2018-09-11 CC Agenda PacketMISSION STATEMENT: "The City of Mound, through teamwork and cooperation, provides, at a
reasonable cost, quality services that respond to the needs of all citizens, fostering a safe, attractive
and flourishing community."
CONCURRENT SPECIAL MEETING AGENDA
MOUND HOUSING AND REDEVELOPMENT AUTHORITY
AND MOUND CITY COUNCIL
TUESDAY, SEPTEMBER 11, 2013 AT 6:00 P.M.
MOUND CITY COUNCIL CHAMBERS
CENTENNIAL BUILDING
5341 MAYWOOD ROAD, MOUND, MN
Call to Order
2. Approval of the agenda, with any amendments
3. Council Action: Approve minutes:
- August 15, 2018 concurrent meeting 1 -6
4. HRA Action: Approve minutes:
- August 15, 2018 concurrent meeting 1 -6
5. Eric Hoversten, City Manager and Public Works Director, 7-72
requesting discussion on a purchase and development agreement
with Mound Harbor, LLC to build a townhome development in
the Mound Harbor District and requesting the following actions:
a. HRA Action: Action on a resolution providing approval for conveyance 40
of land in Mound Harbor District to City of Mound
b. Council Action: Action on a resolution approving purchase and 41
development agreement with Mound Harbor, LLC
6. Adjourn
This is a preliminary agenda and subject to change. The City Council and NRA will set a final agenda at the meeting.
More current meeting agendas may be viewed at City Hall or at the City of Mound web site: www.cityofmound.com.
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August 15, 2018
The Mound City Council and Mound Housing and Redevelopment Authority in and for the City of
Mound, Minnesota, met in concurrent special session on Wednesday, August 15, 2018, at 6:00 p.m. in
the council chambers of the Centennial Building.
Members present: Mayor/Chair Mark Wegscheid, Council Members/Commissioners Kelli Gillispie,
Jennifer Peterson, Jeff Bergquist, Ray Salazar
Members absent: None
Others present: City Manager and Director of Public Works Eric Hoversten, Finance
Director/Clerk/Treasurer Catherine Pausche, Community Development Director Sarah Smith,
Administrative Assistant Rebecca Kress, Tom Bakritges, TQ White II, John Smyth, Robert Sandom,
Scott Gates, Rick Manion, Joe Harrison, Cate Fossing, Sheri Buesuter, Bob Stevens, and Ann Eberhart
1. Open meeting
Mayor/Chair Wegscheid called the meeting to order at 6:00 p.m
2. Approve agenda
MOTION by Salazar, seconded by Bergquist, to approve the agenda. All voted in favor. Motion
carried.
3. Council Action: Approve minutes:
-March 13, 2018 concurrent meeting
MOTION made by Salazar, seconded by Peterson, to approve the March 13, 2018 concurrent meeting
minutes. All voted in favor. Motion carried.
-July 24, 2018 concurrent meeting
MOTION made by Salazar, seconded by Bergquist, to approve the July 24, 2018 concurrent meeting
minutes. All voted in favor. Motion carried.
4. HRA Action: Approve minutes:
- March 13, 2018 concurrent meeting
MOTION made by Salazar, seconded by Peterson, to approve the March 13, 2018 concurrent meeting
minutes. All voted in favor. Motion carried.
-July 24, 2018 concurrent meeting
MOTION made by Salazar, seconded by Peterson, to approve the July 24, 2018 concurrent meeting
minutes. All voted in favor. Motion carried.
5. Catherine Pausche, Director of Finance & Admin Services, requesting discussion on a
purchase and development agreement with Mound Harbor, LLC to build a townhome
development in the Mound Harbor District and requesting the following actions:
Catherine Pausche, Director of Finance & Admin Services, presented Tom Bakritges who is the Vice
President of Land Development for Homestead Partners. Bakridges stated that Homestead Partners is
a residential land development firm that is affiliated with JMS Custom Homes. Bakritges said the
Mound Harbor townhome development will create a synergy and will maintain the connection between
the downtown businesses and the lake area. Bakritges went on to describe the proposed site plan,
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Concurrent City Council/HRA Meeting Minutes—August 15, 2018
which includes 2.3 acres of the 6 acres available in the area, or about 38% of the total area. Bakritges
pointed out that there will be considerable green space kept available adjacent to the townhomes
including an area for a possible restaurant. Bakritges stated that the project is for 21 townhomes,
removal of Auditors Road, with the townhomes orientated to face either green space or the lake area.
All garages would be facing inward with numerous pedestrian connections allowing for walkability to
neighboring businesses and ammenities. This development would target active adults and each
property would include 2 parking stalls with an option for a third tandem garage. There would also be
11 guest parking stalls around the area. Bakritges said the time line would include 3 years of actual
construction between 2019 and 2022 assuming that the land use approval process begins in
September 2018. The goal is to start construction in March of 2019 and have a model in the Parade of
Homes by August 2019.
Bakritges added that the most significant demographic trends affecting demand for housing in Mound
include the baby -boom generation/empty-nesters that are looking for greater flexibility and relief from
exterior home maintenance and young to mid -age households looking for maximum flexibility that a
rental option can provide, but noted that these townhomes will be owner occupied only. Bakritges
stated Maxfiled Research did the City's market study in 2013 and Homestead had them update the
housing market data as of August 2018. Bakritges noted the values have gone up in all of the
categories.
Gillispie asked why The Regatta in Wayzata should be considered a comparable property. Bakritges
stated that would be explained as the presentation continues. Bakritges showed an analysis by Metro
Study out of Chicago, that looks at active and future projects for condos, townhomes, and twin homes
in an 8 mile radius around Mound. Bakritges said that based on the data, this area is prime if the right
product is built in the right location.
Gillispie stated that she had requested this market analysis by Monday at noon, but what she received
was something different. Gillispie stated that the information provided should not be considered
comps. Bakritges said that they do consider these comps, noting that properties on Lost Lake Lane
have sold during the past year for $619K, $640K, $667K which he considers the best comps, but that
one needs to look at a larger radius as well. Gillispie asked who the target market is and Bakritges said
active adults which include people over the age of 50. Gillispie said that Mound does have growth in
the 55+ market, but questioned whether two flights of stairs for this market makes sense. Bakritges
stated that was end of his presentation and thanked the Council, Staff, and the public present for their
attention.
Pausche addressed some of the recurring themes Staff is hearing in the social media discussions.
Theme 1 is that some have asked is if the Lost Lake Slips are being sold to the developer. Pausche
stated that the City will continue to own all 61 slips, 14 transient and 47 overnight which generated
$77K in revenue in 2018 that helps to fund past/future expenses. Pausche said the new townhome
owners will be given first right of refusal on one slip in order to increase the value of the
development/tax capacity, similar to the Villas on Lost Lake. Pausche pointed out the 14 transient/day
slips are the ones that surround the harbor. Theme 2 heard in the community is that the City should
focus on bringing businesses to the downtown and questioning why Mound can't be more like Wayzata
or Excelsior, to which Pausche said that the Harbor Disrict was created prior to the recession, when
development was booming and before the internet transformed retail, and Welsh Properties was
marketing the area to no avail. A major restaurant chain initially showed some interest, but their market
study showed that Mound could not support a lunch crowd due to not enough density of population and
the area not being on a major thoroughfare. Pausche went on to say that the City commissioned a
market study in 2013/2014 to determine what is feasible for this area and that it was concluded more
commercial space could not be supported without putting stress on existing businesses in the area.
Pausche noted Wayzata and Excelsior are the gateways to Lake Minnetonka for much larger
communities such as Minnetonka, Plymouth, and Chanhassen. Theme 3 heard around the community
is that the proposed purchase price for the 2.3 acres with lake access is too low, to which Pausche said
Concurrent City Council/HRA Meeting Minutes—August 15, 2018
that since the recession, the only proposals received were for high-density/3 stories senior living or
apartments with 70-120 units+ and some commercial. Pausche said the City felt that did not fit the
vision for the area and that the community did not want that level of intensity. Pausche went on to say
that the RFQ was sent to 83 luxury home builders and affiliates and 4 responses were received and 2
were selected for interviews and that the three responses had comparable values for that land. Theme
4 heard was that "Market Rate" is another word for affordable and these townhomes will not be luxury.
Pausche stated that this development will be completely private with no public assistance, which is
typically involved in creating affordable housing. Pausche also pointed out that the City maintains
control throughout the development through the land use approval process. Theme 5 heard is that the
area should be kept as a public gathering space for public enjoyment and Pausche said that is
precisely the reason the City said no to the high density proposals. Pausche said this is a compromise
to create some tax value while keeping green space available for public enjoyment.
Pausche reviewed some alternate language that was discussed with the Development Committee but
that did not make it into the agreement. Pausche stated a request was made that the purchaser
provide an affidavit of individual ownership which basically means the purchaser would disclose who
the full ownership group is. The developer's attorney stated that the LLC created would be an affiliate
of Homestead Partners but would not name individuals for personal liability reasons and noted that
listing individuals is not a common practice. Pausche stated "clawback" or a right of first refusal
provision was discussed early in the negotiations that would allow the City to take control back if for
some reason the developer stopped progress, but noted it would be subordinate to the lender. The
developer's attorney said it would still limit their ability to get financing and also didn't feel this was a
common provision. Pausche said the City Attorney admitted there is not much teeth once it was
subordinated, so Staff pursued language to create milestones, financial incentives, expectation that the
development described in the response to the RFQ is what will be built and that JMS will be the builder
and, lastly, a requirement for the City to approve any subsequent sale, all of which were included.
Mayor Wegscheid invited anyone in the audience to ask questions or make comment.
TQ White, resident of 5004 Three Points Blvd, stated that he had entered the last meeting very against
this development idea but left feeling like it could be good for the City. White also stated that some
clarity was needed in regard to the non -housing portion of the area. White said he is also concerned
with the City using up the last chunk of unoccupied property in the commercial area for residential
options. Mayor Wegscheid the commercial situation in Mound is due to the lack of population to drive
more commercial use. Wegscheid also stated that in all the time that this area has been vacant and in
all of the offers and options that have come forward over the years, this is the best most viable option to
date. Wegscheid said the City can always wait for something else to come along or the City can do
something and noted that this option is a great way to make the space useful while still keeping green
space.
Joe Harrison, resident of 5625 Grandview Blvd, said for what the City is selling the land for a movie
theatre could be built or something that would draw more people out to this area. Wegscheid said that
no matter what the City does with the area, there will always be someone to come later with other
options and ideas. Harrison also asked why the City can't bring developers in and replace the Williams
Building on Commerce. Gillispie stated there is nothing the City can do with those properties since they
are privately owned so the owners would need to step up and make a move to better the property.
Mayor Wegscheid stated that a short adjournment is necessary to change the recording equipment and
resumed meeting at 7:00 pm.
Scott Gates, resident of 4379 Wilshire, said that the City's intentions are great and JMS Homes is a
quality builder but questioned why there was such a rush with a project of this nature. Wegscheid said
that this project has been in process for quite some time. Gates stated that the cost to residents to
continue to support the debt would be somewhere around $4-10 per year per resident to the best of his
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Concurrent City Council/HRA Meeting Minutes—August 15, 2018
knowledge in looking over the numbers. Mayor Wegscheid said that he appreciated Gates' efforts to
understand the numbers and how they land for this project. Wegscheid also stated that it isn't just
about the numbers but also about the intangibles pertaining to this project, including bringing more
population to Mound which will help the businesses in Mound thrive. Wegscheid said the City needs to
look beyond the numbers and look at how this project will benefit the community as a whole and the
bigger picture for the prosperity in Mound. Gates asked if the City would entertain taking more time to
make sure that this project is the right project for Mound. Mayor Wegscheid said that the City has
spoken to many developers with vertical mixed-use project ideas over the years and nothing has been
as well rounded as the current project on the table. Peterson asked if Gates is suggesting a rental
property for the Harbor District and Gates confirmed he thinks that is what the area needs. Peterson
said that according to the feedback from the community, Mound already has too much rental property
and that the community is asking for something different like owner occupied properties. Gates said
that the purchase agreement that is on the table is great for the developer. Gates said that the bottom
line is the City has one chance to take a direction with this property and he hopes the City takes time to
make sure this is the right project for right now.
Salazar asked Gates to confirm that he stated that more rentals are needed and that the City could
consier a multi -unit building with ghost platting for commercial or residential. Gates confirmed that he
thinks vertical rental development with some retail is the way to go for this property. Salazar stated that
these types of projects were considered and he thinks since this property is the crown jewel of Mound,
putting in a high-rise building would be an eye sore. Mayor Wegscheid said that these suggestions
take the conversation back about four years as the Council has already weighed these options out in
the past and it was determined that vertical mixed used was not desirable for this area.
Robert Stevens, resident of 5471 Lost Lake Lane, said he decided to move to Mound because all of the
amenities that Mound has to offer. Stevens likes the concept but questions why the developer will need
48 months do build 21 units. Stevens added that the most valuable asset to Mound is the green space
and that City should not build the restaurant. Mayor Wegscheid asked Stevens to guess how many
parks Mound has currently. Stevens guessed that there were 6 public parks. Mayor Wegscheid stated
that there are actually over 30 parks in Mound. Stevens noted that since he has moved to Mound, the
Staff of Mound has been very accommodating and helpful as new residents.
TQ White, resident of 5004 Three Points Blvd, asked what are the benefits to the tax payers in the
community since the tax increase is really only a few dollars per resident in the grand scheme of things.
Mayor Wegscheid said that in the recent past there were residents that were concerned about a $1 or
$2 increase on water bills. The Council needs to be mindful of those residents who may be on fixed
incomes and/or limited resources that would be negatively impacted by a few dollar increase in taxes.
Mayor Wegscheid added that the community will benefit by development in the community that
increases property tax and utilty revenues.
John Smyth, resident of 4846 Wilshire Blvd, thanked the Council for taking comments on the subject,
and said that he is concerned about the loss of transient docks. Smyth added that those docks could
bring in an anchor tenant in the restaurant area and could really bring a lot of traffic to Mound. Mayor
Wegscheid said that if the free market results in a restaurant in the area the restaurant will have to
compete for business with other restaurants and that the City should not go out of its way to support a
specific business that directly competes with other already established businesses in the community.
Gillispie said there is a bit of a misconception on the restaurant portion of the development and that the
concept plan continues to put aside an area for a future restaurant. Gillispie added that meetings were
held with potential restaurant/breweries but that having to build from the ground up is not seen to be
financially viable. Smyth reiterated that Mound needs visitors and not necessarily residents.
Mayor Wegscheid stated that a short adjournment is necessary to change the recording equipment and
resumed meeting at 8:00 pm.
Concurrent City Council/HRA Meeting Minutes—August 15, 2018
Mayor Wegscheid asked for comments and discussion from Council. Peterson said she heard a lot of
positive feedback and comments from the community and noted there has been a void of properties in
this price range in Mound to this point. Wegscheid urged anyone to look online to view the past
conversations regarding this process. Peterson said that the City has been working on concepts for
this property for years and each time those concepts didn't stick so it is nice to have support from the
community on a project. Bergquist asked Pausche when does the property go back on the tax rolls and
Pausche stated 2022, or 15 years past the purchase of the property. Pausche noted the TIF District
doesn't expire until 2031 which means the City would get 100% of the tax increment until 2031 which
will help to pay back the debt and reduce the levy. Bergquist said the land has been vacant since 2006
and most of the constituents are not in favor of apartments. Bergquist added that the green space is
there because it has been undeveloped up to this point, but it is not a considered a park. Bergquist
said this project was designed so the community can have the best of both worlds. Salazar thanked
the public for their comments. Salazar said that high rise condos or apartments are not appropriate for
the area and retail on the first floor is just not viable, noting The Mist in Spring Park which has a lot of
empty commercial space. Salazar said that he has been on the council for 10 years and nothing has
come to light as a viable project for this area in all of that time until now. Salazar added that this is a
good project headed in the right direction, however the contract does have some issues heavily in favor
of the developer. Wegscheid stated that the development committee didn't have time before the last
meeting to go over the contract at length which is part of the reason it was tabled for this meeting.
Gillispie stated that while due diligence has been done, she is not comfortable with the purchase
agreement at this point and that she wants the affidavit of individual ownership in the agreement.
Gillispie said she questions the market analysis and viability of this project based on the research she
has done. Peterson said it is very common that purchases are made with an LLC instead of listing
individuals for confidential reasons. Gillispie also stated that she requested the Clawback option in the
agreement and without it the City would not retain control without it.
Mayor Wegscheid asked to have the developer address Gillispie's concerns. Tom Bakritges noted that
milestones are defined and that a letter of credit will be given. Bakritges noted 4 months have passed
since they were selected as the developer and that they have have worked well with Staff to get the PA
to this point. Bakritges stated that they cannot move forward with the Clawback because lenders will
not support it. Bakritges added that it is their intention to complete this project from start to finish.
