CR 96-149 Sale of Bonds - The Oaks of Mainstreet � � T Y, O
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October 15, 1996 y � P K ,�� Coc►ncifl Repork 96m 149
� SALE OF BONDS--1'HE OAKS OF 1VIAINSI'REET
� Prouosed Action
_ Staff recommends approval of the following motion: Move to a�nrove the following, subject to staflF
- conditions �
= • Resolution 96-86, authorizing; the issuance of the City's $3,795 000 �Inlimited Tax General
: Obligation Bonds (The Oa,ks of Mainstreet Proj�) Taxable Serie"s 1996� and a�pravin�
; and authorizin� the execution of various documents in connection therewith
' • Resolution 96-87, awarding the sale of $500.000 General Obligation 'Tax Increment �onds,
� Series 1996C; fixing�their form and specifications: directin�their execution �nnd de�iver�
� and providine for their payment
• Resolution 96-88, awarding the sale of $680,000 CYenera� Obligation Taxab�e T�
Increment Bonds. Series 1996D_ fixing their forni and specifications: directin�; their
execution and deliverv: and �rovidin�for their pavment
• Fina1 Site Plan dated August 21, 1996
• Fina1 Tax Increment A�plication
It is understood that with this action staff is authorized to mal�e tYrinor changes to the documents,
provided they do not ehange the overall intent of the docurnents.
Overvfew
City staf�has been working �►nth Rea1 Estate Equities, Inc., on a project to facilitateredevelopment of a
66-u�ut toumhouse project. Yn August of this year, the �IRA approved a development agreement for the
a projec�.
The HRE1, as part of this project, is being requested at this time to approve the sale of a revenue bond and
various agreements (H�tA Report 96-27). �
The proposed action is the final action the City needs to undertalce to proceed forward with construction
of the project.
� Primaay Issues to Consider
o What are the specifics of the project? o What is the basis for the staff recommendation?
o What are the specifics of the proposed action? o What is the status of the relocation?
o�Nhat is detailed in the report o What are the sta#� conditions?
from Ehlers/Publicorp?
Suuaorting Documents
o Itesolution 96 o Alley and utility �vntenance agreement
o Resolution 96 o Alley & utility dedication, const�action 8z
o Resolution 96-88 maintenance a.greement
o Development agreement dated Aug. 7, 1996 o Management agreement
o Site plan dated June 21, 1996 o Hopkins Resident �riority Program
o Finat t� increment application o Organization documents--The Oaks �f 1Vgainst�eet
o Ehters/Publicorp reports dated October 15 & 17 o Personal guaranty agreement
4 o Residential real estate purchase agreement o Guaranty agreement--I�eal Estate Equbtges
o Sho e t increment pledge agreement o Prelirninary official statement GO Tax Yncrement
Bonds Series 1996C and l�
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Ja es Y). I�errigan, P 'ng & Economic Development Director
Council Report 96-149 - Page 2
Primarv Issues to Consider
4 o What are the specifics of the project?
The project, as proposed, would involve the construction of 66 owner-occupied townhouse units.
Some of the units would be sold immediately upon completion of construction, with others being
purchased under a lease-to-own option. Under the lease-to-own program, buyers would be able to
have a portion of their lease payment used for down payment assistance.
The conditional use permit has already been approved for the project, subject to certain conditions,
including approval of the final site plan by the Council. This site plan is attached to the report.
Rea1 Estate Equities Development Company will guarantee the following regard°uig this project:
• Payment of shortfalls due to cost overruns in constructing the project
� Payment of revenue shortfalls resulting from occupancy levels being less than 95 percent during
the rental period
• Tax increments are sufficient to make bond payments on the long-term tax increment bonds
• Purchase of unsold units. This agreement would detail that the developer would purchase a
maximum of 33 units of any unsold townhouse units in January 2002 at 80 percent of appraised
value.
In addition to the above, there will be a personal guarantee with 1VIr. Terry Troy and Mr. Itobert
Q Bizanz, the two partners involved in this project, wluch involves the follownig:
• Make up revenue shortfalls due to occupancy levels being below 95 percent during the rental
period
• Tax increments are sufficient to make bond payments on the long-term tax increment boncYs
e Purchase of unsold units. This agreement would detail that the developer vvould purchase a
maximum of 33 units of any unsold townhouse units in January 2002 at 80 percent of appraised
value.
o What are the specifics of the proposed action?
With the subject action, the City Council would be approving the sale of three general obligation
bonds. The total cost of the project will be $9,270,316.77. A majority of the financing vvill be
provided through the HRA/City bond issue as follows:
Bond Amount Issue
� Taxable GO tax increment bond (short term) $3,795,000 City
• Tax-exempt GO tax increment bond (long term) $ 500,000 City
• Taxable GO tax increment bond (long term) $ 665,000 City
• Taxable revenue bond $3,795,000 I�RA
Q It is proposed that the bonds for this project will be sold the day of the subject meeting. �y changes
will be detailed at the meeting.
$300,000 in equity will be provided by the developer. Also, certain fees will be deferxed by the
developer during the rental period.
Council Report 96-149 - Page 3
As of the date of this report, it needs to be noted that certain bond documents will still need to be
p completed in order for the sale to take place.
The motion as recommended by staff also includes approval of the following:
� Fina1 site plan for the project. Other than minor changes, the final plan is the same as u�as
previously approved through the CUP process.
� The final tax increment application. A preliminary application was previously approved for this
project. The amount oftax.increment assistance provided would be $1,165,000. The �crements
used to pay the bond would be generated from TIF District 2-9 (and at the option of th�
�iRA/City, increments from 1-1 and 1-2, if available). It is projected that this will be repaid
through increments generated from the project over an approximately 20-year period.
� The various project documents as provided within this report (under Supporting Documents
section) are incorporated within the bond document resolutions and will be approved with
approval of these resolutions.
o What is detailed in the �eport from Ehlers/Publicorp?
Ehlers/Publicorp was contracted by the City to complete analysis of the financial structure of the
proposed project. The�r final report, which is attached, outlines the financial risks to the City in
undertaking this project. As stated, because the financial structure of the project has changed from
�� what was originally discussed, the risks to the City have increased.
As has been previously emphasized, it needs to be clearly understood that there is potential f nancial
exposure to the HRA/City regarding this project. If it performs as anticipated (based on the ynarket
analysis completed by Ma�ield and Associates), there would be no need for additional public doll�s
to be injected into the project; however, if there were any significant problems with either Yeasing or
selling units that would use the entire $600,000 reserve (because the major�ty of financing is G.0), the
City would be required to inject dollars into the project to cover debt service beyond what �ould be
secured through the personal guarantees.
In making its decision whether to proceed with this project, the HRA/Council needs to vveigh the
benefit of the project and the redevelopment of the site with the financial risks of the project. There
should be action to undertake the project only if the HRA/Council is comfortable assuming the rislcs
as detailed by the financial consultant.
o What is the basis for the staff recommendation?
Staffs recommendation is based on the following:
• An interest, which has been expressed by the HRA and City Council, to facilitate a redevelopment
of the subject site and to proceed with the project as proposed
Q • The proposed proJect is owner-occupied housing and meets the objectives identified in the
Strategic Plan for Econorruc Development .
Council Report 96-149 - Page 4
• The report prepared by Ehlers/Publicorp (an update of this study will be provided to the I3RA/City
� Council prior to October 22)
• The study by Maxfield Research Group, which identifies rnarket support for the project
o What is the status of the retocation�
All but one resident has signed the relocation waivers and purchase agreements with Real Estate
Equities. Staff has received a copy of a11 of these agreements and compared them to the most recent
rent roll, as provided. The developer has stated that they are hopeful the last indi�ridual will sign the
waiver prior to final CounciUHRA action.
Under the terms of the agreement, the residents will have 30 days to move from the subject site
following the second payrnent of $500. This payment was provided October 2,
o�Vl�at are the staff conditions?
l. Completion of atl necessary documents in a form acceptable to staffand legal counsel
2. Compliance with ail conditional use permit requirements as approved.
3: Payment of all legaUconsultant costs as detailed in Section 37 of the development a�reement as of
the date of closing.
4. City approval of plans and specifications.
� t�lternatives
The following alternatives are available with regard to this project:
1. Approve the action as recommended by staff. With approval of this action, the following will
take place:
• Preparation of remaining documents in a form acceptable to City staff and legal counse�
• Sa1e of bonds
2. Continue for additional information or changes in the transaction. The Council needs to discuss this
with the developer, as any significant delay will move the project into winter construction, wlvch witt
increase the cost.
3. Direct staff to work with legal counsel and return at a future date concerning ternunating the
development agreement. With this altemative, there also needs to be discussion of the alternatives
available:
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� Member then introduced the following written resolution,the
reading of which was dispensed with by unanimous consent, and moved its adoption:
RESOLUTION NO. 96-87
A RESOLUTION AWARDING THE SALE OF $500,000
GENERAL OBLIGATION TAX INCREMENT BONDS, SERIES 1996C;
FIXING THEIR FORM AND SPECIFICATIONS;
DIRECTING THEIR EXECUTION AND DELIVERY;
AND PROVIDING FOR THEIR PAYMENT
BE IT RESOLVED By the Czty Council of the City of Hopkins, Hennepin County,
Minnesota (City) as follows:
Section 1. Sale of Bonds
�.O 1. It is hereby detezmined that:
(a} the City has duly established Redevelopment Project No. 1(Project)
pursuant to Minnesota Statutes, Sections 469.001 through 469.047 (the
Act);
� (b) the City has duly established tax increment financing district no. 2-9 (TIF
District) within the Project pursuant to Minnesota Statutes, Section 469.174
to 469.179 (TIF Act);
(c) the City is authorized by Section 469.178 of the TIF Act to issue and sell
its general obligations to pay all or a portion of the public redevelopment
costs (Costs) re�ated to the Project as identified in the tax increment
financing p�an (Plan) for the TIF District;
(d) the following Costs to be financed by the Bonds are authorized by the
Plan:
Redevelopment Project: Cost
Public Alleys and Uti�ities and
Related Costs
Capitaiized Interest
Discount
Costs of Issuance
Total
� SJB108900
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(e) it is necessary and expedient to the sound financial management of the •
affairs of the City to issue $500,000 General Obligation Tax Increment
Bonds, Series 1996C (Bonds) to provide financing for the Costs.
(� the Housing and Redevelopment Authority in and for the City of Hopkins
(Authority) has requested the City to issue and sell its general obligations
to finance a portion of the Costs.
1.02. The proposal of Miller & Schroeder Financial, Inc. (Purchaser) to purchase
$500,000 General Obligation Tax Increment Bonds, Series 1996C (Bonds) of the City described
in the Terms of Proposal thereof is found and determined to be a reasonable offer and is hereby
accepted, the proposal being to purchase the Bonds at a price of $ plus accrued
interest to date of delivery, for Bonds bearing interest as fallows:
Year of Interest Year of Interest
Maturi Rate Maturitv Rate
2012 2015
2013 2016
2014
1.03. The Mayor and City Manager are directed to execute a bond purchase agreement •
with the Purchaser on behalf of the City in substantially the form on file, with such changes
therein consistent with law as the officer executing the agreement may approve, which approval
shall be conclusively evidenced by the execution thereof.
1.04. The City will forthwith issue and sell the Bonds pursuant to Minnesota Statutes,
Chapter 469 (Act), in the total principal amount of $500,000, originally dated October l, 1996,
in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward,
bearing interest as above set forth, and ma'turing serially on February 1 in the years and amounts
as follows:
Year Amount Year Amount
2012 $ 85,000 2015 $105,000
2013 95,000 2016 115,000
2014 100,000
SJB108900 •
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Q In accordance with Minnesota Statutes, Section 475.54, Subd. 17, the City finds that the
Bonds are payable primarily from a source other than `ad valorem taxes, and estimates that the
primary source of payment is sufficient to pay when due the principal of and interest on the
bonds, which primary source of payment is irrevocably appropriated to payment of the
obligations, alI as further described in Section 4 of this Resolution.
I.OS. Optional Redem�tian. The City may elect on February 1, 2006, and on any day
thereafter to prepay Bonds due on or after February 1, 2007. Redemption may be in whole or
in part and if in part, at the option of the City and in such manner as the City will determine.
If less than all Bonds of a maturity are called for redemption, the City will notify DTC (as
defined in Section 7 hereo fl of the particular amount of such maturity to be prepaid. DTC will
determine by lot the amount of each participant's interest in such maturity to be redeemed and
each participant will then select by lot the beneficial ownership interests in such maturity to be
redeemed. Prepayments will be at a price of par plus accrued interest.
Section 2. Registration and Payment.
2.01. Re�istered Form. The Bonds will be issued only in fully registered form. The
interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by
check or draft issued by the Registrar described herein.
2.02. Dates; Interest Pavment Dates. Each Bond will be dated as of the last interest
Q payment date preceding the date of authentication to which interest on the Bond has been paid
or made available for payment, unless (i) the date of authentication is an interest payment date
to which interest has been paid or made available for payment, in whzch case the Bond will be
dated as of the date of authentication, or (ii} the date of authentication is prior to the first interest
payment date, in which case the Bond will be dated as of the date of original issue. The interest
on the Bonds is payable on February 1 and August 1 of each year, commencing February 1,
I 997, to the registered owners of record as of the close of business on the f fteentYt day of the
immediately preceding month, whether or not that day is a business day.
2.03. Re,gistration. The City will appoint a bond registrar, transfer agent, authenticating
agent and paying agent (Registrar). The effect of registration and the rights and duties of the
City and the Registrar with respect thereto are as fol�ows:
(a} Re ister. The Registrar must keep at its principal corporate trust office a
bond register in which the Registrar provides for the registration of ownership of Bonds
and the registration of transfers and exchanges of Bonds entitled to be registered,
transferred or exchanged.
(b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed �
by the registered owner thereof or accoznpanied by a written instrument of transfer, in
form satisfactory to the Registrar, duly executed by the registered owner thereof or by an
attorney duly authorized by the registered owner in writing, the �Registrar will authenticate
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and deliver, in the name of the designated transferee or transferees, one or more new
Bonds of a like aggregate principal amount and maturity, as requested by the transferor. •
The Registrar may, however, close the books for registration of any transfer after the
fifteenth day of the month preceding each interest payment date and until that interest
payment date.
(c) Exchange of Bonds. When Bonds are surrendered by the registered owner
for exchange the Registrar will authenticate and deliver one or more new Bonds of a like
aggregate principal amount and maturity as requested by the registered owner or the
owner's attorney in writing.
(d) Cancellation. Bonds surrendered upon transfer or exchange will be
promptly cancelled by the Registrar and thereafter disposed of as directed by the City.
(e) Improper or Unauthorized Transfer. When a Bond is presented to the
Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is
satisfied that the endorsement on such Bond or separate instrument of transfer is valid and
genuine and that the requested transfer is legally authorized. The Registrar will incur no
liability for the refusal, in good faith, to make transfers which it, in its judgment, deems
improper or unauthorized.
(� Persons Deemed Owners. The City and the Registrar may treat the person
in whose name a Bond is registered in the bond register as the absolute owner of the
Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or •
on account of, the principal of and interest on the Bond and for all other purposes, and
payments so made to a registered owner or upon the owner's order will be valid and
effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or
sums so paid.
(g) Taxes, Fees and Char,ges. The Registrar may impose a charge upon the
owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar
for any tax, fee or other governmental charge required to be paid with respect to the
transfer or exchange.
(h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated
or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount,
number, maturity date and tenor in exchange and substitution for and upon cancellation
of the mutilated Bond or in lieu of and in substitution for a Bond destroyed, stolen or lost,
upon the payment of the reasonable expenses and charges of the Registrar in connection
therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the
Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of
the ownership thereof, and upon furnishing to the Registrar an appropriate bond or
indemnity in form, substance and amount satisfactory to the Registrar, in which both the
City and the Registrar must be named as obligees. Bonds so surrendered to the Registrar
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City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called
for redemption in accordance with its terms it is not necessary to issue a new Bond prior
to payment.
(i) Redemption. In the event any of the Bonds are called for redemption,
notice thereof identifying the Bonds to be redeemed will be given by the Registrar by
mailing a copy of the redemption notice by first class mail (postage prepaid) not more
than 60 and not less than 30 days prior to the date fixed for redemption to the registered
owner of each Bond to be redeemed at the address shown on the registration books kept
by the Registrar and by publishing the notice if required by law. Failure to give notice
by publication or by mail to any registered owner, or any defect therein, will not affect
the validity of the proceedings for the redemption of Bonds. Bonds so called for
redemption will cease to bear interest after the specified redemption date, provided that
the funds for the redemption are on deposit with the place of payment at that time.
2.04. Appointment of Initial Re�istrar. The City appoints Bankers Trust Company, Des
Moines, Iowa, as the initial Registrar. The Mayor 2nd the City Manager are authorized to
execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or
consolidation of the Registrar with another corporation, if the resulting corporation is a bank or
trust company authorized by law to conduct such business, the resulting corporation is authorized
to act as successor Registrar. The City agrees to pay the reasonable and customary charges of
� the Registrar for the services performed. The City reserves the right to remove the Registrar
upon 30 days' notice and upon the appointment of a successor Registrar, in which event the
predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar
and must deliver the bond register to the successor Registrar. On or before each principal or
interest due date, without further order of this Council, the Finance Director must transmit to the
Registrar moneys sufficient for the payment of all principal and interest then due.
2.05. Execution Authentication and Deliverv. The Bonds will be prepared under the
direction of the City Clerk and executed on behalf of the City by the signatures of the Mayor and
the City Manager, provided that all signatures may be printed, engraved or lithographed
facsimiles of the originals. If an officer whose signature or a facsimile of whose signature
appears on the Bonds ceases to be such officer before the delivery of any Bond, that signature
or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer
had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid
or obligatory for any purpose or entitled to any security or benefit under this Resolution unless
and until a certificate of authentication on the Bond has been duly executed by the manual
signat�re of an authorized representative of the Registrar. Certificates of authentication on
different Bonds need not be signed by the same representative. The executed certificate of
authentication on a Bond is conclusive evidence that it has been authenticated and delivered under
this Resolution. When the Bonds have been so prepared, executed and authenticated, the Finance
Director will deliver the same to the Purchaser upon payment of the purchase price in accordance
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with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see
to the application of the purchase price. •
2.06. Temnorarv Bonds. The City may elect to deliver in lieu of printed definitive
Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3
with such changes as may be necessary to reflect more than one maturity in a single temporary
bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be
exchanged therefor and cancelled.
Section 3. Form of �ond
3.01. The Bonds will be printed or typewritten in substantially the following form:
[Face of the Bond]
No. R- LTNITED STATES OF AMERICA $
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF HOPKINS
GENERAL OBLIGATION TAX INCREMENT BOND, SERIES 1996C
Rate Maturitv Ori inal Issue CUSIP •
October l, 1996
Registered Owner: Cede & Co.
The City of Hopkins, Minnesota, a duly organized and existing municipal corporation in
Hennepin County, Minnesota (City), acknowledges itself to be indebted and for value received
hereby promises to pay to the Registered Owner specified above or registered assigns, the
principal sum of $ on the maturity date specified above with interest thereon from
the date hereof at the annual rate specified above, payable February 1 and August 1 in each year,
commencing February 1, 1997, to the person in whose name this Bond is registered at the close
of business on the fifteenth day (whether or not a business day) of the immediately preceding
month. The interest herebn and, upon presentation and surrender hereof, the principal hereof are
payable in lawful money of the United States of America by check or draft by Bankers Trust
Company, Des Moines, Iowa, as Bond Registrar, Paying Agent, Transfer Agent and
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Au�henticating Agent, or its designated successor under the Resolution described herein. For the
Q prompt and full payment of such principal and interest as the same respectively become due, the
full faith and credit and taxing powers of the City have been and are hereby inevocably pledged.
The City may elect on February l, 2006, and on any day thereafter to prepay Bonds due
on or after February l, 2007. Redemption may be in whole or in part and if in part, at the option
of the City and in such manner as the City will determine. If less than all Bonds of a maturity
are called for redemption, the City will notify Depository Trust Company (DTC) of the particular
amount of such maturity to be prepaid. DTC will determine by lot the amount of each
participant's interest in such maturity to be redeemed and each participant will then select by lot
the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a
price of par plus accrued interest.
The City Council has designated the issue of Bonds of which this Bond forms a part as
"qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the Internal
Revenue Code of 1986, as amended (the Code) relating to disallowance of interest expense for
financial institutions and within the $10 million limit allowed by the Code for the calendar year
of issue. -
Additional provisions of this Bond are contained on the reverse hereof and such provisions
have the same effect as though fully set forth in this place.
This Bond is not valid or obligatory for any purpose or entitled to any security or benefit
Q under the Resolution until the Certificate of Authentication hereon has been executed by the Bond
Registrar by manual signature of one of its authorized representatives.
IN WITNESS WHEREOF, the City of Hopkins, Hennepin County, Minnesota, by its City
Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures
of the Mayor and City Manager and has caused this Bond to be dated as of the date set forth
below.
Dated:
CITY OF HOPKINS, MINNESOTA
(Facsimile) (Facsimile)
City Manager Mayor
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CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned within. �
BANKERS TRUST COMPANY
B
Authorized Representative
[Reverse of the Bond]
, This Bond is one of an issue in the aggregate principal amount of $500,000 all of like
original issue date and tenor, except as to number, maturity date, redemption privilege, and
interest rate, all issued pursuant to a resolution adopted by the City Council on October 22, 1996
(the Resolution), for the purpose of providing money to aid in financing the public redevelopment
costs in a Redevelopment Project (Project) in the City, pursuant to and in full conformity with
the home rule charter of the City and the Constitution and laws of the State of Minnesota,
including Minnesota Statutes, Sections 469.174 to 469.179, the Minnesota Tax Increment
Financing Act, and Minnesota Statutes, Sections 469.001 through 469.047 and the principal
hereof and interest hereon are payable primarily from tax increments resulting from increases in
taYable valuation of real property in the Tax Increment Financing District (TIF District) within
the Project as set forth in the Resolution to which reference is made for a full statement of rights .
and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for
payment of this Bond and the City Council has obligated itself to levy ad valorem taxes on all
taxable property in the City in the event of any deficiency of tax increments pledged, which taxes
may be levied without limitation as to rate or amount. The Bonds of this series are issued only
as fully registered Bonds in denominations of $5,000 or any integral multiple thereof of single
maturities. '
As provided in the Resolution and subject to certain limitations set forth therein, this Bond
is transferable upon the books of the City at the principal office of the Bond Registrar, by the
registered owner hereof in person or by the owner's attorney duly authorized in writing, upbn
surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar,
duly executed by the registered owner or the owner's attorney; and may also be surrendered in
exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City
will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner,
of the same aggregate principal amount, bearing interest at the same rate and maturing on the
same date, subject to reimbursement for any tax, fee or governmental charge required to be paid
with respect to such transfer or exchange.
The City and the Bond Registrar may deem and treat the person in whose name this Bond
is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose
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Q of receiving payment and for all other purposes, and neither the City nor the Bond Registrar will
be affected by any notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts,
conditions and things required by the home rule charter of the City and the Constitution and laws
of the State of Minnesota to be done, to exist, to happen and to be performed preliminary to and
in the issuance of this Bond in order to make it a valid and binding general obligation of the City
in accordance with its terms, have been done, do exist, have happened and have been performed
as so required, and that the issuance of this Bond does not cause the indebtedness of the City to
exceed any constitutional, statutory or charter limitation of indebtedness.
The following abbreviations, when used in the inscription on the face of this Bond, will
be construed as though they were written out in full according to applicable laws or reguiations:
TEN COM -- as tenants IJNIF GIFT MIN ACT Custodi�►n
in common (Custj (Minor)
� TEN ENT -- as tenants under Uniform Gifts or
by entireties Transfers to Minors
JT TEN -- as joint tenants with
right of survivorship and Act . . . . . . . . . . . .
not as tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond and all rights thereunder, and
does hereby inevocably constitute and appoint attorney to transfer
the said Bond on the books kept for registration of the within Bond, with full power of
substitution in the premises.
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Dated: •
Notice: The assignor's signature to this assignment must correspond with the name
as it appears upon the face of the within Bond in every particular, without
� alteration or any change whatever.
Signa�ure Guaranteed:
Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm
having a membership in one of the major stock exchanges.
The Bond Registrar will not effect transfer of this Bond unless the information concerning
the assignee requested below is provided.
Name and Address:
(Include information for all joint owners if this •
Bond is held by joint account.)
Please insert social security or other
identifying number of assignee
PROVISIONS AS TO REGISTRATION
The ownership of the principal of and interest on the within Bond has been registered on
the books of the Registrar in the name of the person last noted below.
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� ' `
Q Signature of
Date of Registration Re�istered Owner Officer of Re i�rar
Cede & Co.
Federal ID #13-2555119
3.02. The City Clerk is directed to obtain a copy of the proposed approving legal opinion
of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to
dating thereof and to cause the opinion to be printed on or accompany each Bond.
Section 4. Proceeds• Pavment• Security; Pled�es and Covenants.
4.01. (a) Proceeds of the bonds will be applied in accordance with the
Agreement for Dedication and Maintenance of Public Alleys and Utility Easements
between the City, the Authority, the Oaks of Mainstreet, LLC and the Oaks of Mainstreet
Townhomes dated October 1, 1996 (the Public Improvements Agreement), which
document is hereby approved by the City in all respects. The Mayor and City Manager
are authorized to execute the Public Improvements Agreement in substantially the form
on file, with such changes �not inconsistent with law as the officer executing the same may
approve, which approval shall be conclusively evidenced by the execution thereof.
� (b) The Bonds are payable from the General Obligation Ta�c Increment Bonds,
Series 1996C Debt Service Fund (Debt Service Fund) hereby created, and all tax
increments (Taa� Increments) received by the City pursuant to the Long Term Bonds Tax
Increment Pledge Agreement between the City and the Authority dated October l, 1996
(Long Term Bonds Pledge Agreement) are pledged to the Debt Service Fund. If a
payment of principal or interest on the Bonds becomes due when there is not sufficient
money in the Debt Service Fund to pay the same, the Finance Director is directed to pay
such principal or interest from the general fund of the City, and the general fund will be
reimbursed for those advances out of the proceeds of T� Increments when received.
There is appropriated to the Debt Service Fund (i) capitalized interest funded from Bond
proceeds, if any, (ii) any amount over the minimum purchase price paid by the Purchaser,
and (iii) the accrued interest paid by the Purchaser upon closing and delivery of the
Bonds.
(c) The Mayor and City Manager are authorized to execute the Long Term
Bonds Pledge Agreement in substantially the form on file, with such changes not
inconsistent with law as the officer executing the same may approve, which approval shall
be conclusively evidenced by the execution thereof.
(d) The Mayor and City Manager are also authorized to execute that certain
Guaranty Agreement between Real Estate Equities Development Company, the City and
the Authority dated October 1, 1996 and that certain Personal Guaranty Agreement
�
between Terrence E. Troy, Robert S. Bisanz, the City and the Authority dated October •
l, 1996, each in substantially the form on file, with such changes not inconsistent with
law as the officer executing the same may approve, which approval shall be conclusively
evidenced by the execution thereo£
(e) The Mayor and City Manager also authorized to execute that certain
Agreement for Maintenance of Public Alleys and Utility Easements between the City, the
Authority and the Oaks of Mainstreet Townhomes dated October 1, 1996 (the Public
Improvements Maintenance Agreement) in substantially the form on file, with such
changes not inconsistent with law as the officer executing the same may apFrove, which
approval shall be conclusively evidenced by the execution thereof.
4.02. It is determined that the estimated collection of Tax Increments for payment of
principal and interest on the Bonds will produce at least five percent in excess of the amount
needed to meet, when due, the principal and interest payments on the Bonds and that no tax levy
is needed at this time.
4.03. The City Clerk is directed to file a certified copy of this Resolution with the
Taxpayer Services Division Manager of Hennepin County and obtain the certificate required by
Minnesota Statutes, Section 475.63.
Section 5. Authentication of Transcript.
5.01. The officers of the City are authorized and directed to prepare and furnish to the �
Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records
of the City relating to the Bonds and to the financial condition and affairs of the City, and such
other certificates, affidavits and transcripts as may be required to show the facts within their
knowledge or as shown by the books and records in their custody and under their control, relating
to the validity and marketability of the Bonds, and such instruments, including any heretofore
furnished, will be deemed representations of the City as to the facts stated therein.
5.02. The Mayor, City Manager and Finance Director are authorized and directed to
certify that they have examined the Official Statement prepared and circulated in connection with
the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official
Statement is a complete and accurate representation of the facts and representations made therein
as of the date of the Official Statement.
Section 6. Tax Covenant.
6.01. The City covenants and agrees with the holders from time to time of the Bonds
that it will not take or permit to be taken by any of its officers, employees or agents any action
which would cause the interest on the Bonds to become subject to taxation under the Internal
Revenue Code of 1986, as amended (the Code), and the Treasury Regulations promulgated
�
�
�
�
9
3 thereunder, in effect at the time of such actions, and that it will take or cause its officers,
� Q employees or agents to take, all affirmative action with'in its power that may be necessary to
� ensure that such interest will not become subject to taxation under the Code and applicable
� Treasury Regulations, as presently existing or as hereafter amended and made applicable to the
Bonds.
6.02. (a) The City will comply with requirements necessary under the Code to establish
- and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of
the Code, including without limitation requirements relating to temporary periods for investments,
limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of
excess investment earnings to the United States if the Bonds (together with other obligations
reasonably expected to be issued in calendar year 1996) exceed the small-issuer exception amount
of $5,000,000.
(b) For purposes of qualifying for the small issuer exception to the federal arbitrage
rebate requirements, the City finds, determines and declares that the aggregate face amount of all
tax-exempt bonds (other than private activity bonds) issued by the City (and all subordinate
entities of the City) during the calendar year in which the Bonds are issued and outstanding at
one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section
148(�(4)(C) of the Code.
6.03. The City further covenants not to use the proceeds of the Bonds or to cause or
permit them or any of them to be used, in such a manner as to cause the Bonds to be "private
� activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code.
6.04. In order to qiialify the Bonds as "qualified tax-exempt obligations" within the
meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and
representations:
' (a) the Bonds are not "private activity bonds" as defined in Section 141 of the
Code;
(b) the City designates the Bonds as "qualified tax-exempt obligations" for
purposes of Section 265(b)(3) of the Code;
(c) the reasonably anticipated amount of tax-exempt obligations (other than
private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the
City (and all subordinate entities of the City) during calendar year 1996 will not exceed
$10,000,000; and
(d) not more than $10,000,000 of obligations issued by the City during
calendar year 1996 have been designated for purposes of Section 265(b)(3) of the Code.
�
6.05. The City will use its best efforts to comply with any federal procedural
requirements which may apply in order to effectuate the designations made by this section. �
Section 7. Book-Entry System; Limited Obligation of Citv.
7.01. The Bonds will be initially issued in the form of a separate single typewritten or
printed fully registered Bond for each of the maturities set forth in Section 1.03 hereof. Upon
initial issuance, the ownership of each Bond will be registered in the registration books kept by
the Bond Registrar in the name of Cede & Co., as nominee for The Depository Trust Company,
New York, New York, and its successors and assigns (DTC). Except as provided in this section,
all of the outstanding Bonds will be registered in the registration books kept by the Bond
Registrar in the name of Cede & Co., as nominee of DTC.
7.02. With respect to Bonds registered in the registration books kept by the Bond
Registrar in the name of Cede & Co., as nominee of DTC, the City, the Bond Registrar and the
Paying Agent will have no responsibility or obligation to any broker dealers, banks and other
financial institutions from time to time for which DTC holds Bonds as securities depository
(Participants) or to any other person on behalf of which a Participant holds an interest in the
Bonds, including but not limited to any responsibility or obligation with respect to (i) the
accuracy of the recards of DTC, Cede & Co. or any Participant with respect to any ownership
interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a
registered owner of Bonds, as shown by the registration books kept by the Bond Registrar,) of
any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to �
any Participant or any other person, other than a registered owner of Bonds, of any amount with
respect to principal of, premium, if any, or interest on the Bonds. The City, the Bond Registrar
and the Paying Agent may treat and consider the person in whose name each Bond is registered
in the registration books kept by the Bond Registrar as the holder and absolute owner of such
Bond for the purpose of payment of principal, premium and interest with respect to such Bond,
for the purpose of registering transfers with respect to such Bonds, and for all other purposes.
The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to
or on the order of the respective registered owners, as shown in the registration books kept by
the Bond Registrar, and all such payments will be valid and effectual to fully satisfy and
discharge the City's obligations with respect to payment of principal of, premium, if any, or
interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered
owner of Bonds, as shown in the registration books kept by the Bond Registrar, will receive a
certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City
Clerk of a written notice to the effect that DTC has determined to substitute a new nominee in
place of Cede & Co., the words "Cede & Co.," will refer to such new nominee of DTC; and upon
receipt of such a notice, the City Clerk will promptly deliver a copy of the same to the Bond
Registraz and Paying Agent.
7.03. Representation Letter. The City has heretofore executed and delivered to DTC a
Blanket Issuer Letter of Representations (Representation Letter) which shall govern payment of
principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds.
•
� Any Paying Agent or Bond Registrar subsequently appointed by the Ciry with respect to the
Bonds will agree to take all action necessary for all representations of the City in the
Representation letter with respect to the Bond Registrar and Paying Agent, respectivety, to be
complied with at all times.
7.04. Transfers Outside Book-Entrv Svstem. In the event the City, by resolution of the
City Council, determines that it is in the best interests of the persons having beneficial interests
in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon
DTC will notify the Participants, of the availability through DTC of Bond certificates. In such
event the City will issue, transfer and exchange Bond certificates as requested by DTC and any
other registered owners in accordance with the provisions of this Resolution. DTC may
determine to discontinue providing its services with respect to the Bonds at any time by giving
notice to the City and discharging its responsibilities with respect thereto under applicai�le law.
In such event, if no successor securities depository is appointed, the City will issue and the Bond
Registrar will authenticate Bond certificates in accordance with this resolution and the provisions
hereof wi11 apply to the transfer, exchange and method of payment thereo£
7.05. Pavments to Ce�e & Co. Notwithstanding any other provision of this Resolution
to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC,
payments with respect to principal of, premium, if any, and interest on the Bond and notices with
respect to the Bond wili be made and given, respectively in the manner provided in DTC's
Operational Arrangements, as set forth in the Representation Letter.
� Section 8. Continuin� Disclosure..
8.01: The City nereby covenants. and agrees that it will comply with and carry out all of
the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of
this Resolution, failure of the City to comply with the Continuing Disclosure Certificate is not
to be considered an event of default with respect to the Bonds; however, any Bondholder may
take such actions as may be necessary and appropriate, including seeking mandate or specific
performance by court order, to cause the City to compiy with its obligations under this section.
8.02. "Continuing Disclosure Certificate" means that certain Continuing Disclosure
Certificate executed by the Mayor and City Clerk and dated the date of issuance and delivery of
the Bonds, as originally executed and as it may be amended from time to time in accordance with
the terms thereof.
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:
�
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and the following voted against the same:
•
whereupon said resolution was declared duly passed and adopted.
•
�
;
' � STATE OF MINNESOTA j
: COUNTY OF HENNEPIN ) SS.
; )
� CITY OF HOPKINS )
�
� I, the undersigned, being the duly qualified and acting City Clerk of the City of Hopkins,
Hennepin County, Minnesota, do hereby certify that I have carefully compared the attached and
foregoing extract of minutes of a special meeting of the City Council of the City held on October
22, 1996 with the original minutes on file in my office and the extract is a full, true and correct
copy of the minutes insofar as they relate to the issuance and sale of $500,000 General Obligation
Tax In�rement Bonds, Series 1996C of the City.
WITNESS My hand officially as such City Clerk and the corporate seal of the City this -
day of , 1996.
�
City Clerk
Hopkins, Minnesota
(S�AL)
�
STATE OF MINNESOTA TAXPAYER SERVICES
DIVISION MANAGER'S �
CERTIFICATE AS TO
COUNTY OF HENNEPIN REGISTR.ATION WHERE NO AD
VALOREM TAX LEVY
I, the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota,
hereby certify that a resolution adopted by the City Council of the City of Hopkins, Minnesota,
on October 22, 1996, relating to General Obligation Tax Increment Bonds, Series 1996C, in the
amount of $500,000, dated October 1, 1996, has been filed in my office and said obligations have
been registered on the register of obligations in my office.
WITNESS My hand and official seal this day of , 1996.
Taxpayer Services Division Manager
�
Hennepin County, Minnesota
(SEAL)
By
Deputy
�
f !
+ �
� Member then introduced the following written resolution, the
�
�
� � reading of which was dispensed with by unanimous consent, and moved its adoption:
�
� RESOLUTION NO. 96-88
�
A RESOLUTION AWARDING THE SALE Q�F $665,004
GENER.AL OBLIGATION TAXABLE TAX INCREMENT
BONDS, SERIES 1996D;
FIXING THEIR FORM AND SPECIFICATIONS;
DIRECTING THEIR EXECUTION AND DELIVERY;
AND PROVIDING FOR THEIR PAYMENT
BE IT RESOLVED By the City Council of the City of Hopkins, Hennepin County,
Minnesota (City) as follows:
Section 1. Sale af Bonds
1.01. It is hereby determined that:
(a) the City has duly established Redevelopment Project No. 1(Project)
pursuant to Minnesota Statutes, Sections 469.001 through 469.047 (Act);
� (b) the City has duly established tax increment financing district no. 2-9 (TIF
District) within the Project pursuant to Minnesota Statutes, Sections 469.174 to 469.179
(TIF Act);
(c) the City is authorized by section 469.178 of the TIF Act to issue and sell
its general obligations to pay all or a portion of the public redevelopment costs (Costs)
related to the Project as identified in the tax increment financing plan (Plan) for the TIF
District. �
(d) the Plan authorizes the following Costs to be financed by the general
obligations:
Redevelo�ment Project Cost
Acquisition, Relocation, Construction
and Related Costs
Capitalized Interest
Discount
Costs of Issuance
Total
Q SJB108902
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. � ►
(e) it is necessary and expedient to the sound financial management of the �
affairs of the City to issue $665,000 Taxable General Obligation Tax Increment Bonds,
Series 1996D (Bonds) to provide financing for the Costs;
( fl the Housing and Redevelopment Authority in and for the City of Hopkins
(Authority) has requested the City to issue and sell its general obligations to finance a
portion of the Costs.
1.02. The proposal of Miller & Schroeder Financial, Inc. (Purchaser) to purchase
$665,000 General Obligation Taxable Tax Increment Bonds, Series 1996D (Bonds) of the City
described in the Official Terms of Proposal thereof is found and determined to be a reasonable
offer and is accepted, the proposal being to purchase the Bonds at a price of $ plus
accrued interest to date of delivery, for Bonds bearing interest as follows:
Year of Interest Year of interest
Maturitv Rate Maturitv Rate
2003 2008
2004 2009
2005 2010
2006 2011
2007
•
1.03. The Mayor and City Manager are directed to execute a bond purchase agreement
with the Purchaser on behalf of the City in substantially the form on file, with such changes
therein consister.t with law as the officer executing the agreement may approve, which approval
shall be conciusively evidenced by the execution thereof.
1.04. The City will forthwith issue and sell the Bonds pursuant to Minnesota Statutes,
Chapter 469 (Act) in the total principal amount of $665,000, originally dated October 1, 1996,
in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward,
beaxing interest as above set forth, and maturing serially on February 1 in the years and amounts
as follows:
SJB108902 •
HP110-51
j. . __ . . .. .
= f
_ '.
= Year Amount Year Amount
= � 2003 $55,000 2008 $80,000
� 2004 60,000 2009 85,000
' 2005 85,000 2010 90,000
� 2006 85,000 2011 95,000
� 2007 70,000
� In accordance with Minnesota Statutes, Section 475.54, Subd. 17, the City finds that the
� Bonds are payable primarily from a source other than ad valorem taxes, and estimates that the
primary source of payment is sufficient to pay when due the principal of and interest on the
bonds, which primary source of payment is irrevocably appropriated to payment of the
obligations, all as further described in Section 4 of this Resolution.
1.05. Optional Redemption. The City may elect on February 1, 2006, and on any day
thereafter to prepay Bonds due on or after February 1, 2007. Redemption may be in whole or
in part and if in part, at the option of the City and in such manner as the City will determine.
If less than all Bonds of a maturity are called for redemption, the City will notify DTC (as
defined in Section 6 hereor� of the particular amount of such maturity to be prepaid. DTC will
determine by lot the amount of each participant's interest in such maturity to be redeemed and
each participant will then select by lot the beneficial ownership interests in such maturity to be
redeemed. Prepayments will be at a price of par plus accrued interest.
Q Section 2. Re�istration and Pavment.
2.01. Registered Form. The Bonds will be issued only in fully registered form. The
interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by
check or draft issued by the Registrar described herein.
2.02. Dates; Interest Pa�ment Dates. Each Bond will be dated as of the last interest
payment date preceding the date of authentication to which interest on the Bond has been paid
or made available for payment, unless (i) the date of authentication is an interest payment date
to which interest has been paid or made available for payment, in which case the Bond will be
dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest
payment date, in which case the Bond will be dated as of the date of original issue. The interest
on the Bonds is payable on February 1 and August 1 of each year, commencing February 1,
1997, to the registered owners of record thereof as of the close of business on the fifteenth day
of the immediately preceding month, whether or not such day is a business day.
2.03. Re�istration. The City will appoint a bond registrar, transfer agent, authenticating
agent and paying agent (Registrar). The effect of registration and the rights and duties of the
City and the Registrar with respect thereto are as follows:
Q SJB108902
HP110-51
' 1
(a) Re ister. The Registrar must keep at its principal corporate trust office a
bond register in which the Registrar provides for the registration of ownership of Bonds �
and the registration of transfers and exchanges of Bonds entitled to be registered,
transferred or exchanged.
(b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed
by the registered owner thereof or accompanied by a written instrument of transfer, in
form satisfactory to the Registrar, duly executed by the registered owner thereof or by an
attorney duly authorized by the registered owner in writing, the Registrar will authenticate
and deliver, in the name of the designated transferee or transferees, one or more new
Bonds of a like aggregate principal amount and maturity, as requested by the transferor.
The Registrar may, however, close the books for registration of any transfer after the
fifteenth day of the month preceding each interest payment date and until that interest
payment date.
(c) Exchange of Bonds. When Bonds are surrendered by the registered owner
for exchange the Registrar will authenticate and deliver one or more new Bonds of a like
aggregate principal amount and maturity as requested by the registered owner or the
owner's attorney in writing.
(d) Cancellation. Bonds surrendered upon transfer or exchange will be
promptly cancelled by the Registrar and thereafter disposed of as directed by the City.
(e) Improper or Unauthorized Transfer. When a Bond is presented to the •
Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is
satisfied that the endorsement on the Bond or separate instrume�nt of transfer is valid and
genuine and that the requested transfer is legally authorized. The Registrar will incur no
liability for the refusal, in good faith, to make transfers which it, in its judgment, deems
improper or unauthorized.
(� Persons Deemed Owners. The City and the Registrar may treat the person
in whose name a Bond is registered in the bond register as the absolute owner of the
Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or
on account of, the principal of and interest on the Bond and for all other purposes, and
payments so made to a registered owner or upon the owner's order will be valid and
effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or
sums so paid.
(g) Taxes, Fees and Char�es. The Registrar may impose a charge upon the
owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar
for any tax, fee or other governmental charge required to be paid with respect to the
transfer or exchange.
SJB108902 •
HP110-51
(h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated
Q or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount,
nurnber, maturity date and tenor in exchange and substitution for and upon cancellation
of the mutilated Bond or in lieu of and in substitution for a Bond destroyed, stolen or lost,
upon the payment of the reasonable expenses and charges of the Registrar in connection
therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the
Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of
the ownership thereof, and upon furnishing to the Registrar an appropriate bond or
indemnity in form, substance and amount satisfactory to it and as provided by law, in
which both the City and the Registrar must be named as obligees. Bonds so surrendered
to the Registrar will be cancelled by the Registrar and evidence of such cancellation must
be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured
or been called for redemption in accordance with its terms it is not necessary to issue a
new Bond prior to payment.
(i) Redemption. In the event any of the Bonds are called for redemption,
notice thereof identifying the Bonds to be redeemed will be given by the Registrar by
mailing a copy of the redemption notice by first c�ass mail (postage prepaid) not more
than 60 and not less than 30 days prior to the date fixed for redemption to the registered
owner of each Bond to be redeemed at the address shown on the registration books kept
by the Registrar and by publishing the notice if required by law. Failure to give notice
, by publication or by mail to any registered owner, or any defect therein, will not affect
the validity of the proceedings for the redemption of Bonds. Bonds so called for
Q redemption will cease to bear interest after the specified redemption date, provided that
the funds for the redemption are on deposit with the place of payment at that time.
2.04. Anpointment of Initial Re isg trar. The City appoints Bankers Trust Company, Des
Moines, Iowa, as the initial Registrar. The Mayor and the Cify Manager are authorized to
execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or
consolidation of the Registrar with another corporation, if the resulting corporation is a bank or
trust company authorized by law to conduct such business, the resulting corporation is authorized
to act as successor Registrar. The City agrees to pay the reasonable and customary charges of
the Registrar for the services performed. The City reserves the right to remove the Registrar
upon 30 days' notice and upon the appointment of a successor Registrar, in which event the
predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar
and must deliver the bond register to the successor Registrar. On or before each principal or
interest due date, without further order of this Council, the Finance Director must transmit to the
Registrar monies sufficient for the payment of all principal and interest then due.
2.05. Execution, Authentication and Deliverv. The Bonds will be prepared under the
direction of the City Clerk and executed on behalf of the City by the signatures of the Mayor and
the City Manager, provided that all signatures may be printed, engraved or lithographed
facsimiles of the originals. If an officer whose signature or a facsimile of whose signature
appears on the Bonds ceases to be such officer before the delivery of any Bond, such signature
Q SJB108902
HP110-51
or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer
had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid •
or obligatory for any purpose or entitled to any security or benefit under this Resolution unless
and until a certificate of authentication on the Bond has been duly executed by the manual
signature of an authorized representative of the Registrar. Certificates of authentication on
different Bonds need not be signed by the same representative. The executed certificate of
authentication on a Bond is conclusive evidence that it has been authenticated and delivered under
this Resolution. When the Bonds have been so prepared, executed and authenticated, the Finance
Director will deliver the same to the Purchaser upon payment of the purchase price in accordance
with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see
to the application of the purchase price.
2.06. Temporarv Bonds. The City may elect to deliver in lieu of printed definitive
Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3
with such changes as may be necessary to reflect more than one maturity ir. a single temporary
bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be
exchanged therefor and cancelled.
Sectic�n 3. Form of Bond
3.01. The Bonds will be printed or typewritten in substantially the following form:
[Face of the Bond] •
No. R- LTNITED STATES OF AMERICA $
STATE OF MINNESOTA
COUNTY OF HENNEPIN
. CITY OF HOPKINS
GENERAL OBLIGATION TAXABLF, TAX INCREMENT
BOND, SERIES 1996D
Date of
Rate Maturitv Ori�inal Issue CUSIP
October l, 1996
Registered Owner: Cede & Co.
SJB�08902 �
HP110-51
The City of Hopkins, Minnesota, a duly organized and existing municipal corporation in
Q Hennepin County, Minnesota (City), acknowledges itself to be indebted and for value received
hereby promises to pay to the Registered Owner specified above, or registered assigns, the
principal sum of $ on the maturity date specified above, with interest thereon from
the date hereof at the annual rate specified above, payable February 1 and August 1 in each year,
commencing February 1, 1997, to the person in whose name this Bond is registered at the close
of business on the fifteenth day (whether or not a business day) of the immediately preceding
month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are
= payable in lawful money of the United States of America by check or draft by Bankers Trust
Company, Des Moines, Iowa, as Bond Registrar, Paying Agent, Transfer Agent and
= Authenticating Agent, or its designated successor under the Resolution described herein. For the
_ prompt and full payment of such principal and interest as the same respectively become due, the
= full faith and credit and t�ing powers of the City have been and aze hereby irrevocably pledged.
�
� The City may elect on February l, 2006, and on any day thereafter to prepay Bonds due
� on or after February 1, 2007. Redemption may be in whole or in part and if in part, at the option
of the City and in such manner as the City will determine. If less than all Bonds of a maturity
are called for redemption, the City will notify The Depository Trust Company (DTC) of the
particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each
' participant's interest in such maturity to be redeemed and each participant will then select by lot
� the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a
price of par plus accrued interest.
� Additional provisions of this Bond are contained on the reverse hereof and such provisions
for all purposes have the same effect as though fully set forth in this place.
This Bond is not valid or obligatory for any purpose or entitled to any security or benefit
under the Resolution until the Certificate of Authentication hereon has been Executed by the Bond
Registrar by manual signature of one of its authorized representatives.
IN WITNESS WHEREOF, the City of Hopkins, Hennepin County, Minnesota, by its City
Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures
of the Mayor and City Manager and has caused this Bond to be dated as of the date set forth
below.
� SJB108902
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Dated:
CITY OF HOPKINS, MINNESOTA ,
(facsimile) (facsimile)
City Manager Mayor
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned within.
. BANKERS TRUST COMPANY
By
Authorized Representative
[Reverse of the Bond] •
This Bond is one of an issue in the aggregate principal amount of $665,000 all of like
original issue date and tenor, except as to number, maturity date, redemption privilege, and
interest rate, all issued pursuant to a resolution adopted by the City Council on October 22, 1996
(the Resolution), for the purpose of providing money to aid in financing public redevelopment
costs in a Redevelopment Project (Project) in the City, pursuant to and in full confcrmity with
the home rule charter of the City and the Constitution and laws of the State of Minnesota,
including Minnesota Statutes, Sections 469.174 through 469.179, the Minnesota Tax Increment
Financing Act, and Minnesota Statutes, Sections 469.001 through 469.047, and the principal
hereof and interest hereon are payable primarily from tax increments resulting from increases in
taxable valuation of real property in the Tax Increment Financing District (TIF District) within
the Project as set forth in the Resolution to which reference is made for a full statement of rights
and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for
payment of this Bond and the City Council has obligated itself to levy ad valorem taxes on all
taxable property in the City in the event of any deficiency of tax increments pledged, which taxes
may be levied without limitation as to rate or amount. The Bonds of this series are issued only
as fully registered Bonds in denominations of $5,000 or any integral multiple thereof of single
maturities.
SJB108902
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� As provided in the Resolution and subject to certain limitations set forth therein, this Bond
� is transferable upon the books of the City at the principal office of the Bond Registrar, by the
registered owner hereof in person ar by the owner's attorney duly authorized in writing, upon
surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar,
� duly executed by the registered owner or the owner's attorney; and may also be surrendered in
exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City
will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner,
of the same aggregate principal amount, bearing interest at the same rate and maturing on the
same date, subject to reimbursement for any tax, fee or governmental charge required to be paid
with respect to such transfer or exchange.
The City and the Bond Registrar may deem and treat the person in whose name this Bond
is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose
of receiving payment and for all other purposes, and neither the City nor the Bond Registrar will
be affected by any notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts,
conditions and things required by the home rule charter of the City and the Constitution and laws
of the State of Minnesota to be done, to exist, to happen and to be performed preliminazy to and
in the issuance of this Bond in order to make it a valid and binding general obligation of the City
in accordance with its terms, have been done, do exist, have happened and have been performed
as so required, and that the issuance of this Bond does not cause the indebtedness of the City to
exceed any constitutional, statutory or charter limitation of indebtedness.
�
The following abbreviations, when used in the inscription on the face of this Bond, will
be construed as though they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants LTNIF GIFT MIN ACT Custodian
in common (Cust) (Minor)
TEN ENT -- as tenants under Uniform Gifts or
by entireties Transfers to Minors
JT TEN -- as joint tenants with
right of survivorship and Act . . . . . . . . . . . .
not as tenants in common (State)
Additional abbreviations may also be used though not in the above list.
� SJS108902
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•
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond and all rights thereunder, and
does hereby irrevocably constitute and appoint attorney to transfer
the said Bond on the books kept for registration of the within Bond, with full power of
substitution in the premises.
Dated:
Notice: The assignor's signature to this assignment must correspond with the name
as it appears upon the face of the within Bond in every particular, without
alteration or any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm •
having a membership in one of the major stock exchanges.
The Bond Registrar will not effect transfer of this Bond unless the information concerning
the assignee requested below is provided.
Name and Address:
(Include information for all joint owners if this
Bond is held by joint account.)
Please insert social security or other
identifying number of assignee
SJB108902
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PROVISIONS AS TO REGISTRATION
4 The ownership of the principal of and interest on the within Bond has been registered on
the books of the Registrar in the name of the person last noted below.
Signature of
Date of Re�istration Re�istered Owner Officer of the Registrar
= Cede & Co.
= Federal ID #13-2555119
a
3.02. The City Clerk is directed to obtain a copy of the proposed approving legal opinion
� of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to
� dating thereof and will cause the opinion to be printed on or accompany each Bond.
�
� Section 4. Proceeds; Payment; Securitv.
4.01. (a) Proceeds of the bonds will be applied in accordance with the Series
1996D Loan Agreement between the Authority and The Oaks of Mainstreet, LLC dated
as of October 1, 1996 (Series 1996D Loan Agreement), which document is hereby
approved by the City in all respects.
� (b) The Bonds are payable from the General Obligation Taxable Ta.�c Increment
Bonds, Series 1996D Debt Service Fund (Debt Service Fund) hereby created, and all tax
increments (Tax Increments) received by the City pursuant to the Long Term Bonds Tax
Increment Pledge Agreement betw�en the City and the Authority dated October 1, 1996
(Long Term Bonds Pledge ,Agreement), are pledged to the Debt Service Fund. If a
payment of principal or interest on the Bonds becomes due when there is not sufficient
money in the Debt Service Fund to pay the same, the Finance director will pay such
principal or interest from the general fund of the City, and the general fund will be
reimbursed for those advances out of the proceeds of Tax Increments when received.
There is hereby appropriated to the Debt Service Fund (i) capitalized interest financed
from Bond proceeds, if any, (ii) any amount over the minimum purchase price of the
Bonds paid by the Purchaser, and (iii) the accrued interest paid by the Purchaser upon
closing and delivery of the Bonds.
(c) The Mayor and City Manager are authorized to execute the Long Term
Bonds Pledge Agreement in substantially the form on file, with such changes not
inconsistent with law as the officer executing the same may approve, which approval shall
be conclusively evidenced by the execution thereof.
� SJB108902
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(d) The Mayor and City Manager are also authorized to execute that certain
Guaranty Agreement between Real Estate Equities Development Company, the City and
the Authority dated October l, 1996 and that certain Personal Guaranty Agreement •
between Terrence E. Troy, Robert S. Bisanz, the City and the Authority dated October
l, 1996, each in substantially the form on file, with such changes not inconsistent with
law as the officer executing the same may approve, which approval shall be conclusively
evidenced by the execution thereo£
4.02. It is hereby determined that the estimated collection of Ta�c Increments for payment
of principal and interest on the Bonds will produce at least five percent in excess of the amount
needed to meet, when due, the principal and interest payments on the Bonds and that no tax levy
is needed at this time.
4.03. The City Clerk is authorized and directed to file a certified copy of this resolution
with the Director of Property Taxation of Hennepin County and to obtain the certificate required
by Minnesota Statutes, Section 475.63.
Section 5. Authentication of Transcrint.
5.01. The officers of the City are authorized and directed to prepare and furnish to the
Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records
of the City relating to the Bonds and to the financial condition and affairs of the City, and such
other certificates, affidavits and transcripts as may be required to show the facts within their •
knowledge or as shown by the books and records in their custody and under their control, relating
to the validity and marketability of the Bonds, and such instruments, including any heretofore
furnished, may be deemed representations of the City as to the facts stated therein.
5.02. The Mayor, City Manager and Finance Director are hereby authorized and directed
to certify that they have examined the Official Statement prepared and circulated in connection
with the issuance and sale of the Bonds and that to the best of their knowledge and belief the
Official Statement is a complete and accurate representation of the facts and representations made
therein as of the date of the Official Statement.
