2013.10.01 EDA Meeting PacketAGENDA
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL
• REGULAR MEETING •
TUESDAY, OCTOBER 1, 2013
6:30 P.M.
CRYSTAL CITY HALL
COUNCIL CHAMBERS
1. Call to order
2. Roll call
3. Consider approval of minutes from the September 3, 2013 regular meeting *
4. PUBLIC HEARING: Consider a resolution authorizing the sale of a lot at 5657 Adair
Avenue North to Novak -Fleck for construction of a new house *
5. Consider a resolution approving First Amendment to the Contract for Private
Redevelopment with Crystal Leased Housing Associates I, Limited Partnership
[Dominium entity for The Cavanagh Senior Apartments] *
6. Other business
7. Adjournment
* Materials attached
09/26/13 GAEDA\Agendas\2013\10.01.docx
Minutes of the
Crystal Economic Development Authority
Regular Meeting
September 3, 2013
President Hoffmann called the regular meeting of the Crystal Economic Development Authority
to order at 6:45 p.m.
Upon call of the roll, the following members were present: Jim Adams, John Budziszewski, Julie
Deshler, Mark Hoffmann, Laura Libby and Joe Selton.
The following staff members were present: Anne Norris, Executive Director; John Sutter, City
Planner/Assistant Community Development Director; and Mike Norton, City Attorney.
Motion by Commissioner Selton (Budziszewski) to approve the minutes from the August 5,
2013, work session, August 5, 2013 regular meeting, and August 20, 2013 work session
Motion carried.
The EDA considered tentative acceptance of proposals and approval of option agreements with
Novak -Fleck for the lots at 5657 Adair Avenue North and 6516 Brentwood Avenue North.
Motion by Commissioner Deshler (Budziszewski) to authorize option agreements with Novak -
Fleck for 5657 Adair Avenue North and 6516 Brentwood Avenue North.
Motion carried.
The EDA considered a resolution adopting a proposed HRA tax levy for 2014.
Motion by Commissioner Budziszewski (Libby) to approve Resolution #2013-15 adopting a
proposed 2014 budget and property tax levy and requesting their approval by the City Council.
Motion carried.
Motion by Commissioner Budziszewski (Deshler) to adjourn the regular meeting.
Motion carried.
The meeting adjourned at 6:53 p.m.
Mark Hoffmann, President
ATTEST:
Julie Deshler, Vice President
EDA STAFF REPORT
�,TY.a�` 5657 Adair
CRYSTAL
Public Hearing - Sale of Lot to Novak -Fleck
FROM: John Sutter, City Planner/Assistant Community Development Director ,�
DEPARTMENT HEAD REVIEW: Patrick Peters, Community Development Director;1��
1
DATE: September 26, 2013
TO: Anne Norris, Executive Director (for October 1, 2013 EDA meeting)
SUBJECT: Public Hearing: Consider a resolution authorizing the sale of a lot at 5657
Adair Avenue North to Novak -Fleck for construction of a new house
On September 3 the EDA tentatively accepted a proposal from Novak -Fleck to purchase the
lot at 5657 Adair Avenue North for $50,000. Novak -Fleck has a Minnesota Residential Building
Contractor license with no enforcement actions.
The house would be a split entry with an attached three car garage. The upper level would
have 1,209 sq. ft. with an open living -dining -kitchen area, three bedrooms and two bathrooms.
The lower level would have 1,144 sq. ft. unfinished at this time. It would generally look like the
house being completed at 5548 Yates but with the garage on the left instead of right.
The proposal meets city code including zoning, and also is in conformance with the EDA's lot
sale guidelines. Lot sale closing and construction start are anticipated for early October with
house completion by early 2014.
The proposed resolution, 2012 aerial photo, site sketch and house plan are attached.
REQUESTED EDA ACTION: After holding the public hearing and receiving any testimony,
consider adopting the attached resolution authorizing the property sale.
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL
HENNEPIN COUNTY
STATE OF MINNESOTA
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE SALE OF
5657 ADAIR AVENUE NORTH
FOR NEW HOUSE CONSTRUCTION
WHEREAS, the Economic Development Authority of the City of Crystal ("the EDA") is the
owner of 5657 Adair Avenue North, legally described as Lot 1, Block 2, Kennard's Addition,
according to the recorded plat thereof on file and of record in the office of the County Recorder
in and for Hennepin County, Minnesota ("the Property"); and
WHEREAS, the EDA has solicited proposals from builders who desire to purchase the
Property from the EDA and construct thereon a new single family house; and
WHEREAS, the EDA has reviewed and accepted the proposal from Novak -Fleck.
NOW, THEREFORE, BE IT RESOLVED that the EDA authorizes the sale of the Property to
Novak -Fleck.
