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HomeMy WebLinkAbout02-26-2018CITY OF MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY MEETING AGENDA MOUNDS VIEW CITY HALL Monday, February 26, 2018 6:00 p.m. 1. CALL TO ORDER 2. ROLL CALL: President Mueller, Vice President Gunn, Commissioner Hull, Commissioner Meehlhause, Commissioner Bergeron 3. APPROVAL OF AGENDA 4. PUBLIC INPUT: Citizens may speak to issues not on tonight’s agenda. Before speaking, please give your full name and address for the minutes. Also, please limit your comments to three minutes. 5. APPROVAL OF MINUTES A. January 22, 2018 6. CONSENT AGENDA 7. EDA BUSINESS A. Confirm EDC Chair & Vice Chair Appointments B. Resolution 18-EDA-306 Conditionally Authorizing Acquisition of Tax-Forfeited Land at a Discount for the Development of Multi-Family Affordable Housing C. Joint Resolution Approving Real Estate Option Agreement for Boulevard Apartments 8. REPORTS 9. NEXT EDA MEETING: March 12, 2018 10. ADJOURNMENT PROCEEDINGS OF THE MOUNDS VIEW EDA 1 CITY OF MOUNDS VIEW 2 RAMSEY COUNTY, MINNESOTA 3 4 Regular Meeting 5 January 22, 2018 6 Mounds View City Hall 7 2401 County Road 10, Mounds View, MN 55112 8 9 10 1. CALL MEETING TO ORDER 11 12 President Mueller called the meeting to order at 6:01 p.m. 13 14 2. ROLL CALL: President Mueller, Vice President Gunn, Commissioner Hull, 15 Commissioner Meehlhause, and Executive Director Zikmund. 16 17 NOT PRESENT: Commissioner Bergeron. 18 19 3. APPROVAL OF AGENDA 20 21 MOTION/SECOND: Meehlhause/Hull. To Approve the January 22, 2018, Agenda as 22 presented. 23 24 Ayes – 4 Nays – 0 Motion carried. 25 26 4. PUBLIC INPUT 27 28 Bill Urbanski, 2367 Sherwood Road, spoke against the location of a gun club and indoor 29 shooting range at the Crossroad Pointe development site. He stated he was wearing his 30 Environmental Health and Safety Committee shirt this evening noting he served on the White 31 Bear Lake Health and Safety Committee for five years. He explained one of his responsibilities 32 on this committee was to ensure due diligence in providing health and safety for students, staff 33 and faculty. He encouraged the EDA and City Council to take on this same responsibility. He 34 commented on the amount of lead contamination created by gun clubs and indoor shooting 35 ranges and encouraged the Council to research this topic further. He stated he was not opposed 36 to First Amendment rights but was opposed to having a gun club adjacent to market rate 37 apartments and a senior high rise. He encouraged the Council to further review his handout. 38 39 5. APPROVAL OF MINUTES 40 41 A. December 11, 2017, EDA Minutes. 42 43 MOTION/SECOND: Gunn/Hull. To Approve the December 11, 2017, Minutes as presented. 44 45 Mounds View EDA January 22, 2018 Regular Meeting Page 2 Ayes – 4 Nays – 0 Motion carried. 1 2 B. January 8, 2018, EDA Minutes. 3 4 MOTION/SECOND: Gunn/Meehlhause. To Approve the January 8, 2018, Minutes as 5 presented. 6 7 Ayes – 4 Nays – 0 Motion carried. 8 9 6. CONSENT AGENDA 10 11 None. 12 13 7. EDA BUSINESS 14 15 A. Consider Resolution 18-EDA-304 a Resolution Electing and Appointing 16 Officers to the Mounds View Economic Development Authority (EDA). 17 18 Executive Director Zikmund requested the EDA adopt a Resolution electing and appointing 19 officers for 2018. He reviewed the officers who served in 2017. 20 21 Commissioner Meehlhause recommended Carol Mueller continue serving as President. 22 23 Commissioner Hull suggested all appointments remain the same as 2017 with the President being 24 Carol Mueller, Vice President Sherry Gunn, Treasurer Gary Meehlhause and Secretary Al Hull. 25 The Authority was in agreement with this recommendation. 26 27 MOTION/SECOND: Meehlhause/Hull. To Waive the Reading and Adopt Resolution 18-EDA-28 304, Electing and Appointing Officers to the Mounds View Economic Development Authority 29 (EDA). 30 31 Ayes – 4 Nays – 0 Motion carried. 32 33 B. Resolution 18-EDA-304, a Resolution Requesting the City Council call for a 34 Public Hearing on the Proposed Adoption of a Modification to the 35 Development Program for the Mounds View Economic Development Project 36 and the Proposed Establishment of a Tax Increment Financing District No. 37 1-6, (A Housing District) and the Adoption of a Tax Increment Financing 38 Plan. 39 40 Finance Director Beer requested the EDA adopt a Resolution requesting the City Council call for 41 a Public Hearing on March 12th on the proposed adoption of a modification to the Development 42 Mounds View EDA January 22, 2018 Regular Meeting Page 3 Program for the Mounds View Economic Development Project and the proposed establishment 1 of a TIF District No. 