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07-16-19 HRA Agenda PacketREGULAR MEETING AGENDA Pages 1.Roll Call 2.Approval of Agenda 3.Approval of Minutes Regular Meeting April 16,2019 2 3 4.Reimbursement of City Expenditures 4 5.Receipt of July 2019 Financial Reports 5 7 6.North Wirth Redevelopment Area A.Fourth Amendment and Assignment of GVEC Properties,LLC Private Development Agreement 8 17 7.Adjournment July 16,2019 6:30 pm Council Chambers Golden Valley City Hall 7800 Golden Valley Road REGULAR MEETING MINUTES Call to Order The meeting was called to order at 6:41 pm by Housing and Redevelopment Authority Chair Fonnest. 1. Roll Call Present: Chair Larry Fonnest, Commissioners Joanie Clausen, Shep Harris, Gillian Rosenquist and Steve Schmidgall Staff present: HRA Director Cruikshank, HRA Attorney Cisneros and City Clerk Luedke 2. Approval of Agenda MOTION made by Commissioner Schmidgall, seconded by Commissioner Clausen to approve the agenda of April 16, 2019, as submitted and the motion carried. 3. Approval of Housing and Redevelopment Authority Minutes - Regular Meeting – January 15, 2019 MOTION made by Commissioner Clausen, seconded by Commissioner Schmidgall to approve the Regular Housing and Redevelopment Authority minutes of January 16, 2019, as submitted and the motion carried. 4. Reimbursement of City Expenditures Finance Director Virnig presented the staff report and answered questions from the Commissioners. MOTION made by Commissioner Harris, seconded by Commissioner Clausen to approve the following payments: Check 4092 Cornerstone Creek $22,706.56 for the second half of 2018 property taxes that Hennepin County disbursed after the January meeting and the motion carried. 5. Receipt of March 2019 Financial Reports Finance Director Virnig presented the staff report. MOTION made by Commissioner Schmidgall, seconded by Commissioner Clausen to receive and file the March 2019 HRA Financial Reports and the motion carried. Apr 16, 2019 – 6:30 pm Council Chambers Golden Valley City Hall 7800 Golden Valley Road City of Golden Valley HRA Regular Meeting Minutes Apr 16, 2019 – 6:30 pm 2 6. Adjournment MOTION made by Commissioner Schmidgall, seconded by Commissioner Harris and the motion carried to adjourn the meeting at 6:52 pm. Larry Fonnest, Chair ATTEST: Kristine A. Luedke, City Clerk Executive Summary For Action Golden Valley Housing and Redevelopment Authority Meeting July 16, 2019 Agenda Item 4. Reimbursement of City Expenditures Prepared By Sue Virnig, Finance Director Summary As of July 16, 2019 the HRA has the following expenditures: City Expenditures: Amount 1000 Reimburse City Costs (Audit Fees/Debt Service) 188,234.93 1000 Associated Bank –Pay Go Note 26,930.43 1000 Cornerstone – Pay Go Note 27,510.00 1000 Golden Villas, LLC-Pay Go Note 169,236.50 411,911.86 HRA Expenditures: Amount 9000 General Fund 12,000.00 9250 North Wirth #3 26,930.43 9300 Highway 55 West 214,181.63 9302 Cornerstone Creek 27,510.00 9400 Winnetka/Medicine Lake Road 131,289.80 411,911.86 Recommended Action Motion to approve the following payments: Cornerstone Creek $27,510, Golden Villas 169,236.50, Associated Bank $26,930.43 and the City of Golden Valley $188,234.93. Executive Summary For Action Golden Valley Housing and Redevelopment Authority Meeting July 16, 2019 Agenda Item 5. Receipt of July 2019 Financial Reports Prepared By Sue Virnig, Finance Director Summary Attached are the July 2019 Financial Reports for Housing and Redevelopment Authority (HRA) review. Staff will address questions from the HRA before or at the meeting. Attachments HRA General Fund Budget Report (1 page) HRA Capital Project Funds Report (1 page) Recommended Action Motion to receive and file the July 2019 HRA Financial Reports. Percentage Of Year Completed: 50% Over % Of 2019 Apri-June YTD (Under)Budget Revenue Budget Actual Actual Budget Received Interest Earnings (1)0 0.00 0.00 0.00 Fund Balance 12,000 12,000.00 12,000.00 0.00 Totals $12,000 12,000.00 12,000.00 0.00 100.00% Over % Of 2019 Apri-June YTD (Under)Budget Expenditures Budget Actual Actual Budget Expended Audit 12,000 12,000.00 12,000.00 0.00 100.00% Totals $12,000 12,000.00 12,000.00 0.00 100.00% Notes: 1) Interest will be allocated at year end. HRA of Golden Valley General Fund July 2019 Budget Report (unaudited) HRA Of Golden Valley 2019 Financial Report 9300 9302 9400 9250 Hwy 55/Cornerstone Winnetka North West TIF (4)Med Lk Rd Wirth #3 Cash Balance @ 