BE IT FURTHER RESOLVED that the sale shall be completed in accordance with the terms of
the Purchase and Redevelopment Agreement in substantially the form on file in City Hall, and
that the President and Executive Director are hereby authorized to sign said Agreement and
other documents required to complete the sale of the Property to Novak -Fleck.
Adopted this day of
Mark G. Hoffmann, President
Anne L. Norris, Executive Director
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EDA STAFF REPORT
CITY"Of Resolution approving First Amendment to Contract for
;CRYSTAL
- Private Redevelopment for The Cavanagh Senior Apartments
FROM: Patrick A. Peters, Deputy Executive Director n�4
TO: Anne Norris, Executive Director (for October 1, 2013, EDA Meeting)
DATE: September 26, 2013
RE: Consider a resolution approving First Amendment to Contract for Private
Redevelopment with Crystal Leased Housing Associates I, Limited
Partnership [a Dominium Entity]
BACKGROUND
On December 18, 2012, the EDA approved Resolution 2012-28, authorizing execution of a
Contract for Private Redevelopment and sale of Lot 1, Block 1, Cavanagh Park Addition to
Crystal Leased Housing Associates I, Limited Partnership [a Dominium Entity]. That same
evening the City Council approved a site plan for a three-story building and approved second
reading of the rezoning of Lot 1 to R-3, High Density Residential.
In mid -2013, Dominium sought bids from contractors for construction of The Cavanagh and
found that construction costs would be higher than anticipated. As a result of this and an increase
in borrowing rates, Dominium proposed a four-story design with the same number of units, but a
smaller footprint, to keep the project financially feasible. To exceed three stories, Planned
Development ("PD") rezoning is required along with approval of revised site and building plans,
all of which were considered by the Planning Commission on September 9, 2013 and approved
on first reading by the City Council on September 17, 2013. Council consideration of second
reading on the rezoning appears on the October 1 agenda.
At its October 1 meeting, the EDA will consider a resolution approving the First Amendment to
the Contract for Private Redevelopment with Crystal Leased Housing Associates I, Limited
Partnership, acknowledging modifications to the 2012 Contract that are a direct result of
revisions to the zoning and site and building plans.
THE CONTRACT
The Contract approved in 2012 provides the framework for redevelopment of the site, obligating
the developer to certain stated improvements and conditions that are in the city's interest. Most
of the provisions of that Contract remain as originally approved, but certain provisions affecting
the EDA's interest have necessarily been modified to reflect the rezoning and revised site and
building plans:
The definition of "Minimum Improvements" in Section 1.1 of the original agreement is
modified to mean the construction on the Redevelopment Property of a 130 -unit senior
rental housing facility with four stories of housing units;
° Section 3.1 of the original agreement is modified to reflect the change in zoning to R-3
Planned Development;
° Section 3.2 of the original agreement is modified to require a $5,000 earnest money
deposit at the time of execution of the First Amendment by Dominium; and
° Section 3.3 of the original agreement is modified to change the closing date to December
31, 2013.
RECOMMENDATION
Staff requests EDA approval of a resolution approving first amendment to the Contract for
Private Redevelopment with Crystal Leased Housing Associates I, Limited Partnership.
ATTACHMENTS
A. Resolution
B. First Amendment to Contract for Private Redevelopment
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL
RESOLUTION NO.
RESOLUTION APPROVING FIRST AMENDMENT TO
CONTRACT FOR PRIVATE REDEVELOPMENT WITH
CRYSTAL LEASED HOUSING ASSOCIATES I, LIMITED PARTNERHSIP
BE IT RESOLVED BY the Board of Commissioners (the "Board") of the
Economic Development Authority of the City of Crystal (the "Authority") as follows:
Section 1. Background.
1.01. The City of Crystal (the "City") and the Authority have heretofore
approved the establishment of Tax Increment Financing District No. 4 (the "TIF
District") within Redevelopment Project No. 1 (the "Project"), and have adopted a tax
increment financing plan for the TIF District to finance certain improvements within the
Project.
1.02. The Authority previously entered into a Contract for Private
Redevelopment dated as December 18, 2012 (the "Original Contract") between the
Authority and Crystal Leased Housing Associates I, Limited Partnership (the
"Redeveloper") under which the Authority agreed to convey to the Redeveloper certain
property within the Project described as Lot 1, Block, 1, Cavanagh Park Addition (the
"Redevelopment Property").
1.03. The Original Contract also provides that the Redeveloper will construct a
senior housing facility on the Redevelopment Property, and that the Authority will assist
such effort by issuing a tax increment revenue obligation secured by certain tax
increments from the TIF District.
1.04. The Authority approved the Original Contract by Resolution No. 2012-28
(the "2012 Resolution"), which also authorized issuance of a tax increment revenue
obligation in the form of the Taxable Tax Increment Revenue Note, Series 2013 (the
"Series 2013 TIF Note").
