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2016-04-12 HRA Agenda PacketPLEASE TURN OFF CELL PHONES & PAGERS IN COUNCIL CHAMBERS. AGENDA MOUND HOUSING & REDEVELOPMENT AUTHORITY REGULAR MEETING TUESDAY, APRIL 12,2016 6:30 P.M. MOUND CITY COUNCIL CHAMBERS______ Page 1. Opening the meeting 2. Action approving agenda, with any amendments 3. Action approving minutes: March 22, 2016 regular meeting I 4. Action approving payment of claims in Blake Hopkins, Senior Project Manager, and Aubrie Gold, Project 7-31 Manager, of Aeon presenting an update on the Indian Knoll Manor RAD conversion 6. Blake Hopkins, Senior Project Manager, and Aubrie Gold, Project 32-81 Manager, of Aeon requesting action on a resolution authorizing the Board Chair and Executive Director to enter into an Environmental Response Fund (ERF) Grant Agreement Between the City of Mound Housing and Redevelopment Authority and Hennepin County Environment and Energy Department 7. Adjourn March 22, 2016 The Mound Housing and Redevelopment Authority in and for the City of Mound, Minnesota, met in regular session on Tuesday, March 22, 2016, at 6:55 p.m. in the council chambers of the Centennial Building. Members present: Chair Mark Wegscheid, Ray Salazar, Kelli Gillispie, Heidi Gesch Members absent: Jennifer Peterson Others present: City Manager and Public Works Director Eric Hoversten, Fire Chief Greg Pederson, Planning and Development Director Sarah Smith, Field Officer Stewart Simon, Administrative Assistant Mary Mackres, City Attorney Melissa Manderschied Public Present: Katie Morford 1. Open meeting Chair Mark Wegscheid called the meeting to order at 6:56 p.m. 2. Approve agenda MOTION by Salazar, seconded by Gesch, to approve the agenda. All voted in favor. Motion carried. 3. Approve minutes MOTION by Salazar, seconded by Gesch, to approve the minutes of the March 8, 2016 regular meeting. All voted in favor. Motion carried. 4. Approve claims MOTION by Salazar, seconded by Gesch, to approve the claims in the amount of $6,064.40. All voted in favor. Motion carried. 5. Adjourn MOTION by Gesch, seconded by Salazar, to adjourn at 6:57 p.m. All voted in favor. Motion carried. Attest: Catherine Pausche, Clerk -1- Chair Mark Wegscheid m CITY OF MOUND 04/07/16 9:18 AM Page 1 Current Period: April 2016 Fund Summary 10120 Wells Fargo HRA 680 HRA PUBLIC HOUSING $9,273.68 $9,273.68 Pre -Written Checks $0.00 Checks to be Generated by the Computer $9,273.68 Total $9,273.68 -3- Batch Name 041216COMBND User Dollar Amt $9,273.68 Payments Computer DoilarAmt $9,273.68 $0.00 In Balance Refer 3 COMMON BOND COMMUNITIES Cash Payment E 680-49800-101 F T Empl Regular PR 3-04, & 3-18, & 3-31-16 MGR SALARY $2,362.50 Invoice 1728055 3/31/2016 Cash Payment E 680-49800-111 Other IKM Maint PR 3-04, & 3-18, & 3-31-16 MTCE SALARY $2,875.18 Invoice 1728051 3/31/2016 Cash Payment E 680-49800-122 FICA PR 3-04, & 3-18, & 3-31-16 MGR ER TAX $179.91 Invoice 1728059 3/31/2016 Cash Payment E 680-49800-130 Employer Paid Ins (GEN PR 3-04, & 3-18, & 3-31-16 MTCE ER TAX, $628.88 HEALTH INS & 401 K Invoice 1728054 3/31/2016 Cash Payment E 680-49800-131 Employer Paid Health PR 3-04, & 3-18, & 3-31-16 MGR ER INS $277.29 BENEFITS Invoice 1728058 3/31/2016 Cash Payment E 680-49800-121 PERA PR 3-04, & 3-18, & 3-31-16 MGR ER 401K $83.40 MATCH Invoice 1728057 3/31/2016 Transaction Date 4/6/2016 Wells Fargo HRA 10120 Total $6,407.16 Refer 30 COMMON BOND COMMUNITIES Cash Payment E 680-49800-307 Admin/Finance/Compute ADP W2S $14.39 Invoice 1716804 3/4/2016 Cash Payment E 680-49800-307 Admin/Finance/Compute MGMT FEES FEB 2016 $2,750.00 Invoice 1725769 3/24/2016 Cash Payment E 680-49800-321 Telephone, Cells, & Radi MGR CELL PHONE ALLOWANCE 3-16 $45.00 Invoice 1728056 3/31/2016 Cash Payment E 680-49800-430 Miscellaneous AMERIPRIDE UNIFORMS 2-16 $30.35 Invoice 1716803 3/4/2016 Cash Payment E 680-49800-431 Meeting Expense MGR EXP- HOLIDAY- FOOD FOR REAC MTG- $12.88 INSPECTIONS Invoice 1727480 3/25/2016 Cash Payment E 680-49800-431 Meeting Expense MGR EXP- JUBILEE FOOD FOR REAC MTG- $13.90 INSPECTIONS Invoice 1727481 3/25/2016 Transaction Date 4/6/2016 Wells Fargo HRA 10120 Total $2,866.52 Fund Summary 10120 Wells Fargo HRA 680 HRA PUBLIC HOUSING $9,273.68 $9,273.68 Pre -Written Checks $0.00 Checks to be Generated by the Computer $9,273.68 Total $9,273.68 -3- O4��1s1�12AM CITY OF MOUND Page Payments Current Period: April 2016 Batch Name 041218HRA User DoIla rAmt $9,48062 Payments Computer Dollar Amt $9�80.82 m0.00 In Balance ReferOCBV7BqPO/mTENERGY _ Cash Payment E68O4S000-303Gas Utilities GAS SERVICE 2-18-1OTMRUD-1V-16|KM $1.041.00 Invoice 041210-2 3/22/2010 Transaction Date 4/5/2016 Wells Fargo HRA 10120 Total $1,041.00 Refer 7 FRONTIERICITIZENS COMMUxVCA _ Cash Payment E50n-4S80O-321Telephone, Cells, &Rodi PHONE SERVICE I0NJ-13-1OTO4'12-1O $550.40 Invoice 041216 3/13/2016 Transaction Date 4/5/2016 Wells Fargo HRA 10120 Total $550.40 .—�—� Refer VHAMER8xCKDECORATING COMP _ Cash Payment EO8O'48OOV402Building Maintenance INSTALL CARPET- GLUE DIRECT- TAKE UP $945,54 OLD & INSTALL 4^VINYL COVE BASE- UNIT #2OO|KIM'MATERIALS &LABOR |nvoiceCG003092 3/10/2016 Transaction Date 6/17/2015 Wells Fargo HRA 10120 Total $843.54 1 MOUND, CITY OF_ Cash Payment E 0OV-4gxV0-3O2Water Utilities WATER SVC 2-1-10THRU8-1-1O |KM $2.548.07 Invoice 04122016 3/20/2016 Transaction Date 4/5/2016 Wells Fargo HRA 10120 Total �548.87 Refer 2 PRIME PROPERTY SVCS, INC._ Cash Payment E68V4S0OO4U2Building Maintenance MARCH 5.2018PAINT UNIT #305 824100 Invoice 18 3/16/2016 Cash Payment E 60V-4V8VV4O2Building Maintenance MARCH 1O.2V16PAINT UNIT #2V0- $47605 SPACKLE, SAND, PAINT 2ND COAT & CEILING Invoice 18 3/16/016 Cash Payment EO8O-49OVV-402Building Maintenance MARCH 201OTWICE WEEKLY CLEANING- $729�17 /0N Invoice 20 3/28/20/8 Transaction Date 4/5/2016 Wells Fargo HRA 10120 Total *1,448.22 Refer 9REAL84 GE, INC_ Cash Payment EO80498O0475Tenant Related Services NOV 2O15CALL CENTER MTCEPLAN& $143.00 ROLL OVER PHONE NUMBER |uM Invoice 11511065018 11/19/2015 Cash Payment EV00-w90nn-475Tenant Related Services FEB 2O1GCALL CENTER KTCEPLAN & $143.00 ROLL OVER PHONE NUMBER |KM Invoice 11602014799 2/17/2018 Cash Payment E68O~*8B0V475Tenant Related Somimao MARCH 201VCALL CENTER MTCEPLAN & $143.00 ROLL OVER PHONE NUMBER |KM Invoice 11603015077 3/17/2016 Transaction Date 4/7/2016 Wells Fargo HRA 10120 Total $429.00 Refer 1OREPUBLIC SERVICES _ Cash Payment EG8O-498OV-384Refuse/Garbage Dispoaa GARBAGE SVC APRIL 2016|NN $277.78 Invoice 0894-004053096 3/25/2010 Transaction Date 4/7/2018 Wells Fargo HRA 10120 Total $277.78 Refer 3STA-SAFE LOCKSMITHS C0MPAN -4- CITY OF MOUND 04/07/16 10:12 AM Page 2 Current Period: April 2016 Cash Payment E 680-49800-401 Building Repairs LOCKS REBUILT- PUSH HANDLE SPRINGS $338.20 REPAIRED- BACK DOOR, STRIKE PLATE, DOOR LATCH PLATE, ADAMS RITE INSIDE LEVER ADA DOOR- IKM Invoice 0020313 1/26/2016 Transaction Date 4/5/2016 Wells Fargo HRA 10120 Total $338.20 Refer 11 TRUE VALUE MOUND (1KM) � Cash Payment E680-49800-210 Operating Supplies 10 X 100 BLACK FILM, 100 PK LG $63.88 DISPOSABLE GLOVES- IKM Invoice 132606 3/2/2016 Cash Payment E 680-49800-220 Repair/Maint Supply Invoice 132707 3/7/2016 Cash Payment E 680-49800-220 Repair/Maint Supply Invoice 132806 3/10/2016 Cash Payment E 680-49800-220 Repair/Maint Supply Invoice 132925 3/16/2016 Cash Payment E 680-49800-220 Repair/Maint Supply Invoice 132958 3/17/2016 Cash Payment E 680-49800-220 Repair/Maint Supply Invoice 133183 3/28/2016 EXTENSION WAND- IKM $18.89 PAINT TOOL, JOINT COMPOUND, RETURN -$18.36 NEVER KINK HOSE- IKM ADHESIVE WHITE LINER, GORILLA GLUE- $12.13 IKM GAP & CRACK FOAM, SINK STRAINER- IKM $8.93 KRAZY GLUE, INDOOR/OUTDOOR FILLER- $10.86 IKM Cash Payment E 680-49800-220 Repair/Maint Supply 5 PK BIMETAL UTILITY BLADES- IKM $5.38 Invoice 133271 3/31/2016 Transaction Date 4/7/2016 Wells Fargo HRA 10120 Total � $101.71 Refer 4 TRUE VALUE MOUND (1KM) Cash Payment E 680-49800-220 Repair/Maint Supply TOILET BOWL RING REMOVER- SHOWER $37.85 ROD #210 IKM Invoice 132076 2/3/2016 Cash Payment E 680-49800-220 Repair/Maint Supply VOLTAGE SENSOR, WALL PLATES- IKM $24.70 Invoice 132098 2/4/2016 Cash Payment E 680-49800-220 Repair/Maint Supply UTILITY MASKING TAPE, DOOR STOPS, $14.01 SCREWS, NUTS, BOLTS- IKM Invoice 132119 2/5/2016 Cash Payment E 680-49800-220 Repair/Maint Supply 2 GAL BASE PAINT, HALLWAY IKM $35.84 Invoice 132133 2/7/2016 Cash Payment E 680-49800-220 Repair/Maint Supply EXCHANGE BASE PAINT- IKM $0.65 Invoice 132134 2/7/2016 Cash Payment E 680-49800-220 Repair/Maint Supply PLASTIC PAINT TRAY SET, PAINT TAPE- IKM $13.59 Invoice 132150 2/8/2016 Cash Payment E 680-49800-220 Repair/Maint Supply BIFOLD TP PIVOT SET, SCREWS, NUTS, $21.32 BOLTS- IKM #104 Invoice 132231 2/11/2016 Cash Payment E 680-49800-220 Repair/Maint Supply RUST PROTECTOR, MINI BRUSH SET, WIRE $33.92 BRUSH SCRAPER, LATEX STAIN ENAMEL, 2" & 4" BRUSHES Invoice 132242 2/12/2016 Cash Payment E 680-49800-210 Operating Supplies GLADE REFILL, SCENT BEADS, ODOR $26.49 DEODORIZER, PAPERCLIPS Invoice 132245 2/12/2016 -5- • • Payments Current Period: April 2016 Cash Payment E 680-49800-220 Repair/Maint Supply Invoice 132283 2/15/2016 Cash Payment E 680-49800-220 Repair/Maint Supply Invoice 132299 2/15/2016 Cash Payment E 680-49800-220 Repair/Maint Supply Invoice A74789 2/3/2016 Transaction Date _ 4/4/2016 - - -.- ,vcnu r Cash Payment E 680-49800-381 Electric Utilities Invoice 495285037 3/28/2016 Transaction Date 4/5/2016 Fund Summary 680 HRA PUBLIC HOUSING Pre -Written Checks Checks to be Generated by the Computer Total 04/07/16 10:12 AM Page 3 $241.62 ELECTRIC SVC 2-27-16 THRU 3-26-16 IKM$1 1 5 Wells Fargo HRA 10120 10120 Wells Fargo HRA $9,480.62 $9,480.62 $0.00 $9,480.62 $9,480,62 2 Ed 60.28 Total 1560.28 To: Board Chair and Commissioners of the Mound HRA From: Catherine Pausche, Director of Finance and Administrative Services Date: April 7, 2016 Subject: Update on RAD Conversion of Indian Knoll Manor Background In 1970, the Mound Housing and Redevelopment Authority (HRA) signed a contract with HUD to build Indian Knoll Manor for elderly and handicapped citizens. Through reforms, public housing is now open to individuals and families who meet the income thresholds. Indian Knoll Manor and many other affordable units in the city help to achieve Mound's Comprehensive Plan objective to maintain and continue life -cycle housing for all income levels. There are currently 50 units at Indian Knoll, including 16 studios, 33 1 -bedrooms, and a 2 -bedroom unit. Units are approximately 370-480 square feet in size, which is just below HUD's maximum size of 540 square feet for affordable housing. In 2008, the Mound HRA began to look at options for Indian Knoll Manor as HUD's regulatory requirements continued as funding diminished. While determined to keep the building affordable, deferred capital needs became apparent that would not be satisfied by the projected level of HUD funding. In recent years, capital grants were used to help subsidize the cuts in the operating subsidies. HUD created the Rental Assistance Demonstration (RAD) Project which allows public housing properties to convert to long-term Section 8 rental assistance contracts, and Indian Knoll was approved for this program in 2015. RAD provides flexibility in ownership and financing alternatives and is a central part of HUD's rental housing preservation strategy, which works to preserve the nation's stock of deeply affordable rental housing, promote efficiency within and among HUD programs, and build strong, stable communities. Partnership with Aeon As part of the RAD conversion process, the Mound HRA chose Aeon to be its development partner and ultimately assume ownership of Indian Knoll Manor. The Mound HRA approved a tentative purchase agreement with Aeon to set in motion the process to secure alternative funding/grants for the rehabilitation of Indian Knoll Manor. Aeon representatives will be present to summarize the current proposed financial scenario that will include acquisition of the neighboring parcel and an addition of 16 units, 6 of which will be added to the existing building and 10 separate 3 -bedroom townhomes. It is important to note that without the additional units, the project would have operated at an increasing deficit in years 1 through 15 and would not have scored well in the competitive funding applications. The basic IN Update on RAD Conversion and Indian Knoll Manor Page 2 goal is to break even while improving the quality of the property and services for the long term. The proposed plan has already secured the majority of possible funds, ensuring that this project will become a reality! This accomplishment should not be understated. The current site plan is a product of many meetings and much analysis. Commissioners Salazar and Peterson have been privy to the meetings and progress Aeon has made as the appointed liaisons for the project. HRA staff supports the proposal in concept and will work with Aeon through the local development application review process, which will include Planning Commission and Council land -use approvals; also other applicable public agency approvals (i.e., MCWD, Metropolitan Council, etc.) Attached is a preliminary review report prepared by Community Development Director Sarah Smith. It is important that that process begin with the HRA Board's feedback and authorization to proceed with the public input process. Aeon will be presenting details of the proposal at the April 12th HRA meeting, which begins at 6:3012m. With the HRA Board's authorization to move forward, next steps will include the following meetings, which the HRA Commissioners are invited to attend: Resident Meeting Location: IKM Community Room at 2020 Commerce Boulevard Date/Time: Thursday, April 21st at 5:00 pm Neighborhood Meeting (invitations will be sent to property owners within 350 feet of property): Location: City of Mound Council Chambers at 5341 Maywood Road Date/Time: Thursday, April 28th at 6:00 pm Attendance is optional but a notice of a potential quorum will be posted. 13 To: Blake Hopkins, AEON Aubrie Gold, AEON From: Sarah Smith, Community Development Director Cc: Eric Hoversten, City Manager/Public Works Director Catherine Pausche, Finance Director/City Clerk Date: March 24, 2016 Subject: Preliminary Review Comments - Concept/Sketch Plan for Indian Knoll Manor Redevelopment Proposed Project On behalf of the City of Mound, Staff would like to thank you for forwarding a preliminary concept plan on March 17th proposing (6) additional units to the apartment building at 2020 Commerce Boulevard and construction of (10) new, townhome units on the property located at 5524 Spruce Road which is being purchased by AEON. Staff respectfully offers the following comments and information: Zoning . The property at 2020 Commerce Boulevard is zoned R-3 Multiple Family Residential and subject to the provisions of City Code Chapter 129-103. The specific requirements for a multiple family dwelling in the R-3 District are contained in City Code Sec. 129-103 (e). A multiple dwelling unit structure, exceeding six units, is allowed by conditional use. A multiple dwelling unit structure, three to six units, is a permitted use. Townhomes are allowed by conditional use in the R-3 District. The property at 5524 Spruce Road is zoned R-1 Single Family Residential and subject to the provisions of City Code Sec. 129-100, Mound Comprehensive Plan. The property at 2020 Commerce Boulevard is guided High Density Residential. The property at 5524 Spruce Road is guided Low Density Residential. The City of Mound has many more zoning districts than land use categories in its comprehensive plan. This is due to the general nature of the comprehensive plan versus the specific guidance intended to be provided through zoning. To assist with determining whether an individual parcel's zoning designation was in conformance with the comprehensive plan, the following chart showing each comprehensive plan land use category and those zoning districts which are consistent based on allowable use and density, was prepared: Wa ���MEFR �� Low Density Residential = 01 ME R-1, R -SA, R-2 Medium Density Residential R -1A, R-2, R-3 High Density Residential R-3 Neighborhood Commercial B-2,8-3 _ Pedestrian District B-1, Pedestrian District Destination District B-1, Destination District, R-3 Linear District B-1, R-1, R-2, Linear District Industrial District 1-1 Public/institutional Any Park Any Open Space Any Public Waters/Wetlands Any Preliminary List of Mound Applications and Actions Required for Indian Knoll Manor Redevelopment Project. Review of conveyance of property at 2020 Commerce Boulevard for comprehensive plan consistency per Minnesota statutes 2. Rezoning property at 5524 Spruce Road from R-1 Single Family Residential to R-3 Multiple Family Residential 3. Comprehensive Plan Amendment for 5524 Spruce Road from Low Density Residential to High Density Residential 4, Conditional Use Permit (Planned Development Area, Multiple Family Structure over 6 units, Townhomes) 5. Variance (i.e., new building setbacks, required parking spaces, minimum lot area required per unit, distance between buildings, etc.) 6. Expansion Permit (New units in existing building footprint, building height, etc.) IN 7. Subdivision (Lot combination I reptat) i General information about City of Mound Land Use and Subdivision Application and Processes. Planning Commission determination that property conveyance is not inconsistent with comprehensive plan. Minnesota Statutes Section 462.356 Subd. 2 requires review and determination by the Planning Commission that a proposed property acquisition or conveyance is not inconsistent with the City's adopted comprehensive plan. While the property at 2020 Commerce Boulevard is owned by the Mound Housing and Redevelopment Authority, requested action and determination by the Planning Commission is recommended. 2. Comprehensive plan amendment. Minnesota State Statute 462.355 requires that the Planning Commission conduct a noticed public hearing on any comprehensive plan amendment; also review by adjacent governmental units and school districts for up to 6 - months. This review period may be reduced or waived for "minor plan amendment" requests. Staff's review is that a reduced or waiver of the review period by adjacent governmental units and affected school districts review be pursued and discussed in cooperation with the Metropolitan Council. The amendment request is submitted to the Metropolitan Council following recommendation by the Planning Commission and after consideration but not final approval by the City Council. Final adoption of the comprehensive plan amendment by the City Council cannot take place until after the Metropolitan Council has approved the requested comprehensive plan amendment. Minnesota Statute 462,355 requires a super majority of a governing body to adopt a comprehensive plan except for amendments for an affordable housing development that meet certain requirements, in which case, a simple majority is required. 3. Zoning amendment. Zoning applications require review by the Planning Commission and a public hearing by the City Council and requires publication in the local newspaper a minimum of 10 -days prior to the public hearing; also mailed notice to all property owners of record within 350 feet, per Hennepin County tax records, a minimum of 10 - days in advance of the scheduled public hearing. Refer to City Code Chapter 129-34. For rezoning applications, the City Code requires review by the Planning Commission in advance of the City Council public hearing. 