Bakritges said that if this gets approved then the entitlement process can start and the plans would
begin to take shape. Bakritges also said that they would be purchasing the land at around $330K per
acre and that no one is buying land at that price. Wegscheid asked about the affidavit of individual
ownership. Bakritges said that Mound Harbor LLC will be created but that individual names, except for
the Board of Directors, are not listed because of privacy concerns. Gillispie said she has reservations
about the RFQ process since the City only got a few responses. Gillispie expressed frustration with the
time it took to develop the purchase agreement and the fact the development committee members were
not consulted earlier in the process. Peterson said that this is pretty late in the game to have an issue
with the process as the Council knew what was being sent back in December. Wegscheid asked the
Council if it is a deal breaker if the Affidavit of Individual Ownership and the Clawback are not part of
the Purchase Agreement and Gillispie said the Clawback is a deal breaker for her.
Salazar asked for Mayor Wegscheid's opinion. Wegscheid said Gillispie has some valid points and he
can see both sides to the Affidavit and the Clawback. Wegscheid added that these items are not deal
breakers for him. Gillispie said this PA is not the right one as it is worded and the Council has time now
to re-evaluate the agreement. Salazar asked Gillispie if she liked the project and Gillispie said she
does not think it is a viable project. Peterson said that this has been a long process and the Council
has been privy to all steps in the process. Salazar said this is the 11th hour and he thought the Council
was in agreement that this was a great project. Gillispie said she has been struggling with this for quite
some time now and feels that 21 units is too many units and they won't sell. Peterson said that these
are different properties than the Lost Lake properties at the same price point. Salazar said this is very
late in the game to be unhappy with the whole project. Salazar and Peterson said they think this is a
great project. Salazar asked why Gillispie didn't raise these concerns in December or anytime over the
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Concurrent City Council/HRA Meeting Minutes — August 15, 2018
past several months. Gillispie said that she still hasn't gotten the data to support the market analysis.
Gillispie said that the development committee wasn't able to negotiate and dig into the project since
Staff did much of the negotiating through this process. Salazar said that this needs more time for
review and the development committee needs to look at this in more detail before Council acts on this.
Peterson said that the developer gave us what we asked for and they have presented that to us.
Bergquist said he likes the project but Gillispie does raise some questions on the contract that should
be resolved. Salazar said he likes the project but he thinks that since Gillispie has some concerns with
viability then this needs to be discussed and understood more. Peterson said that from what she heard
from the developer, things won't change on their end. Salazar said anything can be negotiated.
Peterson said that is fine but when there is no development in Mound there needs to be some thought
as to what Council and the City are doing to these developers and people that come to town and try to
bring ideas and concepts in and nothing is done.
MOTION made by Salazar, seconded by Gillispie, to remand back to Staff for further discussion by the
development committee and for more clarification to move forward. Gillispie, Salazar, Wegscheid, and
Bergquist voted in favor. Peterson voted against. Motion carried.
Pausche asked for clarification on a date that this will come back to Council. Wegscheid said by the
end of the calendar year.
A. (TABLED) HRA Action: Action on a resolution providing approval for conveyance of
land in Mound Harbor District to Citv of Mound
RESOLUTION NO: 18- : RESOLUTION APROVING PROVIDING APPROVAL FOR CONVEYANCE
OF LAND IN MOUND HARBOR DISTRICT TO CITY OF MOUND
B. (TABLED) Council Action: Action on a resolution approving purchase and
development agreement with Mound Harbor, LLC.
RESOLUTION NO: 18- H: RESOLUTION APROVING PURCHASE AND DEVELOPMENT
AGREEMENT WITH MOUND HARBOR, LLC
5. Adjourn
MOTION by Bergquist, seconded by Salazar, to adjourn at 8:45 p.m. All voted in favor.
Motion carried.
Chair Mark Wegscheid
Attest: Catherine Pausche, Clerk
Date: September 5, 2018
To: HRA Board of Commissioners & City Council Members
From: Eric Hoversten, City Manager/Public Works Director
Sarah Smith, Community Development Director
Catherine Pausche, Director of Finance and Administrative Services
Subject: Purchase and Development Agreement for Harbor District Townhome Development
At the March 13, 2018 concurrent City Council and HRA meeting, Homestead Partners LLC was
selected as the developer of a 21 unit townhome development in the Mound Harbor District. Staff was
directed to work with Homestead Partners LLC and our attorneys to prepare a Purchase and
Development Agreement for the City Council and HRH's consideration.
At the July 24. 2018 concurrent City Council and HRA meeting, the proposed Purchase and
Development Agreement was presented for consideration and the issue was tabled and remanded back
to staff to coordinate further discussion between staff, the Development Committee and the developer
and in order to allow more time for public viewing and feedback prior to bringing it back to the August
15th meeting. On August 15th, the issue was once again tabled to allow time for further discussion by
the Development Committee on the Purchase and Development Agreement language. An August 28
concurrent meeting was cancelled due to the Official Meeting Notice referencing the wrong day of the
week, so the meeting was rescheduled to Tuesday, September 11, 2018.
The Developer agreed to two language changes proposed by the Development Committee after the
August 15th meeting that (1) expanded Section 20 to clarify a separate irrevocable letter of credit will
be given for 125% of the public improvements which is standard practice/language for a development
agreement with the City, and (2) the reduction in the $35K letter of credit addressed in Section 21
changed from the `original' amount to the `remaining' amount for phases 2, 3 & 4. Lastly, additional
discussion took place regarding the ownership structure. To help clarify that issue, Homestead
Partner's original response to the Request for Qualification and Interest (RFQ/I) has been included in
this packet. The proposal included extensive information about the entities and the resumes of
principal team members involved in the project. The Purchase and Development Agreement also had
the following language to ensure the proposal submitted in the response to the RFQ/I is what is built
and is built by the principals of Homestead Partners/JMS Custom Homes or a subsidiary thereof:
19.1 The Buyer shall construct on the Property the "Minimum Improvements," which consist
of 21 market -rate townhomes, with three to four units per building, including two
garage stalls per unit, at least 2 parking spaces in front of each building per unit, and at
least 11 additional guest parking spaces as shown on the current concept plan. The
specific Minimum Improvements shall be as shown on the preliminary plat, as
approved.
7-
19.3 The Buyer is a Minnesota limited liability company, whose purpose is to install the
required public improvements required for the Minimum Improvements and to develop
the Minimum Improvements. It is in the best interest of Buyer, and the intent of Buyer
to work with JMS Custom Homes, LLC, a Minnesota limited liability company ("JMS
Custom Homes") as the builder of the townhomes. The Buyer acknowledges and
understands that the City expects the completed Minimum Improvements to be similar
in size, scope, and quality to the project submitted to the City as part of the Buyer's
response to the City's Request for Qualifications with respect to the Property.
19.5.1 The Buyer has not made or created and will not make or create or suffer to be made or
created any total or partial sale, assignment, conveyance, or lease, or any trust or power,
or transfer in any other mode or form of or with respect to this Agreement or the
Property or any part thereof or any interest therein, or any contract or agreement to do
any of the same, to any person or entity, with the exception of any bona -fide unit owner
or an assignment to another entity affiliated with Buyer by common ownership,
(collectively, a "Transfer"), without the prior written approval of the City Council of the
Seller. The term "Transfer" does not include encumbrances made or granted by way of
security for, and only for, the purpose of obtaining construction, interim or permanent
financing necessary to enable the Buyer to construct the Minimum Improvements or
component thereof.
The minutes from previous meetings have also been included in this packet as it is imperative action is
taken at the September 11, 2018 meeting in order to maintain the critical path for the entitlement
process, being ready to break ground in the spring and getting a unit in the fall Parade of Homes tour.
All previous presentations and meeting packets are available on the City website or via email upon
request.
As this is a monumental decision for the City and since Staff were asked to provide their reflections
and thoughts after the initial developer presentations on February 27th, Staff offers the following
observations:
• Homestead Partners/JMS Builders are an elite developeribuilder with proven success in this
niche of the residential market who provided the most comprehensive response to the City's
RFQ/I, have negotiated in good faith and have agreed to language not typically included in a
purchase agreement in order to address the City's concerns.
• The proposed project best met the original objectives of the RFQ/I, including ability to provide
a competitive price for the land and to maximize the market value of the completed
development while minimizing intensity of use in order to allow for continued public
enjoyment of the area.
• The two-story slab on grade allows for better continuity between the residential and public
spaces while the upper main -level living area allows for increased privacy/security, better
views and more primary living space, including the second bedroom/den on the main floor,
than what was achieved with the two-story Villas on Lost Lake model.
• The $550K - $700K price range allows for variation in value due to the location of the unit
within the development, but since all units will have similar square footage and amenities, it
won't have the variation seen in the Villa development where units ranged from approximately
1,200 to 2,400 square feet with 2 to 3 stories and 1 — 3 bedrooms/garages. This development
also does more to buffer the residential from the commercial, optimizing the views and
circulation.
LE:�
• The $550K - $700K price range is common for Mound and the surrounding communities,
particularly with lots that provide lake access and few are move -in ready and provide
maintenance -free living. The 2013 market study said our market could absorb 60 — 70 market
rate townhomes or condos through 2020. These townhomes are unique because of the lake
access, in addition to access to trails, retail, restaurants and services, which will enhance their
market appeal.
• Public sentiment seems in support of the project. Delaying the decision has allowed for
multiple newspaper articles and social media discussions, as well as updates have taken place
with the Rotary/Westonka Community and Commerce and the Planning Commission, all of
which were perceived as positive by Staff.
• Acting now will reduce any negative financial implications, including allowing the developer
to have a unit in the fall Parade of Homes, capturing an additional $2.33M in tax increment
between 2021 — 2031 based on the phased build out and an assumed average of $620K per unit.
This will allow the City not to resume a special debt levy on the bonds and possibly allow for a
partial pay -back of the interfund loans.
Staff appreciates the opportunity to provide this feedback and to help facilitate the successful
completion of this project. Staff recommends approval of the Purchase and Development Agreement.
Please let us know if you require any additional information in preparation for Tuesday's meeting.
ANHOTMESTEAD
February 12, 2018
Eric Hoversten
City Manager
City of Mound
2415 Wilshire Boulevard
Mound, MN 55344
RE., RFQ Proposal for Mound Harbor district Townhome Development
Dear Mr. Hoversten, Members of the MRA and City Council Members.
Thank you for the opportunity to submit our proposal for the Mound Harbor Townhome Development
at the corners of Shoreline Drive anti Commerce Boulevard, near the heart of downtown Mound.
Homestead Partners Is a residential land development firm that is affiliated with a custom home
building company, JMS Custom Homes, LLC. The synergies of a land development and home building
entity working as a single source for the project create a uniquely qualified team to bring forth an
exceptional project to recreate an underutilized asset, With the addition of Whitten Associates as the
project's architectural design firm, a team has been created with significant experience in the areas of
project design, market research and project implementation to take a concept to a successful reality.
Homestead Partners views the Mound Harbor Townhome Project as special in a number of ways; we see
an opportunity to provide a high quality townhome development in a currently underutilized area of the
city. The development will help to create linkages from the downtown businesses to the lake area
providing access for the future project residents but also the greater community through boating, biking
and pedestrians. Redevelopment of the site will create a positive tax basis enhancement for the city and
Its constituents.
The Property Purchase and Financing details are described in the section titled "Financial
Considerations", listed on page 12 of our submittal. We expect to be able to create a twenty-two unit
townhome project which provides our ability to offer to purchase the property for $660,000,00.
Additional terms and conditions are noted in the above mentioned section.
Our schedule anticipates the project being awarded by late March 2018, with a goal of having
preliminary plat / finai plat approval by October / November. This will allow for site Improvements to
begin in March 2019 and roads paved by June /July. The project objective will be to have the first units
finished in time for a Grand Opening, during the Fall Parade of Homes, in early September of 2019.
Sincerely,
Tom Bakritges
Director of Land Development
Homestead Partners LLC
952.294.2123 1 to►nb@homestead-partrters.com
N11111
Mound Harbor District Townhome Development I Homestead Partners I Februm-y 2018
Table oYContents
Company Name and General Information ...... .......... .... 2
TeamOverview/Organization
Team Resumes
Qualifications and Experience, .......................................... 6
Current and Past Residential Product Pictures
Project Description
Concept Site Plan and Building Design
Purchase and Financing ... ..................... —............ 12
Financial Considerations
Preliminary Project Schedule ...................................... 14
Attachment A —Residential Product Pictures
Attachment B~Professional RefeneuceLetter
Crown Bank
City ofEden Prairie
City ofWayzata
Builders Association of the Twin Cities
AttauhmentC—Consent for Release ofResponse Data
1IPage
-12-
Mound Harbor District Towiiltome Development I Homestead Partners I f ebruary 2018
Company Name and General Information
COMPANY NAME AND ADDRESS
Homestead Partners, LLC
6035 Culligan Way
Minnetonka, Minnesota 55345
952.949.3630
History and Philosophy
Homestead Partners is an affiliate of a vertically integrated, yet distinctly separate set of companies
specializing in the areas of residential land development, residential construction and real estate sales.
The strategic affiliations include Homestead Partners LLC (residential land development), Prime Real
Estate Services Ltd., and JMS Custom Homes (construction).
Homestead Partners focuses on creating great places for people and for communities. Whether you
engage Homestead Partners for one, or all of our core disciplines, you will receive far reaching benefits
from our consolidated expertise. We understand the City processes and can navigate them efficiently.
Homestead's strategic affiliation with JMS, brings a well experienced builder to the Team; JMS has been
building homes in the Twin Cities since 1985. Leading national magazines such as Midwest Home &
Design, Better Homes and Gardens, Professional Builder, and Builder have recognized JMS for
innovation in building and in our commitment to the communities we serve.
21 Page
-13-
Mowed Harbor District Townhome Development I Homestead Partners I February 2018
Development Team
TEAM OVERVIEW
Minnetonka, Minnesota 55345
952.949.3630
MN Bldr lic #BC392462
Architect
Whitten Associates, Inc
4159 Heatherton Place
Minnetonka, MN 55345
612,747.0771��EAg
Ew,
ATHR -B RGQUI T, INC.
Civil Engineer
Q1�y
"n5 ql*
Sathre-Bergquist, Inc
150 South Broadway
Wayzata, MN 55391
952.476.6000
31 Page
Mound Harbor District Townhome Development I Homestead Partners I February 2018
TEAM RESUMES
Jeffery M. Schoenwetter — CEO and Owner - JMS Companies
33+ years of Industry Experience 1 952.294.2106
Jeffrey M. Schoenwetter is recognized as a professional builder and possesses significant
industry knowledge in the areas of residential land development and real estate finance. Jeff
personally holds a Minnesota General Contractors license and a Minnesota Real Estate
Brokers license.
Over the last 33 years, Jeff has generously assisted many of his vendors in growing their
companies, provided invaluable insight and analysis to these entitles. As an advisor, Jeff
strives to successfully mentor and achieve the objectives of his clients and affiliates,
Jeff is a Minnesota native; growing up in Edina, After graduating from Edina East High School
he continued his education at the University of Minnesota.
Tom Bakri!ges —Director of Land Development - Homestead Partners
28 years of Industry Experience 1952.294.2123
Tom joined Homestead Partners in August of 2016. As Director of Land Development of
Homestead Partners, Tom is responsible for all land development activities including, land
acquisitions, municipal entitlements, engineering, site development, and sales. Tom has
created strong relationships with local municipalities, real estate consultants, and residential
builders.
Tom's experience as a residential developer is key in forming successful business strategies at
Homestead Partners. He has developed neighborhoods for single family homes, townhomes,
apartments, condominiums, and master planned communities with mixed use.
Tom earned a Bachelor of Science degree from the University of Minnesota.
Tim Brown — VP and Chief Financial Officer -JMS Companies
20+ years of Industry Experience 1952.2942126
Tim oversees all of the financial and accounting functions for the JMS Family of companies,
including home building, land development and commercial real estate investments. Tim
brings over 20 years of real estate finance and construction related experience to the JMS
team. Tim's previous experience includes roles with real estate private equity firms,
commercial banks, home building construction, and residential land development companies.
41 Page
-15-
Mound Harbor District Townhome Development i Homestead Partners I February 2018
TEAM RESUMES
Mike Swanson — Executive Vice President- JMS Custom Homes
35 years of industry Experience 1 952.294.2134
As the Executive Vice President at JMS, Mike brings over 35 years of industry experience
and knowledge to the JMS team. His role is to manage all operations including
estimating, purchasing, drafting, construction, and service/warranty. He has built over
11,000 homes throughout his career.
Whitten Associates Inc.
Whitten Associates has been a practicing architectural and land planning firm for the last
10 years. Their focus has been on residential, mixed use and high-density housing and
services include market research and development consulting for their clients.
Tim Whitten, A.I.A., Principal
Tim has over 30 years' experience as an Architect, Land Planner and Developer. For the
previous twelve years he has been an Executive Vice President for a National Residential
developer and home builder. He has been involved in planning and developing for over
100 projects throughout the country. His background includes single family, multifamily,
mixed use, redevelopment and senior projects; and has a unique sense of how projects
should be priced and how they will be received in the marketplace.
Heather Maanum A.I.A. LEER AP
Heather has over 10 years of experience in architecture and planning. Her experience
includes residential, commercial and medical planning. She brings strong technological
experience to Whitten Associates through her extensive 3D modeling, graphics and
construction documents experience.
