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2017 11-27 CCP Regular Session
AGENDA CITY COUNCIL STUDY SESSION November 27, 2017 6:00 p.m. City Hall Council Chambers A copy of the full City Council packet is available to the public. The packet ring binder is located by the Secretary. 1. City Council Discussion of Agenda Items and Questions 2. Miscellaneous 3. Discussion of Work Session Agenda Items as Time Permits 4. Adjourn CITY COUNCIL MEETING City of Brooklyn Center November 27, 2017 AGENDA Informal Open Forum with City Council - 6:45 p.m. —provides an opportunity for the public to address the Council on items which are not on the agenda. Open Forum will be limited to 15 minutes, it is not televised, and it may not be used to make personal attacks, to air personality grievances, to make political endorsements, or for political campaign purposes. Council Members will not enter into a dialogue with citizens. Questions from the Council will be for clarification only. Open Forum will not be used as a time for problem solving or reacting to the comments made but, rather, for hearing the citizen for informational purposes only. 2.Invocation - 7 p.m. 3.Call to Order Regular Business Meeting —The City Council requests that attendees turn off cell phones and pagers during the meeting. A copy of the full City Council packet is available to the public. The packet ring binder is located at the podium. 4.Roll Call 5.Pledge of Allegiance 6. Approval of Agenda and Consent Agenda —The following items are considered to be routine by the City Council and will be enacted by one motion. There will be no separate discussion of these items unless a Councilmember so requests, in which event the item will be removed from the consent agenda and considered at the end of Council Consideration Items. a. Approval of Minutes 1.November 13, 2017— Study/Work Session 2.November 13, 2017 —Regular Session 3. November 13, 2017 - Work Session b. Licenses C. Resolution Granting Approval to the Hennepin County Housing and Redevelopment Authority to Provide a Direct Contribution and File an Affordability Covenant on the Lynwood Pointe Apartment Complex PID Number 26-119-21-44-0070 d. Resolution Adopting Amendments to the Fund Balance and Classification Policy of the Brooklyn Center City Council Code of Policies CITY COUNCIL AGENDA .2- November 27, 2017 7.Presentations/Pro clamations/Recognitions/Donations —None 8.Public Hearings a. Consideration of Public Utility Rates for 2018 —This item was published in the official newspaper on November 2, 2017, and is offered for Public Hearing this evening. Requested Council Action: —Motion to open Public Hearing. —Take public input. —Motion to close Public Hearing. 1.Resolution Adopting 2018 Water Utility Rates, Fees and Charges Requested Council Action: —Motion to adopt resolution. 2.Resolution Adopting 2018 Sewer Utility Rates, Fees and Charges Requested Council Action: —Motion to adopt resolution. 3.Resolution Adopting 2018 Storm Sewer Utility Rates, Fees and Charges Requested Council Action: —Motion to adopt resolution. 4.Resolution Adopting 2018 Street Light Rates and Charges Requested Council Action: —Motion to adopt resolution. 5. Resolution Establishing 2018 Recycling Rate and Charges Requested Council Action: —Motion to adopt resolution. b. Resolution Vacating All Easements Within Lot 1, Block 2, SHINGLE CREEK CROSSING and Outlot A, SHINGLE CREEK CROSSING 2nd ADDITION —This item was published in the official newspaper on November 9, 2017, and is offered for Public Hearing this evening. Requested Council Action: —Motion to open Public Hearing. —Take public input. —Motion to close Public Hearing. —Motion to adopt resolution. 9.Planning Commission Items —None 10.Council Consideration Items a. Consideration of Type IV 6-Month Provisional Rental Licenses 1.2318 55th Ave N 2.509 6lst Ave N 3. l6007lst Ave N CITY COUNCIL AGENDA -3- November 27, 2017 4.2023 Brookview Dr 5.7031 Humboldt AveN 6.6413 Regent Ave N 7.4501 Woodbine La 8.6006 Zenith AveN 9.Resolution Approving a Type IV 6-Month Provisional Rental License for 2006 Brookview Dr 10. Resolution Approving a Type IV 6-Month Provisional Rental License for 7143 France AveN Requested Council Action: —Mayor poll audience for applicants to address Council. —Receive staff report. —Motion to open hearing. —Receive testimony from applicants. —Motion to close hearing. —Take action on rental license applications and mitigation plans. 11.Council Report 12.Adjournment EDA MEETING City of Brooklyn Center November 27, 2017 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 podium. 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. November 13, 2017 - Regular Session 4.Public Hearings —None 5, Commission Consideration Items a. Resolution Approving a Fifth Amendment to Development Agreement (Shingle Creek Crossing Project) 6. Adjournment AGENDA CITY OF BROOKLYN CENTER CITY COUNCIL/ECONOMIC DEVELOPMENT AUTHORITY WORK SESSION November 27, 2017 Immediately Following Regular City Council and EDA Meetings Which Start at 7:00 P.M. City Hall Council Chambers A copy of the full City Council packet is available to the public. The packet ring binder is located at the podium. rrsii L'i au I]I!WJJ (I]ii MI 1.Socioeconomic Opportunity Environmental Scan Report 2.Community Dialogue Follow-up 3. Review of the Draft Tax Increment Development Agreement for HOM Furniture/Kohl's Lot I I 0 k[I'I ffi I i 11) th Iii i 4'i'LI) 1 WJ *1 [I)I Later/Ongoing 1.Legislative Agenda - December 2.Food Trucks Update - December 3.Wage Requirement for the Business Subsidy Policy - December 4.Conducting City Council Business Electronically - January 5.Naturally Occurring Affordable Housing Policy - January 6.Overnight Parking - January 7.South Opportunity Site Development 8.T.H. 252 Freeway Conversion Study Update 9.City Council Code of Policies (October 9 Study Session Discussion) a.Section 2.70 Street and Alley Lighting Policy b.Section 2.93 Long-Term Deer Population Management Plan 10.Tobacco Purchase Age 21 (Brooklyn Youth Council) Oty (C©mindli Agenda I[thm N0 &a MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA STUDY/WORK SESSION NOVEMBER 13, 2017 CITY HALL - COUNCIL CHAMBERS The Brooklyn Center City Council met in Study Session called to order by Mayor Tim Willson at 6:00 p.m. Mayor Tim Willson and Councilmembers Marquita Butler, April Graves, and Dan Ryan. Councilmember Kris Lawrence-Anderson was absent and unexcused. Also present were City Manager Curt Boganey, Deputy City Manager Reggie Edwards, Finance Director Nate Reinhardt, Director of Business and Development Gary Eitel, Interim Community Development Director Michael Ericson, Planner and Zoning Administrator Ginny McIntosh, Deputy Director of Building and Community Standards Jesse Anderson, City Attorney Troy Gilchrist, and Carla Wirth,. TimeSaver Off Site Secretarial, Inc. [i iPJ[iIWOF[WJi ES)tS] eii 71 ID FPI Xliii FiVtl)F1 Councilmember Butler requested discussion on Item 6k, An Ordinance Amending Chapter 11 of the City Code of Ordinances Regarding Liquor License, in particular whether there would be a staff presentation and City Council discussion. City Manager Curt Boganey explained unless it is removed from tonight's Consent Agenda, it would be approved in one vote and the public hearing would be set for December 11, 2017. During that public hearing, the item would be discussed. Councilmember Butler stated she had several questions she would like to ask. Mr. Boganey suggested the City Council raise their questions now during the Study Session. Councilmember Butler asked whether current and new liquor licenses are approved by City staff as they are submitted or by City Council action. Mr. Boganey stated the liquor license is reviewed by staff to assure the applicant meets all conditions for a liquor license and then the liquor license is approved by the City Council. He explained if the applicant does not meet all the required conditions, then staff should not present it to the City Council for consideration. Councilmember Butler asked when the Ordinance amendment would be effective and how it would impact businesses. Deputy City Manager Reggie Edwards stated as the liquor licenses are submitted, it would be effective this coming spring. Mayor Willson stated after that the fee would be prorated during the year. 11/13/17 -1- DRAFT Councjlmember Butler stated a constituent asked whether more than one business/restaurant within a building can have a liquor license. If not, she asked if the new ordinance addresses that issue. City Attorney Troy Gilchrist advised nothing is being changed relating to setbacks. With regard to the fees, the City Council can adopt a resolution to put it into effect right away or the fees can go into effect this coming year. Councilmember Butler stated she was approached by the business next to New Horizon Academy in Humboldt Square Shopping Center so maybe it is the location that is the issue. Mayor Willson stated the current ordinance has different criteria. Mr. Boganey stated no modifications are being made to the location criteria for a licensed property so whatever rules were in place before with location, would still be in place. He stated staff will follow up with the question about distance requirements within Humboldt Square Shopping Center. However, he thought it may relate to the location of the day care. Councilmember Butler asked what can be done if the ordinance is changed and there is an increase in police calls generated by licensed liquor establishments. Mayor Willson stated the City Council can take action on an individual liquor license if there is an issue with increased calls. Mr. Boganey stated staff would determine first whether the increase in calls is related to the liquor license and if that is the case, the City Council could make changes to the ordinance to address that issue. Councilmember Ryan stated it seems the most important changes are the reduction in seating requirements, removing a set of class distinctions, and food ratio. He stated he is pleased to see those changes with this amendment, noting if equivalent fees are charged and with these changes, it levels the playing field. He expressed caution about creating just drinking establishments with a low food to liquor ratio and if that occurs, it can be addressed. Mr. Boganey stated it also addresses the 1 a.m. to 2 a.m. license so the hours would have to be consistent with State law, which has a 1 o'clock limit unless special authorization by the City has been granted to extend beyond 1 o'clock. He advised a dramatic number of police calls occur after 1 o'clock for establishments that have a liquor license until 2 o'clock. Mayor Willson stated if there are special requests, such as the Super Bowl, the City Council can consider that special request. Mr. Boganey concurred and stated the City Council can make minor changes after the public hearing if issues need to be addressed. Dr. Edwards noted another change is to the square footage, which allows smaller establishments to serve liquor. Councilmember Butler thanked Dr. Edwards and Mr. Boganey for staffs work on this to quickly address these issues. 11/13/17 2- DRAFT Correction to Consent Agenda Item 6f, Resolution Accepting Feasibility Report, Declaring Costs to be Assessed and Calling for Improvement and Assessment Public Hearings for Improvement Project Nos. 2018-01, 02, 03 and 04, Firehouse Park Area Street, Storm Drainage, and Utility Improvements Mayor Willson referenced Consent Agenda Item 6f, page 12 of the feasibility study, noting it shows the high school has a private sewer line that runs into the ground and not being connected. He stated this sewer line should be shown as connecting to the sewer line on 65th Mr. Boganey stated staff will address that issue. I!1wia[WJ Parking Regulations Councilmember Graves stated she received a constituent call asking questions about parking regulations, ticketing, and towing. She requested this topic be scheduled for discussion including how many cars are towed in the winter, night plowing routes, and if some street parking should be allowed. Mayor Willson stated there is no street parking from 2 a.m. to 6 a.m. He stated he has been ticketed twice for parking at the curb, with an $85 fine, so he knows officers do ticket for parking violations. Mr. Boganey stated staff has collected a lot of data over the last six months to one year and discussed the same issues relating to demand and complaints. He stated staff could pull together enough information to prepare a report and hold a meaningful discussion on this topic at an upcoming Work Session. Councilmember Ryan stated the complaints he received are overwhelming to enforce the 2 a.m. to 6 a.m. parking ban. He stated he looks forward to that discussion. Councilmember Graves stated that is also one of the complaints she received related to parking on Xerxes Avenue. Mr. Boganey stated that is the complaint calls staff receives also, to enforce the parking ban. Councilmember Butler stated this topic was raised this summer at one of her group discussions by apartment residents in the Shingle Creek Crossing area. Because they only get one parking spot per apartment, they have to park in the street and are getting towed. She also supported holding this discussion. The majority of the City Council supported directing Mr. Boganey to schedule this topic for discussion at an upcoming Work Session. Increasing Legal Age to Purchase Tobacco Products to 21 Years of Age Councilmember Ryan stated he would like to poll the City Council on the issue of raising the legal age to purchase tobacco products to 21 years of age. Mayor Willson explained this question should be phrased whether the City Council would like to have this topic placed on a 11/13/17 -3- DRAFT Work Session agenda and stated he would support that discussion. Councilmember Ryan rephrased his question to ask whether the City Council would support placing this topic on a future Work Session agenda for discussion. Councilmember Graves stated she has been approached about that topic but thought there may be other more important topics. However, she would not object to holding that discussion. Mr. Boganey noted the Brooklyn Bridge Alliance for Youth will be taking up this topic this season with the intent to bring their perspective before the City Council. He asked whether the City Council wants to delay their discussion until receiving that perspective. Mayor Willson pointed out there is a similar consideration related to the age for drinking as they are old enough to serve in the armed forces yet restricted from purchasing alcohol. He noted there are studies saying if young people are not smoking by the age of 21, they are likely to not smoke the rest of their lives. The majority of the City Council supported directing Mr. Boganey to place the topic of raising the legal age to purchase tobacco products to 21 years of age for discussion at an upcoming Work Session along with the Brooklyn Bridge Alliance for Youth's perspective. Prevailing Wag Mayor Willson referenced Mr. Boganey's Friday update relating to the League of Minnesota Cities support of prevailing wage, which he also supports. Increase in Police Calls Mayor Willson commented on the 46% increase in police calls at The Crest Apartments that is managed by Aeon. He stated this is very concerning and will be discussed during tonight's Work Session. aiii (i)rXei ai I7t Vi M IL'I1I mu N [NIEI1U[SJI Nfl iIJi[I)NILi) m (Wd Mr. Boganey introduced the item that had been raised by Mayor Willson at a recent Study/Work Session concerning the Minnesota Supreme Court's decision in State vs. Hensel, a case that arose out of a disruption of two Little Falls, Minnesota, City Council meetings. City Attorney Troy Gilchrist referenced his written report, indicating the important thing to point out is that it was not getting at the ability of the City Council to control the meeting but rather the constitutionality under which the person was charged. The court found it was overly broad, would limit protected speech, and over reaching. That was the thrust of the case. Gilchrist offered two options for the City Council's consideration: 1) adopt a policy establishing Rules of Conduct; or, 2) adopt an ordinance to prohibit disruptions. He advised his recommendation would be to adopt a policy establishing Rules of Conduct. 11/13/17 -4- DRAFT Mayor Willson stated his support to consider a policy. He stated he agrees that signs in the front row should be smaller than 4 feet by 4 feet so all in the Chambers can see the proceedings. Also, he was concerned with the nature of the pictures in this court case which were of deceased fetuses/children, which may be offensive for Councilmembers to be looking at. Or, there could be other things found to be offensive. Mayor Willson noted as long as it is not content based and they are not being disruptive, then it would have to be allowed. Mr. Gilchrist stated that is correct and while there is a line that could be crossed, even 'fighting words' have to be pretty explicit before you can decide if it's gone too far. He noted the First Amendment does not prevent us from being offended and the court has found that does not allow you to regulate it, even if you are offended. Mayor Willson stated his concern when elected officials have fewer rights than ordinary citizens, and this is one of them. He stated the presiding officer would have to make that determination and know expressly how to implement that based on the activity that is going on in the Chambers. Mayor Willson stated he hopes the City Council does not come across this but has in the past and a regional road with public hearings will be coming up that could fall into this category. He stated his hope that the City Attorney is in attendance during those proceedings and able to advise on the decision. Councilmember Ryan stated common sense would suggest the Mayor and City Council have the right to conduct an orderly meeting in respect to all participants but with strict scrutiny, if you stray into First Amendment issues. He asked what is the legal basis of the City to claim the right to an orderly meeting. Mr. Gilchrist advised there are different levels of scrutiny applied to restrictions on speech. Strict scrutiny is an unbeatable standard to meet. But being in a limited public forum (Council Chambers) and if not involving content restrictions, then it would be under intermediate scrutiny which is still a high bar to reach but less strict than trying to regulate something like a person standing on the street with a sign, who has more First Amendment rights applied. Mr. Gilchrist advised when people talk at the podium about that issue, that speaker has less protection under the First Amendment than the person with the sign standing on the street. He stated the City Council has business to conduct and people do not have the right to be repetitive or go over time restrictions. He said the City Council has the right to impose reasonable restrictions so they can move on to conduct City business and/or hear others in the audience. Councilmember Ryan asked whether the City Council can place restrictions as long as under due process standards all are treated the same (same number of minutes to address the body) and the City Council has the authority to set those ground rules. He also asked whether that has been tested. Mr. Gilchrist stated there have been different court challenges, but it has not been an issue as long as the rules are uniformly applied and the rules are not used to screen out topics the City Council does not support. 11/13/17 -5- DRAFT Mayor Willson referenced the sample policy language and asked if an individual can come to speak to any agenda item. He stated he does not agree with that process and would like that topic discussed. He noted if there is a disruption, it generally takes an officer to deal with the trespasser so he would ask whether an officer had to be staffed at the Council meetings knowing it can happen at any time. Mr. Boganey stated this policy, if adopted, for all intents and purposes, does not change the City Council's authority to have someone removed for disrupting a City Council meeting so the way things have operated for the last ten years would not change. Or, if a disruption is anticipated, then an officer would probably be asked to attend. Mr. Gilchrist explained the Little Falls policy was provided only to give an example, and he would recommend if the City Council is supportive of a policy, they direct staff to draft a policy and resolution for consideration at a future meeting. It was the majority consensus of the City Council to direct staff to draft a policy establishing Rules of Conduct and a resolution of adoption for discussion at a future meeting. s] 1W1 SJI1IIMUWA&!'4 N 11111 lI'Li1UEIIiP Mayor Willson closed the Study Session at 6:40 p.m. RECONVENE STUDY SESSION Councilmember Ryan moved and Councilmember Butler seconded to reconvene the Study Session at 6:51 p.m. Motion passed unanimously. DISCUSSIONi:rwi:i DRAFTING1 k1 I MhN I Director of Business and Development Gary Eitel introduced the item and presented the components that would be contained in the drafting of the Fifth Amendment to the Shingle Creek Crossing Tax Increment Development Agreement: address the developer's assignment of its rights to purchase the EDA parcel to Ridgecrest Investors LLC (dba Told Development) process the Shingle Creek Crossing 6 th Addition, the replat of Lot 1, Block 2, Shingle Creek Crossing, and Outlot A; extension of the Additional Improvement Note Maturity Date to complete the 239,000 square foot additional commercial development within Shingle Creek Crossing from December 31, 2018 to December 31, 2021; redevelopment of the Kohl's lot (Lot 2, Block 2, Shingle Creek Crossing) to the Phase II parcels identified for the 230,000 square foot of additional improvements that will be constructed and obtain certificates of occupancy permits; and, clarifications regarding the placement of a transitional screening fence on Food Court Pad Sites 9 and 10 pending the future development of these two pad sites to complete the Food Court improvements. 11/13/17 -6 DRAFT Mr. Eitel stated staff is recommending the City Council provide direction to staff regarding the drafting and processing of a Fifth Amendment to the Shingle Creek Crossing Tax Increment Development Agreement. Mayor Willson stated he has no problem with a bank use even though it was not one of the listed options. He stated he would hate to see the developer overextend and have empty buildings, so he thinks a transitional screening fence is the better short-term option. Councilmember Ryan concurred and stated it is logical the Kohl's property is included in Phase 2 because the developer has owned that building for some time and he was surprised it was not part of the original Shingle Creek Crossing project. He stated the developer has 'gone to bat' for the City and taken on a very challenging project so he would support this. The majority consensus of the City Council was to support the Fifth Amendment to the Shingle Creek Crossing Tax Increment Development Agreement and direct staff to move it forward. Mayor Willson adjourned the Study Session at 6:59 p.m. 11/13/17 -7- DRAFT MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION NOVEMBER 13, 2017 CITY HALL - COUNCIL CHAMBERS CALL TO ORDER INFORMAL OPEN FORUM The Brooklyn Center City Council met in Informal Open Forum called to order by Mayor Tim Willson at 6:45 p.m. ROLL CALL Mayor Tim Willson and Councilmembers Marquita Butler, April Graves, and Dan Ryan. Councilmember Kris Lawrence-Anderson was absent and unexcused. Also present were City Manager Curt Boganey, Deputy City Manager Reggie Edwards, Finance Director Nate Reinhardt, Director of Business and Development Gary Eitel, Interim Community Development Director Michael Ericson, Planner and Zoning Administrator Ginny McIntosh, Deputy Director of Building and Community Standards Jesse Anderson, City Attorney Troy Gilchrist, and Carla Wirth, TimeSaver Off Site Secretarial, Inc. Mayor Tim Willson opened the meeting for the purpose of Informal Open Forum. Roger Kloster, 7223 Lee Avenue N., stated several weeks ago he had asked why there is not a lower water rate for senior citizens as they use a lower consumption and Councilmember Ryan had explained if it was done, it would create a gap in the City's budget. Mr. Kloster asked if that is the case, how is the City paying for design of the new logo and why that decision was not put on a referendum so the residents of the City could decide. He suggested the City Council has its priorities mixed up as a lower senior citizen water rate is needed but a new City logo is not needed. City Manager Curt Boganey asked whether he is aware the City's water rate is among the lowest in the area. Mr. Kloster answered in the affirmative. Mr. Boganey asked if there should be a discount rate for people with lower income. With low-income residents, Mr. Kloster stated they may be receiving other assistance and restated support for a lower rate for lower consumption and for seniors living on social security. Councilmember Ryan moved and Councilmember Butler seconded to close the Informal Open Forum at 6:51 p.m. Motion passed unanimously. 11/13/17 -1- DRAFT 1k'LIiVil(I)I Mayor Willson offered an Invocation. The Brooklyn Center City Council met in Regular Session called to order by Mayor Tim Willson at 7:00 p.m. I. Mayor Tim Willson and Councilmembers Marquita Butler, April Graves, and Dan Ryan. Councilmember Kris Lawrence-Anderson was absent and unexcused. Also present were City Manager Curt Boganey, Deputy City Manager Reggie Edwards, Finance Director Nate Reinhardt, Director of Business and Development Gary Eitel, Interim Community Development Director Michael Ericson, Planner and Zoning Administrator Ginny McIntosh, Deputy Director of Building and Community Standards Jesse Anderson, City Attorney Troy Gilchrist, and Carla Wirth, TimeSaver Off Site Secretarial, Inc. J )II 3(0] ii m,m The Pledge of Allegiance was recited. r. a,iA!L'I I] XCI 3kI )7VI IiXIi 3hN WI3hU7 Councilmember Ryan moved and Councilmember Butler seconded to approve the Agenda and Consent Agenda, and the following consent items were approved: 6a. APPROVAL OF MINUTES 1.October 9, 2017— Work Session 2.October 16, 2017 - Joint Budget Commission 3.October 23, 2017 - Study/Work Session 4.October 23, 2017 - Regular Session 5. October 23, 2017 - Work Session 6b. LICENSES Work Session with Financial GASOLINE SERVICE STATION Awad Company Brooklyn Center Municipal Garage MECHANICAL Binder Heating & Air Conditioning, Inc Boys Mechanical, Inc. PB Services dba PBS 6501 Humboldt Avenue N 6844 Shingle Creek Parkway 222 Hardman Avenue N, S. St. Paul 490 Villaume Avenue 4300, S. St. Paul 9410 Bataan Street NE, Blame 11/13/17 -2- DRAFT 2500 Ventura Drive, Woodbury 18983 York St., New Suite C, Elk River 220 West 81st Street, Bloomington Pioneer Power, Inc. Professional Mechanical Services, LLC Yale Mechanical, LLC RENTAL INITIAL (TYPE III - one-year license) 6825-27 Noble Avenue N. 4512 65th Avenue N. INITIAL (TYPE II— two-year license) 4207 Lakeside Avenue #238 RENEWAL (TYPE III— one-year license) Beard Avenue Apartments 6101 Beard Avenue N. 3818 61st Avenue N. 4100 61St Avenue 4201 Lakeside Avenue #201 6242 Scott Avenue N. RENEWAL (TYPE II— two-year license) Riverwood Estates 20165 th Avenue N. 301365 th Avenue N. 507 69th Avenue N. 6001 Admiral Place 5926 Colfax Avenue N. 5214 Great View Avenue RENEWAL (TYPE I - three-year license) 5314 71st Circle 5201 Ewing Avenue N. 7013 Fremont Avenue N. SECONDHAND GOODS DEALER GarneStop #535 SIGN HANGER Indigo Signworks, Inc. Robert Gardner Massih Sarim Hussein Seman Keven Riley Sherman Yih Feng Kho Emmanuel Coker Justin Frederick Chen Xuan Zhou Donald Kasbohm, Riverwood Estates LLC Ernest Strempke Outreach Six Acres, Inc. Invitation Homes Jack Steven Froelke Joel Salszar Abbas Ali Infinite Property LLC Invitation Homes 6068 Shingle Creek Parkway 1622 Main Avenue, Fargo __RESOLUTION NO. 2017-167 APPROVING THE AGRE EMENT WIT"' SAFEASSURE CONSULTANTS TO PROVIDE SAFETY PROGRA SUPPORT SERVICES AND TRAINING I 6d. ESTABLISHIN GI-KESOLUTION NO. 2017-168 ii1 i I N TERE ST RATEu i.ii F018 SPECIAL ASSSESSMENTS 11/13/17 -3- DRAFT r. IiIE4t1 -i'I ) " i11i AUTHORIZINGVA I[tACQUISITION1S) R ,f i. RESOLUTION NO. 2017-173 ACCEPTING BID AND AWARDING "I CONTRACT, IMPROVEMENT PROJECT NO. 2017-14, 2017 LIFT STATION I IMPROVEMENT PROJECT 6k. APPROVE FIRST READING OF ORDINANCE AMENDING CHAPTER 11 OF THE CITY CODE OF ORDINANCES REGARDING LIQUOR LICENSES AND SET SECOND READING AND PUBLIC HEARING FOR DECEMBER Il Motion passed unanimously. Wi. ti3aI1l [I) JeOI.I W .eUI.)I!1ti1(EIiIhIU [I] AJiS)Yl [I)K - None. EL auuii (ii :suief - None. 9. PLANNING COMMISSION ITEMS 11/13/17 -4- DRAFT Director of Business and Development Gry Bitel provided an overview of Planning Commission Application No. 2017-007 and advised the Planning Commission recommended approval of the applications at its October 26, 2017, meeting. It was noted this application was submitted by HOM Furniture Inc. and Gatlin Development Company for approval of revisions to PUD Amendment No. 8 of the 2011 Shingle Creek Crossing Planned Unit Development to include the storm water management improvements of a bio-infiltration pond and to provide flexibility to use alternate development concepts in the future marketing and development of future commercial pad sites identified in PUD Amendment No. 8 for varying building sizes (i.e., commercial retail, bank, restaurant, and office uses) with the provision that they meet the PUD 'S parking standards. Mayor Willson stated he is glad to see this movement and believes this is an appropriate use. Councilmember Graves moved and Councilmember Ryan seconded to adopt RESOLUTION NO. 2017-174 Regarding the Disposition of Planning Commission Application No. 2017-007 submitted by HOM Furniture, Inc. and Gatlin Development Company for Revisions to Planned Unit Development Amendment No. 8 to the 2011 Shingle Creek Crossing Planned Unit Development and Site and Building Plan for HOM Furniture Store (Located at 2501 County Road 10). Motion passed unanimously. PRELIMINARY PLAT FOR SHINGLE CREEK CROSSINGN6TH AI I) U UI [I]I (LOCATED AT 2545 COUNTY ROAD 10) Director of Business and Development Gary Eitel provided an overview of Planning Commission Application No. 2017-011 and advised the Planning Commission recommended approval of the applications at its October 26, 2017 meeting. It was noted this application was submitted by Gatlin Development Company requesting Approval of the Preliminary Plat for Shingle Creek Crossing 6th Addition (Located at 2545 County Road 10). If approved, a public hearing will be scheduled to consider easement vacations. 1. RESOLUTION NO. 2017-175 RE, GARDING THE DISPOSITION OF PLANNING COMMISSION APPLICATION NO. 2017-011 SUBMITTED BY GATLIN DEVELOPMENT COMPANY FOR APPROVAL OF THE PRELIMINARY PLAT FOR SHINGLE CREEK CROSSING 6TH ADDITION (LOCATED AT 2545 COUNTY ROAD 10) Councilmember Ryan moved and Councilmember Graves seconded to adopt RESOLUTION NO. 2017-175 Regarding the Disposition of Planning Commission Application No. 2017-011 submitted by Gatlin Development Company for Approval of the Preliminary Plat for Shingle Creek Crossing 6th Addition (Located at 2545 County Road 10). Motion passed unanimously. Planner and Zoning Administrator Ginny McIntosh provided an overview of the three components comprised within Planning Commission Application No. 2017-010. It was noted this application was submitted by Luther Company, LLP requesting approval of: 1) the Preliminary Plat for the Northtown Plaza 4th Addition; 2) an amendment to the 2008 Luther Planned Unit Development plans and documents; and 3) the establishment of a new Planned Unit Development for a proposed Luther Mazda and Mitsubishi dealership. Ms. McIntosh presented the Planning Commission's recommendation of approval of the applications at its October 26, 2017, meeting. Councilmember Ryan stated he appreciates staffs efforts to get some flexibility in the Sign Ordinance and asked whether the Luther dealership is satisfied with staffs recommendation. Ms. McIntosh answered in the affirmative, noting that was their request. Councilmember Ryan stated in that case, he is also satisfied. 11/13/17 -6- DRAFT Councilmember Ryan moved and Councilmember Graves seconded to adopt RESOLUTION NO. 2017-176 Regarding the Recommended Disposition of Planning Commission Application No. 2017-0 10 submitted by the Luther Company, LLLP, Requesting Approval of the Preliminary Plat for Northtown Plaza 4th Addition (Located at 4301, 4315, 4321, and 4435 68th Avenue North, and 6701 Brooklyn Boulevard). Motion passed unanimously. Councilmember Graves moved and Councilmember Ryan seconded to adopt RESOLUTION NO. 2017-177 submitted by the Luther Company, LLLP, Requesting an Amendment to the 2008 Luther Planned Unit Development (Located at 4301 and 4315 68th Avenue North and 6701 Brooklyn Boulevard) and Incorporation of 4321 68th Avenue North into the PUD with a New Zoning Classification of PUD/C2 (Planned Unit Development/Commerce). Motion passed unanimously. Councilmember Butler moved and Councilmember Graves seconded to adopt RESOLUTION NO. 2017-178 Regarding the Recommended Disposition of Planning Commission Application No. 2017-010 Submitted by the Luther Company, LLLP, for Approval of a New Planned Unit Development with New Zoning Classification of PUD/C2 (Planned Unit 11/13/17 -7- DRAFT Development/Commerce), and Site and Building Approval for a New Luther Mazda and Mitsubishi Dealership (Located at 4435 68th Avenue North). Motion passed unanimously. Mayor Willson extended the City Council's best wishes to the Luther organization. lEl,. ESiIJ[IJ lOa. CONSIDERATION OF TYPE IV 6-MONTH PROVISIONAL RENTAL LICENSES Mayor Willson explained the streamlined process that will now be used to consider Type IV 6- Month Provisional Rental Licenses. Mayor Willson polled the audience and asked whether anyone was in attendance to provide testimony on any of the rental licenses as listed on tonight's meeting agenda. Seeing no one coming forward, Mayor Willson called for a motion on Agenda Items 1 Oal through 1 Oal 1. lOal.4450 68TH AVENUE NORTH, BASSWOOD APARTMENTS 10a2.1510 69TH AVENUE NORTH 100.6243 FRANCE AVENUE NORTH 10a4.6413 JUNE AVENUE NORTH 106.4216 LAKEBREEZE AVENUE 10a6.RESOLUTION NO. 2017-179 APPROVING A TYPE IV 6-MONTH PROVISIONAL RENTAL LICENSE FOR 3401-3413 47TH AVENUE NORTH, RYAN LAKE APARTMENTS 10a7.RESOLUTION NO. 2017-180 APPROVING A TYPE IV 6-MONTH PROVISIONAL RENTAL LICENSE FOR 1425 55TH AVENUE NORTH 10a8,RESOLUTION NO. 2017-181 APPROVING A TYPE IV 6-MONTH PROVISIONAL RENTAL LICENSE FOR 2113 55TH AVENUE NORTH 100.RESOLUTION NO. 2017-182 APPROVING A TYPE IV 6-MONTH PROVISIONAL RENTAL LICENSE FOR 3000 62ND AVENUE NORTH lOalO.RESOLUTION NO. 2017-183 APPROVING A TYPE IV 6-MONTH PROVISIONAL RENTAL LICENSE FOR 5350 71ST CIRCLE lOall.RESOLUTION NO. 2017-184 APPROVING A TYPE IV 6-MONTH PROVISIONAL RENTAL LICENSE FOR 5642 LOGAN AVENUE NORTH Councilmember Ryan moved and Councilmember Graves seconded to approve the issuance of a Type IV six-month provisional rental license and mitigation plan for the following: 4450 68th Avenue North, Basswood Apartments; 1510 69th Avenue North; 6243 France Avenue North; 6413 June Avenue North; 4216 Lakebreeze Avenue; and adopt Resolution No. 2017-179 Approving a Type IV 6-Month Provisional Rental License for 3401-3413 47th Avenue North, Ryan Lake Apartments; Resolution No. 2017-180 Approving a Type IV 6-Month Provisional Rental License for 1425 55th Avenue North; Resolution No. 2017-181 Approving a Type IV 6- 11/13/17 -8- DRAFT Month Provisional Rental License for 2113 55th Avenue North; Resolution No. 2017-182 Approving a Type IV 6-Month Provisional Rental License for 3000 62nd Avenue North; Resolution No. 2017-183 Approving a Type IV 6-Month Provisional Rental License for 5350 71st Circle; and, Resolution No. 2017-184 Approving a Type IV 6-Month Provisional Rental License for 5642 Logan Avenue North, with the requirement that the mitigation plans and all applicable ordinances must be strictly adhered to before renewal licenses would be considered. Motion passed unanimously. 1 1,41 Councilmember Ryan reported on his attendance at the following and provided information on the following upcoming events: o October 26, 2017: Brooklyn Center Business Association Lunch o October 26, 2017: League of Minnesota Cities Human Rights and Racial Equity Forum o November 2, 2017: Brooklyn Center Lions Club Board Meeting o November 4, 2017: Lions Club Feed the Need Food Drive with CEAP o November 5, 2017: Lions Club Waffle Breakfast o November 10, 2017: Veterans Day Flag Raising Ceremony o November 13, 2017: Highway 252 PAC Meeting • November 14, 2017: Circulation Day at Earle Brown Elementary School • November 24, 2017: Hmong New Year Celebration Councilmember Graves stated her dad suffered from a dense stroke several days following the last Council meeting. She reported on her attendance at the following events: • October 28, 2017: Create the Network Youth of Color Healing Network November 1, 2017: African Community Resources Meeting o November 2, 2017: Hawthorn Huddle on Crime Prevention o November 4, 2017: Parent Event with Teens o November 8, 2017: We Day Celebration • November 9, 2017: Northside Neighborhood Council o November 11, 2017: Community Healing Event Councilmember Butler reported on her attendance at the following and provided information on the following upcoming events: o October 24,2017: MAC Meeting o October 27, 2017: Brooklyn Center Halloween Party • October 30, 2017: Northside Achievement Zone Luncheon • Vacation for several days last week This coming week: Crime Prevention meeting November 24, 2017: Hmong New Year Celebration Mayor Willson reported on his attendance at the following and provided information on the following upcoming events: • October 31, 2017: Rotary Luncheon 11/13/17 -9- DRAFT o November 6, 2017: Mayors Meeting on Blue Line Concerns o November 10, 2017: New Millennium Flag Raising o November 13,2017: Highway 252 PAC Meeting Mr. Boganey announced the City Council is invited to Crescent Cove, a home for children and hospice, for its ribbon cutting ceremony on November 16, 2017, and the public is invited to the Friday afternoon event. Councilmember Ryan moved and Councilmember Butler seconded adjournment of the City Council meeting at 7:43 p.m. Motion passed unanimously. 11/13/17 10- DRAFT MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL/ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA WORK. SESSION NOVEMBER 13, 2017 CITY HALL - COUNCIL CHAMBERS The Brooklyn Center City Council/Economic Development Authority (EDA) met in Work Session called to order by Mayor/President Tim Willson at 8:09 p.m. Mayor/President Tim Willson and Councilmembers/Commissioners Marquita Butler, April Graves, and Dan Ryan. Councilmember Kris Lawrence-Anderson was absent and unexcused. Also present were City Manager Curt Boganey, Deputy City Manager Reggie Edwards, Interim Community Development Director Michael Ericson, Deputy Director of Building and Community Standards Jesse Anderson, City Attorney Troy Gilchrist, and Carla Wirth, TimeSaver Off Site Secretarial, Inc. ,1,A '' :i !iU [I) a Interim Community Development Director Michael Ericson introduced the item, explaining Aeon is requesting the City pass a resolution supporting the Hennepin County Housing and Redevelopment Authority (HRA) to provide a direct contribution and file an affordability covenant on Lynwood Pointe Apartments. He provided background information related to this item and explained this action would allow the property to apply for 4D tax classification payable in 2019, which would provide for reduction of approximately $6,422 in property taxes. Aeon sees the low-income classification as being critical to the long-term viability of the Towers portfolio as affordable housing. Mr. Ericson stated Aeon also owns and manages The Crest Apartments, and the Police Department is concerned with the 48% increase in police calls to that location. Mayor/President Willson stated this increase in police calls to The Crest Apartments is concerning as the City worked to save that property for affordable housing. He stated he is glad Aeon can take on Lynwood Pointe Apartments but conveyed the City Council has deep concerns with the number of calls, consumption of staff and Police Department time, and safety of residents. Rick Kahn, 602 North 6 th Street, Minneapolis, representing Aeon, stated with respect to Lynwood Pointe Apartments, that property will not be managed by Aeon but by Steven Scott Management who also manages the Earle Brown Farm apartments, which does not have any of 11/13/17 -1- DRAFT these issues that have arisen at The Crest Apartments. He stated Aeon decided to bring on Steven Scott to do a better job of taking on these problems. Mr. Kahn stated nothing will change in the nature of the residents living at Lynwood Pointe and in the past, this has not been a problem property. With respect to The Crest Apartments, Aeon has been around for 31 years and owns almost 4,000 units, so the increase in police calls is not acceptable from Aeon's perspective. Mr. Kahn explained that Aeon is in the process of changing the hours for the security company to be on site, improving the quality of staff on site, and working proactively with the Brooklyn Center Police Department to address their concerns. Mr. Kahn stated it is a matter of pride to the extent that Brooklyn Center is not satisfied with the job Aeon is doing with property it owns that will forever damage Aeon's ability to do the things they want to do throughout the region. Mr. Kahn stated Aeon expects to be highly engaged with City staff and the Police Department to create a plan and execute that plan to bring the number of calls down to what the City Council finds to be reasonable. Mr. Kahn stated Aeon pledges to do that. Mayor/President Willson stated Brooklyn Center has a history of dealing with apartment complexes in various states so he is glad to hear Aeon is on top of this issue and willing to take action as he does not want to see Aeon cast in a negative light. Mayor/President Willson stated he believes in affordable housing that is safe and secure. Mayor/President Willson asked Mr. Boganey if there was a process for staff to be in contact with and alert property owners when there is a spike in police calls or a trend is noticed. Mr. Boganey stated the general course is to stay in contact with all apartment owners and on a monthly basis provide information on police activities on the site. He stated that should have happened with this property so the management company would be aware of the increase in police calls. Mr. Boganey stated he does not know the nature of these particular police calls, noting sometimes they do not rise to the action of suspension. Mayor/President Willson stated he is not opposed to a higher number of calls if medically related, but documentation before the City Council/EDA tonight mentions some things that can be addressed. He stated he is not opposed to working with Aeon on the Lynwood Pointe properties or supplying a letter and lauds their efforts to provide affordable housing. Councilmember/Commissioner Ryan asked about the present condition of Lynwood Pointe. Mr. Kahn stated extensive third-party inspections were conducted of the structure, mechanical systems, every single apartment, and no major repairs were required. He stated this property was built in 1969 and until this purchase, was owned by the same family that built it so the building and units were cared for remarkably well and are in excellent condition. Councilmember/Commissioner Ryan asked about the anticipated rent reduction if this goes forward. Mr. Kahn explained the purpose of the tax classification is to avoid rent increases, but for this classification would require a rent increase of about $50 a month. However, by getting this tax reduction, Aeon does not have to increase the rents that would be required to balance income and expenses. Councilmember/Commissioner Ryan reviewed the rents for a one-bedroom and a two-bedroom unit. Mr. Kahn stated other properties like Lynwood Pointe have been purchased, minor 11/13/17 -2- DRAFT improvements made, and then rents increased by 20-30%, which displaces residents. He explained Aeon's intent is to trend rent increases with the rate of inflation. Councilmember/Commissioner Ryan stated he appreciates rents will be held down to the extent possible. He asked whether Brooklyn Center can anticipate the property will be properly maintained because the funds needed to maintain the property come from rents and if rents are held back, it also impacts what can be done for improvements. Mr. Kahn stated Freddie Mac will have a 10-year mortgage and requires a substantial deposit to pay for major improvements to the property and those reserves were established at a very high level. Also, Aeon is a non-profit organization so there is no desire to increase rents to increase profit. Mr. Kahn stated the intent is for Aeon to own its properties for the next 100 years and Aeon will spend money to maintain the properties so they are proud to have their name on the property for the next 80 and 100 years. He noted in this case, there would be just two ownership names on this property and ownership stability correlates to highly maintained properties. Councilmember/Commissioner Ryan stated he has experience with property management and appreciates the importance of good maintenance and management. He echoed the comments of Mayor/President Willson that police calls need to be aggressively addressed. Councilmember/Commissioner Graves voiced her support to direct staff to write the letter. Mr. Boganey asked whether there were plans to address the exterior of the building. Mr. Kahn stated the cedar siding exterior will not be changed in a dramatic fashion, such as residing or a change in how it looks. He stated if the City is concerned with anything about the exterior they will gladly meet with staff to discuss those concerns. Mr. Boganey noted the building appears to be a bit worn. Mayor/President Willson agreed but noted the intent is to maintain affordable rents, which may not generate enough income to pay for a change in the exterior; however, the City wants to assure the property is properly maintained. Councilmember/Commissioner Ryan stated his support is contingent upon exterior improvements so this structure looks like it is on the same plane in appearance and value as the City's other apartment communities. The majority consensus of the City Council/EDA was to support Hennepin County HRA providing a direct contribution and file an affordability covenant on the Lynwood Pointe Apartment complex located at 6915 Humboldt Avenue North and direct staff to prepare a resolution of support for consideration at a future City Council meeting. Councilmember/Commissioner Graves moved and Councilmember/Commissioner Butler seconded adjournment of the City Council/Economic Development Authority Work Session at 8:31 p.m. 11/13/17 -3- DRAFT Motion passed unanimously. 11/13/17 -4- DRAFT City C©il Ada llrn N©0 6b II1i1U[SJ I NI I DWA U I Dk'4 0) 1I I1IJhA I DATE: November 20, 2017 TO: Curt Boganey, City Manag" FROM: Rozlyn Tousignant, Deputy City Clerk SUBJECT: Licenses for City Council Approval Recommendation: It is recommended that the City Council consider approval of the following licenses on November 27, 2017. Background: The following businesses/persons have applied for City licenses as noted. Each business/person has fulfilled the requirements of the City Ordinance governing respective licenses, submitted appropriate applications, and paid proper fees. Applicants for rental dwelling licenses are in compliance with Chapter 12 of the City Code of Ordinances, unless comments are noted below the property address on the attached rental report. CHRISTMAS TREE SALES PQT Company dba: Rum River Tree Farm GASOLINE SERVICE STATION Royalty & Sons, Inc. MECHANICAL Heating & Cooling Design Inc. Liberty Comfort Systems MH Plumbing, Inc. RENTAL See attached report. TOBACCO RELATED PRODUCT Burr St. Market Inc. dba: Quick Shop Royalty & Sons, Inc. Walmart #5625 5040 Brooklyn Blvd 6044 Brooklyn Blvd 13234 Urbank CtNE, Blame 627 East River Rd, Anoka 6725 277th Ave NW, Isanti 5808 Xerxes Ave N 6044 Brooklyn Blvd 1200 Shingle Creek Crossing Mission: Eiisiir!iig an attractive, clean, safe, inclusive community that enhances the quality of life for all people amid preserves the public trust Ei1SJ[iJ I fl I Ik'A UYA I økA(I) 1I )1IJtI Rental License Category Crit ri iI Iicy — Adopted by City Co s iii I t0I01ti Property Code and NuisLViolations Criteria License Category Number of Unitsty Code Violations per (Based on Property Inspected Unit Code Only) _______ Type 1 - 3 Year 1-2 units 0-1 0-0.75 Type 11-2 Year Greater than 1 but not more than 4 =uinits Greater than 0.75 but not more than 1.5 Type III - 1 Year Greater than 4 but not more than 8 I Type IV —6 Months 11-2 units Greater than 8 License Number of Units Validated Calls for Disorderly Conduct Category Service & Part I Crimes (Calls Per Unit/Year) No Category 1-2 0-1 Impact 3-4 units 0-0.25 5 or more units 0-0.35 IMEESSINEEW Decrease 1 1-2 Greater than 1 but not more than 3 Category 3-4 units Greater than 0.25 but not more than 1 5 or more units Greater than 0.35 but not more than 0.50 Decrease 2 1-2 Greater than 3 Categories 34 units Greater than 1 5 or more units Greater than 0.50 Budget Issues: There are no budget issues to consider. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust =30 H0)<0 = C)—0)H F- CD CD0) C)-'0) H, H,CD C')CD0)=3CL * * *= * 02 2.2 CD m 0) CD Co Lf)C) CD E0 FCD D- CD0 V'- C 00 C0 () 0 CD cO) : 0 <= -' 00 <CDC—'—C)u 0 CDC =3uj CL -. -< -o2 -'atI CD -<CD -= CD 2L 0 E.CD fn u-i c —i —i o u-w o CD CD 4 NJ I-A CO Cii —i NJ -J C -.-'0NJCiiNJ4WNJCDC-C o-J t.i.91 C =fl 0rnrnc5a 0)0)0.)CD CD w CD Gi 0LnLn -2 >0<><0 CD 0>,a-CD C o)>>'<m 0.CD >-CD=3=3 z zz -03 II) CDC') (/iI_fl LD t.nNJ HCD CDl\J,co -< aq9 M M Uq m M C CECD CD CD CD (DID CD CD CD l)Q CIQ m0)ii0.),i0)-ii0)1i0)-n0)-n0)-n0)-n0) ..VI V - 33 3333333 CD UI 30 30 30 3)30 30 30 30 30 30 3) _______ 0 30 CD CD CD CDD CDD CD CD CD CD CD3 CD 'CD- CD CD CD CD CD CD CD CD CD CD CD 2.CD 0 0)0)0)0)0)0)0)0)0)0)0)_0) -- c 0)0 CD 0 CD —0)0)3 T CD-<30 0fl CD ><C0 C)-'- a-CD =3 3 o -CD cOC-n Ln G')O')COW CD O)CDtI 3< -CD DCD===—=—=—=-CD CMCD__0n-a CLZ C C C 0 C C C C 0 ID(D aq Hm-< i:;. 5•.23 CD j-=(PD—*C')*CD tI C) CD-—=CD *V) 0CD* (C) City C©llh1dII Agenda ]Ifrm N0 6© [II1Si[iJ I N N MkTA Uh'A I M (I) 1a1I I1IJ'A I DATE: November 27, 2017 TO: Curt Boganey, City Manage THROUGH: Michael Ericson, Interim Community Development Direct*17 FROM: Jesse Anderson, Deputy Director of Building and Community Standards SUBJECT: Resolution Granting Approval to the Hennepin County Housing and Redevelopment Authority to Provide a Direct Contribution and File an Affordability Covenant on the Lynwood Pointe Apartment Complex PID Number: 26-119-21-44-0070 Recommendation: It is recommended that the City Council consider approval of the attached resolution granting approval to Hennepin County Housing and Redevelopment Authority to provide a direct contribution and file an affordability covenant on the Lynwood Pointe Apartment Complex. Background: At the November 13, 2017 City Council Work Session the Council discussed the proposed action by Hennepin County HRA and directed staff to prepare a resolution approving the activity. Aeon is requesting the City of Brooklyn Center pass a resolution supporting the Hennepin County Housing and Redevelopment Authority to provide a direct contribution and file an affordability covenant on Lynwood Pointe Apartment Complex. This action would allow the property to apply for 4D tax classification payable in 2019. This tax classification would provide for a reduction of approximately $6,422 in the property taxes for the property. Aeon sees the Low-Income classification as critical to the long-term viability of the Towers Portfolio as affordable housing. Budget Issues: There are no budget issues to consider. Strategic Priorities: o Resident Economic Stability 1'Jissioi: Ensuring an attluLlive, clean, safe, inclusive community that enhances the quality of life for al/people mu! preserves the public trust Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION GRANTING APPROVAL TO THE HENNEPIN COUNTY HOUSING AND REDEVELOPMENT AUTHORITY TO PROVIDE A DIRECT CONTRIBUTION AND FILE AN AFFORDABILITY COVENANT ON THE LYNWOOD POINTE APARTMENT COMPLEX PID NUMBER: 26-119-21- 44-0070 WHEREAS, the property PID 26-119-21-44-0070 is located in the City of Brooklyn Center; and WHEREAS, the property PID 26-119-21-44-0070 is a rental property and was purchased by Aeon and was financed by two funds designed to preserve naturally occurring affordable housing: the GMHF NOAH Impact Fund; and the Enterprise Multifamily Opportunity Fund; and WHEREAS, Hennepin County Housing and Redevelopment Authority Board has approved an action to provide a direct contribution to the Lynwood Pointe Apartments PID number 26-119-21-44-0070. NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota that: 1. That the Brooklyn Center City Council Grants approval to the Hennepin County Housing and Redevelopment Authority to provide a direct contribution and file an affordability covenant on the Lynwood Pointe Apartment Complex PID Number 26-119-21-44-0070, November 27, 2017 Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: DATE: November 13, 2017 TO: Curt Boganey, City Man THROUGH: Michael Ericson, Interim Community Development FROM: Jesse Anderson, Deputy Director of Building and Community Standards SUBJECT: Approving support to the Hennepin County Housing and Redevelopment Authority to provide a direct contribution and file an affordability covenant on the Lynwood Pointe Apartment Complex Recommendation: It is recommended that the City Council consider providing direction to staff regarding Hennepin County Housing and Redevelopment Authority providing a direct contribution and file an affordability covenant on the Lynwood Pointe Apartment Complex located at 6915-25 Humboldt Ave N. Background: Aeon is requesting the City of Brooklyn Center pass a resolution supporting the Hennepin County Housing and Redevelopment Authority to provide a direct contribution and file an affordability covenant on Lynwood Pointe Apartment Complex. This action would allow the property to apply for 41) tax classification payable in 2019. This tax classification would provide for a reduction of approximately $6,422 in the property taxes for the property. Aeon sees the Low-Income classification as critical to the long-term viability of the Towers Portfolio as affordable housing. Lynwood Pointe Apartments is located at 6915-25 Humboldt Ave N and has 2 buildings consisting of a total of 50 units. There are 8 one bedroom units and 42 two bedroom units. The property was a Type 1 .- 3 year rental license with the previous owner. The rental license application was received on 11/9/2017. Aeon has stated that the property will be managed by Steven Scott Management. Steven Scott Management manages Earl Brown Farm apartments in Brooklyn Center. Aeon owns and manages The Crest Apartment in Brooklyn Center. Recently, the police department has had some difficulties with The Crest Apartment owned and managed by Aeon. The Police Department generally finds that management at The Crest is receptive and willing to work with the Police Department. However, it seems that some issues are often being missed. There have been recent concerns with the security company that Aeon uses. Within the past month Police Department staff met directly with their security manager to discuss ongoing complaints from tenants that security staff are not doing their job. The security rarely patrols the I premises, and is often found in the lobby watching TV. They frequently allow entry for guests not associated with the apartment and does not provide service at hours that would be most beneficial. (35 hours a week spread out over seven 5 hour shifts). Therefore, it is believed that this has resulted in an increase in police calls for service at the property. Service calls have included fights, drunken calls, assaults, etc. In 2017 there have been 315 calls for service from 01/01/2017 through 11/9/2017. This is a 48% increase compared to the same time in 2016 (213 CFS). In May of 2017, Greater Minnesota Housing Fund (GMHF) closed on a $25 million fund to acquire and preserve affordability of naturally occurring affordable housing (NOAH) in the Twin Cities. In October, the nonprofit developer Aeon purchased a portfolio often naturally occurring affordable housing buildings. The equity for this $77 million acquisition (the "Towers Portfolio") was financed by two funds designed to preserve naturally occurring affordable housing: the GMHF NOAH Impact Fund; and the Enterprise Multifamily Opportunity Fund. The Towers Portfolio consists of 768 units, 686 of which are located in Hennepin County. The properties are located in Bloomington (6), Brooklyn Center (1), New Hope (2), and St. Paul (1). Taxable housing developments are genrally classified as "Apartment" or "Low-Income" for property tax purposes. While the effective tax rate for Apartment property might be around 1.2% of assessed value, the effective rate for Low-Income housing depends on the assessed value per unit and ranges from 0.4% to 0.7% of assessed value. To qualify for the "Low-Income" classification there must be a direct government investment documented by rent restrictions filed by the government entity. The total tax levy amount would not change; therefore there would not be a reduction in revenue, However, the taxes would be redistributed to other properties. While Hennepin County contributed to the preservation of the "Towers Portfolio" through the GMHF NOAH Impact Fund, the investment does not meet the direct investment standard and the properties are therefore not eligible for the "Low-Income" classification without the direct contribution. The Bloomington NRA and the city of St. Paul have agreed to provide similar direct assistance for the seven "Towers" buildings in those cities, Hennepin County Housing and Redevelopment Authority will provide assistance on buildings in Brooklyn Center and New Hope. The NOAH Impact fund requires affordability for 15 years and the Enterprise Multifamily Opportunity Fund requires affordability for 7 years. The requested direct investment from Hennepin County will secure rents at the Lynwood Pointe Apartments to remain affordable at 60% of area median income (AMI) for 30 years. Policy Issues: o Are there questions or comments you would like the Housing Commission to provide direction on? o Should staff prepare a resolution of support for a future City Council Meeting? Strategic Priorities: 0 Resident Economic Stability zicon November 3, 2017 Jesse Anderson Deputy Director/HRA Soeciahst City of 13rOOkhn Centel 6301 Shingle Creek Pkwy Flronldyn Center, MN 55430 Ftc: Preservation of Lynwood Poirrte Apart'nents Jesse, On October 31, 2017 Aeon acquired the Towers Potfolin, a 768unit NON I portfolio consisting of ten properties and 768 units throughout the metro. ane of these properties, Lynwood Palate, has a total of 50 units and is located in Brooklyn Center. Aeon crafted a financing plan to close on the Towers Portfolio within the required timoframe; however, a key piece of this model is to apply for a 4d Property lax Classification for alt 10 properties. The City of Bloomington IIRA acted on October 10'h to commit $75,000 to their 6 properties ($12,500 per property) and the City of St. Paul HRA acted on October 11 0 to commit $40,000 to their single lowers property. As we previously discussed, Brooklyn Center currently does not currently have a pool of funds available to commit towards Lynwood Pointe, so we are instead working with Hennepin County to secure a $5,000 loan for the property. A requirement of this loan would be lot Aeon to enter into a Declaration of Restrictive Covenants with I tennepin County that would require Lynwood Pointe to renrain affordable to households at or below 60% of the Area Median Income for the next',, 0 years. This would then allow Aeon to apply for a 4d Property Tax Classification, keeping expenses contained and rents stabilized, For reference, the rents at the property are already below the 60% AM! mark, We look forward to working more closely with Brooklyn Center and Hennephi County as the new owners of the property to not only help preserve these important affordable apartment homes, but help keep them as quality assets for file long term. In summary, I am asking for the City of Brooklyn Center's support for the proposed Hennepin County funding to be dedicated to Lynwood Pointe, I look forward to discussing this with you at your earliest convenience, if you have any questions, please do not hesitate to call. 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Cty (C©ll Agendn llrn N©0 k iEI1IJ[ii Ifli U MT4 LU IhYAO] t1I $1lJ'AI DATE: November 27, 2017 TO: Curt Boganey, City Manage FROM: Nathan Reinhardt, Finance Director P4& SUBJECT: Resolution Adopting Amendments to the Fund Balance and Classification Policy of the Brooklyn Center City Council Code of Policies Recommendation: It is recommended that the City Council consider the adoption of amendments to the City's Fund Balance and Classification policy. Background: The finance division has been working on a policy that updates current fund balance and capital project policies and combines those policies into one single policy. To simplify the process the policies were updated and presented to City Council for consideration in four different resolutions over the last few months. All four separate resolutions were approved by the City Council. The City Council is now being asked to consider an action to combine the previously amended policies into a single, "Fund Balance and Classification Policy". The following policies listed in Section II of the General Policies will be combined with Financial Policies Section 2.23 Fund Balance and Classification Policy. Financial Policies 2.21 J. Capital Improvements Funding Policy Budget 2.41 Capital Improvements and Special Assessments Construction Fund Expenditure Policy 2.42 Capital Reserve Fund Policy The proposed resolution will restructure the City Council Code of Policies, but will not modify any existing policy. The proposed Fund Balance and Classification policy and previous policies have been included for reference. Strategic Priorities: o Safe, Secure, Stable Community Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for allpeople and preserves the public trust Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION ADOPTING AMENDMENTS TO THE FUND BALANCE AND CLASSIFICATION POLICY OF THE BROOKLYN CENTER CITY COUNCIL CODE OF POLICIES WHEREAS, the City Council of the City of Brooklyn Center adopted an amended Fund Balance and Classification Policy on September 11, 2017 included in the City Council Code of Policies; and WHEREAS, revisions to the Financial Policies Section 2.23 Fund Balance and Classification Policy have been reviewed by the City Council; and WHEREAS, Financial Policies Section 2.21 J. Capital Improvements Funding Policy, Budget Policies Section 2.41 Capital Improvements and Special Assessments Construction Fund Expenditure Policy, and Budget Policies Section 2.42 Capital Reserve Fund Policy shall be removed and incorporated into Financial Policies Section 2.23 Fund Balance and Classification Policy. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota that Financial Policies Section 2.23 Fund Balance and Classification Policy attached hereto as Exhibit 1 be incorporated into the Code of Policies and hereby adopted. November 27, 2017 Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member 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. FINANCIAL POLICIES 2.23 Fund Balance and Classification Policy Policy Objective: To provide a definition of the various City funds and to provide direction for classifying the various components of fund balance to indicate the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the fund can be spent. Governmental Funds Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions provide categories and terminology used to describe the components of fund balance in the governmental funds (but it does not apply to the proprietary or fiduciary funds). The City's governmental funds include; General Fund, Special Revenue Funds, Debt Service Funds and Capital Projects Funds. Definitions (as they apply to Governmental Funds under GASB 54): Fund balance - the difference between assets and liabilities reported in a governmental fund. Nonspendable fund balance - amounts that are not in a spendable form (e.g., prepaid items and inventories of supplies). Resources that must be maintained intact pursuant to legal or contractual requirements are also considered nonspendable. Restricted fund balance - amounts subject to externally enforceable legal restrictions (creditors, grantors, contributors, and by law through constitutional provisions or enabling regulations). Unrestricted fund balance - the total of committed fund balance, assigned fund balance, and unassigned fund balance, as described below. Committed fund balance - amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decision-making authority (City Council). Commitments may be changed or lifted only by the City Council taking the same formal action that imposed the constraint originally. The City Council must take action on these commitments before year end. Assigned fund balance - amounts a government intends to use for a specific purpose; intent can be expressed by the government body or by an official or body to which the governing body delegates the authority. The City Council authorizes the City Manager or the City Manager's designee to assign fund balance that reflects the City's intended use of those funds for the purposes of reporting the City's financial position. Unassigned fund balance - amounts that are available for any purpose in the general fund. Only the General Fund can report a positive amount of unassigned fund balance. Prioritization of fund balance use - when both restricted and unrestricted resources are available for use, it is the City's policy to first use restricted resources and then use unrestricted resources as they are needed, unless otherwise required by the restricting authority. When unrestricted resources are available for use, it is the City's policy to use resources in the following order: 1) committed 2) assigned 3) unassigned. General Fund The General Fund is established to account for all revenues and expenditures which are not required to be accounted for in other funds. Revenue sources include property taxes, license and permit fees, fines and forfeits, charges for services, intergovernmental revenues, investment interest earnings, and transfers. The General Fund's resources finance a wide range of functions including the operations of general government, public safety, and public works. The City shall manage its cash flow needs by having a target unassigned General Fund balance at the close of each fiscal year of 50 to 52% of the next year's General Fund operating budget. Unassigned General Fund monies that are not required for cash flow purposes may be transferred into other funds as may be appropriate or needed during the fiscal year. It is specifically anticipated that transfers will be made to the Street Reconstruction Fund, Capital Improvements Fund, and the Technology Fund when operating results generate a surplus of actual revenues over actual expenditures to serve as a recurring source of funding for those three funds. Special Revenue Funds Special revenue funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. Governmental accounting standards require that substantial inflows of revenues into a special revenue fund be either restricted or committed in order for the fund to be considered a special revenue fund. a.Housing and Redevelopment Authority (HRA) Fund - This fund was established to account for housing and redevelopment projects within the City of Brooklyn Center. The HRA has the authority to levy an ad-valorem property tax levy, which is the primary funding source for the Economic Development Authority. b.Economic Development Authority (EDA) Fund - This fund was established to account for the development related activities in the City of Brooklyn Center. The EDA generates the funding to accomplish the development projects from grants, BRA property tax levy, or transfers from other funds of the City. c.Community Development Block Grant (CDBG) Fund - This fund was established to account for the collection of CDBG grant funding for related projects within the City. d.Police Forfeitures Fund - This fund was established to account for the proceeds from property seized by Police Department personnel. i.The City receives property and money through law enforcement seizures under Federal Law 21USCS Section 88 1(e) and Minnesota Statutes, Sections 609.53 1- 609.5317. 