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2002-03-26C 6:00 1. 2. 3. 4. MOUND HOUSING AND REDEVELOPMENT AUTHORITY MARCH 26, 2002 6:00 P.M. 5. 6 7. OPEN MEETING ACTION APPROVING AGENDA, WITH ANY AMENDMENTS ACTION APPROVING MINUTES: FEBRUARY 26, 2002 HOUSING DIRECTOR'S REPORT, WITH ANY REQUIRED ACTION CONSIDERTION/ACTION ON RECOMMENDATION FOR VIP PROPERTIES TO ACT AS TEMPORARY MANAGEMENT FIRM CONSIDERATION/ACTION ON PROPOSED RFP PROCESS FOR DEVELOPERS FOR THE MOUND VISION ADJOURN 1-3 4-5 6-3 0 31-46 • CITY fit= MQUND • HOUSING AND REDEUEL~PMEMT AUTHORITY FEBRUARY 26, 2042 The Housing and Redevelopment Authority of Mound, Hennepin County, Minnesota, met in regular session on Tuesday, February 26, 2002, at 6:30 p.rn. in the council chambers at City F-lall. Members Present: Chairperson Pat Meisel; Commissioners Bob Brown, Mark Hanus, David Osmek and Peter Meyer. Others Present: City Attorney, John Dean; City Manager, Kandis Hanson; City Clerk, Bonnie Ritter. 1. OPEN.. MEETING The meeting was called to order at 6:30 p.m: 2. APPROVE AGENDA Chairperson- Meisel asked that item 4A, letter from Pinky Charon, be added to the agenda. MOT14M by Hanus, seconded by Meyer to approve the agenda as amended. Alt voted in favor. Motion carried. 3. APPRUV.E MINUTES MOTIOM by Brown, seconded by Hanus to approve the minutes of the January 22, 2002 meeting. Alt voted in favor. Motion carried. 4. EXECUTIVE DIRECTQR'S REPORT A. Monthly Bills for February, 2002. MOTION by Brown, seconded by Manus to approve the monthly bills for February, 2002, in the amount ofi $19,002.73. All voted in favor. Motion carried. B. information' Items: 1. Budget progress monthly report for December, 2001 and January, 2002. 2. Marquette Bank Statement for December, 2001 and January, 2002. 3. VUe.IIs Fargo Statement for December, 2001 and January, 2002. 4. M.BIA~ Summary 5. Q:perating subsidy Amount and Payment Schedule 6. Capital Rand Program Grant 7. Pauline Payne's Resignation 8. Joan Schuelter's Acceptance 9. January Le#ter to Board 10. Insurance Rates Mike • -1- Mound MRA Minutes -February 26, 2002 4A. L TTER RECENED E PINKY CHARON • ~_ Cornrnission®r Meyer presented a letter to the Board, tha# was delivered to him at his home the previous evening. This letter was from Karol "Pinky" Charon, Executive Director of the Hl"tA. The letter' indicated her intention to work on a half-time basis, utilizing some sick leave, until such time that she can reduce her stress level. She was not at tonight's- rnee~ting because she thougF~t the rneetirtg would be too stressful for her. She also asked that action on the bylaws and employment review be tabled until she could examine thorn to rake sure they aar~ply with HAD regulations. City Attorney Dean stated that he has a rnan in his offce that deterrni°ned compliance with HUD regulations, and that it is customary that the City Manager serve as the Executive Director for the H#~4. There way concern ex~presse~ver the increased stress level if the wt~rk hours are cut, because Ms. Charon hr~'~ previously requested that her hours be increased to thirty hours in order to handlo ~ work load. It was decided to re-address this issue after action on items~5 and ~.'~ ~. BYLAWS UP©ATE Henson explain®d that the suggested bylaws updates simply reflect how we do business now. The old ones wer® very outdated. "Dean reiterated that as indicated earlier, tt~e function of the Executive Director corr~r~nonly is the same as the City Manager. The Housing Director is in charge' cif housing component of the Hf~, while under the supervision of the Executive: D~r~r. 'y" MOTION by Brown, seconded by Hangs to adopt the revised Bylaws of The Mou ing and Redevelopment Authority in anti t<~~e City of Mound, Minnesota, as shown in the attachmen# to these rrrinutes. =~Aeyer~ expressed concern that this matter should tabled, as requested in Pinky Ghacon's letter re#erenced above. The following v tad in favor: Brown, Hanu~, Meisel and ~nek. The following voted against: Meyer. otion carried. 4,~-.1.C~NT1 The Au#horrty revrsrted ~~e issue o€ tt~re letter received' from Pinky Charon. MOTIO.iV by Brown,. seconded by Hanus to have Chairperson Meisel and. Executi e Qirector Flanson meet with Ms. Charon to determine h®r exact reques# and adds ss concerns of the bard in reference t© being able try fulfiill the job requirements. AI voted in favor. Mo#ion carried. MOTION by Brown, seconded by Meyer f4 appoint Kandis Hanson, City Manag the position of Ex~eutive Director of the H#~. Meyer stated he does not think tl appropriate because Pinky is not in attendance at this m®eting. The foWawing v favor: Brown, Manus, Meisel and Osmek. The following voted against: Meyer. carried. in to • 2 -2- Mountl HRA Minutes -February 2~, 2002 • 6. PERFORMlIINOE E1lA~LUATION FQRMQT. WITM f71R A letter was received from P'rnky Charon, stating that slle would prefer her evaluation in April, and has started looking into revising the personnel policy and job descriptions for the maintenance and executive director. Hanson explained that her proposed 36~-Degree Review Process is very effective, and can be done internally, without the use of outside consultants. The example presented to the Board is an example, to be used as a model for this type of review process. Hams expressed that it is very important not to incur costs that are not necessary. Hanson stated that she feels this would be an effective tool in the evaluation of Ms. Charon because sloe hasn't been evaluated in a long, long time and because of limited contact with. her in her work environment. Manus stated thaf`as long. as Hanson is aware of the concern of any costs and having this a fair process, he has no problem with it. Manson stated that she is not sure, but has indication that a firm has already been hired by Pinky for a salary survey, with an estimated cost of about $400. It was the consensus of the Commission not to contract for this amount, or any other for this purpose. Directive was given to Hanson to utilize the :360-degree:.process, and that an April evaluation was acceptable to the board. Hanson .stated hat the evaluation is based on • a job description, and that job description is also being revised. It will be presented to the Board as soon as it's completed: Hanson informed the Commission that the March 1 ~"° meeting may have to start at 6:00 p,rrt: instead of 6:30 p.m., to allow for the project team to report back on Request for Proposal- guidelines. , 7. ADJ_,,,~ OURI~ MOTION by gown, .seconded by Hanus to adjourn. at 7:18 p.m. All voted in favor. Motion carded. Chairperson Pat Meisel Attest: Kandis Hanson, Executive Director • 3 -3- MAR-22-2002 03 07 MOUND HRA • MouND HousING AND REDEVELOPMENT AUTHORITY Indian Knolt Manor ~# CheciC No. VendorlMerchant Amoern 9524725078 P.02i03 Comments 1 4765 SOS Printing + X44.67 Printing 2 4756 1 O S Gaptial 104.37 Copier lease 3 4767 Lightyear 21.3$ Long Distance 4 4768 M E 1 151.97 Elevator maint 5 4769 Citizen Comm 276.13 Phones 6 4770 Reliant Energy 803.00 Gas 7 4771 All Safe Fire 107.56 fire extinguishers 8 4772 Adams Pest 56.37 exterminator 9 4773 Electro V4latchman 150.00 security alarm 10 .4774 City of Mound 884.07 sewer/water 11 4775 Sta Safe Lock 81,00 locksmith 12 4776 Xcel Energy 959,28 electric 13 4777 G. Naber ~ 95.00 accountant 14 4778 M S I 218.73 bailer service 15 4779 B Sylvester 57.50 50058's 16 4780 Daniel Interiors 364.00 carpeting 17 4781 R H R T5.00 background checks 18 4782 BFI 331.02 trash 19 4783 True Value Hardware 9,256.33 Maint supplies 20 4784 Citi Card 9,560.42 maim, Internet, veil p 21 4785 U S Postmaster 68.00 stamps 22 4786 Gity of~Mound 10,000.00 levy Loan payment 23 4787 Karol Charon 18.55 mileage 24 4788 KDS Communications 2,898A0 Cable wiring 25 4789 Petty Cash 30.78 misc. 26 4780 Nelrod Co. 2,261.60 personnel policy, etc. 27 4791 Diamond Roofing 40,967.82 windows and siding 28 4792 Housing Authority Ins 3,539.21 insurance refund 29 4793 Eric Parkhurst 288.00 maim helper 30 4794 Shears Soderberg 584.00 maint helper 31 4795 Keith Mercier 456.00 maint helper 32 4796 Ryan Cash 160.00 maint helper 33 4797 Marion Curtis 168.43 sec dep 34 4798 V. Zozulya 152.00 sec dep 35 4799 B. Sherven 151.25 see dep 70TAL: TOTAL Acc. PAYABLE Begining Bank Bal. Deposits IVITD ENDING BANK BALANCE $69,341,38 Signature: $69,341.38 $166,000.00 $10,000.00 $106,658,62 AccPay 03~12~zoa2 • •i • -4- MAR-22-2002 03 08 MOUNTI HRA 9524725078 P.03i03 MOUND HOUSING AND REDEVELOPMENT AUTHORITY Indian Knoll Manor • • # Check Na. yendorlMerchant Amount GommentS 1 4800 Patricia Barthel $341.70 sec dep 2 4764 Ntn Dept ofi Revenue 734.00 1 qtr taxes 3 4804 Marquette Bank -IRS 1,387.51 1 gtr taxes 4 4802 Darrin Hrown 1,064.OB maint helper 5 4761 Linda Brown 1,064.08 mains helper 6 4762 Melvin Rabeck 1,821,08 marrit mgr 7 4763 Karol Charon 1,552.28 director 8 9 " 10 11 12 13 14 15 - 16 17 18 ' 19 - ZO 21 22 23 Z4 25 . 26 27 28 29 30 31 32 33 34 - 35 ~ Previous page 69,341.38 TOTAL: TOTAL AGO. PAYAE3LE Begining Dank Bal. Deposits MTD ENDING el4NK BALANCE $77,316.1'1 $77,316.11 $166,000.00 510,000.00 $98,683.89 • Signature: AccPay 03/12/2002 -5- TOTAL P. 03 .~.®®®~,®-..., v I P PR 0 PE RT I E S ..