Bob Molstad, Owner— Project Engineer, Sathre-Bergquist, Inc..
Sathre-Bergquist is based in Wayzata and has been providing a variety of services
including land use design and planning, civil engineering, land surveying, and construction
services for residential and commercial projects in both the private and public sectors
throughout the State of Minnesota.
Sathre-Bergquist, inc. has developed its expertise in these areas from the wide array of
projects ranging from individual lot surveys, boundary interpretation and verification to
master planned communities. Its diversified staff of professionals offers clients years of
exceptional and comprehensive planning and design, engineering, and land surveying
services.
5 1 P a g e
-16-
Mound Harbor District ?nnmbonxoDevelopment | Homestead Partners | February %O18
Homestead Partners Qualifications and Experience
CURRENT DEVELOPMENTS
m Binger Crossing (Minnotomka)
m Crow River Heights (Hanovor)
m DeephaveoLake Ave (Deeyhoven
° Eden Gardens (Eden Prairie)
y Edina Denen(Edi/q)
• Fawn Hill (Chonhmsm)
m Kenwood Hills (Lakeville)
m
Meyer Place atFerndale (N4ayzpta)
w
Pleasant Ridge ptPaul)
�
Plymouth Preserve (Plymoudh)
m RedtuiVTmcewater(Sovng«)
"
Summit Woods NMinnxo/okd
�
The Woodlands atL|nner(Ninnoumka)
m
The Ponds otHunters Crest (Ninoot/ista)
PAST DEVELOPMENTS (portio&t)
= Eden Creek (Eden Prairie)
• Eden View Estates (Eden Prairie)
= Boulder Ridge
" Chapel Hills
• Coldwater Creek
' Clearwater Estates
• Evergreen Trail
m
Forest Creek
~
Mill Run
n Woods utRiley Creek (Eden Prairie)
p Meadows otRiley Creek (Eden Prairie)
u
Grand Haven atMarsh Cove (Eden Prairie)
�
Black Oaks (Minnetunka)
"
St, Albans Woods (Vinnoumka)
"
Parkside Condominiums (5t.Louis Pork)
Whitten Associates, Inc
CURRENT AND PAST DEVELOPMENTS (portta/Jst)
" Renaissance uothe River, Downtown Minneapolis N1N'60Urban Rmwhomes
m Hartford Commons, Eden Prairie K0N-318Urban Flats and Townhomes
= VVuyPointWayzata K4N'8Condominiums; Mixed Use/Office
• OaknnuftCondominiums, Legacy Oaks, Minnetonka MN-2OCondominiums
m Lakeside, Chanhassen, K4N-l2TwinhomeUnits
• Meyer Place, Wayzata, K4N'22Condominiums
JK8SCustom Homes
AWARDS AND ACKNOWLEDGEMENTS
m JO15First Recipient, K8NGreen Path Leadership Award
°
2013 Official Builder of the University of St. Thomas Home (charitable project)
w 2O11Builder nfthe Year Award bythe Builders Association ofthe Twin Cities
� 2O1UBest Neighborhood Website (Trucewater—Prior Lake)
�
2008 Parade of Homes Reggie Award of Excellence by the Builders Association of the Twin Cities
^
2008 Parade of Homes Trillium Award Winner for Best Kitchen by the Builders Association of the
Twin Cities
0 2007 Parade of Homes Trillium Award Winner for Best Exterior by the Builders Association of
the Twin Cities
R 2U0GHome Classic Award Winner
8 2OOS"VVOVV"Award from the Luxury Home Tour/Midwest Home &Design
° National Tiffany Award - Presented from the American Lung Association for "Health House"
m One nfthe "Eleven Who care" Nominee KARE11TV
61PzDe
Motind Harboi, District Townlionie Development I Homestead Partners I February 2018
CURRENT AND PAST RESIDENTIAL PROJECTS — these photos represent projects that have been
completed by Homestead Partners and JIMS Custom Homes.
71 Page
Mound Harbor District TnnmkmmeDevelopment IHomestead Partners | February %018
A(PaOe
-1�-
Mound Harbor District Townhome Development I Homestead Partners I Februaiy 2018
Proposed Development and Design
PROJECT DESCRIPTION
Our concept proposal includes 22 townhomes in 3-4 unit buildings. The site plan closely follows the RFQ
site plan.
AF
91 Page
-20-
Moiiird Harbor DistrictTownhome Development I Homestead Partners I Februarys 2018
Each townhome includes the opportunity for 3 bedrooms and 2.5 baths with 2 car garages. There is
space allocated for 2 cars in front of each garage and 11 separate quest parking spaces for a total of 4.5
parking spaces per townhome.
>r
K=1%0'
(.OWER l TATI , 900 Sr
101 Page
Mound DmdburDistrict Tvnnbmo/ Development | Homestead Partners | February 2U28
The townhumeoare two stories, with the garage, family room and bedroom with full bath onthe lower
level. The main level above includes a great room, kitchen, dining, bedroom, Y4bath and owners suite.
VVeproject the sale price ofthe units tobeinorange uf $500,000 to$7O0,000with selected finishes
DEVELOPMENT AMENITIES THAT INCORPORATES THE CITY OF MOUND VISION
The core principals of the Mound Visions Plan remain intact tuday. Our neighborhood will first and
foremost focus on creating a great pbaa to call home by creating a sense of community and can be
summarized asfollows:
° Adjacent boits greatest natural asset, Lake Minnetonka.
m Near downtown, linking bouts, bicycles, pedestrians, buses and vehicles.
° Provide ohigh quality private development,
^ Part of the Downtown overall mixed-use development pattern that combines commercial, retail,
office and housing.
° incorporate o diversity ofhousing that will serve o broad market from young professionals to
aging active members ofthe community looking todownsize.
* Keeping the downtown vital with anew oralternative housing choice.
* Connecting the downtown area with trails and sidewalks.
111Pug e
Mound Harbor DNuU-ic TowubmneDevelopment / Homestead Partners | February 3O18
*
Enhancing community appreciation of and access to, the area's natural resources by reclaiming
the historic Lost Lake channel and providing public dock and boat slip amenities for the future
residents.
Purchase and Financing
FINANCIAL CONSIDERATIONS
Homestead Partners will form a special purpose entity — HPH Mound Harbor, LLC — to perform the
duties ufthe developer for Mound Harbor.
HPHMound Harbor, LLC will secure its project financing through acombination ufdeveloper equity and
bank financing with one of its lending relationships (reference letters attached). Based uopreliminary
cost estimates prepared by our engineer, site development costs are estimated at $650,000 (grading,
sewer and water, storm water and streets) but subject to change based on further site investigation and
engineering review.
HPHMound Harbor, LLC respectfully submits its offer hopurchase the subject property osoutlined
PRINCIPALTERMS
Property: The property generally described 1nExhibit A"
Seller: City of Mound HRA
Buyer: HPH Mound Harbor, LLC.
Purchase Price: $660,000.00 CASH to Seller to be paid byBuyer, subject to the approval
of a Final Plat acceptable to Buyer.
Earnest Money: Upon execution ufanAgreement ofSale, Buyer will deposit into escrow
otCustom Home Builders acash deposit |nthe amount of$1lU00ao
security for performance. The earnest money shall berefundable
through the Inspection Period and become non-refundobie,except |n
the event ofdefault bySeller, after the Inspection Period and upon
notice to proceed to closing by Buyer.
Closing: The parties will close onthe Property within 3Odays following Final Plat
approval, subject to the Contingencies listed below.
Inspection Period: Buyer shall have until 21Odays following the execution ofthe Purchase
Agreement forthe Inspection Period ("Inspection Period") to review:
1 Title condition, ALTA survey.
2I1Page
Mound Harbor District Tuwo owoDoveloymm¢[8nmestedymtners|Pebmary 2018
2. Phase | & Phase U (if needed) Environmental Report, protective
covenants, zoning, wetland delineation, site conditions, building
coverage based upon architectural renderings, soil conditions,
density, Site planning.
3. Comprehensive Plan Amendment,
4. Preliminary Plat Application.
S. Preliminary Plat Approval.
6. Final Plat approval and other due diligence related items.
Atany time during the Inspection Period, Buyer atits sole discretion
may choose to cancel the purchase agreement for any reason.
Contingencies: The Closing will becontingent upon the following being satisfied utur
before the end of the Inspection Period, or waived by Buyer:
n) AFinal Plat, acceptable toBuyer, approved byCity Council.
N Confirmation tnBuyer ofcommitments satisfactory toBuyer for
access and utility services including sanitary sewer, storm sewer,
water, natural gas, electricity, cable and telephone facilities.
o) Confirmation tnBuyer that building permits are obtainable from the
City ofMound.
Taxes 8'Assessments; Real estate taxes will beprorated onacalendar year basis otclosing,
Seller shall pay all levied and pending special assessments, except those
arising directly from the Buyer's development nfthe property. Seller
shall pay all green acres taxes and all other deferred real estate taxes on
the property.
Regulatory Approvals: Buyer, otits expense and with the cooperation ofthe Sellers, will be
responsible for obtaining all regulatory approvals necessary forBuye/o
intended use ofthe Property.
Engineering Studies: Buyer will beallowed, at its expense, toconduct engineering studies on
the property, including but not limited to, wetland, soil and
environmental assessments, after the execution nfthe Purchase
Agreement.
Brokerage: Seller and Buyer acknowledge that N0brokers are involved 1nthis
Transaction. Buyer discloses that Buyerconsultants and Principals;
both licensed real estate brokers in the State of Minnesota.
Purchase Agreement: Buyer will prepare atits expense, within 1Obusiness days ofSeller's
acceptance nfthis Letter ofIntent, adraft ofaPurchase Agreement tn
bereviewed, negotiated iogood faith and executed byboth parties.
13 1 Page
SEE
Mound Harbor District Townhome Development I Homestead Partners I February 2018
Requirements: Within 10 calendar days of the execution of the Purchase Agreement,
the Seller shall have Custom Home Builders Title, 10850 Old County
Road 15, Suite 100, Plymouth, MN 55441. Attention: Vicki Dellwo (763)
489-3251 deliver to Buyer:
1. A standard title commitment, including schedule B exceptions. The
costs for the title commitment shall be paid by Seller with all further
endorsements, survey, or other requested title policy endorsements
to be paid by Buyer.
Seller's Title: Seller will deliver the Property free of all liens and encumbrances.
Unknown Conditions: Given the nature of this RFQ, certain conditions may exist with regard to
the property that are unknown by all parties, including but not limited
to underlying soil conditions, underground existing utilities,
environment al conditions etc. This proposal assumes that the site as
delivered will be buildable as is with no additional soil correction work
needed to establish buildable pads.
Boat Slips: This proposal also assumes that there will be a minimum of 20 slips
allowed for the exclusive use by residents of the townhome project,
pursuant to the standard city of Mound boat slip agreement.
This offer sheet is an outline of the basic business terms and is not intended to be a binding contract. Neither party
shall be bound until a definitive written purchasejoption agreement is executed by both parties Neither the Seller
nor NPN Mound Harbor, LLC, will be liable by reason for failure to reach definitive agreements regarding the
matters covered by this letter. if the general terms outlined herein are acceptable, please sign as indicated below
and return to me. We will then prepare the formal agreement for your approval.
PRELIMINARY PROJECT SCHEDULE
® March 2018 — Project to be awarded by the City to Homestead Partners..
a May/ June - Concept Plan Review.
0 June / July — Neighborhood meeting.
e September/ October—Approval of rezoning, comprehensive plan, preliminary plat, etc.
October / November— Final plat.
® November/ December — Close on Property.
8 March 2019 — Begin grading.
® March / April — Early building permit model.
® May— Begin construction of streets and utilities.
® June / July — Pave streets.
® 2019 Fall Parade of Homes.
141Page
-25-
NBA'TC HOUSINGe FIRST
February 12, 2018
Eric Hoversten
City Manager
City of Mound
2415 Wilshire Blvd
Mound, MN 55364
Dear Mr. Hoversten,
We are pleased to offer this letter of refence on behalf of JMS and Homestead as part of their submittal
for the Mound Harbor District Townhome Development,
JMS Is a long-time member of BATC-Housing First Minnesota, The JMS and Homestead Partners team
has served in industry leadership roles within BATC-Housing First Minnesota as board leaders,
committee chairs, and has provided substantial industry service through our many programs.
The recent Eden Gardens development in the City of Eden Prairie is a strong example of the innovation
and cohesion brought by the JMS and Homestead Partners team. The project delivered a unique low -
impact development design, with Green Path Master Certified Homes for all homes.
As the creator of Minnesota's Green Path, BATC-Housing First Minnesota worked alongside JMS and
Homestead Partners and was pleased to see this first -of -its -kind project Incorporate the latest green
technologies, while delivering homes at prices families can afford.
Please feel free to contact me at 651-697-1954 or david@batc.org for more information.
SinceOlegel
David
Executive Director, BATC-Housing First Minnesota
-26-
February 8, 2018
Eric Hoversten
City Manager
City of Mound
2415 Wilshire Blvd
Mound, MN 55364
Dear Mr. Hoversten,
OFC 952 949 8300
It Is our pleasure to offer a letter of reference on behalf of Homestead Partners as part of their submittairAx 9329499390
for the Mound Harbor District Townhome Development, TOO 952 949 8399
8080 Mitchell Rd
The City of Eden Prairie entered into a Development Agreement with Homestead Partners In 2013, on a Iden Prairie, 5
55s4a-4495
single-family residential project called Eden Gardens. We held high expectations for the Eden Gardens
development, requiring all 21 homes in the project be built to Green Path Master Certification and odonnrairie.org
incorporating the use of low -impact site development strategies.
Homestead Partners' proposal met the strict RFP requirements and upon being selected by the City
Council, they immediately began work on what would become a showcase of sustainable development
and green building technology.
Homestead Partners conducted community outreach prior to the start of the project to address
concerns homeowners in the adjacent neighborhood may have about the new development. They
continued the outreach and communication throughout the construction process. They even worked
with students enrolled in Hennepin Technical College's construction and architecture program to
provide real life experience in construction and building design.
Homestead Partners kept the construction site clean, secure and well supervised. They were very
welcoming to the community and eager to show City staff and residents the new green technology
being used in the development.
We would welcome an opportunity to work with Homestead Partners on a future project in Eden
Prairie. Please feel free to contact us If you would like more information on our experience working
with Homestead Partners.
Sincerely,
City Planned'
City of -Eden Prairie
jklima@edenprairie,org
952-949-8439
-27-
Molly Koivumaki
Manager, Housing & Community Services
City of Eden Prairie
mkoivumaki@edenprairie.org
952-949-8439
February 12, 2018
Eric Hoversten
City Manager
City of Mound
2415 Wilshire Blvd
Mound, MN 55364
Dear Mr. Hoversten,
Please let this letter of reference on behalf of Homestead Partners serve as part of the submittal package for the
Mound Harbor District Townhome Development.
The City of Wayzata approved a site plan application with Homestead Partners in 2016 for Meyer Place at Ferndale ---
a 21 -unit condo building on Lake Street, just a block away from Lake Minnetonka. The development will include
niche -luxury condominiums, underground parking, and a public plaza on the corner of Lake Street and Ferndale Road.
Simply put, it will replace a blighted industrial site with a high-quality and environmentally -sustainable residential
building that will add charm and vitality to the western edge of downtown Wayzata.
Over the past year or so, Homestead Partners have been refining the site plan, tweaking the redevelopment
agreement, and securing financing. While the City is excited for construction to commence this spring, perhaps most
impressive was the engagement process that was utilized by Homestead Partners in coming up with the final site
plan. Tom Bakridges and Tim Whitten met with the neighborhood on several occasions in order to come up with a
development that worked for both the Homestead AND the neighborhood.
If the engagement process is any indication, we are confident that the rest of the development process will be a
positive experience for the community and look forward to working with Homestead Partners on more projects In the
future.
Please feel free to contact me if you'd like more information on our experience working with Homestead Partners,
Yours truly,
AN
Jeffrey Dahl
City Manager
City of Wayzata
952-404-5309
Phone: 952-404-5300 Fax: 952-404-5318 e-mail: city wayzata.org
EWE
homepage: w,Uavv .wayzata.org
Mayor:
City of Wayzata
Ken Willcox
600 Rice Street
city council:
Wayzata, MN 55391-1734
Dan Koch
Johanna McCarthy
Alex Plechash
Steven Tyacke
City Manager:
Jeffrey Dahl
Please let this letter of reference on behalf of Homestead Partners serve as part of the submittal package for the
Mound Harbor District Townhome Development.
The City of Wayzata approved a site plan application with Homestead Partners in 2016 for Meyer Place at Ferndale ---
a 21 -unit condo building on Lake Street, just a block away from Lake Minnetonka. The development will include
niche -luxury condominiums, underground parking, and a public plaza on the corner of Lake Street and Ferndale Road.
Simply put, it will replace a blighted industrial site with a high-quality and environmentally -sustainable residential
building that will add charm and vitality to the western edge of downtown Wayzata.