4. Conditional use permit. CUP applications require review by the Planning Commission and a public hearing by the City Council and requires publication in the local newspaper a minimum of 10 -days prior to the public hearing; also mailed notice to all property owners of record within 350 feet, per Hennepin County tax records, a minimum of 10 - days in advance of the scheduled public hearing. Refer to City Code Chapter 129-38. For a conditional use permit application, the City Code requires review of by the Planning Commission in advance of the City Council public hearing. -11- 5. Variance. Variance application require review by the Planning Commission and action by the City Council but do not require a public hearing. Refer to City Code Chapter 129- 39. 6. Expansion Permit. Expansion permit applications require review by the Planning Commission and action by the City Council. The expansion permit tool is used to make alterations to a non conforming setback which does not expand the nonconforming condition or create new nonconforming conditions, Refer to City Code Chapter 129-40. 7. Subdivision. City Code Chapter 121 contains the City's subdivivision regulation and can be viewed on the City website. In general, for a major subdivision, the preliminary plat review process requires a public hearing be held by both the Planning Commission and City Council and requires publication in the local newspaper a minimum of 10 -days prior to the public hearing; also mailed notice to alt property owners of record per Hennepin County a minimum of 10 -days prior. Final plat does not require review by the Planning Commission nor is a public hearing required; only City Council action is required for a final plat. Upon request, the City can consider concurrent preliminary / final plat. It is worth mentioning that there are other types of subdivision classifications and tools contained in City Cade Sec. 121 in addition to those required for a major subdivision. Park dedication requirements are contained in City Code Sec. 121-121. Application submittal information. in general, land use and subdivision applications are due on the first business day of each month. However, applications can be submitted at any time. Following submittal, applications are routed for 15 -business days for department / consultant /agency review and comment and determination of completeness . if an applications) is deemed to be complete, it is scheduled for review by the Planning Commission and City Council, usually at the subsequent month following submittal but the schedule is contingent upon the specific request and whether a public hearing is required and by which body. if deemed incomplete, a letter is sent out and identifies the specific items that are deficient and/or incomplete, A preliminary schedule for applications Planning Commission and City Council review of the Mound applications and required actions, based upon a submittal date of April 4, 2016 (first business day far the month of Apri12O16), is provided below as information. Completion of application routing for 15-buisness days April 22, 2016 Planning Commission review of required applications and required June 7, 2016 public hearings for preliminary plat and comprehensive plan City Council consideration of required public hearings for June 28, 2016 or for preliminary plat and conditional use permit and conditional July 12, 2016 approvals Metropolitan Council consideration of the comprehensive plan amendment July/Aug 2016 City Council final approvals and adoption of comprehensive plan amendment July/Aug 2016 The aforementioned preliminary schedule assumes that the submitted applications are deemed to be_complete and that a reduced timeframe or waiver for adjacent governmental units for review of the required comprehensive plan is allowed. it is important to mention that the City and AEON will need to discuss the need for extensions related to the 60 -day and 120 -day timeline requirements in Minnesota Statutes 15.99 for action on land use applications and Minnesota Statutes 462.358 for subdivision applications. Design Guidelines. You are encouraged to review the Mound Environmental and Appearance Model for guidance on the intended character for our community which include components of the area's historic resort hotels. It is expected that any redevelopment in the downtown will reflect this character. Upon request, a PDF of the Mound Environmental and Appearonce Model, will be forwarded electronically. Environment Review. The proposed project will require discussion/evaluation related to the environmental regulations in Minnesota Rules that may applyto the project/site (i.e., EAW, etc.) City of Mound On -Line Resources. The City Code can be found on the City of Mound website (www.cityofmound,com) and click on the "City Code" icon on the left hand side of the page. The chapters of the City Code will appear in the middle. Click on the chapter titles to view the specific regulations. The zoning regulations are contained in City Code Chapter 129. Other resources available include building/zoning/subdivision applications which can be obtained by clicking on the "Department" button on the top of the page and selecting the specific information or document you are looking for. ® MCES. The proposed new apartment and townhome units will be subject to review by the Metropolitan Council Environmental Services related to SAC charges. Mound Trunk Area Charges and Connection Fees for Sewer and Water. The proposed new apartment and townhome units will be subject to review by the City of Mound related to the calculation of Trunk Area Charges and Connection Fees for sewer and water. The current fee structure for a new residential unit is as follows: Trunk Area Water Charge $ 2000.00 Trunk Area Sewer Charge $ 2000-00 Water Connection Fee $ 240.00 Sewer Connection fee $ 240.00 Mound Fee Schedule. The 2016 City of Mound Fee Schedule is available on the City of Mound website. City Code Chapter 101 contains the City's land use fee schedule and is also available for viewing on the City of Mound website. -13- ® MCWD Rules Permitting. Respectfully, I would encourage you to be in contact with the Minnehaha Creek Watershed District to discuss issues related to stormwater%erosion control that apply to the proposed project; also others (i.e,. wetlands, floodplain alteration, etc.) Contact Information. An informational form to include contact information for the Building official, Fire Chief and various public agency contacts that may apply to the proposed project has been included as an attachment. if you have any questions related to information contained in this memorandum, please feel free to contact me by telephone at 952-472-0604. -14- Mound Contact Infonnation Form MnSpect (Mound Building Official) With regard to possible building modifications and/or alterations, you are respectfully advised to contact Mound Building official Scott Qualle at 952.442.7520 to discuss what permits and/or supporting information is needed. Mound Fire Department With regard to possible building modifications and/or alterations, you are respectfully advised to contact Fire Department to discuss what permits and/or supporting information is needed. Please below contact information for Mound Fire Chief and Deputy Fire Marshal: Fire Chief Greg Pederson: 952-472-3533 or by email at gpederson@moundfire.com Deputy Fire Marshal Tony Myers: 952-472-9711 or by email at tmyPrs@moundfire.com Hennepin County Health Inspector With regard to possible building modifications and/or alterations including but not limited to, changes to the building to accommodate new proposed restaurant, you are respectfully advised to contact Hennepin County to discuss health requirements and/or all involved licensing or permitting. Please below contact information for Hennepin County Health Inspector and the Environmentalist for the City of Mound Joseph Jurusik (Hennepin County Health Inspector) 1011 First Street South Suite 215 Hopkins, MN 55343 website: epi-envhlth@hennepin.us Telephone; 612-543-5213 Email: ioejurusik@co.henn p1n.mn.us Steve Bray (Environmentalist for City of Mound) Telephone: 612-543-5210 1011 First Street South Suite 215 Hopkins, MN 55343 Telephone: 612-543-5210 Email: steve.bray@co.hennepion.mn.us -15- Hennepin County Transportation Department With regard to possible site alterations including access(es) on County Roads, please see below contact information for Hennepin County Transportation Department. Steve Groen Supervisor, Permits/GSOC Office Hennepin County DOT 1600 Prairie Dr. Medina, MN 55340 Telephone: 612-596-0337 Email: steven.eroen@hennenin.us Minnehaha Creek Watershed District (MCWD) The MCWD is the permitting authority for erosion control, floodplain alteration, wetland preservation, stormwater management, streambank stabilization and dredging. Katherine Sylvia Permitting Program Lead Minnehaha Creek Watershed District 15320 Minnetonka Boulevard Minnetonka, MN 55345 Direct: (952) 473-2855 Main Office: (952) 471.0590 Fax: 952-471-0682 www.minnehahacreek.orp, Metropolitan Council Environmental Services (MCES) Any proposed neer or expanded use or change or expansion/intensification of the building's use will require a Sewer Area Charge (SAC) evaluation and determination from the Metropolitan Council Environmental Services (MCES). For additional information, please contact information provided below: Karon Cappaert Met Council (karon.cappaert@metc.state.mn.us) Karon Cappaert SAC Program Technical Specialist j MCES Finance karon,caooaert@metc.state.mn.us M ITROPOLI'FAN P. 651.602.1118 ( F. 651.6021030 0 U N 0 1 C.. 390 North Robert Street ) St. Paul, MN ) 55101 ) SAC Program Website air— fr8, m M 0 0 0 0 0 0 m N � n w 03tlA31n08 33V3WW00 w z O I -- CL 0 O z d J J O z Y z a 0 0� d z 4 s fr8, f� 1+ M n� M Qf d as N N N f7 Q Q N � n w 03tlA31n08 33V3WW00 w z O I -- CL 0 O z d J J O z Y z a 0 0� d z 4 s Low Income Housing Tax Credits Committed Hennepin Co. Environmental Response Fund (ERF) Committed Hennepin County Home Fund Committed Met Council Local Housing Incentive Fund Committed Minnesota Housing Finance Agency Preservation Affordable Rental Investment Fund (PARIF) Committed Mortgage 1 Committed (16)Studios (33) 1 -bedrooms (1) 2 -bedrooms (2) 1-bedrooms—on existing building (4) 2 -bedrooms — on existing building (10) 3 -bedroom townhomes Efficiencies: 370 SF 1 -bedrooms: 480 SF 2 -bedrooms: 848-950 SF 3 -bedrooms: 1,233 SF 50 Existing Units + 16 Units New Units Unit Eligibility* *These income limits are effective as of 03.06.2015 and are subject to change by HUD. Units will be subject to 30% and 60% limits. t4 6� sl y 4 A! u Iti, I(p '�.7�u 3,4UU "_5,99 '�,[bKTi 311,1 32,"0 3,4,320 27,_bU 3G,31U 32,760 35,175 37,390 4(040 Sr, a 24, S(P 27,720 31,201) 34,64t} 37',4411 40,2W 42 -Wit) 45,760 27,315 11,1 33,1L)O 38,V7U 4',124.P 43,2.'5 48,13(1"t,4B+;3 311.35(6 34,630 _-wt o 43„3OU 46,8w 5u,2s9 53,7UO S7, 3+_ 115+ 42,%0 47,130 51,4to 55,275 t) ffi 3�r,4?(P 11,5&0 46,x+(1(1 51,96(} -;6,16U AX) 64'"0 #Trig *These income limits are effective as of 03.06.2015 and are subject to change by HUD. Units will be subject to 30% and 60% limits. Development Name Primary Address City Zip Code County Year Built Aeon Indian Knoll Manor 2020 Commerce Blvd Mound 55364 Hennepin 11970 SUMMARY PAGE Acquisition Rehabilitation _ Rental -- Subsidy New Construction Developer Owner Management Co Service Provider RA Administrator Aeon City of Mound Housing and Redevelopment Authority Aeon Management LLC People Inc. 35 TARGET HO ISEI OL(1E; iv aIPtwo id", x", a. .a " ", ua t t # Units 66 General Occupancy 15 Families Single Head of Households with Minor Children Individuals and Households of Color Youth 50 Single Men 50 Single Women 50 Elderly 5 Disabled Individuals Persons with HIV/AIDS Other: TYPE AMOUNT ❑ Minnesota Housing First Mortgage ❑ Minnesota Housing Tax Exempt Bonds - Long Term ❑ Minnesota Housing Tax Exempt Bonds Short Term a ❑ Deferred Loan( s) , a1,10 "ININ 't 01, u1 ❑ RRDL Arm ac �xw,v , Subsidy Funding Request Name of.Soar'e , i # Unfits Rental Assistance Operating Subsidy UNI75UMMARIESt .'>.Y1 li..p T 1 w:kTC tk Unit Type --,,I,# Units,,, OBR/SRO 16 IBR 35 2BR 5 3BR 10 4BR 5BR Request Status 6BR Reservation TOTAL UNITS 66 Pragram;Typeus�,yte-ws�"�r j�iklfaU,tl1?tsnu.3, HTC 66 HOME LTH 7 Market Rate Employee Occupied Owner Occupied Rent Assistance 64 Operating Subsidy i57L•isl Print Version Date Dev# Project# HTC # HDO HMO Architect SHO 8/24/2015 D7878 M17202 ❑ Housing Tax Credits - 4% Ted Tulashie Brenda Beyer I Erika Arms Joel Salzer # Units Strategic Priority 50 Federally Assist ed Housing 7 Homeless 16 New Affordable Housing Existing Housing Tax Credits Foreclosure Rehab not Federally Assisted or Existing Tax Credit �.,r ,tit{ At Risk of Homelessness Homeless (not LTH) 7 LTH Family LTH Single Adults LTH Unaccompanied Youth At Risk LTH (HIB) Drug Dependent Permanent Physical Disabilities Developmental Disability Brain Injury Serious Mental Illness Serious and Persistent Mental Illness Housing Tax Credit Request ss ''-° Type of Tax Credits requested from Minnesota Housing: ❑ Housing Tax Credits - 4% E) Housing Tax Credits -9% ❑ Dual Application Amount --I 168,900 I HTC Request Tax Credit Pool Request Status Metro Reservation Greater MN Carryover Basis Boost 8609 f^ Qualified Contract 42 MS Letter Tax Credit Request Type Tax Credit Set -Aside t First Request f- Nonprofit i* Supplemental Request r Rural Development r Repeat Request - not selected N/A Application to subali � Bond Issuer if not MHFA HFA —E Previously Awarded Tax Credits: Allocator Minnesota Housi Amount 648,950 Allocator Amount Allocator Amount Workbook Summary - Page 1 of 2 4/6/2016 SUMMARY PAGE P ri nt r RENTGRIDk b k ioUni%Type, Units, etlt.,$nt, rt�p� ..n , )t14tt!tS!0. wat OBR/SRO 16 370 430 430 30% MTSP 30% MTSP ' bt oiiant 541,872 SBR 5 480 796 796 30% MTSP 30% MTSP ' 1BR 28 480 535 535 30% MTSP 30% MTSP ' 2BR 1 950 670 30% MTSP 30% MTSP' 541,872 Tota I Other Income 3,000 IBR 2 480 830 830 30% MTSP 30% MTSP ' 514,987 Administrative 116,098 Maintenance 113,500 Utilities 100,350 Unique Operating Expenses 5,924 2BR 2 950 1,000 60% MTSP 60% MTSP ' 2BR 2 848 1,000 1,102 60% MTSP 60% MTSP ' 3BR 6 1,233 1,351 1,469 30Y. MTSP 30% MTSP ' Syndicator Fees Hennepin County AHIF 500,000 3BR 1 1,233 1,220 1,338 30%MTSP 30% MTSP ' 3BR 3 1,233 1,220 1,338 60%MTSP 60% MTSP ' Flexible Financing Cap Cost 115,000 1,742 Reserves and Non -Mortgageable PARIF 885,000 13,409 Total Development Cost Met Council LHIA 400,000 6,061 Syndication Proceeds Round 12015 6,975,515 105,690 Hennepin County ERF 390,982 py � 77 HousingIncome __ bt oiiant 541,872 r Covered Parking ,'Cotifroittpdk`• Surface Parking Residential Vacancy Parking Vacancy Commercial Vacancy Commercial Income Inflator 1 1,62%1 Expense Inflator 3.00% Cap Rate 7.00% DCR Year 1 3.76 Loan Rate r 4.75% OCR Year 15 1.31 MIP 0.25% 100 Gross Potential Rent 541,872 Tota I Other Income 3,000 Total Rental Loss 29,885 Net Rental Income 514,987 Administrative 116,098 Maintenance 113,500 Utilities 100,350 Unique Operating Expenses 5,924 Insurance 15,300 Total M & 0 345,248 Reserves & Escrows 75,200 Effective Gross Expense 420,448 NetOpe"raUn`g,lniame ;` ti;,,3 5, „Amount NOI 94,539 (EXP�NSE3UMM11R1', ,;+k����wk�a���k.t Total expense per Unit($) 6,370 Total expense per Unit(%of Revenue) 82% M & O Per Room 1,409 M & O/Unit/Year 5,231 TOTALS 66 U. j.. ;,7 $541,872 PerUriit s ,'Cotifroittpdk`• :;._ UNDERWI2ITINCASSUMPTIONS°` „,. z..a .,,.,k.r., .,, ,w k,,,;,w, + wC u u l2 dvr` ,r x w �;G kw, :i ,w w tS 1��k w s$Y Residential Vacancy Parking Vacancy Commercial Vacancy 5.5% 10.0% Income Inflator 1 1,62%1 Expense Inflator 3.00% Cap Rate 7.00% DCR Year 1 3.76 Loan Rate r 4.75% OCR Year 15 1.31 MIP 0.25% 100 10.0% SOURCES AND USES Syndication Proceeds ;i` 3k Source ` Amount'`: PerUriit s ,'Cotifroittpdk`• First Mortgage 386,000 5,848 CO General Partner Cash 100 2 0 Syndication Proceeds 740,601 11,221 ❑ State Historic Proceeds ❑ Federal Historic Proceeds 7,916 4% Environmental Abatement Deferred Loan Request 5,924 3% Professional Fees Seller Loan 2,535,000 38,409 Developer Fees Sales Tax Rebate 131,586 1,994 Syndicator Fees Hennepin County AHIF 500,000 7,576 Financing Costs Existing Reserves 65,000 985 Total Mortgageable Flexible Financing Cap Cost 115,000 1,742 Reserves and Non -Mortgageable PARIF 885,000 13,409 Total Development Cost Met Council LHIA 400,000 6,061 Syndication Proceeds Round 12015 6,975,515 105,690 Hennepin County ERF 390,982 5,924 Li Deferred Developer Fee ❑ Total Permanent Financing FUNDING GAP REMAINING 13,124,7P (0) 199,890 (0) SourceAmount Pet Unit,, 67MMItted, Construction loan Total of Construction Financing I 5,705,511 86,447 Deszri`tto[►yrlimount`r�:,?w�.PerUii,.,of,T.otal,r, ,. �,'3►maunts+�: � ku:.z`#tJnit`,�l.,.k�t�, 223,752 ;;Cortirrittted� 16 Acquisition or Refinance 2,811,200 42,594 21% New Construction 2,709,064 41,046 21% Rehabilitation 3,870,256 58,640 29% Contractor Fees Contingency 522,479 7,916 4% Environmental Abatement 390,982 5,924 3% Professional Fees 826,111 12,517 6% Developer Fees 1,115,000 16,894 8% Syndicator Fees 12,000 182 0% Financing Costs 569,910 8,635 4% Total Mortgageable 12,827,000 194,348 98% Reserves and Non -Mortgageable 297,784 4,512 2% Total Development Cost 13,124,784 198,860 100% auva uy � e Namcof3oCrrf�°'~�`�`.';�� ,. , .