04/01/19 $22,706.78 $6.87 $0.00 $16,661.32 Add: Receipts: Interest Lease revenue Increment Received 283,039.17 27,510.97 241,018.75 10,306.21 Less: Expenditures: Payment to Cornerstone Creek (1);(27,510.00) Payment to Golden Villas (2)(169,236.50) Payment to City of Golden Valley (44,945.13)(131,289.80) Payment to Associated Bank (3)(26,930.43) Cash Balance @ 07/11/19 $91,564.32 $7.84 $109,728.95 $37.10 2)(2)(3) 1) Payment for Housing District 2) Payment for Renewal and Renovation District 3) Pay Go Note remaining $160,248.85. Capital Project Funds Executive Summary For Action Golden Valley Housing and Redevelopment Authority Meeting July 16, 2019 Agenda Item 6. Fourth Amendment and Assignment of GVEC Properties, LLC Private Development Agreement Prepared By Maria Cisneros, HRA Attorney Sue Virnig, Finance Director Marc Nevinski, Physical Development Director Summary The Housing and Redevelopment Authority (HRA) entered into the GVEC Properties, LLC Private Development Agreement in 2006. The Agreement provided for the development of land depicted in the attached Exhibit A. The development consisted of three phases. The Developer completed Phase I (lots 5, 7 and 8) in 2007. Phase II was removed from the PUD and Tax Increment District through a 2013 amendment to the Development Agreement. Phase III (lots 4 and 5) is not yet complete. Development of the Property was delayed for several years due to unfavorable market conditions. In 2012, the Developer defaulted on loan payments to its lender, Bank Mutual. Bank Mutual eventually received the property from the Developer by deed in lieu of foreclosure. The parties amended the Development Agreement two times, in 2012 and 2013, to allow the Bank to take ownership of the property but delay construction of the remaining buildings until the Bank conveyed the Property to another party to complete the project. The amendments also eliminated interest on the Tax Increment Finance Note associated with the project. In 2018, Bank Mutual merged with Associated Bank. Associated Bank, as successor in interest to Bank Mutual, now requests that the HRA approve a Fourth Amendment to the Development Agreement to: Consent to the transfer of the Property to Lund Financial Group for development; and Authorize the issuance of an amended TIF Note in the name of Associated Bank as successor in interest to Bank Mutual. The principle amount remaining on the TIF Note is $187,813.13 and no interest is accruing. The Tax Increment District must be decertified by December, 2028. Attachments Exhibit A North Wirth Area Map (1 page) Fourth Amendment and Assignment of GVEC Properties, LLC Private Development Agreement 7 pages) Recommended Action Motion to approve Fourth Amendment and Assignment of GVEC Properties, LLC Private Development Agreement. OWNERSHIP AFTER LAND TRANSFER ?ID NO. 19-029-24-I3-005 I 19-029-24-13-0043 19-029-24-13-0044 19-029-24-13-0049 19-029-24-13-0052 I 9-029-24-13-0053 19-029-24-13-0054 19-029-24-1.3-0055 19-029-24-13-0056 19-029-24-13-0050 19-029-24-14-0f41 & 19-029-24-14-01 42 / /; /, / ,I / OWN ER GV Executive Center Assoc. Bank Mutual Bank niutual Millerr Plant LLC Bank Mutual Goet. z Real Estate Holdings 4282 LLC Bank Mutual Bank Mutual Moga Properties LLC Stan1 Koch Trucking Inc. ;:/) 02-,�-J 615-65 T.29, R.24, S.19 2012163-colorsketch-2. wg MAP - --------�-- 100 200 SCALE IN FEET OWNERSHIP AFT.ER PLATTINC: STAN KOCH TRUCK/NC INC. GENERAL NOTES 1.) Survey coordinate basis: Assumed Property is located in Hennepin County, Minnesota 2.) Ownership information shown hereon was obtained from the Hennepin County Property Tax Information web site. Ownership information is subject to revision upon receipt of a title search by a title insurance company. I hereby certify that this sketch, plan, or report was prepared by me or under my direct supervision and that I am a duly Licensed Land Surveyor under the laws of the State of Minnesota. Dated this 5th day of October, 2012 SUNDE LAND SURVEYING, LLC. BY.