Over the past year or so, Homestead Partners have been refining the site plan, tweaking the redevelopment
agreement, and securing financing. While the City is excited for construction to commence this spring, perhaps most
impressive was the engagement process that was utilized by Homestead Partners in coming up with the final site
plan. Tom Bakridges and Tim Whitten met with the neighborhood on several occasions in order to come up with a
development that worked for both the Homestead AND the neighborhood.
If the engagement process is any indication, we are confident that the rest of the development process will be a
positive experience for the community and look forward to working with Homestead Partners on more projects In the
future.
Please feel free to contact me if you'd like more information on our experience working with Homestead Partners,
Yours truly,
AN
Jeffrey Dahl
City Manager
City of Wayzata
952-404-5309
Phone: 952-404-5300 Fax: 952-404-5318 e-mail: city wayzata.org
EWE
homepage: w,Uavv .wayzata.org
�',
C�4BANK
lf�,,.ViN
6600 PRANCE AVENUE SOUTH, SUITE 125
EDINA, MINNESOTA SS435
February 8, 2018
Mr. Eric Hoversten, City Manager
C/O City of Mound and Redevelopment Authority
2415 Wilshire Blvd
Mound, MN 55364
RE: HP Holdings, Homestead Partners and JM Companies
RFP to the City of Mound for Mound Harbor District
The following summarizes Crown Batik's relationship with HP Holdings, Homestead Partners,
JMS Companies, the principals of JMS and potential transaction referenced above.
Crown Bank has had a long-term relationship with HP Holdings, Homestead Partners, JMS and
more specifically the principals of JMS, Jeff and Nancy Schoenwetter and the Schoenwetter
family, spanning over fifteen years. All past loan obligations and construction projects have been
handled as agreed, I can tell you that JMS and its affiliates are along standing
construction/development company and have a strong reputation in the western Minneapolis
suburbs. They have significant experience and knowledge in each community where they have
built homes and developed communities.
Currently Crown Bank has several solid projects with JMS and affiliated companies. This,
correspondence is intended to exemplify our confidence in JMS. In all instances JMS puts
substantial equity into each project and does not receive their profit until the project is 100%
complete.
Recently Crown Bank approved a loan for the acquisition of I I acres of land and construction of
a 10 -lot development located in Chanhassen, for HPH Fawn Hill, LLC/HP Holdings, LLC. The
project is substantially complete with grading, underground utilities, curb, gutter and black top
installed. This project was completed within budget and ahead of schedule. Over the past 5 -
years the bank has provided financing for 9 projects totaling 120 lots including
developmcnt/ittfrastructttre loans and letters of credits for the benefit of various cities in the
western suburbs including the cities of Mound (Woodlyn Ridge), Eden Prairie (Marsh Cove, The
Meadows & Eden Gardens), Minnetonka (Black Oaks), Chanhassen (Summit Woods, Bents Farm
& Fawn Hill) and Plymouth (Plymouth Preserve).
JMS Companies, Homestead Partners or its associates through Crown Bank represent a qualified
development team, Please do not hesitate to contact me at 952-285-2716,
;in erely,
clan indquist
Senior Vice President
952-205.5000 (PHONE) 952-205-5900(FAX) CROWN-BANK.COM
Attachment C - Consent for Release of Response Data
Form of Consent for Release of Response Data
Date: X - 1Z
City of Mound
2415 Wilshire Boulevard
Mound, MNB 55364
Re: Request for Statement of Qualification and Interest in a Townhome
Development In the Mound Harbor District, Mound, Minnesota Consent for
Release of Response Data
1, Tom Bakrltes, of Homestead Partners 'hereby consents to the release of its
development proposal in response to the Request for Statement of Qualification
and Interest in a Townhome Development in the Mound Harbor District, Mound,
Minnesota and waives any claims it may have under Minnesota Statues Section
13.08 against the City of Mound for making such information public. The
foregoing consent and waiver does not extend to financial statements submitted
under separate confidential cover, which may be public data, but shall be treated
by the City consistent with Minnesota Statues Section 13.591,
22
Its: -41"- e- OR Olt 1-1" AX -1,41f I P, &,, q, W 7 -
-30-
U011111kil • • ;• • s] •.
February 27, 2018
The Mound City Council and Mound Housing and Redevelopment Authority in and for the City of
Mound, Minnesota, met in concurrent special session on Tuesday, February 27, 2018, at 6:30 p.m. in
the council chambers of the Centennial Building.
Members present: Mayor/Chair Mark Wegscheid, Council Members/Commissioners Kelli Gillispie,
Jennifer Peterson, Jeff Bergquist, Ray Salazar
Members absent: None
Others present: City Manager and Director of Public Works Eric Hoversten, Finance
Director/Clerk/Treasurer Catherine Pausche, Community Development Director Sarah Smith, City
Planner Rita Trapp, Tom Bakritges, Mike Kevitt, Scott Kevitt, Jeff Habish, Skip Johnson, Terry Purcell,
Candice Anderson, Cody Anderson, Shelly Zimmerschied, Karla Skeie, Bart Skeie, John Binder, Don
Dedon, Shari Erickson, Colin Schwartz, Trofim Borisov
1. Open meeting
Chair Mark Wegscheid called the meeting to order at 6:33 p.m.
2. Approve agenda
MOTION by Salazar, seconded by Bergquist, to approve the agenda. All voted in favor. Motion
carried.
3. Request for Qualifications and Interest in a Townhome Development in the Mound Harbor
District in Mound, MN: Presentations of concept plans and development proposals from
respondents
Catherine Pausche, Finance Director, repeated a presentation from the November 28, 2017 meeting
that summarized the history of the Mound Harbor District, including original concept plans, a 2013
market study, a 2016 TIF analysis, and a revised concept plan that was used to develop a Request for
Qualification and Interest in a townhome development in the Mound Harbor District. Pausche said the
objectives of the townhome development include: (1) obtain a competitive price for the land and
maximize the market value of the completed development; (2) balance the intensity of use with
preservation of public enjoyment of the area; and (3) complete the development in a timely manner with
the developer independently financing all improvements.
A. Tom Bakritges, Director of Land Development, Homestead Partners
Tom Bakritges, Director of Land Development for Homestead Partners thanked the Council for the
opportunity. Bakritges said they are proposing 21 units and will pay $660K cash to seller subject to
final plat approval. Bakritges walked through other terms including the use of developer equity and
bank financing, and listed closing contingencies. Bakritges gave a project summary, including 21 units,
+/- 2,490 square feet minimum lot size, 2 stories, 2,600 finished square feet, 2+ tandem garage and 3
bedrooms and baths for a total estimated market value of $550-700K per unit or $11.5 — 14.7M for the
development. Bakritges said the proposed site plan is comparable to the original site plan but it adds
one more unit and noted they are not worried that 20 slips will be an issue. Bakritges noted all the
garages face inward, and not toward the commercial, and that they were able to add more green space
between the townhomes and the commercial facing Commerce Boulevard.
Bakritges said the target market will be active adults and that 2 cars can be parked in front of each
garage with 11 additional off-street spaces. Bakritges described the base layout with a 2 car garage
which is considered adequate for active adults but noted a tandem would be optional. Bakritges said it
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Concurrent City Council/NRA Meeting Minutes — February 27, 2018
functions like a rambler walk out, but the difference is the stairs to the kitchen/main living area with a
dumbwaiter and optional elevator. Bakritges showed the front elevation and said the garage, family
room, and bathroom are on Level 1 and the upper living space and bedrooms are on Level 2.
Regarding the Homeowners Association (HOA) structure, Bakritges said they have a good relationship
with management companies, including Omega and First Service, and that all units would be owner
occupied with no rental.
Bakritges reviewed the proposed timeline, saying that site work would begin after land use approvals by
March of 2019 with the objective to be in the 2019 Parade of Homes with the development completed
sometime in 2020. Bakritges said Homestead Partners has been around for 33 years and its affiliate,
JMS Custom Homes, donated a parcel in the Harbor District. Bakritges listed past developments which
are primarily single family homes, townhomes, and apartments/condos. Bakritges noted there are 7
JMS homes currently in the Parade of Homes all over the metro, including Minnetonka, Hanover, and
Deephaven. Bakritges said Whitten Assoc. are the architects that design the projects and noted the
awards and acknowledgements their team has received.
Bakritges showed examples of previous and current developments, including Meyer Place condos in
Wayzata with values between $650K and $2.4M, single family homes in the Parade of Homes with
values between $400k — $2.4M, and Waypoint in Wayzata, which Bakritges said is a good example of
architectural features.
Bakritges expressed excitement and said he is looking forward to working on the project. Mayor
Wegscheid asked for his professional opinion on any challenges in what is being proposed. Bakritges
said the biggest challenge is not knowing what is in the land since there have been no boring samples,
but he knows the utilities are there. Hoversten said info on the new Auditors Road and Phase I was
known, but other areas like Old Shoreline have not been evaluated. Bakritges said the engineer
thought some soil correction would be needed, and that they assumed $660K for the land with another
$650K to prepare the land. Wegscheid asked how long he thought it would take to prepare the lot and
Bakritges said if we close in the fall he did not think it would take more than 1 month to prep the lot for
the first building, which will take a good six months to complete with the idea of being in the Spring or
Fall Parade of Homes.
Wegscheid asked if construction was based on presales and Bakritges said they would build a 4 unit
building and start selling, but they prefer to sell before moving on. Gillispie asked if all the units would
be built whether they were sold or not. Bakritges said that it is a loaded question, but the intent is to
build them all, noting you can't control the economy.
Gillispie asked if the price will be different based on location. Bakritges said there will be some
variation but since it is just 2.3 acres, it will lessen the disparity and the range is projected at $550K —
$700K. Gillispie asked how and if the restaurant will be disclosed. Bakritges said yes, the entire
concept plan/area will be shared. Salazar asked if any projects were abandoned in the last recession.
Bakritges said JMS had some large developments in the northwest quadrant that were restructured, but
did not go bankrupt. Bergquist asked what the approximate height was since it appears to be a fairly
steep roof. Bakritges said no more than 35 feet, and Bergquist noted the code is less than that and
Bakritges said it can be adjusted. Salazar said he likes the design, dumbwaiter, tandem option, option
for elevator, and that it is good for lifecycle housing. Salazar asked about the lower level and whether
the den will have a slider door to a patio. Bakritges said yes. Gillispie asked what is their internal
process to respond to a RFQ. Bakritges said they meet with staff about expectations and then conduct
internal market analysis and prepare an engineering cost estimate, and then the architect designs the
product based on what market could bear. Salazar asked if this is all done under one roof and
Bakritges said the engineer services are contracted.
B. Mike Kevitt, Vice President of Land Development, SVK Development, LLC
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Concurrent City Council/HRA Meeting Minutes— February 27, 2018
Mike Kevitt, Vice President of Land Development for SVK Development, provided background on SVK
and said the owner and operations director are present. Kevitt said the team has over 40 years of
development experience and that luxury townhomes are their niche. Kevitt said they worked on
projects in Plymouth, Eden Prairie and St. Louis Park, and he feels this project is well suited for what
they do. Kevitt said SVK's mission is to boast community and take advantage of area amenities and
that they would not build it unless wanted they would want to live in it.
Kevitt said SVK's proposal is to build 16 units and pay $50 — $70K per lot, but that he feels they could
add one more lot depending on potential variances and structure layout. Kevitt said the lot sizes would
be 5,400 — 8,400 square feet and the style would be a rambler look out, with 2,300 — 3,000 finished
square feet, a 2+ oversized garage, 3 bedrooms and baths with a value of $650K — $750K for units
near the water's edge (higher lot premium) and then units facing the trail would be similar but the lot
value lessened so the value would be in the $550K — $650K range. Kevitt said the total estimated
market value for the development is $10AM and noted he did not account for common space in the
estimated lot size.
Kevitt showed examples of developments including the Marsh in White Bear Lake, Curtis Lake in
Plymouth, and examples of the interior finishes. Kevitt said SVK is a turnkey operation and does all the
earth work, public and private improvements and design and build, providing one seamless
management team to manage the entire lifecycle of the project from design to build. Kevitt noted the
interior finishes shows their focus on high end amenities and that the example of the elevation shows
not a walk out, but a look out. Kevitt emphasized the design includes lots of windows to take
advantage of the natural sunlight, which is not common in side by side townhomes and that they will
work closely with the architect to ensure they take advantage of the views and the units are
aesthetically pleasing to the eye. Kevitt said the 2 car garage is 28 feet wide and deep enough to
accommodate a pickup truck or SUV, noting the deeper lot sizes make this possible. Kevitt said the
target market is active lifestyle, executives, empty nesters and/or young couples. Kevitt said all the
main amenities are on the main floor and noted the lower level has a rec room and additional bed
rooms.
Kevitt said the concept plan was created with input from the engineer from the Walgreens and Dakota
Junction project, so they know the site extensively. Kevitt said they tried to create a concept that would
leverage the existing park space and noted that he lives in Mound within walking distance of the site
and that they want residents to partake in community events and for those events to continue. Kevitt
said closing the road will remediate traffic concerns. Kevitt said the villa style with no shared walls
creates yard space, with lots over 100 feet deep and 45 ft wide with 10 foot setbacks, therefore they
were not able to fit all 20 units. Kevitt said they wanted to maximize the views of the water and
amenities and that the road cycles around to facilitate traffic flow. Kevitt said they observed
parking/traffic issues in the Lost Lake neighborhood. Salazar asked if there were other off-street
parking spaces besides the driveways and Kevitt said no. Salazar asked about the width of the streets
and Kevitt said 22 feet wide. Kevitt said they looked at a possible 17th unit with a side load driveway
closer to the pond, but noted a variance may be required.
Kevitt said SVK is an earth company as well and they would increase the elevation slightly to buffer
from the commercial spaces and the trail. Kevitt said the east side elevation could be achieved many
different ways, and that the approximately 4 foot elevation could also be achieved by landscape, and
noted that SVK would work closely with the engineer and landscape designer. Kevift said the engineer
noted that the parking pad of the restaurant may be able to be reduced to open up additional park
space. Kevitt highlighted the features of the concept plan and noted that quality control that tends to
set them apart and that the HOA would be established that incorporates the City of Mound
requirements.
Gillispie asked for Kevitt to describe a standard HOA agreement and Kevitt said it typically provides for
snow removal, lawn care, landscape, and garbage, and that SVK works with a management company.
Salazar asked if the pond would be maintained and Kevitt said yes and that it was really for storm water
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Concurrent City Council/HRA Meeting Minutes— February 27, 2018
but that they can develop a plan. Bergquist asked if the units would be owner occupied and Kevitt said
SVK has done both, but that they are planning on them being owner occupied, and Wegscheid
responded that the City prefers that.
Kevitt said they are proposing an aggressive timeline with the developer's agreement by mid April,
ground work started in early May, and prep done by end of July, all of which is an advantage that they
can move pretty quickly. Kevitt said if the market supports sales, then all could be built out with the
idea of having a model/initial units done by December of 2018. Gillispie asked about customization
options and whether they would wait for each one to sell before building. Kevitt said the goal is to
complete the build out by 2021 but that it will be market driven. Salazar asked what happened with
SVK's developments during the recession and Kevitt said they were actively developing during the
recession, noting they did not have to take loan or hold back because of their conservative approach.
Kevitt went through a summary of previous developments, including Rose Garden in Plymouth which is
leased by their property management division for $2,800/month, mostly to young executives, and
Hidden Meadows in Plymouth which was an infill project and also leased. Kevitt said Hidden Terrace in
Plymouth were sold for $400K — 500K in 2009 and 2010. Gillispie asked if developments are one or
the other, lease or sale? Kevitt said mostly yes, but Wild Marsh in White Bear Lake was built out during
the recession and leasing proved more robust, so it has both.
Wegscheid asked if there are any current model homes available and Kevitt said no townhomes, only
single family. Salazar asked if they prefer lease or sale and Kevitt said they prefer to sell but got into
leasing because of the downturn.
Gillispie asked about the question to the City as the offer was "as is" and if it changes the offer price.
Kevitt said no and clarified what was meant by the question was that some cities have not been overly
engaged in dealing with the major utilities, so SVK just wanted to know Mound would be and that it was
not asked in relation to finances. Hoversten said it is more about the third party utilities in our major
corridors, primarily gas and telecommunications, and noted that the City has some leverage with
franchise agreements.
Bergquist asked what is the typical rent of $550K unit and Kevitt said $2,600 - $2,800 plus utilities.
Gillispie asked if this development would be comparable and Kevitt said yes. Salazar recommend they
build the 17th unit and said that he likes the units which he thinks are very attractive with no shared
walls, and that the company boasts community, which are buzz words for him.
Wegscheid asked about any concerns with the proximity to public spaces. Kevitt said the engineers
have extensive knowledge on how to mitigate storm water management and Wegscheid said he was
thinking more about the social interaction. Kevitt said that is where elevation and landscaping would
come in. Hoversten asked about the grade changes. Scott Kevitt, SVK owner, said the thought is
there could be some steps to get to the main floor and that the patios represent decks and they can
make design adjustments if there were any water table issues. Gillispie asked if they would be slab on
grade and Kevitt said they will be a rambler style with full stairs to the lower level, but that there may be
steps up from the garage or entry as well. Bergquist asked if you could see the pond from the trail in
the center and Kevitt said no and Bergquist thought that was a good idea. Kevitt said a fence was
considered. Gillispie asked what are the internal processes SVK goes through to evaluate the
feasibility of this kind of opportunity and Kevitt said they work with the engineers and noted that he liked
the site and felt the concept he used in St. Louis Park that was near commercial would be suitable.
