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
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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.
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y
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"_5,99
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311,1
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32,760
35,175
37,390
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27,720
31,201)
34,64t}
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27,315
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*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-
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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
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EXHIBIT B PAGES of 50
Attachment A Page 5 oo5
EXHIBIT B PAGE /� of 50
}
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('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.
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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.
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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
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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
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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.
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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
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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.