169A.63. ii.The City will use proceeds from these seizures as defined in State law and Department of Justice guidelines. Forfeited property and cash will be used: a.Only for law enforcement purposes, or; b.Only as a supplement to budgeted funds, or; c. Not as a source to supplant ordinary operating expenses. iii. The City will establish procedures to ensure the safekeeping of forfeited property and funds until such time as they are used for approved purposes. e.Tax Increment Funds - These funds were established to account for the collection of tax increment generated revenues for parcels within the districts. These funds are used to finance the various redevelopment activities with the Districts. f.City Initiatives Grant fund - Revenues and expenditures from recurring grants or donations received from outside entities (federal, state, local) are accounted for in the fund. Debt Service Funds Debt service funds account for payments of principal and interest on City debt issuances. Fund balances are considered restricted as they are resources accumulated for principal and interest payments maturing in future years. Capital Project Funds Capital project funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. Subledger codes are used to differentiate spending on multiple projects within individual capital project funds. Capital improvements should be included in the City's 15 year Capital Improvement Plan which is adopted by City Council at a public hearing on an annual basis. Role of the Financial Commission - If a review of an expenditure is requested by the City Council from the Financial Commission, the Financial Commission will respond on the basis of the following questions: 1.Does the expenditure comply with the Fund Balance and Classification Policy? 2.Is the expenditure appropriate considering the financial conditions of the City? a. Capital Improvements Fund - Large capital expenditures for municipal buildings, furnishings, equipment, computer/radio systems, park and trail improvements, and capital projects made possible through outside funding sources, are accounted for in the Capital Improvements Fund. i. Funding Sources: a.Each year, following the completion of the annual audit (typically July) the year- end fund balance of the General Fund will be reviewed for surplus operating funds. The audited year-end General Fund unassigned fund balance that exceeds 52% of the next year's General Fund operating budget will be transferred to the Capital Improvements fund. b.Each year, following the completion of the annual audit (typically July) the year- end cash balance of the Brooklyn Center Liquor operations will be reviewed for surplus operating funds. The audited year-end Liquor Fund unrestricted cash balance that exceeds three and a half months of the next year's budgeted operating expenses and one year of budgeted capital equipment needs will be transferred to the Capital Improvements fund. c.On an annual basis, the City will receipt the greater of $650,000 (or the full amount if less than $650,000) of Local Government Aid (LGA) received OR 50 percent of total LGA. d.Project cost sharing grants from Regional, County, State or Federal governments. e.Tax increment funds as applicable f.Allocated investment earnings based on the fund's cash balance Any remaining fund balance at year-end in the Capital Improvements Fund will be carried forward to fund future capital improvement projects as identified in the City's Capital Improvement Plan. ii. Use of Funds: a.The capital improvements fund may be used, pursuant to this policy, for expenditures on capital equipment, infrastructure improvements and construction, and similar projects having an aggregate value in excess of $50,000. The types of expenditures contemplated by this policy include projects such as: • building construction, repair, reconstruction, and remodeling, including component systems for heating, ventilation, and air conditioning • equipment and furnishings, including furniture, lights, and communications cabling • park landscaping, shelter, and improvements • computer, radio, and telephone systems • city contribution portion of cost-share or grant-funded infrastructure projects b.The expenditures from the capital improvements fund are to be used for governmental capital needs and not for enterprise fund capital needs, except as the general governmental portion of a joint project for both governmental and enterprise purposes. c. Additionally, the capital improvements fund may be used to provide loans to other funds maintained by the City in accordance with the City's special assessment and internal loan interest rate policy. Authority to Spend Expenditures meeting the above criteria may be funded through the capital improvements fund based on the following authority limits: a.Expenditures from $0 to $50,000: Not eligible for funding from the capital improvements fund. Funding is required through the general fund operating budget. b.Expenditures from $50,001 to $300,000: The City Council may, through simple majority, approve these expenditures. Expenditures over $300,001: Following a public hearing, the City Council may, through a 4/5ths majority, approve expenditures in this category. iv. Insurance Items Expenditures for repair or replacement of items that are to be reimbursed by insurance proceeds may be accounted for and authorized by the Finance Director. b. Municipal State Aid Construction Fund -In 1957 the Minnesota legislature authorized the establishment of a Municipal State Aid Streets system in all Minnesota cities with a population of 5,000 or greater not to exceed 20 percent of a city's improved local mileage. The City receives an annual allocation of State Aid for streets in two pieces: i.Annual Maintenance Allocation - may be spent on crack sealing, seal coating, signs and striping on streets within the designated MSA system. ii.Annual Construction Allocation - these funds are tied to specific projects that are approved by MNDOT which are then reimbursed over time via an annual allocation. Depending on need and availability of reimbursement funds, the construction funding can lag several years behind the completion of eligible projects in this fund. c. Capital Reserve Emergency Fund While the City carries property and casualty insurance, the City may need additional funds beyond insurance proceeds in the event of natural or other disaster impacting its buildings and their contents, as well as other improvements to real property. Also, unanticipated failure of buildings or improvements to buildings may require immediate expenditure of funds for repair or replacement that are not covered by insurance. The funds placed in the Capital Expenditure Reserve Fund are not to be considered a source for planned or recurring capital needs, but only to deal with emergency needs as described due to damage, loss, or failure of existing buildings and other improvements to real property. i.Use of Funds a. Funds may be expended from the Capital Expenditure Reserve Fund for the repair or replacement of buildings or other improvements to real property and their contents where the repair or replacement is necessitated by damage to such buildings or other improvements to real property and their contents due to: • Natural disaster such as a tornado, storm, flood, or earthquake • Fire, vandalism, terrorism, explosion, building or component collapse ii.Authority to Spend Expenditures meeting the criteria for the use of funds may be funded through the Capital Expenditure Reserve Fund upon Resolution of the City Council finding that the criteria for expenditure have been met and that the use of funds would not otherwise be covered by insurance proceeds, except that the City Council may authorize the use of Capital Expenditure Reserve Funds in anticipation of the receipt of insurance proceeds providing that such funds used in anticipation of insurance proceeds are repaid to the Capital Expenditure Reserve Fund from such insurance proceeds. iii. Fund Balance The Capital Expenditure Reserve Fund shall be established at $1,000,000. Such fund balance shall increase each year by the interest earned on the fund balance. In the event that the fund would drop below $1,000,000, the City Manager shall prepare a plan for restoring the balance to $1,000,000. The fund balance target should reflect an analysis of the City's uninsured exposure to the losses identified in this policy. Such plan, as well as whether the balance should be made higher or lower, shall be reviewed by the Financial Commission and City Council. The plan adopted by the City Council shall be included in the budgetary process if the fund's balance is not restored by transfer of existing funds from another fund, such as the Capital Improvement Fund. d. Special Assessments Construction Fund - The Special Assessments Construction Fund accounts for the resources and expenditures required for the acquisition and construction of infrastructure improvements that are financed wholly or in part by special assessments levied against benefitted properties. Only those expenses that will be reimbursed via special assessment revenues or paid for from bond proceeds of which the underlying bonds will be repaid solely from special assessments qualify for reporting in the Special Assessments Construction Fund. i. The special assessments construction fund may be used, pursuant to this policy, for expenditures on infrastructure improvements and similar projects having an aggregate value in excess of $50,000. The types of expenditures contemplated by this policy include projects such as: a.street repair, replacement, and construction. b.bridge rehabilitation and construction c. water, sanitary sewer, storm drainage, and street light utility improvements ii. Expenditures meeting the above criteria may be funded through the Special Assessments Construction fund based on the following authority limits: a.Expenditures from $0 to $50,000: Not eligible for funding from the Special Assessments Construction fund. Funding is required through the general fund operating budget. b.Expenditures from $50,001 to $300,000: The City Council may, through simple majority, approve these expenditures. c. Expenditures over $300,001: Following a public hearing, the City Council may, through 4/5ths majority, approve expenditures in this category. e. Street Reconstruction Fund - This fund was established to provide funds and to account for the expenditure of such funds, for major street infrastructure improvements. The accumulation of funds to provide for such improvements is an attempt to reduce future debt issuance. i. Sources of Funds a.Franchise fees collected from CenterPoint Energy and Xcel Energy b.Bond proceeds to be repaid with property tax levies ii. Uses of Funds a. Street reconstruction projects performed in accordance with the City's 15 year capital improvement plan, specifically neighborhood reconstruction projects and mill and overlay projects as necessary. f.Technology Fund - The Technology Fund accounts for new technology improvements and the replacement of existing technology and capital items necessary to increase productivity and operating efficiencies. The majority of expenditures in this fund relate to technology infrastructure maintenance and expansion such as servers, switches, wireless access points, surveillance and audio visual technology. Minor technology purchases such as desktop and laptop replacements, monitors, etc. are not permitted in this fund; rather they are coded to the fund and department that utilizes them. g.Additional Capital Project Funds -New capital project funds will be created as necessary for projects that warrant separate presentation due to their scope or complexity of funding sources. Enterprise Funds Enterprise Funds are those programs provided by the City which generate their own revenues for operations and capital maintenance. In some cases these funds are expected to generate enough revenue to support capital projects in other funds, thereby reducing the need for use of the property tax levy. The City of Brooklyn Center operates three Enterprise Funds: a.Brooklyn Center Liquor b.Centerbrook Golf Course c. Earle Brown Heritage Center Capital improvement projects in these enterprise funds that exceed a total anticipated cost of $25,000 should be included in a Capital Improvement Plan which is annually adopted by City Council in conjunction with the budget process. Public Utility Funds The Public Utility Funds track the revenues and expenditures for fee based public utility services provided by the City. These funds operate on their own ability to generate revenues and receive no property tax support. Each year the City Council reviews the operations of these funds and sets rates for each service based on the needs for general operations, capital spending and debt service payments. The public utilities include: a.Water Utility Fund b.Sanitary Sewer Fund c.Storm Sewer Fund d.Streetlight Utility Fund e. Recycling Utility Fund Capital improvement projects in these Public Utility funds that exceed a total anticipated cost of $50,000 should be included in the City's 15-year Capital Improvement Plan which is annually adopted by City Council in conjunction with the budget process. Capital Expenditures may be funded through the Public Utility Funds based on the following authority limits: a. Expenditures from $50,001 to $300,000: The City Council may, through simple majority, approve these expenditures. b.Expenditures over $300,001: Following a public hearing, the City Council may, through a 4/5ths majority, approve expenditures in this category. c. Emergency spending is addressed in the City's purchasing policy and those situations may be exempt from this requirement. Internal Service Funds Internal Service funds exist to centralize certain services and then allocate the cost of those services within the government. The City of Brooklyn Center internal services funds include: a.Central Garage - The Central Garage is used to fund replacement, maintenance, fueling, and insurance of the City's fleet of vehicles through inter-fund charges to departments. Vehicle replacement costs are updated each year to ensure replacement costs being charged to departments are sufficient to purchase a new vehicle when the useful life has been reached. Replacement equipment and new equipment should be identified and approved by council during the budget process. If new or replacement equipment is needed unexpectedly subsequent to the budget process for that year, the items should be presented to and approved by council prior to purchase. b.Employee Retirement Benefit - This fund accounts for certain health care insurance benefits for City employees who retire before age 65. Substantially all of the City's full-time police and fire employees and all other full-time employees hired before July 1, 1989 may be eligible for those benefits from the time they qualify for an unreduced PERA pension, until they reach age 65 or become eligible for Medicare. In the event that future costs would exceed funds available, other funds would be charged for the costs associated with their employees. c.Employee Compensated Absences - This fund accounts for payment of unused vacation and vested sick leave benefits, and the allocation of such costs to the respective departments and funds of the City. d.Pension - GERFIPEPFF - These funds were established to account for the net pension liability and related expense recorded with the adoption of GASB 68 related to the PERA Coordinated plan (GERF) and the PERA Police and Fire plan (PEPFF), respectively, and the allocation of such costs to the respective departments and funds of the City. 11 q I!1IiT(]FI.[I. The following policies will be incorporated into Financial Policies Section 2.23 Fund Balance and Classification Policy (these policies have been provided on the next several pages for reference): 2.21 J. Capital Improvements Funding Policy 2.23 Fund Balance and Classification Policy Budget 2.41 Capital Improvements and Special Assessments Construction Fund Expenditure Policy 2.42 Capital Reserve Fund Policy City Council Code of Policies I.Role of Auditors The City's independent auditors shall be required, in the course of their audit, in the content of their Management Letter, to report any conditions that appear to be violations of our financial management policy. J.Capital Improvements Funding Policy Large capital expenditures for municipal buildings, furnishings, equipment, computer/radio systems, park and trail improvements, and capital projects made possible through outside funding sources, are accounted for in the Capital Improvements Fund. Funding sources: 1.Each year, following the completion of the annual audit (typically July) the year-end fund balance of the General Fund will be reviewed for surplus operating funds. The audited year-end General Fund unassigned fund balance that exceeds 52% of the next year's General Fund operating budget will be transferred to the Capital Improvements fund. 2.Each year, following the completion of the annual audit (typically July) the year-end cash balance of the Brooklyn Center Liquor operations will be reviewed for surplus operating funds. The audited year-end Liquor Fund unrestricted cash balance that exceeds three and a half months of the next year's budgeted operating expenses and one year of budgeted capital equipment needs will be transferred to the Capital Improvements fund. 3.On an annual basis, the City will receipt the greater of $650,000 (or the full amount if less than $650,000) of Local Government Aid (LGA) received OR 50 percent of total LGA. 4.Project cost sharing grants from Regional, County, State or Federal governments. 5.Tax increment funds as applicable. 6.Allocated investment earnings based on the fund's cash balance. Any remaining fund balance at year-end in the Capital Improvements fund will be carried forward to fund future capital improvement projects as identified in the City's Capital Improvement Plan. Reference: City Council Resolution Nos. 2017-150; 2017-137; 2014-19; 2011-167; 2006-120; 2004-189; 99-21; 98-48; City Council Minutes 5/22/95; 6/8/92; 2/26/90; 12/22/80 City of Brooklyn Center 09/25/17 Page 230 D[Iil{SXI fI$p M W(tfltZI) R(*IOI. City Council Code of Policies 2.23 Fund Balance and Classification Policy Policy Objective: To provide a definition of the various City funds and to provide direction for classifying the various components of fund balance to indicate the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the fund can be spent. Governmental Funds Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions provide categories and terminology used to describe the components of fund balance in the governmental funds (but it does not apply to the proprietary or fiduciary funds). The City's governmental funds include; General Fund, Special Revenue Funds, Debt Service Funds and Capital Projects Funds. Definitions (as they apply to Governmental Funds under GASB 54): Fund balance - the difference between assets and liabilities reported in a governmental fund. Nonspendable fund balance - amounts that are not in a spendable form (e.g., prepaid items and inventories of supplies). Resources that must be maintained intact pursuant to legal or contractual requirements are also considered nonspendable. Restricted fund balance - amounts subject to externally enforceable legal restrictions (creditors, grantors, contributors, and by law through constitutional provisions or enabling regulations). Unrestricted fund balance - the total of committed fund balance, assigned fund balance, and unassigned fund balance, as described below. Committed fund balance - amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decision-making authority (City Council). Commitments may be changed or lifted only by the City Council taking the same formal action that imposed the constraint originally. The City Council must take action on these commitments before year end. Assigned fund balance - amounts a government intends to use for a specific purpose; intent can be expressed by the government body or by an official or body to which the governing body delegates the authority. Unassigned fund balance - amounts that are available for any purpose in the general fund. Only the General Fund can report a positive amount of unassigned fund balance. 1.The City shall manage its cash flow needs by having a target unrestricted and unassigned General Fund balance at the close of each fiscal year of 50 to 52% of the next year's General Fund operating budget. 2.Unassigned General Fund monies that are not required for cash flow purposes may be transferred into other funds as may be appropriate or needed during the fiscal year. It is specifically anticipated that transfers will be made to the Street Reconstruction Fund, City of Brooklyn Center 09/11/17 Page 237 J a[WI(IJII.eDViaI eii•ii i( laE1 City Council Code ofPolicies Capital Improvements Fund, and the Technology Fund when operating results generate a surplus of actual revenues over actual expenditures to serve as a recurring source of funding for those three funds. 3.The City Council authorizes the City Manager or the City Manager's designee to assign fund balance that reflects the City's intended use of those funds for the purposes of reporting the City's financial position. 4.When both restricted and unrestricted resources are available for use, it is the City's policy to first use restricted resources and then use unrestricted resources as they are needed, unless otherwise required by the restricting authority. When unrestricted resources are available for use, it is the City's policy to use resources in the following order: 1) committed 2) assigned 3) unassigned. General Fund The General Fund is established to account for all revenues and expenditures which are not required to be accounted for in other funds. Revenue sources include property taxes, license and permit fees, fines and forfeits, charges for services, intergovernmental revenues, investment interest earnings, and transfers. The General Fund's resources finance a wide range of flmctions including the operations of general government, public safety, and public works. Special Revenue Funds Special revenue funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to ' expenditures for specified purposes other than debt service or capital projects. Governmental accounting standards require that substantial inflows of revenues into a special revenue fund be either restricted or committed in order for the fund to be considered a special revenue fund. a.Housing and Redevelopment Authority (HRA) Fund - This fund was established to account for housing and redevelopment projects within the City of Brooklyn Center. The HRA has the authority to levy an ad-valorem property tax levy, which is the primary funding source for the Economic Development Authority b.Economic Development Authority (EDA) Fund - This fund was established to account for the development related activities in the City of Brooklyn Center. The EDA generates the funding to accomplish the development projects from grants, HRA property tax levy, or transfer from other funds of the City. Community Development Block Grant (CDBG) Fund - This fund was established to account for the collection of CDBG grant funding for related projects within the City. • ci. Police Forfeitures Fund - This fund was established to account for the proceeds from property seized by Police Department personnel. i. The City receives property and money through law enforcement seizures under Federal Law 21USCS Section 881(e) and Minnesota Statutes, Sections 609.531-609.5317. 169A.63 City of Brooklyn Center 09/11/17 Page 238 ftIWVfI)I tilJ al flI]I(IaE City Council Code ofPolicies ii. The City will use proceeds from these seizures as defined in State law and Department of Justice guidelines. Forfeited property and cash will be used: 1.Only for law enforcement purposes, or; 2.Only as a supplement to budgeted funds, or; 3. Not as a source to supplant ordinary operating expenditures iii. The City will establish procedures to ensure the safekeeping of forfeited property and funds until such time as they are used for approved purposes. C. Tax Increment Funds - These funds were established to account for the collection of tax increment generated revenues for parcels within the districts. These funds are used to finance various redevelopment activities within the Districts. f. City Initiatives Grant Fund - Revenues and expenditures from recurring grants or donations received from outside entities (federal, state, local) are accounted for in the fund. Debt Service Funds Debt service funds account for payments of principal and interest on City debt issuances. Fund balances are considered restricted as they are resources accumulated for principal and interest payments maturing in future years. Capital Project Funds Capital project funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. Subledger codes are used to diffurentiate spending on multiple projects within individual capital project funds. Capital improvements should be included in the City's 15 year Capital Improvement Plan which is adopted by City Council at a public hearing on an annual basis. a.Capital Improvements Fund - Large capital expenditures for municipal buildings, furnishings, equipment, computer/radio systems, park and trail improvements, and capital projects made possible through outside funding sources, are accounted for in the Capital Improvements Fund. b.Municipal State Aid Construction Fund - In 1957 the Minnesota legislature authorized the establishment of a Municipal State Aid Streets system in all Minnesota cities with a population of 5,000 or greater not to exceed 20 percent of the city's improved local mileage. The City receives an annual allocation of State Aid for streets in two pieces: i.Annual Maintenance Allocation - may be spent on crack sealing, seal coating, signs, and striping on streets within the designated MSA system. ii.Annual Construction Allocation - these funds are tied to specific projects that are approved by MNDOT which are then reimbursed over time via an annual allocation. Depending on need and availability of reimbursement funds, the construction funding can lag several years behind the completion of eligible projects in this fund. City ofBroolclyn Center 09/11/17 Page 239 City Council Code ofPolicies C. Capital Reserve Emergency Fund - While the City carries property and casualty insurance, the City may need additional funds beyond insurance proceeds in the event of natural or other disaster impacting its buildings and their contents, as well as other improvements to real property. Also, unanticipated failure of buildings or improvements to buildings may require immediate expenditure of funds for repair or replacement that are not covered by insurance. The funds placed in the Capital Expenditure Reserve Fund are not to be considered a source for planned or recurring capital needs, but only to deal with emergency needs as described due to damage, loss, or failure of existing buildings and other improvements to real property. d. Special Assessments Construction Fund - The special assessments construction fund accounts for the resources and expenditures required for the acquisition and construction of infrastructure improvements that are financed wholly or in part by special assessments levied against benefited properties. Only those expenses that will be reimbursed via special assessment revenues or paid for from bond proceeds of which the underlying bonds will be repaid solely from special assessments qualify for reporting in the special assessments construction fund. C. Street Reconstruction - This fund was established to provide funds and to account for the expenditure of such funds, for major street infrastructure improvements. The accumulation of funds to provide for such improvements is an attempt to reduce future debt issuance. i. Sources of Funds 1.Franchise fees collected from CenterPoint Energy and Xcel Energy 2.Bond proceeds to be repaid with property tax levies ii. Uses of Funds 1. Street reconstruction projects performed in accordance with the City's 15 year capital improvement plan, specifically neighborhood reconstruction projects and mill and overlay projects as necessary. f.Technology Fund - The Technology Fund accounts for new technology improvements and the replacement of existing technology and capital items necessary to increase productivity and operating efficiencies. The majority of expenditures in this fund relate to technology infrastructure maintenance and expansion such as servers, switches, wireless access points, surveillance and audio visual technology. Minor technology purchases such as desktop and laptop replacements, monitors, etc. are not permitted in this fund; rather they are coded to the fund and department that utilizes them. g.Additional Capital Project Funds - New capital project funds will be created as necessary for projects that warrant separate presentation due to their scope or complexity of funding sources. Enterprise Funds Enterprise Funds are those programs provided by the City which generate their own revenues for operations and capital maintenance. In some cases these finds are expected to generate enough revenue City ofBrooklyn Center 09/11/17 Page 240 I[iil (Ski I ei i fl U ornrirnr City Council Code ofPolicies to support capital projects in other funds, thereby reducing the need for use of the property tax levy. The City of Brooklyn Center operates three Enterprise Funds: a.Brooklyn Center Liquor b.Centerbrook Golf Course C. Earle Brown Heritage Center Capital improvement projects in these enterprise funds that exceed a total anticipated cost of $25,000 should be included in a Capital Improvement Plan which is annually adopted by City Council in conjunction with the budget process. Public Utility Funds The Public Utility Funds track the revenues and expenditures for fee based public utility services provided by the City. These funds operate on their own ability to generate revenues and receive no property tax support. Each year the City Council reviews the operations of these funds and sets rates for each service based on the needs for general operations, capital spending and debt service payments. The public utilities include: a.Water Utility Fund b.Sanitar y Sewer Fund C. Storm Sewer Fund d. Streetlight Utility Fund C. Recycling Utility Fund Capital improvement projects in these public utility funds that exceed a total anticipated cost of $50,000 should be included in the City's 1 5year Capital Improvement Plan which is annually adopted by City Council in conjunction with the budget process. Internal Service Funds Internal Service funds exist to centralize certain services and then allocate the cost of those services within the government. The City of Brooklyn Center internal services funds include: a.Central Garage - The Central Garage is used to fund replacement, maintenance, fueling, and insurance of the City's fleet of vehicles through inter-fund charges to departments. Vehicle replacement costs are updated each year to ensure replacement costs being charged to departments are sufficient to purchase a new vehicle when the useful life has been reached. Replacement equipment and new equipment should be identified and approved by council during the budget process. If new or replacement equipment is needed unexpectedly subsequent to the budget process for that year, the items should be presented to and approved by council prior to purchase. b.Employee Retirement Benefit - This fund accounts for certain health care insurance benefits for City employees who retire before age 65. Substantially all of the City's frill- time police and fire employees and all other full-time employees hired before July 1, 1989 may be eligible for those benefits from the time they qualify for an unreduced PERA pension, until they reach age 65 or become eligible for Medicare. In the event that City of Brooklyn Center 09/11/17 Page 241 3Sil (I).I ei ai a fl (SI I City Council Code of Policies future costs would exceed funds available, other funds would be charged for the costs associated with their employees. c.Employee Compensated Absences - This fund accounts for payment of unused vacation and vested sick leave benefits, and the allocation of such costs to the respective departments and funds of the City. d.Pension GERF/PEPFF These funds were established to account for the net pension liability and related expense recorded with the adoption of GASB 68 related to the PERA Coordinated plan (GERF) and the PERA Police and Fire plan (PEPFF),respectively and the allocation of such costs to the respective departments and funds of the City. Reference: City Council Resolution No. 2017-137 City of Brooklyn Center 09/11/17 Page 242 SECTION II GENERAL POLICIES City Council Code ofPolicies 2.41 Capital Improvements Fund and Infrastructure Construction Fund Expenditure Policy :1. Policy Objective The City of Brooklyn Center makes large unrestricted capital expenditures through one of two funds. Generally, small capital expenditures are funded through the general fund and planned for as part of the annual budget process for the general fund. Large unrestricted capital expenditures for municipal buildings and park improvements are funded through the capital improvements fund based on city Council Resolution No. 68-246, which was approved in 1968. Large unrestricted capital expenditures for street and utility improvement projects are funded through the infrastructure construction fund. Capital expenditures are also made through other funds such as the M.S.A. construction fund, the street construction fund, the water utility fund, the sanitary sewer utility fund, and the storm drainage utility fund. These funds each have restrictions in place to guide their expenditures. The objective of this policy is to clarify funding for all unrestricted capital expenditures by specifically defining which capital expenditures are eligible for funding through the capital improvements fund and infrastructure construction fund. Unrestricted capital expenditures not meeting the criteria for the capital improvements fund must be made from the general fund operating budget. Specifically excluded from this policy are capital expenditures that are to be reimbursed by insurance proceeds. These may be accounted for through the capital improvements fund at the discretion of the Director of Finance. Source of Funds The sources are ad-valorem taxes, issuance of bonds, state and federal grants, transfers of unrestricted balances from other funds, and investment earnings. 3. Use of Funds The infrastructure construction fund may be used, pursuant to this policy, for expenditures on infrastructure improvements and similar projects having an aggregate value in excess of $50,000. The types of expenditures contemplated by this policy include projects such as: street repair, replacement, and construction bridge rehabilitation and construction water, sanitary sewer, storm drainage, and street light utility improvements The capital improvements fund may be used, pursuant to this policy, for expenditures on capital equipment, infrastructure improvements and construction, and similar projects having an aggregate value in excess of $50,000. The types of expenditures contemplated by this policy include projects such as: City ofBrooklyn Center 09/11/17 Page 254 City Council Code ofPolicies • building construction, repair, reconstruction, and remodeling, including component systems for heating, ventilation, and air conditioning • equipment and furnishings, including furniture, lights, and communications cabling' • park landscaping, shelter, and improvements • computer, radio, and telephone systems The expenditures from the capital improvements fund and infrastructure construction ftind.are to be used for general governmental capital needs and not for enterprise fund capital needs, except as the general governmental portion of a joint project for both general and enterprise purposes. Additionally, the capital improvements fund may be used to provide loans to other funds maintained by the City. However, loans from the capital improvement fund may only be made to proprietary funds which have the ability to generate revenue and repay the loan within 10 years at prevailing interest rates. 4. Authority to Spend Expenditures meeting the above criteria may be funded through the capital improvements fund based on the following authority limits: 1.Expenditures from $0 to $50,000: Not eligible for funding from the capital improvements fund. Funding is required through the general fund operating budget. 2.Expenditures from $50,001 to $300,000: The City Council may, Through simple majority, approve these expenditures. 3. Expenditures over $300,001: Following a public hearing, the City Council may, through a 4/5ths majority, approve expenditures in this category. 5. Spending Limitation/Fund Balance Requirement The objective as described in Section 1 and previously defined in City Council Resolution No. 68-246 requires the capital improvements fund and infrastructure construction fund to be a permanent source of funding for planned major expenditures. As such, the following criteria is established to comply with that intent: 1.Planned Expenditures: If the proposed capital expenditure is in excess of $300,000, it must have been included in the fifteen-year Capital Improvement Program for at least two years. 2.Additionally, the fifteen-year Capital Improvement Program must be approved by the City Council at a public hearing on an annual basis. City of Brooklyn Center 09/11/17 Page 255 DtWItI)III'1$I flIOJIDi City Council Code ofPolicies 6. Role of the Financial Commission If a review of an expenditure is requested by the City Council from the Financial Commission, the Financial Commission will respond on the basis of the following questions: 1.Does the expenditure comply with the Capital Improvements Fund Expenditure Policy? 2.Is the expenditure appropriate considering the financial condition of the City? Reference:. City Council Resolution Nos. 2007-56; 2006-46; 97-84; City Council Minutes 1/10/94 City of Brooklyn Center 09/11/17 Page 256 City Council Code of Policies 2.42 Capital Reserve Fund Policy 1.Policy Objective The objective of this policy is to provide funds to meet emergency needs for capital expenditures that may arise from time to time. While the City carries property and casualty insurance, the City may need additional funds beyond insurance proceeds in the event of natural or other disaster impacting its buildings and their contents, as well as other improvements to real property. Also, unanticipated failure of buildings or improvements to buildings may require immediate expenditure of funds for repair or replacement that are not covered by insurance. The funds placed in the Capital Expenditure Reserve Fund are not to be considered a source for planned or recurring capital needs, but only to deal with emergency needs as described due to damage, loss, or failure of existing buildings and other improvements to real property. 2.Use of Funds Funds may be expended from the Capital Expenditure Reserve Fund for the repair or replacement of buildings or other improvements to real property and their contents where the repair or replacement is necessitated by damage to such buildings or other improvements to real property and their contents due to: 1.natural disaster such as a tornado, storm, flood, earthquake, or fire 2.fire, vandalism, terrorism, explosion, building or component collapse 3. Authority to Spend Expenditures meeting the criteria for the use of funds may be funded through the Capital Expenditure Reserve Fund upon Resolution of the City Council finding that the criteria for expenditure have been met and that the use of funds would not otherwise be covered by insurance proceeds, except that the City Council may authorize the use of Capital Expenditure Reserve Funds in anticipation of the receipt of insurance proceeds providing that such funds used in anticipation of insurance proceeds are repaid to the Capital Expenditure Reserve Fund from such insurance proceeds. City ofBrooklyn Center 09/11/17 Page 257 I[Ifl (IJI IM, ii* Ii1I LIJm( I City Council Code of Policies 4. Fund Balance The Capital Expenditure Reserve Fund shall be established at $1,000,000. Such fund balance shall increase each year by the interest earned on the fund balance. In the event that the fund would drop below $1,000,000, the City Manager shall prepare a plan for restoring the balance to $1,000,000. The fund balance target should reflect an analysis of the City's uninsured exposure to the losses identified in this policy. Such plan, as well as whether the balance should be made higher or lower, shall be reviewed by the Financial Commission and City Council. The plan adopted by the City Council shall be included in the budgetary process if the fund's balance is not restored by transfer of existing funds from another fund, such as the Capital Improvement Fund. Reference: City Council Resolution No. 9784. City of Brooklyn Center 09/11/17 Page 258 City Cull Ag©di I[frrn N©0 COUNCIfL HEM MEMORANDUM DATE: November 27, 2017 TO: Curt Boganey, City Mana FROM: Nathan Reinhardt, Finance Director (JK. SUBJECT: Public Hearing on Proposed Utility Rates for 2018 Recommendation: It is recommended that the City Council, following a public hearing, consider approval of the attached resolutions setting rates for City provided utility services for 2018. Background: At the October 16, 2017 joint work session of the City Council and Financial Commission, staff presented the expected expenditures for operation of the City's utility services for 2018. The expenditures include total direct and indirect costs including depreciation of capital assets and administrative costs. The work session also included projections of revenue needed for 2018 and for the next fifteen years to keep operations running smoothly and fund the infrastructure improvements needed in each of the utility systems. The cash flow analysis for each of the five utilities indicate anticipated rate changes necessary to maintain targeted cash balances during the construction of the utility improvements associated with the City's 15-year Capital Improvement Plan (CIP). For 2018, a rate increase is proposed for the Storm Sewer Utility in order to maintain cash reserves, fund operations, pay for debt service and finance infrastructure improvements. Rates for the various utilities are recommended as follows for 2018: 6' cu 0] li4cift:)-0] Iin II Water Base Charge - Residential $14.64 $14.64 No change (quarterly) Tier 1(0 30 gallons)$2.44 $2.44 No changeConsumption Charge -Tier 11(31 60 gallons)3.04 3.04 No changeResidential Meters Tier III (61 and greater)4.54 4.54 No change Consumption Charge (Per 1,000 gallons)$3.04 $3.04 angNo changeNon-residential Sanitary Sewer Base Charge (quarterly)$82.42 $82.42 No change Storm Sewer Base Charge (quarterly)$14.48 $14.77 $0.29 /quarter Street Light Base Charge (quarterly)$6.55 $6.55 No change I Recycling Base Charge (quarterly)$11 .98 $11.98 No change Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust S[WJ[IJ I_ U *YIUk'(l k!1O) t1AI )iIJYAI The utility bill for a household using 18,000 gallons of water (considered the typical residential user) is shown in comparison to 2017 rates as follows: ThIwLi iii iLWJ TiThT Water $58.56 $58.56 $ - Sanitary Sewer 82.42 82.42 - Storm Sewer 14.48 14.77 0.29 Street Light 6.55 6.55 Recycling 11.98 11.98 Total $173.99 $174.28 $0.29 The proposed rates would become effective on January 1, 2018 for the Storm Sewer Utility. City Code sections 11.02 and 11.06 require a notice and hearing prior to the City Council setting new utility rates. The Public Hearing Notice was published in the Brooklyn Center Post on November 2, 2017. Strategic Priorities: o Safe, Secure, Stable Community Mission: Ensuring an attractive, clean, safe colnlnunhty that enhances the quality of life and preserves the public trust Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION ADOPTING 2018 WATER UTILITY RATES, FEES AND CHARGES WHEREAS, the City of Brooklyn Center Charter requires that municipal utilities be self-supporting through revenue provided by a uniform schedule of rates, fees and charges; and WHEREAS, this uniform schedule shall be called the "Public Utility Rate Schedule" and shall be adopted by resolution of the City Council; and WHEREAS, financial requirements for the utility funds have been identified and reviewed by the City Council. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center that the following Water Utility rates, fees and charges are hereby adopted and shall be effective for all billings issued on or after January 1, 2018. 2018 WATER UTILITY RATE SCHEDULE Water Rates, Fees and Charges Base Rate Year 2018 $3.04 per 1,000 Gallons Meter Size,, 1½" 2" 3" 4 ,, 6 " 8" 10" Quarterly Minimum Rate 2018 Quarterly Minimum Charge $42.56 $54.72 $106.40 $212.80 $358.72 $820.80 $1,554.55 $2,072.74 Water Conservation Rate Meter Size 5/8" and 3/4" Thousands of Gallons 0 to 30 31 to 60 61 and greater Base Charge (minimum charge per quarter) $ 14.64 Consumption Charge (per 1,000 gallons used) $2.44 $3.04 $4.54 RESOLUTION NO. Water Meter Charge 5/8" or 3/4" $99.00 Water Meter Charge Larger than 3/4" Actual Cost + $2.00 Other Charges Delinquent account, quarterly charge Greater of $3.00 or 10% of unpaid balance Certification for collection with property taxes $30.00 Fire Service Line Charge $ 12.50 per quarter November 27, 2017 Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member 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. Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION ADOPTING 2018 SEWER UTILITY RATES, FEES AND CHARGES WHEREAS, the City of Brooklyn Center Charter requires that municipal utilities be self-supporting through revenue provided by a uniform schedule of rates, fees and charges; and WHEREAS, this uniform schedule shall be called the "Public Utility Rate Schedule" and shall be adopted by resolution of the City Council; and WHEREAS, financial requirements for the utility funds have been identified and reviewed by the City Council. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center that the following Sewer Utility rates, fees and charges are hereby adopted and shall be effective for all billings issued on or after January 1, 2018. 2018 SEWER UTILITY RATE SCHEDULE Sewer Rates, Fees and Charges Base Rate Quarterly Residential (minimum quarterly charge) Single Family Apartment Senior Citizen Year 2018 $82.42 $57.69 $45.33 Non-Residential Rate Year 2018 $3.32 per 1,000 Gallons Fees SAC Charge set by MCES Fee Established by MCES Charges Delinquent account, quarterly charge Greater of $3.00 or 10% of unpaid balance Certification for collection with property taxes $30.00 Line cleaning charge Labor, materials, equipment and overhead Sanitary Sewer Connection Established annually by resolution November 27, 2017 Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member 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. Member _ introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION ADOPTING 2018 STORM SEWER UTILITY RATES, FEES AND CHARGES WHEREAS, the City of Brooklyn Center Charter requires that municipal utilities be self-supporting through revenue provided by a uniform schedule of rates, fees and charges; and WHEREAS, this uniform schedule shall be called the "Public Utility Rate Schedule" and shall be adopted by resolution of the City Council; and WHEREAS, financial requirements for the utility funds have been identified and reviewed by the City Council. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Brooklyn Center that the following Storm Sewer Utility rates and charges are hereby continued and shall be effective for all billings issued on or after January 1, 2018. 2018 STORM SEWER UTILITY RATE SCHEDULE Storm Sewer Rates and Charges Quarterly Rates per Acre Base Rate Cemeteries and Golf Courses Parks Single Family, Duplex, Townhouse School, Government Buildings Multiple Family, Churches Commercial, Industrial Vacant Land 2018 Minimum Quarterly Charge $ 59.06 $14.77 $29.53 $ 14.77/lot $ 73.83 $ 177.17 $ 295.29 As Assigned Charges Delinquent account, quarterly charge Greater of $3.00 or 10% of unpaid balance Certification for collection with property taxes Private facility cleaning charge November 27, 2017 Date ATTEST: City Clerk $30.00 Labor, materials, equipment and overhead Mayor The motion for the adoption of the foregoing resolution was duly seconded by member 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. Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION ADOPTING 2018 STREET LIGHT RATES AND CHARGES WHEREAS, the City of Brooklyn Center Charter requires that municipal utilities be self-supporting through revenue provided by a uniform schedule of rates, fees and charges; and WHEREAS, this uniform schedule shall be called the "Public Utility Rate Schedule" and shall be adopted by resolution of the City Council; and WHEREAS, financial requirements for the utility funds have been identified and reviewed by the City Council. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center that the following Street Light Utility rates and charges are hereby adopted and shall be effective for all billings issued on or after January 1, 2018. Per Acre: Parks $10.90 Schools, Government Buildings, Churches $21.80 Retail and Service-Office $32.69 Commercial and Industrial $32.69 Vacant Land and Open Space As Assigned Charges Delinquent account, quarterly charge Greater of $3.00 or 10% of unpaid balance Certification for collection with property taxes $30.00 ovember 27, 2017 Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member 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. Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION ESTABLISHING 2018 RECYCLING RATES AND CHARGES WHEREAS, the City of Brooklyn Center is a member of the Hennepin Recycling Group (HRG), which is a joint powers group organized pursuant to Minnesota Statutes Section 471.59 (1987); and WHEREAS, the purpose of the joint powers agreement is to create an organization by which member cities may jointly and cooperatively provide for the efficient and economical collection, recycling and disposal of solid waste within and without their respective corporate boundaries in compliance with the Minnesota Waste Management Act, Minnesota Statutes Chapter 115A (1987); and WHEREAS, the HRG has established a curbside recycling program for its member cities to meet the requirements of Hennepin County Ordinance No. 13, Solid Waste Source Separation for Hennepin County; and WHEREAS, the City of Brooklyn Center must establish rates to fund the City's curbside recycling program and the cost for projected reimbursement of recycling charges from the HRG along with other program operating charges; and WHEREAS, the City Council added a biannual curbside cleanup, beginning in 2017, as part of the recycling program; and WHEREAS, Brooklyn Center Ordinance No. 891 1 authorizes the City to establish rates for recycling services. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center that the recycling charges shall be as follows for all billings issued on or after January 1, 2018: 2018 RECYCLING UTILITY RATE SCHEDULE Recycling Rates and Charges Minimum Charge per Household per quarter: $11.98 per quarter Charges Delinquent account, quarterly charge Greater of $3.00 or 10% of unpaid balance Certification for collection with property taxes $30.00 November 27, 2017 Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member 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. Finance Department November 27, 2017 1 Maintain service levels Stabilize rate changes Provide cash for operating needs Provide cash for capital projects Provide cash for debt service 2 Fund Description 2017 Rate 2018 Rate Change Water Base Charge (Per Quarter) $14.64 $14.64 No change Consumption Charge – Residential Meters Tier I (0 – 30 gallons) Tier II (30 – 60 gallons) Tier III (61 and greater) $2.44 3.04 4.54 $2.44 3.04 4.54 No change Consumption Charge - Non-residential (Per 1,000 gallons) $3.04 $3.04 No change Sanitary Sewer Base Charge (Per Quarter) $82.42 $82.42 No change Storm Sewer Base Charge (Per Quarter) $14.48 $14.77 $0.29 /quarter Street Light Base Charge (Per Quarter) $6.55 $6.55 No change Recycling Base Charge (Per Quarter) $11.98 $11.98 No change 3 4 Fund 2017 Bill 2018 Bill $ Change/quarter Water $58.56 $58.56 $ - Sanitary Sewer $82.42 $82.42 - Storm Sewer $14.48 $14.77 $0.29 Street Light $6.55 $6.55 - Recycling $11.98 $11.98 - Total $173.99 $174.28 $0.29 5 $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00 $110.00 $32.15 $52.73 $58.56 $58.56 $65.45 $69.62 $88.52 $95.24 $103.80 $109.59 $124.71 Residential User – 18,000 Gallons – Per Quarter 6 $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $55.15 $70.75 $73.02 $75.15 $81.60 $82.42 $82.42 $83.70 $90.28 $106.41 $113.11 Residential User – 18,000 Gallons – Per Quarter 7 $- $5.00 $10.00 $15.00 $20.00 $25.00 Fridley Roseville Brooklyn Center - 2017 Brooklyn Center - 2018 Richfield Crystal New Hope Golden Valley Maplewood Shoreview $8.93 $12.95 $14.48 $14.77 $16.31 $16.50 $21.66 $22.00 $25.00 $28.30 Residential User – Per Quarter 8 $- $50.00 $100.00 $150.00 $200.00 $250.00 $300.00 $113.75 $155.46 $155.75 $168.07 $169.63 $175.45 $183.34 $184.03 $184.27 $204.61 $259.48 Residential User – 18,000 Gallons – Per Quarter 9 $- $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 New Hope Crystal Richfield Brooklyn Center - 2017 Brooklyn Center - 2018 Golden Valley Shoreview $4.92 $5.00 $5.77 $6.55 $6.55 $7.05 $12.48 Residential User – Per Quarter 10 $- $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 Roseville Fridley Maplewood Crystal New Hope Brooklyn Center - 2017 Brooklyn Center - 2018 Golden Valley $6.50 $7.86 $9.78 $10.75 $10.95 $11.98 $11.98 $14.00 Residential User – Per Quarter Open public hearing for comments on proposed 2018 utility rates Council consideration of: Resolution adopting 2018 water utility rates Resolution adopting 2018 sewer utility rates Resolution adopting 2018 storm sewer utility rates Resolution adopting 2018 street light rates Resolution adopting 2018 recycling rates Questions? 11 Cty C©iiil Agenda Iltem N0 8b COUNCI{IA ffTEM MEMORANDUM DATE: November 21, 2017 TO: Curt Boganey, City Mana THROUGH: Mike Albers, Acting City Engineer /ifl FROM: Andrew Hogg, Assistant City Engineer SUBJECT: Resolution Vacating All Easements Within Lot 1, Block 2, SHINGLE CREEK CROSSING and Outlot A, SHINGLE CREEK CROSSING 2ND ADDITION Recommendation: It is recommended that the City Council open the Public Hearing, take public input, close the Public Hearing and consider approval of a resolution vacating certain easements as referenced above that are associated with the Shingle Creek Crossing redevelopment in connection with the proposed final plat of SHINGLE CREEK CROSSING 6th ADDITION. Background: A public hearing is scheduled on November 27, 2017. The public hearing is to consider vacating certain easements as referenced above that are associated with the Shingle Creek Crossing redevelopment. The Planning Commission has reviewed the preliminary plat for SHINGLE CREEK CROSSING 6th ADDITION. In connection with the final plat and easement dedication proceedings, the developer is requesting release and termination of easements that are either no longer needed or are being replaced by new easements. The following easements are proposed to be released and terminated as indicated: That part of the drainage and utility easements, over, under and across LOT 1, BLOCK 2, SHINGLE CREEK CROSSING AND OUTLOT A, SHINGLE CREEK CROSSING 2 ADDITION, Hennepin County, Minnesota. As part of the public hearing and notification process, affected entities with interests in said existing easements have been notified in accordance with City Ordinance and State Statute. It is staffs opinion that the portions of the easements proposed to be vacated will be rededicated as shown in the preliminary final plat and should not negatively affect rights to public easements. We are unaware of any entity objecting to the proposed vacation. The attached exhibits outline the release and termination of easements and show the locations of said existing easements. The City Attorney has reviewed the release and termination documents and concurs to the purpose and form of the documents. Staff recommends that a presentation be provided to the City Council prior to holding the public hearing. Following the presentation, a public hearing to consider vacating the easements as referenced above should be conducted to receive public comments. A resolution vacating all easements within LOT 1, BLOCK 2, SHINGLE CREEK CROSSING AND OUTLOT A, SHINGLE CREEK CROSSING 2ND ADDITION is provided for City Council consideration upon closing of the public hearing. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust i1BJ[i1 I U I I IL'A L'A I IkA [I) 1'II )1H'A I Budget Issues: There are no budget issues to consider. Strategic Priorities: Targeted Redevelopment Mission: Ensuring an attractive, clean, safe, inclusive coininu,zitv that enhancesces the quality of life for al/people and preserves the pa b/ic trust Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION VACATING ALL EASEMENTS WITHIN LOT 1, BLOCK 2, SHINGLE CREEK CROSSING AND OUTLOT A, SHINGLE CREEK CROSSING 2ND ADDITION WHEREAS, certain existing easements are no longer needed on LOT 1, BLOCK 2, SHINGLE CREEK CROSSING AND OUTLOT A, SHINGLE CREEK CROSSING 2 ADDITION (collectively, the "Properties"); and WHEREAS, the easements proposed to be vacated on the Properties are described and depicted on the attached Exhibit A (collectively, the "Easements"); and WHEREAS, after due notice and public hearing, the City Council has determined that the Easements will be no longer needed and it is in the public interest to vacate the Easements; and WHEREAS, the vacation of the Easements shall be official pending the approval by City Council and recording of the final plat for the Properties. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota, that: 1.The City Council hereby approves the vacation of the Easements described and depicted in the attached Exhibit A conditioned on the approval and recording of the final plat for SHINGLE CREEK CROSSING 6th ADDITION. 2.The City Clerk is directed to prepare a Notice of Completion of Vacation Proceedings and to record it with the Hennepin County Recorder or Hennepin County Registrar of Titles, as appropriate. November 27,_2017 Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member 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. RESOLUTION NO. EXHIBIT A Description and Depiction of Vacated Easements (attached hereto) Easement Vacation Sketch Of SHINCLE CREEK CROSSINC PROPOSED EASEMENT VACATION DESCRIPTION The drainage and utility easements dedicated in the plat of SHINGLE CREEK CROSSING lying within Lot I, Block 2, said SHINGLE CREEK CROSSING, and the drainage and utility easements dedicated in the plot of SHINGLE CREEK CROSSING 2ND ADDITION lying within Outlot A, said SHINGLE CREEK CROSSING 2ND ADDITION, according to the recorded plots thereof, Hennepin County, Minnesota. LINE TABLE NUMBER BEARING DISTANCE LI S89 0 43'54"E 109.87 L2 S44°43'53'E 37.36 L3 N45 °I6'06"E 37.36 L4 S89 0 43'54"E 123.83 L5 S62 0 20'58"W 2.47 L6 N740 53'58"W 53.86 L7 N6 0 24'I0"W 112.82 L8 N49 0 45'00"W 39.27 L9 N7 °31'58"W 99.63 LID S25 °5I'23"E 53.26 LII S19 0 49'24"E 91.02 L12 S55 0 54'42'E 36.44 L13 SIl °l3'OO"W 45.43 I hereby certify that this sketch, plan, or report was prepared by me or under my direct supervision and that I am a duly Licensed Land Surveyor under the laws of the State of Minnesota. Dated this 6th day of October, 2017 SUNDE LAND SURVEYING, LLC. B y. 72Z4 — ark S. Hanson, P.L.S. Minn. Lie. No. 15480 "s5C ,3 lo6 SH111"I'LE CREEK cRO:s:". 2 IND 0 200 400 SCALE IN FEET BASS LAKE ROAD (COUNTY ROAD NO. DRAINAGE ANDA3 ^' UTILITY EASEMENT TO BE VACATED - f04 cSHINGLE DRAINAGE ANDUTILITY EASEMENTTO BE VACATED CROSSING "Zo IT IO28'54" R=348.70 .59 -' 0. BRG. 100.W G N62'2058E- SHINGL.E CREEK CROSSING 2ND ADDITION N16 '04'06 "W3ZI5- 41P1 •x." \S' \> C).S A ," \4:3 C'.ç A ' 0• '57" '-e., • (' 73 . C)U\ \"_c•' '()4 ,9 C O Q 1 -- 20I0-040-137 912/0 T,IIB R.21 S.2SKIT 20I004OB7001vac.dwg 9001 East Bloomington Freeway (35W) a Suite 118 Bloomington, Minnesota 55420-3435JISVN,DE 952-881-2455 (Fax: 952-888-9526)LAND SURVEYHiG www.sunde.com LOT 1, BLOCK 2, SHINGLE CREEK CROSSING AND OUTLOT A, SHINGLE CREEK CROSSING 2ND ADDITION Public Hearing Vacation of Easements Regular City Council Meeting: November 27, 2017 •Lot 1, Block 2, SHINGLE CREEK CROSSING and Outlot A, SHINGLE CREEK CROSSING 2ND ADDITION •Vacation of underlying platted easements •Needed drainage and utility easements are included under new plat LOT 1, BLOCK 2, SHINGLE CREEK CROSSING AND OUTLOT A, SHINGLE CREEK CROSSING 2ND ADDITION Easement Vacations LOT 1, BLOCK 2, SHINGLE CREEK CROSSING AND OUTLOT A, SHINGLE CREEK CROSSING 2ND ADDITION LOT 1, BLOCK 2, SHINGLE CREEK CROSSING AND OUTLOT A, SHINGLE CREEK CROSSING 2ND ADDITION LOT 1, BLOCK 2, SHINGLE CREEK CROSSING AND OUTLOT A, SHINGLE CREEK CROSSING 2ND ADDITION Easement Vacations Requested City Council Action: •Motion to open Public Hearing •Motion to take public input •Motion to close Public Hearing •Motion to adopt Resolution Vacation of easements are contingent upon: 1.Filing of Final Plat, Lot 1, Block 2, SHINGLE CREEK CROSSING and Outlot A, SHINGLE CREEK CROSSING 2ND ADDITION Public Hearing Vacation of Easements Regular City Council Meeting: November 27, 2017 Oty C©wrdli A genda ll©m N0 ll Oity CcmrdJ1 Agenda Hem N©0 IL(a #1 To: Curt Boganey, City Mana THROUGH: Michael Ericson, Interim Community Development D FROM: Jesse Anderson, Deputy Director of Building and Con COUNCILL ITEM MEMORANDUM DATE: November 27, 2017 SUBJECT: Type IV 6-Month Provisional Rental License for 2318 55tH Ave N Recommendation: It is recommended that the City Council consider approval of the Mitigation Plan and issuance of a Type IV 6-Month Provisional Rental License for 2318 55 t "Ave N. The applicant or representative has an opportunity to present evidence regarding the submitted Mitigation Plan. If the Council chooses to modify or disapprove the Mitigation Plan, it is recommended that the motion be to direct staff to prepare proposed findings for disapproval of the Mitigation Plan and notify the license applicant of any pending license actions to be taken at a subsequent Council Meeting. Back g round: This owner is applying for a renewal rental license. This is a single family property. The previous rental license was a Type I Rental License. This property qualifies for a Type IV Rental License based on twenty five (25) property code violations found during the initial rental license inspection and zero (0) validated police nuisance incidents for the past twelve months. Staff from Administration, Building & Community Standards and Police Departments worked with the property owner regarding a mitigation plan, which requires Phase I, II and III of the Crime Free Housing Program, and other items included by City ordinance for a Type IV Rental License. A Mitigation Plan has been developed addressing the requirements of the ordinance and any issues specific to the property. Therefore, staff is recommending approval of the Type IV Rental License on condition of adherence to the Mitigation Plan. Please refer to the attached copy of the Mitigation Plan for more information. The following is a brief history of the license process actions: 08-24-2017 The Owner, Helen Osonowo, applied for renewal of the rental dwelling license for 2318 55th Ave N, a single family dwelling. 09-07-2017 An initial rental license inspection was conducted and failed. 25 property code violations were cited, see attached rental criteria. 10-30-2017 A second rental inspection was conducted and passed. 11-09-2017 City records indicate 0 validated police nuisance incidents occurred in the past twelve months. 1Iiss!on: Ensiir!izg all attractive, clean, saf', inclusive community that enhances the quality of life fin u/I puople and preseuve.v time public (rust [S1IJ[iI I U I k4 I I k%O] MY, SJ I 11-09-2017 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 11-15-2017 A Mitigation Plan was submitted. 11-17-2017 The Mitigation Plan was finalized. 11-17-2017 A letter was sent to the owner notifying that the hearing before the Council will be held November 27, 2017. If approved, after six months, a new rental license is required. The license process will begin approximately four months. The new license will be based on the property code violations found during the initial renewal license inspection and the number of validated police calls for services for disorderly activities and nuisances as defined in 12-911. The terms of the mitigation plan must also be met. Excerpt from Chapter 12 of City Code of Ordinances: Section 12-913. TYPE IV PROVISIONAL LICENSES. Rental properties that meet the provisional licensing criteria as described in Section 12- 901 are eligible only for provisional licenses. 2. The City will provide by mail to each licensee a monthly report of any police and fire calls and incidents and applicable property Code violations as described in Section 12- 901. Mitigation Plan. The applicant for a provisional license must submit for Council review a mitigation plan for the license period. The mitigation plan shall describe steps proposed by the applicant to reduce the number of police and fire calls and/or the property Code issues described in Section 12-901 and 12-911 to a level that qualifies for a Type I, II, or III license. The mitigation plan may include such steps as changes in tenant screening procedures, changes in lease terms, security measures, rules and regulations for tenant conduct, security personnel, and time frame to implement all phases of the Crime Free Housing Program. 4. Council Consideration. The application with a proposed mitigation plan will be presented to the City Council together with a recommendation by the City Manager or the Manager's designee as to the disposition thereof. After giving the applicant an opportunity to be heard and present evidence, the Council shall approve, disapprove, or approve with conditions the application and the mitigation plan. If the Council disapproves an application and mitigation plan or approves it with conditions, it shall state its reasons for so doing in writing. In evaluating a mitigation plan, the Council will consider, among other things, the facility, its management practices, the nature and seriousness of causes for police and fire incidences and/or property Code issues and the expected effectiveness of measures identified in the plan to reduce the number of police and fire incidences and/or property Code violations. In evaluating a mitigation plan ijsjoIl: En swing an attractive, dean, safe, inclusive cominanify that en/sauces the quality of life for al/people and preserves the public trust [$1IJ[i1 fl I I k7A I'A S 3k4 (0] 1'WI flBA I submitted by an applicant already under a provisional license, the Council will also consider the effectiveness of measures identified in the applicant's previous mitigation plan and the need for different or additional measures to reduce police and fire incidences and/or property Code violations. 5. Compliance with Mitigation Plan. The licensee shall comply with the mitigation plan as approved or modified by the Council. No later than the tenth day after each calendar month, the licensee shall mail or deliver to the City Manager a written report describing all steps taken in furtherance of the mitigation plan during the preceding month. itnin UIF [bN LtDIT(J i aJJT riiii:tc 1.Determining License Categories. License categories are based on property code and nuisance violations noted during the initial or renewal license inspection or for a category verification inspection, along with excessive validated police service calls occurring over a year. License categories are performance based and more accurately depict the condition of the property and the City costs of service. 2.Fees. Fee amounts are determined by the costs of the city to license, inspect, monitor and work with the property to ensure category conditions are met. License fees do not include reinspection fees, late fees, charges for criminal or civil enforcement actions, or other penalties. 3.Category Conditions. The licensee or designated agent must meet the category conditions in the time period specified by the City. A licensee must meet all original conditions required by the License Category, even if a subsequent license category is achieved. 4.License Category Criteria. a. Property Code and Nuisance Violations. Property code violation rates will be based on the average number of property code violations per unit identified during the licensing inspection or category verification inspection. Property code violations for purposes of determining licensing categories shall include violations of property code and nuisances as defined in Chapter 12, 19, 7 and other applicable local ordinances. The City may, upon complaints or reasonable concerns that the establishment no longer complies with the license category criteria, perform a category verification inspection to the same standards as the license renewal inspection as indicated below. Mission: 1n.ssirig an attractive, clean, sate incipsive corninzciiv thai en/maccs the qimality of lif' for all people and pIcse!'r's fire public (rust [EI1IJ[SJI UI I 4YI I MhYI[I) 1A'WI I1SJhYiI Inspections will be conducted in conjunction with established department policies. In cases where 100% of the units are not inspected, the minimum inspection standards will be established as follows: o At least 75% of units will be inspected for properties with 15 or less units. o At least 25% of units, to include a minimum of 12 units, will be inspected for properties with 16 or more units. Property Code and Nuisance Violations Criteria License Category Number of Units Property Code Violations per (Based on Property Inspected Unit Code Only) Type 1 -3 Year 1-2 units 0-1 3+ units 0-0.75 Type II - 2 Year 1-2 units Greater than 1 but not more than 4 3+ units Greater than 0.75 but not more than 1.5 Type III - 1 Year 1-2 units Greater than 4 but not more than 8 3+ units Greater than 1.5 but not more than 3 Type IV - 6 Months 1-2 units Greater than 8 3+ units JGreater than 3 b. Police Service Calls. Police call rates will be based on the average number of valid police calls per unit per year. Police incidences for purposes of determining licensing categories shall include disorderly activities and nuisances as defined in Section 12-911, and events categorized as Part I crimes in the Uniform Crime Reporting System including homicide, rape, robbery, aggravated assault, burglary, theft, auto theft and arson. Calls will not be counted for purposes of determining licensing categories where the victim and suspect are "Family or household members" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 51813.01, Subd. 2 (b) and where there is a report of "Domestic Abuse" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 51813.01, Subd. 2 (a). 