1.05. The parties have determined a need to modify the Original Contract in
certain respects, and to that end have prepared a First Amendment to Contract for Private
Redevelopment (the "First Amendment").
1.06. The Board has reviewed the First Amendment and has determined that it is
in the best interest of the Authority to enter into the First Amendment.
ATTACHMENT A
Section 2. Approvals.
2.01. The Board hereby approves the First Amendment and authorizes the
President and Executive Director to execute such document in substantially the form on
file with Authority, subject to modifications that do not alter the substance of the
transaction and are approved by such officials, provided that execution of the Agreement
by such officials is conclusive evidence of their approval.
2.02. This resolution supersedes the 2012 Resolution as it relates to issuance of
the Series 2013 TIF Note. Any tax increment revenue obligation related to the senior
housing facility described in the Original Contract, as amended, will be issued as
described in the First Amendment, and all provisions of the 2012 Resolution other than
those approving the Original Contract have no further force or effect.
Approved by the board of commissioners of the Economic Development
Authority of the City of Crystal this 1St day of October, 2013.
President
ATTEST:
Secretary
432357v1 CR150-199 2
Execution Copy
FIRST AMENDMENT TO
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS FIRST AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT,
made on or as of the 1 st day of October, 2013, by and between ECONOMIC DEVELOPMENT
AUTHORITY OF THE CITY OF CRYSTAL, a public body corporate and politic established
pursuant to Minnesota Statutes, Sections 469.090 to 469.1081 (the "Authority"), and Crystal
Leased Housing Associates I, Limited Partnership, a Minnesota limited partnership (the
"Redeveloper").
WITNESSETH:
WHEREAS, the Authority was established by the City of Crystal (the "City") under
Minnesota Statutes, Sections 460.090 to 469.1081 (the "EDA Act"), and has all the powers of a
housing and redevelopment authority under Minnesota Statutes, Sections 469.001 to 469.047
(the "HRA Act"); and
WHEREAS, the Authority has undertaken a program to promote the redevelopment of
land which is blighted and underutilized within the City, and in this connection created a
redevelopment project known as the Redevelopment Project No. 1 (the "Redevelopment
Project") pursuant to the HRA Act; and
WHEREAS, pursuant to the HRA Act, the Authority is authorized to acquire real
property, or interests therein, and to undertake certain activities to facilitate the redevelopment of
real property by private enterprise; and
WHEREAS, the Authority and Redeveloper entered into that certain Contract for Private
Redevelopment dated as of December 18, 2012 (the "Original Contract") under which the
Authority acquired the property described as Lot 1, Block 1, Cavanagh Park Addition, according
to the recorded plat thereof, Hennepin County, Minnesota (the "Redevelopment Property"); and
WHEREAS, under the Original Contract, the Authority agreed to convey the
Redevelopment Property to Redeveloper upon satisfaction of certain terms and conditions, and to
provide certain financial assistance to Redeveloper in order to facilitate development of a senior
housing facility on the Redevelopment Property; and
WHEREAS, the parties have determined a need to modify the Original Contract in
certain respects as described herein;
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:
1. Section 1.1 of the Original Contract is amended to modify the following
ATTACHMENT B
definitions to read as follows:
"Apartment TIF Contract" means the Contract for Private Redevelopment
dated November 16, 1999 between the Authority and Crystal Partners LP, Francis
W. Lang and Eugene Nelson, as assigned to Lanel Crystal Estates, LLC, and as
amended by a First Amendment to Contract for Private Redevelopment dated May
14, 2004 between the Authority and Lanel Crystal Estates, LLC.
"Assisted Living TIF Contract" means the Contract for Private
Redevelopment dated November 16, 1999 between the Authority and Crystal
Partners LP, as assigned to Lanel Crystal Manor LLC, and as amended by a First
Amendment to Contract for Private Redevelopment dated May 14, 2004 between
the Authority and Lanel Crystal Manor LLC.
"Minimum Improvements" means the construction on the Redevelopment
Property of an approximately 130 -unit senior rental housing facility, with four
stories of housing units, and in which no unit has more than two bedrooms.
"TIF Bond" has the meaning provided in Section 3.8(a); and the wherever the
term "Series 2013 TIF Note" appears in the Original Contract, the term "TIF Bond"
shall be substituted.
2. Section 3.1 is modified to read as follows:
Section 3.1. Acquisition and Conveyance of Property. (a) As of the date of this First
Amendment, the Authority has acquired the School Property from the School District, and the City
has approved a plat of the School Property (the "Plat"), to create the Redevelopment Property and
the Park Property. In the Plat, the Authority dedicated the Park Property to the City for public park
purposes. Such dedication does not relieve any obligation of Redeveloper to pay park dedication
fees in accordance with City ordinances. The Authority will convey the Redevelopment Property to
Redeveloper subject to all the terms and conditions of this Agreement.