----------------�-:-�::-: Mark S. Hanson, P.L.S. Minn. Lie. No. 15480 if SUNDE 9001 East Bloomlngton freeway (35W)•Sulte 118 Bloomington, Minnesota 55420-3435 952-881-2455 (Fox: 952-888-9526) LAND SURVEYING www.sunde.com 1 Space above reserved for recording information) ______ _ FOURTH AMENDMENT AND ASSIGNMENT OF GVEC PROPERTIES, LLC PRIVATE DEVELOPMENT AGREEMENT THIS FOURTH AMENDMENT AND ASSIGNMENT OF GVEC PROPERTIES, LLC PRIVATE DEVELOPMENT AGREEMENT (the “Fourth Amendment”) is dated as of July ___, 2019, and is made and entered into by and among the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY, a public body corporate and politic established and existing under Minnesota Statutes, Section 460.001 et seq., with its principal offices at 7800 Golden Valley Road, Golden Valley, Minnesota 55427 (the “HRA”); and ASSOCIATED BANK, NATIONAL ASSOCIATION, a national banking association with its principal place of business at 330 E. Kilbourn Ave., Suite 200, Milwaukee, Wisconsin 53202 (the “Bank”); and LUND FINANCIAL GROUP, a Minnesota corporation with its principal office located at 4109 Regent Avenue North, Robbinsdale, MN 55422 (“Lund”). The HRA, the Bank, and Lund are each referred to herein as a “Party,” and collectively as the “Parties.” WHEREAS, on June 24, 2018, the Bank merged with BANK MUTUAL, a federal savings bank, with its principal office located at 4949 West Brown Deer Road, Milwaukee, Wisconsin (“Bank Mutual”), thereby assuming Bank Mutual’s interest in the Development Property (as defined below) and obligations under the Development Agreement (as defined below). WHEREAS, the HRA and GVEC Properties, LLC (“Developer”) entered into the GVEC Properties, LLC Private Development Agreement, dated January 10, 2006, and filed with the Hennepin County Registrar of Titles on February 3, 2006 as Document No. 4222316 and recorded with the Hennepin County Recorder as Document No. 8743490 (the Original Development Agreement”), and a certain First Amendment thereto dated July 15, 2009 (the “First Amendment”); and WHEREAS, the HRA, Developer, and Bank Mutual entered into the Second Amendment of GVEC Properties, LLC Private Development Agreement, dated March 13, 2 2012, and filed with the Hennepin County Registrar of Titles on April 4, 2012, as Document No. T4942086 (the “Second Amendment”); and WHEREAS, the HRA and Bank Mutual entered into the Third Amendment of the GVEC Properties, LLC Private Development Agreement, dated January 8, 2013, and recorded with the Hennepin County Recorder as Document No. A09987338 (the “Third Amendment”); and WHEREAS, the Original Development Agreement, the First Amendment, the Second Amendment, and the Third Amendment are collectively referred to herein as the Development Agreement”; and WHEREAS, pursuant to the Original Development Agreement, Developer purchased from the HRA a site in the North Wirth Parkway Redevelopment Area of Hennepin County, Minnesota having the original legal description of Lot 1, Block 1, North Wirth Parkway 5th Addition, Hennepin County, Minnesota ("Development Property"), and thereafter commenced construction of an office condominium project on the Development Property; and WHEREAS, Developer committed several Events of Default under the Development Agreement, and Developer also defaulted under the mortgage granted by Developer to Bank Mutual with respect to a portion of the Development Property; and WHEREAS, the HRA, Developer and Bank Mutual entered into the Second Amendment to, among other things, modify the schedule for completion of Phase II and Phase III of the Improvements; memorialize the HRA’s waiver of certain defaults under the Development Agreement and acknowledge the cure of certain other defaults; and permit Developer to assign its interest in the Development Property and under the Development Agreement to Bank Mutual; and WHEREAS, the HRA and Bank Mutual entered into the Third Amendment to permit the transfer by Bank Mutual to a third party of a portion of the Development Property, free and clear of all terms, conditions, obligations, and restrictions contained in the Development Agreement; extend the period for completion of the remaining Improvements; and address certain other matters; and WHEREAS, the HRA and the Bank now wish to enter into this Fourth Amendment to permit the transfer by the Bank to a third party a portion of the Development Property, subject to the terms of the Development Agreement and to address certain other matters. NOW THEREFORE, the Parties hereby agree as follows: l. Capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Development Agreement. 2. The HRA consents to the sale of that portion of the Development Property described in Exhibit A (the “Sale Parcel”) by the Bank to Lund pursuant to the terms of that certain real estate Purchase and Sale Agreement having an effective date of November 28, 2018. 