�+ Metro HRA Project Based ,. �,'3►maunts+�: � ku:.z`#tJnit`,�l.,.k�t�, 223,752 ;;Cortirrittted� 16 HUD Section 811 PRA 31,293 5 Li Total of Subsidy Funding 255,045 21 Workbook Summary - Page 2 of 2 4/6/2016 From: Catherine Pausche[mailto:catherinepausche@cityofmound.com) Sent: Tuesday, March 22, 2016 3:55 PM To: Blake Hopkins <BHopkins@aeommn.org>; Aubrie Gould <AGould@aeommn.org> Cc: Eric Hoversten <erichoversten cityofmound.com> Subject: FW: Draft ERF Contract - Indian Knoll Manor, Mound Hi Blake and Aubrie - Please confirm this contract language is acceptable to Aeon prior to the HRA/CC's review/execution. Thanks, Catherine From: Blake Hopkins [mailto:BHopkins(d)aeommn.orq] Sent: Monday, March 28, 2016 11:09 AM To: Catherine Pausche; Aubrie Gould Cc: Eric Hoversten Subject: RE: Draft ERF Contract - Indian Knoll Manor, Mound Hi Catherine, We've reviewed the language and have no proposed revisions, the language is acceptable. One thing to keep in mind is that the scope of work under the ERF grant will likely be revised in the future due to the revisions in the development plan and the addition of 5524 Spruce Road. There is language already included in the agreement that permits revisions if approved by the County so in discussion with our environmental consultant, we think it makes sense to move forward with the agreement as it is today and request an amendment in the future once the full environmental scope of the new plan is known. Blake Hopkins Senior Project Manager aeon' f -do nes for Generations 612 746-05171 aeommn.orq i donate now linkedin I facebook I twitter -21- From: Mary C. Finch[mailto.Mary.FinchCc�hennepin.us] Sent. Monday, March 21, 2016 4:26 PM To: Catherine Pausche Cc: Blake Hopkins; Aubrie Gould; John Evans; Gilbert Gabanski; Adam P. Zobel Subject: Draft ERF Contract - Indian Knoll Manor, Mound Hi Catherine, Attached is a draft ERF grant agreement for the Indian Knoll/City of Mound HRA project. Exhibit B is a copy of the ERF application, I will attach it when we submit the signed contract for County signatures at the County. This will be attached when we send you a final executed agreement. Do not attach the ERF application when you return the contract. Please review the agreement. You may propose language changes, but it is unlikely they will be accepted with the following exceptions. ® Review information contained in the first paragraph on page I (names, addresses, etc). • Review information contained in the bottom of the signature page on page 5 (name, title). Please let us know who will be signing on behalf of the city (name and title) and we'll revise accordingly. ® Please review Section 9.0 - Insurance. Please note first paragraph at the top of page 4. Hennepin County requires the Grantee to obtain insurance certificates for all contractors and subcontractors working on the project that are performing work related to the ERF grant. The certificates must name grantee as the certificate holder and name the County as an additional insured for the commercial general liability coverages. ® Please review Section 13 - Property Tax etc. Call me if you have any questions, it is easier to explain why this is in the contract over the phone. • Please carefully review Exhibit A (this section does not require county attorney review), in particular, the short section after "Approved Budget...." Please note, we are restricting subcontractor markups to 10% or less. We prefer a lower number (5 to 8%), we believe the grant money should be used to accomplish the tasks and not put money in the consultant's pocket. This is between the Grantee and the consultant, but we will not disburse funds for markups above 10%. ® We might require a copy of contracts between the developer and anyone working on the project whose invoices will be submitted for disbursement. Case by case request or when red flags go up on a project! The draft agreement language has been approved by the county attorney. The agreement is a negotiable document and, if someone feels that the language needs to be amended, recommendations can be presented to the county with one exception, the language in Section 8. Indemnification, as shown, is not open for negotiation unless the Grantee has additional language to be added only. If proposed language changes are recommended by the grantee, the county attorney must review and approve those changes. This will significantly increase the time needed to execute the agreement; and, our experience is that changes are rarely accepted. Unless you or someone have some pressing concern, I strongly recommend you not propose alterations to the contract language, with the exception of the items discussed above. Again, please review Exhibit A and the signature page. If there are any concerns or changes to language on Exhibit A on page A-1 or to the name on the signature page, we can amend those without attorney review. Review the footnote at the bottom of page 5 regarding the GRANTEE signature, whoever signs the agreement must have the delegated authority to do so. We require documentation of this authority. M In addition, if you discover any other errors regarding site specific or Grantee information, we will correct those without attorney review. Please call me if you have any questions or changes. We consider this a draft agreement, however, if this agreement is acceptable (once we revise the signature page), you may print out an electronic copy for signature. However, if you would like us to send you printed copies in the mail, please let us know. Please have TWO copies of the agreement signed by the Grantee and return them to me, along with the applicable documentation of authority (see bottom of page 5). If the contract language is acceptable, sending the signature pages only is preferred. Please mail or deliver TWO original signed copies to my attention at the address below. We cannot accept a scanned signature on the contract. 1 will then get the necessary signatures for agreement execution and will return one fully executed copy of the agreement to you. Once we receive the Grantee's signed agreements, it takes approximately two weeks to obtain the county signatures, but no promises on the "two weeks." PLEASE NOTE: The date at the top of Page 5 is the day the Board approved the recommendation for the grant. You may incur costs on the day afterward, however, you incur costs at risk until we execute the contract. The start date for the contract is the day we obtain the final county signature. We will notify you via email as soon as the agreement is executed. At that time, I will provide information on how to submit a disbursement or reimbursement request. Once executed, you may submit requests on a monthly basis. We will forward more information regarding this process once the agreement is executed. Please call me (or Gilbert Gabanski at 612-348-4843) if you have any questions or if we can be of any assistance. We look forward to continuing to work with you and the successful completion of this project. Mary C. Finch Environmental Scientist Land and Water Unit Hennepin County Environment and Energy Department 701 Fourth Avenue South, Suite 700 Minneapolis, MN 55415-1842 Phone: 612-543-1595 Email: Mary Finch@hennepin.us HC Mail Code: DES L609 Disclaimer: If you are not the intended recipient of this message, please immediately notify the sender of the transmission error and then promptly delete this message from your computer system. -23- MOUND HOUSING AND REDEVELOPMENT AUTHORITY RESOLUTION NO. RESPONSERESOLUTION AUTHORIZING THE BOARD CHAIR AND EXECUTIVE DIRECTOR TO ENTER INTO AN ENVIRONMENTAL - • MOUND HOUSING AND REDEVELOPMENT AUTHORITY AND HENNEPIN COUNTY ENVIRONMENT WHEREAS, the City of Mound Housing and Redevelopment Authority has chosen Aeon as a development partner for Indian Knoll Manor Public Housing because of Aeon's successful experience financing, developing, rehabilitating, constructing, and owning similar projects; and WHEREAS, Aeon is applying for multiple competitive financing and grant opportunities to facilitate rehabilitation of Indian Knoll Manor; and WHEREAS, the City of Mound Housing and Redevelopment Authority and its development partner Aeon's proposed project has been approved for a Hennepin County Environment and Energy Department Environmental Response Fund (ERF) Grant; NOW, THEREFORE BE IT RESOLVED by the Housing and Redevelopment Authority of and for the City of Mound, Minnesota, to hereby authorize the Board Chair and Executive Director to enter into an Environmental Response Fund (ERF) Grant Agreement between the City of Mound Housing and Redevelopment Authority and Hennepin County Environment and Energy Department as shown in Attachment A and made a part herein. Adopted by the City Council this 12th of April, 2016. Attest: Catherine Pausche, Clerk Chair Mark Wegscheid -24- Contract No. A 154841 ENVIRONMENTAL RESPONSE FUND GRANT AGREEMENT BETWEEN THE CITY OF MOUND HOUSING AND REDEVELOPMENT AUTHORITY AND HENNEPIN COUNTY ENVIRONMENT AND ENERGY DEPARTMENT This Agreement is between the County of Hennepin, State of Minnesota ("County") at A2300 Government Center, Minneapolis, MN 55487 by its Environment and Energy Department ("Department") and the City of Mound Housing and Redevelopment Authority or affiliated entity ("Grantee") with offices located at 2415 Wilshire Boulevard, Mound, Minnesota, 55364. Grantee has submitted an application to the County for a grant to be used for asbestos containing materials (ACM) and lead-based paint (LBP) abatement, associated consulting activities, and agency fees at the Indian Knoll Manor project site located at 2020 Commerce Boulevard in Mound. The application is incorporated into this Agreement by reference. The parties agree as follows: 1. GRANT AMOUNT AND COMPLETION The County shall grant to Grantee a sum not to exceed Three Hundred Ninety Thousand Nine Hundred Eighty-two dollars ($392,982.00) ("ERF Grant")which funds shall be only for expenses incurred in performing activities specified in the Application and as may be further described in Exhibit A to this Agreement or as approved by the County. Approved activities as may be described in Exhibit A and in the application, attached as Exhibit B, are referred as the "Project". Administrative costs incurred by Grantee are not eligible for reimbursement. Exhibits A and B are attached and incorporated by this reference. Grantee shall complete the Project within two (2) years of execution of this Agreement and within the terms stated herein. Any material change in the scope of the Project, including time schedule and budget, must be approved in writing by the County. Upon approval by the County Administrator, the duration of this Agreement may be extended for up to twelve (12) months. Funds made available pursuant to this Agreement shall be used only for expenses incurred in performing such purposes and activities described in the Application and this Agreement. 2, ACCOUNTING AND RECORD KEEPING For all expenditures of funds made pursuant to this Agreement, Grantee shall keep financial records including properly executed contracts, invoices, and other documents sufficient to evidence in proper detail the nature and propriety of the expenditures. Accounting methods shall be in accordance with generally accepted accounting principles. The County, the State Auditor, or any of their duly authorized representatives at any time during normal business hours, and as often as they may reasonably deem necessary, shall have access to and the right to examine, audit, excerpt, and transcribe any books, documents, papers, records, etc., which are pertinent to the accounting practices and procedures of Grantee and involve transactions relating to this Agreement. Such materials shall be maintained and such access and rights shall be in force and effect during the period of the Agreement and for six (6) years after its termination or cancellation. 3. PAYMENTIDISBURSEMENT SCHEDULE County will disburse funds to Grantee pursuant to this Agreement, based on a payment request form provided by the County, submitted by Grantee and approved by the County. Payment requests can be submitted once per month and must be accompanied by supporting invoices that relate to activities in the approved Project budget. Subject to verification of adequacy of a written disbursement request and approval of consistency with this Agreement, the County will disburse the requested amount to Grantee within six (6) weeks after receipt of a written disbursement request. The final request for disbursement must be submitted within six (6) months of the expiration date of this Agreement. -25- 1 4. REPORTING Grantee shall submit to the County a report on the distribution of funds and the progress of the Project covered from the date of the grant award through June 30 of each year. The reports must be received by the County no later than July 25 of each year. The report shall identify specific goals listed in the application and quantitatively measure the progress of such goals. Reporting forms will be provided by the County. In addition, the required documentation listed in Exhibit A should be supplied as it becomes available. 5. CONTRACTS Grantee shall include in any contract, provisions that require contractors to comply with all applicable State and Federal laws and regulations regarding employment and workplace safety. In accordance with Hennepin County's policies against discrimination, Grantee shall not exclude any person from full employment rights or participation in or the benefits of any program, service, or activity on the grounds of race, color, creed, religion, age, sex, disability, marital status, sexual orientation, public assistance status, or national origin; and no person who is protected by applicable Federal or State laws, rules, or regulations against discrimination shall be otherwise subjected to discrimination. Public Grantees and any contractors or subcontractors performing services as part of this Agreement shall follow that public Grantee's Affirmative Action policy against discrimination. 6. TERMINATION, CANCELLATION AND ASSIGNMENT This Agreement may be canceled by the County upon sixty (60) days written notice to Grantee without cause. In the event of such cancellation, Grantee shall be entitled to payment, determined on a pro rata basis, for work or services satisfactorily performed up to the effective date of such cancellation. If the County finds that there has been a failure to comply with the provisions of this Agreement, that reasonable progress has not been made toward commencement or completion of the assessment and/or clean-up activities specified in the Application and this Agreement, notwithstanding any other provisions of this Agreement to the contrary and after written notice and reasonable opportunity to cure, the County may refuse to disburse additional funds and/or require the return of all or part of the funds already disbursed, to the extent such funds were used for purposes other than activities contemplated by this Agreement. If the County finds that there has been a violation of any state, federal or local law, the County may upon written notice immediately cancel this Agreement in its entirety and may withhold or delay payment. In the event of a decision to withhold or delay payment, the County shall furnish prior written notice to Grantee specifically identifying the reason for withholding or delaying such payment. This Agreement may not be assigned without the prior written consent of the County. 7. INDEPENDENT CONTRACTOR Grantee shall select the means, method, and manner of performing the Project. Nothing is intended or should be construed in any manner as creating or establishing the relationship of co-partners between the parties or as constituting Grantee as the agent, representative, or employee of the County for any purpose. Grantee shall remain an independent contractor with respect to all services and activities performed under this Agreement. Any personnel of Grantee or other persons while engaged in the performance of any work or services required by Grantee under this Agreement will have no contractual relationship with the County, and will not be considered employees of the County. The County shall not be responsible for any claims that arise out of employment or alleged employment under the Minnesota Economic Security Law or the Workers' Compensation Act of the State of Minnesota on behalf of any personnel, including, without limitation, claims of discrimination against Grantee, its officers, agents, contractors, or employees. Grantee shall defend, indemnify and hold harmless the County, its officials, officers, agents, and employees from all such claims irrespective of any determination of any pertinent tribunal, agency, board, commission, or court. Such personnel or other persons shall neither require nor be entitled to any compensation, rights, or benefits of any kind whatsoever from the County, including, without limitation, tenure -26- 2 rights, medical and hospital care, sick leave, Workers' Compensation, Re-employment Compensation, disability, severance pay, and retirement benefits. 8. INDEMNIFICATION Grantee agrees to defend, indemnify and hold harmless, the County, its officials, officers, agents, volunteers and employees from any liability, claims, causes of action, judgments, damages, losses, costs, or expenses, including reasonable attorney's fees, resulting directly or indirectly from any act or omission of Grantee, its contractors or subcontractors or anyone directly or indirectly employed by them, and/or any party that directly or indirectly benefits from the activities specified in this Agreement, and/or anyone for whose acts and/or omissions they may be liable in the performance of the activities specified in this Agreement and against all loss by reason of the failure of Grantee to perform any obligation under this Agreement. 9. INSURANCE In order to protect the County and those listed above under the indemnification provision, Grantee agrees at all times during the term of this Agreement and beyond such term when so required, to have and keep or cause to have and be kept in force, and to cause all contractors to do likewise, the following insurance coverages under either a purchased insurance or self-insurance program: Commercial General Liability on an occurrence basis with Contractual Liability Coverage: Limits General Aggregate $2,000,000 Products -Completed Operations Aggregate 2,000,000 Personal and Advertising Injury 1,500,000 Each Occurrence — Combined Bodily Injury and Property Damage 1,500,000 2. Automobile Liability — Combined single limit each occurrence for 1,500,000 bodily injury and property damage covering owned, non -owned, and hired automobiles. Workers' Compensation and Employer's Liability: a. Workers' Compensation Statutory If the contractor is based outside the State of Minnesota, coverage must apply to Minnesota laws. b. Employer's Liability. Bodily Injury by: Accident — Each accident 500,000 Disease — Policy Limit 500,000 Disease — Each Employee 500,000 4. Professional Liability — Per Claim 1,500,000 Aggregate 2,000,000 The insurance must be maintained continuously for a period of two years after the termination of this Agreement. Grantee shall require that any independent contractors rendering assessment and/or clean-up activities under this Agreement furnish certificates of insurance to Grantee of the insurance coverages listed above, and provide updated certificates as coverages expire. An umbrella or excess policy over primary liability coverages is an acceptable method to provide the required insurance limits. The above establishes minimum insurance requirements. It is the sole responsibility of Grantee to determine the need for and to procure additional insura-27_hich may be needed in connection with this Agreement. Grantee and their contractors shall not commence work until they have obtained required insurance and fled with the Grantee properly executed Certificates of Insurance establishing compliance. The certificate(s) must name the Grantee as the certificate holder and Hennepin County as an additional insured for the commercial general liability coverage(s) for all operations covered under the Agreement. Grantee shall immediately notify County of any cancellations or reduction of insurance coverage. Grantee shall provide copies of insurance certificates to County upon request. If Grantee fails to furnish proof coverages, if requested by the County, the County may withhold payments and/or pursue any other rights or remedy allowed under the contract, law, equity, and/or statute. 10. MERGER AND MODIFICATION It is understood and agreed that the entire Agreement between the parties is contained herein and that this Agreement supersedes all oral agreements and negotiations between the parties relating to the subject matter hereof. All items referred to in this Agreement are incorporated or attached and are deemed to be part of this Agreement. Any alterations, variations, modifications or waivers of provisions of this Agreement shall only be valid when they have been reduced to writing as an amendment to this Agreement signed by the parties. 