®®.... Gino Businano 5341 Maywood Road Mound, MN 55344 September 20, ZOOI Dear Mr. Businano, I would like +o take the opportunity +o say i+ was a pleasure speaking with you the other day. VIP Properties has been providing full service fee management for 33 years. We are staffed wifh a team of experts who approach management with a no nonsense, get the job done right the first time altitude. VIP has many years of experience in managing affordable housing. We understand the social, • economical and cultural needs that arise in affordable housing. We manage low-income buildings financed with tax credits, tax-exempt bonds, NRA Certificates and project based Section 8 buildings. We offer a full service package, which includes, but is not limited +o: Accounting o Rent Collections o Income & Expense Reports o General Ledger o Payables & Receivables Administrative o Required Reporting o Staffing o Marketing o Budgeting • 11300 Minnetonka Mills Road / Minnetonk 6 Minnesota 55305-5157 /Phone: 952-938-4452 • Maintenance o Bidding o Day-to-Day Repair o Worfr Order System o Preventative Maintenance Overa[[~ we oversee and operate the buildings day to day with an eye toward detail while Creeping the bridge of communication open to allow for strong relationships with both our owners and residents. 1 have enclosed some references for your review. We would very much appreciate the opportunity to of fer you a proposal on managing your complex in Mound. 1 [oo(r forward to wor(ring with you in the near f uture as your new Management Company. ~incere[y~ ~, °~ pp~ • Cynthia Reiter Par4ner • -7- MANAGEMENT OBJECTIVES • The services provided by many profession management companies appear to be the same and may seem like an extra expense. This is not true for VIP Properties. VIP actually pays for itself through our value added approach to management and tight control of income and expenses. We believe that the value of any investment property is the extent to which it meets the investment objectives of the owner. Therefore, we manage properties by operating within the framework of goals that are agreed upon in advance between our management team and our owners. Goals are put in writing so all parties work according to the same guidelines and objectives. VIP strives to create a unique relationship between seasoned mangers, maintenance people, owners and residents -- a partnership that serves the special interest and concerns of all. An orderly flow of information from owners to management to owners, revealing both the day to day operations and long term goals, guarantees that every aspect of the building receives the required attention. Our tight control over financial matters, our dedication to preserving and enhancing the performance of our projects and our enthusiastic management style are key factors to realizing the financial goals of our owners. VIP's philosophy is based upon an intimate understanding of the operation of each project we manage. We begin our management strategy plan with an examination of the physical condition of the project, both exterior and interior. In addition, we will establish a • communication link by meeting informally with the owner in order that we may become acquainted with his/her interest and concerns and adopt a management plan specific to the owners needs. • -$- -- - PRIN~IPA~~ - _ ___. e®• seesessees•aearwee•reeeeeseeoseaeeeeeeeesesesaeeeereeeeeeesere•sere•ee•eeseaeees••eeeseeaeeeeeee r~ CYNTHIA REITER ^ Began career in Real Estate in 1980. ^ Owner of Westport Properties, Inc. ^ Licensed Minnesota Real Estate Broker. ^ Member of Minnesota Multi-Housing Association. ^ Member of Institute of Real Estate Management. ^ Experience in establishing cooperative and leasehold housing. ^ Certified Tax Credit development projects. ^ HUD Section 8 project based program certified. ^ Conducts local training seminars. ^ Condominium board management certified. ^ Extensive experience in marketing new construction projects and renovations. • LOIS I. VELASCO ^ In the Real Estate business since 1963. ^ Licensed Real Estate Broker in Minnesota. ^ President and owner of Properties by Velasco, Ltd., ^ General partner of over 700 apartment units in the Minneapolis/St. Paul area. ^ Experienced consultant to the Real Estate industry. ^ First woman elected as president of the Minnesota Multi-housing Association. ^ Served as National Vice President of the National Apartment Association. ^ Served an the Minnesota Governor's Committee on Energy and served on the State Council for the Economic Status of Women. ^ Speaker at Multi-housing News/NAA Conventions in Las Vegas, Atlanta, New Orleans and Miami. ^ Professional consultant for major national firms for various construction projects. ^ Conducts national marketing and management training seminars throughout the country. JOSEPH F. BISANZ ^ B.A. University of St. Thomas. ^ Owner, Bisanz Realty Co. and Bisanz Property Management Co., Inc. ^ Certified Property Manager, Institute of Real Estate Management. ^ Licensed Real Estate Broker in Minnesota, North and South Dakota, Wyoming, Iowa, and Oklahoma. ^ Residential Property Appraisal Course Completed. ^ Member of the National Multi-housing Council. ^ Member of the Minnesota Multi-housing Association. ^ Member of Institute of Real Estate Management, Minnesota Chapter 45. ^ Board of Directors, Minnesota Multi-housing Association, 1993-1995. ^ Court Appointed Receiver, Real Estate Foreclosure, Ramsey and Hennepin Counties. ^ Arbitrator, American Arbitration Association. ^ Arbitrator, Minnesota Better Business Bureau. e `6s~tlS33.~B ~. ~ ~ t _?.. ~'6~E 2 ~N ACCREUREO ' e ~ , . ` eree•ese•e•eoeoeeeesaese•ree•ee••aeeeee®eseeeeeeo e r iee•eeeeeeeeeeesee -9- PROPERTY MANAGERS At VIP our Property Managers uphold the essence of a caring management to achieve satisfied residents and profitable ownership. Frequent training sessions and meetings enable them to work confidently for your benefit. OFFICE STAFF Our office staff coordinates all aspects of VIP Properties ensuring a reliable and smooth running company, thereby enhancing our effectiveness and your real estate investment. • MAINTENANCE PERSONNEL Our maintenance team is dedicated to continuous upkeep and safety while responding with prompt solutions. Teamwork is essential in order to draw on each other's knowledge and skills to quickly resolve any problem which might arise. The daily involvement of the VIP partners, along with experienced managers, a skilled maintenance team and a reliable office staff all add up to: CARING MANAGEMENT for SATISFIED RESIDENTS for PROFITABLE OWNERSHIP. e ~~ ~~~ ~al~~ «~~ a:~~y ~ aA~70~Et~e'°, OflWYiAIION~ '~_/ E ~~' -~0- ;Mipnesota Bxolce-age_Grolr~ 5407 Excelsior Boulevard Suite B St. Louis Parlc, Minnesota 55416 952-922-4405 To Whom It May Concern: August 13, 2001 I have worked with Cynthia Reiter for over twelve years. VIP manages our entire portfolio, which consists of 265 units. Some of our buildings are very complex and need a lot of attention. Especially in the area of reporting. Cynthia and her staff does all our tax credit work, 4-d work, tax-exempt bond reporting and investor reporting for us. They run our buildings with an eye toward detail. The accounting is second to none and the reports are always accurate and timely. We main an overall occupancy of 98.5% and expenses are under control. We just acquired a 48-unit complex, which is a tax credit property as well as a project- based section 8 building. VIP is currently assisting in the rehab and has completed the initial file review and brought all residents into compliance in a timely fashion. We I~ighly recommend using VIP`s management services. f=eel free to contact me if you need further information. Respectfully, c Harold Teasdale General Partner Orleans Homes 1401 Cottage Drive Srillwater, MN 55082 124 units - partial tax credit tax exempt bonds Bay Pointe Apartments 840 Third Ave );xcel.sior, MN 55331 80 units I-IUD financed -11- w. I have known Cindy at VIP for many years. She started maiiaging my buildings in March of 1999. They took over our fist tax credit building then. At the time the files and site were in turmoil. Cindy started in August and by the end of the year they had all verifications complete and we finally determined our qualifying percentage. Since then I , have hired Cindy and VIP to do 2 more of the buildings we own. I recommend them ~ highly; they do a great job. V' Froperties: Caarver Ridge Townhomes 340 Crosstown Blvd Chaska, MN 55318 92 units - 90% tax credit • ~~ i • -12- West Suburban Housing Partners 1 _. _. __ _ _ __ . . _ _ _ _ ®b®®®®/®®I®®®® e'1®®®'/®..®.. VIP P O P T I~ S • ®~®®®®®®®®r March 20, 2002 Ms. Kandis M. Hanson City Manager 5341 Maywood Road Mound, MN 55364 Dear Ms. Hanson: I respectfully submit the enclosed proposal which includes the activities and functions to be performed by VIP Properties and the bid from our company for the management of Indian Knoll Manor Apartments. VIP Properties enjoys working with people and by listening first, help them with the management of their rental homes and investment properties. And we remain always mindful of the capacity in which we are employed that being to serve our clients' needs. VIP Properties is prepared to and can provide the complete and necessary services, including government regulatory accounting and reporting, budget adherence, accounting, bid acquisition and approval and project overseeing to completion of exterior and interior common area improvements or repairs for the property for a sixty day period for a monthly fee as follows: Twelve Hundred Fifty Dollars ($1,250.00) per month. This fee schedule is designed to benefit the property by insuring that VIP Properties will make every effort to control expenses and collect the maximum amounts of revenues available at the property. VIP Properties can also provide, if necessary or desired, interior space improvements or repair work if the present on site maintenance personnel cannot perform the task on a time and material or bid basis. 