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HomeMy WebLinkAbout2018/04/16 - ADMIN - Agenda Packets - City Council - RegularAGENDA APRIL 16, 2018 5:30 p.m. SPECIAL STUDY SESSION – Community Room Discussion Item 1. 5:30 p.m. 2040 Comprehensive Plan Update Discussion 7:20 p.m. ECONOMIC DEVELOPMENT AUTHORITY – Council Chambers 1.Call to Order 2.Roll Call 3. Approval of Minutes 3a. Economic Development Authority Meeting Minutes April 2, 2018 4. Approval of Agenda 5.Reports 6.Old Business – None 7.New Business 7a. Fifth Amendment to Central Park West Redevelopment Contract Recommended Action: Motion to Adopt EDA Resolution approving the Fifth Amendment to the Contract for Private Redevelopment with Central Park West, LLC and Adopt Resolution approving the modification to the CPW Phase II Assessment Agreement. 7b. Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Recommended Action: Conduct the Public Hearing and Adopt EDA Resolution approving the Purchase and Redevelopment Contract between the EDA and SLP Park Ventures,LLC. 8.Communications – None 9.Adjournment 7:30 p.m. CITY COUNCIL MEETING – Council Chambers 1.Call to Order 1a. Pledge of Allegiance 1b. Roll Call 2.Presentations 2a. Retirement Recognition Resolution for Part-Time Firefighter Nicola Typpo 2b. St. Louis Park Parktacular Ambassadors Introduction & Recap of Year 2c. City Volunteers and Boards and Commissions Volunteers Proclamation 2d. 4th Annual SLP Earth Day Community Meal and Town Visioning Proclamation 2e. Recognition of Donations Meeting of April 16, 2018 City Council Agenda 3. Approval of Minutes 3a. Study Session Meeting Minutes of March 26, 2018 3b. Special Study Session Minutes April 2, 2018 3c. City Council Meeting Minutes April 2, 2018 4. Approval of Agenda and Items on Consent Calendar NOTE: The Consent Calendar lists those items of business which are considered to be routine and/or which need no discussion. Consent items are acted upon by one motion. If discussion is desired by either a Councilmember or a member of the audience, that item may be moved to an appropriate section of the regular agenda for discussion. The items for the Consent Calendar are listed on the last page of the Agenda. Recommended Action: Motion to approve the Agenda as presented and items listed on the Consent Calendar; and to waive reading of all resolutions and ordinances. (Alternatively: Motion to add or remove items from the agenda, or move items from Consent Calendar to regular agenda for discussion.) 5. Boards and Commissions -- None 6. Public Hearings 6a. First Reading of Ordinance Amending St. Louis Park Home Rule Charter Sec. 12.08 Related to Voting Method Recommended Action: Mayor to open public hearing, take public testimony, and close public hearing. The Charter Commission has recommended the City Council approve the first reading of an ordinance amending the St. Louis Park Home Rule Charter by adding Sec. 12.08, Voting Method to allow for the use of Ranked Choice Voting in municipal elections. A unanimous vote of all 7 councilmembers is required for approval. 7. Requests, Petitions, and Communications from the Public – None 8. Resolutions, Ordinances, Motions and Discussion Items 8a. Tenant Protection Ordinance Recommended Action: Motion to Adopt Second Reading of Ordinance amending Chapters 8, Section 8-336 of the St. Louis Park Code of Ordinances relating to a tenant protection period following the sale of an affordable housing building and authorize publication of summary ordinance. 8b. Approval of 2018 – 2023 Garbage, Recycling, Organics Recycling and Yard Waste Collection Contract Recommended Action: Motion to Adopt Resolution which designates Waste Management (WM) as the contractor for residential garbage, recycling, organics recycling, and yard waste collection services (solid waste collection) and authorizes the Mayor and City Manager to execute a contract with WM for that service. 9. Communications – None Immediately Following City Council Meeting CLOSED EXECUTIVE SESSION – Westwood Room Discussion Item 1. Closed Executive Session to Discuss Coal Tar Sealant Litigation Meeting of April 16, 2018 City Council Agenda CONSENT CALENDAR 4a. Adopt Resolution to recognize Part-Time Firefighter Nicola Typpo for 20 years of service. 4b. Designate Peterson Companies, Inc. as the lowest responsible bidder and authorize execution of an agreement with the firm in the amount not to exceed $951,326.38 to redevelop the girls fast pitch softball fields in Aquila Park. 4c. Approve a Temporary Liquor License for the Heilicher Minneapolis Jewish Day School for their Annual Meeting to be held on June 7, 2018, at the Sabes Jewish Community Center, 4330 Cedar Lake Road in St. Louis Park. 4d. Approve a Temporary On-Sale Intoxicating Liquor License for Finnegans Community Fund at Gamble Drive and the adjacent privately owned parking lot in West End for June 02, 2018. 4e. Adopt Resolution providing for the Sale of $8,800,000 General Obligation Bonds 2018A. 4f. Adopt Resolution supporting the City of St. Louis Park’s application for becoming a 2018 – 2019 Minnesota GreenCorps Member Host Site. 4g. Adopt Resolution authorizing fund equity transfers. 4h. Adopt Resolution approving acceptance of a monetary donation from the Rotary Club of St. Louis Park in the amount of $1,000 for the Recreation Division’s Summer Concert Series. 4i. Adopt Resolution approving the Fifth Amendment to the Contract for Private Redevelopment with Central Park West, LLC and the modification to the CPW Phase II Assessment Agreement. St. Louis Park Economic Development Authority and regular City Council meetings are carried live on Civic TV cable channel 17 and replays are frequent; check www.parktv.org for the schedule. The meetings are also streamed live on the internet at www.parktv.org, and saved for Video on Demand replays. The agenda is posted on Fridays on the official city bulletin board in the lobby of City Hall and on the text display on Civic TV cable channel 17. The agenda and full packet are available by noon on Friday on the city’s website. Auxiliary aids for individuals with disabilities are available upon request. To make arrangements, please call the Administration Department at 952/924-2525 (TDD 952/924-2518) at least 96 hours in advance of meeting. Meeting: Special Study Session Meeting Date: April 16, 2018 Discussion Item: 1 EXECUTIVE SUMMARY TITLE: 2040 Comprehensive Plan Update Discussion RECOMMENDED ACTION: Discuss and provide feedback on the proposed Housing and Land Use Goals and Strategies of the 2040 Comprehensive Plan. No action is required at this time. POLICY CONSIDERATION: The proposed goals and strategies in the 2040 Comprehensive Plan will be presented for consideration by the City Council. SUMMARY: The process of updating the city’s current Comprehensive Plan for 2040 is continuing. The city’s current 2030 Comprehensive Plan can be found on the city’s website at: https://www.stlouispark.org/government/departments-divisions/community- development/previous-comprehensive-plan-efforts Overview: Staff will be providing an overview of two chapters of the 2040 Plan: Housing and Land Use. A description of each of the various sections and chapters for the Plan Update is attached, as is the schedule for review. Housing: At the meeting staff will review the proposed Housing goals and strategies for the Plan. The goals and strategies combine the Housing Goals adopted by the Council in 2014, along with the relevant Housing Goals in the current Comprehensive Plan and the Vision 3.0 recommendations. They have been written to reflect the updated policies of the city as well as looking toward additional efforts for the future. The current chapter can be found at: https://www.stlouispark.org/home/showdocument?id=3680 Land Use: Staff will review the proposed changes to the Land Use Plan, including the Land Use goals, new land use categories, and changes to densities within the categories. The current chapter can be found at: https://www.stlouispark.org/home/showdocument?id=3676 NEXT STEPS: The remaining chapters goals and strategies will be discussed at the May 14th Council Study Session. In June, the City Council will be asked to take action to begin the formal 6-month review process with adjacent jurisdictions. FINANCIAL OR BUDGET CONSIDERATION: The funding for the Plan has been allocated in the 2017 and 2018 community development budgets. VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community. SUPPORTING DOCUMENTS: Discussion 2040 Comp Plan Outline with Section Descriptions Tentative Comprehensive Plan Review Schedule Housing Plan Goals and Strategies Land Use Plan Goals and Strategies Density Recommendations Table for 2040 Land Use Category Descriptions Future Land Use Map Proposed Changes Prepared by: Meg J. McMonigal, Principal Planner Reviewed by: Karen Barton, Community Development Director Approved by: Tom Harmening, City Manager Page 2 Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion DISCUSSION Housing Plan In 2014 the City Council updated the City’s housing goals following its annual workshop. At that time the city began working toward inclusionary housing opportunities. The city’s Inclusionary Housing policy was adopted in 2015 and amended in 2017. Staff reviewed the Council adopted 2014 Housing goals and combined them with the relevant goals and strategies from the current 2030 Comprehensive Plan and Vision 3.0 recommendations. The goals continue to focus on single-family homes, multi-family homes, home ownership, affordable housing, and preservation, safety and sustainability. Staff has augmented the goals with attention to equity in housing throughout the city, as well. In support of these goals, the Council has created a variety of programs and policies. New housing policies and programs created by the Council include the Inclusionary Housing Policy, the Tenant Protection Ordinance for Naturally Occurring Affordable Housing (NOAH), and the Kids in the Park shallow rent assistance program. For the future, the goals point to additional efforts the city will pursue, including continuing current efforts and pursuing new strategies and tools in every goal area. Land Use Plan The proposed changes in the land use plan include: •Expanding the residential density ranges in several categories to allow for more flexibility, establish clear maximums, and allow additional density in certain areas. Please see the attached density table; categories with changes are shown in orange. o Low density residential density - In both the Housing and Land Use sections, a proposed policy change is to consider allowing Accessory Dwelling Units (ADUs) and two-family dwelling units (twin homes and duplexes) in low density residential areas. The Plan would guide this change, however it would need to be implemented through the Zoning Ordinance as a follow-up step to the Comprehensive Plan. •Creation of a new land-use category: “Transit Oriented Development” or TOD, to support the scale and density expected in transit station areas. The proposed density range is 50- 125 units per acre. This category would be applied to the Green Line Light Rail Transit station areas and allow a mix of employment, commercial and residential uses. Additional work on zoning related to this category will be pursued as an implementation step following the plan adoption. •Land Use map changes on various sites and properties in the city, as shown on the attached map. Overview of Comprehensive Plan Vision and Themes: In the first half of 2017 the city conducted an extensive effort of community input for Vision 3.0. The recommendations of Vision 3.0 include: •Develop Creative Housing Solutions •Develop Future-focused Transit and Mobility Page 3 Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion •Continue to Lead in Environmental Stewardship and Ensure Access to Green Space for Future Generations •Prepare our Next Generation •Commit to Being a Leader in Racial Equity and Inclusion In addition, the city staff working on updating the Comprehensive Plan have developed a set of themes that embody the Vision 3.0 recommendations and combine them with the broad directions of the plan. These themes are: Equity, Health, Livability, Resilience, and Vitality. All of these themes are interrelated and overarching to the work the city is doing. The themes will be noted throughout the plan by icons to show how they are integrated into planning for the future. Plan Format The Plan format for each section uses the current plan format of: §Vision and Introduction §Where We Have Been §Where We Are Today §Where We Are Headed §Goals and Strategies Community Input In 2017 the Vision 3.0 process began the Comprehensive Plan process by gaining input from residents on what is important to the community. That information and the input from the set of Neighborhood Planning Workshops held in November, 2017 were used to inform the Plan update. The Community Input Report can be found on the city’s website also at the above address. Boards and Commissions Staff has been working with a number of Boards and Commissions in developing the content for the updated Plan, as shown in the following table. In addition, the Goals and Strategies of the Plan will be sent to all Commissions for review and comment in May. Comprehensive Plan Meetings with Boards and Commissions Planning Commission: •June 7, 2017 – Review of current plan •December 6, 2017 – Introduction of consultant and schedule •February 21, 2018 - Land Use •March 7, 2018 - Housing •March 21, 2018 - Mobility and Land Use •April 4, 2018 – Climate and Energy, Solid Waste, Parks, Open Space and Natural Resources Park and Recreation Advisory Commission: •October 2, 2017 •November 29, 2017 •January 29, 2018 Environment and Sustainability Commission: •November 1, 2017 •January 3, 2018 •March 7, 2018 St. Louis Park School Board: •February 12, 2018 2040 Comprehensive Plan Update St. Louis Park March 26, 2018 St. Louis Park 2040 Comprehensive Plan Outline CHAPTER Req’d elements SECTION DESCRIPTION I.Vision 3.0 St. Louis Park A.Key Themes for Comprehensive Plan: •Equity •Health •Livability •Resilience •Vitality Vision provides guidance for the city’s specific plans. The key themes have been developed from vision and all of the important thematic directions the city is working towards for the future. These themes are addressed throughout the plan, and will be shown by icons in the goals of each chapter as pertinent. II.Who We Are - Demographics X Provides both city’s projections from Met Council and other pieces of demographic information important to the overall plan. III.A Livable Community A.Planning Context Provides historical background of planning and development of the community. B.Land Use Plan X Sets out land use plan for the future by showing existing and future land use categories descriptions and maps. Land uses on map show the types of uses allowed and density ranges. C.Economic and Redevelopment X Provides guidance for future economic development and redevelopment in city. Includes employment, economic development assistance and redevelopment objectives. D.Housing Plan X Provides a description of housing in the community, including a variety of statistics. Describes housing programs by City and Housing Authority. Sets out future housing goals and direction for the city. E.Historic Describes historic preservation in the community and the St. Louis Park Historical Society and its work. F.Plan By Neighborhood Looks at each neighborhood individually, showing statistics and reflecting the desires of the local residents from the Neighborhood Planning Workshops Mobility in Our Community A.Highways and Streets X Describes the roadway system, predicts future traffic volumes and areas of future congestion, and recommends roadway improvements. B.Transit X Describes bus and light rail transit systems and city’s work with Metro Transit on services. C.Bicycles and Pedestrians X Analyzes bike and pedestrian networks and recommends improvements. Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 4 2040 Comprehensive Plan Update St. Louis Park March 26, 2018 D.Freight Rail X Describes freight rail routes in city and issues related to rail routes. E.Aviation X Describes MSP airport impacts on the city, the city’s interactions with the Metropolitan Airports Commission, and required Federal Aviation requirements for building and noise mitigation. Where We Gather A.Parks, Open Space and Natural Resources X Shows the city’s park system and facilities, programs, and natural resources. Also addressed park design standards, improvements and maintenance and planning for the future. B.Public Art Describes efforts and accomplishments regarding public art in the community, including by city and Friends of the Arts. C.Social networks and organizations St. Louis Park has a number of unique community organizations, such as Children’s First. As these are essential to the community’s overall health and well- being, they will be described in this section. Environmental and Sustainability A.Climate Action and Energy Solar only The Climate Action Plan will be summarized and referred to in this section, as well as numerous other programs and plans the city is working on. A section on solar resources is required. B.Solid Waste The city has made important improvements and strides in solid waste programs and is continuing its efforts into the future. These will be described. C.Water Resources 1.Water System X A Water Supply Plan is being completed by consultants and will include detailed information on volume and capacities and plans for future improvements. Metropolitan Council and Minnesota Department of Natural Resources (MnDNR) set out specific requirements for these plans. 