11. MINNESOTA LAWS GOVERN The Laws of the State of Minnesota shall govern all questions and interpretations concerning the validity and construction of this Agreement and the legal relations between the parties and performance under it. The appropriate venue and jurisdiction for any litigation will be those courts located within the County of Hennepin, State of Minnesota. Litigation, however, in the federal courts involving the parties will be in the appropriate federal court within the State of Minnesota. If any provision of this Agreement is held invalid, illegal or unenforceable, the remaining provisions will not be affected. 12. ACKNOWLEDGMENTS The Grantee shall acknowledge the financial assistance provided by the County in promotional materials, press releases, reports and publications relating to the Project activities described in Exhibit A which are funded in whole or in part with the grant funds. The acknowledgment should contain the following language: Financing, for this project was provided in part by the Hennepin County Environmental Response Fund. Until the Project activities funded by this Agreement are completed, the Grantee shall ensure the above acknowledgment language, or alterative language approved the County, is included on all signs located at the Project or construction sites that identify Project funding partners or entities providing financial support for the project. Until the Project activities funded by this Agreement are completed and for one year after that date, the Grantee shall provide advance notice to the County, including an invitation to the appropriate County Commissioner's office, of any public events related to the Project. 13. HENNEPIN COUNTY PERSONAL PROPERTY TAX AND PROPERTY TAX Grantee shall require the grant recipient to affirm that it and its officers have paid all Hennepin County personal property taxes and property taxes due on all of its Hennepin County properties for taxes owed on or before December 31, 2015. If the County finds that property taxes have not been paid by grant recipient, grant recipient's owner and grant recipient's board of directors (if any), County may refuse to disburse funds or require the return of all or part of the funds already disbursed pursuant to section 6 of this Agreement. 14, USE OF ERF GRANT AS A LOAN An ERF Grant from the County to Grantee may not be disbursed by Grantee to any entity as a loan. -28- 4 i' ' GRANTEE, having signed this agreement, and the Hennepin County Board of Commissioners having duly authorized this agreement on the 9th of February 2016, and pursuant to such approval, the proper County officials having signed this agreement, the parties hereto agree to be bound by the provisions herein set forth. Reviewed by the County Attorney's Office Assistant County Attorney Date: Recommended for approval Bv: Acting Director, Environment and Energy Department Date: LIM County Administrator Date: LION Acting Assistant County Administrator, Public Works Date: GRANTEE Grantee warrants that the person who executed this Agreement is authorized to do so on behalf of GRANTEE as required by applicable articles, bylaws, resolutions or ordinances.* Name: City of Mound Housing Redevelopment Authority -0 Signature Name, Title Date: And: Other signature name, Title (if necessary) Date: *GRANTEE shall submit applicable documentation (articles, bylaws, resolutions or ordinances) that confirms the signatory's delegation of authority. This documentation shall be submitted at the time Grantee returns the Agreement to the County. Documentation is not required for a sole proprietorship. -29- Exhibit A Indian Knoll Manor Project Summary: The project is 1.5 acre site that is currently occupied by the Indian Knoll Manor multi -family apartment complex that is owned by the City of Mound Housing and Redevelopment Authority (HRA). Historically, this site was occupied by a single-family residence that was constructed in 1937. In the early 1970s, the Indian Knoll Manor apartment complex was developed. Aeon intends to purchase the property from the City of Mound HRA and renovate the existing structure and construct 16 new affordable housing units. Assessment of the existing building has detected the presence of asbestos containing materials (ACM) and lead-based paint (LBP) that will have to be removed prior to renovation. Upon completion of this project there will be 66 affordable housing units at this location. The applicant requests ERF assistance for ACM and LBP abatement costs, associated consulting activities, and agency fees. The following costs are based on a budget submitted by Grantee. Modifications must be approved in writing by the County. Approved Budget for the Indian Knoll Manor Project Site: Activities relating to the ACM and LBP abatement costs, associated consulting activities, and agency fees. $392,982.00 Total: $392,982.00 Required Documentation to be Submitted to Hennepin County: Asbestos abatement and disposal documentation and clearance reports, if needed (Include a spread sheet matching manifest, load tickets, unit rates, and final weights, if applicable) Consultant/Contractor and MPCA Invoices (include time period covered by invoice, specific activities related to time, and documentation supporting expenses, including subcontractor and analytical invoices - include unit rates and quantities, subcontractor markup limited to 10% or less); MDH Approval Letters and Permits Annual Project Progress/Summary Report(s). -30- A-1 ERF Application Indian Knoll Manor EXHIBIT B PAGE of 50 Catherine Pausche From: Catherine Pausche Sent: Thursday, February 25, 2016 11:50 AM To: 'Tam i.Bayne-Kuczmarskir7a hennepin.us' Cc: 'Blake Hopkins'; Aubrie Gould; Sarah Smith Subject: Application for Hennepin County 2016 Consolidated Pool Funding Attachments: 1_2015-12-31 RFP 2016 Application ConPool Cities (006).xlsx; 2_Mound HRA CDBG Resolution 022316.pdf; 3 Aeon Support Letter.pdf; 4A RAD Commitement.pdf; 4B_Mound Community Revitalization Letter.pdf; 4C_MHFA IKM Selection Letter.pdf; 4D_ Confirmation of Section 8 from Metro HRA.pdf; 4E_IKM_Wells Fargo Equity_Executed.pdf Hi Tami, Please see the attached application materials for the Hennepin County 2016 Consolidated Pool Funding: I_Excel Application 2 Mound Resolution 3_Aeon Support Letter 4A RAD Commitment 4B_Mound Community Revitalization Letter 4C MHFA Selection Letter 4D Confirmation of Section 8 from Metro HRA 4E_IKM Wells Fargo Equity Letter Questions can be directed to myself or our development partner, Blake Hopkins, Senior Project Manager at Aeon. Thank you, ri Catherine Pausche Director of Finance and Administration, City of Mound 2415 Wilshire Boulevard, Mound, MN 55364 Phone: 952.472.0633 Fax: 952.472.0620 Email: catherinepauschegciiyofmound.com City Hall is open Mon - Fri 8:00 a.m. to 4:30 p.m. November through April information in this message or an attachment may be government data and thereby subject to the Minnesota Government Data Practices Act, Minnesota Statutes. Chapter 13, may be subject to attorney-client or work product privilege, may be confidential, privileged, proprietary, or otherwise protected, and the unauthorized review, copying, retransmission, or other use or disclosure of the information is strictly prohibited, if you are not the intended recipient of this message, please immediately notify the sender of the transmission error and then promptly delete this message from your computer system. -32- |WC]a EXHIBIT B PAGE P),, of 50 2 k / C §) � 2# \/ k / » $ e 0 k / / k \/ £ mR 40- ] # m $ E a m ® § }7 U G - E m . § k \§ / / \ m i § 0 k |® a f \ ± / %m k �k } L tx 2 / CL _ «§ \2 9 k) { \ / \ \ ) / / V \ } § I / % CL % 0 J2 e 2 0 .. ) � .) � � � ■§ ƒ .0} t § ui \ / \ \ ] 0» . , ) f § |WC]a EXHIBIT B PAGE P),, of 50 a O LD C O E 0 c C i m w v E w w '6 2 w v v 3 EXHIBIT B PAGE of Sfl vi c N d CL ori a 'o VNf d 0! 1r 0 s N d 0 N n -E — �- cu w o m Y 3 Q 2 ,D c)i � c�5i t . 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C 4J C tD N N 0 3 d a E O u*' c � v d � E v O C 10 Q 41 A C .O 0 } E Z 1° o a r m r - 34- a C C 3 0 OA y a s-' 0 C cu a O LD C O E 0 c C i m w v E w w '6 2 w v v 3 EXHIBIT B PAGE of Sfl vi c N d CL ori a 'o VNf d 0! 1r 0 s N d 0 N n c c c m EXHIBIT B PAGE q of 50 ho c c kf�k2 E w r r cr cL 0 E E E 41 10 0 JZ CL c C 0 .2 0 0 .0 E ou 0 o t 1-: 3: - E E m -0 -r- jw-- C:, r 0 w v� E rq w CL C CL0 «5c2 26:2m,4>1 8- .0 t o S 0 w E E 'Z,r'-Eo5mg = 0 0 0, two r .2 u E %L w .5 x W a 'a u E w *0 cw 0 'jo 'EO.750-2 u o 3: E w Et crM 0 w Z 0 -r: zm m E 0 7S w 0 2 0 -Z o E r- = a w u 75:L, E 0 mo 1w, 0, 12 0 U M a) E 0 C: 0 t M 0 a) w m 0. 0 > c , M �e . 0 ho c c c / m § EXHIBIT B PAGE of 50 EXHIBIT B PAGE of 50 y �o�v� o m a v N G E`= u L' o` a3 O m2 '«C- N d •'' N LM a+ CD 7 m d C C C d C c ? .3 L.L. CL m m m° •3 � oo LL O N a a as m t c O N M a� c O cc ccd Ec o m O C c T H L C V C tL v O C N C w e .N.. N L d O m CL 0 0 c E L - v o A IA m ° 0 °x' wE r Q 0 o o o M a v° a " O d -O = O. o v Z _ c c 3 CL S p .O m m m ° a o` a 2 m2 > °p = O n c c o c 0 d. a i O m S E -- m h• h = m 5 a+ 'O O v O c= ° o c c y CIL= E m y a v 0 v E c u E a x a 0 I W s S L y m 2< O 'O 0 E T 7 N N N O O S w O p n c= c• Q o c=' c H o � o c °� Q o a� Ln aui od a m m o -' L ei « 'o �c m dA_ ° mw c m m ° v o > aci u c a u u c '+- a m M a� > O am+ w cro w o x S WO S Y J a m m EXHIBIT B PAGE of 50 d N O N d N LM s o � N m d N O N r ba C O a O N L d N CL L - A IA a' o a a D 3 a m ° o` N O �_ d. a h• E d to E E a u -37- 37-A m « C :E v c• H .0 u` 3 Q °" c EXHIBIT B PAGE of 50 W-4 O N m } E I. O d O m m u v> Q r C. C Q 7 O u C-0 c m i EXHIBIT B PAGE __L__ of 50 °D c o a m a N s - w a S L N f0 N C c u %D d d '^ E 04 C: cm L v m c 0 0 d. Y m _a m u a a. 0 d a y— `m c u w p ''' y L Z m O .0 n' w O Ln�' W v 0 0 N a=C,c`° n c as �'N c°,_ Cv u U > a� L M Y a Q ? a f6 E fU 0 m O N a c a M a 'N O c Q a a o a c N E a Q 3 c o ° v a Y E 0 a m E Lon m N ay m o a o p.0 (U u= a E M •N W = iT+ C O a o a to -0.0 c a= a va)o _ E a h u o i� E m E S a s b0 N C N m S 0 m u O + (p m E M N E w N m t m` 0 0 0 Q o CL '-6 a Y c n. u E= Q ° + N .. p c Y L o v o N a a c a ° c f0 Lon o4 0 a a E Q ti ocu c v L00 0 j _ 0°O 00 a c i0 y v y w a E L ° E :�= L .r a 0 a ? O O a s o c S u S C O c v N m ID O K N v_ MWE O a ty 0. -� u 10 c o 0 c p c c y c 4 o Y - a c c�0 a c m v a v 0 O a+ u 14 3 o v y 0 ` X c; m _ r m O° p, :2N c m O a �O C m C O 'N > O m u u *a' `n Q c E ° u a N = u E 3 v ° c v a 0 y a c o m w c w IL- w S v0," H u Y Ln a. m H d EXHIBIT B PAGE __L__ of 50 EXHIBIT B PAGE � of 50 Hornes for Geneeraticns February 16, 2016 'fami Bayne-Kuczmarski, Sr. Planning Analyst Hennepin County Community Works 701 Fourth Avenue South, Suite 400 Minneapolis, MN 55415 Re: Indian Knoll Manor — Hennepin County Consolidated Pool CDBG Application Third Party Commitment Dcar Ms. Bayne-Kuczmarski, This letter is to confirm that Aeon is committed to working with the City of Mound and the Mound Housing and Redevelopment Authority to implement the rehabilitation and new construction of Indian Knoll Manor. Aeon is a mission -driven, nonprofit provider of quality apartment homes for low- to modcrate-income individuals and families. Aeon has been serving the community for 30 years and currently owns and manages more than 2,500 units throughout the 'Twin Cities area. For Indian Knoll Manor qKM), Aeon has assembled an experienced development team with which it has previously completed several successful affordable housing developments. On December 10, 2015, Aeon's Board of Directors approved a Resolution granting 2016 General Authority for the President/CEO. This Resolution authorizes the President and CLO of Aeon to apply for grants, loans and other funding without further action by, or additional authority or direction from, the Aeon Board of Directors. Aeon is committed to providing staff and other resources to assist in the implementation of Indian Knoll Manor. We look forward to working together on this project which will preserve and rehabilitate 50 units of existing affordable housing at 30% area median income (AMI) and add 16 additional units of affordable housing between 30% and 60% of AMI. Should you have any questions regarding this correspondence or the continuing commitment of Aeon to this project, please do not hesitate to contact Blake Hopkins, Sr. Project Manager at bhopkins@aeonrnn.org or by phone at 612-746-0517. Sincrel Alan Arthur, President and CEO 401 North 3 d Street, Suite 150, Minneapolis, MN 55401 612-341-3148 612-341-4208F www.aeommn.org No EXHIBIT B PAGE 61� of 50 MOUND HOUSfNG AND REDEVELOPMENT AUTHORITY WDIAN KNOLL MANOR 2020 Commerce Blvd. Mound, Minnesota 55364 June 16, 2016 Minnesota Housing 400 Sibley Street; Suite 300 Saint Paul, MN 55101-1998 Re: Community Revitalization Plan Indian Knoll Manor 5 Year and Annual Plan To whom it may concern: Telephone/Fax (952) 472-5078 on December 9, 2014, the Mound Housing and Redevelopment Authority (the "HRA") duly adopted the PHA 5 -Year and Annual Plan amendment (the "Plan") to facilitate the revitalization of Indian Knoll Manor through implementation of the Rental Assistance Demonstration (RAD) Program. The RAD program provides alternative funding opportunities to ensure that Indian Knoll Manor can remain a viable and affordable home for the residents. The Plan is consistent with the community's vision that includes a diversity of life -cycle housing, as stated in the Comprehensive Plan. The Plan specifically identifies and includes the Indian Knoll Manor property located at 2020 Commerce Boulevard in the City of Mound. The purpose of the Plan is to promote adequate and affordable housing in the community; however, the HRA has experienced declining support from HUD and capital needs are increasing at this aging building. Preserving and rehabilitating Indian Knoll Manor is a key strategy to protect and promote affordable homes in the City of Mound. The HRA identified the RAD program in the Plan as the primary strategy for long-term revitalization of Indian Knoll Manor. Please contact me with any questions at catherinepausche@cityofmound.com or by phone at 952-472- 0633. Sincerely, Catherine Pausche Director of Finance and Administration Attached: PHA 5 -Year and Annual Pian EXHIBIT13 PAGE L of 50 MIN&ANWUM N:&-101 • Rin FZMA RESOLUTION APPROVING PROPOSED APPLICATION FOR 2016 URBAN HENNEPIN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM FUNDS AND AUTHORIZING EXECUTION OF SUBRECIPIENT AGREEMENT WITH URBAN HENNEPIN COUNTY AND ANY THIRD PARTY AGREEMENTS WHEREAS, the City of Mound, through execution of a Joint Cooperation Agreement with Hennepin County, is cooperating in the Urban Hennepin County Community Development Block Grant Program; and WHEREAS, the City of Mound Housing and Redevelopment Authority has chosen Aeon as a development partner for Indian Knoll Manor Public Housing because of Aeon's successful experience financing, developing, rehabilitating, constructing, and owning similar projects; and WHEREAS, Aeon is applying for multiple competitive financing and grant opportunities to facilitate rehabilitation of Indian Knoll Manor; and WHEREAS, the City of Mound and its development partner Aeon have developed a proposal for the use of 2016 Urban Hennepin County Community Development Block Grant funds; NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Mound, Minnesota, does hereby approve the following project(s) for funding from the 2016 Urban Hennepin County Community Development Block Grant Program and authorizes submittal of the proposal to Urban Hennepin County/Consolidated Pool as shown in Attachment A and made a part herein. Activi Indian Knoll Manor Rehabilitation $385,000 BE IT FURTHER RESOLVED, that the City Council of the City of Mound, Minnesota hereby authorizes and directs the Mayor and its City Manager to execute the Subrecipient Agreement and any required third party agreement on behalf of the City to implement the 2016 Community Development Block Grant Program. Adopted by the City Council this 23rd day of February, 2016. Mayor Mark Wegscheid Attest: Catherine Pausche, Clerk .'6f w •-i 0 N A 6) >r - G to O CL` O CO u O. C Q o CaJ CL w C C a S C M L 0. 9 �v V 9 2 R, LO. a 7 a c v w m v 00 O E C ° a {4�J N C 0 0 t Q a N EXHIBIT B PAGE /I of 50 Attachment A Page I of 5 ; •3 a r C G N C W v Vhf p'fl 5: y Q C S o _ y 10 'N° E .V 4 Zi n b m d d A a ; L^ t G w � R aC0 2N � a m CGJ a° o o w ,°C E<° w C °N ' M c E 0CO E $ - o o° y � ro tg b v o a c 3Y LO cc y v ii A c a° o 0 w u c m� c N; �' c m c m m _c eo u N G N c m a N , d a C O v 2 S ed lw 7 m 2 3 d a d a E �= E a w e O O C �� Zn'' a= C -C ,f-' 6 a K .O a LD'c ro.c p eNi E .c a Cu O;v a E° v c f0 cw 2 Y m M M A w a° N c cm •q v m o a CL M V4S N S, a m �.'$,n =o w 0, y Y c o& C d N a ti 01 t c 3 oc E a°N ` G N ro o v a eo C .0 eo .° a°i c v ¢ Y v, 4 C 191 -42- O m u CL 0 v° G CL C C Z 1 G: EXHIBIT B PAGE M) of 50 Attachment A Page 2 0f--5— a O m M Q v CL d C V CL a c a c a Q E-7 -401- -44--a.' 4--a.' Q t�raaAGE� ui �3 Attacl EX141BIT B of 50 /§k EXHIBIT BPAGE /� 0 50 Attachment A Page ; of 5 ,222. .§§. k / a £ � { / � E , k CL ■ § E -A n'A- -46- EXHIBIT B PAGES of 50 Attachment A Page 5 oo5 � v •T+ N � .a E- CL O =wJaias 'C c t7 Lh 'O C d i °y ro o a 32 s y o V _+ u " U 6 w �o a c S c S,3 o `Z E o G w » 3 N oo> EMll OD =y. O � iC o w G ro 0 c ^ a a w .N 0 E o y `o 0 Q v a oro o a m o a oro v ° =a v CL °- 7; Z7 1 j O � C 'L (O .G � tb � a � ✓ N c a N7 o ro ° N c E °1� E N v oo b c ., Ero'o N N +` a 0 2 x y ro E a $ d o ro a o 6 2 y 4 N N d C Op OW a W O G a ro 0 Qi 3. a f 0 0,0 y- v v 0- G o a y o M ro -D E o a , f a0 c E w x G Ov =� m G 00 C R b c T .-+ "' 'Gvr 0 0 "O O a s H . :¢ C R ro T G I1.0 t b tU s ID a 0 H G pC G a o .