11300 Min~~etonka Mills R,oaei. / Minnetonk_ ~ 3 _znesota 55305-5157 /Phone: 952-938-4452 Ms. Kandis Hanson March 20, 2002 Page - 2 - We are aware of the management requirements of this type of property and location. We understand that a specifically designed management agreement will be the guide used to assist in the management of the property and we are more than willing to be informed by and work with Karol Charon to ensure a smooth transition. We would suggest continuing the services of the outsourced accounting firm during the sixty day management term. If, however, you would wish to extend the management term at that time, we should examine the necessity of continuing with outsourced accounting. Enclosed for your review is a standard Institute of Real Estate Management • Management Agreement draft. You may wish to modify a section or paragraph to suit and we will be more than happy to comply. Thank you for this opportunity to be of assistance to you, and we will look forward again to meeting with you. Respectfully, VIP Properties Joseph F. Bisanz encl. cc: Cynthia Reiter File -14- Management Agreement For Property located at 2020 Commerce Boulevard Beginning ? p 0 2 Enaing 24~ 0 2 C)"~X1;~1ER Mound Housing and Redevelopment; Authority •hGENT VIP Properties AMO --_-- • Mound, Minnesota 55364 -15- This Agreement is made this ~ day of , 20 ~ 2 , Mound Housing and by and between Redevelopment Authority (the "Owner") • and VIP Properties AMO (the "Agent") Section 1 APPOINTMENT OF MANAGING AGENT 1.1 APPOINTMENT AND ACCEPTANCE Owner hereby appoints Agent as sole and exclusive Agent of Ov~ner to lease and manage the property described in paragraph 1.2 upon the terms and conditions provided herein. Agent accepts the appointment and agrees to furnish the services of its organization for tI-te Lasing and management of the Premises; and Owner agrees to pay all exp•°nses in connection with those services. 1.2 DESCRIPTION OF PREMISES The property to be managed by Agent uader this Agreement (the "Premises") is known as Indian Knoll Manor locacedat 2020 Commerce Boulevard Mound. MN 55364 consisting of the land, buildings, and other improvements described as • Fift~r unit Apartment Building _ in the State of M i n n P e n t a 1.3 TERM The term of this Agreement shall be for an initial period of s i~t y day s (the "initial term") from the day of , 20 -~2-.-, to and including the day of , 20~ 2 ,and * thereafter unless termi- * f O r a term mu t u a 11 y Hated as provided in sections 21 or 27 herein. agreed t O i. ri t ~•rinr~c is referred to ac a "term year". advance by the - parties. 1.4 MANAGEMENT OFFICE Owner shall provide, if deemed necessary by Owner and Agent, adequate space on the Premises for a management office. Owner shall pay all ex- penses related to such office, including, but not limited to, furnishings, equip- ment, postage and office supplies, electricity and other utilities, and tele- phone. • 1.5 APARTMENT FOR ON-SITE STAFF Owner shall provide, if deemed necessary by Owner and Agent, a suitable _.. apartment(s) on the Premises for the use of an on-site manager and/or cesi- dent janitor and their families, rent-free or reduced rent, except that such resident staff shall pay For heat and utilities in the same manner as other tenants. The specific apartment(s) shall be th~_ 16 _r's choice. IRLM Management Agreement - 2 Section 2 BANK ACCOUNTS • The various bank accounts established under this Agreement shall at all times be established in Owner's name bttt under Agent's control. Agent's designees shall be the only parties authorized to draw upon such accounts. No amounts deposited in any accounts established under this Agreement shall in any event be commingled with any other funds of Agent. * 2.1 OPERATING (AND/OR) RESERVE ACCOUNT(S) Agent shall establish a separate account(s) known as the India n Knoll Manor Apartments Operating (and/ or) Reserve Account(s), separate and apart from Agent's corporate accounts, for the deposit of receipts collected as described herein, in a bank or other institution whose deposits are insured by the federal l;overnment. Such depository shall be selected by the Agent. However, Agent shall not be held liable in the event of bankruptry or failure of a depository. Funds in the Operating (and/or) Reserve Account(s) remain the property of Owner sub- ject to disbursement of expenses by Agent as des~~ribed in the Agreement. * 2.1.1 INITIAL DEPOSIT AND CONTINGENCY RESERVE Immediately upon commencement of this Agreement, Uwner shall remit to Agent the sum of $_ to be deposited in th.e Operating (and/or) Reserve Account(s) as an initial deposit representing the estirtiated disburse- ments to be made in the first month Following the commencement of this Agreement, plus an additional sum of $ _ as a cnntingenry reserve. Owner agrees to maintain the contingency reserve stated above at all limes in the Operating (and/or} Reserve Account(s) to enable Agent to pay the obligations of Owner under this Agreement as they become due. • Uwner and Agent shall review the :tmourit of the contingency reserve from time to time and shall agree in writing on a new contingenry reserve amount when such is required. 2.2 SECURITY DEPOSIT ACCOUN"t * Agent shall, if required by Iaw, maintain a separate interest-bearing account for tenant security deposits and advance rentals. Such account shall be maintained in accordance with applicable state and local laws, if any. 2..3 FiDEL.ITY BOND Agent shall cause all personnel who handle or are responsible far the safe- keeping of any monies of Owner to be covered by a fidelity bond in the amount of $ 10 0 , 0 0 0 . 0 0 with a company determined byAgent. Such bond shall be secured at Agent's expense. If a fidelity bond cannot be obtained, an arrest and conviction bond shall be obtained at Agent's ex- pense. Owner shall save Agent harmless from any loss or damages caused by such personnel if no bond can be obtained. *Agent will continue to use existing bank account as directed by owner. *Agent will continue to use existing bank account as directed by owner. *Agent will continue to use existing bank account as directed by owner. Section 3 COLLECTION OF RENTS AND OTHER. RECEIPTS * 3.1AG1NT'SAUTHOR.ITY *Agent will continue Agent shall collecr(and give receipts for, if necessary) all rents, charges and to use existing bank other amounts receivable on Owner's account in connection with the man- aCCOUrit as d i reeted • agement and operation of the Premises. Such receipts (except tenants' secu- by owner . rity deposits and advance rentals, which shall be handled as specified in paragraphs 2.2 and 3.3 hereof; and special charges, which shall be handled - as specified in paragraph 3.2 hereof) shall be deposited in the Operating (and/or) Reserve Account(s) maintained by agent for the Premises. _ ~17 _ IREM Management Agreement - 3 3.2 SPECIAL CHARGES If permitted by applicable law, Agent may collect from tenants any or all of ` the following: an administrative charge for late payment of rent, a charge for returned or nonnegotiable checks, a credit report fee, an administrative charge and/or broker's commission for subleasing. Said charges shall be • retained by Agent as compensation for its expenditures for the collecting of same. 3.3 SECURITY DEPOSITS Agent shall collect, deposit, and disburse tenants' security deposits in accor- dance with the terms of each tenant's lease. Agent shall pity tenants interest upon such security deposits only if required bylaw to do so; otherwise, any interest earned on tenant security deposits is to be retained byAgent as corrt- pensation for administering these funds. Agent shall comply with all appli- cable state or local laws concerning the responsibility far security deposits and interest, if any. Section 4 DISBURSEMF,NTS FROM OPERATING (AND/OR) RES)::RVE ACCOUNT(S) 4.1 OPERATING EXPENSES *Revise to suit From the Operating (and/or) Reserve Account(s), Agent is hereby autho- rized to pay or reimburse itself for all reasonable espert.:es and costs of oper- ating the Premises and for all other sums due Agent under this Agreement, including Agent's compensation under section 1.7. 4.2 DEBT SERVICE Owner shall give Agent advance written notice ofat least thirty days if Owner desires Agent to make any addition:ti monthly or recurring payments (such as mortgage indebtedness, general taxes, or special assess- ments, cr fire, steam boiler, or other insurance premiums) out of the pro- ceeds from the Premises. If Owner notifies Agent to make such payments after the beginning of the term of this Agreement, Agent shall have the au- thority to name a new contingency reserve amount pursuant to paragraph 2.1.1 of the Agreement, and Owner shall maintain this new contingenry reserve amount at all times in the Operating (and/or) Reserve Account(s). 