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01-87 - 12-18 - Authorize Agreement Valley Square Commons Rental Townhomes Resolution 01-87 December 18, 2001 Member LeSuer introduced the following resolution and moved its adoption: RESOLUTION AUTHORIZING EXECUTION OF A COOPERATION AGREEMENT FOR THE DEVELOPMENT AND SUPPORT OF MHOP UNITS IN GOLDEN VALLEY (VALLEY SQUARE COMMONS RENTAL TOWNHOMES) WHEREAS CommonBond Communities (CommonBond) has proposed the development of Valley Square Commons, a 25-unit townhouse project with rents affordable to low- and moderate-income families, in the Valley Square Redevelopment Area; and WHEREAS CommonBond has been successful in securing funding for a portion of this project from the Minneapolis Public Housing Authority in and for the City of Minneapolis for 5 units of low-rent housing, to be developed with the financial assistance of the United States Housing and Urban Development, known as "MHOP" units; and WHEREAS the Housing and Redevelopment Authority in and for the City of Golden Valley ("HRA") has supported this project as part of its Valley Square Redevelopment Project in Area B known as Wesley Commons. NOW THEREFORE BE IT RESOLVED that the City Council supports the project, approves the attached Cooperation Agreement between the Minneapolis Public Housing Authority in and for the City of Minneapolis and the HRA, and authorizes the execution of the Agreement on behalf of the City by the Mayor and City Manager. Mary E. ! derson, Mayor ATTEST: Donald G. Ta erk The motion for the adoption of the foregoing resolution was seconded by Member Johnson and upon a vote being taken thereon, the following voted in favor thereof: Anderson, Bakken, Johnson, LeSuer and Micks; and the following voted against the same: none, whereupon said resolution was declared duly passed and adopted, signed by the Mayor and her signature attested by the City Clerk. Resolution 01-87 - Continued December 18, 2001 FINAL EXECUTION October 31, 2001 COOPERATION AGREEMENT This Agreement made and entered into this day of December, 2001, by and between the Minneapolis Public Housing Authority in and for the City of Minneapolis (the "MPHR"), the Housing and Redevelopment Authority in and for the City of Golden Valley (the "HRA") and the City of Golden Valley, State of Minnesota (the "Municipality"). WITNESSETH: In consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows: 1. Whenever used in this Agreement: (a) The term "MHOP Units" means five (5) units of low-rent housing hereafter to be developed with the financial assistance of the United States of America acting through the Secretary of Housing and Urban Development (the "Government") and located within a twenty-five (25) unit multifamily housing development (the "Development") to be owned by Valley Square Commons Limited Partnership ("Owner") and located in the City of Golden Valley, Minnesota. (b) The term "Taxing Body" or "Taxing Bodies" means the State of Minnesota and any and all political subdivisions or taxing units thereof in which the MHOP Units are situated and which would have authority to assess or levy real or personal property taxes, or to certify such taxes to a taxing body or public officer, to be levied for its use and benefit with respect to the MHOP Units if they were not exempt from such taxation. (c) The term "Shelter Rent" means the total of all charges to all MHOP Unit tenants for dwelling rents and nondwelling rents (excluding all other income of the MHOP Units) less the cost of all dwelling and nondwelling utilities. 2. The MPHA shall endeavor: (a) to secure a contract with the Government for capital grants and annual contributions for the MHOP Units; (b) to cause the development of the MHOP Units; and (c) to assign to the Metropolitan Council its responsibilities under this and other agreements relating to the MHOP Units for purposes of ongoing administration thereof. H:ARESOLUTIA2001\FO1-87-LDOC COOPERATION AGREEMENT Resolution 01-87 - Continued December 18, 2001 3. (a) Pursuant to Minnesota Statutes, Section 469.040, the MHOP Units are exempt from all real and personal property taxes levied or imposed by any Taxing Body for so long as either (i) the MHOP Units are owned by a public body or governmental agency and are used for low-rent housing purposes, (ii) the MHOP Units are subject to the requirements of Section 5 of the United States Housing Act of 1937, (iii) the contract between the MPHA and the Owner in connection with the MHOP Units continues to obligate the Owner to operate the MHOP Units as a low income housing project, or (iv) any obligations issued in connection with the MHOP Units or any moneys due to the