� M 3 Q x O .. o S D n aui aYi a c E C m� 7 3 = w o v as C a= � a t� " w m # N N N w .Q j C y tE' .O ry C d m G G f Ln o. M i Q✓ I -A n'A- -46- EXHIBIT B PAGES of 50 Attachment A Page 5 oo5 EXHIBIT B PAGE /� of 50 } *lyill��l`' ('ejY JFY� �Q U.S. 1>EPAR"i MINT OF IfOO Im; .t\n t RB:kN rwvr :[,Omlt:�r WASULNGTON,D 20310 I,V,R 2 5 2015 Kandis M. Hanson Executive Director HRA Of the City of Mound, MN 5341 Maywood Road Mound, MN 55364 CC: Catherine Pausche Dear Ms. Hanson: Thank you for your application under the Rental Assistance Demonstration (RAD) for the conversion of assistance of 50 units at the following PIC Development MN074000001, INDIAN KNOLL MANOR. We are pleased to approve your request for conversion as described in the application, subject to the conditions below. This award letter serves as the Department's Commitment to Enter into a Housing Assistance Payments (CHAP) for the above -referenced project, provided the Owner meets all the requirements contained in the PIH Notice 2012-32, Revision I ("Notice") and all subsequent revisions. In addition, the owner must comply with all "CHAP Milestones" identified in section 1.12 of the Notice as applicable. This award is issued pursuant to the Consolidated and Further Continuing Appropriations Act, 2012, Pub. L. No. 112-55, approved November 18, 2011 and the Consolidated and Further Continuing Appropriations Act of 2015 (P.L. 113-235), approved December 6, 2014; section 8 of the United States Housing Act of 1937 (Act), 42 U.S.C, 1437 et seq.; and the Department of Housing and Urban Development Act, 42 U.S.C. 3531 et seq. The purpose of this award is to begin the process of effectuating the conversion of Public Housing to a form of project -based assistance under section 8 of the Act. This award cannot be transferred without the prior written consent of HUD. www.hud.gov espanoi.hud.gov -47- EXHIBIT B PAGE I of 50 In order to convert your project, the PHA must fulfill the CHAP milestones and deadlines identified in section 1.12 of the Notice. HUD will rely solely on documents and certifications the PHA submits through the RAD Resource Desk to monitor compliance with CHAP milestones. If HUD, in its sole judgment, determines that the PHA fails to meet any of the requirements, the CHAP will be revoked, unless the PHA submits and HUD approves a request for a deadline extension. Any extension request must include both a justification and an explanation of why failure to meet the milestone will not jeopardize the PHA's ability to complete the RAD conversion. Approval of any request for an extension is at HUD's sole discretion. Within 30 days of CHAP issuance, you must confirm your acceptance of a CHAP by submitting an application into the Inventory Removals module in PIC in order to identify the units that will be removed from public housing Annual Contributions Contract (ACC) when the project completes conversion. HUD has made instructions for submitting a Removal Application into PIC available at www.hud.govirad.39 Failure to submit a Removal application into PIC will result in a suspension of the CHAP and a revocation if not corrected within a reasonable time period. Contact your P11-1 Field Office if you have any questions about this submission. As the award is a conditional commitment by HUD, HUD reserves the right to revoke or amend its commitment at any time prior to closing if HUD, in its sole judgment, determines that any of the following conditions are present: A. any of the contract units were not eligible for selection; B, the proposed conversion is not or will not be financially feasible; C. the Owner fails to meet any applicable deadline; D. the Owner fails to cooperate: E. there is any violation of program rules, including fraud; or F. the terms of the conversion would be inconsistent with fair housing and civil rights laws or a fair housing or civil rights court order, settlement agreement, or voluntary compliance agreement. This award shall be interpreted and implemented in accordance with all statutory requirements, and with all HUD requirements, including amendments or changes in HUD requirements, the Notice, and all other applicable RAD guidance. 39 See htt S>i���<�l,[dud_��c��ihutlt�oitalldocu�l�ent�ihudduc'i�1�IZ;1i�t'l inventaty remrn.zl.t�rlf 2 EXHIBITB PAGE /� of 50 As you start the process of conversion, we urge you to continue to maintain an open dialogue with your residents and local officials. If you have any questions or concerns regarding the conversion process or fulfilling the CHAP Milestones, please contact your RAD Transaction Manager. Sincerely; r Jemine A, Bryon General Deputy Assistant Secretary Office of Public and Indian Housing Enclosure 3 ,,^,tri l$iniam Gebre Acting Assistant Secretary for Housing Federal Housing Commissioner C, EXHIBIT 13 PAGE ) ) of 50 EXHIBIT A IDENTIFICATION OF UNITS ("CONTRACT UNITS") BY SIZE AND APPLICABLE CONTRACT RENTS The Contract Rents below for the subject project are based on Fiscal Year 2014 Federal Appropriations and assumptions regarding applicable rent caps. The final RAD contracts rents, which will be reflected in the RAD HAP contract, will be based on Fiscal Year 2014 Federal Appropriations, as well as applicable program rent caps and Operating Cost Adjustment Factors (OCAFs), and, as such, may change. In addition, prior to conversion, the PHA must provide HUD updated utility allowances to be included in the HAP contract. Existing PIC Development Number: MN074000001 Number of Contract Units Number of Bedrooms Contract Rent Utility Allowance Gross Rent 16 0 $430 $0 $430 33 1 $535 $0 $535 1 2 $670 $0 $670 Please note that this rent schedule includes the 2015 OCAF adjustments that the PHA is eligible for, and will be confirmed during the Financing Plan review. -50- EXHIBIT B PAGE � 0 of 50 Minnesota r a October 22, 2015 Mr. Alan Arthur Aeon 901 N 3rd St, Ste. 150 Minneapolis, MN 55401 Re: Multifamily Request for Proposals D7878 / M17202 / Indian Knoll - 9% Proposal Dear Mr. r-thur - I am pleased to inform you that the Minnesota Housing Board has approved the above -referenced proposal for further funding consideration. Minnesota Housing has also approved your request to have the State Designated 30% Basis Boost applied to your proposal. Because this 9% Proposal is recommended for further consideration, your Dual Application Proposal will not be further processed. This year, the Agency received 78 applications requesting $22 million in tax credits for 2016 Round 1 and $145 million in deferred loans, and your proposal was selected in a highly competitive process. I am thankful for your partnership in helping to meet the affordable housing needs of Minnesotans and look forward to working with your organization on this development. While your proposal met our initial criteria for funding, this letter is not a reservation of tax credits nor a commitment by the Agency to provide financing. The amounts listed on the attachments are subject to change based on a thorough underwriting analysis. Any changes in available sources for the project (which may include availability of syndication proceeds, amortizing debt, or gap financing) may result in a reduction of Agency funding. In addition, tax credit amounts are based on estimated tax credit availability for calendar year 2016 based upon the amount of housing tax credits available in calendar year 2015. The amount of housing tax credits available in 2016 will not be communicated to Minnesota Housing until sometime in the first quarter of 2016 when the IRS makes a final determination of Minnesota's population component. This population figure is used in determining the actual amount of 2016 housing tax credits Minnesota will receive. if Minnesota's actual 2016 housing tax credits are reduced as a result of the population component published by the IRS, Minnesota Housing will reduce the credit amounts reserved for the lowest ranking project in the various set -asides, and will notify the affected applicants of the reduction. Upon completion of the underwriting analysis, the Minnesota Housing Board will then consider issuing a formal commitment for any loan funds. In addition, Minnesota Housing will assess the financial strength of the proposed borrower, including guarantor(s) for amortizing loans and financially responsible parties for deferred loans. -51- EXHIBIT B PAGE -� I of 50 NEXT STEPS 1. Housing Tax Credit Appeal Period: The attached Selection Score Summary delineates the total number of selection points awarded to the referenced development. The selection point ranges for selected proposals in2016 Round 1 are: Greater Minnesota For -Profit 214 to 91 Points Greater Minnesota Non -Profit 214 to 214 Points Rural Development/ Small Projects 91 to 91 Points Metro For -Profit 90 to 84 Points Metro Non -Profit 96 to 90 Points included in the above pools and set -asides, selected proposals involving Permanent Housing for Individuals Experiencing Long -Term Homelessness awarded the 100 point bonus provision available in the Self -Scoring Worksheet scored in a range from 214 to 200 points. Certain applications having point totals within these ranges may not have been selected to receive tax credits due to other proposal characteristics and feasibility levels not supporting a selection. Applicants who believe that Minnesota Housing has misinterpreted, was not aware of a submission item, or miscalculated the applicant's selection points or credit amount at time of application/reservation, must submit in writing evidence supporting their position within five business days of Minnesota Housing's notification of application status. An applicant's anneal must be written in letter form containine an orisinal signature, and stating that the communication is an appeal under Chapter 3.P. of the Housing Tax Credit Program Procedural ,_ 11_.a._ i. ...._.L '1 In /'t M ividnuai. Tile dN�iedi �CllCl IllgY UC JUUIIIILLEU 4. )Ugn Ei jj8 l®►+tscn'�yL a�syaa •"'-" "' v' w. Minnesota Housing Finance Agency, Housing Tax Credit Administrator; 400 Sibley Street, Suite 300, St. Paul, MN 55101-1998. An applicant is not permitted to contest the scores of other applicants. The five day period ends at 5:00 P.M. on Thursday, October 29, 2015. Minnesota Housing will then have an additional five business days to review the submissions. After this additional five business day period, the rankings will be made final. Applicants receiving adjustments will be notified and reservations for developments selected will be distributed. 11. Housing Tax Credit Reservation Process: Prior to December 4, 2015, owners must submit a signed copy of the attached Project Profile, Project Selection Summary, and Selection Score Summary verifying the pertinent terms and conditions of the reservation along with a non-refundable reservation fee equal to 3.5% of the annual tax credit amount to Minnesota Housing, Attention: Tamara Wilson. The fee will not be adjusted if the final credit amount is reduced or the tax credits are returned or unused. If a manager unit is part of the HTC unit mix, please add the number of bedrooms and unit square footage of this unit to the attachments before submitting to Minnesota Housing. Upon receipt of the required documents and fees, Minnesota Housing will send out a Reservation Letter and an Election of Applicable Percentage Agreement in early January, 2016, which must be executed and returned to Minnesota Housing by January 8, 2016. An owner may elect the applicable percentage in the month in which the reservation is made or at placed in service. If an owner received a prior reservation of tax credits for the referenced building(s) the owner will have -52- EXHIBIT B PAGE -L of 50 previously elected the applicable percentage. The initial election is irrevocable and shall also apply to any supplemental tax credit allocation. iF YOU DO NOT MEET THE RESERVATION DEADLINES FOR SUBMITTING DOCUMENTS TO MINNESOTA HOUSING AND EXECUTING AND RETURNING THE ELECTION OF APPLICABLE PERCENTAGE AGREEMENTS, YOUR APPLICABLE PERCENTAGE WiLL BE ESTABLISHED AS OF THE PLACED IN SERVICE DATE OF YOUR PROJECT.) Ill. General Process: The attachments to this letter identify the program type and terms for which the project has been selected and Provides the name and contact information for your assigned Housing Development Officer. In addition, the attached Information Sheet describes the next steps for processing your project proposal. Your assigned Housing Development Officer will contact you to schedule a project launch meeting to discuss our process. CONDITIONS OF FINANCING This project was selected based upon many factors including but not limited to project composition, design factors, underwriting factors and financing structuring stated by the applicant in the application and as adjusted through underwriting at Minnesota Housing, ANY REVISIONS TO THESE FACTORS WILL REQUIRE APPROVAL BY MINNESOTA HOUSING. If substantial changes are made to the application, selection of the project may be jeopardized. Projects which have committed to providing Long Term Homeless units as part of their approved application must submit all required Long Term Homeless due diligence items. The complete list of Long Term Homeless due diligence items may be found at http://www.mnhousing.gov/idc/groups/multifamily/documents/webasset/mhfa 009350..rtfj As a condition of receiving financing from Minnesota Housing, the project will be required to participate in the Low Income Rental Classification (LIRC) or Payment in Lieu of Taxes (PILOT) if it is eligible. For more information regarding Low Income Rental Classification (LIRC), please access the following link: http://www.mnhousing.gov/wcs/Satellite?c=Paee&cid-7364120490987&na ename External%2FPaee°Jo2FEXTSt andardLavout In addition, all projects receiving tax credits or deferred funding from Minnesota Housing will be required to provide an Energy Rebate Analysis (ERA) prepared by a third -party entity acceptable to Minnesota Housing. The ERA will be used to determine an estimated rebate amount, which will be considered a source in sizing tax credits and deferred loan awards. Additional information will be provided by your assigned Housing Development Officer at the Project Launch meeting. The project will be required to meet the original conditions of selection as detailed below: Within 90 days, provide written evidence from HUD showing RAD Milestones that incorporate tax credits in a timeline that allows for award and closing of all financing. If there is an identity of interest between the architect and the borrower, an independent architect must be commissioned to assist with construction administration. HUD final approval of the conversion of Public Housing to a form of project -based assistance under the Rental Assistance Demonstration (RAD) for the conversion of assistance of 50 public housing units. Capitalized reserves funded at closing or during construction must remain with project for the term of the Minnesota Housing loan. . The deferred loan will be structured as a cash flow note as described in Minnesota Housing's Underwriting Standards. -53- EXHIBITB PAGE �3 of 50 The deferred and/or amortizing loans awarded to this project will carry rent and income restrictions as follows: � LMIR, FFCC and PARIF - 66 units: rents are at 60 percent MTSP and incomes do not exceed 60% MT er the Tax reit In addition, the project will be subject to additional incom ns may a be d fferent thanrestrictions those requ reddunder your nt Program, as submitted in your application. These restrictio Y Agency loan financing. with Thank you for being a part of our Multifamily Request for Proposal process. We look forward to working you on this affordable housing development. Sincerely, tk�. Mary Tin erthal Comm' loner Enc: Project Selection Summary Project Profile Selection Score Summary CJ mforrlwifull lticct no Project Selection Summary EXHIBIT B PAGE of 50 Property#: D7878 HTC#: 16025 Project#: M17202 RENT Unit Unit Unit Contract + Utility = Gross Rental Total Rent GRID Type Count SgFt Rent Amount Rent Rooms Rooms % AMI OBR/SRO 2 370 $641.00 $.00 $641.00 2.5 5.0 30% AMI OBR/SRO 7 370 $430,00 $,00 $430.00 2.5 17.5 30% AMI 1 BR 2 480 $830.00 $,00 $830,00 3,5 7.0 30% AMI 18R 7 480 $796.00 $,00 $796.00 3.5 24.5 30% AMI 1 BR 26 480 $535.00 $,00 $535.00 3.5 91.0 30% AMI 16R 7 480 $430.00 $,00 $430.00 3.5 24.5 30% AMI 2BR 4 950 $1,000.00 $,40 $1,000.00 4.5 18.0 60% AMI 2BR 1 950 $670.00 $,00 $670.00 4.5 4.5 30% AMI 3BR 6 1,260 $1,351,00 $,00 $1,351.00 6.0 36.0 30% AMI 3BR 1 1,388 $1,220.00 $131.00 $1,351.00 6.0 6.0 30% AMI 3BR 3 1,388 $1,220,00 $131,00 $1,351.00 6.0 18.0 60% AMI PARKING Parkina Descrinlon #Spaces Monthly Fee GRID Parking Surface 57 Parking Covered Additional ELHIF and/or HTF Income Restrictions: POPULATION Tarnet #Units HOUSING Metro HRA Project Based 16 TARGETING General occupancy 66 TYPES Other2 9 Families with Children 15 Perm. Rental with Services 7 Long Term Homeless 7 Permanent Rental 66 Single Men 50 Housing Tax Credits 66 Single Women 50 Elderly 50 STRATEGIC New Const. Rehab Physical disability 9 PRIORITIES Strategic Goal Units Units Foreclosure Long Term Homeless Family 7 Long Term Homeless Single Long Term Homeless Youth New Affordable Housing 16 Preservation Preservation / Federally Assisted 50 Term Interest Selection Program Amount (Years) Rate Date Fiexibile Financing Cap Cost $115,000 30 10/22/2015 PARIF $885,000 30 10/22/2015 Met Council LHIA $400,000 30 10/22/2015 LMIR 1st Mortgage $704,000 30 4.75 + 0.25 MIP 10/22/2015 NOTE: If selected for LMIR First Mortgage, the interest rate shown is locked f lonths from board selection date. This Project Selection Summary does not constitute a commitment to finance. Refer to Next Steps following Selection/�'a attachment for specific commitment terms. Fax corrections to Mary Hieb at 651-296.9545 v(� Project Selection Summary EXHIBIT B PAGE of 50 Date: 10121/2015 ,ROPERTY Property#: D7878 NFORMATION Project#: M17202 Name: Indian Knoll Manor Address: 2020 Commerce Blvd City/ST/zlp: Mound MN 55364 County; Hennepin MINNESOTA HDQ Ted Tulashie HOUSING PROJECT Architect Erika Arms OFFICERS HTC#: 16025 Phone: 651-297-3119 Email: ted.tulashie@state.mn.us Phone: 651-296-9850 Emall: erika.arms@state.mmus Phone:. 612.746.0522 _. Fax: 612-341-4208 Email: Jlehnhoff@aeommn.org Phone: 612-341-3148 Fax: 612-341-4208 Email: aarthur@aeommn.org PROCESSING CName: Contact; Phone: ~°"Z'V ° Fax: Address: Email: City/ST/zip: Name: Aeon DEVELOPER Contact: James Lehnhoff INFORMATION Address: 901 3rd St N Ste 150 Address: Clty1ST/zip: Minneapolis MN 55401 Name: iKM Limited Partnership OWNERSHIP/ Contact: Alan Arthur PARTNERSHIP Address: 901 3rd St N Ste 150 INFORMATION City/ST/zip: Minneapolis MN 55401 HTC#: 16025 Phone: 651-297-3119 Email: ted.tulashie@state.mn.us Phone: 651-296-9850 Emall: erika.arms@state.mmus Phone:. 