(b) Prior to the date of this First Amendment, the City rezoned the Redevelopment
Property to R-3 High Density Residential, but the parties further agree and understand that
development of the Minimum Improvements, as now defined, requires further rezoning of the
Redevelopment Property to R-3 Planned Development under the City zoning ordinance. The
Authority and Redeveloper will cooperate on that effort, and Redeveloper will submit any materials
reasonably requested by the Authority or City in order to process such rezoning.
(c) As of the date of this First Amendment, the Authority has, at its sole cost, caused the
school building on the Redevelopment Property to be demolished and cleared the site of debris, and
has caused all utilities to be disconnected.
3. Section 3.2 is modified to read as follows:
431512v4 CR150-199 2
Section 3.2. Purchase Price; Provisions for Pa Hent. The purchase price to be paid to the
Authority by the Redeveloper in exchange for the conveyance of the Redevelopment Property is
$1,094,314. The purchase price shall be payable as follows:
(a) $5,000 as earnest money, payable upon execution of this First Amendment; and
(b) the balance payable by the Redeveloper in cash or certified check at Closing.
4. Section 3.3 is modified to read as follows:
Section 3.3. Conditions of Conveyance. (a) Generally. The Authority shall convey title to
and possession of the Redevelopment Property to the Redeveloper by a deed substantially in the
form of the deed attached as Schedule B to this Agreement. The Authority's obligation to convey
the Redevelopment Property to the Redeveloper and the Redeveloper's obligations under this
Agreement are subject to and contingent upon satisfaction of the following terms and conditions:
(1) The Authority having approved Construction Plans for the Minimum
Improvements in accordance with Section 4.2.
(2) The Redeveloper having closed on the Housing Revenue Bonds, or provided
evidence reasonably satisfactory to the Authority that the Housing Revenue Bonds will be
timely issued at economically reasonable rates; and if any other form of financing is used
(either instead of or in combination with Housing Revenue Bonds) Redeveloper having
provided reasonable evidence that is has closed on such financing in accordance with Article
VII hereof.
(3) The Redeveloper having delivered to the Authority the Declaration in
accordance with Section 4.5 hereof.
(4) The Redeveloper having received approval by the City and by all
governmental agencies from which approval must be obtained for the redevelopment of the
Redevelopment Property, including without limitation approval by the City of site plans,
building plans, re -zoning of the Redevelopment Property as described in Section 3.1, and
any other City approvals, all to the extent so required under City ordinances.
(5) [Intentionally omitted.]
(6) The Redeveloper having reviewed and approved (or waived objections to)
title to the Redevelopment Property as set forth in Section 3.5.
(7) The Redeveloper having reviewed and approved (or waived objections to)
soil and environmental conditions as set forth in Section 3.6.
(8) [Intentionally omitted.]
(9) There is no uncured Event of Default under this Agreement.
431512v4 CR150-199 3
(b) Exercise and waiver of conditions. Conditions (3) and (9) are solely for the benefit
of the Authority and may be waived by the Authority. Conditions (6) through (8) are solely for the
benefit of the Redeveloper and may be waived by the Redeveloper. Conditions (1), (2), (4) and (5)
are for the benefit of both parties and may be exercised by either party, but none of those conditions
may be waived by one parry without the written consent of the other; that is each party may exercise
any of these contingencies to bar Closing if not timely satisfied, but neither parry may unilaterally
waive these contingencies and require Closing if the contingencies have not been timely satisfied.
All conditions must be satisfied or waived on for before the Closing stated in paragraph (c)
below. If any of such conditions have not been satisfied or waived by the applicable date stated in
this Section, then this Agreement may be terminated, at the benefitted party's option, by written
notice from that party to the other. Such notice of termination must be given no later than three (3)
business days after the applicable date. Upon such termination, this Agreement shall become null
and void and neither party will have any further rights or obligations under this Agreement, except
that Redeveloper relinquishes all rights to the escrow deposit made under Section 3.2 hereof.
Should a party fail to give notice of termination no later than three (3) business days after the
applicable date with respect to any of contingencies benefitting that party, the contingency in
question shall be conclusively deemed to have been waived by that party. Waiver of any condition
(to the extent permitted under this paragraph) must be in writing delivered by the waiving party to
the other party.
(c) The closing on conveyance of the Redevelopment Property from the Authority to the
Redeveloper (the "Closing") shall occur within 15 business days after satisfaction of the conditions
specified in this Section, but no later than December 31, 2013.