1-6, as well as the adoption of a TIF Plan. 2 3 Commissioner Meehlhause noted the numbers from Ehlers would be updated. Finance Director 4 Beer reported this was the case. 5 6 President Mueller stated Ehlers assisted the City with all of its TIF financing and noted the 7 proposed development meets all of the qualifications for TIF. Finance Director Beer stated the 8 proposed project does meet the “but for” test. 9 10 President Mueller requested the report from Ehlers be passed along to the EDC. 11 12 MOTION/SECOND: Gunn/Meehlhause. To Waive the Reading and Adopt Resolution 18-13 EDA-304, a Resolution Requesting the City Council call for a Public Hearing on the Proposed 14 Adoption of a Modification to the Development Program for the Mounds View Economic 15 Development Project and the Proposed Establishment of a Tax Increment Financing District No. 16 1-6, (A Housing District) and the Adoption of a Tax Increment Financing Plan. 17 18 Ayes – 4 Nays – 0 Motion carried. 19 20 8. REPORTS 21 22 Commissioner Meehlhause reported he attended a Twin Cities Gateway meeting last week. He 23 stated this organization continues to be in very good financial standing and noted hospitality 24 taxes for 2017 were comparable to 2016. He discussed how this would impact member city 25 contributions from the convention bureau. 26 27 Commissioner Gunn anticipated revenues for 2018 would be on the rise given the Super Bowl 28 was being held in Minneapolis in February. 29 30 President Mueller explained the Ralph Reeder Food Shelf was in the process of relocating. She 31 noted the food shelf would like to remain in Mounds View or New Brighton given the fact 70% 32 of their client base were Mounds View or New Brighton residents. She encouraged those 33 interested in pursuing a partnership with the food shelf to contact the City. 34 35 9. NEXT EDA MEETING: Monday, February 12, 2018 at 6:00 p.m. 36 37 10. ADJOURNMENT 38 39 President Mueller adjourned the meeting at 6:29 p.m. 40 41 Respectfully submitted, 42 Mounds View EDA January 22, 2018 Regular Meeting Page 4 1 2 Recorded and transcribed by: 3 Heidi Guenther 4 TimeSaver Off Site Secretarial, Inc. 5 Item No: 07A Meeting Date: February 26, 2018 Type of Business: EDA Business City of Mounds View Staff Report To: Economic Development Authority From: Brian Beeman, Business Development Coordinator Item Title/Subject: Confirmation of the 2018 EDC Chairperson and Vice- Chairperson Background: The Mounds View City Code indicates that at the first regular meeting of the year, the Economic Development Commission (EDC) shall appoint a chairperson from among its voting members. This appointment shall be subject to the approval of the Economic Development Authority. Discussion: The EDC held its first regular meeting of the year on February 16, 2018, at which time the Commission selected its Chairperson and Vice-Chairperson for the year. Recommendation: Staff recommends the Authority confirm the EDC’s selection for a Chairperson and Vice- Chairperson by motion. EDC Chairperson: Jim Freichels EDC Vice-Chairperson: Dan Larson Respectfully submitted, __________________________ Brian Beeman Item No: 07B Meeting Date: February 26, 2018 Type of Business: EDA Business City of Mounds View Staff Report To: Economic Development Authority From: Brian Beeman, Business Development Coordinator Item Title/Subject: Resolution 18-EDA-306 Conditionally Authorizing Acquisition of Tax-Forfeited Land at a Discount for the Development of Multi-Family Affordable Housing Background: MWF Properties is proposing to construct a 60 unit workforce housing project on four parcels near Groveland Road and Mounds View Boulevard. Two of the parcels are privately owned and the other two parcels are tax forfeited. If a governmental organization acquires the tax forfeited properties for the use of an affordable housing project, Ramsey County allows the parcels to be purchased at a discount. Discussion: The City of Mounds View City is cooperating with MWF Properties to purchase two tax forfeited land parcels at a discount for the development of a multifamily affordable housing project. Ramsey County requires that a resolution be approved by the EDA/City Council authorizing the acquisition. The resolutions will be sent to the Ramsey County Board of Commissioners for their approval. Once approved by the County Board, the City/EDA will be required to send payment for the two parcels. MWF Properties will be sending the City/EDA a check for the total amount of the two parcels. Whereby, the City/EDA will write a check to the County to finalize the transaction. The DEED and Title process could take approximately three months to complete. Once the