1Vissioii Enswiizg an attractive, clean, sitle, inclusive community that euliuiices ili quality oJlfc for all people and preserves the public tins! I[IiIJ[I1 i U V UU MIiIUSMI 5 or more units Greater than 0.35 but not more than 0.50 Decrease 2 1-2 Greater than 3 Categories 3-4 units Greater than 1 5 or more units Greater than 0.50 Budget Issues: There are no budget issues to consider. Strategic Priorities: Safe, Secure, Stable Community Attachment - Mitigation Plan Mission: Ensuring un attractive clean,sJè', inclusive coinnum/r that (?/IIJIIIICCS the q;uIhJ oj'lfi for nil jeople and pieserves the public ti( Li H. 1/ ii I j" i • LLft. • • 4.. •L: • • •44. • . '• 4.. I1V( ND COW!1VIUNTY ST2fd r.)1RDS R e nt a l License Miyation Plan Type IV nI \lriiy vuf; dotal WAdwaNyi p"adAn bun n"Umnak fwAmmi that V1 no C't (rI! youl :iIi'.i1r ''i, t; li: il ly ros / cuy Ma u o/?:y ( /// I ( - I !I () (1 (7' /) 2 -t / Zi - j (iy of - HURAng C'flTi CC'r nlflhi hndird Inv tAt City Cnfflllili Agf1lldi llirn N©0 i©i #2 COUNCI[L I[TEM MEMORANDUM DATE: November 27, 2017 TO: Curt Boganey, City Manage f THROUGH: Michael Ericson, Interim Community Development FROM: Jesse Anderson, Deputy Director of Building and Community Standards SUBJECT: Type IV 6-Month Provisional Rental License for 509 61 " Ave N Recommendation: It is recommended that the City Council consider approval of the Mitigation Plan and issuance of a Type IV 6-Month Provisional Rental License for 509 61st Ave N. The applicant or representative has an opportunity to present evidence regarding the submitted Mitigation Plan. If the Council chooses to modify or disapprove the Mitigation Plan, it is recommended that the motion be to direct staff to prepare proposed findings for disapproval of the Mitigation Plan and notify the license applicant of any pending license actions to be taken at a subsequent Council Meeting. Background: This owner is applying for a renewal rental license. This is a single family property. The previous rental license was a Type II Rental License. This property qualifies for a Type IV Rental License based on thirteen (13) property code violations found during the initial rental license inspection and zero (0) validated police nuisance incidents for the past twelve months. Staff from Administration, Building & Community Standards and Police Departments worked with the property owner regarding a mitigation plan, which requires Phase I, II and III of the Crime Free Housing Program, and other items included by City ordinance for a Type IV Rental License. A Mitigation Plan has been developed addressing the requirements of the ordinance and any issues specific to the property. Therefore, staff is recommending approval of the Type IV Rental License on condition of adherence to the Mitigation Plan. Please refer to the attached copy of the Mitigation Plan for more information. The following is a brief history of the license process actions: 08-03-2017 The Owner, Tim Daniels, applied for renewal of the rental dwelling license for 509 61st Ave N, a single family dwelling. 08-29-2017 An initial rental license inspection was conducted and failed. 13 property code violations were cited, see attached rental criteria. 09-29-2017 A second rental inspection was conducted and failed. A $100 reinspection fee was charged to the property. 10-05-2017 The $100 reinspection fee was paid. fihission: Ensuring an attractive, clean, satè, inclusive conenzuniiv that enhances the quality of life for (Ill people aiulpreseives the public (lies! [EI1IJ(S1 I U I I M'4 LII Ik'4 (SI t1I flh1 I 10-10-2017 A third inspection was conducted and passed. 10-24-2017 City records indicate 0 validated police nuisance incidents occurred in the past twelve months. 10-24-2017 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 11-13-2017 A Mitigation Plan was submitted. 11-15-2017 The Mitigation Plan was finalized. 11-17-2017 A letter was sent to the owner notifying that the hearing before the Council will be held November 27, 2017. If approved, after six months, a new rental license is required. The license process will begin approximately four months. The new license will be based on the property code violations found during the initial renewal license inspection and the number of validated police calls for services for disorderly activities and nuisances as defined in 12-911. The terms of the mitigation plan must also be met. Excerpt from Chapter 12 of City Code of Ordinances: Section 12-913. TYPE IV PROVISIONAL LICENSES. 1.Rental properties that meet the provisional licensing criteria as described in Section 12- 901 are eligible only for provisional licenses. 2.The City will provide by mail to each licensee a monthly report of any police and fire calls and incidents and applicable property Code violations as described in Section 12- 901. 3.Mitigation Plan. The applicant for a provisional license must submit for Council review a mitigation plan for the license period. The mitigation plan shall describe steps proposed by the applicant to reduce the number of police and fire calls and/or the property Code issues described in Section 12-901 and 12-911 to a level that qualifies for a Type I, II, or III license. The mitigation plan may include such steps as changes in tenant screening procedures, changes in lease terms, security measures, rules and regulations for tenant conduct, security personnel, and time frame to implement all phases of the Crime Free Housing Program. 4.Council Consideration. The application with a proposed mitigation plan will be presented to the City Council together with a recommendation by the City Manager or the Manager's designee as to the disposition thereof. After giving the applicant an opportunity to be heard and present evidence, the Council shall approve, disapprove, or approve with conditions the application and the mitigation plan. If the Council disapproves an application and mitigation plan or approves it with conditions, it shall state its reasons for so doing in writing. In evaluating a mitigation plan, the Council will consider, among other things, the facility, its management practices, the nature and !!ics!on: Ensuring uii attiactii'e, clean, inclusive conunu ally that enhances the quality oJ'ltJè for till people and preserves the public trust i1II[iJ I U V MA UIYA I M"A [I) 1I W1h'A I seriousness of causes for police and fire incidences and/or property Code issues and the expected effectiveness of measures identified in the plan to reduce the number of police and fire incidences and/or property Code violations. In evaluating a mitigation plan submitted by an applicant already under a provisional license, the Council will also consider the effectiveness of measures identified in the applicant's previous mitigation plan and the need for different or additional measures to reduce police and fire incidences and/or property Code violations. 5. Compliance with Mitigation Plan. The licensee shall comply with the mitigation plan as approved or modified by the Council. No later than the tenth day after each calendar month, the licensee shall mail or deliver to the City Manager a written report describing all steps taken in furtherance of the mitigation plan during the preceding month. Rental License Cate g ory Criteria ZCouncilIIII}D 1.Determining License Categories. License categories are based on property code and nuisance violations noted during the initial or renewal license inspection or for a category verification inspection, along with excessive validated police service calls occurring over a year. License categories are performance based and more accurately depict the condition of the property and the City costs of service. 2.Fees. Fee amounts are determined by the costs of the city to license, inspect, monitor and work with the property to ensure category conditions are met. License fees do not include reinspection fees, late fees, charges for criminal or civil enforcement actions, or other penalties. 3.Category Conditions. The licensee or designated agent must meet the category conditions in the time period specified by the City. A licensee must meet all original conditions required by the License Category, even if a subsequent license category is achieved. 4.License Category Criteria. a. Property Code and Nuisance Violations. Property code violation rates will be based on the average number of property code violations per unit identified during the licensing inspection or category verification inspection. Property code violations for purposes of determining licensing categories shall include violations of property code and nuisances as defined in Chapter 12, 19, 7 and other applicable local ordinances. The City may, upon complaints or reasonable concerns that the establishment no longer complies with the license category criteria, A'Jiss!oii. Ensuring an attractive, clean, safe, inclusive coiwneuutr iluit enhances the tjuulltj (,!tIte for all people and preserves 1/ic public /us! iIIJh[iJ I N I U DIL'A U'A I M"A 0] 1I P1IIi I perform a category verification inspection to the same standards as the license renewal inspection as indicated below. Inspections will be conducted in conjunction with established department policies. In cases where 100% of the units are not inspected, the minimum inspection standards will be established as follows: At least 75% of units will be inspected for properties with 15 or less units. o At least 25% of units, to include a minimum of 12 units, will be inspected for properties with 16 or more units. Property Code and Nuisance Violations Criteria License Category Number of Units Property Code Violations per (Based on Property Inspected Unit Code OnM Type I -3 Year 1-2 units 0-1 3+ units 0-0.75 Type II —2 Year 1-2 units Greater than 1 but not more than 4 3+ units Greater than 0.75 but not more than 1.5 Type III - 1 Year 1-2 units Greater than 4 but not more than 8 3+ units Greater than 1.5 but not more than 3 Type IV - 6 Months 1-2 units Greater than 8 3+ units Greater than 3 b. Police Service Calls. Police call rates will be based on the average number of valid police calls per unit per year. Police incidences for purposes of determining licensing categories shall include disorderly activities and nuisances as defined in Section 12-911, and events categorized as Part I crimes in the Uniform Crime Reporting System including homicide, rape, robbery, aggravated assault, burglary, theft, auto theft and arson. Calls will not be counted for purposes of determining licensing categories where the victim and suspect are "Family or household members" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 518B.01, Subd. 2 (b) and where there is a report of "Domestic Abuse" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 51813.01, Subd. 2 (a). IWission: Ensuring an attractive, clean, saf, inc!uivr con,,nuniv that eniIcJics the quality oj1ft for all peop!i? and preserves the public mist kI1IJhi(J I fl UN aIk!IL' I DIkYA (I] t1I WA'A I Decrease 1 Category Decrease 2 Categories 1-2 3-4 units 5 or more units 1-2 3-4 units 5 or more units Greater than 1 Greater than 0.25 Greater than 0.35 Greater than 3 Greater than 1 Greater than 0.50 but not more than 3 but not more than 1 but not more than 0.50 Budget Issues: There are no budget issues to consider. Strategic Priorities: o Safe, Secure, Stable Community Attachment - Mitigation Plan fission: Ensuring an attractive, clean, saf', inclusive coiJilnuflily that enhances the quality 1I for (Il/people and preserves the public trust BiJ1DllG AND C JVA(TIflY STANDARDS V City of CENTERJI iti1 Lu lISO 1WCaOOn P1n lype IV License Han dvritton lliliyniinn Plan on/i not be accepted, A filbulub hum ecu he lorund nm duo Cityn tnduuic ol Oon LyolJ (( 7ncodou orq or nil (7G3:u tGd ttf) to havo on ebctronic eucy sont to you 013 EIui3 opu hi Adm os: C -: 0 u' Ccc. WWI b I uIO). vts !\dOIOsC o. /.:;: -u. T'nn;r P0)n( I10 Ovnnc s -Iu-O .j - .- u Onu rent LpuraCcun LtE. o I ocal /rqoiut(s) AgWs Aui;u Agrunts. Pin cce: Agent's ---'mail: Pending F purdtioi) Ciatc: C -$ tO. HP VK1 in W ""A I '--t PnSOt( 00 Inpally O(JIIuI tuo Oud/Ou VtidOod Poke :duIs the -nori,kelonec o d rrspo y cuaIrf'os fro o Type V-13 vionUi WWILccnso. t-d;or to appdcaton apptvl h/ [Ito City CNOWN 0 hdy C doted MtJ300fl I'Iau\ CIUSI hO CoroplOtOn and )uoVOO by Cult, SLuf A m,ut Ct C OtIt ('tC(u ti uu'dI3Etlt, in etdet to cnore timely COIOPtOt 00 Of ICC 11Cr 030 appd ct en uoccss ifo F/il- otuci Plan should tnoicats the steps, being eAen to COtIOCI ude.ntlIiHJ OOC1 the nwaynes Owl will be taker tu 0051110 (nuqr;iuq (;0tl1)lidclCO With Itilt, cndur;u:o; 0 nd C1upl50udC' COdeS A V utuqatKCI Plan olkonns the ownor and tic Culy to evien concems one identity possuole sotutuns to improve overaH candlionsol the f)iO01tt,. lithe tAigariort 0 1t-un is not sohcutLd and all dents are not uuinptulO nndlnfl lire pendng [00030 prrcd or the aba-in puoporty rit boverit the liuusO ttYputluit doLt. 0luuucOl1.crl1 udoito such an citotuouu, [)rurr:tl crutuplaint or ho .1 ron nov toy er u u t Uefore submitting fill-out Sections A, U, and C located On jmges 2 14, and 5. 0 :. .0 L . '!.O Or. S. 'tOO (:Oy of lit oolOyt Coot or-- Ihul rung and Conu n ity Stand oid; 1) rp rtnlo et iTriLr)iNc ij\.k) UNITY STANDARDSta' CityfI UOO1(LuT Lr G ova OW YW Ra= License ninjation Plan fype IV License Sections 1:100 Wising Program F?equThienls Phase a vnan ieasc aarocn;an:. be lease ' r0n;r shallaaLfde the Crloi Fre l Wing Lease lKlendurn. A copy of the tease agreement and Crime Pree Housing Lraso Addm dum must be attached to the Mitigation Plan tihen submitted, [7' a. ii iha ijrnaf:an r teasa naam rf a a ann ci ten in Vie V ha be Ira e a nay adhend ins. 7 ad md [act! eh IM ah nei ja( a 'de nants If ma currr I - - L'rani a now L'a I; rind chack an int niqUad, OAKhe bh In ptaidy dm irffl;bn; ii cloy j aqua dm1 1 ) Mnd a City app mo d (I hahor 'Thma tee ausjn I 'bi I1ftjr1yjfl for ma;mi con in JUn 1 WI ii(a ii il 1,iiC a! na /C f 'd5 eli, A copy of the Crime Free Housing Certificate must be ettaclied to the Mitigation Plan when submhod, Cm riLe I romiu haTing was c(3u lair] ma ac mica 5;; Cn'nc'r or aecor WAYS QvnWng to attend irnindiq at cliv at b) ;l)mft Mcnth:y Updet by the 10'" ;lay ot CWh nmith, Phase II L/] I ;liW a Cmi In Mes smm and imptome'it ii'npic'ieen'iIr rear sled by the Or cablyn Canar Pabac Peperiment, To ached a t on AVE! or faIIamap Awnrity lam 'rirr cab (i"d) 6643341 A follow up assessnient must be corn pleted before the license expiration date to vat fj tho senor Q i nquomments have boo!) rip acented If a Somady AsesriorrI I-/!5 barn prCV.OUaY eornple:ad WriV Sic corrlg!aInrr dale. Smut d' lame ssrncnt v.as completed Cu! C sabrnmnhd for 1 1 I Sr en rty Assesurvisni roiIomp tens Conipktrrd oral'; scheduled icr; Continue Sections it Phase III on page . ru ar ,Wr a City ot B1'; (5'( At! '(— pmilo i ;rJ '.I yvi d;; III III kit y St idnsd:; Dpirfm;n;( i':;:!,1 I 'IT s "I' I' in BUfl [T)iC NO CCil\/I1VILIthIiY SfANJD DR City of J)rJ (elitOl MemoMoJg3ton Man Type IV LicensenF Se:ton A-Ciirno Fiee I-/ousing Pro yiam RequiremenLs (coniimiod) Phase ill own l ef of allnni wiU allond at :nr imtun of t}tc A&M. moetn. The ARM nieetMqs must ho competed within the rental license period and before the pending Type IV License expiration dote io ; i'l ha,rv:-YOO noot 'a'jo ill oo' lo 150 'P!R Rio tRi dotes an ov;n' aae. oar Ia MO' veo or eo aiIuio A FR OA a 05)' s. 0 I laveM:iI (OrI IOi': 1,i((r5I ((1'nt'0 vat to.' purl yia Tho ioIIow)ig actions are required for properties with four (d) or more units, C o iH 'LflI train rck' P t inCiudOs 2) oar c II onilore nC)nqs City of x oOIyn (c''- 9w ldin)j snd Commundy SWndw do 1APa"n wn1 ''' 0 ' •' SO' '51 -T ' i 'a. r' ,s Mvw yl ' K 0 1h- ,'o' :o- ' ' b'Or: -201 :u ix u:tNc )ND U Civ rI1JNTTYGUY of BRUOhi I o :.Nontal icense MtIgUIOn Plan Typa III Memo Sections P--Long Toiin Capital lu;provernont Plan rod oa oonditon and Eou, ost'nitoo roplornon rIns flcCct to he 1iVKiCMf for cn'. ni I 100 tJ;(hfll Iii tat makhowd vacurdingQ. komJat we lOon vain or 0(rv,I0 VoWn ft 1M( 110( lIIO;llio1f ilM and o bo ie:ftnno Soansk AH i0'1iM Htit kii hJaw; such as: Wnstmen AM know', or whan brokan' s'ill not ho acct;d K you am nn 'lion an ill M0 h7 r:rn ii you can (I UI :M ti•0 )0 OLU100 jojuor (0 'uI Iid li ;•Irc) iJH "Advi nn al Wommam On L1o' F 01 ii found at yc. 'i toy, I toiii i J\pfl an L a InCh ino SINK 1\r11 MAO roonowde Aarrn L>drcin: l:cios P1ii/IdrOJ /! nd own 11001 Pei in Shed Gi L)hvarvay AWaS Oak Lam rRepoced Conditloir hpt'ted Ro 000inoot Onto 0 1 , 0 00/ 0 0 0 (; J• j• . R:0;ut r,rI - 0' • 1 :, 17 0 0 1 COy of Droakyn Cciuoi u;ldron and CUntuniltily St;ndadj Dopitni 0 : r,ro, rOr I4 M.. ;..Y VOK"VOYM WFAMOV Y :1 •j i ;i t PJJ1LOTNG ; cvi u:\Ji i srND)DS J:?CHY of L.P utri TiJtLYN C;ENTER Nlontafl Licensc'MUJJatICn Plan Type IV Licenne Sections C-Steps to !rnp/ove oageeic;it and Conditions of Properly he ams in tiE' SeOmn have huon 1govan to nuM Ymh popc y man ijme and INOPelty hmago, tim cowing actions, are required: 71 n with tcoan every 6,0-days 21 LOW by check Im p usstle(:011; VIcim;;. vk 1 SI: 1 1 1 K 1AwN usnomments,S1i: and I 11 at CU fl iaylTnL CO U m:. U Othe'. ni hioiviiig Mons mro I)ptic)nnl unless nuclUirad by the City, ] ) PrnvSh iO(W 5,fj.(' 7 .i (C)J K: irt •e ) iatiilj S1uIty 5aIc:m, /) 'c.Vft& ni r:teiiancc .s vc ln lvi ap1accs iani.. or Scram colony Ii 1110 'I yps I'! 6 Unn;h Wntal 1 inansp w aç11ava by ho Cay (;uanci[ the ic.ensee iiiUi cnipiy ;niliovcd hi aiim: Kim mid aH avpl cahia Chy Wdos A written repOt must be rhintied by the 10 0 day of each month with an update of actions being taken by the owner nndlor agent to comply with this Mitigation Plan. A copy of the A: dUly Update can be bond on pace I. A ntlnbie tour can na bond on the Cys vibsiU at wwvcitvofc: ocklyneenterero vi ccli (An) :IaU 1330 tO ': icc :i:: e ate,ron:c copy sent to you via coin:!, Please attach additional information if necessary. 'a n /.:'. I : Ci y of Ptootdy: Cnhn Ho:i1i:iq oil ( It uOty Stall ir CIS Dpirtmnt :1 i'Oc J'L C iii: ,: ? 111 C: f) LIf )J CJCity ofAly OOi<LV\f I V d V Typo IV Wow -Tt cu'd V'iify I 'I. • •. -i I iI. in to. m wo mi v I 1 / 7 I • • • I • • •, 1- • $ I I • • • (it ;rff flliTUiV t:uIl' I)i)7 • • • CR' ty Cnll A g e n da ft©rnn N Oa #3 COUNC]IL ITEM MEMORANDUM DATE: November 27, 2017 TO: Curt Boganey, City Mana r (7 THROUGH: Michael Ericson, Interim Community Development DirecQJ FROM: Jesse Anderson, Deputy Director of Building and Community Standard Q7L SUBJECT: Type IV 6-Month Provisional Rental License for 1600 71st Ave N Recommendation: It is recommended that the City Council consider approval of the Mitigation Plan and issuance of a Type IV 6-Month Provisional Rental License for 1600 71st Ave N. The applicant or representative has an opportunity to present evidence regarding the submitted Mitigation Plan, If the Council chooses to modify or disapprove the Mitigation Plan, it is recommended that the motion be to direct staff to prepare proposed findings for disapproval of the Mitigation Plan and notify the license applicant of any pending license actions to be taken at a subsequent Council Meeting. Background: This owner is applying for a renewal rental license. This is a single family dwelling. The previous rental license was a Type III Rental License. This property qualifies for a Type IV Rental License based on sixteen (16) property code violations found during the initial rental license inspection and zero (0) validated police nuisance incidents for the past twelve months. Staff from Administration, Building & Community Standards and Police Departments worked with the property owner regarding a mitigation plan, which requires Phase I, II and III of the Crime Free Housing Program, and other items included by City ordinance for a Type IV Rental License. A Mitigation Plan has been developed addressing the requirements of the ordinance and any issues specific to the property. Therefore, staff is recommending approval of the Type IV Rental License on condition of adherence to the Mitigation Plan. Please refer to the attached copy of the Mitigation Plan for more information. The following is a brief history of the license process actions: 06-12-2017 The Owner, RHA 3, LLC, applied for renewal of the rental dwelling license for 1 600 71St Ave N, a single family dwelling. 07-06-2017 An initial rental license inspection was conducted and failed. 16 property code violations were cited, see attached rental criteria. 08-09-2017 A second rental inspection was conducted and failed. A $100 reinspection fee was charged to the property. Mission: Ensuring an attractive, clean, safe. inclusive conln1u nit that enhances the quality of lift fiji' all people and piese;'ees the pu bile (inst I U V D4YA U I (SI Uh1 UhJ1 08-24-2017 A third inspection was conducted and failed. A $100 reinspection fee was charged to the property. 08-29-2017 The $200 in reinspection fees were paid. 09-07-2017 A fourth inspection was conducted and passed. 09-30-2017 The previous rental license expired. 09-19-2017 City records indicate 0 validated police nuisance incidents occurred in the past twelve months. 09-19-2017 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 10-25-2017 A Mitigation Plan was submitted. 10-31-2017 The Mitigation Plan was finalized. 11-17-2017 A letter was sent to the owner notifying that the hearing before the Council will be held November 27, 2017. If approved, after six months, a new rental license is required. The license process will begin within two months. The new license will be based on the property code violations found during the initial renewal license inspection and the number of validated police calls for services for disorderly activities and nuisances as defined in 12-911. The terms of the mitigation plan must also be met. Excerpt from Chapter 12 of City Code of Ordinances: Section 12-913. TYPE IV PROVISIONAL LICENSES. Rental properties that meet the provisional licensing criteria as described in Section 12- 901 are eligible only for provisional licenses. 2.The City will provide by mail to each licensee a monthly report of any police and fire calls and incidents and applicable property Code violations as described in Section 12- 901. 3.Mitigation Plan. The applicant for a provisional license must submit for Council review a mitigation plan for the license period. The mitigation plan shall describe steps proposed by the applicant to reduce the number of police and fire calls and/or the property Code issues described in Section 12-901 and 12-911 to a level that qualifies for a Type I, II, or III license. The mitigation plan may include such steps as changes in tenant screening procedures, changes in lease terms, security measures, rules and regulations for tenant conduct, security personnel, and time frame to implement all phases of the Crime Free Housing Program. 4. Council Consideration. The application with a proposed mitigation plan will be presented to the City Council together with a recommendation by the City Manager or the Manager's designee as to the disposition thereof. After giving the applicant an opportunity to be heard and present evidence, the Council shall approve, disapprove, or fi;:Ud Ensuring an a(nc1i', clean, safe. inthsrve CUaGWn!r that eitL IIuiC'S the quality of lfc Jn' all peop!e oar! prese;PeS /ie pulilw trust EI]JJ[IJ I 1 U Mk'A I I DkI(I) 1I aIlsJL'A I approve with conditions the application and the mitigation plan. If the Council disapproves an application and mitigation plan or approves it with conditions, it shall state its reasons for so doing in writing. In evaluating a mitigation plan, the Council will consider, among other things, the facility, its management practices, the nature and seriousness of causes for police and fire incidences and/or property Code issues and the expected effectiveness of measures identified in the plan to reduce the number of police and fire incidences and/or property Code violations. In evaluating a mitigation plan submitted by an applicant already under a provisional license, the Council will also consider the effectiveness of measures identified in the applicant's previous mitigation plan and the need for different or additional measures to reduce police and fire incidences and/or property Code violations. 5. Compliance with Mitigation Plan. The licensee shall comply with the mitigation plan as approved or modified by the Council. No later than the tenth day after each calendar month, the licensee shall mail or deliver to the City Manager a written report describing all steps taken in furtherance of the mitigation plan during the preceding month. Mission: an atacth'a, clean, sq/ c. inclusivc connan:iir that enhances the çIlaIltJ' ojlsk [or, all people, wsdpreseres the pe i/ic trust [1IJ[iJ S U I k'A L'A I akYA (I) 1I I1lJtAI Rental License Category Criteria Policy - Adopted by City Council 03-0840 1.Determining License Categories. License categories are based on property code and nuisance violations noted during the initial or renewal license inspection or for a category verification inspection, along with excessive validated police service calls occurring over a year. License categories are performance based and more accurately depict the condition of the property and the City costs of service. 2.Fees. Fee amounts are determined by the costs of the city to license, inspect, monitor and work with the property to ensure category conditions are met. License fees do not include reinspection fees, late fees, charges for criminal or civil enforcement actions, or other penalties. 3.Category Conditions. The licensee or designated agent must meet the category conditions in the time period specified by the City. A licensee must meet all original conditions required by the License Category, even if a subsequent license category is achieved. 4.License Category Criteria. a. Property Code and Nuisance Violations. Property code violation rates will be based on the average number of property code violations per unit identified during the licensing inspection or category verification inspection. Property code violations for purposes of determining licensing categories shall include violations of property code and nuisances as defined in Chapter 12, 19, 7 and other applicable local ordinances. The City may, upon complaints or reasonable concerns that the establishment no longer complies with the license category criteria, perform a category verification inspection to the same standards as the license renewal inspection as indicated below. Inspections will be conducted in conjunction with established department policies. In cases where 100% of the units are not inspected, the minimum inspection standards will be established as follows: o At least 75% of units will be inspected for properties with 15 or less units. o At least 25% of units, to include a minimum of 12 units, will be inspected for properties with 16 or more units. Icio,: iioaractive, cIew, S( f?, inc1us/'' co:wwiilv t1it! el"11""'nees the qiaThj of/if t J; (ii 1 JiP? aiu/prcset'es the p/Iic (Just [II]iLXSJ Sf11 ak"A LA S ak'À [I) 1AhiI JYA I Property Code and Nuisance Violations Criteria License Category Number of Units Property Code Violations per (Based on Property Inspected Unit Code Only) Type 1 - 3 Year 1-2 units 0-1 3+ units 0-0.75 Type II - 2 Year 1-2 units Greater than 1 but not more than 4 3+ units Greater than 0.75 but not more than 1.5 Type III - 1 Year 1-2 units Greater than 4 but not more than 8 3 + units Greater than 1.5 but not more than 3 Type IV - 6 Months 1-2 units Greater than 8 - 3+ units Greater than 3 b. Police Service Calls. Police call rates will be based on the average number of valid police calls per unit per year. Police incidences for purposes of determining licensing categories shall include disorderly activities and nuisances as defined in Section 12-911, and events categorized as Part I crimes in the Uniform Crime Reporting System including homicide, rape, robbery, aggravated assault, burglary, theft, auto theft and arson. Calls will not be counted for purposes of determining licensing categories where the victim and suspect are "Family or household members" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 518B.01, Subd. 2 (b) and where there is a report of "Domestic Abuse" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 518B.01, Subd. 2 (a). License Number of Units Validated Calls for Disorderly Conduct Category Service & Part I Crimes (Calls Per Unit/Ye No Category 1-2 0-1 Impact 3-4units 0-0.25 5ormoreunits 0-0.35 Decrease 1 1-2 Greater than 1 but not more than 3 Category 3-4units Greaterthan0.25butnotmorethan1 5ormoreunits Greater than 0. 3 5 but not more than 0.50 Decrease 2 1-2 Greaterthan3 Categories 3-4units Greaterthan1 5 or moreunits Greaterthan0.50 !ission: Ensuring an a/ti'acui1C clean, safe, inclusive community that enhances the quality oJhti' jar u//people and preserves the public trust I1BJ[IJ I•I U ML!'4 I Dlh'A[I) 1I I1IJAl Budget Issues: There are no budget issues to consider. Strategic Priorities: o Safe, Secure, Stable Community Attachment - Mitigation Plan Mission: EiuriI?g an atinctf in, clean, .saf, inclusive connWt1Ur that eflhi(lIiceS fhe qy1alify ojljte for (ill jeople and preserves the pad/ie has! UITjDT ANE COMMUNITY SANiMDCLLycf KLYMIA. CENTER n1Licri Mi h ,jirnPIn TIVLiiw th Pkiiv. vi'I ria br A filkible form clunteiurd an ie C.11y 'bttc otI 1-333O k i1 ltiik y'cr.1 t ' rHJit. Frpiry I 1I i'.' r ner r,a):Pi H A S., LL i%i 1 C t"!' 1W J kitl r(IL,,I J:•,::1 La nl A d rit) H''' LLC A9rr Addr: ! U Ii CxrIy RJ B Jt i H:iII. F.Ift 13 Ph 4Dj Email: Cu rer4 rathri ria lie: Phone: :: iit' Ernjiil; Frithi' EXirkin DLe ,I rlb L Based on prccier.1 ortc'n iVI Ed pciF uric TicdrIL, he aE rienrJd rapift 1pri Tqx tVi irilh F:rir tir', Prir10 BpIcbn prct b1he City :iflCH 1 fl onptc P Iiitkn 1ln rr'it b nIk'J iri pid 1 CUy uiiff, I'. iiin an m i i b r inp a I e 6 in ini in cilrr In rwo t:nioI cc'nipe.or oittie Iieii 3ppIiitoi proe, 1 h MIi Dri PIn noid Inat slep Lln vkIitirr; pni hi Iht w11 ht Liken k rri:ri orjoirg mpII.inGowiih Cit' dinane and cbI c<Jes. A Pt3tbn [bn 8IIc une owner and The C ki iw jr.d 'dr pIify r ri iriprciir nurrilt cr rdn s z'f1hc vopr. fhiE !4dçIIon t9i irJ all Itenig are nM ': pitd wF.iin tie pendirig Iiceii rkid, ir thd obwa., prperi' aprrib hyzin I.h c. Ii piriiziri d1r: c. nfo. r nior,1 a crorE such E s ctaton, k2 (i Ti 1t;iiir, cif , license riEw niay rkLt tia irnIiIri, IiI-out SE-olDnU A B. and C IOCBted oij pj 2, 3, 4, a rid 5, IIT .11 rinik!urr nr-11in!i11n rirI tie -S :1'ftiiini hfl I I*.!- I. I L I ?4 "i I ft, r- ' u rn 'i - AU11DING 2tiII) COMMUNITY STATWICIDS , CityafRQOUN1140 71sl Awl N 5Iita1 Lrt Miiitziticm K imCENTER IL Type, IV Lkan%r tiOfl Cnrnc Fr J.rciig Pgrw1? Rrc'rm'tt. Was I 1 wrior ki€ r -rrL ire Jr&rri h;It i -icludo 1h GE ri' Fr Hiuiig Lr.r Mth,r.irn 1 c o py of iho rrnri and Qmo ROD F-1uny Loose AdiLuni must blflid Lh ILJton II.n whol auhnflEbLA 21 Al ve ki pir.Iic rniir.ilirn r 4,-Ds e qrE verI 01 'i:Ik:ci of r'rmI Wr VIOJ Lie Lerms of Ihe le or 'iy 8 6deidunm :' C'd'.iz crirnl L'coirourt t'ec< for aE prI:I:icto Ii - ler ;^nL a iew b kiiui::1 dittk N r.cii rq''o. ki: lb piid dtrrerilior lo (i vj If roied. 4 ) Cy çriwtd iii.hriir Cririe Fr• Fru&nj ItTniiig iurr, irfc'rri1iii fr rpro"et coumes c a n be ?e,Lfld SL W% .trTh:pnci inthr ie a;d E';ri kb, A copy QF to We HaimIng O ertirie.alemust bp ami09d lo, 0 -o P l a n when uwi1L C ririi Fmm Ho"ho t rair.-mv;ps orip te'J oWl b.l1L iii ci f ''iii or .iiit Wh W u Mb pLirir ici Ici i' trrnfli o l ciL/ol ! Subdi F/ritiIy !Jdalm Lr' Me 1.iJhl dy 0 eac h IIi11I'! PFiu I 1 CrrIeIe i uitV enit and hnpl iv e r l, ir , prci'oniicfl$ rquIe b Die 01ikFju Ciir PIi:i D n pmrI m n nf. To 6 edi.'e an IrJiI Lit raIi:wip iuil Ammum cII 7E) 5E-2.4. A Wlawwupp asSea sment ii he rnpkibc1 brfcwj 1n-i Irn 1km dl a te lo tlit euurily irn pro 'ionioni have bi tmplcTerito:d. Sawrly AinI has bin pmVV V S N C OMP AW, wr:s Ih eamp NSw d o t. Seury C6r)fit LUirij'cklli Dniij 5 C.1 0 1i led for, JJfI A 66fliEt tOIL ph tiiIUId rr;lQlu g nii nuai Swims A Mase III uci , ii:ii F Cy kLTn Cn1 rdi 11rtTft, nd.ii' Dr1iI,4rt I 'i.Cik irii .!-i R U'& la w UM I I Iii ?li I Ou jMll 291 3 16) BUIEMINGAND COMMUNITY JFI ,1 1 I na I Li Miiigtlon PllrcrER 1ypIV 1,k7onse IM1 A—Csimr Frvr., HorisfM7 Proi uirr,rr! cQiiJJ Phase Or jJ 1 Orir or 3n1wfl lLrE i of II in n, TM A.M. rr.L-:!tinqs must be pk4 Willi Th Wit rriI IIr& ierIds ad b0bra lhcz pending Type IV Uterise expiratkisvdate.,F-eFIr ri i rr uird, hryivuE aijriiti during On loVrAPOO nei!Ig Miwn ni ow,rr or pii ii, IIcij Crticir or a g'r I w aI1erii &H.M. ri irJL ijc ''n: LO 2 H 3 Vcj 'in rLaI odr e JIy 6n UWir,ItJ w. 1h h pI y2ar. TO WHOWN mcdons arerequired lor POPlANP5 with knis (4) OP MM urIt.iii hinri inri.rdJ' ir4 'icIui tri 1cchrIqu.. LIII 2 Conduct rqur riiI ;y :L. "}tl! I.yi c'-i 5 Mly Drinu1 Thci'. L't, UN bvig"Of I OMMINOi?) I T'W 11 F.i C' Citl RULD ' ING AND OMMUTflSTANDARDS NER 0 Rii YN 1L 1 Ri CENTER Type N Lw ck4n B irJp Tñ7t 'mePR 8U tui rorilifor arid Pp, etm31d f d red : ho pr/dr ircii'irjiurj iii ELI ulJ 1. n frrd ,ccorji l. lie ri r, I Foi uolo brkei, kqrji ti. o iiiIiIieiii prnr til 1h. 8T.a1l? f1ILnI iiI r't 10 Lt reThjo.d r'iior. 'J dIe ?rE.L'.'r IFp!ii IrL tM i; urf', "dri{ knv or hri brikmi"wUi Iirjlb ipiL iryw ime urure yI kAieii un ilcri ''aiII ned ii b ipImxd, you can prditin hid cin Iho ppi undi ri, or ir onr nr IthIkril hri iIu n n Expr.c.led LLFLI L ir hr fou id t kweithud in bate Last R.--placed Fci: M1OO FUrric i2iI! Vcater HaI KkFi 1 14pr. L3UiIdry ppInc s 8nic'e AIri CirIxi J.riJixj3 Ali)1 E!ei2!h e rl y. 7li? ?iTli RUV irmjc cI rCr CIO ikfliUrf' pcIe iitricmt Fle F M 2020 (4 l'.'l F I.- G I-> F ri ii - fl Cqy S BkL —3ri!dirlq intL G'rLIiU'ALy n;! C:d 'i:.r' i-:%1I <:1I!r. 'l I J rr? r BUILDING AND COMMUNITY STANDAADs, E.00ICLYN JD7ilAN 'CNTER Rnil Lri ?iI1oq PIri Ucnmrw Skr $rp. Jipr'v ir'f wci C4iiä'i. Ppery lhE IIern in Iii iin iyo bz'?r4 proqerlo 2it'vrh pptFr n:j irn 9nd prcpe.ry irmji, Vile ionowiiii Hcint mrc rqirad1: G?.1 i' Chc.k-i it' iriwi ir' 2 D: Lly çopEir['' lo th: fdr ih c'ck vti. 7] 3] EviL !it in vk%alionn j I1i' cr any o ddleridwr . [] 41 Rnlr Lii Lii i1l uUHIi fcE •nnb, iln rh r;tdil i:;L,in due LCJ ih LJ 5) JIr RuH P'u TfcIIciry nullons are idriI unlc qureci b Ill i (?J ProOde patage tiJii, ) In!;h1ll zc.iiiiI tenL 1 IOi MaHenonco -imlu* p'.ii Fi p:ilianc. Name of ER'i i:iprpj [•J 5) _____ If lli. T yptt IV4P!''iti PritI License i, o rd bt Me C y Cbuntil,jh k7 I craee fl '1 wth II'ie Eppr wime d Vt. kilion PLn aid all link City Cod'. rrft2fl j>rt ri1I.it Lw by the i JJ'j of ti]i m thvithnr updjir b mirjndcir no!L-ri l 46onpyw]t1i thIs. PJri. Aixi'4 [he FdIt-AblyUpdale Ctfl bE iaUri cn i' e F, J filjn!,lo frrn cri we rej ar I h 0 Ci 1 lvm mi. cho l'naritir.orj z'rcll t03) 5 j-.-33O ki jyt m ri cp ei'I .rm?iL Pkmsc itich idiItIciniI äflrnLIicn fcrir'. Li.i UJ C —1Ld1z nn cir'iriUydLV Eti r.rit rL ::,:I•\ Fiiii I?I T( ?1 1 r.!-; l'] IMMADITIC8 AND COMMUNITY tOOIYN 1 rii1 Urome MIlj1icn Pj.ii Lle&rinc hd Vcrlfj I vcr Uit U Ir 1IIII ir-it1r.zI 1 rI"3 EWd a CZiluk, I I rae,retard 1U21t iF] Jc1 riot ruumpiy wilh ir'0'!d iijil on 'Plan, ujrnpl vjilh a] Inrrnw, iihin the In;r prii, c r cipI byind ih Iie epii.ir dniv, unhwarpont schng sueli iIilion, r'iiiai iIihh, or Ina avy rut. Gzd Li.xlir nr cii:r, MH Giii.r r,1f1L'l! ;;:T tn fiu(Il) i,I Scott Beck r (V7il iIwI Lfr1.L&1 C' eq.i ,:,cl iiiiw (! 7jJj I I I1 I I Alam! LI LiTC (Al Itt i .Si'J 4 __ cr F1•LE; ..::iFITIi;! Ago & WOUMUP.1 ip Rii 4j.i. Ii iJJTMyrII Can —uJL'6 nnrl ÜPiTTITII wwv I:-rrjIei; b I I IH 1 r4 i} F1 t i fr'.I - I it W I II TI? 11 I RoIi j Cfity C©ninidli Agenda I[t©m N©0 Mn COUNCI{L ITEM MEMORANDUM DATE: November 27, 2017 TO: Curt Boganey, City Mana THROUGH: Michael Ericson, Interim Community Development Direct9i FROM: Jesse Anderson, Deputy Director of Building and Community SUBJECT: Type IV 6-Month Provisional Rental License for 2023 Brook - Recommendation- It is recommended that the City Council consider approval of the Mitigation Plan and issuance of a Type IV 6-Month Provisional Rental License for 2023 Brookview Dr. The applicant or representative has an opportunity to present evidence regarding the submitted Mitigation Plan. If the Council chooses to modify or disapprove the Mitigation Plan, it is recommended that the motion be to direct staff to prepare proposed findings for disapproval of the Mitigation Plan and notify the license applicant of any pending license actions to be taken at a subsequent Council Meeting. Background: This owner is applying for a renewal rental license. This is a single family dwelling. The previous rental license was a Type II Rental License. This property qualifies for a Type IV Rental License based on eleven (11) property code violations found during the initial rental license inspection and zero (0) validated police nuisance incidents for the past twelve months. Staff from Administration, Building & Community Standards and Police Departments worked with theproperty owner regarding a mitigation plan, which requires Phase I, II and III of the Crime Free Housing Program, and other items included by City ordinance for a Type IV Rental License. A Mitigation Plan has been developed addressing the requirements of the ordinance and any issues specific to the property. Therefore, staff is recommending approval of the Type IV Rental License on condition of adherence to the Mitigation Plan. Please refer to the attached copy of the Mitigation Plan for more information. The following is a brief history of the license process actions: 03-17-2017 The Owner, RHA 3, LLC, applied for renewal of the rental dwelling license for 2023 Brookview Dr, a single family dwelling. 04-12-2017 An initial rental license inspection was conducted and failed. 11 property code violations were cited, see attached rental criteria. 06-30-2017 The previous rental license expired. 08-22-2017 A second rental inspection was conducted and failed. 10-12-2017 A $300 Administrative Citation was issued for operating without a license. Alission: EnSIInIIg an iIItI(lC1iV, clean. StIle, inclusive COIJIIU(IIIIIV that en/IUHCCS the quality of/lie /7l fill People and pieserees the public (just I1IJ[iJ I RI I 1k LU )IkYAO] UI I1lJkkI 10-16-2017 A third inspection was conducted and passed. 10-16-2017 City records indicate 0 validated police nuisance incidents occurred in the past twelve months. 10-16-2017 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 10-25-2017 A Mitigation Plan was submitted. 10-31-2017 The Mitigation Plan was finalized. 11-17-2017 A letter was sent to the owner notifying that the hearing before the Council will be held November 27, 2017. If approved, after six months, a new rental license is required. The license process will begin immediately. The new license will be based on the property code violations found during the initial renewal license inspection and the number of validated police calls for services for disorderly activities and nuisances as defined in 12-911. The terms of the mitigation plan must also be met. Excerpt from Chapter 12 of City Code of Ordinances: Section 12-913. TYPE IV PROVISIONAL LICENSES. Rental properties that meet the provisional licensing criteria as described in Section 12- 901 are eligible only for provisional licenses. 2. The City will provide by mail to each licensee a monthly report of any police and fire calls and incidents and applicable property Code violations as described in Section 12- 901. Mitigation Plan. The applicant for a provisional license must submit for Council review a mitigation plan for the license period. The mitigation plan shall describe steps proposed by the applicant to reduce the number of police and fire calls and/or the property Code issues described in Section 12-901 and 12-911 to a level that qualifies for a Type I, II, or III license. The mitigation plan may include such steps as changes in tenant screening procedures, changes in lease terms, security measures, rules and regulations for tenant conduct, security personnel, and time frame to implement all phases of the Crime Free Housing Program. 4. Council Consideration. The application with a proposed mitigation plan will be presented to the City Council together with a recommendation by the City Manager or the Manager's designee as to the disposition thereof. After giving the applicant an opportunity to be heard and present evidence, the Council shall approve, disapprove, or approve with conditions the application and the mitigation plan. If the Council disapproves an application and mitigation plan or approves it with conditions, it shall state its reasons for so doing in writing. In evaluating a mitigation plan, the Council will consider, among other things, the facility, its management practices, the nature and IIisstoi: En stir! iig (III (tltl'ilCtltC, C/(Ufl S(fe, !nc!zsTVe COt)IIIWW2V thiJ JI(WC?S the qsuzIEiJ oJ/rf! for oil IJOOplI! widpiesenes the pbiic Ernst seriousness of causes for police and fire incidences and/or property Code issues and the expected effectiveness of measures identified in the plan to reduce the number of police and fire incidences and/or property Code violations. In evaluating a mitigation plan submitted by an applicant already under a provisional license, the Council will also consider the effectiveness of measures identified in the applicant's previous mitigation plan and the need for different or additional measures to reduce police and fire incidences and/or property Code violations. Compliance with Mitigation Plan. The licensee shall comply with the mitigation plan as approved or modified by the Council. No later than the tenth day after each calendar month, the licensee shall mail or deliver to the City Manager a written report describing all steps taken in furtherance of the mitigation plan during the preceding month. fi,i En:uing n flhtiUCll?, clean, suf'. inclusive coui,n:uuuiI.r that aiziutnees I/ic qIuallr ofljfi J'n al/people oinlpc.ceiu'es the public (rust [I1PJ(1 IN II AUIU Ik'A F i ll Il )1$Jk'A I Rental License Category Criteria Policy - Adopted by City Council 030840 1.Determining License Categories. License categories are based on property code and nuisance violations noted during the initial or renewal license inspection or for a category verification inspection, along with excessive validated police service calls occurring over a year. License categories are performance based and more accurately depict the condition of the property and the City costs of service. 2.Fees. Fee amounts are determined by the costs of the city to license, inspect, monitor and work with the property to ensure category conditions are met. License fees do not include reinspection fees, late fees, charges for criminal or civil enforcement actions, or other penalties. 3.Category Conditions. The licensee or designated agent must meet the category conditions in the time period specified by the City. A licensee must meet all original conditions required by the License Category, even if a subsequent license category is achieved. 4.License Category Criteria. a. Property Code and Nuisance Violations. Property code violation rates will be based on the average number of property code violations per unit identified during the licensing inspection or category verification inspection. Property code violations for purposes of determining licensing categories shall include violations of property code and nuisances as defined in Chapter 12, 19, 7 and other applicable local ordinances. The City may, upon complaints or reasonable concerns that the establishment no longer complies with the license category criteria, perform a category verification inspection to the same standards as the license renewal inspection as indicated below. Inspections will be conducted in conjunction with established department policies. In cases where 100% of the units are not inspected, the minimum inspection standards will be established as follows: o At least 75% of units will be inspected for properties with 15 or less units. o At least 25% of units, to include a minimum of 12 units, will be inspected for properties with 16 or more units. fklission: Ensuruig an altrucln'e, clean, sqfei inclusive cornnurnitV that enhances the qiialltj ojlrf! for all people and preserves the public trust [EIIiSJ11 I RI I k1U I iki(I] 1WI P]JJhYAI Property Code and Nuisance Violations Criteria License Category Number of Units Property Code Violations per (Based on Property Inspected Unit Code Onlv Type 1-3 Year 1-2 units 0-1 3+ units 0-0.75 Type II -2 Year 1-2 units Greater than 1 but not more than 4 3+ units Greater than 0.75 but not more than 1.5 Type III - 1 Year 1-2 units Greater than 4 but not more than 8 3+ units Greater than 1.5 but not more than 3 Type IV - Months 1-2 units Greater than 8 3+ units Greater than 3 b. Police Service Calls. Police call rates will be based on the average number of valid police calls per unit per year. Police incidences for purposes of determining licensing categories shall include disorderly activities and nuisances as defined in Section 12-911, and events categorized as Part I crimes in the Uniform Crime Reporting System including homicide, rape, robbery, aggravated assault, burglary, theft, auto theft and arson. Calls will not be counted for purposes of determining licensing categories where the victim and suspect are "Family or household members" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 518B.01, Subd. 2 (b) and where there is a report of "Domestic Abuse" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 518B.01, Subd. 2 (a). License Number of Units Validated Calls for Disorderly Conduct Category Service & Part I Crimes (Calls Per Unit/Year) No Category 1-2 0-1 Impact 3-4 units 0-0.25 5 or more units 0-0,35 Decrease 1 1-2 Greater than 1 but not more than 3 Category 3-4 units Greater than 0.25 but not more than 1 S or more units Greater than 0.35 but not more than 0.50 Decrease 2 1-2 Greater than 3 Categories 3-4 units Greater than 1 5 or more units Greater than 0.50 lI!ssion: Ensuring tin I;'ac//t'!, den, stif. jnciusn'e conununity (hut enhances the quality otIjje Ji,- efipeople 01(1 pie selves the public trust II1tk(iJ fl I I KA LU 11115 j, j7j IIIJIYAI Budget Issues: There are no budget issues to consider. Strategic Priorities: Safe, Secure, Stable Community Attachment Mitigation Plan ?ffsv!on: Jinszunzg an altractn'e, clean, saf, incl,sive comma ally 111(11 enhances (lie qualify of life for all people and preserves (he public trust Property Address: 2023 Brook Vw Drii Owners Name(s): RHA 2, LLC Owners Address: 1611 Courty Rd B WesUflO4 Rsü'iRlo, MN, 551 ta Owners Phone: 470)268380 Owners Email; rh3©hvevibraok1i5me.cOm Local Agents: l-lavenBrook Horne5, LW Agent's Address: 1611 County Rd B Wi-104 Ro5evilki MN, 55113 Agent's Phone: (470) 268-920 Agent's Email: mrlvonBrookhcnisøm Current Expiration Date: Pending Expiration Dale: L ' V I Isix months from currcnt piratnt Based on property conditions and/or validated police nuisance incidents, the above referenced property qualifies for a Type IV-6 Month Rental License. Prior to application approval by the City Council a fully completed Mitigation Plan must be completed and approved by City staff, A Mitigation Plan must be compleled immediately in order to ensure timely completion of the license application process. The Mitigation Plan should indicate the steps being taken to correct Identified violations and the measures that will be taken to ensure ongoing compliance with City Ordinances and applicable codes. A Mitigation Plan allows the owner and the City to review concerns and identify possible solutions to improve overall conditions of the property. lithe Mitigation Plan is not submitted, and all items are not completed within the pending license period, or the above property operates beyond the license expiration date, enforcement actions such as citation, formal complaint, or license review may result. Before submitting, fill-out Sections A, B and C located on pages 2 3 4 and 6. Q.1O 116 Typs IV Rnfa/ UOAnSO riM1afiurt Plan, Rev, 444-15 City of Dtooldyn CiiteY—Th1ild.1l9 and C muitfty slandatas molt wd.wIbrociktriootoLorg c3I1 5hinIo Cr kPerkwy, Broo ncenter, M'l 430.2119 1 (763) 56q,3310 I TW: 711 1 Fax: lk3)566-356o BUILDING AND COMMUNITY STANDARDS City of 0 IBROOKLYN 2023 arokview rive Rental L[ceto MtU hon PlanCENTER Type IV License Sections ACrirne Free Housing Program Requirements Phase I 1 Use a w(lUen lease areemenL The lease agreement thafl include the Crime Free Housing Lease Addendum. A copy of the lease agreement and Crime Free Housing Laso Addendum must be attached to the Mitigation Plan when submitted. EZI 2) Agree to pursue the termination or lease agreement orevilion of tenants who violate the terms of the lease or any addendums. 3) Conduct criminal background check for all new prospective tenants. If is a current tenant a new background check is not required. Must be able to provide documentation to City if requested. jJ 4) Atterd a City approved eight-hour Crime Free Housing training course Information for pprovd coor5e5 can be found atwww,mncpanet under the Tra ining &dEvrr1s tub. A copy of the Crime Free Housing Certificate must be attached to the Mitigation Plan when submitted. Crime Free Housing training was completed On/is scheduled for: 512011Z St PaulOwner or agent attended/is p[annIng to attend training at city of: 5) Submit Monthly Update by the 1 0a day of each month Phase II 1) Complete a Security Assessment and Implement improvements requested by the - Brooklyn Center Police Department. To schedule an initial or follow-up Security Assessment, call (763) 569-3344. A follow.-up assessment must be completed before the license expiration date to verify the Security Improvements have been implemented. Ira Security Assessment has been previously completed, write the completion date. Security Assessment was completed on/is scheduled for: Security Assessment follow-Up was completed on/is scheduled for: 0/ Continue Sections A, Phase lii on page 1 Page 2/ri Type !V Rn t/Cr?5 M P v. 4-1445 City OfBroolclyn eutw ut1dbg and c swiUy StAndards Dcpwimulftt t1301 SftiiOte Or Prkwy, CrokIri Certer, MN 5430-215 Phone: (763) 55ri-3330 I TT: 711 I Fax: (70j 653360 RULDING AND COMMUNfl'Y STANDARDS CENTERAT frookvijew DriyoRentatL1eenMtiaonPlan Type IV Licenso Sections A--Crirpe Free Housing Program R&ju!remeiUs (continued') Phase ifi 1) Owner or agent will attend at mhirnum 50% (2) of the ARM. rneelings. The A.RM, meetings must be completed within the rental license period and before the pending Type IV License expiration date. Registration is not required however you must sign-in during the meeting. Write two meeting dates an owner or agent plan to attend. Owner or agent wilt attend AR.tA. meetings scheduled 9114117and17 h/ I 2) Have no repeat code violaUotis previously documented with the past year. The following actions are required for properties with four (4) or more units. 1)Conduct resident training annually that includes crime prevention techniques. 2)Conduct regular resident meetings. Page NC, Type fU root.0 Lkense Piw, Rey, 444-1 Cfty Of 00i1yt Ccnter—Eiii1dth a nd Coetiiy 51idath Dprtmzit 6.O1 Brooklyn CenIr, MN 55402teo 1 Phone I Try: 711 1 Fa (763)-3g_336O BUILDING AND COMMUNITY STANDARDSA/ City Of BROoifl y-j' 2023 Brcicikiicw Drive CENTER Rental License Mitigation Plan Type IV License Sections B=Lony Term Capital Improvement Plan Based on condition and age, estimated replacement dates need to be provided for common capital items, Funding should be considered accordingly, Items that are broken, worn, or otherwise in violation prior to the estimated replacement date need to be replaced sooner, All items must have a date for 6s't/matedReplacornenf Date, Dates such as "unsure", "don't know", or "when broken" will riotbe accepted If you are unsure of when an ltrnwilI need to be replaced, you can make a prediction based on the age, appearance, condition, or manufacture/industry recommendations Additional inlormation on Expected Useful Life can be found at www bud ov Item Date Last Replaced Example: Water 1 -ba Icr May 2010 Furnace 10 Water Heater 1212614 Kitchen Appliances Laundry Appliances NIA Smoke Alarms! Carbon Monoxide Alarms 8117 Exterior Items Faint/Siding 7/15 Windows 8/2000 Roof Fence N/A Shed N/A Garage Driveway Sidewalks 611595 Other Condition Expected Replacement Date F May 2020 0 10/20 0 12/2024 i'lJ 712 ci 8/10 ci 7/29 also F wao ci 6/40 ci 8/40 ci 6/40 tCendilkn Abbreviations: NeviN GQodG FairF Needs RpiacernntR Pig 4Y6 Type iVRenal Lease MP g'*' Pii. R. 414- Ciy of ErkLyn enter—Bui14it9 isd Community Standards Depatni \WciLyoibcckIyntnteraig 6301 Shingle Creek Parkway, BrcAOyri Ce'1or, MN 55430-2159 1 Phor: (763) S693330 I TFY; 711 1 x: (763)9-0 BUILDING AND COMMUNITY STANDARDSCityif DvBROOKLYN 2023 Rental License Mitigation PlanCENTER Type IV License Sections C—Steps to Improve Management and Conditions of Properly The items in this section have been proven to assist with property management and property image. The following actions are required: 1)Check-in with tenants every 30days, 2)Drive by properly to check for possible code violations. '4 3) Evict tenants in violation of the lease or any addendurns. 4)Remain current on all utility fees, taxes, assessments, fines, penalties, and other financial clairnsipayments due to the City. 5) Other: Routina Ma:riRui.nce 1nspction5 The following actions are optional unless required by the City. 1)Provide lawn/snow service, 2)Provide garbage service. 3) Install security system. LI 4) Provide maintenance service plan for appliances. Name of service company: fl 5) Other, It the Type IV Month Rental License is approved by the City Council, the licensee must comply with the approved Mitigation Plan and all applicable City Codes. A written report must be submitted by the 101h day of each month with an update of actlon being taken by the owner and!or agent to comply with this Mitigation Plan. A copy of the Monthly Update can be found on page 7. A tillable fQmi can be found on the City's website at www.cityofbrooklyncenter.org or call (73) 569-3330 to have an electronic copy sent to you via email. Please attach additional Information if necessary. P,jq0 0,16 Te 1V Ren(,! iJcc,-so .'iüit/on F,n, ,'740 414-15 City of Brooklyn C te=.SuUdlng eid Community Standards eparl meit v,c1yo1brynentercy 6301 Srigle Creek Parkway, Brook, lyn Center, MN 5540-2le9 I Phcr: (763) 566-30 I TTY: 711 1 Fax; fV) 659-3360 BUILDING AND COMMUNITY STANDARDS of ibLYN BrookiowDie Rental License Mitigation PlanCENTER I IV License Sign and Verify verify that il information provided is true and accurate, I understand that if J do not comply with Ihe approved Mitigation Plan, comply with all items within the license period, or operate beyond the license expiration date, enforcement actions such as citations, formal complalnis, or license review may result 5col.l aecK Dlracior of OperoAims, MN Owri'rorAgent Name an if Tilt ko' P!jrii) L43h ,i',dScott Beck 1012312017 EU I7 rn p OvnrorAnf Siitne DIe AckfWori& Owner or Agent Name end Title /fAppIicobiri, Pese PrTh( AddlloniJ Owner or Ajant $iqnaWre (MppffcaWe) City Staff Only __ e crC PoJk:e Department Dale t4 SI'c2 7 - - 1IJILJny St anda rds Depwimoaf Date pa'g"' ry'6 TypoWRen1JUcerf/oikirtFlan, Rev, 4-14-I5 City of Brooklyn Cte hfliaC and GGrnrtllrnity SO . 4atds Deaix 6301 5 -tiUçIo CrEek Prkve, Brooklyn Cenhir. 114 55420-21 Phona: (763) H9 ,3330 111:711 1 Fx (763) 9-160 Oty C©llmilldli Agenda I[tm N©0 lli #5 iE111MY14J I fl U M4 UA I IhY4 (I)11IflhJiYAi DATE: November 27, 2017 TO: Curt Boganey, City Mana7' THROUGH: Michael Ericson, Interim Community Development Direct 'r A FROM: Jesse Anderson, Deputy Director of Building and Community Standards SUBJECT: Type IV 6-Month Provisional Rental License for 7031 Humboldt Ave N Recommendation: It is recommended that the City Council consider approval of the Mitigation Plan and issuance of a Type IV 6-Month Provisional Rental License for 7031 Humboldt Ave N. The applicant or representative has an opportunity to present evidence regarding the submitted Mitigation Plan. If the Council chooses to modify or disapprove the Mitigation Plan, it is recommended that the motion be to direct staff to prepare proposed findings for disapproval of the Mitigation Plan and notify the license applicant of any pending license actions to be taken at a subsequent Council Meeting. Background: This owner is applying for a renewal rental license. This is a single family dwelling. The previous rental license was a Type III Rental License. This property qualifies for a Type IV Rental License based on nine (9) property code violations found during the initial rental license inspection and zero (0) validated police nuisance incidents for the past twelve months. Staff from Administration, Building & Community Standards and Police Departments worked with the property owner regarding a mitigation plan, which requires Phase I, II and III of the Crime Free Housing Program, and other items included by City ordinance for a Type IV Rental License. A Mitigation Plan has been developed addressing the requirements of the ordinance and any issues specific to the property. Therefore, staff is recommending approval of the Type IV Rental License on condition of adherence to the Mitigation Plan. Please refer to the attached copy of the Mitigation Plan for more information. The following is a brief history of the license process actions: 05-01-2017 The Owner, Natan Zadik, applied for renewal of the rental dwelling license for 7031 Humboldt Ave N, a single family dwelling. 06-08-2017 An initial rental license inspection was conducted and failed. 9 property code violations were cited, see attached rental criteria. 07-10-2017 A second rental inspection was conducted and failed. Corrections complete; however, new violations were found. Due to the new violations, the $100 reinspection fee will not occur at this time. ,3Jivsion: Ensuring an attiacTh'e clean, safe, inclusive conuntunty that enhances the qualify ojlEft' for al/people and preserves the public trust III1SJh[SI fl I V DW4 LU k74 [I] 1WI UIAJ 07-24-2017 A third inspection was conducted and failed. A $100 reinspection fee was charged to the property. 07-31-2017 The previous rental license expired. 08-08-2017 A fourth inspection was conducted and failed. A $100 reinspection fee was charged to the property. 08-16-2017 The $100 reinspection fee was paid. 08-23-2017 The $100 reinspection fee was paid and rental license passed. 09-06-2017 City records indicate 0 validated police nuisance incidents occurred in the past twelve months. 09-06-2017 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 10-02-2017 A Mitigation Plan was submitted. 10-09-2017 The Mitigation Plan was finalized. 11-17-2017 A letter was sent to the owner notifying that the hearing before the Council will be held November 27, 2017. If approved, after six months, a new rental license is required. The license process will begin immediately. The new license will be based on the property code violations found during the initial renewal license inspection and the number of validated police calls for services for disorderly activities and nuisances as defined in 12-911. The terms of the mitigation plan must also be met. Excerpt from Chapter 12 of City Code of Ordinances: Section 12-913. TYPE IV PROVISIONAL LICENSES. 1 Rental properties that meet the provisional licensing criteria as described in Section 12- 901 are eligible only for provisional licenses. 2. The City will provide by mail to each licensee a monthly report of any police and fire calls and incidents and applicable property Code violations as described in Section 12- 901. Mitigation Plan. The applicant for a provisional license must submit for Council review a mitigation plan for the license period. The mitigation plan shall describe steps proposed by the applicant to reduce the number of police and fire calls and/or the property Code issues described in Section 12-901 and 12-911 to a level that qualifies for a Type I, II, or III license. The mitigation plan may include such steps as changes in tenant screening procedures, changes in lease terms, security measures, rules and regulations for tenant conduct, security personnel, and time frame to implement all phases of the Crime Free Housing Program. 4. Council Consideration. The application with a proposed mitigation plan will be presented to the City Council together with a recommendation by the City Manager or the Mission: Ensuring an attractive, clean, sate, inclusive community that enhances time quality oJlJ'e for all people and preserves the public (rust [S[I1IJ[iI I fl V N WA LA I akA 0] 11hI 1IJ3 I Manager's designee as to the disposition thereof. After giving the applicant an opportunity to be heard and present evidence, the Council shall approve, disapprove, or approve with conditions the application and the mitigation plan. If the Council disapproves an application and mitigation plan or approves it with conditions, it shall state its reasons for so doing in writing. In evaluating a mitigation plan, the Council will consider, among other things, the facility, its management practices, the nature and seriousness of causes for police and fire incidences and/or property Code issues and the expected effectiveness of measures identified in the plan to reduce the number of police and fire incidences and/or property Code violations. In evaluating a mitigation plan submitted by an applicant already under a provisional license, the Council will also consider the effectiveness of measures identified in the applicant's previous mitigation plan and the need for different or additional measures to reduce police and fire incidences and/or property Code violations. 5. Compliance with Mitigation Plan. The licensee shall comply with the mitigation plan as approved or modified by the Council. No later than the tenth day after each calendar month, the licensee shall mail or deliver to the City Manager a written report describing all steps taken in furtherance of the mitigation plan during the preceding month. 3Iiss!on: Ensuring an attractive, clean, saf', inclusive conwwnht,r that enhances the quality ojhft' for all people and preserves the public trust [iI1IIh[iJ I N I k"4 •h'A I DIk! (I) 1I I1IJh1 Rental License Category Criteria Policy - Adopted by City Council 03-08-10 1.Determining License Categories. License categories are based on property code and nuisance violations noted during the initial or renewal license inspection or for a category verification inspection, along with excessive validated police service calls occurring over a year. License categories are performance based and more accurately depict the condition of the property and the City costs of service. 2.Fees. Fee amounts are determined by the costs of the city to license, inspect, monitor and work with the property to ensure category conditions are met. License fees do not include reinspection fees, late fees, charges for criminal or civil enforcement actions, or other penalties. 3.Category Conditions. The licensee or designated agent must meet the category conditions in the time period specified by the City. A licensee must meet all original conditions required by the License Category, even if a subsequent license category is achieved. 4.License Category Criteria. a. Property Code and Nuisance Violations. Property code violation rates will be based on the average number of property code violations per unit identified during the licensing inspection or category verification inspection. Property code violations for purposes of determining licensing categories shall include violations of property code and nuisances as defined in Chapter 12, 19, 7 and other applicable local ordinances. The City may, upon complaints or reasonable concerns that the establishment no longer complies with the license category criteria, perform a category verification inspection to the same standards as the license renewal inspection as indicated below. Inspections will be conducted in conjunction with established department policies. In cases where 100% of the units are not inspected, the minimum inspection standards will be established as follows: • At least 75% of units will be inspected for properties with 15 or less units. • At least 25% of units, to include a minimum of 12 units, will be inspected for properties with 16 or more units. Mission: Ensuring an attractive, clean, saf, inclusive community that enhances the qinthry ojlfe for all people and preserves the public trust I1lI[iJ I U U U k"A Uh 'A I kYA (I) 11I flhIhYA I Property Code and Nuisance Violations Criteria License Category Number of Units Property Code Violations per (Based on Property Inspected Unit Code Only) Type 1 - 3 Year 1-2 units 0-1 3+ units 0-0.75 Type II— 2 Year 1-2 units Greater than 1 but not more than 4 3+ units Greater than 0.75 but not more than 1.5 Type III - 1 Year 1-2 units Greater than 4 but not more than 8 3 + units Greater than 1.5 but not more than 3 Type IV - 6 Months 1-2 units Greater than 8 3+ units Greater than 3 b. Police Service Calls. Police call rates will be based on the average number of valid police calls per unit per year. Police incidences for purposes of determining licensing categories shall include disorderly activities and nuisances as defined in Section 12-911, and events categorized as Part I crimes in the Uniform Crime Reporting System including homicide, rape, robbery, aggravated assault, burglary, theft, auto theft and arson. Calls will not be counted for purposes of determining licensing categories where the victim and suspect are "Family or household members" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 518B.01, Subd. 2 (b) and where there is a report of "Domestic Abuse" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 51813.01, Subd. 2 (a). License Number of Units Validated Calls for Disorderly Conduct Category Service & Part I Crimes (Calls Per Unit/Year) No Category 1-2 0-1 Impact 3-4 units 0-0.25 S or more units 0-0.35 Decrease 1 1-2 Greater than 1 but not more than 3 Category 3-4 units Greater than 0.25 but not more than 1 5 or more units Greater than 0.35 but not more than 0.50 Decrease 2 1-2 Greater than 3 Categories 3-4 units Greater than 1 5 or more units Greater than 0.50 Mission: Ensuring an altractij'e, clean, 511', inclusive community that enhances the quality oJlite for all people an(/preserves the public trust [I[I1IhOJ I fl U Dk'A I'A I Dk'A 0] UI 1JhkI Budget Issues: There are no budget issues to consider. Strategic Priorities: o Safe, Secure, Stable Community Attachment - Mitigation Plan !Jissio,z: Ensuring an atI,'active, clean, saf, inclusive coininunily that enhances the quality of lift for all people and preserves the public trust Prry Mdr: Y 01 HJL AVE N Nrr{: Prit p.1:nc u. hi Th wrerb .4iJr; 121.0 th1 Tll Arh OAfieea PIicin: .AhI Pht!. 17-f EJTM It: IgUnI Ern!I7 vrr'n Epirriin 7/31/2017 KM 1/31/2018 KM Based on prcprty tbftdiliuri police nuJsn Inkin iJ- b'i qua'ff o5 LIcnEa.. 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LII lntl! U 4)i Prvlth laii pIari Ft !fthTp' !V6 P II Rt'1l Lrse Is apprc'ed by ONQ C ityC ouncil , the ?Jfl 11i pjrcied Mibnn Pn43pd O M spo ks 1fle City CaMt Ariuri mp a O mud b ubrnItad b' Lh 1cny Qfach rflhwUi UpEhii c1i.ii blri bkn b1th ciriør ,tfl dtov oornplywhhthtu MtiUn PLn A wp), vf Ibc MnthyiJ jrd o rl ape T^ A flIbIrifrn cn bfund 'n th :Ci.j5 it B i rrrinU, Fkinu w Ha ch Tf'iL itLtI Pii. Jyri riri tnd& tI r I tTh)j5ETh] T1i.?ih I Ft1E3J Q7WNflY TMTDARP J16W2N ftrdXH/w N fl pni Up R risp MitiffmOpm pp Typg IV LIcuna Iti filitiverIfy Iimi1yLhai 11 niNtTirt r itL 1rJriJ [fl Ifd tiaf dt'nQI c rib'With p?rid MlligIki Fn, inip,f with all IIthn vttilti 1he Ii:t1 pdd, or aperiAd beybrid Th tipliIi&i dil, ñTôi cIl1kf, riniI WrTIPla 7hN, at ri' .rPe! riIt. 4I ThU Pm ) t2,'2UI7 yr iL TWO I4 thJi7I •lLW/ ifi Pc4 VI Palo 7.pi IV R v Na iLk im L,c1 RM R6 1 444 ,1 6 JI? £JBrik171I nIu!h 1-Y ILT$-fl rjina WI1I1W Ir M*1rNEEA2lEF) Pt 1S1Th3 TW?1 [ FIL1-3 Oty C©llulldll Agen da I[t©Jnrll N©0 Hi #6 [EI1IJ[iJ I fl V N k'A 1h'A I II (I) 1I USJ I DATE: November 27, 2017 TO: Curt Boganey, City Managj THROUGH: Michael Ericson, Interim Community Development FROM: Jesse Anderson, Deputy Director of Building and Community Standards SUBJECT: Type IV 6-Month Provisional Rental License for 6413 Regent Ave N Recommendation: It is recommended that the City Council consider approval of the Mitigation Plan and issuance of a Type IV 6-Month Provisional Rental License for 6413 Regent Ave N. The applicant or representative has an opportunity to present evidence regarding the submitted Mitigation Plan. If the Council chooses to modify or disapprove the Mitigation Plan, it is recommended that the motion be to direct staff to prepare proposed findings for disapproval of the Mitigation Plan and notify the license applicant of any pending license actions to be taken at a subsequent Council Meeting. Background: This owner is applying for a renewal rental license. This is a single family dwelling. The previous rental license was a Type I Rental License. This property qualifies for a Type IV Rental License based on nine (9) property code violations found during the initial rental license inspection and zero (0) validated police nuisance incidents for the past twelve months. Staff from Administration, Building & Community Standards and Police Departments worked with the property owner regarding a mitigation plan, which requires Phase I, II and III of the Crime Free Housing Program, and other items included by City ordinance for a Type IV Rental License. A Mitigation Plan has been developed addressing the requirements of the ordinance and any issues specific to the property. Therefore, staff is recommending approval of the Type IV Rental License on condition of adherence to the Mitigation Plan. Please refer to the attached copy of the Mitigation Plan for more information. The following is a brief history of the license process actions: 07-21-2017 The Owner, Tim Xiong, applied for renewal of the rental dwelling license for 6413 Regent Ave N, a single family dwelling. 