5. Section 3.8 is modified to read as follows:
Section 3.8. Issuance of TIF Bond. (a) Generally. As additional assistance reasonably required
to make development of the Minimum Improvements financially feasible, the Authority shall
issue a tax increment revenue obligation (the "TIF Bond") in the principal amount of $1,011,175,
bearing interest at the rate of 5.0% per annum, or such other rate approved by the Authority. The
terms of the TIF Bond, including maturity and payment dates will be substantially those set forth
in Schedule C attached to this First Amendment; provided that such form may be revised
as necessary to accommodate the form of sale, assignment or transfer described in
Section 3.8(e) hereof.
(b) Security for TIF Bond. The parties agree and understand that the Redevelopment
Property will not be included in a tax increment financing district under the TIF Act, and instead
the TIF Bond will be payable from Available Tax Increments (further described below)
generated from the existing TIF District located elsewhere in the Project area, and from the
Reserve Fund described below. All the taxable property in the TIF District is owned by the TIF
District Owners, who have entered into the TIF District Contracts. In each TIF District Contract,
each TIF District Owner agrees to comply with certain TIF District Affordability Covenants
(defined in Section 1.1 hereof) through December 31, 2025, which covenants are imposed under
Section 469.1761 of the TIF Act.
4315120 CR150-199 4
(c) Available Tax Increment. The TIF Bond will be payable solely from and to the
extent of Available Tax Increment and funds in the Reserve Fund. The term "Available Tax
Increment" means, on any Payment Date (as defined in the TIF Bond), 90 percent of the Tax
Increment from the TIF District received by the Authority in the six months before that Payment
Date. If on any Payment Date, amounts described in the previous sentence are insufficient to
pay the principal and interest then due on the TIF Bond, and the Authority collects any tax
deficiency under either or both of the TIF Contracts for the same tax -payable year that was the
source of the Tax Increment for the subject payment on the TIF Bond, then the Authority shall
treat such tax deficiency as Available Tax Increment. The Authority will apply any such TIF
Contract tax deficiency amount to the next payment due under the TIF Bond after the Authority
collects such funds from either of the TIF District Owners.
(d) Reserve Fund. The TIF Bond will be further secured by a Debt Service Reserve
Fund (the "Reserve Fund") as described in the TIF Bond. Upon issuance of the TIF Bond, the
Authority shall deposit in the Reserve Fund available Authority funds in the amount of $130,500,
representing approximately one -year's debt service on the TIF Bond. On any Payment Date
under the TIF Bond on which Available Tax Increment is insufficient to pay the amount then
due, the Authority shall (after first applying any TIF Contract tax deficiency amounts then due)
transfer money from the Reserve Fund to the amounts to the Debt Service Fund for the TIF
Bond. The Authority shall have no obligation to replenish the Reserve Fund after any transfer.
(e) Issuance of TIF Bond. The Authority acknowledges that the Redeveloper intends
to realize the present value of the future collections of Available Tax Increment evidenced by the
TIF Bond, through a mechanism yet to be determined. The Redeveloper, at its option, may
request that (i) the Authority issue the TIF Bond directly to the Redeveloper, and the
Redeveloper will pledge the TIF Bond to collateralize a loan from one or more lenders, (ii) the
Authority issue the TIF Bond directly to one or more lenders; (iii) the City incorporate the TIF
Bond in the Housing Revenue Bonds, such that the Available Tax Increment is pledged to all or
a portion of the Housing Revenue Bonds rather than a separate TIF Bond; or (iv) any other
assignment or sale mechanism that allows Redeveloper to monetize the present value of the
Available Tax Increment without materially altering the Authority's financial obligations under
this Section. The TIF Bond will be issued at substantially the same time as issuance of the
Housing Revenue Bonds, unless the parties mutually agree otherwise. The Authority will, by
resolution, approve the final terms of the TIF Bond consistent with this Section.
(f) Qualified Costs. Proceeds of the TIF Bond, however issued, must be used only
to finance costs of construction of the Minimum Improvements ("Qualified Costs'). The
Redeveloper shall deliver to the Authority certification that Redeveloper has incurred and paid
such costs ("Qualified Costs") together with reasonable evidence supporting that certification.
Evidence of Qualified Costs must include, at a minimum, paid invoices describing the costs
incurred and paid. Evidence of Qualified Costs must be submitted as follows:
(i) if the TIF Bond is issued to Redeveloper, the TIF Bond may be issued
prior to Redeveloper's submittal of Qualified Cost evidence, but interest will not accrue
4315120 CR150-199 5
on the TIF Bond until Qualified Costs in the principal amount of the TIF Bond have been
submitted and approved by the Authority.
(ii) if the TIF Bond is issued to one or more third parry lender, such that the
lender pays the Authority a purchase price of the par amount of the TIF Bond, the
Authority will disburse proceeds of the TIF Bond upon presentation of evidence of
Qualified Costs.
(iii) if the TIF Bond is incorporated into the Housing Revenue Bonds, the
Authority will cause the relevant bond documents to provide for disbursement of
proceeds allocable to the TIF Bond upon presentation of evidence of Qualified Costs.