Kevitt clarified that St. Louis Park site was located near 28th & Texas and consisted of 72 townhomes
that were built between 2001 and 2004.
Mike Kevitt thanked the Council and said they were very excited about this opportunity and that it fits
well in their area of specialty.
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Concurrent City Council/HRA Meeting Minutes — February 27, 2018
4. Discussion and action to select the preferred developer for a townhome development in the
Mound Harbor District
Mayor Wegscheid thanked the developers for the quality of their presentations and participation.
Wegscheid invited discussion and encouraged the Council to continue to ask the developers questions,
but said he wanted to note that the City gets one shot at this and in order to ensure it is properly
considered, he proposes to direct staff to come back with their reflection and thoughts and put the
action items on the next meeting agenda. Gillispie agreed that it was a lot to digest and would
appreciate more time. Salazar said they were both great proposals and that the City has had this
property a long time and that it is the crown jewel, so the City wants to do it right and not just fill it in.
Salazar said he would like to do some site visits and more research. Bergquist said both proposals
were very similar and yet very different would like to more time and Peterson agreed. Wegscheid
asked if this approach works for staff and Hoversten said yes and that it is important for the Council
have the time for a respectful decision process. Hoversten requested any additional questions or
information requests to be relayed to Staff by Friday who in turn will forward them to both developers.
Council Action: MOTION by Wegscheid , seconded by Salazar, to direct staff to do a summary
reflection of their analysis of the presentations, to provide Council the opportunity to ask more
questions, and to work with the developers to see if site visits are possible and table the remainder of
the agenda items to the next meeting on March 13, 2018. All voted in favor. Motion carried.
HRA Action: MOTION by Wegscheid , seconded by Salazar, to table the agenda items and
reconvene the concurrent meeting with the Mound City Council and Housing and Redevelopment
Authority on March 13, 2018 immediately following the regular City Council meeting that begins at
7:00pm. All voted in favor. Motion carried.
Council Action: MOTION by Wegscheid , seconded by Salazar, to reconvene the concurrent meeting
with the Mound City Council and Housing and Redevelopment Authority on March 13, 2018
immediately following the regular City Council meeting that begins at 7:00pm. All voted in favor.
Motion carried.
5. TABLED Council Action: Action on a resolution authorizing staff to negotiate the terms of a
purchase agreement for consideration by the HRA Board and City Council (insert selected
developer name)
RESOLUTION NO.18- : RESOLUTION AUTHORIZING STAFF TO NEGOTIATE THE TERMS
OF A PURCHASE AGREEMENT FOR CONSIDERATION BY THE HRA BOARD AND CITY
COUNCIL
6. TABLED HRA ACTION: Action on a resolution authorizing staff to negotiate the terms of a
purchase agreement for consideration by the HRA Board and City Council (insert selected
developer name)
RESOLUTION NO. 18- H: RESOLUTION AUTHORIZING STAFF TO NEGOTIATE THE TERMS
OF A PURCHASE AGREEMENT FOR CONSIDERATION BY THE HRA BOARD AND CITY
COUNCIL
7. TABLED Council Action: Action on a resolution approving amended and restated Master
Subordination Agreement and Estoppel Certificate related to the Indian Knoll Manor Project
RESOLUTION NO. 18- : RESOLUTION APPROVING AMENDED AND RESTATED MASTER
SUBORDINATION AGREEMENT AND ESTOPPEL CERTIFICATE RELATED TO THE INDIAN
KNOLL MANOR PROJECT
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Concurrent City Council/HRA Meeting Minutes — February 27, 2018
8. TABLED HRA Action: Action on a resolution approving amended and restated Master
Subordination Agreement and Estoppel Certificate related to the Indian Knoll Manor Project
RESOLUTION NO: 18- H: RESOLUTION APROVING AMENDED AND RESTATED MASTER
SUBORDINATION AGREEMENT AND ESTOPPEL CERTIFICATE RELATED TO THE INDIAN
KNOLL MANOR PROJECT
9. Adjourn
MOTION by Salazar, seconded by Peterson, to adjourn at 8:22 p.m. All voted in favor.
Motion carried.
Attest: Catherine Pausche, Clerk
EM
Chair Mark Wegscheid
MINUTES OF THE CONCURRENT MEETING OF THE MOUND CITY COUNCIL AND
MOUND HOUSING AND REDEVELOPMENT AUTHORITY
March 13, 2018
The Mound City Council and Mound Housing and Redevelopment Authority in and for the City of
Mound, Minnesota, met in concurrent special session on Tuesday, March 13, 2018, immediately
following the regular City Council meeting that started at 7:00 p.m. in the council chambers of the
Centennial Building.
Members present: Mayor/Chair Mark Wegscheid, Council Members/Commissioners Kelli Gillispie,
Jennifer Peterson, Jeff Bergquist, Ray Salazar (7:45 pm)
Members absent: None
Others present: City Manager and Director of Public Works Eric Hoversten, Finance
Director/Clerk/Treasurer Catherine Pausche, Community Development Director Sarah Smith, and
Administrative Assistant Rebecca Kress, Tom Backritges, Tim Whitten, Mike Kevitt.
1. Open meeting
MOTION made by Chair Mark Wegscheid, seconded by Peterson, to reconvene the February 27,
2018 concurrent special session with the City Council and the Mound Housing and Redevelopment
Authority at 7:30 p.m. All voted in favor. Motion carried.
2. Approve agenda
MOTION by Wegscheid, seconded by Peterson, to approve the agenda. All voted in favor. Motion
carried.
3. Council Action: Approve minutes from February 27, 2018 concurrent meeting
MOTION by Peterson, seconded by Gillespie, to approve minutes from February 27, 2018
concurrent meeting. All voted in favor. Motion carried.
4. HRA Action: Approve minutes from February 27, 2018 concurrent meeting
MOTION by Peterson, seconded by Bergquist, to approve minutes from February 27, 2018
concurrent meeting. All voted in favor. Motion carried.
5. Request for Qualifications and Interest in a Townhome Development in the Mound Harbor
District in Mound, MN: Discussion and action to select the preferred developer
Catherine Pausche, Finance Director, summarized review of what was discussed at the previous
February 27, 2018 meeting in which staff were directed to provide recommendations in response to the
presentations and material submitted by the developers in response to the City request for
qualifications and interest in the Mound Harbor District Townhome Development. The Council heard
from 2 developers: Tom Bakritges, Director of Land Development, Homestead Partners and Mike
Kevitt, Vice President of Land Development, SVK Development. Pausche reviewed the objectives from
the previous meeting which are (1) obtain a competitive price for the land and maximize the market
value of the completed development, (2) balance the intensity of use with preservation of public
enjoyment of the area; and (3) complete the development in a timely manner with the developer
independently financing all improvements.
Pausche continued the review of the concept plans presented from each developer. Homestead
Partners proposed a 21 unit development, which Pausche pointed out fits within the footprint of the
Staff concept plan and the idea there would be more circulation for the public to the downtown area and
allowing for a restaurant parcel which will be set aside for future use. SVK Development, although
similar, presented a detached style of townhome with a bit less public space being proposed. Pausche
added that the SVK Development proposal suggested a build of 16-17 units and offered $960K for the
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Concurrent City Council/HRA Meeting Minutes — March 13, 2018
parcel of land and Homestead offered $660K with 21 units. Pausche said more units will provide higher
tax revenue to the City over time and noted that both concepts were desireable, formidable offers of
high quality. Pausche stated that both participants stated they were able and willing participants in
moving forward in the land use process. Pausche reiterated that both proposals have many similarities
which the City is looking for such as owner occupied properties with both presented proposals which
are complimentary to the Villas on Lost Lake. Pausche also mentioned that Homestead provided for
additional off-street parking and SVK for stormwater management, as well as both demonstrated high
end finishes which will support higher market value.
Pausche referenced the Staff memo observation that although there are many benefits to the stand
alone units in SVK's proposal, including windows which takes advantage of views, the City does not
want the development to have a single-family residential neighborhood feel. Pausche said
Homestead's design compliments the Villas by using slab -on -grade flush with the trails and public
spaces and achieves the medium density targets for the area, therefore Staff recommends proceeding
to negotiate a purchase and development agreement with Homestead Partners with SVK as the
alternate.
Mayor Wegscheid said he was glad all City parties took the time to pause and condsider all the
information presented by the developers. Wegscheid stated he appreciated Staffs reflection on both
proposals. Wegscheid also stated that both participants are highly qualified parties and thanked both
parties for their time and effort in this process.
Peterson added that she felt both proposals were great but that the Homestead Partners option feels
more like downtown and more aligned with what the public has been requesting.
6. Council Action: Action on a resolution authorizing staff to negotiate the terms of a purchase
agreement for consideration by the HRA Board and City Council with Homestead Partners
MOTION by Peterson, seconded by Bergquist, to authorize staff to negotiate the terms of a
purchase agreement for consideration by the HRA Board and City Council with Homestead
Partners. All voted in favor. Motion carried.
RESOLUTION NO.18-29 : RESOLUTION AUTHORIZING STAFF TO NEGOTIATE THE TERMS
OF A PURCHASE AGREEMENT FOR CONSIDERATION BY THE HRA BOARD AND CITY
COUNCIL WITH HOMESTEAD PARTNERS
7. HRA Action: Action on a resolution authorizing staff to negotiate the terms of a purchase
agreement for consideration by the HRA Board and City Council with Homestead Partners
Gillispie asked if there is a timeline as to when we would see a purchase agreement come back
from the developer. Pausche stated that the City would be back with a progress report by the last
meeting in April. Pausche added that the timeline is hopeful but there are variables to consider that
could affect the proposed timeline. Pausche said that the intention is to keep the process moving
forward. Smith added that Staff would like to meet with Homestead Partners and get the timeline
nailed down and agreed that the timeline should keep moving forward for both the City and the
developers benefit.
MOTION by Bergquist, seconded by Peterson, to authorize staff to negotiate the terms of a
purchase agreement for consideration by the HRA Board and City Council with Homestead
Partners. All voted in favor. Motion carried.
RESOLUTION NO. 18-03H: RESOLUTION AUTHORIZING STAFF TO NEGOTIATE THE TERMS
OF A PURCHASE AGREEMENT FOR CONSIDERATION BY THE HRA BOARD AND CITY
COUNCIL WITH HOMESTEAD PARTNERS
191:10
Concurrent City Council/HRA Meeting Minutes— March 13, 2018
8. Council Action: Action on a resolution approving amended and restated Master
Subordination Agreement and Estoppel Certificate related to the Indian Knoll Manor Proiect
Pausche stated that Aeon is modifying the Master Subordination Agreement for the mortgages on
Balsam Hill to move the primary to MHFA (the end loans) in place of Wells Fargo who was the
construction lender. Pausche noted that the City/HRA's place in line doesn't change and this is just
a housekeeping issue.
MOTION by Gillispie, seconded by Salazar, to approve amended and restated Master
Subordination Agreement and Estoppel Certificate related to the Indian Knoll Manor Project. All
voted in favor. Motion carried.
RESOLUTION NO. 18-30: RESOLUTION APPROVING AMENDED AND RESTATED MASTER
SUBORDINATION AGREEMENT AND ESTOPPEL CERTIFICATE RELATED TO THE INDIAN
KNOLL MANOR PROJECT
9. HRA Action: Action on a resolution approving amended and restated Master Subordination
Agreement and Estoppel Certificate related to the Indian Knoll Manor Project
MOTION by Gillispie, seconded by Salazar, to approve amended and restated Master
Subordination Agreement and Estoppel Certificate related to the Indian Knoll Manor Project. All
voted in favor. Motion carried.
RESOLUTION NO: 18-04H: RESOLUTION APROVING AMENDED AND RESTATED MASTER
SUBORDINATION AGREEMENT AND ESTOPPEL CERTIFICATE RELATED TO THE INDIAN
KNOLL MANOR PROJECT
10. Adiourn
MOTION by Bergquist, seconded by Gillispie, to adjourn at 7:53 p.m. All voted in favor.
Motion carried.
Attest: Catherine Pausche, Clerk
1BRE
Chair Mark Wegscheid
HOUSING AND REDEVELOPMENT AUTHORITY OF AND FOR
THE CITY OF MOUND, MINNESOTA
RESOLUTION NO. 18- H
• �, , , i 1 , , . �; �; I
WHEREAS, the City of Mound, Minnesota (the "City) underwent a request for qualifications
process to choose a developer to develop townhomes in the Mound Harbor area, and through that process the
City determined to work with Mound Harbor, LLC (the "Developer") for a proposed townhome
development; and
WHEREAS, the Developer has proposed to construct 21 market -rate townhomes, with three to four
units per building, including two garage stalls per unit, at least two parking spaces in front of each building
per unit, and at least 11 additional guest parking spaces (the "Minimum Improvements"); and
WHEREAS, there has been presented to the Board of Commissioners of the Housing and
Redevelopment Authority of and for the City of Mound, Minnesota (the "Authority") a Purchase and
Development Agreement (the "Agreement") proposed to be entered into between the City and the Developer,
pursuant to which the City will convey certain property to the Developer and the Developer will agree to
construct the Minimum Improvements; and
WHEREAS, the Authority owns certain property with the Mound Harbor area, some of which will
be needed for the Minimum Improvements;
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Housing and
Redevelopment Authority of and for the City of Mound, Minnesota that:
1. The Authority hereby approves the conveyance of all property the Authority owns within the
Mound Harbor area to the City for development purposes for $1.00.
2. Authority staff is hereby directed to cause a quit claim deed to be drafted for the purpose of
conveying such property to the City for the Authority's review and approval.
Adopted by the Board of Commissioners of the Housing and Redevelopment Authority of and for the City of
Mound, Minnesota, this 11th day of September, 2018.
Clerk
.m
Chair
RESOLUTION NO. 18 -
RESOLUTION APPROVING PURCHASE AND DEVELOPMENT AGREEMENT
WITH MOUND HARBOR, LLC
WHEREAS, the City of Mound, Minnesota (the "City) underwent a request for qualifications
process to choose a developer to develop townbomes in the Mound Harbor area, and through that process
the City determined to work with Mound Harbor, LLC (the "Developer") for a proposed townbome
development; and
WHEREAS, the Developer has proposed to construct 21 market -rate townhomes, with three to
four units per building, including two garage stalls per unit, at least two parking spaces in front of each
building per unit, and at least 11 additional guest parking spaces (the "Minimum Improvements"); and
WHEREAS, there has been presented before the City Council a Purchase and Development
Agreement (the "Agreement") proposed to be entered into between the City and the Developer, pursuant to
which the City will convey certain property to the Developer and the Developer will agree to construct the
Minimum Improvements.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Mound, Minnesota
that:
1. The City finds that the execution of the Agreement by the City and performance of the
City's obligations thereunder are in the best interest of the City and its residents.
2. The Agreement is hereby authorized, approved, and confirmed in all respects and the
Mayor and the City Manager are hereby authorized and directed to execute and deliver the Agreement for
and on behalf of the City in substantially the form now on file with the City but with such modifications as
shall be deemed necessary, desirable or appropriate, their execution thereof to constitute such conclusive
evidence of their approval of any and all modifications therein.
3. The Mayor and the City Manager are authorized and directed to execute and deliver any
additional agreements, certificates or other documents that the City determines are necessary to carry out
the intentions of this resolution and the Agreement.
Approved by the City Council of the City of Mound, Minnesota this 11 th day of September, 2018.
ATTEST:
Clerk
Zy�
Chair
Draft
August 27, 2018
PURCHASE AND DEVELOPMENT AGREEMENT
This Purchase and Development Agreement is made as of , 2018 (the
"Agreement"), between the CITY OF MOUND, MINNESOTA, a statutory city and political subdivision
of the State of Minnesota, having its office located at 2415 Wilshire Boulevard, Mound, Minnesota 55364
(the "Seller"), and MOUND HARBOR, LLC, a Minnesota limited liability company, having its principal
office at 6035 Culligan Way, Minnetonka, MN 55345, or its assigns (the "Buyer"). The "Effective Date"
of this Agreement shall be the later date on which both the Seller and the Buyer have executed this
Agreement, as shown by the dates next to their signature blocks.
1. Sale of Real Property. The Buyer offers to purchase and the Seller agrees to sell real property in
Hennepin County, Minnesota, legally described in EXHIBIT A attached hereto (the "Property").
2. Purchase Price. The price for the Property is $660,000 (the "Purchase Price"). The Purchase
Price shall be paid as follows:
2.1 Earnest Money. Twenty Thousand and no/100 Dollars ($20,000) as earnest money
("Earnest Money") which Earnest Money shall be delivered and held by Custom Horne
Builders Title ("Escrow Agent") in an interest bearing escrow account, pursuant to the
Escrow Agreement attached hereto as EXHIBIT B, provided, however, that the fee for
any such account shall be paid by the Buyer. The Earnest Money shall be deposited
within three (3) business days after the Effective Date. Unless otherwise disbursed
pursuant to the Escrow Agreement, the Earnest Money and all interest accrued thereon
shall be paid to the Seller at Closing and credited towards the Purchase Price.