Government in connection with such MHOP Units remain unpaid, whichever period is the longest (the "Exemption Period"). (b) During the Exemption Period, the Municipality, on behalf of the Taxing Bodies, agrees that it will not levy or impose any real or personal property taxes upon the MHOP Units or upon the MPHA with respect thereto. Because the MHOP Units consists of five (5) units located within and under common private ownership with twenty (20) additional housing units which comprise the Development, the property taxes and property tax exemption shall be determined as follows: (i) the tax capacity of the total Development shall be multiplied by a fraction, the numerator of which equals the total number of MHOP Units and the denominator of which equals the total number of housing units in the Development and (ii) the product thereof shall be deducted from said tax capacity. (c) During the Exemption Period, the MPHA shall cause to be included in agreements with the Owner the obligation of the Owner to make annual payments in lieu of taxes ("PILOT") in payment for the public services and facilities furnished from time to time without other cost or charge for or with respect to the MHOP Units. Each PILOT shall be made at the time when real property taxes on the MHOP Units would be paid if it was subject to taxation, and shall be in an amount equal to either (i) five percent (5%) of the Shelter Rent actually collected but in no event to exceed five percent (5%) of the Shelter Rent charged with respect to such MHOP Units during the preceding calendar year, or (ii) the amount permitted to be paid by applicable State law in effect on the date such payment is made, whichever is lower. (d) Pursuant to Minnesota Statutes, Section 469.040, subdivision 3, the County of Hennepin shall distribute the PILOT among the Taxing Bodies in the proportion which the real property taxes which would have been paid to each Taxing Body for such year if the MHOP Units were not exempt from taxation; provided, however, that no payment for any year shall be made to any Taxing Body in excess of the amount of the real property taxes which would have been paid to such Taxing Body for such year if the MHOP Units were not exempt from taxation. H:\RES0LUTI\2001\F01-87-1.DOC 2 COOPERATION AGREEMENT Resolution 01-87 - Continued December 18, 2001 (e) In the event the PILOT is not paid, no lien against the MHOP Units or assets of the MPHA or HRA shall attach, nor shall any interest or penalties accrue or attach on account thereof. 4. During the Exemption Period, the Municipality, or other appropriate Taxing Body, without cost or charge to the MPHA, HRA or tenants of the MHOP Units (other than PILOT) but consistent with Plans approved by the Municipality in the normal course and in accord with applicable procedures shall: (a) Furnish or cause to be furnished to the MHOP Units public services and facilities of the same character and to the same extent as are furnished from time to time without cost or charge to other dwellings and inhabitants in the Municipality; (b) Insofar as the Municipality may lawfully do so, vacate such streets, roads, and alleys within the area of the MHOP Units as may be necessary in the development thereof, and convey without charge to the MPHA, HRA or Owner of the MHOP Units such interest as the Municipality, or other Taxing Body may have in such vacated areas; and, in so far as it is lawfully able to do so without cost or expense to the MPHA, HRA and the Owner of the MHOP Units or to the Municipality or other Taxing Body, cause to be removed from such vacated areas, in so far as it may be necessary, all public or private utility lines and equipment; (c) In so far as the Municipality or other Taxing Body may lawfully do so, (i) grant such deviations from the building code of the Municipality or other Taxing Body as are reasonable and necessary to promote economy and efficiency in the development and administration of the MHOP Units, and at the same time safeguard health and safety, and (ii) make such changes in any zoning of the site and surrounding territory of the MHOP Units as are reasonable and necessary for the development and protection of the MHOP Units and the surrounding territory; (d) Accept grants of easements necessary for the development of the MHOP Units; and (e) Cooperate with the MPHA and HRA by such other lawful action or ways as the Municipality or other Taxing Body and the MPHA may find necessary in connection with the development and administration of the MHOP Units. 