(g) Qualifications. The Redeveloper understands and acknowledges that the
Authority makes no representations or warranties regarding the amount of Available Tax
Increment, or that revenues pledged to the TIF Bond will be sufficient to pay the principal
amount of the TIF Bond. Redeveloper expressly acknowledges that:
(i) Available Tax Increment is payable solely from the TIF District, and the
Authority's ability to pay Tax Increment under the TIF Bond is conditioned upon the
continued compliance by the TIF District Owners with the TIF District Affordability
Covenants under the TIF District Contracts, and that the Authority will not pay Available
Tax Increment if and while, as of any Payment Date on the TIF Bond, there is an uncured
event of default under the respective TIF District Affordability Covenants; provided that
such withholding applies only to the Available Tax Increment attributable to the. property
for which there is a default under the respective Housing TIF Contracts, and further
provided that enforcement of the TIF District Affordability Covenants is qualified by the
provisions of paragraph (h) of this subdivision.
(ii) estimates of Tax Increment prepared by the Authority or its financial
advisors in connection with the TIF District or this Agreement are for the benefit of the
Authority, and are not intended as representations on which the Redeveloper may rely;
and
(iii) if the cost of acquisition of the Redevelopment Property exceeds the
principal amount of the TIF Bond, such excess is the sole responsibility of Redeveloper.
(h) Authority Representations and Covenants Regarding Available Tax Increment
and the TIF Contracts.
(i) Pursuant to the Assisted Living Contract, the Authority issued to Crystal
Partners LP (one of the TIF District Owners) a Limited Revenue Tax Increment Note (the
"Prior TIF Note"), which is payable solely from and to the extent of a portion of the Tax
Increment from the TIF District.
(ii) The last payment on the Prior TIF Note is February 1, 2016, and thereafter
the Authority has no further obligation to make payments of Tax Increment on the Prior
431512v4 CRI 50-199 6
TIF Note or any other obligation; further, the Authority has not made, and will not make,
any other pledge of Available Tax Increment that is collected after February 1, 2016 to
any other obligation unless such pledge is subordinate to the TIF Bond.
(iii) The Authority will take no actions to impair collection of Tax Increment
from the TIF District.
(iv) The Authority will not amend or waive any provision of the TIF
Contracts, the minimum assessment agreements referenced in each TIF Contract, the
Declaration of Restrictive Covenant and Prohibition Against Tax Exemption referenced
in each TIF Contract, and the Prior TIF Note, without Redeveloper's written consent.
(v) The Authority will, at the Authority's cost, enforce any provision of the
TIF Contracts that materially affects the collection of Available Tax Increment, including
without limitation: the TIF District Affordability Covenants; Section 5.7 of the Assisted
Living Contract and Section 5.5 of the Apartment Contract; 7.5 of both TIF Contracts;
and 9.1 and 9.3 of both TIF Contracts.
(vi) In any enforcement effort regarding either of the TIF Contracts, the
Authority shall, at the Authority's cost, take direction from Redeveloper to as to such
efforts, provided that Authority will have no obligation to undertake any enforcement
action that is not reasonably related to the collection of Available Tax Increment; and
further provided that in lieu of undertaking enforcement of either TIF Contract in order to
ensure collection of Available Tax Increment, the Authority may instead may make any
payment due with respect to the TIF Bond from any available Authority funds.
(vii) As of the date of this First Amendment, there are no uncured events of
default under either of the TIF Contracts.
(viii) The Authority will promptly deliver to Redeveloper any notices delivered
by the TIF District Owners to the Authority, or by the Authority to the TIF District
Owners, under the TIF District Contracts.
(ix) The TIF District was duly created in accordance with the TIF Act, remains
in full force and effect; the Authority is entitled to collect Tax Increment from the TIF
District through December 31, 2025 (conditioned upon continued compliance by the TIF
District Owners with TIF District Affordability Covenants); the properties that are the
subject of the both TIF Contracts are located within the TIF District; and the Authority is
authorized by law to pledge the Available Tax Increment from the TIF District to the TIF
Bond.
(x) The Authority agrees and understands that Redeveloper prefers that the
TIF Bond be issued as a so-called "exempt facility bond" under Section 142 of the
Internal Revenue Code of 1986, as amended. To that end, the Authority, in cooperation
with the City, will takes such actions as are reasonably necessary to issue the TIF Bond
431512v4 CRI 50-199 7
on such basis, including without limitation holding public hearings and applying for
volume cap allocation.
(xi) The Authority further agrees to cooperate with Redeveloper as reasonably
necessary to effect the sale, transfer or assignment of the TIF Bond, including without
limitation, providing and certifying to historical tax collection, tax capacity and local tax
rates with respect to the TIF District and enforcement of the TIF Contracts.