2.2 Closing Payment. Subject to adjustments provided for herein, Six Hundred and Forty
Thousand and no/100 Dollars ($640,000) in cash or by wire transfer of U.S. Federal
Funds to be received by the Seller on or before 1:00 p.m. local time on the Closing Date.
3. Payment of Purchase Price. The Buyer shall pay the Purchase Price as follows:
(a) nonrefundable earnest money of $20,000 by check (the "Earnest Money"), receipt of which is
hereby acknowledged by the Seller; and (b) the balance of -the Purchase Price must be paid by
certified check or wire transfer on the Closing Date. The "Closing Date" shall be no later than
thirty (30) days following the date of the final plat approval.
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4A. Buyer's Contingencies.
4.1 Performance of the Seller's Obligations. The Seller shall have performed all of the
obligations required to be performed by the Seller under this Agreement, as and when
required by this Agreement.
4.2 Title. Title shall have been found acceptable by the Buyer or made acceptable in
accordance with the requirements and terms of Section 10 below.
4.3 Phase I. No later than 210 days after the Effective Date, the Buyer shall have determined
that it is satisfied with a Phase I Environmental Report (prepared in accordance with the
current ASTM standard for Phase I environmental site assessments) to be prepared with
regard to the Real Property by an environmental consultant reasonably acceptable to the
Buyer (the "Phase I"). The Buyer shall cause the Phase I to be prepared no later than 35
days after the Effective Date, at the Buyer's cost and expense. The Buyer shall deliver a
copy to the Seller within three business days after any termination of this Agreement.
4.4 Feasibility Period. Following the Effective Date of this Agreement, the Buyer may enter
the Property to conduct, at its expense, engineering studies on the Property, including but
not limited to wetland, soil, and environmental assessments. No later than two hundred
ten (210) days after the Effective Date, the Buyer shall have determined, in its absolute
sole discretion, that it is satisfied with the results of and matters disclosed by any soil
tests, engineering inspections, hazardous waste, environmental reviews of the Property,
and that the Property is suitable for the Buyer's intended use.
4.5 Utilities. The Buyer shall have determined that the Property's access, utility services
(including sanitary sewer, storm sewer, water, natural gas, electricity, cable and telephone
services) are sufficient for the Buyer's intended use of the Property.
4.6 No Adverse Action. There shall not exist on the Closing Date any lawsuit, governmental
investigation or other proceeding challenging the transaction contemplated in this
Purchase Agreement, or which might adversely affect the right of the Buyer to own,
develop, or use the Property after the Closing Date for the Buyer's intended use.
4.7 Governmental Approval. The Buyer shall have obtained, reviewed, or completed the
following items to the Buyer's sole satisfaction within 210 days from the Effective Date
of this Agreement: (A) condition of title and an ALTA survey; (B) land use applications;
(C) preliminary plat application; (D) final plat application; (E) land use approvals; (F)
preliminary plat approval; (G) Development Agreement with the Seller as described in
Paragraph 20; (H) Approvals as required by the County, the watershed district, or any
other regulating body; and (I) final plat approval (collectively, the "Governmental
Approvals"). The Seller shall without charge to the Buyer cooperate in the Buyer's
attempts to obtain all such Governmental Approvals.
4.8 Access/EasementsNacation of Roadways. The Seller shall have completed the vacation
of certain roadways and easements on and surrounding the Property and created roadway
access rights to the Property for the Buyer's intended use.
4.9 Boat Slip Priority. The Seller will have amended its City Code of Ordinances to provide
for the Townhome Association having exclusive access to 20 boat slips each year (as
further described in Section 19.7 below and set forth in EXHIBIT F).
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4B. Termination by Buyer. If any of the foregoing contingencies set forth in Section 4A hereof
have not been satisfied, in the Buyer's sole discretion, on or before the stated date then this
Agreement may be terminated, at the Buyer's option, by written notice from the Buyer to the
Seller; provided, however, the Buyer may only terminate this Agreement as a consequence of its
dissatisfaction with the physical condition of the Property if the Buyer has performed reasonable
and customary investigation or due diligence with respect to the physical attributes of the
Property that the Buyer finds unsatisfactory. Such notice of termination shall be given no later
than three (3) business days after the stated date for the relevant contingency item, provided,
however, that said notice shall be given prior to the Closing Date. If the Buyer fails to give notice
of termination as provided above, the contingencies are automatically deemed waived. The
Buyer may also waive any contingency by written notice to the Seller but such written notice is
not required for a waiver to be effective. Upon a termination by the Buyer (a) the Buyer and the
Seller shall execute a recordable written termination of this Agreement, which shall include the
Buyer's quit claim of any interest in and to the Property, (b) the Earnest Money and any interest
accrued thereon shall be released to the Buyer, and (c) upon fulfillment of (a) and (b) above
neither party will have any further rights or obligations regarding this Agreement or the Property
except for the rights and obligations of indemnification set forth in Sections 6, 17, 22, and 23
hereof.
5. [Intentionally Omitted.]
6. Buyer's Access, Investigation, and Security. The Seller shall allow the Buyer, and the Buyer's
agents, access to the Property without charge and at all reasonable times for the purpose of the
Buyer's investigation and testing the same. The Buyer shall pay all costs and expenses of such
investigation and testing and shall indemnify and hold the Seller and the Property harmless from
all costs and liabilities relating to the Buyer's activities. The Buyer shall further promptly repair
and restore any damage to the Property caused by or occurring during the Buyer's testing and
return the Property to substantially the same condition as existed prior to such entry.
7. The Seller's Closing Documents. On the Closing Date, the Seller shall execute and/or deliver to
the Buyer the following (collectively, "the Seller's Closing Documents"):
7.1 Deed. A Warranty Deed, substantially in the form attached hereto as EXHIBIT C, in
recordable form reasonably satisfactory to the Buyer, conveying the Property to the
Buyer, free and clear of all encumbrances, except the Permitted Encumbrances.
7.2 Title Policy. The Policy described in Section 10 hereof, or a suitably marked up Title
Commitment for the Policy initialed by Title Company (hereinafter defined), in the form
required by this Agreement.
7.3 Affidavits. Such Affidavits of the Seller as may be reasonably required by Title
Company to issue the Policy.
7.4 IRS Reporting Form. The appropriate Federal Income Tax reporting form, if any, as
required.
7.5 Development Agreement. The Development Agreement described in Section 20.
7.6 Declaration Regarding Boat Slams. The Declaration Regarding Boat Slips described in
Section 19.10.
7.7. FIRPTA Affidavit. A non -foreign affidavit, in commercially acceptable form (if not
applicable to this the Seller, then the Seller agrees to comply with all withholding
requirements of the Internal Revenue Service related thereto);
7.8 A Bring -Down Certificate. A bring -down certificate confirming the truth and accuracy
of those representations made by the Seller in Paragraph 17 of this Agreement; and
7.9 Other Documents. All other documents reasonably determined by the Buyer to be
necessary to transfer the Property to the Buyer free and clear of all encumbrances, except
the Permitted Encumbrances.
8. Buyer's Closing Documents. On the Closing Date, the Buyer will execute and/or deliver to the
Seller the following (collectively, "Buyer's Closing Documents"):
8.1 Purchase Price. The Purchase Price, by wire transfer of U.S. Federal Funds or by
certified check to be received in Title Company's trust account or delivered to the Seller
on or before 1:00 p.m. local time on the Closing Date.
8.2 Title Documents. Such Affidavits of Purchaser, Certificates of Value or other documents
as may be reasonably required by Title Company in order to record the Seller's Closing
Documents and issue the Policy.
8.3 Development Agreement. The Development Agreement described in Section 20.
8.4 Other Documents. All other documents reasonably determined by the Seller to be
necessary to consummate the transaction contemplated hereby in a manner consistent
with the terms and conditions hereof.
Prorations. The Seller and the Buyer agree to the following prorations and allocation of costs
regarding this Agreement:
9.1 Title Insurance and Closing Fee. The Seller will pay all costs of the Title Commitment
described in Section 10 of this Agreement and the fees charged by Title Company for any
escrow required regarding the Buyer's Objections. The Buyer will pay the premium or
cost of the Owner's Title Policy and all additional premiums required for the issuance of
any Mortgagee's Title Insurance Policy required by the Buyer. The Seller and the Buyer
will each pay one-half of any reasonable and customary closing fee or charges imposed
by any closing agent designated by Title Company.
9.2 Deed Tax. The Seller shall pay all state deed tax regarding the Warranty Deed to be
delivered by the Seller under this Agreement.
9.3 Real Estate Taxes and Special Assessments. On the Closing Date, the Purchase Price
shall be adjusted as follows:
9.3.1 Current Year's Taxes. All property taxes and green acres taxes which have
become a lien on the Property (the "Taxes") and which are due and payable prior
to the year in which the Closing Date occurs shall be paid by the Seller at or prior
to the Closing Date. All Taxes which are due and payable in the year in which
the Closing Date occurs shall be prorated to the Closing Date and the Seller's
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portion shall be paid by the Seller on the Closing Date. This proration shall
result in the Seller's payment of Taxes from January 1 to the date immediately
prior to the Closing Date and the Buyer's payment of Taxes from the Closing
Date to December 31.
9.3.2 Assessments. All charges for improvements or services already made to or
which benefit the Property, and all levied and pending assessments (general or
special) created or confirmed prior to the Closing Date (the "Assessments") shall
be paid in full by the Seller on the Closing Date. All assessments (general or
special) which levied as of the Closing Date or which become levied after the
Closing Date shall be assumed and paid by the Buyer.
9.4 Recording Costs. The Seller will pay the cost of recording all documents necessary to
place record title in the condition warranted by the Seller and requested by the Buyer in
this Agreement. The Buyer will pay the cost of recording all other documents, including
the cost of recording the final plat.
9.5 Other Costs. All other operating costs of the Property will be allocated between the
Seller and the Buyer as of the Closing Date, so that the Seller pays that part of such other
operating costs payable before the Closing Date, and the Buyer pays that part of such
operating costs payable from and after the Closing Date.
9.6 Attorney's Fees. Each of the parties will pay its own attorney's fees, except that a party
defaulting under this Agreement or any closing document will pay the reasonable
attorneys' fees and costs incurred by the non -defaulting party to enforce its rights
regarding such default.
10. Title Examination. Title examination will be conducted as follows:
10.1 Seller's Title Evidence. The Seller shall, no later than 30 days after the Effective Date
furnish to the Buyer, at the Seller's cost and expense, the following: a commitment (the
"Title Commitment") for the most current ALTA Form B Owner's Policy of Title
Insurance insuring title to the Property in the amount of the Purchase Price, issued by
Custom Home Builders Title (the "Title Company"). The Title Commitment will commit
Title Company to insure title to the Property subject only to the Permitted Encumbrances.
The Buyer is responsible for purchasing an Owner's Policy of Title Insurance.
10.2 Survey. No later than 60 days after its receipt of the Title Commitment, the Seller shall
obtain at its own expense an ALTA/ASCM as built survey (the "Survey") prepared by a
Registered Land Surveyor properly licensed to practice in the State of Minnesota in form
acceptable to the Buyer (the "Survey"). The Seller shall provide a copy of the Survey to
the Buyer within three days of receipt.
10.3 Buyer's Objections. Within 10 business days after receiving the later of the Title
Commitment and the Survey, the Buyer shall make written objections (the "Objections")
to the form and/or contents of the Title Commitment and the Survey if the Buyer has
obtained one within the time set forth in Section 10.2 hereof. The Buyer's failure to
make Objections within such time period will constitute a waiver of Objections. Any
matter shown on the Title Commitment and/or Survey and not objected to by the Buyer
shall be a "Permitted Encumbrance" pursuant to this Agreement. The Seller will have 60
days after receipt of the Objections to cure the Objections, during which period the
Closing will be postponed if necessary. The Seller shall use its best efforts to correct any
Objections. To the extent that the Objections are not cured within such 60 -day period,
the Buyer will have the option to terminate this Agreement and receive a refund of the
Earnest Money, or waive the Objections and proceed to Closing.
11. Closing. The closing of the purchase and sale contemplated by this Agreement (the "Closing")
shall occur on the Closing Date. The Closing shall take place at the offices of the Title Company,
or at such other place as may be agreed to. The Seller agrees to deliver possession of the Property
to the Buyer on the Closing Date.
12. Property. The Seller, in advance of or as part of the land use and preliminary plat application
process will vacate roads and easements on and surrounding the Property as required for the
Buyer to undertake the Minimum Improvements.
13. Well Disclosure. The Seller's knowledge of wells is as follows:
O The Seller certifies that the Seller does not know of any wells on the described real
property.
❑ A well disclosure certificate accompanies this document.
0 I am familiar with the property described in this instrument and I certify that the status and
number of wells on the Property have not changed since the last previously filed well
disclosure certificate.
14. Individual Sewage Treatment System Disclosure. The Seller certifies that there is [no]
individual sewage treatment system on or serving the Property.
15. Right of Entry. The Seller hereby grants to the Buyer, its agents, employees, officers, and
contractors, a license to enter the Property to perform all work and inspections deemed
appropriate by the Buyer in conjunction with this Agreement.
16. No Representations by Seller. IT IS UNDERSTOOD AND AGREED THAT THE SELLER IS
NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR
REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESSED OR IMPLIED, WITH
RESPECT TO THE CONDITION OF THE PROPERTY, INCLUDING, BUT NOT LIMITED
TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, ZONING, TAX
CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL
CONDITIONS, UTILITIES, ACCESS, OPERATING HISTORY OR PROJECTIONS,
VALUATION, GOVERNMENTAL APPROVALS, THE TRUTH, ACCURACY OR
COMPLETENESS OF ANY PROPERTY DATA OR OTHER INFORMATION PERTAINING
TO THE PROPERTY DELIVERED TO BUYER BY SELLER, OR ANY OTHER MATTER OR
THING REGARDING THE PROPERTY. BUYER ACKNOWLEDGES AND AGREES THAT
UPON THE CLOSING OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT,
THE SELLER SHALL SELL AND BUYER SHALL ACCEPT THE PROPERTY "AS IS,
WHERE IS, WITH ALL FAULTS." THE BUYER HAS NOT RELIED AND WILL NOT
RELY ON, AND THE SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESSED OR
IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR
INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO
(INCLUDING SPECIFICALLY, WITHOUT LIMITATION, PROPERTY INFORMATION
PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY) MADE OR FURNISHED
BY THE SELLER, THE MANAGER OF THE PROPERTY, OR ANY REAL ESTATE BROKER
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OR AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO
WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING,
UNLESS SPECIFICALLY SET FORTH IN THIS AGREEMENT.
THE BUYER REPRESENTS TO THE SELLER THAT THE BUYER HAS CONDUCTED, OR
WILL HAVE HAD THE OPPORTUNITY TO CONDUCT PRIOR TO CLOSING, SUCH
INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE
PHYSICAL, ENVIRONMENTAL AND GEOTECHNICAL CONDITIONS THEREOF, AS THE
BUYER DEEMS NECESSARY TO SATISFY ITSELF OF THE CONDITION OF THE
PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE
TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES OR
MATERIALS ON, WITHIN, UNDER OR DISCHARGED FROM THE PROPERTY, AND
WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY
OR ON BEHALF OF THE SELLER OR ITS AGENTS, OFFICERS, DIRECTORS,
SHAREHOLDERS OR EMPLOYEES WITH RESPECT THERETO.
UPON CLOSING, THE BUYER SHALL ASSUME THE RISK THAT ADVERSE MATTERS,
INCLUDING BUT NOT LIMITED TO, ADVERSE PHYSICAL, ENVIRONMENTAL AND
GEOTECHNICAL CONDITIONS MAY HAVE BEEN REVEALED BY THE BUYER'S
INVESTIGATIONS, AND BUYER, UPON CLOSING, SHALL BE DEEMED TO HAVE
WAIVED, RELINQUISHED AND RELEASED THE SELLER (AND THE SELLER'S
OFFICERS, COUNCIL MEMBERS, EMPLOYEES AND AGENTS) FROM AND AGAINST
ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF
ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES
(INCLUDING ATTORNEYS' FEES AND COURT COSTS) OF ANY AND EVERY KIND OR
CHARACTER, KNOWN OR UNKNOWN, WHICH BUYER MIGHT HAVE ASSERTED OR
ALLEGED AGAINST THE SELLER (AND THE SELLER' OFFICERS, COUNCIL MEMBERS,
EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF ANY
LATENT OR PATENT PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE
LAWS (INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL LAWS) AND
ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS
REGARDING THE PROPERTY.
17. Representations
17.1 Representations and Warranties of Buyer. The Buyer represents and warrants to the
Seller that the Buyer is a limited liability company duly organized under the laws of the
State of Minnesota; that the Buyer is duly qualified to transact business in the State of
Minnesota; that the Buyer has the requisite company power and authority to enter into
this Agreement and the Buyer's Closing Documents signed by it; such documents have
been duly authorized by all necessary company action on the part of the Buyer and have
been duly executed and delivered; that the execution, delivery and performance by the
Buyer of such documents do not conflict with or result in violation of state law or any
judgment, order or decree of any court or arbiter to which the Buyer is a party; such
documents are valid and binding obligations of the Buyer, and are enforceable in
accordance with their terms.