4.3 NET PROCEEDS *Revise to suit To the extent that funds arc• available, and after maintaining the cash contin- genry reserve amount as specified in paragraph 2.1.1, Agent shall transmit cash balances to Owner periodicaLy, as follows: monthly On a s d ]. r e C t e d, Such periodic cash balances shall be remitted to the follow- ing person(s), in the percentage(s) specified, and at the address(es) shown: Name Percentage Address Mound Housing and 100% 5341 Maywood Road Redevelopment Authority Mound, Minnesota 55364 • _~$_ IREM Management Agreement - 4 Section 5 AGENT NOT REQUIRED TO ADVANCE FUNDS In the event that the balance in the Operating (and/or) Reserve Account(s) is at any time insufficient to pay disbursements due and payable under para- . graphs 4.1 and 4.2 above, Owner shall, immediately upon notice, remit to Agent sufficient funds to cover the deficiency and replenish the contin- gency reserve. In no event shall Agent be required to use its own funds to pay such disbursements. Nor shall Agent be required to advance any mon- ies to Owner, to the Security Deposit Account, or to the Operating (and/ or) Reserve Account(s). * If Agent elects to advance any money in connection with the Pre- * De 1 e t e mises to pay any expenses for Owner, such advance shall be considered a loan subject to repayment with interest, and Owner hereby agrees to reim- burse Agent, including interest as provided in paragraph 17.7, and hereby authorizes Agent to deduct such amounts from any monies due Owner. Section G FINANCIAL AND OTHER REPORTS gy d1e fifteenth day of the following month, Agent shall furnish Owner with a statement of cash receipts and disbursements From the opera- tion of the Premises during the previous month. In addition, Agent shall on a mutually acceptable schedule, prepare and submit to Owner such other reports as are agreed on by both parties. G.1 OWNERS RIGI3T TO AUDIT Owner shall have the right to request periodic audits of all applicable ac- counts managed by Agent, and the asst of such audit(s) shall be paid by . Owner. Section 7 AL)VERTISING * Agent is authorized to advertise the Premises or portions thereof for rent, * R ev i S e t O S u 1 t using periodicals, signs, plans, brochures, or displays, pr such other means as Agent may deem proper and advisable. Agent is authorized to place signs on the Premises advertising the Premises for rent, provided such signs com- ply with applicable laws. The cost of such advertising shall be paid out of the Operating (and/or) Reserve Account(s). All advertising shall make clear that Agent is the manager and NOT the Owner of the Premises. Newspa- per ads that share space with other properties managed by the Agent shall be prorated based on: Not applicable • - ~ `~ IREM Management Agreement - 5 Section 8 LEASING AND RENTING 8.1 AOENT'S.AtTTHORITYTO LEASE PREMISE'S Agent shall use all reasonable efforts to keep the Premises rented by procur- ing tenants for the Premises. Agent is authorized to negotiate, prepare, and execute all leases, including all renewals and extensions of leases (and expan- sions ofspace in the Premises, if applicable) and to cancel a.nd modify exist- ing leases. Agent shall execute all leases as agent for the. Owner. Ail reason- able costs of leasing shall be paid out of the Operating (and/or) Reserve Account(s). No lease shall be in excess of rie year(s) without written approval by Owner. The form of the lease shall be agreed upon by Owner and Agent. 8.2 NO OTHER RENTAL AGENT During die term of this Agreement, Owner shall not authorize: any other person, 6rm, or corporation to negotiate or act as leasing or rental agent with respect to any leases for space in the Premises. Owner agrees [o promptly forward all inquiries about leases to agent. 8.3 RENTAL Rtii'ES .Agent is authorized to establish and change of revise all rents, F es, or depos- its, and any other charges chargeable with respect to the Premises. * 8.4 ENFORCEMENT OF LEASES Agent Is authorized to institute,. ir. Owner's name, all Legal actions to prv- ceedings for the enforcement of any lease term, for the collection of rent or other income from the Premises, or for the; eviccirag cr dispossessing of ten- ants or other persons from tl-:e Prenises. Agent is authorized to sign and serve such notices as Agent deems necessary for lease enforcen3enr., includ- ing the collection of rent or other income. Agent is authorized, when expe- dient, to settle, compromise, and release such legal actions or suits or rein- state such tenancies. Any mottles for such settletrcrts paid out by Agent shall not exceed $ 5 0 0.0 0 without prior approval by Owner. Attorney's fees, filing fees, court costs, and orher necessary expenses incurred in con- nection with such actions and not recovered from tenants shall be paid out of the Operating (and/orl Resetw•e Account(s) or reintbw~sed directly to Agent by Owner. Agent may select the attorney of its choice to handle such litiga- tion. • *Revise to suit • Section 9 EMPLOYEES 9.1 AGEI`T'T'S AUTHORITY TO )-LIRE Agent is authorized to hire, supervise, discharge, an<i pay all servants, em- ployees, contractors, or other personnel necessary to be employed in tl:e management, maintenance, and operation of the Premises. All on site em- ployees shall be deemed employees of the Owner acid Agent shall not be liable to Owner of others for any act or omission on the part of such em- ployees. 9.2 OWNER PAYS EMPLOYEE EXPENSES All wages and fringe benefits payable to such employees hired per paragraph 9.1 above, and all local, state, and federal taxes and assessments (including but not limited to Social Security taxes, unemployment insurance, and work- ers' compensation insurance) accounting incident to the employmene ofsuch on site personnel, performed by Agents payroll service provider shall be paid by Agent out of the Operating (and/or) Reserve Account(s) and shall be treated as operating expenses.. Agent shall not be liable to such employees for their wages or r_ompensation. -20- *Revise to suit r IREIrf Management Agreement . G 9.3 AGENT'S AUTHORITYTO FILE RETURNS Agent shall do and perform all acts required of an employer with respect to the Premises and shall execute and file all tax and other returns required under the applicable federal, state, and local laws, regulations, and/or ordi- • nances governing employment, and all other statements and reports per- taining to labor employed in connection with the Premises anal under any similar federal or state law now or hereafter in force. In connection with such filings, Owner shall upon request promptly execute and deliver to Agent. all necessary powers of attorney, notices of appointment, and the like. Owner shall be responsible for all amounts required to be paid under the foregoing laws, and Agent shall pay the same from the Operating (and/or) Reserve Account(s). 9.4 WORKERS' COMPENSATION INSURANCE Agent shall, at Owner's expense, maintain workers' compensation insur- ance covering alt liability of the employer under established workers' com- pensation laws. 9.5 HOLD HARMLESS, LABOR LAWS Agent shall be responsible for compliance with all applicable state or federal labor laws. Owner shall indemnify, defend, and save Agent harmless from all claims, investigations, and suits, or from. Owners actions or failures to act, with respect to any alleged or actual violation of state or federal labor laws. Owner's obligation with respect to such. violation(s) shall include payment of all settlements, judgments, damages, liquidated damages, pen- alties, forfeitures, back pay awards, court costs, litigation expenses, and at- torneys' fees. Section 10 MAINTENANCE AND REPAIR • * Agent is authorized to make or cause to be made, throu;h contracted ser- *ReV i Se to Suit vices or otherwise, all ordinary repairs and replacements reasonably neces- sary to preserve the Premises in its present condition and for the operating efficienry of the Premises, .and all alterations required to comply with lease requirements, governmental regulations, or i..^.surance requirements. Agent is also authorized to decorate the Premises and to purchase or rent, on Ov~~ner's behalf, all equipment, tools, appliances, materials, supplies, uniforms, and other items necessary for the management, maintenance, or operation of the Premises. Such maintenance and decorating expenses shall be paid out of the Operating (and/ot•) Reserve Account(s). This section applies except where decorating and/or maintenance arc at tenants' expense as stipulated in a lease. 10.1 APPROVAL FUR EXCEPTIONAL MAINTENANCE EXPENSE The expense to be incurred for any one item of maintenance, alteration, refurbishing, or repair shall not exceed the sum of $ 0 0 0.0 0 ,unless such expense is specifically authorized by Owner, or is~ncurreei under such circumstances as Agent shall reasonably deem to be an emergency. In an emergenry where repairs are immediately necessary for the preservation and safety of the Premises, or to avoid the suspension of any essential service to the Premises, or to avoid danger to life or property, or to comply with fed- eral, state, or local law, such emergency repairs shall be made by Agent at Owner's expense without prior approval. • -21- CRE;M Managemen[ Agmment - 7 Section 11 CONTRACTS, UTILITIES AND SERVICES , Agent is authorized to negotiate contracts for nonrecurriccg items of expense, • not to exceed $ 1 ~ 0 0 0 . 