City/EDA has legal possession of the two parcels, the City/EDA will transfer the two parcels back to MWF Properties so they can assemble the two tax forfeited parcels and the two privately owned parcels for their project. Recommendation: Staff recommends the Authority consider approval of 18-EDA-306 by motion. Respectfully submitted, __________________________ Brian Beeman 1 516451v3 DTA MU205-47 EDA RESOLUTION 18-EDA-306 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA A RESOLUTION CONDITIONALLY AUTHORIZING THE ACQUISITION OF TAX-FORFEITED LAND AT A DISCOUNT FOR THE DEVELOPMENT OF MULTI-FAMILY AFFORDABLE HOUSING WHEREAS, two parcels of real property (PID 06.30.23.31.0031 and PID 06.30.23.31.0241), both of which are legally described on the attached Exhibit A (the “Property”), have forfeited to the State of Minnesota in trust for the taxing districts for the failure to pay real estate taxes; and WHEREAS, pursuant to Minnesota Statutes, section 282.01, Ramsey County manages the Property and is authorized to sell the Property directly to an organized or incorporated governmental subdivision of the state for any public purpose for which the governmental subdivision is authorized to acquire property; and WHEREAS, the Economic Development Authority of the City of Mounds View, Minnesota (the “EDA”), together with the City of Mounds View, Minnesota (the “City”), desires to purchase the Property and partner with Boulevard Apartments, Limited Partnership (the “Developer”) for the development of a 60-unit affordable housing complex (the “Development”); and WHEREAS, the Developer anticipates breaking ground during calendar year 2018 and the Development will include a mix of one-, two-, and three-bedroom workforce housing units; and WHEREAS, the EDA and the City have entered into a Real Estate Option Agreement with the Developer (the “Option Agreement”); and WHEREAS, the Option Agreement authorizes the Developer to provide the EDA and the City with written notice that will require them to make reasonable efforts to acquire the Property from Ramsey County (the “Option Notice”); and WHEREAS, the EDA, by virtue of its enabling resolution, possesses the authority of both an economic development authority and a housing and redevelopment authority pursuant to Minnesota Statutes, Section 469.091, subd. 1; and WHEREAS, Minnesota Statues, Sections 469.101 and 469.012 authorize an economic development authority and housing and redevelopment authority, respectively and collectively, to acquire property for the purpose of redevelopment; and WHEREAS, Minnesota Statutes, section 282.01, subd, 1a(d) authorizes a county to sell tax-forfeited property to a governmental subdivision at less than fair market value if (1) the 2 516451v3 DTA MU205-47 reduced price will lead to the development of affordable housing and (2) the governmental subdivision has documented both its plans for developing affordable housing and the laws authorizing it to acquire the property in furtherance of said plans; and WHEREAS, Section 4.57.60 of the Ramsey County Administrative Code allows the Property to be purchased by a governmental subdivision for 25% of its market value, plus maintenance costs and recording fees, on condition that the acquiring party enter into a memorandum of understanding with the county providing that it will place and enforce a deed restriction and/or declaration of restrictive covenant on the Property requiring that it will only be sold to parties qualifying for affordable housing for the next seven years; and WHEREAS, the EDA wishes to acquire the Property from Ramsey County together with the City for the amount provided in the price sheets contained in the attached Exhibit B and pursuant to the aforementioned discount, for a total of $53,036.25 for the purpose of facilitating the Development. NOW THEREFORE, BE IT RESOLVED by the Economic Development Authority of the City of Mounds View, Minnesota, as follows: 1. The EDA hereby approves the purchase of the Property from Ramsey County for $53,036.25 for the purpose of a collaborative redevelopment project, as described herein, between the EDA, the City, and the Developer. 2. The acquisition of the Property is conditioned on the EDA and the City first receiving the aforementioned Option Notice from the Developer in accordance with the terms of the Option Agreement. 3. Upon the receipt of the Option Notice from the Developer, EDA staff may provide a copy of this Resolution to Ramsey County and may further enter into a memorandum of understanding with Ramsey County, as approved by the EDA’s attorney, related to the requirement that the Property be used for affordable housing for seven years following the acquisition thereof. 