Section 6. Book-Entr� Svstem; Limited Obligation of CitX.
6.01. The Bonds will be initially issued in the form of a separate single typewritten or
printed fully registered Bond for each of the maturities set forth in Section 1.03 hereo£ Upon
initial issuance, the ownership of each Bond will be registered in the registration books kept by
the Bond Registrar in the name of Cede & Co., as nominee for The Depository Trust Company,
New York, New York, and its successors and assigns (DTC). Except as provided in this section,
all of the outstanding Bonds will be registered in the registration books kept by the Bond
Registrar in the name of Cede & Co., as nominee of DTC.
SJB108902
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� 6.02. With respect to Bonds registered in the registration books kept by the Bond
-0 Registrar in the name of Cede & Co., as nominee of DTC, the City, the Bond Registrar and the
� � Paying Agent will have no responsibility or obligation to any broker dealers, banks and other
- financial institutions from time to time for which DTC holds Bonds as securities depository
a (Participants) or to any other person on behalf of which a Participant holds an interest in the
Bonds, including �but not limited to any responsibility or obligation with respect to (i) the
accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership
interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a
registered owner of Bonds, as shown by the registration books kept by the Bond Registrar,) of
any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to
any Participant or any other person, other than a registered owner of Bonds, of any amount with
respect to principal of, premium, if any, or interest on the Bonds. The City, the Bond Registrar
and the Paying Agent may treat and consider the person in whose name each Bond is registered
in the registration books kept by the Bond Registrar as the holder and absolute owner of such
Bond for the purpose of payment of principal, premium and interest with respect to such Bond,
for the purpose of registering transfers with respect to such Bonds, and for all other purposes.
The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to
or on the order of the respective registered owners, as shown in the registration books kept by
tl�e Bond Registrar, and all such payments will be valid and effectual to fully satisfy and
discharge the City's obligations with respect to payment of principal of, premium, if any, or
interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered
owner of Bonds, as shown in the registration books kept by the Bond Registrar, will receive a
certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City
� Clerk of a written notice to the effect that DTC has determined to substitute a new nominee in
place of Cede & Co., the words "Cede & Co.," will refer to such new nominee of DTC; and upon
receipt of such a notice, the City Clerk will promptly deliver a copy of the same to the Bond
Registrar and Paying Agent.
6.03. Representation Letter. The City has heretofore executed and delivered to DTC a
Blanket Issuer Letter of Representations (Representation Letter) which shall govern payment of
principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds.
Any Paying Agent or Bond Registrar subsequently appointed by the City with respect to the
Bonds will agree to take all action necessary for all representations of the City in the
Representation letter with respect to the Bond Registrar and Paying Agent, respectively, to be
complied with at all times.
6.04. Transfers Outside Book-Entry S s�m. In the event the City, by resolution of the
City Council, determines that it is in the best interests of the persons having beneficial interests
in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon
DTC will notify the Participants, of the availability through DTC of Bond certificates. In such
event the City will issue, transfer and exchange Bond certificates as requested by DTC and any
other registered owners in accordance with the provisions of this Resolution. DTC may
determine to discontinue providing its services with respect to the Bonds at any time by giving
notice to the City and discharging its responsibilities with respect thereto under applicable law.
Q SJB108902
HP110-51
In such event, if no successor securities depository is appointed, the City will issue and the Bond
Registrar will authenticate Bond certificates in accordance with this resolution and the provisions •
hereof will apply to the transfer, exchange and method of payment thereof.
6.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution
to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC,
payments with respect to principal of, premium, if any, and interest on the Bond and notices with
respect to the Bond will be made and given, respectively in the manner provided in DTC's
Operational Arrangements, as set forth in the Representation Letter.
Section 7. Continuin� Disclosure.
7.01. The City hereby covenants and agrees that it will comply with and carry out all of
the provisions of ihe Continuing Disclosure Certificate. Notwithstanding any other provision of
this Resolution, failure of the City to comply with the Continuing Disclosure Certificate is not
to be considered an event of default with respect to the Bonds; however, any Bondholder may
take such actions as may be necessary and appropriate, including seeking mandate or specific
performance by court order, to cause the City to comply with its obligations under this section.
7.02. "Continuing Disclosure Certificate" means that certain Continuing Disclosure
Certificate executed by the Mayor and City Clerk and dated the date of issuance and delivery of
the Bonds, as originally executed and as it may be amended from time to time in accordance with
the terms thereof.
� 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.
SJB108902 •
HP110-51
STATE OF MINNESOTA )
)
� COUNTY OF HENNEPIN ) SS.
)
CITY OF HOPKINS )
- I, the undersigned, being the duly qualified and acting City Clerk of the City of Hopkins,
= Hennepin County, Minnesota, do hereby certify that I have carefully compared the attached and
foregoing extract of minutes of a special meeting of the City Council of the City held on October
�
�
� 22, 1996 with the original minutes on file in my office and the extract is a full, true and correct
copy of the minutes insofar as they relate to the issuance and sale of $665,000 General Obligation
Taxable Tax Increment Bonds, Series 1996D of the City.
WITNESS My hand officially as such City Clerk and the corporate seal of the City this
day of , 1996.
�
City Clerk
Hopkins, Minnesota
(SEAL)
� SJB108902
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STATE OF MINNESOTA TAXPAYER SERVICES DIVISION MANAGER'S R
CERTIFICATE AS TO
COUNTY OF HENNEPIN REGISTRATION WHERE NO AD •
VALOREM TAX LEVY
I, the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota,
hereby certify that a resolution adopted by the City Council of the City of Hopkins, Minnesota,
on October 22, 1996, relating to General Obligation Taacable Tax Increment Bonds, Series 1996D,
in the amount of $665,000, dated October l, 1996, has been filed in my office and said
obligations have been registered on the register of obligations in my office.
WITNESS My hand and official seal this day of , 1996.
Taxpayer Services Division Manager �
Hennepin County, Minnesota
(SEAL)
. B
Deputy
SJB108902
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4: _ !�
4
Execution Draft
4
CONTRACT
= FOR
�
9
3
� PRIVATE REDEVELOPMENT
�
By and Between
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR TIIE CITY OF
HOPKINS
0
and
REAI. ESTATE EQUITIES DEVELOPMENT COMPANY
Dated as of : August 7, 1996
This document was drafted by:
BRADLEY & DEIKE, P. A. �
5100 Eden Avenue, Suite 306
Q Edina, Miv 55436
Telephone: (612) 927-4333
� __
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�
_ � TABLE OF CONTENTS
= Pa�e
' PREAMBLE I
�
ARTICLE I
Definitions
Section l.l. Definitions 3
ARTICLE II
Representatio�s and Warranties
Section 2.1. Representations by the Authority �
Section 2.2. Representations by the Redeveloper �
� ARTICLE III
Status of Redeveiopment Propertv; Making of Loans
Section 3.1. Status of Property 9
Section 3.2. Conditions Precedent 9
Section 3.3. Time of Closing I 1
Section 3.4. Title 1 j
Section 3.5. Relocation 1 I
Section 3.6 Environmental Review l�
Section 3.7 Authority Costs 12
Section 3.8. Development Timetable 13
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Description of Minimum Improvements 14
Section 4.2. Construction Plans 14
Section 4.3. Commencement and Completion of Construction 16
Section 4.4. Construction Contracts 16
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ARTICLE V
_ Q
- � Bonds
_ Section 5.1. Issuance of Bonds 17
� Section 5.2. Series A Bonds � g
= Section 5.3. Series B Bonds 1 g
� Section 5.4. Series C Bonds t g
a
ARTICLE VI
Authority Loans
Section 6.1. Basis for Authority Loans 19
Section 6.2. First Authority Loan 19
Section 6.3. Second Authority Loan 19
Section 6.4. Third Authority Loan 19
Section 6.5. Authority Loan Documents 20
Section 6.6. Reserve Fund and Operating Fund 21
Section 6.7. Disbursement of Loan Proceeds 21
Section 6.8. Redeveloper Fees 21
� Section 6.9. Guarantees and Security Arrangements 22
Section 6.1 Q. Authority Determination to Proceed 22
ARTICLE VII
Tax Increment
Section 7.1. Tax Increment District 24
Section 7.2. Tax Increment Guarantee 24
Section 7.3. Use of Tax Tncrement 24
ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Prohibition Against Transfer of Property and Assignment of Agreement 26
Section 8.6. Release and Indemnification Covenants; Insurance 26
ARTICLE IX
Events of Default
� Section 9.1. Events of Default Defined 28
(ii)
, ,
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Section 9.2. Authority's Remedies on Default 28
� Section 9.3. No Remedy Exclusive 28
= Section 9.4. No Additional Waiver Implied by One Waiver 28
= ARTICLE X
- Additional Provisions
Section 10.1. Representa.tives Not Individually Liable 30
� Section 10.2. Equal Employment Opportunity 30
� Section 10.3. Restrictions on Use 30
� Section 10.4. Provisions Not Merged With Deed 30
�
Section 10.5. Titles of Articles and Sections 30
Section 10.6. Notices and Demands 30
Section 10.7. Disclaimer of Relationships 30
Section 10.8. Covenants ruru�ing with the Land 31
Section 10.9. Modifications 31
Section 10.10 Counterparts 31
Section 10.11. Judicial Interpretation 31
Section 10.12. Venue 31
� TESTIMONIUM 32
SIGNATURES 32
SCHEDULE A Description of Property
SCHEDULE B Site Plan
� (iii)
r �
r►
� CONTa2ACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made on or as of the day of , 1996, by
and between the Housing and Redevelopment Authority In and For the City of Hopkins, a public
body corporate and politic (hereinafter referred to as the "Authority"), established pursuant to
Minnesota Statutes: 469.001-469.047 (hereinafter referred to as the "Act"), and having its
principal office at 1010 First Street South, Hopkins, Minnes�ta 55343, and Real Estate Equities
Development Company, a Minnesota corporation (hereinafter referred to as the "Redeveioper"),
having its principal office at 400 Degree of Honor Building, 32S Cedar Street, St. Paul,
= Minnesota SS1Q1.
= WITNESSETH:
e WHEREAS, the Authority was created pursuant to the Act and was authorized to transact
' business and exercise its powers by a resolution of the City Council of the City of Hopkins (the
= City of Hopkins is hereinafter referred to as the "City") adopted pursuant to Section 469.003 of
the Act; and
WHEREAS, in fizrtherance of the objectives of the Act, the Authority has undertaken a
program for the clearance and reconstruction or rehabilitation of blighted, deteriorated,
deteriorating, vacant, unused, under used or inappropriately used, areas of the City, and in this
Q connection is engaged in carrying out a redevelopment project known as the Hopkins
Redevelopment Project No. 2(hereinafter referred to as the "Project") in an area (hereinafter
referred to as the "Project Area") Iocated in the City; and
WHEREAS, as of the date of this Agreement there has been prepared and approved by the
Authority and the City Council of the City a redevelopment plan for the Project (which Ptan is
hereinafter refened to as the "Redevelopment Plan"); and
WHEREAS, a major objective of the Redevelopment Plan is to stimulate and promote the
development of the Project Area through the redevelopment of areas that conta.in structurally
substandard buildings and improvements and areas that for a variety of reasons are vacant or
underutilized; and
\ WHEREAS, pursuant to Section 469.012, subd. 1(7) of the Act the Authority has the legal
ability to acquire real property within its area of operation and to demolish improvements located
thereon and to construct and equip new improvements and facilities on such property; and
WHEREAS, pursuant to Minnesota Statutes, section 469.192, the AutY�ority has the legal
ability to make loans to private parties for any purpose that the Authority is authorized to carry
out pursuant to the Act; and
� WHEREAS, the Redeveloper has presented to the Autharity a proposal for the
development of certain real property within the Project Area, which property is presently
r
�
� occupied by buildings and improvements that are structurally substandard, blighted, and
represent a threat to the health, safety and welfare of the residents of the City; and
WHEREAS, the Redeveloper has proposed the development on such real property (the
"Redeveloprnent Property") of a 66-unit, owner-occupied townhouse development (the
"Minimum Improvements"); and
WHEREAS, due to the high costs of land acquisition, �emolition and relocation of the
current occupants of the Redevelopment Property, the Redeveloper has represented that pr�vate
_ financing is not available to finance the proposed development and that without the Authority's
= provision of f nancing the development would not occur; and
v WHEREAS, the Authority intends to take steps to create a new tax increment financing
_ district encompassing the Redevelopment Propez�ty to provide a partial funding souree to provide
� financing to the Redeveloper for acquisition of the Redevelopment Property and development of
� the Minimum Improvements; and
s
�
�
WHEREAS, the Authority believes that the redeveiopment of the Redevelopment
Property through the construction of the Minimum Improvements wi11 assist in the revitalization
and preservation of the Project Area.
� 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 foliows:
�
2
�
�
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ARTICLE I
�
Definitions
Section l.l. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Act" means Minnesota Statutes, Sections 469.001-469.047, as amended.
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
"Authority" means the Housing and Redevelopment Authority In and For the City of
Hopkins, or any successor or assign.
"Authority Loans" means, collectively, the First Authority Loan, the Second Authority
Loan, and the Third Authority Loan.
"Authority Loan Documents" means, collectively, the First Authority Loan Documents, the
Second Authority Loan Documents, and the Third Authority Loan Documents.
"Bonds" means, collectively, the Series A Bonds, the Series B Bonds and the Series C
Q Bonds. The term "Bonds" shall also include any bonds or obligations issued to refinance any
Bonds.
"City" means the City of Hopkins.
"Construction Plans" means the plans, specifications, drawings and related documents on
the construction of the Minimum Improvements by the Redeveloper on the Redevelopment
Property which comprise the Redeveloper's application to the City for conditional use permit
approval, together with any changes or conditions imposed by the City in granting conditional
use permit approval.
"Conversion Date" means, with respect to the First Authority Loan and the Second
Authority Loan, the date that all amounts outstanding under the Series A Bonds and the Series B
Bonds are no longer secured by the revenues derived from the operation of the Minimum
Improvements and no longer constitute a general obligation of the City or the Authority.
"County" means the County of Hennepin.
"Event of Default" means an action or failure by the Redeveloper listed in Section 9.1 of
this Agreement or as defined in the Authority Loan Documents.
� "First Authority Loan" means the loan hy the Authority to the Redeveloper using the
proceeds of the Series A Bonds as described in Article VI of this Agreement.
3
t
s
� "First Authority Loan Documents" means all documents and instruments given by the
Redeveloper to evidence, secure or to otherwise document the First Authority Loan.
"Guarantees" means the Guarantees to be executed pursuant to Sections 6.9(e) and 7.2 of
this Agreement, which agreement shall be in a form approved by the Authority.
"Hazardous Substance" means that and/or similar terms as defined in Section 104(14) of
the Comprehensive Environmental Response, Compensation & Liability Act of 1980, and as
amended, 42 U.S.C. Sec. 9601 et seq. (14), and Section 2(8) of the Minnesota Environmental
Response and Liability Act, and as amended, Minnesota Statutes Sec. 115B.02(8), and includes
the term "regulated substance" as defined in Section 9001(2) of the Underground Storage Tank
Act, and as amended, 42 U.S.C. Sec. 6991(2), and the term "hazardous waste" as defined in
Section 1Q04(5) of the Resource Conservation and Recovery Act, and as amended, 42 U.S.C.
Sec. 6903(5), and includes all regulations issued pursuant to any of the above statutes, and any
unsafe, noxious, toxic or hazardous substance or similar terms under any other state, federal or
local law, and any other applicable environmental, land use or similar act, statute, ordinance or
regulation or as�lleged or determined under common law. The term "Hazaxdous Substance"
includes asbestos and related substances, PCBs, and gasoline, kerosene and all other liquid or
viscous petroleum products.
"Maturity Date" means the date when the Third Authority Loan has been paid in full.
�
"Minimum Improvements" means the construction by the Redeveloper in accordance with
the approved Construction Plans and this Agreement of a 66-unit, owner-occupied (except for
initial leases to prospective purchasers) townhouse development, and related and incidental
improvements.
"Operating Fund" means the fund to be created at the time of the issuance of the Bonds as
described in Section 6.6 of this Agreement.
"Purchase Agreement" means the Purchase Agreement dated as of October 30, 1994,
between The Oaks of Mainstreet, as purchaser, and H& H Pines Park Partnership, as seller.
"Project" means the Authority's Redevelopment Project No. 2.
"Project Area" means the real property located within the boundaries of the Project.
"Redeveloper" means Real Estate Equities Development Company, a Mir►nesota
corporation, its successors and assigns, and any future owners of any right, tit1E or interest in the
Redevelopment Property, except for purchasers of Units as their residences.
"Redevelopment Property" means the real property described as such on the attached
� Schedule A.
4
R
"Redevelopment Plan" means the redevelopment plan for the Project, as amended as of the
� date of this Agreement.
"Reserve Fund" means the fund to be created at the time of the issuance of the Bonds as
descrihed in Section 6.6 of this Agreement.
"Second Authority Loan" means the loan by the Authority to the Redeveloper using the
�roceeds of the Series B Bonds as described in Article VI of this Agreement.
"Second Authority Loan Documents" means all documents and instruments given by the
Redeveloper to evidence, secure or to otherwise document the Second Authority Loan.
"Series A Bonds" means the Authority's Taxable H�u�ing Revenue Bonds to be issued as
described in Section 5.2 of this Agreement.
"Series B Bonds" means the City's Taxable General Obligation Tax Increment Bonds to be
issued as described in Section 5.3 of this Agreement.
"Series C Bonds" means the City's Taxable General Obligation Tax Increment Bonds to be
issued as described in Section 5.4 of this Agreement.
"Site Plan" means the preliminary site plan showing the general nature and location of the
Q Minimum Improvements which has been submitted to and preliminarily approved by the
Authority and which is attached hereto as Schedule B.
"State" means the State of Minnesota.
"Ta�c Increment" means that portion of the real property taxes paid with respect to the
Redevelopment Property and Minimum Improvements that is remitted to the Authority as tax �
increment pursuant to the T� Increment Act.
"Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes, Sections
469.174-469.179, as amended.
"Tax Increment District" means the tax increment financing district proposed to be created
by the Authority pursuant to the Tax Increment Act to encompass the Redevelopment Property as
described in Section 7.1 of this Agreement.
"Third Authority Loan" means the loan by the Authority to the Redeveloper using the
proceeds of the Series C Bonds as described in Article VI of this Agreement.
"Third Authority Loan Documents" means all doc�:ments and instruments given by the
� Redevelcper to evidence, secure or to otherwise docuxnent t�e Third Authority Loan.
"Unit" means an individual townhouse unit within the Minimum Improvements.
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A
Q "Unavoidable Delays" means delays which are the direct result of acts of God, unforeseen
adverse weather conditions, strikes, other labor troubles, material shortages, fire or other casualty
to the Minimum Improvements or improvements to be constructed by the Authority or the City,
litigation commenced by third parties which, by injunction or other similar judicial action,
directly results in delays, or acts of any federal, state or local governmental unit (other than the
Authority in enforcing its rights under this Agreement) which directly result in delays.
� �
�
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�
� ARTICLE II
Representations and Warranties
Section 2.1. Representations bv the Authoritv The Authority makes the foilowing
representations as the basis for the undertaking on its part herein contained:
(a) The Authority is a municipal housing and redevelopment authority duly organized
and existing under the laws of the State. The execution and performance of this Agreement has
been duly authorized by proper action of the Authority's governing body. Under the provisions
of the Act, the Authority has the power to enter into this Agreement and to perform its
obligations herein.
(b) The Project is a"redevelopment project" wichin the meaning of the Act and was
created, adopted and approved in accordance with the terms of the Act.
(c) Subject to satisfaction of the terms and conditions of tl�s Agreement, the Authority
will make the Authority Loans to the Redeveloper to finance the development of the Minimum
Improvements in accordance with the terms of this Agreement.
(d) The Authority will cooperate with the Redeveloper with respect to any litigation
� commenced with respect to the Pian, Project, or Minimum Improvements.
(e) The Authority has received no notice or communication from any local, state or
federal official that the activities of the Redeveloper or the Authority in the Project Area may be
or will be in violation of any environmental law or regulation. The Authority is aware of no facts
the existence of which would cause it to be in violation of any Iocal, state or federal
environmental law, regulation or review proceduxe.
Section 2.2. Representations bv the Redeveloper. The Redeveloper represents that:
(a) The Redeveloper is a duly organized Minnesota corporation, is duly authorized to
do business in the State of Minnesota and is in good standing under the laws of the State, is not
in violation of any provisions of its articles of incorporation or bylaws or the laws of the State,
has power to enter into this Agreement and has duly authorized the execution, delivery and
performance of this Agreernent by proper action of its directors.
(b) Subject to the terms and conditions of this Agreement, the Redeveloper will
construct tYze Minimum Improvements in accordance with the terms of this Agreement, the
Redevelopment Plan and all local, state and federal laws and regulations (including, but not
limited to, environmental, zoning, building code arzd public health laws and regulations), except
for variances necessary to canstruct the improvements contemplated in the Construction Plans
approved by the Authority.
�
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(c) The Redeveloper has received no notice or communication from any local, state or
Q federal official that the activities of the Redeveloper or the Authority in the Project Area may be
or will be in violation of any environmental law or regulation. The Redeveloper is aware of no
facts the existence of which woutd cause 'rt to be in violation of any local, state or federal
environmental law, regulation or review procedure. In the event that it is necessary to take any
action to obtain any necessary permits or approvais with respect to the Redevelopment Property
under any local, state or federal environmental Iaw or reguiation, the Redevetoper shall be
responsible for any such action.
(d) The Redeveloper will obta.in, in a timely manner, ali required permits, licenses and
= approvals, and will meet, in a timely manner, all requirements of all applicable Iocal, state and
federal laws and regulations which must be obtained or met before the Minimum Improvements
= may be lawfully constructed.
; (e) Neither the execution and delivery of this Agreement, the consummation of the
� transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
' conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of,
the terms, conditions or provisions of any corporate restric±ion or any evidences of indebtedness,
agreement or instrument of whatever nature to which the Redeveloper is now a party or by which
it is bound, or constitutes a default uncler any of the foregoing.
� (� The Redeveloper will cooperate with the Authority with respect to any litigation
commenced with respect to the Redevelopment Plan, Project, ar Mznimum Improvements.
(g) Whenever any default occurs under this Agreement or under the Authority Loan
Documents and the Authority shall employ attorneys or incur other expenses for the collection of
payments due or to become due or for the enforcement of performance or observance of any
obligation or agreement on the part of the Redeveloper under this Agreement or the Authority
Loan Documents and the Authority prevails in such action or effort, the Redeveloper agrees that
it shall be liable to the Authority for the amount of the reasonable fees of such attorneys and such
other expenses so incurred by the Authority.
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_ � ARTICLE III
= Status of Redevelopment Propertv; Making of Loans
= Section 3.1. Status of Propertv. (a) The Oaks of Mainstreet, Inc., an affiliate of the
= Redeveloper, has entered into the Purchase Agreement pursuant to which it is entitled to acquire
� � the Redevelopment Property for a total purchase price of $1,100,000.00. Subject to the
satisfaction of the terms of this Agree�nent, the Redeveluper agrees that it will accept an
assignment of the Purch�se Agreement and acquire the Redevelopment Property for the
development of the Minimum Improvements. In order to finance the Redeveloper's acquisition
of the Redevelopment Property and construction of the Minimum Improvements, the Authority
agrees that it will make the Authority Loans to the Redeveloper, subject to the terms and
conditions of this Agreement.
(b) The Redeveloper shall be responsible for taking all actions to ensure that the
Purchase Agreement remains in full force and effect and that the Redeveloper continues to have
the right to purchase the Redevetoprnent Property. In the event that the Piu�chase Agreement
shall expire or be terminated, the Authoriry sha11 be entitled to terminate this Agreement upon
the giving of ten (10) days' written notice of termination to the Redeveloper, upon which this
Agreement shall terminate and neither parry hereto shall have any obtigations to the other, except
as provided in Section 3.7 herein.
� Section 3.2. Conditions Precedent.
(a) The Authority's obligation to make the Authority Loans shail be subject to
satisfaction, or waiver in writing by the Authority, of all of the following conditions precedent:
(i) no Event of Default havin�g occurred that is continuing under the terms of
this Agreement;
(ii) the Redeveloper having secured all governmental permits and approvals,
including rezoning of the Redevelopment Property, necessary to be obtained in
order to permit the construction and operation of the Minimum Improvements and
the lease and sale of Units;
(iii) the Redeveloper having acquired fee title to the Redevelopment Property
pursuant to the Purchase Agreement, except that such acquisition may occur
simultaneously with the closing on the Authority Loans;
(iv) the Authority and the Redeveloper having completed their review of title to
the Redevelopment Property and any objections to title having been either cured or
waived by them pursuant to Section 3.4 of this Agreement;
�
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(v) the Redeveloper having submitted and the Authority having approved the
� Construction Plans for the Minimum Improvements and the construction contracts
described in Section 4.4 of this Agreement;
(vi) the Redeveloper having secured the agreements concerning relocation
benefits from all owners and occupants of the Redevelopment Property as described
in Section 3.5 of this Agreement;
(vii) the Authority, the Redeveloper, and the purchasers of the Bonds ha ✓ing
determined, as described in Section 3.6 of this Agreement, that the environmental
conditions existing on the Redevelopment Property are acceptable;
(viii) the Redeveloper, the Authority, and the purchasers of the Bonds having
agreed on the form of the Authority Loan Documents and the Authority Loan
Documents having been executed and delivered by the Redeveloper to the
Authority;
(ix) the Authority and the City having issued the Bonds and the proceeds
thereof, when added to the Redeveloper's equity, being sufficient to finance the
acquisition of the Redevelopment Properly and the construction of the Minimum
Improvements and all costs related thereto, including the initial funding of the
Reserve Fund and the Operating Fund described in Section 6.6;
_ Q
(x) the Authority having received from its financial consultant the report
described in Section 6.10 of this Agreement;
(xi) the Redeveloper having provided all guarantees and made all security
anangements described in Section 6.9 of this Agreement;
(xii) the Tax Increment District having been established by the Authority and
City as described in Section 7.1 of this Agreement;
(xiii) the Redeveloper having provided to the Authority a list of Hopkins'
residents that have expressed interest in purchasing Units in the Minimum
Improvements; and
(xiv) all conditions contained in the Authority Loan Documents that must be
satisfied prior to the closing on the Authority Loans having been satisfied.
(b) In the event that all of the above conditions have not been satisfied, or waived in
writing by the Authority, by the times set forth in this Agreement for satisfaction of such
conditions, or if no time is set forth herein by December 31, 1996, the Authority may terminate
this Agreement upon the giving of ten (10) days' written notice to the Redeveloper of its
Q intention to do so and unless the conditions not satisfied have been satisfied to the satisfaction of
the Authority within said ten (10) days, both parties sha'.'. enter into a recordable agreement
10
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� evidencing the termination of this Agreement. If the Redeveioper fails to execute and deliver to
the Authority, after request by the Authority, the termination agreement called for by this section
or by any other section of this Agreement, so long as the Authority is not in defauit under this
Agreement, the Redeveloper shali be liable to the Authority for any costs incurred by the
Authority, including reasonable attorney's fees, in canceling this Agreement. Upon such
termination, except as provided in section 3.7 herein, neither the Authority nor the Redeveloper
shall have any obligations or liability to the other hereunder.
Section 3.3. Time of Cl�sin�. Upon satisfaction of all of the conditions contained in
Section 3.2 of this Agreement other than such conditions that the parties intend to be satisfied on
the date of closing, the Authority will close on the Authority Loans with the Redeveloper.
Section 3.4. Title. Within thirty (30) days after req: �_e �t by the Authority, the Redeveloper
will furnish to the Authority a commitment for an AL'I'A 1990 Mortgagor's Policy of Title
Insurance insuring title to the Redevelopment Property, deleting standard exceptions and
including affirmative insurance regardirzg zoning, contiguity, and appurtenant easements, in the
amounts required by the purchasers of the Bonds if a mortgage on the Redevelopment Property is
required in connection witfi the issuance of the Bonds. The cost of abstract continuation and title
opinion to secure the commitment for such policy and the cost of purchasing the policy of title
insurance shaii be borne by the Redeveloper, subject to reimbursement or payment out of the
proceeds of the Authority Loans. The Authority shall have twenty (20) days from the date of its
_ � receipt of such commitment to review the state of title to the Redevelopment Praperty and to
provide the Redeveloper with a list of written objections to such title. Upon receipt of the
= Authority's list of written objections, the Redeveloper will proceed in good faith and with all due
= diligence to attempt to cause the objections made by the Authority �o be cured. If all such
= objections are cured to the reasonable satisfaction of the Authority, the Authority and the
= Redeveloper shall proceed with the closing on the Authority Loans, subject to satisfaction of the
� conditions contained in this Agreement. It is anticipated that title to the Redevelopment Property
�
will also be subject to review and approval of the underwriter of the Bonds pursuant to the
Authority Loan Documents for the First Authority Loan. The Authority shall have no obligation
to expend any money or to exercise its powers of eminent domain to clear defects in the title to
the Redevelopment Property.
Section 3.5. Relocation. (a) The Redeveloper shall be responsible for the relocation of all
owners and occupants of the Redevelopment Property, including the provision of any relocation
benefits and payments. The Redeveloper has been meeting with such owners and occupants and
represents to the Authority that it believes that it will be able to reach arrangements with such
parties resulting in their �awful relocation. The Redeveloper shall work with a relocation
consultant, approved by the Authority, to negotiate agreements with all such owners and
occupants concerning the legal notices, relocation benefits and payments to be provided to them
in exchange for their relocation from the Redeveloprr�ent Property. The Authority approves
Wilson Development Services as a relocation consultant for this purpose. The Redeveloper shall
� provide the occupants of the Redevelopment Property with written notices, on a monthly basis
until they are relocated from the Redevelopment Property, as to the status of its development and
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on how the development is expected to affect them. Prior to giving such monthly notices, the
Q Redeveloper shall submit the notices to the Authority for its review and approval.
(b) The Redeveloper shail provide to the Authority written agreements, in a form
approved by the Authority, from each owner and occupant of the Redevelopment Property by
which such owners and occupants agree to relocated from the Redevelopment Property on terms
contained in the agreements. In addition, the Redeveloper shall furnish to the Authority a written
certification from its relocation consultant to the effect that the agreements obtained from the
owners and occupants of the Redevelopment Property are valid and binding and in compliance
with applicable laws. The Authority's obligation to proceed with the making of the Authority
Loans shall be subject to its receipt of the above described agreements and certification and shall
be subject to the condition that the total amount of all payments for relocation benefits to owners
and occupants does not exceed the amounts budgeted for such purpose in the Redeveloper's final
project cost proforma. The Redeveloper agrees that it will indemnify, defend and hold harmless
the Authority, the City, and their governing body members, employees, agents and contractors
from any and all claims for benefits or payments arising out of the relocation or displacement of
any person or entity from the Redevelopment Property as a result of the implem�ntation of this
Agreetnent. The Redeveloper shall not be entitled to reimbursement for any claims of relocation
expenses made after the closing on the Authority Loans, except as provided in Sections 6.6 and
7.3 of this Agreement.
Section 3.6. Environmental Review. The Redeveloper has obtained and furnished to the
� Authority a Phase I environmental review concerning the existence of Hazardous Substances on
the Redevelopment Property. Based upon these environmenta.l reviews and the
recommendations contained therein, the Authority's environmental consultant, HKS Associates,
Inc., by a letter dated April 29, 1996 (the "HKS Recomm�ndations"), recommended certain
actions that should be taken with respect to matters identified in the Phase I environmental
review. The Authority has furnished the Redeveloper with the HKS Recommendations and the
Redeveloper agrees that it will develop a remediation plan to address the matters raised. To the
extent that the purchasers of the Bonds require additional review or testing of the Redevelopment
Property as a condition to the purchase of the Bonds the Redeveloper will cooperate and take
such actions as will fulfill such condition. The Redeveloper warrants that it has no knowledge of
any other Hazardous St�bstances located on the Redevelopment Property other than those
indicated in the Phase I environmental review. The Redeveloper shall indemnify, defend and
hold harmless the Authority, the City, and their governing body members, employees, agents and
contractors from any and all claims and causes of action arising out of the presence or release of
Hazardous Substances from or on the Redevelopment Property.
Section 3.7. Authori Costs. The Redeveloper has paid to the Authority funds to defray
the Authority's out-of-pocket costs incurred for legal services and consultants' fLes to review and
analyze the Redeveloper's development and financing proposal and to negotiate and draft this
Agreement. The Redeveloper will be responsible for the payment of all costs billed to the
Authority after February 1, 1996, and all costs incurred by the Authority up to the closing on the
,� Authority Loans for attorneys and consultants relative to the negotiation and preparation of this
Agreement and the Authority Loan Documents, the analysis of the Redeveloper's development
12
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proposal, the arrangement of financing, the preparation of the documents relative to the sale of
� the Bonds, and the review by the Authority's residentiai housing management consultant of the
townhouse association documents described in Section 4.1(c). If the Redeveloper is able to reach
written agreements with attorneys or consuitants under which such attorneys or consultants agree
to wait until the closing on the Authority Loans to be paid and provides copies of such
agreements to the Authority, such fees will be paid from the proceeds of the Bonds. All amounts
previously paid to the Authority by the Redeveloper for such costs and ali costs paid after the
date hereof shall be included within the Authority Loans and reimbursed to the Redeveloper at
the time of closing on the Authority Loans. The Redeveloper has deposited funds with the
Authority, and the Authority shall have the right to use such funds to pay its above described
costs. If the amount on deposit becomes depleted, the Authority shall have the right to request
that the Redeveloper replenish such funds upon which the Redeveloper shall within fourteen (14)
days after request by the Authority remit to the Authority z�iditional funds to be held on deposit.
If on termination of this Agreement, the amounts held by the Authority are insufficient to pay the
Authority's costs, the Redeveloper shall be liable for any deficiency. If this Agreement is
= terminated in accordance with the terms hereof, any sums remaining on deposit with the
a Authority, after the Authority pays or reimburses itself for costs incurred to the date of
= termination, shall be returned to the Redeveloper.
Section 3.8. Development Timetable. Within sixty (60) days from the date hereof the
Redeveloper shall prepare and submit to the Authority for its approval a schedule detailing the
timing of all aspects of the development of the Minimum Improvements, including, without
� limitation, the obtaining of governmental approvals, the preparation of each phase of
construction drawings, the relocation of occupants of the Redevelopment Property, the bidding of
construction contracts, the creation of the Tax Increment District, the final structuring of the
financing for the development, the sale of the Bonds and the schedule for construction of the
Minimum Improvements. From time to time, the Redeveloper wi11 prvvide to the Authority
revised and updated schedules reflecting any changes in the timing of the development.
�
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� ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Description of Minimum Improvements. (a) The Minimum Improvements
are proposed to consist of a 66-unit, owner-occupied townhouse development. The listed sales
prices of the Units will average at least $118,000.00 and, except for sales to the third party under
the agreement described in Section 6.9(c), actual sales of the Units will be for an average sales
price of at least $112,100.00. Initial sales of the Units will be only to persons who intend to
occupy the Units as their primary residences. The Redeveloper will offer to praspective
purchasers of Units the opportunity to participate in a lease-to-own program under which the
purchaser will be pre-qualified to purchase the Unit, subject to the purchaser's ability to
accumulate necessary funds to make the downpayment and to pay mortgage financing closing
costs. The purchasers will be allowed to lease the Units for up to three (3) years and will receive
an allowance toward the downpayment and other costs of purchasing the Unit if they are not
otherwise in default u.nder their lease agreements. The Redeveloper will secure a commitment
for purchase money mortgage financing for such purchasers at an interest rate acceptable to both
the Authority and the Redeveloper. The arrangement of such purchase money mortgage
financing for the purchasers of the Units sha11 be a condition precedent to the Authority's
obligation to proceed under this Agreement.
(b) The Redeveloper agrees that it will establish a program approved by the Authority
� un�ier which residents of the City will have the first opportunity to purchase Units in the
Minimum Improvements.
(c) The Redeveloper shall create a Townhouse Association in connection with its
development of the Minimum Improvements. The Authority shall have the right to review and
approve the documents creating the Townhouse Association.
(d) The Redeveloper agrees that it will construct the Minimum Improvements on the
Redevelopment Property in accordance with the approved Construction Plans, this Agreement
and the Authority Loan Documents and at all times prior to the Conversion Date will operate, or
cause to operated by the Townhouse Association created by the Redeveloper, the Minimum
Improvements in accordance with this Agreement and the Authority Loan Documents and will
maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements
to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in
good repair and coniiition.
Section 4.2. Construction Plans.
(a) The Redeveloper has prepared and submitted to the Authority and the Authority has
preliminarily approved a Site Plan showing the general location and nature of the Minimum
Improvements. The Redeveloper has also received preliminary approval of the Construction
� Plans by the Authority but the Site Plan and Construction Plans are subject to final approval by
the Authority and the City Council of the City. The Redeveloper shall be responsible for
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� obtaining all necessary permits and approvals necessary to construct and operate the Minimum
Improvements, including without limitation . concept review approval, rezoning approval and
construction drawing approval. The Redeveloper shall submit all necessary applications and
supporting documentation in a timely manner so as to enable the Redevetaper to meet the
schedule described in Section 3.8 for closing on the acquisition of the Redevetopment Property
and construction of the Minimum Improvements. The Authority shaii have no obligation to
_ proceed with the transactions contemplated in this Agreement untii the City and the Authority
= have approved, in their respective sole discretion, the final plans for the development of the
° Minimum Improvements.
= (b) Within sixty (60) days from the date hereof, the Redeveloper shall submit
= construction drawings to the City's building off cials. The construction drawings shall provide
_ for the construction of the Minimum Improvements and sh� Il be in conformity with the approved
_ Site Plan, the Construction Plans, this Agreement, and all applicable federal, state and local laws
= and regulations.
_ (c) If the Redeveloper desires to make any change in any Construction Plans after their
:
_ approval by the Authority, the Redeveloper shall submit the proposed change to the Authority for
� its approval. Any requested change in the Construction Plans shall be accompanied by a written
� description of any modif cations in the Minimum Improvements from the conditional use permit
� � approvals and shall be deemed approved by the Authority urzless rejected, in whole or in part, by
written notice by the Authority ta the Redeveloper, setting forth in detail the reasons therefor.
� Such rejection shall be made within ten (10) days after receipt of the notice of such change unless
the change must be approved by the Authority's Board of Commissioners or the City Council of
the City, in which case the change will be considered at the next meeting on whicn it can be
scheduied in accordance with the Authoriry's and Ciry's scheduling policies. Additional
provisions concerning the Authority's right to approve changes in construction drawings,
including changes that affect the cost of the development, shali be set forth in the Authority Loan
Documents.
(d) Nothing in this Agreement shall be deemed to relieve the Redeveloper from its
obligation to comply with the City's normal construction approval and permitting process.
Section 4.3. Commencement and Completion of Construction Subject to Unavoidable
Delays, the Redeveloper shall commence construction of the Minimum Improvements within
ninety (90) days after the closing on the Authority Loans, or on such other date as the parties
shall mutually agree. Subject to Unavoidable Delays, the Redeveloper shall complete the
construction of the Minimum Improvements within nine (9) months after commencement of
construction. All work with respect to the Minimum Improvements to be constructed or
provided by the Redeveloper on the Redevelopment Property shall be in conformity with the
Construction Plans as submitted by the Redeveloper and approved by the Authority, or as may be
approved puxsuant to Section 4.2(c).
� The Redeveloper agrees for itself, its successors and assigns, and every successor in
interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and its
15
successors and assigns, shall promptly begin and diligently prosecute to �ompletion the
Q redevelopment of the Redevelopment Property through the construction of the Minimum
Improvements thereon, and that such construction shall in any event be commenced and
completed within the period specified in this Section 4.3. It is intended and agreed that such
agreements and covenants shall be covenants running with the land and that they shall, in any
event, and without regard to technical classification or designation, legal or otherwise, and except
- only as otherwise specifically provided in this Agreement itself, be, to tne fullest extent
- permitted by law and equity, binding for the benefit of the Authority and enforceable by the
- Authority against the Redeveloper and its successors and assigns. Until construction of the
� Minimum Improvements has been completed, the Redeveloper shall make construction progress
- reports, at such times as may reasonably be requesteci by the Authority as to the actual progress
'=- of the Redeveloper with respect to such construction.
�
a
� Section 4.4 Construction Contracts. The Redeveloper will enter into a construction
� contract for the construction of the Minimum Improvements. Such contract shall be let
- according to a bidding procedure approved by the Authority. The form of the eontract and the
identity of the Redeveloper's contractor shall be subject to the approval of the Authority. The
contract shall be bonded and shall be a guaranteed maximam price contract.
�
�
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Q ARTICLE V
Bonds
Section 5.1 Issuance of Bonds. (a) It is intended that the Authority Loans will be
funded using the proceeds of the Bonds. It is currently estimated that, if issued, the Bonds will
consist of the following:
(i) The Series A Bonds in the amount of $3,750,000.00;
(ii) The Series B Bonds in the amount of $3,750,000.00; and
(iii) The Series C Bonds in the amount of °' 1,250,000.00.
The actual sizing a.nd structare of the Series A Bonds and tYie Series B Bonds relative to
each other shall be determined based on bond market conditions and the feasibility of the
development.
(b) The Authority's obligation to proceed with the making of the Authority Loans is
= subject to the abiiity of the City and the Authoriry to issue the Bonds and realize sufficient net
= proceeds to finance, when added to the Redeveloper's equity contribution, all costs of the
_ � acquisition of the Redeveiopment Property and construction of the Minimum Improvements, and
_ all related costs, including the initial funding of the Operating Fund and the Reserve Fund.
�
(c) The Bonds will be structured in consultation with the Authority's public financial
advisor, Ehlers-Publicorp, and will be subject to the review of the Authority's bond counsel,
Kennedy and Graver�. The reasonable costs of issuing the Bonds shail be included in the
principal amottnt of the Bonds. It is expected that the interest on the Bonds wi11 be taxable and
not tax-exempt. T'he Bonds shall contain capitalized interest in amounts deemed sufficient by the
Authority and its public financial advisor (giving due regard for then prevailing market
conditions and assuming the accuracy of Redeveloper's representations contained herein and
Redeveloper's timely and complete performance of its obligations under this Agreement) in
order to provide the prompt and full payment of the stated principal and interest due on the
Bonds. All amounts of capitalized interest and the amounts, if any, of accrued interest paid by
the purchaser of the Bonds shall be used by the Authority and City to pay interest first coming
due on the Bonds. The principal amount of the Bonds shall be structured by the Authority's
public f nancial advisor with due regard to the reasonable expenses and other amounts which will
be deducted from the proceeds of the Bonds.
(d) The net proceeds of the Bonds that will be available to be used to make the
Authority Loans will be equal to the amount paid by the purchasers of the Bonds, less accrued
interest, capitalized interest, the costs of issuing tne Bonds, and the amount of the proceeds of the
Bonds identified to pay the administrative and other expenses incurred by the Authority (and not
�� paid by the Redeveioper) in connection with the analysis and review of the Redeveloper's
17
�
�
� � ,
� �
development proposal, the creation of the Tax Increment District, the negotiation and preparation
� of this Agreement, and any other costs described in Section 3.7.
Section 5.2. Series A Bonds. (a) It is intended that the First Authority Loan will be
financed with the net proceeds of the Series A Bonds. The Series A Bonds are anticipated to be
bonds with a term of thirty (30) years and with a Conversion Date occurring no later than five (5)
�ears after issuance.
(b) During the initial five (5) year term of the Series A Bonds, the Series A Bonds will
be payable from and will have a first lien on the gross revenues generated from the
Redeveloper's leases and sales of Units in the Minimum Improvements. Neither the Authority
nor the City shall have any liability for the payment of the Series A Bonds except to the extent of
the revenues pledged thereto. All of the lease and sales revenues generated by the development
shall be first applied to the payment of the Series A Bonds. In addition, all Tax Increment, in
excess of the amounts of Ta�c Increment necessary to be paid with respect to the Series B Bonds,
shall be pledged to the Series A Bonds. After the initial term of the Series A Bonds, the Series A
Bonds will be secured by FNMA securities and revenues from the Minimum Improvements will
no longer be subject to the lien of the Series A Bonds.
Section 5.3. Series B Bonds. (a) It is intended that the Second Authority Loan will be
financed with the net proceeds of the Series B Bonds. The Series B Bonds are anticipated to be
Q bonds with a term of thirty (30) years and with a Conversion Date occurring no later than five (�)
years after issuance.
(b) During the initial five (5) year term of the Series B Bonds, the Series B Bonds will
be payable, subject to the lien of the Series A Bonds, from the gross revenues generated from the
Redeveloper's leases and sales of Units in the Minimum Improvements. In addition, the Series B
Bonds shall be secured by the full faith, credit and taxing power of the City. In addition, Tax
Increment shall be pledged to the Series B Bonds. After the initial term of the Series B Bonds,
the Series B Bonds will be secured by FNMA securities, revenues from the Minimum
Improvements will no longer be a subject to the lien of the Series B Bonds, and the Series B
Bonds will no longer be a general obligation of the City.
Section 5.4. Series C Bonds. (a) It is intended that the Third Authority Loan will be
financed with the net proceeds of the Series C Bonds. The Series C Bonds are anticipated to have
a term of twenty-two (22) years.
(b) The Series C Bonds will be payable in the first instance from Tax Increment and if
Tax Increment is insufficient, then from a general property tax levy of the City. The Series C
Bonds shall also be payable with amounts realized with respect to the Redeveloper's guarantee
pursuant to Section 7.2 of this Agreement.
�
18
� ARTICLE VI
Authority Loans
Section 6.1 Basis for Authoritv Loans. The Authority is willing to make the Authority
Loans in order to make the development of the Minimum Improvements possibie. The Authority
believes that without such financing the redevelopment of the Redevelopment Property will not
c?ccur due to the extraordinary costs associated with such redevelopment. The estimates in this
= Agreement as to the amounts of the Authority Loans contained in this Agreement and the
- Authority's willingness to proceed with the Redeveloper's development are based upon the
= parties' current estimates of the cost of constructing the Minimum Improvements, bond market
= conditions and the current real esta.te sales market, including interest rates available to residential
� purchasers. The amounts and terms of the Authority LoaT s will be determined based upon the
� economics of the finalized transactions between the Redeveloper and its construction contractors
� and the market conditions affecting the sales of municipal obligations. The amounts of the
Authority Loans shall be fnalized after the Redeveloper's costs of constructing the 1Vlinimum
Improvements are f nalized and at such time as the Authority secures binding commitments for
the �rurchase of the Bonds. In order to assist the Authority in making this determination, as well
as the determination as to whether to proceed with the transactions contemplated by this
Agreement, the Redeveloper will provide the Anthority with the following information by the
time that the Authority or City executes a bond purcnase agreement relating to the sale of the
� Bonds:
(a) Current financiai statements of the Redeveloper and its partners;
(b) A final financial proforma for the deveiopment showing sources and uses of funds
available to the Redeveloper; and
(c) A sworn construction statement from ail contractors and subcontractors that wi11 be
retained to construct the Minimum Improvements.
Section 6.2. First Authoritv Loan. Subject to the terms and conditions of this Agreement,
the Authority will use the net proceeds of the Series A Bonds to make the First Authority Loan.
It is presently anticipated that the amount of the First Authority Loan will be $3,750,000.00, but
such amount will be determined prior to issuance of the Bonds. The actual sizing and structure
of the First Authority Loan and the Second Authority Loan relative to each other shall be
determined based on bond market conditions and the feasibility of the development.
Seetion 6.3 Second Authoritv Loan. Subject to the terms and conditions of this
Agreement, the Authority will use the net proceeds of the Series B Bonds to make the Second
Authority Loan. It is presently anticipated that the amount of the Second Authority Loan will be
$3,750,000.00, but such amoe�nt will be determined prior to the issuance of the Bonds.
a Section 6.4 Third Authoritv Loan. Subject to the terms and conditions of this
Agreement, the Authority will use the net proceeds of the Series C Bonds to make the Third
19
Authority Loan. It is presently anticipated that the amount of the Third Authori±y Loan will be
� $1,250,000.00, but such amount wiii be determined prior to the issuance of the Bonds.
Section 6.5. Authority Loan Documents. The Authority Loans shail be documented
and secured by the Authority Loan Documents, all of which shail be executed and delivered to
the Authority prior to the making of the Authority Loans. The Authority Loan Documents shall
ne in such form as the Authority and the Redeveloper, in their respective sole discretion, shall
agree and shall be subject to the approval of the purchasers of the Bonds. The Authority Loan
Documents will be prepared in conjunction with and at the same time as the documents related to
the sale of the Bonds.
Section 6.6. Reserve Fund and Operatin�und. (a) In connection with the sale of the
Bonds and the making of the Authority Loans there will be created a fund (the "Reserve Fund")
which shall be initially funded with $600,000.00, including $300,000.00 in Redeveloper's cash
equity and $300,000.00 from the sale of the Bonds constituting the deferred developer fee
described in Section 6.8 of this Agreement. Funds in the Reserve Fund, including interest earned
thereon, shall be available for distribution to the Operating Fund from time to time as needed to
pay the costs of operating the Minimum Improvements. All distributions from the Reserve Fund
shall be subject to approval by the Authority.
(b} In connection with the sale of the Bonds there will also be created an Operating
� Fund into which wiil be deposited all revenues derived from the lease and sale of units in the
Minimum Improvements. Funds in the Operating Fund will be used f rst to pay scheduled debt
service on the Series A Bonds, then to pay scheduied debt service payments on the Series B
Bonds and then to pay the costs of operating the Minirnum Improvements. The Authority Loan
Documents v�ill provide for the periodic withdrawal of the �unds in the Operating Fund to be
used to convert the Series A Bonds and the Series B Bonds as described in Sections 5.2 and 5.3.
The Operating Fund shall be held by the trustee for the Series A Bonds and the Series B Bonds,
and all disbursements from the fund shall be subject to the approval of the Authority.
(c) On the Conversion Date, amounts remaining in the Operating Fund and the
Reserve Fund shall be distributed for the following costs in the following order:
(i) First, to pay the Redeveloper the amount of $600,000.00, consisting of a deferred
development fee of $300,000.00 and the return of the Redeveloper's $300,000.00
equity contribution. The Redeveloper shall next be paid an amount equal to
interest earned on its $300,000.00 equity contribution at the average rate of
� interest actually earned on amounts in the Reserve Fund from the date of its
creation, but not to exceed $45,000.00 in total interest.
(ii) Second, to pay the Authority's administrative expenses in connection with the
Redeveloper's development ar�d the Tax Increment District. The amount to be
� disbursed to the Authority for administrative expenses, regardless of the actual
amount of the Authority's administrative expenses, shall be 10% of the Tax
Increment generated from the Tax Increment District from the date of the issuance
20
� of the Bonds through the end of the year in which the funds in the Operating and
Reserve Funds are distributed, but not to exceed $70,000.00.
(iii) Third, to reimburse the Redeveloper for its actuai out of pocket and unreimbursed
expenses reasonably necessary for the success of the development of the
Minimum Improvements and incurred in connection with the development of the
Minimum Improvements, but only to the extent that such expenses were approved
by the Authority prior to the time that they were paid by the Redeveloper. The
amount to be disbursed to the Redeveloper under this subsection (iii) to reimburse
it for its expenses shall not exceed $70,000.00.
- (iv) Fourth, to create a debt service reserve fund to be held and administered by the
_ Authority in the amount of one (1) year's a��erage debt service on the Series C
= Bonds. Such fund shall be available to the Authority to pay debt service on the
a Series C Bonds if other sources are insufficient but shall not relieve the
� Redeveloper of its guarantee obligations under Section 7.2. The principal amount
of the debt service reserve fund, together with interest thereon, shall be applied to
the final instaltments of principal and interest on the Series C Bonds.
(v) Fifth, to reimburse the Redeveloper for any remaining approved expenses not
reimbursed under (iii) above.
� (vi) Sixth, any amounts rernaining in the Reserve Fund or Operating Fund shall be
shared equally by the Authority and the Redeveloper.
Section 6.7. Disbursement of Loan Proceeds. Except for the amounts to be deposited in
the Reserve Fund, th� proceeds of the Authority Loans shali be deposited with a disbursing agent
pursuant to a disbursing agreement acceptable, in the sole discretion of the Authority, the
Redeveloper, and the purchasers of the Bonds. Subject to the terms of Section 6.6, the Authority
shall have the right to approve all disbursements by the disbursing agent.
Section 6.8. Redevelober Fees. The Authority agrees that the Redeveloper shall be
entitled to a development fee for the development of the Minimum Improvements and that a
developrraent fee in the amount of $498,000.00 is a reasonable fee. The development fee shali
consist of $198,000.00 that shall be disbursed to the Redeveloper at the following times: (a) fifty
percent (50%) of such fee shall be paid at the time of closing on the Autharity Loans; and (b) the
remaining f fty percent (50%) of such fee shall be paid at the time that the construction of the
Minimum Improvements has been completed and at least eighty percent (80%) of the Units in
the Minimum Improvements have been sold or leased and occupied by purchasers under the
Redeveloper's lease-to-own mortgage program. In addition the Redeveloper shall be entitled to
the deferred development fee described in Section 6.7 in the amount of $300,000.00 payable out
of any amount remaining in the Reserve Fund and Operating Fund at the Conversion Date.
Q Section 6.9. Guarantees and Securitv Arran ements. The Redeveloper's financing
proposal to finance the deveiopment of the Minimum Improvements includes several guarantees
21
by the Redeveloper and third-party ar�'angements intended to limit the financial risk of the
Q Authority. In addition to the security discussed elsewhere in this Agreement, the following
guarantees and arrangements will be given and made by the Redeveloper, all of which shall
constitute conditions to the obligation of the Authority to proceed under this Agreement:
(a) The Redeveloper will guarantee to pay the cost of any construction cost overruns
encountered in the course of the construction of the Minimum Improvements and will guarantee
the timeiy completion of the Minimum Improvements.
(b) The Redeveloper will secure the mortgage financing commitment described in
Section 4.1 of this Agreement.
_ (c) Within thirty (30) days from the date hereof, the Redeveloper will secure an
= agreement, in a form acceptable to the Authoriry and its legal counsel, under which a third party
= approved by the Authority wiil agree that at a time� acceptable to the Authority it will purchase
= any Units that have not been purchased by individual purchasers for purchase prices acceptable
= to the Authority. The Redeveloper shall also provide to the Authority documentation as to the
= identity and financial strength of such third party and its principals to allow the Authority to
� determine whether, in its sole discretion, the proposed agreement with the third party provides
a the Authority with sufficient assurance that the unsold units will be purchased. The obligations
� of the third party under such agreement shall be secured by security arrangements acceptable to
� the Authority. The agreement with the third party for the purchase of the Units shall contain
� language acceptable to the Authority by which the third party agrees that its use and sales of the
Units shall be subject to the terms of this Agreement, including, without limitation, language
assuring that the Minimum Improvements will continue to be used as an owner-occupied
townhouse development.
(d) The Redeveloper will secure a management agreement, in a form acceptable to the
Authority and its legal counsel, from Real Estate Equities Management Company, the
management company for the Minimum Improvements, under which the management fees
payable to Real Estate Equities Management will be reduced to the extent that the occupancy of
the Units of the Minimum Improvements, exclusive of any Units that have been sold, is less than
ninety-five percent (95%) of projected occupancy rates. The amount of the reduction in the
management fee payable shall be equal to the reduced revenues realized as a result of the
occupancy rate being less than ninety-five percent (95%) of the projected occupancy rates. To
the extent that the reduction in the management fee is insufficient to offset the entire reduced
revenues, the Redeveloper shall be responsible for the payment of any difference, which amount
shall be due fifteen (15) days after written demand by the Authority.
(e) The Redeveloper shall secure a personal guarantee in a form acceptable to the
Authority by which Terrence E. Troy and Robert S. Bisanz, the principals of the Redeveloper
unconditionally guarantee the obligations of the Redeveloper in Sectioris 6.9(d) and 7.2.