612.746.0522 _. Fax: 612-341-4208 Email: Jlehnhoff@aeommn.org Phone: 612-341-3148 Fax: 612-341-4208 Email: aarthur@aeommn.org PROCESSING CName: Contact; Phone: ~°"Z'V ° Fax: Address: Email: City/ST/zip: Phone: 651.556-8631 Fax: 651-225-8720 Email. cwegscheid@cermakrhoades.com Phone: 651-787-0687 Fax: 651-787-0407 Email: chris@frerichsconstruction.com Phone; 612-746-0546 Fax: Email: cnimmer@aeommn.org Phone: 651-291-1082 Fax: 651-491-4397 Email: geoffrey.meyer@peopleincorporated.org NOTE: This Project Selection Summary does not constitute a commitment to fir- 56- Refer to Next Steps following Selection/Award attachment for specific commitment terms. Fax corrections to Diary Hieb at 651.296.9545. Name: Cermak Rhoades Architects ARCHITECT Contact: Chris Wegscheid Address: 275 4th St E Ste 800 CitylSTlzip: Saint Paul MN 55101 CONTRACTOR Name: Frerichs Construction Company Contact: Chris Zuspann Address: 3600 Labore Rd Ste 8 City/ST/zip: Vadnais Heights MN 55110 MANAGEMENT Name: Aeon Management LLC COMPANY Contact: Chris Nimmer Address: 901 3rd St N Ste 150 City/ST/zip: Minneapolis MN 55401 PRIMARY Name: People Incorporated SERVICE Contact: Geoffrey Meyer PROVIDER Address: 2060 Centre Pointe Blvd City/ST/zip: Mendota Heights MN 55120 Phone: 651.556-8631 Fax: 651-225-8720 Email. cwegscheid@cermakrhoades.com Phone: 651-787-0687 Fax: 651-787-0407 Email: chris@frerichsconstruction.com Phone; 612-746-0546 Fax: Email: cnimmer@aeommn.org Phone: 651-291-1082 Fax: 651-491-4397 Email: geoffrey.meyer@peopleincorporated.org NOTE: This Project Selection Summary does not constitute a commitment to fir- 56- Refer to Next Steps following Selection/Award attachment for specific commitment terms. Fax corrections to Diary Hieb at 651.296.9545. EXHIBIT B PAGE -� 40 of 50 2014 Multifamily Consolidated RFP Information Sheet Your assigned Housing Development Officer will contact you to schedule a project launch meeting following this funding announcement. It is recommended that all members of your development team participate in this meeting, including the architect, contractor, management officers, service provider and/or processing agent. At the project launch meeting you will receive your Mortgage Loan Checklist which includes a list of documents and submittals that will be required prior to closing your loan. Prior to your project launch meeting, it is recommended that you review the relevant documents at the following links: Underwriting Standards - htt www mnhousing goy/idc/groups/multifamily/documents/webcontent/mhfa 0118Q4.pdf *Note that all applicants will be subject to Minnesota Housing's Mortgage Credit committee for final feasibility and capacity review prior to loan closing or end loan commitment. * Design Standards - if awarded capital financing for new construction or rehabilitation, Minnesota Housing's Design standards must be adhered to. To obtain design standard information, visit; htt : www.mnhousino gov/wcs/Satellite?c Page&cid=1358905261142&pagename=External%2FPage %21`EX1'StandardLayout * Long -Term Homelessness (LTH) — If your proposal has deemed LTH units, certain requirements and definitions must be adhered to. Information on all aspects of the LTH requirements. http //Www,Yrniiousing gov/wcs/Satellite?c=Page&cid=1358905268965&pagename=External%2FPage%2FEXTSt andar_ dLayout Prior to your project launch meeting, it is also recommended that you review the relevant program Guides for the funding source(s) your project has been awarded. All program guides can be found on the Agency website: http://www.rnnhousin . ov wcs Satellite?c=Pa e&cid=1363132277702& a ename=External%2FPa e1 o2FEXTStandardL avout Low and Moderate Income Rental Program (LMIR) —LMIR mortgage loans are generally 30 -year fully amortizing loans in first lien position. Under most circumstances, LMIR loans will be processed under HUD's Risk Share Mortgage Insurance Program with 50% insurance and a mortgage insurance premium of 0.25%. Minnesota Housing agrees to provide an interest -rate lock at 5.25% for a period of 12 months from the date of the selection letter to allow for further processing and underwriting. NOTE This rate lock does not represent a funding commitment. Applicants and their projects are subject to final feasibility and capacity review by Minnesota Housing's Mortgage Credit Committee and must receive final commitment approval from Minnesota Housing's Board of Directors within 12 months of the selection letter. If Board approval is not achieved within the 12 -month period, Minnesota Housing reserves the right to revise the interest rate based on current market conditions, impose a fee to maintain the previous rate, or rescind the selection. Once Minnesota Housing's Board has given final commitment approval, the interest rate (current or revised) will be locked for six additional months from the date of the Board approval. If the loan does not close within six months of Board approval (for construction loans) or if the applicant does not enter into an End Loan Commitment within six months of Board approval (for end loans), Minnesota Housing reserves the right to reassess the interest rate or impose a fee to maintain the locked interest rate. Flexible Financing Capital Costs (FFCC) - FFCC loans are generally made with an interest rate of 0%. They will be co -terminus with the accompanying LMIR loan and will be due and payable upon prepayment or maturity of the LMIR loan. Applicants and their projects are subject to final feasibility and capacity review by Minnesota Housing's Mortgage Credit Committee and must receive final commitment approval from Minnesota Housing's Board of Directors within 12 months of the selection letter. _57_ 11/2011 EXHIBIT B PAGE / of 50 & Economic Development Housing Challenge (EDHC) — EDHC loans are generally a No, 30 year loan with principal and interest due at the end of a 30 year term. A 20 -month term will be imposed to enter into an end loan commitment and/or close. Applicants will be subject to the Agency's Mortgage Credit Committee for final feasibility and capacity review. • Home Affordable Rental Preservation Program (HOME HARP) - HOME loans are offered as 0%, 30 year loans with principal and interest due at the end of a 30 year term, unless different terms are required by another funding source. Under the federal HOME Investment Partnership Program (HOME), the applicant must enter into a legally binding written agreement which indicates all necessary financing is secured, a budget and schedule have been established, and underwriting is complete and under which construction is scheduled to start within twelve month of the agreement date. A 20 -month term will be imposed to enter into an end loan commitment and/or close. Applicants will be subject to the Agency's Mortgage Credit Committee for final feasibility and capacity review, and Community Housing Development Organizations (.CHDOs) that are selected will be required to be recertified prior to commitment of HOME funds. ® Preservation Affordable Rental investment Fund (PARIF) —A 20•rnonth term will be imposed to enter into an end loan commitment and/or close. Applicants will be subject to the Agency's Mortgage Credit Committee for final feasibility and capacity review. • Housing Infrastructure Bonds (NIB) — A 20 -month term will be imposed to enter into an end loan commitment and/or close. Applicants will be subject to the Agency's Mortgage Credit Committee for final feasibility and capacity review. If your project was awarded funds from a Funding Partner Agency, you will receive additional information directly from that Agency, m Family Housing Fund (FHF) — Awards are contingent upon approval by the FHF Board of Directors. • Greater Minnesota Housing Fund (GMHF) — Awards are contingent upon approval by the GMHF Board of Directors. If awarded GMHF funds with the absence of Minnesota Housing capital funds, notification of further consideration will be provided under separate cover. • Metropolitan Council Local Housing Incentives Account (Met Council LHIA) - Awards are contingent upon approval by the Met Council LHIA Board of Directors. Anticipated funding recommendations will be made at their next board meeting following this award letter. Tht� I: iA program requires a dollar -for -dollar match from the municipality in which the development is located. Contact Linda Milashius with Metropolitan Council at 651.602.1541 or linda milashius@metc.state.mn.us for further information. • Minnesota Department of Employment and Economic Development (MN DEED) - If you have been awarded funding from MN DEED's Small Cities Development Program (SCDP) for an eligible multifamily project that complements funds from Minnesota Housing, a SCDP pre -application and/or full application will not be required. If awarded funds, you must enter into an agreement with MN DEED. Contact Christine Schieber with DEED at 651.259.7461 or Christine.Schieber@state.mn.us for further information. o Minnesota Green Communities - if you are considering seeping certification from Green Communities (encouraged but not required), please contact Janne Flisrand at Minnesota Green Communities at 612-816-2115 or ianne@mngreencommunities.o�. -58- as as 4• *a ,it1 P50to /(;C sin J Property Information Indian Knoll Manor MHFA Identification D7878 Numbers Property Number Project Costs Appl Fraction - Sq Ft Status Status Date Request Cycle cle Alt Appl Fraction - Unit 100% Appl Percentage @ 4% 100% Appl Percentage @ 9% 3.20% Developer Fee 7,47% Total M & O Expenses $1,115, 00 Total Project Costs $345,2488 Project Cost Per Unit $11,274,844 For- profit $170,830,97 Bedrooms Uni-itom- Count 0 Br 9 Total Units 1 Br 42 Total HTC Units 2 Br 5 MKT Units 3 Or 10 Com Space Units 4 Br Units EXHIBIT B PAGE 2 �/ of 50 M17202 Project Number Eligible Basis Eligible Basis with Boost Qualified Basis Minimum Set -Aside 66 66 0 0 Basis Federal Set-aside Newly Constructed not federally subsidized; Rehabilitation expenditures not federally subsidized; $9,832,330 $9,716,330 $9,716,330 40/60 16025 HTC Number Tax Credit Year Type Allocation Status Status Date Request Cycle cle Alt 2016 Federal Tax Set. Requested 6/18/2015 Initiative Amount Credits FirstAside Round 1 MHFA Metro MHFA $648,950 2016 Federal Tax For- Reserved 10/22/2015 First profit Administered Credits Round 1 MHFA Metro MHFA $648,950 For- profit Administered Qualified Census Tract: No Difficult Development Area: No -59- EXHIBIT B PAGE _e�j of 50 Minnesota Housing Finance Agency Score Summary Sheet 2016 Housing Tax Credit Program D7878 16026 Indian Knoll Manor - 9% I Mound i Development Number I Protect NumberDevelopment Name i Development City Developer Claimed _ _. Agency Awarded IMaxlmifm Acciievable' Points Point Category _ _ _ _ _ i Points _ Points , 10 Household Targeting 10 iii 5 to 10 12 j Strategically Targeted Resources I 10 10 to 12 0 Economic Integration 0 2 to 9 5 i Workforce Housing Communities 5 5 10 Federal / Local/ Philanthropic Contributions 10 i 2 to 10 10 Financial Readiness to Proceed 10 2 t014 I 3 Intermediary Costs (Soft Costs) 2 y� 1to6 0 Unacceptable Practices 0 (10) to (25) 0 Eventual Tenant Ownership 0 1 5 Temporary Priority - Foreclosed Properties 5 S or 10 11 0 Preservation 0 9 to 35 Permanent Housing for Individuals Experiencing Long -Term 107 Homelessness 7 5 to 110 1 High Speed Internet Access 1 1 3 Location Efficiency 3 j 1 to 9 1 5 Universal Design 1 5 ,. _ _ _..._ _ 3 to 5_.. _ 1 Smoke Free Bu _. ilding _ 8 Serves Lowest income Tenants/Rent Reduction 8 5 to 16 17 Rental Assistancei 10 4to21 0 QCT/Community Revitalization 0 1 4 Cost Containment 0 4 201 + 87 TOTAL Developer Claimed j TOTAL Points Agency Awarded Points E�111 EXHIBIT B PAGE 30 of 50 REGULAR MEETING OF THE COMMUNITY DEVELOPMENT COMMITTEE Monday, November 10.2O15 Committee Members Present: ChAvez, Cunningham, Dorfman, Elkins, Kramer, Letof8ko Wulff Committee Members Absent: Commers.MWnt Committee Members Excused: CALL TO ORDER Aquorum being present, Committee Chair Wulff* called the regular meeting ofthe Council's Community Development Committee to order at 4:05 p.m. on Monday, November 16, 2015. 'Community Development Committee Chair Cunningham arrived late due to a conflict. APPROVAL OF AGENDA AND MINUTES It was moved by Letofsky, seconded by Elkins to approve the agenda. Motion carried. � Itwas moved byElkins, seconded bvCh6vez toapprove the minutes of the November 1S.2O15regular meeting of the Community Development Committee. Motion carried. Council Member Dorfman requested agenda item 5 be pulled from the consent list for discussion. A. Consent 1� 2O15-274Land Exchange and Boundary Amendment, Spring LakoParkResgrve.DakohaCVunty (Jan YoungquiotG516O2-1O2S\ It was moved bvElkins, seconded bvOh6voz'that the Metropolitan Council: 1. Approve aland exchange atSpring Lake Park Reserve that exchanges 10.OGacres ofregional parkland that is used for agricultural purposes for 8.26 acres of wooded bluff land along Spring Lake within the Mississippi River, as depicted in Attachment A. 2. Approve a master plan boundary amendment to Spring Lake Park Reserve that removes a total of 31.78 acres from the park reserve boundary, including 16.06 acres of existing regional parkland and an adjacent 15.72 acre parcel that is a privately owned inholding, as depicted in Attachment B. Motion carried. 2. 2O15-275Land Exchange Agreement Extension, Cottage Grove Regional Ravine Regional Park, Washington County (Jan YoVngquint 851 602-1029) It was moved by Elkins, seconded by Ch6vez, that the Metropolitan Council approve an amendment to the Land Exchange Agreement between the Metropolitan Council and Washington County for Cottage Grove Ravine Regional Park dated February 20O8.subject tnthe following conditions: Page 1 -61- 49aM 000mc/L EXHIBIT B PAGE 3 ) of 50 Allow an acre for acre land replacement or an equally valuable facility exchange within Cottage Grove Regional Park that is acceptable to the Council to fulfill the remaining obligations of replacing 13.36 acres that were removed from the regional park. Provide a final extension of the expiration date to December 31, 2022, with consequences including, but not limited to, withholding regional parks funding to Washington County if the terms of the agreement are not met by the expiration date. Motion carried. 3. 2015-276 Lake Waconia Regional Park Boundary Amendment, Carver County (Michael Peterka 651 602-1361; Jan Youngquist 651 602-1029) It was moved by Elkins, seconded by Chavez, that the Metropolitan Council approve an amendment to the boundary of Lake Waconia Regional Park to add the 33.77 acre property known as Coney Island as shown in Attachment A. Motion carried. 4. 2015-291 City of Minneapolis Request for a Project Change to the TBRA Grant, Number SG012- 149, for the 4250 Upton Project (Paul Burns 651 602-1106) It was moved by Elkins, seconded by Chavez, that the Metropolitan Council (1) approve a project change for the Tax Base Revitalization Account grant for the 4250 Upton project in the City of Minneapolis, acknowledging a change in the project from ownership to rental apartments, an increase in the number of units, a decrease in the projected increase in net tax capacity and an increase in the number of jobs produced by the project; and (2) authorize the Community Development Director to execute an amendment to Grant No. SGO14-085 reflecting the change. Motion carried. B. Non -consent 5. 2015-292 Livable Communities Act Transit Oriented Development Tax Base Revitalization Account Site Cleanup and Livable Communities Demonstration Account Development Grant Recommendations (Erin Heelan 651 602-1633) It was moved by Elkins, seconded by Letofsky, that the Metropolitan Council (1) award four Livable Communities Demonstration Account Transit -Oriented Development grants as follows, totaling $4,295,000, and (2) authorize its Community Development Division Director to execute the grant agreements on behalf of the Council: Recommended:,t Prc��ects 5 7777 Aaplicant t y \, vq zitu # ppl►lt5VbS y Vt 3 2 btt . ti tY t, ry11LnuP a ;,yt, tta" tetsY�'tty bttt�"^ 103 'tt �, 3ty� to � �';�'�+�.���vltey,. ,'u ttl\t11,m t LCISTOD,,i?veiprnent ht Y, k1 \ V W $2,000,000 Place St. Louis Park Minneapolis Edina 81 81 $395,000 $900,000 Superior Plating G6 West Raymond Avenue St. Paul 74 $1,000,000 Flats Total Recommended (LCDA) $4,295,000 Total LCDA — TOD Available $4,750,000 Total TBRA-TOD Available $1,145,000 Page -2 1 METROPOLITAN COUNCIL -62- EXHIBIT B PAGE of 50 Motion carried. Sr. Planner Erin Heelan presented the grant recommendations with the LCAC chair, Apple Valley Mayor Mary Hamann -Roland. The Community Development Committee members commented on the great projects, but encouraged even more affordable housing is needed. 6. 2015-293 Livable Communities Act Livable Communities Demonstration Account Grant Recommendations (Erin Heelan 651 602-1633) It was moved by Elkins, seconded by Kramer, that the Metropolitan Council (1) award six Livable Communities Demonstration Account grants, as follows, and (2) authorize its Community Development Division Director to execute the grant agreements on behalf of the Council: Youth Link Minneapolis 82 $841,852 Selby -Milton -Victoria Great River Landing Village on Rivoli St. Paul 79 Minneapolis 77 St. Paul 74 $597,000 $500,000 $975,000 Arlington Row St. Louis Park 65 $581,000 Great River Landing Parking Hastings 60 Total Recommended $1,485,000 $4,979,852 Total Available $7,500,000 Motion carried. Sr. Planner Erin Heelan presented the grant recommendations with the LCAC chair, Apple Valley Mayor Mary Hamann -Roland. Community Development Committee member commented she was pleased to see the St Louis Park program. Mayor Hamann -Roland commented the good influence for this project from the former Mayor of St Louis Park. 7. 2015-294 Livable Communities Act Local Housing Incentives Account Grant Recommendations (Paul Burns 651 602-1106) It was moved by Elkins, seconded by Letofsky, that the Metropolitan Council (1) award $2.2 million in Local Housing Incentives Account grants as follows and (2) authorize its Community Development Division Director to execute the grant agreements on behalf of the Council: Rental Housing Proposals Project Cit /A 'licant 66 West Edina Marshall Flats Minneapolis Indian Knoll Manor Mound 72 Cesar Chavez St. Paul Sub -total Rental: Ownership Housing Proposals Page - 3 1 METROPOLITAN COUNCIL _63® 39 y4vu,vvv 36 __ $400,000 16 50 $400,000 40 $400,000 131 50 $1,600,000 EXHIBIT B PAGE 33 of 50 Motion carried. Livable Communities Manager Paul Burns presented the recommendations to the Community Development Committee. The Community Development Committee members remarked the enjoyment in seeing these project recornmendations, especially homeownership. Commenting perpetual, permanently affordable housing is the way to go. 8. 2015-295 Project Based Voucher Award Recommendations (Terri Smith 651 602-1187) It was moved by Elkins, seconded by Letofsky, that the Metropolitan Council approve proposals for Project Based Voucher Assistance (PBV) and authorize staff to execute necessary documents with the U.S. Department of Housing and Urban Development (HUD) and the owners of the projects to assign a total of 68 Vouchers in six (6) projects as follows: 66 West Bluff Creek Apartments Bottineau Ridge Apartments City Number of Number of Targeted Population Units in PBV Units Project Requested Edina 39 39 Supportive Housing Homeless Young Adults Carver 14 3 2 Units - General Occupancy 1 Unit — Long Term Homeless Maple Grove 50 Centennial Hili Chanhassen 65 Indian Knoll Manor Mound 66 Windstone Chaska 92 Townhomes Total Motion carried. 4 Long -Term Homeless 3 2 units — General Occupancy 1 Unit — Long -Term Homeless 16 9 Units - General Occupancy 7 Units — Long Term Homeless 3 2 units — General Occupancy 1 Unit — Long -Term Homeless 68 9. 2015-297 Metro HRA Administrative Plan Revision (Terri Smith 651 602-1187) It was moved by Dorfman, seconded by Kramer, to table this item for a future Community Development Committee meeting, Motion carried. Page -4 1 METROPOLITAN COUNCIL M „Number of City/Applic Number of New Preserved p LHIA Eundmg Project Units" ' Units . Resomrneridation Ivy Estates Forest 6 $150,000 Lake City of Lakes Community Land Trust Minneapoli 20 $150,000 S Homes Within Reach Hennepin 6 $114,000 County Suburbs Twin Cities Habitat for Humanity Multiple 40 $186,000 cities Sub -total Ownership: 46 26 $600,000 TOTAL RENTAL AND 177 76 $2,200,000 OWNERSHIP Motion carried. Livable Communities Manager Paul Burns presented the recommendations to the Community Development Committee. The Community Development Committee members remarked the enjoyment in seeing these project recornmendations, especially homeownership. Commenting perpetual, permanently affordable housing is the way to go. 8. 2015-295 Project Based Voucher Award Recommendations (Terri Smith 651 602-1187) It was moved by Elkins, seconded by Letofsky, that the Metropolitan Council approve proposals for Project Based Voucher Assistance (PBV) and authorize staff to execute necessary documents with the U.S. Department of Housing and Urban Development (HUD) and the owners of the projects to assign a total of 68 Vouchers in six (6) projects as follows: 66 West Bluff Creek Apartments Bottineau Ridge Apartments City Number of Number of Targeted Population Units in PBV Units Project Requested Edina 39 39 Supportive Housing Homeless Young Adults Carver 14 3 2 Units - General Occupancy 1 Unit — Long Term Homeless Maple Grove 50 Centennial Hili Chanhassen 65 Indian Knoll Manor Mound 66 Windstone Chaska 92 Townhomes Total Motion carried. 