2.Sanitary Sewer X Met Council owns and operates the sewer systems in the Twin Cities Metro Area and the city owns and operates the local system that feeds into it. Growth projections are shown relating to sanitary sewer needs. Attention to preventing and reducing excessive inflow to the systems is also required. 3.Surface Water X A Surface Water Management Plan is being completed by consultants, and will meet detailed rules by various watershed and state agencies. The final plan will be completed in fall of 2018, as required by these agencies. Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 5 2040 Comprehensive Plan Update St. Louis Park March 26, 2018 D.Other utilities + fiber This chapter notes various utility providers in the city and discussed the extension of fiber in the city. How We Govern A.City Government Describes the city government structure and organization. B.Public Health and Safety 1.Public Health 2.Emergency Services: Police and Fire 3.Emergency Plan Public health has become more important to the city and is being addressed on a number of fronts. This section will describe the work that has been completed as well as efforts for the future. Police and Fire service approaches and importance to health and safety in the city are described. A summary of the Emergency Plan is included. C.Race and Equity Description of the city’s past, current and future efforts related to race and equity. D.Communications Description of the communication methods the city uses to keep residents connected and informed. E.Schools Listing of schools and the city and school district’s joint efforts for the future. F.Implementation of the Plan Specific steps for implementing the Comprehensive Plan will be listed and described. APPENDICES: Water Supply Plan, Surface Water Management Plan, I & I Study, Climate Action Plan These plans will be referred to and available with the Comprehensive Plan. Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 6 Comprehensive Plan 2040 - Tentative Review Schedule Date Topics for discussion Feb 21 Land Use March 7 Housing March 21 Land Use and Mobility -City Council invited April 4 Climate and energy Parks and Recreation Solid Waste -Parks and Recreation Advisory Commission and Environment & Sustainability Commission invited April 16 City Council Study Session April 18 Surface Water Water Supply Sanitary Sewer May Additional Community Engagement May 2 Mobility Public Safety Health May 14 City Council Study Session May 15 Send to Commissions for Review May 16 Plan by N’hood and additional remaining sections May 30 Planning Commission Review June 6 Planning Commission recommendation to send out for review June 18 City Council action to send out for review Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 7 Housing Goals and Strategies The city of St. Louis Park will promote and facilitate a balanced and enduring housing stock that offers a continuum of diverse life-cycle housing choices suitable for households of all income levels including, but not limited to affordable, senior, supportive and mixed- income housing disbursed throughout the City. •Create a broad range of housing types to provide more diverse and creative housing choices to meet the needs of current and future residents. •Review existing policies, programs and regulations to remove barriers to innovative and creative housing options. •Establish affordable housing policies and provide equitable housing choices. •Use data and research to guide and evaluate housing priorities, policies, and programs. •Use infill and redevelopment opportunities to help meet housing goals. Single Family Homes: The City places a high priority on creating, preserving, and improving the City’s single family housing stock. •Promote the creation of family-sized, owner-occupied, single-family homes with more bedrooms, more bathrooms, more amenities and 2+ car garages through the expansion of existing homes and through construction of new homes. •Proactively address blighted housing properties through code enforcement and public or private redevelopment activities such as acquisition, demolition and housing replacement. •Promote high-quality architectural design standards of homes through the use of good design, quality materials and superior construction. •Allow for Accessory Dwelling Units (ADUs) on all low density parcels. •Allow for two-family dwelling units (twin homes and duplexes) on all appropriately-sized single family parcels. Multi-Family: The City is committed to promoting quality multi-family developments, both rental and owner occupied, in appropriate locations such as near transit centers, retail and employment centers and in commercial mixed use districts. •Promote the preservation and maintenance of existing multi-family housing stock. •Ensure rental housing is well-maintained and safe through policies and programs for property owners including building inspections, education and rehabilitation resources. •Promote high-quality architectural design in the construction of new multi-family developments. •Be proactive in analyzing and guiding redevelopment opportunities for multi-family developments. •Increase densities and housing options on high-frequency transit routes and near rail stations. Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 8 Home Ownership: The City places a high priority on home ownership including affordable homeownership options. Explore traditional and non-traditional owner- occupied housing options such as; row houses, courtyard housing, high-rises, live-work units, 3-story homes, co-housing, Land Trust and Habitat sponsored homes, and multi- generational housing. •Promote and facilitate a balanced and sustainable housing stock to meet diverse needs for today and in the future. •Continue promoting first-time home buyer, homeownership counseling, down payment, and other assistance programs. •Expand Homeownership: Improve access to homeownership, especially for low-income residents, disabled residents, and people of color. •Minimize the involuntary displacement of people of color, indigenous people and vulnerable populations, such as low-income households, the elderly and people with disabilities, from their communities as neighborhoods grow and change. •Explore strategies and tools to prevent loss of affordable homeownership opportunities near LRT station areas. Affordable Housing: The City is committed to promoting affordable housing options for low and moderate income households. •Ensure affordable housing is disbursed throughout the City and not concentrated in any one area of the City. •Continue to support the preservation of naturally occurring affordable housing •Promote the inclusion of affordable housing opportunities in new developments located near the Southwest Light Rail Transit Corridor and other transit nodes, retail and employment centers and commercial mixed use districts. •Future affordability goals with the Metropolitan Council should be reflective of the City’s existing affordable housing stock as well as City’s future needs. Pursue policies, tools and programs to ensure long-term housing affordability for households at or below 30, 50 and 80% of AMI. •Pursue innovative housing strategies to maximize the creation and preservation of affordable housing. o Continue the implementation of the Inclusionary Housing Policy. o Support shallow rent subsidy programs to promote the ability of rental households to secure and maintain stable housing (such as Kids in the Park). o Develop additional strategies to ensure long-term housing affordability such as the city’s Tenant Protection Ordinance, non-discrimination of rental subsidy, reductions in fees, and others. o Expand landlord participation in the Housing Choice Voucher Program. o Continue acceptance and support of transitional and supportive housing programs for specialized groups and affordable multifamily housing providers. o Promote safe, stable and affordable housing opportunities and strategies for homeless youth, singles, and families. Continue to support the households who are homeless or at risk of homelessness through programs like the Stable HOME program and STEP Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 9 Emergency Program. o Continue to engage in regional dialog and collaboration to expand and maximize affordable housing resources and tools at the local, regional, state and federal levels. •Continue successful administration of the Housing Authority’s core federally funded rental assistance programs including maximizing program utilization, ensuring sound fiscal policies including securing renewal funding through the submission of competitive grant applications and maintaining and improving the Public Housing properties. Preservation, Safety and Sustainability: The City places a high priority on ensuring all housing is safe and well maintained. •Strengthen the City’s single- and multi-family home maintenance and rehabilitation programs. •Preserve and enhance housing quality through code enforcement and the promotion of housing improvement programs related to home rehabilitation, design and housing safety. •Encourage the use of green building techniques, energy efficient products, and sustainable measures in both single-family and multi-family housing construction. •Proactively address health hazards in housing and advance design that supports physical and mental health. •Strengthen neighborhoods and neighborhood amenities to encourage residents to stay and reinvest in St. Louis Park. Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 10 Land Use Goals and Strategies Livable Communities Goals Provide attractive public streets, spaces and facilities that contribute to creating connections and a strong sense of community, and opportunities for community interaction. A.Establish unique and cohesive street character for major community streets, such as Cedar Lake Road, Minnetonka Boulevard, Excelsior Boulevard, and Louisiana Avenue, emphasizing pedestrian connections and safety, landscaping, decorative lighting, and street furniture for the use and enjoyment of the public. B.Create well-defined community gateways at appropriate points where major streets cross the City’s municipal boundary, using location appropriate signage, public art, public plazas, and architecturally significant buildings. C.Incorporate “complete streets” design principles into future improvements of the community’s streets to implement planned multi-modal transportation networks and to help achieve the city’s goals to reduce vehicle emissions and provide a more equitable system of transportation options. D.Provide pedestrian and bicycle pathways that connect key departure points and destinations throughout the City and require installation of identified connections during the redevelopment process. E.Promote high quality design of public and private open spaces that will benefit anticipated users with proper consideration given to use, design, maintenance, appearance, location, and accessibility of the space. F.Encourage placement of works of art, sculpture, or fountains throughout the City to help increase civic prominence and a unique sense of place where appropriate. G.Continue to use decorative outdoor lighting for illumination of streets, parking lots, and other public and private areas. H.Incorporate “living streets” design principles into future improvements of the community’s streets in order to enhance the corridors’ appearance and environment. I.Continue to reduce the level of obtrusive signage within the City by promoting a balance between aesthetics, safety, and communication needs. J.Work with internal and external partners to ensure that all roadway and pedestrian facilities, including bridges, located in the City are functionally and aesthetically appealing and contribute to the use, overall design scheme (where applicable), and enjoyment of the City. K.Continue to achieve high quality design standards for the exterior appearance of public structures. Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 11 L.Establish a timetable and implementation strategies to bury utilities. Continue to require the undergrounding of utilities in all new developments and redevelopment projects. Promote building and site design that is oriented toward creating a connected, human scale, multi-modal, and safe environment for people who live and work here. A.Encourage quality design in new construction considering such design elements as building orientation, scale, massing, and pedestrian access. B.Encourage new buildings to orient to walkable streets with appropriate building height to street width ratios. C.Revisit the City’s architectural control ordinance ensuring that it provides clear direction to developers and enhances the visual quality and livability of the City. D.Require parking lots to be separated from sidewalks and roadway facilities with appropriate landscaping, street walls or berms, and curbs. E.Continue to enforce parking lot standards that address surfacing, light standards, tree canopy, and heat island reduction. F.Incorporate Crime Prevention through Environmental Design (CPTED) principles and practices into building and site design to maximize visibility and eyes on the street. Commercial & Office Land Use Goals Preserve and enhance community commercial centers that offer desirable and complementary commercial retail and services for the community’s residents, workers, and visitors. A.Minimize the adverse impacts associated with large community commercial centers using design, performance standards, site planning techniques, buffering, and traffic management. B.Ensure that community commercial centers contribute to an aesthetically positive identity for the community. C.Encourage integrating community travel routes within commercial centers in order to improve overall multi-modal safety, access and circulation around and through the centers. D.Encourage infill development and aesthetic improvements to commercial surface parking lots in order to enhance adjacent public streets and sidewalks and more efficiently utilize commercial land. E.Promote the inclusion of office employment uses within or adjacent to large commercial developments to strengthen the functionality and vitality of community commercial centers. Create commercial corridors that are functional, vibrant, and present an aesthetically positive identity for the community. Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 12 A.Minimize the adverse impacts associated with commercial corridor development using design, performance standards, site planning techniques, and buffering. B.Enhance commercial corridors’ compatibility with nearby residential areas. Preserve and revitalize neighborhood commercial nodes that provide essential neighborhood commercial services, unique neighborhood identity, and neighborhood gathering opportunities. A.Encourage infill and redevelopment in neighborhood commercial nodes that is neighborhood scale in terms of building size, architecture, and orientation to the street. B.Encourage convenient pedestrian access to and within the neighborhood commercial nodes from adjacent neighborhoods and transit stops. C.Reguide or rezone targeted commercial nodes. Reguide or rezone viable commercial nodes for mixed use in order to require a mix of commercial and employment or residential uses on specific properties if they redevelop. Rezone certain commercial areas or small commercial sites that abut residential properties from General Commercial to Neighborhood Commercial to reduce the potential size and intensity of future commercial uses. Reguide struggling commercial nodes to medium or high density residential to encourage redevelopment. D.Prepare small area plans for commercial nodes and corridors where the appropriate future land use is unclear or needs additional guidance and where significant changes are anticipated. Preserve and enhance office/medical centers to retain and grow the community’s employment opportunities, tax base, and convenient access to desirable services. A.Support expansion of existing medical centers and supportive uses. B.Support new and expanded office development. C.Reguide or rezone targeted commercial corridors from general commercial to office in order to promote redevelopment. D.Encourage integrating community travel routes within office and medical centers in order to improve overall multi-modal safety, access and circulation around and through the centers. Industrial & Business Park Land Use Goals Protect and enhance the viability of the City’s designated industrial areas through reinvestment in long-term industrial areas, and adaptive reuse and eventual redevelopment in transitional industrial areas. A.Protect planned industrial areas from encroachment by non-industrial and incompatible uses. Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 13 B.Encourage and support the appropriate evolution and expansion of individual industrial businesses. C.Support new industrial land uses that are able to minimize negative environmental impacts and nuisances to surrounding land uses. D.Promote and support the transition and eventual redevelopment of physically and economically obsolete or underutilized industrial properties. E.Create a Transitional Industrial zoning district and rezone suitable redevelopment properties to Transitional Industrial. F.Enhance industrial areas’ compatibility with nearby residential neighborhoods. G.Prepare small area plans for both reinvestment industrial areas and transitional industrial areas where significant changes are anticipated. Promote the development of business park land uses in designated employment areas as a way to expand the City’s employment base and opportunities, increase the City’s tax base, and meet the changing market and technological needs of the industrial business sector. A.Promote business park developments that utilize more efficient land use and building designs than traditional industrial development, such as multi-story buildings, multi-tenant buildings, and structured parking. B.Encourage and support new business park developments that are designed as employment centers that are integrated into the community with strong connections to adjacent public streets and spaces, natural features, transit, and other community amenities. C.Require that new business park developments provide efficient and attractive parking designs, appropriate landscaping, and high quality building architecture. D.Allow limited commercial and service uses that provide valuable services to, and extend hours of activity within, employment centers without eroding the employment focus of these areas, sites and buildings. Residential Land Use Goals Create a mix of residential land uses and housing types to increase housing choices, including affordable housing, and increase the viability of neighborhood services through redevelopment or infill development. A.Allow a broader range of housing types and densities within and adjacent to existing low density residential neighborhoods that are complementary and compatible with the existing neighborhood character. B.Promote and support the development of medium and high density residential land uses near commercial centers and nodes. Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 14 C.Ensure that new and redeveloped medium and high density residential land uses are located within walking distance of transit services. D.Update zoning codes to allow an increased mix of housing types near transit corridors, parks and commercial nodes/corridors. Preserve and enhance the livability and unique character of each neighborhood’s residential areas. A.Promote maintenance and reinvestment of existing residential land uses that have experienced deferred maintenance, deteriorating property values, high vacancy rates, or reuse opportunities. B.Require the creation of appropriate and effective buffer or transition areas between different land use types. Public Land Use Goals A.Ensure access to public land, parks, open space and facilities by the entire community, including children, adults, the elderly, those in multi-family housing, people of color, and those with mobility challenges. B.Maintain accessibility to community facilities and public places consistent with Americans with Disabilities Act (ADA) guidelines. Mixed-Use Goals Continue to enhance the Park Commons area as St. Louis Park’s “town center”. A.Promote and support the redevelopment of the remaining designated redevelopment sites in the Park Commons area with mixed-use buildings to strengthen the area’s function as the “town center”. B.Ensure that future redevelopment provides similar building forms and densities that will complement the character of the “town center”. C.Require that future redevelopment is designed with buildings that are oriented to the public streets and spaces that are the heart of the “town center.” D.Encourage integrating community travel routes within the area in order to improve overall multi-modal safety, access and circulation around and through the area. E.Prepare revised small area plans for the Park Commons West Master Plan. Pursue redevelopment of future light rail transit station areas as transit-oriented, high density, well-connected, mixed-use centers. A.Promote and support the Wooddale Station Area as a transit-oriented mixed-use neighborhood. Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 15 B.Promote and support the Belt Line Station Area and Louisiana Station Area as primarily transit-oriented mixed- use employment centers. C.Rezone properties near future light rail transit stations to require transit-oriented development to help implement station area framework plans. D.Consider adopting form-based codes or similar zoning amendments to help implement station area framework plans. Expand the development of mixed-use districts within St. Louis Park to create a more livable and connected community. A.Encourage and support mixed-use infill and redevelopment where the design of the project enables compatibility with existing surrounding land uses. B.Expand the distribution of mixed-use redevelopment in neighborhood commercial nodes and along commercial corridors to the broader community. C.Promote and support reinvestment in the Historic Walker-Lake area as a mixed commercial/industrial district that is compatible with its unique character and scale. D.Complete small area plans for the Historic Walker-Lake area. E.Promote and support mixed-use redevelopment in The West End to strengthen its role as a unique and dynamic place to live, work, shop, and play in the metropolitan area. Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 16 Residential Density Recommendations for 2040 Land Use Categories Land Use Categories with Residential Density Range Allowed by Land Use Category in 2030 Plan (dwelling units per acre) Description from Land Use Category Proposed Density Range - 2040 (dwelling units per acre) Purpose for Changing Density Range Allowed Low Density Residential (RL) 3 to 7 du/acre Intended primarily for single- family detached housing 3 to 10 du/acre Would add flexibility to explore allowing smaller lot sizes, duplexes and accessory dwelling units Medium Density Residential (RM) 6 to 30 du/acre Allows a variety of housing types including single-family detached, duplexes, townhomes, and small two- and three-story apartment buildings 6 to 30 du/acre Add bonuses for affordable housing High Density Residential (RH) 20 to 50 du/acre, PUD allows 50+ (no maximum) Intended for higher density, compact urban residential development, including high- rise apartment buildings 30 to 75 du/acre Minimum density of 30 du/acre would limit development of townhouses in RH; maximum density of 75 du/acre allows mid- rise apartment buildings (4-8-story range)* Commercial (C) 20 to 50 du/acre, PUD allows 50+ (no maximum) Residential are also appropriate as part of a mixed use commercial development 20 to 50 du/acre 50 du/acre maximum will help limit amount of residential in commercial areas.* Mixed Use (MX) 20 to 50 du/acre, PUD allows 50+ (no maximum) A mixing of uses including commercial is required for every development parcel; mixed use buildings typically have approximately 75 to 85 percent of the building for residential use 20 to 75 du/acre Maximum density of 75 du/acre allows mid-rise apartment buildings (4-8-story range)* Office (O) Not identified (no minimum or maximum) Residential allowed as a limited use when part of a larger development 50 to 125 du/acre This residential density range complements the intended scale of office employment areas Transit Oriented Development (TOD) Proposed new land use category for 2040 Plan N/A 50 to 125 du/acre This residential density range supports the intended scale of transit station areas *Land use categories should be general and not reference zoning districts (PUD) specifically Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 17 1 IV. Why We Are A Livable Community Where We Are Headed This section of the Land Use chapter establishes the City’s official land use categories and the 2030 2040 Comprehensive Plan Land Use Map, which is intended to guide current and future land use planning and development through the year 20302040. The land use plan categories are fully defined below. The 2030 2040 map is the official land use designation map for the City. The land use designations are intended to shape the character, type and density of future development according to sound planning principles. Any new development, redevelopment, change in land use, or change in zoning is required to be consistent with the land use guiding for each parcel. Comprehensive Plan Land Use Categories There are 12 13 land use categories that guide the City’s 2030 2040 Comprehensive Plan Land Use Map, which are described below. In general, the categories reflect a movement towards greater mixing of uses. I. RL - Low Density Residential The Low Density Residential category is intended for residential neighborhoods primarily consisting of for single-family detached housinghomes. It allows single-family detached housing and limited semi- detached housing, such as duplexes and accessory dwelling units. This category allows net residential densities from three (3) to seven ten (710) units per acre. II.RM - Medium Density Residential The Medium Density Residential category is intended for residential areas adjacent to commercial centers, corridors, and nodes. It allows net residential densities from six (6) to 30 units per acre. This category allows for a variety of housing types that are compatible in scale to single-family homes, including single- family detached, duplexes, townhomes, and small two- and three-story apartment buildings. III.RH - High Density Residential The High Density Residential land use category is intended for higher density, compact urban residential developmentareas with convenient access to major transportation corridors, open spaces, and commercial centers, including high-rise apartment buildings. This category allows for a net residential density range of 20 30 to 50 75 units per acre. These Rresidential densities greater than 50 units per acre may be achieved by utilizing the PUD process and addressing the City's Livable Communities Principles and other goals of the Comprehensive Plan, such as including structured parking, affordable housing, or incorporating sustainable site and building design elements. The appropriate building height will vary by development and depend upon the characteristics of the development and its surroundings. Pedestrian- scale, three- to four-story buildings will be appropriate in some areas, while six- to eight-story buildings and even taller high-rises will be acceptable in others. In addition to residential development, a small Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 18 2 proportion of supportive retail and service is also appropriate. Retail, service and office beyond those supporting the residential development would only be permitted as part of a mixed-use PUD. IV.C - Commercial The Commercial land use category is intended to accommodate a wide range and scale of commercial uses, such as retail, service, entertainment, and office. Commercial uses can range from small neighborhood convenience nodes, to community retail areas along major roadways, to large shopping centers, to auto-related commercial uses along freeways. Residential uses are also appropriate as part of a mixed-use commercial development, with a net residential density range of 20 to 50 units per acre allowed. These Rresidential densities greater than 50 units per acre may be achieved by utilizing the PUD process and addressing the City's Livable Communities Principles and other goals of the Comprehensive Plan, such as including structured parking, affordable housing, or incorporating sustainable site and building design elements. V.MX – Mixed-Use In the Mixed Use land use category, a mixing of uses including commercial is required for every development parcel. The goal of this category is to create pedestrian-scale mixed-use buildingsareas, typically with mixed-use buildings having a portion of retail, service or other commercial uses on the ground floor and residential or office uses on upper floors. Mixed use buildings typically have approximately 75 to 85 percent of the building for residential use and 20 15 to 25 percent for commercial or office uses. Taller buildings may be appropriate in some areas and net residential densities between 20 and 50 75 units per acre are allowed. These Rresidential densities greater than 50 units per acre may be achieved by utilizing the PUD process and addressing the City's Livable Communities Principles and other goals of the Comprehensive Plan, such as including structured parking, affordable housing, or incorporating sustainable site and building design elements. The MX designation is intended to facilitate an integrated mixed-use town center atmosphere in Park Commons and a diversity of uses inas well as certain other key community and neighborhood commercial centers, corridors, and nodesareas of the community. VI.TOD –Transit Oriented Development In the Transit Oriented Development land use category, a mix of uses are allowed and required to be oriented around transitway stations along the proposed Green Line LRT. The goal of this category is to create pedestrian-scale developments within a 10-minute walk of regional transit stations. The focus of the designation is on building form rather than a specific mix of uses. It is expected that residential uses will make up approximately 75 to 85 percent of uses; the remaining 15 to 25 percent will likely be commercial, office, and other similar uses. The net residential density range allowed is 50 to 125 units per acre. These residential densities may be achieved by addressing the City’s Livable Communities Principles and other goals of the Comprehensive Plan, such as structured parking, affordable housing, or incorporating sustainable site and building design elements. Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 19 3 VII.O - Office The Office land use category is primarily intended for employment centers of fairly intensive office and mixed use development with high floor area ratios (FARs) and building heights. Business, professional, administrative, scientific, technical, medical, research and development services are typical uses appropriate for the Office land use category. The Office category also allows other limited uses such as hotels, parking ramps, residential, day care, retail and restaurants when part of a larger development. Residential uses fitting the form and scale of an office employment center are appropriate, so net residential densities from 50 to 125 units per acre are allowed. VIII. BP - Business Park The Business Park land use category is intended to encourage the creation of significant employment centers that accommodate a diverse mix of office and light industrial uses and jobs. The Business Park designation should be applied to larger sites that can be redeveloped to provide a greater diversity of jobs, higher development densities and jobs per acre, higher quality site and building architectural design, and increased tax revenues for the community. Office, office-showroom-warehousing, research and development services, light and high-tech electronic manufacturing and assembly, and medical laboratories are typical uses appropriate for this land use category. Some retail and service uses may be allowed as supporting uses for the primary office and light industrial uses of the employment center. IX.I - Industrial The Industrial land use category covers all industrial uses from manufacturing, assembly, processing, warehousing, storage, laboratory, distribution, and related offices. Industrial areas consist of both lighter industrial uses, which tend to have higher appearance standards and fewer impacts on surrounding properties, and general industrial uses which are typically set off from other uses. Current industrial uses tend to be concentrated around the City’s railroads, where industrial uses first developed in the community. Future industrial uses to be protected should primarily be located in close proximity to either a railroad line or regional roadway system with limited traffic circulation through residential and pedestrian-oriented areas. However, some industrial areas may transition over time to some non- industrial uses that are appropriate to their changing context, such as the future Southwest LRT station areas or increasing incompatibility with surrounding development. Transitional industrial areas may consist of a broader range of industrial and non-industrial uses and need to ensure compatibility with surrounding non-industrial land uses. X. CIV- Civic The Civic land use category is intended for public buildings and uses as well as similar private uses, such as schools, government buildings, places of assembly, community centers, libraries and non-profit institutions. XI.P - Parks and Open Space The Parks & Open Space land use category includes all public parks and open space land, as well as public recreational facilities, such as the Recreational Center. It also encompasses lakes and waterways, such as Bass Lake and Minnehaha Creek. This category is intended for areas which are reserved for Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 20 4 active and passive recreational uses, natural amenities, protected natural areas, and the City’s major stormwater retention and drainage areas. XII.ROW – Public Right-of-Way The Public Right-of-Way land use category includes right-of- way for both streets, sidewalks, trails and drainageways. XIII. RRR - Railroad The Railroad land use category includes right-of-way used for railway and trail purposes. Some of the land is owned by rail companies; some of the land is owned by the Hennepin County Regional Rail Authority and a portion of it is used as a multi-purpose regional trail operated by Three Rivers Park District. Inconsistencies in Zoning and Comprehensive Plan Designation: There may be areas in the City where the current zoning does not correspond to the Comprehensive Plan land use designation. The intent of the inconsistency is to allow an existing use to continue as a conforming use, while planning for a different use in the long term. Therefore, the zoning is maintained consistent with the existing use and the property’s Comprehensive Land Use designation indicates the future use. Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 21 169 169 169 7 394 394 100 100 25 5 3 100 3 7 5 5 17 !PlannedTransitwayStations Transitway Green Line Extension RL - Low Density Residential RM - Medium Density Residential RH - High Density Residential MX - Mixed Use TOD - Transit Oriented Development COM - Commercial OFC - Office BP - Business Park IND - Industrial CIV - Civic PRK - Park and Open Space ROW - Right of Way RRR - Railroad Change in Land Use ´ 2040 Future Land Use 0 0.25 0.50.125 Miles ROW to Office ROW to LDR Civic to P&OS LDR to P&OS Commercial to Office Commercial to MDR Office to HDR Commercial to MDR Commercial to Mixed Use Commercial, Office, Mixed Use, & HDR to TOD Commercial, Mixed Use, & BP to TOD Commercial to BP Mixed Use to TOD Industrial to BP Commercial to Mixed Use Industrial to BP Industrial to MDR Commercial to Office LDR to MDR Special Study Session Meeting of April 16, 2018 (Item No. 1) Title: 2040 Comprehensive Plan Update Discussion Page 22 Meeting: Economic Development Authority Meeting Date: April 16, 2018 Minutes: 3a UNOFFICIAL MINUTES ECONOMIC DEVELOPMENT AUTHORITY ST. LOUIS PARK, MINNESOTA APRIL 2, 2018 1. Call to Order President Hallfin called the meeting to order at 7:35 p.m. Commissioners present: President Steve Hallfin, Tim Brausen, Rachel Harris, Anne Mavity, Thom Miller, Margaret Rog, and Jake Spano. Commissioners absent: None. Staff present: Executive Director (Mr. Harmening), Engineering Director (Ms. Heiser), Senior Planner (Mr. Walther); and Recording Secretary (Ms. Pappas). 2. Roll Call 3. Approval of Minutes 3a. Economic Development Authority Meeting Minutes March 19, 2018 It was moved by Commissioner Mavity, seconded by Commissioner Spano, to approve the EDA minutes as presented. The motion passed 7-0. 4. Approval of Agenda It was moved by Commissioner Brausen, seconded by Commissioner Mavity, to approve the EDA agenda as presented. The motion passed 7-0. 5. Reports 5a. Approval of EDA Disbursements It was moved by Commissioner Brausen, seconded by Commissioner Mavity, to approve the EDA Disbursements. The motion passed 7-0. 6. Old Business - None 7. New Business - None 8. Communications - None 9. Adjournment The meeting adjourned at 7:42 p.m. ______________________________________ ______________________________________ Melissa Kennedy, Secretary Steve Hallfin, President Meeting: Economic Development Authority Meeting Date: April 16, 2018 Action Agenda Item: 7a EXECUTIVE SUMMARY TITLE: Fifth Amendment to Central Park West Redevelopment Contract RECOMMENDED ACTION: Motion to Adopt EDA Resolution approving the Fifth Amendment to the Contract for Private Redevelopment with Central Park West, LLC and Adopt Resolution approving the modification to the CPW Phase II Assessment Agreement. POLICY CONSIDERATION: Does the EDA/City Council support extending the required commencement and completion dates of the Central Park West Phases IV and V office buildings by two years? Does the EDA/City Council support extending the required commencement and completion dates of the Central Park West Phase II apartment building by approximately three years, as well as extending its related minimum assessment agreement? SUMMARY: As indicated in the March 26th study session staff report (attached), developers responsible for constructing the Central Park West office buildings (CPW Phases IV and V) have requested to extend the construction schedule for the facilities by two years to allow additional time to prelease the buildings and attract equity investors. Additionally, the developer for CPW Phase II (second apt building) has also requested an extension. Under the proposed Fifth Amendment to the Redevelopment Contract the required project commencement and completion dates for Phases II, IV and V would be modified as follows: PROPOSED REVISED CO NSTRUCTION SCHEDULE FINANCIAL OR BUDGET CONSIDERATION: The proposed Modification to Assessment Agreement extends implementation of the minimum assessment agreement for the CPW Phase II property. Without the modification, CPW would be paying property taxes on undeveloped land valued at over $30 million for the next several years under the current Assessment Agreement. CPW has indicated this would create an extreme financial hardship and has requested to modify the existing Assessment Agreement to implement the higher assessed value on January 2, 2023, to coincide with the revised CPW Phase II construction schedule. SUPPORTING DOCUMENTS: Discussion & Staff Report of March 26, 2018 Resolutions of Approval Proposed Fifth Amendment Proposed Modification to Assessment Agreement Prepared by: Greg Hunt, Economic Development Coordinator Reviewed by: Karen Barton, Community Development Director Approved by: Tom Harmening, EDA Executive Director, and City Manager Central Park West Phase Current Required Commencement Date Proposed Revised Commencement Date Current Required Completion Date Proposed Revised Commencement Date Phase II (apt building #2) October 2, 2017 April 1, 2020 March 4, 2019 April 1, 2022 Phase IV (office building #1) April 1, 2018 April 1, 2020 September 30, 2019 September 30, 2021 Phase V (office building #2) April 1, 2021 April 1, 2023 September 30, 2022 September 30, 2024 Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 2 Title: Fifth Amendment to Central Park West Redevelopment Contract DISCUSSION Supplement to March 26th Central Park West Project Update: Construction of the CPW Civic Space (Linear Park) and the Woonerf has been completed, with final landscaping to be installed this spring. Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 3 Title: Fifth Amendment to Central Park West Redevelopment Contract STAFF REPORT of March 26, 2018 EXECUTIVE SUMMARY TITLE: Central Park West Project Updates RECOMMENDED ACTION: None at this time. Staff desires direction on the policy questions noted below. POLICY CONSIDERATION: Does the EDA/City Council support extending the required commencement and completion dates of the Central Park West Phases IV and V office buildings by two years? Does the EDA/City Council support extending the required commencement and completion dates of the Central Park West Phase II apartment building by approximately two years as well as extending its related minimum assessment agreement? SUMMARY: The Excelsior Group and Ryan Companies (developers responsible for constructing the Central Park West office buildings (CPW Phases IV and V) have requested to extend the construction schedule for the facilities by two years to allow additional time to prelease the buildings and attract equity investors. Additionally, CPW Phase II (multifamily housing) has missed its required construction commencement date, and is proposing the revised construction schedule below: PROPOSED REVISED CONSTRUCTION SCHEDULE FINANCIAL OR BUDGET CONSIDERATION: CPW has also requested an amendment to the Assessment Agreement for the CPW Phase II property to delay the minimum assessment implementation. The agreement sets a minimum market value for property tax purposes of $30,340,000 as of January 2, 2018 and each year thereafter, regardless of the status of construction. Due to the delay in construction, CPW would be paying property taxes on vacant land valued at over $30 million for the next several years under the current Assessment Agreement. CPW has indicated that this creates an extreme financial hardship and has requested to modify the existing Assessment Agreement to implement the higher assessed value on January 2, 2023, to more accurately coincide with the revised CPW Phase II construction schedule. SUPPORTING DOCUMENTS: Discussion Memo from The Excelsior Group Prepared by: Greg Hunt, Economic Development Coordinator Reviewed by: Karen Barton, Community Development Director Approved by: Tom Harmening, EDA Executive Director, and City Manager Central Park West Phase Current Required Commencement Date Proposed Revised Commencement Date Current Required Completion Date Proposed Revised Commencement Date Phase II (apt building #2) October 2, 2017 April 1, 2020 March 4, 2019 April 1, 2022 Phase IV (office building #1) April 1, 2018 April 1, 2020 September 30, 2019 September 30, 2021 Phase V (office building #2) April 1, 2021 April 1, 2023 September 30, 2022 September 30, 2024 Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 4 Title: Fifth Amendment to Central Park West Redevelopment Contract DISCUSSION Background and Redevelopment Contract Summary: In May of 2015, the EDA, City of St. Louis Park, Duke Realty, LLC (“Duke”) and Central Park West, LLC (“CPW”; an affiliate of DLC Residential) entered into a Second Amendment to Amended and Restated Contract for Private Redevelopment for The West End redevelopment project, which constituted a major amendment to the existing Amended and Restated Contract with Duke Realty. Duke had previously constructed West End Phases I, IIA, and assigned Phase IIC to The Excelsior Group. Under the Second Amendment, Duke assigned most of the remaining improvements required under the Contract to CPW. CPW agreed to construct the improvements in six phases (called Central Park West Phases I through VI). The Contract has been amended twice since that time to revise the construction schedule for certain phases. CPW has also partially assigned the Contract to separate developer entities for specific phases. The phases and their current construction schedules and statuses are listed in the table below: Current Construction Schedule Phase Required Commencement Date Required Completion Date Phase I (Duke)* (Demolition and 16th St.) December 18, 2007 August 1, 2009 (completed) Phase IIA (Duke)* (Retail and office; West End Blvd.) July 1, 2008 June 1, 2010 (completed) Phase IIC** (Multifamily housing) March 1, 2014 December 31, 2016 (completed) Central Park West Phase I+ (multifamily housing) November 28, 2015 June 30, 2017 (completed) Central Park West Phase II (multifamily housing) October 2, 2017 March 4, 2019 Central Park West Phase III (hotel)++ April 1, 2016 August 31, 2017 (completed) Central Park West Phase IV (office) April 1, 2018 September 30, 2019 Central Park West Phase V (office) April 1, 2021 September 30, 2022 Central Park West Phase VI (TBD) TBD TBD Construction Update *Duke Realty completed site preparation and construction of the 350,000 sq. ft. West End lifestyle shopping center and 28,000 sq. ft. office space (Phases I & IIA) in September 2009 and Certificates of Completion were delivered for these Phases. **The Excelsior Group completed construction on the six-story, 119-unit upscale Flats at West End (Phase IIc) in June 2013 and a Certificate of Completion was delivered for this Phase. +CPW (an affiliate of DLC Residential) completed construction on the six-story, 199-unit luxury Central Park West Apartments (Central Park West Phase I) in December 2017. A Certificate of Completion is being prepared for this Phase. Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 5 Title: Fifth Amendment to Central Park West Redevelopment Contract ++TPI Hospitality completed construction on the six-story, 126-room is the AC Hotel by Marriott (Central Park West Phase III) this month. A Certificate of Completion is being prepared for this Phase. Map of Central Park West Phases Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 6 Title: Fifth Amendment to Central Park West Redevelopment Contract Excelsior Group & Ryan Companies Contract Extension Requests In December 2014 responsibility for the construction of the Phase IV and V office buildings required under the Redevelopment Contract with Central Park West, LLC, was assigned to The Excelsior Group. Under the Third Amendment to the Contract, the construction commencement and completion dates for Phase IV were established at April 1, 2017 and September 30, 2018, respectively. The construction commencement and completion dates for Phase V were established at April 1, 2020 and September 30, 2021, respectively. The Excelsior Group subsequently teamed with Ryan Companies for the development, design, and construction of the office buildings. The team has conducted property due diligence and prepared complete site and building plans for the structures. These plans were submitted to both St. Louis Park and Golden Valley and approvals for the first office building (10 West End) were granted by both municipalities in fall 2016. During this time, the team was in active discussions with a prospective anchor tenant for 125,000 SF or 35% of the building. Unfortunately, that tenant elected to renew its lease in its current location rather than relocate into the new 10 West End building. As a result, the developers requested and were granted a Fourth Amendment last year extending the construction commencement dates for the Phase IV office building to April 1, 2018 and the commencement date for the Phase V office building to April 1, 2021 To date, the development team has been actively marketing the site and has received expressions of interest from prospective tenants but they have not yet translated into lease commitments sufficient to spur building construction. Based on discussions with prospective equity partners (who remain very interested in the development), the team maintains that 40-50% of the proposed office building needs to be pre-leased (approximately. 125,000 SF – 160,000 SF) to initiate construction of the $100+ million project. As required under the Redevelopment Contract, the team recently submitted a report to staff (attached) outlining its progress and its plans to continue to aggressively market 10 West End to prospective tenants. Given the required commencement and completion dates for Phases IV and V established in the Contract will not be realized, the developers have requested a two year extension to allow them sufficient time to reach their pre-leasing threshold. DLC Residential’s Contract Extension Requests Installation of a new Metropolitan Council lift station and other related sewer improvements in the Central Park West area in 2015 & 2016 severely hampered the reconstruction of Utica Avenue, which in turn, restricted access to the Central Park West project sites. As a result of this and an issue with their lumber supplier, construction of the CPW Phase I apartments was delayed approximately 6 months and, as noted above, were just recently completed in December. Construction of the CPW Phase II apartments was originally intended to commence shortly thereafter, however the developer (CPW) needs time to sufficiently lease up Central Park West Apartments Phase I before they begin constructing Phase II. Because the developer has missed its required construction commencement date, staff reached out to CPW to request a revised construction schedule for that phase. The developer has requested a revised commencement date of April 1, 2020 and completion date of April 1, 2022. CPW has also requested an amendment to the Assessment Agreement for the CPW Phase II property. That agreement sets a minimum market value for property tax purposes of $30,340,000 as of January 2, 2018 and each year thereafter, regardless of the status of construction. Due to the delay in construction, the Assessment Agreement would require CPW to pay property taxes on vacant land valued at over $30 million for the next several years. CPW has indicated that this Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 7 Title: Fifth Amendment to Central Park West Redevelopment Contract would create an extreme financial hardship and has requested to modify the existing Assessment Agreement to delay the higher assessed value to January 2, 2023, to coincide with the revised construction schedule of CPW Phase II. In addition to EDA approval of the minimum assessment extension, the TIF Act requires that Hennepin County and St. Louis Park School District also approve the modification, since the current estimated market value of the property is less than the value established in the Assessment Agreement. If the EDA agrees to an amendment of the Assessment Agreement, CPW has indicated that they will take the lead on any conversations or presentations needed to bring the requested amendment to the governing bodies of the County and School District. Implications for Developer’s TIF Note The construction delays means that the original Redeveloper’s (Duke Realty) reimbursement by the City of TIF-eligible expenses related to the Central Park West portion of the overall West End project will likewise be delayed. Once the subject properties are redeveloped and fully assessed, Duke’s TIF payments will increase. Next Steps Should the EDA/City Council agree to provide the above extensions, a Fifth Amendment to the Redevelopment Contract will be presented for consideration on April 16th which will establish a revised construction schedule for Phases II, IV and V as follows: PROPOSED REVISED CONSTRUCTION SCHEDULE Central Park West Phase Current Required Commencement Date Proposed Revised Commencement Date Current Required Completion Date Proposed Revised Commencement Date Phase II (apt building #2) October 2, 2017 April 1, 2020 March 4, 2019 April 1, 2022 Phase IV (office building #1) April 1, 2018 April 1, 2020 September 30, 2019 September 30, 2021 Phase V (office building #2) April 1, 2021 April 1, 2023 September 30, 2022 September 30, 2024 Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 8 Title: Fifth Amendment to Central Park West Redevelopment Contract ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 18-____ RESOLUTION APPROVING A FIFTH AMENDMENT TO AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT AMONG THE CITY OF ST. LOUIS PARK, THE ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY, CENTRAL PARK WEST, LLC, AND RELATED REDEVELOPER ENTITIES BE IT RESOLVED By the Board of Commissioners ("Board") of the St. Louis Park Economic Development Authority ("Authority") as follows: Section 1. Recitals. 