� Section 6.10. Authoritv Determination to Proceed.. (a) Because the Authority's
participation in the Redeveloper's development and the nature and extent of such participation is
22
Q dependent upon a number of factors unknown at this time, including, without limitation, the
costs of construction of the Minimum Improvements, the costs of relocating the owners and
occupants from the Redevelopment Property and the terms of the sale of the Bonds, the
Authority's review and approval of all information and documents and determination as to
whether to proceed with the transactions contemplated herein shall be in its sole discretion and
the Authority shall have no liability to the Redeveloper for rejecting any information or
determining to not proceed hereunder. In addition and without limiting the foregoing, the
Authority'� determination to proceed shall be subject to its receipt of a report from its public
financial advisor indicating that based on its review of the final financing structure and loan
documents:
(i) The public financial assistance requested is necessary and appropriate;
(ii) There will be sufficient project cash flow and ta�c increment generated to
repay all of the Authority's investment and that there are adequate
guarantees in place to secure such repayment;
(iii) That the financing of the Redeveloper's development will not unduly
impair the Authority's ability to undertake other development activities;
and
Q . (iv) That based on a review of the market study provided by the Developer, a
townhouse project and Developer's proposed rents and sale prices for the
units in the Development are supportable by market conditions.
(b) Staff of the Authority shall have the authority to approve on behalf of the
Authority information and documentation provided by the Redeveloper pursuant to this
Agreement; provided, that all such approvals shall be in writing and that the final determinations
of whether to proceed with the transaction, of the final structure of the transaction and of the
form of the Authority Loan Documents and the Bond documents shall be made by the Board of
Commissioners of the Authority.
_ �
- 23
;
Q ARTICLE VII
Tax Increment
Section 7.1. Tax Increment District. (a) The Redevelopment Property is located within
= an existing tax increment financing district that was created in 1990. The Authority has
_ determined to proceed to decertify such tax increment district and to create a new district. The
- Authority will cause to be prepared a tax increment financing plan to create the Tax Increment
� District and schedule consideration of the approval of such plan before the City Council of the
City. The parties acknowledge that approval of such plan and creation of the Tax Increment
� District can only occur after the holding of a public hearing as required under the Tax Increment
� Act ana that the City Council and Authority may after receipt of public comment on the question
determine to not proceed with the creation of the Tax Increment District. If the Tax Increment
District is not created, this Agreement shall be subject to termination in the manner and with the
effect described in Section 3.2(b). The Authority's costs of creating the Ta�c Increment District
shall be paid as described in Section 3.7 of this Agreement.
(b) The Authority agrees that it will pleage the Tax Increment to the payment of the
Series B and Series C Bonds and to the payment of the other costs payable with Tax Increment as
described in this Agreement. In addition, the Authority will take no action that would limit the
amount of Tax Increment beiow the amount that would be generated absent such actions. In the
� event that at any time following the date hereof: (i) either (A) the Tax Increznent Act is amended
in such a manrier as to reduce Tax Increment, or (B) Tax Increment is reduced as a result of
changes in the law regarding the privilege of pubiic entities to levy reai property taxes; and (ii) in
lieu of such reduced Tax Increment the City or the Authority is authorized to receive and
receives additional revenues in any form in substitution for the Iost Ta�c Increment which
additional revenues the City or the Authority is authorized to spend for the same purposes and
under the same conditions that apply to Tax Increment, then the share of such additional
revenues attributable to the reduced Tax Increment shall be deemed to be Tax Increment for ali
purposes of this Agreement.
Section 7.2. Tax Increment Guarantee. If the Bonds are issu�d, they will be structured
based on certain assumptions as to the amount of Tax Increment that will be generated from the
Redevelopment Property and Minimum Improvements. The Redeveloper is willing to guarantee
that sufficient annual Tax Increment will be generated to enable the Authority and the City to
pay, solely from Tax Increment or amaunts guaranteed under this Section 7.2, all required
principal and interest payments on the Series C Bonds when due. In addition, the Redeveloper
will guarantee that there is generated in excess of the amount necessary to pay debt service
payments on the Series C Bonds an amount equal to five percent (5%) of the Ta�c Increment
actually generated in each year. The Redeveloper's guarantee shall be conta�ned in a separate
instrument to be prepared and executed prior to the issuance of the Bonds. Such instrument shall
be subject to the approval by the Authority and the Redeveloper.
� Section 7.3. Use of Ta�c Increment. Tax Increment generated from the Tax Increment
District prior to the Conversion Date shall be available for payment and applied first to the
24
__ _ _ ___ ___ _ _ __ _ . __ _ _
� ,
Q payment of such bonds in accordance with the Authority Loan Documents. After the Conversion
Date Tax Increment generated each year shall be applied to the following costs in the following
order:
(a) First, to pay scheduled principal and interest payments on the Series C Bonds.
(b) Second, ten percent (10%) of the Tax Increment shall be paid to the Authority,
taking into account any payments that may have been made under Section 6.6(c)(ii).
(c) Third, to pay to the Redeveloper the amount payable under Section 6.6(c)(i) to the
extent not paid from amounts in the Reserve Fund and Operating Fund.
(d) Fourth, to prepay or to defease the Series C I'��nds.
(e) Fifth, to reimburse the Redeveloper for its paymen� of expenses not reimbursed
under Section 6.6(c)(iii) or (v) and for expenses not approved by the Authority prior to the time
that they were paid but which were reasonably necessary for the success of the development of
the Minimum Improvements.
(� Sixth, to pay the Redeveloper simple non-compounding interest at the average
rate of interest on the Series C Bonds on its expenses incurred as described in Section 6.6(c)(iii)
Q or 7.3(e) from the date the expenses were incurred until such expenses were reimbursed to the
Redeveloper. Interest at the average rate of interest on the Series C Bonds shall also be paid on
the $600,000.00 used to fund the Reserve Fund from the date of establishment of the Reserve
Fund for so long as such funds, or portions thereof, remained in the Reserve Fund, but deducting
any interest that may have been paid pursuant to Section 6.6(c)(i). To the extent that portions of
the $600,000.00 were expended interest will be payable on such portions until the date such
funds were applied to costs.
�
- 25
_ p ARTICLE VIII
= Prohibitions Against Assignment and Transfer, Indemnification
- Section 8.1. Prohibition A�ainst Transfer of Propertv and Assignment of A�reement. The
= Redeveloper represents and agrees that prior to the Maturity Date the Redeveloper will not make
= or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, or
- lease (other than leases or sales of Units to purchasers of such Units), or any trust or power, or
= transfer in any other mode or form of or with respect to the Agreement or the Redevelopment
Property, or any part thereof or any interest therein, or any contract or agreement to do any of the
� same, without the prior written approval of the Authority, which approval shall not be
= unreasonably withheld or delayed. In the absence of specific written agreement by the Authority
- to the contrary, no transfer by the Redeveloper or approval by the Authority thereof shall be
= deemed to relieve the Redeveloper, or any other party bound in any way by this Agreement or
- the Authority Loan Documents from any of its obligations with respect thereto.
Section 8.2. Release and Indemnification Covenants; Insurance. (a) The Redeveloper
= releases from and covenants and agrees that the Authority ana the governing body members,
= officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify
� and hold harmless the Authority and the governing body members, officers, agents, servants and
' employees thereof against any loss or damage to property or any injury to or death of any person
= Q occurring at or about or resulting from any defect in the Minimum Improvements.
= (b) Except for any willful misrepresentation or any willful or wanton misconduct or
- negligence of the following named parties, the Redeveloper agrees to .protect and defend the
= Authority and the City and the governing body members, officers, agents, servants and
_ employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any
= claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever
= arising or purportedly arising from this Agreement, or the transactions contemplated hereby or
= the acquisition, construction, installation, ownership, and operation of the Minimum
= Improvements.
(c) The Authority and the governing body members, officers, agents, servants and
employees thereof shall not be liable for any damage or injury to the persons or property of the
= Redeveloper or its officers, agents, servants or employees or any other person who may be about
� the Redevelopment Property or Minimum Improvements due to any act of negligence of any
- person other than the Authority, its governing body members, officers, agents, servants and
= employees.
� (d) All covenants, stipulations, promises, agreements and obligations of the Authority
�
� contained herein shall be deemed to be the covenants, stipulations, promises, agreements and
= obligations of the Authority and not of any governing body member, officer, agent, servant or
� employee of the Authority in the individual capacity thereof.
_�
� 26
�
�
_ ,
�
_ � (e) The Authority Loan Documents will contain provisions, acceptable to the Authority
and the Redeveloper in their respective sole discretion, obligating the Redeveloper to maintain or
- to cause to be maintained both during and after construction of the Minimum Improvements
= general liability, casualty, and other insurance coverages protecting the interests of the Authority
- and the Redeveloper.
�
i
�
�
�
a
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�
�
�
27
�
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_ , ;
� '
�
�
�
� Q ARTICLE IX
� Events of Default
Section 9.1. Events of Default Defined. The term "Event of Default" shall mean, whenever
it is used in this Agreement (unless the context otherwise provides): (a) any failure� by
Redeveloper to observe or perform any covenant, condition, obligation or agreement on its part
to be observed or performed under this Agreement; (b) the occurrence and continuance of an
event of default under any of the Authority Loan Documents; or (c) the Redeveloper does any of
the following :(i) files any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under United States
Bankruptcy Laws or any similar Federal or State Laws; or (ii) makes an assignment for the
benefit of its creditors; or (iii) admit, in writing, it inability to pay its debts generally as they
become due; or (iv) be adjudicated, bankrupt or insolvent.
Section 9.2. Authoritv's Remedies on Default. Whenever any Event of Default by
Redeveloper referred to in Section 9.1 of this Agreement occurs, the Authority may suspend its
performance under this Agreement and the Authority Loan Documents until it receives
assurances from the Redeveloper, deemed adequate by the Authority, that the Redeveloper will
cure its default and continue its performance under the Agreement and may take any one or more
of the following actions after providing thirty (30) days written notice to the Redeveloper of the
Q Event of Default, but only if the Event of Default has not been cured within said thirty (30) days:
(a) Terminate this Agreement.
(b) Exercise any remedies available to it under the �uthority Loan Documents.
(c) Take whatever action, including legal, equitable or administrative action, which
may appear necessary or desirable to the Authority to collect any payments due under this
Agreement, or to enforce performance and observance of any obligation, agreement, or covenant
of the Redeveloper under this Agreement or the Authority Loan Documents.
Section 9.3. No Remed�Exclusive. No remedy herein conferred upon or reserved to the
Authority or Redeveloper is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to every other
remedy given under this Agreement or now or hereafte.r 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 Authority or the Redeveloper to exercise any remedy reserved to it, it shal. not be necessary
to give notice, other than such notice as may be required in this Article IX.
Section 9.4. No Additional Waiver Implied bv One Waiver. In the event any agreement
Q contained in this Agreement should be breached by either party and thereafter waived by the
28
�
_ , ;
= , ,
J
� other party, such waiver shall be limited to the particular breach so waived and shall not be
� Q deemed to waive any other concurrent, previous or subsequent breach hereunder.
� �
�
�
�
�
a
�
�
�
�
i
�
�
�
�
�
�
�
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29
- t ;
- , „
- ARTICLE X
_ �
� Additional Provisions
_ Section 10.1. Representatives Not Individually Liable. No member, official, or employee
= of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the
= event of any default or breach or ior any amount which may become due to Redeveloper or its
= successors or assigns or on any obligations under the terms of this Agreement.
�
� Section 10.2. Equal Emplovment Opportunitv. The Redeveloper, for itself and its
; successors and assigns, agrees that during the construction of the Minimum Improvements
� provided for in the Agreement it will comply with all applicable federal, state and local equal
� employment and non-discrimination laws and regulations.
i
Section 10.3. Restrictions on Use. The Redeveloper agrees for itself, and its successors
and assigns, and every successor in interest to the Redevelopment Property or any part thereof,
that the Redeveloper, and such successors and assigns, shall, until the Maturity Date, devote the
Redevelopment Property to, and only to and in accordance with, the uses specified in this
Agreement and the Authority Loan Documents.
Section 10.4. Provisions Not Merged With Deed. None of the provisions of this Agreement
Q are intended to or shall be merged by reason of any deed transferring any interest in the
Redevelopment Property and any such deed shall not be deemed to affect or impair the
provisions and covenants of this Agreement.
Section 10.5. 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 10.6. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under the Agreement by either party to
the other shall be sufficiently given or delivered if it is dispatched by rPgistered or certified mail,
postage prepaid, return receipt requested, or delivered personally; and
(a) in the case of the Redeveloper, is addressed to or delivered personally to the
Redeveloper at 400 Degree Of Honor Building, St. Paul, Minnesota 55101; and
(b) in the case of the Authority, is addressed to or delivered personally to the Authority
at 1010 First Street South, Hopkins, Minnesota 55343.
or at such other address with respect to either such party as that party may, from time to time,
designate in writing and forward to the other as provided in this Section.
� Section 10.7. Disclairner of Relationships. The Redeveloper acknowledges that nothing
contained in this Agreement nor any act by the Authority or the Redeveloper shall be deemed or
30
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_ �
4 � : t
_ Q construed by the Redeveloper or by any third person to create any relationship of third-party
beneficiary, principal and agent, limited or general partner, or joint venture between the
- Authority and the Redeveloper or any third party.
- Section 10.8. Covenants Runnin� with the Land. The terms and provisions of this
- Agreement shall be deemed to be covenants running with the Redevelopment Property and shall
be binding upon any successors or assigns of the Redeveloper and any future owners or
= encumbrancers of the Redevelopment Property.
- Section 10.9. Modifications. This Agreement may be modified solely through written
- amendments hereto executed by the Redeveloper and the Authority.
= Section 10.10. Counterparts. This Agreement r; iay be executed in any number of
- counterparts; each of which shall constitute one and the same instrument.
- Section 10.11 Judicial Interpretation. Should any provision of this Agreement require
- judicial interpretation, the court interpreting or construing the same shall not apply a presumption
= that the terms hereof shall be more strictly construed against one party by reason of the rule of
= construction that a document is to be construed more strictly against the party who itself or
- through its agent or attorney prepared the same, it being agreed that the agents and attorneys of
both parties have participated in the preparation hereof.
- 4 Section 10.12. Venue. The parties submit and consent to personal jurisdiction in the State
- of Minnesota for the enforcement of this Agreement and waive any and all personal rights under
the laws of any state or the United States of America to object to jurisdiction in the State of
= Minnesota for the purposes of litigation to enforce this Agreement.
= �
� 31
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_ •" ,�
�
_ Q IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed
in its name and behalf and its and the Redeveloper has caused this Agreerrient to be duly
executed in its name and behalf on or as of the date first above written.
- HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR
CITY OF H NS
_ �, ;.
By
B �
Y
REAL ES Q TIES
DEVE PM T C PANY
By
Its
STATE OF MINNESOTA) � JAAAES A. GENELLIE
. )SS. : M NOTARY PUBLIC MINNESOTA
4�� MY COMMISSION EXPIRES
COLJNTY OF In ��MM JANUARY 31, 2000
Q The foregoing instrument was acknowledged befor��e this � day of �1uq� 1926, by
Exuw��
C�arIQS 0� Re�epenn�n� and St�evrn Cm�tlk?the Chairrnah and o i rec+or of The Housing and Redevelopment
Authority in and for the City of Hopkins, a public body politic and corporate, on behalf of the
Authority.
Public
■ w
STATE OF MINNESOTA) � DEBRA J EMERY
�SS. �' NOTARYPUBUC-MINNESOTA
COITNTY OF �� .) �'" � COmm. Expire9 Jan. 31 2000
The foregoing instrument was acknowledged before me this .� day of ��, 19� by
,L j•, the� P�� . of Real Estate Equities Development Compa�y, a Minnesota
corporati n, on behalf of the corporation.
=° E � Yt_CJ1,,.� �,
Notary Public `
.�
�
32
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- [•~ •K •
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� SCHEDULE A
Description of Property
Parcel 1:
�'hat part of the Southeast Quarter of �outheast Quarter of Section 23, Township 117, Range 22
described as follows:
Commencing at a poim in a line parallel to and 660 feet West at right angles from
the east line of said Subdivision which point is 689.3 feet measured along said line
Northerly from the intersection of said line � rith the Northerly line of the
right-of-way of the Chicago MiIwaukee and St. Paul Railroad Company; thence
West at right angles 29I feet to the point o£ beginning of the tract to be described;
thence continuing West 382.6 feet more or less to the West line of said
Subdivision; thence North to the Northwest corner of said Subdivision; thence
East along the North line thereof; thence East along the Narth line thereof to an
intersection with a line drawn form the actuat point of beginning parallel with the
East line of said Subdivision; thence South along said parallel line to the point of
begiruiing.
� Parcel2:
Thai part of the Southeast Quartear of Southeast Quarter of Section 23, Township 117, Range 22
described as follows:
Commencing at a point in a line parallel to and 660 feet West at right angles from
the East line of said Subdivision which point is 689.3 feet measured along said line
Northerly firom the intersection of said line with the Northerly line of the
right-of-way of the Chicago, Milwaukee and St. Paul Railroad Company; thence
West at right angles 291 feet; thence North at right angles to the North line of said
Subdivision; thence East atong the North line of said Subdivision to a point in a
line parallel to and 660 feet West at right angles from the East line of said
Subdivision; thence Southerly on an extensicn of tl�e last mentioned line to the
point of beginning.
A-1
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MILLER I
DUNWIDDIE
INC.
ARCHITBCTS
� 123 N. THIRD STREET �
SUTTE 104
� � � MINNEAPOLIS
. � DSINNESOTA 55401
� � . TELEPHONE NUMBER I
812-337-0000 i
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400 DEGREE OF
HONOA BUILDING
79'-6• 325 CEDAR STREET
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I I PH. 812-227-8925
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MINNEAPOL[S I
. )fINNESOTA 55401 ',
� � TELEPHONE NUMBER ��
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____---__
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, � �
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� I 400 DEGREE OF � I
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, - . I . . I ST. PAUL, MN 55101 ��,
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' � Comm. No. MDY6IEB ��
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I BASEMENT PLAN - UNIT AIF ��, FIRST FLOOR PLAN - UNIT AIF �
3 SECOND FLOOR PLAN - UNIT AIR AIF
3 vs• . r-m�. � 3 ut• . i•-m• 3 va• . r-m•
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I
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� MINNESOTA 55401 .
TEI.EPHONE NUMHER
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MEGHANICAL °''� �' I/2 BATH GLOSET � DEVELOPMENT
� AI26 AI28
i COMPANY
' I 400 DEGREE OF
HONOR BUILDING �
325 CEDAR STREET
� � ST. PAUL, MN 55101
� � I PH. 812-227-8925
, . I � � FX. 612-227-9003
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. , Comm. No. MD981SB
. � � . � � Drowin9 Number
�, BASEMENT PLAN - UNIT AIR �Z, FIRST FLOOR PLAN - 11NIT AIR � � .
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� � CLO$ET . MINNESOTA 55401
� � ' A235 e TELEPHONE NUMBER
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. Comm. No. MDY61lB � � �
� Dro�rinq Numper '
�_ BASEMENT PLAN - UNITS A2, A2E, A2• � �, FIRST FLOOR PLAN - UNITS A2, A2E,_A2. � � 4 BEGOND PLOOR f'LAN - UNITS A2, A2E ��,
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INC.
ARCHITBC7S
� 123 N. THIRD STREET
SUITE 104
MINNEAPOLIS
- MINNESOTA 55401
� - TSLEYHONE NUMHER
812-337-0000
FAX NUMBER
612-337-0091
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X I 400 DEGREE OF
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Comm. No. YDY6IEB
prmrinq Numbar
I SASEMENT PLAN - UNIT B2 �, FIRST FLOOR PLAN - UNIT 82 l
3 v4• . r-m• �
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SOU7H ELEVATION AT BIJILDiNG NOS. 3, 4 AND t0 � !
EAST ELEVATION AT BUILDINCa NO. 2 at3
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J va" - r-m• , � Date: OOlJV%
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FINAL APPLICATION
TAX INCREMENT FINANCING AND/OR
DEVELOPMENT ACCOUNT FUNDS
GENERAL INFORMATION
Business Name: '� oAKS OF MAINSTRE�r, LLC Date: �tober 9, 1 996
Address: 325 Cedar Street, Suite 400, St. Paul, i�MI 55101
�y�c «.a l iii�I'�i�ii;, ��c. j: Limited Liability Corporation
l�uthorized representative: Keith S. Jans - Vice President phone: 612-227-6925
Description of business: single Asset Corporation to Develop, own and operate
The Oaks o f Mainstree To ouses.
I,egal counsel: �I��eimer, Wolff & Donnelly (nti-ke Zalk) phone: 223-2517 '
� Address: � 700 First Bank Building, St.Paul, Minnesota 55101
�7NANCIAL BACKGROUND
1. I-�ave you ever filed for bankruptcy? No
2. Have you ever defaulted on any loan commitment? No
3. Have you applied for conventional financing for the project? No
4. List financial references.
a Century Bank, 11455 Viking Drive, Eden Prairie, MN 943-2300 Ken Brooks
b. Western Bank, 663 University Ave., St. Paul, NI�I 290-8130 A1 Mueller
�. Park Bank, 2265 Como Ave., St. Paul, MN 647-0131 Rick Beeson
5. Have you ever used Tax Increment Financing before or requested financial assistance from a
public source? NO If yes, where and when?
� PROJECT INFORMA7'ION
l. Location of proposed project: 2012 Mainstreet, Hopkins, N1�1 55343
2. Amount of Tax Increment Financing or Development Account funds requested: $5, 025, 000
3. Explain in detail your need for T� Increment Financing or Development Account funds: �
Because of the high cost of site aquisition, clearance and relocation costs
an ig eve opmen costs associat wi e redevelopment of an in-fill"
site, a conventionally financed/for sale project would result in a sale price
(per unit) which exceeds the Hopkins market.
4. Present ownership of site: �'chase Agreement
5. Number of permanent jobs created as a result of project: 2
6. Estimated annual sales: present: N�A future: N/A
�i . �i1��iai�:8`� vaiue v^� y�CJBC� iC��O�ti'2T'_� ecmpl�tion.�f im�rove.nnents: � 278 r ���
8. Name and address of architect: I`'liller Dunwiddie Architechts ( Chuck Liddy )
123 North Third Stree, Suite 104, Minneapolis, MN 55401
9. Anticipated start date: November 1996 Completion date: August 1997
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�7NANCIAL INFORMATION
1. Estimated project-related costs: �
a. land acquisition $�1 , 415, 875
b. �ap'italized interest 732,126
c. building 5, 344, 093
d debt service reserve 140,438
e. architecturaUengineering 170,200
f �cost of issuance 748,640
g pperating fund 600,000
h.contingency 122,329 $9,273,700
2. Source of financing:
a �onds � i $ 7,490,000
b. Tax Increment Financing 1, 280, 000
c. Development Account funds
d. other public funds
e. developer equity ?ee, eeo
f.const. period interest 203,700 $9,273,700
3. Additional information (please attach):
a. preliminary financial commitment from bank - Bond Funded through City / HRA
b. plans and drawing of project - Attached
c. background material for company_ previously Submitted
d. pro forma analysis - Attached
e. financial statements - previously Submitted �
f. statement of property ownership or control - Previously Submitted
g. payment of application fee--$1,000
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MEMORANDUM
DATE: October 15, 1996
TO: Steve Mielke - City of Hopkins
Jim Kerrigan - City of Hopkins
FROM: Sid Inman, Ehlers & Associates
Mark Ruff, Ehlers & Associates
RE: Review of Oaks of Mainstreet Project and Partners' Financial Statements
Overview
As we have outlined to the City of Hopkins previously, the Oaks of Mainstreet project contains a substantial
amount of risk to the City due to the level of general obligation bonds involved in the project and the risk
inherent in any real estate project.
We, staff, and the developer have attempted to minimize the risk to the City, however, recent changes to the
Q project financing have increased our perception of the risk to the City. Individually, these changes may not
seem snbstantial but combined, we believe the issues should be noted in writing and deserve a review by the
City.
Over the past few months, the project has encountered the following financial issues:
1. Loss of interest rate lock-in at inztial occupancy for lease-to-own residents.
2. Loss of third party buy out of units if not sold at the end of the five year term.
3. Increase of $5,000 per unit in the price of the units to cover increased construction costs.
4. Delay in the opening of units from spring to mid-summer.
The most important of the changes are the increase in the sales price and the loss of the third party buyout.
Regarding the sales price, Maxfield Research Group has indicated that the market study will support the
increase. In our experience, however, market studies have been wrong, and we have always been more
comfortable with projects that have sales prices which are below the market. Being "at the market" rneans
that the project has much less flexibility and a greater potential for a City payment of debt service.
Secondly, the loss of the third party buyout has left the project without another outside opinion on the
project. The developer has�said that it will replace the third party buy out with its own personal guarantees.
Please note that the developer is already guaranteeing a revenue stream of monthiy tease-to-own payments.
Further, the developer may be providing these guarantees to other projects in the future. If the project does
not pre-sell and does not lease; the deveIoper will be required to pay from $1,000 to over $50,000 per month
to support the revenue pledge. If the project is in trouble, the developer will most likely use a portion of the
personai guarantee in the early years of the project and would have less incentive to remain in the project
4 if a buy out is required.
Partners Financial Statements
We have been ask to review the financial statements of the parties involved in Real Estate Equities •
Development Company and to comment on the financial position as presented in the statements. While
personal financial statements indicate a substantial combined net worth, almost 90% is not liquid and would
require the sale of other real estate property to meet obligations. In general, the financial statements do not
show an ability of Real Estate Equities or its partners to meet any large cash outlays in a short period of time,
and depending on values of ownership interests from their other real estate, at any time. Therefore, if a
buyout on the remaining units would be necessary, the developer would likely need to sell other real estate
holdings, finance the buyout or litigate the City's claim.
If the developer did resist a payment from the personal guarantee, the City would likely be required to pay
out of its general�und to purchase the units. It could take several months or years to collect on a personal
guarantee and other cities' experiences with a personal guarantee indicate that a dollar for dollar collection
is not assured.
We are not able to predict the future of the financial situation of the developer. To reduce the risk, we could
request that the developer not pledge assets to new projects, but the developer would not be able to conduct
business if the City prevented them from pledging a personal guarantee to other projects. In addition,
changes to the real estate market could reduce the value of the personal guarantees.To mitigate the lack of
knowledge of the developer's financial position in the future, the developer has agreed to the following:
1. Provide an annuai statement as to net worth to the City.
2.. Agree to notify the City of Hopkins at least 30 days prior to committing a personal guarantee to
another municipality.
3. Agree not to transfer or encumber assets to avoid payment to the City. .
Recammendations
Personal guarantees are certainly a strong motivation for the developer to perform on this project. However,
collection on these guarantees in a worst case situation are difficult. The only security for the project is the
strength of the market, the dedication of the developer to the project, and ability of the City to collect on
personal guarantees.
The only other source of security in the short time frames for this project would be a letter of credit for a
portion of the developer's obligation to provide additional liquidity, if necessary.
Please contact us with any questions or comments.
cc: Bob Dieke
Steve Bubul
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- Ehters and Associates, Inc.
� L E A D E R S I N P U B L I C F I N A N C E
October 17, 1996
Mr. Steve Mielke
Executive Director
Hopkins Housing and Redevelopment Authority
1010 First Street
Hopkins, MN 55343
Dear Steve:
Our firm has been retained by the Hopkins Housing and Redevelopment Authority (the "�llZA") in
conjunction with the HRA's issuance of $3,780,OQ0 Taxable Housing Revenue Bonds, Series A("Series
A Bonds"), and the City of Hopkins' issuance of $3,780,000 Taxable G.O. Tax Increment Bonds, Series
B("Series B Bonds"), $740,000 G.O. Taac Increment Bonds, Series C("Series C Bonds"), and the
$540,000 Taxable G.O. Tax Increment Bonds, Series D("Series D Bonds") to be loaned to the Oaks of
Mainstreet Limited Liability Corporation ("LLC") for the construction of 66 town home units to be
constructed in the City of Hopkins (the "Project"). Please note that the final bond amounts are subject to
_ change.
Q This letter is intended to provide an overview of the financing and the assumptions underlying the
projected cash flows for the project.
Sourc�s of Data and Assumptions
The data and assumptions used in this letter were derived from information provided by a variety of
sources including the following
Sales Prices: Oaks of Mainstreet, LLC as recommended by a market study by
Maxfield Research Group and appraised values based upon
architectural plans by Comprehensive Valuations Services, Inc.
Lease Revenues
and Lease Absorption Schedule: Oaks of Mainstreet, LLC as recommended by a market study by
Ma�cfield Research Group.
Operating Costs: Oaks of Mainstreet, LLC
Sales Expenses: Oaks of Mainstreet, LLC
In the review of the financial projections, we have assumed that the information provided is accurate,
complete and not misleading. Nothing has come to our attention to the contrary. The results of our
review should be read in its entirety, including all text, footnotes, and schedules. All financial
projections are based upon certain assumptions which are subject to significant variation.
Q
- OFFICES IN MINNEAPOLIS, MN AND BROOKFIELD, WI
2950 Norwest Center . 90 South Seventh Street . Minneapolis, MN 55402-4100
Telephone 612-339-8291 . FAX 612-339-0854
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Mr. Meillce - Oaks of Mainstreet Project .
Page 2
Soarces and Uses of Funds
At closing on the financing, following sources of funds and uses of funds are anticipated:
SOURCES OF FUNDS USES OF FUNDS
Series A Bond Proceeds $3,795,000 Acquisition & Relocation $ 1,416,000
Series B Bond Proceeds 3,795,000 Construction Costs 5,644,000
Series C Bond Proceeds 500,000 Series A Debt Service Reserve Fund 140,000
Series D Bond Proceeds 665,000 Costs of Issuance 549,000
Developer Equity 300,000 Capitalized Interest* 506,000
Marketing Costs 200,000
Special Reserve Fund 600,QQ0
TOTAL $9,055,000 TOTAL $9,055,000
*Calculated including interest earnings on construction and other funds through 1998 at an assumed rate of 5.25%.
The special reserve fund is designated as a reserve for operating costs and certain debt service payments,
if needed.
The Project
The Project is a 66 unit townhouse development on the southwest corner of Shady Oak Road and Main
Street in the City of Hopkins, Minnesota. The primary market for the Project, as stated in the Maxfield •
Research Group study, is lease-to-own residents who are persons or families with sufficient incomes to
afford lease payments and, potentially mortgage payments for the purchase of the units, but are unable to
qualify immediately for mortgage financing to purchase the units outright. Leasing for a period of two to
three years enables the resident to build equity and purchase the unit with assistance from a lease-to-own
program provided by the Oaks of Mainstreet LLC, including down-payment assistance and closing costs
assistance. The units of the Project will also be available for any purchaser outside of the lease-to-own
program.
Currently, no units are pre-sold or pre-leased. The Maxfield Research Group study indicates that lease-
to-own residents will occupy the units within three to six months after construction of the units. Due to
the lack of comparable lease-to-own projects in the upper midwest, we are unable to evaluate the validity
of the lease-up schedule or the percentage of units that will utilize the lease-to-own program.
Projections
Attached is a projections for the Project, titled "100% Lease-to-Own", which demonstrates the cash flow
if all of the units are sold pursuant to the lease-to-own program over a three to four year period.
Assuming that the units are leased in the end of 1997 and beginning of 1998 and sold in 2040 and 2001,
the annual cash flow for the Series A Bonds interest payments provides a debt service coverage of 200%
and, for all remaining debt, debt service coverage of approximately 100%.
The projection is not more likely to occur than any mixture of immediate sales and lease-to-own
transactions for the Project. The projections are intended only to show that leasing of the units and sales
of the units are essential to payment of the Series A Bonds and other debt associated with the Project.
Interest payments for Series A Bonds have priority on lease revenues, and principal payment on the •
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� Mr. Meillce - Oaks of Mainstreet Project
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Series A Bonds have priority on sales revenues of the units. In addition, the Series A Bonds have a
priority pledge of tax increment revenues in a m�imum amount of $3,030 per unsold unit for taxes
payable in 1999 only. Projected lease payments and tax increment revenues are expected to provide
200% coverage on the interest payments on the Series A Bonds. "Tax increment revenues are derived
from the Project and a corporate guaranty from Real Estate Equities Development Company and
personal guaranties of its principals. If taxes are not paid on the Project, tax increment revenues will not
be available.
There is no guarantee that the units will be leased in the time frames proposed by the Oaks of Mainstreet
LLC nor that the units will be sold before the five year maturity of the Series A and Series B Bonds. A
corporate guaranty from Real Estate Equities Development Company and personal guaranties of its
principals are providing the only additional source of payment of lease revenues and an amount equal to
80% of the appraised value for 50% of the unsold units prior to maturity on the Series A Bonds. The
only debt service coverage above 100% for the Series B, Series C, and Series D Bonds is a$600,000
reserve funded from equity and bond proceeds.
The Series A and Series B Bonds will be callable in whole or in part at any time. This allows the
flexibility to absorb sales of the units at any time during the five year term of the Series A and Series B
Bonds.
The Series C and Series D Bonds will be payable from tax increment revenues from the Project
Q beginning in 1999 through the year 2016. If tax increment revenues are not sufficient during the term of
the Series A and Series B Bonds, Series C and Series D Bonds may be payable from Project lease
revenues or the Special Reserve Fund on a subordinate basis to the Series A and Series B Bonds.
Actual results for the Project will vary depending upon construction completion, level of lease revenues,
lease up schedule, expense levels, sales prices, and sales schedule. These variations will have an effect
upon the Project's ability to meet obligations incurred in conjunction with the issuance of the Series A,
Series B, Series C, and Series D Bonds.
We appreciate the opportunity to assist the HRA on this project.
Sincerely,
�
�-�C��S C S� �l/��
Ehlers & Associates
Attachments: Projection
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N:VvSINNS OTA�I-IOPKINS�PINES\OAK SOS.LET
100% LEASE TO OW[V
OAKS OF MAINSTREET: Projections C3nly - Actual Results Will Vary
Hopkins Housing and Redevelopment Authority/City of Hopkins
i�Z i�$ 1�2 2444. 2001
Units Constructed ss ss ss ss ss
Units Leased 38 66 66 33 0
Units Sold 0 0 0 33 66
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REVENUES FOR SERIES A BONDS
i 9g7 j 998 i2�4 24S2S2 244.1 I�1 '
1 GROSS LEASE REVENUE 152,148 699,484 782,473 440,635 74,098 2,148,837 ,,
2 TAX INCREMENT REVENUE FOR SERIES A 0 0 200,000 0 0 200,000
' 3 INTEREST/OTHER INCOME 47,215 35,372 7,372 7,372 0 97,330
4 TOTAL LEASE INCOME 199,362 734,855 989,845 448,007 74,098 2,446,167
5 TOTAL LEASE EXPENSES (53,285) (167,130) (398,599) (231,383) (14,438 (864,834
6 NET REVENUE FOR SERIES A IN7EREST 146,077 567,725 591,246 216,624 59,660 1,581,333
7 SERIES A INTEREST PAYMENTS {70,208) (280,830) (280,830) (93,610) 0 725,478 '
8 NET LEASE REVENUES 75,870 286,895 310,416 123,014 59,660 855,855
9 SERIES A INTEREST COVERAGE 208% 202% 211 % 231 % ---- 218%
, 10 SALES INCOME 0 0 0 3,862,640 3,722,225 7,584,866 �
11 SERIES A PRINCIPAL PAYMENTS 0 0 0 (3,695,000) (100,000 (3,795,000
12 NET SALES & LEASE INCOME 75,870 286,895 310,416 290,654 3,681,886 4,645,721 '
REVENUES FOR C.O. BONDS �
, 13 NET LEASE & SALES (NCOME 75,870 286,895 310,416 290,654 3,681,886 4,645,721
14 TAX INCHEMENT REVENUE FOR G.O. BONDS 0 0 15,272 183,946 150,356 349,574
� 15 TOTAL INCOME FOR G.O. BONDS 75,870 286,895 325,688 474,600 3,832,242 4,995,295 '
16 Series B Debt Service (65,464) (261,855) (261,855) (261,855) (3,892,808 (4,743,836 �
17 Series C Debt Service 0 0 (29,250) (29,250) (29,250 (87,750
18 Series D Debt Service 0 0 (50,330) (50,330) (50,330 (150,990
19 NET ANNUAL INCOME 10,406 25,040 (15,747) 133,165 (140,146 12,719
20 SPECIAL RESERVE FUND BALANCE 600,000 610,406 635,446 619,700 752,864 612,719
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10/16/96• Estimates PrG ared by Ehlers �AKSI5.WK4
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OAKS OF�INSTREET - "
Ciry of Hopkins: Lease-Purchase Housing
Source and Uses
SOURCES US�S
I P HO 1RIN � TOTALS LP HOU&IS TOTA C pFR UNIT °/, OF TOT L
SERIES A REVENUE BONDS 3,795,000.00 3,795,000.00 ACQt11SIT10N 1,415,875 21,453 15.279'.
SERIES B SHORT-TERM TI BONDS 3,795,000.00 3,795,000.00 IAND 1,100,000
SERIES C lONQ-TEAM TAX EXEMPT TI BOND 500,000.00 500,000.00 CONSULTANTS 29,800
SERIES D LONQ-TERM TAXABLE TI BONDS 665,000.00 665,000.00 APPRAISALS 11,940
REAL ESTATE EQUITIES 300,000.00 300,000.00 TITLE & CLOSING 74,135
AELOCATtON COSTS 200,000
INTEREST ON PAOJECT FUND 215,316.77 215,3i6.T7 CONSTRUCTION FUND 5,614,293 85,065 60.569G
ACCpUED INTEREST 0.00 0.00 BLDG COSTS 4,953,830
TOTAL SOURCES 9,270 316.T! 9,270,316.77 SITE WORK 129,676
CONTINGENCY 80,587
Assumptions: CITY FEES 8 PERMITS 90,000 ,
ARCH. & ENG. 142,000
1. Closing on financing on November 1, 1996. DOCS/FEES 110,000
2. Construction completed on Merch through Auguat 31, 1997. DEMOLITIOWCLEARANCE 90,000
3. Capitalized interest on Series A and B through Oct. 1, 1997. ENVlRONMENTAL 18,200
4. Capita!ized interest on Se�iea C and D through February 1, 1999.
5. Developer guarentees buyout COSTS OF ISSUANCE 748,790 11,345 8.089'.
6. No Mortgage Forward Purchase UNDERWRITER COUNSEL 30,000
7. •City fees deferred of $0 and developer fee of $70,000 UNDERW RITER 159,788
BOND COUNSEL 35,000
RATING AGENCY 1Q000
FINANCIAL ADVISOR 40,000
TRUSTEE 7,500
PRINTING AND PUBUSHING 15,000
�SSUEFI FEE 15,060
ISSUER COUNSEL 20,000
OTHER COUNSEL 55,000 i
MARKET STUDY 8,000 �
BUYOUT 0
PAOJECT ADMtNISTRATION' 118,000 I
INSURANCE 2,000
FtNAL CLEANUP 3,300
LEASE PURCHASE COUNSELING l6,800
MISCELLANEOUS 15,402
MARKETING AOVERTISING 198,000
MORTGAGE FORWARD PURCHASE 0
CAPITALIZED INTEREST FUND 721,740 10,935 T.79°h
CAP. INTEAEST 721,740
DEBT SERVICE RESEHVE FUND 140,416 2,128 1.b19:
DEBT SERVICE RESERVE 140,415
' OPERA7lNG FUMD 600,000 9,091 6.479:
DEFERRED FEE 300,000
EQUITY CON7RIBUTION 300,000
CONTINGENCY 29,204 29,204 442 0.329'.
TOTAI USES 9,270 377 9,270 317 140,459 100.00°/.
10/16/96 Estimates Prepared by Ehlers OAKSI3.WK4
OAKS OF MAINSTREET
City of Hopkins: Lease-Purchase Housing
Revenue, Rate and Inflation Assumptions
PROJECT REVENUE ASSUMPTIONS - RESIDENTIAL RATE ASSUMPTIONS
LEASE MONTHLY ANNUAL UNIT RENT1 ,
. TYPE t FAS� UNITS REVENUE_ S•F• S•F• Series A& B Cap. Interest Period: 12 months
2 BR Townhouse 986 40 473,280 1208 0.82 Accrued Interest Days 0
3 BR Townhouse 1123 26 350,376 1378 0.81 Series A Revenue Interest Rate 7.40%
Subtotal Housing 823,656 Series B interest Rate 6.90%
Garage Revenue 0 0 0 Series C interest Rate 5.85%
Rental Revenue 66 823,656 Series D Interest Rate 7.63%
Avg. Rent 1,040 �
Reserve investment Rate 5.2500%
SALES SAL.E PRICE UNITS REVENUE Other Funds Investment Rate 5.2500% �
2 BR Townhouse 123,950 40 4,958,000
3 BR Townhouse 127,692 26 3,319,992 '
Sale Revenue 8,277,992
Av . Sale 125,424 I
INFLATION /�SSUM�TIONS �
1996 i�Z i� i� 2944 2991 294� 244.� 2444 2005
RENTAL REVENUE NA 0.00%a 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
PROPERTY APPRECIATION NA 0.00% 0.00°/a 0.00% 0.00% 0.00°/a 0.00% 0.00% 0.00% 0.00%
EXPENSES NA 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% ,
VACANCY 100.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
MONTHS OPERATING 0 6
10/16/96 Estimates P�ed by Ehlers �!(S13.WK4
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OF MAINSTREET City of Hopkins: Lease-F�ase Housing �
G� Series A Gross Revenue Bonds (Short-Term) Avera e Cou on: 7.40% �`
J p
Gross Net Calendar Year
Principal Interest Debt Service Cap. Debt Service Debt Service
Period Month Day Year Payment Coupon Payment Payment Interest 0.00% Payment Payments
0.000 11 1 1996 0.00 0.00 0.00 0.00
0.250 2 1 1997 70,207.50 70,207.50 70,207.50 0 0.00 0
0.750 8 1 1997 0 7.40% 140,415.00 140,415.00 140,415.00 0 0.00
1.250 2 1 1998 0 7.40% 140,415.00 140,415.00 70,207.50 0 70,207.50 70,208
1.750 8 1 1998 0 7.40% 140,415.00 140,415.00 0.00 0 140,415.00
2.250 2 1 1999 0 7.40% 140,415.00 140,415.00 0.00 0 140,415.00 280,830
2.750 8 1 1999 0 7.40% 140,415.00 140,415.00 0.00 0 140,415.00
3.250 2 1 2000 1,365,000 7.40% 140,415.00 1,505,415.00 0.00 0 1,505,415.00 1,645,830
3.750 8 1 2000 2,330,000 7.40% 89,910.00 2,419,910.00 0.00 0 2,419,910.00
4.250 2 1 2001 100,000 7.40% 3,700.00 103,700.00 0.00 0 103,700.00 2,523,610
4.750 8 1 2001 0 7.40% 0.00 0.00 0.00 0 0.00
5.250 2 1 2002 0 7.40% 0.00 0.00 0.00 0 0.00 0
3,795,000 1,006,307.50 4,801,307.50 280,830.00 0.00 4,520,477.50 4,520,478
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10/17/96 Estimates Prepared by Ehlers OAKS15.WK4
OAKS OF MAINSTREET City of Hopkins: Lease-Purchase Housing
Series B Tax-Increment Bonds '�hort-Term) Avera e Cou on: 6.90%
Gross Net Calendar Yea
Principal Interest Debt Service Cap. Debt Service Debt Service '�
Period Month Day Year Payment Coupon Payment Payment Interest 0.00% Payment Payments
0.000 11 1 1996 0.00 0.00 0.00 0.00
0.250 2 1 1997 65,463.75 65,463.75 65,463.75 0 0.00 0 ',
0.750 8 1 1997 0 6.90% 130,927.50 130,927.50 130,927.50 0 0.00 I
1.250 2 1 1998 0 6.90% 130,927.50 130,927.50 65,463.75 0 65,463.75 65,464
1J50 8 1 1998 0 6.90% 130,927.50 130,927.50 0.00 0 130,927.50
2.250 2 1 1999 0 6.90% 130,927.50 130,927.50 0.00 0 130,927.50 261,855
2.750 8 1 1999 0 6.90% 130,927.50 130,927.50 0.00 0 130,927.50
3.250 2 1 2000 0 6.90% 130,927.50 130,927.50 0.00 0 130,927.50 261,855
3.750 8 1 2000 0 6.90% 130,927.50 130,927.50 0.00 0 130,927.50
4.250 2 1 2001 960,000 6.90% 130,927.50 1,090,927.50 0.00 0 1,090,927.50 1,221,855
4.750 8 1 2001 2,835,000 6.90% 97,807.50 2,932,807.50 0.00 0 2,932,807.50
, 5.250 2 1 2002 0 6.90% 0.00 0.00 0.00 0 0.00 2,932,808 �
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3,795,0 1,210,691.25 5,005,691.25 261,855.00 0.00 4,743,836.25 4,743,836
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' 10/17/96 Estimates Pi d by Ehlers KS15.WK4 ,
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� OF MAINSTREET City of Hopkins: Lease-P�se Housing � ,
Series C Tax Exempt TI Bonds (Long Term) _ Average Coupon: 5.85% ^
Gross Net Calendar Yea
Principal Interest Debt Service Cap. Debt Service Debt Service
Period Month Day Year Payment Coupon Payment Payment Interest 0.00% Payment Payments
0.000 11 1 1996 0.00 0.00 0.00 0.00
0.250 2 1 1997 7,312.50 7,312.50 7,312.50 0 0.00 0
0.750 8 1 1997 14,625.00 14,625.00 14,625.00 0 0.00
1.250 2 1 1998 14,625.00 14,625.00 14,625.00 0 0.00 0
1.750 8 1 1998 14,625.00 14,625.00 14,625.00 0 0.00
2.250 2 1 1999 14,625.00 14,625.00 14,625.00 0 0.00 0
2.750 8 1 1999 14,625.00 14,625.00 0.00 0 14,625.00
3.250 2 1 2000 14,625.00 14,625.00 0.00 0 14,625.00 29,250
3.750 8 1 2000 14,625.00 14,625.00 0.00 0 14,625.00
4.250 2 1 2001 14,625.00 14,625.00 0.00 0 14,625.00 29,250
4.750 8 1 2001 14,625.00 14,625.00 0.00 0 14,625.00
5.250 2 1 2002 14,625.00 14,625.00 0.00 0 14,625.00 29,250
5.750 8 1 2002 14,625.00 14,625.00 0.00 0 14,625.00
6.250 2 1 2003 14,625.00 14,625.00 0.00 0 14,625.00 29,250
6.750 8 1 2003 14,625.00 14,625.00 0.00 0 14,625.00
7.250 2 1 2004 14,625.00 14,625.00 0.00 0 14,625.00 29,250
7.750 8 1 2004 14,625.00 14,625.00 0.00 0 14,625.00
8.250 2 1 2005 14,625.00 14,625.00 0.00 0 14,625.00 29,250
8.750 8 1 2005 14,625.00 14,625.00 0.00 0 14,625.00
9.250 2 1 2006 14,625.00 14,625.00 0.00 0 14,625.00 29,250
9.750 8 1 2006 14,625.00 14,625.00 0.00 0 14,625.00
10.250 2 1 2007 14,625.00 14,625.00 0.00 0 14,625.00 29,250
10.750 8 1 2007 , 14,625.00 14,625.00 0.00 0 14,625.00
11.250 2 1 2008 14,625.00 14,625.00 0.00 0 14,625.00 29,250 '
11.750 8 1 2008 14,625.00 14,625.00 0.00 0 14,625.00
12.250 2 1 2009 14,625.00 14,625.00 0.00 0 14,625.00 29,250
12.750 8 1 2009 14,625.00 14,625.00 0.00 0 14,625.00
13.250 2 1 2010 14,625.00 14,625.00 0.00 0 14,625.00 29,250
13.750 8 1 2010 14,625.00 14,625.00 0.00 0 14,625.00
14.250 2 1 2011 14,625.00 14,625.00 0.00 0 14,625.Q0 29,250
14.750 8 1 2011 14,625.00 14,625.00 0.00 0 14,625.00
15.250 2 1 2012 85,000 5.85% 14,625.00 99,625.00 0.00 0 99,625.00 114,250
15.750 8 1 2012 12,138.75 12,138.75 0.00 0 12,138.75
16.250 2 1 2013 95,000 5.85% 12,138.75 107,138.75 0.00 0 107,138.75 119,278
16.750 8 1 2013 9,360.00 9,360.00 0.00 0 9,360.00
17.250 2 1 2014 100,000 5.85% 9,360.00 109,360.00 0.00 0 109,360.00 118,720
17.750 8 1 2014 6,435.00 6,435.00 0.00 0 6,435.00
18.250 2 1 2015 105,000 5.85% 6,435.00 111,435.00 0.00 0 111,435.00 117,870
18.750 8 1 2015 3,363.75 3,363.75 0.00 0 3,363.75
19250 2 1 2016 115,000 5.85% 3,363.75 118,363.75 0.00 0 118,363.75 121,72
500,000 508,657.50 1,008,657.50 65,812.50 0.00 942,845.00 942,845
10/17/96 Estimates Prepared by Ehlers OAKS15:WK4
,
I OAKS OF MAINSTREET City of Hopkins: Lease-Purchase Housing
Series D Ta xable TI Bonds (Long Term) 7.63%
Gross Net Calendar Yea
� Principal Interest Debt Service Cap. Debt Service Debt Service
Period Month Day Year Payment Coupon Payment Payment Interest Payment Payments
0.000 11 1 1996 0.00 0.00 0.00 0.00
0250 2 1 1997 12,582.50 12,582.50 12,582.50 0.00 0
0.750 8 1 1997 25,165.00 25,165.00 25,165.00 0.00
1.250 2 1 1998 25,165.00 25,165.00 25,165.00 0.00 0
1.750 8 1 1998 25,165.00 25,165.00 25,165.00 0.00
2.250 2 1 1999 25,165.00 25,165.00 25,165.00 0.00 0
2.750 8 1 1999 25,165.00 25,165.00 0.00 25,165.00
3.250 2 1 2000 25,165.00 25,165.00 0.00 25,165.00 50, 330
3.750 8 1 2000 25,165.00 25,165.00 0.00 25,165.00
4.250 2 1 2001 25,165.00 25,165.00 0.00 25,165.00 50, 330 ,
4.750 8 1 2001 25,165.00 25,165, 00 0.00 25,165.00
5.250 2 1 2002 25,165.00 25,165.00 0.00 25,165.00 50,330
5.750 8 1 2002 25,165.00 25,165.00 0.00 25,165.U0
6.250 2 1 2003 55,000 7.10% 25,165.00 80,165.00 0.00 80,165.00 105,330
6.750 8 1 2003 23,212.50 23,212.50 0.00 23,212.50
7.250 2 1 2004 60,000 7.20% 23,212.50 83,212.50 0.00 83,212.50 106,425 '
7.750 8 1 2004 21,052.50 21,052.50 0.00 21,052.50
8.250 2 1 2005 65,000 7.30% 21,052.50 86,052.50 0.00 86,052.50 107,105 i
' 8.750 8 1 2005 18,680.00 18,680.00 0.00 18,680.00
9250 2 1 2006 65,000 7.40% 18,680.00 83,680.00 0.00 83,680.00 102,360 �
9.750 8 1 2006 16,275.00 16,275.00 0.00 16,275.00
10250 2 1 2007 70,000 7.50% 16,275.00 86,275.00 0.00 86,275.00 102,550
10.750 8 1 2007 13,650.00 13,650.00 0.00 13,650.00 '
11.250 2 1 2008 80,000 7.80% 13,650.00 93,650.00 0.00 93,650.00 107,300
11.750 8 1 2008 10,530.00 10,530.00 0.00 10,530.00 '
12.250 2 1 2009 85,000 7.80% 10,530.00 95,530.00 0.00 95,530.00 106,060
12.750 8 1 2009 7,215.00 7,215.00 0.00 7,215.00
13.250 2 1 2010 90,000 7.80% 7,215.00 97,215.00 0.00 97,215.00 104,430 I
� 13.750 8 1 2010 3,705.00 3,705.00 0.00 3,705.00
14.250 2 1 2011 9 5,000 7.80% 3, 705.0 0 98,705.00 0 .0 0 98,705.00 102,410
665,000 i! 543,202.50 1,208,202.50 113,2 1,094,960.00 1,094,960
�
10/17/96 � Estimates Pr�ed by Ehlers •KS15.WK4 �
� i
r .
rnGi�1 OWD ;Tr�i' 1.0. �7' �� .?; �;%ST. .�;:9;`NC. 3��C539i i� p �/��
,
� DR�1FT 10/17/9G
KE��DENT�,4.L �ZE,A�.L EST,rtTE �'U�C�4S� ,q.GREEMElVT
_ ?�rzs l�.greerrlent dated as af OctQber 1, 1996 is be�t�een THE OAK.S Q� Iv1AINS'T1�EET, L1..0
�"Seller"j havirzg i�s pnz�cxpa� o�e� a� 325 Cedar Street, 4D� Dc�tee of Honor Building, Saznt Paul, MN
_ 551�1 and I�E�I, ES?ATE EQTJYTIES DEVELOFMEN7 COMPAN� (" Qu�chase�r" ) �iaving irs �rtr�c�pal
_ affice at 32� Cedar Sttcct, 400 Dcgree of Hoz�or Buildin�, Sgint �au1, TviN S�lOI,
3 W'F�REAS the Seller desires to secure a loan for the cpnstruc�ion �f a ccctair+ pro�eriy described
� ' hetein frat�rl tbc J�ousXng azxd Redevelapment r�uthoriry in and f,or che City �f Hopkins (tfZe "Autharity"j
and tE�e �ity af Hopkins, Pvii[tnesote (the "City") (col�ectively. t� "Lender"), and t[�e Selter will use t6is
Agneement fa� t�ie putpose a� obtazz�in.g a Ioan of the net pr�ceeds of the $3,795,000 �Tous�r�g
Deyelopmertt Gross Rewe�ue So�tds (Oaks of Mai�st�ect Project}. TaXai�le Se�[es 1996A iss�ed by the
Aut�o�t�j, �d $3,795,OOQ Unlimited Ta�t Gerter�( Obliga��on Bonds (Oa�s o��ax�s�eEProJect), Taxable
Series I996B i�s�eed by the City {coll�ctively, the "Bands"), w�I ich wrill be used, together wit�t tkte pto�e�ds
of other bonds issued by the City, fa� tbe constcttetion of 66 towc�hames (�fze "Tawnlzomes") Qn the
property beatin� the Iesal description attached �e�ctp zn tbe tit�e repo�t (the "Praject Site"), and
W�REAS the Selier and the Purchase� wislx to enter into tlYis Residential T�eal Estat.e purc�ase
.4greenzent �"A,g,ree�zienr") for up tn 33 of �the Townhomes (xhe "U��atd Town�a�n�s"),
a NO�V ���,FC)RE, iz� cansideratio� af the foregoing prerrtases, the m,�st�a� c��e�zaz�ts pf the
parties contained nerein snd goad and �aluable canszderatian, receipt au�d svffczency of which is hereby
�cknp�ledged by the parties, t�c Sel�et �.�nd Che Purchaser, through tlieir autlzoriz�ed representatives, hereby
c�te� an,to thls Agte�ment subject to the foliowing kcrms a�d corzdiCzons;
�. D�FII`�I'�'IONS •
I.1 APFRAISED YALUE: The fair rr�arke� vaJ,�e ofa Ur�soid Toti�+zrhoznes as determined by
a k'NMA �pp�oved appraisex In accordance Vri�lt �rrdustry standards.
1.2 HO1�D�: The So�7ds, as defined in ttre reci�tals �ta this Agreerrrent.
1.3 LO.AN AMC}L1zV'T: T'he amovnt the Ler�der is wi[Iirtg to advance the Seller �om rret
praceeds o� tl�e Bonds.
1.4 PUk�.CHA.S�E PRICE: T[�e azzcount the Pcircl�as�r vri[L pa}� ta the Seller for the Unsald
To�ati.omes.