4. EDA staff is hereby further authorized to take any and all necessary steps as may be determined required to effectuate the acquisition contemplated by this Resolution. Adopted on the 26th day of February, 2018. _________________________________ Attest: Carol A. Mueller, President ________________________________ Nyle Zikmund, Executive Director (SEAL) A-1 516451v3 DTA MU205-47 EXHIBIT A Legal Description of the Property PID: 06-30-23-31-0031 Parcel 1. Lot 50, except that part which lies Southwesterly of a line run parallel with and distant 100 feet Northeasterly of the Southwesterly boundary of said Lot 50, also except that part described as follows: Commencing at the Northwest corner of said Lot 50; thence East 7 feet along the North line of said Lot 50; thence Southerly 100 feet to a point of intersection on the West line of said Lot 50; thence North along said West line of said Lot 50 to the point of commencement; Auditor's Subdivision No. 89, Ramsey Co., Minn. The said excepted part of the above described property, the Southwesterly 100 feet has been taken by the State of Minnesota for public Highway purposes. Parcel 2. All that part of Lot 32, Auditor's Subdivision No. 89, Ramsey Co., Minn., described as follows, to-wit: Commencing at a point on the West line of Lot 50, Auditor's Subdivision No. 89, which point is 100 feet South of the Northwest corner of said Lot 50; thence South to a line 100 feet Northeasterly from and parallel with the Southerly line of Lot 32; thence Northwesterly on said parallel line 32 feet; thence Northeasterly to the point of beginning. and, PID: 06-30-23-31-0241 The South 135.00 feet, front and rear, of Lot 47, Auditor's Subdivision No. 89, lying westerly of the East 187.00 feet. B-1 516451v3 DTA MU205-47 EXHIBIT B Price Proposals for the Property B-2 516451v3 DTA MU205-47 Item No: 07C Meeting Date: February 26, 2018 Type of Business: EDA Business City of Mounds View Staff Report To: Economic Development Authority From: Brian Beeman, Business Development Coordinator Item Title/Subject: Joint Resolution 8917, 18-EDA-307 Approving Real Estate Option Agreement for Boulevard Apartments Background: MWF Properties is proposing to construct a 60 unit workforce housing project on four parcels near Groveland Road and Mounds View Boulevard. Two of the parcels are privately owned and the other two parcels are tax forfeited. If a governmental organization acquires the tax forfeited properties for the use of an affordable housing project, Ramsey County allows the parcels to be purchased at a discount. MWF Properties is requesting an extension to their original real estate option agreement which expired November 1, 2017 for the option to purchase the two tax-forfeited parcels from the City. The City Attorney has reviewed and updated the real estate option agreement for the EDA’s consideration. The EDA will review and consider the option agreement extension prior to the City Council meeting. Discussion: The City of Mounds View City is cooperating with MWF Properties to purchase two tax forfeited land parcels at a discount for the development of a multifamily affordable housing project. MWF Properties would like the option to purchase the two tax-forfeited parcels from the City. However, a legal document called the Real Estate Option Agreement is required which outlines the Seller (City) and Buyer’s (Boulevard Apartments) duties/responsibilities and roles in the transaction. Once the City/EDA has legal possession of the two parcels, the City/EDA will transfer the two parcels back to MWF Properties so they can assemble the two tax forfeited parcels and the two privately owned parcels for their project. The City Attorney briefly discussed the reasoning and process for the extension at the February 5, 2018 Council Worksession. Recommendation: Staff recommends the Authority consider approval of joint Resolution 8917, 18-EDA-307 by motion. Respectfully submitted, __________________________ Brian Beeman Attachments: 1) Joint Resolution 8917, 19-EDA-307 2) Real Estate Option Agreement 1 499209v7 MU205-47 RESOLUTION 8917 RESOLUTION 18-EDA-307 CITY OF MOUNDS VIEW AND THE MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY COUNTY OF RAMSEY STATE OF MINNESOTA JOINT RESOLUTION APPROVING A REAL ESTATE OPTION AGREEMENT FOR PROPERTY IN THE CITY OF MOUNDS VIEW WHEREAS, the City of Mounds View (the “City”) is a municipal corporation and political subdivision duly organized and existing under the Constitution and laws of the State of Minnesota; and, WHEREAS, the Mounds View Economic Development Authority (the “EDA”) is a public body corporate and politic under the laws of the