5. In the initial development of the MHOP Units, the Municipality further agrees, on behalf of all Taxing Bodies, that within a reasonable time after receipt of a written request therefor from the MPHA or HRA: H:ARESOLUTIA2001\FO1-87-LDOC 3 COOPERATION AGREEMENT Resolution 01-87 - Continued December 18, 2001 (a) that it will accept all interior streets, roads, alleys, and adjacent sidewalks within the area of the Development, together with all storm and sanitary sewer mains in such dedicated areas, after the Owner of the MHOP Units, at its own expense, has completed the grading, improvement, paving, and installation thereof in accordance with specifications acceptable to the Municipality or other Taxing Body; (b) that it will accept necessary dedications of land for, and will grade, improve, pave, and provide sidewalks for, all streets bounding the Developments as are necessary to provide adequate access thereto (in consideration whereof the Owner shall pay to the Municipality or other Taxing Body such amount as are or could be assessed against the Development); and (c) that it will provide, or cause to be provided, water mains, and storm and sanitary sewer mains, leading to the Development and serving the bounding streets thereof (in consideration whereof the Owner of the MHOP Units shall pay to the Municipality or other Taxing Body such amount as is or could be assessed against the Development). 6. If by reason of the Municipality's or other Taxing Body's failure or refusal to furnish or cause to be furnished any public services or facilities which it has agreed hereunder to furnish or cause to be furnished to the MPHA, HRA, the Owner or tenants of the MHOP Units, and the MPHA, the HRA or the Owner of the MHOP Units incurs any expense to obtain such services or facilities, then the MPHA or HRA may cause to be deducted the amount of such expense from any PILOT due or to become due to the Municipality or other Taxing Body in respect to the MHOP Units, provided that the MPHA shall notify the Municipality or other taxing body of the alleged failure in writing at least thirty (30) days prior to deducting such expense from any PILOT. 7. No Cooperation Agreement heretofore entered into between the Municipality and the MPHA or HRA shall be construed to apply to any MHOP Units covered by this Agreement. 8. No member of the governing body or any other public official of the Municipality or other Taxing Body who exercises any responsibilities or functions with respect to the MHOP Units during his/her tenure or for one year thereafter shall have any interest, direct or indirect, in the MHOP Units or any property included or planned to be included in the MHOP Units, or any contracts in connection with the MHOP Units or property. If any such governing body member or such other public official of a Taxing Body involuntarily acquires or had acquired prior to the beginning of his/her tenure any such interest, he/she shall immediately disclose such interest to the MPHA or HRA. H:\RESOLUTI\2001\FO1-87-1.DOC 4 COOPERATION AGREEMENT Resolution 01-87 - Continued December 18, 2001 9. During the Exemption Period this Agreement shall not be abrogated, changed, or modified without the consent of the Government. The privileges and obligations of the Municipality and other Taxing Bodies hereunder shall also remain in full force and effect with respect to the MHOP Units so long as the beneficial title to the MHOP Units is held by the MPHA or by any other public body or governmental agency, including the Government, authorized by law to engage in the development or administration of low-rent housing projects. If at any time the beneficial title to, or possession of, the MHOP Units is held by such other public body or governmental agency, including the Government, the provisions hereof shall inure to the benefit of and may be enforced by, such other public body or governmental agency, including the Government. 10. The Government, the Municipality and the HRA hereby consent to the future assignment of the MPHA's interest in this Agreement to the Metropolitan Council. IN WITNESS WHEREOF the Municipality, the MPHA and the HRA have respectively signed this Agreement and caused their seals to be affixed and attested as of the day and year first above written. MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS By Cornell L. Moore Its Chairman And by Cora McCorvey Its Executive Director CITY OF GOLDEN VALLEY, MINNESOTA By Mary E. Anderson Its Mayor And by William S. Joynes Its City Manager H:\RESOLUTI\2001\FO1-87-LDOC 5 COOPERATION AGREEMENT Resolution 01-87 - Continued December 18, 2001 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY By Gloria L. Johnson Its Chair And by William S. Joynes Its Executive Director H:\RESOLUT1\2001\F01-87-1.DOC 6 COOPERATION AGREEMENT