� 1.5 SC�iEDULED CLOS�Nf'r D�.'IE: Janu�z� 15, ZQQ2, waien it �s a�ticzp�ted the Pux+chaser
wiil, c)ose ot� ttte U�sold To�mhames in the e�ent any of sucti Town(tvtnes remain unsald ta a TErird Party
Buyer, as it may be ea�ended pursuant to ¶ 2. � 9.
1.5 ,EFFECTNE I?A,TE �F THIS �GREEl�1ENT: Tlie �ffective Date of this Agr�em�nt
Q sk�al� be t}�e dafe hereof.
I.7 S&,ASONti�L ADJUSTNN.[ENT: [RESERvED),
1.8 �'I0IZTGAGB: �'he fii�st �tor,tgage, Security Agreemes�t atid Financi�g Stateznent] by
Sellet in favor of the Authorzty dated as of dctober l, 1996.
, � �
FRON: ��WD (1 HU � 10. �?' 9� � 2: 5Fi"ST, :1 ?�1N4. 35605�9 � a�� "4,�� �= n
1.9 LC7�k�T_ the loan af c�et proceeds of the Bonds to tl�e Seller b� the I,ender for the purpase •
o� co�.suucting a�d/ar caz�y°rztg the Townhomcs until soid.
i, _ i(� LOAN t�C'rR��M�NT: The Loan A,grccm,et�t d�ted as af Ocxobc� 1, 1996 relati�tg m the
�onds between th,e ,�,ut�ozxty arrd the Cit�, as Issuers, and tlie Scl�er, as De�eloper.
l.I 1 LE�DER: TEte Housing aad �edevelopment Authatily i,n �nd for the Ciry o£ Hvpkins
an.d tbe Ciry af Hop�Cins, Minn,esota.
I.1Z THIRD �A�R7�' BUYER: That �crson, persans or entity, otli�r than ti-�e Purchaser or ttre
Seller, �hi�h purchases tt Townitar�es.
J.13 TU°VJNHOMES: the si�.ry-szx (6�) to�r►i�otnes tn be consiructed by tt�e Seller on tbe
Project Site.
1.I�4 TR.US`�EE; Fi�st Trust �Fatiortal .A,ssoc�atxon, �r its successors, a� txustee, v�ith respectto
the �nde,�tittte of Trust dated as o� October 1, I996 amon� iz and �f�e Le�det, rela�ing to the Bor�ds.
1.15 UNSOLD TOW�1�-TOMES: up to thirty-tllree {33} of clie T��nhomes remaining unsotd
on the Schedu(�d CIosing I)�te.
2. TEl�2PKS
2.I AGI�EEMBI'�'T TO SELL ZJNS�LD TOWNI Tl�c Pu�chaser liereby agrees to •
purch�sa fror�t gel.),e� for tJ:te Purch�e Pr�ce and S�JIer aQrees to se11 to the Purchaser at T�,e Purck�ase
Pz�ce, tT1e �ropezty descr[b�d. her�iA, xn.c�uding �11 fixtures artd °fmprovcments (inclUding but not 1[m,ited
to any fumihue, �urCains and rads, valances, bl�nds, •�indotv shades, sct�eens, shutters, a�in,gs, ca�pentt�,
rcXitrors, ceiling and atrxe fazts, ma'tlboses, tetevision antennas, he�ti�� and air con�iitier�ing units and
�quiprtteztt, secc[riiy and fire detection cquipr�►e�ti, lagl�ting and plurr�bing fi3ctvres, wat�r saftemer, 1�'ash
compactor, garage doar ogextez�s with controls, spas, sh�bbcry, s�ia�:zz�xi�g poats, pool equipme�t, and a}t
otb.e� pruperty' a�ned by Se1ler an,d atrac�.ed to tl7e above �roperty).
2.2 CC}ND�I`IONS �RECED�N7: �RE�E�wEI�J.
z.3 COMPLETI4N TQ SPECIFI�A'I�OIV�: The Serl�r �gcees to camplete thc Ta�xrbaxr�es
3ccording to the appraved plan,s and specificatians prror to �the Sehcdulcd Closing Aate, and sha11 secvre
a cert�ficate �f �ozn.pletlon by an appraiser, inspecting azc�xiteGt, en�ineer, ar �ther profession�� aceeptable
to the Pur�haser, a�� certi�cat�s of accupan� or tlzeir equi�+aEe�t, arxd an.y orher gowernm�t perrrfits
necessa.zy �a a�low the occupancy o�' �he "fovrnliomes by a resi�dei�t.
2.4 API?Rt�JSfiD jJ1�L'UE; The totat App�aised ��f ue for H�e Tawnhomes shawn on Exhibi�
,� sh�il. be �8,278,(�OQ Dollars.
2.5 PL]R.CH�:SE PRICC: �'hc Puzc(�ase Peice �IzaIC be: eighty pereent {80%) a� thc ap�raised
�1�ue of th,e Unsold �'owr�homcs,
2.6 S�HEDULED �LOSI1�fG bATC: [RESE��EDJ.
2.7 CT�OSII�T� AGEI�tT: The Closing agcn� slaall bc •
2
` F�c?�� owD (THVi � 0. �,?' 96 1? : 5�js �. i�: � 9:�'Nc, 3560539119 F 5/34
_ � Z.8 ESCRO� �,GE�1T: 1�ie escro�v agent, if �ny, s�zall be and aLI
paztxes sha�l �.ecute any such escrow instructions as r�ecessary.
= 2.9 CLOSl�,VG/ES�ROW AGE1�1T: Any m.aneys d�pc�sited ti�ith the ciosing andlar escrvw
� age�t xs deposited �ith t�,e u�derstandirrg d�at s��d agent (a) zs not a pat�y to this contrdct and does not
� assurrie to k�av� any �iability for Q��J'ormancc of any signatorsr; (b) has tl�e ri�l�t to re�u�ze a��ritte�x �elease
of liabili�ty oY s�rd agent vvhich authorized the dasbursemcnt of fi�nds held in escrow; (c) is not liable foX
i�[terest on funds heId except as ot�terwise provlded itere�n.
2.I0 FA�NT �� Cl�,SH AT CLO�ING; �n tlae date as �rovide� in ¶ Z_14, the T�u�rchaser
��11 close a� t�e Unsold Townfxozries �vith tlle Seller by paL�me��t oF the �'urchase Przce in casF�, At closirrg,
tbe Pt�rehaser vril[ take cle�X titte and fee simple; provided tIlar if t��e TnlstEC ��as acquited title to the
LJnsoid Townhomes, Purchase wj�� ta.ke title an.d fe�e simpfe withottt qbject�ons other !han with tespect to
abJectians ta tstl� �hic}� atose follovving die datc T�ustee tao�k tirle, �s provided x�i � 2.12_
2.11, EARN�ST MOP�fEY: Tk�e Parchase� s�iall depas�t no earnest mpney for th,is tr�nsaction.
2,12 E�EN�E OF TITLE, �O1'�'VEY�NC� OF T'IT1,E, 7T`TLE INSURA,fiTCE: �el1e� shall
fiunish to t�e �urcheser at Seller's e;�pcz�se an A,LTA P�Iicy of Titf� Insurartcc, pr its equivalent, issued
by ��t[tle compan.y acceptabie to tlte F�rchaser tw�enry {20) business days prior to closing. The Title
I'oiicy sfzal.l contain a broad form meck�zn,ics ]ie�rx covera�e pravision �vhich insures vwer Iiens 1�nv�u and
un�crr,own. Zf suc� a broad �orm mecIiariics lien co�era�e is not available, d�en the po�icy shali eontazz�
the mast c�txtpzehensf�e zz�.eclianxcs Ife� �overage availabfe. Tbe p�licy si�all also guarantee tbe title ta
� b� goad and andefeasible, in fcc simple subject v�Iy to (a} restricti�e co�en�nts of recor¢ affecEing t�e
'�lnsold. T�wnliomes, (}�) raxes gar fhe wzrent and p�zor years duc to a change i❑ [and usage or ownexship,
(c� e��sting bu��diU�g a�nd zaning ozdinances, (d} utility ease�zents cotnrrton to the plaxted subdivision of
x�+liich ttte Uztsold To�homes are a par� and (e) �resctwatians or o�.�er excepti�os pertnitted b� the terms
o�'this contract; �ro�ide�, t�'�at, if t[ie Trustce Iias a�quircd title to tl�e Unsold Tor�mhomes� tfre potic� r�ay
guarantee the title to be �ood and indefeasiblc, in fee sim�l� subject all exeeptzons to title e�isting at the
date the' �'xustee acqui,xed ti��, ra�ceptions perr�itfied in the decd sL1alI not be �ceptions tQ txtf e.
If th� `x�.tstee has assumed title to tbe Unsold Tocvnhomes a�d th� title policy wil� be subject to
en�acl�rRez�t� or e�c�pt�ons other ,th�,n. those existiz�g on t11� dat�- tlxe Trustee assu�m.ed titie, tk�e Tm.tstee
sha1J deliver � the Purchaser tbe coxrcmii�rtze�t and Ie�ible copies of any documents ereatin� such
cxceptions aX le�st twenry (��) b2isiness days priQr co closing, Ti�e Purctiaser �a�l theci I�ave ben (10}
bus�ness days afte� receipt t� mal;ce written objectians ta Trustee. Tf abj�cz�ons tr ti�ic as permitted
hereunder ere raised by the Pu�chaser, the Purchaset sF►atJ extend tt-�e Ciosing Date for a. period of one
year, a�Iv�ving �the T'�stee to cure t,itle. If the objections are not satisf ed wit�,in su�h Qerzod then th°ss
coz�tract shaT� te7miAate at tk�e option of the Fut�ltaser �xth tlie l�urchaser, being relicved of a11 obli,�atioz�s,
e�xess or unpiied. a,n,d with there bexn� no refund or reimbursezz�ent af aay �'ees paid to �ttte Pvrchaser by
tfae Trustee.
Z.D3 C�JNDITT,O� OF SYS�E,MS: [RES�.R`�ED].
2.14 S�P�IC l�1D WE�.L; [�SERVEA],
2_�5 RADON .l�.i�D T-IA7A,RDOU5 MATERI�.LS: [RLS�R�'ED].
� 2.16 '4N�RRt�I�`I'Y: jJtESERVEDJ. .
3
� AO�I CWD (THU7 1 C. 1?' 96 ; 2:`�?/Si. l' : i�/N�. 3560539 i 1� �'�i 3''� `
2.17 BROKER'S �OMMT,SSION: Sath Seller and the Fnr�Izasex represent tk�at no broker has �
been invalvcd xn the ne�o�xaCAOn of this �greemen� and that na real estat� cam.�ission is dtse any brp�Cer
he�eti.t�der SeTIe� agrees to i�,dcmnify the �uXchaser i�cludirag but not (itr�ited t� paym�nt 4� any cnst or
sttorneys' fces, from any claazm for cp�missio� a�i�ing from the sale of th� Unsold Towz�homes pnzsuant
to this Agreement.
2.I8 CERT�FICAT� OP OCCUPAN�Y: (RESERVLT�],
2.�9 C,L.OSING: Thc closi�g ��' the sale shal( taka place on the $cheduled Clasing Date {as
it Tn�y b� extended pu�sttartf to this ¶ Z-I4). �r� tlze euent zl�c clQSing does nvt occuc wirhin �ifteer� (15)
days af tliis dat� fpr ��asons outside of �ae Purchaser�s control, th� Purchaser shatl ha�e th� option b�
terrria�afe tl�is Agr�Ernenr, �rovidcd tktat, Purchaser tn3�' noc te�nitlate thJS A.greer�ent ac a,ny tirne
�ol�ovwing the da�e that t�e Trust�� provides w�r�tten noticc �o t��.e Purchascr of a.n Event o�' Default und�r
the L.a.an ,Agreetcser�c, co�zJ,z�ences fo�ec�osure �roeeedin�s �vitl� respect ta the Unso�d Tow�homcs or
athe�ise assumes title to the U�sold Towv��ozn.es. If the sc{�edvted ciosing date sI1a1! fall ort a le�al
I�oliday ot �w,eel�end then c)osx�g shail �ake place on d�te �rst day t1��reafter which is rrot a weekend ar
l�o�ida3�. Ctosir�g shall take place at tk�e office o� the closin� agent, ar else�here as znay be agr�cd upon
by both the Selter ar�d the Puzc[taser.
�riax �,o the date that th� Trust�e prov1des �wriiten notiee tv the Purchaser of an E�ent of l�e�ault
ur�de� tkte L�an, Agreezz�en� the Tntstec eammences fo�closure proceed�ng,s with respeet to the Unsold
, Townh4mcs vr atherwise as�uztzes �t[tIe to tb.e Unsold �o�vxtlro�nes, S�Iler and Pur'chase� may e�d the
�u�chager's Closi�ng Date past the Scheduled Closiztg Date ��itlt �l�c pnior written ca�s�nr of the Le�tde�.
�ol.lpwing tk�e date �.at tl�e'I'xustee pr�vides wrirtcn not'tce to the Pu�chase� of an Evertt of Defa.ult !
uz�der �tie Los� P�greezper�t, th;e Trtlstee c�mtxacn.ees foreciosure p�oceedings �rit6 �espccc tc� the U'nsold
Towt�boines or otherwzse �.ssume�s �it1e to the Unsotd Townl�.omes, the Trustee may eatend the Sc�cduted
Closi�g pat�, vrrithout �tke conscnt of the Purch.as�r, to a date �to (ai.er than the first anniversary of the date
t�e �'rust�e acqu��ee5 tiile to the Uttsald Tov+nhoxa�es.
�.2Q SA.LES EXPEI'�S�S T�J BE PAID �,T O�. PRIOR TO CLOSIIVG (WITH PURCHI�SER�e
�etler'st�a11 pay ttre cast of �ax statetrients, pxeparation of Gen,eral Warrant� Deed (or its eqa�valent in an�
sta�e �vh,� t�ansfeF is by other tha�n Ge�t�zal Warraaty Dced Form), one��a�f' of ctvsi�g and/or �s�mvr fees
if any, aIl traflsfer taxes, recording and ��ing fiees and such atC�er expenses to whACh tl�e Setler ar�d che
Purchasez agree,
� 2.Z I �OSSES5TON: �el�er sliall deli�et eYClusive posscssion of �Ile Unsald Townhames to t�te
Purchasex at closing.
2.22 PRORA.TIONS: Ta�tes, �.00d and hazard insu�aRCe, rents, mazntenance fees, etc,, s�a��
be pror�ted tkuough �e date af cl,asing.
Z.Z3 CA3UAI,T4' LOS�: The risk of loss ar daznzge to tl�o Ur�sold TownJzomes by fire o�
vrher casualty, until the time of. delivery of th� de.�d �s Ilerein prov�d�d, zs assurned by t�e Se1�et, but
wit�,out obligatxo� of tiability, except at zts option, for t�e tepa,ir or replacement af a�,y suc17 loss oz
damage to �uch UnsvId To�vrrf���cg. In the event tha[ the Selie,r, wit11 tfX� written consent af the Lender,
does not elect ta rep�iz o� replace any suc�Z (oss or damage, the Purchaser rnay e�ect on.e of the following
aptians: �
4
- - _
.:�utv� OU�D (THU) i G, '+. �'' ar l 2; 58i ST. ;;;1 �;'N0, �56C539;19 P 7134
O a} To acce�t a dccd of conveyan�e ko such dat7�agcd Utrso1d `�ovvtthornes in
accvrdanc� with a�1 tita athe� pmrisions of this A`reerr�ent c�poiT paymer�t of the Purc�tase Price
less thte amount o�' elt suz�ts paid as �osses vnder the p�ovis►ans of the h�ar,dtd insurancc policies
eovering sa�d grennises.
b) To dec�ar,e this A�reeznent termirrated witl� respect to such damaged Unsotd
- Tc�wnhomes and receive a rc�d frot��the Sa�Je� of al1 sums hc�eeofore paid to tlie 5etler by the
_ Pwrch�ser on accow�;t af af�oresaid pur�hase pri�e togedZer �ith rhe reasanab[e f,ee,s for tF►e
_ eacami�tatxQ� of titL� to said prcrxi,ises and all rtto��a_�e application fecs �vliich ate non-r�fvndable,
' if art�. Upon receipt of sucll payme�t, fitttiier ciai�ns aild obli�ations befwcen tlZe patties �he�to
� by f�ason vf this agreemcnt sha�I be �eteasec( and discharged_
�
2.24 'IFRMIh(�,,TDpN C}k CONTIZACT
a) BY SFL�,�IZ: The Sellcr r�ay terrninate tliis �tgrc�ement at any time by written
nat�ee to ctte purctxas�r request�og te�inatian alan� ��iti � w�itten reiease frar� this l�greer�ent
by the Lender. Tetrn�rt�tioz� of this Agreeme�z b� the Seller releases the PurcheSer from any and
al1 ob�xgatlons expressed or 'smp��ed by the terr�s of this �,��eeinent with there bcin�t �o refund
ar rei�burser�ertt of any fees paid to tbc puzcl�aser by the Seller. Th�� ag�eez�ez�t autQmaticalIy
t�rr�znat�s when aI1 the Townh.omes ar� said and closed wid� T�i�rd Pariy Suyers.
225 SELLER FEES'TO PURCH�iSER; Se1�e� has agreed to pa� the Purchaser pne ax�d orte
ha�� percent (1.5"/0) of rhe Purchase Price (¶ 2,$), in arr amovnt equal ta $ , ir�
� consid�ratiorz fo[ agreeing to en�ter intQ this contract. These fees are d�e a�.d a�zz�g as provided in Section;
of the Loan A,gzeem�n.c �tiier fees u�hicb zzi.ay be due and owing to tfte Pu�cha�ser after the
Effect�xre Date o�' t3iis Ageerrlien�t �Z�a�l be pa.id directly to t[ze �u�cbase[ by 5eller.
�_26 PUKCHAS�R I�IGHT TO ��J'I�IT: tR�SERvET�J
2.2� �7BL�G�,,T�[pN TO M�R[CET: ,A;t a date one hundred tWeniy (1�24j days priar to tbe
�c�xedu Civsing Date (es it m�y bc eXtended p�ersuar�t to'� 2.19), w1letlier or �ot an Unsold Tv�ome
k�as been used a.s a�o�el, alt offers pcesent�� co rhe Seller (os Trustee, if the Trustee has acguzred TYtle)
by a potet)�a� ThTrd Pacty Buyer musx be presented to 2hc �vrchase�r for review. Tktc Purcha.ser may
denrtand that any offer ptesented by a potcntAa� Thi�rd Party Buyer must be a�ccept�d, pravided that xf �ae
net pto�eed.s of an� sale Qu�suartt to such o�Fer is icss iha�n clle Purcha.se Pri�e sv�t� xespeet to such
To�hozne, the Pure�aser 6ha[I pgy to 5e11e� tl�e difference between sueh net prviceeds and t�e Pu�ehas�
Price at �e time af acceptance o� such offer by tlze �cllez� (or Trustee, if the Tru�tee has �quired Titie),
If the Selter (or Trustea, if the Trustee h,as �equired tztie� does not scce�t tl�,c of�er, after a demand by the
�urehasex, �d payraent by the Purch,aser, if required, �ursuant to c��is pa�agra.plZ, the Purchaser may
terminat�e its Ob�1�atJOII3 e►nder this AgFecmen,t �uith re�pect to sud� U�tsaJd Tow��,orz�.e (�rx�out
te�muiatuzg its abliga�tiorts with r�pect to any other Unso�d Towt��.omes).
Z.2$ Il�iDEMNIFZCPt"�ON: Set[er agrees to fndett�nify arrd ltold �arzz�le5s tFie Purthase� a�d
its sources of c�diz cheir respecx►�+e directors, o1'facers, agents, einployees, succ�ssors, and assigns �rom.
any claims, SiIItS act�ons, causes of action, losses, daznages. or �xpe��ses o�f any kind, including b11t not
, iirz►ited to ar6orneys' fees and c�sts, f,or bodily injury, sicknes$, dise�se qr death, damage or destruction
to groperty in;cludjr�g loss of �se t�ierefr�m, srising out of or resUltin� �ro�n eid�.er (1} the perFarntaartce of
Q tb,�s ,Ptgteeme�rt, �r (2) �� bvildirtg o�tkze Tow�homes, or (3) any bodily injury o� property dar�age caused
in wt�ole or in pa� by The s��g[igent act or orrtissian o�'tl�,e Selle�, the Se11er's contractors, subcontra�tars,
5
FRGr,� aWD (TH�) 1�. ':?' 96 12: 58; s`T. 1;: i�/Na. 3560539? 19 � 8/3� .
agents; emplo�rees oc scryants. SelJer �xpressip agrees to indemnif� including at�orriey fe�5 and costs the •
Pu�c�,aser, its directors, of�icers, agents exnpioyees, or s�zVants from and a�a�nst any neglige�,t �ct v�
orrtissi.on by �ellei, its dicer.to�s afficers. age�ts, emplay�es o� secvants which r�su1T isn bodily i�jury or
property damage o� dcsuuct�on inc�uding lass of use or diminished �afue to che Tawnhomcs.
2.29 J3EF�LJLTS: [RL-SE�VEDl.
2.30 PURC�ASE OF INSUR�NCE: 1�4/ith cespect to the cazt5�ruction of the 'Z'ownhomes, tt�e
Setle�r agxees fa abtain and maintain i�.surance required by �he Mort�ge.
2.31 REPRESENTI�TTO�TS AND W�RRANTIES: Se�Ier represents and warrar�t5 tliat � of
the eff�ctive date o�' th;zs A.�ee�ner�t, �t holds:
�.) title in fee simple to the Praject Site, or w�ll 1zald said t�tie by t��.e a�chedaled
'Closir�g Dat� and,
b) as of ctosing there �viil be no unrecorded Iiens, assessments, o�r Uz�xform
Coc�tr�erc�a� Code S��tttity interests against it►� Uz�SOJd Townl�omes.
232 NOIrT-FOREIGN �FFI]7A�IT3- Sc))er sl�ali del�v�e�r to t��.e Purc) at elasir�g, an
�d�vit cettifying the SeJler is not a'`forelgn person" as defirted in Title 26 IJ.S.C., Secf�on 1445(fj(3).
2.33 E'�ECUTION OF DOCU�fEI'VTS: SeIler and Seller's attorney and/or r�presentative sha11 .
execu� end deJi�er at eiosz�rg aIJ documents which l,txay be rea�ozrabEy reqvired to be executed by the
Purchase� ox any ler�ding institutian, t�tle eoz�tpany or closing agent.
234 rT0'IZCES: AIl notices shatt bc iz� vuriting and effectiwe when deiivered ei�Cfte� zn. petsen
or v�a eezrified mail, return r�c�i,pt �eque,�t�ed, at the addresse� show� i�n t�e openYn� paragraph of thxs
�p�eeme�t.
2,35, �i,S�IGNI�✓I�NT The p�rties bc�[o agr�e thai di� Seller has assigr�e� this ,�gtcc,mcn,t to
the Lender. Sel�et' S�Zall no��fy �1�e Pvrchaser, in wrxtin�g, withiz� �ve �5) busirtess d�ys of suci� assig�nncte�t_
luc�twitbstazitd�ng the assigrunent �ursuant fo this ¶ 2.3 5 the riglits, dtrties and ab[igations o:F the Purchase�
s,ha11 remain aa �ull fo�e �d ef�ect.
�n addit�on, �pon, an, Event of Default undc� thc Loan, /�reeme�C, tlie Purcl�aser at L�nder's
disc�etzozl aitd �ith Lender paying fypica) Se�1er?s axpenses, will take over znarketing o� zhe Ut�sol,d
Towr�ho�nes unti� it �s sa�d oz' antil such time es thc Purchas�r is �bligated tu purchase urcder the te.rms
of � 2. J 4, or elects to parchase in E�ent of pe�'au�� per ¶ 2.29.
236 LE�TpER A`�D `iRUS�EE.A.� SEl'dBFTCtAIZIES: 5ellet and Purehaser acknavyiedge �hat
t�,�r arc afftiated entities and i3zat the� are entering izzto this A.greerrrent tv induce �� Lender bo make a
t�an of the Lo�n t�tnout�t t� tl�e �eller under the Loan �greemertt� '��ere�'or�, rrotwxt�sta,r�ding �.n,� ot}�er
provisiart of this Agreeme�t to tbe con�ry, the �elter �nd Purc4taser agre� to the foliowing for the benefit
af th� Lezcdcr a�,d �lie Truscee:
a. N�ith�r Selier or Pur+chaset sl�rall petmi� any modif�atzon or tennination of this •
Agz+eement �ithout t�te T�uscee's prior v�ritten consent. Nor slzsll arsy terrr�inacion of this
Agreement p��sua�l r,a die terrns hereof b� efFectiVe vvid�our ti1�e p�r;or vwrirtezx consent o£ �ae
G
, ��
,� � k0i'di� ��iND � ; �'Hli; ; 0, ? ?' 96 12 : �9,'S�', ; i : � �!�1C. 356C 539 � 1 � p 9i .��
e
Q �'NStee.
t. N� actior�, inaction, or misreprese�cation. b� the Se[ler, of arly kind whatsoever,
= tliat would give rise to a 1cgal defense or sc�off on the part of thc Purchaser to the pe�orxttax�ce
of its ab[�gat�ons u�zder t�i� �,greem�nt or tllat would excuse suc11 perforrnance shatl be effective
' a,gaxz�st the Trustee or impair cl�c rig(xts of the 'Trustee.to en�orce ttie obligaziozr of the Purchasc�
_ �to purchas�r the Unso�d Townhomes wxtliout tiTe Tntstee's ���tt�n corrsent.
= c. �f due to the actions ar lack t)xereof by tlie Seller, the TKustee is unable to co�ply
= vr�i�ikk any pravision of t1�is q,�ee�n.ent, ir[cluding, w�thout lzmitation, the Seiler's obligation to
= complete cottsuuct�on of an� of the Unsold Ta�vnfiarraes, sueh inabilzty s17a11 nat reltevc E(te
= Purehase� �i�ot�7. its obliga.tivn ta purchase tJ7e Unsvtd Towntiomes.
�
� d. Tn. no event shall t1�.e Trustee be r�sponsibte or Iiable to the Purchaser ort �coun.t
� of any aet�on, [nactio�, mis;representaxion or indemnifi�akio� ablig�t�on of th� 5eller srislr�g uader
this I4gree►r�en,t.
e. Na notice requ►red to be given undzr Chis Agreement shall be e#�ective uztless a
cogy thereof is fur��sFted �� che xnanner provided in Sec�ion 2.34 to the Trustee at the folJowi�g
�ddxess.
Fl,ist ��r.[St National Associatiop
First Trust Cenr��
Q ISO East 5�h Strest
St. �au1, P�IN 55 �01
I�ar shall a,ny time period v�hich cornmences upon tlie giyir�g o� a z�otxce ot o�llet
epmrnunication be deemed ta h,ave corrcmenced urtless tl�e Tr�s�ee is gi��n noEice thereof' as
prov�ded above.
REAI� �S�,A;TE EQUI'TIES DE�►�ELOPME1tJT TI3E OAKS OF Mr�Il�STREE'�, LLC
CO�PviiPA�NY
BY� �Y:
Dul� Authoziz�ed A�.gent Duly Avtlzarized Agent
���p_ DATED:
�
• z2U616La t11351S7DBY-PU Ol'7�10•17AdlMlYL
7
.}
,
� /�T�frc�: Draft _
/���t�ber �?; 1996
� SHORT TERM BONDS
TAX INCREMENT PLEDGE �GREEMENT
by and nbefi�ee�i
CITY OF HOPKINS, MINNESOTA
` and
_ THE HOUSING AND REDEVELOPMENT AUTHORITY
= IN AND FOR THE CITY OF HOPKINS, MINNESOTA
� n
�
THTS AGREEMENT is made and entered into on or as of the 1 st day of October, 1996,
by and /�b�t���n'::the City of Hopkins, Minnesota (the "City")n and The Housing and
_ _.: _ ::
_ ..
Redevelopment Authority in and for the City of Hopkins, Minnesota (the "Authority")n.
WHEREAS, the Authority and City have heretofore estab(ished Tax Increment Financing
District No. 2-9 (the "TIF District"), and Redevelopment Project No. 2(the "Project"); and
WHEREAS, pursuant to authority conferred by Minnesota Statutes, Section 469.178, and
Minnesota Statutes, Chapter 475, the City has agreed to finance the acquisition of certain blighted
Q property in the Project and construction of certain improvements thereon by the Authority (such
actions referred to as the "Development"), through the issuance of general obligation bonds of
the City, designated the n5�3,795,Q€�E} ;Unlimited Tax General Obligation Tax Increment Bonds
_ : ;
(Oaks of Main Street Project) Taxable Series 1996B (the "Series 1996B Bonds"); and
WHEREAS, in order to finance additional costs of the Development, the Authority has
agreed to issue its n�i3�'�9� Housing Development Gross Revenue Bonds (Oaks of Main
_<. _ ,
Street Project) Taxable Series 1996A (the "Series 1996A Bonds"); and
WHEREAS, the Series 1996A Bonds and the Series 1996B Bonds are hereinafter referred
to collectively as the "Short Term Bonds;" and
WHEREAS the Short Term Bonds are issued pursuant to an Indenture of Trust among
the City; the Authority and F�x�t T'r�� I+Ta��tan�I Ass�c��tzo�z �the "Trustee") dated October l, 1996
(the "Indenture"), and the proceeds thereof shall be applied pursuant to that certain Loan
Agreement among the City and the Authority and the Oaks of Mainstreet, LLC (the "Borrower")
dated October l, 1996 (the "Short Term Bonds Loan Agreement").
WHEREAS, in order to finance additional costs of the Development, the City has agreed
to issue its n���i5,(}�fl <General Obligation Taxabie Tax Increment Bonds, Series 1996D (the
_ : _,
"Series 1996D Bonds"); and
� WHEREAS, in order to cany out the Development and in connection with issuance of the
Series 1996D Bonds, the Authority has entered into that certain Series 1996D Bonds Loan
SJB109881 1
HP110-51
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Agreement among the Authority and The Oaks of Mainstreet, LLC (the "Borrower") of even date
herewith (the "Series 1996D Bonds Loan Agreement"); and +
WHEREAS, in order to provide funds to construct certain public improvements in
connection with the Development, the City has agreed to issue its n$S(#0,4f�t� General Obligation
Tax Increment Bonds, Series 1996C (the "Series 1996C Bands"}; and
WHERE�IS, the Series 1996C Bonds and Series 1996D Bonds are hereinafter referred to
collectively as the "Long Term Bonds"
WHEREAS, the Authority has agreed to pledge certain tax increment revenues generated
from the TIF District ("Tax Increments") to the City for the payment of a portion of the principal
of and interest on the Short Term Bonds in accordance with the terms of this Agreement; and
WHEREAS, the Authority has also agreed to pledge Tax Increments to the City for the
payment of the principal and interest on the Long Term Bonds, pursuant to a separate agreement
designated the Long Term Bonds Tax Increment Pledge A�reement between the Authority and
the City of even date herewith (the "LTB Pledge Agreement"); and
WHEREAS, the City and AuthQrity have determined that not less than 24 percent of the
cost of the Development and related public improvements financed by the Series 1996B Bonds
and the Long Term Bonds is estimated to be received from Tax Increments generated from the
TIF District; and � •
WHEREAS, pursuant to Minnesota Statues, Section 469.178, Subdivision 2, any
agreement to pledge tax increment revenues must be made by written agreement by and between
the Authority and the City and must be filed with the Ta�cpayer Services Division Manager of
Hennepin County;
NOW, THEREFORE, the City and the Authority mutually agree to the following:
(1) The City will issue the Short Term Bonds under the Indenture, and hereby assigns
a11 its rights with respect to this Agreement to the Trustee for the benefit of the
holders of the Short Term Bonds.
(2) The proceeds from the sale of the Short Term Bonds will be will be made
available by the City to Authority to pay or reimburse certain costs of the
Development, in accordance with the Indenture and the Short Term Bonds Loan
Agreement.
(3) All Tax Increments received by the Authority from and after the date of this
Agreement shall be deposited in a special fund (the "Project Fund") held by the
Authority. The Authority hereby pledges Tax Increments to the payment of the
principal and interest on the Short Term Bonds, subject to the following terms and
in the following priority: �
SJB109881 �
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Q (a) First, to the Series 1996A Bonds, in the lesser of (i) the amount
necessary to pay when due the principal of and interest on the Series
1996A Bonds, after taking into account ail Revenues available for such
purpose as of each Payment Date, or (ii) $a,fl3.� 3€7 per unit of Residences
leased as of , 19
(b) Second, to the Long Term Bonds in accordance in accordance with the
LTB Pledge Agreement;
(c) Third, to the Series 1996B Bonds, in the lesser of (i) the amount
necessary to pay when due the principal of and interest on the Series
1996B �onds, or (ii) the atnount of Tax Increments remaining in the
Project Fund on each Payment Date after making the payments described
in clauses (a) and (b) of this Section 3.
(4) Not less than three business days prior to each Payment Date for the Short Term
Bonds, there shall be transferred from the Project Fund to Trustee for deposit in
the Series A Principal and Interest Fund and the Series B Principal and Interest
Fund (as the case may be) the amounts specified in Section 3(a) and 3(c),
respectively.
(5) This Agreement shall terminate and the pledge of Tax Increments hereunder be
p released on the date on which the Short Term Bonds have been paid in full,
redeemed or defeased.
(6) The Authority shall make no other pledge of Tax Incrernents (except that
described in the LTB Pledge Agreement) uniess such pledge is subordinate to the
pledge under this Agreement and the Long Term Bonds Loan Agreement.
(7) In addition to the pledge of Tax Increments hereunder, the Authority pledges tax
to payment of principal and interest on the Series I996B Bonds tax increments
from Tax Increment Financing Districts Nos. 1-1 and 2-1 (the "Additional Tax
Increments"), subject to the following terms and conditions:
(a) Additional Tax Increments are pledged in the amount necessary to pay
when due the principal of and interest on the Series 1996B Bonds, after taking
into account all Revenues and Tax Increments availabie for such purpose on each
Payment Date.
(b) the pledge of Additional Tax Tncrements is subordinate to any piedge
of such revenues made prior to the date of this Agreement;
(c) the Authority may make any subsequent pledge of Additional Tax
Increments to any other contract or obligation on a parity basis with the piedge
Q hereunder;
SJB109881 �
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(d) the pledge of Additional Tax Increments hereunder is for the benefit
of the City, and the parties her�to reserve the right to modify the terms of this •
Agreement at any time during the term of this Agreement.
(8) An executed copy of this Agreement shall be filed with the Taxpayer Services
Division Manager of Hennepin County pursuant to the requirement contained in
Minnesota Statutes, Section 469.178, Subdivision 2.
(9) All capitalized terms used in this Agreement have the meanings assigned them in
the Indenture, unless the context or use thereof indicates another or different
meaning or intent.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on their behalf and their seals to be hereunto affixed and such signatures and seals to
be attested, as of the day and year first above written.
ATTEST: CITY OF HOPKINS,
MINNESOTA
•
By
City Manager Mayor
(SEAL)
•
SJB109881
HP110-51 4 � �
i
i
�
Q ATTEST: THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
- HOPKINS, MIi�INESOTA
: By
' Chair President
;
,
�
� (SEAL)
�
�
n
�
�
sJa�o�sei 5
xPi�o-sl
x
r
STATE OF MINNESOTA TAXPAYER SERVICES
DIVISION MANAGER'S .
COUNTY OF HENNEPIN CERTIFICATE
I, the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota,
hereby certify that a Tax Increment Pledge Agreement by and nbet�veen;the City of Hopkins,
Minnesota n�d;the Housing and Redevelopment Authority in and for the City of Hopkins, n
relating to th� A.u�o�ty's �3�'�9���0 H�us�n� U���Iop�xe�t C`r�ss R�ve�;ue BQ�z� (t}a� c�f
I���nstr�t Pra�Jee�� Taxabl�; ��ries I9��, �ct'the City's $3,595,000 Unlimited Tax General
Obligation Bonds (Oaks of Mainstreet Project) Taxable Series 1996B, dated October 1, 1996, has
been filed in my office.
WITNESS my hand and official seal this _ day of , 1996.
�
Taxpayer Services Division Manager
(SEAL) Hennepin County, Minnesota
By
Deputy
•
sJSio9aai 6
HP110-51
I
- ,
�
: �
l
1
; /�T�zrd Draft
� � nf3ct�ber 17,;>;1996
_
____.
� LONG TERM BONDS �
TAX INCREMENT PLEDGE AGREEMENT
by and between
CITY OF HOPKINS, MINNESOTA
and
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY UF HOPKINS, MINNESOTA
THIS AGREEMENT is made and entered into on or as of the lst day of October, 1996,
by and between the City of Hopkins, Minnesota (the "City"), and The Housing and
Redevelopment Authority in and for the City of Hopkins, Minnesota (the "Authority")
WHEREAS, the Authority and City have heretofore established Tax Increment Financing
District No. 2-9 (the "TIF District"), and Redevelopment Project No. 2(the "Project"); and
WHEREAS, pursuant to authority conferred by Minnesota Statutes, Section 469.178, and
Minnesota Statutes, Chapter 475, the City has agreed to finance the acquisition of certain blighted
� property in the Project and construction of certain improvements thereon by the Authority (such
', actions referred to as the "Development"), through the issuance of generai obligation bonds of
the City, designated the $n3,79S;�0 Unlimited Tax General Obligation Tax Increment Bonds
(Oaks of Main Street Project) Taxable Series 1996B (the "Series 1996B Bonds"); and
WHEREAS, in order to finance additional costs of the Development, the Authority has
agreed to issue its $n'� Housing Development Gross Revenue Bonds (Oaks of Main
Street Project) Taxable Series 1996A (the "Series 1996A Bonds"); and
WHEREAS, the Series 1996A Bonds and the Series 1996B Bonds are hereinafter referred
to collectively as the "Short Term Bonds;" and
WHEREAS the Short Term Bonds are issued pursuant to an Indenture of Trust among
the City, the Authority and �`�r�t Trt�t N�ian�I .�ss��t��o� �"the Trustee") dated October 1, 1996
; -
(the "Indenture"), and the proceeds thereof shall be appiied pursuant to that certain Loan
Agreement among the City and the Authority and the Oaks of Mainstreet, LLC (the "Borrower")
dated October 1, 1996 (the "Short Term Bonds Loan Agreement").
WHEREAS, in order to finance additional costs of the Development, the City has agreed
to issue its $/���aS,(}(�� General Obligation Taxable Tax Increment Bonds, Series 1996D (the
"Series 1996D Bonds"); and
Q WHEREAS, in order to carry out the Development and in connection with issuance of the
Series 1996D Bonds, the Authority has entered into that certain Series 1996D Bonds Loan
SJB108912 1
HP110-51
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.
Agreement among the Authority and The Oaks of Mainstreet, LLC (the "Borrower") of even date
herewith (the "Series 1996D Bonds Loan Agreement"); and •
� WHEREAS, in order to provide funds to construct certain public improvements in
connection with the Development, the City has agreed to issue its $n5t}(�,Qt�� General Obligation
,___;
Tax In�rement Bonds, Series 1996C (the "Series 1996C Bonds"); and
WHEREAS, the Series 1996C Bonds and Series 1996D Bonds are hereinafter referred to
collectively as the "Long Term Bonds;" and
WHEREAS, the Authority has agreed to pledge certain tax increment revenues generated
from the TIF Distrist ("Tax Increments") to the City for the payment of principal of and interest
on the Long Term Bonds in accordance with the terms of this Agreement; and
WHEREAS, the Authority has also agreed to pledge Tax Increments to the City for the
payment of a portion of the principal and interest on the Short Term Bonds, pursuant to a
separate agreement designated the Short Term Bonds Tax Increment Pledge Agreement between
the Authority and the City of even date herewith (the "STB Pledge Agreement"); and
WHEREAS, the City and Authority have determined that not less than 20 percent of the
cost of the Development and related public improvements financed by the Series 1996B Bonds
and the Long Term Bonds is estimated to be received from Tax Increments generated from the
TIF District; and - •
WHEREAS, pursuant to Minnesota Statues, Section 469.178, Subdivision 2, any
agreement to pledge tax increment revenues must be made by written agreement by and between
the Authority and the City and must be filed with the Taxpayer Services Division Manager of
Hennepin County; �
NOW, THEREFORE, the City and the Authority mutually agree to the following:
(1) The City will sell the Long Term Bonds.
(2) The proceeds from the sale of the Series 1996C Bonds will be made available by
the City to the Authority to pay or reimburse costs of certain public alley and
utility improvements in accordance with the Agreement for Dedication and
Maintenance of Public Alleys and Utility Easements by and between the City and
the Borrower of even date herewith; and proceeds from the sale of the Series
1996D Bonds will be will be made available by the City to Authority to pay or
reimburse certain costs of the Development, in accordance with the Series 1996D
Bonds Loan Agreement.
(3) All Tax Increments received by the Authority from and after the date of this
Agreement shall be deposited in a special fund (the "Project Fund") held by the
Authority. The Authority hereby pledges to the payment of the principal and
interest on the Long Term Bonds (on a parity basis as between the Series 1996C .
Bonds and the Series 1996D Bonds), Tax Increments from the Project Fund in an
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Q amount sufficient to pay 105% of debt service due on the Long Term Bonds from
time to time, subject to the prior pledge of Tax Increments to the Series 1996A
Bonds as set forth in Section 3(a) of the STB Pledge Agreement.
(4) Not less than three business days prior to each debt service payment date for the
Long Term Bonds, there shall be transferred from the Project Fund to the Debt
Service Funds maintained by the City for the payment of the Long Term Bonds,
an amount which when taken together with amounts already on deposit in such
Debt Service Funds, is equal to 105% of principal of and interest next due on the
Long Term Bonds, subject (while any Series 1996A Bonds remain Outstanding)
to the availability of Tax Increments after making the payments required with
respect to the Series 1996A Bonds under Section 3(a) of the STB Pledge
Agreement.
- (�) While any Short Term Bonds remain outstanding, after making the payment
required under clause (4) hereof, the Authority shall pay Tax Increments from the
Project Fund to the City in accordance with the terms of the STB Pledge
- Agreement.
;
= (6) From and after the date on which the Short Term Bonds have been paid in full,
� redeemed or defeased, the Authority shall, after making the payment required
; under clause (4) hereof on each debt service payment date, apply any Tax
� p Increments remaining in the Project Fund as of such date in accordance with the
� terms of Section 10.1 of the Series 1996D Bonds Loan Agreement.
(7) The Authority shall make no other pledge of Tax Increments (except that
described in the STB Pledge Agreement) unless such pledge is subordinate to the
pledge under this Agreement and the Long Term Fonds Loan Agreement.
(8) In addition to the pledge of Tax Increments hereunder, the Authority pledges tax
to payment of principal and interest on the Long Term Bonds tax increments from
Tax Increment Financing Districts Nos. 1-1 and 2-1 (the "Additional Tax
Increments"), subject to the following terms and conditions:
(a) Additional Tax Increments are pledged in the amount necessary to pay,
when due, the principal of and interest on the Long Term Bonds, after taking into
account all Tax Increments available for such purpose and any other revenues on
deposit on each payment date in the Debt Service Fund established for each series
of Long Term Bonds.
(b) the pledge of Additional Tax Increments is subordinate to any pledge
of such revenues made prior to the date of this Agreement;
(c) the Authority may make any subsequent pledge of Additional Tax
Q Increments to any other contract or obligation on a parity basis with the pledge
hereunder;
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(d) the pledge of Additional Tax Increments hereunder is for the benefit
of the City, and the parties hereto reserve the right to modify the terms of this •
Agreement at any time during the term of this Agreement.
(9) An executed copy of this Agreement shall be filed with the Taxpayer Services
Division Manager of Hennepin County pursuant to the requirement contained in
Minnesota Statutes, Section 469.178, Subdivision 2:
IN WITNE5S WHEREOF, the City and the Authority have caused this Agreement to be
duly executed on their behalf and their seals to be hereunto affixed and such signatures and seals
to be attested, as of the day and year first above written.
ATTEST: CITY OF HOPKINS,
MINNESOTA
B y • City Manager Mayor
(SEAL)
ATTEST: THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
HOPKINS, MINNESOTA
By
Chair President
(SEAL}
•
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� STATE OF MINNESOTA TAXPAYER SERVICES
DIVISION MANAGER'S
COUNTY OF HENNEPIN CERTIFICATE
I, the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota,
hereby certify that a Tax Increment Pledge Agreement by and between the City of Hopkins,
- Minnesota and the Housing and Redevelopment Authority in and for the City of Hopkins, relating
: to the City's $/�S€}Q;(��Q General Obligation Tax Increment Bonds, Series 1996C, dated October
� l, 1996 and $nf65,.f��0 General Obligation Taxable Tax Increment Bonds, Series 1996D, dated
October l, 1996, has been filed in my office.
WITNESS my hand and official seal this _ day of , 1996.
�
Taxpayer Services Division Manager
(SEAL) Hennepin County, Minnesota
By
Deputy
n
�
sJaioe�iz
HP110-51 5
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Drafted 10/ 17/96
� AGREEMENT FOR MAINTENANCE
OF PUBLIC ALLEYS AND UTILITY EASEMENTS
This Agreement made this day of , 1996, by and �
between Homeowners Association, Inc., a Minnesota nonprofit
corporation ("Association") and the City of Hopkins, a municipal corporation under the laws of the
State of Minnesota ("City").
RECITALS
A. The Oaks of Mainstreet LLC, a Minnesota limited liability company ("Developer")
has applied to the City for approval of a sixty-six (66) unit townhome development (the "Project"}
on land located in the City of Hopkins, County of Hennepin, State of Minnesota (the "Subject
Property") legally described in Exhibit A attached hereto and incorporated herein by reference.
Developer is the fee owner of the Subject Property as of the date of execution of this Agreement.
B. Developer has submitted an application to the City to plat the Subject Property and
has agreed to complete the platting process and obtain final approval of the plat of the Subject
Property ("Plat") from the City. The Plat is to be designated with the name
, Hennepin County, Minnesota. In the Plat,
Q Developer proposes to dedicate to the public certain alleys ("Public Alleys") and easements for
sanitary sewer and water purposes ("Sewer and Water Easements"). The City has agreed to accept
dedication of the Public Alleys and Sewer and Water Easements on the condition Developer and the
Association agree to maintain, repair and replace the Alley Improvements and the Utility
Improvements (the phrases "Alley Improvements" and "Utility Improvements", when used herein
having the same meanings as stated in Paragraph 3, a. of the Dedication, Construction and
Maintenance Agreement defined and identified in Recital Paragraph D. of this Agreement),
indemnify the City from all liability resulting from the public ownership of the Public Alleys and
Sewer and Water Easements as hereinafter provided and otherwise comply with the terms, covenants
and conditions of this Agreement.
C. In connection with the development of the Project, the Developer has incorporated
the Association as owners association for the townhome project as required by Minn. Stat. S 15B.3-
101. The Developer intends to sell the completed Units (hereinafter defined) to individual owners
("Unit Owners").
D. On the date of this Agreement, the Developer has entered into an Agreement for
Dedication, Construction and Maintenance of Public Alleys and Utility Easements ("Dedication,
Construction and Maintenance Agreement") with the City relating to the dedication, construction
and maintenance of the Public Alleys, Sewer and Water Easements, the Alley Improvements and the
Utility Improvements.
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_ _ _. __ _ _ _ _ �
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NOW, THEREFORE, in consideration of the foregoing Recitals , One Dollar ($1.00) and
other good and valuable considerable, receipt of which is hereby acknowledged by Association, and �
the agreements contained herein, the parties hereto agree as follows:
1. Incorporation of Recitals. The foregoing Recital Paragraphs A-D are inco:rporated
in and made a part of this Agreement in their entirety.
2. Maintenance and Repair. The Association agrees, on behalf of itself and on behalf
of all Unit Owners, that the Association shall be solely responsible for all repair, maintenance
(including, but not limited to, snow plowing, snow removal and sweeping), restoration and
replacement of the Alley Improvements and the Utility Improvements, at its expense; and that the
Association and the Unit Owners shall be jointly and severally liable for all costs, expenses,
liabilities, obligations, claims arid demands related to or arising from, either directly or indirectly,
the design, construction, use, maintenance, repair, reconstruction or replacement of the Alley
Improvements and the Utility Improvements together with all modifications or replacements thereof
or additions thereto. 'Fhe Association agrees, on behalf of itself and on behalf of Unit Owners, that
the Association shall repair and maintain the Alley Improvements and the Utility Improvements in
good condition and state of repair in accordance with the City's standards for maintenance of streets
and utility improvements as the same shall from time to time be modified or amended. The
obligations and agreements of the Association and the Unit Owners stated in this paragraph shall be
perpetual in duration. The Association agrees and acknowledges, on behalf of itself and all Unit
Owners, that the City and its officials, representatives, agents and employees shall have no •
obligation whatsoever to design, construct, maintain, repair, reconstruct or replace the Alley
Improvements, the Utility Improvements or any modifications or replacements thereof or additions
thereto. The Association also agrees and acknowledges, on behalf of itself and all Unit Owners, that
the City and its officials, representatives, agents and employees shall have no obligation to locate
the Utility Improvements should it become necessary to do so in the future in connection with any
construction or excavation activities. The City specifically disclaims responsibility for the repair,
maintenance, restoration or replacement of the Alley Improvements and the Utility Improvements
or for locating the Utility Improvements after their completion.
3. Indemnification of Citv. The Association agrees to protect, indemnify and hold the
City, and its officials, representatives, agents and employees, harmless from and against all
liabilities, obligations, responsibilities, claims, costs, expenses (including attorneys' fees), demands
and causes of action relating to or arising out of, directly or indirectly, the design, construction,
maintenance, repair, reconstruction, replacement, ownership or use of the Alley Improvements, the
Utility Improvements and any replacements or substitutions therefore, including, but not limited to, ,
claims for injury to persons or property. The City shall promptly notify the Association of any claim
made against the City that is subject to the indemnification provisions of this Paragraph 8.
4. Insurance. At such time as the Developer ceases to maintain the insurance required
by Paragraph 9 of the Dedication, Construction and Maintenance Agreement, the Association agrees
that it shall purchase and continuously maintain comprehensive general public liability insurance,
providing coverage on an "occurrence" and not a"claims made" basis, in a single limit amount of •
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not less than $2,000,000.00 for personal injury or death and not less than $500,000.00 for property
Q damage, insuring against all claims arising from or relating to the design, construction, maintenance,
repair, reconstruction, replacement, ownership or use of the Alley Improvements, the Utility
Improvements and any replacements or substitutions therefore. Such comprehensive general public
liability insurance shall name the City as an additional insured and shall provide for thirty (30) days
written notice to the City prior to cancellation or nonrenewal thereof. A certificate evidencing such
insurance shall be delivered to the City on or before the date on which the insurance maintained by
the Developer under Paragraph 9 of the Dedication, Construction and Maintenance Agreement is
cancelled or terminated, and the Association agrees it shall assure there will be no lapse or gap in
the insurance coverage maintained by the Developer under Paragraph 9 of the Dedication,
" Construction and Maintenance Agreement and by the Association under this Paxagraph 4. The
� minimum limits for the comprehensive general public liability insurance to be maintained by the
� Association shall be increased as reasonably requested by the City by written notice to the
= Association, provided such increases may not be required more frequently than one (1) time per year
� and may not exceed percent per year.
5. Reserves for Maintenance and Repair. The Association agrees, on behalf of itself
and on behalf of all Unit Owners, that the Association shall collect an assessment from the Unit
Owners to pay all costs of performing the Association's obligations hereunder and shall maintain an
adequate cash reserve for the maintenance, repair, reconstruction and replacement of the Alley
Improvements, the Utility Improvements and all replacements or substitutions therefore. Upon
Q request from the City to the Association, the Association shall provide the City with written
evidence, in detail reasonably satisfactory to the City, demonstrating the Association is maintaining
such cash reserve. Such cash reserve shall be separately maintained and dedicated to the payment
of the costs of performing the Association's obligations hereunder. The Association acknowledges
the City shall be entitled to specifically enforce the agreements and undertakings of the Association
and the Unit Owners under this Paragraph 5, as provided in Paragraph 7 of this Agreement.
6. Assessments. If, despite the provisions of this Agreement, the City shall incur any
cost, expense, damages or liabilities arising out of or relating to the design, construction,
maintenance, repair, reconstruction, replacement, ownership or use of the Alley Improvements or
the Utility Improvements, and such cost, expense, damage or liabilities shall not have been fully
reimbursed to the City within thirty (30) days after demand for reimbursement to the Association,
the City, if it so elects, may cause all of such cost, expense, damages or liabilities, including all
reasonable legal fees and administrative expenses incurred by the City, to be recovered and levied
as a special assessment against the Units under Minnesota Statutes Chapter 429, and the Association,
on behalf of itself and the Unit Owners, hereby waives notice and hearing on said special
assessments to the fullest extent permitted by law.
7. Enforcement of Agreement. The Association acknowledges that the rights of the
City to enforce performance of the Association's obligations under this Agreement are unique and
that, in the event the Association fails to perform any covenant, condition, agreement or provision
Q of this Agreement, the City shall be without an adequate remedy at law. The Association agrees,
that, in the event the Association fails to perform any term, covenant, condition, agreement or
c:\file\hopcivil\mainten.oak 3
_ _ _ �
provision of this Agreement the City may, at its option, institute and prosecute an action to
specifically enforce the performance of this Agreement. No remedy a�ailable under this Agreement •
is intended to be exclusive, and each remedy shall be cumulative and in addition to every other
available remedy. The election of any one or more remedies shall not constitute a waiver of any
other remedy.
8. Notices. All notices or other communications hereunder shall be in writing and shall
be hand delivered or sent by first class United State mail, postage prepaid, or by a nationally-
recognized overnight delivery service, to the parties at the following addresses:
If to the City: City of Hopkins
Attention: City Engineer
1010 First Street South
Hopkins, Minnesota 55343
If to the Association:
Attention:
If notice is given by mail or by overnight delivery service, such notice shall be deemed to have been
properly given the next business day following the date of mailing or delivery to such overnight •
delivery service.
9. Successors and Assigns. This Agreement and the obligations of the Association and
the Unit Owners hereunder shall run with the title to the Subject Property and the Units, in
perpetuity, and shall be binding upon the Association, the Unit Owners and their respective
successors, assigns and mortgagees. All of the terms, covenants and conditions of this Agreement
shall inure to the benefit of the City and its successors and assigns. The Association agrees that it
shall execute such further instruments as shall be required by the City to establish the continuing
validity and enforceability of this Agreement beyond the date on which Developer no longer controls
the Association, and the recordation of this Agreement shall constitute notice to all Unit Owners of
the Association's perpetual obligations under this Agreement.
10. Misceilaneous
a. This Agreement is made and executed in the State of Minnesota, and shall be
construed according to Minnesota law.
b. The invalidity or unenforceability of any provision of this Agreement shall not affect
or impair the validity of any other provisions; and paragraph titles and captions in
this Agreement are for convenience of reference only and do not define, limit or
construe the contents of such paragraphs or of this Agreement.
.
c:\file\hopcivif\mainten,oak 4
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,
c. Any modifications to this Agreement must be in writing and signed by all of the
0 parties bound by this Agreement.
d. An original of this Agreement shall be recorded in the Hennepin County Recorder's
or Registrar of Titles' office(s) as an encumbrance against the title to all of the
Subject Property and each Unit. The existence of this Agreement and the obligations
established hereunder shall be noted in the Declaration of Covenants, Conditions and
Restrictions for the Project. The recordation of this Agreement and said Declaration
of Covenants, Conditions and Restrictions for the Project shall constitute notice to
all Unit Owners of the duties, responsibilities and obligations of the Association and
Unit Owners under this Agreement and the disclaimer by the City of responsibility
for maintenance, repair, reconstruction or replacement of the Alley Improvements
and the Utility Improvements as herein provided.
e. No provision of this Agreement nor any act by the City or the Association shall be
deemed or construed by the Developer, the Association, the Unit Owners or any third
person to create any relationship of third party beneficiary, principal and agent,
partnership or joint venture between the City and the Association.
f. This Agreement may be executed in any number of counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the same
instrument.