state of Minnesota; and, WHEREAS, the City has the ability under Minnesota Statutes, Chapter 282, to acquire certain tax-forfeited property upon application to Ramsey County, which is legally described on Exhibit A (the “Property”) attached hereto and hereby made a part hereof; and, WHEREAS, Boulevard Apartments, a limited partnership under the laws of the state of Minnesota (“the “Developer”), desires to enter into a Real Estate Option Agreement (the “Option Agreement”) which is attached hereto as Exhibit B; and, WHEREAS, the City and EDA wish to acquire the Property and to enter into the Option Agreement for the purpose of allowing the sale of the Property to the Developer; and, WHEREAS, the Planning Commission for the City has reviewed the proposed sale of the Property and has determined that such sale complies with the City’s comprehensive plan as required by Minnesota Statutes, Section 462.356 or the City desires to dispense with the requirements of Minn. Stat. § 462.356, subd. 2 and finds in the City’s judgment that the proposed sales of the Property has no relation to the comprehensive municipal plan of the City of Mounds View. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Mounds View and the Board of the Mounds View Economic Development Authority that the recitals and exhibits, if any, set forth in this Resolution are incorporated into and made a part of this Resolution. 2 499209v7 MU205-47 Resolution 8917 & 18-EDA-307 February 26, 2018 Page 2 NOW, THEREFORE, BE IT FURTHER RESOLVED, that the City Council of the City of Mounds View and the Board of the Mounds View Economic Development Authority do hereby approve the Option Agreement regarding the Property as substantially set forth in Exhibit B, subject to modifications approved by the City Attorney that do not materially alter the City’s and the EDA’s rights and obligations under the Option Agreement, and that are further approved by the City’s Mayor and City Administrator and EDA’s President and Executive Director, which approvals shall be conclusively evidenced by execution of the Option Agreement. NOW, THEREFORE, BE IT FURTHER RESOLVED, that City and EDA staff are hereby authorized to undertake any actions necessary regarding the Property sufficient to allow the City and EDA to enter into the Option Agreement. NOW, THEREFORE, BE IT FINALLY RESOLVED, that the City Council of the City of Mounds View and the Board of the Mounds View Economic Development Authority hereby authorize City staff and City consultants to develop any necessary documents to effectuate such Option Agreement, and the Mayor and City Administrator and the President and Executive Director, respectively, are duly authorized to execute any further agreements which are necessary, in the opinion of the City Attorney, to carry out this transaction. Adopted this 26th day of February, 2018. CITY OF MOUNDS VIEW By: ______________________________ Carol A. Mueller, Mayor ATTEST: By: ______________________________ Nyle Zikmund, City Administrator (seal) MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY By: ______________________________ Carol A. Mueller, President ATTEST: By: ______________________________ Nyle Zikmund, Executive Director (seal) A-1 499209v7 MU205-47 EXHIBIT A Legal Description PID: 06-30-23-31-0031 Parcel 1. Lot 50, except that part which lies Southwesterly of a line run parallel with and distant 100 feet Northeasterly of the Southwesterly boundary of said Lot 50, also except that part described as follows: Commencing at the Northwest corner of said Lot 50; thence East 7 feet along the North line of said Lot 50; thence Southerly 100 feet to a point of intersection on the West line of said Lot 50; thence North along said West line of said Lot 50 to the point of commencement; Auditor's Subdivision No. 89, Ramsey Co., Minn. The said excepted part of the above described property, the Southwesterly 100 feet has been taken by the State of Minnesota for public Highway purposes. Parcel 2. All that part of Lot 32, Auditor's Subdivision No. 89, Ramsey Co., Minn., described as follows, to-wit: Commencing at a point on the West line of Lot 50, Auditor's Subdivision No. 89, which point is 100 feet South of the Northwest corner of said Lot 50; thence South to a line 100 feet Northeasterly from and parallel with the Southerly line of Lot 32; thence Northwesterly on said parallel line 32 feet; thence Northeasterly to the point of beginning. and, PID: 06-30-23-31-0241 The South 135.00 feet, front and rear, of Lot 47, Auditor's Subdivision No. 89, lying westerly of the East 187.00 feet. EXHIBIT B Option Agreement [INSERT REAL ESTATE OPTION AGREEMENT] 1 517239v2 MU205-47 REAL ESTATE OPTION