6. Section 9.2 is modified to read as follows:
Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section
9.1 of this Agreement occurs, the non -defaulting parry may exercise itsrights under this Section
9.2 after providing thirty days written notice to the defaulting parry of the Event of Default, but
only if the Event of Default has not been cured within said thirty days or, if the Event of Default
is by its nature incurable within thirty days, the defaulting party does not provide assurances
reasonably satisfactory to the non -defaulting parry that the Event of Default will be cured and
will be cured as soon as reasonably possible:
(a) Suspend its performance under the Agreement or the TIF Bond until it receives
assurances that the defaulting parry will cure its default and continue its performance under the
Agreement.
(b) Cancel and rescind or terminate the Agreement, provided that the Authority may
not terminate the TIF Bond prior to the Termination Date.
(c) Take whatever action, including legal, equitable or administrative action, which
may appear necessary or desirable to collect any payments due under this Agreement, or to
enforce performance and observance of any obligation, agreement, or covenant under this
Agreement.
4315120 CR150-199 8
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed
in its name and behalf and its seal to be hereunto duly affixed and the Redeveloper has caused
this Agreement to be duly executed in its name and behalf on or as of the date first above written.
ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF CRYSTAL
LM
STATE OF MINNESOTA )
SS.
COUNTY OF HENNEPIN )
Mark Hoffmann
Its President
Anne Norris
Its Executive Director
The foregoing instrument was acknowledged before me this day of October, 2013,
by Mark Hoffmann and Anne Norris, the President and Executive Director of the Economic
Development Authority of the City of Crystal, a public body politic and corporate, on behalf of
the Authority.
Notary Public
431512v4 CR150-199 9
CRYSTAL LEASED HOUSING ASSOCIATES I,
LIMITED PARTNERSHIP
By Crystal Leased Housing Associates I, LLC, its
general partner.
LOW
Its
STATE OF )
SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of October, 2013
by , the of Crystal Leased Housing Associates
I, LLC, the general partner of Crystal Lease Housing Associates I, Limited Partnership, a
Minnesota limited liability company, on behalf of the limited partnership.
Notary Public
431512v4 CR150-199 10
No. R-1
SCHEDULE C
FORM OF TIF BOND
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF CRYSTAL
TAX INCREMENT REVENUE BOND, SERIES 2013
Rate: 5.0%
Date
$1,011,175
20
The Economic Development Authority of the City of Crystal (the "Authority") for
value received, certifies that it is indebted and hereby promises to pay to
or registered assigns (the "Owner"), the principal
sum of $1,011,175 with interest thereon at the rate of 5.0% per annum, as and to the
extent set forth herein. This Note is issued pursuant to the Contract for Private
Redevelopment between the Authority and Owner dated as of December 18, 2012, as
amended by a First Amendment thereto dated , 2013 (the "Agreement").
Capitalized terms not otherwise defined herein have the meaning provided in the
Agreement.
1. Payments. Principal shall be paid in semi-annual installments (the
"Payments") on each February 1 and August 1, commencing August 1, 2016 and
concluding no later than February 1, 2026 (the "Payment Dates") in the amounts set forth
in Exhibit A hereto, but solely from the sources set forth in Section 3 herein. Payments
are payable by mail to the address of the Owner or such other address as the Owner may
designate upon thirty (30) days written notice to the Authority. Payments on this Note
are payable in any coin or currency of the United States of America which, on the
Payment Date, is legal tender for the payment of public and private debts. Payments
shall be applied first to accrued interest and second to outstanding principal.
2. Available Tax Increment. The Authority shall pay on each Payment Date
to the Owner the lesser of the Available Tax Increment and the payment due on that date
as set forth in Exhibit A, together with deferred amounts, if any, as set forth below. To
the extent that on any Payment Date the Authority is unable to make the total scheduled
payment due on such date as a result of its having received as of such date insufficient
Available Tax Increment, the Authority shall:
431512v4 CR150-199
first apply any tax deficiency amounts that were collected under the TIF Contract
and are available as of such Payment Date; and
second transfer from the Reserve Fund any amount needed to cover the
deficiency, to the extent of funds remaining the Reserve Fund.
If, after application of the above amounts, the Authority has insufficient funds to
make the full scheduled payment due on such Payment Date, the amount of such
deficiency shall be deferred and shall be paid, with interest thereon at the rate of interest
on this Note, on the next Payment Date on which the Authority has available to it
Available Tax Increment in excess of the amount necessary to make the scheduled
payment due on such Payment Date.
Payments on this Note are payable on each Payment Date solely from and in the
amount of "Available Tax Increment," which shall mean, on each Payment Date, ninety
percent (90%) of the Tax Increment attributable to Tax Increment Financing District No.