1.01. The Authority is currently administering its Redevelopment Project No. 1 ("Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 ("HRA Act"), and within the Project has established The West End Tax Increment Financing District (“TIF District”). 1.02. The Authority, the City of St. Louis Park (“City”), and Duke Realty Limited Partnership (“Duke”) entered into an Amended and Restated Contract for Private Redevelopment Dated as of May 17, 2010, as amended (the “Contract”), regarding redevelopment of a portion of the property within the TIF District. 1.03. Duke assigned its obligations under the Contract to Central Park West, LLC (“CPW”), and CPW has assigned certain of its obligations under the Contract to Central Park West Phase II Land, LLC, Millenium Phase II, LLC, OP4 SLP, LLC, and ACSLP, LLC, all pursuant to various Assignment and Assumption instruments approved by the Authority (such entities collectively the “Redeveloper Entities”). 1.04. The parties to the Contract have determined a need to revise the Contract in order to extend the required construction timeline for CPW Phase II, CPW Phase IV, and CPW Phase V (as defined in the Contract), and to that end have prepared a Fifth Amendment to Amended and Restated Contract for Private Redevelopment (the “Fifth Amendment”), by and among the Authority, the City, and the Redeveloper Entities. 1.05. The Board has reviewed the Fifth Amendment and finds that the approval and execution thereof and performance of the Authority's obligations thereunder are in the best interest of the City and its residents. Section 2. Authority Approval; Other Proceedings. 2.01. The Fifth Amendment as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the documents by such officials shall be conclusive evidence of approval. Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 9 Title: Fifth Amendment to Central Park West Redevelopment Contract 2.02. The President and Executive Director are hereby authorized to execute on behalf of the Authority the Fifth Amendment and any documents referenced therein requiring execution by the Authority, and to carry out, on behalf of the Authority its obligations thereunder. 2.03. Authority staff and consultants are authorized to take any actions necessary to carry out the intent of this resolution. Reviewed for Administration: Adopted by the Economic Development Authority April 16, 2018 Thomas K. Harmening, Executive Director Steve Hallfin, President Attest Melissa Kennedy, Secretary 520694v1 MNI SA285-84 Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 10 Title: Fifth Amendment to Central Park West Redevelopment Contract ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 18-____ RESOLUTION APPROVING A MODIFICATION OF ASSESSMENT AGREEMENT BETWEEN THE ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY AND CENTRAL PARK WEST PHASE II LAND, LLC BE IT RESOLVED BY the Board of Commissioners ("Board") of the St. Louis Park Economic Development Authority, St. Louis Park, Minnesota (the "Authority") as follows: Recitals. 1.01. Pursuant to its authority under Minnesota Statutes, Sections 469.090 to 469.1082 and 469.174 to 469.1794, as amended, the Authority created the West End Tax Increment Financing District within its Redevelopment Project No. 1 (the “Project”), for the purpose of facilitating the redevelopment of certain substandard property within the Project. 1.02. The Authority, the City of St. Louis Park (“City”), and Duke Realty Limited Partnership (“Duke”) entered into an Amended and Restated Contract for Private Redevelopment Dated as of May 17, 2010, as amended (the “Contract”), regarding redevelopment of a portion of the property within the TIF District. 1.03. Duke assigned its obligations under the Contract to Central Park West, LLC (“CPW”), and CPW has assigned certain of its obligations under the Contract to Central Park West Phase II Land, LLC (the “Redeveloper”) as to the phase of development described in the Contract as CPW Phase II. 1.04. The Authority and CPW further executed an Assessment Agreement dated as of May 8, 2015 in connection with the construction of CPW Phase II (the “Assessment Agreement”), which established a minimum market value for the portion of the Redevelopment Property comprising CPW Phase II and the improvements constructed thereon, which has been assigned to the Redeveloper. 1.05. The parties have negotiated and propose to execute a Fifth Amendment to the Contract (the “Fifth Amendment”) to allow for a delay in the required dates of Commencement and Completion of Construction for CPW Phase II. 1.06. In connection with the Fifth Amendment, the Redeveloper has requested a Modification of Assessment Agreement (the “Modification”) to revise the effective dates for full valuation of the CPW Phase II Property and improvements constructed thereon. 1.07. The proposed Modification must be approved by the Board of Commissioners of Hennepin County (the “County”) and by the Board of Education of Independent School District No. 283 (the “School District”), because the estimated market value for the CPW Phase II Property for taxes payable in 2018 is less than the minimum market value established by the Modification for such year. Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 11 Title: Fifth Amendment to Central Park West Redevelopment Contract Section 2. Modification Approved. 2.01. The Modification as presented to the Board is hereby in all respects approved, subject to approval of the Modification by the County and School District and to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the document by such officials shall be conclusive evidence of approval. The President and Executive Director are hereby authorized to execute, on behalf of the Authority, the Modification. 2.02. Authority staff and consultants are hereby authorized and directed to take all actions necessary to give effect to this resolution, including without limitation obtaining approval of the County and School District and arranging for the filing of the Modification with the Hennepin County Registrar of Titles. Reviewed for Administration: Adopted by the Economic Development Authority April 16, 2018 Thomas K. Harmening, Executive Director Steve Hallfin, President Attest Secretary Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 12 Title: Fifth Amendment to Central Park West Redevelopment Contract FIFTH AMENDMENT TO AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT This Fifth Amendment to Amended and Restated Contract for Private Redevelopment (“Amendment”), dated as of ____________, 2018, by and between the CITY OF ST. LOUIS PARK, a Minnesota municipal corporation (the “City”), ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of the State of Minnesota (the “Authority”), CENTRAL PARK WEST PHASE II LAND, LLC, a Minnesota limited liability company (“CPW Phase II”), MILLENNIUM PHASE II, LLC, a Minnesota limited liability company (“Millennium Phase II”), and OP4 SLP, LLC, a Minnesota limited liability company (“OP4” and, together with CPW and Millennium, as their interests appear, the “Redeveloper”); WITNESSETH: A. The Authority currently administers Redevelopment Project No. 1 (the “Redevelopment Project”) and the West End Tax Increment Financing District within the Redevelopment Project (the “TIF District”), pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the “HRA Act”) and Sections 469.174 to 469.1799, as amended (the “TIF Act”). B. The Authority, the City, and Duke Realty Limited Partnership (“Duke”) entered into an Amended and Restated Contract for Private Redevelopment dated May 17, 2010, recorded as Document No. 4781478, amended by a First Amendment thereto dated November 21, 2011 recorded as Document No. 4913709 (as so amended, the “Contract”), which described the parties’ respective responsibilities regarding redevelopment of certain property in the TIF District (referred to as the “Redevelopment Property”). C. On September 11, 2013, Duke assigned its interests in the Contract as to a portion of the Redevelopment Property described as Lot 1, Block 1 and Lot 2, Block 1, The Shops at West End to Millennium at West End, LLC (“Millennium”), pursuant to an Assignment and Assumption of Redevelopment Contract, recorded in the office of the Hennepin County Registrar of Titles as Document No. T05115015. A certificate of completion has been issued for Lot 1, Block 1, The Shops at West End, described below as Phase IIC (multifamily). D. Millennium has subsequently assigned its interests in the Contract as to Lot 2, Block 1, The Shops at West End (the “Olive Garden Property”) to Millennium Phase II, an Affiliate (as such term is defined in the Contract), pursuant to an Assignment and Assumption of Redevelopment Contract dated as of April 26, 2016. The Olive Garden Property is described below as Central Park West Phase VI. E. On May 8, 2015, Duke assigned its interests in the Contract to Central Park West, LLC (“CPW”) pursuant to an Assignment and Assumption of Redevelopment Contract, recorded in the office of the Hennepin County Registrar of Titles as Documents No. T05254066 and T05258753, and simultaneously therewith, the City, the Authority, Duke, and CPW entered into a Second Amendment to Amended and Restated Contract for Private Redevelopment, recorded in the office of the Hennepin County Registrar of Titles as Document No. T05254067 (the “Second Amendment”), relating to the Olive Garden Property and the portion of the Redevelopment Property described as Lots 1, 2, and 3, Block 1 and Outlot A, Central Park West P.U.D. No. 121. F. In accordance with the Contract and Second Amendment, and pursuant to separate Assignment and Assumptions of Redevelopment Contract, both dated as of May 8, 2015 and recorded in the office of the Hennepin County Registrar of Titles as Documents No. T05254076 and T05254079, CPW assigned (i) to OP4, CPW’s rights in and obligations under the Contract and Second Amendment with respect to Central Park West Phase IV and Central Park West Phase V, which phases relate to the portion of the Redevelopment Property described as Lot 2, Block 1, Central Park West P.U.D. No. 121 Second Addition and Outlot A, Central Park West P.U.D. No. 121 Second Addition, and (ii) to ACSLP, LLC, CPW’s rights in and obligations under the Contract and Second Amendment with respect to Central Park West Phase III, which Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 13 Title: Fifth Amendment to Central Park West Redevelopment Contract phase relates to the portion of the Redevelopment Property described as Lot 3, Block 1, Central Park West P.U.D. No. 121. G. Construction of Central Park West Phase I and Central Park West Phase III has been completed, and certificates of completion have been issued for those two phases. H. In accordance with the Contract and Second Amendment, and pursuant to an Assignment and Assumption of Redevelopment Contract, dated as of April 10, 2017, CPW assigned its rights in and obligations under the Contract and Second Amendment with respect to Central Park West Phase II, which phase relates to the portion of the Redevelopment Property described as Lot 2, Block 1, Central Park West P.U.D. No. 121, to CPW Phase II. I. On May 2, 2016, the parties entered into a Third Amendment to Amended and Restated Contract for Private Redevelopment, recorded in the office of the Hennepin County Registrar of Titles as Document No. 5354383 (the “Third Amendment”), in order to extend the required dates of commencement and completion of construction of certain phases of the Redevelopment Property. J. On March 20, 2017, the parties entered into a Fourth Amendment to Amended and Restated Contract for Private Redevelopment, recorded in the office of the Hennepin County Registrar of Titles as Document No. T05519407 (the “Fourth Amendment” and together with the Second Amendment and Third Amendment, the “Amendments”), in order to extend the required dates of commencement and completion of Central Park West Phase IV and Central Park West Phase V of the Minimum Improvements. K. Due to unavoidable delays in the commencement of construction of Central Park West Phase II of the Minimum Improvements, and further delays in the commencement of construction of Central Park West Phase IV and Central Park West Phase V of the Minimum Improvements, the parties have agreed to modify certain terms and conditions of the Contract and Amendments as set forth below. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 1. Amendment to Schedule G of the Contract. Schedule G of the Contract is amended as follows: CONSTRUCTION SCHEDULE Phase Required Commencement Date Required Completion Date Phase I (Demolition and 16 St.) December 18, 2007 August 1, 2009* Phase IIA (Retail and office; West End Blvd.) July 1, 2008 June 1, 2010** Phase IIC (multifamily housing) March 1, 2014 December 31, 2016*** Central Park West Phase I (multifamily housing) November 28, 2015 June 30, 2017+ Central Park West Phase II (multifamily housing) April 1, 2020 April 1, 2022 Central Park West Phase III (hotel) April 1, 2016 August 31, 2017++ Central Park West Phase IV (office) April 1, 2020 September 30, 2021 Central Park West Phase V (office) April 1, 2023 September 30, 2024 Central Park West Phase VI (TBD) TBD TBD Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 14 Title: Fifth Amendment to Central Park West Redevelopment Contract *Phase I is complete and a Certificate of Completion has been delivered for this Phase. **Phase IIA is complete and a Certificate of Completion has been delivered for this Phase. ***Phase IIC is complete and a Certificate of Completion has been delivered for this Phase. +Central Park West Phase I is complete and a Certificate of Completion has been delivered for this Phase. ++Central Park West Phase III is complete and a Certificate of Completion has been delivered for this Phase. 2. Maintenance of Redevelopment Property. Each of CPW Phase II, as owner and Redeveloper of Central Park West Phase II; OP4, as owner and Redeveloper of Central Park West Phase IV and Central Park West Phase V; and Millenium Phase II, as owner and Redeveloper of Central Park West Phase VI, agree that they shall maintain their respective portion of the Redevelopment Property in compliance with all applicable watershed and City requirements. 3. Miscellaneous. Except as amended by this Amendment, the Contract and Amendments shall remain in full force and effect. Upon execution, Redeveloper shall reimburse the Authority for all out-of pocket-costs incurred by the Authority in connection with negotiating, drafting and approval of this Amendment. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. (The remainder of this page is intentionally left blank.) Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 15 Title: Fifth Amendment to Central Park West Redevelopment Contract IN WITNESS WHEREOF, the City, the Authority and the Redeveloper have caused this Amendment to be duly executed by their duly authorized representatives. CITY OF ST. LOUIS PARK 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 Jacob Spano and Thomas K. Harmening, the Mayor and City Manager of the City of St. Louis Park, a Minnesota municipal corporation, on behalf of the City. Notary Public ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _________, 2018, by Steven Hallfin and Thomas K. Harmening, the President and Executive Director of the St. Louis Park Economic Development Authority, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the Authority. Notary Public (City and Authority Signature Page to Fifth Amendment to Amended and Restated Contract) Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 16 Title: Fifth Amendment to Central Park West Redevelopment Contract CENTRAL PARK WEST PHASE II LAND, LLC By: Central Park West Partners, LLC, its Sole Member By: Providian Holdings, LLC, its Managing Member By Ruslan Krivoruchko, as Managing Member STATE OF ___________ ) ) SS. COUNTY OF _______ __ ) This instrument was acknowledged before me on ___, 2018, by Ruslan Krivoruchko, the Managing Member of Providian Holdings, LLC, a Florida limited liability company, the Managing Member of Central Park West Partners, LLC, a Delaware limited liability company, the Sole Member of Central Park West Phase II Land, LLC, a Minnesota limited liability company. Notary Public OP4 SLP, LLC By Its _______________________ STATE OF MINNESOTA ) ) SS. COUNTY OF _________ ) The foregoing instrument was acknowledged before me this ____ day of _________, 2018, by _________________, the _________________ of OP4 SLP, LLC, a Minnesota limited liability company, on behalf of the company. Notary Public (Redeveloper Signature Page to Fifth Amendment to Amended and Restated Contract) Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 17 Title: Fifth Amendment to Central Park West Redevelopment Contract MILLENNIUM PHASE II, LLC By _________________________________ Its Managing Member STATE OF FLORIDA ) ) SS. COUNTY OF __________ ) The foregoing instrument was acknowledged before me this ____ day of _________, 2018, by Ruslan Krivoruchko, the Managing Member of Millennium Phase II, LLC, a Minnesota limited liability company, on behalf of the company. Notary Public (Redeveloper Signature Page to Fifth Amendment to Amended and Restated Contract) 519208v2 MNI SA285-84 Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 18 Title: Fifth Amendment to Central Park West Redevelopment Contract MODIFICATION TO ASSESSMENT AGREEMENT This Modification to Assessment Agreement (the “Modification”) is dated as of ___________, 2018, by and between the ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic (the “Authority”), and CENTRAL PARK WEST PHASE II LAND, LLC, a Minnesota limited liability company (the “Redeveloper”), as assignee of CENTRAL PARK WEST, LLC (“CPW”). RECITALS A. The Authority, the City of St. Louis Park (the “City”), and Duke Realty, LLC have previously executed a certain Amended and Restated Contract for Private Redevelopment, dated as of May 17, 2010 (the “Contract”) and recorded in the office of the Hennepin County Registrar of Titles as Document No. 4781478, as amended and assigned in part to the Redeveloper, pursuant to which the Redeveloper agreed to construct certain improvements known as Central Park West Phase II on certain property described as Lot 2, Block 1, CENTRAL PARK WEST P.U.D. NO. 121, Hennepin County, Minnesota (the “CPW Phase II Property”), and the Authority pledged certain tax increment to reimburse the Redeveloper for costs associated with the construction of the CPW Phase II improvements on the CPW Phase II Property. B. In connection with the Contract and pursuant to the authority of Minnesota Statutes, Sections 469.174 to 469.1794 (the “TIF Act”), the Authority and CPW entered into an Assessment Agreement dated as of May 8, 2015 (the “CPW Phase II Assessment Agreement”) and recorded in the office of the Hennepin County Registrar of Title as Document No. T05254068, establishing a minimum market value for the CPW Phase II Property that is scheduled to take effect on January 2, 2018 for taxes payable in 2019. C. Due to unanticipated delays, the Redeveloper has requested an extension of the construction timeline for the Central Park West Phase II improvements, and has also requested a modification of the CPW Phase II Assessment Agreement such that the effective date of the minimum market value established in the CPW Phase II Assessment Agreement is extended to January 2, 2023. D. As provided in paragraph 8 of the CPW Phase II Assessment Agreement, the parties may execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements, amendments and modifications to the CPW Phase II Assessment Agreement, and such further instruments as may reasonably be required, for correcting any inadequate, or incorrect, or amended description of the CPW Phase II Property or the CPW Phase II improvements or for carrying out the expressed intention of the CPW Phase II Assessment Agreement. E. To carry out the expressed intention of the CPW Phase II Assessment Agreement to establish a minimum market value for both the CPW Phase II Property and the improvements to be constructed thereon, with the understanding that the Central Park West Phase II improvements should be at least partially constructed prior to the effective date of such minimum market value, the parties have agreed to modify certain terms and conditions of the CPW Phase II Assessment Agreement as set forth below. F. Pursuant to Section 469.177, subd. 8 of the TIF Act, the governing bodies of Hennepin County (the “County”) and Independent School District No. 283 (St. Louis Park Public Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 19 Title: Fifth Amendment to Central Park West Redevelopment Contract Schools) (the “District”) must approve the proposed modification of the CPW Phase II Assessment Agreement because the most recently available assessment for the CPW Phase II Property is less than the minimum market value established by the CPW Phase II Assessment Agreement, and the Authority’s bond counsel has not concluded that termination of the CPW Phase II Assessment Agreement is necessary to protect the tax-exempt status of any bonds. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 1. Paragraph 1. Paragraph 1 of the CPW Phase II Assessment Agreement is hereby modified as follows: 1. The minimum market value which shall be assessed for ad valorem tax purposes for the CPW Phase II Property, together with the portion of the Minimum Improvements designated as CPW Phase II constructed thereon, shall be $7,000,000, as of January 2, 2017, notwithstanding the progress of construction by such date, and $30,340,000 as of January 2, 2023 and each January 2 thereafter until termination of this Agreement under Section 2 hereof. 2. Miscellaneous. Except as amended by this Amendment, the CPW Phase II Assessment Agreement shall remain in full force and effect. Upon execution, Redeveloper shall reimburse the Authority for all out-of pocket-costs incurred by the Authority in connection with negotiating, drafting and approval of this Amendment. Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 20 Title: Fifth Amendment to Central Park West Redevelopment Contract IN WITNESS WHEREOF, the Redeveloper and the Authority have caused this Amendment to be duly executed by their duly authorized representatives. CENTRAL PARK WEST PHASE II LAND, LLC By: Central Park West Partners, LLC, its Sole Member By: Providian Holdings, LLC, its Managing Member By Ruslan Krivoruchko, as Managing Member STATE OF ___________ ) ) SS. COUNTY OF _________ ) This instrument was acknowledged before me this __ day of ___________, 2018, by Ruslan Krivoruchko, the Managing Member of Providian Holdings, LLC, a Florida limited liability company, the Managing Member of Central Park West Partners, LLC, a Delaware limited liability company, the Sole Member of Central Park West Phase II Land, LLC, a Minnesota limited liability company. Notary Public Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 21 Title: Fifth Amendment to Central Park West Redevelopment Contract ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY By: ____________________________________ Steven Hallfin, its President By: ____________________________________ Thomas K Harmening, its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _________, 2018, by Steven Hallfin and Thomas K Harmening, the President and Executive Director of the St. Louis Park Economic Development Authority, a public body corporate and politic and political subdivision of the State of Minnesota, on behalf of the Authority. Notary Public THIS INSTRUMENT WAS DRAFTED BY: Kennedy & Graven, Chartered (MNI) 470 U.S. Bank Plaza 200 South 6th Street Minneapolis, Minnesota 55402 (612) 337-9300 Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 22 Title: Fifth Amendment to Central Park West Redevelopment Contract CONSENT OF HENNEPIN COUNTY HENNEPIN COUNTY, MINNESOTA, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the “County”) acknowledges that it has reviewed the Modification to Assessment Agreement entered into by and between the St. Louis Park Economic Development Authority, a public body corporate and politic organized and existing under the laws of the State of Minnesota and Central Park West Phase II Land, LLC, a Minnesota limited liability company, dated as of April 16, 2018 (the “Modification”), to which this Consent is attached. As required pursuant to Section 469.177, subd. 8 of the TIF Act, the County hereby consents to the terms, conditions and provisions of the Modification. HENNEPIN COUNTY, MINNESOTA By: ____________________________________ Its _______________________________ By: ____________________________________ Its _______________________________ STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _________, 2018, by __________________ and ______________________, the _______________ and __________________ of Hennepin County, Minnesota, a public body corporate and politic and political subdivision of the State of Minnesota, on behalf of the County. Notary Public Economic Development Authority Meeting of April 16, 2018 (Item No. 7a) Page 23 Title: Fifth Amendment to Central Park West Redevelopment Contract CONSENT OF INDEPENDENT SCHOOL DISTRICT NO. 283 (St. Louis Park Public Schools) INDEPENDENT SCHOOL DISTRICT NO. 283 (St. Louis Park Public Schools), an independent school district organized and existing under the laws of the State of Minnesota (the “School District”) acknowledges that it has reviewed the Modification to Assessment Agreement entered into by and between the St. Louis Park Economic Development Authority, a public body corporate and politic organized and existing under the laws of the State of Minnesota and Central Park West Phase II Land, LLC, a Minnesota limited liability company, dated as of April 16, 2018 (the “Modification”), to which this Consent is attached. As required pursuant to Section 469.177, subd. 8 of the TIF Act, the School District hereby consents to the terms, conditions and provisions of the Modification. INDEPENDENT SCHOOL DISTRICT NO. 283 (St. Louis Park Public Schools) By: ____________________________________ Its _______________________________ By: ____________________________________ Its _______________________________ STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _________, 2018, by __________________ and ______________________, the _______________ and __________________ of Independent School District No. 283 (St. Louis Park Public Schools), a public body corporate and politic and political subdivision of the State of Minnesota, on behalf of the School District. Notary Public 519362v3 MNI SA285-84 Meeting: Economic Development Authority Meeting Date: April 16, 2018 Public Hearing Agenda Item: 7b EXECUTIVE SUMMARY TITLE: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC RECOMMENDED ACTION: Conduct the Public Hearing and Adopt EDA Resolution approving the Purchase and Redevelopment Contract between the EDA and SLP Park Ventures, LLC. POLICY CONSIDERATION: Does the EDA wish to continue taking the necessary steps to facilitate the Platia Place project? SUMMARY: SLP Park Ventures, LLC (“Redeveloper”) proposes to purchase vacated right-of- way from the EDA and construct a mixed-use redevelopment at 9808 and 9920 Wayzata Blvd (former Santorini’s restaurant property) which would entail cleaning up the current vacant site, removing its three billboards and constructing a six-story, 149-unit, mixed-income apartment building as well as a six-story, 100-room hotel together called Platia Place. The cost to construct the proposed apartment building is approximately $37 million and would have an estimated taxable market value of nearly $30 million upon completion. The cost to construct the hotel is $20 million and would have an estimated taxable market value of approximately $8.5 million upon completion. The subject site has poor structural soils which create significant extraordinary costs for the proposed redevelopments and impede both projects’ financial feasibility. In order for both projects to achieve a market rate of return, the Redeveloper applied to the EDA for Tax Increment Financing (TIF) assistance. The Redeveloper’s TIF application was reviewed at the February 12th Study Session where it received favorable support. FINANCIAL OR BUDGET CONSIDERATION: Ehlers’ analysis of the Platia Place financial proforma determined that the apartment and hotel buildings would not be reasonably expected to occur in the foreseeable future but for the provision of $2,760,000 and $714,000 respectively, in tax increment. Such assistance is necessary to offset a portion of both projects’ extraordinary site preparation costs. The financial assistance would be provided via two Tax Increment Financing (TIF) Notes structured on a pay-as-you-go basis over a maximum term of 9 years. Once the TIF Notes are retired, the additional property taxes generated by the projects would accrue to the local taxing jurisdictions. Also under the Contract, the EDA would convey vacated Right-of-Way needed by the projects to the Redeveloper for $73,772. VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and diverse housing stock. SUPPORTING DOCUMENTS: Discussion Resolution of Approval Purchase and Redevelopment Contract Prepared by: Greg Hunt, Economic Development Coordinator Reviewed by: Karen Barton, Community Development Director Approved by: Tom Harmening, EDA Executive Director and City Manager Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 2 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC DISCUSSION BACKGROUND: The subject redevelopment site consists of two parcels: 9808 and 9920 Wayzata Blvd (along with adjacent rights-of-way) and is approximately 3.19 acres. It is located in the upper northwest quadrant of the city within the Shelard Park Neighborhood. It is bounded by the Westmarke Condominiums to the west, the MetroPoint Office Park to the north, US Highway 169 to the east and I-394 to the south. Most recently it was the former location of Santorini’s restaurant and is now currently vacant. Given its proximity to the highway interchange it is highly visible. The site has been subject to occasional dumping which has created a public nuisance. According to the current St. Louis Park Plan by Neighborhood Input Report, “the most critical neighborhood improvement identified [within the Northwest Neighborhood Planning Area] was decreasing public nuisances, which was primarily related to concerns about [property] maintenance.” Encouraging redevelopment of the subject site as proposed is consistent with this objective. Subject redevelopment site: 9808 and 9920 Wayzata Blvd REDEVELOPMENT PROPOSAL: SLP Park Ventures, LLC (“Redeveloper”) a real estate development company led by Bill Stoddard of Stoddard Companies, has a purchase agreement to acquire the subject site. The Redeveloper proposes to clean up the subject site, remove its three billboards and construct a six-story, 205,669 SF apartment building as well as a six-story, 61,411 SF hotel together temporarily called Platia Place. The projects would require the acquisition of approximately 18,440 square feet of vacated Right-of-Way from the city. The apartment building would consist of 149 housing units of which 134 would be market rate and 15 (10%) would be affordable at 50% of the Area Median Income (AMI) which meets the requirements of the city’s Inclusionary Housing Policy. It would also include five 3-bedroom units of which one would be affordable. The hotel building would have 100 rooms and offer limited services. Both projects will be required to comply with the City’s Green Building Policy, Building Readiness ordinance, and Climate Action Plan. The Final Plat and the First Reading of the Ordinance creating the PUD to allow construction of the proposed projects on the subject site were approved by the City Council on March 5, 2018. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 3 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Rendering of proposed Platia Place apartment building and hotel Redeveloper’s Request for Public Financing Assistance The cost to construct the apartment building is approximately $37 million and the cost to construct the hotel is $20 million. There are significant extraordinary costs associated with redeveloping the subject site due to its poor structural soils, which include: the removal of three billboards, soil excavation and correction, pilings and a foundation support system. For the apartment building, these costs exceed $3.1 million and for the hotel they are approximately $900,000. These costs prevent both proposed projects from achieving a market rate of return. Consequently the Redeveloper applied to the EDA for Tax Increment Financing (TIF) assistance to offset a portion of these costs so as to enable the projects to proceed. Tax increment financing uses the increased future property taxes generated by a new development to finance certain qualified redevelopment costs incurred during construction of that project for a limited period of time. Recommended Amount of TIF Assistance The Redeveloper’s sources and uses statements, cash flow projections, and investor rate of return (ROR) related to the Platia Place apartment building and hotel projects were reviewed by staff and the EDA’s financial consultant, Ehlers & Associates. Based upon its analysis of the Redeveloper’s financial proforma, Ehlers determined that the proposed apartment building would not be reasonably expected to occur in the foreseeable future but for the provision of $2,760,000 in tax increment assistance and the hotel would not be reasonably expected to occur but for the provision of $714,000 in tax increment financing. Such assistance would represent 7.5% of the apartment’s total project costs and less than 4% of the hotel’s total project costs which is consistent with other developments the EDA has previously assisted. The TIF assistance would be provided via two TIF Notes, one for each project, and would be made available to exclusively reimburse the Redeveloper for a portion of the extraordinary site preparation costs noted above. Upon project completion and the Redeveloper’s submission of verified qualified redevelopment costs, tax increment generated from the increased value of each property would be provided to the Redeveloper on a "pay-as-you-go" basis, which is the preferred financing method under the City's TIF Policy. Bi-annual TIF payments would be made to the Redeveloper from the increased property taxes generated by each project provided sufficient tax increment was available. The EDA would be obligated to provide assistance to the project only to the extent that the project generates sufficient tax increment to make the bi-annual payments. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 4 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC It will take approximately 16 months to construct the proposed Platia Place apartment and hotel projects. The first increment would be paid in 2021. Given current estimates of market value, it is projected that the apartment project’s TIF Note would be paid off in approximately 9 years and the hotel project’s TIF Note would be paid off in approximately 8 years with increment generated by the respective projects (on a net present value basis). The Notes would terminate with final payment during or before 2030. The Notes would bear interest at the lessor of 5.5% or the Redeveloper’s actual rate of financing. The size of the TIF Notes is based upon no inflationary value in the project (as with all projects). This is more conservative estimating and thus it is anticipated that the pay-as-you -go Notes will likely be paid off earlier than projected. As with most EDA redevelopment contracts, the Redeveloper will be required to execute a separate Minimum Assessment Agreement for the value utilized for projecting the amount of TIF assistance available for each project. The proposed Contract also includes a "look-back" provision under which the Redeveloper would be required to submit a final proforma detailing the actual financial performance of each project. The look-back provision establishes a cap on the return that the Redeveloper earns on a cash-on- cash basis, once the projects reach stabilized income. The cap is essentially an industry standard for similar projects. The look-back provision ensures that if either project cash flows at a higher rate than currently estimated, the EDA shares economically in the success of the project by reducing the amount of TIF assistance provided. Conveyance of Remnant Right-of-Way The City recently acquired right-of-way along Wayzata Boulevard adjacent to the subject site from MnDOT. The land was released to the City in 2013 and conveyed by quit claim deed in August 2017. The City will be retaining a portion of this property for right-of-way purposes and vacating the remainder (“Remnant Right-of-Way”). The Remnant Right-of-Way will be conveyed to the EDA for subsequent sale to the Redeveloper. On March 5, 2018 the City Council approved the First Reading of Ordinance Vacating Right-of-Way adjacent to 9808 and 9920 Wayzata Boulevard and approved the Second Reading on March 19th. The Redeveloper has requested to purchase the Remnant Right-of-Way (as shown in the image below and described in the Ordinance and Contract) from the EDA for $73,772 in order to accommodate the proposed redevelopment. Image of Remnant Right-of-Way (highlighted) Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 5 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC TIF Application Review The EDA/City Council reviewed the Redeveloper’s TIF Application for the proposed project at the February 12th Study Session. There was consensus support for favorably considering the recommended amounts of financial assistance and conveying the Remnant Right-of-Way to the Redeveloper to facilitate both projects. As a result, staff was directed to call for a public hearing on the proposed sale of vacated right–of-way property needed for both projects and prepare business terms for a formal purchase and redevelopment contract with SLP Park Ventures, LLC. TIF District On March 21, 2016 the EDA/Council approved the establishment of the Wayzata Blvd Redevelopment TIF District to proactively encourage redevelopment of the subject site. Both Platia Place projects qualify as redevelopments under the state TIF Act so no further action is required at this time relative to the Wayzata Blvd TIF District. Property Value and Taxes The taxable market value of 9920 Wayzata Blvd is $1.1 million and generates approximately $6,800 in City property taxes. The estimated taxable market value of the property upon completion of the proposed apartment building (for TIF estimation purposes) is nearly $30 million. The taxable market value of 9808 Wayzata Blvd is $1.2 million and generates approximately $7,800 in City property taxes. The estimated taxable market value of the property upon completion the proposed hotel building (for TIF estimation purposes) is $8.5 million. Most of the new values would be captured as tax increment and used to make payments on the proposed TIF Notes until they are paid off and the TIF district is terminated. The City, County and School District would continue to receive the property taxes collected on the subject site’s base value. Once the TIF Notes are retired, the additional property taxes generated by both projects would accrue to the local taxing jurisdictions. Upon termination of the District, the City’s portion of the property taxes is projected to increase to $177,400/year (or 2,500%) for the apartment site and approximately $54,000/year (or a nearly 600%) for the hotel site. Proposed Purchase and Redevelopment Contract Specific business terms for providing the proposed financial assistance and selling the Remnant Right-of-Way were provided in the March 12th Study Session staff report. Those terms served as the basis for the proposed Purchase and Redevelopment Contract (“Contract”) (attached) with SLP Park Ventures, LLC (“Redeveloper”) and assigns. The proposed Contract specifies the property acquisition terms and mutual obligations between the EDA and the Redeveloper as well as the precise terms of the financial assistance to be provided. The Contract is consistent with EDA Policy, past practices and previous discussions with the EDA/City Council. The following are key terms of the proposed Contract. 1. For purposes of the proposed Purchase and Redevelopment Contract, the following parcels, and “Remnant Right-of-Way” shall together be understood as “the Redevelopment Property”: • 9808 Wayzata Blvd • 9920 Wayzata Blvd Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 6 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC 2. The City owns former MnDOT right-of-way along Wayzata Boulevard adjacent to Redevelopment Property. It is the intention of the City to retain a portion of this property for right-of way purposes with the balance of the right-of-way property (“Remnant Right- of-Way”) to be vacated and conveyed to the EDA by quit claim deed for reconveyance to the Redeveloper. 3. Upon vacation and conveyance of the Remnant Right-of-Way to the EDA, the EDA agrees to convey title to and possession of the Remnant Right-of-Way to the Redeveloper by quit claim deed, subject to the following terms and conditions: (a) Prior to Closing, the Redeveloper shall prepare and obtain City approval of a Final PUD ordinance for the Redevelopment Property and a Final Plat of the Redevelopment Property at Redeveloper’s cost and subject to all City ordinances and procedures. (b) The EDA will use its best efforts to obtain approval by the City Council before Closing of any amendment to the City zoning ordinance in order to permit construction and use of the Minimum Improvements on the Redevelopment Property. 4. The purchase price for the Remnant Right-of-Way shall be $73,772 which the Redeveloper shall pay in full at Closing. 5. The EDA's obligation to convey the Remnant Right-of-Way to the Redeveloper is subject to satisfaction of the following terms and conditions: (a) The Redeveloper having closed on permanent financing at or before Closing on transfer of title to the Redevelopment Property from the EDA to the Redeveloper, or having received a binding commitment from a lender to provide financing sufficient for construction of the Minimum Improvements, or having otherwise provided the EDA with proof of funds available to finance construction of the Minimum Improvements. (b) The City having approved the Final Redevelopment Plat and PUD and the Redeveloper having recorded the Redevelopment Plat at or before Closing. (c) The City having approved all necessary zoning variances to the Redevelopment Property. (d) The EDA having approved Construction Plans for the Minimum Improvements. (e) The Redeveloper having reviewed and approved (or waived objections to) title to the Redevelopment Property and having obtained a commitment from a title company acceptable to the Redeveloper (the “Title Company”) to issue a suitable owner’s policy. (6) The City having conveyed the Remnant Right-of-Way to the EDA. (7) The Redeveloper being satisfied with the results of its due diligence inspections and testing with regard to the Redevelopment Property. (8) No events of default under the Contract having occurred. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 7 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC 6. Closing on the Remnant Right-of-Way shall occur within 30 days of satisfaction or waiver of the above conditions but no later than September 28, 2018, unless extended by mutual agreement of the parties. 7. The Redeveloper shall have the right to enter the Remnant Right-of-Way at reasonable times for the purpose of inspection and testing and to determine the feasibility of the Remnant Right-of-Way for the Redeveloper’s intended use. 8. The EDA has determined that, in order to make development of the Minimum Improvements financially feasible, it is necessary to reimburse Redeveloper for a portion of the cost of: site demolition (including billboard removal and disposal), soil excavation, disposal and correction, pilings and/or foundation support system, environmental remediation, utility relocations, and underground structured parking (collectively referred to as “Public Redevelopment Costs”). The tax increment generated from the Wayzata Blvd TIF District will be payable to Redeveloper in the form of two tax increment revenue notes (the “Notes”); one for the apartment building and one for the hotel. The Note for the apartment building would be structured on the following basis: Ø Issue total: $2,760,000 Ø Type: Pay-as-you-go Ø Term: Until full repayment – not to exceed 9 years Ø Interest Rate: Lesser of 5.5% or Redeveloper’s actual financing rate Ø Admin Fee: 5% Ø Fiscal Disparities: Paid from within the district The Note for the hotel building would be structured on the following basis: Ø Issue total: $714,000 Ø Type: Pay-as-you-go Ø Term: Until full repayment – not to exceed 8 years Ø Interest Rate: Lesser of 5.5% or Redeveloper’s actual financing rate Ø Admin Fee: 5% Ø Fiscal Disparities: Paid from within the district The EDA shall issue and deliver each Note upon Redeveloper having: (a) delivered to the EDA written evidence satisfactory to the EDA that Redeveloper has incurred Public Redevelopment Costs in an amount at least equal to the principal amount of the Note, which evidence must include copies of the paid invoices or other comparable evidence for costs of allowable Public Redevelopment Costs; (b) submitted and obtained EDA approval of finance; and (c) delivered to the EDA an investment letter in a form reasonably satisfactory to the EDA. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 8 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC (d) The EDA acknowledges that the Redeveloper may assign one or both Notes to a third party. The EDA consents to such assignments, conditioned upon receipt of an investment letter from such third party in a form reasonably acceptable to the EDA. (e) The Redeveloper understands and acknowledges that all Public Redevelopment Costs must be paid by the Redeveloper and will be reimbursed from Available Tax Increment pursuant to the terms of the Note. The Redeveloper understands and acknowledges that the EDA makes no representations or warranties regarding the amount of Tax Increment, or that revenues pledged to the Notes will be sufficient to pay the principal and interest on the Notes. Any estimates of Tax Increment prepared by the EDA or its financial advisors in connection with the TIF District or this Contract are for the benefit of the EDA, and are not intended as representations on which the Redeveloper may rely. Public Redevelopment Costs exceeding the principal amount of the Notes are the sole responsibility of Redeveloper. 9. The EDA will perform a “lookback” calculation when the Apartment Component achieves 93% occupancy and the Hotel Component has one-full year of operations at 68% occupancy. Such an analysis will entail reviewing certain cost and expense assumptions associated with constructing the Minimum Improvements to verify the requested amounts of TIF assistance were justified or determine the extent to which the TIF Notes may require reduction. 10. Redeveloper agrees that it will pay the reasonable costs of consultants and attorneys retained by the EDA in connection with the preparation of the TIF Plan, the establishment of the Wayzata Blvd TIF District, the negotiation and preparation of the Purchase and Redevelopment Contract and other incidental agreements and documents. Upon termination of the Purchase and Redevelopment Contract the Redeveloper remains obligated for costs incurred through the effective date of termination. 11. Redeveloper agrees to undertake the Minimum Improvements and Redeveloper Public Improvements as shown in the approved Construction Plans and operate and maintain the Minimum Improvements in good repair and condition. In summary, the Redeveloper agrees to completely remove the three billboards on the Redevelopment Property, construct the Redeveloper Public Improvements, and construct the Minimum Improvements which together consist of a six-story, multi-family apartment building with 149 units of rental housing, and a six-story, limited service hotel building consisting of 100 rooms along with associated surface and structured underground automobile parking, bicycle parking, associated infrastructure, sidewalks, landscaping, designed outdoor recreation areas, and artwork as required under the city’s corresponding PUD and Planning Development Contract. 12. Before commencing construction of the Minimum Improvements, the Redeveloper must submit Construction Plans regarding the Minimum Improvements for approval by the EDA. All work on the Minimum Improvements shall be in accordance with the approved Construction Plans and shall comply with all City requirements regarding such improvements. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 9 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC 13. If the Redeveloper desires to make any material change in the Construction Plans after their approval by the EDA, the Redeveloper shall submit the proposed change to the EDA for its approval. The term “material” means changes that decrease construction costs by $500,000 or more. 14. Subject to Unavoidable Delays, Redeveloper agrees to commence construction of the multi-family apartment building and hotel building by October 1, 2018 and substantially complete them both by February 28, 2020. If the Redeveloper anticipates that the timetable for construction of either building will not be met, Redeveloper shall provide a written and oral presentation to the City Council at a regular City Council meeting at least 45 days prior to the Required Commencement Date or Completion Date. The report must describe the reasons for the expected failure to meet the schedule, evidence of Redeveloper’s due diligence in working toward construction of the Minimum Improvements, and a detailed revised construction schedule. Approval of a modified schedule for construction by the EDA shall not be unreasonably withheld, conditioned or delayed. Failure to timely provide such written and oral report is an Event of Default. 