property to Buyer, all as described in the Contract. Approved by the Board of Commissioners of the Economic Development Authority of Brooklyn Center, Minnesota this 13th day of October, 2014. October 13, 2014 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. PURCHASE AND REDEVELOPMENT AGREEMENT 5338 Logan Avenue North 1.Parties. This Purchase and Redevelopment Agreement is made as of October 13, 2014 between the ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA, a public body corporate and politic under the laws of Minnesota having its office located at 6301 Shingle Creek Parkway, Brooklyn Center, MN (the "Seller"), and NOVAK-FLECK Incorporated, a Minnesota corporation (the "Buyer"). 2.Offer/Acceptance. Buyer offers to purchase and Seller agrees to sell real property legally described as follows (the "Property"): Parcel 1: The South 75 feet of the West Half of that part of Lot 46, Auditor's Subdivision No. 218, Hennepin County, Minnesota, described as follows: Commencing at the Southwest corner of said Lot 46; thence North along the West line of said lot a distance of 330; thence East parallel with the South line of said lot a distance of 330 feet; thence South at right angles 330 feet to the South line of said Lot 46; thence West along the South line of said lot to the point of beginning; except the Westerly 30 feet thereof, and except the Easterly 7 feet thereof. [Abstract] Parcel 2: Lot 12, Block 4, "Humbolt Addition", Hennepin County, Minnesota [Torrens] 1 4492090 BR305-130 3.Price and Terms. The price for the Property is Twenty-Five Thousand Dollars ($25,000.00) which Buyer shall pay as follows: Earnest money of Five Hundred Dollars ($500.00) by check, receipt of which is hereby acknowledged by Seller, and the balance of Twenty-Four Thousand and Five Hundred Dollars ($24,500.00) to be paid by certified check on the Date of Closing. The "Date of Closing" shall be October 15, 2014, or such other earlier or later date as the parties mutually agree. 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.Deed. Upon performance by Buyer, Seller shall deliver a quit claim deed conveying title to the Property to Buyer, in substantially the form attached as Exhibit A (the "Deed"). 6.Real Estate Taxes and Special Assessments. The parties agree and understand that the Property is exempt from real estate taxes for taxes payable in the current year. Seller shall pay on Date of Closing all special assessments levied against the Property as of the date of this agreement, including those certified for payment with taxes due and payable in 2014. Seller represents that there are no special assessments pending as of the date of this agreement. If a special assessment becomes pending after the date of this agreement and before the Date of Closing, Buyer may, at Buyer's option: A.Assume payment of the pending special assessment without adjustment to the purchase agreement price of the Property; or B.Require Seller to pay the pending special assessment and Buyer shall pay a commensurate increase in the purchase price of the Property, which increase shall be the same as the estimated amount of the assessment; or C. Declare this agreement null and void by notice to Seller, and earnest money shall be refunded to Buyer. 7.Closing Costs and Related Items. The Seller shall be responsible for the following costs: (a) recording fees and conservation fees for all instruments required to establish marketable title in Seller; and (b) deed transfer taxes and conservation fees required to be paid in connection with the Deed be given by Seller. Buyer shall be responsible for the payment of the following costs: (c) recording fees required to be paid in connection with this Agreement and the Deed to be given by Seller; (d) the cost of all title evidence, including all search and commitment fees and the premium for an owner's policy of title insurance, and (e) closing fee, if any. Each party shall be responsible for its own attorneys' fees and costs. 8.Sewer and Water. Seller warrants that city sewer and water are available at the Property line. 9. Condition of Property. Buyer acknowledges that it has inspected or has had the opportunity to inspect the Property and agrees to accept the Property "AS IS." Buyer has 2 449209v1 BR305-130 the right, at its own expense to take soil samples for the purpose of determining if the soil is suitable for construction of the dwelling described in section 14 below. If the soil is determined to be unacceptable the Buyer may rescind this agreement by written notice to the Seller, in which case the agreement shall be null and void and all earnest money paid hereunder shall be refunded to the Buyer. Seller makes no warranties as to the condition of the Property. 10.Marketability of Title. The Buyer may order, in Buyer's sole discretion and at the Buyer's expense, a commitment (the "Title Commitment") issued by any title insurance company acceptable to Buyer ("Title"), for an owner's title insurance policy in the full amount of the Purchase Price, showing fee simple title to the Property in Seller. Buyer shall have fifteen (15) business days after receipt of the Title Commitment to examine the same and to deliver written objections to Title, if any, to Seller. Seller shall have the greater of (i) the number of days remaining until the Date of Closing or (ii) thirty (30) days to have such objections removed or satisfied. 11.Title Clearance and Remedies. If Seller shall fail to have title objections timely removed, the Buyer may, at its sole election: (a) terminate this Agreement without any liability on its part; in which event the earnest money shall be promptly refunded in exchange for a quit claim deed to the Property from Buyer; or (b) take title to the Property subject to such objections. If title is marketable, or is made marketable as provided herein, and Buyer defaults in any of the agreements herein, Seller may elect either of the following options, as permitted by law: A.Cancel this contract as provided by statute and retain all payments made hereunder as liquidated damages. The parties acknowledge their intention that any note given pursuant to this contract is a down payment note, and may be presented for payment notwithstanding cancellation; B.Seek specific performance within six months after such right of action arises, including costs and reasonable attorney's fees, as permitted by law. If title is marketable, or is made marketable as provided herein, and Seller defaults in any of the agreements herein, Buyer may, as permitted by law: C.Seek damages from Seller including costs and reasonable attorney's fees; D.Seek specific performance within six months after such right of action arises. 12. Well Disclosure. Seller certifies that the status and number of wells has not changed since the previously filed well disclosure certificate 3 4492090 BR305-130 13.Individual Sewage Treatment System Disclosure. Seller certifies that there is no individual sewage treatment system on or serving the Property. 14.Construction and Sale of Dwelling. Buyer agrees that it will construct a new single family dwelling on the Property, intended for sale to a person or persons for residential occupancy (an "Owner Occupant"). This covenant shall survive the delivery of the Deed. A.The single family dwelling described in this Section is referred to as the "Minimum Improvements." B.The Minimum Improvements shall consist of a house with approximately 2,176 gross square feet, 3 bedrooms and 1 bathroom on the upper level, 2 future bedrooms and 1 bath on the lower level, and a 3 car garage and shall be constructed substantially in accordance with the plans on file in City Hall. Construction of the Minimum Improvements must be substantially completed by October 15, 2015. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of Brooklyn Center building official. C.Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Buyer to construct such Minimum Improvements (including the date for completion thereof), the Seller will furnish the Buyer with a Certificate of Completion for such improvements. Such certification by the Seller shall be (and it shall be so provided in the Deed and in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement and in the Deed with respect to the obligations of the Buyer and its successors and assigns, to construct the Minimum Improvements and the dates for completion thereof. The certificate provided for in this Section of this Agreement shall be in such form as will enable it to be recorded in the proper office for the recordation of deeds and other instruments pertaining to the Property. If the Seller shall refuse or fail to provide any certification in accordance with the provisions of this Section, the Seller shall, within 30 days after written request by the Buyer, provide the Buyer with a written statement, indicating in adequate detail in what respects the Buyer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Seller for the Buyer to take or perform in order to obtain such certification. D.The Buyer represents and agrees that until issuance of the Certificate of Completion for the Minimum Improvements: 449209v1 BR305-130 (1)Except for any sale to an Owner Occupant, the Buyer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a "Transfer"), without the prior written approval of the Seller's Board of Commissioners. The term "Transfer" does not include encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or permanent financing necessary to enable the Buyer or any successor in interest to the Property, or any part thereof, to construct the Minimum Improvements or component thereof. (2)If the Buyer seeks to effect a Transfer to any person or entity other than an Owner Occupant prior to issuance of the Certificate of Completion, the Seller shall be entitled to require as conditions to such Transfer that: (i)any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Seller, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Buyer as to the portion of the Property to be transferred; and (ii)Any proposed transferee, by instrument in writing satisfactory to the Seller and in form recordable in the public land records of Hennepin County, Minnesota, shall, for itself and its successors and assigns, and expressly for the benefit of the Seller, have expressly assumed all of the obligations of the Buyer under this Agreement as to the portion of the Property to be transferred and agreed to be subject to all the conditions and restrictions to which the Buyer is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the Seller) deprive the Seller of any rights or remedies or controls with respect to the Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit the Seller of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Property that the Seller would have had, had there been no such transfer or change. In the absence of specific written agreement by the Seller to the contrary, no such transfer or 5 449209v1 BR305-130 approval by the Seller thereof shall be deemed to relieve the Buyer, or any other party bound in any way by this Agreement or otherwise with respect to the Property, from any of its obligations with respect thereto. (iii) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Property governed by this subsection D. shall be in a form reasonably satisfactory to the Seller. (3)If the conditions described in paragraph (2) above are satisfied then the Transfer will be approved and the Buyer shall be released from its obligation under this Agreement, as to the portion of the Property that is transferred, assigned, or otherwise conveyed. The provisions of this paragraph (3) apply to all subsequent transferors. (4)Upon issuance of the Certificate of Completion, the Buyer may Transfer the Property and/or the Buyer's rights and obligations under this Agreement with respect to such Property without the prior written consent of the Seller, except to the extent required under paragraph F of this Section. B. The Buyer, and its successors and assigns, agree that they (a) will use the Minimum Improvements only as a single family dwelling, and in the case of an Owner Occupant, will occupy the Property as a residence, (b) will not seek exemption from real estate taxes on the Property under State law, and (c) will not transfer or permit transfer of the Property to any entity whose ownership or operation of the Property would result in the Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City of Brooklyn Center or Seller in accordance with this Agreement). The covenants in this paragraph run with the land, survive both delivery of the Deed and issuance of the Certificate of Completion for the Minimum Improvements, and shall remain in effect for 15 years after the Date of Closing. F. The Buyer shall convey the Property (either before or after issuance of the Certificate of Completion) to an Owner Occupant whose household income does not exceed (a) 100% of median income in the case of one or two person household Owner Occupants, or (b) 115% of median income in the case of three or more person household Owner Occupants. The term "median income" means the median income in the seven-county metropolitan area, or the State as a whole, whichever is greater, using income data available from the Minnesota Housing Finance Agency as of the date of closing on sale to the Owner Occupant. Prior to closing on sale the Property by Buyer to an Owner Occupant, Buyer shall: (1) Notify the Seller in writing that the proposed Owner Occupant will meet the income qualifications under this paragraph; and n. 449209v1 BR305-130 (2) Submit to Seller evidence of Owner Occupant's income in a form satisfactory to Seller, evidencing compliance with the income limits described above. The covenant in this Section applies only to the first sale of the Property to an Owner Occupant, and does not apply to any subsequent sale by an Owner Occupant to any other person or party. 15. Revesting Title in Seller upon Happening of Event Subsequent to Conveyance to Buyer. In the event that subsequent to conveyance of the Property or any part thereof to the Buyer and prior to receipt by the Buyer of the Certificate of Completion for of the Minimum Improvements, the Buyer, subject to Unavoidable Delays (as hereafter defined), fails to carry out its obligations with respect to the construction of the Minimum Improvements (including the nature and the date for the completion thereof), or abandons or substantially suspends construction work, and any, such failure, abandonment, or suspension shall not be cured, ended, or remedied within 30 days after written demand from the Seller to the Buyer to do so, then the Seller shall have the right to re-enter and take possession of the Property and to terminate (and revest in the Seller) the estate conveyed by the Deed to the Buyer, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the Property to the Buyer shall be made upon, and that the Deed shall contain a condition subsequent to the effect that in the event of any default on the part of the Buyer and failure on the part of the Buyer to remedy, end, or abrogate such default within the period and in the manner stated in such subdivisions, the Seller at its option may declare a termination in favor of the Seller of the title, and of all the rights and interests in and to the Property conveyed to the Buyer, and that such title and all rights and interests of the Buyer, and any assigns or successors in interest to and in the Property, shall revert to the Seller, but only if the events stated in this Section have not been cured within the time periods provided above. For the purposes of this Agreement, the term "Unavoidable Delays" means delays beyond the reasonable control of the Buyer as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse weather or acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Seller in exercising its rights under this Agreement) which directly results in delays. Unavoidable Delays shall not include delays in the Buyer's obtaining of permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such construction is required under this section of this Agreement. 16. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the Seller of title to and/or possession of the Property or any part thereof as provided in Section 15, the Seller shall apply the purchase price paid by the Buyer under Section 4 of this Agreement as follows: (a) First, to reimburse the Seller for all costs and expenses incurred by the Seller, including but not limited to proportionate salaries of personnel, in connection with 7 4492090 BR305-130 the recapture, management, and resale of the Property or part thereof (but less any income derived by the Seller from the Property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the Property or part thereof (or, in the event the Property is exempt from taxation or assessment or such charge during the period of ownership thereof by the Seller, an amount, if paid, equal to such taxes, assessments, or charges (as determined by the Seller assessing official) as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Property or part thereof at the time of revesting of title thereto in the Seller or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Buyer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the Minimum Improvements or any part thereof on the Property or part thereof; and any amounts otherwise owing the Seller by the Buyer and its successor or transferee; and (b) Second, to reimburse the Buyer for the balance of the purchase price remaining after the reimbursements specified in paragraph (a) above. Such reimbursement shall be paid to the Buyer upon delivery of an executed, recordable warranty deed to the Property by the Buyer to the Seller. 17.Time is of the essence for all provisions of this contract. 18.Notices. All notices required herein shall be in writing and delivered personally or mailed to the address shown at paragraph 1 above and, if mailed, are effective as of the date of mailing. 19.Minnesota Law. This contract shall be governed by the laws of the State of Minnesota. 20.Specific Performance. This Agreement may be specifically enforced by the parties, provided that an action is brought within one year of the date of alleged breach of this Agreement. 21.No Remedy Exclusive. No remedy herein conferred upon or reserved to the Seller or Buyer is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 22.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. 8 4492090 BR305-130 23. Recording. This Agreement shall be filed of record with the Hennepin County Recorder and Registrar of Titles. Buyer shall pay all recording costs. 449209v1 BR305-130 In witness of the foregoing, the parties have executed this agreement on the year and date written above. SELLER: ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By: Tim Willson Its President By: Curt Boganey Its Executive Director STATE OF MINNESOTA } ss. COUNTY OF HENNEP1N This instrument was acknowledged before me on this day of October, 2014, by Tim Willson and Curt Boganey, the President and Executive Director, respectively, of the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of Minnesota, on behalf of the public body corporate and politic. (Stamp) Notary Public S-i 449209v1 BR305-130 BUYER: NOVAK-FLECK INCORPORATED By- Its: f 7_ STATE OF MINNESOTA ) } COUNTY OF HENNEPIN )1ç14. The ii 'forong wads acknowledged before ine this day of (2014, ItIL JIlL JT LfU the iei (('1 of Novak-Flee Incorporated, Minnesota corporation, on behalf of the corporation. (Stamp ) OA 2 41W4vL w-wJCAND!CE L. JOHNSON Notary Pubi) Notary Public-Minnesota My Commission Expires Jan 31, 2015 VVWWWWWWW This document drafted by: Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 S-2 by a 4492090 BR305-130 EXHIBIT A to PURCHASE AND REDEVELOPMENT AGREEMENT FORM OF QUIT CLAIM DEED Deed Tax Due: $85.00 ECRV QUIT CLAIM DEED THIS INDENTURE, between the Economic Development Authority of Brooklyn Center, Minnesota, a Minnesota public body corporate and politic (the "Grantor"), and Novak-Fleck Incorporated, a Minnesota corporation (the "Grantee"). WITNESSETH, that Grantor, in consideration of the sum of $25,000 and other good and valuable consideration the receipt whereof is hereby acknowledged, does hereby grant, bargain, quitclaim and convey to the Grantee, its successors and assigns forever, all the tract or parcel of land lying and being in the County of Hennepin and State of Minnesota described as follows, to-wit (such tract or parcel of land is hereinafter referred to as the "Property"): Parcel 1: The South 75 feet of the West Half of that part of Lot 46, Auditor's Subdivision No. 218, Hennepin County, Minnesota, described as follows: Commencing at the Southwest corner of said Lot 46; thence North along the West line of said lot a distance of 330; thence East parallel with the South line of said lot a distance of 330 feet; thence South at right angles 330 feet to the South line of said Lot 46; thence West along the South line of said lot to the point of beginning; except the Westerly 30 feet thereof, and except the Easterly 7 feet thereof. [Abstract] Parcel 2: Lot 12, Block 4, "Humbolt Addition", Hennepin County, Minnesota [Torrens] Check here if all or part ofproperly is registered (Torrens) 0 To have and to hold the same, together with all the hereditaments and appurtenances thereunto belonging. A-i 4492090 BR305-130 SECTION 1. It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and provisions of the Purchase and Redevelopment Agreement recorded herewith, between the Grantor and Grantee, dated as of October 13, 2014 (the "Agreement") and that the Grantee shall not convey this Property, or any part thereof, except as permitted by the Agreement until a certificate of completion releasing the Grantee from certain obligations of said Agreement as to this Property or such part thereof then to be conveyed, has been placed of record. This provision, however, shall in no way prevent the Grantee from mortgaging this Property in order to obtain funds for the purchase of the Property hereby conveyed or for erecting the Minimum Improvements thereon (as defined in the Agreement) in conformity with the Agreement, any applicable development program and applicable provisions of the zoning ordinance of the City of Brooklyn Center, Minnesota, or for the refinancing of the same. It is specifically agreed that the Grantee shall promptly begin and diligently prosecute to completion the redevelopment of the Property through the construction of the Minimum Improvements thereon, as provided in the Agreement. Promptly after completion of the Minimum Improvements in accordance with the provisions of the Agreement, the Grantor will furnish the Grantee with an appropriate instrument so certifying. Such certification by the Grantor shall be (and it shall be so provided in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants of the Agreement and of this Deed with respect to the obligation of the Grantee, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion thereof. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Grantee to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance the purchase of the Property hereby conveyed or the Minimum Improvements, or any part thereof. All certifications provided for herein shall be in such form as will enable them to be recorded with the County Recorder, or Registrar of Titles, Hennepin County, Minnesota. If the Grantor shall refuse or fail to provide any such certification in accordance with the provisions of the Agreement and this Deed, the Grantor shall, within thirty (30) days after written request by the Grantee, provide the Grantee with a written statement indicating in adequate detail in what respects the Grantee has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Grantor, for the Grantee to take or perform in order to obtain such certification. SPPTTflN '7 The Grantee's rights and interest in the Property are subject to the terms and conditions of Sections 14 and 15 of the Agreement relating to the Grantor's right to re-enter and revest in Grantor title to the Property under conditions specified therein, including but not limited to the condition subsequent that the Grantee substantially complete construction of the Minimum A-2 449209v1 BR305-130 Improvements by October 15, 2015 and that the Grantee shall transfer or convey the Property and Minimum Improvements thereon only in accordance with Sections 14D and 14F. SECTION 3. The Grantee agrees for itself and its successors and assigns to or of the Property or any part thereof, hereinbefore described, that the Grantee and such successors and assigns shall comply with Section 14E of the Agreement for a period of 15 years after the date hereof. It is intended and agreed that the above and foregoing agreements and covenants shall be covenants running with the land for the respective terms herein provided, and that they shall, in any event, and without regard to technical classification or designation, legal or otherwise, and except only as otherwise specifically provided in this Deed, be binding, to the fullest extent permitted by law and equity for the benefit and in favor of, and enforceable by, the Grantor against the Grantee, its successors and assigns, and every successor in interest to the Property, or any part thereof or any interest therein, and any party in possession or occupancy of the Property or any part thereof. in amplification, and not in restriction of, the provisions of the preceding section, it is intended and agreed that the Grantor shall be deemed a beneficiary of the agreements and covenants provided herein, both for and in its own right, and also for the purposes of protecting the interest of the community and the other parties, public or private, in whose favor or for whose benefit these agreements and covenants have been provided. Such agreements and covenants shall run in favor of the Grantor without regard to whether the Grantor has at any time been, remains, or is an owner of any land or interest therein to, or in favor of, which such agreements and covenants relate. The Grantor shall have the right, in the event of any breach of any such agreement or covenant to exercise all the rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant, to which it or any other beneficiaries of such agreement or covenant may be entitled; provided that Grantor shall not have any right to re-enter the Property or revest in the Grantor the estate conveyed by this Deed on grounds of Grantee's failure to comply with its obligations under this Section 3. A-3 4492090 BR305-130 IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its President and Executive Director this day of, 2014. o The Seller certifies that the Seller does not know of any wells on the described real property.o A well disclosure certificate accompanies this document or has been electronically filed. (If electronically filed, insert WDC number: V I am familiar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously filed well disclosure certificate. GRANTOR ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By Tim Willson Its President By Curt Boganey Its Executive Director "STATE OF MINNESOTA ) ) ss COUNTY OF_______ ) This instrument was acknowledged before me on this day of by Tim Willson and Curt Boganey, the President and Executive Director, respectively, of the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of Minnesota, on behalf of the public body corporate and politic. (Stamp) Notary Public My commission expires: This instrument was drafted by: Kennedy & Graven, Charted (JSB) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 Tax Statements should be sent to: Novak-Fleck Incorporated 8857 Zealand Avenue North Brooklyn Park, MN 55445 A-4 449209v1 BR305-130 EXHIBIT B TO PURCHASE AND REDEVELOPMENT AGREEMENT FORM OF CERTIFICATE OF COMPLETION WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota, a public body, corporate and politic (the "Grantor"), conveyed land in Hennepin County, Minnesota to Novak-Fleck Incorporated, a Minnesota corporation (the "Grantee"), by a Deed recorded in the offices of the County Recorder and Registrar of Titles in and for the County of Hennepin and State of Minnesota, as Document Numbers and respectively; and WHEREAS, said Deed contained certain covenants and restrictions set forth in Sections 1 and of said Deed; and WHEREAS, said Grantee has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to be done and made by the Grantee have been completed and the above covenants and conditions in said Deed and the agreements and covenants in Sections 14 and 15 of the Agreement (as described in said Deed) have been performed by the Grantee therein, and the County Recorder and the Registrar of Titles in and for the County of Hennepin and State of Minnesota are hereby authorized to accept for recording and to record, the filing of this instrument, to be a conclusive determination of the satisfactory termination of the covenants and conditions of Sections 14 and 15 of the Agreement and the covenants and restrictions set forth in Sections 1 and 2 of said Deed; provided that the covenants set forth in Sections 14E of the Agreement, and in Section 3 of the Deed, remain in full force and effect through the period stated thereon. B-i 449209v1 BR305-130 Dated: , 20 ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By Its President By Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of___ 20, by and , the President and Executive Director, respectively, of the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the public body corporate and politic. Notary Public This document drafted by: KENNEDY & GRAVEN, CHARTERED 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 B-2 449209v1 BR305-130 > IL C! ri .4 TI F - I & - - ----- _-- -- ---I Z5 w-"'-v 1 -i1 1 I - ----------- lug - riuq Eat Ji 111 4$Ii4$ 1'- - -_-!---1IiI - •- I- ?i WJI -h1'!i'iitri jA4 iiII liii hjIj C\it4Il I J4IL&1-J?it - ---j ri.3fttIi-ir -±II1IInrAID Novak-flee k. Inc. Single Family Standard Features ieeral Conçtiop • Concrete Fomdation • 2 X 6 Construction Floor Truss Construction Drain Tile and sump basket • 50 gallon cicetile water beater Rough-in 3/4 bath in Lower level • Fiberglass single laitadry tub 150 amp elecnicakendce Five phone or cable jacks/Media Panel Bedroom ceiling lights Vinyl patio door • LoE vinyl windows 90 4 iiaturl gas forced air furnace 111W (Heat Recovery Ventilation) system • 3 panel White Maothte interior doors • Poplar stained shaker cabinets Poplar stained railing and 1 1/4 poplar stained spindles • Poplar stained sldflbósrth • Poplar stained trim and casings MB 17 Base and P156 casings • Polo chrome door knobs/hinges Kitchen • Dishwasher & Microwave circuit (WDP3 I OPAAS) C Garbage Disposal on city lots Laminated countertops Poplar staine-d Oak v- cabinet s, • r Stainless steel dual sink with sprayer Single level Chrome faucet• Range and Dryer • Waterline to refrigerator Bath• 45'iberglass I piece shower unit • 5 Fiberglass tub and surround • One piece vanity mirror • Cultured marble vanity tops (Moat Plans) • Single lever Chrome faucets Poplar stained Shaker ranity in intion • Exterior wall R-Value of 2198 • R-44 ceiling insulation • Exterior block walls insulated and damp proofed •Polywall waterproofing on interior concrete walls xtrlot Vinyl Siding (Napco-Comfort Series) Architectural Shingles (OAF-Timberline) Asphalt driveway Concrete front step and sidewalk Steel insulated front door Two (2) outdoor faucets* 4gge steep panel garage doors House wrap on exterior walls Allowances $2700,00 Appliance Allowance (SM Package) 700 Lighting allowance SI6M0 per yard flooring allowance Warranty RWC - Resideiflial Warranty Corporation Other •Wa1kthru inspection before closing • Construction clean prior to occupancy mw-JE-Fleek,h!.. the right to rig the prie, pur iatthit irc tnio mahods without prk'r uoti rob1ig11ti6 tr LLUpdat& 8/1 W014 10:3 1 AM 5347 [1 5350 rH .... Ti 5339 I II 5346 I 5343 I H 5331 ... ........ - -- 5342 5337 5327 L _ ... 5331 ....... 5323 I..............:-......... 5319 5338 i 5325 At a 5317 1 5328 -- 5319 ............ 5315 I H : I 5322 I 5315 Legend - Storm Sewer Water Services v 5316 I 5311 I I I I - Water Main I-I I Sanitary Services I V I I —> Sanitary Sewer ........ I 'H.1 5310 I -. 5307 - - - - Road Edge I I I Business & Development5338 Logan Avenue N. October 2014 RT.'()UAL I A' - ('!',TER Sale to Novak-Fleck, Inc. 0 15 30 60 Feel I I I I I I I I DATE: September 8, 2014 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business & Development SUBJECT: Resolution Calling for a Public Hearing Regarding Sale of Land Located at 5338 Logan Avenue North. Recommendation: It is recommended that the Economic Development Authority consider approval/adoption of the Resolution Calling for a Public Hearing Regarding Sale of Land Located at 5338 Logan Avenue North. Background: 5338 Logan Ave. N. was a vacant foreclosed single family residence in a blighted condition and determined not to be a candidate for restoration under the Neighborhood Stabilization Program (NSP). The property was considered by staff to be an eligible acquisition through the City's Remove and Rebuild Program and on August 4, 2011, the City's Housing Consultant, Greater Metropolitan Housing Corporation, (GMHC) acquired the property for the amount of $45,600 and removed the buildings. On June 10, 2013, the EDA adopted Resolution No. 2013-05, Authorizing the Acquisition of Property in Connection with the Remove and Rebuild Program (5338 Logan Avenue North). The total acquisition cost, including holding costs, demolition, and fees was $77,766.96. The Remove and Rebuild Program is funded through the Housing Fund of Tax Increment District #3. The resale of property acquired with these funds does have to meet the following affordable income qualifications: • a family of one or two cannot exceed the average household median income for the Metropolitan Area (2014 - $83,900) and • a family of 3 or more cannot exceed 115% of the Metropolitan Average Household Income ( 2014 - $95,300) Proposed Sales of 5338 Logan Avenue North: The property is an interior lot with 123 feet of frontage on Logan Avenue North, a lot depth that varies from 119 feet to 127 feet and is served by a rear alley. The 2014 assessed valuation of the adjacent properties are $112,300 to the north and $97,600 to the south and includes land values of$ 34,100. Mission: Eiisiiiii:g an attractive, clean, safe, inclusive community that enhances the quality of life for al/people ant'! preserves the public trust IM YáI'1 II M'A U I '4 (I) 1WI L1IA'AI Novak-Fleck, Inc., an experienced residential builder with infill development of 40+ vacant lots within residential neighborhoods in the City of Crystal, has expressed an interest to acquire 4 lots from the EDA for the purpose of starting construction of 4 spec homes this year that would be sold to owner occupants meeting the City's Tax Increment Affordable Housing Criteria. The proposed purchase price for this lot is $25,000 each and does not involve a real estate fee by the EDA. Additionally, the purchase price recognizes that the builder will have soil correction costs in the area of the former basement. Novak-Fleck, Inc. has provided the attached plans for a split entry home and construction specification. The plans provide for the construction of a 5 bedroom home having a total square footage of 2,172 sq.fi. with a 3 car garage. • 1058 sq.ft. on the main floor (3 bedrooms, bath, living room, dining room, kitchen, with options for a deck off of the dining area) o 108 sq.fl. foyer with stairway to lower level • 1008 sq.fi. on the lower lookout level (identified as future 2 bedrooms, bath, family room and mechanical room). Note: The building plans illustrate a pad width of 50 feet. The width of this lot can easily accommodate the builders proposed building plans. The builder has reviewed a copy of the Development and Purchase Agreement prepared by the City Attorney for FDA's recent sales of the vacant lot at 5919 Xerxes Ave. N. and understands conditions and terms associated with the EDA's sales of vacant land. The City Attorney has prepared the attached resolution which authorizes the setting of a public hearing for the October 15, 2014 FDA Meeting to consider the sale of this property. Budget Issues: The proceeds from this land sale are considered Tax Increment Revenues and will be placed back into the TIF 3 Housing Fund. Strategic Priorities o Focused Redevelopment Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves tlsepti bile trust AFFIDAVIT OF PUBLICATION STATE OF MINNESOTA )ss COUNTY OF HENNEPIN ) Charlene Void being duly sworn on an oath, states or affirms that they are the Authorized Agent of the newspaper(s) known as: SP Brooklyn Ctr/Brooklyn Park and has full knowledge of the facts stated below: (A)The newspaper has complied with all of the requirements constituting qualifica- tion as a qualified newspaper as provided by Minn. Stat. §331A.02, §331A.07, and other applicable laws as amended. (B)This Public Notice was printed and pub- lished in said newspaper(s) for I succes- sive issues; the first insertion being on 10/02/2014 and the last insertion being on 10/02/2014. By: ALLt I7YQ Authorized Agent Subscribed and sworn to or affirmed before me on 10/02/2014. Notary Pu7fl v -v v vVVVVVV,W.VVV4VV~*""4%OR1ENE MARIE MACPHERSON• Notary PubIIcMnnesota My Con-nission Een3l9 City of Brooklyn Center (Official Publication)NOTICE OF PUBLIC HEARINGREGARDING LAND SALE NOTICE IS HEREBY GIVEN that the Board of Commissioners of the Economic Development Authority of Brooklyn Center, Minnesota (the "EDA') will meet at City Hall at 6301 Shingle Creek Pkwy, Brooklyn Cen- ter, Minnesota (the "City') at or after 7:00 p.m. on Monday, October 13, 2014 to conduct a public hearing on the proposed sale of certain real property ("Property') located in the City to Novak-Fleck, Inc. The Prop- erty is located in the City at 5338 Logan Avenue North and legally de- scribed as: Parcel 1: The South 75 feet of the West Half of that part of Lot 46, Audi- tor's Subdivision No. 218, Hennepin County, Minnesota, described as follows: Commencing at the Southwest corner of said Lot 46; thence North along the West line of said lot a distance of 330; thence East paral- lel with the South line of said lot a distance of 330 feet; thence South at right angles 330 feet to the South line of said Lot 46; thence West along the South line of said lot to the point of beginning; except the Westerly 30 feet thereof, and except the Easterly 7 feet thereof. Parcel 2: Lot 12, Block 4, "Humboldt Addi- tion", Hennepin County, Minnesota. The EDA will meet at the public hearing to determine if the sale is advisable. A copy of the terms and conditions of the proposed sale of the Property will be on file and avail- able for inspection at City Hall dur- ing regular business hours. Any person wishing to express an opinion on the matters to be con- sidered at the public hearing will be heard orally or in writing. BY ORDER OF THE BOARD OF COMMISSIONERS 285362 10/02/14 5338 Logan Ave N PHN Rate Information: (1) Lowest classified rate paid by commercial users for comparable space: $46.90 per column inch Ad ID 285362 EDA ITEM MEMORANDUM DATE: October 13, 2014 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business & Development SUBJECT: Resolution Approving Purchase and Redevelopment Agreement and Conveyance of Certain Property Located at 5331 Morgan Avenue North. Recommendation: It is recommended that the Economic Development Authority consider approval/adoption of a Resolution Approving Purchase and Redevelopment Agreement and Conveyance of Certain Property Located at 5331 Morgan Avenue North. Background: On September 8, 2014, the EDA considered an offer from Novak & Fleck, Inc. to acquire the vacant lot at 5331 Morgan Avenue North for the purpose of constructing a 5-bedroom, 2-bath split entry home with a three car attached garage. The EDA moved to adopt Resolution No. 2014-17 a resolution calling for a public hearing on October 13, 2014 regarding the sale of land located at 5331 Morgan Avenue North. Attached for your reference are copies of the September 8, 2014 staff memorandum. On October 2, 2014, a notice of public hearing regarding this land sale was published in the Official Newspaper. Attached is a copy of the Affidavit of Publication. Attached is a copy of the floor plans, building exterior, and construction specifications provided by Novak-Fleck, Inc. for a 2,172 sq.ft..split entry home that includes the following: o 1058 sq.ft. on the main floor (3 bedrooms, bath, living room, dining room, kitchen, with options for a deck off of the dining area) o 108 sq.ft. foyer with stairway to lower level o 1008 sqf. ft. on the lower lookout level (identified as future 2 bedrooms, bath, family room and mechanical room • a three car garage. Purchase and Redevelopment Agreement The City Attorney has prepared the enclosed Purchase and Redevelopment Agreement, which includes the following components related to the EDA's sales of this vacant lot for an infill development of a new single family residence: The purchase price is $25,000. Mission: Ensuring an (i//tactile, clean, safe, iiicliisii'e CoinnilIll!tj' /11(1/ enhances the quality of life for al/people aiui preserves the public trust • The buyer agrees that it will construct a new single family dwelling on the Property, intended for sale to a person or persons for residential occupancy (an Owner Occupant). • The minimum improvements shall consist of a house with approximately 2,172 gross square feet, 5-bedrooms and a 3-car attached garage and shall be constructed substantially in accordance with the plans on file in City Hall. • The minimum improvements must be substantially completed by October 15, 2015. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of Brooklyn Center building official. At this time, a Certificate of Completion for the Minimum Improvements will be issued by the EDA. • The Buyer shall convey the Property to an Owner Occupant whose household income does not exceed (a) 100% of median income in the case of one or two person household Owner Occupant, or (b) 115% of the median income in the case of three or more persons household Owner Occupants. The average median income for the seven-county metropolitan area for 2014 is $83,900. • Provisions which provide the EDA with the rights to re-enter and take possession of the property in the event the buyer does not carry out the obligations with respect to the construction of the Minimum Improvements or abandons or substantially suspends construction. Budget Issues: The proceeds from this land sale are considered Tax Increment Revenues and will be placed back into the TIF 3 Housing Fund. Strategic Priorities: • Focused Redevelopment A'Jission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for al/people and preserves flue public trust Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT AGREEMENT AND CONVEYANCE OF CERTAIN PROPERTY LOCATED AT 5331 MORGAN AVENUE NORTH 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 and Redevelopment Agreement (the "Contract") between the Authority and Novak-Fleck Incorporated (the "Buyer"), under which, among other things, the Authority will convey the property located in the City at 5331 Morgan Avenue North and legally described as: The South 115 feet of Block 7, "Humbolt Addition". That part of Lot 40, Auditor's Subdivision Number 218, Hennepin County, Minnesota, lying East of Hjelvik Addition, and South of a line draw parallel with and 116.8 feet South of the North line of said Lot 40, except that part thereof lying South of the South line of the North 232.4 feet of said Lot 40. (the "Property") to the Buyer to construct a new single family dwelling on the Property, intended for sale to an individual or family for residential occupancy. 1.03. The Authority has on this date conducted a duly noticed public hearing regarding the sale of the Property to Buyer, at which all interested persons were given an opportunity to be heard. 1.04. The Authority finds and determines that conveyance of the Property to the Buyer is in the public interest and will further the objectives of its general plan of economic development, because it will provide an opportunity for increased housing opportunities in the City and serve as an impetus for further development. Section 2. Authority Approval; Further Proceedings. 2.01. The Board hereby approves the Contract in substantially the form presented to the Board, including conveyance of the Property to Buyer, 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 Contract 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 Contract as a whole, including without limitation execution of any documents to which the Authority is a party referenced in or attached to the Contract, and any deed, mortgage or other documents necessary to convey the Property to Buyer, all as described in the Contract. Approved by the Board of Commissioners of the Economic Development Authority of Brooklyn Center, Minnesota this 13th day of October, 2014. October 13, 2014 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. PURCHASE AND REDEVELOPMENT AGREEMENT 5331 Morgan Avenue North 1.Parties. This Purchase and Redevelopment Agreement is made as of October 13, 2014 between the ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA, a public body corporate and politic under the laws of Minnesota having its office located at 6301 Shingle Creek Parkway, Brooklyn Center, MN (the "Seller"), and NOVAK-FLECK INCORPORATED, a Minnesota corporation (the "Buyer"). 2.Offer/Acceptance. Buyer offers to purchase and Seller agrees to sell real property legally described as follows (the "Property"): The South 115 feet of Block 7, "Humbolt Addition". That part of Lot 40, Auditor's Subdivision Number 218, Hennepin County, Minnesota, lying East of Hjelvik Addition, and South of a line draw parallel with and 116.8 feet South of the North line of said Lot 40, except that part thereof lying South of the South line of the North 232.4 feet of said Lot 40. 3. Price and Terms. The price for the Property is Twenty-Five Thousand Dollars ($25,000.00) which Buyer shall pay as follows: Earnest money of Five Hundred Dollars ($500.00) by check, receipt of which is hereby acknowledged by Seller, and the balance of Twenty-Four Thousand and Five Hundred Dollars ($24,500.00) to be paid by certified check on the Date of Closing. The "Date of Closing" shall be October 15, 2014, or such other earlier or later date as the parties mutually agree. 449205v2 BR305-132 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.Deed. Upon performance by Buyer, Seller shall deliver a quit claim deed conveying title to the Property to Buyer, in substantially the form attached as Exhibit A (the "Deed"). 6. Real Estate Taxes and Special Assessments. The parties agree and understand that the Property is exempt from real estate taxes for taxes payable in the current year. Seller shall pay on Date of Closing all special assessments levied against the Property as of the date of this agreement, including those certified for payment with taxes due and payable in 2014. Seller represents that there are no special assessments pending as of the date of this agreement. If a special assessment becomes pending after the date of this agreement and before the Date of Closing, Buyer may, at Buyer's option: A.Assume payment of the pending special assessment without adjustment to the purchase agreement price of the Property; or B.Require Seller to pay the pending special assessment and Buyer shall pay a commensurate increase in the purchase price of the Property, which increase shall be the same as the estimated amount of the assessment; or C. Declare this agreement null and void by notice to Seller, and earnest money shall be refunded to Buyer. 