08-10-2017 An initial rental license inspection was conducted and failed. 9 property code violations were cited, see attached rental criteria. 09-12-2017 A second rental inspection was conducted and passed. 09-30-2017 The previous rental license expired. A'Iission: Ensuring an attractive, clean, safe, inclusive conulnunity that eiuluuuuces the quality ojlte for all people and preserves the public trust SIIISLYSI I N I Mh'A L I ak!4 (I) 1DhIJ I 10-09-2017 City records indicate 0 validated police nuisance incidents occurred in the past twelve months. 10-09-2017 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 10-26-2017 A Mitigation Plan was submitted. 11-15-2017 The Mitigation Plan was finalized. 11-17-2017 A letter was sent to the owner notifying that the hearing before the Council will be held November 27, 2017. If approved, after six months, a new rental license is required. The license process will begin approximately four months. The new license will be based on the property code violations found during the initial renewal license inspection and the number of validated police calls for services for disorderly activities and nuisances as defined in 12-911. The terms of the mitigation plan must also be met. Excerpt from Chapter 12 of City Code of Ordinances: Section 12-913. TYPE IV PROVISIONAL LICENSES. Rental properties that meet the provisional licensing criteria as described in Section 12- 901 are eligible only for provisional licenses. 2. The City will provide by mail to each licensee a monthly report of any police and fire calls and incidents and applicable property Code violations as described in Section 12- 901. Mitigation Plan. The applicant for a provisional license must submit for Council review a mitigation plan for the license period. The mitigation plan shall describe steps proposed by the applicant to reduce the number of police and fire calls and/or the property Code issues described in Section 12-901 and 12-911 to a level that qualifies for a Type I, II, or III license. The mitigation plan may include such steps as changes in tenant screening procedures, changes in lease terms, security measures, rules and regulations for tenant conduct, security personnel, and time frame to implement all phases of the Crime Free Housing Program. 4. Council Consideration. The application with a proposed mitigation plan will be presented to the City Council together with a recommendation by the City Manager or the Manager's designee as to the disposition thereof. After giving the applicant an opportunity to be heard and present evidence, the Council shall approve, disapprove, or approve with conditions the application and the mitigation plan. If the Council disapproves an application and mitigation plan or approves it with conditions, it shall state its reasons for so doing in writing. In evaluating a mitigation plan, the Council will consider, among other things, the facility, its management practices, the nature and seriousness of causes for police and fire incidences and/or property Code issues and the Mission: Ensuri,sg an attractive, clean. sate, inclusive conlinunhty that eiilusisces the quality oJliJC for all people and preserves the public trust [I1i1SJ[J I U U N MA Uh'A I M'4 [I) 1YI P1Ik1 expected effectiveness of measures identified in the plan to reduce the number of police and fire incidences and/or property Code violations. In evaluating a mitigation plan submitted by an applicant already under a provisional license, the Council will also consider the effectiveness of measures identified in the applicant's previous mitigation plan and the need for different or additional measures to reduce police and fire incidences and/or property Code violations. 5. Compliance with Mitigation Plan. The licensee shall comply with the mitigation plan as approved or modified by the Council. No later than the tenth day after each calendar month, the licensee shall mail or deliver to the City Manager a written report describing all steps taken in furtherance of the mitigation plan during the preceding month. 1Jiss!o,,: Ensuring uji all,ucth'e, clean, sale, inclusive comniuizity that enhances the quality of lift for all people and preserves the public (ins! [EI1SJ[iJ I R V V 31k'A L'A I MhYA (I) 1IIJ1IJ'2 I Rental License Category Criteria Policy - Adopted by City Council 03.0840 1.Determining License Categories. License categories are based on property code and nuisance violations noted during the initial or renewal license inspection or for a category verification inspection, along with excessive validated police service calls occurring over a year. License categories are performance based and more accurately depict the condition of the property and the City costs of service. 2.Fees. Fee amounts are determined by the costs of the city to license, inspect, monitor and work with the property to ensure category conditions are met. License fees do not include reinspection fees, late fees, charges for criminal or civil enforcement actions, or other penalties. 3.Category Conditions. The licensee or designated agent must meet the category conditions in the time period specified by the City. A licensee must meet all original conditions required by the License Category, even if a subsequent license category is achieved. 4.License Category Criteria. a. Property Code and Nuisance Violations. Property code violation rates will be based on the average number of property code violations per unit identified during the licensing inspection or category verification inspection. Property code violations for purposes of determining licensing categories shall include violations of property code and nuisances as defined in Chapter 12, 19, 7 and other applicable local ordinances. The City may, upon complaints or reasonable concerns that the establishment no longer complies with the license category criteria, perform a category verification inspection to the same standards as the license renewal inspection as indicated below. Inspections will be conducted in conjunction with established department policies. In cases where 100% of the units are not inspected, the minimum inspection standards will be established as follows: • At least 75% of units will be inspected for properties with 15 or less units. • At least 25% of units, to include a minimum of 12 units, will be inspected for properties with 16 or more units. I'vfissioii: Ensuring an att,'active, clean, safe, inclusive conununitv that enlunices the quality ojl(ft for all people (lad preserves the public trust •1lJ(i1 i I V M4 U I Ik [0) P1IJI Property Code and Nuisance Violations Criteria License Category Number of Units Property Code Violations per (Based on Property Inspected Unit Code Only) Type 1 - 3 Year 1-2 units 0-1 3+ units 0-0.75 Type II - 2 Year 1-2 units Greater than 1 but not more than 4 3+ units Greater than 0.75 but not more than 1.5 Type III - 1 Year 1-2 units Greater than 4 but not more than 8 3+ units Greater than 1.5 but not more than 3 Type IV - 6 Months 1-2 units Greater than 8 3+ units Greater than 3 b. Police Service Calls. Police call rates will be based on the average number of valid police calls per unit per year. Police incidences for purposes of determining licensing categories shall include disorderly activities and nuisances as defined in Section 12-911, and events categorized as Part I crimes in the Uniform Crime Reporting System including homicide, rape, robbery, aggravated assault, burglary, theft, auto theft and arson. Calls will not be counted for purposes of determining licensing categories where the victim and suspect are "Family or household members" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 518B.01, Subd. 2 (b) and where there is a report of "Domestic Abuse" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 51813.01, Subd. 2 (a). License Number of Units Validated Calls for Disorderly Conduct Category Service & Part I Crimes (Calls Per Unit/Year) No Category 1-2 0-1 Impact 3-4 units 0-0.25 5 or more units 0-0.35 Decrease 1 1-2 Greater than 1 but not more than 3 Category 3-4 units Greater than 0.25 but not more than 1 5 or more units Greater than 0.35 but not more than 0.50 Decrease 2 1-2 Greater than 3 Categories 3-4 units Greater than 1 5 or more units Greater than 0.50 il/I!SSiOJJ Ensuring an attractive, clean. saft', inclusive connnunhtr that enhances the quality of//fe for all people and preserves the public trust EI1SJ[iJ I NI N M'A L'A I Mk'A 0) t1PhIW4i Budget Issues: There are no budget issues to consider. Strategic Priorities: Safe, Secure, Stable Community Attachment - Mitigation Plan LI fission: Ensuring an attractive, clean, sat, inclusive comnwnitv that enhances the quality of lite for all people and preserves the public trust OC :3611MTU j^jTY STANDARDS it'Di - JJfr P.00HI1N EJ4-. RirilL Lle we MI4r F1ar Type. IVLIfL rith'/JtP afIon p'i wJin itb pted.> 1r filIl fim cn b ft n trn CHy' r ll 3U t b'e an 07.1.drd it 1tjLI ia 'EPJil. Eii cri ppri? c iifl artthr it d puT nunrt Fh aDou ç rr]Ce'i p'oprl.j quIUin; rr a Tpr IV-&:MiirjIh Rental Lix.n PDr plIC1i rI by b"e CII Coun c il Tjifl Plan anp. d road by 0- iif A MiUOF PIn iii b ci'lZW n'ifldl lyu order to iln pI11 of Di IiItCfl Th Mi1aUom PI211loUid it iiia1c ihiIep ?Jr Lfl b rrcct p and th lile sjrr: iiv1Illx nlo iICcfli1] onpi3rWuihO 'Ord t and ipC:it A Mi(ifl Pi.in 11OW oIi€h 10 niprc over dkn oiibi iFiIe 1L 11i:f'I PIin i.1iiUid zri iii it8m ir' n.Cit nplid 'lihin ih pithig liei pirk4 c Th vt popiiY t'yind t,hn i3 üxriilN1 dr i-LiOr cIki1I gr lice,,iEn r;hi ra riM. eiau bmttlng,fiItc' A1 R , nd C loid r.ii I irid CftT u'IIF.]YTL 14iD nti. ir 5Jizd iL DiL I i1 !r*Jtj C* 9.3,rik 9.3 C4 rj-,IM-Mitl C4 rj-, N'1 1 Fi1i!P3J E:3Ju I 1Tc:71 F: XCIENTER n!IIUMNG ANDCOWIMtrNLTY JiND1LRDS j,I JI [J rI1 ILi FLUPJV rrTf '' Rental I krrv MiLigLrr Plan Type IV LIcc c+iDmI— Crg'I iIri- oi.n PJrr11r rr!rwT1cJ L 1 [] 1 We a 'rilLr lzi 7@5o zvyeefileit. lhelunsr,, ji qrduffte ri L SM II Iicji 110 Crirr H':'un !.dthr rci. 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Phaslo U 1) cmpIr rnrifiJ p" Mel rnpriwamal.r qusisd brtho brc44ri (3 ,Linime Police prtririi, T b 73cI ,,ejjuje Ei n iA IijIcfrA!uw- cJr1y' rithI,CO 4,763) -34L Aft'Jiow-ip cm-iitmuattw cin1:p1E1'd befmm thc limense ra1im ç1a1 urt Irmprd!jbftq-,nIs ho lboorl inwIorrnkf Fa u' ?flfl 1E- beEn priouy COfr)OeIcJ,WR'to 0c. 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ST2DfDFLtD obIcLyiJ 4 U1 .t In R31 LIri Mii11a1kIfl Plan 1ir LiccnCENTER ii1(1 Vrf - I I I '4ri1y iIjt all rur'Adr;i ir Itue 2nd acciiroln, I ii Ji:1arid hal i[ I Ii iiul crnpy Iii irir 1ilii P lqn, k7cnlpIy vilth Elf, n"rms vmafln IJi' i:;1rir l:iad, or cor.k, hiVu ridl 1i'i :ie Cp'iTi1!r\i d;i., &i1i:rTcnI iiIiC'FN. :UC i m :iC'irr., 1uDrrriI .; riipIii'il, r Iici::rc m a y j'r:iiII Trn N6R1 n1 :ITI1•. .I;u! ,,'.:iril II4J 3LL4 F) ^f flj kw 1ELl kifTh)l ) L'VC iIjiil L' Iit 1'i h1 ii 'I7 iV'{ C 1I!:IIY ,TIH!W i;pV.3k) 'LiIL' cr!f C'i I, - L't.-.i ii I AAJ :FJ j A 1c2= . fltT-3UUtRflff I;;- ithnyLnLLTdi Dtrni• 111IUhIITU r1k i #.E11z1 I iTy?il City CounaR Aitdi ll©m N©0 1©i #7 [EWJ[i1 I I Mh'4 UhYA I IIhYA ES] 1I I1SJhYA I DATE: November 27, 2017 TO: Curt Boganey, City Maria gj f THROUGH: Michael Ericson, Interim Community Development Directoi7 FROM: Jesse Anderson, Deputy Director of Building and Community Standards SUBJECT: Type IV 6-Month Provisional Rental License for 4501 Woodbine La Recommendation: It is recommended that the City Council consider approval of the Mitigation Plan and issuance of a Type IV 6-Month Provisional Rental License for 4501 Woodbine La. The applicant or representative has an opportunity to present evidence regarding the submitted Mitigation Plan. If the Council chooses to modify or disapprove the Mitigation Plan, it is recommended that the motion be to direct staff to prepare proposed findings for disapproval of the Mitigation Plan and notify the license applicant of any pending license actions to be taken at a subsequent Council Meeting. Background: This owner is applying for a renewal rental license. This is a single family dwelling. The previous rental license was a Type II Rental License. This property qualifies for a Type IV Rental License based on seventeen (17) property code violations found during the initial rental license inspection and zero (0) validated police nuisance incidents for the past twelve months. Staff from Administration, Building & Community Standards and Police Departments worked with the property owner regarding a mitigation plan, which requires Phase I, II and III of the Crime Free Housing Program, and other items included by City ordinance for a Type IV Rental License. A Mitigation Plan has been developed addressing the requirements of the ordinance and any issues specific to the property. Therefore, staff is recommending approval of the Type IV Rental License on condition of adherence to the Mitigation Plan. Please refer to the attached copy of the Mitigation Plan for more information. The following is a brief history of the license process actions: 05-01-2017 The Owner, Jerad Morey, applied for renewal of the rental dwelling license for 4501 Woodbine La, a single family dwelling. 06-07-2017 An initial rental license inspection was conducted. 17 property code violations were cited, see attached rental criteria. 07-13-2017 A second rental inspection was conducted and failed. A $100 reinspection fee was charged to the property. 07-31-2017 The previous rental license expired. Mission: Ensuring an altracTh'e, clean, saf, inclusive coninunuty that enhances the quality of life for all people and preserves the public trust [i[I1lJhSI I fl U V I'A I 4 [I) IAI )1IJ I 08-03-2017 A third inspection was conducted and failed. A $100 reinspection fee was charged to the property. 08-07-2017 City records indicate 0 validated police nuisance incidents occurred in the past twelve months. 08-07-2017 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 08-15-2017 The $200 reinspection fees were paid. 08-17-2017 A fourth inspection was conducted and passed. 08-18-2017 A Mitigation Plan was submitted. 10-09-2017 The Mitigation Plan was finalized. 11-16-2017 A letter was sent to the owner notifying that the hearing before the Council will be held November 27, 2017. If approved, after six months, a new rental license is required. The license process will begin in approximately four months. The new license will be based on the property code violations found during the initial renewal license inspection and the number of validated police calls for services for disorderly activities and nuisances as defined in 12-911. The terms of the mitigation plan must also be met. Excerpt from Chapter 12 of City Code of Ordinances: Section 12-913. TYPE IV PROVISIONAL LICENSES. 1.Rental properties that meet the provisional licensing criteria as described in Section 12- 901 are eligible only for provisional licenses. 2.The City will provide by mail to each licensee a monthly report of any police and fire calls and incidents and applicable property Code violations as described in Section 12- 901. 3.Mitigation Plan. The applicant for a provisional license must submit for Council review a mitigation plan for the license period. The mitigation plan shall describe steps proposed by the applicant to reduce the number of police and fire calls and/or the property Code issues described in Section 12-901 and 12-911 to a level that qualifies for a Type I, II, or III license. The mitigation plan may include such steps as changes in tenant screening procedures, changes in lease terms, security measures, rules and regulations for tenant conduct, security personnel, and time frame to implement all phases of the Crime Free Housing Program. 4.Council Consideration. The application with a proposed mitigation plan will be presented to the City Council together with a recommendation by the City Manager or the Manager's designee as to the disposition thereof. After giving the applicant an opportunity to be heard and present evidence, the Council shall approve, disapprove, or approve with conditions the application and the mitigation plan. If the Council 1'J,ssion: Ensuring an attractive, clean, sqfe, inclusive conununitv that enhances the quality ojli,te for al/people and preserves the public trust E$1IJ[U I U N 3k'A L!4 I 11111%,11 i(I) 1II PISI YA I disapproves an application and mitigation plan or approves it with conditions, it shall state its reasons for so doing in writing. In evaluating a mitigation plan, the Council will consider, among other things, the facility, its management practices, the nature and seriousness of causes for police and fire incidences and/or property Code issues and the expected effectiveness of measures identified in the plan to reduce the number of police and fire incidences and/or property Code violations. In evaluating a mitigation plan submitted by an applicant already under a provisional license, the Council will also consider the effectiveness of measures identified in the applicant's previous mitigation plan and the need for different or additional measures to reduce police and fire incidences and/or property Code violations. 5. Compliance with Mitigation Plan. The licensee shall comply with the mitigation plan as approved or modified by the Council. No later than the tenth day after each calendar month, the licensee shall mail or deliver to the City Manager a written report describing all steps taken in furtherance of the mitigation plan during the preceding month. Rental License Category Criteria Policy - Adopted by City Council 03-08-10 Mission: Ensuring an attractive, clean, safi?, inclusive conlinuinly that enhances the quality of life for al/people and preserees the public trust D1SJ[iI I U I U 3h'A L!A I Dk4 [0) 1li1IJkA1 1.Determining License Categories. License categories are based on property code and nuisance violations noted during the initial or renewal license inspection or for a category verification inspection, along with excessive validated police service calls occurring over a year. License categories are performance based and more accurately depict the condition of the property and the City costs of service. 2.Fees. Fee amounts are determined by the costs of the city to license, inspect, monitor and work with the property to ensure category conditions are met. License fees do not include reinspection fees, late fees, charges for criminal or civil enforcement actions, or other penalties. 3.Category Conditions. The licensee or designated agent must meet the category conditions in the time period specified by the City. A licensee must meet all original conditions required by the License Category, even if a subsequent license category is achieved. 4.License Category Criteria. a. Property Code and Nuisance Violations. Property code violation rates will be based on the average number of property code violations per unit identified during the licensing inspection or category verification inspection. Property code violations for purposes of determining licensing categories shall include violations of property code and nuisances as defined in Chapter 12, 19, 7 and other applicable local ordinances. The City may, upon complaints or reasonable concerns that the establishment no longer complies with the license category criteria, perform a category verification inspection to the same standards as the license renewal inspection as indicated below. Inspections will be conducted in conjunction with established department policies. In cases where 100% of the units are not inspected, the minimum inspection standards will be established as follows: • At least 75% of units will be inspected for properties with 15 or less units. • At least 25% of units, to include a minimum of 12 units, will be inspected for properties with 16 or more units. Property Code and Nuisance Violations Criteria License Category Number of Units Property Code Violations per It'Iission: Ensuring an attractive, clean, safe. inclusive comnwnitv that enhances the qualify of lift' for (l/people (Furl preserves the public hits! 1ik[iJ I UI I 3IhYA U'A I K'4 0) UI flhJ I (Based on Property Inspected Unit Code Only) Type I - 3 Year 1-2 units 0-1 3+ units 0-0.75 Type II— 2 Year 1-2 units Greater than 1 but not more than 4 3+ units Greater than 0.75 but not more than 1.5 Type III - 1 Year 1-2 units Greater than 4 but not more than 8 3+ units Greater than 1.5 but not more than 3 Type IV - 6 Months 1-2 units Greater than 8 3+ units Greater than 3 b. Police Service Calls. Police call rates will be based on the average number of valid police calls per unit per year. Police incidences for purposes of determining licensing categories shall include disorderly activities and nuisances as defined in Section 12-911, and events categorized as Part I crimes in the Uniform Crime Reporting System including homicide, rape, robbery, aggravated assault, burglary, theft, auto theft and arson. Calls will not be counted for purposes of determining licensing categories where the victim and suspect are "Family or household members" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 5 18B.01, Subd. 2 (b) and where there is a report of "Domestic Abuse" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 51813.01, Subd. 2 (a). License Number of Units Validated Calls for Disorderly Conduct Category Service & Part I Crimes (Calls Per Unit/Year) No Category 1-2 0-1 Impact 3-4 units 0-0.25 5 or more units 0-0.35 Decrease 1 1-2 Greater than 1 but not more than 3 Category 3-4 units Greater than 0.25 but not more than 1 5 or more units Greater than 0.35 but not more than 0.50 Decrease 2 1-2 Greater than 3 Categories 3-4 units Greater than 1 5 or more units Greater than 0.50 Budget Issues: There are no budget issues to consider. i'rJ!s!oii Ensuring an attractive, clean, safe, inclusive conununhty that enhances the quality of life for till people and preserves the public mist [iII1IJ[iJ I N N IhY4 L I MhYA 0] 1'WI $1IJ'A I Strategic Priorities: o Safe, Secure, Stable Community Attachment - Mitigation Plan Mission: Ensuring an tiltiyiclii'e, clean, sfe, inclusive conimunhly that enhances the quality of lfa for all people and preserves the public has! PBRO, 3ELYN riji PbiNTER f,iarithriMff Jtir w!W ycjr cipid, A fthbki.forrn n L oi.vi n ll el Ci L/ bii mok tm c rri tri rxrrj, cir riJI T(I) 5' ir kc'offlc cp'e se nt 'Pi via Bd ui prprty cDrdUIr a ncor 'itei o!lco nuri> hik, 1n t,b:ci rr.rnii r tij ip /-E .Mc'ith Fi en ti LI c e nc. 1i Ly vrl pziEIDn up po'i'I bythe O' i 1LJy cripdLiJ Mitip.lin P1fl rnL L ci ipkL.:I ;j rd -"p p rd b t)' 4iL A Ailnr PIti j-nmi bu rçiII'9d rnhtJh!ty Ii a rdt i rcirurçi Irt( HIi: prIr p mmm u. to 11 jm1bn FIm n *; u M I rel kiLc ihi bInj t&rri Lct r1 ii3ruflfld wh a tions and iI rness6 res 1III be t.ikcn to oivo ciohmj rnp6 a rt ce Wti City Orirrn. rd ap plAW cWej^. AMiII aftri F12n Iwih i'rTh,J Lhi C'1c. ririrrrii !dunlify p itlt IUILWi it' ipr.W WfII tiLiCi 01' 1h rprEy. If 1I:c M iIk.n F1m I not uJ and al Mms am po ckc1 w 1h i n IVA prriiij Ii•ñ thrid, ar 1h a4irkire prootj pnrt br; I;cr.ci r.pIrnthn thi, rr 'iM otEUoi, IriI irnpIirit, k7 R. rivw rcs Li t . s dom s u msm i,fill -outP, kwd C Ioitid On 2. 3, , an . T, ic'c LtFiv, , 1 *I17 tT1uI7LzLrt 'n1 SMI UNQO old FKAM-y. fj F,r, 4' TTf fl. BUILDING AND COMMUNUn BROW L.R 5F421 fl EP E..... Rri.il LILrI_ riLiitIon P ir I Tjp RI LIcri c p i67 ricar -J) 1) U i rnr1. 1he lease agrE-3ME117e, l'all cI(hlh. J:iIri Lm in m NE Juriffu rI. A c*py Iit apre Lnn uri t and crim a FTpp. Hu5Iri Li ArJrji j' hALISI bpi i1tiloc1 to the r iEiUu P[in wIr, liL1d, 2) Ariro :' paru r.rithc'n rrc qrcrncncEr 1rUii ciithc rir iry o rArril,irr. i) Cjct riInI bjkr•'.ind dcmlk for ifl ,,mw prp.i' 1ciirlt II H Is.u. cur7cnt Lararta r''w tackrircmrd cIiik 1 mtr'iurd Mu ,-.-O b rk 1 to c i iy jr ru'd, ) Akid nb Cthi -ri HU ilfiithJ ()Lrt. Für ipprovd rmumas ran lxi kuriJ zil. w 7rthii'r ih Li!. 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Thi ARM rncdinq ru{ b mpkkii ihin ih. rinall Iiccin p:rlc'cl before h' pirdIri Tj IV LIcLnu F jirkiri da1- Fk'iLIr.IE ar 1 rcil rr'qI irr 1 Mriu E riL -i ri-1'i dul -elp im, rYUi'j. VvrlLe Iw ii'liri dat in :wir ir z'r r,4ari 1 1Ionci, C nc or qrrj1 ' I b r 1 n'i -Iirj jpIlLjI1 01' ii 2 Hrx-'o ri ipi Idn cri; pr ht yd ,iiriih1 'M!ii thp 1 Th m Ft1Iwin ur€ r 40r4 ro r pf.p4irtI eS NY 11 Toijr r 'r urdts.. LIII i C Act rifl thlrj n riiIy th4: r4uic: mmc prr1k:n 1E?thI1qL. 2 Criuct roifr r '' r9'c kflri 'Pci Pi.'. i44 Cil t.J• Jjt Ti —fl _iI4jnff rd rirm_iSlan 'ud ri ifli jI E.rL:Ii1 rx... I Ph4: 3ZI) I TW?ii j FIE r6I Criridftibr tptd Rpcni1Da1 ru :' a Feb 20-2 U u. WIN LI flD Eullaiw AND COMMUNITY 4i:tbi Lthm ry- Gvtr, WI ft4a1LILr1BROORLYN oandtnn condidon ar,.d wo, r rriti-d rphir iiI da x; rmd tabntab prcwi1ci f;rcrinn r. vpiIiI Fiii -%ding Elon,7d ba c rdrd II rjl-th'o bi;irIwfrI, oroItrio h vkili'km prar k 1h t1iirfitod kzxiri ir ?iu'd U. be rItaCJ socoef. AI L€rs fliUi ti't -11Deo : Thnir" dcn'L}no'.. of "when .brrtfI(1 rlc!L b 1oj iro 'n Iftni to r ,!Jru cm rrike pfflcJion bn:-Aif ihr nga, appnPraicn. cmRim, r Add1irI rirrriiIri i, £ iickd Undbil Lib a.an Im friiri. it Hoff)EJat Lt Ikpbud a Furriati \r HiIec 'Jfl! !UZt K!1i:n App'ioncos UIC Fui1O rrke A hu ur cn rnIc AirTr AUuil 1Y JE;xl ejr, Jrfi Pain diii iqiH i1 Fcnicc N4 I:. al crj.'a 14 Cri:fl4 b hoi j-"' .) r, k'' 4:w. i3 FrF N:d R:nI L q i; uC Crl-1LLFj iii r ThA!TJtT $TITdL 4jJL J1 h'W 21'i 1 71 ODI 1T 71: ?Fix f7!;J1Lfl3 JM1flRD cMMUNtTY STNNflRDS. ERT O?i LIcri MLiiôh Piri CE Type IV Lkio Tolirpfl moo t;en ii it 'ith and piprF 1' Itriu. T hil f1owlg n'tif11 rn lIEII f) Ct i•) j inwiI ocry :rIiy. EiE11 2 Di IM by pro rIt.S fir jrI!ri. 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RE rL1at L UJ1!U Mil lga Voll FIh _____ Tpo IV Lln.0 I vu riF Ihn RU lr-^b ma uon prviith i-m md U^Oxlrd te. FurJr.rwd if d Jr,.;M:Plat), c Wily with ;tI !n 1h IV! ll tk.rj proc, ce a pupite, Eori tie!cr Irio rTzrrront acdco *- i 'thn, 1rr1I r;ilRir 1 OF ci ricwnqy rull. c - ;:j F.',,I Vik R! LLC .it EiFrrj 1IpryIk M-rr !P!t o wy SAJ , 1,9 Amo II.tI'ciA.i; C(fy /42 -c( Cu&' ge h Ii) fti" 4-44I.,-. ... . . .'.. . - -Ciit —u1Id.r,.rjd crT1mu1ity I i'ii-iu ]nprtn -r1i(i Cdk Drlir, i E4.ii Pii-.: I 1; 791 I F I)4 Ctty C©u©il Agends. Item N©0 Az EI1IJ[J I fl Mk'4 U'A I k'4 (I) 1I I1IJ'A I DATE: November 27, 2017 TO: Curt Boganey, City Mana3 THROUGH: Michael Ericson, Interim Community Development FROM Jesse Anderson, Deputy Director of Building and C( SUBJECT: Type IV 6-Month Provisional Rental License for 6006 Zenith Ave N Recommendation: It is recommended that the City Council consider approval of the Mitigation Plan and issuance of a Type IV 6-Month Provisional Rental License for 6006 Zenith Ave N. The applicant or representative has an opportunity to present evidence regarding the submitted Mitigation Plan. If the Council chooses to modify or disapprove the Mitigation Plan, it is recommended that the motion be to direct staff to prepare proposed findings for disapproval of the Mitigation Plan and notify the license applicant of any pending license actions to be taken at a subsequent Council Meeting. Background: This owner is applying for a renewal rental license. This is a single family dwelling. The previous rental license was a Type I Rental License. This property qualifies for a Type IV Rental License based on nine (9) property code violations found during the initial rental license inspection and zero (0) validated police nuisance incidents for the past twelve months. Staff from Administration, Building & Community Standards and Police Departments worked with the property owner regarding a mitigation plan, which requires Phase I, II and III of the Crime Free Housing Program, and other items included by City ordinance for a Type IV Rental License. A Mitigation Plan has been developed addressing the requirements of the ordinance and any issues specific to the property. Therefore, staff is recommending approval of the Type IV Rental License on condition of adherence to the Mitigation Plan. Please refer to the attached copy of the Mitigation Plan for more information. The following is a brief history of the license process actions: 07-11-2017 The Owner, Keith McConnell, applied for renewal of the rental dwelling license for 6006 Zenith Ave N, a single family dwelling. 08-01-2017 An initial rental license inspection was conducted and failed. 9 property code violations were cited, see attached rental criteria. 09-29-2017 A second rental inspection was conducted and passed. 10-31-2017 The previous rental license expired. Mission: Ensuring an attractive, clean, safe, inclusive cOniiiiUintV that enlialleL'S the quality ojlzft' for all people and preserves the public has! III1H(SJ SU U U 3k' U'A I alh!A (I) 1Ii1SJkAi 10-04-2017 City records indicate 0 validated police nuisance incidents occurred in the past twelve months. 10-04-2017 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 10-17-2017 A Mitigation Plan was submitted. 10-24-2017 The Mitigation Plan was finalized. 11-17-2017 A letter was sent to the owner notifying that the hearing before the Council will be held November 27, 2017. If approved, after six months, a new rental license is required. The license process will begin approximately four months. The new license will be based on the property code violations found during the initial renewal license inspection and the number of validated police calls for services for disorderly activities and nuisances as defined in 12-911. The terms of the mitigation plan must also be met. Excerpt from Chapter 12 of City Code of Ordinances: 12-913. TYPE IV PROVISIONAL LICENSES. Rental properties that meet the provisional licensing criteria as described in Section 12- 901 are eligible only for provisional licenses. 2.The City will provide by mail to each licensee a monthly report of any police and fire calls and incidents and applicable property Code violations as described in Section 12- 901. 3.Mitigation Plan. The applicant for a provisional license must submit for Council review a mitigation plan for the license period. The mitigation plan shall describe steps proposed by the applicant to reduce the number of police and fire calls and/or the property Code issues described in Section 12-901 and 12-911 to a level that qualifies for a Type I, II, or III license. The mitigation plan may include such steps as changes in tenant screening procedures, changes in lease terms, security measures, rules and regulations for tenant conduct, security personnel, and time frame to implement all phases of the Crime Free Housing Program. 4. Council Consideration, The application with a proposed mitigation plan will be presented to the City Council together with a recommendation by the City Manager or the Manager's designee as to the disposition thereof. After giving the applicant an opportunity to be heard and present evidence, the Council shall approve, disapprove, or approve with conditions the application and the mitigation plan. If the Council disapproves an application and mitigation plan or approves it with conditions, it shall state its reasons for so doing in writing. In evaluating a mitigation plan, the Council will consider, among other things, the facility, its management practices, the nature and seriousness of causes for police and fire incidences and/or property Code issues and the Mission: Ensuring an attractive, clean, se/i?, inclusive conununity that enhances the quality q/'ljt? for all people (lad1) reserves the public trust [E•]JJ[IJ I U U U k'A U I MA (I) 1WI $1IJL' I expected effectiveness of measures identified in the plan to reduce the number of police and fire incidences and/or property Code violations. In evaluating a mitigation plan submitted by an applicant already under a provisional license, the Council will also consider the effectiveness of measures identified in the applicant's previous mitigation plan and the need for different or additional measures to reduce police and fire incidences and/or property Code violations. 5. Compliance with Mitigation Plan. The licensee shall comply with the mitigation plan as approved or modified by the Council. No later than the tenth day after each calendar month, the licensee shall mail or deliver to the City Manager a written report describing all steps taken in furtherance of the mitigation plan during the preceding month. ifissio,i: Ensuring an a#racuii'a, clean, sqfe, inclusive conununhly that enhances the quality ojl.fc for all people and preserves the public trust Ii[I1IJEIJ fl U U MTJ IhYA I k"A (I] 1II flBA' I Rental License Category Criteria Policy Adopted by City Council 0308-10 1.Determining License Categories. License categories are based on property code and nuisance violations noted during the initial or renewal license inspection or for a category verification inspection, along with excessive validated police service calls occurring over a year. License categories are performance based and more accurately depict the condition of the property and the City costs of service. 2.Fees. Fee amounts are determined by the costs of the city to license, inspect, monitor and work with the property to ensure category conditions are met. License fees do not include reinspection fees, late fees, charges for criminal or civil enforcement actions, or other penalties. 3.Category Conditions. The licensee or designated agent must meet the category conditions in the time period specified by the City. A licensee must meet all original conditions required by the License Category, even if a subsequent license category is achieved. 4.License Category Criteria. a. Property Code and Nuisance Violations. Property code violation rates will be based on the average number of property code violations per unit identified during the licensing inspection or category verification inspection. Property code violations for purposes of determining licensing categories shall include violations of property code and nuisances as defined in Chapter 12, 19, 7 and other applicable local ordinances. The City may, upon complaints or reasonable concerns that the establishment no longer complies with the license category criteria, perform a category verification inspection to the same standards as the license renewal inspection as indicated below. Inspections will be conducted in conjunction with established department policies. In cases where 100% of the units are not inspected, the minimum inspection standards will be established as follows: • At least 75% of units will be inspected for properties with 15 or less units. • At least 25% of units, to include a minimum of 12 units, will be inspected for properties with 16 or more units. Mission: Ensuring an attractive, clean, saf, inclusive comma ni/V that enhances the quality of life for al/people and preserves the public trust II1lJ[J IU I I MY4 U I Ih74 [0) MI IiiA I Property Code and Nuisance Violations Criteria License Category Number of Units Property Code Violations per (Based on Property Inspected Unit Code Only) Type 1-3 Year 1-2 units 0-1 3+ units 0-0.75 Type II - 2 Year 1-2 units Greater than 1 but not more than 4 3+ units Greater than 0.75 but not more than 1.5 Type III - 1 Year 1-2 units Greater than 4 but not more than 8 3 + units Greater than 1.5 but not more than 3 Type IV - 6 Months 1-2 units Greater than 8 3+ units Greater than 3 b. Police Service Calls. Police call rates will be based on the average number of valid police calls per unit per year. Police incidences for purposes of determining licensing categories shall include disorderly activities and nuisances as defined in Section 12-911, and events categorized as Part I crimes in the Uniform Crime Reporting System including homicide, rape, robbery, aggravated assault, burglary, theft, auto theft and arson. Calls will not be counted for purposes of determining licensing categories where the victim and suspect are "Family or household members" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 51 8B.01, Subd. 2 (b) and where there is a report of "Domestic Abuse" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 518B.01, Subd. 2 (a). License Number of Units Validated Calls for Disorderly Conduct Category Service & Part I Crimes (Calls Per Unit/Year) No Category 1-2 0-1 Impact 3-4 units 0-0.25 Sor more units 0-0.35 Decrease 1 1-2 Greater than 1 but not more than 3 Category 3-4 units Greater than 0.25 but not more than 1 5 or more units Greater than 0.35 but not more than 0.50 Decrease 2 1-2 Greater than 3 Categories 3-4 units Greater than 1 5 or more units Greater than 0.50 Mission: Ensuring an attract/pa, clean, safe, inclusive conununitr that enhances the quality oJ'Iif' for all people and preserves the public trust EI1IIYiJ I U I N ak'A 1h!A I MhYA (I) t1IhI WI'A I Budget Issues: There are no budget issues to consider. Strategic Priorities: Safe, Secure, Stable Community Attachment - Mitigation Plan !klissio,i: Ensuring mi attractive, clean, safe, inclusive cominuni/r that enhances the quality of lif' for all people and preserves the public trust II : ll hl Z ihiwt1 I.Pr'p'"1y Adçtrlj!;; kt' UN552 Oni.r rnit: Kthh r,II Loc.ff: BUThDIN( AN]) COMMUNITY TUJJ)ARI) City Of ) 1(ROOICL'YN rnJ F tinion PIinCENTERTp IV LIc1s JriiriMigicr R41MG MY no!i iccptcd, AiIIibt krrn cri be faund cn lhe City ii1 pt ci!I 731) i-33O 10 ho a.n c 1cLronic. .opy s erl 1' vi"t r;iI. Cwru' dr: I er,6 14EV F ',v .AgeriVE. Oi'r Pi: uI1i !:::r Arl IIne Orirrr Ein;i r Aii Emil: Current Eptriori 1ei-p Ieiidirig ExLb i- I IE1#kd IIIJfl LUJ as on prop on1kin or validated pc-fice nu 1? Ixo ruFwrid propert'' qualifies, Type tV6 Mon1h Rei11 Lcrie., PriUr In rili:titi i;;r'jt brih; City ctdI 2 hill y iciir lkcJ P1iIiyIr1 P ifflU 1ji rlp]u11111 'n' IpprIiai L. CyIifl A FiiiUfl Pkfl) mI b rr 1I ,riri it) ririjru 4inIGIy 1 irr Qicin cii 1h Iicn' ppIi;trp Rib Milig ,'ilidi) PI;fl 01>ukI hi(:;lii tpj k:cjini tnkun o rcrrici id'nFi '4 ii; ri mrJ tUl il IFit 011 Nw JiM t -.,owo cr]cirJq compliumv with City Orc II1 .! Ptirj it; ili 'pir rind Ui City lo r'',io' c n'cris and ifrit• i;ibh oI' )r1 Ic? improv tnu wridilions of Iho proporty. If the Ma.tbn Pi is tc l.1bi1fr?I1 r4 u.1 iIcrn r4 comnplobd within the perTimg fconse period, or th the propiy bond tho Iicrio opirio.n $10 tin ment zicCvns such ascits.lion, formal con1pIir1, or lima., roviow may rouIL fore submitfing, f1t-out Sectlans & 8, and C Thd on 2, 1, 4, id 5 , j flankLyn 1—iUr{1j inrt riuntT tI1T1 r)tmrit UJ1 C •U 'r$;?3y, iJFJli I F I I ]MIMING AND COMM UNITY STANDARDScily of W6ZeRviA,^o N ,BROOICLYN ijceseCENTER S43 V Lifl oiEin A—rm Fr 1*1 4 afng Prc.qjrirn ReqmIr-emen ts Phase 1 1) UE iUr Iu : rrrit Thi Jçrcorront ahitI ii the Crime Hcwini Lee Addertthrn. A copy f tha l e ase reern iiid Cr1,md ,Frv Q flrins Lcati Addrithnii mu s t be ttaciad L the Mtri Pki *ht brn!d EE 2) Agree to pursue th En'nr1atn & Ie i&riv I of, nriI iio vbe lhe Le rnis of or tiny thirn. 1EI1 Condut cftirdl Lkiround ioc.: for all novi pt'e te nants , 11 1 t1n1E nef vb&kgrcurtd oieck is ncit.rquIred. rdt:te a bl la jc'k .iinnki (c City If roquEbd. ii) A11,nd i ON ppruwfi 6y}11-11U,Jr Ctra Frr.1 I'wirij trairnq course. InforrimLan fo r flfl 4 rouild ;iI w;n!rlrpur1ol idor!he A copy of the Crnia FIBU H o LvAng Cart1firmte must &e aLLSC h &d ijoj P la n when subrnIed. CrIre Free H ilr Lrihulng ciui'i Iiid Cr1 '>f tir upjrii ] çkd9!; ç)Jririirq Ici lond rdrg t dty ci: ______________________________ 5) Submit PAoriIhy Update byihe 10LI day of nioriLi. Ph a se Ii I) C pI1i 5urHy iñCñt riJ irnptJ ffflprotrnonts roqLEtd b' ft. arooWy. contiv PiIi:t Dipa1riciu1L To ir inill! ccfiIIow-up SecLy rncr, c'll (73. iGfL'a3 44 , AfoNow-iup as s ess men t mu 91 he con, 1k1ri biii l i c e nse xlrtori da l e em viri1r the .urity Iii in Ljuin ii P ;rirnt 1i boon ppoiJIy completed, v,.Tke Ihe Sccir1tA.s' rien wa cicinpkIed cin l dtfd frir: 1L'2'1' Si:UriIy fcil ip in cc'nipIotd orJis cflduled ContIibue cioris A Phase ifi on page 3. Pti) 2. jL' i l.'.1! 'i'xt:ii 41 L17 i} .il1kIyT1. tr in —i rLti inj U)1 t Py.L:+Gi-Iiir, VN $XI1-rt . J TTV. I 1i 74x tfIILDINC COMUN1TY TADAPDS ROLYNCENTtllRLIt.I LiA Mitkjtk'n Pbfl -Type IV Liann-5o ei'n =-CrIiini Fr &iuthii R erie Ph Iii 1 1 r cur nn1 wili Iti ;I riinhj -unii !iU% ARM. Th ARM Inpotings muL be inpfrd within lhe, ren1 rir;Dnse period iiI trQr] the pndnj Type IV LICbM-0 oypiration Jte jintion i not reIiiE1d u hi.Ecer U riu;I &iir-n duihg ihe m&1iij-, iriIQ iv'o riiellrii 1;0& n uwer oc kin ti 21 W, id, q I i /11/r r Oiier r rit vifl aftEnd A.R. M. nitJinr cheduIed am 2) '4c no repeat code prvIousiyii nbd wilfl the pest TFt ro iinçj atio15 are iaqui.md forpropurtles VJUh f6ur (4) rnire J 1 Cc'rdu1no tr -iFnn armually1hA iidl4G crrne preuierJin kthnique. 2 OtrujicJ rojus resfrJeri L rtrig LV 'ii! Lwtj L1 Ri3. i4 U IV of *!1Iiyn C iTIu1 Cojaffaiahy Simd.ruh tat1rriug (101 Ci&u F vyIJJ V1I-1 I > t 1T:7t1 B=ING AND CQMMItNfly ,CLP r P - E R Y Rrsntal Llri;o MitIq.Iri Kim Type IVLicri S1iDr1 —Lo,1q TLrsri pi) PfIcj Hased mi cnr1ti and ijr IiI Tjrj-rr'jit zicad to be pri3 vided, for curn nDro ci1:'itiitrii. FLI idirtj, ahould •oriderd kii- th;-It an broken, %morn, or ctharwi;D jr-'.'tciIIiüri ridor to 1rL? i?SI ;rii:i rCpIEq IILl tJ;l- 'lo'Dd L. b iiij- ',II jtotii 1ILi;t have-,11Ed f:-',i,.--' )-i:', Drjrr s.iir.h un rre",, 'duri' kri'i O vihrri ,trJjFt' 'ii II ri':' be u :ciptid, I P fe !L:I!;,lr,-i of n riit-ii c'Ir iirI In ho repIi:-L:d. juij canmake 3 pi dirir. basecr uLi 1v, ;'q'D, 'p12i gdi, ur rriiig. DIui'iriiic.ir,rccori -irjthjir; Acd:1ci FIrrfliL,Jfl on Epii:t.1 Ussetur Urn::i ' hE IOUI:i ,#'ijfl Jri im5: ir Furnace V1 j I r KiIçh pIiEr[.E Lnindrj pIii:r S.mcAe AI;1jflii bti Li Rc-pIiced M3y 23 O ondito -cjo€'d R pIicrnorit Df F l 4 Caton inido AIry Pnt_Iiiy VJ 1Iiiii rkN NoAft rnrnI-F Ri -4J JV Ctl Lr 6j 1-In uid G li±1LU1Iy lJri miM F 1Z]3C4111I WING A.ND COMMUNITY STANDARDS €IC -Zw wcrI BROOKLYN UInIur?N I Rental License M109a1itn Plan)U CENTER j Ty-pp P1 Lims Sctkris C—SXpOmpmveiriernsn id Cod Jwr of Property `rhe;derns In tJi; c.Iiln hEvIs bsn pmvsi La asnIsIWIliproperly nariag&rnnI irI prqcrty inje. The foIlowinfj 1ibris nr rquFrod; i:i C<(:k1n vih tiant E1 2) CAys b apety t i:hrrc fut pIs Co es vIafrhuri, Jj 3) Lii:t triiri in vica1ion of tis or i'cJcJndun. 4 Remain ornt on co ui1y 1j;4 i, poaltbs, and ath fIn9cIJ C1I Jp;JjTriLl; tdju, to, Ihe Cey. [j 5) The, r0lovoiny zLtIw1 are opt on unt I Uirc by'flhe City. fj 1) .Pro'Ads wria'. LIII 2} PnvkJi wirbi 3 IibElII Ell 4) F'su.,kTo moinkmoanrxi -soriice plan Name of EerCC npny: &) Oter. lfIio Typo JV•'' Monh Rental License hs, appruAd by thuz City CctaaIl, Me ficarii:,00 niutcornpIy il,pprc.i MltIa1cun Plan ;irui ;iIt ip cii.Ia City A iittrn rpert mut ba uimiftd by th 1 day o bach nQlith with an upfat a 1iori inçj tak blha owntr on4dilorm9g,ni Io4oompy th 1iirn Pan Ar4opyef flie, rVo rid -OV Upcaie oamb found puyu 7, 1; fiablo form can be OUr On lh y' viobsiteat w.oiIy of cII I76) 00-3320 Ia have an [Irurii:(py uont. tcyou vA, emaIl Prt mttinh adrIftlGrtal nnaiIôx ifnecessary. 1j T! W&WAIj iui cLri Hai; RLle. 444. 1y _J1)n i—Ifricj rund 0TflflULfl1ty dAJiL )Z]Ol RiIIQ'V, Lrc 1Tl P-iu iio I TrY. 711 STAN MRDS ( BROOKLYN Licn iiation PlanCENTERType IV Ltcr& Si g n arid Verify I verify thai ail Ir m!jJf3I1 rc,idcd is true and ac C ural e . ii unthrLrid ihit If.! do io orriy th tle c'&d MiLjkc.ri Piri, ccmp '1h II [Brr'iLIIrI th Iiri p&:rcxi, orcpimt,e tid ih iiCfVtj i.:n Ji ifrconerit?ctn .uci as iIri[:ri rriiI ozirnpiir, orh.c&nsi iIiwrry KiIh &cCcr•rcli r PTUJ 'ti L:pp r1 .^Vzb!, ptiI .IrLI )r ic.!I! (fppVc CJ1y Jry Lt 4r 1 ) c L j 1Lj ) -' JiTh'\.cVj 5 mrvwh r1yiinr Pap cvf ,'At/; i.,.' ff5YA CB1r iir Crii'mnk adiid WA E3fll FI ufi L !Jn r.ii Ir, MJ J Pf(ri; I? (I I ITY: 71 1 Ctty C Agrada Item N©0 li0oa DATE: November 27, 2017 TO: Curt Boganey, City Man3 THROUGH: Michael Ericson, Interim Community Development Jesse Anderson, Deputy Director of Building and C( Type IV 6-1VI-01It11 Provisional Rental License for 2 1 )u Recommendation: It is recommended that the City Council consider approval of the Mitigation Plan, Resolution and issuance of a Type IV 6-Month Provisional Rental License for 2006 Brookview Dr. The applicant or representative has an opportunity to present evidence regarding the submitted Mitigation Plan. If the Council chooses to modify or disapprove the Mitigation Plan, it is recommended that the motion be to direct staff to prepare proposed findings for disapproval of the Mitigation Plan and notify the license applicant of any pending license actions to be taken at a subsequent Council Meeting. Background: This owner is applying for a renewal rental license. This is a single family property. The previous license was a Type IV Rental License issued on May 22, 2017, on condition of adherence to the Mitigation Plan and City Ordinances. The property qualifies for a Type IV Rental License based on fourteen (14) property code violations found during the initial rental inspection and zero (0) validated police nuisance incidents for the past twelve months. Further, the owner failed to comply with the Mitigation Plan and applicable Ordinances, specifically failed to attend Owners/Managers Association Meetings, turn in monthly updates, and failed to complete security improvements. According to City Ordinances, if the requirements of the license category and the Mitigation Plan are not met, the license renewal category remains a Type IV. City Ordinance Section 12-901.2 requires a licensee of a Type IV Rental Property to complete Phase II of the Crime Free Housing Program. City Ordinance Section 12-914.3.c requires an owner (or authorized representative) to attend a minimum of 50 percent of Owners/Managers Association Meetings. Staff is recommending approval of the continued Type IV Rental License in lieu of denial, revocation or suspension because the owner is working with staff to meet the license requirements and the property is currently in compliance with the ordinance. mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of tUe for all people and preserves the public trust FROM SUBJECT: [i[I1SJJ fl U M"4 U'A I UI) t1I I1lh' I The following is a brief history of the license process actions. Current rental license approval activities: 03-31-2017 The previous Type IV Rental License expired. 04-05-2017 The owner, MNSF II, LLC, applied for renewal of the rental dwelling license for 2006 Brookview Dr, a single family dwelling. 05-08-2017 An initial rental license inspection was conducted. Fourteen property code violations were cited, see attached rental criteria. 06-14-2017 A $300 Administrative Citation was issued for operating without a license. 06-22-2017 A second inspection was conducted and failed. A $100 reinspection fee was charged to the property. 07-10-2017 The $100 reinspection fees were paid. 07-14-2017 A third inspection was conducted and failed. 07-31-2017 A fourth inspection was conducted and failed. 08-16-2017 A fifth inspection was conducted and failed. Reinspection fees were waived due to a change in management companies. 09-18-2017 The City utilities became delinquent. 09-19-2017 City records indicate zero validated police nuisance incidents occurred in the past twelve months. 09-19-2017 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 09-27-2017 The City utilities were paid. 10-18-2017 A Mitigation Plan was submitted. 10-31-2017 The Mitigation Plan was finalized. 11-09-2017 A $300 Administrative Citation was issued for operating without a license. 11-17-2017 A letter was sent to the owner notifying that the hearing before the Council will be held November 27, 2017. Prior Type IV Rental License approval activities: 09-09-2016 The owner, RHA 3, LLC, applied for renewal of the rental dwelling license for 2006 Brookview Dr, a single family dwelling. 09-30-2016 The previous Type IV Rental License expired. 10-07-2016 An initial rental license inspection was conducted. Fourteen property code violations were cited, see attached rental criteria. 11-16-2016 A second inspection was conducted and failed. A $100 reinspection fee was charged to the property. 11-18-2016 A $300 Administrative Citation was issued for renting without a license. 12-06-2016 A third inspection was conducted and failed. A $100 reinspection fee was charged to the property. 12-21-2016 A fourth inspection was conducted and failed. A $100 reinspection fee was charged to the property. 12-22-2016 The $200 in reinspection fees was paid. 01-27-2017 A $600 Administrative Citation was issued for renting without a license. iviI!Oii. Ensuring an attractive, clean, s(ife. inclusive comnuinil V that enhances the quality of lift' for all people and preserves the public tins! [i[O1IJ[J I fl V V MhYA U'A I M'A [I) 1I WJ I 01-30-2017 A fifth inspection was conducted and failed. A $100 reinspection fee was charged to the property. 03-09-2017 The $200 in reinspection fees was paid and the rental license passed. 03-20-2017 A $1200 Administrative Citation was issued for renting without a license. 03-21-2017 City records indicate zero validated police nuisance incidents occurred in the past twelve months. 03-21-2017 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 04-13-2017 A second letter was sent to the owner(s) notifying of qualification for Type IV 6- Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 05-01-2017 A Mitigation Plan was submitted. 05-12-2017 The Mitigation Plan was finalized. 05-15-2017 A letter was sent to the owner notifying that the hearing before the Council will be held May 22, 2017. Prior Type IV Rental License approval activities: 06-17-2015 The Owner, Simply Residential Property Management, applied for an initial rental dwelling license for 2006 Brookview Dr, a single family property. 07-13-2015 An initial rental license inspection was conducted. 14 property code violations were cited, see attached rental criteria. 08-13-2015 A second inspection was not conducted; no access was provided at time of inspection. A $100 reinspection fee was charged to the property. 08-27-2015 A third inspection was not conducted; no access was provided at time of inspection. A $100 reinspection fee was charged to the property. 09-09-2015 Housing Supervisor was notified that the rental property is under rehab and will not be completed for two months. Inspections postponed until further notice. 09-11-2015 The $200 reinspection fees were paid. 11-10-2015 A fourth inspection was conducted and failed; corrections not completed. A $100 reinspection fee was charged to the property. 11-23-2015 The $100 reinspection fee was paid. 11-24-2015 A fifth inspection was conducted and failed; corrections not completed. A $100 reinspection fee was charged to the property. 12-02-2015 The $100 reinspection fee was paid. 12-09-2015 A sixth inspection was conducted and failed; corrections not completed. A $100 reinspection fee was charged to the property. 12-16-2015 A seventh inspection was conducted and passed; corrections completed. The $100 reinspection fee was paid. 01-05-2016 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 7'I!sioii: Ensuring an attractive, dean, safe, inclusive COmIflhInhIV that eui/ituutces the tjiitthtj' of lift' for all people and preserves the public has! [311SJ[J lUll U I 3k"A 0) 1I 1SA'A I 01-22-2016 A second letter was sent to the owner(s) notifying of qualification for Type IV 6- Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 02-09-2016 A Mitigation Plan was submitted. 02-22-2016 The Mitigation Plan was finalized. 03-04-2016 A letter was sent to the owner notifying that the hearing before the Council will be held March 14, 2016. If approved, after six months, a new rental license is required. The license process will begin immediately. The new license will be based on the property code violations found during the initial renewal license inspection and the number of validated police calls for services for disorderly activities and nuisances as defined in 12-911. The terms of the mitigation plan must also be met. Excerpt from Chapter 12 of City Code of Ordinances: Section 12-913. TYPE IV PROVISIONAL LICENSES. 1.Rental properties that meet the provisional licensing criteria as described in Section 12- 901 are eligible only for provisional licenses. 2.The City will provide by mail to each licensee a monthly report of any police and fire calls and incidents and applicable property Code violations as described in Section 12- 901. 3.Mitigation Plan. The applicant for a provisional license must submit for Council review a mitigation plan for the license period. The mitigation plan shall describe steps proposed by the applicant to reduce the number of police and fire calls and/or the property Code issues described in Section 12-901 and 12-911 to a level that qualifies for a Type I, II, or III license. The mitigation plan may include such steps as changes in tenant screening procedures, changes in lease terms, security measures, rules and regulations for tenant conduct, security personnel, and time frame to implement all phases of the Crime Free Housing Program. 4.Council Consideration. The application with a proposed mitigation plan will be presented to the City Council together with a recommendation by the City Manager or the Manager's designee as to the disposition thereof. After giving the applicant an opportunity to be heard and present evidence, the Council shall approve, disapprove, or approve with conditions the application and the mitigation plan. If the Council disapproves an application and mitigation plan or approves it with conditions, it shall state its reasons for so doing in writing. In evaluating a mitigation plan, the Council will consider, among other things, the facility, its management practices, the nature and seriousness of causes for police and fire incidences and/or property Code issues and the expected effectiveness of measures identified in the plan to reduce the number of police and fire incidences and/or property Code violations. In evaluating a mitigation plan 1Jissio,z: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of /IJi for (dl people and preserves the public trust EI1II[iJ I U I I M'AL' I k!4 (I) 1AI 1IJ'A I submitted by an applicant already under a provisional license, the Council will also consider the effectiveness of measures identified in the applicant's previous mitigation plan and the need for different or additional measures to reduce police and fire incidences and/or property Code violations. 5. Compliance with Mitigation Plan. The licensee shall comply with the mitigation plan as approved or modified by the Council. No later than the tenth day after each calendar month, the licensee shall mail or deliver to the City Manager a written report describing all steps taken in furtherance of the mitigation plan during the preceding month. P'J,cswii: Ensuring an attractive, clean, safe, inclusive comnuinily that en/sauces the quality of life for all people and preserves the public trust [[S1SJESi fl V U MA UhYA I ØhYA (I) UI I]SJh'1J I Rental License Category Criteria Policy - Adopted by City Council 03-0840 1.Determining License Categories. License categories are based on property code and nuisance violations noted during the initial or renewal license inspection or for a category verification inspection, along with excessive validated police service calls occurring over a year. License categories are performance based and more accurately depict the condition of the property and the City costs of service. 2.Fees. Fee amounts are determined by the costs of the city to license, inspect, monitor and work with the property to ensure category conditions are met. License fees do not include reinspection fees, late fees, charges for criminal or civil enforcement actions, or other penalties. 3.Category Conditions. The licensee or designated agent must meet the category conditions in the time period specified by the City. A licensee must meet all original conditions required by the License Category, even if a subsequent license category is achieved. 4.License Category Criteria. a. Property Code and Nuisance Violations. Property code violation rates will be based on the average number of property code violations per unit identified during the licensing inspection or category verification inspection. Property code violations for purposes of determining licensing categories shall include violations of property code and nuisances as defined in Chapter 12, 19, 7 and other applicable local ordinances. The City may, upon complaints or reasonable concerns that the establishment no longer complies with the license category criteria, perform a category verification inspection to the same standards as the license renewal inspection as indicated below. Inspections will be conducted in conjunction with established department policies. In cases where 100% of the units are not inspected, the minimum inspection standards will be established as follows: • At least 75% of units will be inspected for properties with 15 or less units. • At least 25% of units, to include a minimum of 12 units, will be inspected for properties with 16 or more units. IvItSiOii Ensuring an attractive, clean, safe, inclusive conunu n/tv that enhances the quality nfl/fr fin all people and preserves the public trust [E$iii[iJ I fl I V M Uh'A I M '4 (I] 1WI flIJ I Property Code and Nuisance Violations Criteria License Category Number of Units Property Code Violations per (Based on Property Inspected Unit Code Only) Type I - 3 Year 1-2 units 0-1 3+ units 0-0.75 Type II - 2 Year 1-2 units Greater than 1 but not more than 4 3+ units Greater than 0.75 but not more than 1.5 Type III - 1 Year 1-2 units Greater than 4 but not more than 8 3+ units Greater than 1.5 but not more than 3 Type IV - 6 Months 1-2 units Greater than 8 3+ units Greater than 3 b. Police Service Calls. Police call rates will be based on the average number of valid police calls per unit per year. Police incidences for purposes of determining licensing categories shall include disorderly activities and nuisances as defined in Section 12-911, and events categorized as Part I crimes in the Uniform Crime Reporting System including homicide, rape, robbery, aggravated assault, burglary, theft, auto theft and arson. Calls will not be counted for purposes of determining licensing categories where the victim and suspect are "Family or household members" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 51813.01, Subd. 2 (b) and where there is a report of "Domestic Abuse" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 51813.01, Subd. 2 (a). License Number of Units Validated Calls for Disorderly Conduct Category Service & Part I Crimes (Calls Per Unit/Year) No Category 1-2 0-1 Impact 3-4 units 0-0.25 Sor more units 0-0.35 Decrease 1 1-2 Greater than 1 but not more than 3 Category 3-4 units Greater than 0.25 but not more than 1 5 or more units Greater than 0.35 but not more than 0.50 Decrease 2 1-2 Greater than 3 Categories 3-4 units Greater than 1 5 or more units Greater than 0.50 Mission: Ensuring an alirac/ive, clean, saf, inclusive co,n;nnnitv that enhances the quality of life for all people and preserves the public trust EI1IJ[iJ I fl V M UhYA S ML'4 [I) 1I I1iI'A I Budget Issues: There are no budget issues to consider. Strategic Priorities: o Safe, Secure, Stable Community Attachment - Mitigation Plan - Resolution Approving a Type IV Rental License for 2006 Brookview Dr Iission: Ensuring an attractive, clean, safe, inclusive conununty that enhances the quality of//fr for all people am/preserves the public trust Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION APPROVING A TYPE IV RENTAL LICENSE FOR 2006 BROOK-VIEW DR WHEREAS, City Ordinance Sections 12-900 to 12-916 set forth requirements for licensed rental properties; and WHEREAS, the property located at 2006 Brookview Dr, was issued a Type IV Rental License on May 22, 2017; and WHEREAS, City Ordinance Section 12-901.2 requires a property owner who receives a Type IV Rental License complete Phase I, II and III of the Crime Free Housing Program; and WHEREAS, City Ordinance Section 12-914.3.c establishes the requirement for Phase II of the Crime Free Housing Program including attendance at a minimum of 50 percent of Owners/Managers Association Meetings and completion of Crime Prevention Through Environmental Design Requirements; and City Ordinance Section 12-913 requires submittal of monthly updates; and WHEREAS, the property owner of 2006 Brookview Dr, Brooklyn Center failed to attend Owners/Managers Association Meetings, complete security improvements, turn in monthly updates, and/or other requirements. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota, that a TYPE IV Rental License is hereby approved for the property at 2006 Brookview Dr, Brooklyn Center, MN. November 27, 2017 Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member 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. ci r ui:mc 3N) bMMu&ir,r CEITTIMR nifl LicEri MiiiIoh PJr Tpa IV Wo n vi Sxitr fi i!QI1 Pin w').r e A iik± n bo Lw cr cal4Th3I56-32UtD h ui rcirrarftj ft?itJ yd L vk irriII. i -rprI'j irE: L\ Crtr trrie() WNF JITSLLC Oc' Jcfri; As 000, N O 20 2 1 'rr PI'F '7i:.4. 442-ii QfEE Efli3iL rnrIiriIi1irn 03/31/2017 tcc! n1lJ: Rrr ''1i AriAIru:tr 'rfl, MM A,., c, P h ceiE !J?U jn1 E'ii1: ndExitici 9O r1 •i 'rij Basil 01 prr pIi:ir ncIn 1h bo eyiy rr 1VB Min.t Rriil Li:r, PrrLopikOwn Eijprol by Ih nh1 Cc'i.ncIl NO CCI1I 1E4 Mii1ih Pian wiuAb ri.kind p.n d p'roiitq 01 ? 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VM 21i.I N.i: j'!Zj 1' ri c':' Cty Cowiindll Agethi hem N0 filto 0011-11,11 i • u a u s a oJ auik'i i DATE: November 27, 2017 TO: Curt Boganey, City Man3 THROUGH: Michael Ericson, Interim Community Development Directo ) FROM: Jesse Anderson, Deputy Director of Building and Community Standards,YL SUBJECT: Type IV 6-Month Provisional Rental License for 7143 France Ave N Recommendation: It is recommended that the City Council consider approval of the Mitigation Plan, Resolution and issuance of a Type IV 6-Month Provisional Rental License for 7143 France Ave N. The applicant or representative has an opportunity to present evidence regarding the submitted Mitigation Plan. If the Council chooses to modify or disapprove the Mitigation Plan, it is recommended that the motion be to direct staff to prepare proposed findings for disapproval of the Mitigation Plan and notify the license applicant of any pending license actions to be taken at a subsequent Council Meeting. Background: This owner is applying for a renewal rental license. This is a single family dwelling. The previous license was a Type IV Rental License issued on April 10, 2017, on condition of adherence to the Mitigation Plan and City Ordinances. The requirements of the Mitigation Plan were met for the previous license. However, the property qualifies for a Type IV Rental License based on ten (10) property code violations found during the initial rental inspection and zero (0) validated police nuisance incidents for the past twelve months. Therefore, according to City Ordinance, based on the number of property code violations, the license category remains a Type IV. City Ordinance Section 12-901.2 requires a licensee of a Type IV Rental License to complete Phase II of the Crime Free Housing Program. City Ordinance Section 12-914.3.c requires an owner (or authorized representative) to attend a minimum of 50 percent of Owners/Managers Association Meetings. Staff is recommending approval of the Type IV Rental License in lieu of denial, revocation or suspension because the owner is working with staff to meet the license requirements and the property is currently in compliance with the ordinance. 1Jission: Ensuring 011 attractn'e, clean, saf, inclusive coijunwdtv that enhances the quality of life for all people and preserves the public trust [i[I1IJ[SJ I UI I I4 U I M'4 [I) 1I I1lh I The following is a brief history of the license process actions. Current rental license approval activities: 06-09-2017 The owner, Yi LinlKhai Hong Lim Properties, applied for renewal of the rental dwelling license for 7143 France Ave N, a single family dwelling. 06-27-2017 An initial rental license inspection was conducted. Ten property code violations were cited, see attached rental criteria. 09-28-2017 A second inspection was conducted and failed. 09-30-2017 The previous Type IV Rental License expired. 10-12-2017 A third inspection was conducted and passed. 10-24-2017 City records indicate zero validated police nuisance incidents occurred in the past twelve months. 10-24-2017 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 11-09-2017 A second letter was sent to the owner(s) notifying of qualification for Type IV 6- Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 11-13-2017 A Mitigation Plan was submitted. 11-15-2017 The Mitigation Plan was finalized. 11-16-2017 A letter was sent to the owner notifying that the hearing before the Council will be held November 27, 2017. Prior Type IV Rental License approval activities: 12-20-2016 The Owner, Yi LinIKhai Hong Lim Properties, applied for renewal of the rental dwelling license for 7143 France Ave N, a single family dwelling. 01-20-2017 An initial rental license inspection was conducted. 11 property code violations were cited, see attached rental criteria. 02-22-2017 A second rental inspection was conducted and passed. 03-07-2017 City records indicate zero validated police nuisance incidents occurred in the past twelve months. 03-07-2017 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 03-14-2017 A Mitigation Plan was submitted. 03-16-2017 The Mitigation Plan was finalized. 03-31-2017 The previous rental license expired. 04-03-2017 A letter was sent to the owner notifying that the hearing before the Council will be held April 10, 2017. If approved, after six months, a new rental license is required. The license process will begin in approximately three months. The new license will be based on the property code violations found during the initial renewal license inspection and the number of validated police calls for Mission: Ensuring an attractive, clean, sate, inclusive connnunitr that enhances the quality /lfL' for all people and preserves the public trust I1ILTiJ I N I I DkA L'A I DIL'A (I] t1I flhJA I services for disorderly activities and nuisances as defined in 12-911. The terms of the mitigation plan must also be met. Excerpt from Chapter 12 of City Code of Ordinances: Section 12-913. TYPE IV PROVISIONAL LICENSES. 1.Rental properties that meet the provisional licensing criteria as described in Section 12- 901 are eligible only for provisional licenses. 2.The City will provide by mail to each licensee a monthly report of any police and fire calls and incidents and applicable property Code violations as described in Section 12- 901. 3.Mitigation Plan. The applicant for a provisional license must submit for Council review a mitigation plan for the license period. The mitigation plan shall describe steps proposed by the applicant to reduce the number of police and fire calls and/or the property Code issues described in Section 12-901 and 12-911 to a level that qualifies for a Type I, II, or III license. The mitigation plan may include such steps as changes in tenant screening procedures, changes in lease terms, security measures, rules and regulations for tenant conduct, security personnel, and time frame to implement all phases of the Crime Free Housing Program. 4.Council Consideration. The application with a proposed mitigation plan will be presented to the City Council together with a recommendation by the City Manager or the Manager's designee as to the disposition thereof. After giving the applicant an opportunity to be heard and present evidence, the Council shall approve, disapprove, or approve with conditions the application and the mitigation plan. If the Council disapproves an application and mitigation plan or approves it with conditions, it shall state its reasons for so doing in writing. In evaluating a mitigation plan, the Council will consider, among other things, the facility, its management practices, the nature and seriousness of causes for police and fire incidences and/or property Code issues and the expected effectiveness of measures identified in the plan to reduce the number of police and fire incidences and/or property Code violations. In evaluating a mitigation plan submitted by an applicant already under a provisional license, the Council will also consider the effectiveness of measures identified in the applicant's previous mitigation plan and the need for different or additional measures to reduce police and fire incidences and/or property Code violations. 