0 0 unless approved by Owner, and to enter into agreements in Owner's name for all necessary repairs, maintenance, minor alterations, and utility services. Agent shall, in Owner's name and at Owner's expense, make contracts on Owner's behalf for electricity, gas, tele- phone, fuel, or water, and such other services as Agent shall deem necessary or prudent for the operation of the Premises. All utility deposits shall be the Owner's responsibility, except that Agent may pay same from the Operating (and/or) Reserve Account(s) at Owner's request. Section 12 RELATIONSHIP OF AGENT TO OWNER The relationship of the parties to this Agreement shall 1-~e that of Principal and Agent, and all duties to be performed by Agent under this Agreement shall be for and on behalf of Owner, in Owner's name, and for Owner's account. In taking any action under this Agreectteut, Agent shall be acting only as Agent for Owner, and nothing in this Agreement shall be construed as creating a partnership, joint venture, or aciy other relationship between the parties to this Agreement except that of Principal and Agent, or as re- quiring Agent to bear any portion of losses arising out of or connected with the ownership or operation of the Premises. Nor shall Agent at any time during the period of this Agreement be considered a direct etnployee of Owner. Neither parry shall have the power to bind or obligate the other except as expressly set forth in this Agreement, except that Agent is autho- rized to act with such additional authority and power as may be necessary to carry out the spirit and intent of this Agreement. • Section 13 SAVE HARMLESS Ovmer shall indemnify, defend, and save Agent har.~nless from all loss, dam- age, cost, expense (including attorney's fees), liability, or clain•,s for personal injury or property damage incurred of occurring in, on or about the Pre- mises. Section 14 LIABILITY INSURANCE Owner shall obtain and keep in force adequate insurance against physical damage (e.g. fire with extended coverage endorsement, boiler and machin- ery, etc.) and against liability for loss, damage, or injury t<> property or per- sons which might arise out of the occupanry, management, operation, or maintenance of the Premises. The amounts and types of insurance shall be acceptable to both Owner and Agent, and any deductible required under such insurance policies shall be Owner's expense. Agent shall be covered as an additional insured on all liability insurance maintained with respect to the Premises. Liability insurance shall be adequate co protect the interests of both Owner and Agent and in form, substance, and amounts reasonably satisfactory to Agent. Owner agrees to furnish Agent with certificates evi- dencing such insurance or with duplicate copies of such policies within days of the execution of the Agreement. IF Owner fails to do so, Agent may, but shall not be obliged to, place said insurance and charge the cost thereof to the Operating (and/or) Reserve: Account(s). Said policies -22- • IRE2vf Management Agreement - 8 shall provide that notice of default or cancellation shall be sent to Agent as well as Owner anti shall require a minimum of. thirty _ days' written notice to Agent before any cancellation of or changes to said policies. • Section 15 AGENT ASSUMES NO LIABILITY Agent assumes no liability whatsoever for any acts or omissions of Owner, or any previous owners of the Premises, or any previous management or other agent of either. Agent assumes no liability for any failure of or default by any tenant in the payment of any rent or other charges due Owner or in the performance of any obligations owed by any tenant to Owner pursuant to any lease or otherwise, Nor does Agent assume any liability For previously unknown violations of environmental or other regulations which may be- come known during the period this Agreement is in effect. Any such regu- latory violations or hazards discovered by Agent shall be brought to the at- tention of Owner in writing, and Owner shall pt~:~tnptly cure them. Section 16 OWNER RESPONSIBLE FORALL EXPENSES (}F Ll'I'1C~ATION Owner shall pay all expenses in a timely manner or when incurred by Agent, including, but not limited to, reasonable attorneys' fees and Agent's costs and time, and any liability, fines, penalties or the like, in connection with any claim, proceeding, or suit involving an alleged violation by Agent or Owner, or both, of any law pertaining to lair employment, fair credit report- ing, environmental protection, rent control, ta:ces, or fair housing, includ- • ing, but not limited to, any l.aw prohibitin€; or making illegal discrimina- tior. on the basis of race, sex, creed, color, religion, national origin, or mental or physical handicap, provided, however, that Owner shall not be respon- ' Bible to Agent far any such expenses in the event Agent is finally adjudged to have personally, and. not in a representative capacity, violated any such law. Nothing contained in this Agreement shall obligate Agent to employ legal counsel to represent Owner in any such proceeding or suit. * 16.1 FEES FOR LEGAL ADVICE Owner shall pay reasonable expenses incurred by Agent in obtaining legal advice regarding compliance with any law :affecting the Premises or activities related to them. If such expenditure also benef is others for whom Agent in this Agreement acts in a similar capacity, Owner agrees to pay an appor- ' boned amount of such expense. *Delete Section 17 AGENT'S COMPENSATION AND EXPENSES As compensation for the services provided by Agent under this Agreement (and exclusive of reimbursement of expenses to which Agent is entitled hereunder), Owner shall pay Agent as follows: 17.1 FOR MANAGEMENT SERVICES A f Z a t f e e -rn~~(i) ~ 1250.00 per month er (ii) or ^F~I,P f,.t~l .t.i„ ^*~ ~ ^^, *tiP n..P~„~~Fe payab-le by the 1 a s t • day of the current month for the duration of this Agreement. Pay- mentsdue Agent for periods of less than a calendar month shall be prorated over the number of days for which compensation is due. The percentage amount set forth in (ii) above shall be based upon the total gross receipts from the Premises during the preceding month. -23- THE COMMISSION RATE FOR THE SALE, RENTAL OR MAN- AGEMENT OFREAL PROPERTY SHALL BE DETERMINED BE- TWEEN EACH INDIVIDUAL REAL ESTATE BROKER AND ITS CLIENT. IREh1 Management Agreement - 9 The term "gross receipts" shall be deemed to include all rents and other income and charges from the normal operation of~the premises, including, • but not limited to, rents, parking fees, laundry income, forfeited security deposits, pet deposits, other fees and deposits, and other miscellaneous in- come. Gross receipts shall NOT be deemed to include the special charges listed in paragraph 3.2, or excess interest otl security deposits (from pars- • graph 3.3), or incoming arising out of the sale of real property or the settle- ment of fire or other casualty losses and items of a similar nature. 17.2 FOR APARTMENT LEASING included in 17.1 17.3 FOR COMMERCIAL LEASING Not applicable 17.4 FOR MODERNIZATION (REHABILITATION/CONSTRUCTION) to be mutually agreed to in advance between Owner and Agent ---, 17.5 FOR FIRE RESTORATION same as 17.4 17.G FOR OTHER ITEMS OF MUTUAL AGREEMENT same as 17.4 17.7 INTEREST ON UNPAID SUMS Any sums due Agent under any provision of this Agreement, and not paid within thirty days after such sums have become due, shall bear interest at the rate of ten % per annum. - ~ `'~ IREM Managemrnt Agreemenr - 10 Section 18 REPRESENTATIONS ' Owner represents and warrants: That Owner has full power and authority to • enter this Agreement; that there are no written or ura[ agreements affecting the Premises other than tenant leases, copies of which have beers furnished to Agent; that there are no recorded easements, restrictions, reservations, or rights of way which adversely affect the use of the Premises for the purposes intended under this Agreement; that to th.e best of Owner's knowledge, the property is zoned for the intended use; that all 1<;asing and other permits for the operation of the Premises have been secured and are current; that the building and its construction and operation do not violate any applicable statues, laws, ordinances, rules, regulations, orders of the like (including, but not limited to, those pertaining to hazardous or toxic substances): that the building does not contain any asbestos, urea, Formaldehyde, radon, or other toxic or hazardous substance; and that no unsafe condition. exists. Section 19 STRUCTURAL CI-IANGES Owner expressly withholds from Agents ;any power or authority to make any structural changes in any building, or to make any other major alter- ations or additions in or to any such building or to any equipment in any such building, or to incur any expense chargeable to Owner other than ex- penses related to exercising the express powers vested in Agent through this Agreement, without the prior written consent of the following person: Mound Housing and 5341 Maywood Road Name Address • Redevelopment Authority Mound, MN 55364 How[:ver, such emergenry repairs as may be required because of danger to life or property, of which are immediately necessary fur the preservation and safety of the Premises or the safety of the tenants and occupants thereof, or required to avoid the suspension of a.ny necessary service to the Premises, or to comply with any applicable federal, state, or local laws, regulations, or ordinances, shall be authorized pur:;uant to paragraph 10.1 of this Agree- ment, and Agent shall notify Owner appropriately. Section 20 BtTILDING COMPLIANCE Agent does not assume and is given