4 (the "TIF District") that is paid to the Authority by Hennepin County in the six (6)
months preceding the Payment Date. If on any Payment Date, amounts described in the
previous sentence are insufficient to pay the principal and interest then due on this Note,
and the Authority collects any tax deficiency under either or both of the TIF Contracts for
the same tax-payable year that was the source of the Tax Increment for the subject
payment on this Note, then the Authority shall treat such tax deficiency as Available Tax
Increment. The Authority will apply any such TIF Contract tax deficiency amount to the
payment due on the next Payment Date (prior to any transfer from the Reserve Fund on
such Payment Date).
The Authority shall have no obligation to pay principal of this Note or interest
thereon on each Payment Date from any source other than Available Tax Increment and
the failure of the Authority to pay the entire amount due on any Payment Date shall not
constitute a default hereunder as long as the Authority pays principal and interest hereon
to the extent of Available Tax Increment or transfers from the Reserve Fund. The
Authority shall have no obligation to pay unpaid balance of principal or accrued interest
that may remain after the final payment on February 1, 2026 except from Available Tax
Increment attributable to property taxes paid in the 2025 or any prior years.
3. Interest. [If no capitalized interest, insert the following] The payment
schedule attached as Exhibit A reflect that interest accruing from the date of issue of this
Note through and including February 1, 2016 is compounded semiannually on February 1
and August 1 of each year and added to principal. Interest shall be computed on the basis
of a year of 360 days and twelve 30-day months.
4. Default. Upon an Event of Default by the Redeveloper under the
Agreement, the Authority may exercise the remedies with respect to this Note described
in Section 9.2 of the Agreement, the terms of which are incorporated herein by reference.
431512v4 CR150-199
5. Optional Prepayment. The principal sum of this Note is prepayable in
whole or in part at any time by the Authority without premium or penalty. No partial
prepayment shall affect the amount or timing of any other regular payment otherwise
required to be made under this Note.
6. Nature of Obligation. This Note is one of an issue in the total principal
amount of $1,011,175 issued to aid in financing certain public redevelopment costs and
administrative costs of a Project undertaken by the Authority pursuant to Minnesota
Statutes, Sections 469.001 through 469.047, and is issued pursuant to the Agreement and
an authorizing resolution (the "Resolution") duly adopted by the Authority on December
18, 2012, and pursuant to and in full conformity with the Constitution and laws of the
State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179. This
Note is a limited obligation of the Authority which is payable solely from Available Tax
Increment pledged to the payment hereof under the Resolution, together with amounts
available in the Reserve Fund. This Note shall not be deemed to constitute a general
obligation of the State of Minnesota or any political subdivision thereof, including,
without limitation, the Authority. Neither the State of Minnesota, nor any political
subdivision thereof shall be obligated to pay the principal of this Note or other costs
incident hereto except out of Available Tax Increment, and neither the full faith and
credit nor the taxing power of the State of Minnesota or any political subdivision thereof
is pledged to the payment of the principal of this Note or other costs incident hereto.
7. Registration and Transfer. This Note is issuable only as a fully registered
note without coupons. As provided in the Resolution, and subject to certain limitations
and exceptions set forth therein, this Note is transferable upon the books of the Authority
kept for that purpose at the principal office of the City Finance Director, by the Owner
hereof in person or by such Owner's attorney duly authorized in writing, upon surrender
of this Note together with a written instrument of transfer satisfactory to the Authority,
duly executed by the Owner. Upon such transfer or exchange and the payment by the
Owner of any tax, fee, or governmental charge required to be paid by the Authority with
respect to such transfer or exchange, there will be issued in the name of the transferee a
new Note of the same aggregate principal amount, maturing on the same dates.
Except as otherwise provided in the Resolution, this Note shall not be transferred
to any person other than an affiliate, or other related entity, of the Owner unless the
Authority has been provided with an opinion of counsel or a certificate of the transferor,
in a form satisfactory to the Authority, that such transfer is exempt from registration and
prospectus delivery requirements of federal and applicable state securities laws.
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 exist, to
happen, and to be performed in order to make this Note a valid and binding limited
obligation of the Authority according to its terms, have been done, do exist, have
happened, and have been performed in due form, time and manner as so required.
431512v4 CR150-199
IN WITNESS WHEREOF, the board of commissioners the Authority has caused
this Note to be executed with the manual signatures of its President and Executive
Director, all as of the Date of Original Issue specified above.
ECONOMIC DEVELOPMENT
AUTHORITY
OF THE CITY OF CRYSTAL
President
Executive Director
431512v4 CR150-199
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond
register of the City Finance Director, in the name of the person last listed below.
Signature of
Date of Registration Registered Owner City Finance Director
, 20_
431512v4 CR150-199
Exhibit A
to Tax Increment Revenue Bond, Series 2013
Payment Date Principal Interest
4315120 CR 150-199