5. Compliance with Mitigation Plan. The licensee shall comply with the mitigation plan as approved or modified by the Council. No later than the tenth day after each calendar month, the licensee shall mail or deliver to the City Manager a written report describing all steps taken in furtherance of the mitigation plan during the preceding month. ?PJiN!o,z: En.cziring ((Ii attractive, clean , safi', inclusive coinmu,ntr that enhances the quality oJhsfe for (III people and preserves the public trust [iiI1IJh(J fl N N Dk'A •h I ak'A 0) UI alA' I Rental License Category Criteria Policy - Adopted by City Council 0308-10 1.Determining License Categories. License categories are based on property code and nuisance violations noted during the initial or renewal license inspection or for a category verification inspection, along with excessive validated police service calls occurring over a year. License categories are performance based and more accurately depict the condition of the property and the City costs of service. 2.Fees. Fee amounts are determined by the costs of the city to license, inspect, monitor and work with the property to ensure category conditions are met. License fees do not include reinspection fees, late fees, charges for criminal or civil enforcement actions, or other penalties. 3.Category Conditions. The licensee or designated agent must meet the category conditions in the time period specified by the City. A licensee must meet all original conditions required by the License Category, even if a subsequent license category is achieved. 4.License Category Criteria. a. Property Code and Nuisance Violations. Property code violation rates will be based on the average number of property code violations per unit identified during the licensing inspection or category verification inspection. Property code violations for purposes of determining licensing categories shall include violations of property code and nuisances as defined in Chapter 12, 19, 7 and other applicable local ordinances. The City may, upon complaints or reasonable concerns that the establishment no longer complies with the license category criteria, perform a category verification inspection to the same standards as the license renewal inspection as indicated below. Inspections will be conducted in conjunction with established department policies. In cases where 100% of the units are not inspected, the minimum inspection standards will be established as follows: • At least 75% of units will be inspected for properties with 15 or less units. • At least 25% of units, to include a minimum of 12 units, will be inspected for properties with 16 or more units. IUissroi,: Ensuring an attractive, clean, saft, inclusive eonnnunhl,v that enhances the quality oJ1 te for nil people and preserves the pu b/ic trust S1SJ[SJ fl I Mk'4 U'A I DIkTA (I) 1I I1IA'A1 Property Code and Nuisance Violations Criteria License Category Number of Units Property Code Violations per (Based on Property Inspected Unit Code Onlv Type I -3 Year 1-2 units 0-1 3+ units 0-0.75 Type 11-2 Year 1-2 units Greater than 1 but not more than 4 3+ units Greater than 0.75 but not more than 1.5 Type III - 1 Year 1-2 units Greater than 4 but not more than 8 3+ units Greater than 1.5 but not more than 3 Type IV - 6 Months 1-2 units Greater than 8 3+ units Greater than 3 b. Police Service Calls. Police call rates will be based on the average number of valid police calls per unit per year. Police incidences for purposes of determining licensing categories shall include disorderly activities and nuisances as defined in Section 12-911, and events categorized as Part I crimes in the Uniform Crime Reporting System including homicide, rape, robbery, aggravated assault, burglary, theft, auto theft and arson. Calls will not be counted for purposes of determining licensing categories where the victim and suspect are "Family or household members" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 51813.01, Subd. 2 (b) and where there is a report of "Domestic Abuse" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 51813.01, Subd. 2 (a). License Number of Units Validated Calls for Disorderly Conduct Category Service & Part I Crimes (Calls Per Unit/Year) No Category 1-2 0-1 Impact 3-4 units 0-0.25 5 or more units 0-0.35 Decrease 1 1-2 Greater than 1 but not more than 3 Category 3-4 units Greater than 0.25 but not more than 1 5 or more units Greater than 0.35 but not more than 0.50 Decrease 2 1-2 Greater than 3 Categories 3-4 units Greater than 1 5 or more units Greater than 0.50 !'Jissio,,: Ensuring an attractive, clean, S1i/', inclusive cominunily tial enhances the quality of life for all people and preserves the public trust EI]BJ[OI N I I Ik!A U'A I 1Ih'A (I] flI SJh'A I Budget Issues: There are no budget issues to consider. Strategic Priorities: Safe, Secure, Stable Community Attachment - Mitigation Plan - Resolution Approving a Type IV Rental License for 7143 France Ave N Mission: Ensuring an i/tractn'e, dean, s(ife, inditsiVe coninzuintv that enhances i/ic qwthij' ()jlfe foe al/people tindpreserees the public Iciest Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION APPROVING A TYPE IV RENTAL LICENSE FOR 7143 FRANCE AVE N WHEREAS, City Ordinance Sections 12-900 to 12-916 set forth requirements for licensed rental properties; and WHEREAS, the property located at 7143 France Ave N, was issued a Type IV Rental License on April 10, 2017; and WHEREAS, the property qualifies for a Type IV Rental License based on the number of property code violations (10) and validated police nuisance incidents (zero); and WHEREAS, City Ordinance Section 12-901.2 requires a property owner who receives a Type IV Rental License to complete Phase I, II and III of the Crime Free Housing Program; and WHEREAS, City Ordinance Section 12-914.3.c establishes the requirement for Phase II of the Crime Free Housing Program including attendance at a minimum of 50 percent of Owners/Managers Association Meetings and complete security improvements; and City Ordinance Section 12-913 requires submittal of monthly updates. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota, that a TYPE IV Rental License is hereby approved for the property at 7143 France Ave N, Brooklyn Center, MN. November 27 Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member 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. DUILDING XWOOKLYN AND CMUN11 STA NDRUD ov icnt Hrdkr/(Jrfl?J? P)aI wif x'r be I; ri lils ic'ni cn Nal tLird on i Mi,£y !I)! al ci .32C' to ha arEllrflk cp, 'OU V)J PrcprLy dr; 113. 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L1LtC 1ft 1iv ! in1i r12 I inn p!cPcJrJ j nd Iu Ili 'rIEid ti iiI iizi ri:i w 'rIy vLl 1t üd r flci PIM camps 'MI aL lems 'iIhi Iau Iii'ie per.-d, or criIobupr4 ,i!cic 1ii1 oornFiAr 6 s, or Lzrm r uvairfw :J Lii L 1 ? I 1.7c2U1 7 4D'( n'ui Vi Lh U4 rti imf 7U rY i{t', Q -cr /wM &1V. /çAi - Iii 1I,I - 'DA J I ' : :-,-: i i ry • ri n :' :vu I,L..l t: i. Fop &T.U., I?L'._.J-' i!,)- •-1'• c.I•e L'r r: Iy .I:--!l ? C. fliTiIIr lt. ..iiiJ :tI D1II:,riI 'tr:'.•. )II..Iii /j -::l'i - -: :,-r r-r1tii I.'I .2iI Ii -;n Ti I j:ukv C! Elm AGENDA CITY OF BROOKLYN CENTER CITY COUNCIL/ECONOMIC DEVELOPMENT AUTHORITY WORK SESSION November 27, 2017 Immediately Following Regular City Council and EDA Meetings Which Start at 7:00 P.M. City Hall Council Chambers A copy of the full City Council packet is available to the public. The packet ring binder is located at the podium. !'IId V 'i DI)) I1[WIi (I]I i V 1.Socioeconomic Opportunity Environmental Scan Report 2.Community Dialogue Follow-up 3. Review of the Draft Tax Increment Development Agreement for HOM Furniture/Kohl's Lot PENDING LIST FOR FUTURE WORK SESSIONS Later/Ongoing 1.Legislative Agenda - December 2.Food Trucks Update - December 3.Wage Requirement for the Business Subsidy Policy - December 4.Conducting City Council Business Electronically - January 5.Naturally Occurring Affordable Housing Policy - January 6.Overnight Parking - January 7.South Opportunity Site Development 8.T.H. 252 Freeway Conversion Study Update 9.City Council Code of Policies (October 9 Study Session Discussion) a.Section 2.70 Street and Alley Lighting Policy b.Section 2.93 Long-Term Deer Population Management Plan 10.Tobacco Purchase Age 21 (Brooklyn Youth Council) W©mk §©frrn Arrlithi ]Itm N©0 iii k"A I Dk4 (0) 1II OJJ ES]SJ[iJ I 'L0) .1 I lILi (il DATE: November 27, 2017 TO: Curt Boganey, City Manag FROM: Reggie Edwards, Deputy City Manager SUBJECT: City of Brooklyn Center Socioeconomic Opportunity Environmental Scan Report Recommendation: It is recommended that the City Council consider receiving the City of Brooklyn Center Socioeconomic Opportunity Environmental Scan Report. It is also recommended that the Council provide feedback to staff regarding the report and related efforts moving forward. Background: In March of 2015 the Council adopted the City's 2016-2018 Strategic Plan, which included six strategic priorities. One specific strategic priority identified in the plan is "Resident Economic Stability". In the plan "Resident Economic Stability" is described as being, "essential to vibrant neighborhoods and to retail, restaurant, and business growth ". In the plan, it is further stated that the City will lead in this area by, "supporting collaborative efforts of education, business, and government sectors to improve opportunities for residents ". In March of 2016, the City entered into an agreement with the Everybody In, Inc. to research and report on economic equity within the City; facilitate community and business dialogue on promising economic strategies, and to assist in developing and monitoring related strategic actions. In July and August of 2016, the Council heard and accepted the report titled, "City of Brooklyn Center Socioeconomic Opportunity Profile." The report outlined the City's current demographic, educational, and economic outlook. The Council unanimously accepted the report and directed staff to move forward in designing and implementing steps to achieve the City's strategic priority of "Resident Economic Stability." In October of 2016, the City also adopted a resolution that publicly announced its commitment to addressing resident economic stability. In of 2017, the Council reaffirmed its commitment to "Resident Economic Stability" by reestablishing "Resident Economic Stability" as a city strategic priority in the City's 2018-2020 Strategic plan. In of 2017, staff worked with Everybody Into complete a second report titled "City of Brooklyn Center Environmental Scan", which is attached. The purpose of this report was to assess the economic landscape of the City to determine what efforts or strategies are currently being employed by organizations to address resident economic stability within the City. Staff believed gathering of this data was critical to gather prior to the development of citywide strategies and actions. Mission: Ensuring an attractive, clean, safe, inclusive community that en/sauces the quality of life for al/people and preserves the public trust k I M (I) 11I WJ'A EI1IJ[J I !!LI) 1 S1 aIii [I)l There were twenty diverse stakeholders representing business owners, non-profits, faith-based organizations, chambers of commerce and city officials engaged in developing the findings of the second report. The interviewers heard from leaders in the community on city residents' current well-being in education, employment, and business development. Everybody In indicated that, "Each conversation helped its gain better understanding on 1) challenges in education, employment, and business development and 2) services and supports already provided that are currently implemented in the community to address challenges and bridge gaps for residents to achieve economic stability." The report focuses on findings and development of possible strategies in three key areas: 1) Education, 2) Workforce and 3) Business Development. The key findings and insights from the stakeholder interviews and focus group sessions were: • The City of Brooklyn Center needs capacity to coordinate community outreach and collaboration with partners and leaders on this initiative. • The City needs to communicate about this initiative and its possible benefits to the community. • Specific outreach to the City's largest employers in the region - such as Walmart and Luther Automotive Group that need to become a core part of the initiative. • The City needs to reach out to our local financial institutions and support their engagement in an equity strategy. The intent of the first report "City of Brooklyn Center Socioeconomic Opportunity Profile" and the this second report "City of Brooklyn Center Environmental Scan" was to lay a foundation for engaging business and community leaders from across the city in a collaborative effort to address residential economic stability. As articulated in the related resolution, the City Council indicated its understanding that addressing resident economic stability would require efforts beyond that of the City government. Therefore, the Council set forth a direction that the City would take an active leadership role in efforts to achieve "Resident Economic Stability." Policy Issues: 1.Does the Council desire additional information beyond the City of Brooklyn Center Environmental Scan Report in order to receive the report? 2.Is there a consensus of the Council to direct staff to continue the efforts of this initiative? Strategic Priorities: • Resident Economic Stability Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust k"A I K4 0) 1WI 1IJhYA EI1IJ[iJ I !LS) 1 S1 DIEI (I)l DATE: November 27, 2017 TO: Curt Boganey, City Manager FROM: Reggie Edwards, Deputy City Manage— SUBJECT: City of Brooklyn Center Socioeconomic Opportunity Environmental Scan Report Recommendation: It is recommended that the City Council consider receiving the City of Brooklyn Center Socioeconomic Opportunity Environmental Scan Report and provide suggestions on next steps in an effort to engage community leaders in a dialogue regarding the meaning and implications of the report. Background (Repeat): In March of 2015 the Council adopted the City's 2016-2018 Strategic Plan, which included six strategic priorities. One specific strategic priority identified in the plan is "Resident Economic Stability". In the plan "Resident Economic Stability" is described as being, "essential to vibrant neighborhoods and to retail, restaurant, and business growth ". In the plan, it is further stated that the City will lead in this area by, "supporting collaborative efforts of education, business, and government sectors to improve opportunities for residents ". In March of 2016, the City entered into an agreement with the Everybody In, Inc. to research and report on economic equity within the City; facilitate community and business dialogue on promising economic strategies, and to assist in developing and monitoring related strategic actions. In July and August of 2016, the Council heard and accepted the report titled, "City of Brooklyn Center Socioeconomic Opportunity Profile." The report outlined the City's current demographic, educational, and economic outlook. The Council unanimously accepted the report and directed staff to move forward in designing and implementing steps to achieve the City's strategic priority of "Resident Economic Stability." In October of 2016, the City also adopted a resolution that publicly announced its commitment to addressing resident economic stability. In of 2017, the Council reaffumed its commitment to "Resident Economic Stability" by reestablishing "Resident Economic Stability" as a city strategic priority in the City's 2018-2020 Strategic plan. In of 2017, staff worked with Everybody In to complete a second report titled "City of Brooklyn Center Environmental Scan", which is attached. The purpose of this report was to assess the economic landscape of the City to determine what efforts or strategies are currently being employed by organizations to address resident economic stability within the City. Staff believed gathering of this data was critical to gather prior to the development of citywide strategies and actions. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust k I !AII) 1.'II Wh'A EWJ[SI I !ALI) 1 I *'i1 (ikI There were twenty diverse stakeholders representing business owners, non-profits, faith-based organizations, chambers of commerce and city officials engaged in developing the findings of the second report. The interviewers heard from leaders in the community on city residents' current well-being in education, employment, and business development. Everybody In indicated that, "Each conversation helped its gain better understanding on]) challenges in education, employment, and business development and 2) services and supports already provided that are currently implemented in the community to address challenges and bridge gaps for residents to achieve economic stability" The report focuses on findings and development of possible strategies in three key areas: 1) Education, 2) Workforce and 3) Business Development. The key findings and insights from the stakeholder interviews and focus group sessions were: The City of Brooklyn Center needs to staff-up capacity to coordinate community outreach and collaboration; The City needs to communicate about this initiative and its possible benefits to the community - both so that people know about it and to secure their investment as partners; o Specific outreach to our largest employers in the region - such as Walmart and Luther Automotive Group needs to become a core part of the approach; The City needs to reach out to our local financial institutions and support their engagement in an equity strategy. The intent of the first report "City of Brooklyn Center Socioeconomic Opportunity Profile" and the this second report "City of Brooklyn Center Environmental Scan" was to lay a foundation for engaging business and community leaders from across the city in a collaborative effort to address residential economic stability. As articulated in the related resolution, the City Council articulated its understanding and direction that addressing resident economic stability would require efforts beyond that of the City government. However, the City has committed to leading in such an effort. Policy Issues: 1.Does the Council desire additional information beyond the City of Brooklyn Center Environmental Scan Report in order to direct staff regarding moving forward? 2.What is the direction of the Council to staff regarding moving forward regarding this specific effort to achieve the City's strategic priority of "Resident Economic Stability"? Strategic Priorities: o Resident Economic Stability Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the qiu:lity of life for al/people and preserves the public trust introduced the following resolution andMember Dan Ryan moved its adoption: RESOLUTION NO. 201 6-1 77 RESOLUTION COMMITTING THE CITY OF BROOKLYN CENTER TO WORK COLLABORATIVELY TO PROMOTE GREATER ECONOMIC STABILTY, THE ELIMINATION OF ECONOMIC RACIAL DISPARITIES, AND A MUTUALLY PROSPEROUS COMMUNITY FOR ALL BROOKLYN CENTER RESIDENTS, BUSINESSES, AND ENTREPRENEURS WHEREAS, the City of Brooklyn Center is one of the most diverse cities in the Twin Cities metropolitan region; and WHEREAS, the City of Brooklyn Center has far too many of its residents earning an income significantly below the median income for Hennepin County, according to U.S. Census Bureau; and WHEREAS, the City of Brooklyn Center has identified and acknowledged that significant racial disparities exist among residents in its local economy that can and must be improved; and WHEREAS, the City of Brooklyn Center recognizes that the economic disparities and lack of opportunity that adversely affects too many of our residents are beyond the means of the City, acting alone to correct; and WHEREAS, the City of Brooklyn Center is committed to bringing diverse stakeholders together to design and implement equitable economic strategies that will enable every student, every worker, every resident, and every entrepreneur in the City to thrive; and NOW, THEREFORE, BE IT RESOLVED by the City Council of Brooklyn Center, Minnesota that we firmly commit to the following, in order to ensure that we set an example for the Twin Cities Region and world to establish greater and more equitable economic opportunities for all residents, by taking the following steps: 1.Form and convene a coalition of community members and representatives of higher education, government, non-profits, private businesses, and professional experts who will gather local insights and best practices to help design an effective and equitable approach to economic stability for all residents; 2.Use a series of broader community gatherings to share what the City is learning and doing to take action on eliminating economic disparities and fostering mutual success or all residents; 3. Build capacity within the City to sustain this effort, until a significant and measurable increase in equitable economic opportunity has been achieved and experienced, and that all residents may envision a bright prosperous future: RESOLUTION NO, 2016-177 October 24, 2016 Date ATTEST: A—Af—k nZt'L City Clerk / I - Mayor The motion for the adoption of the foregoing resolution was duly seconded by member Lin Myszkowski and upon vote being taken thereon, the following voted in favor thereof: Tim Willson, April Graves, Kris Lawrence-Anderson, Lin Myszkowski, Dan Ryan and the following voted against the same: whereupon said resolution was declared duly passed and adopted. EVERYBODY J It C,Jty of Brooklyn Center Environmental Scan Everybody In October 16, 2017 Authors: Kia Her, Research Analyst - Everybody In and Sam Grant, Director of Research and Development, Everybody In 1 n - L EVERYBODY ii FWini Executive Summary The City of Brooklyn Center contracted with Everybody In - a key driver of regional efforts for racial equity - to Launch a campaign for racial equity and social innovation in the City. This report: a) documents our assessment of the current status of the City's socio-economic profile; b) documents a series of stakeholder meetings to assess and connect the range of perspectives of diverse stakeholders; and c) proposes an action plan. In March of 2015, Brooklyn Center's City Council adopted its 2016-2018 Strategic Plan. This plan included a strategic priority in "Resident Economic Stability". As one of the most diverse cities in Minnesota, Brooklyn Center has an opportunity to address resident economic stability by 'leading with racial equity'. Everybody In recommends amending this to include specific language on racial equity - such that "The City of Brooklyn Center actively celebrates its racial and ethnic diversity, recognizing these as key assets around which the City defines and operationalizes its strategies for resident economic stability." In July 2016, Everybody In completed a report titled "City of Brooklyn Center Socioeconomic Opportunity Profile" that 1) analyzed the risks, strengths, and areas of opportunity for the City using baseline indicators in education, workforce, and business growth, 2) disaggregated outcomes by racial ethnic groups, age, and gender, and 3) compared outcomes among Hennepin County and the state as a whole. Analysis of the baseline data revealed a medium-sized city with diverse assets and opportunities. Risks that impede economic stability for residents are low educational achievement, high unemployment, and low-income. However, Brooklyn Center has a diverse and young population with untapped talent and potential to contribute to the city's economy. Over half of residents are of color. Students of color in the Brooklyn Center, Osseo, Robbinsdale, and Anoka-Hennepin school districts make up 80% of the student body. The unemployment rate is at 9%, and disproportionately consists of African Americans and American Indians. Despite the higher unemployment rates of communities of color in Brooklyn Center, 2 out 5 firms are minority owned and minority firms are growing at a fast rate. The top 3 industries have consistently been Trade, Transportation & Utilities, Education and Health Services, and Manufacturing. Thus, leading the City of Brooklyn Center to focus on its diversity as a critical asset. After the analytical profile was completed, 20 diverse stakeholders were interviewed (business owners, non-profits, faith-based organizations, chambers of commerce and city officials) to gain key insights on the city's current economic landscape in addition to the baseline data. We heard from leaders in the community on city residents' current well-being in education, employment, and business development. Each conversation helped us gain better understanding on 1) challenges in education, employment, and business development and 2) services and supports already provided that are currently implemented in the community to address challenges and bridge gaps for residents to achieve economic stability. Key findings from the interviews are: o Education 1)Key challenges and barriers identified in the education institutions are poverty, language and culture, mobility, access to healthy foods, and navigating the school system. 2)Strategies to address challenges in education are focused on a) a student- centered approach for extracurricular activities, and decision-making fl I y EVERYBODY processes, b) culturally appropriate, relevant, and responsive practices inside and outside the classroom, c) increased student, parent, and community engagement, and d) intentional staff recruitment, retention, and more professional development opportunities on racial equity. Workforce 1)In the area of nonprofit and workforce development, key challenges and barriers revolve around being able to provide comprehensive services, living wage jobs, workforce training, community engagement, transportation, and housing. 2)Strategies among workforce developers are a) providing employment and training opportunities for residents in partnership with employers, b) leadership development opportunities for youth and residents to be engaged in their community, c) civic engagement opportunities for disconnected communities of color to be active in decision making processes that directly affect them, and d) data and research for the community in order to make informed decisions. Business Development 1)Finally, businesses are challenged in finding skilled workers, leveraging the diverse workforce and business partners, accessing capital, finding opportunities, and obtaining sustainability. 2)Strategies among capacity builders are a) leading training and workshops for new to experienced business owners, b) providing business consultation to meet individual business needs, c) micro-lending, and d) networking opportunities for businesses, and e) philanthropy. The key findings from the stakeholder interviews informed the city on its current economic landscape and opportunity, which led to organizing a racial equity stakeholder group meeting. The meeting's purpose was to compare perspectives and develop a unified racial equity strategy. On Friday, May 12, 2017, the diverse range of critical stakeholders interviewed gathered at the Brooklyn Center Community Center for the City of Brooklyn Center's first Racial Equity Stakeholder meeting. The key insights from the meeting included: a)The City of Brooklyn Center needs to staff-up capacity to coordinate community outreach and collaboration; b)We need to communicate about this initiative and its possible benefits to the community - both so that people know about it and also to secure their investment as partners; c)Specific outreach to our Largest employers in the region - such as Walmart and Luther Automotive Group needs to become a core part of the approach; d)We also need to reach out to our Local financial institutions and support their engagement in an equity strategy. EVERY person we have spoken with has said they are interested in a City-wide racial equity strategy and that they would add value to it. Yet there is not a short path, with a simple set of steps to goal realization. Racial Equity will only be realized with very steady work of many hands and hearts. EVERYBODY Everybody In proposes a racial equity framework with proposed roles for stakeholders in each sector, actions, and intended results that will set the condition of Brooklyn Center towards achieving racial equity. The key words for the journey: creative; collaborative; committed; comprehensive; capabilities; credit and capital. In the long term phase of this work, Everybody In proposes the development of a regional comprehensive racial equity strategy that does not just consider Brooklyn Center, but also brings surrounding cities into a formal racial equity partnership. However, before Brooklyn Center invites other cities to join its effort, it wants to more firmly take action, lead, and establish its own capacity as a catalyst to drive racial equity. The next critical, steps will thus include: • Convening more stakeholder meetings to specify the steps, timeframe and resources necessary to fully implement a plan of action that results in the desired level of racial equity performance; • Working with largest employers in the city to support capacity to anchor racial equity in the City; • Developing and implementing a communications strategy so that the diverse stakeholders in the community are aware of what is happening, have ample touch- points to plug-in, and support to make meaningful contributions to the City's racial equity strategy; • Working with city and regional financial institutions and capacity building organizations to assess current supports available to support development, growth and expansion of businesses in the community, particularly designing supports for the fastest growing enterprises the promise most significant job creation and retention potential at living wages. • Partnering public schools and higher education with the private sector to foster career pathways for workforce and enterprise development within the City and region - boosting livability, the local skills base, economic opportunity and vitality in the City. In the long term phase, we propose that Brooklyn Park, Crystal, Osseo and Robbinsdale form a five-city partnership with Brooklyn Center, and, together, to take the following steps: 1.A base line assessment is completed for all five cities together; 2.A series of interviews are completed with key stakeholders in each City, inclusive of police and fire, real estate, large businesses with many employees, small businesses, financial institutions, faith-based institutions, non-profit organizations, city administration, schools and district offices, colleges, civic leaders among residents, and low income residents. 3.An analysis interview results 4.A series of stakeholder gatherings to design and implement a common racial equity plan 5. Capacity building and resource development to implement a long-term plan of action to increase and sustain racial equity in the five-city region 4 p r ' EVERYBODY it Current Landscape - Changing the Narrative The whole state of Minnesota is faced with a complex challenge - the failure to substantively address racial equity in economic opportunity. The City of Brooklyn Center Looked at the data and determined that it is better to get out in front of this prevailing pattern after a preliminary baseline data assessment was completed by Everybody In, with the active engagement of the City administration, the Mayor and City Council. The City is not alone. From the Governor's office down to the newest small businesses just started today, many people in Minnesota recognize that the time is NOW to create and sustain a robust, effective, results-oriented social architecture that generates a future of mutual prosperity. In March of 2015, Brooklyn Center's City Council adopted its 2016-2018 Strategic Plan, which included a strategic priority in "Resident Economic Stability". This priority is imperative for a thriving community and sustainable economic growth by supporting collaborative efforts in education, business, and government sectors to improve opportunities for all residents. In order for a diverse city to stabilize economic opportunity for residents, it must counter the prevailing pattern in the region, which exacerbates racial disparities. As the demographic transformation of Minnesota continues it is highly imperative that we wisely address the racial disparities in educational outcomes, in employment, in higher educational attainment, in credit and capital access for business development and expansion. Further, it is important to do this in a way that builds on existing assets within the City, and fosters a culture of positive collaboration for intended results. With 8.3 square miles of land and a total population of 30,684, the City of Brooklyn Center continues to grow in diversity and opportunity. However, resident perceptions of Brooklyn Center are greatly divided. Where some see the City as a great place to live, others see a place with rising crime and lower economic stability and resilience. The community, like the region as a whole, is fragmented and there is not a process in place to bring diverse stakeholders together to make a collective impact on our quality of life. • From 2010-2014, the city continued to be a Racially Concentrated Area of poverty (Metropolitan Council), where half of households made less than $44,826 a year. o The 2017 Leatherman Survey of Brooklyn Center residents also revealed different perspectives in quality of life and current city developments. Residents pointed to high crime as the city's largest issue followed by lack of jobs and lack of businesses. o 19% of residents in the survey see growing diversity negatively impacting the city based on the perspective of "rising crime". o Although the majority of residents think the city is "well prepared" to meet the needs of an increasing resident population, the other small but critical 7% think the city is "not well prepared" because of Language barriers and a lack of comfortability, social services, and police. These data points are extremely significant as we consider how to improve the quality of life for all in Brooklyn Center. The divisive perception that rising diversity leads to rising crime must be countered. The crime rate in the city has actually dramatically decreased by 46% from a peak in 2007. The perception of crime risk does not match reality, statistically, but it is real, nonetheless for those who hold this perception. Developing a city-wide investment in racial equity and conversations that bridge the divides of perceptions can set conditions for a mutually prosperous future that everyone can be proud to be part of. 5 EfERY'BOD'Y \Virl I ! Despite the perceptions and realities of crime, poverty, and economic inefficiencies, residents stilt choose Brooklyn Center as their home. According to the Leatherman survey, 27% have lived in Brooklyn Center for more than two decades, 28% moved in within the past five years, and more than half of residents intend to stay for at least another 10 years. This reflects the resilience of residents and the opportunity to harness community engagement and collective impact for greater resident economic stability. Stakeholders in Brooklyn Center also see a polarized narrative but believe in the potential of the diverse city, which with committed resources and investment, can rise up to be a city that realizes mutual thriving outcomes for all residents. Effectively engaging and amplifying this commitment to place is an extremely important asset to coordinate in a racial equity strategy. An obvious question that arises is by what means can a medium-size city with limited resources possibly serve as an example for the region? How might Brooklyn Center operationatize a strategy that it can facilitate, within its power that makes consistent measurable improvement in defined racial equity outcomes? Everybody In believes that aligning existing efforts according to a shared racial equity action plan supports the development of a collaborative results-orientation and capacity to consistently create and improve racially equitable outcomes. Everybody In is a Twin Cities metropolitan region-wide organization contracted with the City of Brooklyn Center on this strategic priority. In July 2016, Everybody In completed a report titled "City of Brooklyn Center Socioeconomic Opportunity Profile" that pulled baseline data indicators in education, workforce, and business growth. Within these 3 areas, we also looked at outcomes by racial groups, age, and gender and compared outcomes among the city, county, and state. Overall, we analyzed and identified the risks, resilience, innovation, and strategy in the City of Brooklyn Center. Analysis of baseline data revealed a medium-size city with diverse assets and opportunity: o 1 out of 2 Brooklyn Center residents are of color; o 4 out of 5 students Living in Brooklyn Center are of color in the Brooklyn Center, Osseo, Robbinsdale, and Anoka-Hennepin school districts; o 72% overall graduation rate among the 4 school districts combined; o 1 out of 3 residents have some college or Associate's degree; o Top 3 industries are Trade, Transportation & Utilities, Education and Health Services, and Manufacturing; o 2 out of 5 firms are minority-owned; o Minority-owned firms are growing at a faster rate. Risks Lower educational achievement compared to Hennepin County and Minnesota. High unemployment rates among Brooklyn Center's residents of color Low per capita income among residents of color but overall lower across all racial ethnic groups compared to the county and state. Resilience • Brooklyn Center has a diverse resident population. • Higher graduation rates compared to Hennepin County and the state. • Persistent industries in Manufacturing and Healthcare that are in-demand. Innovation 6 fl - - - _1 EVERYBODY • Growing presence of minority firms, especially entrepreneurs of color. • Opportunity to learn more about the barriers and success of Brooklyn Center's diverse students • Prepare Brooklyn Center's diverse resident population to meet future labor shortage and workforce needs. • Connecting the high rate of unemployed youth and residents of color to sustainable living wage jobs. Strategy: Brooklyn Center's diverse residents are an ASSET. • Frame the future starting with Brooklyn Center's greater diversity than the region as a whole as a strength and become a keystone city in the region's racial equity movement. • Increase opportunities for enterprise and workforce development in Brooklyn Center leading to resident economic stability. This report dives deeper into the community than just statistics and numbers. Within a 4- month period, we interviewed and discussed with 20 critical stakeholders in Brooklyn Center to hear key insights on residents' current well-being in education, employment, and business development. Each conversation helped us to understand 1) key challenges in education, employment, and business development and 2), services, supports, and strategies that are currently implemented in the community to address challenges and barriers and bridge gaps for residents to achieve economic stability. Overall, there is a realization of the challenges and barriers in Brooklyn Center but also an appreciation of the current supports available. However, there is agreement that more resources need to be invested along with a more strategic, comprehensive, and collaborative infrastructure needed to produce greater results for economic stability. Following the individual stakeholder interviews, the City of Brooklyn Center held its first Resident Economic Stability stakeholder meeting on Friday, May 12, 2017. Ten of twenty stakeholders interviewed were able to attend this important meeting to begin action planning. The key insights from the meeting included: a) The City of Brooklyn Center needs to staff-up capacity to coordinate community outreach and collaboration; b) We need to communicate about this initiative and its possible benefits to the community - both so that people know about it and also to secure their investment as partners; c) Specific outreach to our Largest employers in the region - such as Walmart and Luther Automotive Group needs to become a core part of the approach; d) we also need to reach out to our Local financial institutions and support their engagement in an equity strategy. A racial equity development framework at the end proposes potential roles for key stakeholders. Given these stakeholder meeting results, City Management has indicated that the proposed 2018 budget will include the expansion of staff capacity and resources to implement the required outreach, collaboration and technical assistance that will be needed to carry out this strategic priority of the City Council. More and more cities across the country recognize that the future of all cities is a future of greater cultural diversity, not Less. Therefore, it is no Longer viable to practice patterns of exclusion, because exclusive cities will be dying cities. Minnesota is ranked worst for racial disparities on a composite index of income gap, homeownership rate gap, poverty rate gap, 7 EVERYBODY. 1 iw and higher educational attainment gap.' Therefore, Minnesota cities and regions have to work smarter and more collaboratively to address a pattern that is statewide. Medium-size cities with high diversity, like Brooklyn Center are well positioned to offer a catalytic Leadership role that enhances resident economic stability in the city, while also showing all of Minnesota how to align diverse assets for racial equity results at diverse levels of scale. Stakeholder Interview Findings From November 2016 to February 2017, Everybody In conducted interviews with 20 stakeholders. Sam Grant, Research & Development Director, and Kia Her, Research Analyst, contacted and scheduled interviews with each stakeholder. At each interview, we provided background information on the City of Brooklyn Center's Resident Economic Stability Initiative and discussed a couple of questions: 1.Tell us about your business/role in the City of Brooklyn Center. 2.What key factors most determine differential outcomes for residents in: a.Education - K-12, Higher Education b.Workforce Development - Jobs, Skills, Training c. Business Development - Business climate, Access, Opportunity, Resources 3. What efforts are currently in place to advance the well-being and success of: a.Communities of color b.Youth/Students c. Businesses 4. What are the most critical gaps in supports currently available? 5. How do you envision partnership with the city and other stakeholders towards greater economic prosperity for all residents? The table below lists the organizations in the education, nonprofit, and business development sectors we were able to interview. • Anoka-Hennepin School District • Brooklyn Center Community Schools • Osseo School District • Robbinsdale School District • North Hennepin Community College • ACER, Inc. • Asamblea De Derechos Civiles • Brooklyn Bridge Alliance for Youth • CAPI USA • Northwest Suburbs & Community Coalition • RESOURCE, Inc. • African Development Center • Brooklyn Center Business Association • North Hennepin Area Chamber of Commerce • Open to Business - MCCD • TwinWest Chamber of Commerce Brooklyn Center has the presence of four school districts and 9 schools providing early education to 12th grade. Hennepin Technical College and North Hennepin Community College are the nearest post-secondary institutions. Schools prioritize reducing the achievement gap and preparing students to be successful as the future workforce. Nonprofit organizations are 1 R. Bernardo. 2015's States with Highest and Lowest Financial Gaps by Race/Ethnicity. www.wallethub.com February 3, 2015. 8 Fvrryh-,d ,i fn EVERYBODY it it-' organizing and engaging the community in workforce and economic issues. They are working together in partnership to provide comprehensive services and supports. Lastly, businesses continue to grow in Brooklyn Center, especially minority-owned businesses. Capacity builders see the value to assist these businesses to thrive and benefit the community. The diagram below encompasses the current strategies and efforts being done in each sector. dent-Centered Approach L1rIIy Appropriate, ReIe'ant, and Respomive Friics dent Parents, & Community Engagement If RrUitmci & • Employrnen &TrInlng • Leadership Development tMe Engagement Doto & Rarh nI & Workshops ,1teaa Consultation id1r tworking I. Education. Education is critical in providing a healthy, challenging, and equitable environment for youth to develop the necessary skills and relationships to be successful at all parts of life. This means also adequately preparing students as the future workforce and future change makers. There is a common agreement that student success is not only impacted by time spent at school but also a student's circumstances and responsibilities at home. Thus, it is extremely important to consider the larger context of student diversity inside and outside of school. Our driving design question is - what can a medium-size city do to best advance the best educational outcomes for every child in our school districts? Challenges Poverty - Poverty encompasses a wide range of challenges and common barriers for youth and families to thrive. This includes unemployment, Low-income, affordable housing, high mobility, homelessness, and social and emotional mental health that directly impacts student performance in and outside of school. . Language and culture - With a highly diverse student body, language and cultural barriers have become more evident. Almost 1 out of 3 residents speak a language other than English at home (ACS 2011-2015 5-Year Estimates). School districts are reflecting on curriculum and policies to ensure inclusion of different cultures and elimination of bias and discrimination. ) Mobility - One factor in student success is having a trusted adult in school whether it's a staff, teacher, or social worker. It is difficult to maintain relationships with students and consistently track student performance and development when they are moving in 9 EVERYBODY 1 and out of schools. + Access to healthy foods - When winter break is around the corner, schools are nervous to hear the concern of parents who will not be able to provide childcare and adequate food for their children white they are at work. Sometimes breakfast and lunch at schools are what parents entirely rely on to make sure their children are receiving the nutrition needed to grow. KidPack is offered throughout many schools where volunteers pack brown bags with snacks for kids as they leave home for the weekend. + Navigating the school system - Some families and parents do not show up to school meetings or fully understand how to enroll students to high schools, in courses, and for post-secondary institutions. They are disconnected and schools are trying to find ways to effectively inform and engage diverse communities. Strategies Each of the four school districts (Brooklyn Center Community Schools, Osseo, Robbinsdale, and Anoka-Hennepin) has its own strategic plan. They actively take steps to be welcoming, inclusive and effective with all students, and articulate equity as a priority. Steps are being taken internally and externally for all students to achieve success and reduce the achievement gap (Table 1). •• Student Centered Approach - All school districts and post-secondary institutions are spending more time and resources to address achievement gaps by focusing more on the student voice to play a critical role in planning processes and through establishing scorecards where data is disaggregated by race and ethnicity, equity goals, and accountability. + Culturally Appropriate, Relevant, & Responsive Approach - A stronger effort and emphasis is made on making sure schools are acknowledging student diversity through a culturally appropriate and relevant approach to curriculum and reducing discrimination and bias by re-evaluating policies. • Students, Parents, & Community Engagement - Schools are being more intentional on reaching out to parents and the larger community to better support students and increase the likelihood of success in and out of school. The engagement also provides more opportunities for building better relationships and connections among students, parents, and the community. •• Staff Recruitment a Retention - Lastly, they have goals to hire and retain staff and teachers of color to reflect the growing diverse student body. Schools are also being more intentional on also providing more training opportunities for staff. We recognize an opportunity for collaboration across school districts focused on the resident economic stability of Brooklyn Center. How can the school districts partner with the city and other stakeholders to enhance student success, to deepen attachment to community, to engage students and districts as active partners in community building strategies? Further, how might career pathway partnerships be designed by high schools, colleges, businesses and chambers of commerce to ensure the City is never lacking for skilled workers wherever needed to keep the city's economy bustling and innovating? Table 1. Strategies by School District in Brooklyn Center Brooklyn Center Community Schools > Increase academic outcomes by including students and young people in the planning process. Osseo School District 10 - -- - I EVERYBODY N j I \Vin U > Internal Equitable Student Development Scorecard tracking student performance by race and ethnicity. Robbinsdale School District > Internal dashboard that measures students' path towards graduation and whether or not they are on the right track. > Amplify the student voice: Student Advisory to the Board or Education, leadership opportunities and service learning. Anoka-Hennepin School District > Increase student participation rate in extracurricular activities through targeted listening sessions to provide activities of students' interest. > Amplify students' choice of courses to take with the notion that students will be more successful if they choose the courses they want to take. Providing opportunities for students to be exposed to PSEO in partnership with St. Cloud University and career pathways in manufacturing and technical careers in partnership with Hennepin Technical College. North Hennepin Community College > TRIO supports Low-income, first generation college students, and students with a documented disability through personalized support services in academic advising, tutoring, and workshops in order to achieve students' academic goals, personal development, and graduation. Culturafly Brooklyn Center Community Schools Appropriate, > Using an equity lens to evaluate every decision in programming and when Relevant, & redesigning policies such as reducing expulsions. Responsive Osseo School District Approach Culturally responsive instructional strategies. Revisiting policies and special education through positive behavior intervention and reducing expulsions. Robbinsdale School District > Culturally and historically responsive teaching. Collaborates with the West Metro Education Program that provides civil rights research tours for students and as a professional development opportunity for staff. > Evaluate and reduce behavioral referrals and suspensions. Students, Brooklyn Center Community Schools Parents, & > One of the few full-service model schools in Minnesota that works with Community partners to provide services for students and the community (i.e. offer Engagement free mental health clinic) > Community canvassing to inform community of resources available at the school. Conduct regular formal and informal needs assessments to ensure services are meeting the needs of the community. Robbinsdale School District Engage family and community members as partners through intentional engagement practices. > Volunteers in Partnership (VIP) program recruiting volunteers from the community. > Parents as Partners program to educate parents on the school system and to be an advocate. > Community Connect program to reach out and build relationships with disconnected communities. North Hennepin Community College i-i EVERYBODY > Multicultural Center that supports the diversity of students and student ted programs such as the Black Men's Leadership Movement, American Indian - Education Initiative, Latino Success Initiative, and Asian Heritage Initiative. -Staff Brooklyn Center Community Schools Recruitment Employment diversity goat that includes a 2-year culturally responsive a Retention training for teachers increasing staff of color. - Osseo School District > Increasing teachers of color to match student demographics (Recently -- partnered with University of Minnesota Mankato). > Providing professional development opportunities for staff to bridge cultural barriers, discrimination, and bias. Robbinsdale School District - - - Increasing teachers of color to match student demographics. - > Provide professional development opportunities. Anoka-Hennepin School District - - > Provide highly trained and effective staff. - -; Forming partnerships with colleges that have a pipeline of diverse teachers. - - > Reduce ratio of student to counselor by hiring for staff. - North Hennepin Community College - - > Hosted a business and workforce equity forum and employment fair in - - partnership with Think Again Brooklyns, Hennepin Technical College, North - Hennepin Community College, and Everybody In to share best practices - and increase employment access in post-secondary institutions. II. Workforce Development. There are many organizations serving Brooklyn Center and the surrounding cities. These nonprofit organizations are working passionately in the communities they serve. Specializing in specific focus areas and communities, they each play a key role amongst each other (Table 2). However, most nonprofit organizations active in Brooklyn Center are based in Minneapolis and surrounding cities serving multiple jurisdictions, leaving Brooklyn Center as some call a "nonprofit desert". This pattern is also found among Brooklyn Center residents who are finding work in the surrounding cities, namely Brooklyn Park and Minneapolis due to lack of living wage jobs and gainful employment. The unemployment rate is highest among residents of color, especially Black/African American and the Hispanic/Latino community. Although the majority of residents who participated in the Leatherman Survey rated the quality of life in Brooklyn Center as "good", almost 40% of residents are experiencing financial stress where monthly expenses exceed their income and hardly being able to retain any savings. Just as residents are not finding work, employers are also faced with the challenge of finding skilled workers. Our design question here is - what are the most opportune linkages to make between the private sector and our workforce development sector to align efforts to close workforce gaps in the City that exist or are now emerging? Challenges+ Comprehensive services - There are more organizations servicing Brooklyn Center residents that are based outside of the city compared to organizations actually Located in the city. Recognizing the need for social services in Brooklyn Center and overcoming the pattern of fragmentation. + Living wage jobs - The highest number of jobs available to residents are retail jobs 12 In - - - - EVERYBODY 1 H 1 Wii that do not provide a living wage income. This means taking on extra jobs just to make ends meet thus having to compromise housing, healthy foods, or time spent at home with children. + Training in high wage jobs - There is a Lack in opportunity and access to workforce skills training in Brooklyn Center. To participate in workforce training programs, residents will have to travel outside of Brooklyn Center to surrounding cities. + Direct community engagement - There is a large immigrant population in Brooklyn Center who are disconnected to city government and processes. The undocumented population is afraid to engage in the community and the city's economy. Not everyone feels safe and connected in the community. In order for impactful change to occur, residents should be the ones driving change. + Transportation - Residents have to drive to nearby cities to access other opportunities. To eliminate transportation as a barrier, RESOURCE Inc. has developed a carpool system for those living in Brooklyn Center and surrounding inner-ring suburbs for trainings held in Minneapolis. With the Blue Line Extension developing close to Brooklyn Center, there will be more flexibility in mobility and should be viewed as an opportunity. + Housing - The community is divided when it comes to housing and development. While some think there are too few affordable housing, rental apartments, and rental homes, some think there are too many. Cost burden of housing rises with low-income families. Residents choose to live in Brooklyn Center because of the high presence of starter homes. The lack of high wage jobs and resources and investment in affordable housing are impacting residents to move to other cities and pay more than 1/3 of income on housing. Strategies •. Employment rEt Training - CAPI USA, RESOURCE Inc. and Hennepin County provides employment services and training opportunities for working adults in careers that are in high demand such as health care and IT. They also partner with employers in entry- level jobs creating a pipeline from training to employment. •) Leadership Development - Schools and nonprofits recognize that it is important to encourage, prepare, and support youth and residents to become leaders in their community through trainings and leadership opportunities. The Brooklyn Bridge Alliance for Youth specifically serves "opportunity youth" as a resource hub offering research and leadership opportunities and employment readiness training. While Asamblea De Derechos Civiles and ACER provides trainings and mentorship for the immigrant community in the Brooklyn Center area. + Civic Engagement - With a newer immigrant population and diverse resident population, civic and community engagement is among the priorities for nonprofit organizations like African Career Education & Resource Inc. (ACER), Asamblea De Derechos Civiles, and CAPI USA to eliminate language and cultural barriers and ensure residents are aware of and participate in decision-making processes that impact their livelihood at home, at work, and in the Brooklyn Center community. A large part of their work is focused on housing, civic engagement, and the Blue Line Extension project. Each serves a specific racial and ethnic population and specializes in the different needs of each community. The Northwest Suburbs & Community Coalition is a collaborative of many of these nonprofits serving the Brooklyn Park and Brooklyn Center area. •• Data & Research - The Northwest Hennepin Human Services Council, Hennepin County Workforce Development, and Brooklyn Bridge Alliance for Youth have data tools and research capacity measuring demographics, educational attainment, employment, and 13 EVERYBODY J) o Ti,U youth voice as resources to the community. Table 2. Nonprofit Strategies in Brooklyn Center St ategies Organizations Empl9yme t CAPI USA & Training > Serving low income immigrants, refugees, and people of color primarily in Hennepin County, CAPI provides employment services and career pathways in CAN Training, Truck Driving, and Hand Soldering. - Hennepin County Workforce Development > The county is currently in a phase of engaging a taskforce on a police training pathway program in the suburban metro area to build relationship among the police department and the community. RESOURCE, Inc. > Provide workforce training in IT through the Northwest Regional Hub consisting of Emerge and HIRED. Hold career fairs for the community. > Partner with large corporations for entry-level jobs in service and healthcare industry. Brooklyn Bridge Alliance for Youth > BrookLynk Youth Employment Program provides paid summer internship opportunities for youth that trains youth in essential job skills and prepares employers to engage the future workforce. eadetThip Asamblea De Derechos Civiles iDe eta merit > Provides transformational trainings and mentorships to cultivate leaders to build justice for the Latino community through organizing and public policy. ACER > Educate and prepare the community on how to identify and advocate on issues that matter to them and engaging in community meetings and events. Brooklyn Bridge Alliance for Youth > Youth Council engages with the board and partners to integrate youth voice into decision-making processes by providing recommendations, hosting summits, and fundraising after providing various avenues to gather youth voice. > Brooktyns Connect serves a resource hub for extracurricular activities and summer programs for youth. Civic CAPI USA Ejjgagemnt > Work with new immigrants and refugees to increase voter participation > Advocate for issues identified from the community so that their voices are heard in publicly financed initiatives and benefit from new developments. CAPI conducts surveys of community members in the metro and utilize grassroots strategies to organize. Asamblea De Derechos Civites > Organize Latino communities around affordable housing, transit equity, and immigrant justice to ensure their voices are heard and they will be benefit from new developments. Northwest Suburbs & Community Coalition > Partner with community groups and mobilize for municipal, state, and federal election. 14 EVERYBODY U I > Policy focus to advocate raising wages, passing sick and safe time. ACER Engage the community on issues identified from the community for the community by hosting community conversations and assessments. Brooklyn Bridge Alliance for Youth > Rec-On-The-Go is a mobile program that brings youth activities directly to the community at 12 different sites varying from apartment complexes, parks, and schools. Data & Brooklyn Bridge Alliance for Youth Research Youth Impact Scorecard collects data on Brooklyn Center and Brooklyn Park communities, schools, adults, and youth on demographics, high school graduation, employment, and youth violence in order to help with planning and programming. > The Afterschool Quality Network is a group of professional and experienced educators who run after school programming that work together to ensure programs are high quality and create positive experiences for youth in Brooklyn Center and Brooklyn Park. Provide trainings, assessment, and technical trainings. Hennepin County Workforce Development > Has a Career Pathways tool that identifies top employers, entry Level positions, number of job openings, starting minimum wages and advanced wages by programs and number of graduates provided by 5 MnSCU institutions (Metropolitan State University, Minneapolis Community & Technical College, Normandate Community College, Hennepin Technical College, North Hennepin Community College). Northwest Hennepin Human Services Council > Conducts regional research that provides local information to decision makers, community assessments, planning and coordination of human services in the northwest region of Hennepin County. III. Business Development. Similar to nonprofits, most business services and supports are based outside of Brooklyn Center. The Brooklyn Center Business Association is the only agency located and serves specifically Brooklyn Center businesses. The North Hennepin Area Chamber of Commerce and Twin West Chamber of Commerce also serve Brooklyn Center, though offices are located in neighboring cities. Regardless of distance, these associations are interconnected through membership and partnership in the northwest region of Hennepin County. Capacity builders currently provide services to businesses and entrepreneurs and see the increasing needs. Although there are services in place to support business development, there is still a need for more resources, partnership, and innovation to leverage business development, diversity, and growth and bring jobs to the city. At a recent forum at North Hennepin Community College, key business support organizations working in the region presented on their capacity to support more business development and expansion among minority businesses. Everybody In presented on a panel - proposing that by designing strategies to significantly increase minority business development, particularly firms with great job creation potential, we can greatly increase resident stability and economic opportunity in the region. Our design question here is - what mechanisms can Brooklyn Center and adjacent cities put in place to ensure that as the cities grow, the capacity of our diverse businesses in American Indian and communities of color grow equitably in all sectors of the economy? Fwrft^'dy Y11 15 E'VERYBODY : Barriers/Challenges + Skills Mismatch - There are a range of Large businesses to micro businesses in Brooklyn Center and the northwest region. From the perspective of Large employers, one of the critical needs is finding skilled and qualified workers to bridge the workforce gap, especially among manufacturers looking for skilled technicians. • Access to Capital - Small business needs are concentrated in obtaining access to capital, licensing, and opportunity to expand business capacity and reach. One of the most challenging steps is to secure that first loan and capital in order to reach the next step in business development. • Business Retention - Taxes and retail rates are too high for businesses to sustain. Folks are seeing more businesses leave than stay in Brooklyn Center. There are many empty lots and buildings not being used. • Innovation - There are many open Lots for development and space for businesses to come in. This means there is opportunity for innovation, but it is critical to define innovation that will meet the needs of the current community. + Leveraging diversity - The city of Brooklyn Center is extremely diverse. Businesses and employers are aware of the increasing diversity and are being more strategic to intentionally hire and engage communities of color. Businesses and businesses of color also want to explore partnership and collaboration among each other. Strategies There are 2,132 business firms in Brooklyn Center as of 2012 (Survey of Business Owners). The largest growing businesses from 2007-2012 came from businesses of color. This change is occurring along with the city's growing diversity in resident population and retiring Baby Boomers. How can we get more small to large businesses and businesses of color involved and invested through a racial equity framework? Businesses and employers seek to bridge the gap among populations of color and residents and build capacity through culturally competent trainings and workshops, businesses advising, lending, networking, and investing money into the community (Table 3). •• Workshops/Trainings - Business chambers, associations, and nonprofits provide workshops and trainings to support entrepreneurs and small businesses due to increasing demand in Brooklyn Center as the number of entrepreneurs and businesses have grown. The African Development Center provides culturally competent trainings for immigrant communities with language and cultural barriers. • Business Advising - To take it a step further, entrepreneurs and businesses can receive one-to-one business advising to assist in the more detailed processes such as business planning, securing loans, and more. •. Lending - The African Development Center and Open to Business also make it more accessible for entrepreneurs and businesses to obtain loans by directly providing loans as accessing capital continues to be at the top of the list for barriers for business success. • Networking - Businesses often do not having the capacity to network themselves. Business chambers and associations provide networking opportunities for member businesses to connect and collaborate. • Philanthropy - Chambers and associations have reached beyond the business community by offering scholarships for students, holding charity events, and funding early childhood education. In a Phase two of this work we would work with the City of Brooklyn Center to design and 16 EVERYBODY Ii implement a robust, city-facilitated, business development and expansion framework that significantly increases: a) the number of businesses certified to secure contracts in the appropriate industry sectors; b) the formalization of a facilitative role shared among Chambers of Commerce to support a significant increase in minority business development and expansion; and c) securing the committed partnership of local and regional financial institutions and intermediaries to connect local entrepreneurs with the appropriate bundles of credit and capital to successfully deliver on a triple bottom line of growing the business, adding new jobs, and improving the quality of life in the community. Other steps may become necessary as we expand our dialogues with and insight into the development and expansion needs of minority firms. Thlc I rfr n t ardinchi Ri icinpvz fl,innm'nt Accncitinc in Rrnnktvn Center Strategies - Organizations Workshops /African Development Center Training ) Provides culturally competent services to the African immigrant and refugee community such as workshops on financial Literacy, improving credit, steps to becoming a homeowner, and starting a business. North Hennepin Area Chamber of Commerce Hennepin> The Manufacturers Consortium is a group under the North Area Area Chamber of Commerce, consisting of 40 companies, higher education institutions, and government partners, working to address the worker shortage in skilled technicians. This group is currently in the process of developing a training and internship pilot program with Hennepin Technical College and North Hennepin Community College to train future technicians. usi ess African Development Center d s g ) Offers one-to-one counseling services in money and debt management, budgeting, and housing. Open to Business - MCCD> Provides one-to-one consultation for small to large businesses and entrepreneurs to reach their business goals. > Values honesty and trust with businesses and entrepreneurs in order to be truly successful and build relationship. Le ding African Development Center> Micro-tending to African businesses and entrepreneurs to bridge the gap in access to capital for the African immigrant and refugee community. Open to Business - MCCD> Offers micro loans to small and large businesses and entrepreneurs whether for a start-up business or an existing business looking to boost its profits. Netwo king Brooklyn Center Business Alliance> Monthly luncheon meetings introducing new businesses and inviting speakers on a variety of relevant topics to members. North Hennepin Area Chamber of Commerce> Reality Store activity exposing students to real wage income and expense decisions as a working adult. III > Career Pilots is a program in partnership with DEED, Hennepin County, post-secondary institutions and high schools to dialogue and interview students about their aspirations offering advice and job opportunities. TwinWest Chamber of Commerce 17 EVERYBODY JN) > Has a Government Affairs Committee that networks with government officials and legislators to advocate for policies to improve the business climate and community and serve as the voice for businesses in government. Philanthropy Brooklyn Center Business Alliance Holds an annual charity event where proceeds are given to a specific charity or organization. North Hennepin Area Chamber of Commerce-> Provides scholarships to graduating seniors attending post-secondary- institutions and continuing education scholarships to students who have been out of high school for at least one year.