no responsibility for compliance of the Premises of any building thereon or any equipment therein with the require- , menu of any building codes or with any statute, ordinance, law, or regula- tion of any governmental body or of any public authority or official thereof having jurisdiction, except to notify Owner promptly or forward to Owner promptly any complaints, warnings, notices, or summonses received by Agent relating to such matters. Owner represents that to the best of Owner's knowl- edge the Premises and all such equipment comply with all such require- menu, and Owner authorizes Agent to disclose the ownership of the Pre- mises to any such officials and agrees to indemnify and hold Agent, its rep- resentatives, servants, and employees, harmless of and from all loss, cost, • expense, and liability whatsoever which may be imposed by reason of any present or future violation or alleged violation of such existing laws, ordi- nances, statutes, or regulations. - 25 ' IRbM Managemen[ Agreemen[ - I 1 Section 21 TERMINATION 21.1 TERMINATION BY EITHER PARTY * R ev i s e t o s u i t This Agreement may be terminated by either Owner or Agent, with or with- e out cause, at the end of the initial term or of any following term. year upon the giving of days' written notice prior to the end of said initial term or following term year. 21.2 TERMINATION FOR CAUSE Notwithstandingthe foregoing, this Agreement shall terminate in any event, and all obligations of the parties hereunder shall cease (except as to liabilities or obligations which have accrued of arisen prior to such termination, or which accrue pursuant to paragraph 21.3 as a result of such termination, and obligations to insure and indemnify), upon the occurrence of any of the following events: (a) BREACH OF AGREEMENT -Thirty (30} days after the receipt of notice by either party to the other specifying in detail a material breach of this Agreement, if such breach has not been cured within said. thirty (30) day period; or if such breach is of a nature that it cannot be cured within said thirty (30) day period but can be cured within a reasonable time there- after, if efforts to cure such breach .have not commenced or/and such efforts are not proceeding and being continued diligently both during and after such thirty (30) day period prior to the breach being cured. I-IOWEVER, the breach of any obligation of either party hereunder to pay any monies to the other party under the terms of this Agreement shall be deemed to be curable within thirty (30) days. (6) FAILURE TO ACT, ETC. - In the event that any insurance required of Owner is not maintained without any lapse, or it is alleged or charged that the Premises, or any portion thereof, or any act or failure to act by Owner, its agent and employees with respect to the Premises, fails to comply with • any law or regulation, or any order or ruling of any public atlthority, and agent, in its sole discretion, considers that the action or position of Owner or its ,representatives with respect thereto may result in damage or liability to Agent, or disciplinary proceeding with respect to the Agent's license, Agent shall have the right to terminate this Agreement at any time by written notice to Owner of its election to do so, which terrnirtatiort shall be effective upon the service of such notice. Such termination shall not release the in- demnities of Owner set forth herein. (c) EXCESSNE DAMAGE -Upon. the destruction of or substantial dam- age to the Premises by any cause, or the taking of all or a substantial portion of the Premises by eminent domain, in either case making it impassible or impractical to continue operation of the Premises. (d) INADEQUATE INSURANCE - If agent deems that the liability insur- ance obtained by Owner per section 14 is not reasonably satisfactory to protect its interest under this Agreement, and if Owner and Agent cannot agree as to adequate insurance, Agent shall have the right to cancel this Agreement upon the service of notice to Owner. * 21.3 TERMINATION COMPENSATION * De 1 e t e If (i) Owner terminates this Agreement before the end of the initial term or any subsequent term year as provided in paragraph 21.1 above for any rea- son other than for a breach by Agent under paragrapl-i 21.2(a) above, or if (ii) Agent terminates this Agreement for a breach by Owner under para- graph 21.2 (a) above or pursuant to the provisions of paragraphs 21.2(6) or 21.2(d) above, then in any such event, Owner shall be obligated to pay • Agent as liquidated damages an amount equal to the management fee earned by Agent, as determined under paragraph 17.1 above, for the calendar month immediately preceding the month ir, which the notice of termination is 26 IREM Maaxgemenc Agreement - 17. given to Agent or to Owner, multiplied by tl;e .number of months and/or • portions thereof remaining from the termination date until the end of the initial term or term year in which the termination occurred. Such damages, plus any amounts accruing to Agent prior to such termination, shall be due and payable upon termination of the Agreement. To the extent that funds • are available, such sums shall be payable from the Operating (and/or) Re- serve Account(s). Any amount due in excess of the funds available from the Operating (and/or) Reserve Account(s) shall be paid by Owner to Agent upon demand. 21.4 OWNER RESPONSIBLE FOR PAYMENTS Upon termination of or withdrawal from this Agreerent, Owner shall as- sume the obligations of any contract or outstanding bill executed by Agent under this Agreement for and on behalf of Owner and responsibility for payment of all unpaid bills. In addition, Owner shall furnish Agent security, in an amount satisfactory to Agent, against any obligations or liabilities which Agent may have properly incurred on Owner's behalf under this Agreement. Agent may withhold funds for ninety (90) days afrer the end of the month in which this Agreement is terminated, in order co pay bills previ- ously incurred but not -yet invoiced and to close accounts. Agent shall de- liver to Owner, within ninety (90} days alter the end of the month in which this Agreement is terminated, any balance of rnonies due Owner or of ten- ant security deposits, or both, which were held by Agent with respect to the Premises, as well as a final accounting reflecting the balance of income and expenses with respect to the Premises as of the date of terminations or with- drawal, and all records, contracts, leases, receipts for deposits, and other papers or documents which pertain to the Premises. 21.5 SALE OF PREMISES *Delete In the event that the Premises are sold by Owner during the period of this • Agreerrlent, Agent shall have exclusive rights of representation in the sale if stated in a specific sales agreement ro be negotiated separately. Upon trans- for ofow~nership, this Agreement shall terminare by mutual consent of Owner and Agent under the terms and conditions set Forth below Section 22 INDEMNIFICATION SURVIVES TERMINATION All representations and warranties of the parties contained herein shall sur- vive the termination of this Agreement. All provisions of this Agreement that require Owner to have insured or to defend, reimburse, or indemnify Agent (including, but not limited to, paragraphs 21., 2.3, 5. 8.4, 9.2, 9.5, 13, 14, 15, 16, 17.7, 20, 21.3, and 21.4) sha(1 survive ary termination; and if Agent is or becomes involved in any proceeding or litigation by reason of having been Owner's Agent, such provisions shall apply as if this Agreement were still in effect. Section 23 HEADINGS • All headings and subheadings employed within this Agreement and in the accompanying List of Provisions are inserted only for convenience and ease of reference and are not to be considered in the construction or interpreta- tion of any provision of die Agreement. - 2 ~ IREM Management Agreement - 13 Section 24 FORCE MAJEUR Any delays in the performance of any obligation of Agent under this Agree- ment shall be excused to the extent that such delays arc caused by wazs, • national emergencies, natural disasters, strikes, labor disputes, utility fail- ures, governmental regulations, riots, adverse weather, and other similar causes not within the control of Agent, and any time periods required for petfor- mance shall be extended accordingly. Section 25 COMPLETE AGREEMENT This Agreement, including any specified attachtnents, constitutes the entire agreement between Owner and Agent with respect to the management and operation of the Premises and supersedes and replaces any and all previous management agreements entered into or/and negotiated between Owner and Agent relating to the Premises covered by this Agreement. No change to this Agreement shall be valid unless made L- y supplemental written agree- ment executed and approved by O•tivner and Agent. Except as otherwise provided herein, any and all amendments, additions, or deletions to this Agreement shall be null and void unless approved by Owner and Agent in writing. Each pazty to this Agreement hereby acknowledges and agrees that the other party has made no warranties, representations, covenants, or agree- ments, express or implied, to such party, other than those expressly set forth herein, and the each party in entering into and executing this Agreement, has relied upotr no warranties, representations, covenants, or agreements, express or implied, to such parry, other than those expressly set forth herein. Section 26 RIGHTS CUMULATIVE; NO WAIVER No right or remedy herein conferred upon or reserved to either of the parties to this Agreement is intended to be exclusive of any tether right or remedy, and each and every right and remedy shall be cumulative and in addition to any other right or remedy given under this Agreement or now or hereafter legally existing upon the occurrence of an event of default under this Agree- ment. The failure of either party to this Agreement to insist ae azy time upon the strict observance or performance of arty of the provisions of this Agreement, or to exercise any right ar remedy as provided in this Agree- ment, shall not impair any such right or remedy or be construed as a waiver or relinquishment of such right or remedy with respect to subsequent de- faults. Every right and remedy given by this Agreement t:o the parties to it may be exercised from time to time and as often as may be deemed expedi- ent by those parties. 