AGREEMENT THIS REAL ESTATE OPTION AGREEMENT (“Agreement”) is made and entered into as of this 26th day of February, 2018, by and between the City of Mounds View, a Minnesota municipal corporation together with the Mounds View Economic Development Authority, a public body corporate and politic under the laws of Minnesota (collectively, the “Seller”) and Boulevard Apartments, Limited Partnership, a Minnesota limited partnership (“Buyer”). RECITALS: A. Seller has the opportunity to acquire certain tax forfeited real property, which is located in Ramsey County, Minnesota, for less than market value. The real property is legally described on Exhibit A attached hereto and hereby made a part hereof, together with all rights, title and interest appurtenant thereto (the “Real Property”); and B. Seller only intends to pursue such opportunity to acquire the Real Property upon a commitment from Buyer that Buyer intends to purchase the Real Property from Seller and develop the Real Property; and C. Seller wishes to grant Buyer an option to cause Seller to take all reasonable efforts to acquire the Real Property; and D. Should Seller successfully obtain title to the Real Property, Seller desires to grant to Buyer, and Buyer desires to obtain from Seller the Real Property, under the terms and conditions hereunder. NOW, THEREFORE, in consideration of mutual covenants set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows: 1. Grant of Option. In consideration of the sum of Five Hundred Dollars ($500.00) paid by Buyer to Seller (the “Option Deposit”), receipt of which is hereby acknowledged by Seller, Seller hereby grants to Buyer from and after the date of this Agreement and through and including 11:59 PM Central Standard Time on _______________, 2018 (the “Option Deadline”), the option to direct Seller to take all reasonable efforts to acquire the Real Property (the “Option”). 2. Option Contingent. Buyer hereby acknowledges that Seller’s obligation to sell the Real Property hereunder is contingent on Seller’s successful receipt of title to the Real Property from the state of Minnesota, pursuant to state law. Any right granted to Buyer under this Agreement is subject to the contingency expressed in this Section 2. 3. Obligation to Purchase. If Buyer elects to exercise its Option, and Seller is successful in obtaining title to the Real Property, Buyer shall be obligated to purchase the Real Property from Seller under the terms stated herein. This provision shall be subject to specific performance. 2 517239v2 MU205-47 4. Manner of Exercise of Option; Notices. If Buyer elects to exercise the Option, it shall do so by giving written notice thereof to Seller (such notice, an “Option Notice”) on or before the Option Deadline. An Option Notice shall be in writing and shall be deemed given on the date (i) delivered personally, (ii) deposited with the United States Postal Service, postage prepaid, registered or certified, return receipt requested, (iii) deposited with a national courier guaranteeing overnight delivery, or (iv) sent via facsimile or email with electronic delivery confirmed. Notwithstanding anything in this Agreement to the contrary, upon Buyer giving a written Option Notice to Seller, Buyer shall be obligated to acquire the Real Property from Seller and shall pay all costs associated with such transaction, including, but not limited to the Purchase Price and the Seller’s Costs, as defined below, and Buyer shall enter into both a Contract for Private Development and a Purchase and Development Agreement with Seller regarding the sale and development of the Real Property consistent with Minnesota law, including but not limited to Minnesota Statutes, Section 469.105. 5. Seller’s Actions. Promptly upon receipt of an Option Notice from Buyer, Seller shall undertake all actions required in order for Seller to obtain title to the Real Property, and thereafter to convey title to Buyer pursuant to the terms of this Agreement. 6. Purchase Price; Costs; Assessment. 