> Gives recognition to students with leadership in employment skills, career advancement, and volunteer services with a Start Student Award that has four levels of sponsorship ($200 -$2000).-TwinWest Chamber of Commerce> Has an active workforce and high school scholarships providing up to $1 million for high school graduation seniors who want to attain a two-year degree or go to a four-year college.> The Kids at Work Early Childhood Scholarship helps fund pre-kindergarten and early learning programs such as the Meadowbrook Collaborative Preschool in St. Louis Park. Brooklyn Center Racial Equity Stakeholder Meeting After individual stakeholder interviews were completed, the stakeholders were invited to attend the first Racial Equity Stakeholder Group meeting in the city of Brooklyn Center on Friday May 12, 2017. The meeting was held at the Brooklyn Center Community Center from 12 p.m. to 2:00 p.m. Out of 21 stakeholders, 10 were able to attend. The meeting focused on five key questions: 1.What is the current state of racial equity in Brooklyn Center? 2.How is your organization contributing to racial equity in the city and region? 3.What might we do collectively to best advance racial equity in the city and region? 4.What are the most important things to do over the next 6 months, over the next year? 5. What is our ultimate vision of what a solid racial equity plan results in for the city and region? The collective dialogue allowed stakeholders to share with each other their perceptions of racial equity, their efforts in dismantling racial disparities, and to begin working together towards a shared vision of racial equity in Brooklyn Center. The dialogue resulted in an initial collective understanding of racial equity in Brooklyn Center along with the commitment and resources that need to be invested towards a racial equity strategy. First, racial equity has to be on the agenda. Economic disparities continue to affect the community and residents of color who are experiencing little movement towards mutual thriving. It will take commitment and better alignment towards a united racial equity agenda and outcomes. It will take more resources invested to support and leverage current racial equity efforts. Lastly, it will need the ongoing engagement of the diverse community, residents, and leaders in order to define what racial equity looks like for the city of Brooklyn Center, build trust and relationship, and create equitable change for everyone. 18 - - j:_ Y EVERYBODY j1 What this Looks like in each different role is 1) City Administration committing to allocate resources and engage and listen to the community, 2) Businesses hire a diverse pool of talent at all levels and provide sustaining living wage jobs and 3) Nonprofits align efforts to amplify racial equity results and eliminate the pattern or working in silos, so that ultimately, life outcomes are not determined by race, education, social class, and geographic location. This is only the beginning of a collective dialogue towards racial economic stability in Brooklyn Center. The City of Brooklyn Center and stakeholders are interested in continuing this dialogue with a follow-up meeting expanding to a larger group in the near future. Leaders in the city (Mayor, City Council, City Manager and Deputy City Manager) express the similar challenges and barriers across the populations and communities they serve in Brooklyn Center. It is because of the recognition of a pattern-shift opportunity, that this initiative was launched. The keys to success will include: a) increased staffing capacity of City; b) funding to catalyze a racial equity network, inclusive of all sectors; c) the development and implementation of an action plan with well-defined, achievable measurable results; and d) constant discipline and creative pressure, mutually applied and accepted by all stakeholders to achieve collaboratively defined results. Analysis - Key Implications When it comes to racial equity and mutual thriving, it seems everyone hopes someone out there somewhere has the silver bullet. No one does. Strong collaborative efforts are required, with the right mix of capacities and commitments in the network. Everybody In believes in honoring and building on existing strengths. Three key assets will shape a viable pathway toward racial equity when they become aligned and organized. The first asset is the strong and growing leadership of the City of Brooklyn Center - recognizing and catalyzing a pathway toward racial equity for the city and adding staff to build capacity to lead and engage in community-wide coalition efforts are steps in the right direction. Second, bringing key stakeholders together and effectively engaging them in organizing a network organizing approach to change, each utilizing available assets. Schools, nonprofit organizations, businesses, and business development agencies serving the community are invested in Brooklyn Center for the long run. Current supports and services and tools already exist to address challenges identified by residents, stakeholders and should continue to manifest where the greatest needs are, and align efforts for greater collective impact. Third, with land ready for development, small businesses looking to hire and expand, residents looking for training and high wage jobs, and community partners providing a variety of services in Brooklyn Center, there is a tremendous opportunity to implement and comprehensive equity strategy to increase economic opportunity for everyone. Residents in Brooklyn Center are in agreement that the greatest factor to provide economic stability for all is jobs followed by resources for small businesses, and transportation to jobs (Leatherman Survey 2017). After conducting interviews with key stakeholders in the city and dialoguing as a collective, there is common agreement among the barriers that negate Brooklyn Center residents to thrive and the direction we need to move towards. We see a shared vision of increasing community engagement, learning, partnership, investment, innovation, and jobs in Brooklyn Center by leveraging the city's assets. There are untapped opportunities in Brooklyn Center and the current synergy is where it should be. The diagram bellows shows relationship of the 19 In I 1 EVERYBODY i II T challenges, assets, and strategies defined from the stakeholder interviews and Racial Equity Stakeholder meeting. The assets and resources are present, and if collectively aligned through a shared racial equity strategy, can address the challenges and move Brooklyn Center towards resident economic stability. Ree and Ethnic Groups .Yoth • EmployedlUn yd reMdents Gender rup Entrepreneur/Büsinesss - ,4e Groups Racial Equity Framework EVERY person we have spoken with has said they are interested in a City-wide racial equity strategy and that they would add value to it. Yet there is not a short path, with a simple set of steps to goal realization. Changing the long-standing pattern of racial inequity in the region as a whole has not happened - regardless of who is leading, regardless of whether the economy is growing or declining, regardless of the Level of interest on an individual, institutional or network level. Racial Equity will only be realized with very steady work of many hands and hearts. LProposed Actor Proposed Action Intended Results City of BrookLyn 1. Lead a coalition based effort to The City, with the support of Center advance racial equity in the city Everybody In plays the 'anchor role' and region,for the equity-producing efforts and is able to sustain this role to ensure the achievement of intended results. 20 Fvrybcy - - - EVERYBODY Largest 1. Commit to best hiring practices Employers formally join city-Led emplo ers n city and offer civic Leadership for partnership, commit to employment racial equity. and procurement equity, and regularly document results. Cha bers of 1. Foster opportunities for Orchestrate a business-to-business Commerce businesses within the City to equity ecosystem in the city and collaborate as partners to region, encouraging we grow consistently improve racial equity together" strategies (perhaps defined through procurement and and developed at annual business contracting, through sharing and performance forums). applying best HR practices. Small Businesses 1. Develop a collaborative Support existing and emerging of color approach to growing businesses of businesses of color to define growth color and hiring talent within the objectives for their businesses and the City. equity ecosystem in ways that best foster business success and resident economic stability. Hi her EducatWS 1. Orchestrate workforce Area higher education institutions pipelines specifically targeted to embody best practices and strong developing the labor force needed partnerships to ensure the region is for local employers, supplied with a highly capable workforce and top-of-the-line class of entrepreneurs and innovators. Sc oat D'stric s 1. Strengthen existing racial All students, regardless of where they equity strategies for educational start in educational competencies is attainment and align efforts with enriched and supported in our school other stakeholders in the region districts to excel in academic to ensure all efforts are achievement and in life. connected to improve quality of life in the City. 2. Schools may also play a useful hosting rote for community convenings. Non- rofit 1. Lead the grassroots Ensure we have a high tough system Service and engagement of residents and that connects and enrolls across our Engagement Orgs advocate for transparency, spectrum of cultures and social classes inclusion, and effectiveness, to actively engage in making our City the greatest one any of us could imagine. Residents 1. Lead with your experiences and Become active citizens and enroll hopes for the community. family, friends, faith communities and 2. Continue to advocate for what professional networks in promoting a you need to improve your quality high quality of life for all in the city. of life and that of the whole community. Media 1. Broadcast the state of racial Make the racial equity story a core equity and highlight racial equity story tine. Celebrate what we are champions. doing well, document our processes, and offer clear data and connections to help keep us building our momentum. 21 - 7] EVERYBODT It1 It Financial 1. Examine and improve financial Commit to innovative, high quality hjstitutions products to close racial wealth resident and business financial asset gaps within the City. - products that close equity gaps in L. Evaluation capacity to advance homeownership, in wealth building -homeownership and business asset development and business development and expansion.development and expansion. The key words for the journey: creative; collaborative; committed; comprehensive; capabilities; credit and capital. Everybody In proposes the development of a comprehensive racial equity strategy that does not just consider Brooklyn Center, but also brings surrounding cities into a formal racial equity partnership. We propose that Brooklyn Park, Crystal, Osseo and Robbinsdale form a five-city partnership with Brooklyn Center. Together we take the following steps: 1.A base line assessment is completed for all five cities together; 2.A series of interviews are completed with key stakeholders in each City, inclusive of police and fire, real estate, large businesses with many employees, small businesses, financial institutions, faith-based institutions, non-profit organizations, city administration, schools and district offices, colleges, civic leaders among residents, and low income residents. 3.An analysis interview results 4.A series of stakeholder gatherings to design and implement a common racial equity plan 5. Capacity building and resource development to implement a long-term plan of action to increase and sustain racial equity in the five-city region. Pathway to Racial Equity 1 Organize CoordinatedJEffort with collective impact measures The steps outlined here are preliminary. We propose that a follow up 'phase 2' of this work commence soon to apply a racial equity action research model to the driving questions identified in this document. By keeping these key questions in front of us, with committed contributors all investing in an equity ecosystem, the future we desire does come. With continued effort, what is created will persist, ensuring that future equity disparities are far less likely to manifest. We look forward to a future in Brooklyn Center that makes you the envy of every city in the world, and an example for any public entity of any size. Ending with Questions rather than Answers 22 rrrd H-- EVERYBODY We end this report with more questions than answers in order to invite the next round of conversations and considerations to design and deliver on racial equity. + What do we see in the reports or significant findings? + What do we collectively need to do to help change the situation with the targeted population? + What specific actions and roles are stakeholders willing and able to take on as part of a comprehensive strategy? This last question offers the key. For the sake of the City we know we have to do more than talk about these issues. We have to act. We Look forward to support the City's robust actions so a mutually thriving future emerges in Brooklyn Center, and sets an example for other cities to follow. Finally, while the effort may seem daunting and the realization of equity goals too far away to see clearly, Everybody In trusts the power and effectiveness of the steady-hand of a guiding coalition led by the City. Brooklyn Center CAN! The City can design and deliver on a racial equity strategy that significantly improves resident economic stability. Sincerely, Sam Grant, Director of Research and Development Kia Her, Research Analyst 23 rvrrft ,3dy inU 11-27-2017 Brooklyn Center City Council A Must -Win Movement Timeline July 2016 •Baseline Report •Adopted Resolution November 2016 – February 2017 •Stakeholder Interviews May 2017 •Racial Equity Stakeholder Meeting November 2017 •Final Report Environmental Landscape - Stakeholders Education Non-Profit Business •Anoka-Hennepin School District •Brooklyn Center Community Schools •Osseo School District •Robbinsdale School District •North Hennepin Community College •ACER, Inc. •Asamblea De Derechos Civiles •Brooklyn Bridge Alliance for Youth •CAPI USA •Northwest Suburbs & Community Coalition •RESOURCE, Inc. •African Development Center •Brooklyn Center Business Association •North Hennepin Area Chamber of Commerce •Open to Business – MCCD •TwinWest Chamber of Commerce 1)Tell us about your business/role in the City of Brooklyn Center. 2)What key factors most determine differential outcomes for residents? 3)What efforts are currently in place to advance the well-being and success of residents? 4)What are the most critical gaps in supports currently available? 5)How do you envision partnership with the city and other stakeholders towards greater economic prosperity for all residents? Environmental Scan - Challenges Environmental Landscape - Strategies Racial Equity Stakeholder Meeting Key Findings •There is great interest in a city-wide racial equity strategy •Need capacity to build trust and relationships with the diverse community, residents, and leaders Keys to Success •Increased staffing capacity of City •Funding to catalyze a racial equity network •Development and implementation of an action plan •Constant discipline and pressure of stakeholders to achieve collaborative results Key Implications •Assets and resources are present, and if collectively aligned through a shared racial equity strategy, can address the challenges and move Brooklyn Center towards resident economic stability. Analysis Education Pathway to Racial Equity Organize Coordinated Effort with collective impact measures Dial-in viable strategies for results that close equity gaps in educational attainment, employment, in earnings, in net financial wealth, in homeownership. Consistently measure, monitor and amplify results and implement long-term sustainability strategies to create enduring stability Next Steps to Drive Racial Equity •Convening more stakeholder meetings to specify the steps, timeframe and resources necessary to fully implement a plan of action that results in the desired level of racial equity performance •Working with largest employers in the city to support capacity to anchor racial equity in the City •Developing and implementing a communications strategy •Working with city and regional financial institutions and capacity building organizations to assess current supports available to support development, growth and expansion of businesses in the community •Partnering public schools and higher education with the private sector to foster career pathways for workforce and enterprise development within the City and region Q&A Sam Grant Research & Development Director Sam.Grant@everybodyinmn.org Kia Her Research Analyst Kia.Her@everybodyinmn.org Walter Smith Executive Director Walter.smith@everybodyinmn.org Work Sssrn Agenda ]Itrn N©0 2 IY4 I 3k'4 (I) UhI WIYA 1IMiJ I YLi] 1 J aEfI [I)l DATE: November 27, 2017 TO: Curt Boganey, City Mana THROUGH: Reggie Edwards, Deputy City Manager FROM: Angel Smith, Communication and Community Engagement Coordinato SUBJECT: Brooklyn Center Community Dialogue Recommendation: It is recommended that the City Council consider receiving the Brooklyn Center Community Dialogue Summary Report. It is also recommended that City Council direct staff regarding next steps for the "Brooklyn Center Community Dialogue" effort. Background: In the past, the City Council has structured council meetings in a manner that permitted residents to speak on various issues during the start of the City Council's meetings. This structure was created as a means to provide opportunities for citizens to communicate directly with the City Council. In 2012, the City Council established the City six strategic priorities of which the following two were included: • Citizen engagement • Improving the Image of the City In January of 2017, the City Council and City Manager received an email from a citizen expressing her desire to partner with the Council to affect change in the City and improve its reputation. In February of 2017, the City Council expanded the time and structure for residents to discuss current issues. The Council discussed the need and desire to create a method for ongoing dialogue with residents outside of the City Council regular meeting structure. In February of 2017, the Council discussed their desire to engage citizens in a dialogue process. Council directed staff to develop a recommendation for moving forward with regard to a community dialogue process. In April of 2017, staff presented a community dialogue concept including: values, desired outcomes, and various methods and approaches to the Council. The Council reached consensus and directed staff to move forward with looking into options to hold listening sessions with the public using the values and desired outcomes presented by staff. The City hosted three community dialogue sessions, which were facilitated by a third party entity (JP Consulting) on the following dates: • Tuesday, July 25, 2017 (6:00PM - 8:00PM) Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public (must k'A I k'A [I) 1iI I1IJkA SIi1Ii[ii I '!i'LI) 1 C411 DI'Li [ikI Saturday, August 5, 2017 (11:00AM - 1:00PM) Tuesday, August 22, 2017 (6:00PM— 8:00PM) Attached for the Council's review and consideration is a summary report. The summary report includes: 1)Introduction 2)Dialogue Questions 3)Common Themes 4)Key Findings 5)Recommendations 6)Next Step Options Next Step Options include: 1)Initiating an ongoing regular community dialogue sessions based upon the data and feedback gathered during the three dialogue sessions. 2)Simultaneously, initiating an ongoing regular community dialogue sessions, while establishing a short-term community engagement community dialogue taskforce to plan additional community dialogues over an 18 month time period. 3)Establish a short-term community engagement community dialogue taskforce to plan additional community dialogues over an 18 month time period. 4)Establish a Community Engagement Commission. Establishment of a Community Engagement Commission would be a formal city commission similar to all other city commissions. The option of establishing a commission would transcend all previous options. That means that establishment of a Community Engagement Commission is proposed irrespective of the action taken upon the previous options 1-3. It is the belief of staff that the base information and feedback gathered during the dialogue sessions can authentically inform the City in regard, to moving forward particularly in areas such as: 1) frequency of dialogues, 2) marketing of dialogues, and 3) community location of dialogues. Due to the limited number and diversity of representation present during the dialogue, sessions detail specifics of topics and methods of engagement may need further development in order to maximize effectiveness or success. Policy Issues: 1.Does the Council desire additional information beyond the Brooklyn Center Community Dialogue Summary Report in order to direct staff regarding moving forward with the City's community dialogue effort? 2.Is there a consensus of the Council regarding a preferred next step option for moving forward with the City's community dialogue effort? Strategic Priorities: Inclusive Community Engagement Mission: Ensnriizg an attractive, clean, safe, inclusive con wuinit3' that enhances the quality of life for all people and preserves the public trust Kral City of Brooklyn Center Community Dialogue 2017 Summary Report The City of Brooklyn Center (BC) contracted with JG Consulting, LLC, a consulting firm that specializes in community engagement, racial equity and specific dialogues and conversations, to support the City in engagement of residents of Brooklyn Center. JG Consulting, LLC, authored this summary report and all of its components. The consultant and city staff collaboratively developed the attached addendum of next steps options. The original intent by the City for conducting the community dialogues sessions was to engage residents in an exploratory discussion about "how" and "what topics" might the City consider for developing future community dialogues. With that intention in mind, the planning process for the dialogue sessions revolved around the concept of "engagement." Elements of the planning process included: • Planning sessions with staff • City engagement of community partners • Marketing of dialogue sessions by the City (i.e. flyers, mailings, electronic notice blasts, website posting, newspaper advertisements, building signage, social media posts, television lead stories, partnering and church bulletin boards) • Facilitation of three dialogue sessions held on: July 25 th (Tuesday), August 5th(Saturday), and August 22 d (Tuesday) • Debriefing of the dialogue sessions with city staff • Development of summary report • Presentation and discussion of summary report with Brooklyn City Council (Monday, November 27th) The balance of this report covers the five sections of: 1) Dialogue Questions, 2) Common Themes, 3) Key Findings, 4) Recommendations and 5) Addendum I - Next Step Options. i1F1[.Ju[Isti[*t [•]111 Five guided questions influenced the BC community dialogue process. The questions focused on areas for organizational learning: collaboration opportunities, niche, efficiencies, service, and relationship cultivation. The questions are as follows: 1.Collaboration Opportunities: Asa result of the community dialogues, what would you like for the next steps to consist of? 2.Niche Opportunities: What is important to you as a constituent of Brooklyn Center? 3. Efficiencies Opportunities: How would you like the City to engage with you and how often? Page 1 of 4 JG CONSULTING 4.Service opportunities: What are the biggest challenges and opportunities that exist within the City that you would like addressed? 5.Relationship Cultivation Opportunities: What would you like to see different as a result of this engagement? S6T11uI.]iuiii1uui* The community dialogues aim to uncover the City's strengths, opportunities and challenges that might exist and how to address them through an innovative and community lens. Dialogue #1: July 25, 2017 Dialogue #2: August 5, 2017 I Dialogue #3: August 22, 2017 Increase involvement by citizens Better inform community of Change methods to engage with opportunities like these forums constituents Freedom and openness for Encourage more interaction More mass transit access public to know city council is among all generations available A sense of comfort knowing the Strengthen communication-use Strengthen communication-use council is willing to listen multiple means of sharing multiple means of sharing community events community events More intentionality around Economic stability, inclusive Possibly re-branding of the city communication communities to increase its image Build Trust Build trust Build trust Encourage participation from Redevelopment and Multiple locations for future those, so that their "voices" are gentrification an area of dialogues-located within the a little louder concern community Opportunities for community County representatives to Economic stability, inclusive relationships (community attend group meetings communities volunteerism) Development Opportunities Development opportunities Development opportunities Invite more face-to-face Invite more face-to-face Invite more face-to-face interaction with city council interaction with city council interaction with city council IiTiI iii rn.I.,rs.I.1!Ji1.iui1tt Communication. There appears to be a little lack of communication for when events are taking place (who receives the information and how often). This brings an opportunity to increase collaborative efforts across the city and with other key stakeholders. There were a few barriers presented, but none of which that would not allow for any collaboration initiatives to move forward. There were multiple inquiries on how to best engage more consistently and connect with various diverse subgroups in order to gauge a broader audience on pertinent issues pertaining to the city. Page 2of4 GJ CO TI S LI LT I N Image. A number of participants mentioned how raising the awareness of what the city is doing would be beneficial across departments from a sharing perspective. In addition, the participants discussed the positive image and innovative things that the city could get involved in. Connections to city officials. Many participants and stakeholders discussed the connections that need to be cultivated a little more with its city officials. Furthermore, engaging in specific initiatives with neighboring cities to increase partners and engagement among community. IIiI.]iili11t Relationship-centered. A few stakeholders mentioned how the city has a sense of community and safety, which reflects in the strategic priorities of economic stability and inclusivity. The city is set apart from its neighboring cities however sometimes there are comparisons to Brooklyn Park and north Minneapolis. It was described, as our city is "supportive of everyone". Similarly, a few participants call attention to the populations that are often forgotten, including the elderly, youth, veterans, and people of color. There are other issues like making sure there is affordable housing and rentals, maintaining the parks and other recreational areas. Efficiency Opportunities Inconsistent communication practices. Efficiencies and staff engagement could be enhanced and increase the engagement of the city officials through multiple communication mediums. Some participants discussed ways in which to increase the communication between the various city staff, officials, and key stakeholders. Summary of the City's unique strengths • A broad sense of community • Safety • Connections to: • economic development organizations • education • other city and county departments • Freedom and Openness for public to know city council is available • Resident stability Service Opportunities Equity. As a result of the dialogues, the discussion of income differences arose which presents a challenge within the city. The need to develop more diverse housing types in order to coincide with cultivating the diversity of income assists with alleviating gentrification and low income residents being forced out. In addition, the need for redevelopment opportunities supports the economic stability with the city and its surrounding areas. Staff. The lack of city staff can somewhat be a barrier in order to implement a few innovative ideas and initiatives to ignite or boost city economy. The increase of staffing will aid with the support of the community and businesses to enhance economic investment. Page 3 of 4 Business. There was quite a bit of discussion that surrounded the best way to support businesses or even increase business development efforts that could increase the economic stability. Community. Moving towards more dialogues and openness will allow trust to be built among and between city staff, officials, and other key stakeholders in order to obtain further growth of communal initiatives. Several questions that surfaced honed in attracting talent and businesses to coincide with the strategic priorities that may result in a total rebranding initiative for the city or seeking solutions for some of the barriers that may exist. Dialogues and conversation. The majority wanted to continue the community discussions and align the discussions with the strategic priorities. The idea of having the meeting locations around the city and within the neighborhoods in order to gather more diverse and/or targeted groups (i.e. youth, elders, people of color, etc...). F:.]n1uiisfl. There appears to be a willingness to increase and enhance engagement and communication between and among the staff, city officials, and other key constituents. The idea of offering such dialogues in multiple settings such as: > Dialogue in Subgroups • Education partners • Faith-based community partners • Specific cultural groups • Topic driven (health, economic development, workforce, youth, etc...) > Frequent Community Dialogues • Monthly discussions with the city officials • Weekly newsletters (i.e. From the desk of the council) o Social media (enhance use) > Development of Engagement Strategy Plan • Involve community members • Special Taskforce (advisory group) • Youth added to the council (If applicable) Page 4 of 4 IF1*tIi1bii In a collaborative effort, the consultant (JG Consulting, LLC) and city staff developed the next step options outlined below. City of Brooklyn Center Community Dialo Options Description Pros Option 1:Engage in regular Demonstrate the City's Act Now -community dialogue commitment to Community based upon community engagement Dialogues findings/feedback from and listening to the initial 3 community community. dialogues. Immediately continue momentum established in the initial dialogue sessions. T'sIEngagementiII]1 [iii!.. Cons - Comments This would require a Regular community concentrated and dialogue session would committed effort by the include factors of: 1) City. frequency, 2) community located, 3) Does not further issue based, and 4) community engagement widely marketed in an interactive or co- ownership model. May be perceived as a City driven agenda. Option 2: Engage and Act Now Bring partners together to co-host community dialogue sessions based upon the findings/feedback from the initial 3 community dialogues. Simultaneously, recruit a diverse community and partners to work with the City to plan scheduled dialogue sessions for the next 18 months. The City and current partners will conduct and host community dialogues, while the recruitment of a diverse community group is Demonstrate the City's commitment to community engagement and listening to community. Immediately continue momentum established in the initial dialogue sessions. Opportunity for community engagement. Establish working relationship between staff and taskforce members. Create a short-term feeder system for a This would require a concentrated and committed effort by the City. The time for planning and hosting, the community dialogues along with establishing a taskforce will stretch limited staff and may require longer lead-time for coordination. Regular community dialogue session would include factors of: 1) frequency, 2) community located, 3) issue based, and 4) widely marketed. The structure of diverse community group will be a taskforce group. Once the task of planning and hosting the community dialogue session have concluded the taskforce would dispense or sunset. underway. The efforts of the City and current partners will combine its efforts with the new community group. possible Community Engagement Commission. Increase the community engagement capacity of the City. Option 3:Recruit a diverse Demonstrate the City's This would require a The structure of a Engage to Plan community group and commitment to concentrated and diverse community partners to work with community engagement committed effort by the group will be a the City to plan and listening to City.taskforce group. Once scheduled dialogue community.the task of planning and sessions for the next 18 The time for hosting the community months.Continue momentum establishing a taskforce dialogue session have established in the initial will delay execution of concluded the taskforce dialogue sessions.conducting the next would dispense or round of community sunset. Opportunity for dialogues. community engagement.May be perceived as the City not being Establish working responsive or moving relationship between too slow, staff and taskforce members.The City would have to work and strategize Create a short-term methods of maintaining feeder system for a momentum during the possible Community stretch of time before Engagement another round of Commission.community dialogues are announced. Increase the community engagement capacity of the City. Option 4:Establish and recruit Demonstrate the City's This would require a This would be a formal Community members for a commitment to concentrated and city commission similar Engagement Community community committed effort by the to all other city Commission Engagement engagement.City.commissions. Commission. Establish ongoing This option would infrastructure for transcend all previous community options. Meaning that engagement.establishment of a Opportunity for Community community Engagement engagement.Commission is proposed irrespective of the Establish working action taken upon the relationship between previous options 1-3. staff and the Commission.The Communication and Increase the community Community engagement capacity of Engagement Division the City.would staff this Commission. The Commission would have specific criteria of its composition to ensure diversity and inclusion. BC Community Dialogue Summary Report November 27, 2017 1 It is recommended that the City Council consider receiving the Brooklyn Center Community Dialogue Summary Report. It is also recommended that City Council direct staff regarding next steps for the “Brooklyn Center Community Dialogue” effort. 2 In the past, the City Council has structured council meetings in a manner that permitted residents to speak on various issues during the start of the City Council’s meetings. This structure was created as a means to provide opportunities for citizens to communicate directly with the City Council. In 2012, the City Council established the City six strategic priorities of which the following two were included: Citizen engagement Improving the Image of the City In January of 2017, the City Council and City Manager received an email from a citizen expressing her desire to partner with the Council to affect change in the City and improve its reputation. 3 In February of 2017, the City Council expanded the time and structure for residents to discuss current issues. The Council discussed the need and desire to create a method for ongoing dialogue with residents outside of the City Council regular meeting structure. In February of 2017, the Council discussed their desire to engage citizens in a dialogue process. Council directed staff to develop a recommendation for moving forward with regard to a community dialogue process. In April of 2017, staff presented a community dialogue concept including: values, desired outcomes, and various methods and approaches to the Council. The Council reached consensus and directed staff to move forward with looking into options to hold listening sessions with the public using the values and desired outcomes presented by staff. 4 The City hosted three community dialogue sessions, which were facilitated by a third party entity (JP Consulting) on the following dates: Tuesday, July 25, 2017 (6:00PM – 8:00PM) Saturday, August 5, 2017 (11:00AM – 1:00PM) Tuesday, August 22, 2017 (6:00PM – 8:00PM) 5 Authentically Open And Sustainable 6 To inform To listen for understanding To engage To build ongoing trusted relationships with Residents 7 Collaboration Opportunities: As a result of the community dialogues, what would you like for the next steps to consist of? Niche Opportunities: What is important to you as a constituent of Brooklyn Center? Efficiencies Opportunities: How would you like the City to engage with you and how often? Service opportunities: What are the biggest challenges and opportunities that exist within the City that you would like addressed? Relationship Cultivation Opportunities: What would you like to see different as a result of this engagement? 8 9 Dialogue #1: July 25, 2017 Increase involvement by citizens Freedom and openness for public to know city council is available A sense of comfort knowing the council is willing to listen More intentionality around communication Build Trust Encourage participation from those, so that their “voices” are a little louder Opportunities for community relationships (community volunteerism) Development Opportunities Invite more face-to-face interaction with city council 10 11 Dialogue #2: August 5, 2017 Better inform community of opportunities like these forums Encourage more interaction among all generations Strengthen communication-use multiple means of sharing community events Economic stability, inclusive communities Build trust Redevelopment and gentrification an area of concern County representatives to attend group meetings Development opportunities Invite more face-to-face interaction with city council Dialogue #3: August 22, 2017 Change methods to engage with constituents More mass transit access Strengthen communication-use multiple means of sharing community events Possibly re-branding of the city to increase its image Build trust Multiple locations for future dialogues-located within the community Economic stability, inclusive communities Development opportunities Invite more face-to-face interaction with city council 12 13 Collaboration opportunities Communication. Lack/need of communication for when events are taking place (who receives the information and how often). There were multiple inquiries on how to best engage more consistently and connect with various diverse subgroups in order to gauge a broader audience on pertinent issues pertaining to the city. Image. Raising the awareness of what the city is doing would be beneficial. Connections to city officials. Need to cultivate a little more with its city officials. 14 Niche Opportunities – Relationship Centered A few stakeholders mentioned how the city has a sense of community and safety, which reflects in the strategic priorities of economic stability and inclusivity. The city is set apart from its neighboring cities but sometimes there are comparisons to Brooklyn Park and north Minneapolis. Need of inclusion of populations that are often forgotten, including the elderly, youth, veterans, and people of color. There are other issues like making sure there is affordable housing and rentals, maintaining the parks and other recreational areas. Efficiency Opportunities - Consistent Communication Engagement and communication efficiencies could be increase through multiple communication mediums. Some participants discussed ways in which to increase the communication between the various city staff, officials, and key stakeholders. 15 Service Opportunities Equity. Income differences arose which presents a challenge within the city. The need to develop more diverse housing types in order to coincide with cultivating the diversity of income. In addition, the need for redevelopment opportunities supports the economic stability with the city and its surrounding areas. Staff. The limited city staff can somewhat be a barrier in order to implement a few innovative ideas and initiatives to ignite or boost city economy. The increase of staffing will aid with the support of the community and businesses to enhance economic investment. Business. Need to support businesses or even increase business development efforts that could increase the economic stability. 16 Relationship Cultivation Opportunities Community. Moving towards more dialogues and openness will allow trust to be built among and between city staff, officials, and other key stakeholders in order to obtain further growth of communal initiatives. Dialogues and conversation. The majority wanted to continue the community discussions and align the discussions with the strategic priorities. The meeting locations around the city and within the neighborhoods in order to gather more diverse and/or targeted groups (i.e. youth, elders, people of color, etc…). 17 18 Dialogue in Subgroups Education partners Faith -based community partners Specific cultural groups Topic driven (health, economic development, workforce, youth, etc…) Frequent Community Dialogues Monthly discussions with the city officials Weekly newsletters ( i.e. From the desk of the council) Social media ( enhance use) Development of Engagement Strategy Plan Involve community members Special Taskforce (advisory group) Youth added to the council (If applicable) 19 20 Description Engage in regular community dialogue based upon findings/feedback from the initial 3 community dialogues. Pros Demonstrate the City’s commitment to community engagement and listening to community. Immediately continue momentum established in the initial dialogue sessions. Cons This would require a concentrated and committed effort by the City. Does not further community engagement in an interactive or co-ownership model. May be perceived as a City driven agenda. Comments Regular community dialogue session would include factors of: 1) frequency, 2) community location, 3) issue based, and 4) widely marketed 21 Description Bring partners together to co-host community dialogue sessions based upon the findings/feedback from the initial 3 community dialogues. Simultaneously, recruit a diverse community and partners to work with the City to plan scheduled dialogue sessions for the next 18 months. The City and current partners will conduct and host community dialogues, while the recruitment of a diverse community group is underway. The efforts of the City and current partners will combine its efforts with the new community group. Pros Demonstrate the City’s commitment to community engagement and listening to community. Immediately continue momentum established in the initial dialogue sessions. Opportunity for community engagement. Establish working relationship between staff and taskforce members. Create a short-term feeder system for a possible Community Engagement Commission. Increase the community engagement capacity of the City. 22 Cons This would require a concentrated and committed effort by the City. The time for establishing a taskforce will delay execution of conducting the next round of community dialogues. May be perceived as the City not being responsive or moving too slow. The City would have to work and strategize methods of maintaining momentum during the stretch of time before another round of community dialogues are announced. Comments The structure of a diverse community group will be a taskforce group. Once the task of planning and hosting the community dialogue session have concluded the taskforce would dispense or sunset. 23 Description Recruit a diverse community group and partners to work with the City to plan scheduled dialogue sessions for the next 18 months. Pros Demonstrate the City’s commitment to community engagement and listening to community. Continue momentum established in the initial dialogue sessions. Opportunity for community engagement. Establish working relationship between staff and taskforce members. Create a short-term feeder system for a possible Community Engagement Commission. Increase the community engagement capacity of the City. 24 Cons This would require a concentrated and committed effort by the City. The time for planning and hosting, the community dialogues along with establishing a taskforce will stretch limited staff and may require longer lead-time for coordination. Comments Regular community dialogue session would include factors of: 1) frequency, 2) community location, 3) issue based, and 4) widely marketed. The structure of diverse community group will be a taskforce group. Once the task of planning and hosting the community dialogue session have concluded the taskforce would dispense or sunset. 25 Description Establish and recruit members for a Community Engagement Commission. Pros Demonstrate the City’s commitment to community engagement. Establish ongoing infrastructure for community engagement. Opportunity for community engagement. Establish working relationship between staff and the Commission. Increase the community engagement capacity of the City. Cons This would require a concentrated and committed effort by the City. Comments This would be a formal city commission similar to all other city commissions. This option would transcend all previous options. Meaning that establishment of a Community Engagement Commission is proposed irrespective of the action taken upon the previous options 1-3. The Communication and Community Engagement Division would staff this Commission. The Commission would have specific criteria of its composition to ensure diversity and inclusion. 26 Does the Council desire additional information beyond the Brooklyn Center Community Dialogue Summary Report in order to direct staff regarding moving forward with the City’s community dialogue effort? Is there a consensus of the Council regarding a preferred next steps option for moving forward with the City’s community dialogue effort? 27 W©irk §oi Anda ]Itm N©0 3 kYA I aI4 (I] UI PlSJh'A I JI"LI) 1 DATE: November 27, 2017 TO: Curt Boganey, City Manag FROM: Gary Eitel, Director of Business & Development SUBJECT: Review of the Draft Tax Increment Development Agreement for HOM Furniture/Kohl Lot. Recommendation: It is recommended that the City Council review the Draft Tax Increment Agreement and consider providing direction to staff regarding proceeding with HOM Furniture Tax Increment Development for the redevelopment of the Kohl's lot. Background: On March 28, 2016, the City Council adopted Resolution No. 2016-40, a Resolution Approving Modification to Redevelopment Plan for Housing Development and Redevelopment Project No. 1, Establishing Tax Increment Financing District No. 7 (Redevelopment District) Therein and Approving a Tax Increment Financing Plan Therefor (Opportunity Site). The boundaries of Tax Increment District No. 7 include 9 parcels within the southern portion of the Opportunity Site (lying south of John Martin Drive): 5930 Shingle Creek Parkway Jani King (office building) 5939 John Martin Drive former Golden Value Market (acquired by EDA) 5927 John Martin Drive 5915 John Martin Drive 5 90 John Martin Drive 5910 Shingle Creek Parkway 5900 Shingle Creek Parkway 2500 Co. Rd. 10 PID 02-118-21-13-0007 New King Buffet & Tires Plus former Perkins Restaurant site (for sale by owner) Health Partners Dental Clinic Mn. School of Business (office building) former Brookdale Square Center (acquired by EDA) former Brookdale Ford (acquired by EDA) remnant parcel adjacent to Hwy 100 ramp and 3 adjacent parcels within the eastern portion of the Shingle Creek Crossing Development: PID 02-118-21-24-0021 remnant parcel adjacent to 2545 Co. Rd. 10 2545 Co. Rd. 10 former Boulevard Restaurant (acquired by EDA) 2501 Co. Rd. 10 former Kohl's building This tax increment district deferred the first year of tax increment collection until 2019 and deferred its certification pending redevelopment proposals. (The Tax Increment Laws allow the deferral of certification for 3 years from the EDA actions of declaring blight conditions and first demolition activity, May-June 2015). Attached is a copy of March 28, 2016 staff memorandum for further reference on the background of Tax Increment Financing District No. 7. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for al/people and preserves the public trust I4 I 3i"4 [I) 1I )lIJh'A I I1AI!A'LIJ i i DJ1 [SAl TIF Development Agreement By and Between Economic Development Authority of Brooklyn Center, Minnesota and KKMBA Brooklyn Center LLC (AKA HOM Furniture. The draft development agreement provides the following components: 1.The minimum improvements are identified as the building renovations and expansions as approved by the February 13, 2017 City Council approvals to the Shingle Crossing PUD Amendment No. 8 (Resolution No. 2017-007) 2.The schedule for the minimum improvements has been identified as beginning no later than August 1, 2018 and ending no later than March 31, 2019. 3.The Future improvements are identified as the future Pad Site X improvements and the Storm Water Improvements as approved by November 13, 2017 City Council approval to the Revisions to the Shingle Creek Crossing PUD Amendment No.8 (Resolution No. 2017- ). 4.The agreement does not include an obligation by the developer to commence the future improvements on Pad Site X. The schedule for this redevelopment is driven by market conditions; however, the completion of the Storm Water Improvements (bi-infiltration basin) is an obligation to be completed as part of the future development of Pad Site X. 5. The economic assistance to enable the redevelopment of the Kohl's Site includes 3 components: a.The payment of $300,000 from TIF 2 Fund for the portion of the Kohl's lot identified for the drainage & utility easements Storm Water Improvements. These TIF 2 funds are intended to be replaced by future TIF 5 revenue for Out—of —District eligible expenditures. b.A Pay-As-You-Go Note (not to exceed $300,000) for the construction of the Storm Water Improvements (bio-infiltration basin) from 15% of the annual tax increment generated from TIF 5 (this amount in 2017 is projected at $84,000) commencing in 2019 and subsequent years until there is sufficient funds ($300,000 cap) for these storm water improvements. c. A Pay-As-Go-You Note in the amount equal to the lesser of $3,272,400 or the Eligible Costs actually incurred and paid by the Developer which includes the following: - Land acquisition costs; - Utility improvements and relocations - Landscaping; - Demolition; - Structural or other renovation of substandard building to address conditions in the Report of Inspection Procedures and Results for Determining Qualifications of a Tax Increment Financing District, dated November 10, 2015, prepared by LHB, Inc.; and - Any other expense incurred by the Developer in connection with the acquisition of the Development Property and the construction of the Minimum Improvements and eligible of payment form Tax Increment in accordance with the TIF Act. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust k I aI'A 0) 1'Il 1SJ'A I PLIALI) 1 r4iiIihl Springsted Financial has structured the PAYG Note based on 97.5% of the potential Tax Increment Revenue Stream projected from HOM' s Renovation, Expansion and Future Development of the Kohl's lot, identified the projected TIF Assistance Terms, and has prepared a But-For-Test/analysis for the need of assistance. Policy Issues: Does the EDA require any additional information for its future consideration of the KKIVIBA Brooklyn Center LLC (HOM Furniture) TIF Agreement? Strategic Priorities: Targeted Redevelopment Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust w I iI / Ii ci Cit' of BROOKLYN JJJCENTER LEGEND TIF Pr MM TIE District No. 7 o 00375 0.075 0.15 .Miles WE Created by Brooklyn Center Business and Development Dept./G IS Document Path: L:lUsers\ComDevlTlpureas\TIF_DISTRICT_NO.7.mOd S pr I n q ste d Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101-2887 Tel: 651-223-3000 Fax: 651-223-3002 w.springsted.com TO: Gary Eltel, City of Brooklyn Center FROM: Tom Denaway, Assistant Vice President/Consultant DATE: November 10, 2017 SUBJECT: TIF (Redevelopment) District No. 7 - Summary Memo Kohl's Site Redevelopment Project The Developer is proposing the purchase and redevelopment of the vacant former Kohls site into a new retail/office development. The proposed redevelopment is anticipated to occur in two phases, with the first phase including the redevelopment of the existing building into a home furniture store along with construction of approximately 11,805 square feet of inline retail space, while the second phase proposes the construction of an approximately 33,000 square foot medical office building. The total cost for both phases of the redevelopment are projected to total approximately $14,377,000. The Developer anticipates completing the construction of the first phase of the development in 2018, while the second phase is anticipated to begin construction in 2020. In addition to constructing the buildings, the Developer will also be undertaking the necessary site work and remediation costs necessary for the redevelopment of the site. The first phase of the development is anticipated to be completed by the end of 2018, assessed as of January 2019, for taxes payable 2020. For the purposes of estimating Tax Increment Financing (TIF) revenue we have assumed the first receipt for increment for the District will occur in taxes payable 2020 resulting in a term of the TIF District running from 2020 through 2045. The projected term of the TIF District is based on the assumption that the District will not generate inflationary increment for taxes payable 2019. If increment is generated in 2019, it would shorten the term of the TIF District to 2044 and would result in a lower amount of TIF revenue being generated by the District. The Developer provided cost estimates, based on information provided by their contractor and based on prior experience, for the redevelopment of the site totaling $14,377,000. Included in the total cost are individual line-items related to the acquisition of the site, the construction of new vertical improvements, the undertaking of site improvements, and soft costs related to the redevelopment of the site. For the phase 1 redevelopment the Developer provided a building construction cost of $3,000,000 for the redevelopment of the existing building of 86,117 square feet and the construction the new 11,805 square feet of new retail space. This cost estimate equates to a blended per square foot cost of $30.63. Additionally, in phase I the Developer has included a cost estimate of $500,000 for tenant buildout contingency, which we have assumed pertains to the 11,805 square feet of new inline retail space, and equates to a per square foot cost of $42.35. The cost of developing the approximately 32,870 square foot medical office building in phase 2 includes $4,500,000 for the building construction and $1,500,000 for tenant buildout contingency, for a total cost of $6,000,000 which equates to $182.54 per square foot for costs incurred in 2020. Using the RSMeans Online Cost Estimator to provide a comparison, the Developer's construction cost estimate for the medical office building appears reasonable. Our review of the Developer's construction cost estimate for the redevelopment of the site as a whole found the budget to be reasonable. The Developer is a real estate holding entity that will be leasing the space to tenants. The large former Kohls space will be leased to a separate but related home furniture tenant, while the inline retail and medical office spaces are anticipated to be leased to unrelated third-party entities. In order to review the reasonableness of the proposed leasing of the furniture store space we reviewed a copy of an existing lease the tenant previously entered into in the occupancy of a comparably sized space. The lease rate assumption for the occupancy of this space was right in-line with the cost they incurred in the comparable space, as documented by the provided lease contract. Based on this we found the estimate to be reasonable. Additionally, the Developer provided lease rate assumptions related to the occupancy of the inline retail and medical office spaces. We evaluated those lease rates based on available third-party data and found them to be reasonable. Projected TIF Assistance Terms Revenue projections were prepared for the redevelopment of the site, based on market value information provided by Hennepin County. The total estimated post-development market value for the completed project is $10,096,080. The total duration of the of the District is based on the first receipt of increment. In order to maximize the potential assistance level of the District we have assumed the first increment will be received in the taxes payable year 2020. In the event that increment is generated in 2019, it would shorten the term of the TIF District and reduce the amount of increment generated, and subsequently the amount of assistance realized by the Developer. The TIF assistance is proposed to be provide in the form of a pay-as-you-go note to the Developer in a principal amount of $3,272,400, with an interest rate of 4.0%. The Developer would be reimbursed for TIF eligible expenditures in this amount, following the completion and verification that they have incurred TIE eligible expenditures, and the other requirements identified in the Development Agreement. The Developer would be reimbursed annually on a pay-as-you-go basis from 97.5% of the total TIE revenue, which would be used to repay the principal and interest amounts incurred on the note. The total term of the TIE repayment period is 26-years. In the event that TIE revenue is insufficient to fully repay the note over its 26-year term the City will have no obligation to make additional payments, as the Developer is only eligible to be repaid from increment generated by the District. As a result, all risk associated with the ability of the TIF District to satisfy this note rests with the Developer. Need for Assistance In order to make the finding that the project would not be likely to proceed "but-foe' the requested financial assistance we reviewed project cost and operating assumptions prepared by the Developer. Using this information, we prepared an Internal Rate of Return (IRR) analysis which allowed us to estimate the potential return on investment to the Developer both with and without the requested TIE assistance. For purposes of this analysis we calculated the return over a 11-year period, to capture 10-years of operation and one-year of construction for phase 1, and used this information to project the anticipated unleveraged IRR of the project both with and without assistance. When calculating the IRR for the project without TIF assistance we projected the development would return an unleveraged return of approximately 3.81%. This return is significantly below what would be sought by a real estate developer, and indicates the project is not financially feasible without assistance and unlikely to be undertaken due to insufficient economic benefit considering the level of risk inherent in a real estate investment. In comparison when estimating the potential return with the TIF assistance included we calculated a return of approximately 8.05% with assistance. To evaluate the reasonableness of the return with assistance we consulted the IRR Viewpoint - Third Quarter 2017 which identified an average return target of 8.00% as a return target for retail projects in Minnesota. As a result, we found the Developer's return of 8.05% with assistance to be reasonable. Additionally, we performed a sensitivity analysis to determine the rate at which assumptions for project costs and revenues would need to change for the project to be feasible without assistance; for purposes of identifying a feasible threshold we solved for the IRR Viewpoint benchmark return of 8.00%. In the case of project costs, the Developer would need to realize cost savings of approximately 26% to achieve a rate of return of 8.17% without assistance. In the case of project revenues, the Developer would need to realize an increase in net revenue of approximately 34% for the project to achieve a return of 8.04%. If assumptions for both project costs and revenues were to change, it would take a combined change of a 15% decrease in project costs and a 15% increase in net revenue, for the project to be feasible without assistance and have a return of 8,19%. Given the significance of the changes necessary for the project to be feasible without assistance we concluded that the project would be unlikely to proceed but-for the requested assistance. Projected Tax Increment Report City of Brooklyn Center, Minnesota Tax Increment Financing (Redevelopment) District No. 7 Updated Kohis Site TIF Revenue Projections Annual Period Ending (1) Total Market Value (2) Total Net Tax Capacity (3) Less: Original Net Tan Capacity (4) Less: Fiscal Clap. @ 31.7362% (5) Retained Captured Net Tax Capacity (51 Times: I Tax capacity Pale (6) Annual Gross Tax Increment (7) Less: State Aud. Deduction 0.360% (6) Subtotal Net Tax Increment 191 Less. Admin. Retainage 2.50% (10) Annual Net Revenue (II) 12131117 1,771,000 34,670 34,670 0 S 165.971%0 0 0 0 0 012131/18 1,771,000 34,e70 34.675 0 0 165.971%0 0 0 0 0121311191,771,000 34,670 34,670 0 22,949 0 49,362 155.971°!, 165.9711/. 0 81,927 0 295 0 81,632 0 2,041 179,590812131120 12131121 5,306,549 5,494,280 106,901 108,136 34,670 40,171 21.887 47,078 185,971%78,135 281 77,854 1,946 75,9 12/31/22 10,096,080 201,172 40,171 51,095 109,906 165.971%182,411 657 161.754 4,544 177,210 12/31/23 10,298,002 205,210 40,171 52,377 112,662 165.971%186,666 673 186,313 4,658 181,655 12/31124 10,503,962 209,329 40,171 53,884 115.474 165.971%191,684 690 190,964 4,774 186,190 12131125 10,714,041 213,531 40,171 55,018 118,342 165.971%196,413 707 195,706 4,893 190,813 12/31126 10,928,322 217,816 40,171 56,378 121,267 165.971%201,269 725 200,544 5,014 195.530 12/31/27 11,146,888 222,188 40,171 57.765 124.252 165.971%206,222 742 205.480 5,137 200,343 12131/28 11,369,826 226,847 40,171 59,180 127,296 165.971%211,274 761 210,513 5.263 205,250 12/31129 11,597.222 231,194 40.171 60,624 139,399 185.971%216,425 779 215.646 5,391 210,255 12131130 11,829,167 235,833 40,171 62,096 133,566 165.971%221,681 798 220,883 5,522 215,361 12131131 12,065,750 240,565 40,171 63,597 136,797 165.971%227,043 817 226.226 5.856 220,570 12/31132 12,307,065 245,391 40,171 65,129 140,591 165.971%232,511 837 231,674 5,792 225,882 12/31/33 12,553.206 250.314 40,171 66,691 143,452 165.97195 238,089 857 237,232 5,531 231,301 12131134 12,804,271 255,335 40,171 88,285 146,879 165.971%243,777 878 242,899 8,072 236,827 12/31/35 13,060,356 260,457 40,171 69,910 150,376 165.971%249,591 899 248,883 6,217 242,466 12/31/36 13,321,563 265,681 40,171 71,568 153,942 165.971%255,500 920 254,580 6,365 248,215 12131137 13.587,994 271.010 40,171 73,259 157,580 165.971%261,537 942 260,595 6,515 254,080 12131138 13,859,754 276,445 40,171 74,984 161,290 165.971%267,695 964 266,731 6,668 260,063 12131139 14,136,949 281,989 40,171 76,744 165,074 165.971%273,975 906 272,989 6,825 266,184 12/31/40 14,419,888 297,644 40,171 78,538 168,935 165.971%280,383 1,009 279,374 6,984 272,390 12131141 14,708,082 293,412 40,171 80,369 172.872 165.971%286,917 1,033 285,894 7,147 278,737 12131142 15,002,244 299,295 40,171 82,236 178,888 185.9711A 293,583 1,057 292,526 7,313 285,213 12131143 15,302,289 305,296 40,171 84.141 180,984 165.971%300,381 1,081 299,300 7,483 291,817 12131144 15,608,334 311,417 40,171 86,083 185,163 165.971%307.316 1.106 306.210 7,655 298,555 12/31145 15,920,501 317,660 40,171 88,064 189.425 165,971%314,391 1,132 313,259 7,831 305,428 $0.007.076 $21,625 $5,985,451 $149,637 $5,835,814 Prepared by Spring sled Incorporated (printed on 10/11/2017 at 10:19 yj Brooklyn Center Kohls Projectionn 101117 PROJECTED PAY-AS-YOU-GO-NOTE REPORT City of Brooklyn Center, Minnesota Tax Increment Financing (Redevelopment) District No. 7 Updated Kohis Site TIF Revenue Projections Note Date: 05101118 Note Rate: 4.00% Amount: $3186000 Cumulative Unpaid Semi-Annual Loan Interest Accrued Net Balance Date Principal Interest P & I Due Interest Revenue Outstanding (1) (2) (3) (4) (5)(6)(7)(7) 3,186,000.00 02101/19 0.00 0.00 0.00 95,580.00 95,580.00 0.00 3,186,000.00 08/01/19 0.00 0.00 0.00 159,300.00 159,300.00 0.00 3,186,000.00 02101120 0.00 0.00 0.00 223,020.00 223,020.00 0.00 3,186,000.00 08/01/20 0.00 39,795.50 39,795.50 286,740.00 246,944.50 39,795,50 3,186,000.00 02/01121 0.00 39,795,50 39,795.50 310,664.50 270,869.00 39,795.50 3,186,000.00 08/01/21 0.00 37,954.00 37,954,00 334,589.00 296,635.00 37,954.00 3,186,000.00 02/01122 0.00 37,954.00 37,954.00 360,355.00 322,401.00 37,954.00 3,186,000.00 08/01122 0.00 88,605.00 88,605.00 386,121.00 297,516.00 88,605.00 3,186,000.00 02101123 0.00 88,605.00 88,605.00 361,236.00 272,631.00 88,605.00 3,186,000.00 08/01/23 0,00 90,827.50 90,827.50 336,351.00 245,523.50 90,827.50 3,186,000.00 02/01/24 0.00 90,827.50 90,827.50 309,243.50 218,416,00 90,827.50 3,186,000.00 08/01124 0,00 93,095.00 93,095.00 282,136.00 189,041.00 93,095.00 3,186,000.00 02/01/25 0.00 93,095.00 93,095.00 252,761.00 159,666.00 93,095.00 3,186,000.00 08/01/25 0.00 95,406.50 95,406.50 223,386.00 127,979.50 95,406,50 3,186,000.00 02/01/26 0.00 95,406,50 95,406.50 191,699,50 96,293.00 95,406.50 3,186,000.00 08/01/26 0,00 97,765.00 97,765.00 160,013.00 62,248.00 97,765.00 3,186,000.00 02/01/27 0,00 97,765.00 97,765.00 125,968.00 28,203.00 97,765.00 3,186,000.00 08/01/27 8,248,50 91,923.00 100,171.50 91,923.00 0.00 100,171.50 3,177,751.50 02/01/28 36,616.47 63,555.03 100,171.50 63,555,03 0.00 100,171.50 3,141,135.03 08/01/28 39,802,30 62,822.70 102,625.00 62,822.70 0.00 102,625.00 3,101,332.73 02/01/29 40,598.35 62,026.65 102,625.00 62,026.65 0,00 102,625,00 3,060,734.38 08/01/29 43,912,81 61,214.69 105,127.50 61,214.69 0.00 105,127.50 3,016,821.57 02/01/30 44,791.07 60,336,43 105,127.50 60,336.43 0.00 105,127.50 2,972,030.50 08/01/30 48,239,89 59,440.61 107,680.50 59,440,61 0.00 107,680.50 2,923,790.61 02/01131 49,204,69 58,475.81 107,680.50 58,475.81 0.00 107,680.50 2,874,585.92 08/01/31 52,793.28 57,491.72 110,285.00 57,491.72 0.00 110,285.00 2,821,792.64 02101/32 53,849,15 56,435.85 110,285.00 56,435.85 0,00 110,285.00 2,767,943.49 08/01/32 57,582,13 55,358.87 112,941.00 55,358.87 0.00 112,941.00 2,710,361.36 02101/33 58,733.77 54,207.23 112,941.00 54,207,23 0.00 112,941.00 2,651,627.59 08/01/33 62,617.95 53,032.55 115,650.50 53,032.55 0.00 115,650,50 2,589,009.64 02/01/34 63,870.31 51,780.19 115,650.50 51,780,19 0.00 115,650.50 2,525,139.33 08/01/34 67,910,71 50,502,79 118,413.50 50,502.79 0,00 118,413.50 2,457,228.62 02/01/35 69,268.93 49,144.57 118,413.50 49,144.57 0.00 118,413.50 2,387,959.69 08/01/35 73,473.81 47,759.19 121,233.00 47,759.19 0.00 121,233.00 2,314,485.88 02/01/36 74,943.28 46,289.72 121,233.00 46,289,72 0.00 121,233.00 2,239,542.60 08/01/36 79,316.65 44,790.85 124,107.50 44,790.85 0.00 124,107.50 2,160,225.95 02/01/37 80,902.98 43,204.52 124,107.50 43,204.52 0.00 124,107.50 2,079,322.97 08/01/37 85,453.54 41,586.46 127,040.00 41,586.46 0.00 127,040.00 1,993,869.43 02/01/38 87,162.61 39,877.39 127,040.00 39,877.39 0.00 127,040.00 1,906,706.82 08/01/38 91,897,36 38,134.14 130,031.50 38,134.14 0.00 130,031,50 1,814,809.46 02/01/39 93,735.31 36,296.19 130,031.50 36,296.19 0.00 130,031.50 1,721,074.15 08/01/39 98,660.52 34,421.48 133,082.00 34,421.48 0.00 133,082.00 1,622,413.63 02/01/40 100,633.73 32,448.27 133,082.00 32,448.27 0.00 133,082.00 1,521,779.90 08/01/40 105,759.40 30,435.60 136,195.00 30,435.60 0.00 136,195.00 1,416,020.50 02/01141 107,874.59 28,320.41 136,195.00 28,320.41 0.00 136,195.00 1,308,145.91 08/01/41 113,205.58 26,162.92 139,368.50 26,162.92 0.00 139,368.50 1,194,940.33 02/01/42 115,469.69 23,898.81 139,368.50 23,898.81 0.00 139,368.50 1,079,470.64 08/01/42 121,017.09 21,589.41 142,606.50 21,589.41 0.00 142,606.50 958,453.55 02/01/43 123,437.43 19,169.07 142,606.50 19,169.07 0.00 142,606.50 835,016.12 08/01/43 129,208.18 16,700.32 145,908.50 16,700.32 0.00 145,908.50 705,807.94 02/01/44 131,792.34 14,116.16 145,908.50 14,116.16 0.00 145,908.50 574,015.60 08101/44 137,797.19 11,480.31 149,277.50 11,480.31 0.00 149,277.50 436,218.41 02/01/45 140,553.13 8,724.37 149,277.50 8,724.37 0.00 149,277.50 295,665.28 08/01/45 146,800.69 5,913.31 152,714.00 5,913.31 0.00 152,714.00 148,864.59 02/01/46 148,864.59 2,977.29 151,841.88 2,977.29 0.00 151,841.88 0.00 $3,186,000 $2,648,941.88 $5,834,941.88 $5,961,208.38 $3,312,266.50 $5,834,941.88 Surplus Tax Increment 872.12 Total Net Revenue $5,835,814.00 Prepared by: Springsted Incorporated (printed on 10111/2017 at 10:19 AM) Brooklyn Center Kohls Projections 101117 Ill I$] l'i M U) I 1 WTh 1 aWi I1K1 I I 3tES)h[I) I [SI)] 'A M U] A I )h1 VLSI 18 (SII] Ci R'dXS1 I I iYi IIIhi ?II LIL I Ci CiY4 HAl:] UiII] Ci W1LII Dh1 V December , 2017 494129v7 BR291-371 ARTICLE I DEFINITIONS .3 Section1.1 Definitions....................................................................................................3 ARTICLE II REPRESENTATIONS AND WARRANTIES..........................................................8 Section 2.1 Representations and Warranties of the EDA...............................................8 Section 2.2 Representations and Warranties by the Developer......................................9 ARTICLE III CONSTRUCTION OF MINIMUM IMPROVEMENTS.......................................11 Section 3.1 Planned Unit Development ........................................................................11 Section 3.2 Construction Plans . ....................................................................................11 Section 3.3 Construction of Minimum Improvements . ................................................12 Section 3.4 Commencement and Completion of Construction.....................................12 Section 3.5 Effect of Delay...........................................................................................13 Section 3.6 Compliance with Environmental Requirements........................................13 Section 3.7 Additional Responsibilities of the Developer . ...........................................13 Section 3.8 Certificate of Completion ..........................................................................14 ARTICLE IV TAX INCREMENT ASSISTANCE.......................................................................15 Section 4.1 Creation of TIF District and Approval of TIF Plan . ..................................15 Section 4.2 Issuance of TIF Note..................................................................................15 Section 4.3 Issuance of TIF 5 Pooled TIF Note............................................................16 Section 4.4 Storm Water Property Acquisition.............................................................17 Section4.5 Review of Taxes ........................................................................................18 Section 4.6 Use of Tax Increments . ..............................................................................19 Section 4.7 Business Subsidy Act.................................................................................19 ARTICLE V ENCUMBRANCE OF THE DEVELOPMENT PROPERTY................................20 Section 5.1 Encumbrance of the Development Property . .............................................20 Section 5.2 Copy of Notice of Default to Financing Parties.........................................20 Section 5.3 Mortgagee's Option to Cure Events of Default.........................................20 Section 5.4 Defaults Under Mortgage . ......................................................................... 