The Buyer will indemnify the Seller, its successors and assigns, against, and will hold the
Seller, its successors and assigns, harmless from, any actual expenses or damages,
including reasonable attorneys' fees, that the Seller incurs because of the breach of any of
the above representations and warranties, whether such breach is discovered before or
a UI:;
after Closing; provided, and notwithstanding the foregoing, each of the representations
and warranties herein contained shall survive the Closing for a period of three years and
any action concerning a breach of any of the foregoing representations or warranties of
the Buyer shall be commenced within three years of the Closing or shall be deemed
waived. Consummation of this Agreement by the Seller with knowledge of any breach of
such warranties and representations by the Buyer will constitute a waiver or release by
the Seller of any claims due to such breach.
17.2 Representations and Warranties of the Seller.
(a) The Seller is duly authorized and empowered to enter into this Agreement and to
perform fully the Seller's obligations hereunder.
(b) The Seller has received no notice of any pending or threatened condemnation
proceeding or other litigation relating to or otherwise affecting the Property, except as
may be shown in the public record.
(c) The Seller has received no notice of any pending or threatened violations or
litigation at the Property, except as may be shown in the public record.
1$. Condemnation. If, prior to the Closing Date, eminent domain proceedings are commenced
against all or any part of the Property by any entity other than the Seller, the Seller shall
immediately give notice to the Buyer of such fact and at the Buyer's option (to be exercised
within 30 days after the date of the Seller's notice), this Agreement shall terminate, in which
event neither party will have further obligations under this Agreement, except for the rights and
obligations of indemnification set forth in Sections 6, 17, 22, and 23, and the Earnest Money,
together with any accrued interest, shall be refunded to the Buyer. If the Buyer shall fail to give
such notice then there shall be no reduction in the Purchase Price, and the Seller shall assign to
Buyer at the Closing Date all of the Seller's right, title and interest in and to any award made or to
be made in the condemnation proceedings. Prior to the Closing Date, if the Agreement has not
been terminated pursuant to the first sentence of this Section, the Seller shall not designate
counsel, appear in, or otherwise act with respect to such condemnation proceedings without the
Buyer's prior written consent.
19. Construction of Minimum Improvements. The Buyer agrees that it will construct the
Minimum Improvements (defined below) on the Property as described in this Section. This
covenant shall survive the delivery of the Deed.
19.1 The Buyer shall construct on the Property the "Minimum Improvements," which consist
of 21 market -rate townhomes, with three to four units per building, including two garage
stalls per unit, at least 2 parking spaces in front of each building per unit, and at least 11
additional guest parking spaces as shown on the current concept plan. The specific
Minimum Improvements shall be as shown on the preliminary plat, as approved.
19.2 The Buyer agrees to commence and complete construction of each phase of the Minimum
Improvements as follows:
Phase 1: Infrastructure Improvements — grading, water main, sanitary sewer and storm
sewer and small utilities (as described in the Development Agreement referred to in
Sections 20) will be performed in one phase with the completion by December 31, 2019.
The Buyer may request an Early Start Agreement for consideration by the City Council
and HRA Board prior to release of the Final Plat and completion of the Development
Agreement for recording to allow issuance of a building permit to begin construction of
the infrastructure improvements.
Phase 2: Commence building construction by June 1, 2019 and complete construction of
6 units (2 buildings) by December 31, 2020.
Phase 3: Commence building construction by June 1, 2020 and complete construction of
7 units (2 buildings) by December 31, 2021.
Phase 4: Commence building construction by June 1, 2021 and complete construction of
8 units (2 buildings) by June 1, 2022.
Landscaping 1 Irrigation Improvements: To be installed in the spring or summer
following the completion date for each building construction phase referenced above. It
being understood and acknowledged that the landscaping and irrigation improvements are
not conditions to issuance of a Certificate of Completion of Phases 2 through 4.
For each of Phases 2 through 4 described above, the Buyer may request an extension for
the commencement and/or construction dates described above of up to 6 months, which
such extension shall not be unreasonably withheld.
For Phases 2 through 4 of the Minimum Improvements, construction of each respective
phase will be considered satisfied when the building exterior and the respective units
vanilla shell have been completed.
19.3 The Buyer is a Minnesota limited liability company, whose purpose is to install the
required public improvements required for the Minimum Improvements and to develop the
Minimum Improvements. It is in the best interest of the Buyer, and the intent of the Buyer
to work with JMS Custom Homes, LLC, a Minnesota limited liability company ("JMS
Custom Homes") as the builder of the townhomes. The Buyer acknowledges and
understands that the City expects the completed Minimum Improvements to be similar in
size, scope, and quality to the project submitted to the City as part of the Buyer's response
to the City's Request for Qualifications with respect to the Property.
19.4 Promptly after the Buyer's substantial completion each Phase, upon written request from
the Buyer, the Seller will furnish the Buyer with a Certificate of Completion, at no cost to
the Buyer, in the form attached hereto as EXHIBIT D and reduce the Buyer's letter of
credit in the applicable percentages as described in Section 21 below. Such issuance of
Certificates of Completion by the Seller shall be a conclusive determination of
satisfaction and termination of the agreements and covenants in this Agreement with
respect to the obligations of the Buyer and its successors and assigns, to construct the
Minimum Improvements and the dates for completion thereof. The Buyer's completion
of any Phase ahead of the required deadline shall not affect the required timing of
commencement or completion of subsequent Phases.
If the Seller shall refuse or fail to provide any certification in accordance with the
provisions of this Section, the Seller shall, within 30 days after written request by the
Buyer, provide the Buyer with a written statement, indicating in adequate detail in what
respects the Buyer has failed to complete the particular phase of the Minimum
Improvements in accordance with the provisions of the Agreement, or is otherwise in
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default, and what measures or acts it will be necessary, in the opinion of the Seller for the
Buyer to take or perform in order to obtain such certification and the Buyer shall be
afforded a fair and reasonable opportunity, as necessary, to cure or address such stated
default.
19.5 The Buyer represents and agrees that until issuance of the Certificate of Completion for
the Minimum Improvements:
19.5.1 The Buyer has not made or created and will not make or create or suffer to be
made or created any total or partial sale, assignment, conveyance, or lease, or any trust or
power, or transfer in any other mode or form of or with respect to this Agreement or the
Property or any part thereof or any interest therein, or any contract or agreement to do
any of the same, to any person or entity, with the exception of any bona -fide unit owner
or an assignment to another entity affiliated with the Buyer by common ownership,
(collectively, a "Transfer"), without the prior written approval of the City Council of the
Seller. The term "Transfer" does not include encumbrances made or granted by way of
security for, and only for, the purpose of obtaining construction, interim or permanent
financing necessary to enable the Buyer to construct the Minimum Improvements or
component thereof.
19.5.2 If the Buyer seeks to effect a Transfer other than to a bona -fide unit owner, prior
to issuance of the final Certificate of Completion for the Minimum Improvements, the
Seller shall be entitled to require as conditions to such Transfer that:
19.5.2.1 Any proposed transferee shall have the qualifications and financial
responsibility, in the reasonable judgment of the Seller, necessary and adequate to fulfill
the obligations undertaken in this Agreement by the Buyer as to the portion of the
Property to be transferred.
19.5.2.2 Any proposed transferee, by instrument in writing satisfactory to the
Seller and, if necessary, in form recordable in the public land records of Hennepin
County, Minnesota, shall, for itself and its successors and assigns, and expressly for the
benefit of the Seller, have expressly assumed all of the obligations of the Buyer under this
Agreement as to the portion of the Property to be transferred and agreed to be subject to
all the conditions and restrictions to which the Buyer is subject as to such portion;
provided, however, that the fact that any transferee of, or any other successor in interest
whatsoever to, the Property, or any part thereof, shall not, for whatever reason, have
assumed such obligations or so agreed, and shall not (unless and only to the extent
otherwise specifically provided in this Agreement or agreed to in writing by the Seller)
deprive the Seller of any rights or remedies or controls with respect to the Property, the
Minimum Improvements or any part thereof or the construction of the Minimum
Improvements; it being the intent of the parties as expressed in this Agreement that (to
the fullest extent permitted at law and in equity and excepting only in the manner and to
the extent specifically provided otherwise in this Agreement) no transfer of, or change
with respect to, ownership in the Property or any part thereof, or any interest therein,
however consummated or occurring, and whether voluntary or involuntary, shall operate,
legally, or practically, to deprive or limit the Seller of or with respect to any rights or
remedies on controls provided in or resulting from this Agreement with respect to the
Property that the Seller would have had, had there been no such transfer or change. In
the absence of specific written agreement by the Seller to the contrary, no such transfer or
approval by the Seller thereof shall be deemed to relieve the Buyer, or any other party
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bound in any way by this Agreement or otherwise with respect to the Property, from any
of its obligations with respect thereto.
19.5.2.3 Any and all instruments and other legal documents involved in effecting
the transfer of any interest in this Agreement or the Property governed by this clause shall
be in a form reasonably satisfactory to the Seller.
19.5.3 If the conditions described in Section 19.5.2 hereof are satisfied then the Transfer
will be approved and the Buyer shall be released from its obligation under this
Agreement, as to the portion of the Property that is transferred, assigned, or otherwise
conveyed. The provisions of this Section 19.5.3 apply to all subsequent transferors.
19.5.4 Except for transfers to bona -fide unit owners, which does not require the Seller
consent, upon issuance of the final Certificate of Completion for the final unit, the Buyer
may Transfer the Property and/or the Buyer's rights and obligations under this
Agreement with respect to such Property without the prior written consent of the Seller,
19.6 Upon the completion of the Minimum Improvements, the Townhome owner's association
(the "Townhome Association") shall provide a copy of [the Declaration Creating
] (the "Townhome Declaration"). The Townhome owner's association must
include in its Declaration a covenant that the first buyer of each townhome unit intends to
live in the unit as an owner -occupant and will not rent the townhome unit for at least five
years following the purchase of such townhome.
19.7 Annually, the Seller, its successor or assign, shall offer the Townhome Association the
ability to enter into a Boat Slip Use Agreement each year for up to 20 boat slips for
exclusive use of the owners of a Townhome unit in the form as attached hereto as
EXHIBIT F. The Boat Slip Use Agreement will include the exclusive use of up to 20
boat slips; provided, however, that the number of boat slips offered each year to the
Townhome Association will not exceed the number of Townhome units completed and
units under construction. The Seller covenants and represents that, subject to the
provisions of this Section 19.7, the Townhome Association shall have exclusive access to
20 boat slips each year. Notwithstanding the foregoing, if owners of the Townhomes
decline the use of all 20 boat slips, the City may enter into rental agreements for the
unused boat slips for that year. Prior to the conveyance of the Property to the Buyer, the
Seller will amend its City Code of Ordinances to provide for the Townhome Association
having exclusive access to 20 boat slips each year. In addition, upon creation of the
Townhome Association, the Seller shall enter into the Declaration Regarding Boat Slips
set forth in EXHIBIT E which shall be recorded against the Property.
20. Development Agreement. Prior to the issuance of any grading or building permits for the Property,
the Buyer shall enter into a Development Agreement with the Seller with respect to the infrastructure
required for the Minimum Improvements and the requirements of the Seller for the Buyer's
construction of such infrastructure, and such Development Agreement shall be recorded against the
Property. Pursuant to the City's standard development agreement, prior to commencement of
construction of the Improvements, the Developer will furnish the City an irrevocable letter of credit
("Security"), approved by the City Attorney, in the amount of 125% of the estimated project costs for
the infrastructure required for the Minimum Improvements as agreed by the City. The letter of
credit shall renew automatically, as applicable, and released by the City pursuant to the terms of the
Development Agreement.
-52-
21. Penalties for Failure to Complete Minimum Improvements. The Buyer will submit a letter of
credit in the amount of $35,000 (the "Letter of Credit") at Closing to secure performance of the
Buyer's obligations under Section 19.2. Upon completion of one or more Phases of the Minimum
Improvements, the Letter of Credit shall be reduced as follows: 10% reduction of the original amount
after satisfactory completion of Phase 1 (in addition to any applicable reductions or releases in
relation to the Development Agreement), 25% reduction of the remaining amount after satisfactory
completion of Phase 2, 25% reduction of the remaining amount after satisfactory completion of
Phase 3, and release of the balance after satisfactory completion of Phase 4.
In the event that, subsequent to conveyance of the Property to the Buyer, the Buyer, subject to
Unavoidable Delays (as hereafter defined), fails to carry out its obligations to construct Phases 1
through 4 as described in Section 19.2 with respect to the commencement of construction of the
Minimum Improvements (including the nature and the date for the completion thereof), or abandons
or substantially suspends construction work, and any such failure, abandonment, or suspension shall
not be cured, ended, or remedied within thirty (30) days after written demand from the Seller to the
Buyer to do so, then the Seller may grant up to a 6 month extension to commence or complete the
Phase as provided in Section 19.2. If following the applicable extension, the Buyer has not satisfied
the applicable commencement or completion of the applicable Phase, the Seller may draw down on
or make a claim against the Letter of Credit (in the percentage of the remaining amounts for each
Phase set forth in the first paragraph of this Section 21), as appropriate, upon five (5) business days'
notice to the Developer.
For the purposes of this Agreement, the term "Unavoidable Delays" means delays beyond the
reasonable control of the Buyer as a result thereof which are the direct result of strikes, other labor
troubles, prolonged adverse weather or acts of God, fire or other casualty to the Minimum
Improvements, litigation commenced by third parties which, by injunction or other similar judicial
action, directly results in delays, or acts of any federal, state or local governmental unit (other than
the Seller in exercising its rights under this Agreement) which directly results in delays. Unavoidable
Delays shall not include delays in the Buyer's obtaining of permits or governmental approvals
necessary to enable construction of the Minimum Improvements by the dates such construction is
required under this section of this Agreement.
22. Broker's Commission. The Seller and the Buyer represent and warrant to each other that they
have dealt with no brokers, finders or the like in connection with this transaction. The parties agree
to indemnify each other and to hold each other harmless against all claims, damages, costs or
expenses of or for any other such fees or commissions resulting from their actions or agreements
regarding the execution or performance of this Agreement, and will pay all costs of defending any
action or lawsuit brought to recover any such fees or commissions incurred by the other party,
including reasonable attorneys' fees.
23. Mutual Indemnification. The Seller and the Buyer agree to indemnify each other against, and
hold each other harmless from, all liabilities (including reasonable attorney's fees in defending
against claims) arising out of the ownership, operation or maintenance of the Property for their
respective periods of ownership. Such rights of indemnification will not arise to the extent that
(a) the party seeking indemnification actually receives insurance proceeds or other cash payments
directly attributable to the liability in question, (net of the cost of collection, including reasonable
attorney's fees) or (b) the claim for indemnification arises out of the act or neglect of the party
seeking indemnification. If and to the extent that the indemnified party has insurance coverage,
or the right to make claim against any third parry for any amount to be indemnified against as set
forth above, the indemnified party will, upon full performance by the indemnifying party of its
WINES
indemnification obligations, assign such rights to the indemnifying party or, if such rights are not
assignable, the indemnified party will diligently pursue such rights by appropriate legal action or
proceeding and assign the recovery and/or right of recovery to the indemnifying party to the
extent of the indemnification payment made by such party.
24. Assignment. The Buyer may not assign its rights under this Agreement, without the prior written
consent of the Seller which consent shall be granted if the assignment is commercially
reasonable.
25. Survival. Except as stated in Section 17 hereof, all of the terms of this Agreement will survive
and be enforceable until a Certificate of Completion is provided as to each phase of the Minimum
Improvements.
26. Notices. Any notice required or permitted to be given by any party upon the other is given in
accordance with this Agreement if it is directed to the Seller by delivering it personally to an
officer of the Seller, or if it is directed to the Buyer, by delivering it personally to an officer of the
Buyer, or if mailed in a sealed wrapper by United States registered or certified mail, return receipt
requested, postage prepaid, or if deposited cost paid with a nationally recognized, reputable
overnight courier, properly addressed as follows:
If to the Seller: City of Mound, Minnesota
2415 Wilshire Boulevard
Mound, MN 55364
Attention: City Manager
If to the Buyer: Mound Harbor, LLC
6035 Culligan Way
Minnetonka, MN 55345
With a copy to: Foley & Mansfield, PLLP
Attention: Ailana McIntosh
250 Marquette Avenue, Suite 1200
Minneapolis, MN 55410
Notices shall be deemed effective on the earlier of the date of receipt or the date of deposit as
aforesaid, provided, however, that if notice is given by deposit that the time for response to any
notice by the other party shall commence to run one business day after any such deposit. Any
party may change its address for the service of notice by giving written notice of such change to
the other parry, in any manner above specified, ten days prior to the effective date of such change.
27. Captions. The paragraph headings or captions appearing in this Agreement are for convenience
only, are not a part of this Agreement and are not to be considered in interpreting this Agreement.