7. Closing Costs and Related Items. The Seller shall be responsible for the following costs: (a) recording fees and conservation fees for all instruments required to establish marketable title in Seller; and (b) deed transfer taxes and conservation fees required to be paid in connection with the Deed be given by Seller. Buyer shall be responsible for the payment of the following costs: (c) recording fees required to be paid in connection with this Agreement and the Deed to be given by Seller; (d) the cost of all title evidence, including all search and commitment fees and the premium for an owner's policy of title insurance, and (e) closing fee, if any. Each party shall be responsible for its own attorneys' fees and costs. 8.Sewer and Water. Seller warrants that city sewer and water are available at the Property line. 9.Condition of Property. Buyer acknowledges that it has inspected or has had the opportunity to inspect the Property and agrees to accept the Property "AS IS." Buyer has the right, at its own expense to take soil samples for the purpose of determining if the soil is suitable for construction of the dwelling described in section 14 below. If the soil is determined to be unacceptable the Buyer may rescind this agreement by written notice to the Seller, in which case the agreement shall be null and void and all earnest money paid hereunder shall be refunded to the Buyer. Seller makes no warranties as to the condition of the Property. 2 449205v2 BR305-132 10.Marketability of Title. The Buyer may order, in Buyer's sole discretion and at the Buyer's expense, a commitment (the "Title Commitment") issued by any title insurance company acceptable to Buyer ("Title"), for an owner's title insurance policy in the full amount of the Purchase Price, showing fee simple title to the Property in Seller. Buyer shall have fifteen (15) business days after receipt of the Title Commitment to examine the same and to deliver written objections to Title, if any, to Seller. Seller shall have the greater of (i) the number of days remaining until the Date of Closing or (ii) thirty (30) days to have such objections removed or satisfied. 11.Title Clearance and Remedies. If Seller shall fail to have title objections timely removed, the Buyer may, at its sole election: (a) terminate this Agreement without any liability on its part; in which event the earnest money shall be promptly refunded in exchange for a quit claim deed to the Property from Buyer; or (b) take title to the Property subject to such objections. If title is marketable, or is made marketable as provided herein, and Buyer defaults in any of the agreements herein, Seller may elect either of the following options, as permitted by law: A.Cancel this contract as provided by statute and retain all payments made hereunder as liquidated damages. The parties acknowledge their intention that any note given pursuant to this contract is a down payment note, and may be presented for payment notwithstanding cancellation; B.Seek specific performance within six months after such right of action arises, including costs and reasonable attorney's fees, as permitted by law. If title is marketable, or is made marketable as provided herein, and Seller defaults in any of the agreements herein, Buyer may, as permitted by law: C.Seek damages from Seller including costs and reasonable attorney's fees; D.Seek specific performance within six months after such right of action arises. 12.Well Disclosure. Seller certifies that the status and number of wells has not changed since the previously filed well disclosure certificate. 13.Individual Sewage Treatment System Disclosure. Seller certifies that there is no individual sewage treatment system on or serving the Property. 14. Construction and Sale of Dwelling. Buyer agrees that it will construct a new single family dwelling on the Property, intended for sale to a person or persons for residential occupancy (an "Owner Occupant"). This covenant shall survive the delivery of the Deed. 3 449205v2 BR305-132 A.The single family dwelling described in this Section is referred to as the "Minimum Improvements." B.The Minimum Improvements shall consist of a house with approximately 2,176 gross square feet, 3 bedrooms and 1 bathroom on the upper level, 2 future bedrooms and 1 bath on the lower level, and a 3 car garage and shall be constructed substantially in accordance with the plans on file in City Hall. Construction of the Minimum Improvements must be substantially completed by October 15, 2015. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of Brooklyn Center building official. C.Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Buyer to construct such Minimum Improvements (including the date for completion thereof), the Seller will furnish the Buyer with a Certificate of Completion for such improvements. Such certification by the Seller shall be (and it shall be so provided in the Deed and in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement and in the Deed with respect to the obligations of the Buyer and its successors and assigns, to construct the Minimum Improvements and the dates for completion thereof. The certificate provided for in this Section of this Agreement shall be in such form as will enable it to be recorded in the proper office for the recordation of deeds and other instruments pertaining to the Property. If the Seller shall refuse or fail to provide any certification in accordance with the provisions of this Section, the Seller shall, within 30 days after written request by the Buyer, provide the Buyer with a written statement, indicating in adequate detail in what respects the Buyer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Seller for the Buyer to take or perform in order to obtain such certification. D.The Buyer represents and agrees that until issuance of the Certificate of Completion for the Minimum Improvements: (1) Except for any sale to an Owner Occupant, the Buyer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a "Transfer"), without the prior written approval of the Seller's Board of Commissioners. The term "Transfer" does not include encumbrances made or granted by way of security for, and only 4 449205v2 BR305-132 for, the purpose of obtaining construction, interim or permanent financing necessary to enable the Buyer or any successor in interest to the Property, or any part thereof, to construct the Minimum Improvements or component thereof. (2) If the Buyer seeks to effect a Transfer to any person or entity other than an Owner Occupant prior to issuance of the Certificate of Completion, the Seller shall be entitled to require as conditions to such Transfer that: (i)any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Seller, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Buyer as to the portion of the Property to be transferred; and (ii)Any proposed transferee, by instrument in writing satisfactory to the Seller and in form recordable in the public land records of Hennepin County, Minnesota, shall, for itself and its successors and assigns, and expressly for the benefit of the Seller, have expressly assumed all of the obligations of the Buyer under this Agreement as to the portion of the Property to be transferred and agreed to be subject to all the conditions and restrictions to which the Buyer is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the Seller) deprive the Seller of any rights or remedies or controls with respect to the Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit the Seller of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Property that the Seller would have had, had there been no such transfer or change. In the absence of specific written agreement by the Seller to the contrary, no such transfer or approval by the Seller thereof shall be deemed to relieve the Buyer, or any other party bound in any way by this Agreement or otherwise with respect to the Property, from any of its obligations with respect thereto. (iii) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Property governed by this subsection D. shall be in a form reasonably satisfactory to the Seller. 5 449205v2 BR305-132 (3)If the conditions described in paragraph (2) above are satisfied then the Transfer will be approved and the Buyer shall be released from its obligation under this Agreement, as to the portion of the Property that is transferred, assigned, or otherwise conveyed. The provisions of this paragraph (3) apply to all subsequent transferors. (4)Upon issuance of the Certificate of Completion, the Buyer may Transfer the Property and/or the Buyer's rights and obligations under this Agreement with respect to such Property without the prior written consent of the Seller, except to the extent required under paragraph F of this Section. B. The Buyer, and its successors and assigns, agree that they (a) will use the Minimum Improvements only as a single family dwelling, and in the case of an Owner Occupant, will occupy the Property as a residence, (b) will not seek exemption from real estate taxes on the Property under State law, and (c) will not transfer or permit transfer of the Property to any entity whose ownership or operation of the Property would result in the Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City of Brooklyn Center or Seller in accordance with this Agreement). The covenants in this paragraph run with the land, survive both delivery of the Deed and issuance of the Certificate of Completion for the Minimum Improvements, and shall remain in effect for 15 years after the Date of Closing. F. The Buyer shall convey the Property (either before or after issuance of the Certificate of Completion) to an Owner Occupant whose household income does not exceed (a) 100% of median income in the case of one or two person household Owner Occupants, or (b) 115% of median income in the case of three or more person household Owner Occupants. The term "median income" means the median income in the seven-county metropolitan area, or the State as a whole, whichever is greater, using income data available from the Minnesota Housing Finance Agency as of the date of closing on sale to the Owner Occupant. Prior to closing on sale the Property by Buyer to an Owner Occupant, Buyer shall: (1)Notify the Seller in writing that the proposed Owner Occupant will meet the income qualifications under this paragraph; and (2)Submit to Seller evidence of Owner Occupant's income in a form satisfactory to Seller, evidencing compliance with the income limits described above. The covenant in this Section applies only to the first sale of the Property to an Owner Occupant, and does not apply to any subsequent sale by an Owner Occupant to any other person or party. 15. Revesting Title in Seller upon Happening of Event Subsequent to Conveyance to Buyer. In the event that subsequent to conveyance of the Property or any part thereof to the Buyer and prior to receipt by the Buyer of the Certificate of Completion for of the Minimum 449205v2 BR305-132 Improvements, the Buyer, subject to Unavoidable Delays (as hereafter defined), fails to carry out its obligations with respect to the construction of the Minimum Improvements (including the nature and the date for the completion thereof), or abandons or substantially suspends construction work, and any such failure, abandonment, or suspension shall not be cured, ended, or remedied within 30 days after written demand from the Seller to the Buyer to do so, then the Seller shall have the right to re-enter and take possession of the Property and to terminate (and revest in the Seller) the estate conveyed by the Deed to the Buyer, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the Property to the Buyer shall be made upon, and that the Deed shall contain a condition subsequent to the effect that in the event of any default on the part of the Buyer and failure on the part of the Buyer to remedy, end, or abrogate such default within the period and in the manner stated in such subdivisions, the Seller at its option may declare a termination in favor of the Seller of the title, and of all the rights and interests in and to the Property conveyed to the Buyer, and that such title and all rights and interests of the Buyer, and any assigns or successors in interest to and in the Property, shall revert to the Seller, but only if the events stated in this Section have not been cured within the time periods provided above. For the purposes of this Agreement, the term "Unavoidable Delays" means delays beyond the reasonable control of the Buyer as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse weather or acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Seller in exercising its rights under this Agreement) which directly results in delays. Unavoidable Delays shall not include delays in the Buyer's obtaining of permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such construction is required under this section of this Agreement. 16. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the Seller of title to and/or possession of the Property or any part thereof as provided in Section 15, the Seller shall apply the purchase price paid by the Buyer under Section 4 of this Agreement as follows: (a) First, to reimburse the Seller for all costs and expenses incurred by the Seller, including but not limited to proportionate salaries of personnel, in connection with the recapture, management, and resale of the Property or part thereof (but less any income derived by the Seller from the Property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the Property or part thereof (or, in the event the Property is exempt from taxation or assessment or such charge during the period of ownership thereof by the Seller, an amount, if paid, equal to such taxes, assessments, or charges (as determined by the Seller assessing official) as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Property or part thereof at the 7 449205v2 BR305-132 time of revesting of title thereto in the Seller or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Buyer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the Minimum Improvements or any part thereof on the Property or part thereof; and any amounts otherwise owing the Seller by the Buyer and its successor or transferee; and (b) Second, to reimburse the Buyer for the balance of the purchase price remaining after the reimbursements specified in paragraph (a) above. Such reimbursement shall be paid to the Buyer upon delivery of an executed, recordable warranty deed to the Property by the Buyer to the Seller. 17.Time is of the essence for all provisions of this contract. 18.Notices. All notices required herein shall be in writing and delivered personally or mailed to the address shown at paragraph 1 above and, if mailed, are effective as of the date of mailing. 19.Minnesota Law. This contract shall be governed by the laws of the State of Minnesota. 20.Specific Performance. This Agreement may be specifically enforced by the parties, provided that an action is brought within one year of the date of alleged breach of this Agreement. 21.No Remedy Exclusive. No remedy herein conferred upon or reserved to the Seller or Buyer is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof; but any such right and power may be exercised from time to time and as often as may be deemed expedient. 22.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. 23. Recording. This Agreement shall be filed of record with the Hennepin County Registrar of Titles. Buyer shall pay all recording costs. 