6.1. The purchase price paid by Buyer to Seller for the Real Property shall be an amount equal to the sum of the price paid by Seller to Ramsey County to obtain the Real Property (such price being estimated to be approximately $53,036.25), less the amount of the Option Deposit (such sum, the “Purchase Price”). The Purchase Price shall be payable by certified check or wire transfer on the Closing Date (as hereafter defined). Buyer acknowledges and understands that the estimated price above ($53,026.25) is based on a 75% reduction of the Real Property’s fair market value pursuant to Ramsey County’s authority to sell tax-forfeited property to a government subdivision at a reduced price for the purpose of developing and maintaining affordable housing. This price reduction is authorized pursuant to Minnesota Statutes, Section 282.01, subd. 1a(d) and Section 4.57.60 of the Ramsey County Administrative Code and is strictly conditioned on the Real Property being used for affordable housing, as defined therein, for at least seven years. Buyer agrees that if it does not purchase the Real Property from Seller as required by this Agreement, or if the Real Property is not developed as affordable housing and maintained as such for seven years following Seller’s acquisition of the Real Property, irrespective of the cause, Buyer shall be solely responsible for any and all payments due to Ramsey County in accordance with its policies in order for the county to recapture the 75% price reduction. Buyer further acknowledges and agrees that Seller is obligated to place a deed restriction and/or declaration of restrictive covenant on the Real Property in order to ensure that affordable housing is maintained on the Real Property for the applicable seven-year period. 6.2. In addition to the Purchase Price, Buyer shall also be required to reimburse Seller for any and all costs incurred by Seller in acquiring the Real Property and undertaking all actions required in order for Seller to obtain fee title to the Real Property, including, 3 517239v2 MU205-47 without limitation, taxes and fees, attorneys’ fees, document drafting fees, engineering fees, and financial advisor fees (the “Seller’s Costs”). The Seller’s Costs shall include all costs incurred in effectuating a Proceeding Subsequent, if incurred by Seller and as may be necessary to clear title defects. Buyer shall, upon execution of this Agreement, provide a cash escrow in the amount of $___________ to be used to reimburse Seller for the Seller’s Costs. If such costs exceed the amount of the established escrow, Buyer shall, upon demand by Seller, pay such additional costs to Seller within ten (10) days of such demand, and provided further that the amount by which this deposit exceeds the Seller's Costs, if any, shall be returned to Buyer . 6.3. In the event Seller does not recover its costs as required by this Agreement, as an additional remedy, Seller may, at its option, assess the Real Property in the manner provided by Minnesota Statutes, Chapter 429, and Buyer hereby consents to the levy of such special assessments without notice or hearing and waives all rights to appeal such assessments pursuant to Minnesota Statutes, Section 429.081, provided the amount levied, together with the funds deposited with Seller under this Section 6, does not exceed the expenses actually incurred by Seller. Further, Seller may, at its option, as an additional remedy, recover expenses actually incurred by Seller as service charges, in the manner provided by Minnesota Statutes, Sections 415.01, 366.011 and 366.012, and Buyer hereby consents to the levy of such assessments without notice or hearing and waives all rights to appeal such assessments pursuant to such Minnesota Statutes, provided the amount levied, together with the funds deposited with Seller, does not exceed the expenses actually incurred by Seller pursuant to this Agreement. 6.4 This entire Section 6 shall survive termination of this Agreement and shall be binding on Buyer regardless of the enforceability of any other provision of this Agreement. 7. Closing. If Buyer shall become obligated to purchase the Real Property from Seller pursuant to this Agreement, the parties shall set a mutually agreeable closing date, which shall be as soon as reasonably practicable following Seller’s acquisition of fee title (the “Closing Date”). On the Closing Date, Seller shall deliver to Buyer a Quit Claim Deed, duly executed and in recordable form, together with any such other documents as may be reasonably required by Buyer’s title insurance company to effectuate the conveyance of marketable title of the Real Property to Buyer. Upon the Closing Date, Buyer shall deliver to Seller the Purchase Price, together with any documents as may be reasonably required by Buyer’s title insurance company to consummate the transaction. Buyer shall be responsible for any and all costs of the closing for the Real Property. 