�
g. The Association represents and warrants to the City that it has the necessary power
and authority to enter into this Agreement and perform its obligations hereunder, and
that the execution of this Agreement by the undersigned representatives of the
Association has been duly authorized by all required actions of the shareholders and
directors of the Association.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first set forth above.
Homeowners Association, Inc.
B
Its
�
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STATE OF MINNESOTA )
)SS •
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
,1996, by , the
of Homeowners
Association, Inc., a nonprofit corporation under the laws of Minnesota, on behalf of the nonprofit
corporation.
Notary Public
The City of Hopkins
By
Its •
By
Its
STATE OF MINNESOTA )
)SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
,1996,by amd
, the and
, respectively, of the City of Hopkins, a municipal
corporation under the laws of the State of Minnesota, on behalf of the municipal corporation.
Notary Public
•
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_f .
.
R
� THIS INSTRUMENT WAS DRAFTED BY:
Vesely, Miller & Steiner, P.A.
4001�TOrwest Bank Building
1011 First Street South
Hopkins, Minnesota 55343
� .
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EXHIBIT A
LFGAi, nF.SC'RIPTION �
� Parcel 1 � •
. 7hat part of the Southeast Quarter of Southeast Quarter of Section 23,
Township 117, Range 22 described as foilows:
Commencing at a point in a line parallel to and 660 feet West at right
angles from the East line of said Subdivision which point is 689.3 feet
measured along said line Northeriy from the intersection of said line with
� the Northerly line of the right-of-way of the Chicago Milwaukee and St.
Paul Raiiroad Company; thence West at right angles 291 feet to the point
, ' of beginning of ihe tract to be described; thence continuing West 382.6
feet more or less to the West line of said Subdivision; thence North to the
Northwest corner of said Subdivision; thence East a4ong the North fine
thereof; thence East along the North line thereot to an intersection with a
line drawn from the actual point of beginning parallel with the East line
of said Subdivision; thence South along said parallel line to the paint of
- beginning.
Parcel 2:
�
That part of the Southeast Quarter of Southeast Quarter of Section 23,
7ownship 117, Range 22 described as follows:
. Commencing at a point in a line parallel to and 660 feet West at right
' angles from the East line of said Subdivision which point is 689.3 feet
measured along said line Northerly from the intersection of said fine with
the Northerly line of the right-of-way af the Chicago, Mi{waukee and St.
Paul Railroad Company; thence West at right angles 291 feet; thence North
at right angles to the North line of said Subdivision; thence East along the
North line of said Subdivision to a point in a line parallel to and 660 feet
West at right angles from the East line of said Subdivision; thence
Southerly on an extension of the last mentioned line to the point of
beginning.
�lnd correctly shows the location of all easements, if any that appear on a
commitment for title insurance prepared by Commonwealth Land Title Insurance
Company, File No. 36878 C, dated January 16, 1996, and all buildings, structures, and
improvements on said described property; that there are no visible encroachments
onto adjoining properties, streets or alleys by any of said buildings, structures, or
improvements, that there are no visible rights-of-way or easements on said �
clescribed property other than shown thereon; that there are no party wal{s or visible
encroachments on said described property by buildings, structures or other
improvements situated on adjoining property except as shown on said plat of survey.
.. .
Drafted 10/17/96
� AGREEMENT FOR DEDICATION, CONSTRUCTION AND MAINTENANCE
OF PUBLIC ALLEYS AND UTILITY EASEMENTS
This Agreement made this day of , 1996, by and
between The Oaks of Mainstreet LLC, a Minnesota limited liability company ("Developer") and the
City of Hopkins, a municipal corporation under the laws of the State of Minnesota ("City").
RECITALS
A. Developer has applied to the City for approval of a sixty-six (66) unit townhome
development (the "Project") on land located in the City of Hopkins, County of Hennepin, State of
Minnesota (the "Subject Property") legally described in E�ibit A attached hereto and incorporated
herein by reference. Developer warrants and represents to the City that it is the fee owner of the
Subject Property as of the date of execution of this Agreement and has all necessary authority to
enter into this Agreement and perform its obligations hereunder.
B. Developer has agreed to submit an application to the City to plat the Subject Property
and to complete the platting process and obtain final approval of the plat of the Subject Property
("Plat") from the City. The Plat is proposed to be designated with the name The Oaks of Mainstreet,
Hennepin County, Minnesota. In the Plat, Developer proposes to dedicate to the public certain alleys
� ("Public Alleys") and easements for sanitary sewer and water purposes ("Sewer and Water
Easements"). The City has agreed to accept dedication of the Public Alleys and Sewer and Water
Easements on the condition Developer agrees to maintain, r"epair and replace the Alley Improve-
ments (hereinafter defined) and the Utility Improvements (hereinafter defined), indemnify the City
from all liability resulting from the public ownership of the Public Alleys and Sewer and Water
Easements as hereinafter provided and otherwise comply with the terms, covenants and conditions
of this Agreement.
C. In connection with the development of the Project, the Developer has incorporated
Homeowners Association, Inc., a Minnesota nonprofit
corporation ("Association") as the owners association for the townhome project as required by Minn.
Stat. S15B.3-101. The Developer intends to sell the completed Units (hereinafter defined) to
individual owners ("Unit Owners").
NOW, THEREFORE, in consideration of the foregoing Recitals , One Dollar ($1.00) and
other good and valuable considerable, receipt of which is hereby acknowledged by Developer, and
the agreements contained herein, the parties hereto agree as follows:
1. Incorporation of Recitals. The foregoing Recital Paragraphs A-C are incorporated
in and made a part of this Agreement in their entirety.
�
c:\filelhopcivil\mainten l .oak
b. The Alley Improvements and Utility Improvements shall be completed not later than
the date for completion of the Units under the Series 1996A bonds and Series 19968 •
Bonds Loan Agreement among the City, the Authority and the Developer dated
i�ovember 1, 1996. All wo:'.: for the construction of the Alley Improvements and
Utility Improvements shall be under the sole supervision and control of the
Developer, but shall be subject to the review and approval of the City Engineer or the
Project Engineer, and, where appropriate, any other governmental agency having
jurisdiction. At the time of completion, proof of payment of all improvements by the
Developer shall be provided to the City. No Unit shall be sold or conveyed by the
Developer prior to completion of the Alley Improvements and Utility lmprovements,
provided Developer may enter into executory purchase agreements for the sale of
Unit(s) prior to the completion of the Alley Improvements and the Utility Improve-
ments, but may not transfer title to any Unit(s) until said improvements have been
completed.
c. All of the Alley Improvements and Utility Improvements shall be completed in
accordance with the plans approved by the City Engineer or the Project Engineer and
shall be free and clear of any mechanic's lien, claim, charge or encumbrance for any
work, labor, materials, equipment or skill furnished in connection with the
completion thereof. All of the materials to be incorporated in the Alley Improve-
ments and the Utility Improvements and all of the work performed in connection
therewith shall be of uniformly good and workmanlike quality, shall equal or exceed
City standards and specifications, and shall be subject to the inspection and approval •
of the City Engineer or Project Engineer and City Inspections Department. At such
time as the Alley Improvements and Utility Improvements have been completed and
approved by the City Engineer or Project Engineer, the Developer shall cause to be
prepared and filed with the City Engineer complete "as built" plans of the Alley
Improvements and the Utility Improvements.
6. Tax Increment Guarantv. Subsequent to issuance of the Series 1996C Bonds and
continuing until the Series 1996C Bonds (and any bonds issued to refund such bonds) are no longer
outstanding, if the Available Tax Increment (as hereafter defined) received by and available to the
Authority ten (10) days before any semi-annual scheduled payment date for principal or interest on
the Series 1996C Bonds (or any refunding bonds) is less than the amount necessary to make such
principal or interest payment (after crediting any capitalized interest and any other amounts in the
Debt Service Fund for the Series 1996C Bonds as of such date), then the City shall pr�vide notice
to the Developer of such fact and the amount of such deficiency in Tax Increment. Ten days after
receipt of such notice of deficiency, the Developer shall be liable for and shall pay to the City such
deficiency. Failure by the City to provide the notice of deficiency when required by this section
shall not relieve the Developer of its obligation to make the required payment ten (10) days after the
Developer receives actual notice of the deficiency from the City.
The obligation of the Developer to make the payments described in this section shall be
absolute and unconditional irrespective of any defense or any rights of setoff, recoupment or •
c:\file\hopcivil\maintenl .oak 4
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= counterclaim it might otherwise have against the:Authority or the City or any other government body
or other person. The Developer shall riot fail to make any required payment under this section for
� � any cause or circumstance whatsoever, including without limitation, any change in state property
tax laws or any other law, or any other event, even if beyond the control of trP Developer.
For the purposes of this Agreement, the term "Available Tax Increment" means the portion
of real property taxes paid with respect to the Subject Property that is remitted to the Authority as
tax increment pursuant to Minn. Stat. 469.174 to 469.179 after deducting the amount necessary to
pay on any subject payment date the amount payable with respect to the $3,745,000.00 Housing
Development Gross Revenue Bonds (Oaks of Mainstreet Project) Taxable Series 1996B and the
$3,745,000.00 Unlimited Tax General Obligation Bonds (Oa1cs of Mainstreet Project) Taxable Series
1996B pursuant to the Short Term Bonds Tax Increment Pledge Agreement between the Authority
and the City dated November 1, 1996, and the amount payable with respect to the $540,000.00
General Obligation Taxable Tax Increment Bonds, Series 1996D pursuant to the Long Term Bonds
Tax Increment Pledge Agreement btween the Authority and the City dated as of November 1, 1996.
7. Maintenance and Repair. Developer acknowledges that, pursuant to a separate
Agreement for Maintenance of Public Alleys and Utility Easements of even date herewith between
the City and the Association (the "Maintenance Agreement"), the Association shall be solely
responsible for all repair, maintenance (including, but not limited to, snow plowing, snow removal
and sweeping), restoration and replacement of the Alley Improvements and the Utility Improve-
ments, at its expense; and that the Association and the Unit Owners shall be jointly and severally
Q liable for all costs, expenses, liabilities, obligations, claims and demands related to or arising from,
either directly or indirectly, the design, construction, use, maintenance, repair, reconstruction or
replacement of the Alley Improvements and the Utility Improvements together with all modifications
or replacements thereof or additions thereto. The Developer acknowledges it has approved all of the
terms, covenants, conditions and provisions of the Maintenance Agreement and Developer shall,
during the term of this Agreement, take all necessary actions to cause the Association to comply with
its obligations thereunder.
8. Indemnification of Citv. The Developer agrees to protect, indemnify and hold the
City, and its officials, representatives, agents and employees, harmless from and against all
liabilities, obligations, responsibilities, claims, costs, expenses (including attorneys' fees), demands
and causes of action relating to or arising out of, directly or indirectly, the design, construction,
maintenance, repair, reconstruction, replacement, ownership or use of the Alley Improvements, the
Utility Improvements and any replacements or substitutions therefore, including, but not limited to,
claims for injury to persons or property. The City shall promptly notify Developer of any claim
made against the City that is subject to the indemnification provisions of this Paragraph 8.
9. Insurance. The Developer agrees to purchase and continuously maintain
comprehensive general public liability insurance, providing coverage on an "occurrence" and not a
"claims made" basis, in a single limit amount of not less than $2,000,000.00 for personal injury or
death and not less than $500,000:00 for property damage, insuring against all claims arising from
� or relating to the design, construction, maintenance, repair, reconstruction, replacement, ownership
c:\file\hopcivil\mainten I .oak 5
or use of the Alley Improvements, the Utility Improvements and any replacements or substitutions
therefore. Such comprehensive general public liability insurance shall name the City as an additional �
insured and shall provide for thirty (30) days written notice to the City prior to cancellation or
nonrenewal thereof. A certificate Pvidencing such insurance shall be delivered to the City on the
date of issuance of a permit by the City for commencement of construction of the Alley
Improvements or the Utility Improvements.
10. Enforcement of Agreement. Developer acknowledges that the rights of the City to
enforce performance of Developer's obligations under this Agreement are unique and that, in the
event Developer fails to perform any covenant, condition, agreement or provision of tnis Agreement,
the City shall be without an adequate remedy at law. The Developer agrees, that, in the event the
Developer fails to perform any term, covenant, condition, agreement or provision of this Agreement
the City may, at its option, institute and prosecute an action to specifically enforce the performance
of this Agreement. No remedy available under this Agreement is intended to be exclusive, and each
remedy shall be cumulative and in addition to every other available remedy. The election of any one
or more remedies shall not constitute a waiver of any other remedy.
11. Notices. All notices or other communications hereunder shall be in writing and shall
be hand delivered or sent by first class United State mail, postage prepaid, or by a nationally-
recognized overnight delivery service, to the parties at the following addresses:
If to the City: City of Hopkins
Attention: City Engineer •
1010 First Street South
Hopkins, Minnesota 55343
If to Developer: The Oaks of Mainstreet LLC
Attention:
If notice is given by mail or by overnight delivery service, such notice shall be deemed to have been
properly given the next business day following the date of mailing or delivery to such overnight
delivery service.
12. Successors and Assigns. This Agreement and the obligations of the Developer
hereunder shall run with the title to the Subject Property and the Units, in perpetuity, and shall be
binding upon the Developer and its respective successors, assigns and mortgagees. All of the terms,
covenants and conditions of this Agreement shall inure to the benefit of the City and its successors
and assigns. Developer shall obtain and deliver to the City an original consent, in recordable form,
from each and every mortgagee holding a lien on the Subject Property, as of the date of Developer's
execution of this Agreement, consenting to the terms and conditions of this Agreement.
.
c:\file\hopcivil\mainten l .oak 6
i
.. •
13. Miscel(aneous. -
= 4 a. This A reeme
g nt is made and executed in the State of Minnesota, and shall be
= construed according to Minnesota law.
_ b. The invalidity or unenforceability of any provision of this Agreement shall not affect
or impair the validity of any other provisions; and paragraph titles and captions in
= this Agreement are for convenience of reference only and do not define, limit or
- construe the contents of such paragraphs or of this Agreement.
c. Any modifications to this Agreement must be in writing and signed by all of the
' parties bound by this Agreement.
- d. An original of this Agreement shall be recorded in the Hennepin County Recorder's
or Registrar of Titles' office(s) as an encumbrance against the title to all of the
Subject Property and each Unit. The existence of this Agreement and the obligations
established hereunder shall be noted in the Declaration of Covenants, Conditions and
= Restrictions for the Project. The recordation of this Agreement and said Declaration
_ of Covenants, Conditions and Restrictions for the Project shall constitute notice to
= all Unit Owners of the disclaimer by the City of responsibility for maintenance,
= repair, reconstruction or replacement of the Alley Improvements and the Utility
= Improvements as herein provided.
- 4 e. No rovision of this A reement nor an act b the Cit or th
P g y y y e Developer shall be
deemed or construed by the Developer or any third person to create any relationship
of third party beneficiary, principal and agent, partnership or joint venture between
the City and the Developer.
� f. This Agreement may be executed in any number of counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the same
instrument.
g. Developer represents and warrants to the City that it has the necessary power and
authority to enter into this Agreement and perform its obligations hereunder, and that
the execution of this Agreement by the undersigned representatives of Developer has
: been duly authorized by all required actions of the members and managers of
Developer.
= 14. Developer Release. At such time as: a) the Alley Improvements and Utility
Improvements shall have been completed in accordance with the provisions of this Agreement and
= a Certificate of Completion executed by the City Engineer or Project Engineer, b) Developer no
longer holds fee title to any Unit, and c) Developer has performed all of its obligations hereunder
and Developer is fully in compliance with all of the terms, covenants, conditions and undertakings
� stated in this Agreement, Developer shall be released from its obligations hereunder, excent for the
c:\file\hopcivil\mainten l.oak 7
• ..
obligations described in Section 6 hereof, which shall survive for the period described therein. The
City agrees that it shall execute a Certificate, in recordable form, acknowledging Developer's release
at such time as the conditions stated in the preceding sentence have been satisfied. Such release of •
Developer shall not in any way release, reduce, impair, affect or modify t::� obligations of the
Association and the Unit Owners under this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first set forth above.
The Oaks of Mainstreet, LLC
By
Its
STATE OF MINNESOTA )
)SS
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
, 1996, by , the i
of The Oaks of Mainstreet, LLC, a limited liability
company under the laws of Minnesota, on behalf of the limited liability company.
Notary Public
•
c:\file\hopcivil\mainten I.oak g
EXHIBIT A
I,F(3AL DESCRPTION
�
� Parcel 1 � '
. That part of the Southeast Quarter of Southeast Quarter of Section 23,
Township 117, Range 22 described as foilows:
Commencing at a point in a line parallel to and 660 teet West at right
angles from the East line of said Subdivision which point is 689.3 feet
measured along said line Northerly irom the intersection of said line with
the Northerly line of the right•of-way of the Chicago Milwaukee and St.
Paul Railroad Company; thence West at right angles 291 feet to the point
' of beginning of the tract to be described; ther�ce continuing West 382.6
feet more or less to the West line of said Subdivision; thence North to the
Northwest corner of said Subdivision; thence East along the North line
thereof; thence East along the North line thereof to an intersection with a
line drawn from the actual point of beginning paralfel with the East line
of said Subdivision; thence South along said paralle{ line to the point of
- beginning.
Parcel 2:
� That part of the Southeast Quarter of Southeast �uarter of Section 23,
Township 117, Range 22 dsscribed as follows:
. Commencir►g at a point in a line parailei to and 660 feet West at right
' angles from the East line of said Subdivision which point is 689.3 feet
measured a{ong said fine Northerly from the intersection of said line with
the Norther{y fine of the right-of-way of the Chicago, Milwaukee and St.
Paul Railroad Company; thence West at right angles 291 feet; thence North
at right angles to the North line of said Subdivision; thence East along the
North line of said Subdivision to a point in a line pa�allel to and 660 feet
West at right angles from the East line of said Subdivision; thence
Southerly on an extension of the iast mentioned line to the point of
begirining.
�►nd correctly shows the location of all easements, if any that appear on a
commitment for title insurance prepared by Commonwealth Land Title Insurance
Company, File No. 36878 C, dated January 16, 1996, and all buildings, structures, and
improvements on said described property; that there are no visible encroachments
c►nto adjoining properties, streets or alleys by any of said buildings, structures, or
improvements, ihat there are no visible rights-of-way or easements on said
clescribed property other than shown thereon; that there are no party walls or visible '
��ncroachments on said described property by buildings, structures or other
timprovements situated on adjoining property except as shown on said plat of survey.
, ..
The City of Hopkins
.
By
Its
BY
Its
STATE OF MINNESOTA )
)SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
,1996, by and
, the and
, respectively, of the City of Hopkins, a municipal
corporation under the laws of the State of Minnesota, on behalf of the municipal corporation. �
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
Vesely, Miller & Steiner, P.A.
400 Norwest Bank Building
1011 First Street South
Hopkins, Minnesota 55343
�
c:\file\hopcivil\mainten►.oak 9
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� I�LANAGEI�'[E1�iT �.GREET'�IE�TT
�
�
�
beivreen
THE O�KS ��' t�vltAIr15TREET, LLC,
("Ow�ner")
and
�iEAL E�T.A.TE EQUITIES Mr�1'�TA.GEt�tENT CO1�P.�.IY�'
� �„�ge�t���
� ' fot �'ownhoine LJz�its located at;
Th� 0�1cs of 1�Ilainsueet
20IZ l�iaxrt Street
H9pkins, Pvlinnesota
� Dated: � October 30, I99G
� .
a":l:l� �1��1 ��'."'.1T, ���, �� �� i�;�. ST. .. � ��jl�' ����, ir � �"u/��4-
ii �
�
. MANAGEMENT A�1ZE�1VtENT �
1N CONSID�RP►TION of tl�e cov�na�ts ��c�ein c�ntaine�, Tf-IE OAItS OF M�II�fST�tEE�', LLC
(heze�z��te� called "OV�NER"), and REAL ES �TA� EQUI'T�ES M�1.I��.GEMEI�tT CONIPANY
(hereir�ai�ter called ",4,GENT°'} agirce as £�l�ows:
1� . 'I'b.e QWN�.R herc�y e�ttpl�ys the �GENT �xclusiv�l� ta rent arrd manage zt�e gzvp�z'ey
(fierei.nafter called, the "Pre�n.ises") known as THE OaKS OF M.ti,INSTI�E�T upon the terms artd
sortflitians hereinafter set forth, for a terrci of five (5} years beginnf�� on tf�e 1 st day of, October, 1996,
a�d ending on the earliet o'f (i) ��bnlarv 1, 2002, (it) thirty (30) days followin� the date of �ritten nvtice
firom �he T�us�ee (the "Trustee"j under that certain Indenture of Tnist (the "Indenture"), dated as of
October l, i�95, �e1�t[[tg to �3,795,OOQ Housing Devela�crt�nt �r�ss Re��nue Bonds (Oaks af, Maxnstreet
Pz�ject)� Tax�b�e �eries 1996A, and $3,795,000 Un[imited Ta.t �neral Ob�igacion Bonds (�aks of
�ainstreet �roject), �'a�ab�e S�rz�S [9965 (co��cccively,, TI�e "Bonds"), that an �ve�.t of De�au�t �as
occlured and is csintinuing under the Indenture, tE�e TrustPe has cammenced fareclosure prac,�edings
pux�uan,t to tt�,e Mot�gage enc�ztzbcriz�g Ghe P�+cm�ses and �[�e Truslee has e�ectcd To tern���.at� th� A,GENT,
' and (i�z} 'tF�xtty �30) dsys natice by tlie C�WI�TEI� that t�lis �gr�ement has been termirtated pursua�r�� tn
Seetion $,7�}(i) af tlYe Loan .4greement (as de�ned in tlle Indenture). Following September 30, 2401,
th[s .�.greettte�o.t sh!all coneinue ttzczea,fter gor yearly periods from time to time, unless on or befare 1 SO days
prior tv Septeraber 30� Z001 or on or befar� 18tl days' �rior to the expirat�on of any sueh renewal period,
ei,t�xez paziy b;eseto sha�I �.ot�fy ik�c ok�tez iz� Writsng diat it elects to term.i�ate �xs Agrec�cn,t, �n whlch case
tkis �igreetrten�t shall be tkeFeby tet�ninated vn said last mentiot�ed date. (See atso Paragraph 6.3 below.).
2. TT3E AGEI�I'r I�,GREF�_ •
2.1 To accept the management of the Preanises, to the e�tent, fo� ehe peziod, and r�po�
t� tezz�s.s �Ze�eiz� pxovided and agreos to fu�xs�� rltc scrv�ccs o� its argaai�ation �ar the rental
o�reration �d manager�ent of the Premises,
2_2 To �cndLx a znqttthl� statcrncnt of receipts, disburserri�ents, �nd charges tio the
fal�owit�g gersQn(s) at the address(es) showrr:
Name Address
'The Oaks of 1l�ainstreet LLC 325 Cedar Street
400 Deg�cc of Honar Buiiding
�aint Paul, Minnesa�a 551Q1
Th,� Housing and Redevelogment IQ�O F'irst Screet
�uthority of the Ci� of Hopks�s, l�ianesota 55343
Hop[cins, Minz�esota
and to remit each mo�z#x the �ross t�ceipts c� t��,e �o�lo�ing person st tlYe address shown.:
1�(arne Add�ess
F'irst T�ust Natianal Association, 180 East Fi�tfz Street
as t�usr�ee Saint Paui, Minnesata SSIaI
[/�,ccount Ref�rertce] •
X
, . . ....__. .. . .. ... .. " . �'.. �
- T �� ' ^��n�%cm �.� F���
-. bnCM ;THJ; �0, :�� 9E ��.���+;�'a. ., ��;'�C, 3�6����9�'.� r��,�4
;
;
Q Pursuant to 2hc procedax� set forth in Section S.1�VI} �f the Indenture, tl�e t�gen'l' agrees ta sen�d
� net�ce to ihe Trus� by the 20th day of eac1� montll, together with capies o� �nvoiceS received,
� oY t�e arc�8urtt of Oper�tfn� E.xpenses payaUle prior to th� 20tTi day of ths followlrtg monti�.
: 1�fothing �letefn conta.inetl shal[ obligat� t��� r1GENT ta ad�artce zts owytt fur�ds on behalf of the
� OVVNER.
�
� 2.� To causc a�( e�ployees of'the AG�NT v+lxo �ta�dle or are r�es�Q�sxble for fihe ��fe-
kee�ing af an.3� monies af the OVd'N�R to bc eove�ed by a fidelity band ir an. amount and �rxt�t,
� a eomparty determined bry tite RG�1V� w�th tl�.e cot��ent af tl�e Ciry.
3. THE ��dNBR AGREES:
To give tk�e AC'rENT t6e fol�oWing a�itho�ity and po�verg (a1l or any ,�£ �bxch ma� be �xer�ised
in the name of thc OVaNER) and a��rees to assume a1! e!eper�ses in coc�nection �therewith:
3.1 To advertise the Premises or any pait thereof; to display signs t[lereon and to r�st
the same; ro cause �efererrces of prospect�vc te�a►ics [o be izta�estigarxd; tp sxgn lease�, in the form
� atl�.ched hereto as Exhibit BD for term� not in excess of tl�ree (3) years, nox with a tetminatiozt
dat�c later�'tttat). January 15, 20�2, aztd to renew and/or cancei the esisting Ieases and pr�pare and
execut�e t�e z�ew leases �wit�o�ut additior�al char�c �o �he OjJVNER; prov[dcd, however, khat the
.A.GENT may ooliect fxo�tz tenaz�cs a1I or arXy of tlie follo�wing: a Iate xent �d�z�'rsUraxive cbarge,
a n�n-negatiable check c1la�ge, cre�iit repoXt fee_ a�ubleasing administrat��ve charge er�d/or
btoker's cozt�r[xission and n,eed z�ot account for such charges artdlor commissxon w the 06�VI�ER;
Q ta te�mxnate fenancies and to sign and serve such iaociees as are deemed needful by the AGENT;
to Anrsri,tutc az�d gzosccute aet,ions to oust tcnan� az�d ta recouec passcssio�z of the Prc�xses; to 8ue
for and recover re�t; E►nd, when expedient, to settie, compramise, and release sue�t a�t�ons or, saits,
or reinsi'ate such tenan�ies. O'W4�NER shall reiinUurse AGENT for aIl expenses of litigation
�r�eludAng at�o�zze�s /,cCSy �t�az�g fccs, and cour� costs �hich AGE1�T does nat recover from
tenan�.s, AGENT may se�ect the attarney a�f its choi�e �o h,andTe sucl� Iittgatiot�.
3.2 To hire, aischarge, ar�d gay al.� e�r,in,e�rs, jazixtoxs, and othe� cm,p�oye�s; to rr�ake
or cause to be made �1J ozd�zzary repairs and rept�cements necessar� ta preserve the Premises in
ATS pre5ent c�rtd'itlon and f�X the operating efficiency ttZereof and atI aiteratioas reqnired ta carr��ly
with ��ase rec�uzzezziez�.ts, a�,d �a do decorazxn� on the Premises; to negotiate con�r�cta fvr
�anrecurr��g itetns nat ea�ceeding 55,000 and to enr�r in'to agrecmcnts far alI neccssary xepairs,
maint�nance, rninor alterations, and util�ty secVices; and to purc�iase supplies and pay all bills.
AGENT sha1� securc thc approval of thc O�'�TFR for atty aSterat'rons o#� expenditures in excess
o� $S,f3Q0 for any ane item, eicept monti�ly or recurring operating cl�arges an,d ezn.ergertcy z�pai�5
pr� e�cess of the mazimurr�, if, in the op�nion of Tlle AGENT, suc11 rep�irs are necessar� to protieci
th.e preperry from dart�age or to z�a[n�ta�� se�ryzces to ��@ te�ancg as calted for by their tenane�.
3.3 'I'o collect rents and�or assessmcn�sand other it�ems due or to be�vme dae �ttd glve
receipts theregor arrd, to deposit �il fut�ds coltected [Yereund�r in tbe ,QGENT's custadial account_
� 3.4 'j'a hand�e tenants' security deposits and to comply, pn tl�e �JI�T�R b�hal� �+'rtf�
applicab[e state or Iacal la�+s concezn�n,� t� AGENT's responsibility for security depo�itg a.zid
' �nterest Th�reon, z� arry. •
� 3.5 To execuEc and file at! retarns ar�d orher ins�ruments and do and �erfon� ait acts
r�quired of Th,e OW�ER as an employer with respzcr to tlle Premxses under the Federal Insuran.ce
2
s aKVlYi VYYU tT11U! 1 u� �!� 7�' i`� ����,j I�:� ' i,!� ���J���! l' i� I ,.� ���;i;,vn ,
�O�frT�tlt10n5 f�CtS, the Fede�a.l tJnemployment Tas I�t,ct, artd Subut{e C of the I�t�mal �e�eave •
Code of 1,95�41with res�e�t to wages paid b� the �GFNT on beh.aSf of tl�c OWI�TER and under any
' similar federal ar�d state Jaw no.�+ ar l�cr¢after i� f,arce (and in connection tf�erew�ck� the OWNE�
agtees upoa requeSt to prottapxly ezecute and deliver to t�le A,GENT a[.k tte�essar� pow�c5 0�
artorn,ey, r�ot�ces of appo��tmen� an.d t11e lik�},
�4. THE O�NEK FURTHER AGREES:
�4.1 To snder�nify, de�cnd, and save tIle r�.GENI' ha.nmlcss froxn all suits i�r contteetiot�
with the �rerccises aftd frntn 1F�bility ['or dania�� tn prope�tjr ai�d injr�ries t� c� deatfx u� ar�y
etnploy�e or o[her person whom,soever, ans� �a caFZV a� its own expense'public lxab�lir�, ele�ator
�iabiiiry (if elevarors are part of the equipmezt� of rhe Pretrt[ses), and �+orker's compe�sation
irrsprance naming the OWk�iER and tlie AGENT and adequaze ta �rotcct thear ►nte�est5 atrd in
for�, subsrance, ans� ar�t�uztis reasonabiy sati�factory to �lie AGENT, ax►d tn furnish to th.�
,4.�ENT certiftcat�s evide�cFng tlte er�istenc� o� sucli ii�s�rarcce, LT��ess the OWNFR shall p�COVide
5uch �nsr�rance and fitxnish sac� certificate witl�i� thir� (30) days frozn the daee o� th%s
.t�.greement, rhe AC��ENT m,ay, but sha�� not be obligated to, ptaCe said insuran�ce �nd charge t�e
'cost thereof to rhe accaant of tfre OWI�iEI�. A.11 sucl� �nsuranee �oli�zes shall ptovide 'that the
,tX,GENT shall receive thirty (30) days' �titten tzoeice prior ta cancellation of the palicy.
4.2 To pay a�i espcnses ir�curted bv the �GEN'�', including, but n,ot litz��ted to,
reasonable atGozn�ys' fees an.d r�GE�i'�''s costs and time #n conneelion witla any claxzzx, proceeding
or sua�t in�olving an aI[eged violati,an by tl�e ,(�GENT or the OWNEI�, Qr both o�f any IavW
pc�tainir�g ua �ai� e�mp�oyment, fair credxt reporting, enviranr�te�rtal Qro��ction, rcRt contro�d ts.�es,
or fau k�ousuag, includittg, bat not limxted ro, any taw p�oh�b�tin�, or mak�ng illegal, •
discz�sinati�n an t�ye bgsls of race, sex, creed CDldf religion, naeional arigin, or �eAntal or
�h3�sical �andicag, provided, iiowever, that the QLVNER sl�stl nat be r�Sportsible to the AC�ENT
far arly sucfi e�cpense5 zz�. the eve�t the AGENT is ftnaXly adjudacated co �a�e pe�sonally, a�d not
xn, a represe�.�ative capacity, vrolated any such la�v. �ioth�,ng contaiza,ed hereit� s�ZaIi obliga�e t�.�
AG��' to e�tp�oy couz�Sel ta repxesent tlie OjJVN'�R 's� any sttch proceediii� oz� suit, az�d the
4��'NER rrzay elect to e,mptoy e�unse� to represent t{�e OVVI�T�� in any such praceediz�g ar su�t,
'�'he ��JV].1TLi�also agrees ta �ay reasonable eape�nses {or an appa�toned a�mount of sr�cfi expenses
whlete other employexs ot AGT�]T also benefit frocn the c�pendiLUre) incarred b� th,e AGE�TT in
oT�tajniA.g le�gal advt�e rcgarding co�n�[ian.ec ���it1i any latv a�fecting the prelnlises or activitie5
reiated thereta,
, 4,3 Ts� inde�nnify, dc�end, azid save t(�e AGEl�1T �tarmlesa from �1] dairtzs,
iIIVeStigflt10�15, end Sttils or fro�rt actiox►s or failutes tp act of the� OtiWNER, with tespec� tO atty
aileged or a�tuai violation of st�te o� federa� Iabor Iz�+�s, ,[t bei�g expressi� ag�eed ar�d understood
tl�at as b�ee� the OWNER a�d tlze �GEN'T, al1 perso�s emplo�+ed irz connectraa wRth tiie
Pternises ar� employees o�ihe Oti�fiTER, noc �he �GENT. How.ev.er, it shala be the respons�,biiity
of the �GENI' t� �orttp�y with all a�p(icabie state or federaf aabor laws. The OV�NET�'s
abli�atzon und�t this paragraph 4,3 shall include the payzxtcnt af all sett�emants, Judgments
datz�age�; Ixquidatec� dama,�es, penaltxes, fnrfeitures, back pay awards, court costs, l�ttgalzon
e�pertse, and atto�neys' fees.
4.4 To give fLCiec�u3te adYa.nce �vriti�n natice to t�e �.�ENT [f t�ie O�lJNER desi�es
that t}�e �CrEI�T trfake paymer�� out of �lie proce�ds from the premises, of ma�tgage in,debbed�tess,
general taxes, sp�cial assessments, or fire, scearn bailer, ar a�� other in,surance prerrtiums. Iz� a�o •
event shall tTi� AC3ENT be require� to advance its own mvney in paymerct o� any suc6.
3
� �RQ� oWD (TH } j�; � �� � , ,� ,� ; �%"NG, 3��0�3�' 19 � ?3i3�
li; � f�� 3;��i�,�, � � � A
� in,d�bt�ciness, t��a�res; assessmenzs, or pzemiums.
5. TH� Ow1�IL-R ,�G�ZEES TO PAY TI�i�E ,g.GENT FACH MOI�iTH;
5_ Z FOK 1�+Il�,NAGBME�TT: rxiorttlYty, an arrtount equal 'ro �vc pe�cent (�°/n) a� th,e
monthl� gross recei�ks frozz�. the �p�ration Q� iI'CE Premises during tl7e pericrd t�is Agreement
�em�ins in fuil force and effect. G�oss receiptg are all �.rnounts received from �e vpexatior� o�tk�e
Prerrexses ir�cluding, but not Iimited to, rents, parking fccs, deposits, laundry �ncome. a.nd fee$;
provxded tbaL s�e�Z Managemestt fees shaPl be deferred'to ttie e�te�lt that tt�c occup,a.ncy of the
uztsvld tTnits is less thas� ninery-fi�e pzrcent (95°/a) of proseeted oceupancy rates (as set ferrh o�
ExEiibit A► attaehed hez�to) in � amount ec�ttal To the dx�ere�ce between 9�% of �rojeeted
= revetxues and actual �ev�enues. Por �urposes o£ determiaing occupanc� I�ereu�,der. a Unit is
= occupied �+�ert (i) oecupxed pu�suant tn an existing lease or (ii) ii ba� bsen sold a,rrd �he sale has
` c�osed. IVlanager�ent fees defierred pursuant to this secYion s�i�ll be paid, to tii� extent of avax�ab�e
= r�anies, pur�uant to �ection I0.1(B)(i) of the Loa� Agreet�ten,t {�s d�fined rn. �lie Indenture).
= 5.2 APARTIV4.ENT LEaSi1�TG: Upor� rbe e�e�utiion ltemof, tiie sum of �?_500.00 as
; a s�t-up fe� �io� the Iease marketsng pragram, a�d monthly, cartzrr�et�cin� �To�er�ber �. 1996 and
- ending February 1, 1.997, an amount equal to �1,718.75, �rovided that such �ayments s�ra�l be
� aecelerated and paid in fult vsrherr atl e�vaitablc (i.e_, qnsoad) ToWnhomes are �e�ased.
�
� 6. IT I� MUNALLY AGREED TI�.T:
� 6.1 Tb.� OVVNER expressly w�ti�I7olds from the �CsE1�TT any power ar authoriky to
rrlatce any stLVCtural changes in any building �r to mak,e ��+ othcr majar a1�e�rat�o�ns or additivns
in or to any s���a buil�xz�g o� eqt�ipment therein, vr to incur arry expense cLiargeabie to the
O'i3�i�TER or its ►nterest ire tlie Premises otlte�r t1�an expe�ses re[a,tied to exercis�ng the e7cpress
pow�xs ab�vc ve5t�d in Ct�e AGENT without t1�e priar wfitten direct'son of the Owner, e�cept �ucb,
emeFgen�cy tepaizs as m,ay be �equ��ed bccause of dan�er tn life or properiy or WI�1�GI1 �re
►mm�diatiely necessary far the presec�+at(on and safery of tE►e Pter�iscs or th� sa'fety of �h� tenants
arkd occupantg tfiereof or are require� to avozd tlie suspension of a�y necessazy ser��ee to th.e
Prer� �ses.
6.2 The AGENT does not assume 3nd is g�ve�, na r�spo�.sibi�ity for comp[iance of
any baildi�[g ar� the Pterz��ses or an.y equipment tE�erein with the mquirements o� a��+ statut�, or-
di,rAax�c�, law, ar �egulation of any �overamental body oc of az�.y pub�ic avtharity or officia[ thereof
liavu►g ju�isdicrion excegt to natif� the O'J�'NEI� prorr�pt(y or �orward to ti�e OWI�ER proID�tl�
, any cornp[a.ints, vyarrting,s, �notices, or S�tnrnonses recei�ed by it relating to sucF� tnarters, `�he
��TE).� z�p��sents tt��t to itte best of its knoti�ted�ae the Premises �nd s�uc�, equzpme�lt eompty
with al� such requi�ements and auti�or�7es tbe r�,GENT to disclose tl�e owr�ership of the Prer�ises
ta az�y s�tch �cials and ag�ees to indemnify and hvtd hatr�less tl�e �►,GEl�'�° its zeprese,ntatives,
servants, and ernp�oyccs o�' �.nd fra�n a11 loss, cost, expense, and liability wliatsoever wl�ich rctay
be Xtrtposed on them ar �n� of t�iem Ery reason Of 3f1� �fCSCili QP futurc vip�aciozz o�r a�i,eged
� �+iolatiaR o� such laws, ardioanccs, statutes, or re�ula,tions.
6,3 Tn �tbe ever�L �t is a1Je�ed or cl�arged tl�at any building vn the Premises or any
�quipment therein or any act or faiiu�e to act by tiTC OWI�F�}� yvytl� tespECt to the �r�t�isos or th:e
� � saXe, r��ztal, ot othe� disposzTxon. fhereof fails to comply vJith, or is in �iolation of, any o�' the ,
requirements �f ar�y cor�stituti�nai pfio�ision SLRNLC, ordi�anec, la�v, o� negula[ion of any
govarnmental b�dy or any arder or ruliiYg of am public aathority nr official thereof having or
a
�x�U:Vi V44� �1RU� iU ��' ��1 i�J.��l��i, i� IJ�1VU, J�VO����i9 C��4%��4
� ctaiming to hav� jurisdictio� rhereover, and t(le .�,GENT, in its sole and absolute discreCiQn, ,
, cansiders that the actiart or pasitaon of the O�WI�1L-,R or registered managing agen2 w�tJ� respect
t��reto ��:,� resa�� in dama�e or liability� �o tl7e i1,G�1'�iT tI]� AGENT SI73II ]lave tI7� fight fo G3110E�
this A�reement �t any Yizrte by wr�tten not►ce to tl�e OWhTEJZ of its etecfion so ro da, whic6
canceuatfQn shall be effective upon the servi,ce of sacli natiee. Such notic� znay b� sec�ed
personatly or by �egist��ed rrTaCl, on or to the person namcd co recez�e the A,r'.�L �T1OilZI�I�
st�tement az the address desi�nat�d far such perso� �s provided in Paragra�h 2,2 �bove, and i�
served�by ��iI sha1� b� deem�d to have besn ser�ed when depQSited in The maEJs, Sucft cancella
h,or� sball �t�t release the indemnities of the OWNER set forth ir� Pa�ag�aplxs �4 artd 6.Z aboWe a�nd
sF�a1i nat termznate any Iiab,iiity or obligauon of dic OWI�IE� to t! A.�"iENT for any paymen�
�imbursexrzent, or other sum of zn.one� tlien due and payable to the AG�NT he,reunder_
7. T1�e ��'NER sba�� pav or reirrcbvr�e ihe �GE1�1T for �ny surr�s of money due it under this
,Ptgreeme,nt �or ser�+[ces fot actions prior to termination, notwithstanding any t�r�tinatiorc o� this
Agree�nent. A[l provisians of this Agreemer►t tiiat require the QWhIER to IYxve ynsured or ga defend,
, reizn�uxsc or indemnify �thc AGENT (inclodsng, but no� limited to, Paaragraphs 4_ 1, 4.2, and 4,3� sba11
survj�e ar�y �i�atjo�t az�d xf AGE�[" is or bccorr�cs �n�ol�ed in an,y proce�ding ar Iit�gation by re�sorr
o� ha�ring Ueen the OWl'�E,R's �4GENT, suclY provisiot�� shall apply as if this A�eement vwere stil! [n
effect The parties undersrand �nd a�rc� rhat ti�e AGENT znay withl�.old �'Ur�d.s for thir[y (30) days a�ter
t�e en�d of the moxttb, �z� w�t�cJ� t1�,�s ,t��r�emen,t xs te�minated L� pay bills previously i�cvr�ed but not yet
u�uoiced arcd � ctose accounts.
This Agreern�x�t shal� be b��diztg upon t(ie successors aaid assigns of tF�e A,GENT a�.d t�e�x beus,
adrrrxnistrators, e�cecutbrs, suecessars, and asSigns of tlzc O�ttr�V�R_ �
[�igz►aturc psgc fvllo�ws.j
' •
5
+ ; �U1Vl UY4� . . . T 1 l .�1�7� 1 �� ;ivm + q a -� �^, <
;TI�Ui �f�. �� 96 �3;u�;'��. ;; :�;NO. 3��uF39��5 r%�;'34
� IN W�'T�ESS �ifj�EEREOF, tbe patties I�ereto havc affi;�ed or c�u5ed to be affiz�d t�►eir zespective
signaiuzes this 30th day of October, 199G
U�NE�Z:
THE O�KS O�' 1�+1AJ�STREET, LLC
B � �
Its
AGE�i';
R'bAL E�T�►TE EQ'[n'T�ES I�+IANAGEMENT COI�PANY
Q BY
Its
� .
- 710G7ff1Za 1\ f 751MANACPME.6[ T IQ-I 1-961MDZ'
6
HOPKINS RESIDENT PRIORITY PROGRANT
�
The Oal�s of Mainstreet �izll implement an aggressive networl:ing plan within the community of Hopl:ins
giving preference to residents and employees to Lease-Purchase.
This plan includes names and contacts of community influences. All contacts will be invited to the ground
breaking, model opening, open houses, and grand opening gala. Their involvement and interest in the
communit�� newsletter will be encouraged. Local groups will be encouraged to come hear about The Oal:s
and progress at the project
Starting in October 1996, collateral materials will be distributed to businesses, neighbors, schools,
community leaders, local groups, and churches. Staff will encourage the communiry to participate in Open
Houses at The Oaks of Mainstreet with each Open House specific to the group that is invited.
Realtors and Referral Services - Local Referral services and Realtors will be contacted to assist in
promoting The Oaks. The realtors will be contacted and The Oaks will be part of the regular Tuesday
Tour schedule. The referral services open house will be in February 1997. These open houses will
initiate the excitement coming up with The Oaks of Mainstreet's participation in the Parade of
Homes Spring Previe�v. _
Major Businesses & Business Owners - Super Value, Taits, and AlliantTech Systems are some of
the larger businesses located in Hopkins. An open house targeted specifically to them and other
businesses in Hopkins will offer an opportunities to the company and their employees to live w�here
- Q they work. This event is scheduled for April 1997.
Senior Citizen Groups - An open house targeting seniors who wlsh to remain in Hopl:ins is planned.
Welcome Wagon, Senior news and other incentives will be available at the Open House. This Open
House is scheduled for June 1997.
Professionals - Professionals who currently live in or work in Hopkins will be invited to attend this
- open house. The Oal:s of Mainstreet offers an opportunity to purchase a home in the city they choose
= to work and live in « a time frame for purchasing that fits their needs. The Lease-Purchase plan
= offers assistance in home ownership that will assist in securing a home for someone �vho might,
= othen�ise, not be able to buy .
- Neighbors - Neighborhoods, Churches, Institutions, Schools, Commtmiry Groups, and the Ciry tivill
= be invited to attend this open house. These groups will be encouraged to participate and be part of
- this change in Hopkins. These groups already have an interest in Hopkins. Living at The Oaks of
- Mainstreet �vill be attractive due to it's convenient location in Hopkins. This Open House is
- scheduled for Julv 1997.
= The staff will participate in local events and will encourage resident participation as well. The community.
; will be educated and informed about The Oal:s through nerivorl:ing efforis. The sales staff �vill have
� networking goals of a minimum 3 contacts per week, and will be in the community at least one morning
` weeldy. All community groups «�ill be informed about the positive changes that are underway at The Oaks.
�
; The Oaks will advertise «ee�ly in the local distribution of the MN Sun Sailor. All residents in Hoplcins and
� � surrounding subtubs receive this paper.
�
�
� � r ..` °' _
� �
R
Q CO�iMON [NTEREST COMMI.INITY NCIMBER
A Ptanrred Community
OAKS OF MAINSTREET TOWN�--�OMES R� D L I N E D
DECLARATION
This Declaration is made in the County of Hennepin, State of Minnesota, on this ��_
day of � , 1996, by OAKS OF MAINS�'RE�"I`, L.L.C., a Minnesota limited
liability company (hereinafter referred to as "Declarant") pursuant to the provisions of Minnesota
S�atutes Chapter S 15B, known as the Minnesota Common Interest Ownership Act (the "Act"),
for the purpose of creating Oaks of Mainstreet Townhomes, a Planned Community.
WHEREAS, Declazant is the fee owner of certain real property located in Hennepin
Cotznty, Minnesota, legally described in E' i attached hereto; and
WHEREAS, Declarant desires to submit said real property and all improvements thereor�
(collectively the "Property") to the Act; and
VVHEREAS, Declarant desires to establish on the Property a plan for a permanent
resicl�nti�1 townhome community to be owned, occupied and operat�d for the use, health, safety
and welfare of its resident Owners and Occupants, and for the p�rpose of preserving the valuea
� structural quality and original architectural and aesthetic chara�ter of the Property; and
WHEREAS, the Property is not subject to an ordinance referred to in Section S 15Be l m 106
of the Act, governing conversions to co�nmon interest ownership9 ar�d
� THEREFORE, Declarant makes the Declaration arid submits the Property to the Act as
a planned community under the name "Oaks of Mainstreet Townhomes", consisting of the Llnits
referred to in Section 2, declaring that tlais Declaration shall constitute covenants to run with the
Property, and that the Property shall be owned, leased, used, occupied and conveyed subject to
the covenants, restrictions, easements, charges and liens set forth herein, all of which shall be
binding upon all Persons owning or acquiring any right, title or interest therein, and their heirs,
personal representatives, successors and assigns.
l. DEFINITIONS
The following words when used in the Governing Documents shall have the following
rneanings (unless the context indicates otherwise):
l,1 "Association" shall nnean the Oaks of Mainstreet To�vclhomes Owner's �ssociationo
Inc.o a nonprofit corporation which has been created pursuant to Chapter 317A of the taws of the
State of Minnesota and Minnesota Statutes Section S15B.3-101, whose mecnbers c�nsist Uf all
Owners as defined herein,
�
?3i'U�
� �
�
t
l.2 "Board" shall mean th� Board of �irectors of the �ssociati�n as provided for in th�
By-�,aws. •
1.3 ``Bond Documents" shall mean
L4 "Bv-Laws" shall mean the BymL,aws goverraing the operation of the Association, as
arrier�d�d from time to time.
1.5 "Common Elements" shall anean all parts of the Property except the Units,
including all improvements thereon, owried by the Associatio� for the common benefit of the
Owners and Occupants. The Common Elements are leg�llv described in Exhibit B attached
hereto
I,6 "Common Ex�enses" shall meari and include all expenditures made or liabilities
incurred by or on behalf of the Association and incident to its operation, including without
limitation, water, gas, electric and other utilities servicing the Corrimon Elements or the
individual Units determined to be included in "Common Expenses" by the Association�
allocations to reserves and those items specifically identified as Comrnon Expenses in ihe
Decl,aration or By-Laws.
1,7 '°Dwelline°' shall mean a part of a building consisting of one or more £loor�
designed and intended for occupancy as a single family residence, and located �vithin the
borxndaries of a Unit. The Dwelling includes any garage attached thereto or otherwise included �
within the boundaries of the Unit in which the Dwelling is located,
1,8 '"Eligible Mortgagee" shall mean any Person o�zing a rraortgage on any LTnit,
which rnortgage is first in priority upon foreclosure to all other mortga�es that enctamber such
Unit, and which has requested the Association, in writxng, to notify it regardin� any proposed
action which requires ap�roval by a specified percentage of Eligible Mortgagees.
1,9 "Governing Documents" shall mean this Declaration, and the Articles af
Incorporation and By-Laws of the Association, as amended from time to tirxie,
all of which shall govern the use arid aperation of the Property,
1.10 "Member" shall mean all persons who are members of the Association by v�rtue
of being Owners as defined in this Declarationo The words "Owner" and "1Vlember" may be us�d
interchangeably in the Governing Documents.
1.11 "Occupant" shall mean any person or persons, other than an Owner, in possession
of or residing in a I1nit.
1.12 '"Owner" shall mean a Persor� who owns a Unit, b�t excluding contract for deed
vendocs, mortgag�es and other secured parties withir� the meaning of S�ction S 15B,1-103(29) of�
the Act. The term "Owner" includes, without limitation, contract for deed vendees arid h�lders •
of � Izfe estate.
_�_
� !. ( 3 "Partv Wall" shall mean the shar�d wall betw�een tw�o Dwellings.
1.14 "Person" shall m�an a natural individual, corporatic,n, limitPd liability corn�any,
p�nership, trustee, or other legal entity capable af holding title to real property.
l.1 � "Plat" shall mean the recorded plat depicting the Property pursuant to the
rer�uirements of Section � 15B.2-1 10(d) of the Act, and satisfying the requirements of Mlinnesota
Statutes Chapter �05, �08 or 508A, as applicable, including any amended oc supplerr�ental Plat
recorded from time to time in accordance with the Act.
1.16 "Pro e" shall mean all of the real property submitted to this Declaration,
= including the Dwellings and all other structures and improvements located thereon now or in the
fi.�ttu The Property is legally described in E�chibit A attached hereto.
= 1.17 "Rules and Regulations" shall mean the Rules and Regulations of the Association
� as approved from time to time pursuant to Section 5.6.
; t.18 " T i" shall mean any platted lot subject to this Declaration upon, which a
� Dwelling is located or intended to be located, as shown on the Plat, includin� all improvez�ents
;
� thereon, but �xcluding the Common Elementse
� Any terms used in the Governing Do�uments, and defined in the Act and not iz� tk�is
� Section, shall have the meaning set forth in the Act.
2. DESCRIPTION OF UNITS AND '' APPUR'TE1�IANCE�
2.1 ni , There are 66 Units, all of which are restricted to resider�tial use, Each Unit
constitutes a separate parcel of real estate. No additional Units may be created by the
subdivision or conversion of Units pursuant to Section S 15B.2-112 of the Act, The Unit
identifiers and locations of the Units are shown on the Plat, which is incorporated here�n by
reference, and a schedule of Units is set forth on Exhibit A. The Unit identifier for a Un�t shal�
be its lot and block numbers and the subdivision name.
2.2 Unit Boundari�. The front, rear and side boundaries c�f each Unit shall be the
boundary lines of the platted lot upon which the Dwelling is located or intended to be located as
shown on the Plat. The Units shall have no upper or lower boundaries, Subject to this Sectior� 2
and Section 3,2., all spaces, walls, and other improvements within the boundaries of a Unit are a
part of the L�nit.
2.3 Access Easements. Each Unit shall be the beneficiary of an appurter�ant easetnent
for access to a public street or highway on or across the Common Elemenxs as shown on the f'lat,
subj�ct to any restrictions set forth in the Declaration.
2.4 Use and Enjovment Easements. Each Unit shall be the beneficiary of appurtenant
� easements for use and enjoyment on and across the Corrirnon Elerrients, and for use and
,
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enjoyment of any Limited Common Elements allacated to the Unit, subject to any c�strictions �
autk�orized bv the Declaration.
2.� Utilitv and Maintenance Easements, Each Unit shall be subject to arid shall be tt�e
be�e�ciary of appurtenant easements for all services and utilities servicing the tlnits and the
Corrirz�►on Elements, and for maintenance, repair arid replacement as described in S�ction l3.
2.6 Encroachment Easements. Each Unit shall be subject to and shall be th�
beneficiary of the appurtenant easer�ents for encroachments as described in Section 13,.,
2.7 Declarant's Easements. Declarant shall have and be the beneficiary of easements
for construction and sales activities as described in Section 1 �.6.
2.8 Recorded Easements. The Property shall be subject to such other easements as rr►ay
be recorded against it or otherwise shown on the Plat.
2.9 Easements are A��t�rten�nt. All easements and similar rights burdening or
benefiting a Unit or any other part of the Property shall be appurtenant thereto, arid shall be
permanent, subject only to termination in accordance with the Act or the terms of the easement,
Any recorded easement benefiting or burderaing the Property shall be constn�ed �r� a mac�cier
cor�sistent with, and not in conflict with, the easements created by this Declaratione
2.10 Impairment Prohibited. No person shall materially restrict or impair any easement �
benefiting or burdening the Property; subject to the Declaration and the right of the Associa�ioa�
to impose reasonable Rules and Regulations �overning the use of the Property.
2.1 I Bond Document Restrictions The Pro�le�ty shall be subject to such estrictions
on use occupancy or othenvise as im�osed by the Bond Documents.
3, COMMON ELEMENTS AND LIMITED COMMO�1 ELEMEI�i°TS
3.1 Common Elements. The Common Elements and their characteristics are as
follows:
(a} All of the Property except the Units constitutes Comrr�on Elements. The
Common Elements include those parts of the Property described in Exhibit B oc
designated as Common Elements on the Plat or in the Act. The Cori�mon
Elements are owned by the Association for the benefit of the Owners and
Occupants.
(b} The Common Elements shall be subject to appurtenant easements E'or services
public and private utilities, access, use and enjoyment in favor of each Unit and its
Owners and Occupants; subject to (i) the rights of Owriers and Oceupants in
Limited Common Elements appurtenant to their [.lnits and (ii) the right of the
Association to establish reasanab(e Rules and �.egulations governing th� use of •
the Property.
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� (c) Subj�ct to Sections �, 6 artd 9, all maintenance, repair, replac�r�ent, rx�anagement
and operation of the Common Elernents shall be the responsibility of the
�lssoci�tio�n. -
{d) Corrirr�on Expenses for the maintenance, repair, replaceme:�t �nana�ement and
operation of the Common Elements shall be assessed and collec�ed fz°om the
Owners in accordance with Section 6.
3.2 Limited Common Elements. The Limited Common Elements are those parts of the
Common Elements reserved for the exclusive use of the Owners and Occup�nts of the Units to
which they are allocated, and the rights to the use and enjoyment thereof are automatically
conveyed with the conveyance of such Units. The Limited Common Elements are described and
allo�ated to the Units as follows:
(a) Chutes, flues, ducts, pipes, wires, vents, gutters, downspouts, conduit or other
utility installations, bearing walls, bearing columns, or any other components or
= fixtures lying partially within and partially outside the bound�ries of a Unit, and
- serving only that Unit, aze allocated to the Unit they serve. Any portion of such
= installations serving or affecting the function of more thari one Unit or any portion
= of the Common Elements is a part of the Common Elements, but is r�o� a Limited
� Common Element.