26.1 ARBITRATION Any controversy or claim arising out of or relating to this contract, or breach thereof, shall be settled, by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Asso- ciation, and judgement upon the award rendered by the arbitrators} may be entered in any court hav- ingjurisdiction thereof. Section 27 APPLICABLE LAW AND PARTIAL INVALIDITY The execution, interpretation, and performance of this Agreement shall in all respects be wntrolled and governed by the laws of the State of MN If any part of this Agreement shall be declared invalid or unenforceable, Agent shall have the option to terminate this Agreement by notice to Owner. • - 2(~ - IFEM Mana~,enunt Agreement - 14 Section 28 NOTICES Any notices, demands, consents and reports necessary or provided for under • this Agreement shall be in writing and shall be addressed as follows, or at such other address as Owner and Agent individually may specify hereafrer in writing: Agent: VIP Properties AMO 11300 Minnetonka Mills Road Minnetonka, MN 55305 Owner: Mound Housing and Redevelopment Authority 5341 Maywood Road Mound, MN 55364 Such notice or other communication maybe mailed. by United States regis- tered orcertified mail, return receipt requested, postage prepaid, and may be deposited in a United States Post Office ar a depository Eor the receipt of mail regularly maintained by the post office. much notices, demands, con- sents, and reports may also be delivered by hand or by any other receipted • method or means permitted by law. For purposes of this Agreement, notices shall be deemed to have been "given" or "delivered" upon personal delivery thereof or forty-eight (48) hours after having been deposited in the United Stages mails as provided herein. Section 29 AGREEMENT BINDING UPON SUCCESSORS AND ASSIGNS This agreement shall be binding upon the palsies hereto and their respective personal representatives, heirs, administrators, executors, successors and as- signs. SIGNATUF.ES IN WITNESS WHEREOF, the parties hereto have affixed or caused to be affixed their respective signature this day of 20 Witnesses: (Owner Name} (Tide) (Address) (City/Brace/Zip) • Agent VIP Properties AMO Firm Joseph F. Bisanz Submiacd by gy - 29 - IREM ManagementAgreement - 15 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRF,SF,NTS, TI~IAT • Mound Housing and Redevelopment Authority , (Name) located at (State whether individual, partnership, corporation, etc.) 5341 Maywood Road, Mound, MN 55364 has made, constituted, and appointed, and, by these presents does hereby make, constitute and appoint, VIP PROPERTIES and its agents of Minnetonka, Minnesota, whose address is 11300 Minnetonka Mills Road (its) true and lawful agents for (it) (me) in (its) (my} name, place and stead to execute and act on my behalf, and to file and appear in all conciliation court and unlawful detainer actions in the counties of Ramsey, Hennepin, and for the property known as Indian Knoll Manor Apartments Dated this ___ day of March , 20 02 Signature of 1?mpetry Owner Executed in the presence of: Tide Signature of property Owner Witness Witness Acknowledged before me this day of NOTARIAL SEAL Signature of property Owner Tide 20 Notary • • -30- FREERS • & ASSOCIATES INC O To: Kandis Hanson, City Manager From: Jim Prosser W Date: March 22, 2002 Subject: Draft Development RFP Attached is the draft RFP for the Downtown Redevelopment. Please note the following information and issues: 1. The draft RFP will include graphics with design guideline information. The graphics were unavailable at time of this draft. 2. The RFP cover the Langdon, Auditors and Lost Lake districts. 3. Proposals will be accepted for parcels as well as entire districts. 4. Emphasis is placed on retail and commercial development. Lost Lake site is targeted for hospitality, entertainment and retail. Housing proposals would be permitted. It is • very important that the HRA is comfortable with the language relating to this aspect of the RFP. 5. The proposed schedule for the RFP is as follows: Issue RFP March 26, 2002 Developer Information Session Apri18, 2002 RFP Due Apri126, 2002 Developer Review Apri130, 2002 HRA Developer Review May, 2002 Developer submittal of concept plans June 2002 HRA Review of plans July 2002 Approval of Developer July 2002 Development Approval August -March 2003 Start of Construction Spring 2003 This schedule should be modified as necessary per HRA direction. 6. The current draft RFP includes an application fee of $500 to cover cost of initial evaluation. The HRA should decide whether to keep this fee in the RFP. It is likely that the fee will deter some developers/builders from submitting a proposal. The fee was suggested because of the lack of other funds to pay for "out of pocket" expense to review • the proposals. The out of pocket expense refers to Ehlers and Hoisington Koegler cost to assist in preparing an analysis for HRA review. This review typically includes analysis LEADERS IN PUBLIC FINANCE 3060 Centre Pointe Drive Phone: 651-697-8503 Fax: 651-697-8555 Roseville, MN 55113-1105 -37 - Email: jim@ehlers-inc.com of proposals and interviews with firms submitting proposals to gather information for the • summary report provided to the HRA. The summary is generally used to select the developers for final interviews. Additionally, since this RFP process accepts proposals for parcels, some analysis of how the parcel proposals could be successfully coordinated may be necessary. One option would be to eliminate the review (and the fee). The HRA or a committee of the HRA would then review the proposals and interview all or a select number based on the HRA review. Depending on the number of proposals received this may or may not be a significant issue. -32- City of Mound g F~ a~ Request fog Proposals 3 ;~, ~ ,~ - . ~ ~ ~ F .~:~ ~ ~-' j; t _. t 1 r;~,~~ m,~' ' ~r ~y ,. ~.~ 4, ~' `~ ~^ . .,.; ~ ~ ,. ~ P~~ , T~~111" i ~~ 5341 Maywood Road ~~ ~ Mound MN 55364 March 22, 2002 -33- I. Introduction The City of Mound is awell-established southwest suburb of Minneapolis with population of 9,435 residents. This charming, historic community is oriented along the shoreline of Lake Minnetonka, just fifteen minutes from downtown Minneapolis. The City offers the tranquility and beauty of the country as well as the diverse amenities of the city. The Lake and wildlife are just minutes from a vast array of stores and restaurants. We proudly welcome and encourage you to visit or website at www. cityofmound.com The City of Mound, Minnesota is initiating the redevelopment of its downtown in order awn charm and natural downtown features, while providing a business and shopping environment which will appeal to its growing cosmopolitan population. This is the mission of Mound Visions, a program undertaken to reawaken the spirit and vibrance of downtown. The Vision calls for downtown Mound to recapture the charm of Lake Minnetonka by reopening a historic boat access channel via Lost Lake, as it was in the era of the streetcar boats. The Mound Vision calls for reoriented, newly designed, attractive and complimentary structures, which will maintain an individual identity, yet conform to a historic, resort hotel architectural theme. The individual goals of the three-redevelopment areas are to: 2 Redesign Auditors Road as a downtown "main street." The Lost Lake canal and greenway will focus pedestrian and boater activity on Auditors Road, which has been built with on-street, diagonal parking. The City realizes that auditors Road will not experience as much drive-by traffic as nearby county roads, but the community feels strongly that Auditors Road should have a retail presence. 