4 Long -Term Homeless 3 2 units — General Occupancy 1 Unit — Long -Term Homeless 16 9 Units - General Occupancy 7 Units — Long Term Homeless 3 2 units — General Occupancy 1 Unit — Long -Term Homeless 68 9. 2015-297 Metro HRA Administrative Plan Revision (Terri Smith 651 602-1187) It was moved by Dorfman, seconded by Kramer, to table this item for a future Community Development Committee meeting, Motion carried. Page -4 1 METROPOLITAN COUNCIL M EXHIBIT B PAGE 3� of 50 The Community Development Committee had questions regarding the two minor revisions to the Administrative Plan related to the Project Based Voucher program. Questions were raised from the Community Development Committee regarding the notification of the policy change and the mailing process. Committee members inquired as to how persons without an address are notified. Ms. Smith responded supportive services assist with the notification of the policy change. INFORMATION Strategic Land Acquisition Discussion (Beth Reetz 651 602-1060) Community Development Director Beth Reetz presented information to the Community Development Committee on the strategic land acquisition and the Twin Cities Land Bank. The committee members asked for the differences in this draft and the previous submission. A handout was given to the committee members regarding suggestions and investment guidelines. (Copy of handout at the end of the minutes) Questions were raised regarding geographic equity, and percentages in proportion to population. Also, the language of the guidelines does not indicate any priority to transit oriented development. This goal will not hinder development but grant more flexibility. The use of funds was discussed, revolving and long term acquisitions for other projects. ADJOURNMENT Business completed, the meeting adjourned at 5:45 p.m. Michele Wenner Recording Secretary Page - 5 1 METROPOLITAN COUNCIL -65- EXHIBIT PAGE 3J of 50 (HANDOUT- distributed at 11/16 CDC meeting) Twin Cities Community Land Bank (Land Bank) Investment Guidelines Purpose The Metropolitan Council strategic acquisition grant funds will be invested in the Twin Cities Community Land Bank as a pilot project for the acquisition of strategic real estate sites for the creation of affordable housing for two main purposes: to provide access to stable, quality housing in communities of low opportunity and to expand housing options in areas of high opportunity, as those terms are described in the Council's Housing Policy Plan, The Metropolitan Council is seeking this partnership with the Land Bank because of its ability to leverage additional investment and because of its ability to act quickly and nimbly to acquire sites. None of the Metropolitan Council funding for this program shall be used to increase the concentration of poverty, as defined in the Council's Housing Policy Plan and Choice, Place and Opportunity Report, in any area of the Region. Guidelines The Land Bank will use the grant funds: 1. In location -efficient sites within the 7 -county metropolitan region, and when appropriate, allocating at least half of the funds from the Metropolitan Council: (a) to opportunities in the counties other than Hennepin and Ramsey, or, (b) alternating the investment of such funds between an opportunity located in either the counties of Hennepin or Ramsey and an opportunity in the counties other than Hennepin and Ramsey. 2. Sites are eligible whether they have or don't have good access to transit as described in the Council's Transportation Policy Plan. 3. For developments that include housing affordable to households earning at or below 80% of AMI, with a preference for units 50% of AMI and below, as identified in the Metropolitan Council's Housing Policy Plan. 4. For both owner -occupied housing and rental housing. 5. As revolving funds, with the expectation of repayment to allow reinvestment. Reporting Requirements The Land Bank will provide semi-annual reports for a period of five years on: 1. Invested funds. Property and project information containing location and project descriptions, including anticipated affordability and type of housing. 2. Leveraged funds. Amounts and sources of capital leveraged from grant funds. 3. Review of Pilot. Challenges, successes, learning opportunities and recommendations for changes and enhancements to the program. Page -6 1 METROPOLITAN COUNCIL -66_ EXHIBIT B PAGE _ 3_b of 50 Wells Fargo Community Lending and Investment February 12, 2016 Mr. James Lehnhoff and Mr. Blake Hopkins Aeon 901 North P Street Minneapolis, Minnesota 55401 Re: Indian Knoll Apartments, Mound, MN Dear Messrs. Lehnhoff and Hopkins: Wells Fargo Community Lending and Investment is pleased to offer you the following Term Sheet based on information received to date. We appreciate the opportunity to work with you as a provider of tax credit equity and related debt products. Investment Entity: IKM Limited Partnership (the "Partnership"), with to be determined taxable, single purpose remote General Partner (s) having a .01% ownership interest, and Wells Fargo Bank (its affiliate or designee), as Investor Limited Partner (hereafter "Wells Fargo") with a 99.99% ownership interest in the Partnership. Project Indian Knoll Apartments, an affordable, general occupancy apartment complex to NamelDescription: be located in Mound, Minnesota consisting of the following: # Units Unit Type Rent 9 OBRA BA -30% AMI rents/HHI $430 5 1BR/1BA -30% AMI rents/HHI $487 35 IBR/IBA -30% AMI rents/ HHI $487 2 IBR/1BA-30% AMI rents/HHI $487 1 2BR/lBA-30% AMI rents/HHI $585 4 2BR/1BA-60%AMI rents/HHI $1,000 6 3BR/2BA-30% AMI rents/HHI-LTH $675 1 3BR/2BA-30% AMI rents/HHI-LTH $544 3 3BR/2BA-60% AMI rents/HHI $1,220 66 Totals **rents exhibited above do not include any subsidy. The property will have, at minimum; a 15 year project based section 8 /RAD/811 contracts executed at partnership closing. -67- Page 1 of 15 EXHIBIT B PAGE 7 of 50 Wells Fargo Community Lending and Investment LIHTC Tax Credits $6,489,500 x 99.99% _ $6,488,851 Available: LIHTC Tax Credit $1.0750 Price: Total Capital $6,975,515 Contribution: A) Capital Contribution #1: $1,395,103 (20.00%) Available on a construction draw basis at closing - $400,000 of Development Fee as described below, anticipated on or before September 1, 2016. B) Capital Contribution #2: $4,953,203 (71.01 %) Available at the latter of Certificate of Occupancy on all units, evidence of lien free completion, funding of MHFA LMIR Loan, accountants' cost certification and January 1, 2018. This Capital Contribution, along with the funding (s) of the MHFA LMIR Loan, $300,000 of Hennepin HRA, $92,787 of Flexible Financing, $714,056 of PARIF, $322,737 of Met Council LHIA and $116,001 of Sales Tax Rebate, will be used first to pay off the Wells Fargo Construction/Bridge Loan and second to fund $250,000 of Development Fee as described below. C) Capital Contribution #3: $627,209 (8.99%) Available at the latter of Stabilization which should be defined as the date the following events should have occurred: (i) the Partnership's achievement of a 1.20x Debt Service Coverage Ratio ("DSCR") and 94.50% Occupancy for at least 90 consecutive days, which ratio shall be calculated based on the parameters set for below (Other Notes and Conditions Item G), provided that, in all events the Partnership's calculated DSCR for the entire 15 year Compliance Period (based on trending income at 1.62% per annum and operating expense at 3% per annum, excluding replacement reserves) shall be no less than 1.15x DSCR, (ii) Permanent Loan Conversion (if applicable); and (iii) the Partnership's receipt of executed form(s) 8609; receipt of a satisfactory Income Qualification / Initial Tenant File Audit for 100% of the LIHTC Units, and April 1, 2018. These funds will be used first, to fund the $227,209 Operating Reserve and second to pay $400,000 of the Development Fee as described below. -68- Page 2 of 15 EXHIBIT B PAGE 3 S of 50 Wells Fargo Community Lending and Investment Developer Fees: Developer Fees are estimated at $1,050,000 of which approximately $0 is projected to be deferred and paid through cash flow (subject to further underwriting consideration based on MHFA / State requirements). The General Partner agrees to make a special capital contribution to the Partnership, equal to any unpaid balance of the deferred portion of the Developer Fees, if such portion has not been fully paid within 13 years from the date of Construction Completion. Notwithstanding anything to the contrary contained in this Term Sheet or in the Development Fee Agreement, the Developer Fee, or any rights thereto, shall not be assigned or transferred, directly or indirectly, to any third party, other than to Wells Fargo in connection with the Construction Loan. Development Fees will be paid as followed: A) Capital Contribution #1: $400,000 13) Capital Contribution #2: $250,000 C) Capital Contribution #3: $400,000 Incentive 90% of Cash Flow to the General Partner. Total Incentive Management Fee Management Fee: and Property Management Fees will be capped at 12% of Effective Gross Income (based on actual income, expenses and vacancy); subject to tax counsel approval. Asset Management Starting in January 2018 annual asset management fee to Wells Fargo is $7,500 Fee: with a 3% annual increase; payable per the cash flow schedule below. GPAsset Starting in January 2018 annual asset management fee to General Partner is Management $7,500 with a 3% annual increase; payable per the cash flow schedule below. Fee: Subject to approval of lenders and Wells Fargo tax counsel and review of services provided by the GP. -69- Page 3 of 15 EXHIBIT B PAGE I of 50 Wells Fargo Community Lending and Investment Cash Flow Split: Cash FIow shall be distributed as follows: A) To Investor Limited Partner in payment of any amounts due as a result of any unpaid Credit Adjuster Amount. B) To Investor Limited Partner in payment of Asset Management Fee or any unpaid Asset Management Fee. C) To maintain / replenish the $227,209 Operating Reserve D) To payment of any Deferred Developer Fee E) To payment of any Operating Deficit Loans or GP Partnership Loans. F) Payment of the GP Asset Management Fee or any unpaid GP Asset G) Management Fee Payment on any soft loan obligations; subject to Wells tax counsel review H) Of the remaining balance, ten percent (10%) shall be distributed to the Investor Limited Partner; I) To payment of Incentive Management Fee; J) Any remaining cash to General Partner Residual Split: Any gain upon sale or refinancing shall be distributed as follows: A) To Investor Limited Partner in payment of any amounts due because the Actual Credit is less than the Project Credit, or there has been a recapture of Credit. B) To Investor Limited Partner for payment of any unpaid Asset Management C) Fees. To maintain/replenish the Operating Reserve, as required per a refinancing, in the amount of $227,209, unless the initial compliance period has expired. D) To the Investor Limited Partner for payment of any Exit Taxes. E) Toward the payment of any Deferred Developer Fees F) To the General Partner for payment of any Unpaid Partnership Loans G) Payment on any soft loan obligations; H) To General Partner, any remaining GP Asset Management Fees I) 90% to General Partner. J) 10% to Wells Fargo. Replacement $450 per unit per year, increasing 0% annually; amount subject to Wells Fargo Reserves: final underwriting; including review of the 15 year Replacement Reserve analysis Development Operating Reserve — At the Third Capital Contribution Wells Fargo will fund the Reserves: subject reserve in the amount of $227,209 (subject to further underwriting; must be six months of debt service and operating expenses including replacement reserve funding). This account will be held at Wells Fargo. Any withdrawals from this reserve are subject to the approval of Wells Fargo. At the end of the 14`h year of compliance, if the property audit exhibits a 1.15x DSCR, HAP contract(s) Page 4 of 15 -70- EXHIBIT B PAGE 4�0 of 50 Wells Fargo Community Lending and Investment are current and property is at 94.5°/x, any funds remaining in this Reserve will be distributed through the cash flow waterfall, subject to Wells Fargo tax counsel opinion. Sinkiniz Fund Reserve - If the subject property is unable to produce a 1.20x DSCR and maintain a 1.15x DSCR for the entire compliance period on the underwriting assumptions noted in this term sheet at the Final Capital Contribution, and/or the Permanent Lender will not allow a resize, the Investor Limited Partner, at its sole discretion, may use a portion of the final equity contribution to fund a Sinking Fund Reserve. This Reserve will be calculated by adding the "income" needed over the 15 year compliance period to the annual NOI that will result in the property maintaining a 1.15x DSCR for the entire compliance period. In the event that the Investor Limited Partner's Final Installment ("Stabilization") is not sufficient to fund the Sinking Fund Reserve in an amount equal to the EGI Shortfall (as hereinafter defined), the General Partner shall be obligated to fund to the Partnership the amount needed to fund the Sinking Fund Reserve up to such required amount. These funds will be held in an interest bearing Wells Fargo account. If the property achieves a 1.15x DSCR based on the second full operating year audit and subsequent annual audits (based on actual income/expenses), 1/1 2th of the reserve maybe released annually per the cash flow requirements. Any remaining funds at the end of the compliance period shall be released to the General Partner. The funding of the Sinking Fund and testing will occur only at the Final Capital Contribution. Replacement Reserve — initial funding of the property's Replacement Reserve account in the amount of $50,000 at closing. Wells Fargo Development Reserve - Wells Fargo's current budget / pay -in structure reflects $339,660 in additional equity that may be deposited into a Development Reserve at the First Capital Contribution Payment. Wells Fargo and the developer/owner will mutually agree on how these funds will be disbursed; i.e. pay down of soft debt, other construction/development costs, etc. Obligations of the Development Completion Guarantv: The General Partner will guarantee General Partner and completion of construction of the Project substantially in accordance with plans Guarantor(s): and specifications approved by Wells Fargo, including, without limitation, a guaranty (i) to pay any amounts needed in excess of the construction loan and other available proceeds to complete the improvements, (ii) of all amounts necessary to achieve permanent loan closing, and (iii) to pay any operating deficits prior to the conclusion of Project construction. The General Partner will provide copies of each draw request, change orders and all supporting documentation to Wells Fargo simultaneously with submissions to Page 5 of 15 -71- EXHIBIT B PAGE /I of 50 Wells Fargo Community Lending and Investment the construction lender. Wells Fargo shall have the right to approve change orders in excess of amounts to be determined during due diligence. The construction contract shall be a fixed or guaranteed maximum price contract and the general contractor shall be bonded in a manner satisfactory to Wells Fargo or a letter of credit shall be provided in a minimum amount set during the due diligence review. Operating Deficit Guaranty: The General Partner agrees to provide unlimited operating deficit loans to the Partnership until all conditions of the capital contributions have been satisfied. Thereafter, the guarantee will be reduced to $227,209 minimum of six months of operating expenses, replacement reserves and must pay debt service), for at least 60 -months. At the end of the 60 -month period, the Operating Deficit Guaranty will be released, provided the Operating Reserves are fully funded, the project averages 1.15x DSCR (actual income/expenses) better on all must pay debt for any previous 12 month period, or any subsequent 12 -month period, and the project is projected to maintain a DSCR of 1.15x for the entire 15 year Compliance Period (based on trending income at 1.62% per annum and operating expense at 3% per annum, including replacement reserves at 0016). The release criteria will be attested and documented by the Partnership Accountants and delivered to Wells Fargo or its successors. Tax Credit Adjusters: The General Partner and the Guarantors will indemnify Wells Fargo for any reduction, recapture, or late delivery of the Low Income Housing Tax Credits in amounts determined as described below. The Partnership Agreement contains Credit Adjuster provisions designed to preserve Wells Fargo's yield in the event Credits are not delivered as projected, as well as an upward credit adjuster for additional or faster delivery of credits capped at $250,000. The projected aggregate credits at equity closing will be determined by the projected qualified basis of the Partnership multiplied by the most recently published applicable percentage for the 70% present value credit or the credit rate locked with the Agency/Authority. If an event occurs which affects the delivery of Federal LIHTC aggregate tax credits (e.g., increase/shortage in basis in accountants final cost certification, or shortage in amount of Tax Credits allocated by the Agency/Authority in IRS Forms 8609), then the Partnership Agreement will provide for a return of capital, to Wells Fargo, net of any tax consequences, in an amount reduced by the net credit price to the Partnership ($1.0750) times the difference between (i) the projected aggregate tax credits, less (ii) the adjusted aggregate tax credits. The adjustor due for any increase in eligible basis will be capped at $250,000. -72- Page 6 of 15 EXHIBIT B PAGE q.2 of 50 Wells Fargo Community Lending and Investment If an event occurs, which affects the timing and delivery of Federal LIHTC tax credits (e.g., faster/lease up slower than projected) allocable to Wells Fargo in years 2017, then the Partnership Agreement will provide for a return of such capital, to Wells Fargo, net of any tax consequences, in an amount reduced by (x) the net credit price ($1.0750) times the difference between (i) the shortfall in projected current year tax credits, less (ii) the net present value of the shortfall in projected current year tax credits for a 10 year period at a discount rate of 10%. As noted above the upward timing adjuster will be capped at $250,000. There may be adjustment events occurring during the compliance period not considered or described in the aforementioned paragraphs; subject to limitations below. In the event that the actual amount of tax credits claimed by Wells Fargo, is less than the amount specified, then the General Partner shall reimburse Wells Fargo, on a dollar for dollar basis, for each lost dollar of tax credits plus any resulting penalties, taxes due, or tax consequences. Similarly, if there is a recapture of tax credits (except from the sale or transfer of Wells Fargo's interest in the Partnership), the General Partner shall indemnify Wells Fargo against any tax credit recapture liability incurred (including interest, penalties, tax effects, or and any reasonable related legal or accounting costs). The obligations of the General Partner(s) set forth in the Partnership Agreement, including but not limited to those described above, shall be guaranteed by the General Partner(s), Developer (s), Aeon, and / or Entities/Individuals considered appropriate by Wells Fargo. Tax Credit Recapture will be limited to $1,050,000 once the partnership evidences: 1. receipt of executed 8609's, 2. receipt of a satisfactory Income Qualification / Initial Tenant File Audit for 100% of the LIHTC Units, 3. Receipt and acceptance of first year tax return exhibiting credits being delivered, and 4. All Capital Contributions have been made. Until these items are received the tax credit guaranty will be unlimited. -73- Page 7 of 15 EXHIBIT B PAGE '� 3 of 50 Wells Fargo Community Lending and Investment Other Notes and Wells Fargo reserves the right to adjust the Capital Contributions herein based on Conditions: diligence of the following information: A) The General Partner must have a firm commitment for fixed-rate permanent financing with terms, conditions and Lender acceptable to Wells Fargo. The amounts assumed for this Term Sheet are as follows: Wells Fargo Construction/Bridge Loan - Loan proceeds available at closing on a construction draw basis of up to $6,770,784 — subject to Wells Fargo final underwriting. This loan will be paid offwith proceeds from the Second Capital Contribution, funding of the MHFA LMIR Loan and soft loan (s) funding requirements as described above. Closing, on the purchase of the low income housing tax credits is conditioned upon closing on a Wells Fargo Construction Loan. 2. Permanent Loan —A MHFA LMIR Permanent loan of approximately $522,000 will be initially underwritten to an 4.750% (not inclusive of 25 bps MIP), 30 year term, amortized over a period of at least a 360 months and require a debt service coverage ratio for all must pay debt of at least 1.20x for conversion testing and evidence 1.15x DSCR for the entire compliance period on all must pay debt— based on 1.62%/3% income/expenses (incl. RR funding) trending Funding of the Permanent Loan at/around Certificate of Occupancy. Terms on the Permanent Financing must be acceptable to Wells Fargo (i.e. ability to resize at conversion, notice/cure rights, ability to transfer LP interest, no debt service coverage covenants, etc.). The permanent loan conversion currently assumes that the property will be underwritten at a 5.5% vacancy rate and with per unit per annum expenses of $6,370 (inclusive of the $450 pupy Replacement Reserve Funding), or as determined during the due diligence period based upon Wells Fargo's underwriting. 