8 449205v2 BR305-132 In witness of the foregoing, the parties have executed this agreement on the year and date written above. SELLER: ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By Tim Willson Its President By Curt Boganey Its Executive Director STATE OF MINNESOTA ) ss) COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of______________ 2014, by Tim Willson and Curt Boganey, the President and Executive Director, respectively, of the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the public body corporate and politic. (Stamp) Notary Public S-i 449205v2 BR305-132 BUYER: NOVAK-FL K INCORPORATED By: Its:" DE M r STATE OF MINNESOTA ) ) COUNTY OF HENNEPIN ) The foroing was acknowffL d before me this day ofSU1014, by f21(i7tj)/ /\iLl1ILLL , the EI i)E7Jr of Novak-Fleck Incorporated, a Minnesota corporation, on behalf of the corporation. (Stamp) u1 NotyJublic WAWA CANDJCE L JOHNSON Notary Public Minnesota My Commission Expires Jan 31, 2015 1 This document drafted by: Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 S-2 449205v2 BR305-132 EXHIBIT A to PURCHASE AND REDEVELOPMENT AGREEMENT FORM OF QUIT CLAIM DEED Deed Tax Due: $85.00 ECRV QUIT CLAIM DEED THIS INDENTURE, between the Economic Development Authority of Brooklyn Center, Minnesota, a Minnesota public body corporate and politic (the "Grantor"), and Novak-Fleck Incorporated, a Minnesota corporation (the "Grantee"). WITNESSETH, that Grantor, in consideration of the sum of $25,000 and other good and valuable consideration the receipt whereof is hereby acknowledged, does hereby grant, bargain, quitclaim and convey to the Grantee, its successors and assigns forever, all the tract or parcel of land lying and being in the County of Hennepin and State of Minnesota described as follows, to-wit (such tract or parcel of land is hereinafter referred to as the "Property"): The South 115 feet of Block 7, "Humbolt Addition". That part of Lot 40, Auditor's Subdivision Number 218, Hennepin County, Minnesota, lying East of Hj elvik Addition, and South of a line draw parallel with and 116.8 feet South of the North line of said Lot 40, except that part thereof lying South of the South line of the North 232.4 feet of said Lot 40. Check here if all or part ofproperly is registered (Torrens) I?! To have and to hold the same, together with all the hereditaments and appurtenances thereunto belonging. SECTION 1. It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and provisions of the Purchase and Redevelopment Agreement recorded herewith, between the Grantor and Grantee, dated as of October 13, 2014 (the "Agreement") and that the Grantee shall not convey this Property, or any part thereof, except as permitted by the Agreement until a certificate of completion releasing the Grantee from certain obligations of said Agreement as to this Property or such part thereof then to be conveyed, has been placed of record. This provision, however, shall in no way prevent the Grantee from mortgaging this Property in order to obtain funds for the purchase of the Property hereby conveyed or for erecting the Minimum A-1 449205v2 BR305-132 Improvements thereon (as defined in the Agreement) in conformity with the Agreement, any applicable development program and applicable provisions of the zoning ordinance of the City of Brooklyn Center, Minnesota, or for the refinancing of the same. It is specifically agreed that the Grantee shall promptly begin and diligently prosecute to completion the redevelopment of the Property through the construction of the Minimum Improvements thereon, as provided in the Agreement. Promptly after completion of the Minimum Improvements in accordance with the provisions of the Agreement, the Grantor will furnish the Grantee with an appropriate instrument so certifying. Such certification by the Grantor shall be (and it shall be so provided in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants of the Agreement and of this Deed with respect to the obligation of the Grantee, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion thereof. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Grantee to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance the purchase of the Property hereby conveyed or the Minimum Improvements, or any part thereof. All certifications provided for herein shall be in such form as will enable them to be recorded with the County Recorder, or Registrar of Titles, Hennepin County, Minnesota. If the Grantor shall refuse or fail to provide any such certification in accordance with the provisions of the Agreement and this Deed, the Grantor shall, within thirty (30) days after written request by the Grantee, provide the Grantee with a written statement indicating in adequate detail in what respects the Grantee has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Grantor, for the Grantee to take or perform in order to obtain such certification. SPPTTflN 7 The Grantee's rights and interest in the Property are subject to the terms and conditions of Sections 14 and 15 of the Agreement relating to the Grantor's right to re-enter and revest in Grantor title to the Property under conditions specified therein, including but not limited to the condition subsequent that the Grantee substantially complete construction of the Minimum Improvements by October 15, 2015 and that the Grantee shall transfer or convey the Property and Minimum Improvements thereon only in accordance with Sections 14D and 14F. SECTION 3. The Grantee agrees for itself and its successors and assigns to or of the Property or any part thereof, hereinbefore described, that the Grantee and such successors and assigns shall comply with Section 14E of the Agreement for a period of 15 years after the date hereof. A-2 449205v2 BR305-132 It is intended and agreed that the above and foregoing agreements and covenants shall be covenants running with the land for the respective terms herein provided, and that they shall, in any event, and without regard to technical classification or designation, legal or otherwise, and except only as otherwise specifically provided in this Deed, be binding, to the fullest extent permitted by law and equity for the benefit and in favor of, and enforceable by, the Grantor against the Grantee, its successors and assigns, and every successor in interest to the Property, or any part thereof or any interest therein, and any party in possession or occupancy of the Property or any part thereof. In amplification, and not in restriction of, the provisions of the preceding section, it is intended and agreed that the Grantor shall be deemed a beneficiary of the agreements and covenants provided herein, both for and in its own right, and also for the purposes of protecting the interest of the community and the other parties, public or private, in whose favor or for whose benefit these agreements and covenants have been provided. Such agreements and covenants shall run in favor of the Grantor without regard to whether the Grantor has at any time been, remains, or is an owner of any land or interest therein to, or in favor of, which such agreements and covenants relate. The Grantor shall have the right, in the event of any breach of any such agreement or covenant to exercise all the rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant, to which it or any other beneficiaries of such agreement or covenant may be entitled; provided that Grantor shall not have any right to re-enter the Property or revest in the Grantor the estate conveyed by this Deed on grounds of Grantee's failure to comply with its obligations under this Section 3. IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its President and Executive Director this day of, 2014. • The Seller certifies that the Seller does not know of any wells on the described real property. • A well disclosure certificate accompanies this document or has been electronically filed. (If electronically filed, insert WDC number: D. I am familiar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously filed well disclosure certificate. GRANTOR ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By Tim Willson Its President By Curt Boganey Its Executive Director A-3 449205v2 BR305-132 STATE OF MINNESOTA ) ) ss COUNTY OF______ ) This instrument was acknowledged before me on this day of by Tim Willson and Curt Boganey, the President and Executive Director, respectively, of the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of Minnesota, on behalf of the public body corporate and politic. (Stamp) Notary Public This instrument was drafted by: Kennedy & Graven, Charted (JSB) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 Tax Statements should be sent to: Novak-Fleck Incorporated 8857 Zealand Avenue North Brooklyn Park, MN 55445 A-4 449205v2 BR305-132 EXHIBIT B TO PURCHASE AND REDEVELOPMENT AGREEMENT FORM OF CERTIFICATE OF COMPLETION WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota, a public body, corporate and politic (the "Grantor"), conveyed land in Hennepin County, Minnesota to Novak-Fleck Incorporated, a Minnesota corporation (the "Grantee"), by a Deed recorded in the office of the Registrar of Titles in and for the County of Hennepin and State of Minnesota, as Document Number and WHEREAS, said Deed contained certain covenants and restrictions set forth in Sections 1 and 2 of said Deed; and WHEREAS, said Grantee has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to be done and made by the Grantee have been completed and the above covenants and conditions in said Deed and the agreements and covenants in Sections 14 and 15 of the Agreement (as described in said Deed) have been performed by the Grantee therein, and the Registrar of Titles in and for the County of Hennepin and State of Minnesota is hereby authorized to accept for recording and to record, the filing of this instrument, to be a conclusive determination of the satisfactory termination of the covenants and conditions of Sections 14 and 15 of the Agreement and the covenants and restrictions set forth in Sections 1 and 2 of said Deed; provided that the covenants set forth in Sections 14E of the Agreement, and in Section 3 of the Deed, remain in full force and effect through the period stated thereon. Dated: , 20 ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By Its President By Its Executive Director B-i 449205v2 BR305-132 STATE OF MINNESOTA ) ss) COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of___________ 20_, by and the President and Executive Director, respectively, of the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the public body corporate and politic. Notary Public This document drafted by: KENNEDY & GRAVEN, CHARTERED 470 U.S. Bank Plaza Minneapolis, MN 55402 (612) 337-9300 B-2 449205v2 BR305-132 > 'II ! lit & ::::::::L:I . 1 fd i _____ r .'Ii r j11 N1 11J'II it :: 1 -1 -.9TZ?Z ZZZ zziw,t.-I 114 rfli ItF9p II 1J1h=r.. 1 . II- II I 4i IfftVFff II -I An x ______ Noyak-FleekU Ing- Single Family Standard Features General Construction * Concrete Foundation 2 X 6 Construction Floor Truss Construction Drain Tile and sump basket ° 50 gallon electric water heater Rough-in 314 bath in Lower level ° Fiberglass single laundry nib ° 150 amp electrical service s Five phone or cable jacks/Media Panel ° Bedroom ceiling lights Vinyl patio door Lu-B vinyl windows 90 4- natural gas forced air furnace 111W (Heat Recovery Ventilation) system U 3 panel White Masonite interior doors ° Poplar stained shaker cabinets Poplar stained railing and 1 114 poplar stained spindles U Poplar stained skirtbdards Poplar stained trim and casings MB 17 Base and P156 casings U Polo chrome door knobs/hinges Kitchen U Dishwasher & Microwave circuit (WDF3 JOPAAS) U Garbage Disposal on city lots U Laminated countertops U Poplar stained shaker cabinets ° 8" Stainless steel dui sink with sprayer Single level Chrome faucet Eketric Range and Dryer ° Waterline to refrigerator Bath 4 Fiberglass I piece shower unit 5 Fiberglass tub and snrroimd One piece vanity mirror U Cultured marble vanity tops (Most Plans) ° Single lever Chrome fimeets U Poplar stained Shaker vanity insi,ilgtion ° Exterior wall R-Value of 22,98 U R-M ceiling insulation ° Exterior block walls in and damp proofed U Polyll waterproofing on interior concrete wails Ecierior Vinyl Skiing (Napco-Comfort Serie) Axchitecturai Shingles (OAF-Timberline) Asphalt driveway Concrete front step and sidewalk Steel insulated front door Two (2) outdoor faucets 24guage sleep panel garage doors b House wrap on exterior wails Allowances $270000 Appliance Allowance (SXS Package) 700 Lighting allowance SI6M0 Nr yard flooring allowance Warranty RWC -" Restdeiuial Warranty Corporation Other* ralk,Jru inspection before closing Construction clean prior to occupancy NDk.flk, IflL r5h o thig thpde, pkr pf ions, rnatria r otrtkn mthcd- wthut prior noi robIiti CU\lpTd!d Fthr4 LtUpdat& 311 V2014 10: Alvl 544 - 5348 AiL 5344 4,- - P 5341 • Al1 ci I - '•- I I - 5338 4 5330 c1II ___I_1I1 33 274±-- ] Z115324:. II LJ5331 5328 - I -, r • .1 I II 531 18 -. j• I 532 - 4 1 , - L 532 ._ - -----r T- 318 5312 5315 = Legend i L - _____ •1, •i4 -- -:1 _-:.--_ Road Edge - --------i 5312 - I I -4> Storm Sewer Ozz 11 4. C Water Main D We.. 20oo -. - ^j 5306 > Sanitary Sewer - I- - I • I Public Works - Engineering5331 Morgan Ave. N. July 8 , 2010 Tax Forfeiture Property .15 50 60 • I I Mk' 0] t1I 1IJ'A I DATE: September 8, 2014 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business & Development SUBJECT: Resolution Calling for a Public Hearing Regarding Sale of Land Located at 5331 Morgan Avenue North. Recommendation: It is recommended that the Economic Development Authority consider approval/adoption of the Resolution Calling for a Public Hearing Regarding Sale of Land Located At 5331 Morgan Avenue North. Background: On August 9, 2010, the City Council considered a request from Hennepin County regarding the sale/conveyance of a tax forfeited property that was located within the City's Neighborhood Stabilization Area and a potential candidate for either the City's Remove & Rebuild Program or as a purchase & rehab for resale. The City Council adopted Resolution No. 2010-113, A Resolution Approving the Request for Nonpublic Sale of the Non-Conservation Tax Forfeited Land at 5331 Morgan Ave. North to the City of Brooklyn Center by Hennepin County. In 2010, the property was inspected with Staff from Hennepin County and determined that the home had sufficient structural damage that it should be considered as a property for the City's Remove and Rebuild Program. In 2011, the tax forfeiture process and notices to the heirs of the previous owner's estate was completed and the County proceeded with a contract to remove all of the debris and possessions within the residence and garage. On March 26, 2012, the EDA adopted Resolution No. 2012-04, Resolution Authoring the Acquisition of Tax Forfeited Property in Connection with the Remove and Rebuild Program (5331 Morgan Avenue N.) The property was acquired for its appraised value of $17,000 plus the County's conveyance costs of $5,468.52. The demolition of this property was coordinated through the city's housing consultant, Greater Metropolitan Housing Corporation (GMHC) and completed in fall of 2012. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust I M J1 I Ih'4 U' I OI'A [I] 1I P1IWkl The Remove and Rebuild Program is funded through the Housing Fund of Tax Increment District #3. The resale of property acquired with these funds does have to meet the following affordable income qualifications: • a family of one or two cannot exceed the average household median income for the Metropolitan Area (2014 - $83,900) and • a family of 3 or more cannot exceed 115% of the Metropolitan Average Household Income ( 2014 - $95,300) Proposed Sales of 5331 Morgan Avenue North: The property is a large interior lot with 115 feet of frontage on Morgan Avenue North and 134 feet of lot depth. The 2014 assessed valuation of the adjacent properties are $96,000 to the north and $82,000to the south. The home to the north is a foreclosed home that was acquired by GMHC for $61,000 in February, 2013 and is being renovated through the Neighborhood Stabilization Program (NSP). The assessed land value for these lots is identified as $38,100 and $35,900 respectively. 