3 The HRA’s consent to the sale of the Sale Parcel to Lund is contingent on Lund’s acceptance of the terms of the Development Agreement and this Fourth Amendment. 3. The Bank assigns and transfers unto Lund all of its right, title and interest in and under the Development Agreement, and Lund agrees to accept such right and interest subject to the terms and conditions hereof. Lund assumes the Developer’s obligations under the Development Agreement as modified by this Amendment. The foregoing assignment and assumption shall become effective as of the date Lund receives (or received) legal title from the Bank by valid deed effectively conveying to Lund marketable title in the Sale Parcel. 4. Within 30 days after execution of this Fourth Amendment by the Parties, the Bank shall deliver the original Seconded Amended Tax Increment Note (or a legally sufficient Affidavit of Lost Note), the HRA shall cancel the Seconded Amended Tax Increment Note, and the HRA shall issue and deliver the Third Amended Tax Increment Note to the Bank, as provided in the Second Amendment. The Third Amended Tax Increment Note shall supersede and replace all previous versions of the Tax Increment Note. Within 30 days after issuance of the Third Amended Tax Increment Note, the HRA shall pay all payments currently owed to Bank Mutual under the Tax Increment Note to the Bank. Notwithstanding its sale of the Sale Parcel, the Bank shall continue to receive payments on the Third Amended Tax Increment Note as required therein. 5. The Bank shall record this Fourth Amendment and the transfer documents for the sale of the Sale Parcel and pay all recording fees in connection therewith. 6. As amended hereby, the Development Agreement continues in full force and effect. Except as described herein, to the knowledge of the HRA there are no defaults by Developer or the Bank under the Development Agreement that have not been waived or cured. The Bank agrees that the HRA is not currently in default under the Agreement, and any prior defaults by the HRA are hereby waived. The Bank also agrees that the HRA has made all payments of principal and/or accrued interest under the Tax Increment Note and any amendments to the Tax Increment Note when due, and that the HRA is _not in default thereunder. 7. The HRA hereby acknowledges that the Bank has deposited with the HRA the sum of $6,000, to be used solely for reimbursement of the HRA’s legal expenses incurred in connection with the review of this Amendment and for no other purpose; and further, the HRA agrees that it shall return the balance of such funds remaining, if any, to the Bank upon receipt of a recorded copy of this Fourth Amendment. The HRA further confirms and acknowledges that no costs or fees in excess of said deposit or as otherwise provided herein shall be assessed to the Bank or Development Property in connection with this Amendment without the prior knowledge and approval of the Bank. 8. The City is not a Party under this Agreement. Remainder of Page Blank. Signature Page to Follow] 17593273v2 4 IN WITNESS WHEREOF, the Parties have duly executed this Amendment as of the date first above written. HOUSING AND DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY Larry Fonnest, Chair Timothy Cruikshank, Director STATE OF MINNESOTA ) SS. COUNTY OF HENNEPIN ) This instrument was acknowledged before me on _____ day of ___________________, 2019, by Larry Fonnest and Timothy Cruikshank, the Chair and Director, respectively, of the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY. 5 ASSOCIATED BANK, NATIONAL ASSOCIATION, a national banking association By: Kimberly McCann Its: Senior Vice President STATE OF ___________ ) SS. COUNTY OF ___________ ) This instrument was acknowledged before me on _____ day of ___________________, 2019, by Kimberly McCann, the Senior Vice President of ASSOCIATED BANK, NATIONAL ASSOCIATION, a national banking association, on behalf of said bank. 6 LUND FINANCIAL GROUP, INC., a Minnesota corporation By: Its: STATE OF MINNESOTA ) SS. COUNTY OF HENNEPIN ) This instrument was acknowledged before me on _____ day of ___________________, 2019, by the ________________, of the LUND FINANCIAL GROUP, INC., a Minnesota corporation, on behalf of said corporation. THIS INSTRUMENT WAS DRAFTED BY: City of Golden Valley (MTC) 7800 Golden Valley Road Golden Valley, MN 55427 EXHIBIT A Description of Sale Property Lots 4 and 5, Block 1, North Wirth Business Center P.U.D. No. 100, Hennepin County, Minnesota.