8. Exercise of Option. For the avoidance of doubt, the Option granted to Buyer hereunder represents purely an option and not an obligation to initiate Seller’s acquisition of the Real Property pursuant to the terms of this Agreement. However, notwithstanding anything in this Agreement to the contrary, upon Buyer giving a written Option Notice to Seller, Buyer shall be obligated to acquire the Real Property from Seller in the event that Seller is successful in gaining title to the Real Property, and Buyer shall pay all costs for such transaction, including, but not limited to the Purchase Price and the Seller’s Costs as set forth in this Agreement. Buyer shall also be required to enter into a Contract for Private Development (for any public financing 4 517239v2 MU205-47 assistance) and a Purchase and Development Agreement (for the Real Property) with Seller regarding the sale and development of the Real Property consistent with Minnesota law, including but not limited to Minnesota Statutes, Section 469.105. In the event that Buyer does not exercise the Option by the Option Deadline, then Seller shall retain the Option Deposit as full and complete consideration for the Option granted by this Agreement. 9. Property “As Is” / Buyer’s Diligence. SELLER MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND TO BUYER, INCLUDING, WITHOUT LIMITATION, THE PHYSICAL CONDITION OF THE REAL PROPERTY OR ITS SUITABILITY FOR ANY PARTICULAR PURPOSE. Buyer acknowledges that Buyer has already (or, prior to the Closing Date, will have) independently inspected the Real Property and, if Buyer shall deliver an Option Notice, then it shall do so based solely upon Buyer’s own examination and inspection. Buyer agrees that the Real Property is to be sold to and accepted by Buyer upon the Closing Date in its then present condition, AS IS, WITH ALL FAULTS, IF ANY, AND WITHOUT ANY WARRANTY WHATSOEVER, EXPRESS OR IMPLIED. To the extent possible, Seller shall permit Buyer access to the Real Property to conduct such inspections and tests thereof as Buyer may deem necessary or desirable prior to the Closing Date, provided that Buyer shall indemnify and save Seller harmless from any claims or liability arising from Buyer’s tests and inspections of the Real Property. 10. Governing Law. This Agreement shall be construed as to both validity and performance and enforced in accordance with and governed by the laws of the State of Minnesota. 11. Seller’s Obligation. Buyer expressly acknowledges that Seller’s sole obligation hereunder is to take all reasonable steps in order to acquire title to the Real Property. The parties hereby acknowledge that Seller has no right to purchase the Real Property, and that no government entity is under any legal obligation to sell the Real Property to Seller. In the event that Seller is unable to obtain title to the Real Property, all of Seller’s obligations hereunder shall terminate immediately upon notice of such finding. [THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.] 5 517239v2 MU205-47 IN WITNESS WHEREOF, the undersigned have signed this Real Estate Option Agreement as of the day and year first written above. SELLER: CITY OF MOUNDS VIEW By: ______________________________ Carol A. Mueller Its: Mayor By: ______________________________ Nyle Zikmund Its: City Administrator MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY By: Carol A. Mueller Its: President By: Nyle Zikmund Its: Executive Director [Signature pages to Purchase Agreement] 6 517239v2 MU205-47 BUYER: BOULEVARD APARTMENTS, LIMITED PARTNERSHIP By: ___________________________ Its: General Partner By: ____________________________ Chris Stokka Its: ____________________________ [Signature pages to Purchase Agreement] A-1 517239v2 MU205-47 EXHIBIT A Legal Description PID: 06-30-23-31-0031 Parcel 1. Lot 50, except that part which lies Southwesterly of a line run parallel with and distant 100 feet Northeasterly of the Southwesterly boundary of said Lot 50, also except that part described as follows: Commencing at the Northwest corner of said Lot 50; thence East 7 feet along the North line of said Lot 50; thence Southerly 100 feet to a point of intersection on the West line of said Lot 50; thence North along said West line of said Lot 50 to the point of commencement; Auditor's Subdivision No. 89, Ramsey Co., Minn. The said excepted part of the above described property, the Southwesterly 100 feet has been taken by the State of Minnesota for public Highway purposes. Parcel 2. All that part of Lot 32, Auditor's Subdivision No. 89, Ramsey Co., Minn., described as follows, to-wit: Commencing at a point on the West line of Lot 50, Auditor's Subdivision No. 89, which point is 100 feet South of the Northwest corner of said Lot 50; thence South to a line 100 feet Northeasterly from and parallel with the Southerly line of Lot 32; thence Northwesterly on said parallel line 32 feet; thence Northeasterly to the point of beginning. and, PID: 06-30-23-31-0241 The South 135.00 feet, front and rear, of Lot 47, Auditor's Subdivision No. 89, lying westerly of the East 187.00 feet.