20 ARTICLE VI INSURANCE AND MAINTENANCE..................................................................21 Section6.1 Insurance . ...................................................................................................21 Section6.2 Subordination.............................................................................................22 Section 6.3 Maintenance and Operation of the Development . .....................................23 ARTICLE VII TRANSFER LIMITATIONS AND INDEMNIFICATION.................................24 Section 7.1 Representation as to Development.............................................................24 Section 7.2 Limitations on Transfer..............................................................................24 Section 7.3 Indemnification . .........................................................................................2 Section7.4 Limitation ...................................................................................................2' ARTICLE VIII EVENTS OF DEFAULT AND DAMAGES .......................................................28 Section 8.1 Events of Default Defined . ........................................................................28 Section 8.2 Developer Events of Default......................................................................28 Section 8.3 EDA Events of Default . .............................................................................29 Section 8.4 EDA Remedies on Default.........................................................................29 Section 8.5 Developer Remedies on Default................................................................29 Section 8.6 No Remedy Exclusive................................................................................30 1 Section 8.7 No Additional Waiver Implied by One Waiver.........................................30 ARTICLE IX ADDITIONAL PROVISIONS...............................................................................31 Section 9.1 Conflicts of Interest....................................................................................31 Section 9.2 Titles of Articles and Sections...................................................................31 Section 9.3 Notices and Demands ................................................................................31 Section9.4 Counterparts...............................................................................................31 Section 9.5 Law Governing . .........................................................................................31 Section 9.6 Consents and Approvals ............................................................................32 Section 9.7 Representatives ..........................................................................................32 Section 9.8 Superseding Effect . ....................................................................................32 Section 9.9 Relationship of Parties...............................................................................32 Section9.10 Tenn ...........................................................................................................32 Section9.11 Venue . ........................................................................................................32 Section 9.12 Provisions Surviving Rescission or Expiration..........................................32 EXHIBIT A DESCRIPTION OF DEVELOPMENT PROPERTY ..................................A-i EXHIBIT B CERTIFICATE OF COMPLETION ............................................................. B-i EXHIBITC ELIGIBLE COSTS .......................................................................................C-i EXHIBITD FORM OF TIF NOTE ..................................................................................D-1 EXHIBIT E FORM OF TIF 5 POOLED TIF NOTE ......................................................... E-i EXHIBIT F FORM OF COLLATERAL ASSIGNMENT OF TAX INCREMENT FINANCINGDOCUMENTS ........................................................................ F-i 11 TIF DEVELOPMENT AGREEMENT THIS TIF DEVELOPMENT AGREEMENT is made and entered into this - day of December, 2017, by and between the ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA, a body corporate and politic organized and existing under the laws of the State of Minnesota (the "EDA"), and KKMBA BROOKLYN CENTER LLC, a Minnesota limited liability company, or permitted assigns (the "Developer"). WHEREAS, pursuant to Minnesota Statutes, Section 469.090 through 469.1081 and Sections 469.001 through 469.047, the EDA has formed Housing Development and Redevelopment Project No. 1 (the "Project Area") and has adopted a Redevelopment Plan (the "Redevelopment Plan") for the Project Area which sets forth development objectives for the Project Area. A major objective of the Redevelopment Plan is to foster the development and redevelopment of commercial facilities in the Project Area; WHEREAS, the Developer has submitted a proposal to the EDA in connection with the renovation of an existing approximately 75,000 square foot substandard retail building on the Development Property and construction of an approximately 23,600 square foot addition thereto. The Development Property is within the Project Area; WHEREAS, the Developer intends to acquire the Development Property and the Storm Water Property and construct thereon the Minimum Improvements (as defined herein); WHEREAS, the Developer may, in addition, construct certain Future Improvements (as defined herein) and certain Storm Water Improvements (as defined herein) in connection therewith; WHEREAS, under Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the "TIF Act"), the EDA is authorized to finance certain public redevelopment costs of a redevelopment project area with tax increment revenues derived from a tax increment financing district established within such project area; WHEREAS, the EDA has heretofore adopted a tax increment financing plan and created and established Tax Increment Financing District No. 7 (Redevelopment District) as a redevelopment tax increment financing district pursuant to the TIF Act (the "TIF District"); WHEREAS, in order to set forth the conditions under which the EDA will provide certain tax increment assistance to the Developer, the EDA and Developer have agreed to enter into this Agreement; WHEREAS, the requirements of the Business Subsidy Law, Minnesota Statutes, Sections 116J.993 through 116J.995, do not apply to this Agreement pursuant to an exemption for the redevelopment of property under Minnesota Statutes, Section 116J.993, Subdivision 3(17); and 1 494129v7 BR291-371 WHEREAS, the EDA believes that the development of the Development Property, as more fully set forth in this Agreement, is in the best interests of the residents of the City of Brooklyn Center, Minnesota (the "City"), and will facilitate the redevelopment of blighted areas in the City, and increase opportunities for commercial development, and will otherwise benefit the health, safety, morals and welfare of the residents of the City, in accordance with the public purpose and provisions of the applicable State and local laws and requirements under the Redevelopment Plan; and NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 2 4941290 BR291-371 ARTICLE I DEFINITIONS Section 1.1 Definitions. All capitalized terms used and not otherwise defined herein shall have the following meanings unless a different meaning clearly appears from the context: "Affiliate" means any Person directly or indirectly controlling or controlled by or under direct or indirect common control with a Person and any purchaser of all or substantially all of the assets of such Person. For this purpose, "control" means the power to direct management and policies, directly or indirectly, whether through ownership of at least a majority of its voting securities, or the right to designate or elect at least a majority of the members of its governing body, or by contract, [by trustees of a family trust], or by other arrangements, and the terms "controlling" and "controlled" have correlative meanings. "Agreement" means this TIF Development Agreement as the same may be from time to time modified, amended or supplemented. "Available Tax Increment" means 97.5% of the Tax Increment. "Business Day" means any day except a Saturday, Sunday or a legal holiday or a day on which banking institutions in Minnesota are authorized by law or executive order to close. "Certificate of Completion" means the certificate in substantially the form attached hereto as Exhibit B signed by the EDA Representative certifying completion of the Minimum Improvements. "City" means the City of Brooklyn Center, Minnesota, a municipal corporation. "Completion Date" means the date the Certificate of Completion is executed by the EDA Representative. "Construction Lender" means a lender who makes a Construction Loan to the Developer. "Construction Loan" means any loan or loans to be made to provide financing for the construction of the Minimum Improvements. "Construction Plans" means the plans, specifications, drawings and related documents for the construction of the Minimum Improvements which shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the building inspector of the City. "County" means Hennepin County, Minnesota. "Developer" means KKMBA Brooklyn Center LLC, its successors or assigns. 3 4941290 BR291-371 "Developer Event of Default" means the occurrence of an Event of Default set forth in Section 8.2 hereof. "Developer's Representative" means either Rod Johansen or John Pierce, or designee evidenced in writing to the EDA. "Development" means the Development Property and the Minimum Improvements. "Development Property" means the real property legally described in Exhibit A hereto. "EDA" means the Economic Development Authority of Brooklyn Center, Minnesota, its successors and assigns. "EDA Representative" means the Executive Director of the EDA or his or her designee. "Eligible Costs" means the costs identified on Exhibit C attached hereto. "Event of Default" means any of the events described in Sections 8.2 or 8.3. "Financing Party" means any mortgagee of a Mortgage, any Construction Lender, any other lender or other Person providing construction or permanent financing for the Minimum Improvements, or any member or partner of the Developer. "Future Improvements" means the proposed construction of one of four alternate designs approved under the PUD which include (a) an approximately 20,000 square foot retail building (with at least 90 parking stalls), (b) an approximately 3-story, 32,800 square foot medical center/office building (with at least 148 parking stalls), (c) an approximately 5460 square foot restaurant and 9,795 square foot retail building (with at least 55 and 44 stalls, respectively), or (d) an 26,225 square foot retail building (with at least 119 parking stalls) on Building Pad Site X (as defined in the PUD), all consistent with the PUD and any approved development plans. "Market Value" or 'Market Valuation" means the market value of real property as determined by the assessor of the County in accordance with Minnesota Statutes, Section 273.11 (or as finally adjusted by any assessor, board of equalization, commissioner of revenue, or any court). "Minimum Improvements" means the renovation of an existing approximately 75,000 square foot substandard retail building on the Development Property and construction of an approximately 23,600 square foot addition thereto, all consistent with the PUD and any approved development plans. "Mortgage" means any mortgage of all or any part of the Development Property granted by Developer. "Parties" means the Developer and the EDA. "Party" means the Developer or the EDA, as the context may require. 4 4941290 BR291-371 "Person" means any individual, corporation, partnership, joint venture, limited liability company or partnership, association, trust, unincorporated organization, or government, or any agency or political subdivision thereof. "PUD" has the meaning provided in Section 3.1. "PUD Agreement" has the meaning provided in Section 3.1. "Sale" means any sale, direct or indirect, conveyance, assignment, transfer, exchange or other disposition of all or a part of the Developer's interest in the Minimum Improvements, to any Person other than an Affiliate. "State" means the State of Minnesota. "Storm Water Improvements" means the storm water improvements required by the Shingle Creek Watershed Management Commission in connection with the Future Improvements. "Storm Water Property" means a portion real property currently legally described as Lot 2, Block 1, SHINGLE CREEK CROSSING, Hennepin County, Minnesota, according to the recorded plat thereof, Hennepin County, Minnesota, [depicted in Exhibit _J [legally described as: ,] which area will be subject to a drainage and utility easement [need correct description]. "Tax Increment" means that portion of the real property taxes generated by the Development Property and any improvements thereon which is actually remitted to and received and retained by the EDA as tax increment under the TIF Act after deducting the amount of Tax Increment, if any, which must be paid to the City, the school district(s), the County and the State pursuant to Minnesota Statutes, Section 469.177, subdivisions 3, 9 and 11, Section 469.176, subdivision 4h, and Section 469.175, subdivision la or are otherwise allocated to other taxing jurisdictions pursuant to the TIF Act; for purposes of this definition, "generated by the Development Property and any improvements thereon" means the portion of Tax Increment actually received by the EDA from the TIF District determined by the EDA, in its sole determination, to have been derived from the Development based on the ratio that the captured tax capacity of the Development Property bears to the total captured tax capacity of the TIF District, taking into account tax delinquencies and petitions. "Tax Official" means any City or County assessor; County auditor; City, County, or State board of equalization; the Commissioner of Revenue of the State; or any State or Federal district court, the Tax Court of the State, or the State Supreme Court. "TIF Act" means Minnesota Statutes, Sections 469.174 through 469.1794, as amended, or any successor statutes. "TIF District" means Tax Increment Financing District No. 7 (Redevelopment District) as the same is amended from time to time. S 4941290 BR291-371 "TIF District No. 2" means Tax Increment Financing (Redevelopment) District No. 2 created by the City and the EDA. "TIF District No. 5" means Tax Increment Financing District No. 5 (Renewal and Renovation District) as the same is amended from time to time. "TIF 5 Pooled TIF Note" means the Taxable Pooled Tax Increment Revenue Note (HOM Furniture Project) to be executed by the EDA and delivered to the Developer pursuant to Section 4.3 hereof, a copy of which is attached hereto as Exhibit E. "TIF 5 Pooled TIF Note Payment Date" means each February 1 and August 1, commencing on the first February 1 or August 1 following the dated date of the TIF 5 Pooled TIF Note and thereafter to and including the TIF 5 Pooled TIF Note Termination Date; provided, that if any such date should not be a Business Day, the TIF 5 Pooled TIF Note Payment Date shall be the next succeeding Business Day. "TIF 5 Pooled TIF Note Termination Date" means the earlier of (i) February 1, 2030, (ii) the date the TIF 5 Pooled TIF Note is paid in full, (iii) the date on which TIF District No. 5 expires or is otherwise terminated or the EDA is no longer receiving tax increment from TIF District No. 5, or (iv) the date the TIF 5 Pooled TIF Note or this Agreement is terminated or rescinded in accordance with its terms. "TIF Note" means the Taxable Tax Increment Revenue Note (HOM Furniture, Inc. Project) to be executed by the EDA and delivered to the Developer pursuant to Section 4.2 hereof, a copy of which is attached hereto as Exhibit D. "TIF Note Payment Date" means each February 1 and August 1, commencing on the first February 1 or August 1 following the receipt by the EDA of Available Tax Increment from the Development Property and thereafter to and including the TIF Note Termination Date; provided, that if any such date should not be a Business Day, the TIF Note Payment Date shall be the next succeeding Business Day. "TIF Note Termination Date" means the earliest of (i) the February 1 following the 25th anniversary of the first TIF Note Payment Date, (ii) the date the TIF Note is paid in full, (iii) the date on which the TIF District expires or is otherwise terminated or the EDA is no longer receiving Tax Increment from the TIF District, or (iv) the date the TIF Note or this Agreement is terminated or rescinded in accordance with its terms. "TIF Plan" means that certain Tax Increment Financing Plan for the TIF District approved by the EDA, as amended from time to time. "TIF 2 Available Tax Increment" means, tax increment received by the EDA from TIF District No. 2 on or before December 31, 2017 and not otherwise pledged to other obligations of TIF District No. 2. "TIF 5 Available Tax Increment" means 15% of the real property taxes generated by the improvements within TIF District No. 5 which is actually remitted and retained by the EDA as tax increment under the TIF Act less the amounts, if any, which the EDA must pay to the rol 4941290 BR291-371 school district, the County and the State pursuant to Minnesota Statutes, Sections 469.177, subds. 9, 10, and 11; 469.176, subd. 4h; and 469.175, subd. la, as the same maybe amended from time to time, which is received by the EDA with respect to the taxes payable in calendar year 2019 through the earlier of the TIF 5 Pooled TIF Note Termination Date or calendar year 2029 and not otherwise pledged to other obligations of TIF District No. 5. "Unavoidable Delays" means delays, outside the control of the party claiming its occurrence, which delay the activities contemplated by this Agreement, and which are the direct result of (a) unusually severe or prolonged bad weather, (b) acts of God, fire or other casualty to the Minimum Improvements, (c) litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, (d) acts of any federal, State or local governmental unit which directly result in delays, (e) strikes, or other labor trouble, (f) delays in delivery of materials for the Minimum Improvements, (g) soil conditions of the Development Property or (h) acts of war or terrorism, not existing on the date hereof. 7 4941290 BR291-371 ARTICLE II i a i a aii i oii w a is ri Section 2.1 Representations and Warranties of the EDA. The EDA makes the following representations and warranties: (a)The EDA is a body corporate and politic organized and existing under the laws of the State of Minnesota with the authority to enter into this Agreement and carry out its obligations hereunder. (b)The EDA has taken all action necessary to create the Project Area and the TIF District, to adopt and approve the Redevelopment Plan and TIF Plan, to approve this Agreement, and to authorize the execution and delivery of this Agreement, and any other documents or instruments required to be executed and delivered by the EDA pursuant to this Agreement. (c)The EDA has elected in the TIF Plan to retain 100% of the captured net tax capacity of the Tax Increment Financing District, subject to Section 469.177, subdivision 3 of the TIF Act to finance permissible expenditures under the TIF Act, and has elected that the duration of the TIF District will be the maximum duration permitted by the TIF Act. (d)The activities of the EDA are undertaken for the purpose of fostering the redevelopment and renovation of certain real property that is or was occupied primarily by substandard and obsolete buildings, which will revitalize this portion of the Project Area, increase tax base, increase employment opportunities and provide commercial and retail facilities. (e)The execution, delivery and performance of this Agreement, and any other documents or instruments required pursuant to this Agreement by the EDA does not, and consummation of the transactions contemplated therein and the fulfillment of the terms thereof will not, conflict with or constitute on the part of the EDA a breach of or default under any existing (i) indenture, mortgage, deed of trust or other agreement or instrument to which the EDA is a party or by which the EDA or any of its property is or may be bound, or (ii) legislative act, constitution or other proceeding establishing or relating to the establishment of the EDA or its officers or its resolutions. (f)There is not pending, nor to the best of the EDA' s knowledge is there threatened, any suit, action or proceeding against the EDA before any court, arbitrator, administrative agency or other governmental authority that materially and adversely affects the validity of any of the transactions contemplated hereby, the ability of the EDA to perform its obligations hereunder, or as contemplated hereby or thereby, or the validity or enforceability of this Agreement. (g) No member of the Board of the EDA or officer of the EDA, has either a direct or indirect interest in this Agreement or the Development within the meaning of Minnesota Statutes, Sections 412.311 and 471.87, as amended, or any successor statute. 8 494129v7 BR291-371 Section 2.2 Representations and Warranties by the Developer. The Developer represents and warrants that: (a)The Developer is a Minnesota limited liability company organized and in good standing under the laws of Minnesota, is duly authorized to transact business within the State, is not in violation of any provisions of its organizational documents or to the best of the Developer's knowledge the laws of the State, has the power and authority to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its governing body. (b)The Developer will construct, or cause to be constructed, the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Plan, the PUD and all local, State and federal laws and regulations (including, but not limited to, environmental, zoning, energy conservation, building code and public health laws and regulations), except for variances necessary to construct the Minimum Improvements contemplated in the Construction Plans approved by the City. (c)The Developer will obtain, or cause to be obtained, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state, and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (d)The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of the terms and conditions hereof do not and will not conflict with or result in a material breach of any of the terms or conditions of the Developer's organizational documents or any restriction or any agreement or instrument to which the Developer is now a party or by which it is bound or to which any property of the Developer is subject, and do not and will not constitute a material default under any of the foregoing. To the best of the Developer's knowledge, the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of the terms and conditions thereof do not and will not result in a material violation of any order, decree, statute, rule or regulation of any court or of any state or federal regulatory body having jurisdiction over Developer or its properties, including its interest in the Development, and do not and will not result in the creation or imposition of any lien, charge or encumbrance of any nature upon any of the property or assets of Developer contrary to the terms of any instrument or agreement to which Developer is a party or by which it is bound. (e)To the best of the Developer's knowledge, the execution and delivery of this Agreement will not create a conflict of interest prohibited by Minnesota Statutes, Section 412.311, as amended, or any successor statute. (f)The Developer would not construct the Minimum Improvements and the Storm Water Improvements but for the execution of this Agreement and the tax increment financing assistance made available hereunder. 494129v7 BR291-371 (g)The Developer will fully cooperate with the EDA and the City with respect to any litigation commenced by third parties with respect to the activities contemplated by this Agreement. (h)There are no pending or threatened legal proceedings, of which the Developer has notice, contemplating the liquidation or dissolution of the Developer or threatening its existence, or seeking to restrain or enjoin the transactions contemplated by the Agreement, or questioning the authority of the Developer to execute and deliver this Agreement or the validity of this Agreement. (i) The Developer has not received any notice from any local, State or federal official that the activities of the Developer with respect to the Development Property may or will be in violation of any environmental law or regulation. The Developer is not aware of any State or federal claim filed or planned to be filed by any party relating to any violation of any local, State or federal environmental law, regulation or review procedure, and the Developer is not aware of any violation of any local, State or federal law, regulation or review procedure which would give any Person a valid claim under any state or federal environmental statute. U) The Developer will obtain financing commitments to finance construction of the Minimum Improvements in amounts sufficient and on terms which will enable the Developer to timely and successfully complete the Minimum Improvements in conformance with the Construction Plans. (k) The Developer will cooperate fully with the EDA and the City in the resolution of any traffic, parking, trash removal or public safety problems which may arise in connection with the construction and operation of the Minimum Improvements and any Future Improvements or Storm Water Improvements. (1) The Developer understands that the EDA or the City may subsidize or encourage the development of other developments in the City, including properties that compete with the Development Property and the Development, and that such subsidies may be more favorable than the terms of this Agreement, and that neither the City nor the FDA has represented that development of the Development Property will be favored over the development of other properties. (m) The Developer expects that the construction of the Minimum Improvements will begin on or before August 1, 2018 and, barring Unavoidable Delays, will be substantially completed not later than March 31, 2019. 10 4941290 BR291-371 ARTICLE III CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 3.1 Planned Unit Development. On February 13, 2017, the City Council of the City adopted Resolution No. 2017-25 approving Planned Unit Development Amendment No. 8 to the Shingle Creek Crossing Declaration of Covenants and Restrictions dated June 28, 2013 and recorded in the office of the Hennepin County Registrar of Titles on June 30, 2011 as Document No. T4868187, as amended by Resolution No. 2017- "Resolution Regarding the Disposition of Planning Commission Application No. 2017-007 Submitted by HOM Furniture, Inc. and Gatlin Development Company for Revision to the Planned Unit Development Amendment No. 8 to the 2011 Shingle Creek Crossing Planned Unit Development (Located at 2501 and 2545 County Road 10)" and as the same may be further amended from time to time ("PUD"). Prior to the commencing the construction of the Minimum Improvements, the Developer shall have entered into a separate development agreement with the City (the "PUD Agreement") that addresses planning and land use requirements. Section 3.2 Construction Plans. (a)Prior to the commencement of construction of any portion of the Minimum Improvements, the Developer will deliver to the EDA the Construction Plans and a sworn construction cost statement certified by the Developer and the general contractor (the "Sworn Construction Cost Statement") for such portion of the Minimum Improvements. Within 20 days after receipt of the Construction Plans and the Sworn Construction Cost Statement the EDA shall review the Construction Plans and deliver to the Developer a written statement approving the Construction Plans or a written statement rejecting the Construction Plans and specifying the deficiencies in the Construction Plans. The City's building official on behalf of the EDA shall approve the Construction Plans if: (i) the Construction Plans substantially conform to the terms and conditions of this Agreement and the PUD; (ii) the Construction Plans are consistent with the goals and objectives of the Redevelopment Plan; and (iii) the Construction Plans do not violate any applicable federal, State or local laws, ordinances, rules or regulations except as set forth in approved variances (provided, however, that a finding of no such violations does not necessarily constitute a finding that the Construction Plans meet all requirements of such federal, State or local laws, ordinances, rules or regulations). If the Construction Plans are not approved by the EDA, then the Developer shall make such changes as the EDA may reasonably require and resubmit the Construction Plans to the EDA for approval. If the EDA has not rejected the revised Construction Plans in writing within 20 calendar days of submission, such Construction Plans shall automatically be deemed approved by the EDA. (b)The approval of Construction Plans, or any proposed amendment to the Construction Plans, by the EDA for purposes of this Agreement does not constitute a representation or warranty by the EDA that any of the Construction Plans or the Minimum Improvements comply with any applicable building code, health or safety regulation, zoning regulation, environmental law or other law or regulation, or that the Minimum Improvements will meet the qualifications for issuance of a certificate of occupancy, or that the Minimum Improvements will meet the requirements of the Developer or any other users of the Minimum 11 4941290 BR291-371 Improvements. Approval of the Construction Plans, or any proposed amendment to any of the Construction Plans, by the EDA will not constitute a waiver of an Event of Default. Nothing in this Agreement shall be construed to relieve the Developer of its obligations to receive approval of the Construction Plans and necessary construction permits from the City. Section 3.3 Construction of Minimum Improvements. Subject to the terms and conditions of this Agreement, the Developer agrees to construct, or cause to be constructed, the Minimum Improvements on the Development Property in substantial conformance with the approved Construction Plans for the Minimum Improvements. No changes shall be made to the Construction Plans for the Minimum Improvements without the EDA's prior written approval, unless the aggregate of such changes do not decrease the cost of the Minimum Improvements as set forth in the Sworn Construction Cost Statement by more than 10%. No changes (each a "Material Change") which in the aggregate would result in a decrease in the cost of the Minimum Improvements by more than 10% or which would materially alter, (a) the site plan, (b) exterior appearance, (c) quality, (d) facility amenities, or (e) exterior materials included in the PUD and Construction Plans shall be made without the FDA's prior written consent. For purposes of the elements set forth in clauses (c) or (e) of the preceding sentence, a Material Change shall mean a decrease in the line item(s) for such element as set forth in the Sworn Construction Costs Statement of more than 10%. The Developer shall submit a description of any Material Change to the EDA. The approval of the EDA will not be unreasonably withheld, unreasonably conditioned or unreasonably delayed. The EDA shall either approve the Material Change or provide to the Developer specific written comments on the basis for its failure to approve within 20 days following submission. If the EDA does not respond to the Developer within such 20 day period, the Material Change shall be deemed approved. Section 3.4 Commencement and Completion of Construction. (a)Subject to the terms and conditions of this Agreement, the Developer will commence construction of the Minimum Improvements by _________, 2018 and, barring Unavoidable Delays, will cause the Minimum Improvements to be substantially completed not later than , 2018. The term "commence" means the making of visible improvements, including without limitation asbestos abatement and subsurface excavation but excluding mere surface grading. (b)The Developer will construct, or cause to be constructed, the Minimum Improvements on the Development Property and the Storm Water Property, respectively, in substantial conformity with the Construction Plans approved by the EDA and the PUD. Prior to delivery of the Certificate of Completion referred to in Section 3.8 hereof, upon the request of the EDA, the Developer will provide the FDA reasonable access to the Development Property. "Reasonable access" means at least one site inspection per week during regular business hours. During construction of the Minimum Improvements and the Storm Water Improvements, the Developer will deliver quarterly progress reports to the EDA. (c) In addition to the Minimum Improvements, the Developer expects to construct certain Future Improvements and the Storm Water Improvements on the Development Property. The parties agree and understand that, while Developer has no obligation under this Agreement to construct anything other than the Minimum Improvements; nevertheless, the Developer shall 12 494129v7 BR291-371 submit Construction Plans for any Future Improvements and the Storm Water Improvements on the Development Property in accordance with Section 3.2 and comply with Sections 3.1 through 3.8 except as otherwise provided herein. If the Developer constructs any Future Improvements, the Developer shall cause the Storm Water Improvements to be completed no later than the completion date of such Future Improvements. Section 3.5 Effect of Delay. The Developer acknowledges that if construction of the Minimum Improvements is delayed or not completed, the effect of such delay or failure to complete may be to reduce the amount of the Tax Increment available to pay the TIF Note. In addition, the Developer intends to construct the Future Improvements on the Development Property and if construction thereof is delayed or not completed, the effect of such delay or failure to complete may be to reduce the amount of the Tax Increment available to pay the TIF Note. If construction of the Storm Water Improvements is delayed or not completed, the TIF 5 Pooled TIF Note will not be issued or payable. Section 3,6 Compliance with Environmental Requirements. The Developer shall comply with all applicable local, State, and federal environmental laws and regulations, and will obtain, and maintain compliance under, any and all necessary environmental permits, licenses, approvals or reviews. As of the date of this Agreement, the Developer has received no notice or communication from any local, State, or federal official that the activities of the Developer or the FDA under this Agreement may be or will be in violation of any environmental law or regulation. Without limiting its obligations under Section 7.3 of this Agreement, the Developer further agrees that it will indemnify, defend, and hold harmless the FDA, the City, and their governing body members, officers, and employees, from any claims or actions arising out of the presence, if any, of Hazardous Substances (as that term is defined below in paragraph 7.3(c) of this Agreement) existing on or in the Development Property or the Storm Water Property. Nothing in this section will be construed to limit or affect any limitations on liability of the City or EDA under State or federal law, including without limitation Minnesota Statutes Sections 466.04 and 604.02. Section 3.7 Additional Responsibilities of the Developer. (a)The Developer will construct, operate and maintain, or cause to be constructed, operated and maintained, the Minimum Improvements and any Future Improvements or Storm Water Improvements substantially in accordance with the terms of this Agreement, the Redevelopment Plan, the PUD and all local, State, and Federal laws and regulations (including, but not limited to zoning, building code, public health laws and regulations, except for variances necessary to construct the Minimum Improvements and any Future Improvements or the Storm Water Improvements contemplated in the Construction Plans approved by the FDA). (b)The Developer will obtain, or cause to be obtained, in a timely manner, all required permits, licenses, and approvals, and will meet, in a timely manner, all requirements of all applicable local, State, and federal laws and regulations which must be obtained or met before the Minimum Improvements and any Future Improvements or the Storm Water Improvements may be lawfully constructed. The EDA makes no representations or warranties that all permits or licenses that may be required by State and federal entities, other than the EDA, have been or will be approved. 13 4941290 BR291-371 (c)The Developer will not construct any building or other structures on, over, or within the boundary lines of any public utility easement unless such construction is provided for in such easement or has been approved by the City. (d)Except as provided in the approved Construction Plans or any development plans attached to the PUD, the Developer, at its own expense, will replace any public facilities and public utilities damaged during the construction of the Minimum Improvements, in accordance with the technical specifications, standards and practices of the owner thereof. Section 3.8 Certificate of Completion. The Developer shall notify the EDA when the construction of the Minimum Improvements has been substantially completed. The EDA shall, within 14 days after such notification, inspect the Minimum Improvements in order to determine whether the Minimum Improvements have been constructed in substantial conformity with the approved Construction Plans. If the EDA determines that the Minimum Improvements have not been constructed in substantial conformity with the approved Construction Plans, the EDA shall, within 28 days after the Developer's notification of completion of construction, deliver a written statement to the Developer indicating in adequate detail the specific respects in which the Minimum Improvements have not been constructed in substantial conformity with the approved Construction Plans and the Developer shall promptly remedy such deficiencies, or cause such deficiencies to be remedied. If the EDA determines that the Minimum Improvements have been constructed in substantial conformity with the approved Construction Plans, the EDA shall furnish to the Developer a Certificate of Completion in the form attached hereto as Exhibit B certifying the completion of the Minimum Improvements. The Certificate of Completion issued for the Minimum Improvements shall conclusively satisfy and terminate the agreements and covenants of the Developer in this Agreement to construct the Minimum Improvements only. The issuance of a Certificate of Completion shall not be construed to relieve the Developer of any approval required by any City department in connection with the construction, completion or occupancy of the Minimum Improvements nor shall it relieve the Developer of any other obligations under this Agreement. 14 4941290 BR291-371 ARTICLE IV TAX INCREMENT ASSISTANCE Section 4.1 Creation of TIF District and Approval of TIF Plan. The EDA has taken all necessary actions to create and establish the TIF District. The Developer represents that the estimated market values, construction costs, acquisition costs, projected rentals, development costs and other information provided to the EDA's fiscal consultant reflect the reasonable expectations of the Developer. The Developer has made its own projections of Tax Increment to be generated from the Development and the Developer has not relied on any assumptions, calculations, determinations or conclusions made by the City, the EDA, their governing body members, officers or agents, including the independent contractors, consultants and legal counsel, servants and employees thereof, with respect to the foregoing. Section 4.2 Issuance of TIF Note. The EDA shall reimburse the Developer for Eligible Costs in an amount equal to the lesser of $3,272,400 or the Eligible Costs actually incurred and paid by the Developer and not previously reimbursed (the "Reimbursement Amount") exclusively through the issuance of the EDA's TIF Note in substantially the form attached to this Agreement as Exhibit D, subject to the following conditions: (a)The TIF Note shall be dated, issued in a principal amount equal to the Reimbursement Amount and delivered to the Developer when the Developer shall have demonstrated in writing to the reasonable satisfaction of the EDA that (A) the Developer has substantially completed the Minimum Improvements in accordance with the approved Construction Plans and the PUD; and (B) the Developer has submitted signed settlement statements showing the cost of the Development Property and submitted paid invoices for any other Eligible Costs not previously reimbursed in an amount not less than the Reimbursement Amount. (b)The unpaid principal amount of the TIF Note shall bear simple, non-compounding interest, except during any period that the payment on the TIF Note has been suspended, from the date of issuance of the TIF Note, at a rate per annum equal to the lesser of 4.00% per annum or the effective rate of the long-term Construction Loan as determined on the date of issuance of the TIF Note. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30-day months. (c)The principal amount of the TIF Note and the interest thereon shall be payable solely and exclusively from the Available Tax Increment. (d)On each TIF Note Payment Date and subject to the provisions of the TIF Note, the EDA shall pay, solely from the Available Tax Increment received by the EDA during the preceding 6 months (or, with respect to the first TIF Note Payment Date, in the period commencing on the date of issuance of the TIF Note through the day prior to the first TIF Note Payment Date) to the extent of the outstanding principal and accrued interest on the TIF Note. All such payments shall be applied first to the payment of accrued interest and then to the payment of the principal of the TIF Note. 15 4941290 BR291-371 (e)The TIF Note shall be a special and limited obligation of the EDA and not a general obligation of the EDA or the City, and only Available Tax Increment shall be used to pay the principal and interest on the TIF Note. If, on any TIF Note Payment Date, the Available Tax Increment for the payment of the accrued and unpaid interest on the TIF Note are insufficient for such purposes, the difference shall be carried forward, without accruing additional interest, and shall be paid if and to the extent that on a future TIF Note Payment Date there are Available Tax Increment to pay such accrued interest on the TIF Note. (f)The EDA's obligation to make payments on the TIF Note on any TIF Note Payment Date or any date thereafter shall be conditioned upon the requirement that there shall not at that time be a Developer Event of Default that has occurred and is continuing under this Agreement, the PUD Agreement or any issued permits for the Minimum Improvements. (g)The TIF Note shall be governed by and payable pursuant to the additional terms thereof, as set forth in Exhibit D. In the event of any conflict between the terms of the TIF Note and the terms of this Section 4.2, the terms of the TIF Note shall govern. The issuance of the TIF Note pursuant and subject to the terms of this Agreement, and the taking by the EDA of such additional actions as bond counsel for the TIF Note may require in connection therewith, are hereby authorized and approved by the EDA. (h)The Developer may assign its interest in this Agreement and the TIF Note to a Construction Lender as collateral for a Construction Loan in accordance with the form of Collateral Assignment of Tax Increment Financing Documents attached as Exhibit F. Section 4.3 Issuance of TIF 5 Pooled TIF Note. The EDA shall reimburse the Developer for the costs of constructing the Storm Water Improvements in an amount equal to the lesser of $300,000 or the costs actually incurred and paid by the Developer and not previously reimbursed (the "Storm Water Reimbursement Amount") exclusively through the issuance of the EDA' s TIF 5 Pooled TIF Note in substantially the form attached to this Agreement as Exhibit E, subject to the following conditions: (a)The TIF 5 Pooled TIF Note shall be dated, issued in a principal amount equal to the Storm Water Reimbursement Amount and delivered to the Developer when the Developer shall have demonstrated in writing to the reasonable satisfaction of the EDA that (A) the Developer has substantially completed the Minimum Improvements and the Storm Water Improvements in accordance with the approved Construction Plans and the PUD; and (B) the Developer has submitted paid invoices for any other costs of constructing the Storm Water Improvements not previously reimbursed in an amount not less than the Storm Water Reimbursement Amount. (b)The unpaid principal amount of the TIF 5 Pooled TIF Note shall bear simple, non- compounding interest, except during any period that the payment on the TIF 5 Pooled TIF Note has been suspended, from the date of issuance of the TIF 5 Pooled TIF Note, at a rate per annum equal to the lesser of 6.00% per annum or the effective rate of the long-term Construction Loan as determined on the date of issuance of the TIF 5 Pooled TIF Note. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30-day months. 16 4941290 BR291-371 (c)The principal amount of the TIF 5 Pooled TIF Note and the interest thereon shall be payable solely and exclusively from TIF 5 Available Tax Increment. (d)On each TIF 5 Pooled TIF Note Payment Date and subject to the provisions of the TIF Note, the EDA shall pay, solely from TIF 5 Available Tax Increment received by the EDA during the preceding 6 months (or, with respect to the first TIF 5 Pooled TIF Note Payment Date, in the period commencing with calendar year 2019 through the day prior to the first TIF 5 Pooled TIF Note Payment Date) to the extent of the outstanding principal and accrued interest on the TIF 5 Pooled TIF Note. All such payments shall be applied first to the payment of accrued interest and then to the payment of the principal of the TIF 5 Pooled TIF Note. (e)The TIF 5 Pooled TIF Note shall be a special and limited obligation of the EDA and not a general obligation of the EDA or the City, and only TIF 5 Available Tax Increment shall be used to pay the principal and interest on the TIF 5 Pooled TIF Note. If, on any TIF 5 Pooled TIF Note Payment Date, the TIF 5 Available Tax Increment for the payment of the accrued and unpaid interest on the TIF 5 Pooled TIF Note are insufficient for such purposes, the difference shall be carried forward, without accruing additional interest, and shall be paid if and to the extent that on a future TIF 5 Pooled TIP Note Payment Date there are TIF 5 Available Tax Increment to pay such accrued interest on the TIF 5 Pooled TIF Note. (f)The EDA's obligation to make payments on the TIF 5 Pooled TIF Note on any TIF 5 Pooled TIF Note Payment Date or any date thereafter shall be conditioned upon the requirement that there shall not at that time be a Developer Event of Default that has occurred and is continuing under this Agreement, the PUD Agreement or any issued permits for the Minimum Improvements and the Storm Water Improvements. (g)The TIF 5 Pooled TIF Note shall be governed by and payable pursuant to the additional terms thereof, as set forth in Exhibit E. In the event of any conflict between the terms of the TIF 5 Pooled TIF Note and the terms of this Section 4.3, the terms of the TIF Note shall govern. The issuance of the TIF 5 Pooled TIP Note pursuant and subject to the terms of this Agreement, and the taking by the EDA of such additional actions as bond counsel for the TIF 5 Pooled TIP Note may require in connection therewith, are hereby authorized and approved by the EDA. (h)The Developer may assign its interest in this Agreement and the TIF 5 Pooled TIF Note to a Construction Lender as collateral for a Construction Loan in accordance with the form of Collateral Assignment of Tax Increment Financing Documents attached as Exhibit F. Section 4.4 Storm Water Property Accuisition. The EDA shall pay to Shingle Creek, LLC (the "Seller") on behalf of the Developer $300,000, solely from TIF 2 Available Tax Increment, to pay for the cost of the Storm Water Property upon the Developer's closing of the acquisition of the Development Property from the Seller when the following conditions have been satisfied: (a) the Developer shall have obtained site plan approval from the City for the Minimum Improvements; and 17 4941290 BR291-371 (b)the Developer and the Seller shall have executed a deed for the acquisition of the Development Property, including the portion thereof which constitutes the Storm Water Property; (c)the Developer shall have delivered an executed copy of a Fifth Amendment to Development Agreement between the EDA and the Seller pursuant to which the Seller agrees, upon receipt of $300,000 from the EDA, to convey the Storm Water Property to the Developer in connection with its purchase of the remainder of the Development Property from the Seller. Section 4.5 Review of Taxes. The Developer acknowledges that the primary source of money to pay debt service on the TIF Note is the Available Tax Increment derived from the Development Property and any improvements thereon, including the Minimum Improvements. The Developer further acknowledges that any of the following actions taken by the Developer could reduce such Tax Increment below the amount necessary to pay a portion or all of the payments due on the TIF Note: (a)Initiation of administrative or judicial review of the applicability of any tax statute determined by any Tax Official to be applicable to the Development Property and any improvements thereon, including the Minimum Improvements. (b)Initiation of administrative or judicial review of the constitutionality of any tax statute determined by any Tax Official to be applicable to the Development Property and any improvements thereon, including the Minimum Improvements. (c)A reduction in the real property taxes paid with respect to the Development Property and any improvements thereon, including any reduction in the assessed Market Value of the Development Property and any improvements thereon, including the Minimum Improvements, that is made without a request or petition of the Developer, a reduction in the tax classification of the Development Property and any improvements thereon, including the Minimum Improvements, under Minnesota Statutes, Section 273.13, or any successor statute, a reduction in the local tax rates applicable to the Development Property and any improvements thereon, including the Minimum Improvements, or any change to the method of taxing real property that has the effect of reducing the revenues derived from such taxes. (d)Any application for an abatement or deferral of real property taxes under any applicable statute of the State. (e)Other actions or events outside the control of the Developer or outside the control of the City or the EDA, including a reduction in the Market Value of the Development Property and the Minimum Improvements that are made without a request or petition of the Developer, a reduction in the tax classification of the Development Property and the Minimum Improvements under Minnesota Statutes, Section 273.13, or any successor statute, a reduction in the local tax rates applicable to the Development Property and the Minimum Improvements, or any change to the method of taxing real property that has the effect of reducing the revenues derived from such taxes. (f)Failure of the Developer to commence and complete the Minimum Improvements by the times set forth in Section 3.4 hereof. 18 494129v7 BR291-371 The Developer shall notify the EDA within 10 days of filing any petition seek reduction in Market Value or property taxes on any portion of the Development Property under any State law (referred to as a "Tax Appeal"). If as of any TIP Note Payment Date any Tax Appeal is then pending, the EDA will withhold payments of Available Tax Increment attributable, as determined by the EDA, to the portion of the tax payment that is the subject of the Tax Appeal. The EDA will pay any withheld amount to the extent not reduced as a result of the Tax Appeal, without interest, promptly after the Tax Appeal is fully resolved and the amount of Available Tax Increment attributable to the disputed tax payments is finalized. Section 4.6 Use of Tax Increments. The EDA shall be free to use the Tax Increment, other than the Available Tax Increment herein pledged to the payment of the TIF Note, for any other purpose for which the Tax Increment may lawfully be used pursuant to applicable provisions of the Minnesota law. Section 4.7 Business Subsidy Act. The County assessor has estimated the current year's market value of the Development Property to be $1,771,000. The Developer represents that the Developer's investment in acquisition and site preparation of the Development Property will be not less than $. The Developer represents that because its investment in the purchase price and cost of site preparation for the Development Property will equal 70% or more of the assessor's current year's estimated market value of the Development Property the assistance for the Development does not constitute a "business subsidy" and therefore the provisions of the Business Subsidy Law do not apply. The Developer shall submit paid settlement statement(s) and invoices for acquisition and site preparation costs in an amount not less than $1,239,700 not later than ,20l8. [This exception depends on Developer's ability to satisfy the requirement for acquisition and site preparation costs. If not satisfied, the project will be subject to business subsidy law requirements including job creation goals.] 19 4941290 BR291-371 ENCUMBRANCE OF THE DEVELOPMENT PROPERTY Section 5.1 Encumbrance of the Development Property. Neither the Developer nor any successor in interest to the Developer will engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the Development Property, or portion thereof, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attach to the Development Property except only for the purpose of obtaining funds to the extent necessary for financing the costs of the Minimum Improvements and any Future Improvements or the Storm Water Improvements and any additional capital improvements thereto (including, but not limited to, land and building acquisition, labor and materials, professional fees, real estate taxes, construction interest, organization and other indirect costs of development, costs of constructing the Minimum Improvements and any Future Improvements or the Storm Water Improvements, and an allowance for contingencies), plus reasonable transaction costs. Section 5.2 Copy of Notice of Default to Financing Parties. If the EDA delivers any notice or demand to the Developer with respect to any Event of Default under this Agreement, the EDA will also deliver a copy of such notice or demand to any Financing Party at the address of such Financing Party provided to the EDA in a written notice from the Developer or such Financing Party. Section 5.3 Mortgagee's Option to Cure Events of Default. Upon the occurrence of an Event of Default, the mortgagee under any Mortgage will have the right, at its option, to cure or remedy such Event of Default. Section 5.4 Defaults Under Mortgage. The Developer will use its best efforts to obtain an agreement from any mortgagee under a Mortgage that, in the event the Developer is in default under any Mortgage, the mortgagee, within 10 days after it becomes aware of any default and prior to exercising any remedy available to it due to such default, will notify the EDA in writing of (i) the fact of default; (ii) the elements of default; and (iii) the actions required to cure the default. If, within the time period required by the Mortgage, the EDA cures any default under the Mortgage, the mortgagee will pursue none of its remedies under the Mortgage based on such default. 494129v7 BR291-371 ARTICLE VI Section 6.1 Insurance. (a) The Developer will cause to be maintained at all times during the process of constructing the Minimum Improvements and any Future Improvements or Storm Water Improvements the Developer owns, and, from time to time during that period, at the request of the EDA, furnish the EDA with proof of payment of premiums, on policies covering the following: (i)Builder's risk insurance, written on the so-called "Builder's Risk Completed Value Basis," in an amount equal to the replacement value of the relevant Improvements, and with coverage available in non-reporting form on the so-called "all risk" form of policy. The interest of the EDA, to the extent insurable, shall be protected in accordance with a clause in form and content satisfactory to the EDA, or in the alternative, provide similar coverage in a form and content satisfactory to Developer's Construction Lender which provides substantially similar coverage to the EDA; (ii)Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations, and contractual liability insurance) together with an Owner's Protective Liability Policy with limits against bodily injury and property damage of not less than $1,000,000 for each occurrence and $2,000,000 in the aggregate (to accomplish the above-required limits, an umbrella excess liability policy may be used). The EDA shall be listed as an additional insured on the policy; and (iii) Workers' compensation insurance, with statutory coverage, provided that the Developer may be self-insured with respect to all or any part of its liability for workers' compensation. (b) Upon completion of construction of the Minimum Improvements and any Future Improvements or Storm Water Improvements the Developer owns and prior to the Maturity Date, the Developer shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the request of the EDA shall furnish proof of the payment of premiums on, insurance as follows: (i)Insurance against loss and/or damage to the Minimum Improvements and any Future Improvements or Storm Water Improvements the Developer owns under a policy or policies covering such risks as are ordinarily insured against by similar businesses. (ii)Comprehensive general public liability insurance, including personal injury liability (with employee exclusion deleted), against liability for injuries to Persons and/or property, in the minimum amount of $1,000,000 for each occurrence and 21 494129v7 BR291-371 $2,000,000 in the aggregate and shall be endorsed to show the City and EDA as additional insureds. (iii) Such other insurance, including workers' compensation insurance respecting all employees of the Developer, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided that the Developer may be self-insured with respect to all or any part of its liability for workers' compensation. (c)All insurance required in Article VII of this Agreement shall be taken out and maintained in responsible insurance companies selected by the Developer that are authorized under the laws of the State to assume the risks covered thereby. Upon request, the Developer will deposit annually with the EDA a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article VII of this Agreement each policy shall contain a provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided below the amounts required herein without giving written notice to the Developer and the EDA at least 30 days before the cancellation or modification becomes effective. In lieu of separate policies, the Developer may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Developer shall deposit with the EDA a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements the Developer owns. (d)The Developer agrees to notify the EDA immediately in the case of damage exceeding $100,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In such event the Developer will forthwith repair, reconstruct, and restore the Minimum Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction, and restoration, the Developer will apply the net proceeds of any insurance relating to such damage received by the Developer to the payment or reimbursement of the costs thereof. (e)The Developer shall complete the repair, reconstruction and restoration of the Minimum Improvements, regardless of whether the net proceeds of insurance received by the Developer for such purposes are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs, construction, and restoration shall be the property of the Developer. (f)In lieu of its obligation to reconstruct Minimum Improvements as set forth in this Section, the Developer shall have the option of cancelling the TIF Note and delivering the cancelled TIF Note to the EDA. (g) All insurance requirements set forth in this Article VII terminate upon the earlier of the final Payment Date of the TIF Note or termination of this Agreement. Section 6.2 Subordination. Notwithstanding anything to the contrary herein, the rights of the EDA with respect to the receipt and application of any insurance proceeds shall, in 22 494129v7 BR291-371 all respects, be subordinate and subject to the rights of any mortgagee under a Mortgage allowed pursuant to Article VI of this Agreement. Section 6,3 Maintenance and Operation of the Development. The Developer will at all times during the term of this Agreement operate and maintain the Development or cause the Development to be operated and maintained in a safe and secure way and in compliance with this Agreement and all federal, State and local laws, regulations, rulings and ordinances applicable thereto. Developer shall pay all of the reasonable and necessary expenses of the operation and maintenance of the Development, including all premiums for insurance insuring against loss or damage thereto and adequate insurance against liability for injury to Persons or property arising from the Development as required pursuant to this Agreement. Developer shall not knowingly cause any person working in or attending the Development to be exposed to any hazardous or unsafe condition; provided that Developer shall not be in default hereunder if it has required the contractors employed by Developer to perform work on the Development to take such precautions as may be available to protect the Persons in and around the Development from hazards arising from the work, and has further required each such contractor to obtain and maintain liability insurance protecting against liability to Persons for injury arising from the work. The expenses of operation and maintenance of the Development shall be borne solely by Developer. 