35,900... Novak-Fleck, Inc., an experienced residential builder with infill development of 40+ vacant lots within residential neighborhoods in the City of Crystal, has expressed an interest to acquire 4 lots from the EDA for the purpose of starting construction of 4 spec homes this year that would be sold to owner occupants meeting the City's Tax Increment Affordable Housing Criteria. The proposed purchase price for this lot is $25,000 each and does not involve a real estate fee by the EDA. Additionally, the purchase price recognizes that the builder will have soil correction costs in the area of the former basement. Novak-Fleck, Inc. has provided the attached plans for a split entry home and construction specification. The plans provide for the construction of a 5 bedroom home having a total square footage of 2,172 sq.fi. with a 3 car garage. • 1058 sq.ft. on the main floor (3 bedrooms, bath, living room, dining room, kitchen, with options for a deck off of the dining area) o 108 sq.ft. foyer with stairway to lower level o 1008 sq.fl. on the lower lookout level (identified as future 2 bedrooms, bath, family room and mechanical room) Note: The building plans illustrate a pad width of 50 feet. The size of this lot can easily meet the side yard setback standards to accommodate the builder's house plan. The builder has reviewed a copy of the Development and Purchase Agreement prepared by the City Attorney for EDA's recent sales of the vacant lot at 5919 Xerxes Ave. N. and understands conditions and terms associated with the EDA' s sales of vacant land. The City Attorney has prepared the attached resolution which authorizes the setting of a public hearing for the October 13, 2014 EDA Meeting to consider the sale of this property. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public Ernst Budget Issues: The proceeds from this land sale are considered Tax Increment Revenues and will be placed back into the TIF 3 Housing Fund. Strategic Priorities: . Focused Redevelopment Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust AFFIDAVIT OF PUBLICATION STATE OF MINNESOTA )ss COUNTY OF HENNEPIN ) Charlene Void being duly sworn on an oath, states or affirms that they are the Authorized Agent of the newspaper(s) known as: SP Brooklyn Ctr/Brooklyn Park and has full knowledge of the facts stated below: (A)The newspaper has complied with all of the requirements constituting qualifica- tion as a qualified newspaper as provided by Minn. Stat. §331A.02, §331A.07, and other applicable laws as amended. (B)This Public Notice was printed and pub- lished in said newspaper(s) for 1 succes- sive issues; the first insertion being on 10/02/2014 and the last insertion being on 10/02/2014. By: Authorized Agent Subscribed and sworn to or affirmed before me on 10/02/2014. Kwlv^^ Notary Public ity of Brooklyn Center (Official Publication)OTICE OF PUBLIC HEARING REGARDING LAND SALE NOTICE IS HEREBY GIVEN that ;he Board of Commissioners of the Economic Development Authority Df Brooklyn Center, Minnesota (the EDA) will meet at City Halt at 6301 Shingle Creek Pkwy, Brooklyn Cen- ter, Minnesota (the "City") at or after 7:00 p.m. on Monday, October 13, 2014 to conduct a public hearing on the proposed sale of certain real property (Property") located in the City to Novak-Fleck, Inc. The Prop- erty is located in the City at 5331 Morgan Avenue North and legally described as:The South 115 feet of Block 7, "Humbolt Addition". That part of Lot 40, Auditor's Subdivision Number 218, Henna- pin County, Minnesota, lying East of Hjelvik Addition, and South of a line draw parallel with and 116.8 feet South of the North tine of said Lot 40, except that part hereof lying South of the South line of the North 232.4 feet of said Lot 40. The EDA will meet at the public hearing to determine if the sale is advisable. A copy of the terms and conditions of the proposed sale of the Property will be on file and avail- able for inspection at City Hall dur- ing regular business hours. Any person wishing to express an opinion on the matters to-be con- sidered at the public hearing will be heard orally or in writing. BY ORDER OF THEBOARD OF COMMISSIONERS 285352 10/02/14 5331 Morgan Ave N PHN %DARLENE MAWE MAZPHERSON Notary PubIIc•Mlnnesota my coffvmaw a 31,2019 Rate Information: (1) Lowest classified rate paid by commercial users for comparable space: $46.90 per column inch Ad ID 285352 EDA Agenda Item No. 5a EDA ITEM MEMORANDUM DATE: October 13, 2014 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business & Development . AL, SUBJECT: Resolution Authorizing the Acquisition of Property to Facilitate Neighborhood Improvements and Redevelopment Opportunities within the Brooklyn Boulevard Corridor. (6301 Brooklyn Boulevard) Recommendation: It is recommended the Economic Development Authority (EDA) approves and adopt the Resolution Authorizing the Acquisition of Property to Facilitate Neighborhood Improvements and Redevelopment Opportunities within the Brooklyn Boulevard Corridor. (6301 Brooklyn Boulevard) Proposed Acquisition: The EDA has been approached regarding its interest in acquiring 6301 Brooklyn Boulevard, a large corner lot in the northwest quadrant of Brooklyn Boulevard and 63rd Ave. North. The property has a lot area of 30,487 sq.fi. with 163+ feet of frontage on Brooklyn Boulevard and 218+ feet of frontage on 63'' Ave. North. The property is zoned R-1 Single Family Residential and contains a 1,221 sq.ft. rambler style residence with a 3 car detached garage constructed in 1950. The 2015 assessed valuation of the property is $145,500 which is based on comparable properties that were sold in good condition. To achieve a similar property condition, staff estimates that the property owner would need to reinvest approximately $40,000 into renovations and repairs/replacements to the residences. The property owner is offering the property to the EDA in an as-is-condition for the amount of $109,500. The attached purchase agreement has been prepared by the City Attorney and signed by the property owner's daughter, who has been given Power of Attorney. Purchase Agreement: The agreement provides for a purchase price of $109,500 and includes the following provisions: - The closing is scheduled to occur on October 14, 2014. - There are no real estate commission fees involved in this transaction - The seller is responsible for any deferred or delinquent real estate taxes or utilities. - The Seller is responsible for all pending and levied special assessments, including delinquent utility fees, nuisance abatement fees, and administrative citation fees, - The real estate taxes allocable to the Premises that are due and payable in the year of the closing shall be prorated between the Seller and Buyer to the closing date. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public tins! I M I V i'A U I (1] I1J!AI The funding source for this property is proposed to be the Housing Fund of Tax Increment District # 3. Tax Increment Finance District No. 3: Tax Increment Finance (TIF) District No. 3 was created in 1994 as a Redevelopment District to provide assistance to various commercial redevelopment and housing development projects within the District. The housing objectives included the following: 1.To acquire blighted or deteriorated residential property for rehabilitation or clearance and redevelopment; and 2.To develop housing opportunities for market segments underserved by the City including housing for the disabled and elderly. The special state legislation associated with the creation of this Tax Increment District included provisions that 15% of the revenues generated from tax increment in any year is deposited in the housing development account of the authority and expended according to the Tax Increment Financing Plan. The acquisition, removal, and redevelopment of this property are consistent with the Brooklyn Boulevard Corridor Studies and the "Land Use Redevelopment and Community Image Goals and Objectives" found in the City's 2030 Comprehensive Plan, and noted as follows: • Protect and enhance the residential neighborhoods; • Gradually reduce and eliminate incompatible relationships among land uses; • Continue the selective redevelopment of targeted areas, commercial, industrial and residential, to eliminate obsolescent or deteriorating land uses and stimulate new investment, and • Promote the redevelopment of obsolete, underutilized or vacant sites into uses that address needs in the marketplace, and that provide a more pedestrian-friendly atmosphere. Brooklyn Boulevard Corridor Study: The acquisition of this property will assist in the future corridor improvements, including the replacement of the existing 5 foot sidewalk with a 10 foot trail, boulevard improvements and better separation of the walkway from the roadway, improvements to the existing transit bus stop located at this corner, the removal of driveways accessing onto Brooklyn Boulevard, and the replacing of the single family residences with new transit oriented redevelopment options that would complement the planned redevelopment and community's vision for this area. The plans would be to complete the demolition and cleanup of the property this fall. Budget Issues: Jliission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust The acquisition and the demolition costs of this property are eligible TIF-3 Housing expenditures. If the EDA determines that it is in the community's best interest to convey this property for a use that is not consistent with the rules and regulations of this Tax Increment District, the proceeds from that sale would be used to reimburse the TIF-3 Housing Fund. Strategic Priorities: e Focused Redevelopment Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust I WEST 13O.13 lL'55314J12, eu 24o PART OF LOT 1 (1) 114,11 62064 (31) 141.2 620 = City Owned/Acquired Properties •' •I• . . !IlIpI;:IuIp_:_ .,1 JL ' 4 . I r p 3 1 •':i : 1. 4L • •' 1KNA !•. ._i'•,._ - V .:. -'Pt • I - -:. .;.' I d - - ,- CI- 0) 0)C)0 I- 0)) U) 0)0) roQ 00 © _T\\fl\\(; I••l_!tr \\ Wil i If la ri4 !b PAN 41 , hl Vt tiN ,/iI , 4; \ç\\\\ i4r I! I. iI //i 1 r fsjI jI -.. 1 k rL ( ( Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION AUTHORIZING THE ACQUISITION OF PROPERTY TO FACILIATE NEIGBHORHOOD IMPROVEMENTS AND REDEVELOPMENT OPPORTUNITIES WITHIN THE BROOKLYN BOULEVARD CORRIDOR (6301 Brooklyn Boulevard) WHEREAS, the Brooklyn Center Economic Development Authority, Minnesota has hereto established Housing Development and Redevelopment Project No. 1, and has established the Tax Increment Financing District No. 3 and adopted a Tax Increment Financing Plan which includes the following objectives: • To enhance the tax base of the City. • To provide maximum opportunity, consistent with the needs of the City, for development by private enterprise. • To better utilize vacant or underdeveloped land. • To attract new businesses. • To acquire blighted or deteriorated residential property for rehabilitation or clearance and redevelopment. • To develop housing opportunities for market segments underserved by the City including housing for the disabled and elderly; and WHEREAS, the Tax Increment Financing Plan for Tax Increment District No. 3 includes a budget of $5,000,000 in the Housing Development Account (Affordable Housing) which includes the following components: • Acquisition of Single and Multi-Family Housing • Rehabilitation of Single and Multi-Family Housing • Environmental Remediation of Single and Multi-Family Housing Properties, and; WHEREAS, the real property located at 6301 Brooklyn Boulevard, (the "Subject Property") is a voluntary sale of a vacant single family residence for the amount of $109,500; and WHEREAS, the EDA has determined acquisition of the Subject Property is consistent with the goals and objectives of the Brooklyn Boulevard Streetseape Amenities Study, the City's Comprehensive Plan, the vision of the 2013 Brooklyn Boulevard Corridor Study, and the Tax Increment District No. 3 Housing Program and is in the best interest 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 Executive Director 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. October 13, 2014 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. PURCHASE AGREEMENT 1.PARTIES. This Purchase Agreement ("Purchase Agreement") is entered into this 13th day of October, 2014, by and between M. Donald Blom, a single person by Nancy P. Blom, attorney in fact ("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 ("Property") located at 6301 Brooklyn Blvd. Brooklyn Center, MN 55429, Hennepin County, Minnesota and legally described as follows: Lot 5 except that part thereof which lies Southwesterly of Trunk Highway No. 152 as now located and established and Southeasterly of the following described line: Beginning at a point on the Southwesterly boundary of said Trunk Highway No. 152 distant 25 feet Northwesterly of its intersection with the Northerly boundary of 63'' Avenue North; thence run Southwesterly to a point on said Northerly boundary distant 25 feet Westerly of said intersection, Block 2, Fair Meadows, Hennepin County, 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 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. 5. PURCHASE PRICE AND TERMS: A.PURCHASE PRICE: The total Purchase Price ("Purchase Price") for the Property is One Hundred Nine Thousand Five Hundred and No/lOOths Dollars ($109,500.00). B.TERMS: (1)EARNEST MONEY. The sum of Zero Dollars ($0.00) Earnest Money ("Earnest Money") shall be 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 ("Closing") any remaining Balance Due according to the terms of this Agreement. 4500160 CBR BR305-128 (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. d. Title defects waived by Buyer pursuant to paragraph 12 below. 6. DOCUMENTS TO BE DELIVERED AT CLOSING BY SELLER. A.Warranty Deed free and clear of encumbrances subject only to the exceptions stated in 5B (3a, 3b, 3c and 3d). B.Standard form Affidavit of Seller. C.Well disclosure certificate, if required, or, if there is no well on the Property, the Warranty Deed must include the following statement: "The Seller certifies that the seller does not know of any wells on the described real property". D.Such other documents as may be reasonably required by Buyer's title examiner or title insurance company. 7. CLOSING DATE. The closing of the sale of the Property shall take place within 60 days after the date of this Agreement ("Closing") or at an earlier date as mutually agreed by the parties. The closing shall take place at the offices of Economic Development Authority of Brooklyn Center, 6301 Shingle Creek Parkway, Brooklyn Center, MN 55430. 8.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 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. 9.LEAD. If the dwelling structure on the Property was constructed prior to 1978, a lead paint disclosure accompanies this Agreement. 4500160 CBR BR305-128 2 10.REAL.ESTATE TAXES. A; Seller will pay at or prior to Closing all real estate taxes due and payable in 2013 and prior years on the Property, including any delinquent real estate taxes. B. Real estate taxes due and payable in 2014 shall be prorated as of Closing between Buyer and Seller. 11.SPECIAL ASSESSMENTS. A.Seller shall pay on or prior to Closing the balance of all special assessments levied or pending. 