� (b) Improvements such as decks, patios, balconies, shutters, awning�, window boxes,
- doorsteps, stoops, sidewalks, landscaping, yazd lights building lights, perimeter
� doors and windows, constructed as part of the original co�nstruction to serve a
i single Unit, and authorized replacements and modifications thereof, if located
� outside the Unit's boundaries, are Limited Gommon Elertlenks allocated
� exclusively to that Unit.
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' 4. ASSOCIATION MEMBERSHIP: RIGHTS AND OBLIGATIOrfS
Membership in the Association, and the allocation to each Unit of a portzon of the votes
in the Association and a portion of the Common Expenses of the Association shall be govemed
by the following provisions:
4.1 Membershi�. Each Owner shall be a member of the Association by virtue of Unit
ownership, and the membership shall be transfened with the conveyance of the Owner's interest
in the Unit An Owner's membership shall terminate when the Owner's ownership terminates.
Vdhen more than one Person is an Owner of a IJnit, all such Persons -shall be members of the
Association, but multiple ownership of a Unit shall not increase the voting �ights allocated to
s�ch Unit nor authorize the division of the voting rights,
4.2 Voting and Common Ex en nses. Voting rights and Common Expense obligations
are allocated equally among the Units; except that special allocations of Common Expenses shall
p b� p�� as provided in Section 6,1,
�
4,3 A,�2purtenant Ri,�;hts and Obligations. The ownership ��' a Unit sk�a(1 include the �
��oting rights and Corzxrnan Expense obligations described in Sectiora 4.�, Said rights, obligations
and interes�s, and the title to the Units, shall not be separated. o� conveyed separately. "rhe
allocation of the rights obligations and interests described in this Section may r�ot be changed,
excepk in ac.�ordance with the Governing Documents and the Act.
4.4 Authorit�to Vote. T'he Owner, or some natural person designated zo act as proxy
on behalf of the Owner, and who need not be an Owner, may cast the vote allocated to such Unit
at meetings of the Association; provided, that if there are multiple Owriers of a Unit, only the
Owner or other Person designated pursuant to the provisions of the �y�Laws may �ast such vote.
The voting rights of Owners are more fully described in Section 3 of the By-Laws,
5. ADMINIS"TRATION
The administration and operation of the Association and the Property� including but not
limited to the acts required of the Association, shall be governed by the following provisions:
5.1 n r . T`he operation and administration of the Association and the Property
shall be governed by the Governing Documents the Rules and Regulations and th� Act The
Association shall, subject to the rights of the Owners set forth in the Goveming Doc�ents and
the Act, be responsible for the operation, management and control of the Property. The
Association shall have all powers described in the Governing Documents, the Rules and
Regulations, the Act and the statute under which it is incorporated. All power and authority of �
the Association shall be vested in the Boazd, unless action or approval by the individual Owners
is specifically required by the Governing Documents or the Act, All r�ferences to the
Association shall mean tl�e Association acting through the Board unless specifi�ally stat�d tc� the
contr�r
5.2 ODerational Pur�oses. The Association shall operat� and manage the Property for
the purposes of (i) administering and enforcing the covenants, restrictions, easements, charges
arid liens set forth in the Governing Documents and the Rules and Regulations {ii) maintaining
repairing and replacing those portions of the Property for which it is responsible and (iii)
preserving the value and azchitectural unifor�nity and character of the Property,
5.3 Binding Effect of Actions. All agreements and determinations made by the
Association in accordance with the powers and voting rights established by the Governing
Documents or the Act shall be binding upon all Owners and Occupants, and their lessees, guests,
heirs, personal representatives, successors and assigns, and all secured parties as deftned in the
Act.
S.4 Bv-Laws. The Association shalL have By-Laws. The By�Laws and any
amendments thereto shall govern the operation and administration of the Association,
5.� Management. The Board may delegate to a manager or managing agent the
management duties imposed upon the Association's officers and dire-ctors by the Goverc�in� �
Documents and the Act; provided, however, that such delegation shall not celieve the officecs and
6
� directors of the ultirnate responsibility for the performanc� of their duti�s as pres�ribed by the
Gov�rning Doc�znents and by law.
�.6 Rules and Regulations. The Board shall have �xclusive authority to approve and
ir��leczient such reasonable Rules and Regulations as it deerns necessary from tirr�e to time for
xhe purpose of operating and administering the affairs of the Association and regulating the use
of �he Property; provided that the Rules and Regulations shall not be inconsistent with the
Goverrzing Documents or the Act. The inclusion in other parts of the Governing Documents of
authority to approve Rules and Regulations shall be deemed to be in furtherance, and not in
l�znitation, of the authority granted by this Section. New or arr�ended Rules and Regulations shall
be €ffective only after reasonable notice thereof has been giv�n to the Owners.
5.7 Association Assets: Surplus Funds. All furids and real or personal property
acquired by the Association shall be held and used for the benefit of the Owners for the purposes
stated in the Governing Documents. Surplus funds remairung after payment of or provision for
Comrnon Expenses and reserves shall be credited against future assessrnents or added to
reserves, as determined annually by the Boazd.
6. ASSESSMENTS FOR COMiV�011�1 EXPEN�ES
6,1 General. Assessments for Common Expenses shall be deterrnined and assessed
against the Units by the Board, in its discretion; subject to the limitations set forth in Sections 6.2
Q and 6,3, and the requirements of the By-Laws. Assessments for Common Expenses shall include
annual assessrrients and may include special assessments. Assessments shall be allocated among
�he Units accarding to the Comrnon Expense allocations set forth in Section 4.2e, subject to the
followin� qualifications;
{aj Any Common Expense associated with the mainfiena�nce, repair, or replacernent of
a Limited Common Element under�aken by the Association may be assessed
exclusively against the Unit or Units to which that Limited Common Ele�nent is
assigned, on the basis of (i) equality, (ii) square footage of the azea being
. maintained, repaired or replaced, or (iii) the actual cost incurred w�th respect to
each Unit.
(b) Any Common Expense or portion thereof benefiting fewer thari all of the Units
may be assessed exclusively against the Units benefited, on the basis of (i)
equality, (ii).square footage of the area being maintained, repaired or replaced, or
(iii) the actual cost incurred with respect to each Unit.
(c) The costs of insurance may be assessed in proportion to value, risk or �overage,
and the costs of utilities may be assessed in proportion to usag�.
(d) Reasonable attorneys fees and other costs incurred by the Association in
connection with (i) the collection of assessments and (ii) the �nforcetaient of the
Q Governing Documents, the Act, or the Rules and Regulations agai�nst an Ow�ner
or Occupant or their guests, may be assessed against the Own�z�'s Unit.
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. ,
(e) Fees, charges, late charges, fines and i�terest rr�ay be assessed as provided in •
Section � 1 �B.3-1 16(a) of the Act.
{� Assessments levied under Section S15�,3-116 of the Act to pay a judgment
against the Association may be levied only agair�st the Units existing at the time
the judgment was entered, in proportion to their Cocncnon Expense liabilities.
{g) If any damage to the Common Elements or another Unit is caused by the act or
omission of any Owner or Occuparit, or their guesxs, the Association may assess
the costs of repairing the damage exclusively against the Owner's Unit to the
extent not covered by insurance.
(h) If any instaliment of an assessment becomes more than 30 days past due, then the
Association may, upon 10 days written notice to the Owner, declare the entire
amount of the assessment immediately due and payable in full.
(i) If Common Expense liabilities are reallocated for any purpose authorized by the
Act, Common Expense assessments and any installment thereof not yet due shall
be recalculated in accordance with the reallocated Common Expense liabilities.
(j) Assessments under Subse�tions 6, l.amh shall not be considered specia�
assessments as described in Section 6.3.
6.2 Annual Assessments. Annual assessments shall be established and levied by the .
Board, subject only to the limitations set forth in Section 6.2 and 603. Each annual assessment
shall cover all of the anticipated Common Expenses of the Association for that ��rear as well
as ex�enses of maintaining the public rights of way and utilities serving the Pro�ertv only as
�rovided in Section 9.1 hereof Annual assessments shall provide, among other things, for
contributions to a separate reserve fund sufficient to cover the periodic cost of maintenance
repair and replacement of the Common Elements and those parts of the Uniis for which the
Association is responsible an a separate reserve fund sufficient to cover the periodic cost of
maintenance, repair and re�lacement of the public ri�hts of wav and utilities set forth above.
(a) Until a Corrunon Expense assessment is levied, Declarant shall pay all accrued_
expenses of the common interest community.
(b) After a Common Expense assessment is levied, the annual assessznent may be
subsequently increased by the Board.
6.3 S.pecial Assessments. In addition to annual assessments, and subject to the
limitations set forth hereafter, the Board may levy in any assessment year a special assessment
against all Units for the purpose of defraying in whole or in part (i) the cost of any foreseen or
un:budgeted Common Expense (ii) general or specific reserves for maintenarice, repair or
replacement, and (iii) the maintenance, repair or replacerr�ent of any part of the Prope�ty, and a�y
�Ktures or other property related thereto. Notwithstanding the foregoing, any special assessment �
sha[� be subject to approval by the vote of a majority of those Owners voting, in person oc by
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� � .
Q proxy, at a meeting called for that purpose. Written notice of the nneeting shall be sent to all
Ow�aers not less than 21 days nor more than �0 days in advance of the meeting.
b.4 Liability of Owmers for Assessrnents. The obligation of an Owner to pay
ass�ssments shall commence at the later of (i) the recording of the Declaration or amendrx�ent
there�o which creates the Owner's Unit, or (ii) the time at which the Owner acquires title to the
Unit, s�abject to the alternative assessment program described in Section 6.6. The Owrner at the
tirr�e an assessment is payable with respect to the tlnit shall be personally liable for the share of
the Common Expenses assessed against such Unit. Such liability shall be joint and several
where chere are multiple Owners of the Unit. The liability is absolute and unconditional. No
Owner is exempt from liability for payment of his or her share of Common Expenses by right of
setmoff, by waiver of use or enjoyment of any part of the Property, by absence from or
abandonment of the Unit, by the waiver of any other rights, or by reason of any claim against ihe
Association or its officers, directors or agents, or for their failure to fulfill any duties under the
Governing Documents or the Act. The Association may invoke the charges, sanctions �nd
remedies set forth in Section 16, in addition to any remedies provided elsewhere in the
Governing Documents or by law, for the purpose of enforcing its rights hereunder.
6.5 Declarant's Alternative Assessment Program. Notwithstanding anything to the
contrary in this Section 6, and pursuant to Section S15B.3m115(a)(2) of the Act, if a Common
Expense assessment has been levied, any Unit owned by Declarant for initial sale shall be
assessed at the rate of 25% of the assessment levied on other Units of the same type until a
Q certificate of occupancy has been issued with respect to such Unit by the municipality in which
the L1nit is located. This reduced assessment shall apply to each Unit owned by Declarant at the
tirr�e that the Unit is created, and sh�ll continue until the issuance of the certificate of occup�cy
as previously described. There are no assixrances that this alternati�e assessment pro�ram �ill
have no effect on the level of services for iterris set forth in the Association's budget.
6.6 Assessment Lien. The Association has a lien on a Unit for any assessment levied
against that Unit from the time the assessment becomes due. If an assessment is payable in
installments, the full amount of the assessment is a lien from the time the first installment thereof
becomes due. Fees, charges, late chazges, fines and interest charges imposed by the Association
pursuant to Section S15B.3-102(a)(10), (11) and (12) of the Act are liens, and are enforceable as
assessments, under this Section. Recordtng of the Declaration constitutes record notice and
perfection of any lien under this Section, and no further recordation of any notice of or claim for
the lien is required.
6.7 Foreclosure of Lien: Remedies. A lien for Common Expenses may be foreclosed
against a Unit under the laws of the State of Minnesota (i) by action, or (ii) by advertisement as a
lien under a mortgage containing a power of sale. The Association, or its authorized
representative, shall have the power to bid in at the foreclosure sale and to acquire, hold, leasea
mortgage and convey any Unit so acquired. The Owner and any other Pecson claiming an
interest in the Unit by the acceptance or assertion of any in.terest in the Unit, grants to the
Association a power of sale and full authority to accomplish the-for�closure, The Associaeion
Q
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shalla in addition, have the right to pursue a�y other remedy at (aw or in equity against the Ow�er .
wh.o tails to pay any assessment or charge against the Unit.
6.8 Lien Priority: Foreclosure. A lien under this Section is prior to all other liens and
er�cumbrances on a Unit except (i) (iens arid encumbrances recorded before the Decl�ration, (ii)
any Erst mortgage on the Unit, and (i�i) liens for real estate taxes and other governmental
assessments or charges against the Unit. I�1ot�vithstanding the foregoing, if a first mortgage on a
Unik is foreclosed, the first mortgage was recorded on or after June l, 1994, and no Uwn�r
redeems during the Owner's period of redemption provided by Chapters 580, 581, or 582, ther�
the holder of the sheriffs certificate of sale from the foreclosure of the first mortgage shall take
title to the Unit subject to unpaid assessments for Common Expenses levied pursuant to Sections
515B,3-115(a), (h)(1) to (3), (i), and (1) of the Act which became due, without acceleratiom
during the six months immediately preceding the first day following the end of the Owner's
period of redemption.
6.9 Voluntarv Conveyances• Statement of Assessment . In a voluntary conveyance of
a Unit the buyer shall not be personally liable for any unpaid assessrrients and other charges
made by the Association against the seller or the seller's Unit prior to the time of conveyance to
the buyer, unless expressly assumed by the buyer. However, the lien of such assessm�nts shall
remain against the Unit until satisfied� Any seller or buyer shall be entitled to a statement, �n
recordable form, from the Association sett�ng forth the amount of the unpaid assessments agains�
the Unit, including all assessments payable in the Association's current fiscal year, wl�ich
statement shall be binding on the Association, seller and buyer. •
7. RESTItICTIO�iS ON USE OF PItOPERTY
All Owners and Occupants, and all secured parties, by their acceptance or �ssertion of an
interest in the Property, or by their occupancy of a Unit, covenant and agree that, in addition to
any other restrictions which may be imposed by the Act or the Governing Documents, the
occupancy, use, operation, alienation and conveyance of the Property shall be subject to the
folla�ving restrictions:
7,1 eneral. The Property shall be owned, conveyed, encumbered, leased, used and
occupied subject to the Governing Documents and the Act, as amended from time to time. All
covenants, restrictions and obligations set forth in the Governing Documents are in furtherance
of a plan for the Property, and shall run with the Property and be a burden and benefit to all
Owners and Occupants and to any other Person acquiring or owning an interest in the Property,
their heirs, personal representatives, successors and assigns.
7.2 Subdivision Prohibited. Except as permitted by the Act, no Unit nor any part of the
Common Elements may be subdivided or partitioned without the prior written approval of all
Owners and all secured parties holding first mortgages on the Units�
7,3 Residential Use. T'he Units shall be used by Oen�ners and Occupants and their
�uests exclusively as private, singl� family residential d�vetlings and not for transier�t, hotel, �
connmercial, business or other non-residential purposes, except as provided in Section 7.4. Any
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� lease of a ilnit (except for occupancy by guests with the consent of the Owmer) for a period of
less than 3U days, or any occupancy which includes services customarily furnished to hotel
�uests, shall be presurra�d to be for transient purposes. �
7.� Business Use Restricted. Nc� business, trade, occupation or profession of any kind,
whether carried on for profit ox otherwise, shall be conducted, maintained or permitted ir� any
C1nit or the Commom Elements; except (i) ari Owner or Occupant residing in a Unit max keep and
�x�aintain his or her business or professional records in such Unit and handle matters relating to
such business by telephone or correspondence therefrom, provided that such uses are incidental
to the residential use, do not involve physical alteration of the Unit and do not involve any
observable business activity such as signs, advertising displays, bulk mailings, deliveries, or
visitation or use of the Unit by customers or employees, (ii) the Association may maintain offices
on the Property for management and related purposes, and (iii) with the consent of the Board,
garage sales and other occasional neighborhood business events may be permitted on an event-
by-event basis.
7.5 ' Owner Occu The Units shall be occunied
onlv �y their Owners excent as herein provided unless other an�roved bv
Leasing of Units bX the Declazant only shall be �llowed, subject to
reasonable regulation by the Association, and subject to the following conditions: (i) that no Urut
shall be leased for transient or hotel purposes, (ii) that no Unit may be subleased, (iii) that �11
� leases shall be in w"riting, (iv) that all leases shall provide that they aze subordinate and subject to
the provisions of the Governing Documents, the Rules and Regulations and the Act, and that any
failure of the lessee to comply with the terms of such documents shall be a default under the
lease, and (v) that a copy of the executed lease be provided to the Board -prornptly upon r�quest,
The Association may impose such reasonable Rules and Regulations as txtay be neeessary to
implerrient procedures for the leasing of Units, consistent with this Section,
7.6 Parkin , Garages, driveways and parking areas on the Property shall be used only
for parking of vehicles owned or leased by Owners and Occupants and their guests, and such
other incidental uses as may be authorized in writing by the Association. The use of garages,
drive�vays and other parking areas on the Property, and the types of vehicles and personal
property permitted thereon, shall be subject to regulation by the Association, including without
limitation the right of the Association to tow illegally parked vehicles or to remove unauthorized
personal property.
7.7 Animals. No animal may be bred, or kept or maintained for business or
commercial purposes, anywhere on the Property, However, the Board shall have the exclusive
authority to prohibit, or to allow and regulate, by Rules and Regulations, the keeping of animals
on the Property. The word "animal" shall be construed in its broadest sense and shall include all
living creatures except humans.
7,8 Ouiet En.jovment: Interference Prohibited. All Owners and Occuparits and their
gu�sts shall have a right of quiet enjoyment in their resp��tive Units, azid shall use the Property
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in such a manner as wi�l not cause a nuisance, nor unduly restrict, ir�terfere wi�k� ar icnpede the �
use of the Property by �ther Owners and Occupants and their guests.
7.9 Compliance with Law. No use shall be made of the Property wl�ich �vould vio�ate
any then exisxing municipal codes or ordinances, or state or federal laws nor shall �y act or �se
be perrriitted whick� could cause waste to the Property, cause a material incxease ir� insurance
rates ora the Property, or otherwise cause any unusual liability, health or safety rislc, or expense
for the Association or an� Owner or Occupant.
7.10 Alterationse Except for those made by Declarant in consideration of its initial sale
of a Unit, no alterations, changes, improvements, repairs or replacements of any type, temporary
or permanent, structural, aesthetic or otherwise (collectively referred to as "alterations") shall be
� made, or caused or allowed to be made, by any Owner or Occupant, or their guests in any part of
the Common Elements, or in any part of the Unit which affects the Common Elemer►ts or which
is visible from the exterior of the Unit, without the prior written authoriza.tion of the Board, or a
cornmittee appointed by it, as provided in Section 8. The Board, or the appointed corilmittee if
so authorized by the Board, shall have authority to establish reasonable criteria and requir��nents
for alterations, and shall be the sole judge of whether the criteria are satisfied.
7.11 Time Shares Prohibited. The time share form of ownership, or �y �orzYparabl�
form of lease, occupancy rights or o`vnership which has the effect of dividing �he a�nership �ir
occupancy of a Unit into separate time periods, is prohibited.
7.12 Access to Units. In case of emergency, all Units and Lim'ited Cornmon Eler�ents •
are subject to entry, without notice and at any time, by an officer ox member of th� Bo�rd �f the
Association, by the Association's management agents or by any public safety personnelo Entry is
also authorized fc�r maintenance purposes under Section 9 and for enforcernent purposes t�c��r
Section 14,
8. ARCHITECTUItAL CON'TROL
8.1 Restrictions on Alterations. The following restrictions and requirerrients shall
ap�ly to altecations on the Property:
(a) Except as expressly provided in this Section 8, and except for alterations made by
Declarant in consideration of its initial sale of a Unit, no structure, building,
addition, deck, patio, fence, wall, enclosure, window, skylight, exterior door, sign,
display, antenna or other sending or receiving apparatus or device, decoration,
color change, shrubbery, tree, material topographical or landscaping change, nor
any other exterior improvements to or alteration of any Dwelling or ariy ather part
of a Unit which is visible from the exterior of the Unit (collectively referred to as
"alterations"), shall be commenced, erected or maintained in, upon or about a
Unit, unless and until the plans and specifications showing the nature, kinda shape,
height, color, materials and locations of the alterations shall have been approved
in wTiting by the Board of Directors or a committee appointed by it. �
Notwithstanding the foregoingp Declararit's w� consent shall also be required
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� f`ar alteratior�s until Declarant no longer o�4ns any unsold C1nit az�d has r�o further
rights to add Additional Real Estate to the Property.
(b) The Boa� shall establish criteria for approval which shall include �nd require, at
a r�iinirriurr�, (i) substantial uniformity of color, size, locat�on, type az�d design in
relation tc� existing improvements and tapography, (ii) corriparable or better
quality of �naterials as used in existing improvements, (iii) ease of �nair�tenance
and repair, (iv) adequate protection of the Property, the Association, Owners and
Occupatits from liability and liens arising out of the proposed alterations, and (v)
corripliance with governmental laws, codes and regulations,
(c) Approval of alterations which encroach upon another Unit or the Common
Elements shall create an appurtenant easement for such encroachment in favor of
the Unit with respect to which the alterations are approved; provided, that any
easement for a deck or patio other than as originally constructed shall be approved
by resolution of the. Board of Directors and a file of such resolutions shall be
maintained permanently as a part of the Association's records.
(d) Alterations described in Section 16 shall be governed by that Section,
8,2 Review Procedures. The following procedures shall govem requests fQr alt�rations
u�der this Section:
� (a) Detailed plans, specifications and related information regarding any proposed
alteration, in form and content acceptable to the Board of Directors, shall be
submitted to the Board of Directors at least sixty (60) days prior to the projected
commencement of construction. No alterations shall be comrrr�ncecl prior to
approval.
{b) The Board of Directors shall give the Owner written notice of approval or
disapproval. If the Board of Directors fails to approve or disapprove within sixty
(60) days after receipt of said plans and specifications and all other information
requested by the Board of Directors, then approval will not be required, and this
Section shall be deemed to have been fully corrzplied with so long as the
alterations are done in accordance with the plans, specifications and related
information which were submitted.
(c) If no request for approval is submitted, approval is denied.
$.3 Remedies for Violations. The Association may undertake any measures, legal or
administrative, to enforce compliance with this Section and shall be entitled to recover from the
Owner causing or permitting the violation all attornevs' fees and costs of enforcement, whether
or r�ot a Le�al action is started, Such attorneys' fees and costs shall be a(ien against the Owner's
Unit and a personal obligation of the Own�r. 1n addition, the Association shall have the right to
� enxe� the Owner's Unit and to restore any part af the Dwelling or Unit to its prior condition if any
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alterations were made in violation of this Section, and the cost of' such restoratiQn shall be a •
�ersona� obli�ation �f the Ov�mer and a lien against the Owner's Unit.
9. MAINTENANCE
9,1 Maintenance by Association. T'he Association shall provide for all maintenance,
repair or replaceznent (collectively refened to as "maintenance") of the Common Elements and
shall provide for adequate maintenance. and repair of an}� streets within the Pro�ertv which have
been publicl� dedicated; adeauate snow removal from anv of said streets; adeauate control of
surface water drainage: adeauate maintenance and repair�of anv sanitarv sewer. storm sewer,
water supplv s,ystem. or other bublic utilities serving the Prope , only, maintenance and repair
of which are the responsibili of the Association. In addition, for the purpose of preserving the
architectural character, quality, and uniform and high standards for appearance of the Property,
the Association shall (i) provide for exterior maintenance upon the Dwelling in each Unit that is
subject to assessment as follows: maintenance of roofs, gutters, downspouts, decks, mailboxes
and mailbox stands, garage doors (except hardware), and exterior siding and o�her building
surfaces, and (ii) provide for lawn, shrub and tree maintenance on all Units, except for watering.
The Association's obligation to maintain exterior building surfaces shall exclude patios, entry
doors, door hardware, air conditioning equipment, glass and window fraznes and any other items
not specifically referred to in this Section, unless otherwise approved under Section 9.20 'The-
Association shall have easements as described in Section 13 to perform its obli�ations under this
Section 9. �
9,2 Q�tional Maintenance by Association. In addition to the maintenance, repair or
repl�cement (collectively referred to as"Maintenance") described in this Section the Association
may, �rith the approval of a majority of votes cast in person or by proxy at a meetir�g called for
such purposes, undertake to provide additional exterior maintenance to-the Units o�° Dwellings,
or maiz�tenarice of water and sewer systems within the Urvts.
9.3 Maintenance by Owner. Except for the exterior maintenance required to be
provided by the Association under Section 9.1 or 9.2, all maintenance, repair or replacement
(collectively referred to as"Maintenance") of the Dwellings and Units shall be the sole
responsibility and expense of the Owners thereof. However, the Owners and Occupants shall
have a duty to promptly notify the Association of defects in or damage to those parts of the
Property which the Association is obligated to maintain. The Association may require that any
exterior maintenance to be performed by the Owner be accomplished pursuant to specific
uniform criteria established by the Association. The Association may also undertake any exterior
maintenance which the responsible Owner fails to or improperly performs and assess the Unit
and the Owner for the cost thereof.
9.4 Damage Caused bv Owner, Notwithstanding any provision to the contrary in this
Section, if, in the judgment of the Association, the need for maintenanc� of any part of the
Property is caused by the willful or negligent act or omission of an Owner or Occupant, or their
guests, or by a condition in a Unit which the Owner or Occupant has willfully or negligently �
allowed to exist, the Association may cause su�h damage or condition to be repaired ar c�rrected
�� 14-
� __ -
� � {arid �nter upon any Unit to do so), and the cost there�f cra�y be assessed against the Unit of the '
_ �Jwner responsible for the damage. In the case of party w�alls between Dwellings, the Owners of
= � th,e �ffected Dw�llings shall be tiable as prc�.�ided in Section 10. °
�
�
� 10. PARTY W�AL,IdS
� 10.I nrl Rul f Lw
, • a t� A.�Iv. E�ch wall built as part of thc onginal
� constnxction of the Dwellings and located on the bounda.ry line between Units shall constitute a
� party �vall, and, to the extent not inconsistent with the provisians of this Section, th.e general rules
�
of layv regarding pariy walls and liability for property darr�age due to negligent or willfut acts or
omissions shall apply thereto.
� I0.2 Repair a.nd Maintenance. The Owners of the Uruts which share t
he party wall
sh�ll be responsible for the maintenance, repair and replacerrient of the party wall in proportion
with their use; provided (i) that any maintenance, repair or replacernent necessary due to the acts
or omissions of a certain Owner or Occupant sharing such party wali shail be paid for by such
Owner, and (ii) that the Association may contract for and supervise the repair of damage caused
by an Owner or Occupant and assess the Owners for their respective shares of the cost to the
extent not covered by insurance.
10,3 Destruction by Fire or Other Casualtv. If a party wall is destroyed or damaged by
� fire or other casualty, any Owner who has the use of the wa11 may, with the consent of the
Association, restore it, and the other Owner shall promptly reimburse the Owner who restored
the vvall for his or her share of the cost of restoration thereof; provided, however, that the cost of
restoration resulting &om destruction or other casualty resulting &om the acts or omissions of
certain Owners shall be the financial responsibility of such Owners, and the Association may
assess the responsible Owners for their share of the costs, without prejudice to the right of an
Owner to recover a larger contribution from the other Owner. Insurance claims shall b� made
prorriptly following any casualty.
10.4 Weather�roofin�. Notwithstanding any other provision of this Section; any
Owner who, by his negligent or willful act, causes a party wall to be exposed to the elements
shall bear the whole cost of the repairs necessary for protection against such elements.
10.5 Right to Contribution Run With Land. The right of any Owner to contribution
from any other Owner under this Section shall be appurtenant to the Unit and shall pass to such
Owner's assign and successors in title.
10.6 Arbitration. In the event of any dispute arising concerning a party wall, and if the
same is not resolved within thirty (30) days of the event causing the dispute, the matter shall be
submitted to binding arbitration under the rules of the American Arbitration Association, upon
the written demand of the Association or any Owner whose Dwelling shares the party wall. Each
party agrees that the decision of the arbitrators shall be final and conclusive of the questions
� involved. The fees of the arbitrators shall be shared equally by the parties, but each p�u-ty shall
pay its own attorney fees or other costs to prove its case.
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1 l. IN�URANCE
�
1 l, l .R�e uired Covera,�e. T'he �lssociation shall obtain and maintain, at a minimum, a�
rrr�ster policy or policies of insurance in accordance with the insurance requirements set forth in
t�a� A�t �nd th� additional requirements set forth h�rein, issued by a reputable insurance company
or �omp�r�ies authorized to do business in the State of Minnesota, as follows:
(a) Property insurance in broad form covering all risks of physical loss in an amount
equal to one hundred percent (100%) of the insurable "replacement cost" of the
Property, less deductibles, exclusive of land, footings, excavation and other items
normally excluded from coverage (but including all building service equipment
and machinery). The policy or policies shall cover personal property owned by
the Association. The policy or policies shall also contain "Inflation Guard" and
"Agreed Amount" endorsements, if reasonably available. Such policy or policies
shall include such additional endorsements, coverages and limits with respect to
the foregoing and other hazards as may be required form time to time by the
regulations of the FHA or Federal National Mortgage Association ("FNMA") as a
precondition to their insuring, purchasing or financing a mortgage on a Unit. T°he
Board may also, on behalf of the Association, enter into binding written
agreements with a mortgagee, inswrer or servicer, including without limitation th�
FHA or FNMA, obligating the Association to keep certain specified coverages or
endorsements in effect.
(b) Comprehensive public liability insurance covering the use, operation and •
maintenance of the Common Elements, with criinirnum limits of $1,000,000 per
occurrence, against claims for death, bodily injury and property damage, and such
other risks as are customarily covered by such policies for projects sir�ilar in
construction, location and use to the Property. The policy shall contain a
"severability of interest" endorsement which shall preclude the insurer from
denying the claim of an Owner or Occupant because of negligent acts of the
Association or other Owners or Occupants. The policy shall include such
additional endorsements, coverages and limits with respect to such hazards as may
be required by the regulations of the FHA or FNMA as a precondition to their
insuring, purchasing or financing a mortgage on a Unit.
(c) Fidelity bond or insurance coverage against dishonest acts on the part of directors,
officers, committees, managers, trustees, employees or persons responsible for
handling funds belonging to or administered by the Association if deemed to be
advisable by the Board or required by the regulations of the FHA or FNMA as a
precondition to the purchase or financing of a mortgage on a Unit, The fidelity
bond or insuz�ance shall name the Association as the named insured and shall, if
required by the regulations of the FHA or FNMA as a precondition to their
insuring, purchasing or financing of a mortgage on a Unit be written in an
amount equal to the greater of (i) the estimated maximum of Associatic�n fiinds,
including reserves, in the custody of the Association or managerrzer�t agent at any �
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�
�
�
�
,
�
�
� � given time while the borid is in force, or (ii) � sum equal to three mo�ths
aggregate assessments o� all IJnits plus reserves. Arz appropriate endorserri�r�t to
che policy to cover any p�rsor�s who serve without corripensation shall be added if
the policy would not otk�er�vise cover volunteers, or a waiver of defense based
upon the exclusion of persons serving without compensation shall be added.
{d) Workers' Compensation insurance as required by laiv,
(e) Directors and officers li�bility insurance (including coverage for mecnbers of�
committees designated or appointed by the Board or pursuant to the Governing
Documents) with such reason�ble limits arid coverages as the Board shall
determine from time to tizne,
(� Such other insurance as the Board may determine from time to time to be in the
best interests of the Association and the Owners.
11.2 Premiums: Improvements: Deductibles. All insurance premiums shall be assessed
and paid as a Common Expense. The insurance need not cover improvements and betterments to
the Units installed by Owners, but if irnprovements and betterments are covered, any increased
�ost tnay be assessed against the Units affected, The Association may, in the case of a clabrn for
darr�age to a Unit, (i) pay the deductible amount as a Common Expense, (ii) assess the deductible
arnount against the Units affected in any reasonable manner, or (iii) require the Owners of the
� Units aff�cted to pay the deductible amount directly.
11.3 Loss PaXee: Insurance Trustee. All insurance coverage maintained by th�
As�oci�tion shall be written in the name of, arid the proceeds thereof shall be payable to, the
Association (or a qualified insurance trustee selected by it) as trustee for the benefit of the
Owners and secured parties, including Eligible Mortgagees, which suffer loss. The Association, �
or any insurance trust�e selected by it, shall have exclusive authority to negotiate, settle and
collect upon any claims or losses under any insurance policy maintained by the Associatione
11.4 Waivers of Subrogation. All policies of insurance shall contain waivers of
subrogation by the insurer against the Association, or an Owner, members of the Owner's
household, officers or directors, as applicable, and, if available, waivers of any defense based on
co-insurance or of invalidity from any acts of the insured.
11.5 Cancellation: Notice of Loss. All policies of property insurance and
cocnprehensive (iability insurance maintained by the Association shall provide that the policies
shall not be cancelled or substantially modified, for any reason, without at least 30 days prior
written notice to the Association, to the FHA or FNMA (if applicable), all of the insureds and all
Eligible Moz�gagees.
I l.6 Restoration in Lieu of Cash Settlement. All policies of property ir�surarice
maintained by the Association shall pravide that, despite any provisions giv�ng the insurer �he
� right to elect to restore damage in lieu of a cash settlement, suGh option shalt not be exercisable
(i) without the prior wTitten approval of the Association (or any Insurance - I'rustee) or (ii) when
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i� conflict with provisions of any insuranc� ti°ust agreement to which the Association may be a �
partv, or any require�nent of law,
I 1.7 No Contribution. All policies of insurance maintained by the Association shal� be
the prirnary insurance where there is other insurance in the name of the Owner covering the s�e
proper�y, and may not be brought into contrib�tion with any insurance purchased by Owners or
their eligible Mortgagees.
11.8 Effect of Acts Not Within Association's Control. All policies of insur�nce
maintained by the Association shall provide that the coverage shal( not be uoided by or
conditioned upon (i) any act or omission of an Owner or Etigible Mortgagee, unless acting
within the scope of authority on behalf of the Association, or (ii) any failure of the Association to
comply with any warranty or condition regarding any portion of the Property over which the
Association has no control.
11.9 Owner's Personal Insurance. Each Owner may obtain additional personal
insurance coverage at his or her own expense covering fire and other casualty to the Unit,
personal property or personal liability. All insurance policies maintained by Owners shall
provide that they are without contr�bution as against the insurance purchased by the Assoc�ati��a
12. RECONSTRUCTION, CO�DEMNATION AND EMINEI�IT DOMAIIY -
12.1 Reconstruction. The obligations and procedures for the repair, reconstruction or �
dispc�sition of the Property following damage to or destruction thereof shall be governed by the
Act� Any repair or reconstruction shall be substantially in accordance with the plans aYad
specifications of the Property as initially constructed and subsequently impro�ed upon, tatotic:e
of substantial damage or destruction shall be given p�xrsuant to Section 18.10, �°he Bo�rd shall
have authority to cause the damaged portion of the Property to be reconstructed to its prior
coradition. This grant of authority shall include, without limitation, the authority t� require any
Owner to enter into reconstruction contracts approved by the Association, or to cause the
Association to contract on behalf of any or all Owners to complete the reconstruction if any
Owner fails or refuses to do so. The Owners of any damaged Units shall cooperate vvzth the
Association to cause all damage to the Dwellings located thereon to be promptly reconstructed
and repaired,
12.2 Condemnation and Eminent Domain. In the event of a taking of any part of the
Property by condemnation or eminent dornain, the provisions of the Act shall govern; provided,
that notice shall be given pursuant to Section 18.10. Eligible Mortgagees shall be entitled to
priorixy for condemnation awards in accordance with the priorities established by the Act and the
Governing Documents, as their interests may appear.
12.3 Notice. All Eligible Mortgagees shall be entitled to receive no�zce of any
cor�dernnation proceedings or substantial destruction of the Property, ax�d the Associ�tion shall
give written noti�e thereof to a Eligible MoRgagee pursuant to Section I$.10.
.
�18-
� 13. EASEMENTS
13.1 Easerrrent for Encroachments. Each Unit and the Comrrion� Elem�nts, and the
rights of the Owners and Occupants therein, shall be subject to an exclusive easement for
�ncroachments in favor of the adjoining Units for fireplaces, walls� roof o��rhangs, air
conditioning systems, decks, balconies, patios9 utility installations and other app�a�tenances (i)
which are part of the original construction on the adjoining Unit or the Property ar (i�) which are
added pursuant to Section 8. If there is an encroachment by a Dwelling, or other building or
improvement located in a Unit, upon another Unit or Dwelling as a result of the construction,
ceconstruction, repair, shifting, settlement or movement of any part of the Property, an
appurtenant easement for the encroachment, for the use, enjoyment and habitation of any
encroaching Dwelling, building or improvement, and for the maintenance thereof, shall exist;
provided that with respect to improvements or alterations added pursuant to Section 8, no
easement shall exist unless the same have been approved and constructed as required by this
Declaration. Such easements shall continue for as long as the encroachment exists and shall not
affect the marketability of title.
13.2 Easement for Maintenance. Repair. Replacement and Reconstructione Each Unit,
and the rights of the Owners and Occupants thereof, shall be subject to the rights of the
Association to an exclusive, appurtenant easernent on and over the Units for the purposes of
maintenance, repair, replacement and reconstruction of the Units, and utilitie� serving the Units
� to the extent necessary to fulfill the Association's obligations under the Goveming Documents.
13.3 Utilities Easements. The Property shall be subject to non�exclusive, appurtenan�
easements for all utilities water and sewer, and similar services, which exist from time to tim�
as cor�structed or referred to in the Plat, or as otherwise described in this Declaration or any other
duly recorded instrument, Each Unit, and the r�ghts of the Owners and Occupants thereof, shall
be subject to a non-exclusive easement in favor of the other Units for all such services� including
without limitation any sewer or water lines servicing other Units. Each Unit shall also be subject
to an exclusive easement in favor of the Association and all utilities companies providing service
to the Units for the installation and maintenance of utilities metering devices,
13.4 Continuation and Sco�e of Easements. Notwithstanding anything in this
Declaration to the contrary, in no event shall an Owner or Occupant be denied reasonable access
to his or her Unit or the right to utility services thereto. The easements set forth in this Section
shall supplement and not limit any easements described elsewhere in this Declaration or
recorded, and shall include reasonable access to the easement areas through the Units and the
Common Elements for purposes of maintenance, repair, replacement and reconstruction.
14. COMPLIANCE AND REMEDIES
Each Owner and Occupant, and any other Person owning or acquiring any interest in the
Property, shall be governed by and comply with the provisions of the Act the Governing
� Docrxments, the Rules and Regulations, the decisions of the Association, and such arnendments
thereto as may be made from time to time. A f�ilure to comply shall entitle the Association to
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the relief set forth in this Section, in addition to the rights and remedi�s authorized else�here by �
the Governing Documents and the Act.
14.1 � Entitlement to Relief. rh� Association may commence legal action ta recover
su�s due, for damages, for injunctive relief or to foreclose a lier� owraed by it or any
combinatioz� thereof, or an action for any other relief authorized by the Goverrrair�g Docr�ments or
available at law or in equity. Legal relief may be sought by the Associatior� against any Owner,
or by an Owner against the Association or another Owner, to enforce compliance with the
Governing Documents, the Rules and Regulations, the Act or the decisions of the Association
however, no Owner may withhold any assessments payable to the Association, oz° take (or omit)
other action in violation of the Governing Documents, the Rules and Regulatior�s or che �1ct, as a
measure to enforce such Owner's position, or for any other reason.
14.2 Sanctions and Remedies. In addition to any other rernedies or s�ctions,
expressed or implied, administrative or legal, the Association shall have the right, but not the
obligation, to implement any one or more of the following actions against Owners and Occupants
and/or their guests, who violate the provisions of the Governing Docuinents, the Rules and
IZegulations or the Act:
(a) Commence legal action for damages or equitable relief in ariy court of cor�petent
jurisdiction.
(b) Impose late charges of up to 15% of the past due amount of an assessm�nt or �
installment thereof.
(c) In the event of default of more than 30 days in the payment of ariy assessment or
installment thereof, all remaining installments of assessments assessed a�ainst the
Unit owned by the defaulting Owner may be acc�lerated and shall then be payable
in full if all delinquent assessments, together with all costs of collection and late
charges, are not paid in full prior to the effective date of the acceleration.
Reasonable advance written notice of the effective date of the acceleration shall
be given to the defaulting Owner.
(d) Impose reasonable fines, penalties or charges for each violation of the Ac;t, the
Governing Documents or the Rules and Regulations of the Association.
(e) Suspend the rights of any Owner or Occupant and their guests to use any
Common Element amenities; provided, that this limitation shall not apply to
Limited Common Elements or deck, balcony or patio easements, appurtenant to
the Unit, and those portions of the Common Elements providing utiliti�s service
and access to the Unit. Such suspensions shall be limited to periods of def�ult by
such Owners and Occupants in their obtigations under the Governing Documents
and the Rules and Regulations and for up to 30 days thereafter, for each violation.
(fl Restore any portions of the Comrrzc�n Eler�nents ar Limited Common Elernents �
damaged or altered, or allowed to be damaged or altered, by any Owner or
e?p�
Q Occuparic or their guests in violation of the Goveming Docurr�ec�ts and to assess
the cost of such restoration against the responsible Own�rs and their Ltnics.
(g) Enter any Unit or Limited Common Element in which, or as to which a violation
or breach of the Goveming Documents exists which materially aff�cts, or is likely
to materially affect in the near future, the health or safety of the other Owners or
Occupants, or their guests, or the safety or soundness of any Dwelling or other
part of the Property or the property of the Owners or Occupants, and to summarily
abate and remove, at the expense of the offending Owner or Occupant, any
structure, thing or condition in the Unit or Limited Common Elements which is
causing the violation; provided, that any improvements which are a part of a Unit
may be altered or demolished only pursuant to a court order or with the agreernent
of the Owner.
(h) Foreclose any lien arising under the provisions of the Governing Documents or
under law, in the manner provided for the foreclosure of mortgages by action or
under a power of sale in the state where the Property is located,
14,3 Rights to Hearing. Before the imposition of any of the remedies authorized by
Sectian 14.2ed,, e. or f. of this Section, the Board shall, upon written req�est of the offender,
grant to the offender a fair and equitable hearing as contemplated by the Act, T`he offender shall
� be given notice of the nature of the violation and the right to a hearing, and at least 10 days
within which to request a hearing, The hearing shall be scheduled by the Board and held within
thirty days of receipt of the hearing request by the Board, and with at least 10 days prior vvritten
notice to the offendere If the offending Owner fails to appear at tlxe hearing then the right to a
hea�ng shal� be waived and the Board may take such action as it deems appropriate. The
decision of the Board and the rules for the conduct of hearings established by che Board sha�l be
final arid binding on all parties. The Board's decision shall be delivered in writing to the offender
w�thin ten days following the hearing, if not delivered to the offender at the hearing.
14.4 Lien for Charges. Penalties. Etc. Any assessments, charges, fines, penalties or
interest imposed under this Section shall be a lien against the Unit of the O�vner or Occupant
against whom the same are imposed and the personal obligation of such Owner in the same
manner and with the same priority and effect as assessments under Section 6. The lien shall
attach as of the date of imposition of the rernedy, but shall not be final as to violations for w•hich
a hearing is held until the Board gives written notice following the hearing. All remedies shall
be cumulative, and the exercise of, or failure to exercise, any remedy sha(1 not be deemed a
waiver of the right to pursue any others.
14.5 Costs of Proceeding and AttorneXs Fees. With respect to any callection measures,
or any measures or action, legal, administrative, or otherwise, which the Association takes to
enforce the provisions of the Act, Governing Documents or Rules and Regulations, whether or
�ot f nally determined by a court or arbitrator, the Association may assess the violator and his or
her Un�t with any expenses incurred in connection with such enforc�ment, including without
�
� -21-
lirt�itation fines or charges previously imposed by the Associ�tion: reasonable attorneys, fees, and •
ir��erest (at the highest rate allowed by law) on the delinque�c amounts owed to the Association.
14.6 Liabilitv for Ow�ners' and Occupants' Acts� An Uwner shall be liable for the
expense of any maintenance, repair or reptacement of the Prope�ty rendered necessary by such
Owrzer's acts or omissions, or by that of Occupants or guests in the Uwner's Unit, to the extent
that such expense is not covered by the proceeds of in.surance carried by the Association or such
O�rner or Occupant. However, any insurance deductible arrioux�t and/or increase in insurance
rates, resulting from the Owner's acts or omissions may b� assessed against the Owner
responsible for the condition and against his or her Unit.
14.7 Enforcement by Owners. The provisions of this Section shall not limit or impair
�he independent rights of other Owners to enforce the provisions of the Governing Documents,
the Rules and Regulations, and the Act as provided therein.
15. SPECIAL DECLARAN'T RIGHTS
Declarant hereby reserves exclusive and unconditional authority to exercise the following
specia� declarant rights within the meaning of Section S 15Bo 1� 103(31) of the Act for as long as it
o�ns a Unit, or for such shorter period as may be specifically indicat�d:
15,1 Comolete Improvements. To complete all the Clnits and other improvements
indicated on the Plat, or otherwise included in Declarant's development plans or allowed by the •
Declaration, and to make alterations in the Units and Common Elements to accommodate its
sales facil�ties;
1502 Relocate Boundaries and Alter Units. To relocat� boundaries between'Units ari�
to otherwise alter Units owned by it, to the extent permitted by Section 16.
15,3 Sales Facilities. T'o construct, operate and maintain a sales office, management
office, model Units and other development, sales and rental facilities within the Common
Elements and any Units owned by Declarant from time to t�me, located anywhere on the
Property.
15.4 Si�ns. To erect and maintain signs and other sales displays offering the Units for
sale or lease, in or on any Unit owned by Declarant and on the Common Elements,
15.� Easements. T'o have and use easements, for itself, its employees, contractors,
representatives, agents and prospective purchasers through and over the Common Elem�nzs for
the purpose of exercising its special declarant rights;
1�.6 Control of Association, To control the operation and administration of the
Association, including without limitation the power to appoint and remove the rriemb�rs of the
�oard pursuant to Section S15B.3�103 of the Act, u�til the earliest of. (i) voluntary surr�nder of
contro( by Dectarant, (ii) an Association meeting which shall be held within 60 days after �
conveyance to Owners other than a Dec(arant of 75% of the total number of Units autho�ized to
-22-
Q b� �z�c�luded in the Property or (iii) the date three °(3) years following the date of the first
co�tveyance of a Unit to an Owner other than a Declarant. Notwithstanding the foregoing, the
� O�ers other than a Declarant shall have the r}ght to nominate and �lect not less than 33 1/3% of �
_ the directors at a meeting of the Owners which shall be he�d within 60 days following the
conveyance b� Declarant of 50% of the total number af U�nits authorized to be inc.luded in the
= Property.
= 15.7 Consent to Certain Amendments. As long as D�clarant owns any unsold Unit,
= Declarant's written consent shall be required for any amendznent to the Governing Documents or
- Rules �nd Regulations which directly or indirectly affects oz° may affect Declarant's rights under
- �he Caoveming Documents.
16. RIGHTS TO RELOCATE. UNIT BOUND�itIES AND ALTER UNITS
� 16.1 Rights to Relocate Boundaries and Alter Units. Existing or future Units may be
' altered and Unit boundaries may be relocated only in accordance with the following. conditions:
�
� (a) Combining Units. An Owner may make improvements or alterations to such Unit
� or, may, after acquiring an adjoining Unit, remove or alter any intervening
� partition or create apertures therein in accordance �vith Section 5 1 SBo2m 113 of
the Act and Subsection d of this Section.
� b Relocation of Boundaries. The boundaries between adjoining Units may be
� � �)
relocated in accordance with Section S 15B.2� 114 of the Act and Subsection d of
this Section.
(c) Subdivision of Conversione No additional tJnits may be created by the
subdivision of conversion of a Unit (within the meaning of the Act) into two or
more Units, nor into other Units, Connmon Elements or Limited Comxnon
Elements.
(d) Requirements. The alteration, relocation of boundaries or other modif cation of
Units or the Dwellings or other structures located therein (collectively referred to
herein as "alteration" or "alterations") pursuant to this Section, Section 8, and the
Act may be accomplished only in accordance with the following conditions:
(i) No Unit may be altered if, thereafter, the Dwelling located therein, or any
other Dwelling affected by the alteration, would no longer be habitable or
practicably usable for its intended purpose or would violate any law, code
or ordinance of any governmental authority having jurisdiction over the
Property.
(ii) No alteration may be made which adversely affects the structural or
functional integrity of any building system or the structural support or
Q weathertight integrity of any portion of any building or other structure.
�,
(iii j T'he prior written cons�r�t of the Association shall be required for any �
alteration, except alterations by Declarant. Wl��re required, such consent
shall be requested irr writing by each Owner whose Unit is proposed to b�
altered, accompanied by such explanation, drawings and specifications
relating to the proposed alterations as may be reasonably required by the
Association or the first rnortgagee of the tJnit. The Association shall give
such Owner(s) notice irt an expeditious mar�ner, granting, denying or
qualifying its consent,
(iv) As a precondition to cor�ser�ting to alterations the Association may require,
among other things, the following: (i) that all alterations will be done in a
workmanlike manner and without impairing the structural, mechanical or
weather-tight integrity of the Building; (ii) that the Common Elements and
altered Units will be repaired and/or restored in the future as required by
the Association; (iii) that the construction of the alterations will not create
dangerous conditions for any Owners or Occupants; (iv) that the Property,
the first mortgagees arld the Owners and Occupants dvill be protected from
liens and other liability arising from the alterations; and (v) that the
alterations will be done in compliance with the applicable la�vs,
regulations and ordinances of the governmental authorities havirig
jurisdiction over the Property.
(v) The Association may require that t�e Owners of the Units to be altered pay •
all costs of processin� and documentation for the request and the
preparation and recording of any necessary amendment to the Governing
Documents, including without limitation such costs as filing, architects
and attorneys fees, incurred by the Association in coririection with the
alterations.
t 7, A11�IENDMENTS
�'his Declaration may be amended by the consent of (i) Owners of Units to which are
allocated at least sixty-seven percent (67%) of the votes in the Association, (ii) the percentage of
Eligible Mortgagees (based upon one vote per first mortgage o`vned) required by Section 18 as to
matters prescribed by said Section and (iii) the consent of Declarant to certain amendments as
provided in Section 15.8. Consent of the Owners may be obtained in writing or at a meeting of
the Association duly held in accordance with the By-Laws. Consents of Eligible Mortgagees and
the Declarant shall be in writing. Any amendment shall be subject to any greater requirements
imposed by the Act. The Amendment shall be effective when recorded as provided in the Act.
An affidavit by the Secretary of the Association as to the outcome of the vote, or the eYecution of
the foregoing agreements or consents, shall be adequate evidence thereof for all purposes,
including without limitation, the recording of the amendment, Further_ anv amendment to this
De�laration which affects the Owner Occu�ancv requirement in Section 7 5 or the requirement to
maintain public rights of wav and utilities servin��the Propertv in Section 9 1 shall require the �
consent of the City of Hopkins.
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� t8. RIGE-�"TS �F EL[GIBLE MORTGAGEES
Notwithstanding anything to �k�e contrary in the Goveming Documents and subject to
�ny greater requirements of the Act o�° o�her laws, Eligib(e Mortgagees shall have the fol(owing
rights and protections:
18.1 Consent to Certain Amendments. T'he written consent of E(igible Mortgagees
representing at least fifty-one percent (51 %) of the Units that are subject to first mortgages held
b� Eligible Mortgagees (based upon one vote per first mortgage owned) shall be required for any
amendment to the Governing Documents which causes any change in the following: (i) voting
rights; (ii) assessments, assessment liens, or priority of assessment tiens; (iii) reserves for
maintenance, repair and replacement of Common Elements; (iv) responsibility for maintenance
and repairs; (v) reallocation of interests in the Common Elements or Limited Common Elements,
or rights to their use; (vi) redefinition of any Unit boundaries; (vii) convertibility of Units into
Common Elements or vice versa; (viii) expansion or contraction of the Property or the addition,
annexation or withdrawal of property to or from the Properiy; (ix) insurance or fidelity bonds; (x)
leasing of Units; (xi) imposition of any restrictions on an Owner's right to sell or transfer his or
her iJnit; (xii) a decision by the Association to establish self management when professional
management is in effect as required previously by the Governing Documents or a Eligible
Mortgagee; (xiii) restoration or repair of the Property (after a hazard damage or partial
condemnation) in a manner other than that specified in the Goveming Documents; (xiv) any
action to terminate the legal status of the common interest community after substantial
0 destruction or condemnation occurs; or (xv) any provisions that expressly benefit Eligible
Mortgagees, or insurers or guarantors of mortgages.
18.2 Consent to Certain Actionse The written consent of Eligible Mortgagees
representing at least eighty percent (80%) of the Units that are subject to frst mortgages held by
Eligible Mortgagees (based upon one vote per first mortgage ovvned) shall be required to
abandon or terminate the common interest community.
1$.3 Consent to Subdivision. No Unit may be partitioned oc subdivided without the
prior written approval of the Owner and Eligible Mortgagee thereof, and the Association.
18.4 No Right of First Refusal. The right of an Owner to sell, transfer or otherwise
convey his or her Unit shall not be subject to any right of first refusal or similar restrictions.
18.� Priorit.y of Lien. Any holder of a first mortgage on a Unit or any purchaser of a
first mortgage at a foreclosure sale, that comes into possession of a Unit by foreclosure of the
first mortgage or by deed or assignrnent in lieu of foreclosure, takes the Unit free of any claims
for unpaid assessments or any other charges or liens iznposed against the Unit by the Association
vvhich have accrued against such Unit prior to the acquisition of possessioz� of the Unit by said
f rst mortgage holder or purchaser; (i) except as provided in Section 6.7 and the Act and (ii)
ex�ept that any unreimbursed assessments or charges may be reallo�ated amount all Units i�
� �ccordac�ce with their interests in the Common Elements.
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18.6 Prioritv of Taxes and Other Charges, All taxes, assessmen�s and charges which �
rr�ay become liens prior to the first mortgage under state law shall relate only to �he individual
Units and not to th� Prop�rty as a whole. �
18.7 Prioritv for Condemnation Awards. I�to provision of the Govemin� Docutnents
shall give an Owner, or any other party, priority over any rights of the Eligible Mortgagee of the
[lnit pursuant to its mortgage in the case of a distribution to such Owner of insurance proceeds or
condeznnation awards for losses to or a taking of the Unit and/or the Common Elernents, The
Association shall give written notice to all Eligible Mortgagees of any condemnation or eaniazent
domain proceeding affecting the property promptly upon receipt of notice frorr� the condemning
authority.
L 8.8 Access to Books and Records/Audit, Eligible Mortgagees shall have �he right to
examine the books and records of the Association upon reasonable notice during norznal business
hours, and to receive free of charge, upon written request, copies of the Associatiozx's annual
reports and other financial statements. Financial statements, including those which ,are audited,
shall be available within one hundred twenty (120) days of the end of the Association's fiscal
year, If a request is made by FNMA or any institutional guarantor or insurer of a mortgage loan
against a Unit, for an audit of the Association's financial statements for the prec�ding year� tlie
Association may determine to cause an audit to be made and deliver a copy tc� the r�questing
P�'•
18.9 Notice Requirements. Upon written request to the Association identifyin� the •
narne and address of the holder, insurer or guarantor of a mortgage on a LTnit, and the Unit
nramber 6r address, the holder, insurer or guarantor shall be entitled to timely �vritten not�c� of:
(a) a condemnation loss or any casualt� toss which affects a zr�ate�al portion of th�
'Property or the Unit securing the moregage;
(b) a 60 day delinquency in the payment of assessments or charges o�rred by th�
Owner of a Unit on which it holds a mortgage;
(c) a lapse, cancellation or material modification of any insurance policy maintained
by the Association; and
(d) a proposed action which requires the consent of a specified percentage of Eligible
Mortgagees.