3. Seller Loan — $2,535,000 at 5.25% interest, 30 year term / 30 year Amortization. Subject to Wells Fargo tax counsel's review. Financing may be payable out of available cash flow; to be determined during underwriting. Funds available at partnership closing. 4. Hennepin County HRA Loan- $300,000 at 0.00% interest, 30 year term / 30 year Amortization. Subject to Wells Fargo tax counsel's, financing may be payable out of available cash flow; to be determined during underwriting. Funds available at Second Capital Contribution. 5. MHFA Flexible Financing Loan- $115,000 at 0.00% interest, 30 year -74- Page 8 of 15 EXHIBIT B PAGE �q of 50 Wells Fargo Community Lending and Investment term / 30 year Amortization. Subject to Wells Fargo tax counsel's, financing may be payable out of available cash flow; to be determined during underwriting. Funds available: $22,213 at partnership closing and $92,787 at Second Capital Contribution. 6. PARIF Loan- $885,000 at 0.00% interest, 30 year term / 30 year Amortization. Subject to Wells Fargo tax counsel's, financing may be payable out of available cash flow; to be determined during underwriting. Funds available: $170,944 at Closing and $714,056 at Second Capital Contribution. 7. Met Council LHIA- $400,000 at 0.00% interest, 30 year term / 30 year Amortization. Subject to Wells Fargo tax counsel's, financing may be payable out of available cash flow; to be determined during underwriting. Funds available: $77,263 at Closing and $322,737 at Second Capital Contribution. 8. Existing Reserves - $65,000 available at Closing 9. Sales Tax Rebate - $116,001— available at Second Capital Contribution to pay Development Fee; if not will be funded by GP Please note that a reduction in the loan amounts, interest rates, benefits or losses, change in capital contribution schedule or linj material change that increases the amounts of the deferred Developer Fee (i.e. Budget increases) could result in (i) lower creditpricing, (ii) a reduction ofDeveloperFeespaid at closing or (iii) extended timing for the payment of capital contributions. B) Partnership Closing contingent upon receipt, review and approval of environmental reports including testing for lead based paint, radon testing (if applicable at completion and prior to occupancy of the units), asbestos and black mold as applicable, geological reports, geotechnical reports, structural integrity report, site inspection, appraisal and Wells Fargo market study supporting lease -up schedule and underwritten achievable restricted rents noted in the market study must provide a minimum rental advantage relative to market rental rates of 10% (debt to be sized to this rent structure), acceptable utility allowance schedule, for acquisition / rehabilitation Wells Fargo will require a Capital Needs Assessment along with a 15 year Replacement Reserve Analysis (if applicable), personal and/or corporate financial statements, Real Estate Schedules and resumes on the General Partner, general contractor and guarantor(s), management company review, revised construction budgets/timelines, construction contract, GC Payment and Performance Bond or 10% Letter of Credit, development budget that exhibits 5% hard cost -75- Page 9 of 15 EXHIBIT B PAGE qS of 50 Wells Fargo Community Lending and Investment contingency for new construction or 10% hard cost contingency for acquisition / rehab (construction contingency must be held outside the GC Contract and funded, if needed, with either debt and/or equity proceeds), for properties with gas appliances and/or attached garages Wells Fargo will require carbon monoxide detectors in all units, 15 year operating cash flow review (i.e. AMI and rent/expense trending; must maintain a 1.15x DSCR during the 15 year compliance period- based on 1.62%/3% income/operating expense (incl. RR funding at 00) trending, etc.). C) Prior to partnership closing Wells Fargo will engage an inspecting engineer to review the project's plans/specs and cost and to provide monthly construction inspections; including "reconciliation" of the plans/specs with any Green requirements from state housing agency or other lending sources. Wells Fargo may accept the construction lender's inspecting engineer subject to approval. Wells Fargo will pay up to $22,300 for the cost of the plan/cost review and monthly construction inspections • any additional costs will be paid by the partnership. If an acceptable appraisal is not required by the lender, the cost of an appraisal will also be paid by the partnership. All other costs of the Investor (including updated market study and legal expenses capped at the amount below) will be paid by Wells Fargo. D) The Capital Contributions are based on a Projected Credit Allocation to Wells Fargo as follows: Year Credits 2017 Federal LIHTC $202,367 2018-2026 Federal LIHTC $648,885 2027 Federal LIHTC $446,518 E) To help fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person or corporation who opens an account and/or enters into a business relationship. F) If the project has soft debt financing, Wells Fargo will require a residual analysis that shows that any soft debt financing will be repaid at the end of the respective soft debt term. Wells Fargo will pay for this analysis. G) The Partnership Agreement will contain provisions requiring Investor approval to convert to Permanent Loan/Final Endorsement and Investor approval of the 1.20x DSCR test on all must pay debt for the Final Capital Contribution based on the following conditions: • Subject to final underwriting, or Investor Approval at the time of -76- Page 10 of 15 EXHIBIT B PAGE' of 50 Wells Fargo Community Lending and Investment stabilized operations as described in Capital Contribution #3, the annualized DSCR must be no less than 1.20x at the time of testing and exhibit a projected DSCR on not less than 1.15x in any year of the 15 year Compliance Period, based on the underwriting parameters, and rates of escalation, as set for below • Size of the permanent debt, which requires periodic payments, may not be in excess of total amount of Permanent Debt Sources noted above — $522,000. • Subject to final underwriting, rents will assume to escalate at 1.62% per year; any rent concessions will be spread by the amount of such concessions evenly over term of lease • Subject to final underwriting, vacancy and collection loss for residential income will be the greater of actual or 5.5% • Subject to final underwriting, Other Income will be the lesser of $3,000 per year or actual other income (subject to a 5.5% vacancy/collection loss). • Subject to final underwriting, annual operating expenses will be underwritten at the greater of (i) Actual annual operating expenses (estimated at conversion), or (ii) $6,370 per unit per annum ("PUPA"), inclusive of replacement reserves of $450 PUPA. • Subject to final underwriting, expenses shall escalate 3% per year H) Ownership and financial structure (including all set aside requirements that may be subject to any housing laws) is subject to review and approval by Wells Fargo's underwriter and tax counsel. I) Wells Fargo requires that the property management company have a demonstrated history ofpositive performance and experience with multi -family and Low -Income Tax Credit properties. Wells Fargo reserves the right to approve the property management firm selected, and their property management agreement. The management agreement shall have an initial term of one year and shall be renewable annually thereafter. If the management agent is affiliated with the General Partner, the management agent shall provide for a deferral of up to '/z of the management fee in the event that the property does not generate positive cash flow. J) The Accountants for the Partnership shall be Eide Bailly, MUCR, or another accounting firm approved by Wells Fargo. The Accountants shall prepare tax and financial reports as set forth in the Partnership Agreement, including the final cost certification. K) For developments that have rental subsidy and/or supportive service contracts; -77- Page 11 of 15 EXHIBIT B PAGE of 50 Wells Fargo Community Lending and Investment Not a Binding Contract: The purpose of this Term Sheet is to generally describe an investment Wells Fargo is considering. This Term Sheet is not a commitment to invest nor a commitment to be bound by the terms proposed herein, and no commitment to invest will exist prior to the negotiation and execution of a mutually satisfactory Operating Agreement or Partnership Agreement. Except with respect to confidentiality provisions and reimbursement obligations contained herein, it is expressly understood and the parties expressly agree that this Term Sheet does not create a legally binding agreement as to any of the parties. In addition, the terms contained herein are subject to change upon the completion of the Bank's due diligence, and as maybe required pursuant to the Bank's applicable investment criteria, credit policies, or underwriting standards as may be in effect from time to time, along with other factors relevant to making an investment decision. Except with regard to the confidentiality obligations, this Term Sheet does not the survive Closing of the transaction. This Term Sheet shall not limit or modify in any way the terms and conditions ultimately contained in a Partnership Agreement or related agreements. Confidentiality: The recipient of this Term Sheet agrees to keep all terms of this Term Sheet confidential, and shall not disclose the terms of this Term Sheet to any third party other than their attorneys, accountants and tax advisors, who must in turn treat that disclosure as confidential. Notwithstanding the foregoing, nothing contained herein shall be deemed to limit in any way the disclosure of the tax treatment or tax structure of the transaction to third parties. -78- Page 14 of 15 EXHIBIT B PAGE ' tS of 50 Wells Fargo Community Lending and Investment the transaction described herein has not closed by the Closing Date, Wells Fargo may, in its sole and absolute discretion, elect to extend the Closing Date. In the event that Wells Fargo extends the Closing Date, in addition to any other conditions or requirements that may be imposed at that time, Developer/Guarantor(s) agrees that it will pay any and all costs and expenses associated with the Legal Review in excess of the Fixed Fee Amount. For Projects With A) Wells Fargo assumes there will be a taxable subsidiary in order to preserve Non -Profit Partners: 27.5 year depreciation and avoid disqualified allocations B) An operating reserve will be required — $227,209, yet subject to further underwriting. C) Wells Fargo will permit the sale of the project consistent with the terms of the right of first refusal and option in accordance with Internal Revenue Code Section 42 (i) (7). Process: When Wells Fargo receives an executed copy of this proposal, a Due Diligence Period will begin. The Due Diligence Period will be the greater of (i) a period not to exceed 30 business days or (ii) a period of not more than 10 days after receipt of the last due diligence item (as tracked by Wells Fargo's Due Diligence Checklist), during which time Wells Fargo will conduct a Due Diligence review and negotiate with the General Partner, in good faith, the open terms, if any, of this proposal. The Due Diligence review may include such matters as the verification of factual representations made by the General Partner; a review of the Project documents; site visit; an evaluation of the General Partner's financial capacity to perform under the terms and conditions of this proposal and the Partnership Agreement; the experience and expertise of the General Partner, Guarantor(s), Contractor and Management Agent; the project area market; the construction schedule; the residual potential of the property; and other relevant factors. Prior to the termination of the Due Diligence Period, Wells Fargo will approve ("Approval'), approve with conditions, or reject the terms and structure of the proposed investment. Upon Approval, both parties will reaffirm their intent to enter into the Partnership Agreement upon the terms specified in this proposal. If Wells Fargo reaffirms this proposal prior to the termination of the Due Diligence Period, but the General Partner has offered the Interest to another purchaser, the General Partner will be responsible for reimbursing Wells Fargo for all third -party costs incurred in conducting the Due Diligence Review, including, but not limited to, legal fees, a market study, an appraisal, a background investigation and site visits. -79- Page 13 of 15 EXHIBIT B PAGES of 50 Wells Fargo Community Lending and Investment (i.e. ACC, Section 8, RAD, 811 state/local rental assistance, MOU's, etc) those contracts may be in place for the entire 15 year compliance period. Partnership Closing will be subject to receipt of an acceptable subsidy/ service contract (s). The Partnership will partner with local service providers to provide referral and supportive service coordination for the set aside units. The cost of providing these services may be a Partnership expense and will be subject to further underwriting. MHFA documents (LURA and Loan Documents) will allow the Partnership to petition MHFA to rent the LTH units to non -LTH households at 50% AMI rents if tenants are not available and/or if supportive services/rental subsidies cannot be adequately funded. Subject to further underwriting, the General Partner/Guarantors will guaranty any expenses associated with the LTH set aside and supportive services. L) Pricing is subject to Full Partnership Closing occurring before or on November 1, 2016. If closing occurs after this time Wells Fargo reserves the right to reasonably adjust pricing and terms. If the General Partner/Developer/Guarantor does not agree to the revised reasonable pricing/terms or is unable to close the transaction for any other reason, other than for an action or inaction on the part of Wells Fargo, the General Partner/Developer/Guarantor would be required to reimburse Wells Fargo for all reasonable third party costs incurred (see below). M) Please note the attached proforma pages that were used in preparing this Tenn Sheet. As noted above the capital contributions are date sensitive. Any changes in the dates, financing structure and corresponding lease up schedule may require an adjustment in pricing. N) Wells Fargo will require that any lender subordinate their mortgage to any cross use/cross access agreements with subject property — subject to Wells Fargo counsel review. O) All partnership accounts will be held with Wells Fargo, except those required to be held by first lender. P) The parties hereto agree that the transaction described herein is anticipated to close on or before November 1, 2016 (the "Closing Date"). Wells Fargo will engage a third -party legal review of documentation associated with the transaction (the "Legal Review"), which review will not commence until at least 70% of the items on the Due Diligence Checklist are received and will not conclude until all noted items are received and approved. Wells Fargo has budgeted and will pay up to $80,000 (the "Fixed Fee Amount") for expenses associated with the Legal Review. The Partnership/Guarantors will be responsible for any costs exceeding the Fixed Fee Amount. If for any reason -80- Page 12 of 15 EXHIBIT B PAGE of 50 Wells Fargo Community Lending and Investment Expiration: This Term Sheet shall expire on February 18, 2016, unless re -affirmed by Wells Fargo. Again, thank you for your time and we appreciate the opportunity to work with you. Very truly yours, i Daniel G. Metz Senior Vice President, Tax Credit Investments Group Wells Fargo Community Lending and Investment Agreed and Accepted this Day: By: ... Date: The purpose of this Term Sheet is to generally describe an Investment Wells Fargo Bank is considering, These terms are subject to change upon the completion of the Bank's Due Diligence, and as may be required pursuant to the Bank's applicable investment criteria, credit policies, or underwriting standards as may be in effect from time to time, along with other factors relevant to making an investment decision. These terms may not be changed or otherwise modified orally, This Term Sheet does not survive Closing of the transaction. This correspondence is not a commitment to invest, and no commitment to invest will exist prior to the negotiation and execution of a mutually satisfactory letter of Intent and Partnership Agreement. Page 15 of 15 M.