23 4941290 BR291-371 ARTICLE VII TRANSFER LIMITATIONS AND INDEMNIFICATION Section 7.1 Representation as to Development. The Developer represents to the EDA that its purchase of the Development Property, and its other undertakings under this Agreement, are for the purpose of developing commercial and retail facilities, and not for the purpose of speculation in land holding. The Developer acknowledges that, in view of the importance of the development of the Development Property to the general welfare of the EDA and the City, and the substantial financing and other public aids that have been made available by the EDA for the purpose of making such development possible, the qualifications and identity of the Developer are of particular concern to the EDA. The Developer further acknowledges that the EDA is willing to enter into this Agreement with the Developer because of the qualifications and identity of the Developer. Section 7.2 Limitations on Tr ans fer. (a)Except only by way of security for, and only for, a Construction Loan, and any refinancings of such Construction Loan or other financing as provided in Article VI and as further provided in this Section 7.2(a), or as provided in Section 7.2(e), the Developer will not sell, assign, convey, lease or transfer in any other mode or manner (collectively, "Transfer") this Agreement, the TIF Note, the TIF 5 Pooled TIF Note or the Development Property or the Minimum Improvements, or any interest therein, without the express written approval of the EDA, which consent will not be unreasonably withheld, conditioned or delayed. In case of a Transfer by way of security for a Construction Loan, or a refinancing of a Construction Loan, the Developer, the EDA and the Construction Lender will execute and deliver a collateral assignment in substantially the form of, or containing provisions substantially in accord with, the Collateral Assignment of Tax Increment Financing Documents attached as Exhibit F to this Agreement. (b)Notwithstanding the foregoing, the EDA shall be entitled to require, in connection with any Transfer of the TIF Note or the TIF 5 Pooled TIF Note that: (i)There shall be submitted to the EDA for review all instruments and other legal documents involved in effecting such transfer, and if approved by EDA, its approval shall be indicated to the Developer in writing; and (ii)Any proposed transferee of the TIF Note or the TIF 5 Pooled TIP Note shall (A) execute and deliver to the EDA, as applicable, the Acknowledgment and Receipt of Note in the form included in Exhibit A to the TIF Note or Exhibit A to the TIF 5 Pooled TIF Note and (B) surrender the TIF Note or the TIF 5 Pooled TIF Note to the EDA either in exchange for a new fully registered note or for transfer of the TIF Note or the TIF 5 Pooled TIF Note on the registration records for the TIF Note or the TIF 5 Pooled TIP Note maintained by the EDA. 24 4941290 BR291-371 (c) Except as set forth in Section 7.2(a) and 7.2(b), and except in the case of a foreclosure or deed in lieu of foreclosure after completion of the Minimum Improvements in accordance with Article IV hereof in which case only clause (c)(iv) shall apply, the EDA shall be entitled to require, as conditions to any approval of any Transfer of this Agreement, the Development Property, the Minimum Improvements, or applicable portion thereof, the TIF 5 Pooled TIF Note or the TIF Note in connection therewith, that: (i)Any proposed transferee shall have the qualifications and financial responsibility, as reasonably determined by the FDA, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Developer; (ii)Any proposed transferee, by instrument in writing satisfactory to the EDA shall, for itself and its successors and assigns, and expressly for the benefit of the EDA have expressly assumed all of the obligations of the Developer under this Agreement and agreed to be subject to all the conditions and restrictions to which the Developer is subject; (iii)There shall be submitted to the EDA for review all instruments and other legal documents involved in effecting transfer, and if approved by EDA, its approval shall be indicated to the Developer in writing; (iv)Any proposed transferee of the TIF Note or the TIF 5 Pooled TIF Note shall (i) execute and deliver to the EDA, as applicable, the Acknowledgment and Receipt of Note in the form included in Exhibit A to the TIF Note or Exhibit A to the TIF 5 Pooled TIF Note and (ii) surrender the TIF Note or the TIF 5 Pooled TIF Note to the FDA either in exchange for a new fully registered note or for transfer of the TIF Note or the TIF 5 Pooled TIF Note on the registration records for the TIF Note or the TIF 5 Pooled TIF Note maintained by the EDA; and (v) The Developer and its transferees shall comply with such other conditions as the EDA may reasonably require in order to achieve and safeguard the purposes of the Act, the TIF Act and this Agreement. (d) The Developer agrees to pay all reasonable legal fees and expenses of the EDA, including fees of legal counsel retained by the FDA to review the documents submitted to the EDA in connection with any Transfer. (e) Nothing contained in this Section shall prohibit the Developer, without the consent or approval of the FDA, from (i) entering into leases with tenants in the ordinary course of business, (ii) entering into easement or other agreements necessary for the operation of the Minimum Improvements, (iii) making a Transfer of this Agreement, the TIF Note (subject to the requirements of (c)(iv) above), the TIF 5 Pooled TIF Note (subject to the requirements of (c)(iv) above), the Development Property, or the Minimum Improvements to an Affiliate or to a partnership whose general partner(s), or to a limited liability company whose managing member, or family trusts controlled by the Developer includes Developer or the principals of Developer, or (iv) transferring ownership interests in the Developer or admitting or removing members in accordance with the applicable organizational documents. 25 4941290 BR291-371 (f)Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Development Property governed by this Article VIII, shall be in a form reasonably satisfactory to the EDA. (g)In the event the foregoing conditions are satisfied then the Developer shall be released from its obligation under this Agreement, as to the portion of the Development Property that is transferred, assigned or otherwise conveyed. Section 7.3 Indemnification. (a)The Developer releases the EDA, the City, their governing body members, officers, agents, including the independent contractors, consultants and legal counsel, servants and employees thereof (hereinafter, for purposes of this Section, collectively the "Indemnified Parties") from any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Development to the extent not attributable to the intentional misconduct of the Indemnified Parties. (b)Except for intentional misconduct of the Indemnified Parties, the Developer agrees to indemnify the Indemnified Parties, now and forever, and further agrees to hold the aforesaid harmless from any claims, demands, suits, costs, expenses (including reasonable attorneys' fees) actions or other proceedings whatsoever (a "Claim") by any Person or entity whatsoever arising or purportedly arising from the actions or inactions of the Developer (or if other Persons acting on its behalf or under its direction or control) under this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of, or any defect in, the Development; including, without limitation, any Claim by a land owner or tenant located on the Development Property to be entitled to relocation costs and expenses. (c) Neither the EDA nor the City makes any warranties or representations regarding, nor do they indemnify the Developer with respect to, the existence or nonexistence on or in the vicinity of the Development Property or anywhere within the TIF District of any toxic or hazardous substances or wastes, pollutants or contaminants (including, without limitation, asbestos, urea formaldehyde, the group of organic compounds known as polychlorinated biphenyls, petroleum products including gasoline, fuel oil, crude oil and various constituents of such products, or any hazardous substance as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 961-9657, as amended) (collectively, the "Hazardous Substances"). The foregoing disclaimer relates to any Hazardous Substance allegedly generated, treated, stored, released or disposed of, or otherwise placed, deposited in or located on or in the vicinity of the Development Property or within the TIF District, as well as any activity claimed to have been undertaken on or in the vicinity of the Development Property that would cause or contribute to causing (1) the Development Property to become a treatment, storage or disposal facility within the meaning of, or otherwise bring the Development Property within the ambit of, the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. § 691 et or any similar state law or local ordinance, (2) a release or threatened release of toxic or hazardous wastes or substances, pollutants or contaminants, from the Development Property within the meaning of, or otherwise bring the Development Property within the ambit of, CERCLA, or any similar state law or local ordinance, or (3) the 26 4941290 BR291-371 discharge of pollutants or effluents into any water source or system, the dredging or filling of any waters or the discharge into the air of any emissions, that would require a permit under the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et q., or any similar state law or local ordinance. Further, neither the EDA nor the City makes any warranties or representations regarding, nor does either the EDA or the City indemnify the Developer with respect to, the existence or nonexistence on or in the vicinity of the Development Property or anywhere within the TIF District of any substances or conditions in or on the Development Property that may support a claim or cause of action under RCRA, CERCLA or any other federal, state or local environmental statutes, regulations, ordinances or other environmental regulatory requirements, including without limitation, the Minnesota Environmental Response and Liability Act, Minnesota Statutes, Chapter 115B. (d) The Developer waives any claims against the Indemnified Parties, for indemnification, contribution, reimbursement or other payments arising under federal and state law and the common law or relating to the environmental condition of the land comprising the Development Property. Section 7.4 Limitation. All covenants, stipulations, promises, agreements and obligations of the EDA or the Developer contained in this Agreement shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the EDA or the Developer, respectively, and not of any governing body member, officer, agent, servant or employee of the EDA, the City or the Developer in the individual capacity thereof. 27 494129v7 BR291-371 ARTICLE VIII EVENTS OF DEFAULT AND DAMAGES Section 8.1 Events of Default Defined. Subject to applicable cure periods, the following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean whenever it is used in this Agreement any one or more of the events set forth in Sections 8.2 and 8.3, as applicable. Section 8.2 Developer Events of Default. The following shall be Developer Events of Default: (a)the Developer shall fail to begin construction of the Minimum Improvements or, subject to Unavoidable Delays, to proceed with due diligence to complete the Minimum Improvements as provided in Section 3.4 and by the date set forth therein, or the Developer shall default in or violate its obligations with respect to the construction of the Minimum Improvements (including the nature thereof) and such failure, default, or violation, shall not be cured within 30 days after written notice to do so. Notwithstanding the foregoing, if the default reasonably requires more than thirty (30) days to cure, such default shall not constitute an Event of Default, provided that the curing of the default is promptly commenced upon receipt by the Developer of the notice of the default, and with due diligence is thereafter continuously prosecuted to completion and is completed within a reasonable period of time, and provided that Developer keeps the EDA well informed at all times of its progress in curing the default; provided in no event, other than as a result of Unavoidable Delays, shall such additional cure period extend beyond 180 days; (b)there is, in violation of Article VIII of this Agreement, any conveyance or other transfer of the Development Property or any part thereof, and such violation is not cured within 30 days after written demand by the EDA to the Developer; (c)failure by the Developer to timely pay any ad valorem real property taxes or special assessments assessed with respect to the Development Property; (d)subject to Unavoidable Delays, failure by Developer to observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement or the PUD Agreement (taking into account the cure periods in the PUD Agreement), and the continuation of such failure for a period of 30 days after written notice of such failure from the EDA. Notwithstanding the foregoing, if the default reasonably requires more than 30 days to cure, such default shall not constitute an Event of Default, provided that the curing of the default is promptly commenced upon receipt by the Developer of the notice of the default, and with due diligence is thereafter continuously prosecuted to completion and is completed within a reasonable period of time, and provided that Developer keeps the EDA well informed at all times of its progress in curing the default; provided in no event, other than as a result of Unavoidable Delays, shall such additional cure period extend beyond 180 days; or 28 4941290 BR291-371 (e) the Developer shall (i) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act of 1978, as amended or under any similar Federal or State law; or (ii) make an assignment for the benefit of its creditors; or (ii) become insolvent or adjudicated a bankrupt; or if a petition or answer proposing the adjudication of Developer, as a bankrupt or its reorganization under any present or future Federal bankruptcy act or any similar Federal or State law shall be filed in any court and such petition or answer shall not be discharged or denied within 90 days after the filing thereof, or a receiver, trustee or liquidator of Developer, or of the Development, or part thereof, shall be appointed in any proceeding brought against Developer, and shall not be discharged within 90 days after such appointed, or if Developer shall consent to or acquiesce in such appointment. Section 8.3 EDA Events of Default. Subject to Unavoidable Delays, the failure of the EDA to observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement, and the continuation of such failure for a period of 30 days after written notice of such failure from any party hereto shall be an Event of Default for the EDA. Notwithstanding the foregoing, if the default reasonably requires more than 30 days to cure, such default shall not constitute an Event of Default, provided that the curing of the default is promptly commenced upon receipt by the EDA of the notice of the default, and with due diligence is thereafter continuously prosecuted to completion and is completed within a reasonable period of time, and provided that the EDA keeps the Developer well informed at all times of its progress in curing the default; provided in no event, other than as a result of Unavoidable Delays, shall such additional cure period extend beyond 180 days. Section 8.4 EDA Remedies on Default. Whenever any Developer Event of Default occurs, the EDA may take any one or more of the following actions: (a)Suspend performance under this Agreement and the TIF Note and the TIP 5 Pooled TIP Note until it receives assurances from the Developer, deemed adequate by the EDA, that the Developer will cure its default and continue its performance under this Agreement. Interest on the TIF Note and the TIF 5 Pooled TIF Note shall not accrue during the period of any suspension of payment. (b)Withhold the Certificate of Completion for the Minimum Improvements. (c)Cancel and terminate either or both this Agreement, the TIF 5 Pooled TIF Note and the TIF Note. (d)Take whatever action at law or in equity may appear necessary or desirable to the EDA to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant of the Developer under this Agreement. Notwithstanding anything to the contrary set forth in this Agreement, any Financing Party or Financing Parties shall have the right, but not the obligation, to cure an Event of Default during the cure period provided for the Developer. Section 8.5 Developer Remedies on Default. Whenever any Event of Default occurs by the EDA, the Developer may suspend its performance under this Agreement and/or take 29 494129v7 BR291-371 whatever action at law or in equity may appear necessary or desirable to the Developer to enforce performance and observance of any obligation, agreement, or covenant of the EDA under this Agreement. Nothing in this Agreement shall entitle the Developer to make any claim against the EDA for any damages whatsoever and the Developer's remedies are strictly limited to the foregoing. Section 8.6 No Remedy Exc1usive No remedy herein conferred upon or reserved to the EDA or the Developer, except as set forth in Section 8.5, is intended to be exclusive of any other available remedy or remedies unless otherwise expressly stated, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the EDA or the Developer, to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article IX. Section 8.7 No Additional Waiver Implied by One Waiver. If any agreement contained in this Agreement should be breached by either Party and thereafter waived by the other Party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. crc 4941290 BR291-371 i trn*i I] I] VI (I1 N tI1'i Ki (S)F1 Section 9.1 Conflicts of Interest. No member of the EDA or other official of the EDA shall have any financial interest, direct or indirect, in this Agreement, the Development Property, the Minimum Improvements or any contract, agreement or other transaction contemplated to occur or be undertaken thereunder or with respect thereto, nor shall any such member of the governing body or other official participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. No member, official or employee of the EDA or the City shall be personally liable in the event of any default or breach by Developer or successor or on any obligations under the terms of this Agreement. Section 9.2 Titles of Articles and Sections. Any titles of the several parts, articles and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 9.3 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by any party to any other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, and (a)in the case of Developer, is addressed to or delivered personally to Developer at in the case of the Developer is addressed to or delivered personally to: KKMBA Brooklyn Center LLC 10301 Woodcrest Drive Coon Rapids, MN 55433 Attn: Real Estate Manager & Accounting Manager (b)in the case of the EDA is addressed to or delivered personally to the EDA at: 6301 Shingle Creek Parkway Brooklyn Center, MN 55430-2199 Attn: Executive Director or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other, as provided in this Section. Section 9.4 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 9.5 Law Governing. This Agreement will be governed and construed in accordance with the laws of the State of Minnesota. 31 4941290 BR291-371 Section 9.6 Consents and Approvals. In all cases where consents or approvals are required hereunder, such consents or approvals shall not be unreasonably conditioned, delayed or withheld. All consents or approvals shall be in writing in order to be effective. Section 9.7 Representatives. Except as otherwise provided herein, all approvals and other actions required of or taken by the EDA shall be effective upon action by the EDA Representative. All actions required of or taken by Developer shall be effective upon action by the Developer Representative. Section 9.8 Superseding Effect. This Agreement reflects the entire agreement of the Parties with respect to the matters covered herein, and supersedes in all respects all prior agreements of the Parties, whether written or otherwise, with respect to such matters. Section 9.9 Relationship of Parties. Nothing in this Agreement is intended, or shall be construed, to create a partnership or joint venture among or between the Parties, and the rights and remedies of the Parties shall be strictly as set forth in this Agreement. Section 9.10 Term. The term of this Agreement shall be effective from the day and year first above written and, except as provided in Section 9.12, shall continue in effect until the earlier of (i) the date this Agreement is terminated pursuant to Section 8.4(c); (ii) the date that the TIF District is terminated or expires or the EDA is no longer receiving Tax Increment from the TIF District; or (iii) the date the TIF Note is paid in frill, defeased, forgiven or terminated in accordance with its terms. Section 9.11 Venue. All matters, whether sounding in tort or in contract, relating to the validity, construction, performance, or enforcement of this Agreement shall be controlled by and determined in accordance with the laws of the State of Minnesota, and the Developer agrees that all legal actions initiated by the Developer or EDA with respect to or arising from any provision contained in this Agreement shall be initiated, filed and venued exclusively in the State of Minnesota, Hennepin County, District Court and shall not be removed therefrom to any other federal or state court. Section 9.12 Provisions Surviving Rescission or Expiration. Sections 3.6, 7.3 and 7.4 shall survive any rescission, termination or expiration of this Agreement with respect to or arising out of any event, occurrence or circumstance existing prior to the date thereof. 32 4941290 BR291-371 IN WITNESS WHEREOF, the EDA and Developer have caused this Agreement to be duly executed in their names and on their behalf, all on or as of the date first above written. ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By President By Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of 2017 by , the President of the Economic Development Authority of Brooklyn Center, Minnesota, a body corporate and politic organized and existing under the Constitution and laws of the State of Minnesota, on behalf of said Authority. Notary Public STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of 2017 by , the Executive Director of the Economic Development Authority of Brooklyn Center, Minnesota, a body corporate and politic organized and existing under the Constitution and laws of the State of Minnesota, on behalf of said Authority. Notary Public S4 4941290 BR291-371 KKMBA BROOKLYN CENTER LLC a Minnesota limited liability company BY: Its STATE OF )ss COUNTY OF The foregoing instrument was acknowledged before me this _____ day of ________ 2017, by , the ________ of KKMBA Brooklyn Center LLC, a Minnesota limited liability company, on behalf of said company. Notary Public Signature Page to the Development Agreement S2 4941290 BR291-371 EXHIBIT A I I) aI[Ii .1 I [I)tS) 1 I] &'i I S] I *M I ti] al V The property located in the City of Brooklyn Center, Hennepin County, Minnesota identified as Parcel ID #0211821310062 and legally described as: Lot 2, Block 2, SHINGLE CREEK CROSSING, Hennepin County, Minnesota, according to the recorded plat thereof, formerly described as Tract B Registered Land Survey Number 1614, Hennepin County, Minnesota (collectively, the "Development Property") A1 4941290 BR291-371 :11 :i CERTIFICATE OF COMPLETION WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota, Minnesota (the "EDA"), a body corporate and politic subdivision of the State of Minnesota and KKMBA Brooklyn Center LLC, a Minnesota limited liability company (the "Developer") have entered into a TIP Development Agreement dated December , 2017 (the "TIF Development Agreement"); and WHEREAS, the TIF Development Agreement requires the Developer to construct certain Minimum Improvements (as defined in the TIF Development Agreement); WHEREAS, the Developer has constructed the Minimum Improvements in a manner deemed sufficient by the EDA to permit the execution of this certification and the release of the Development Property from the terms and conditions of the TIF Development Agreement; NOW, THEREFORE, this is to certify that the Developer has constructed the Minimum Improvements. Any remaining obligations under the TIF Development Agreement shall be solely contractual obligations of the Developer and parties to whom the Developer expressly assigns, and who expressly assume, the Developer's obligations under the TIF Development Agreement. The remaining covenants of the Developer under the TIF Development Agreement are not intended to run with title to the Development Property or bind successors in title to the Development Property. B-1 4941290 BR291-371 IN WITNESS WHEREOF, the EDA has caused this Certificate of Completion to be executed with by its duly authorized officer as of the day of ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By President By Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of 20, by , the President and , the Executive Director of the Economic Development Authority of Brooklyn Center, Minnesota, a municipal corporation and politic subdivision organized and existing under the Constitution and laws of the State of Minnesota, on behalf of said Authority. Notary Public B..2 494129v7 BR291-371 I 3114 : H 113 VLi ELIGIBLE COSTS (a)land acquisition costs; (b)utility improvements and relocation; (c)site improvements, soil corrections, pilings and grading; (d)landscaping; (e)demolition; (f)structural or other renovations of substandard building to address conditions in the Report of Inspection Procedures and Results for Determining Qualifications of a Tax Increment Financing District, dated November 10, 2015, prepared by LHB, Inc.; and (g) any other expenses incurred by the Developer in connection with the acquisition of the Development Property and the construction of the Minimum Improvements and eligible for payment from Tax Increment in accordance with the TIF Act. c-i 494129v7 BR291-371 IIk' IIII IpI,, I..IJ _! F(SJti(I1JiI[I)U No. R-1 $ UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER TAXABLE TAX INCREMENT REVENUE NOTE (HOM FURNITURE, INC. PROJECT) The Economic Development Authority of the City of Brooklyn Center, Minnesota (the "EDA"), hereby acknowledges itself to be indebted and, for value received, hereby promises to pay the amounts hereinafter described (the "Payment Amounts") to KKMBA Brooklyn Center LLC, a Minnesota limited liability company (the "Developer") or its registered assigns (the "Registered Owner"), but only in the manner, at the times, from the sources of revenue, and to the extent hereinafter provided. The original principal amount of this Note shall equal the lesser of the principal amount stated above or the amount of Eligible Costs actually incurred and paid by the Developer and not previously reimbursed as determined in accordance with Section 4.2 of the TIF Development Agreement described herein. Such principal amount shall be reduced from time to time to the extent that principal shall have been paid in whole or in part pursuant to the terms hereof; provided that the principal amount shall in no event exceed $3,272,400 as provided in that certain TIF Development Agreement, dated as of December -, 2017, as the same may be amended from time to time (the "TIF Development Agreement"), by and between the EDA and the Developer. The unpaid principal amount hereof shall bear simple, non-compounding interest from the date hereof at the rate of four and no hundredths percent (4.00%) per annum. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30-day months. The amounts due under this Note shall be payable on each February 1 and August 1, commencing first February 1 or August 1 following the receipt by the EDA of Available Tax Increment from the Development Property and thereafter to and including the earliest of (i) the February 1 following the 25th anniversary of the first Payment Date, (ii) the date this Note is paid in full, (iii) the date on which the TIF District expires or is otherwise terminated or the EDA is no longer receiving Tax Increment from the TIF District, or (iv) the date this Note or the TIP Development Agreement is terminated or rescinded in accordance with its terms (the "TIF Note Termination Date") or, if the first should not be a Business Day (as defined in the TIF Development Agreement) the next succeeding Business Day (the "Payment Dates"). On each Payment Date the EDA shall pay by check or draft mailed to the Person that was the Registered Owner of this Note at the close of the last business day of the EDA preceding such Payment Date D-1 494129v7 BR291-371 an amount equal to 97.5% of the Tax Increment (as defined in the TIF Development Agreement) (the "Available Tax Increment") received by the EDA during the six month period preceding such Payment Date (or, with respect to the first Note Payment Date, in the period commencing on the date of issuance of the TIF Note through the day prior to the first Payment Date). All payments made by the EDA under this Note shall first be applied to accrued interest and then to principal. If, on any TIF Note Payment Date, the Available Tax Increment for the payment of the accrued and unpaid interest on the TIF Note are insufficient for such purposes, the difference shall be carried forward, without accruing additional interest, and shall be paid if and to the extent that on a future TIF Note Payment Date there are Available Tax Increment to pay such accrued interest on the TIF Note. This Note is pre-payable by the EDA, without penalty, in whole or in part, on any date. This Note shall terminate and be of no further force and effect upon the TIF Note Termination Date. The EDA makes no representation or covenant, express or implied, that the Available Tax Increment will be sufficient to pay, in whole or in part, the amounts which are or may become due and payable hereunder. In the event Available Tax Increment is not sufficient, the EDA is not responsible to further fund or reimburse the Developer (or its assigns or creditors) for any such shortfall. The EDA is not responsible to fund or reimburse any obligation of the Developer (or its assigns or creditors) unless expressly stated in the TIF Development Agreement. Subject to the terms of the TIF Development Agreement, the EDA' s payment obligations hereunder shall be further conditioned on the fact that no Event of Default under the TIF Development Agreement shall have occurred and be continuing at the time payment is otherwise due hereunder; and further, if pursuant to the occurrence of an Event of Default under the TIF Development Agreement the EDA elects to cancel and rescind the TIF Development Agreement, the EDA shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to all of the provisions of the TIF Development Agreement, including without limitation Section 4.2 thereof, for a fuller statement of the rights and obligations of the EDA to pay the principal of this Note, and said provisions are hereby incorporated into this Note as though set out in full herein. This Note is a special, limited revenue obligation of the EDA and is payable by the EDA only from the sources and subject to the qualifications stated or referenced herein. This Note is not a general obligation of the EDA or the City of Brooklyn Center, Minnesota (the "City"), and neither the full faith and credit nor the taxing powers of the EDA nor the City are pledged to the payment of the principal of this Note and no property or other asset of the EDA or the City, save and except the above-referenced Available Tax Increment, is or shall be a source of payment of the EDA' s obligations hereunder. This Note is issued by the EDA in aid of financing a project pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including the provisions of D-2 4941290 BR291-371 Minnesota Statutes, Sections 469.174 through 469.1794, as the same may be amended or supplemented from time to time (the "TIF Act"). This Note may be assigned only as provided in Section 7.2 of the TIF Development Agreement. In order to assign the Note, the assignee shall surrender the same to the EDA either in exchange for a new fully registered note or for transfer of this Note on the registration records for the Note maintained by the EDA. Each permitted assignee shall take this Note subject to the foregoing conditions and subject to all provisions stated or referenced herein. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the EDA outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the EDA to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, Economic Development Authority of the City of Brooklyn Center, Minnesota, by its Board of Commissioners, has caused this Note to be executed by the manual signatures of its Chair and Secretary and has caused this Note to be dated as of President Executive Director D-3 4941290 BR291-371 :si M I I (Wi I (I)LI) A i [I I I (S]l It is hereby certified that the foregoing Note was registered in the name of the Registered Owner set forth below, and that, at the request of the Registered Owner of this Note, the undersigned has this day registered the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. NAME AND ADDRESS OF REGISTERED OWNER KKMBA Brooklyn Center LLC 10301 Woodcrest Drive Coon Rapids, MN 55433 DATE OF SIGNATURE OF EDA REGISTRATION EXECUTIVE DIRECTOR MI 494129v7 BR291-371 Exhibit A to TIF Note ACKNOWLEDGMENT REGARDING TIF NOTE The undersigned, a ("Note Holder"), hereby certifies and acknowledges that:. A.On the date hereof the Note Holder has [acquired from]/[made a loan (the "Loan") to/for the benefit of] The KKMBA Brooklyn Center LLC (the "Developer") [secured in part by the Developer's interest as payee in] the Taxable Tax Increment Revenue Note (HOM Furniture, Inc. Project), a pay-as-you-go tax increment revenue note in the original principal amount of $___________ dated __, 201 of the Economic Development Authority of Brooklyn Center, Minnesota (the "EDA"), a copy of which is attached hereto, (the "Note"). The Note Holder has had the opportunity to ask questions of and receive all information and documents concerning the Note as it requested, and has had access to any additional information the Note Holder thought necessary to verify the accuracy of the information received. In determining to [acquire the Note]/[make the Loan], the Note Holder has made its own determinations and has not relied on the EDA or information provided by the EDA. B.The Note Holder represents and warrants that: 1.The Note Holder is acquiring [the Note]/[an interest in the Note as collateral for the Loan] for its own account, and without any view to resale or other distribution. 2.The Note Holder is [a bank or financial institution]/[a partnership whose general partner(s), or a limited liability company whose managing member, includes Developer or the principals of Developer] and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of acquiring [the Note]/[an interest in the Note as collateral for the Loan]. 3.The Note Holder understands that the Note is a security which has not been registered under the Securities Act of 1933, as amended, or any state securities law, and must be held until its sale is registered or an exemption from registration becomes available. 4.The Note Holder is aware of the limited payment source for the Note and interest thereon and risks associated with the sufficiency of that limited payment source. C. The Note Holder understands that the Note is payable solely from certain tax increments derived from certain properties located in a tax increment financing district, if and as received by the EDA. The Note Holder acknowledges that the EDA has made no representation or covenant, express or implied, that the revenues pledged to pay the Note will be sufficient to pay, in whole or in part, the principal and interest due on the Note. Any amounts which have not D-5 4941290 BR291-371 been paid on the Note on or before the final maturity date of the Note shall no longer be payable, as if the Note had ceased to be an obligation of the EDA. The Note Holder understands that the Note will never represent or constitute a general obligation, debt or bonded indebtedness of the City of Brooklyn Center, Minnesota (the "City"), the EDA, the State of Minnesota, or any political subdivision thereof and that no right will exist to have taxes levied by the City, the EDA, the State of Minnesota or any political subdivision thereof for the payment of principal and interest on the Note. D. The Note Holder understands that the Note is payable solely from certain tax increments, which are taxes received on improvements made to certain property (the "Improvements") in a tax increment financing district from the increased taxable value of the property over its base value at the time that the tax increment financing district was created, which base value is called "original net tax capacity". There are risk factors in relying on tax increments to be received, which include, but are not limited to, the following: 1.Value of Improvements. If the contemplated Improvements constructed in the tax increment financing district are completed at a lesser level of value than originally contemplated, they will generate fewer taxes and fewer tax increments than originally contemplated. 2.Damage or Destruction. If the Improvements are damaged or destroyed after completion, their value will be reduced, and taxes and tax increments will be reduced. Repair, restoration or replacement of the Improvements may not occur, may occur after only a substantial time delay, or may involve property with a lower value than the Improvements, all of which would reduce taxes and tax increments. 3.Change in Use to Tax-Exempt. The Improvements could be acquired by a party that devotes them to a use which causes the property to be exempt from real property taxation. Taxes and tax increments would then cease. 4.Depreciation. The Improvements could decline in value due to changes in the market for such property or due to the decline in the physical condition of the property. Lower market valuation will lead to lower taxes and lower tax increments. 5.Non-payment of Taxes. If the property owner does not pay property taxes, either in whole or in part, the lack of taxes received will cause a lack of tax increments. The Minnesota system of collecting delinquent property taxes is a lengthy one that could result in substantial delays in the receipt of taxes and tax increments, and there is no assurance that the full amount of delinquent taxes would be collected. Amounts distributed to taxing jurisdictions upon a sale following a tax forfeiture of the property are not tax increments. 6.Reductions in Taxes Levied. If property taxes are reduced due to decreased municipal levies, taxes and tax increments will be reduced. Reasons for such reduction could include lower local expenditures or changes in state aids to municipalities. For instance, in 2001 the Minnesota Legislature enacted an education EDE 494129v7 BR291-371 funding reform that involved the state increasing school aid in lieu of the local general education levy (a component of school district tax levies). 7.Reductions in Tax Capacity Rates. The taxable value of real property is determined by multiplying the market value of the property by a tax capacity rate. Tax capacity rates vary by certain categories of property; for example, the tax capacity rates for residential homesteads are currently less than the tax capacity rates for commercial and industrial property. In 2001 the Minnesota Legislature enacted property tax reform that lowered various tax capacity rates to "compress" the difference between the tax capacity rates applicable to residential homestead properties and commercial and industrial properties. 8.Changes to Local Tax Rate. The local tax rate to be applied in the tax increment financing district is the lower of the current local tax rate or the original local tax rate for the tax increment financing district. In the event that the Current Local Tax Rate is higher than the Original Local Tax Rate, then the "excess" or difference that comes about after applying the lower Original Local Tax Rate instead of the Current Local Tax Rate is considered "excess" tax increment and is distributed by Hennepin County to the other taxing jurisdictions and such amount is not available to the EDA as tax increment. 9.Legislation. The Minnesota Legislature has frequently modified laws affecting real property taxes, particularly as they relate to tax capacity rates and the overall level of taxes as affected by state aid to municipalities. 10.Multi-parcel TIF District. The Note Holder understands and acknowledges that the TIF District includes properties other than the Development Property, and the County remits Tax Increment to the EDA on the basis of the captured tax capacity of the entire TIF District. Consequently, the EDA will determine the amount of Tax Increment actually received by the EDA from the entire TIF District that is properly allocable, in the EDA's sole determination, to the Development Property based on the ratio that the captured tax capacity of the Development Property bears to the total captured tax capacity of the TIF District, taking into account tax delinquencies and tax petitions. E.The Note Holder acknowledges that the Note was issued as part of a development agreement between the EDA and the Developer dated December , 2017 ("Development Agreement"), and that the EDA has the right to suspend payments under this Note and/or terminate the Note upon an Event of Default under the Development Agreement. F.The Note Holder acknowledges that the EDA makes no representation about the tax treatment of, or tax consequences from, the Note Holder's acquisition of [the Note]/[an interest in the Note as collateral for the Loan]. D-7 IPJI1W3JI WITNESS our hand this day of , 20 Note Holder: By:_ Name: Its: 494129v7 BR291-371 D-8 10,14 0,11 FORM OF TIF 5 POOLED TIF NOTE $ UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER TAXABLE POOLED TAX INCREMENT REVENUE NOTE (HOM FURNITURE, INC. PROJECT) The Economic Development Authority of the City of Brooklyn Center, Minnesota (the "EDA"), hereby acknowledges itself to be indebted and, for value received, hereby promises to pay the amounts hereinafter described (the "Payment Amounts") to KKMBA Brooklyn Center LLC, a Minnesota limited liability company (the "Developer") or its registered assigns (the "Registered Owner"), but only in the manner, at the times, from the sources of revenue, and to the extent hereinafter provided. The original principal amount of this TIF 5 Pooled TIF Note shall equal the lesser of the principal amount stated above or the amount of costs of the Storm Water Improvements actually incurred and paid by the Developer and not previously reimbursed as determined in accordance with Section 4.2 of the TIF Development Agreement described herein. Such principal amount shall be reduced from time to time to the extent that principal shall have been paid in whole or in part pursuant to the terms hereof, provided that the principal amount shall in no event exceed $300,000 as provided in that certain TIF Development Agreement, dated as of December 2017, as the same may be amended from time to time (the "TIF Development Agreement"), by and between the EDA and the Developer. The unpaid principal amount hereof shall bear simple, non-compounding interest from the date hereof at the rate of six percent (6.00%) per annum. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30-day months. The amounts due under this Note shall be payable on each February 1 and August 1, commencing on the later of 1, 201 or the first February 1 or August 1 following the date hereof and thereafter to and including February 1, 2029, or, if the first should not be a Business Day (as defined in the TIF Development Agreement) the next succeeding Business Day (the "Payment Dates"). On each Payment Date the EDA shall pay by check or draft mailed to the Person that was the Registered Owner of this TIF 5 Pooled TIF Note at the close of the last business day of the EDA preceding such Payment Date an amount equal to the TIF 5 Available Tax Increment (as defined in the TIE Development Agreement) received by the EDA during the six month period preceding such Payment (or, with respect to the first TIF 5 Pooled TIF Note Payment Date, in the period commencing with calendar year 2019 through the day prior to the first TIF 5 Pooled TIF Note Payment Date). All payments made by the EDA under this Note shall first be applied to accrued interest and then to principal. If, on any Payment Date, the TIF 5 E-1 4941290 BR291-371 Available Tax Increment for the payment of the accrued and unpaid interest on the TIF 5 Pooled TIF Note are insufficient for such purposes, the difference shall be carried forward, without accruing additional interest, and shall be paid if and to the extent that on a future Payment Date there are TIF 5 Available Tax Increment to pay such accrued interest on the TIF 5 Pooled TIF Note. This Note is pre-payable by the EDA, without penalty, in whole or in part, on any date. This Note shall terminate and be of no further force and effect following the last Payment Date defined above, on any date upon which the EDA shall have terminated the TIF Development Agreement under Section 8.4(c) thereof, the date TIF District No. 5 is terminated, or on the date that all principal and interest payable hereunder shall have been paid in full, whichever occurs earliest. The EDA makes no representation or covenant, express or implied, that the TIF 5 Available Tax Increment will be sufficient to pay, in whole or in part, the amounts which are or may become due and payable hereunder. In the event TIF 5 Available Tax Increment is not sufficient, the EDA is not responsible to further fund or reimburse the Developer (or its assigns or creditors) for any such shortfall. The EDA is not responsible to fund or reimburse any obligation of the Developer (or its assigns or creditors) unless expressly stated in the TIF Development Agreement. Subject to the terms of the TIF Development Agreement, the EDA' s payment obligations hereunder shall be further conditioned on the fact that no Event of Default under the TIF Development Agreement shall have occurred and be continuing at the time payment is otherwise due hereunder; and further, if pursuant to the occurrence of an Event of Default under the TIF Development Agreement the EDA elects to cancel and rescind the TIF Development Agreement, the EDA shall have no further debt or obligation under this TIF 5 Pooled TIF Note whatsoever. Reference is hereby made to all of the provisions of the TIF Development Agreement, including without limitation Section 4.3 thereof, for a fuller statement of the rights and obligations of the EDA to pay the principal of this TIF 5 Pooled TIF Note, and said provisions are hereby incorporated into this Note as though set out in full herein. This TIF 5 Pooled TIF Note is a special, limited revenue obligation of the EDA and is payable by the EDA only from the sources and subject to the qualifications stated or referenced herein. This Note is not a general obligation of the EDA or the City of Brooklyn Center, Minnesota (the "City"), and neither the full faith and credit nor the taxing powers of the EDA nor the City are pledged to the payment of the principal of this Note and no property or other asset of the EDA or the City, save and except the above-referenced TIF 5 Available Tax Increment, is or shall be a source of payment of the EDA's obligations hereunder. This Note is issued by the EDA in aid of financing a project pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including the provisions of Minnesota Statutes, Sections 469.174 through 469.1794, as the same may be amended or supplemented from time to time (the "TIF Act"). E-2 494129v7 BR291-371 This Note may be assigned only as provided in Section 7.2 of the TIF Development Agreement. In order to assign the Note, the assignee shall surrender the same to the EDA either in exchange for a new fully registered note or for transfer of this TIF 5 Pooled TIF Note on the registration records for the TIF 5 Pooled TIF Note maintained by the EDA. Each permitted assignee shall take this TIF 5 Pooled TIF Note subject to the foregoing conditions and subject to all provisions stated or referenced herein. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this TIF 5 Pooled TIF Note, together with all other indebtedness of the EDA outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the EDA to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, Economic Development Authority of the City of Brooklyn Center, Minnesota, by its Board of Commissioners, has caused this Note to be executed by the manual signatures of its Chair and Secretary and has caused this Note to be dated as of President Executive Director E-3 4941290 BR291-371 [SI DI t V B (N? I (I](S) JN 3(11 Fi I 1.Yd I (SJl It is hereby certified that the foregoing TIF 5 Pooled TIF Note was registered in the name of the Registered Owner set forth below, and that, at the request of the Registered Owner of this TIF 5 Pooled TIF Note, the undersigned has this day registered the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. NAME AND ADDRESS OF REGISTERED OWNER KKMBA Brooklyn Center LLC 10301 Woodcrest Drive Coon Rapids, MN 55433 DATE OF SIGNATURE OF EDA REGISTRATION EXECUTIVE DIRECTOR E-4 4941290 BR291-371 Exhibit A to TIF Note ACKNOWLEDGMENT REGARDING TIF 5 POOLED TIF NOTE The undersigned, a ("Note Holder"), hereby certifies and acknowledges that:. A.On the date hereof the Note Holder has [acquired from]/[made a loan (the "Loan") to/for the benefit of] KKMBA Brooklyn Center LLC (the "Developer") [secured in part by the Developer's interest as payee in] the Taxable Pooled Tax Increment Revenue Note (HOM Furniture, Inc. Project), a pay-as-you-go tax increment revenue note in the original principal amount of $____________ dated __, 201_ of the Economic Development Authority of Brooklyn Center, Minnesota (the "EDA"), a copy of which is attached hereto, (the "TIF 5 Pooled TIF Note"). The Note Holder has had the opportunity to ask questions of and receive all information and documents concerning the TIF 5 Pooled TIF Note as it requested, and has had access to any additional information the Note Holder thought necessary to verify the accuracy of the information received. In determining to [acquire the TIF 5 Pooled TIF Note]/[make the Loan], the Note Holder has made its own determinations and has not relied on the EDA or information provided by the EDA. B.The Note Holder represents and warrants that: 1.The Note Holder is acquiring [the TIF 5 Pooled TIF Note]/[an interest in the TIF 5 Pooled TIF Note as collateral for the Loan] for its own account, and without any view to resale or other distribution. 2.The Note Holder is [a bank or financial institution]/[a partnership whose general partner(s), or a limited liability company whose managing member, includes Developer or the principals of Developer] and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of acquiring [the TIF 5 Pooled TIF Note]/[an interest in the TIF 5 Pooled TIF Note as collateral for the Loan]. 3.The Note Holder understands that the TIF 5 Pooled TIF Note is a security which has not been registered under the Securities Act of 1933, as amended, or any state securities law, and must be held until its sale is registered or an exemption from registration becomes available. 4.The Note Holder is aware of the limited payment source for the TIF 5 Pooled TIF Note and interest thereon and risks associated with the sufficiency of that limited payment source. C. The Note Holder understands that the TIF 5 Pooled TIF Note is payable solely from certain tax increments derived from a tax increment financing district, if and as received by the EDA. The Note Holder acknowledges that the EDA has made no representation or covenant, E-5 4941290 BR291-371 express or implied, that the revenues pledged to pay the TIF 5 Pooled TIF Note will be sufficient to pay, in whole or in part, the principal and interest due on the TIF 5 Pooled TIF Note. Any amounts which have not been paid on the TIF 5 Pooled TIF Note on or before the final maturity date of the TIF 5 Pooled TIF Note shall no longer be payable, as if the TIF 5 Pooled TIF Note had ceased to be an obligation of the EDA. The Note Holder understands that the TIF 5 Pooled TIF Note will never represent or constitute a general obligation, debt or bonded indebtedness of the City of Brooklyn Center, Minnesota (the "City"), the EDA, the State of Minnesota, or any political subdivision thereof and that no right will exist to have taxes levied by the City, the EDA, the State of Minnesota or any political subdivision thereof for the payment of principal and interest on the TIF 5 Pooled TIF Note. D. The Note Holder understands that the TIF 5 Pooled TIF Note is payable solely from certain tax increments, which are taxes received on improvements made to certain property (the "Improvements") in a tax increment financing district from the increased taxable value of the property over its base value at the time that the tax increment financing district was created, which base value is called "original net tax capacity". There are risk factors in relying on tax increments to be received, which include, but are not limited to, the following: 1.Value of Improvements. If the contemplated Improvements constructed in the tax increment financing district are completed at a lesser level of value than originally contemplated, they will generate fewer taxes and fewer tax increments than originally contemplated. 2.Damage or Destruction. If the Improvements are damaged or destroyed after completion, their value will be reduced, and taxes and tax increments will be reduced. Repair, restoration or replacement of the Improvements may not occur, may occur after only a substantial time delay, or may involve property with a lower value than the Improvements, all of which would reduce taxes and tax increments. 3.Change in Use to Tax-Exempt. The Improvements could be acquired by a party that devotes them to a use which causes the property to be exempt from real property taxation. Taxes and tax increments would then cease. 4.Depreciation. The Improvements could decline in value due to changes in the market for such property or due to the decline in the physical condition of the property. Lower market valuation will lead to lower taxes and lower tax increments. 5.Non-payment of Taxes. If the property owner does not pay property taxes, either in whole or in part, the lack of taxes received will cause a lack of tax increments. The Minnesota system of collecting delinquent property taxes is a lengthy one that could result in substantial delays in the receipt of taxes and tax increments, and there is no assurance that the full amount of delinquent taxes would be collected. Amounts distributed to taxing jurisdictions upon a sale following a tax forfeiture of the property are not tax increments. 6.Reductions in Taxes Levied. If property taxes are reduced due to decreased municipal levies, taxes and tax increments will be reduced. Reasons for such E-6 4941290 BR291-371 reduction could include lower local expenditures or changes in state aids to municipalities. For instance, in 2001 the Minnesota Legislature enacted an education funding reform that involved the state increasing school aid in lieu of the local general education levy (a component of school district tax levies). 7.Reductions in Tax Capacity Rates. The taxable value of real property is determined by multiplying the market value of the property by a tax capacity rate. Tax capacity rates vary by certain categories of property; for example, the tax capacity rates for residential homesteads are currently less than the tax capacity rates for commercial and industrial property. In 2001 the Minnesota Legislature enacted property tax reform that lowered various tax capacity rates to "compress" the difference between the tax capacity rates applicable to residential homestead properties and commercial and industrial properties. 8.Changes to Local Tax Rate. The local tax rate to be applied in the tax increment financing district is the lower of the current local tax rate or the original local tax rate for the tax increment financing district. In the event that the Current Local Tax Rate is higher than the Original Local Tax Rate, then the "excess" or difference that comes about after applying the lower Original Local Tax Rate instead of the Current Local Tax Rate is considered "excess" tax increment and is distributed by Hennepin County to the other taxing jurisdictions and such amount is not available to the EDA as tax increment. 9.Legislation. The Minnesota Legislature has frequently modified laws affecting real property taxes, particularly as they relate to tax capacity rates and the overall level of taxes as affected by state aid to municipalities. 10.TIF 5 Pooled TIF. The Note Holder understands and acknowledges that the TIF 5 Pooled TIF Note is payable only from the TIF 5 Available Tax Increment from TIF District No. 5 (as defined in the TIF Development Agreement) and other tax increment from TIF District No. 5 is not pledged to the payment of the TIF 5 Pooled TIF Note. E.The Note Holder acknowledges that the Note was issued as part of a development agreement between the EDA and the Developer dated December , 2017 ("Development Agreement"), and that the EDA has the right to suspend payments under this Note and/or terminate the Note upon an Event of Default under the Development Agreement. F.The Note Holder acknowledges that the EDA makes no representation about the tax treatment of, or tax consequences from, the Note Holder's acquisition of [the Note]/[an interest in the Note as collateral for the Loan]. E-7 494129v7 BR291-371 WITNESS our hand this day of 520 Note Holder: By: Name: Its: 494129v7 BR291-371 E-8 EXHIBIT F •iii 1Y4 CI] 1I] P 'fl 'Ii OhWAI Il) f1 ki a& r iM ,iujI Dated as of , 20 1.Parties. The parties to this Collateral Assignment of Tax Increment Financing Documents (the "Agreement") are KKMBA Brooklyn Center LLC, a Minnesota limited liability company (the "Developer") and , a ("Lender"). The Economic Development Authority of Brooklyn Center, Minnesota (the "EDA") is executing this Collateral Assignment of Tax Increment Financing Documents to confirm that this Collateral Assignment is a permitted assignment under Section 7.2 of the TIF Development Agreement, as defined below. 2.Recitals. 2.1 Recital One. The Developer and the EDA are parties to that certain TIF Development Agreement dated 201_ (the "TIF Development Agreement"). 2.2 Recital Two. The Developer and Lender are parties to that certain [DESCRIBE LOAN DOCUMENTS] pursuant to which Lender has loaned $ the Developer (the "Loan"). The Developer intends to use a portion of the proceeds of the Loan to construct the "Minimum Improvements," as defined in the TIF Development Agreement. 2.3 Recital Three. Pursuant to the TIF Development Agreement, Developer has agreed to construct the Minimum Improvements and the EDA has: issued its $ Tax Increment Revenue Note (HOM Furniture, Inc. Project)/Taxable Pooled Tax Increment Revenue Note (HOM Furniture, Inc. Project)] dated , 201, (the "TIF Note") to provide funds to reimburse the Borrower for certain costs of the Project. 2.4 Recital Four. As security for the Loan, the Developer has granted Lender a mortgage on the real property legally described on the attached Exhibit A (the "Mortgaged Property"). 2.5 Recital Five. As a condition of the Loan, Lender has required that the Developer collaterally assign the Developer's rights under the TIF Development Agreement and the TIF Note to Lender so that if Lender exercises Lender's remedies under the Loan Documents, forecloses the Mortgage and becomes the owner of the Development Property, as defined in the TIF Development Agreement, Lender may perform the Developer's obligations under the TIF Development Agreement and receive the benefits of the TIF Development Agreement from the EDA. F-i 494129v7 BR291-371 3.Assignment of Agreement. In consideration of the Loan, the Developer hereby irrevocably transfers and assigns all of the Developer's rights and obligations under the TIF Development Agreement to Lender, and Lender, for the benefit of the EDA, assumes and agrees to perform all of the obligations of the Developer under the TIF Development Agreement; provided, however, the assignment and assumption set forth in this Section 3 shall not become effective until Lender acquires title to the Mortgaged Property pursuant to either a conveyance in lieu of foreclosure from the Developer or the foreclosure of the mortgage and the expiration of all applicable redemption periods. Except as set forth in Sections 4 and 7 below, the Developer is entitled to exercise all of the Developer's rights and receive all of the benefits under the TIF Development Agreement until this assignment becomes effective as provided above. 4.Pledge of TIF Note. Developer hereby pledges and grants Lender a security interest in the TIF Note, and does hereby grant, assign, transfer and set over unto Lender all of its right, title and interest in and to the any and all revenue and/or proceeds of the TIF Note which the EDA is required to pay pursuant to the terms of the TIF Note after the date hereof and prior to Developer's repayment of the Loan (the "TIF Note Proceeds"). Borrower agrees that EDA shall pay TIF Note Proceeds from the TIF Note directly to Lender and in the name of Lender. 5.Right to Disclaim. Lender may, at any time prior to (a) the recording of a conveyance of the Mortgaged Property from Developer to Lender in lieu of a foreclosure or (b) the recording of a sheriffs certificate of sale pursuant to which Lender has purchased all or any portion of the Mortgaged Property at a Sheriffs Sale, notify the EDA, in writing, that Lender is terminating this Collateral Assignment and disclaiming any rights under the TIF Development Agreement in which case Lender will acquire title to the Mortgaged Property free and clear of any rights or obligations under the TIF Development Agreement. Notwithstanding the foregoing, in no event will this Agreement limit the exercise of the remedies by the EDA under the TIF Development Agreement or under the TIF Note (as defined in the TIF Development Agreement). 6.Further Assignment. Subject to Section 7.2(c)(iv) of the TIF Development Agreement, Lender may assign its rights and obligations under this Agreement to (a) any assignee of the Mortgage; (b) any purchaser of all or any portion of the Mortgaged Property at a Sheriffs Sale; or (c) any party acquiring title to the Mortgaged Property from Developer pursuant to a deed in lieu of foreclosure. 7 • Developer Default. If Developer defaults in the performance of one or more of Developer's obligations under one or more of the Loan Documents, Lender will give the EDA written notice of the default; provided, however, the Lender's failure to give the EDA notice of a Developer default under one or more of the Loan Documents will not extend any cure periods provided for Developer under any of the Loan Documents and will not invalidate or render ineffective, in any way, any notice of default provided by Lender to Developer. 8. Authorization to EDA. The Developer hereby irrevocably authorizes and directs the FDA to recognize the claims of the Lender without investigating the reason for any action taken or the validity of or the amount of indebtedness owing to the Lender or the existence of any Event of Default; and the Developer hereby irrevocably directs and authorizes the EDA to pay exclusively to the Lender or its assigns [from and after the date of any notice as set forth in Section 7], all sums due under the TIF Development Agreement or the TIF Note, subject to the F-2 4941290 BR291-371 terms thereof, without the necessity of any such investigation; and to the extent such sums are paid to the Lender, the Developer agrees that the EDA shall have no further liability to the Developer for the same. The sole signature of the Lender shall be sufficient for the exercise of any rights under this Assignment and the sole receipt by the Lender of any sum paid by the EDA shall be in discharge and release of that portion of any amount owed by the EDA. The Lender acknowledges that the EDA 's rights and remedies against the Developer under the TIF Development Agreement are unaffected by this Agreement. 9. Notices. All notices and communications given pursuant to this Agreement shall be deemed to have been given or made when personally delivered or three (3) days after being sent by United States Mail, postage prepaid, to the parties at the following addresses or at such other addresses as the parties may hereinafter designate in writing: To the Developer KKMBA Brooklyn Center LLC 10301 Woodcrest Drive Coon Rapids, MN 55433 Phone No.: (763) Fax No.: (763) Email: With a copy to: To Lender: With a copy to: To the EDA: Economic Development Authority of Brooklyn Center, Minnesota 6301 Shingle Creek Parkway Brooklyn Center, Minnesota 55430-2199 Attn: Executive Director With a copy to: Kennedy & Graven Chartered 200 S. Sixth St. #470 Minneapolis, MN 55402-1458 Attention: Jenny Boulton F-3 494129v7 BR291-371 10. Titles of Articles and Sections. Any titles of the Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. 11.Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. 12.Law Governing. This Agreement will be governed and construed in accordance with the laws of the State of Minnesota. 13. Relationship of Parties. Nothing in this Agreement is intended, or shall be construed, to create a partnership or joint venture among or between the Parties, and the rights and remedies of the Parties shall be strictly as set forth in this Agreement. KKMBA BROOKLYN CENTER LLC a Minnesota limited liability company BY: Its STATE OF MINNESOTA ) )ss COUNTY OF The foregoing instrument was acknowledged before me this day of 20, by , the __________ of KKIVIBA Brooklyn Center LLC, a Minnesota limited liability company on behalf of said company. Notary Public F-4 494129v7 BR291-371 LENDER: STATE OF__________ ) ) ss: COUNTY OF_________ The foregoing instrument was acknowledged before me on this 20 by the a on behalf of the Notary Public By Its F-5 day of of 494129v7 BR291-371 a rIOWJ al iei ahYA I DWN 'II XES)i h1 To induce Lender to make advances pursuant to the Loan Agreement described in the foregoing Assignment, the undersigned EDA hereby acknowledges and consents to the foregoing Assignment to Lender, and further agrees to deliver to Lender a copy of any Default Notice given to Borrower with respect to any breach or default by Borrower under the TIF Development Agreement or the TIF Note within five (5) days of delivering any such notice to Borrower. Dated: ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By______ Its: President and by Its Executive Director STATE OF MINNESOTA ) ) ss: COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me on this day of _________ 20_ by and , the President and Executive Director of the Economic Development Authority of Brooklyn Center, Minnesota, a body corporate and politic, on behalf of such Economic Development Authority. Notary Public Drafted by: KENNEDY & GRAVEN, CHARTERED 470 U. S. Bank Plaza 200 South Sixth Street Minneapolis, Minnesota 55402 F-6 494129v7 BR291-371 Exhibit A Iii[ H I .l [I]h(I] LflI] (exeIau 1 'J Ui]fJ I The property located in the City of Brooklyn Center, Hennepin County, Minnesota identified as Parcel ID # legally described as: Lot 2, Block 2, SHINGLE CREEK CROSSING, Hennepin County, Minnesota, according to the recorded plat thereof, formerly described as Tract B Registered Land Survey Number 1614, Hennepin County, Minnesota (the "Mortgaged Property") F-7 494129v7 BR291-371 EDA Work Session Item No. 3 November 27, 2017 On March 28, 2016, the City Council adopted Resolution No. 2016-40, a Resolution Approving Modification to Redevelopment Plan for Housing Development and Redevelopment Project No. 1, Establishing Tax Increment Financing District No. 7 (Redevelopment District) Therein and Approving a Tax Increment Financing Plan Therefor (Opportunity Site). This tax increment district deferred the first year of tax increment collection until 2019 and deferred its certification pending redevelopment proposals. (The Tax Increment Laws allow the deferral of certification for 3 years from the EDA actions of declaring blight conditions and first demolition activity, May-June 2015). The Draft TIF Development Agreement By and Between Economic Development Authority of Brooklyn Center, Minnesota and KKMBA Brooklyn Center LLC (AKA HOM Furniture) includes the following components: 1. The minimum improvements are the building renovation and expansion included in the site plan approved by the City Council on 2/13/2017 2-story addition - 11,805 sq. ft. of new retail (multi-tenant) space; 12,817 sq. ft. will be opened up to the 2nd floor of the HOM store and used for additional floor/display area. Site Plan Analysis 2. The schedule for the minimum improvements has been identified as beginning no later than August 1, 2018 and ending no later than March 31, 2019. 3. The Future improvements are identified as the future Pad Site X improvements and the Storm Water Improvements as approved by November 13, 2017 City Council approval to the Revisions to the Shingle Creek Crossing PUD Amendment No.8 (Resolution No. 2017- ). 4. The agreement does not include an obligation by the developer to commence the future improvements on Pad Site X. The schedule for this redevelopment is driven by market conditions; however, the completion of the Storm Water Improvements (bi-infiltration basin) is an obligation to be completed as part of the future development of Pad Site X. 5. The economic assistance to enable the redevelopment of the Kohl’s Site includes 3 components: a. The payment of $300,000 from TIF 2 Fund for the portion of the Kohl’s lot identified for the drainage & utility easements Storm Water Improvements. These TIF 2 funds are intended to be replaced by future TIF 5 revenue for Out–of –District eligible expenditures. b. A Pay-As-You-Go Note (not to exceed $300,000) for the construction of the Storm Water Improvements (bio-infiltration basin) from 15% of the annual tax increment generated from TIF 5 (this amount in 2017 is projected at $84,000) commencing in 2019 and subsequent years until there is sufficient funds ($300,000 cap) for these storm water improvements. c. A Pay-As-Go-You Note in the amount equal to the lesser of $3,272,400 or the Eligible Costs actually incurred and paid by the Developer which Springsted Financial has structured the PAYG Note based on 97.5% of the potential Tax Increment Revenue Stream projected from HOM’s Renovation, Expansion and Future Development of the Kohl’s lot, identified the projected TIF Assistance Terms, and has prepared a But-For-Test/analysis for the need of assistance. Does the EDA require any additional information for its future consideration of the KKMBA Brooklyn Center LLC (HOM Furniture) TIF Agreement?