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2025-031 Resolution Approving a Housing Improvement Fee for the Summit on 7 Housing Improvement AreaCITY OF HOPKINS HENNEPIN COUNTY, MINNESOTA RESOLUTION 2025-031 RESOLUTION APPROVING A HOUSING IMPROVEMENT FEE FOR THE SUMMIT ON 7 HOUSING IMPROVEMENT AREA WHEREAS, the City is authorized under Minnesota Statutes, Sections 428A.11 through 428A.21, as amended (the "Act"), to establish by ordinance a housing improvement area within which housing improvements are made or constructed and the costs of the improvements are paid in whole or in part from fees imposed within the area; and WHEREAS, the City Council of the City of Hopkins (the "Council") adopted a Housing Improvement Area Policy on September 18, 2024 (the "Policy"); and WHEREAS, by Ordinance No. 2025-1266, adopted by the Council on May 6, 2025 (the "Enabling Ordinance"), the Council established the Summit on 7 Housing Improvement Area (the "Housing Improvement Area") in order to facilitate certain improvements to property known as the "Summit on 7," all in accordance with the Policy; and WHEREAS, in accordance with Section 428A.12 of the Act and the City's Housing Improvement Area Policy, owners of at least seventy five percent (75%) of the housing units within the Housing Improvement Area filed a petition with the City Clerk requesting a public hearing regarding imposition of a housing improvement fee for the Housing Improvement Area; and WHEREAS, the City has consulted with The Summit Condominium Association, Inc. a Minnesota nonprofit corporation (the "Association"), and with residents in the proposed Housing Improvement Area regarding the establishment of the Housing Improvement Area and the housing improvements to be constructed and financed under the Enabling Ordinance; and WHEREAS, on the date hereof, the Council conducted a public hearing, duly noticed in accordance with Section 428A.14 of the Act, regarding adoption of this Fee Resolution, at which all persons, including owners of property within the Housing Improvement Area were given an opportunity to be heard; and WHEREAS, the Council finds that the Housing Improvement Area continues to meet the criteria provided in the Act and that a majority of the Summit on 7 owners support the project and the financing; and WHEREAS, prior to this date, the Association submitted to the City an adopted financial plan acceptable to the City and the Association, that provides for the Association to finance maintenance and operation of the common elements in the Summit on 7 and a long-range plan to conduct and finance capital improvements therein, all in accordance with Section 428A.14 of the Act; and WHEREAS, for the purposes of this resolution, the term "Housing Improvements" has the meanings provided in the Enabling Ordinance. NOW THEREFORE BE IT RESOLVED, by the City Council of the City of Hopkins as follows: 1. That the above recitals are incorporated into this Resolution as findings as if fully set forth herein. 2. The total costs of the Housing Improvements are $4,640,000.00 including construction costs, administrative costs, soft costs, costs of issuing bonds to finance the improvements, and capitalized interest. Pursuant to this Resolution, the City shall impose a fee on each housing unit within the Housing Improvement Area (the "Housing Improvement Fee") based on the square footage (percentage of common expense obligation) of each unit, as specified in Exhibit A attached hereto (except for the portion of the fee allocable to City and administrative costs and administrative costs of Hennepin County, Minnesota (the "County"), which are imposed on a per -unit basis). Allocation of the Housing Improvement Fee is consistent with Section 428A.14, subdivision 1 of the Act and with the "Common Interest Community No. 1422 (Condominium) The Summit Condominiums Restated Declaration." The City further finds that it is more fair and reasonable to impose the fee allocable to City and County administrative costs on a per -unit basis, as those costs do not vary with unit size. 3. The owner of any housing unit in the Housing Improvement Area may prepay the Housing Improvement Fee in total at any time between the effective date of this resolution and June 20, 2025. The amount of the prepayment is shown under the headings Total Assessment (principal/prepayment amount) in Exhibit A attached hereto. Partial prepayment of the Housing Improvement Fee is not permitted. Prepayment must be made to the City. After expiration of the prepayment period on June 20, 2025, owners may not prepay any portion of the Housing Improvement Fee. 4. If the Total Prepayment Fee is not prepaid pursuant to paragraph 3 above, the Housing Improvement Fee will be imposed as an annual fee, in the amount shown under the heading Total Annual Fee in Exhibit A attached hereto. The Housing Improvement Fee will be imposed in equal annual installments for a period of 20 years, with the first installment payable in calendar year 2026. Interest at the rate of up to 7.20% per annum, which includes 1.00% above the average coupon of the bonds, shall accrue on the principal amount of the Housing Improvement Fee for each unit. The Total Annual Fee also includes an amount of $10.00 per unit to compensate the City for administrative costs related to the Housing Improvement Area. The Total Annual Fee also includes an amount to compensate the County for its administrative costs as described in paragraph 6 hereof. 5. Unless prepaid pursuant to paragraph 3 above, the Housing Improvement Fee is a lien against each of the housing units within the Housing Improvement Area and is payable at the same time and in the same manner as provided for payment and collection of ad valorem taxes, pursuant to Section 428A.15 of the Act and Minnesota Statutes, Section 428A.05. As set forth in the Act, the Housing Improvement Fee is not included in the calculation of levies or limits on levies imposed under any law or charter. 6. The County imposes a de minimis annual fee in the amount of $2.50 per unit for services in connection with the administration required in order for the Housing Improvement Fee to be made payable at the same time and in the same manner as provided for payment and collection of ad valorem taxes. If the County increases its administrative fee during the term described in paragraph 4 hereof, the Total Annual Fee will be increased by the same amount. 7. Within five days after the adoption of this resolution, the City Clerk is directed to mail the following to the owner of each housing unit in the Housing Improvement Area: a summary of this resolution, notice that owners of at least forty-five percent (45%) of the housing units' tax capacity subject to the Housing Improvement Fee may veto this resolution by filing a written objection with the City Clerk before the effective date of this resolution, and notice that a copy of this resolution is on file with the City Clerk for public inspection. 8. This resolution shall be effective forty-five (45) days after adoption hereof, subject to (a) the veto rights of housing unit owners under Section 428A.18 of the Act and (b) execution in full of a development agreement between the Authority and the Association providing for construction of the Housing Improvements. 9. After the effective date of this resolution, the City Clerk is directed to file a certified copy of this resolution with the County to be recorded on the property tax lists of the County for taxes payable in 2026 and thereafter. 10.City staff and consultants are hereby authorized and directed to take any other actions deemed reasonable and necessary to carry out the intent of this Resolution. Adopted by the City Council of the City of Hopkins this 6th day of May, 2025. i By. Patrick Hari Ion, Mayor AazST :: 'aw(-.104 Amy Domeier, City Clerk EXHIBIT A Housing Improvement Fee by Unit Chy of Hopidns Aplwtiau Allot •ibfcb W5 ■ pm 6uifding N�o St7. Ft irSi EZI-7. P qd Total Caoon rt Area Cet,sbwtim Cast Total Total Costs F,nmx:ing 3 (BEFORE SoftCosis BO![7&" Amtsi Fx (1■9R al TdUCoWi Total P Si Paid Per Unit (105%) - Pion prepaid only � Rebate to 0—Total to Prepaid A.sessl—A. An al Fee With SIB City AAWn. 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