3 Redesign Langdon as a mixed-use retail/office/residential district with uses oriented toward Commerce Boulevard and the opportunity to orient residential uses toward the visual and recreational amenities of Lake Langdon. The City is requesting development program proposals from creative and qualified developers to assess the interest, financial feasibility, and concept compatibility with the Mounds Visions Redevelopment Plan. Please note the following general guidelines: :• Proposals will be accepted for individual parcels or entire project areas. • The goal of the redevelopment is to create a more viable retail center for the City of Mound• Commercial uses, especially retail and office, are strongly encouraged. Mound Mixed-Use RFP Reinforce Lost Lake as a hospitality/entertainment District. Unique destination commercial uses such as hotel, banquet facility, farmers market and restaurants that diversify the mix of downtown offerings without decentralizing the downtown core retail will be favored. The City will also consider housing options worked into the mix as long as the other development goals for the district are met. Page 1 -34- • Efforts to incorporate existing retail businesses in new developments are encouraged. • •'• The City encourages, but does not require, partnering with other developers to accomplish redevelopment objectives. The City expects the private development firm to embrace and support the principles demonstrated by The Mound Visions Downtown Redevelopment Design Framework (copy enclosed). In turn, the City is committed to a public/private partnership and win/win relationship. II. Description of Sites •'• Location All three (3) districts are located in the core of downtown. Following is a description of their size and location. Langdon District The Langdon District is comprised of six (6) acres and is bounded by the future regional trail on the north, Our Lady of the Lake Church on the south, Commerce Boulevard on the east and Lake Langdon on the west. • uditor's Road District A Auditor's Road District is comprised of six (6) acres and is bounded by the railroad line on the north, Auditors Road on the south, Commerce Boulevard on the west and the new County Road 15 to the east. L ost Lake/Hotel District The Lost Lake District is comprised of five (5) acres and is bounded by the new County Road 15 on the north, Lost Lake on the south and west and the Maxwell site on the east. •'• Zoning 11 three (3} of the District are currently zoned B1 (Central Business District) and will be rezoned to APED-PUD (Pedestrian Planned Unit Development District), when development is ready to commence. This is a mixed-use zoning category that allows retail, office, institutional, public open space and attached high-density residential uses that are organized and planned in a manner that is pedestrian friendly (see attached copy of the zoning ordinance). • Mound Mixed-Use RFP Page 2 -35- • Design Guidelines he intent of the Mound Visions Downtown Redevelopment Plan is to draw from the historic • Tchazacter of the community for inspiration in developing a new downtown.....one which accommodates modern retail practices yet has an appealing identity of its own. The five goals of the plan are to: 1. Provide marketable commercial space 2. Take full advantage of view, access and use of downtown lakes 3. Improve pedestrian and vehicular circulation 4. Maintain "downtown" character as opposed to "suburban" character; and 5. Make doing business in downtown Mound easy and enjoyable. Part of the strategy in strengthening downtown Mound is to diversify the reasons people use it. The City is focusing on weaving recreational opportunities into the downtown by creating green space, providing facilities for boating and working on a farmer's market and visitor. facility. In regard to private development, the City believes that downtown's long-term success relies upon crating a mix of uses including retail, entertainment, office and housing. Other elements the City desires include: • A continuous pedestrian loop of retail storefronts from the new County Road 15/110 intersection to Auditors Road intersection. This suggests ground-level retail at the Commerce Boulevard street front in both the Langdon and Auditors districts. .;. A mix of housing types, styles and tenure to create a "neighborhood feel" to the development. The City encourages a higher percentage of owner-occupied housing to rental development (if you are proposing rental housing, you are encouraged to accompany the suggestion with detailed information about development experience, long-term ownership plans, management techniques, parking solutions and relationship to other uses). • Higher density, residential development, especially if underground pazking is incorporated into the development. All off-street surface parking must be located behind the buildings or within interior courtyards. • Placement of buildings up to public sidewalk to provide a traditional downtown character as opposed to a suburban character. • Manage storm water at the source. Space for storm water ponding is limited, therefore developers are encouraged to suggest techniques such as bioswales and rooftop gardens to manage storm water in small spaces. • Development proposals that include a mix of retail and housing and that suggest a staged approac~ to development are strongly encouraged. Mound Mixed-Use RFP Page 3 -36- • • The City is open to consideration of proposals that address any portion of the redevelopment area or proposals that suggest a team approach to redevelopment. The City expects the developer to provide a creative, urban design that encourages and incorporates the use of high quality, durable building materials. Architectural detailing is highly encouraged and landscaping and streetscape design should be used to enhance pedestrian circulation and create a sense of unity and identity. III. Desired Developer Commitments/Contributions • The developer must demonstrate an understanding and commitment to the City of Mound concept development plan. • The developer must demonstrate the experience necessary to organize and deliver a high quality project of this type and scale. • The developer is expected to provide private capital to fund 100% of the fair market value of the project. • IV. City of Mound Commitments • The City will consider requests for gap financing as appropriate to assure the desired level of quality of development. • The City will assist in land assembly if the developer is unable to acquire the properties through direct negotiation. V. Desired Qualifications • Experience in development of this type of housing, hotel, entertainment and hospitality, retail and/or office redevelopment • Experience in land assembly where there are current businesses, residents and buildings residing • Proven organizational and project management capabilities • Experience in public/private development work • Commitment to collaborate with City staff and City Commissions ., Mound Mixed--Use RFP Page 4 -37- VI. Submission Requirements To assist you with this proposal, the City has scheduled aPre-proposal Conference for: • ------, 2042 at -:-- p.m. Mound City Hall 5341 Maywood Road 952-472-0600 In order to properly evaluate a proposal for a project of this nature, please submit twelve (12) copies with the following information: 1. A development program including type, size, estimated market value, pad size and use for each project component. (An example would be "four story, brick and masonry, 125-room limited service hotel, constructed on a 2.1 acre pad. Estimated construction cost of $6,250,000.") 2. A general description of the public improvements, which may be required to support the new development. Potential improvements to consider may include transit, water and .sewer, etc. The City understands that engineering has not been initiated as yet and that an environmental review would be undertaken if the project would proceed. However, the City would appreciate preliminary information of the type of improvement, which will be considered. 3. Generalized development proforma, detailing sources and uses of funds (includin~ proposed cost of land) 4. A description of the project team including, but not limited to master or lead developer, development planner, architect, engineering consultant, attorney, etc 5. Background summary of related development experience, financing capacity and references from at least three communities where you have completed similar developments. 6. Detail of unique characteristics and design elements that would be incorporated into the project 7. Proposed sale prices and rental rates of residential units and rental rates for the commerciaUoffice space 8. Proposed timeline for development Proposals rstcrst Ge acco~apanied Gy a nor-refundaGle pcryrrrent of $5(10 to cover cost of proposrr.l review cxnd evaluation. All RFP packages shall be submitted to the City of Mound, no later than 4:00 p.m., Friday, April 26, 2002. Responses should be addressed to: Mound Vision Downtown Redevelopment • Attention: Kandis Hanson Mound City Manager Mound Mixed-Use RFP Page S -38- 5341 Maywood Road Mound MN 55364 • 952-472-0600 VII. Selection This information will be reviewed and evaluated by the Project Team including the Mound City Manager and Financial Advisor. The evaluation will be provided to the City Council/HRA to be used in the selection of developers for final interviews. Thank you again for your interest in developing within our community. We look forward to receiving information regarding your proposal VIII. Preliminary Project Schedule Issue RFP March 26, 2002 Developer Information Session Apri18, 2002 RFP Due April 26, 2002 • Developer Review Apri130, 2002 HRA Developer Review May, 2002 Developer submittal of concept plans June 2002 HRA Review of plans July 2002 Approval of Developer July 2002 Development Approval August -March 2003 Start of Construction Spring 2003 • Mound lltixed--Use RFP Page 6 -39- Zoning Ordinance • r ~ ~J -40- • Retail Market Study • • -41- Site Map ~~ L -42- Design Framework/ Guidelines -43- Traffic Analysis • • -44- Concept Plans • • -45- Demographics • • -46-