19. MISCELLANEOUS
19.1 Rights of the City of Hopkins.
__ (a) Maintenance by CitX If, in the opinion of the Cit�Council of the City of
HQOkins expressed in a resolution adopted after a public hearing, the Association
or the Owners have failed to provide� adequate maintenance and repair of anX
streets within the Propertv which have been dedicated to public use as provided in ,
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� Section 9 1 hereof adeauate snow removal from an of said str�ets adeq�P
control of surface water drainage; adeqc�are maintenance and �gpair of an sar,;r�
��w�, storm sewer water supply�vstem, or other pufiiic utilities serving�h,P
P�cr p onlv the maintenance and regair of which are the res�onsibilitv of the
Association or the Owner ; then dulv authorized agents of the Citv of Ho�,kins
may enter upon the Propertv and perform such street mainten�nce and rgpair•
�n�w removal from streets; control of surfacewater drainage; maintenance nci
rgpair of sanitary sewer, storm sewer, water su�ply system or other nublic �it�i;r;P�
as the Citv Council of the itv of Hopkins shali have deemed necessar,y to
preserve the health, safe and welfare of the residents of Ho�kins or of the CitX
of Hopkins.
(bl A Costs. If the .itv of Honkns ("Citv"1 nerform maintPnance o
makes re�airs nurs���nt to this Decl�ration. thP Citv may assess the cos,t of said
maintenance or renairs directiv a�ainst the benefitted nits for the co t of said
maintenance or revairs If the Citv asses�es the Units for th c t of said
maintenance or reu�. �hen the Association or the Owners chait iPV� a snecial
assessment �ursuant to Section 6 3 hereof aga;,,�t rhP benefitted it to defrav
�he total amount of the Citv assessment Said snecial � esGme„r nPP� nnt havP
the consent of the Owners occunants or o�vner/ tenant�
_ � (c) Assessment of CoSt� The cost of ar�y work �erfc�rmed by the Ci of Hopkins
�ursuan�to ihis Decla�ration shall be assessed nursuant to the above nrovisions
19.2 �everabili�, If any term, covenant, or provision of this instrument or an}� e�chibit
attached hereto is held to be invalid or unenforceable for any reason vvhatsoever, such
. dete�rmiz�ation shall not be deemed to alter, affect or impair in any manner whatsoever any other
_ po�ion of this instrument or exhibits.
= 19.3 Construction. Where applicable the masculine gender of any word used herein.
sh�ll mean the feminine or neutral gender, or vice versa, and the singular of any word used herein
shall mean the plural, or vice versa. References to the Act, or any section thereof, shall be
deemed to include any statutes amending or replacing the Act, and the comparable sections
i thereo f.
i
19.4 'I`ender of Claims. In the event that any incident occurs which could reasonably
give nse to a demand by the Association against Declarant for indemnification pursuant to the
Act, the Association shall promptly tender the defense of the action to its insurance carrier and
,
give Declarant written notice of such tender, the specific nature of the action and an opportunity
to defend against the action.
19.5 Notices, Unless specifically provided otherwise in the Governing Dacuments or
the Act, all notices required to be given by or to the Association the Board of Directors, the
� Association officers or the Owners or Occupants shall be in writing and shall be effective upon
hand delivery, or mailing if properly addressed with postage prepaid and deposited in the United
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�tates mail; except that registrations pursuant to Section ?? of the By-Laws shall b� etfective �
upon receipt by the Association.
19.6 C'onflicts Among Docu�nents. In the event of any conflic� amo�g th� p�ovisions
af the Act, the Declaration, the By-Laws or any Rules or Regulations appro�red by the
Association, the Act shall control. As among the Declaration, BymL,aws and Rules and
Regulations, the Declaration shall control, and as between the By-Lau��s and th� Rul�s and
Regulations, the ���Laws sk�all control.
IN WITlYESS WHEREOF, the undersigned has executed this irzstrument the day and
y�ar ��rst set forth in accordance with the requirements of the Act.
OAKS OF MAINSTREE°I LoL,C,, a
Minneso� limited liability compac�y
By:
tts:
STAT� OF 1�fIIVNESOTA )
)ss.
COUNTY OF HENNEPIN )
The foregoing instnzment was acknowledged before me this day of �_�> �
1996 by , the of Oaks �f M�instreet L,L,�., �
Mlnriesota limited liability cornpasiy, on behalf of the cornpany.
No� Public � �
T'his instrument was drafted by:
James J. Schwert
Oppenheimer Wolff & Donnelly
45 South Seventh Street, Suite 34Q0
Minneapolis, Minnesota 55402
(612) 344-9308
�
e�g�
E-XHIBI C E� �
C'()MMON -A-��4 ELE�1�;i I S �
�
�
• rc ?���: 2sa��sa ��o�
�
� RED-LINED
� BY-LAWS OF OAKS OF NIAINSTRF'E'I" T`0�,�✓�iHOMES
° l. GENEItAL,
�'he following are the By-Laws of Oaks of Mair►str�et Townhomes, a Minnesota
n�onpro�it corporation (the "Association"). The Association is organized pursuant to Section
SI5�,3-101 of the Minnesota Common Interest Ownership Act (the "Act") for the purpose of
operating and managing Oaks of Main Street Tovvnhomes, a planned community created
pursuant to the Act. The terms used in these By-Laws shall hav� the same meaning as they have
in the Declaration of Oaks of Main Street Townhomes (the "Declar�ation") and the Act.
2. MEMBERSHIP
2.1 Owners Defined. All Persons defined as Owners in Section 1.13 of the Declaration
shall be members of the Association. No Person shall be a member solely by virtue of halding a
security interest in a Unit. A Person shall cease to be a member at such time as that Person is no
lon�er an Owner.
2.2 Registration of Owners and Occu�ants, Each O�mer shal� register with the
Secretary of the Association, in writing, within 30 days after talcing title to a Unit, (i) the name� �
and address of the Owners and any Occupants of the Unit, (ii) the natrzre of such Owner's interest
or estate in each Unit owned; (iii) the address at which the Owner desires to recei�e notice of any
� meeting of the Owners, if other than the Unit address; and (iv) the name and address of the
secured p�rty holding the first mortgage on the Unit, if any. The Owner shall have a conti�nuing
obligation to advise the Association in writing of any changes in the foregoing information.
2.3 Transfers. The interests, rights and obligations of an Owner in the Association may
be assigned, pledged, encumbered or transferred, but only along with and as a part of the title to
the O�ner's Unit or as otherwise specif cally authorized by the Goveming Documents or by law.
� 3. VOTING �
3.1 Entitlement. Votes shall be allocated to each Unit as provided in the Declaration.
Ho�vever, no vote shall be exercised as to a Unit while the Unit is owned by the Association, No
Owner shall be entitled to vote during any period when any assessment against the Owner's Unit
is past due.
3.2 Authoritv to Cast Vote. At any meeting of the Uwners, an Owner included on the
voting register presented by the Secretary in accordance with Section 4.6, or the holder of such
Ow�er's proxy, shall be entitled to cast the vote which is allocated to the Unit owned by the
Owner. If there is more than one Owner of a Unit, only one of the Owners may cast the vote, If
the Owners af a Unit fail to agree as to who shall cast the vote, or fail to register pursuant to
Section 2.2., the vote shall not be casx
4 3.3 Voting by ProxX. An Owner may cast the vote which is allocated to the O�ner's
Unit and be counted as present at any meeting of the Owners by executing a wz�txer� proxy
�
M
n�i�g another Person entitled to act on that Owrier's behalf and delivering the same to the •
Secret�ry for the commencement of any such meeting. All proxies granted by an Owner shall
° r�rriain in effect u.ntil the earliest of the following events; (i) revoc�tion by the granting Owner by '
�ritten �otice or by personally attending and voting at the meeting for which the proxy is
effective, (ii) eleven months after the date of the proxy, unless otherwise provided in the proxy,
or (�ii) the ti�e at which the granting Owner is no longer an Owner,
3.4 Voting b,y Mail Ballot. The entire vote on any issue, except the removal of
directors, may be determined by mailed ballots, subject to the fol�owing requirements.
(a) The notice of the vote shall: (i) clearly state the proposed action, (ii) indicate the
number of responses needed to meet the quorum requirements, (iii) state the
percentage of approvals necessary to approve each matter other than election of
directors, and (iv) specify the time by which a ballot must be received by the
Association in order to be counted.
(b) The ballot shall: (i) set forth each proposed action. and (ii) provide an opportunity
to vote for or against each proposed action.
(c) The Board of Directors shall set the time for the re�urn of ballots, which shall nt�t
be less than 15 nor more than 30 days after the date of mailing of the ballots to the
Owners. The Board of Directors shall provide notice of the results of the vote to
the Owners within 10 days after the expiration of the voting period. •
(d) Approval by written ballot under this Section is val�d only if the number of votes
cast by ballot equals or exceeds the quorum required to be present at a meetin�
authorizing the action, and the number of approvals equals or exceeds the number
of votes that would be required to approve the matter at a meeting at which the
total number of votes cast was the same as the number of votes cast by ballot,
�.5 Vote Re�uired. A majority of the votes cast at any properly constituted meeting of
the Owners, or cast by mail in accordance with Section 3.4, shall decide all matters properly
braught before the Owners, except where a different vote is specifically required by the
Governing Documents or the Act. The term "majority" as used herein shall mean in excess of
50% of the votes cast at a meeting, in person or by proxy, or voting by mail, in accordance with
. the allocation of voting power set forth in the Declaration. Cumulative voting shall nnt be
permitted.
4. MEETINGS OF OWNERS
4.1 Place. All meetings of the Owners shall be held at a location reasonably accessible
to the Owners as may be designated by the Board of Directors in any notice of a meeting of the
Odvriers.
4.2 Annual Meetin�s. An annual meeting of the Ow shall be held in each fiscal •
ye�r on a date, and at a reasonable time and place, designated by the Board of Directo�s, At ea�h
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�
Q az�xiva� meeting of the Owners, (i) the Persons who are to constitute the Board of Directors sh.all
be �l�cted pursuant to Section 5, (ii) a report shall be made to the Owners on the activities a.�d
finaricial. condition of the Association, and (iii) any other matter which is included in the notice
of the annual meeting, and is a proper subject for discussion or decision by the Owners, shall be
considered and acted upon at the meeting,
4.3 Snecial Meetings. Special meetings of the Owners may be called by the President
as a znatter of discretion. Special meetings of the Owriers shall be called by the President or
Secretary within 30 days following receipt of the written request of a majority of the members of
the Board of Directors or of Owners entitled to cast at least 25% of all the votes in the
Association. The meeting shall be held within 90 days following receipt of the request. The
request shall state the purpose of the meeting, and the business transacted at the special meeting
shall be confined to the purposes stated in the notice. The purpose for which the meeting is
requested and held must be lawful and consistent with the Association°s purposes and authority
under the Governing Documents.
4.4 Notice of Meetin�s. At least 21, but no more than 30, days in advance of any
annual meeting of the Owners, and (subject to Section 6.3 of the Declaration) at least 7, but no
mo�� than 30, days in advance of any special meeting of the Owners, the Secretary shall send, to
all persons who are Owners as of the date of sending the notice, notice of the time, place and�
agenda of the meeting, by United States mail, or by hand delivery, at the Owner's Unit address or
� to such other address as the Owner may have designated in writing to the Secretary. The notice
shall also be sent to the Eligible Mortgagee, upon request, at the address provided by the Eligible
Mortgagee and to the Citv of Honkins,��on reauest at the address �rovided bY the Citv�f
Ho�kins Any Eligible Mortgagee and the Citv of Ho�kins shall, upon request, be ezatitled to
designate a representative to be present at any meeting. Notice of ineetings to vote upon
amendments to the Articles of Incorporation shall also be given separately to each officer and
director of the Association.
4.5 �uorum/Adjournment. The presence of Owners in person or by proxy, who have
the authority to cast in excess of fifty percent (50%) of all the votes in the Association shall be
necessary to constitute a quorum at all meetings of the Owners for the transaction o:f any
business, except that of adjourning the meeting to reconvene at a subsequent time. Any meeting
may be adjourned from time to time, but until no longer than 15 days later, without notice other
than announcement at the meeting as initially called. If a quorum is present at the reconvened
meeting, any business may .be transacted which might have been transacted at the meeting as
initially called and a quorum then been present. The quorum, having once been established at a
meeting or a reconvened meeting, shall continue to exist for that meeting notwithstanding the
departure of any Owner previously in attendance in person or by proxy. The Association may
not be counted in determining a quorum as to any Unit owned by the Association.
4.6 Voting Register. The Secretary shall have available at the meeting a list of the Unit
number, the names of the Owners and the name of the Person (ir� the case of multiple Owners)
Q authorized to cast the vote.
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�
4.7 ��. T.he agenda for rn�eti�xgs of the Owners shall be established by the Board •
of Directors, cansistent with the Governing Documents, and shall be sent to all Owcxers alon�
with the notice of the meetirig °
5 A�I�iNUAL REPORT
The Board of Directors shall prepare an annual report on behalf of the Associatio� to be
criailed or delivered to each Owner together with the notice of the annual meeting, The report
shall contain at a minimum:
(a) A statement of any capital expenditures in excess of two percent of the cunrent
budget or $5,000, whichever is greater, approved by the Association for �he
current year or succeeding two fiscal years.
(b) A statement of the balance in any reserve or replacement hind and any portic�n of
the fund designated for any specified project by the Board of Directorso
(c) A copy of the statement of revenues and expenses for the Association's last fiscal
year, and a balance sheet as of the end of said fiscal year,
(d) A statement of the status �f ar�y pending litigation or judgm�nts to �rhich ttie�
Association is a party.
(e) A statexnent of the insurance coverage provided by the Association, •
(� A statement of the total p�st due assessments on all Units, c�x�z�t �s �f �o� r�ore
than 60 days prior to the date of the meeting.
6, BOARD OF DIRECTORS
6.1 Number and Q�alification, The affairs of the Association sha11 b� governed by a
Boa�°d of Directors. The first Board of Directors shall consist of the persons designated as
directors in the Articles of Incorporation of the Association or appointed to replace th.em by the
Declarant, subject to the rights of Owners to elect directors as set forth in Section 5,2, Upon the
expiration of the terms of the members of the first Board of Directors, the Board of Directors
shall be composed of five (5) directors, a majority of whom shall be Owners, or a duly
authorized representative of the Owner if the Owner is a corporation, partnership, limited
liability cocnpany, trust or other entity which has the capacity to hold title to real estate.
6.2 Term of Office. The terms of office of the members of the Board of Dire�tors shall
be as follo�vs:
(a) Subject to Subsection b, the terms of all diz appointed by Declarant as
authorized by the Declaration shall terminate upon the earliest of (i) voluntary
surrender of control by Declarant, or (ii) an Association meeting which shall be .
held within 60 days after conveyance to Ownez other than a declarant of' 75% of
_4a
Q the total number of Units authorized to be included ir� the comrxion interest
community The term of office of any director elected to the first Board of
DireCtors by Owners other than the Declarant shall terminat� at t�� same time as
those appointed by Declarant.
(b) Notwithstanding the provisions of Subsection (a), the Owraers otYaer than
Decla� shall have the right to nominate and elect not less thati 33 1/3% of the
directors at a meeting of the Owners held within 60 days following the
conveyance by Declarant of° 50% of the total number of Units authorized to be
included in the common interest community.
(c) The first terms of office of the directors elected by the Owners immediately
following the termination of the terms provided for in Subsection (a) shall be two
years for three. of the directors and three years for two of the d�rectors. The
nominee or nominees receiving the greatest numbers of votes shall fill the longer
terms. Each term of office thereafter shall be two years and shall expire upon the
election of a successor at a subsequent annual meeting of the Owners; provided,
that a director shall continue in office until a successor is elected, A number of
nominees equal to the number of vacancies, and receivin� the greatest nu�b�rs of
votes, shall be elected, notwithstanding that one or more of them does not recsive�
a majority of the votes cast. A director appointed to fill an uncompleted term
� shall serve until the natural termination of that term, unless removed in
accordance with these By-Laws, There shall be no curnulative voting for
directors,
6.3 Nominations, Nominations for election to the Boa�rd of Directors sh�ll be made b�
� nomi�atin� �ommittee appointed by the Board of Directors, or from the fl�aor at the ar�ual
meeting or b� "write�in" if authorized by the Board.
6,4 Powers. The Board of Directors shall have all powers necessary for the
administration of the affairs of the Association, and may exercise for the Association all powers
and authority vested in or delegated to the Association (and not expressly prohibited or reserved
to the owners) by law or by the Governing Documents. The powers of the Boazd of Directors
shall include, without limitation, the power to:
(a) adopt, amend and revoke Rules and Regulations not inconsistent with the
Governing Documents, as follows: (i) regulating the use of the Common
Elements; (ii) regulating the use of the Units, and the conduct of Owners and
Occupants, which may jeopardize the health, safety, or welfare of other Owners
and Occupants, which involves noise or other disturbing activity, or which may
damage the Common Elements or other Units; (iii) regulating or prohibiting
animals; (iv) regulating changes in the appearance of the Common Elements and
conduct which may damage the Property, (v) regulating the exterior appearance of
Q the Property, including, for example, balconies and patios, window treatments,
and signs and other displays, regardless o f whether inside a Unit; (vi)
5
implementing the Governing Documents, and exercisin� the powers g.ranted by •
this Section; and (vii) otherwise facilitating the operation� of the Propert�9
(b) adopt and amend budgets for revenues, expenditures and r��erves, arid levy arid
collect assessznents for Common Expenses from Owners and foreclos� assessrnent
li�ns incidez�tal to its collection efforts;
(c) hire and discharge managing agents and other employees, agents, and i�dependent
contractors;
(d) institute, defend, or intervene in litigation or administrative proceedings (i) in its
own name on behalf of itself or two or more Owners on matters affecting the
Common Elements or other matters affecting the Propert� or the Association, or,
(ii) with the consent of the Owners of the affected Units on rnatters affecting only
those Units;
(e) make contracts and incur liabilities;
(� regulate the use, maintenance, repair, replacement azid modific�tion of th�
Common Elements and the Units;
(g) cause improvements to be made as a part of the Commo� Eleta�ents;
(h) acquire, hold, encumber, and convey in its own name any right, title, or interest tc� i
real �state or personal property, subject to the requirements of the �c� for the
conveyance or encumbrance of the Common Elernents;
(i) grant public utility easements through, over or under the ComYnon Elernents �nd
subject to approval by resolution of the Owners other than a declazan� ox its
affiliates at a meeting duly called, grant other public or private easeznents, leases
and licenses through, over or under the Conunon Eletnents;
(j ) impose and receive any payments, fees, or charges for the �se, rental, or operatiAn
of the Common Elements, other than Limited Common Elements, and for services
provided to Owners;
(k) impose charges for late payment of assessments and, after notice and an
opportunity to be heard, levy reasonable fines for violations of the Governing
Documents and the Rules and Regulations;
(l) impose reasonable charges for the review, preparation and record�tion af
amendments to the Declaration or By�Laws, resale cer�ificates required by Section
S15B.4-107 of the Act, statements of unpaid assessments, or furnishing copies of
Association records;
•
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Q (m) provide fnr the indemnification of its officers, directars, and cornr�ni�tee members,
, and cnai�ntain directors' and officers' liability insurari�e whi�h ir��lr�des comrnittee
' m �mbers; �
(nj provide for reasonable procedures governing the �o�duct of m�e�ings and the
electiort of directors;
(o) appoint, regulate and dissolve committees;
(p) subject to the requirements of the Governing Docuznents �d the Act, borrow
money and encumber or pledge the assets of the Association as security therefor;
(c� exercise any other powers conferred by law or the Goverrung Documents, or
which are necessary and proper for the governance of the Association.
6.5 Meetings and Nofices. An annual meeting of the Board of Directors shall be held
proznptly following each annual meeting of the Owners. At each annual meeting of the Board,
the officer� of the Association shall be elected.
(a) Regular meetings of the Board of Directors shall be held at least on a quarterly
basis, at such times as may be fixed from time to time by ��ajority of the�
members of the Board of Directors. A schedule, or any amended schedule, of the
d regular meetings shall be provided to the directors,
(b) Special meetings of the Boazd of Directors shall be held when called (i) b� the
_ President of the Association, or (ii) by the Secret�ry within ten (10) days
- following the written request of any two (2) directorso Notice of ��r special
- meeting shall be given to each director not less than three (3) d�ys in advance
= thereof, Notice to a director shall be deemed to be given ivhen deposited in the
United States mail postage prepaid to the Unit address of such director, or when
� personally delivered, orally or in writing, by a representative of the Board of
- Directors,
' (c) Any director may at any time waive notice of any meeting of the Board of
Directors orally, in writing, or by attendance at the meeting, If all the directors
' are present at a meeting of the Board of Directors, no notice shall be required, and
; any business may be transacted at such meeting.
; 6.6 �uorum and Voting. A majority of the members of the Board of Directors shall
� constztute a quorum for the transaction of business at any meeting thereof. A quorurn, once
� established, shall continue to exist, regardless of the subsequent departure of any directors, Each
� director shall have one vote. The vote of a rnajority of the directors present at any meeting at
which a quorum is present shall be sufficient to adopt any action. Proxies shall not be permitted.
�
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6.7 Action Taken Without a Meeting. The Board of Diz�ectors shall have the right to �
r.a�ce �ny actinn in the absence of a meeting which it could take at a meeting when: autlnorized in a
' writ�ng signed by all the directors. °
6.8 Vacancies. A vacancy in the Board of Directors shall be filled by a person
appointed within 15 days following the occurrence of the vacancy by a majority vote of the
rerriaining directors, regardless of their number; except for vacancies created pursuant to Sections
5a2 �d 6.9 of this Section. Each person so elected shall serve out the term vacated.
6.9 Removal. A director may be removed &om the Board of Directors, with or without
cause, by a majority vote at any annual or special meeting of the Owners; provided, (i) that the
notice of the meeting at which removal is to be considered states such purpose, (ii) that the
director to be removed has a right to be heard at the meeting and (iii) that a new director is
elected at the meeting by the owners to fill the vacant position caused by the removal. A director
may also be removed by the Board of Directors if such director (i) has more than two unexcused
absences from Board meetings and/or Owners meetings during any twelve month period or (ii) is
rriore than 60 days past due with respect to assessments on the director's Unit. Such vacancies
shall be filled by the vote of the Owners as previously provided in this Section.
6,10 Compensation. Except as authorized b� a vote of the Owners at a meetin��.
thereof, the directors of the Association shall receive no compensation for their services in such
capacity. A director, or other Owner or Occupant may, upon approval by the Board of Directors,
be retained by the Association and reasonably compensated for goods and services furnished to .
the Association in an individual capacity. Directors ma}r be reimbursed for out-of-pocket
expenses in�urred in the performance of their duties.
5,11 Fideli , Bond. Fidelity bonds or insurance �overage for unlawful talcin� of
Association funds shall be obtained and maintained as provided in the Declaration on all
directoxs and officers authorized to handle the Association's funds and other monetary assets.
7. OFFICERS
7.1 Princi�al Officers. The principal officers of the Association shall be a President, a
Vice President, a Secretary and a Treasurer, all of whom shall be elected by the Board of
Directors. The Board of Directors may from time to time elect such other officers and designate
their duties as in their judgment may be necessary to manage the affairs of the Association, A
person may hold more than one office simultaneously, except those of the Presidenk and Vice
President. Only the President and Vice President must be members of the Board of Directors,
7.2 Election. The officers of the Association shall be elected annually by the �oard of
Directors at its annual meeting and shall hold office at the pleasure of the Board,
7.3 R v. Upon an affirmative vote of a majority of the members of the �oard, any
officer may be removed, with or without cause, and a successor elected, at any regular tneeting of
the Board of Directors, or at any special meeting of the Board of Directors called for that •
puzpose,
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� 7.4 President. The President shall be the chief e���utiv� officer of the Association, and
shall preside at all meetings of the Board of Directors and the Association. The President shall
� have all of the powers and duties which are custozn�°ily vested ir� the office of the president of a °
co�poration, including without limitation the duty to supervise all ather officers and to execute all
contracts and similar obligations on behalf of the Association, The President shall have such
other duties as may from time to time be prescribed by the Board of Directors.
7.5 Vice President. The Vice President shall take the place of the President and
perforcn the duties of the office whenever the President shall be absent or unable to act. The Vice
President shall also perform such other duties as sha11 from time to time be prescribed by the
Board of Directors.
7.6 Secretarv. The Secretary shall be responsible for recording the minutes of all
meetings of the Board of Directors and the Association. The Secretary shall be responsible for
keeping the books and records of the Association, and shall give all notices required by the
Governing Documents or the Act unless directed otherwise by the Boazd of Directors, The
Board of Directors may delegate the Secretary's administrative functions to a managing agent;
provided that such delegation shall not relieve the Secretary of the ultimate responsibility for the
Secretary's duties.
7,7 Treasurer. The Treasurer shall have responsibilifiy fc�r all financial assets of the
� Association, and shall be covered by a bond or insurance in such sum and with such companies
as the Board of Directors may requireo The Treasurer shall be responsible for keeping the
Association's financial books, assessment rolls and accounts and the preparation of an annual
financial report for the Association, subject to review by the Association's accountants, The
Treasurer shall cause the books of the Association to be kept iri accoa°dance with customa� and
accepted accounting practices and shall submit them to the Board of Directors for its exarnination
upon request. The Treasurer shall cause all moneys and other monetary assets of the Association
to be deposited in the name of or to the credit of the Association in depositories designated by
the Board of Directors, shall cause the funds of the Association to be disbursed as ordered by the
Board of Directors and shall perform all other duties incident to the office of Treasurer. The
Board of Directors may delegate the Treasurer's administrative functions to a managing agent;
provided that such delegation shall not relieve the Treasurer of the ultirnate responsibility for the
Treasurer's duties.
7.8 ComFensation. Except as authorized by a vote of the Owners at a meeting thereof,
officers of the Association shall receive no compensation for their services in such capacity. An
officer, or other Owner or Occupant may, upon approval by the Board of Directors, be retained
by the Association and reasonably compensated for goods and services furnished to the
Association in an individual capacity. Officers may be reimbursed for out�of-pocket expenses
incurred in the performance of their duties.
�
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8. OPERAT"I01�1 OF THE PR.OPERTY �
�.1 Assessment Procedures. 'The Board of Directors shall, at least thirty (30) days prior
to the first day of the Association's fiscal year, prepare a budget of Common Expenses for the
Association and assess and levy su,,ch C�rnmon Expenses against the Units according to their
�°espective Cammon Expense liability as set forth in the Uecl�ration. The annual budget shall
include a general operating reserve, and an adequate reserve fund for maintenance, repair and
replac�ment of those Common Elements and parts of the Units that must be maintained, repaired
or replaced by the Association on a periodic basis.
(a) �'he Boazd of Directors shall fix the amount of the annual assessment against each
Unit and advise the Owners in writing of the assessment at least thirty (30) days
prior to the date when the first installment thereof is due. Increases in assessments
shall be subject to the 'imitations set forth in Section 6 of the Declaration. 'I°he
failure of the Boazd of Directors to timely levy an annual assessment shall not
relieve the Owners of their obligation to continue paying assessment installments
in the amount curiently levied, as well as any increases subsequently levieda
(b) If an annual assessment proves to be insufficient, the budget and �ssessments
thereof may be amended, or a special assessment levied, by the Board of I�irectors=
at any time subject to the limitations set forth in Section 6 of the Declaration, The
levy shall be deemed to occur upon the date specified in the resolution which fixes �
the assessment.
(c) T'he Association shall fi�rnish copxes of each budget on which the Comrnon
Expenses and the assessment are based to an Owner or to any Eligible 11�Iortga�ee
or to the Citv of Hopkins, upon request of such personse
8.2 Pavment of Assessments. Annual assessments sha11 be due and payable in monthly
installanents in advance on the first day of each month of the year or other period for which the
assessznents �re made, and special assessments shall be due when designated by the Board of
Directors, All Owners shall be absolutely and unconditionally obligated to pay the assessments
levied pursuant to the Governing Documents, No Owner or Occupant shall have any right of
witi�holding, offset or deduction against the Association with respect to any assessments, or
related late chazges or costs of cotlection. Any rights or claims alleged by an Owner may be
pursued only by separate action.
8.3 Default in Pavment of Assessments. If any Owner does not make payment on or
before the date when any assessment or installment thereof is due, subject to such grace periods
as �ay be established, the Board of Directors may assess, and such Owner shall be obligated to
pay, a late charge as provided in the Declaration for each such unpaid assessment o� installment
thereof; together with all expenses, including reasonable attorneys' fees, incurred by the Board in
collecting any such unpaid assessrrzents.
(a) If there is a default of more than thirty (30) days ir� payment of any assessment, •
the Board of Directors may accelerate any remaining installments of the
-(0-
� assessment upon prior ivri�en notice tfiereof to the Owner, and the entire us�pa�d
balance of the assessment ar�d late charges shall become due and payable upon the
date stated in the°notice unless all past due amounts, including late charges, costs
of collection and fines, are p�id prior to said date.
- (b) `I'he Board of Directors shall ha�e the right and duty to attempt to recov�r �11
- assessments for Common Expenses, together with any charges, attorneys' fees or
= expenses relating to the collection thereof.
_ (c) Upon written request of an Owner or an Eligible Mortgagee of such Unit, notice
= of a default of more than thirty (30) days in payment of any assessment or
= installment of an assessrrient for Common Expenses or any other default in the
� performance of obligations by the Owner shall be given in writing to such Eligible
� Mortgagee.
� ; (d) The rights and remedies referred to herein shall in no way lirnit the rernedies
; available to the Association under the Declaration or by law.
�
�
� 8.4 Foreclosure of Liens for Ilnvaid Assessments. The Association has the riglit to
� foreclose a lien against a Unit for assessmer�ts imposed by the Association, as more fi.Ylly,
descr�bed in the Declaration and the Act,
Q 8.5 Records. The Boazd of Directors shall cause to be kept at the re�istered office of
the Association, and at such other place as the Board of Directors may determine, records of the
ac�ioras of the Board of Directors, ininutes of the meetings of the Board of Directors minutes of
th� rrieetings of the Owners of the Association, n�anes of the Owners and Eligible Mortgag�es,
_ arid detailed and accurate records of the receipts and expenditures of the Assoc�ationo All
Association records, including receipts and expenditures and any vouchers authorizing payments,
shall be available for examination by the Owners and the Eligible Mor�gagees upon reasonable
notice and dux�ing normal business hours. Separate accounts shall be maintained for each Unit
setting forth the amount of the assessments against the Unit, the date when due, the amo�nt paid
thereon and the balance remaining unpaido
8,6 Enforcement of Obligations. All Owners and Occupants and their guests are
obligated and bound to observe the provisions of the Governing Documents, the Rules and
Regulations and the Act. The Association may impose any or all of the charges, sanctinns and
remedies authorized by the Governing Documents, the Rules and Regulations or by la�v to
enforce and implement its rights and to otherwise enable it to manage and operate the
Association,
9. AMENDMENTS
These By-Laws may be amended, and the amendxnent shall be effective, upon the
satisfaction c�f the following conditions:
�
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9.1 �pproval, The amendrrient m:�s� b� approved by Owners who have authority to
cast in excess of fifty (50%) of the total vot�s in ihe Association, in writiri� or at a duly held •
rrtee�iz�g of the (�wners, s�bject to any approval �igl�ts of Eligible Mortgagee and Yhe I�eclarant as
provided in the Declaration; and
9.2 Notice. A copy of the proposed arrt�ndment and, if a meeting is to be he�d, notice
of such meeting, shall be mailed by U.S. �1a11, ox hand delivered, to all Ownez°s authorized to cast
votes; and
9.3 Effective Date° Recording. The amendment shall be effective on the date of
approval by the required vote of the Owners and need not be recorded, If recorded, t�e
amendment shall be recorded in the office of the recording officer for the county in which tlxe
Property is located.
10. INDEMNIFICATION
The Association shall, to the extent the alleged liability is not covered by insurance,
indemnify every individual acting in any official capacity on behalf of the Elssociation, pursuarit
to the provisions of Minaiesota Statutes 317Aa521.
i l . MISCELLANEOUS
11.1 �lotice�• Unless specific�lly provided otherwise in the Act, the Declaration or •
these By-Laws, all notices required to be given by or to the Association, the �oard of Directors,
the �lssociation officers or the Owners or Qccupants shall be in writing a�d shall be effective
upon hand delivery, or mailing if properly addressed with postage prepaid and cieposited in the
Uruted States mail; except that registrations pursuant to Section 2.2 shall tie effective upon
receipt by the Associatione
11.2 Severabilitv. The invalidity or unenforceability of any part of these By�Laws
shall not impair or affect in any manner the validity, enforceability or effect of the balance of
these By-Laws.
11.3 �tions. The captions herein are inserted only as a matter of convenience and
for reference and in no way limit or proscribe the scope of these By-Laws or the intent of any
provision hereof.
11.4 Gonflicts in Document . In the event of any conflict among the provisions of the
Act, the Declaration, the By-Laws or the Rules and Regulations, the Act shall control unless it
perznits the documents to control. As among the Declaration, By-Laws a.nd Rules and
Regulations, the Declaration shall control, and as between the B�-Laws and the Rules and
Regulations, the By-Laws shall control.
11.5 Waiver. I�10 restriction, condition, obligation or provision contained in these By-
Laws shall be deemed to have been abrogated or waived by reason of any failure ko enforce the •
sarne, irrespective of the number of violations or breaches thereof which may occur.
- I 2-
a
.
Q t l.6 N�(?1�orate Seal. The Association shall have no corporate sea�.
t 1.7 Fisc � Year. The fiscal year of the Association shall be �.s de�e�nined by the
Qoard of Directorso
The undersigned hereby executes these By-Laws and certifies that tkzey were adopt�d by
Oaks of Mainstreet Tov�homes, a non�profit corporation incorporated urider the La�,vs of the
State of Minnesota effective as of the date hereof.
Dated this day of , 1969.
OAK_S UF MAIN STREET TOWN�I�NIES
By:
Its: ___
� �
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♦TC3 364.�i2-T 62 8135 v01
r ., f
7
'
Q Third Draft
October 17, 1996
PERSONAL GUARANTY AGREEMENT
THIS PERSONAL GUARANTY AGREEMENT is made and entered into as of this
1 st day of October, 1996 (the "Guaranty") by and between TERRENCE E. TROY and ROBERT
S. BISANZ (the "Guarantors"), and the CITY OF HOPKINS (the "City") and the HOUSING
AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS (the
"Authority").
WITNESSETH:
PRELIMINARY STATEMENT:
The City and the Authority have heretofore created Redevelopment Project No. 2(the
"Project") and Tax Increment Financing District No. 2-9 (the "TIF District") within the Project,
pursuant to Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.174 to 469.179.
In order to provide funds to carry out redevelopment of certain real property in the Project
(such property referred to as the "Property" and the development thereof referred to as the
"Development"), the Authority has agreed to issue its $n ��;?9�,000 Housing Development Gross
Revenue Bonds (Oaks of Main Street Project) Taxable Series 1996A (the "Series 1996A Bonds"),
and the City has agreed to issued its $n �,7�5,000 Unlimited Tax General Obligation Bonds
� (Oaks of Main Street Project) Taxable Series 1996B (the "Series 1996B Bonds"), which bonds
are collectively referred to hereafter as the "Short Term Bonds", such Short Term Bonds to be
issued under that certain Indenture of Trust between the City and the Authority (collectively, the
"Issuers") and First Trust National Association (the "Trustee"), dated as of October l, 1996 (the .
"Indenture").
The City and Authority have agreed to loan the proceeds of the Short Term Bonds to The
Oaks of Mainstreet, LLC (the "Borrower") in order to acquire, construct and equip the
Development, pursuant to that certain Loan Agreement between the Issuers and the Borrower
dated October 1, 1996 (the "Short Term Bonds Loan Agreement").
In order to provide additional funds to acquire and construct the Development, the City
has agreed to issue it $n �C�5:,000 General Obligation Tax Increment Bonds, Series 1996n I� (the
"Series 1996/� Bonds"). T'he Authority has agreed to loan the proceeds of the Series 1996D
Bonds to the Borrower pursuant to that certain Series 1996D Bonds Loan Agreement between
the Authority and the Borrower dated n G�c�c�ber ;:1, 1996 (the "Series 1996D Bonds Loan
Agreement").
In order to provide funds to acquire and construct certain public alleys and utilities in
connection with the Development, the City has agreed to issue its $n St�€},000 General Obligation
Tax Increment Bonds, Series 1996C (the "Series 1996C Bonds"). The Developer will construct
� such public improvements on the City's behalf in accordance with an Agreement for Dedication
and Maintenance of Public Alleys and Utility Easements between the City and the Borrower of
even date herewith (the "Public Improvements Agreement").
SJB110636
HP110-51 l .
1 ^ j
�
f
The Series 1996C Bonds and the Series 1996D Bonds are hereinafter referred to �
collectively as the "Long Term Bonds."
It is a condition precedent to the City's and Authority's agreement to issue the Series
1996D Bonds and the Short Term Bonds and enter into the Series 1996D Bonds Loan
Agreement, Short Term Bonds Loan Agreement, and the Public Improvements Agreement
respectively, that the Guarantors shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and to induce the City and
Authority to issue the Series 1996D Bonds and the Short Term Bonds, and to make the loan in
accordance with the Long Term Bonds Loan Agreement and the Short Term Bonds Loan
Agreement, the Guarantors hereby agree as follows:
Section l. Guarantv. The Guarantors hereby unconditionally guarantee the punctual
payment and performance when due of any payments or contractual obligations of the Borrower
now or hereafter existing under Sections �:'� of the Short Term Bonds Loan Agreementn ,
Section 4.2 of the Series 1996D Bonds Loan Agreementn , and Section 6 of the Public
Improvements Agreement n x �r�i�. an� ��I�gatza�� af �.eai E�t� Ee��fizes T.��elap�ne�.t Ca�i�any
iu�r�er the Resii����ial; �ea� ;�stat�' Pi�rcl�ase �igre�rne�t bet�raen , tl�e �€�rrow�r and Reai E�te
>
> ... , , ;
E�;ux�.�s ;��velo��ez�t �onip�sa.y �at�d ��tc�be� �, 1 (such obligations hereafter referred to
collectively as the "Obligations"), and agrees to pay any and all re��r�a��e;; attvrr�ey f�es a�.�
_
>;
expenses incurred by the City or Authority in enforcing any rights under this Guaranty.
Section 2. Guaranty Absolute. The Guarantors unconditionally guarantee that the �
Obligations will be paid or performed strictly in accordance with the terms of the Short Term
Bonds Loan Agreement, the Series 1996D Bonds Loan Agreement, and the Public Improvements
Agreement, as the case may be, (collectively, the "Transaction Docurrients") regardless of any
law, regulation or order now or. hereafter in effect in any jurisdiction affecting any of such terms
or the rights of the City or Authority with respect thereto. The liability of the Guarantors under
this Guaranty shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any Transaction Documents or any
other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment or performance of, or
in any other term of, all or any of the Obligations or any other amendment or waiver of
or any consent to departure from the Transaction Documents or any other agreement or
instrument relating thereto;
(iii) any exchange, release or non-perfection of any collateral or any release or
amendment or waiver of or consent to departure from any other guaranty, for all or any
of the Obligations;
(iv) any sale, lease, assignment, conveyance, or transfer in any other form of
the Property or the Borrower's rights and obligations under any Transaction Documents; �
or
SJB110636 �
HP110-51 � .
Q (v) any other circumstance which might otherwise constitute a defense available
to, or a discharge of, the Borrower in respect of the Obligations.
This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Obligations is rescinded or must otherwise be returned by the City or
Authority upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, all
as though such payment had not been made.
Section 3. Waiver. The Guarantors hereby waive promptness, diligence, notice of
acceptance and any other notice with respect to any of the Obligations and this Guaranty and any
requirement that the City or Authority protect, secure, perfect or insure any security interest or
lien or any property subject thereto or exhaust any right or take any action against the Borrower
or any other person or entity, including, without limitation, any collateral.
- Section 4. Subro ag tion. The Guarantors sha11 not exercise any rights which they may
= acquire by way of subrogation under this Guaranty, by any payment or performance made
- hereunder or otherwise, until all the Obligations shall have been paid or performed in full. If any
amount shall be paid to either Guarantor on account of such subrogation rights at any time when
= all the Obligations shall not have been paid in full, such amount shall be held in trust for the
_ benefit of the City and the Authority and shall forthwith be paid to the City or Authority to be
= credited and applied upon the Obligations, whether matured or unmatured. If (i) any Guarantor
= shall make payment to the City or Authority of all or any part of the Obligations, or perform all
_ Q or any part of the Obligations and (ii) all the Obligations shall be paid or performed in full, the
= City or Authority will, at the Guarantors' request, execute and deliver to the Guarantors
_ appropriate documents, without recourse and without representation or warranty, necessary to
= evidence the transfer by subrogation to the Guarantors of an interest in the Obligations resulting -
= from such payment or performance by the Guarantors.
; Section 5. Representations and Warranties. Each Guarantor hereby represents and
- warrants that: (a) each Guarantor has full power and authority to enter into and perform his
� obligations under this Guaranty ; and (b) the execution and delivery and compliance with the
� terms hereof shall not contravene or constitute a default under any indenture, commitment,
�
� agreement or other instrument to which each Guarantor is bound or any judgment, order or decree
to which he is subject.
� Section 6. Amendments Etc.. No amendment or waiver of an rovision of this
� YP
� Guaranty nor consent to any departure by the Guarantors herefrom shall in any event be effective
unless the same shall be in writing and signed by the City and the Authority, and then such
waiver or consent shall be effective only in the specific instance and for the specific purpose for
which given.
Section 7. Addresses for Notices. All notices and other communications provided for
hereunder shall be in writing (including telegraphic communication) and, if to the Guarantors,
mailed by certified or registered mail or telegraphed or delivered to it, addressed to:
� , and if to the City or the Authority mailed by certified or
registered mail or delivered to it, addressed to the City or Authority at 1010 First Street South,
Hopkins, MN 55343 or as to each party as such other address as shall be designated by such
SJB110636 �
HP110-51
. . ,
party in a written notice to the other party. All such notices and other communications shall, •
when mailed or telegraphed, respectively, be effective when deposited in the mails or delivered
to the telegraph company, respectively, addressed as aforesaid.
Section 8. �No Waiver; Remedies. (a�;No failure on the part of the City or Authority to
exercise, and no delay in exercising, any right hPreunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
(�r� �� �dcii�ia� ti� aa�3� vfi�Z� irem�ed,y fi��t ��� Y�e ava�I�ble t�;th� �i� ar fik�� Au�i�o�i�y
he��n� a� ���v !: or in equrt�, ���i� e�ent tl�a,t d�r�n� �h� ter� €�� th�� :: ��ran� th�re �rceur� a
def�ulfi ti� �e ��ai��e�rs, c�r ��er a� �em� an�l su�� defa�fi 1� riat cuxed �x�n �h�rty (3�� d��s
;: ,
af �vr��t�n d��ia�.d �� t�a.e ���� �?z �.h� �.�1�+��t�, �I�� ��ity €�x t�.��n��r ��1 l�a��_�1�� r�gh.t �ci
d���ar� ��m������ due �i�c� �S��a�t� �� t�t�'�uar�t4�� ��� �h�1e an�z �h�rt �"�rrn �nds re�n���
<
, , ,,
�u�s�a�3;i� th� s�ia. o� $1;flt�����I, aEnt� �z�� i��zx�g the xeix�aiz��g ter�. c�:� �i� ,�.gr�e��� a.�ter
;
n� ShQr� `�`�r�ri �4nc�s r�r���r� a�ut�tand�ng ��� i��� �utY�c�rit�r �s �ael� n�, �r�� re�p�ct
; _.: :
fic�: an}� C�blagafizon� und�r t�is .�,gree���t �rz�: rio pr�€�r d�x�z�d �ci�;� fi�� Se�t��n ��b�� a�z �irnaunt
�q�I �ta; t�e ���t�um �r�w�I° Deb� ��rvt��e p� �2� frQ�: �nd a��r tli� r��its; t}� Au�c�rit� h�
;
; x
';
rnade �i�r c2a��n �zth r�spect ta <an�r c��' �he C�b��gat�€�ns u� a�ci��tt��e �v�€� the t�xms cif �his
�gre�e�� o� ir��d� �n� �ri€�r c�ei�nd ur��er th�s �ect�o�. 8�b� ��� e�c�: ca�e; :���t�er or iio� t�e
d�inan� br �laim l�a� �en �ne� Qr �� ;�d�:l��ng i��fa�t; ����rig ��� ;�t� �the d�rnand h�s be�
���� � �c��rz� e�qu�I to t�e h't�a.murzi ��an�i� ��Z� �r����, ��r �� p��e� c�� tk�us �e��aons
t�� te� , •�Vl�urnu�; �nr��a� L�6t ��ie�" m��s th� ���re��t� nf �� °I��e� pr�cip�I ani� •
: _
��eres� pay�e��s due in� �� �aiex�d�r �e� vua.�h �e �s�pect t�o �h�! �,�z�g �'��a: ��r�+d� c�uistand�n�
�s;;�fthe:�at� �f cal�ulat�cz�; �r�ci the t�r� "�kria��rnum �ia��a.� I3�bt ���r�r�: �iea.�� � ��gie�at�
��; the lazges� pxu�c�`pa� ��. u���r�st pa�m��s ;due zz� a�� tws� �Ie� ; y��rs ; ��fih r��pec€; t� t��
Lon� ��n B�nds ; out�nding;: a� o� ���;: d��e ; af cat�ulatiQn Suc� : r��l�t shali ex�s�
,: ; ; ,
>
n�atu�.th:s;tan��ng ��e �a�� t�� a� su�h t�z�z� ��e�� zs n�t othe�se ;��r ��un� dt�e and c��ving by
�tz� ��ara�.taz� Qz� a�c,���; o� t�.� Qb���a�aons. . T�� ,�.ut�i€�r�ty :vr Gzt� sh�Ik ha-�e<. th� rig�t t�
u�stitt�t� ar�y appxo�r��t� l�g�I ��tiQrt tr, �€��le�t �ueh:surr� ��n �a�ll�ct�d, s�ic� amow�t s1�all �
;
b�I�i b� t�.e �€ty c�z �ut�azi�� z� ;a� x��.��e�� ���z�g �c���� �d ma� � app�.ed, tagethe� �vi�
i�t���sti tl�e�re�i�, lf ne�ssa�r, tQ ;th� �l��igat�4� c�f the �ua�r���r� �ider th�� f.ru�rant�;;� th�
<;
�u�a�tar� faz�; tv tu�.ely p�i}� amaur��� �iu��. under �I��� �uaxanty ; The, �x��teri�e a�f s�ch acec�unt
s��l �ot rei�e�e �� �ai�tars �if a��r �f ttY�ir ��I�;gat��r�s �de� t�s,G�araiity �I�ss th� total
, , ,
c�uts��r�.di�zg p�t��ial i�ab�l�fi� c�� t�e ��ra�tars un�ier thts ��xari#� �s d�:t�r�n�ne� in �vrzti�g b�r
��� �ut�tc�r�� ��iil �OIISt1I�3�1�5� i5 I�S� �� ��� c`�I�IfYII�I� i)� IIIiJ�i$� bk.'��� I1�If.� �?� ��if.' AbI�110�'i�?
or t�� Cit�, up�� �+l�i�� c��term�.n�ti�� �� ��rar�tars' c��Ii��t�c�ri� t�n�.er ��s ;A�reein�nt ��II b�
d�em�� i��eas�, pr�?��d�d t�� t�z� �c?zgozr�g z�I�ase sl�ail not appty �� �� �ve�� t�� Aut�ority ha�
> ,; , ;
;
ace�pt��. � I��r� �n an a���t �r� l�eu �a� c�s}� a� t�escr�b�d �� ��ct�Qt� 5��� Ir� �� ���t€ tha� u�oti
t�z�u�ati�n af t�as C`ri�ar�ty as p?rou�c�eci ��. ��ct�c�rz ��i� hereof the�re z��ri:�rzs �i��e�;�n t�e a�v��.
;
descr��er� �c�o�znt n�a��t�n�d b� ;;th� t�izthor��� �� ��e c��; su�� ;rnc�ne� s��ll; b� r�t�zrr�ed `ta t�e
;
C�iarar�t�r� �n ik�� pz�opc�r�.ta�n that;:tb�� as��ts �c�ntr�butec� to th� es�a�xl���ex�t af tli� funcl
(�j ��. l��u ��'any eash pa�x��� requ��c�d ux�c�er ��e�ion S��x�, any ��axanfiar ��� .a�er, an�i •
the Aut�iax��� �y �x�; i� soI� c�zsc�et�c�rz;a�ce�a�y de��ve� ta the t�.��ho�t� �s� � per�'e�t�d �r�� �iez�
1� favor Qf ��:�u���t� ari an� ��t ��;e�pt���e tc� ��� 1���on�y a�ci �ri ��a�rr� acce;�tabt� tc� th�
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Q �ut�4r pr��r�decl tha� at a�� t��� a�`t�r ��c�p�iice �f ;sucl� se�un€� �t�r�st, if the Authari�
�et��in�s z� its sc�I� d�scre�c�n. t�ia� the vaJue o� th� �ss�t �s n� long�r suff cient tQ �cure the
pa�met�t ath�r��s� requ��� u�d�r �e�on $�b�, �e �ut��r�ty ;m�� de�d �at the Borrov�er
�3TO171p��� ���Y� �fl t,�3.0 #�.Ll;'Cl2E?T�'� �L� r� �IS� �1�TI Ril ��I �;f�f�E�lE3T�1� ��E �,�C��}ta�3�� fE� t�l� �.���DI'l.�
�i�� a fir� t��� +�� a su�stitute a��et �ccept�ble €� ;t�� ��thar�t� u� e�change f�r;r���tn tQ the
Bc�rr€��ver c��`the ���n: �r� �h� ��€�sting as�et Qr (i�i) �z�yrnent;;of Ga�h �n tli� at�c�i:�r�� arr'ginatiy Q�in�
under �ec�an ���3
Section 9. Continuin� Guaranty; Joint and Several. This Guaranty is a continuing
guaranty and shall: (i) remain in full force and effect until payment and perfor�nance in full of
the Obligations and all other amounts payable under this Guaranty; (ii) be binding upon the
Guarantors, their successors, their transferees and assigns; (iii) be a joint and several IiabiIity of
_ the Guarantors; and (iv) inure to the benefit of and be enforceable by the City and the Authority
= and their successors, transferees and assigns.
= Section 10. Financial Statements. (a) The parties hereto acknowiedge that on or before
_ the date hereof each Guarantor has delivered to the n Authority ci�signated ��tai�cfal ;�dr��sar'
;
_ inancia statements evidencing the Guarantor's assets and liabilities, and that the City and
= Authority have relied on such statements in entering into and accepting this Guarantee and aIl the
� Transaction Documents. Each Guarantor warrants and represents that ail statements and
� information contained in such financial statements are true and accurate as of the date hereof, and
� that no information ar facts material to the Guarantor's assets and Iiabilities have been omitted
Q from such financial statements. �
n (�� ;�ot Ia��r �an t�.p��z� 3� of �acJ� y� pxzr��: ��h� �xayzne�.� z� ��I �f th� �exz��
� 9�f A. �Qrtci� : a�d tlie ��ries ��9�� Bo�ds �d Y�ie�e�er d�� tf� �� ; b� f�2iS Agre�tn�rtt
u�an �tten request;of the; �.�thar�ty, fiY�� �u�ant�rs shal�: p�o�r��e fia the ,�:u�or�ty's desig�atee�
�in�c�a� adv�sor s�x�cute�. f�anc�al s�,t�mex�ts w�� �espe� tQ €h�;��rai� ��rsc�ri�l ��t� ani�
l�abzl�x�.�s �a� �ubs�an.tza�].X x�Ze fc�r�i. af �he f���i�.al s�ate�nei�t� �ieiiv��d t� th� ��.t� �ia.� Aufiharity
a� repre�nted �n �e��an l 0�a� �ere��, ac�r�npam�e�; ��r a� "agre�d �pQm �x�����ar�s :�eegart" fro�zi:
��"urn s�f' ��t��'ie�ct publ�� aec�u�tant� relat�n�; t� t�e ��rt�ic�ti�� of as�� i�. ;t�e �a�rn suti�.€t�
:
; ;>.
to the A:��ZO�:� ��th tl�,� f�zaz��zal �tatem�rzt�: descri�d a� ��ct�Qn �a�a)
Section 11. Covenant Re�ardin Assets. (��';;;Each Guarantor covenants that he will use
his best efforts to maintain and avoid waste of his assets, and that he will not make or permit any
pledge, encumbrance or transfer in any mode to any other person or entity with respect to his
assets with an intent to avoid liability for the Obligations hereunder.
(b� <�uz�mg �e tez�rn. o�this ��ran��:y, e�.c� of t�:� Gua��att��rs; cove�a�ts n�� fQ t�n��er
as�ts t� ��y niern�r c�F �� ��ar�te�r's �a�i],y uril�ss th�: fo�f��v�n� candi�ions ar� ;rnet �riar tc�
tYze �zazisf�r:
; _ _.
__ __ .
__
__
_.. _.
€i� "I'k�:e ;A.uthc�rifiX �� nat�fied af ,;�e ��Q�a�eii t�an��`� a�i #he a��efs;; ��ing
.;
�ra�sf�r��d, an�
_, .. . .
�
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(�i� Th� A��o�� s� �rnts��� �v�tY� � agr�ement �� a��� accepta�Ie �t� th� •
�.�€harii�, b� .wha�h t�� �rans�'��:e agrees tc� Yae kaaui�d b3� th� teri�.s of.tlu� �uarar�� witl�
respect .tQ �c� ta th� e��� �f t�ie ass�r� be�ii� �rari�fe�r�ii:
(G� ��rt�,� th� ��ioti e�d�t�g {u�� �e ga�en€ ;in ��zl� af �e S�r��ss; I9g6A Bond,� and
�� ��ri�s � ��� �c�nds, �ae� �i� �� ;��rat�t€�rs e��re��t� t�; prcrv�'rte �uritt�x �atice to t�i�
,�iit�€�xzt� �� ��asi ��rty (��) d�ys gr�az, to e�e�ut�n� a�y ��r�i.y o� p��d��'�� p�rsona� assets
i� fav�r ; a�' an� "�lit��al �ubd��i��on" as ��n�d in ��ru� �tat � 47 � 4�, su�+ci ;` 3, and au�
, ;
�z�z��� p�Ii�G�I �ubda����o� �f � ��� €�t��x t�r� tl�e �ta��; Qf �S�nest�ta '�he �t�ase c�� s�zc�i
i�a�ficatic�� �s �� �li��v the �t1�bT1�� �Il@ ��#j3�'1£�13i11�� �b t�1�t1:5S Wit�. 2'��F�5�Il�c`1�I�@�S 0� t�li.'
;
pQ�zt�.c�� subd���sk�r� t� �vhi�h fi�.� gu��ty c�r! pled�� �s t� �a� ,g:tv� �he na�ur� af th� �r�c�p��e�
g�ar�.t� a� pt�d��, t� �ta�e Q� �1��� ��ara�ty �d th� �����g�ien�, �d ��h �th�i mat�ers a�
th� At��nt� ��erxrs apprc�prrat�:
Section 12. Notice Re�ardin��Chan�e in Finances. In addition to Guarantor's obligations
under Section 10(b) hereof, each Guarantor shall promptly notify the City or Authority in writing
upon any of the following occurrences:
(a) the Guarantor files 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
(b) the Guarantor makes any assignment for the benefit of its creditors; •
Section 13. Governin� Law; Severabilitv. This Guaranty shall be governed by, and
construed in acc�rdance with, the laws of the State of Minnesota. If any provision of this
Guaranty shall be held to be invalid by any court of competent jurisdiction, the invalidity of such
provision shall not affect any of the remaining provisions.
Section 14. Counterparts. This Guaranty may be executed in several counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the undersigned have caused this Guaranty to be duly executed
and delivered as of the date first above written.