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 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. If a notice of pending special assessment is issued after the date of this Agreement and on or before Closing, Buyer. shall assume payment of all of any such special assessments and Seller shall, provide for payment on date of closing of none of any such special assessments. 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 Agreement, snow removal, or other current services provided to the Property by the assessing authority while the Seller is in possession of the Property. 12.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 or other evidence satisfactory to Buyer ("Title Evidence") for the Property or examine the abstract of title. 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 Closing (or such later date as the parties may agree upon) to make title marketable, at the Seller's expense. In the event that title to the Property cannot be made marketable or is not made marketable by the Seller by the Closing, then, at the option of the Buyer, this Agreement shall be null and void and all Earnest Money will be returned to Buyer, if any. 13.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. Buyer shall be responsible for the payment of the following costs: (a) any deed transfer taxes and conservation fees and recording fees required to enable the Buyer to 4500160 CBR BR305-128 record its deed from Seller under this Agreement, (b) the title search, name search and assessment search fees and other fees incurred in preparation of the Commitment for title insurance or other Title Evidence, and title insurance premium, if any; and (c) any closing fee ii.charged by the title insurance' or other closing agent, if any, utilized to close the transaction contemplated by this Agreement. Each party shall be respohsible for its own attorneys' fees and costs. 14.POSSESSION/CONDITION OF PROPERTY. Seller shall deliver possession of the • Property to Buyer immediately. after Closing. Seller shall remove all personal property from the Property :prior to Closing. Any furniture, fixtures, equipment or other personal property remaining at the Property as of Closing shall be deemed the property of Buyer and may be used by Buyer or disposed of by Buyer as 'Buyer sees fit. Buyer and' Seller will conduct a joint inspection of the Property at a time to be mutually agreed upon prior to Closing. 15.DISCLOSURE;. INDIVIDUAL SEWAGE TREATMENT SYSTEM. Seller discloses that there (is) (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) (is not) in use. In the event there is a sewage treatment system, a map of said location of the system is attached. 16.' WELL DISCLOSURE. Seller discloses that there is/is nota well on or serving the Property. If a well is present, a well disclosure statement accompanies this agreement. 17.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 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. Seller has good and marketable simple title interest to the Property and no consents or approvals from any third parties 'are required. Seller will not enter into a lease 'after the date of this Agreement. Seller represents that the Property is vacant.• Seller agrees to pay all charges for sewer, water, electric, gas, rubbish removal and cable television incurred prior' to," Closing. These warranties shall survive the Closing of this transaction. 18.RELOCATION BENEFITS. Seller acknowledges that the 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 represents that the Property is vacant and unoccupied. 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. 19.NO MERGER OF REPRESENTATIONS, WARRANTIES. All representations and warranties contained in this Agreement shall not be merged into any instruments or conveyance delivered at Closing, and the parties shall be bound accordingly. 4500160 CBR BR305-128 4 20.ENTIRE AGREEMENT; AMENDMENTS. This 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 exprèssly.sôt 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. :. 21.BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the partied and their respective heirs, executors, administrators, successors and assigns. Buyer shall not assign. its rights and interest hereunder , without notice to Seller. 22.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: M. Donald Blom, do Nancy P. Blom 2820 67"' Lane Brooklyn Center, MN 55429 BUYER: Economic Development Authority of Brooklyn Center Attn: Gary Eitel 63 01 Shingle Creek Parkway' Brooklyn Center, MN 55430-2113 AGENT: Kennedy & Graven, Chartered Attn: Charles LeFevere .' 470 U.S. Bank Plaza 200 South Sixth Street . Minneapolis, MN 55402 23.BROKER COMMISSIONS... Buyer and Seller each represents and warrants to each 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. 24. SPECIFIC PERFORMANCE. This 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. 4500160 CBR BR305-128 5 IN WITNESS WHEREOF, the parties have executed this agreement as of the date written above. SELLER By POA M. Donald Bm by Nancy P. Blom Attorney in Fact BUYER Economic Development Authority of Brooklyn Center, Minnesota By: Its: President By: Its: Executive Director 4500160 CBRBR305-128 a LA'I Yi 4') 1 C.)-213A iN P I, the undersigned, acknowledge that I met with a representative of the Economic Development Authority of Brooklyn Center, Minnesota (EDA) on 2014. The representative, explained that in the event that the EDA acquires my residence located at 6301 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 residence. These benefits may include: 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 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.Homeowner 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 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. 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. 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 agreement, I will be waiving those relocation benefits. After having these benefits explained to me, I agree to waive them. In signing this agreement, I acknowledge that no threats have been made to me, either expressly or by implication; and that the property will not be taken from me through condemnation. If after signing this agreement, I attempt to collect relocation benefits, I will have to prove that, contrary to what I am agreeing to in this agreement, my waiver of relocation benefits was not entered into voluntarily. This agreement is conditioned upon the Economic 4500160 CBR BR305-128 7 Development Authority of Brooklyn Center, Minnesota purchasing my property for the gross purchase price of $109,500.00. If this commitment to me is not fulfilled, the agreement is null and void. ell Date M. Donald Blom by Nancy P. Blom Attorney in Fact, Seller WITNESS: C-^ 4500160 CBR BR305-128 EPA Agenda Item No. Sb EIA ITEM MEMORANDUM DATE: October 13, 2014 TO: Curt Boganey, City Manager FROM: Gary Eitel, Business and Development Director SUBJECT: Consideration of Approval of Grant Applications for Contamination Cleanup of the Former Howe Chemical Site Located at 4821 Xerxes Avenue North in Brooklyn Center Recommendation: It is recommended that the Economic Development Authority of Brooklyn Center, Minnesota (EDA) consider approval of the following resolutions: A.Resolution Authorizing the Economic Development Authority of Brooklyn Center, Minnesota to Apply for a Contamination Cleanup Grant from the Minnesota Department of Employment and Economic Development. B.Resolution Authorizing the Submission of a Grant Application to the Metropolitan Council for the Tax Base Revitalization Account. Background: On April 21, 2010, the EDA adopted resolutions authorizing the submittal of applications to the Environmental Cleanup Grant programs offered through the Minnesota Department of Employment and Economic Development (DEED), the Metropolitan Council, and Hennepin County. At that time, the developer, Real Estate Recycling, as known as MBC II, LLC, had received an approval letter from the Minnesota Pollution Control Agency (MPCA) on a Remedial Investigation and Cleanup Action Plan (RI-CAP), but did not have the necessary approval from the Department of Agriculture (MDA). The applications were determined to be incomplete and not considered as candidates for the May 1st grant cycle. Attached for reference is a copy of the staff which accompanied the three Resolutions. Subsequent applications were made on October 20, 2010 and April 25, 2011 with the expectation that the necessary approvals or other actions would occur to allow the investigation and cleanup plan proposed by the developer to proceed. However, without the necessary MDA approvals, these applications were also considered incomplete and not funded. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust I ai J1 V V M'A LA I ak'A (I) 1tI I1IJ'À1 During the winter of 2013-2014, the Responsible Parties identified by the Ag Department to have had agricultural products stored on the site, continued the investigation of the former Howe Fertilizer Operation in a method acceptable to the Ag Department. A mobile testing lab was set up at the site in January-February, 2014 and the Ag Department coordinated a thorough soils investigation of the Howe site and adjacent railroad property known to have been used in the former Howe Fertilizer operation. In addition to defining the volume of the contaminated soils on the Howe Site, the investigation found areas within the adjacent railroad property that had previously been used as disposal sites for the burying of agricultural products. On March 7, 2014, Environmental Scientific, a consultant for the companies identified as the Responsible Parties, submitted a Remedial Investigation Report and Corrective Action Plan for the Howe Site and the adjacent railroad property to the MN Department of Agriculture. The plan specifically identified the perimeter and depth of several areas with levels of contaminated soils to be removed and properly disposed at an approved landfill. It is staffs understanding that approximately 15,000 cubic yards of contaminated soils, (10,000 cubic yards on the Howe site and 5,000 cubic yards on the railroad property) will need to be exported with clean soils imported to balance the grading plans for the planned industrial development of the site. In anticipation of an approval of this RI-CAP, the developer proceeded with the necessary modifications to the prior cleanup budgets for the Mayl, 2014 grant cycle. On April 28, 2014, the Economic Development Authority adopted the following resolutions associated with grant applications for the proposed environmental remediation (soils cleanup) of the industrial property located at 4821 Xerxes Avenue North (former Howe Fertilizer Site): • Resolution No.2014-05, A Resolution Authorizing the Economic Development Authority of Brooklyn Center, Minnesota to Apply for a Contamination Cleanup Grant from the Minnesota Department of Employment and Economic Development. • Resolution No. 2014-06, A Resolution Authorizing the Submission of a Grant Application to the Metropolitan Council for the Tax Base Revitalization Account. • Resolution No. 2014-07, A Resolution Approving an Application for a Hennepin County Environmental Financial Grant. On June 24, 2014, the Hennepin County Board approved the Environmental Financial Grant (ERF) application in the amount of $440,000 with conditions that included the necessary approval letters from the Minnesota Department of Agriculture (MDA) and the Minnesota Pollution Control Agency (MPCA. However, the MDA review of the RI-CAP took longer than expected and the grant applications submitted for DEED's Contamination Cleanup Grant ($610,000) and the Metropolitan Council's Tax Base Revitalization Account ($400.000) were once again deemed premature and/or incomplete until the necessary MDA and MPCA approval letters were available. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust I 1 J'U I V 'A U I MA(I) 1I P1PJYA1 On August 28, 2014, the Minnesota Department of Agriculture (MDA) sent a notice of their approval of the Remedial Investigation Report/Corrective Action Plan for the Howe Agricultural Chemical Incident Investigation to the ConAgra, Syngenta, and their environmental consultants. On September 4, 2014, the Minnesota Pollution Control Agency (MPCA) provided a letter to Paul Hyde, President of MBC II LLC, confirming their approval of modifications to its 2010 conditional approval of a Response Action Plan for Non-Ag Substances, as specified in Braun Intertec's report entitled "Response Action Plan Modification Former Howe Chemical/Fertilizer Site", dated April 3, 2014. . The modifications were generally referenced as the approach to soil cleanup being changed from excavating and re-compacting the Non Ag Substances and placing a building on top of them, to excavations and removal of the Non Ag Substances incidental to the implementation of the MDA approved RAP. On September 22, 2014, the EDA reviewed an agreement with Hennepin County relating to the previously approved Environmental Financial Grant (ERF) application and moved to adopted Resolution No. 2014-21, A Resolution Approving and Authorizing the Execution of Grant and Sub Grant Agreements for the Environment Cleanup (Howe Fertilizer Site). The developer has revised his budget and developed a strategy that would enable the maximum use of the Hennepin County's grant funds to commence with the cleanup action plans approved by the MDA and prepared applications for the November 1, 2014 grant cycle to complete the required environmental cleanup plans by both the MDA and MPCA in 2015. Available Contamination Clean Up Grants: The resolutions to be considered by the EDA address two contamination cleanup grant programs. The programs are as follows: + Department of Employment and Economic Development (DEED) The Minnesota Contamination Cleanup Grant Program was established in 1993 to clean up contaminated sites and convert contaminated property into a marketable asset. The Department of Employment and Economic Development (DEED) is the administering state agency for the grant program. The DEED grant requires a 25% local match which will be provided by MBC II, LLC (Real Estate Recycling) This program does have provisions for the reimbursement of eligible costs that have occurred up to six months from the date of approval. The grant application is requesting $610,000. + Metropolitan Council Tax Base Revitalization Account (TBRA) Enacted by the Legislature in 1995, the Metropolitan Livable Communities Act designated the Metropolitan Council as the administrator of the Tax Base Revitalization Program. This program makes grants to clean-up contaminated land for subsequent redevelopment, job retention and job growth in areas that have lost some of their commercial industrial base. No local match is required. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves (lie public trust I I I aIhYA L'A I MA 0) UI lSJi This grant program restricts the use of funds to only eligible costs that have occurred after the execution of agreements with the EDA. The grant application is requesting $400,000. The developer has identified a cleanup budget of $2,206,700 with the following funding sources to complete the clean activities: dollar amounts identified from the various grant programs are as follows: o $440,000 from Hennepin County Environmental Response Fund and/or EPA Brownfield's Grant Program. • $610,000 from DEED contamination cleanup grant program. o $400,000 from Metropolitan Council Tax Base Revitalization Account (TBRA) program. • $356,300 from Developer as a local match for investigation costs • $300,000 from the Developer to provide capping of The Site and also to meet the 25 percent local match funding required by the DEED grant program. • $50.000 from the 2010 DEED Investigation Grant • $50,000 from the 2011 Met Council Investigation Grant. The developer's budget for the projected building costs for the 60,000 sq.ft. multi-tenant industrial building are identified as $5,800.000/ Budget Issues: There are no direct budget impacts to consider since Hyde Development will provide the local match for the DEED grant and the various grant agencies will provide all funding for contamination cleanup, including demolition of the buildings on the site. Presently, the EDA' s budget impact will be the staff time necessary to monitor the grants, process payment requests to RER's contractors performing grant related work and maintain the required financial records for the various funding agencies. Strategic Priorities: • Focused Redevelopment Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION AUTHORIZING THE ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA TO APPLY FOR A CONTAMINATION CLEANUP GRANT FROM THE MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT WHEREAS, RER Acquisitions, LLC is the owner of certain real property located at 4821 Xerxes Avenue North in Brooklyn Center, known as the former Howe Chemical Site (the Site); and WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota (EDA) believes it is in the best interest of the City of Brooklyn Center to encourage the environmental cleanup and redevelopment of the Site; and WHEREAS, the EDA desires to facilitate the cleanup and redevelopment of the Site by RER Acquisitions, LLC; and WHEREAS, the redevelopment of the Site meets the redevelopment objectives of the City's modified redevelopment plan (The "Redevelopment Plan") for Housing Development and Redevelopment Project No. 1 (The "Redevelopment Project Area") as adopted on December 19, 1994 by the EDA; and WHEREAS, the EDA has the legal authority to apply for financial assistance, and the institutional, managerial and financial capability to insure adequate project administration. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of Brooklyn Center, Minnesota as follows: • The EDA approves the contamination cleanup grant application submitted to the Department of Employment and Economic Development on May 1, 2014 by the EDA for the Howe Chemical site. • The EDA is authorized to act as the legal sponsor for Project (s) contained in the Contamination Cleanup Grant Program to be submitted on May 1, 2014 and that the FDA Executive Director is hereby authorized to apply to the Department of Employment and Economic Development for funding of this project on behalf of the EDA. • The EDA has the legal authority to apply for financial assistance and the institutional, managerial and financial capability to insure adequate project administration. • The sources and amounts of the local match identified in the application are committed to the Project identified. • The EDA has not violated any federal, state or local laws pertaining to fraud, bribery, graft, kickbacks, collusion, conflict of interest or other unlawful corrupt practices. • Upon approval of its application by the State, the EDA may enter into an agreement with the State of Minnesota for the above referenced Project(s) and that the EDA certifies that it will comply with all applicable laws and regulations as stated in all contract agreements. • The EDA Executive Director is hereby authorized to execute such agreements as are necessary to implement the project on behalf of the applicant. October 13, 2014 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. Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION AUTHORIZING THE SUBMISSION OF A GRANT APPLICATION TO THE METROPOLITAN COUNCIL FOR THE TAX BASE REVITALIZATION ACCOUNT WHEREAS, The City of Brooklyn Center is a participant in the Livable Communities Acts Local Housing Incentives Account Program, as determined by the Metropolitan Council, and is therefore eligible to make application for funds under the Tax Base Revitalization Account; and WHEREAS, the City, through its Economic Development Authority (EDA) has identified a contamination cleanup project within the City that meets the Tax Base Revitalization Account's purpose and criteria; and WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota (EDA) has the institutional, managerial and financial capability to insure adequate project and grant administration; and WHEREAS, the EDA certifies that it will comply with all applicable laws and regulations as stated in the contract grant agreements; and WHEREAS, the EDA finds that the required contamination cleanup will not occur through private or other public investment within the reasonable foreseeable future without Tax Base Revitalization Account grant funding; and WHEREAS, the EDA represents that it has undertaken reasonable and good faith efforts to procure funding for the activities for which Livable Communities Act Tax Base Revitalization Account funding is sought but was not able to find or secure from other sources funding that is necessary for clean-up completion and states that this representation is based on the following reasons and supporting facts: • No local funds are available to fund the proposed cleanup activities, including General Fund and Special Revenue Funds of the City and/or EDA. • State Department of Agriculture Cleanup Funds are not available for the proposed cleanup activities at the Site. • Proposed cleanup activities at the Site do not qualify for Minnesota Petrofund funding. • Tax Increment Finance funding is not available for cleanup activities at the site. NOW THEREFORE BE IT RESOLVED by the Economic Development Authority of Brooklyn Center, Minnesota that it acknowledges it will be the grantee and agrees to act as legal sponsor administer and be responsible for grant funds expended for the project contained in the Tax Base Revitalization grant application submitted on May 1, 2014; and BE IT FURTHER RESOLVED that the EDA Executive Director is hereby authorized to apply to the Metropolitan Council for this funding on behalf of the Economic Development Authority for Brooklyn Center, Minnesota and to execute such agreements as are necessary to implement the Project on behalf of the applicant. October 13, 2014 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 I1t/ a1 I I c9' /21 hL N - - --- 1'ifJ U0 00 OLL ILHIINDZ jF i /tJK-- ) I ,! f/ _ 0 1, 11 1 M1 DATE: April 21, 2010 TO: Curt Boganey, City Manager FROM: Tom Bublitz, EDA/HRA Specialist THROUGH: Gary Eitel, Business and Development Director SUBJECT: Consideration of Approval of Grant Applications for Contamination Cleanup of the Former Howe Chemical Site Located at 4821 Xerxes Avenue North in Brooklyn Center Recommendation: It is recommended that the Economic Development Authority of Brooklyn Center, Minnesota (EDA) consider approval of the following resolutions: A.Resolution Authorizing the Economic Development Authority of Brooklyn Center, Minnesota to Apply for a Contamination Cleanup Grant from the Minnesota Department of Employment and Economic Development. B.Resolution Authorizing the Submission of a Grant Application to the Metropolitan Council for the Tax Base Revitalization Account. C. Resolution Approving an Application for a Hennepin County Environmental Financial Grant. Background: This memorandum addresses the proposed environmental remediation and redevelopment of the industrial property located at 4821 Xerxes Avenue North in Brooklyn Center (the Site) and known as the former Howe Chemical Site. With regard to environmental remediation of The Site, the EDA is being asked to apply for grant funding to assist with cleanup of the Site by the new owner, Real Estate Recycling Acquisitions, LLC (RER, LLC). The grant funds are awarded on a competitive basis from the State Department of Employment and Economic Development, Metropolitan Council and Hennepin County Department of Environmental Services. The grant mechanisms require that the EDA apply for the grant and be accountable for expenditure of the funds but RER, LLC would manage and conduct all the cleanup activities through private contractors and consultants. Essentially, the EDA serves as a pass through of grant funds to RER, LLC. Available Contamination Clean Up Grants: The resolutions to be considered by the EDA address three contamination cleanup grant programs. The programs are as follows: Department of Employment and Economic Development (DEED) Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust S[I]JJ[IJ I U U ik'A U I 1k'4 0) UI 1S1k'A I The Minnesota Contamination Cleanup Grant Program was established in 1993 to cleanup contaminated sites and convert contaminated property into a marketable asset. The Department of Employment and Economic Development (DEED) is the administering state agency for the grant program. The DEED grant requires a 25% local match which will be provided by RER, LLC. Metropolitan Council Tax Base Revitalization Account (TBRA) Enacted by the Legislature in 1995, the Metropolitan Livable Communities Act designated the Metropolitan Council as the administrator of the Tax Base Revitalization Program. This program makes grants to cleanup contaminated land for subsequent redevelopment, job retention and job growth in areas that have lost some of their commercial industrial base. No local match is required. Hennepin County Environmental Response Fund (ERF) and Environmental Protection Agency (EPA) Brownfield's Revolving Loan Fund Grants Hennepin County makes environmental cleanup grants available through its Environmental Response Fund (ERF) grant program, which is funded by the collection of mortgage registry and deed tax for deposit into an Environmental Response Fund account. The ERF grants can be used for assessment and or cleanup of contaminated sites located within Hennepin County. In addition to the ERF program, Hennepin County also manages the EPA Brownfield Revolving Loan Fund Grant Program. This is funded by the Federal EPA for the redevelopment of Brownfield's. A Brownfield is defined as real property, the expansion, redevelopment, or reuse of which may be complicated by the presence of potential hazardous substance, pollutant or contaminant. The program was created by the 2002 Federal Brownfield's Law. No local match is required. Site History The Site at 4821 Xerxes Avenue North has been a manufacturer and distributor of custom formulated agricultural fertilizers, insecticides, fungicides, and herbicides since approximately 1940. A retail petroleum station was also located at the Site from approximately 1945 to 1970. The Site was owned for many years by the Howe family and operated under both the name of Howe, Inc. and Howe Chemical Company. Subsequently, in approximately 1983, the facility was purchased by the Con Agra Fertilizer Company now known as United Agra Products (also known as UAP Distribution, Inc.) The Site operations that came after the Howe ownership included distribution of agricultural fertilizers. A major industrial incident occurred at the Site in 1979 when one of the buildings burned down. The building reportedly contained over 80 tons of 100 different types of pesticides and over 120 tons of bag and bulk fertilizers, all of which burned along with equipment, electrical equipment, vehicles, maintenance chemicals, wood, metal, batteries, etc. (stored within the building). The water used to fight the fire (estimated at 500,000 gallons) drained onto the Site, pavements and soil where it pooled as well as ran into site storm water catch basins. Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust Site soil and groundwater sampling and analysis subsequent to the fire were performed and elevated concentrations of agricultural chemicals were detected in both the Site soil and ground water. Following the fire, the State of Minnesota assumed control of the investigation and clean up of the Howe site in Brooklyn Center and selected and implemented two cleanup steps, first the removal of contaminated soil, ice and snow to Martin County, Minnesota and second, pumping out contaminated groundwater downgradient from the Howe facility. The second step also involved the State's decision not to further investigate or cleanup any soils on the Howe site itself. Soil excavation was ruled out since it was determined that the pesticides in the soil would eventually infiltrate into groundwater where they could be controlled or removed and because of the amounts present and hydrogeologic conditions, remedial action of the Howe site was not thought to be necessary. Current requirements for investigation and clean up of contaminants on the Site suggest that the initial investigation and cleanup was not adequate. Subsequent to the 1979 fire and initial cleanup, the Site continued in operation as a fertilizer distribution operation. In 1986 the Crop Mate Company which was a Con Agra affiliate acquired the site. All Site operations were discontinued in 2006. In 2008, site and building plan approval was granted by the City to RER for a 50,000 sq. ft. Office Warehouse facility. Over the past few years since 2008, RER Acquisitions, LLC had been working with the Department of Agriculture and Minnesota Pollution Control Agency to establish which State agency had authority to provide oversight relative to the cleanup of The Site. It is staff's understanding that the issue of agency oversight has been resolved and that the cleanup of the Howe Chemical Site will be overseen by the Minnesota Pollution Control Agency (MPCA) through its Voluntary Investigation and Clean Up program (VIC). Site Clean Up and Proposed Development RER Acquisitions, LLC acquired the Howe site in April 2010 and has enrolled the property in the MPCA's Voluntary Investigation and Clean Up (VIC) program in order to =proceed with required cleanup and redevelopment of The Site as per MPCA standards spelled out in work plans approved by the MPCA. Based on MPCA approved work plan and a Phase I environmental investigation completed by RER, The Site requires over $1.5 million in soil remediation. Additional costs include site investigation and Remedial Action Plan (RAP) development, demolition of vacant buildings, costs of MPCA oversight and capping of the site with hard surface materials. The total cost of remediation/clean up of The Site is projected at $2,407,000. The cleanup of The Site is proposed to be funded by grant programs previously discussed. The dollar amounts requested from the various grant programs are as follows: o $1,242,000 from DEED contamination cleanup grant program. • $200,000 from Metropolitan Council Tax Base Revitalization Account (TBRA) program. o $700,000 from Hennepin County Environmental Response Fund and/or EPA Brownfield's Grant Program. Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust [EI1IMIJ I fl N N I4 L'A I DhYA (1] 1I UIJ I o $265,000 from Developer to provide capping of The Site and also to meet the 25 percent local match funding required by the DEED grant program. The development proposed for the Site by RER will be a 50,000 to 60,000 square foot Office Warehouse building identical in appearance to the buildings constructed by RER directly across Brooklyn Boulevard in Minneapolis. Budget Issues: There are no direct budget impacts to consider since RER will provide the local match for the DEED grant and the various grant agencies will provide all funding for contamination cleanup, including demolition of the buildings on the site. Presently the primary budget impact will be staff time necessary to monitor the grants, process payment requests to RER's contractors performing grant related work and to the various funding agencies and maintain the required financial records. With past environmental cleanup grants from DEED, Met Council and Hennepin County, the City paid the contractors doing work as part of the grant funding and then submitted requests for reimbursement to the various funding agencies. Council Goals: The Council Goal addressed is the following: Strategic: 1. We will aggressively proceed with implementation of City's redevelopment plans - -- T$-'Jission: Ensuring an attractive, c/ca,:, safe conununify that enhances the quality of life and preserves the public trust