28. Entire Agreement; Modification. This written Agreement constitutes the complete agreement
between the parties and supersedes any prior oral or written agreements between the parties
regarding the Property. There are no verbal agreements that change this Agreement and no
waiver of any of its terms will be effective unless in writing executed by the parties.
29. Binding Effect. This Agreement binds and benefits the parties and their successors and assigns.
30. Controlling Law. This Agreement has been made under the laws of the State of Minnesota, and
IMM
such laws will control its interpretation.
31. Remedies. If either party defaults under this Agreement, the non -defaulting Party shall have the
right to terminate this Agreement by giving written notice to the defaulting Party. If the Buyer
fails to cure such default within five business days, or such time period as allowed pursuant to
this Agreement of the date of such notice from the Seller, the Seller may cancel this Agreement
pursuant to Minnesota Statutes, Section 559.21. If the Seller fails to cure such default within five
business days of the date of such notice from the Buyer, the Buyer may immediately terminate
this Agreement by delivering to the Seller at the address noted in Section 27 hereof a Notice of
Termination executed by an authorized representative(s) of the Buyer.
The foregoing is the exclusive remedy for either party. All other remedies, including damages for
breach, equitable remedies, specific performance, and all other remedies at law or equity are
waived and relinquished by each of the parties.
(The remainder of this page is intentionally left blank.)
-55-
IN WITNESS WHEREOF, the Seller and the Buyer have executed this Purchase and
Development Agreement as of the date and year first written above.
SELLER:
By
Its Mayor
By
Its City Manager
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of , 2018, by
Mark Wegscheid, the Mayor of the City of Mound, Minnesota, a statutory city and political subdivision of
the State of Minnesota, on behalf of the Seller.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of , 2018, by
Eric Hoversten, the City Manager of the City of Mound, Minnesota, a statutory city and political subdivision
of the State of Minnesota, on behalf of the Seller.
This document drafted by:
KENNEDY & GRAVEN, CHARTERED (JAE)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612)337-9300
Notary Public
EM
Execution page of the Buyer to the Purchase and Development Agreement, dated as of the date and year
first written above.
By
Its
STATE OF MINNESOTA )
SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this
, the
on behalf of the Buyer.
Notary Public
-57-
day of , 2018, by
of Mound Harbor, LLC, a
EXHIBIT A
LEGAL DESCRIPTION
[Insert legal description]
F::
ESCROW AGREEMENT
The undersigned ("Title Company"), acknowledges receipt of
$ (the "Earnest Money") to be held by it pursuant to the Purchase Agreement to
which this Escrow Agreement is attached. Title Company will hold the Earnest Money (hereinafter the
"Earnest Money") in accordance with the terms of the Purchase Agreement and disburse the same strictly
in accordance with such terms. Title Company will invest the Earnest Money in such interest-bearing
accounts, instruments, corporate paper, or money market funds as approved by both the Buyer and the
Seller, Interest will accrue for the benefit of the Buyer, unless the Purchase Agreement is terminated by
reason of the default of the Buyer, in which case the interest will be paid to the Seller. Prior to the waiver
or satisfaction of its contingencies, the Buyer may direct the Title Company to return the Earnest Money
to it if the Buyer is entitled to terminate and elects to terminate the Purchase Agreement.
Title Company is not responsible for any decision concerning performance or effectiveness of the
Purchase Agreement or for resolution of any disputes concerning the Purchase Agreement. Title
Company is responsible only to act in accordance with the joint and mutual direction of both the Seller
and the Buyer, or in lieu thereof, the direction of a court of competent jurisdiction except as to the
Buyer's right to direct the return of the Earnest Money in accordance with the Purchase Agreement. The
Seller and the Buyer will hold Title Company harmless from all claims for damages arising out of this
Escrow Agreement and do hereby agree to indemnify Title Company for all costs and expenses in
connection with this escrow, including court costs and attorneys' fees, except for Title Company's failure
to account for the funds held hereunder, or acting in conflict with the terms hereof.
The fees and charges of the Title Company will be paid by the Seller. This Escrow Agreement is
dated this _ day of , 20
an
MWE
EXHIBIT C
Deed Tax Due: $
ECRV
Date:
FOR VALUABLE CONSIDERATION, the City of Mound, Minnesota, a statutory city and political
subdivision of the State of Minnesota, Grantor, hereby conveys and warrants to Mound Harbor, LLC, a
Minnesota limited liability company, Grantee, real property in Hennepin County, Minnesota, described as
follows:
[Insert legal description]
Check here ifpart or all of the land is Registered (Torrens) L7
together with all hereditaments and appurtenances belonging thereto, subject to the following exceptions:
easements of record.
❑ The Seller certifies that the Seller does
not know of any wells on the described
real property.
❑ A well disclosure certificate accompanies
this document or has been electronically
filed. (If electronically filed, insert
WDC number: ).
❑ I am familiar with the property described
in this instrument and I certify that the
status and number of wells on the
described real property have not
changed since the last previously filed
well disclosure certificate.
CITY OF MOUND, MINNESOTA
By
Its Mayor
By
Its City Manager
-60-
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of , 2018, by
Mark Wegscheid, the Mayor of the City of Mound, Minnesota, a statutory city and political subdivision of
the State of Minnesota, on behalf of the City.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of , 2018, by
Eric Hoversten, the City Manager of the City of Mound, Minnesota, a statutory city and political subdivision
of the State of Minnesota, on behalf of the City.
This instrument was drafted by:
Kennedy & Graven, Chartered
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612)337-9300
Notary Public
Tax Statements should be sent to:
Mound Harbor, LLC
[ADDRESS]
EXHIBIT D
FORM OF CERTIFICATE OF COMPLETION
(To be completed for each Phase of the Minimum Improvements)
The undersigned hereby certifies that Mound Harbor, LLC, a limited liability
company (the "Developer"), has fully satisfied its obligations under Section 19 of the Purchase and
Development Agreement, dated , 2018 (the "Agreement"), between the City of Mound,
Minnesota and the Developer, with respect to construction of Phase of the Minimum Improvements in
accordance with Section 19 of the Agreement relating to the Property described in the attached Exhibit A,
and that the Developer is released and forever discharged from its obligations with respect to construction of
Phase of the Minimum Improvements under Section 19 of the Agreement.
Dated: , 20
CITY OF MOUND, MINNESOTA
By
Its Mayor
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
City Manager
The foregoing instrument was acknowledged before me this day of , 20_, by
, the Mayor of the City of Mound, Minnesota, a statutory city and political subdivision
of the State of Minnesota, on behalf of the City.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of , 20_, by
, the City Manager of the City of Mound, Minnesota, a statutory city and political
subdivision of the State of Minnesota, on behalf of the City.
Notary Public
Wo
This document drafted by:
KENNEDY & GRAVEN, CHARTERED (JAE)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612)337-9300
1WX1'113108�1
DECLARATION REGARDING BOAT SLIPS
DECLARATION — BOAT SLIPS
THIS DECLARATION REGARDING BOAT SLIPS (the "Declaration") entered into this _
day of , 2018, by and between the CITY OF MOUND, MINNESOTA, a statutory city and
political subdivision of the State of Minnesota, having its office located at 2415 Wilshire Boulevard,
Mound, Minnesota 55364 (the "City"), and [TOWNHOME ASSOCIATION], a
, having its principal office at (the "Townhome
Association").
RECITALS:
WHEREAS, the City intends to convey the real property legally described on Exhibit A attached
hereto (the "Development Property") to Mound Harbor, LLC, a Minnesota limited liability company (the
"Developer") under Purchase and Development Agreement, dated , 2018, between the
City and the Developer ("Development Agreement'); and
WHEREAS, pursuant to the Development Agreement, the Developer will construct 21 townhome
units (the "Minimum Improvements") on the Development Property; and
WHEREAS, in exchange for the Developer constructing the Minimum Improvements, the City has
agreed to provide the Townhome Association exclusive use of up to 20 boat slips under certain
conditions and the City and the Townhome Association desire to memorialize this agreement
pursuant to this Declaration.
NOW, THEREFORE, for good and valuable consideration, the City hereby agrees, covenants, and
declares the following:
1. Boat Slip Agreement. Annually, the City shall offer the Townhome Association the
ability to enter into a Boat Slip Use Agreement each year for up to 20 boat slips for exclusive use of the
owners of a Townhome unit. The Boat Slip Use Agreement will include the exclusive use of up to 20
boat slips; provided, however, that the number of boat slips offered each year to the Townhome
Association will not exceed the number of Townhome units completed and units under construction. The
Seller covenants and represents that, subject to the provisions of this Section 1, the Townhome
Association shall have exclusive access to 20 boat slips each year. Notwithstanding the foregoing, if
owners of the Townhomes decline the use of all 20 boat slips, the City may enter into rental agreements
for the unused boat slips for that year.
2. Failure to Provide Boat Slips. If the City takes action to permanently reduce the number
of boat slips available for the exclusive use of the owners of the Townhome units below 20, the
Townhome Association shall have all rights and remedies available to it at law or in equity, including a
right to injunctive relief and specific performance. If any arbitration, litigation, or other legal proceeding
occurs between the parties relating to this Agreement, the Townhome Association shall be entitled to
u
recover (in addition to any other relief awarded or granted) the reasonable costs and expenses, including
attorney's fees, incurred by the Townhome Association.
3. Enforceability; Successors and Assigns. The covenants contained herein are intended to
be perpetual, shall run with the land, and shall be binding upon, and inure to the benefit of, the
Townhome Association and its successors, assigns, and future owners, tenants and occupants of
any portion of the Development Property. Without limiting the foregoing, the restrictions and
prohibitions contained herein on the Development Property (or any portion thereof) shall be
enforceable by the City, and its successors and assigns, by injunctive relief, the remedy at law
being inadequate.
4. Governing Law. This agreement shall be governed by the laws of the State of Minnesota.
5, Amendment. This agreement shall not be amended or modified unless by an instrument
in writing executed by the City and the Townhome Association, at the time of the amendment or
modification, of all of the Development Property.
6. No Merger. This instrument shall not merge or be extinguished by reason of common
ownership, including common ownership of the Development Property and any property adjacent
to the Development Property.
SNM
IN WITNESS WHEREOF, the City and the Townhome Association have executed this
Declaration as of the date first above written.
By
Its
Mayor
By
Its City Manager
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of , 2018,
by Mark Wegscheid, the Mayor of the City of Mound, Minnesota, a statutory city and political
subdivision of the State of Minnesota, on behalf of the Seller.
Notary Public
STATE OF MINNESOTA }
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of , 2018,
by Eric Hoversten, the City Manager of the City of Mound, Minnesota, a statutory city and political
subdivision of the State of Minnesota, on behalf of the Seller.
Notary Public
This document drafted by:
KENNEDY & GRAVEN, CHARTERED (JAE)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612)337-9300
By
Its
STATE OF MINNESOTA )
SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of , 2018,
by the of [TOWNHOME
ASSOCIATION], a , on behalf of the Townhome Association.
Notary Public
SOME
[insert]
EXHIBIT A OF DECLARATION
LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY
am
EXHIBIT F
BOAT SLIP AGREEMENT
SLIP USE AGREEMENT BETWEEN THE CITY
OF MOUND AND THE HARBOR DISTRICT TOWNHOME ASSOCIATION
THIS SLIP USE AGREEMENT (this "Agreement") is made and entered into as of the day
of , 2019, by and among The Harbor District Townhome Association, Common Interest
Community No. , acting by and through its association board ("HOA") and the City of Mound, a
Minnesota municipal corporation ("City"). The HOA and the City may hereinafter be referred to
individually as a "party" or collectively as the "parties."
RECITALS:
A. The City owns the 37 slip multiple slip complex in Lost Lake adjacent to the Villas on Lost
Lake townhomes ("37 Slip Complex") and the 24 slip multiple slip complex ("24 Slip Complex")
adjacent to the Harbor District's Greenway and Pier. The 37 Slip Complex and the 24 Slip Complex may
hereinafter be referred to collectively as the "Slip Complexes."
B. In 2018 the City approved a Purchase and Developer Agreement with MOUND HARBOR,
LLC, the original developer of the Harbor District Townhomes, ("Developer"), which provides for
priority assignment of a slip at one of the Slip Complexes for the residents of the Harbor District
Townhomes; and
D. The parties desire to enter into an Agreement that sets forth the terms and conditions of the
slip assignments, fee structure, rules governing use of the Slip Complexes and the City's obligation to
maintain the Lost Lake Channel and the Slip Complexes and appurtenances.
NOW THEREFORE, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Slip Assignment. In accordance with Chapter 78, Section 78-122 (d) of the Mound City
Code, as amended from time to time, up to twenty [20] slips at the Slip Complexes will be reserved for
owners or renters of the Harbor District Townhomes who will be given first priority for assignment of
these slips. Applications and fees for the slip are due by the last day of February each year. All slips not
used by Harbor District Townhomes owners or renters will be released by the City for licensing in
accordance with the Mound City Code (Chapter 78, Section 78-122) beginning on March 1 st of each year.
2. Fee Structure. The City establishes its fee schedule as part of the annual budget process
and the City reserves the right to modify the fees for the slips at the Slip Complexes from time to time.
The City agrees to provide for maintenance activities of the channel, the slips and surrounding
appurtenances of the Slip Complexes including, but not limited to, debt service on bonds related to the
Lost Lake development or renewal, maintenance of the channel and mulitiple slip structures and
appurtenances, utilities, insurance premiums and deductibles, program administration and funding
reserves for these activities.
3. Dock Use Area. The slips at the Slip Complexes are licensed and regulated by the Lake
Minnetonka Conservation District ("LMCD"), which imposes certain restrictions on the use of the lake,
including the slips, that must be complied with by those using the Slip Complexes. In addition, Chapter
78, Article VI the City of Mound City Code, as amended from time to time, regarding slip licensing has
additional regulations that all multiple slip licensees need to comply with. Each user of a slip is
responsible for complying with all applicable federal, state, and local laws, rules, regulations, and
ordinances related to their use. The City may terminate a Townhome resident's use of the Slip
Complexes and refuse to lease a slip to the resident for such period of time as the City determines is
reasonable if the resident violates any of the applicable regulations or the terms and conditions of the
lease.
4. Maintenance Activities. Lost Lake was redredged in 2005 to provide access to Lake
Minnetonka for the planned redevelopment of the City's downtown. The Slip Complexes were
constructed to provide pedestrian access to these amenities. The City is responsible for maintaining the
dredge and any aquatic vegetation removal/management so that reasonable access can be obtained in and
around the Slip Complexes. The dredge depth is regulated by the Department of Natural Resources
("DNR") and the standard limit is out to 48" of water depth measured from the Ordinary High Water
("OHW") level elevation of 929.4 feet. The City will maintain the Slip Complexes and appurtenances, as
public amenities, to a reasonable standard, as determined by the City, providing for the health and safety
of pedestrians and functionally equivalent replacement, if necessary. The City's agreement to maintain
the Slip Complex and appurtences is as the owner of the facilities to make them available to the general
public as a public amenity and does not create a special duty between the City and the users of the Slip
Complexes.
5. Liability. All slip licensees must provide proof of boat owners insurance upon license
renewal. The City maintains a General Liability Policy with the League of Minnesota Cities Insurance
Trust and currenly has a Property In the Open policy for the Slip Complexes. The City maintains the
right to self insure the Property in the Open coverage as an alternative to the relatively high premiums of
its current policy. Nothing in this Agreement constitutes, or shall be interpreted as, a waiver by the City
of any limitation on or exemption from liability available to it under common law, Minnesota Statutes,
chapter 466, or other law.
6. Notices. Any notice required hereunder shall be given in writing, signed by the party
giving notice, personally delivered or mailed by certified or registered mail, return receipt requested, to
the parties' respective addresses as set forth below:
To City: Eric Hoversten
City Manager
City of Mound
2415 Wilshire Blvd
Mound, MN 55364
With Copy to: Troy Gilchrist
City Attorney
Kennedy & Graven
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
To HOA: The Harbor District Townhome Association
C/O
MN 55XXX
911
Notice shall be deemed delivered (a) in the case of personal delivery, on the date when personally
delivered; or (b) in the case of certified or registered mail, on the date which is one day after deposited in
the United States mail with sufficient postage to effect such delivery. Each party may change recipient
and the address to which notice must be given by delivery of written notice to the other parties in
accordance with this Paragraph 6.
7. Counterparts. The parties may sign this Agreement in several counterparts, each of
which constitutes an original, but all of which together constitute one instrument.
8. Termination. The parties may agree in writing to terminate this Agreement at any time.
The City may terminate this Agreement upon providing the HOA 12 months written notice of
termination. The termination will not affect the use of the slips by the Townhome residents in the then
present season, but the City may refuse to grant the priority provided for in this Agreement for the then
upcoming season and thereafter.
8. Miscellaneous. This Agreement shall be binding upon the parties hereto and their
respective successors and assigns. This Agreement can be amended or modified only by a writing
signed by the parties hereto. This Agreement shall be governed by the laws of the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first
above written.
CITY OF MOUND HARBOR DISTRICT TOWNHOME
ASSOCIATION (COMMON INTEREST
COMMUNITY NO. )
Its
an
Its
Its Its