Terrence E. Troy
Robert S. Bisanz •
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� IN WITNESS WHEREOF, the undersigned have caused this Guaranty to be duly executed
and delivered as of the date first above written.
CITY OF HOPKINS
By
Its Mayor
By
Its City Manager
��OUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
HOPKINS
� By
Its Chair
BY
Its Executive Director
�
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/�Qci�o�er �'�� ;:1996
, GUARANTY AGREEMENT
� THIS GUAR.ANTY AGREEMENT is made and entered into as of this l st day of October,
1996 (the "Guaranty") by and between REAL ESTATE EQUITIES DEVELOPMENT
COMPANY (the "Guarantor"), and the CITY OF HOPKINS (the "City") and the HOUSING
AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS (the
"Authority").
WITNESSETH:
PRELIMINARY STATEMENT:
The City and the Authority have heretofore created Redevelopment Project No. 2(the
"Project") and Tax Increment Financing District No. 2-9 (the "TIF District") within the Project,
pursuant to Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.174 to 469.179.
In order to provide funds to carry out redevelopment of certain real property in the Project
(such property referred to as the "Property" and the developmer.t thereof referred to as the
� "Development"), the Authority has agreed to issue its $/�;;7��,�(�f� Housing Development Gross
Revenue Bonds (Oaks of Main Street Project) Taxable Series 1996A (the "Series 1996A Bonds"),
and the City has agreed to issued its $n��?��,(3E�f� Unlimited Tax General Obligation Bonds (Oaks
of Main Street Project) Taxable Series 1996B (the "Series 1996B Bonds"), which bonds are
collectively referred to hereafter as the "Short Term Bonds", such Short Term Bonds to be isstied
_ under that certain Indenture of Trust between the City and the Authority (collectively, the
"Issuers") and First Trust National Association (the "Trustee"), dated as of October 1, 1996 (the
"Indenture").
The City and Authority have agreed to loan the proceeds of the Short Term Bonds to The
Oaks of Mainstreet, LLC (the "Borrower") in order to acquire, construct and equip the
- Development, pursuant to that certain Loan Agreement between the Issuers and the Borrower
- dated October 1, 1996 (the "Short Term Bonds Loan Agreement").
- In order to provide additional funds to acquire and construct the Development, the City
= has agreed to issue its /���S,tl(�(} :'General Obligation Taxable Tax Increment Bonds, Series
_ ; .>
= 1996D (the "Series 1996D Bonds"). The Authority has agreed to loan the proceeds of the Series
= 1996D Bonds to the Borrower pursuant to that certain Series 1996D Bonds Loan Agreement
= between the Authority and the Borrower dated October 1, 1996 (the "Series 1996D Bonds Loan
= Agreement"); and
� In order to provide funds to acquire and construct certain public alleys and utilities in
; Q connection with the Development, the City has agreed to issue its /�$�£�O��f#O::General Obligation
� Tax Increment Bonds, Series 1996C (the "Series 1996C Bonds"). The Developer will construct
� such public improvements on the City's behalf in accordance with an Agreement for Dedication
� SJB110637 1
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and Maintenance of Public Alleys and Utility Easements between the City and the Borrower of
even date herewith (the "Public Improvements Agreement"). •
The Series 1996C Bonds and the Series 1996D Bonds are hereinafter referred to
collectively as the �"Long Term Bonds."
It is a condition precedent to the City's and Authority's agreement to issue the Long Term
Bonds and the Short Term Bonds and enter into the Series 1996D Bonds Loan Agreement, the
Short Term Bonds Loan Agreement, and the Public Improvements Agreement, respectively, that
the Guarantor shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and to induce the City and
Authority to issue the Long Term Bonds and the Short Term Bonds, and to make the loan in
accordance with the Series 1996D Bonds Loan Agreement and the Short Term Bonds Loan
Agreement, the Guarantor hereby agrees as follows:
Section 1. Guarantv. The Guarantor hereby unconditionally guarantees the punctual
payment and performance when due of any payments or contractual obligations of the Eonower
now or hereafter existing under Sections n3! �{3), ;� � arid S? of the Short Term Bonds Loan
<. . .
,-, .
Agreementn, Section 4.2 of the Series 1996D Bonds Loan Agreementn, and Section 6 of the
Public Improvements Agreement n(such obligations hereafter referred to collectively as the
"Obligations"), and agrees to pay any and all re��ci�abl� �ttt�rnej� �e�s �t� :expenses incurred by
the City or Authority in enforcing any rights under this Guaranty. •
Section 2. Guarantv Absolute. The Guarantor unconditionally guarantees that the
Obligations will be paid or performed strictly in accordance with the terms of the Short Term
Bonds Loan Agreement, the Series 1996D Bonds Loan Agreement, and the Public Improvements
Agreement, as the case may be, (collectively, the "Transaction Documents"} regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of the City or Authority with respect thereto. The liability of the Guarantor under
this Guaranty shall be absolute and unconditional inespective of:
(i) any lack of validity or enforceability of any Transaction Documents or any
other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment or performance of, or
in any other term of, all or any of the Obligations or any other amendment or waiver of
or any consent to departure from the Transaction Documents or any other agreement or
instrument relating thereto;
(iii) any exchange, release or non-perfection of any collateral or any release or
amendment or waiver of or consent to departure from any other guaranty, for all or any
of the Obligations;
(iv) any sale, lease, assignment, conveyance, or transfer in any other form of
the Property or the Borrower's rights and obligations under any Transaction Documents; •
or
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- Q (v) any other circumstance which might otherwise constitute a defense available
to, or a discharge of, the Borrower in respect of the Obligations.
- This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Obligations is rescinded or must otherwise be returned by the City or
- Authority upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, all
= as though such payment had not been made.
� Section 3. Waiver. The Guarantor hereby waives promptness, diligence, notice of
= acceptance and any other notice with respect to any of the Obligations and this Guaranty and any
= requirement that the City or Authority protect, secure, perfect or insure any security interest or
= lien or any property subject thereto or exhaust any right or take any action against the Borrower
; or any other person or entity, including, without limitation, any collateral.
�
� Section 4. Subro ation. The Guarantar shall not exercise any rights which they may
; acquire by way of subrogation under this Guaranty, by any payment or performance made
� hereunder or otherwise, until all the Obligations shall have been paid or performed in full. If any
amount shall be paid to the Guarantor on account of such subrogation rights at any time when
all the Obligations shall not have been paid in full, such amount shall be held in trust for the
benefit of the City and the Authority and shall forthwith be paid to the City or Authority to be
credited and applied upon the Obligations, whether matured or unmatured. If (i) the Guarantor
shall make payment to the City or Authority of all or any part of the Obligations, or perform all
� or any part of the Obligations and (ii) all the Obligations s�hall be paid or performed in full, the
City or Authority will, at the Guarantor's request, execute and deliver to the Guarantor
appropriate documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to the Guarantor of an interest in the Obligations resulting
from such payment or performance by the Guarantor.
Section 5. Re�resentations and Warranties. The Guarantor hereby represents and warrants
that: (a) the Guarantor has full power and authority to enter into and perform his obligations
under this Guaranty; (b) the Guarantor has duly executed and delivered and, by proper corporate
action, has duly authorized the execution and delivery of this Guaranty; and (c) the execution and
delivery and compliance with the terms hereof shall not contravene or constitute a default under
any indenture, commitment, agreement or other instrument to which the Guarantor is bound or
any judgment, order or decree to which he is subject.
Section 6. Amendments, Etc.. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by the Guarantor herefrom shall in any event be effective
unless the same shall be in writing and signed by the City and the Authority, and then such
waiver or consent shall be effective only in the specific instance and for the specific purpose for
which given.
Section 7. Addresses for Notices. All notices and other communications provided for
hereunder shall be in writing (including telegraphic communication) and, if to the Guarantor,
mailed by certified or registered mail or telegraphed or delivered to it, addressed to:
� , and if to the City or the Authority mailed by certified or
registered mail or delivered to it, addressed to the City or Authority at 1010 First Street South,
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,
Hopkins, 1VIN 55343 or as to each party as such other address as shall be designated by such •
party in a written notice to the other party. All such notices and other communications shall,
when mailed or telegraphed, respectively, be effective when deposited in the mails or delivered
to the telegraph company, respectively, addressed as aforesaid.
Section 8. No V�aiver: Remedies. No failure on the part of the City or Authority to
exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single ar partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 9. Continuing Guarantv. This Guaranty is a continuing guaranty and shall: (i)
remain in full force and effect until payment and performance in full of the Obligations and all
other amounts payable under this Guaranty; (ii) be binding upon the Guarantor, its successors,
their transferees and assigns; and (iii) inure to the benefit of and be enforceable by the City and
the Authority and their successors, transferees and assigns.
Section 10. Financial Statements.
(a) The parties hereto acknowledge that on or before the date hereof the Guarantor has
delivered to the City and Authority financial statements evidencing the Guarantor's assets and
liabilities, and that the City and Authority have relied on such statements in entering into and
accepting this Guarantee and all the Transaction Documents. The Guarantor warrants and �
represents that all statements and information contained in such financial statements are true and
accurate as of the date hereof, and that no information or facts material to the Guarantor's assets
and liabilities have been omitted from such financial statements.
(b} Upon written request of the Authority, the Guarantor agrees to furnish to the
Authority's designated financial advisor copies of the most recently available unaudited
consolidated financial statements of the Guarantor which are prepared in the normal course of the
Guarantors' operations, in accordance with generally accepted accounting principles certified by
an authorized representative of the Guarantor.
n
Section 11. Covenant Re�ardin� Assets. The Guarantor covenants that it will use its best
efforts to maintain and avoid waste of his assets, and that it will not make or permit any pledge,
encumbrance or transfer in any mode to any other person or entity with respect to his assets with
an intent to avoid liability for the Obligations hereunder. During the term hereof, the Guarantor
shall not transfer its interest in any of its assets to any person or entity for consideration of less
than fair market value.
Section 12. Notice Re�ardin� Chan�e in Finances. In addition to Guarantor's obligations
under Section 10(b) hereof, the Guarantor shall promptly notify the City or Authority in writing
upon any of the following occurrences:
(a) the Guarantor files any petition in bankruptcy or for any reorganization, �
arrangement, composition, readjustment, liquidation, dissolution, or similar relief under
SJB11C63'7 4
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.
the United States Bankruptcy Act of 1978, as amended or under any similar federal or
Q state law; or
(b) the Guarantor makes any assignment for the benefit of its creditors;
Section 13. Governing Law; Severabilitv. This Guaranty shall be governed by, and
construed in accordance with, the laws of the State of Minnesota. If any provision of this
Guaranty shall be held to be invalid by any court of competent jurisdiction, the invalidity of such
provision shall not affect any of the remaining provisions.
Section 14. Counterparts. This Guaranty may be executed in several counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS VJHEREOF, the undersigned has caused this Guaranty to be duly executed
and delivered as of the date first above written.
_ REAL ESTATE EQUITIES
� DEVELOPMENT COMPANY
` By
Its
�
SJB110637 5
HP110-51
IN WITNESS WHEREOF, the undersigned have caused this Guaranty to be duly executed
and delivered as of the date first above written. •
CITY OF HOPKINS
By
Its Mayor
By
Its City Manager
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
HOPKINS
By •
Its Chair
By
Its Executive Director
�
SJB110637 L
HP110-51 .+ V
� �_ SE�( BY�F�EGRE � BE�iSU�� ;lU-1�-q6 olU��2a�41 : (�12) 336-3U26� �12 �3� 1834;# 4/18
_ • PRELIMINARY OFFICfAI.. STATFMRNT nATGU OC'1'013Eit IS, 1996
- „ IvEW ISSUES MUUDY'S RATING: Applied fer
- � � W
v� !h !he vuit�lo« of Bor1d C'ovnsel, tmder exfsllnR M[y�ttesola r�1fd je�f�rul !un•a, re�;ufafian.c, neling.c aad judicra! deci.eiorts, re.c r f tl�ly dc7fe oJi3Stk7ACN. escepl as
,� � dcserihe:d unde� dte Jse�dUtg "'/'RX atA%'!'h'RJ" Jrcttslrt, !/r8 SC!'leJ /yS�GC� Fonrly Gc�ui inli�n:sl whiafr rs rfuf iircludaGle in �;rnss'int�tfine,frx 1�nr��o.4N.4 O�fFCICYOI
_ �� income tasadiun ar�d is not includablr., ro �l�e snme ezterrt, in tnxnb(t net income oJ'irtdivlduarls, estcrles nr rrusGc.(i,r h9Frtne.rr�la i��crmte tu� pur,rroses, bnt is sasbject
- g zo �he Minnesora f rpr1CI113C 1!!X In�rp,SCA nA Cnr�prqllorlY inct��ding firranciol rnstito�aior�s. lnre:resr on the Serles 1996C Bar�(r i.c no1 an ilem nf tu�r p.efe�encc}or
� tR' MSE'9 O dre eJrial nr hlirvte.vota allernarive rninitnwii t�ne,c n �>ltr.nhler to individuals, hr+7 sucle i�rleresl is incfudaGle in ue! us1e�1 c:urrenl earnin � nr the
P 1 1 I r1 i x�' J'
- w� pvrpnsr q/ delerrrsertin� fhe a!lernatrve mirtrnwm 8uah/e rrtcqme Or f.OrFrnrqlfOnc �J11rj1o38.P o f �he federa! �nd ,t�linnesof�r aJfernatTvc m1n6m,m !a=e.r. Thr.
� �� Se:��les IY9GC Batds httve heen rlcsi�;nuled aS "quulr tttr�remp! nhli,�nlions" u.rder .Secrinn 165(fiJ(.?) of the frRternal Revenue Code of !9$G, as amenrlecL
i �� G SCG ��S h9A"!'1'liRS" hcrei�r. lr:lc�rsf oir drr. Scric.x 1946D Bonds rs subfect lu,jzdei�! and Saxte nf �Lli�u�e.ao[u if�roerre taralivri.
� ��� �soa,00a
� >..� .
�'s.� City Of Hopkins, Minnesota
� o� General Obligation Tax Increment Bands, Series 1996C
o�� �nd
�' � A
` 6 � $665,0�0
� �� =° City Of Hogkins, Minnesota
b• �
� o�� General Obligation '�ax Increment Bonds, Taxable Series 1996D
�N
�'�� Dated: Uctober 1, 1946 Duc: Fcbrnary l, as Shown Beluw
. o
�� �T'he Series 199G�3 13oixis offerc�cl l�ereby are geueral obligations uf U�c Cily of Hopkins, Minnesnta (the "City") to whi.clt the City Itas
,� o� pledged its Full faith anil credi[ and unlittiited tazittg powcrs, psyablc prim�rily from cert;iin tax incre�nentc �ledged to the paylnenl 1t1e1�C4f.
�'�o' � Tlte pCC�ceCds Uf thc Sctics 1996C Bonds will b� ured tci tin�nce �:ertain public improvements. I'ursoattt to a I,oan Agre�mcnt, all
;; �� proceeds of the Series l94G1} Bonds will be loaned by the City t� '1'he Uaks of Mainstreet, LLC {tt�e 'Burre�wcr") t�� financ:e pan of the costs
�'�'� of xcquiring convtructing and eyuipping 66 tonwh<m�es tc� he marketed for sate and oe � lease-to-owti busls.
��° Thc Bunds wil[ bi i:csucd as fnlly registered tx>ndti in the dene�mination of $S,WU or any whole muttlple thereof. Thc Bonds will he
� �� i�Fqed (�ur.��ant tn a hnot-entry sy�tem and rs+ill tK regislcri�l in lhi: namc. uf Cede � Co_, as nominee of The Uepn.�;itoiy 'I'ru,�t c`s,�a�pany
„�� {"DTC"), Nc:w Yurk, Ncw Yutk. Purch:�acn will not receive ceniticat� representing Thele owllerallip inteeests ilt tlie Bonds Purehasul. See
��� "TFiE BnN1�S -� Acxik �nty Systen�." The ownership interest of each actual purcliaser ol" tlie Bonds (chc `Beneticial 4wners") wi11 be
� ��� retoCdzti on thc rtcorJs of cach DTC Participxnt. Psyments of interest on the Bonds witl he made to the re�isterad DTC �w�niuce xnd DTC
.a �� will then credit the accounts of the DTC YarticipanLs. DTC, as che Owner of die f3unds, wlll glv� �Il huliccs. Interest on the Rnnci.e is pa.yah3e
ao ° on each Pebiva�y 1 and August I, cuuunencing 1�ebruAiy 1, 1�7.
o � '�
a.�� Subject to earlier reclemption and prepayinent as descrilse� licrein undcr "THE BONDS - Optional Redem��ti�n," the 13ouds shall
mxturc and bear intere�t at the r�[es per annum as follows:
v=Y
's� w MA'1'llRl'1'Y SCHEUULE5
� ;� � Serics l99G�' Bonds
•� � � MaLUtiLy (F6hrUpry I) Princioul Amuunt Intcrest ltatc Price
� 2U32 $85,00(3
,y � � 2013 95,O1N}
� 201q 1U0,000
� 2D15 105,000
� '�
2016 l I5,Q00
a �� °
� � d Scrics lY9Gll Bonds
� o Maturity Principal Lntcrest b4alunty Principxl (ntcrest
5 � � Kcbrua 1 Amount Rate Price (l�cembtr I) Amouni kxtc 1'rice
„ 2W3 $�5,000 % 2011R $50,000 %
� � � 2U04 60,OU0 20�9 R5,006
�� " 3 2q05 ti5,000 2010 9[Y,000
�, •� 20(H� 65,000 2p 1! 95,6UU
�.� zuo� �a,000
��:� (l'ius Accrued Interest from Octol�er 1,1996)
y N •n
� V:� The Boncis are at�crcd, 3ubjcct lu priiir sale, w}u�n, as and if accepted by the LJnderwriter named 6elow, and subje�:t !o an opinion as
�'° � ta validity xoJ taz cxemption by Kannrxfy 8c Graven, Chartered, Minneapnlis, Minnesota, as Bon<I Coutuet, :tpptvval of certain matters by
o�� Fae�re Sr. Aen�n T.i.N, Minneapnli� Minne�NA, u�lely f'nr Ihe tx.ni:fit uf thc Urulerwriter, and c:ertain other conclitiona. It is expected lhat
� �� de1'tveCy of tlte 13onds tvill be roxcle to DTC ar its numin�c in New Yurk, New Ynrk, on o� about Octobe[ 30, 194fi, agaiust paytnenl therefc�r.
y �� St�bj�tit lu dpplicablc aecurities laws snd prevailing marke[ c�mditionti, the iJnderwriter intends, bui is no4 oUlig�fl�d, io cffect secondary market
�.� N trading in thc $onds. For inforrnation wi[h re.4pect tn the Unde�•wricer, see "C1NA�RWRITING" hcrcin.
�°� Miller & Schroeder Financial, Inc.
Q 'fhe dsle of this Officia.l Stakeinent. is ___ , 1946_
_ -_ _
��.�i Br �r�tGRE � 8�;��U;ti ; lu-lti-9b ; lU`•43:�1� ; 1b12! �36-3U2E�y �i12 93a 1ii34.# 5/16 �
.
'C'H.HSE Sb'CURITIES IIAVE I+IOT B��N REGIS7'l�:Rh:l� WiTH Tl[E SCCURiTC'�:S �ND EXCfIANGE •
C:UMMISSIC)N BY [iEASON Or TFIE PTtOVCSIONS UF SECTION 3(a)(2) OF T'T-�I-: SEC;CJRITIES ACT U�
1933, AS AMENDGD. TH� RFGiS`fRA'1']ON UK QUALIFICATION OF THF.S�: S�CURITIES UNDGR THF.
SECUItC['3liS c.)K Bt,UF S�:X LAWS OF THE STATES IN WHI(',H THFY N11VE .BEEN RliC;15'1`ERF.D OR
(�UnUFIED, ANn TE-IE EXEMPTION I'ROM REGl5'CRA'C4ON OR QUALIPICATION YN i71'HhR STA,TES
SH�1LL NUT BE RBGARD�D AS A RT:CC)MMF;NDATIUN TIIERCO�. NCITHEk 'l'HF:SF. STATFS NOR
ANY OF T11E[R AGGNCtES HAV'�: }�ASSFsf) UPON THE MERITS OF TH�:SI: SECURITIES OR THG
ACCURACY QR COMPLE'I'�NESS OF THIS UFF[C1AL STATEMF.N'I'. ANY KEPRESENTAT[ON TO TH�
CUNTRARY MAY BE A CRIMINAL O'rE��:h3Sl.:.
TASLE OF CONTENTS
i'u u
SUMMARYINFORMATIDN ................................................. ............................................... ii
INTRODLJCTORY .................................. ...............................................• r
"fH1= RQNnS ...................................................................................................................... 2
SECURITY TIIE IIONDS ............................................................................................... 4
SUURCES USES OF PUNDS ...........................�-........................................._................... 5
THEBORROWER ............................................................................................................... S
THEPROJECT ................................................................................................................... 5
RATTI�7G ................................................................................................. ........... . .............. 7
ENFORCEA131L1TY OF OBLIGATIONS ................................................................................... 7 �
APPROYAL OF L�GAL PRaCEEDINGS ................................................................................. 7
TAXMA1"I'ERS -----• .:......................................................................................................... 8
UNDERWRTTiNG ..............................................................•••.....................................-�----.. 9
FINANCIAL ............................................................�------------........................:...... 9
CONTINUINGDISCLOSl1RE ...............................................:................................................ 9
MISCL�LLANEOUS ............... . ....................................................... ................ .,....,......,. 9
APPENUCX A: CITY INFORMATION.------ -----�-�-----� . .......................................................... A-1
APPENDIX B: �iNANC1A�, ST.ATEM$N1'S OF CiTY ..............................................................B-1
No person has been autl�orized by tlie Citq, tt�c Underwriter co give any informatio�i regard3ng the
Bond�a, 4he City or thc Pro}cct, the offering cantained herein and refatad matters Ur to malce ony
representations othe� thun those containcd in this Official Stakement, and if given or made, such other
information or represent�tions must not be rclicd upon as I�avZn� bee� authorized by any of tLe fore�oin�,
This Officiel Statement does aut constitute an offcr to sclt or the aolicitation uf s�n offer to buy in any atale in
wliich 'ai is w�t�wful !or any persun to make such oifcr or sollcitation. The Uncierwreter docs not make any
guaraetee as to accurs►cy or complcteness of sttcl� informution. The informntion flnd expressionv �rf ��pinion
herein :�re subJect to change without nokice and neithrr the delivery o[ this C}fticial Stat�n►ent Ht ssny timc
nur any sale made hereunder creace4 any imiplication that the information herein is correct s+s of any timc
subaeyuent ro its dnte.
.
,SEiVI SY�F�EGRE & BE�SUi� ;1U-18-96 :1U��3�,19 : (612) 336-3026y 612 935 1834.# 6(16
�
SUMA'L4RY INFURiV1AT10N
Thc following is a sumrnary ofcer���i�, infi�rmaticmcuntaiincd in this Uilicial titatemeiit. 'Pfla surnrns�ry is nol wmprchcnsivcor complctr.
xnci is qualif�cd in its en[�rety by refen:uceli� tMe u,mplete nFlicixl �Is�h:n,e:nr. t,indctincd capitalized terrns useJ boic�w arc Jcfincd in AppcnAix 13
heroko or clscwhcrc in this (lfficiat Stateinent..
'1"LeTk�nJx,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, $SOU,000 Gcncral ObliRatlott Tax Incrunenl RunJs, Serics ]99GC aitd 5685,000 Creneral C)hlig�4iun
7'suc Incrcmcnt Bondx, 'faacable SerieS 199bD to be issucd by dic Ciry of I[opkins, Minnesutti in
dcnominatiauof$S,WUorwlx�lemr�ltipl�sthercof, Sce"T[-IEBUNllS".
Pryment,,.,,..� ....................................... I,��:r�st accrucs un lfia liunds �a� �he �tites sct forth on tlic cover page I�reof un� iy pa.yeble ue
r'cbruary 1 and Au�ust 1 nl'e�ch yzar (commencing��cbruary l,1997).
[tedrmpli[tn
orPrepttyme��t .................................... Ax mc�rc fully dc��ribcAhcrcin, thc l3ottds on ur af'tcrFcbrusry I, 200� are subjcer.to redempr.ionprior
to maturity ¢l llie u�tion �zf I�c City on Ecbrttary't, 2UUb and any date Cherenflcr,id p:�r, lugctAcr wiih a
paymcntofaccrued interest.
� ..
Uxe uf Yroor�da ................................... Proceeds ol' �hc Serich 1946(: Rnnd�: aro to hc usod for certaitt publie improvemcntv pprstlApt to thc
Loan Agrccment, pre�eeede fraet� thc wle vf the 5eTics 199GD Bonds tivi{S be loaned tn tht At�rrt�wer tv
tinunc.c thc ru;yuiring, wiuvucting and equippingol"6fi uiwnhames to'bc markcted for sale and on a
lotxe-tn-ownha4is. Scc"'I'HRPRpl1^'CP'�nd".SOURCLSANBUS&SOPF[1NDS."
Theliurrowr.r ..................................... '1'he Dormwer is The nn&x of Mtiisulrecl, LLC, a Minncsotalimitcd tiability u�mpany, Sze; "'11-I�,
• BUR[tUWER."
Sccurit� for
thc Ronda ............................................. '11�c Bonds are general nhlih�,tiunsuf lhe City, payablc prim5tilytinm tax inerettronitlerived Gvm thc.
Prujec�. Uixlcr Ihc BonQ Rcsolutioe the City i� requ�tid lu levy a tar on a(I taxxble pmperty in the
City without limitation :js to rate. nr amnutu if nc�ossary to pay thc principat of and intei�est on the
Serics 1996R Roncl� �vh�hi duc.
Pnyin�A�cnt ....................................... N'itsYl'rustNationolAssuclaliotl,Sl.P:nd,Minncsnta.
7'ax Exemption ..................................... The interestun thc Scrics 1996C Doads is �e�wrallylna enrmpt� inlc�cston the 5crics 1'1�?S1�Dnnds is
taxahle.
�
ii
5Eiti'T �Y��aEGRE � BE;�SUiV� ;iu-1�-96 :lU����� ; i6121 �3b-�U26� 612 935 1834;# 7116 _,
UF.FICIAL STATEMEN'1' �
�sao,00a
City uf Hopkins, M�m►esota
General ObligAtiun TaY Increment Honds, Series 1996C
and
$665,000
City of Hopkins,lViinncsota
Gcncral Ubli$atian Tax Increment Bonds,'Caxable Series 1996D
INTRODUC'1'ORY STA'�F,IVIENT
`C'he following is a brief inlroiluetion as to certain matters discussed elsewhere in tlais Ufficial
St�tement �nd is qualified in its entiirety as to such matters by such discussion and the text nf the actiaat
documenls described or refecenced. Any capitali�ed tenn nc}t otherwise required ta be eapitalized is used
with tltc mcatling assig��ed herein or in the [3ond Rcsolt�tions. Definitions eantaitted in the lext herec�f
are for ease of rcference unly and are q�t�lifaed in tl3cir cntirety to the extent defined in t6e Bontl
Resolutions.
Purpos�
The Bonds ztre being issued hy the ('ity t� provide fueds in connectian with thc hotising Project
described hcrein. In s�lditiun to the Bonds tite C;ity and ttic Housing and Itedevelopment Al�thotily in
and for the City of Hopkins are issuing an ag�regate of $7,590,000 01' additional obli�ations for the .
Pr�jeci as more fully explained herein.
Sec�trity
''I'he Ra�ids are gccycral obliga�ivns e,t the City to which the City has alsn pled�ed ccrtain
increment. tJadct thc Boncl Rcsolutious tlic City is required to le�vy a t�.c on all taxable pr�periy itt thc
City withaut limit as to rate ot amount if necessary to pay tho princspal of and interest on the ROtlt�3
when due.
^ Book-Entry Only Sy�tcm
The Bonds are being issued in book-cntry form cmly under the book-cntry system rriaintained by
The Depository Trust Company, Nc�v York, New York {"DTC")_ So long as DTC �r its nominee is the
rc�istercd owtter of the Bonds, disbursements and paymettts oF principal and interest to t�ic: Participants
(as defined herein) is ific re5ponsibiliLy oF UTC and disburscmet�t of such payments to the uttimate
purchnsers (the "I3cncticial Owttcrs") is t.hc responsibility of the Parlicipxms. See "7'HE BONDS --
Book-Entry Only System" for a dcscriptlon ol� I.he book-entry system of raytnc�ni arid kransfer.
Mi4celtaneous
This Oflici.�1 St atement (inc[uding Appendices) cotit�ins, among other mattets, deseriptions of
the Bonds ftnd tfae [3ond Resolutions. Such descriptions and informstion d<� not purport to be
comprehensive or definiti�e. A11 refcrcnces Co documents descrihed laerein arc qualilied in their entirety
�
•
� �E�7� 6Y�FAEGRE � BEtiSUi� ;lU-1�-96 :1U�4�a1� ; 1612) 336-3U26� 612 935 1834:# 8J16
� by refereneo to siael� doeuments, copies of wftich xrc available for inspection at the office of ittc
Undenuriter.
THE BONDS
Tnterest Payments and Maturity Schedule
The Bands of eACh series will be issued in the a��;regate principal amowrts and will bear interest
as �cl fur�t� on the cover hereot; payable semiannuaily on �ebruary I and August I af each year
commeneing on Februaiy ], 1�)�)?. Intcresi will be calculated on thc basis ut a 36U-d�y year of twelve
30-day munths. Principal of thc Ronds of ea.ch series will mttturc an the dates and in the am�unts set
fort}t on ihe cover hereof, subject to earliet prepayment or redemptioll as described below_ The Bonds
will bc issued ih the fo�n �f fully rcgistcred bonds without int�rest coup�ns in the denaminatiun of
�S,UUO or whole multiples thereof.
Book E�utry-Only Sy�tern
The Uepository "l'rust Company ("DTC"), New York, New York, will act as securities depositoYy
for tlie Series 1995 Bonds. "1'he Series 1995 I3onds will be issued �,� tiil1y rc�istcred securities registeced
in t��e nante o:f Ccde 8c Ca (U'i'C's part�iership numinee). One ful ly rebistercd Series 1995 Bnnd will bc
issued for eaoh maturity of the Series ]{)�)5 Cionds, in t.hc agbregate princi�a) amouttt of such n�aturity,
and wili be depositcd with DTC.
� DTC is a limited purpose triist comp�ny organizcd under the New York Banking Law, a
"banking or�a�aization" within the meaning of the New York Banking i,FSw, a me�nbcr oC !he Federa(
Reserve System, a"cicaring curpotation" withita the mcaning ol' the New York Uniform Commercial
Cale, and a"clettring a.gcncy" rcgislered pursuant to the pro�isions of Section 17A of the Securities
�xchange Act c�f 1934. I.)'l�C holds securities that its �articipants {"Participants") depasit with DTC.
DTC also facilitates the settlement arnong Patticipants of securitics transacLions, sucEi zs transfcrs and
plecfbes, in deposited securities thrau�;lt cicclronic computerized book-entry ehanges in Partieipants'
socounts, tk�ereby eliminnting the nced foC physicxl moveinent of seeurities certiftcates. DiCeet
PartieipantS incl�ude securities, brokers and dealcrs, banks, trust eomPanics, clearing corporntions, and
certain othcr organizations. nTC is owncd by a number of its Uirect Participants and by the Ncw York
Stock fiXChange, Inc., the American Stock Exchange, Tnc., a.nd thc Natiunal Ass�ciation of Sectrrities
Dealers, inc. Access to the D"!'C system is atso available to others such �s securities broket's and dealers,
banks, and tru�t companies th�.t cicar through or maintain a. custodial relatioa�ship with a Diract
Participant, c[ther directly or indirectly ("Indirect Participants"), '1'he Rules applicable to 13'I'C and its
Participai�ts are ort tile witF► the Securities and F;xchangc Commis5ion.
Purchases of Bonds Lmder the DTC syslctn musl be made by or throu�Gl� Direct l'articipants,
which will reeeivc a crodit l��r the Bonds o�� UTC"s records. The ownership interest ol` cach actual
pt�rcl�aser of each 13ond (the "Benellcial Owner") is in turta to be recorded on tl�e Ditcct and Indirect
ParCicip reeords, [3enctieisl Owners will not reccive written confirmation from DTC of their
purchases, but a Aeneficia.l Uwncr is expecled t� receive � writ.tca cunFirnzation �roviding cfctails �f the
trt�nsactiott, as well ns periodic statements of the Beneficial Ow31er's holdings, ltam the Uirect pr Ind�rect
Patticipant through which tl�c Bcnelicial Owner entered into thc transaction. "1'ransfers af uwnership
interests in thc Bonds are to be accomplished by entties made on the books of' Pa.rticipants flcting oz�
Q behalf uf Beneficial Owners. E3enefieial O�mers will not reeei�e Certificates representin� their
�
__
- _ SE�1' BY � FAEGRE & BEVSO�L ; l U- Y t3-96 ; l U� 4�AiK : l Ei r 2 l 33f�-3Q26y 6� 2 935 1834 ;# 9./ 16 ,
ownership interests in the Butids, �xcept in the event th�t usc of the book-entry system for the t3onds is �
discontinued.
Tn facilit.atc subseqlyent transfers, all i3onds dcposited by Participsnts with DTC are re�istered in
the naane of QTC's partnership nomtinee, Ccdc & Co. The depnsit �f Ronds wiih DT�. and thcir
re�;istra.tian in tt�e name ol'Cede.& Co, effect no change in benefici�l owsicrship, DTC has no knowlcdge
�f the actual Bcneticial Owners of the Boiids; DTC's recordti reflect only the identity of tl�e Uiroct
Participa.nts to whase accounts the Ronds are crcditcd, whiCh may or may not be the BenefiCial UwneCS.
The i'articipants will remain res�nsible for kccping account of their holdings an behAlf of thcir
cu�to►��ers.
t'onveyancc ot° notices and other commuuications by U'!'C to Direct Participancs, by Direot
Parteoipants to Indirect Participnntc, and by Dircct P articipants and [ndirt;ct Participants to fienefieia.l
C)wncrs will be governed by arrangements �unonb them, subjcct lu atty statutory or rcgulatory
rcqu�retnents as may be in effect from time to lime.
Redcmption notices shat! be sent ta Cec�e & Co. [f less thsn all oi lhe Series ] 995 I3ands are
bein� redeemed, DTC's prxctice is to determinc by lot the amount of khc inte�est of eACli Dircct
Participant in su.ch issuc ta be redeemed_
Neither U'I'C nor (:ede c4c Co. will consent or vote witlt respect ic� the E3onds. Undcr its usual
proccdures DTC mails mn Umalibus Proxy lo L6e Cily �ts soon as possible afrer the record date. The
Omnlbus Proxy tissigns Cctic & Co.'s consenting or v�ting righEs lo those llirect Pa�ticipaul.� tu whose
aeeuunCs the Bonds are cred�ted on the record date (idcntified jn a listing uttachcd to thc; Omnibus •
Pcoxy).
Yrincipal an� interest paymei�ts an the Bonds will be n,ade to D"TC. DTC's practice is to crcdil
Direct �Yt►tticipants' accoYmts c�n a payable date in accorilance with their res�eciive haldin�s shown on
DTC's records unless DTC has teasoi� to believe that it will nut receive pa.ymcnt on lhe pay�bte datc.
Paytnents by Participants to I3cneticial Owners will be govcrned by standing instructions and customnry
practices, as is tl�e case with securities held for the accounts of customers i» bearer form or registered in
"street name," an� will be lhe respnnsihility of such Part.icipant and not of DTC or che City, subject to
flny statutory or regulaCory requirements as may be in c!1'ect from time to ti�t�a. Payuiertl of principal and
interest to [�TC ►s the responsibitity of the City, disbursement of such pay.mcni:s to Direct 1'articipants
shall he the re.cponsibilil:y oF DTC, and dishurscmer�t of s��ch payments to thc Rene[lci�l Owners shall bc
the responsihility af Direcl anil Indirect PaRicipa.nts.
DTC ma.y discontiaue providing i�s services as securiCies depositoiy w'sth respecl to the Bonds st
aoy timc hy �iving reasonable notiac to the City. Under such circumstances, in the event t!►at a successor
securities depository is not obtained, Rond certificates are required to be print�d ancl delivered.
'Che City may dccid� �o discontinue use of thc system of bcx�k-entry transfcrs thraugh ll"I'C (or a
successor seeurities dcpository). In that event, Series 1995 Bond certificates rvill bc prinled and
dcliveted.
"1'he information in Chis section concsrning DTC and DTC's baok-entry systetn hijs been obtai�ed
from sourccs thal the City believes to bc rcliable, but the City takes no t'esponsibility for the aecuracy
thereof.
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. �E�T BY�fiAEGRE & BE��SU,� �lu-i�-�6 :lu���a��1 ; (6121 336-3U2�� 612 935 1834;�1O116
Q Optional �tedemi�tion
[3ands rn�lurin� on or aftcr February i, 2007 fl.re subject lo redemption pri�r tv m�turity at the
�ptian of the City in w1��le or itti parE utf February I, 2UU6 and on any date thercai�er, in the mRturities
selected by the City, ai�d by lat witt�in a maturity, at par p(us accrued interest.
Notice of Redemption
t3onds may be redeemed by not.ice mailed to the ! toldcrs of (he �3onds to bc redeemed no p�.ter
than thirty days prior ta the redemptiun dalc. Bc�nds called for redemption will be payable at the p(a.ce
stated fur pc�yment in the noticc �1'rcdcmption. If money 1or payment of the redc�tiption price h�s bccn
dcpositeci with tl�e paying agcnt, interest shali ce�.se to acerue lliereon rni thc rcdcmption date.
Uwnership
The person in whose ►iame a Bond is re�istered may be treated fo� all pi:rposes as the owncr
thereo{.
SECURITY �'Olt TH.�!; BONDS
'['he �onds will he genersl obligatiuns ol'the City which plcdgc the full faith and crcdit of the
City to the pa.ymertt when due of the �rincipa) of; premiom, if any, or it�terest on the Ronds. The Bonds
Q are pmyable pritnarily 1'rom tax incre�nent dcrived I�um the Pmject.
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SE�T Bk�k��EGRE & BE�v�U�� ;1U-lti-96 ;lU��bA.l9 ; 1E�12) 336-3UZE;-� Ei12 935 1834:#11,/lE; ,
SO�JRCES ANU US�;S ()N 1?UNDS .
E�ollowin� arc thc approximate sources i+nd uses of funds as presctitly eSLimafed ior tho Pr�jecl�
Saurces
Series 1996C Bond Proceeds �SOO,UUO
Scri�s 1996D Bond Procecds 665,U04
Other Bond Prcrceeds (1) 7,S40,OQ0
D�veluper Equity 300,000
Total Sourcesof I�unds $9,055,000
I1ses
[..,and t\cyuisition and Relocation $1,4 ] 6,000
Design and Crn�stritction 5,614,0�0
Fanded Interest 533,000
I"inancing Costs and Uthcr 750,000
Dcposit lo Series A lteservc I'und 142,000
Deposit to Special Reserve f� und 6U(}
'1'otal Applica4ion of Funds �9,055,000
TI[r+, i3oRROWER �
The R�rrowcr 'cvas Formed under the nattse the 01ks of Mait�strz�t, LLC �s a limitied lisbility
c:ompany under the laws of lhe State �f Minnesota on Aug�+st 29, 199f,. The Borrower wfls fc�mied i'ur the
purpose of cteveloping, constructing, operating and sclling the Prc�ject, howcver the &�rrower has the power
to engage in any business or in�vestment activity permitled by Minnesota la�v. The sote m.embcrs of'the
IIorrower are Terrence E:. Troy and Rohert S. 13isanz. The Borr<�wer is go�cmed pursuant to a Member
Lontrol Agreement dated 4s of Atigust 29, 1�)�)b, wfiich vests managemcnt ol' the Borrawer in a
Mana.getnent Committee composed of Cl�e t�vo memE�ers. As of° the date of tlais Ufficial St°.�temsnt, thc
tiorraweCl�as iw ernployees.
THE YK(3JFCT
Ceneral Description
The Project consists of 66 Cawnho�ne un its to bc conStructed by the f3orrower on a�'-acre site rte�r
downfiwn Hopkins, Minnesota. 'f'he Ptojcct is part of a redevelopment project being ut�dzriaken by the
City and the Authority aaid includes acquisition of a mobile home park and relocarion o� residcnts of the
mobile Ilome park Whu pruseully occupy the site.
The Project will include 40 two bedroom townh�mes and 2G tl�ree bcdro�m townhomes.
The �3orrowcr plans lo market the units ttnder a for sale a.nd "renl-to-owii rfan un�zr which
prospectivc renler/owners witl initial ly enter into a purchasc agreement wi�ich pecrttiis lhe rentedowners to
lcase tl�e t�wnhame for and up tu 3-year lease Period. During the lease perioil tl�e renter will tttxke lease �
5 �
, �E:��i� BY�FaEGRE � BE:�S��� ;lu-1�-9� ;1o���aM : �612a 336-3uz6� 612 935 1834;#12i1�
� payments, a portion al'which will �ccruc tov�r�.rtl downpaymentat thc maturity of the lcase:. At th�t tianc th�
renter may appfy the �ccrued doNn�p�yment to�va.rd lhe purcl��se of the unit.
Locxt�on
The Project site is loeated in lhe southeflst c�uadrant oE the intersection uf Main Strcet and Shady
Usk Roa.d in Hopkin`, Minnesota. The bt�undaries of thc site extend east to 19th Avenue South a�id south to
lst Street South. The site is currently oecupied by a mobile home pa.rk. Adiacent land uses are
predominantlyretail and enc�mpass a wide variety of prodacts and services.
Project Marketing sind Management
Property mflnagemcnt and marketing will be provided by Rcal Estate Equitics Management
Company, an �ffilia.te af the Borrower.
Real Estate 1:quitics ManagementCor�pany has been in property tnattagement busincss since 1972.
It prescntly manages 21 �eside�ltiaE rentaE properties with 3,800 �u�its itt the Twin Cities arca, iucludin�
Polynesian Villa.ge in New Hrigi�ton, Stratford Wood in Minnelonkaand Aspen Valley in Burnsviflc.
"I'he Borrowcr and R�al F,state Lquitics lvlanagement Conipany wil! enter inEu x five�year
M�n�gementAgreement,subjecttoearliertecmi�t:+lionaccordin�toitstcrtns. 'f'heMt�nA�ctnentAgreerraent
provides for monthlycompensation equal to 5% ufgross receipts irom operatiqn oftl�e Pruject.
ProjCCt.l)evelopment,Dcoign and (�oestrnction
� L)evelopment. The Develc�per of the Projeet is Real L'statc Equities i)evelopment Company, a.
Minnesuta eorporatio�i whose principals are 'I'errenec E. Trc�y �nd Itobcrt S. Bisanz. Keal Cstate Equities
1)eveloprncntCompany t»s dcvetoped five multifamilyhousing projects aggregating925 u��its, including
�olumbine Tovs+nhouses in h:den Prairie (149G), Polynesian Village Apartments in Naw Kri�;hton (1995),
�den Park Apsrtmenls in Eiroaklyn Park (1994}, C:�•osby Poinie Apartments in St. P�ul (1989) anil
Rivetwuod Ap<u�tments in Lilyda.l� (1988). 7'he Dc�eloper has also acquired, mxna�ed and sold an
addition�l 5,500 units on its owa behalf and o►t beha.lP of private and individual investars. Its fe� for
development �ctivitics for lhe Project is �;498,Q00, consisting of a$106,000 cotnponent to be disbursed
^ upon closing of the �ionds, ah $( 8,000 compo�icnt to be cfisbursed qpon co�npletio�i and occrypat�cy �f 8Q'%
of the urrits and a$380,UU0 cumponentto be disbursed upon paymentof fhe Bonds_
Mr. Troy and Mr. Bisanz will be the membcrs ol'the tiorrowcr and are the owners of the property
mana�cr for ihe Pr�ject, liea( Estate Equities �M�nagement C�mpany. 1 n a.dditiun, Mr. Bisanz is the brother
of the owners of thc construction ma�aager ot�the Project, Iiisan2 Bros. Uevelopme�at Company.
Ue.rag�a_ Thz a�'chilect far the Project is Miller-Uunwiddic Assaciateti, Inc., of Mii�neapolis,
Minnesot�t. Under a Standarcl Form of Agreement B�tween Owner �nd Architect (AIA poeument No.
I3141 } the Architect. will reccive a 1'ee for blsic servicos o1� $]�2,OUt). Miilcr-Qumviddie wac fioundcd in
1963 and currcntlyhas a staffaf 27, incltiding I 1 registercd arc.hilects.
C.`vnslruction The gcncral contractar for thc Project is 5ka�pohl ConStruction (�roup, Inc. of
Burnsville, Minnesots. Prior to delivery of the Bonds, the I3orrower and con4ractoC will enter into a
Standard .C'orm of Agreement Bctween Owner and Architect (AlA Oocument A11]) under which the
� cofitr<►ctor will �grce to perform the consttuciion w�rk for cost plus a 3'/ %� fixed fee, with a guar�ntccd
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Jt�i �z •c:�cGRt sc tSt,`SU;ti ,lu-lii-9b ;1u��7a1� tb12) 33�;-3U2ti 612 9�i5 1�3349m13/16
ma:cimum price c�f not mvre thut $5, I 75,004_ Skal'pohl wtts organiZSd in 1492 and its cut'ret�l partners aze •
Charles S[carpohl, Michael Petersoa and Michacl R. Roebuctc. Ct pmvides beneral ca�itructit�g, construction
management�nd design/build services are commc�cial, medicflE nnd muCtii'�mily residential prc?�ects.
Co�rslruction Manu�,�c>�: Th� construction inanager is I3isanz Bros_ T)evelopmeni Company,
("BBDC") West St. Pa.ul, Minnesota. Ux�der a Standard Form of Agreement f3etwcen Owner and
Construction Manager (AlA nocument B801/CMa.) BBDC wil! providc construction mant�gcment services
for the Pruject for � tixeci tce of $ I 1 E1,OOf�. [313DC has been involvcd in ihe developn�cnt and sale of
residential and cacnmereial real estate since 1949. BkilX; was inval�ed in the development �nd
wnstruction c�f nearly 2,0�0 singte-family reside�uial and ovec 1,400 n�ulti-fa�nily residential units in
Rumsey nnd I.�akata c�unties since 1�52, I3IIUC curreiitly has 15 cuiployee� and thc principats are 3ohn N.
Bisa�iz and Michael P. Bisanz. 'Ciiey are brathers of Roher S. B2s�nz, a principal of Q�c Borrower a►sd b�tl�
iteal I:stA.te f�quitiesDevelopmentC:ompanyand Refll Lstatc ManabementCrnnpar�y.
RATIN(�
An aPplicationfor a ratin� for the lionds has heen mad.e to Moody's Investors Service
("Me�ody'S ), �9 Church Street, New York, Ncw York 1(�007. lf a rating is assigncd, it ��rill ret7ect only the
opinic�n nf Moody's. Any exp4an�tion of the significance of the ratings rnay he obtained unly From
Moody's.
There is no asst.irance that t6e ratin�;, if a�signed, wi Il cnntinue IoC ttny given periad of timc, or that
sttch rating will not bc rcvised, suspended or withdr<�wn, iF; in the,juds►TicnloPMoody's, circurnstnncesso
warrant. A revision, suspension ur �tvithdrawal of � rating tnay have an adversc cile�t on tEye markcf. price of •
the l�onds.
ENFORCi+,Af31LITY OF OBLIGAT10N5
On the date ofdelivety uClhe $onds, Kennedy & Gtaven, (:hartercct, of Minneapolis, Minnes�ta,
f3ond CounseE, shall delivcr thcir opinion, dated the delivery date, that I.tie Bonds and thc Bond
Resoliations are valid and legally binding on the City, enliirce�tible in �ceordxnce with their respeci.ive
terms. "f(tc foreg�ing opinions will bc generally qualified to lhe extent tEiat the enforceubility �f the
respective instniments m�y be lintited by laws, decision and equitttble prineiPlcs al'[ecting retnedies and
hy b�nkruptey or in:�>lv�ncy or other la�vs decisions and equitable principles afCecting creditors' rights
�enera.11y.
AYYK(lYAi, OF LEGAL.1'KUCF,EDINGS
I..cgal matters incident to thc is5uance and sale ot' Q�c Bonds and w;tl� rega.r�t to the tax-exempt
status of intereat on the Bonds imder existing laws are subject to the approving le�at opinio.n of Kennedy
8t Graven, Chartered, Minneapolis, Minnes�ta, as Rond C:ounsel_ "T'hc Ut�derwriter h2s bccn represented
in this transaction by I�aegre & Bensan Li.,P, Minncapolis, Minnesota.
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. 5ENi� BY�F�EGRE � BE��SU�� ;lU-i�-96 :1U��7a� : (612) 33�-3U2�� � 612 935 �834;#14/lb
0 TAX 1VIATTT.RS
[n lhe Upinian of Kcnqcd�+ & Graven, Chartercd, �!tinncapolis, Minnesot.�, as Bond C'ounsel,
under appltcahle laws flnd ruliitgs, it�teYeSt on the Series 1996C Bonds is »ot includable in �ross iuc�mc
far purposes uf feder�E ancomc taxalion or in taxahle nct income of individuals, eslates or trusts for
purposes of' Minnesota incomc taxaCiun. Howe�er, certain pruvisions of the Internal Revenue Codc of
14R6, as amended {the "Code"}, and reEAted Minnesuta tax law provisions do af('ect the trix treatmcN �I'
interest on the Serics 1996C Bonds for ce��tain taxpayers. The treatment of interest on the Secics 1946C
Bo�ids under certain oFthose provi�;ions is refercnced below:
t. Mi�tjxesvlie FrUm:hise 1ux. ]nterest on the Series (996C 13onds is subject to the .Minnesota
franchise tax. itnpuscd upon cor�orations, inetuding 'Fnancial institutions, measured by taxable ineume
nnd the altcrnati'vc minimum tax base.
2. Indivar�r�rr�l Allesrttrtive Minirrlturt Tcrx. Interest on the Serics 1996C Bonds is nat an itom ol� tax
prefcrcnce required to he incli.Gded in tl�e computation �f any fedcral alternative minimum tax applic��ble
to individuals or ihe Minnesota alternativc minimum tax ap�licablc to individuats, trusts and cstat�s.
3. I�edcrr�xl. Cvr,�orate .4lternative Mir:in�um Tczr. Tn, computing lhe corporate alternative
minimum tax, intcrest on the Series 1�}96C Bonds is in�luded in detcrmining lhe adjusted current
earnings of corporations for the purpc�se of th is computation.
4. B¢nk Qualaftcatic��r. Seric� 199bC ]3onds a��e "qualif ic�[ tax obligations' for purposes
Q of Seclion 265(b)(3) of thc Cod� and, therefore, fin�cial LflStltut10115 may deduct a portion of their +
interest expenses allocablc Yo Che i�iterest received from the Series 1995 13��ids.
5. Prnperty artd C:crsualty Lzsurunce C onrpanies. Ccrt��in deductions for undcrwriting lc�sses of
property and casualty insurance eompanies are disallowed by aci amount equal to ] 5% oi' t<tx exempt
income reccived or accrued on obli��tions stich as interest on the Series 1995 Bonds.
fi_ F.rrviron»�enrul Tuz. Under the Superf'vnd Amendments and Rcauthoricxtic3n Act of 1986, an
addilional lax is i�nposed on eorporations eyuml to Q.12% of a earporQtion's altcriiat�ve minimun� ta�ablc
income in excess of $2,OQ0,000 (whether or not thc corpuralio�� is subject to alternative minii�tqm tax).
7. 13rur1ch Profits 'l'ax and Fareibry: lnsurarrce C 'nmj�ar�ie,s, [nlerest on the Serics 1996C Sonds is
subject ta fedcral inc;ome taxation t� thc extent il is included in "effectively conneeted" t1.S. earnin�s
And profix5 of a.,I'oreign a�rporation for purposes of the branch pr�fits ta'x imposed hy Section 884 of the
Code and is includable in the net i��vestmcnt income of foreign insurance companies �or purposes uf
Seclion 842(b} of the Codc.
8. .Soci�x! �Scc.ur•i1y. Inlerest an the Serics 1496C Bonds is includable itt the calcul�.tion. of
ino�iriect adjusted gross income in determini3�g wllethcr Sacial Security ar railroa.d retirement are to be
incEuded in taxable income of indi�iduals.
4, Pr�ssive Inve.ctment Ir�cume v f S Cor�j�nratinra.c. Passtve in�estment iitcomC, including interest
an the Series 1995 Bonds, may be subject to Icdc:ral income taxatiun uncicr Seci.ion 1375 of the C'od� fi�r
an S Corporntion tl�at has Subchapter C earnings and pt'ofits �t i.he close of the taxablc �ear if tnore thsn
25% of its gross rcccipis is passive investment income.
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SE.��T BY�FAEGRE & BE��SU�� �lU-1�-96 ;10���a�� 9 1612� 338-3Q26� 612 93� 1834;�15/16
The fore�oing is not ah exhaustive disc�issi��n oi' all tax consequcnces arising fro�tt tho ow�ncrshi}� of the •
Series 199�iC f3onds. Purchasers of the l3onds are cncotu•aged to cnnst�ll with their persizf�al tsx �tdvisors
regarding tl�e impact ol`the t�>re�oing on their individual tax lia.bilities.
UNDF,RW:�i1T1NG
The Series 19y5 fionds are being parch�.sed f�om tt►c Cily by Miller 1� Schroecter Financis(, Inc.,
Minnea.pc�tis, Minnesota (the "tlndcrwriter"). 'E'he U��derwriter has agreed to purchase the F3onds at a
�►ricc ol' $ _,, ., plus accrued interest, suhject tu tli� terms of a Rond Purchase A�reement
ksetwccn tht City and the llnderwriter. The Bond Purchasc A�rcement �rovides Chat lhe LJnderwritea'
shal) pttrcliase all Bonds if any are purchased and that tlae obli6ation to makc such purchase is subjeet to
cert<'tin lerms and co��d.itions set li�r�h in the li�nd Purchase Agreement, the approval of certain Iegal
matlers by counsel �nd ccrta.in other conditioats. "Tlic iuitial public offering prices set forth on tJ�c cor�er
pagc hereot' may be ahanged from time to time hy tltc Und�rwriter. Tl�e City has agreed under the Bond
Purcliase Agreement to indemnify the Undenvriter ��ainst. certain li�bilities, including certain liabilitie5
under thc federal end state securitics laws.
FINANCIAL AUV[SUR
I?hlcrs anct Associntes, Cnc., Minneap�lis, Minnesota, lias ServecE as the financia.l ttdvisor for the
City in con�icction with the Bonds_ F.hlcrs ancl Associates, Inc. ii a linanciat advisory ancl wnsulting
organizfltion aod is nol engaged in the business of undenvritin�„ [narketing �r tradin�, of municipal
securitie� c�r a��y othcr ncgatiable instrumea�ts. .
CONTINUiNC .DISCLOSURE
MISCCLLANEOU5
The foregoit�g does ttot. purport to bc cOmprehensive or dcf►�iti�vc and all references fv t�y
document herein a.��e qi�alificd in fheir enttrety by rcfc�ence to each such document. Alt referenccs to ihe
Series 1995 Bonds are qua]itied in their entirety by relerence to the f�rmc t.hereof and the infarmalion
witt� respecl tl,ereta includcd iti Ehe aforesaid documcnts. Copies of thesc documents are availablc fur
inspection during t6e period of thc al7�ering �t tlae offices a1`the IJnderwriter in Minneapolis, Minnesota,
and thcreafter at the offices of t}lc City.
Thc City lias autl�ori�ed ttte ase ancl distribution of and approved the information in this Official
Statement, incluciitig lhe information in the Appendices hereto.
M 1;OIR9�{ I2.01
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, �t.\i D�•r:�tGRt � Bt,\5u;` .iu-l�-9e� :1u�-��a19 ; �E�12) �33G-3u2�;y t�12 935 1�3�;nlbil�
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APPEN�)IX A
C;1.'1'Y iNFORMAI'IUN
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