15. The Redeveloper shall comply with the City’s Green Building Policy, adopted by the City Council on February 16, 2010 and updated September 16, 2014 and as such policy may be amended as of the date of issuance of a building permit for the Minimum Improvements. 16. The Redeveloper agrees to comply with the City’s Inclusionary Housing Policy, as adopted June 1, 2015 and amended May 15, 2017, including without limitation the following: (a) The Redeveloper agrees to reserve at least 15 of the units within the Apartment building for households earning fifty percent (50%) of Area Median Income (“AMI”) (collectively, the “Affordable Apartments”) for at least twenty-five (25) years following building occupancy. (b) The monthly rental price for Affordable Apartments shall include rent and utility costs and shall be based on no more than fifty percent (50%) of AMI adjusted for bedroom size and calculated annually by Minnesota Housing in connection with establishing rent limits for the Housing Tax Credit Program. (c) The size and design of the Affordable Apartments shall be consistent and comparable with the market rate units in the Minimum Improvements and is subject to the approval of the City. The Affordable Apartments shall be distributed throughout the Apartment building. (d) The Affordable Apartments shall have a number of bedrooms in the approximate proportion as the market rate units. (e) The Redeveloper agrees to prepare an affordable housing plan as defined in the City’s Inclusionary Housing Policy (the “Affordable Housing Plan”). The Affordable Housing Plan shall describe how the Redeveloper complies with each of the applicable requirements of the Inclusionary Housing Policy. The Affordable Housing Plan shall be prepared by the Redeveloper and must be approved by the City prior to or in conjunction with delivery of the Certificate of Completion for the North Apartments Component or the South Apartments Component, whichever is earlier. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 10 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC 17. The Redeveloper shall install dedicated wired connections from each building’s point of presence to each internal wiring closet, thence to each living and commercial unit in conformity with the terms and specifications provided in the corresponding City Planning Development Contract. 18. The Redeveloper shall install a video surveillance system to provide complete coverage of all parking facilities constructed as part of the Minimum Improvements, including entrances to stairs and elevators in conformity with the terms and specifications provided in the corresponding City Planning Development Contract. 19. The Redeveloper shall equip both buildings with an approved bi-directional 800 MHz signal enhancement system in conformity with the terms and specifications provided in the corresponding City Planning Development Contract. 20. The Redeveloper shall install Electric Vehicle Charging Station Infrastructure in both buildings in conformity with the terms and specifications provided in the corresponding City Planning Development Contract. 21. The Redeveloper shall construct the roofs of both buildings in such a manner as to allow for Solar Readiness in conformity with the terms and specifications provided in the corresponding City Planning Development Contract. 22. The Redeveloper shall construct designed outdoor recreation areas and other public amenities including privately owned artwork on the Redevelopment Property as required under the corresponding City Planning Development Contract and as depicted in the approved Site Plan. The parties agree and understand that the Redeveloper shall be responsible for the cost of any maintenance and repair of the amenities and artwork. 23. The Redeveloper agrees to comply with the terms of the Maintenance Plan for the Redevelopment Property as specified in the corresponding City Planning Development Contract. 24. The Redeveloper shall, with the EDA, execute an Assessment Agreement specifying an assessor’s minimum market value for the Redevelopment Property and the Minimum Improvements constructed thereon. 25. The EDA agrees to subordinate its rights under the Contract to the Holder of any Mortgage securing construction or permanent financing, in accordance with the terms of a mutually- approved subordination agreement. 26. The Redeveloper agrees not to transfer the Purchase and Redevelopment Contract or the Redevelopment Property (except to an affiliate) prior to receiving a Certificate of Completion without the prior written consent of the EDA, except for construction mortgage financing and/or permanent financing. The EDA's consent shall not be unreasonably withheld, conditioned or delayed. 27. The Redeveloper agrees that any proposed transferee, shall, for itself and its successors and assigns, and expressly for the benefit of the EDA, expressly assume all of the obligations of the Redeveloper under the Contract as to the portion of the Redevelopment Property to Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 11 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC be transferred and agrees to be subject to all the conditions and restrictions to which the Redeveloper is subject. 28. The Redeveloper shall undertake all work related to the Minimum Improvements and Redeveloper Public Improvements in compliance with all applicable federal and state laws, including without limitation all applicable state and federal Occupational Safety and Health Act regulations. Any subcontractors retained by Redeveloper shall be subject to the same requirements. All Redeveloper Public Improvements shall be constructed in accordance with the City Ordinance. 29. The Redeveloper agrees that the EDA and the City will not be held liable for any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Redevelopment Property or the Minimum Improvements. 30. The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in the Contract it will comply with all applicable federal, state, and local equal employment and non-discrimination laws and regulations. 31. The Redeveloper agrees until the Contract Termination Date not to discriminate upon the basis of race, color, creed, sex or national origin in the construction or maintenance of the Minimum Improvements or in the use or occupancy of the Redevelopment Property or any improvements erected thereon. The above terms are subject to further definition, revision and/or refinement provided they do not alter the substance of the transaction. Summary The EDA has been in discussion with SLP Park Ventures, LLC relative to the Platia Place project for over a year. Providing the proposed financial assistance and selling vacated right-of-way to the Redeveloper makes it possible to clean up the vacant former Santorini’s property, remove three billboards and construct a sustainable six-story, 149-unit mixed income apartment building as well as a six-story, 100-room hotel consistent with the Comprehensive Plan. The projects will further diversify the city’s housing stock with 134 market rate and 15 affordable multi-family units and a 100-room, limited service hotel. Economically these projects will create over 45 new employment positions and bring the currently vacant properties to optimal market value by generating $39 million in additional tax base. The EDA’s financial participation in the proposed projects will leverage approximately $57 million in new private investment. The ratio of private to public investment is nearly $13 to $1 for the apartment project and nearly $27 to $1 for the hotel project. Finally, the Platia Place project will remove blight from this highly visible vacant site and bring additional economic vibrancy to the Shelard Park neighborhood. Recommendation As indicated in the February 12, 2018 staff report, the Platia Place redevelopment meets the City’s objectives and Minimum Qualifications as well as nearly all Desired Qualifications for the provision of Tax Increment Financing as specified in the City’s TIF Policy. Given these findings, staff supports selling the vacated Remnant Right-of-Way needed by the proposed projects for $73,772 and reimbursing SLP Park Ventures, LLC for qualified redevelopment costs up to $2,760,000 for the apartment project and $714,000 for the hotel project in the form of pay-as-you- go tax increment generated by the respective projects so as to advance both redevelopments. The EDA’s legal counsel in consultation with staff prepared the proposed Purchase and Redevelopment Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 12 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Contract with SLP Park Ventures, LLC and recommends its approval. The attached resolution of approval allows for modifications to the Contract that do not alter the substance of the transaction without bringing the Contract back to the EDA for amendment. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 13 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 18-____ RESOLUTION APPROVING A PURCHASE AND REDEVELOPMENT CONTRACT, INCLUDING PROVISIONS FOR THE CONVEYANCE OF REAL PROPERTY, AND AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAX INCREMENT REVENUE NOTE TO SLP PARK VENTURES LLC BE IT RESOLVED BY the Board of Commissioners (the “Board”) of the St. Louis Park Economic Development Authority (the “Authority”) as follows: Section 1. Recitals; Approval and Authorization; Award of Sale. 1.01. Recitals. (a) The Authority and the City of St. Louis Park have heretofore approved the establishment of the Wayzata Tax Increment Financing District (the “TIF District”) within Redevelopment Project No. 1 (the “Project”), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. (b) To facilitate the redevelopment of certain property within the Project and TIF District, the Authority and SLP Park Ventures LLC (the “Owner”) have negotiated a Purchase and Redevelopment Contract (the “Agreement”) which provides for the conveyance of certain City- owned property described in Exhibit A (the “Authority Parcels”) to the Authority for reconveyance to the Owner, the construction by the Owner of a rental housing facility, a hotel, and associated parking on certain Redevelopment Property adjacent to the Authority Parcels, and the issuance by the Authority of one or more Tax Increment Revenue Notes, Series 2018 (the “Notes”) to the Owner. (c) On October 4, 2017, the Planning Commission of the City reviewed the plans for development of the Redevelopment Property by the Redeveloper, including the City Parcels, found that such development is consistent with the City’s comprehensive plan, and recommended approval of the final plat of the Redevelopment Property. (d) On the date hereof, the Authority conducted a duly noticed public hearing regarding the conveyance of the Authority Parcels to the Owner pursuant to the Agreement, at which all interested parties were given an opportunity to be heard, and hereby finds that the execution of the Agreement and performance of the Authority's obligations thereunder, including the conveyance of the Authority Parcels to the Owner, are in the best interest of the City and its residents. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 14 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC 1.02. Approval of Agreement. (a) The Agreement as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, and subject to approval by the City Council of the conveyance of the Authority Parcels (as defined in the Agreement) to the Authority, provided that execution of the Agreement by such officials shall be conclusive evidence of approval. (b) Authority staff and officials are authorized to take all actions necessary to perform the Authority’s obligations under the Agreement as a whole, including without limitation execution of any documents to which the Authority is a party referenced in or attached to the Agreement, and any deed or other documents necessary to acquire the Authority Parcels from the City, and to convey the Authority Parcels to Redeveloper, all as described in the Agreement. 1.03. Authorization of Notes. Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell the Notes to the Owner for the purpose of financing certain Public Redevelopment Costs of the Project, subject to all terms and conditions of the Agreement. 1.04. Issuance, Sale, and Terms of the Notes. (a) The Authority hereby authorizes the President and Executive Director to issue the Notes in accordance with the Agreement. All capitalized terms in this resolution have the meaning provided in the Agreement unless the context requires otherwise. (b) The Notes shall be issued to the Owner as two separate Notes: the Hotel Note in the maximum aggregate principal amount of $714,000 in consideration of certain eligible costs incurred by the Owner in connection with construction of the Hotel Component of the Minimum Improvements, and the Multifamily Note in the maximum aggregate principal amount of $2,760,000 in consideration of certain eligible costs incurred by the Owner in connection with construction of the Multifamily Component of the Minimum Improvements under the Agreement. The Notes shall be dated the date of delivery thereof, and shall bear interest at the lesser of the rate of 5.5% per annum or the actual rate of the Owner’s mortgage financing, from the date of issue to the earlier of maturity or prepayment. The Notes will be issued in the principal amount of Public Redevelopment Costs submitted and approved in accordance with Section 3.6 of the Agreement. The Notes are secured by Available Tax Increment, as further described in the form of the Note herein. The Authority hereby delegates to the Executive Director the determination of the date on which each Note is to be delivered, in accordance with the Agreement. Section 2. Form of Notes. The Notes shall be in substantially the following form, with the blanks to be properly filled in and the principal amount adjusted as of the date of issue: Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 15 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY No. R-1 $_____________ TAX INCREMENT REVENUE NOTE SERIES 20__ (Platia Place, ________ Component) Date Rate of Original Issue ___% The St. Louis Park Economic Development Authority (“Authority”) for value received, certifies that it is indebted and hereby promises to pay to SLP Park Ventures LLC or registered assigns (the "Owner"), the principal sum of $__________ and to pay interest thereon at the rate of __% per annum, solely from the sources and to the extent set forth herein. Capitalized terms shall have the meanings provided in the Purchase and Redevelopment Contract between the Authority and the Owner, dated as of _______________, 2018 (the "Agreement"), unless the context requires otherwise. 1. Payments. Principal and interest ("Payments") shall be paid on August 1, 20__ and each February 1 and August 1 thereafter to and including February 1, 20__ ("Payment Dates") in the amounts and from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Simple interest accruing from the date of issue through and including February 1, 20__ shall be added to principal. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal, commencing on the date of original issue. Interest shall be computed on the basis of a year of 360 days and charged for actual days principal is unpaid. 3. Available Tax Increment. (a) Payments on this Note are payable on each Payment Date solely from and in the amount of Available Tax Increment, which shall mean 95% of the Tax Increment attributable to the [______ Component] of the Minimum Improvements and Redevelopment Property that is paid to the Authority by Hennepin County in the six months preceding each Payment Date on the Note. (b) The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment and the failure of the Authority to pay principal or interest on this Note on any Payment Date shall not constitute a default Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 16 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC hereunder as long as the Authority pays principal and interest hereon to the extent of Available Tax Increment. The Authority shall have no obligation to pay any unpaid balance of principal or accrued interest that may remain after the final Payment on February 1, 20__. 4. Default. If on any Payment Date there has occurred and is continuing any Event of Default under the Agreement, the Authority may withhold from payments hereunder under all Available Tax Increment. If the Event of Default is thereafter cured in accordance with the Agreement, the Available Tax Increment withheld under this Section shall be deferred and paid, without interest thereon, within 30 days after the Event of Default is cured. If the Event of Default is not cured in a timely manner, the Authority may terminate this Note by written notice to the Owner in accordance with the Agreement. 5. Prepayment. (a) The principal sum and all accrued interest payable under this Note is prepayable in whole or in part at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular Payment otherwise required to be made under this Note. (b) Upon receipt by Redeveloper of the Authority’s written statement of the Participation Amount as described in Section 3.8 of the Agreement, fifty percent of such Participation Amount will be deemed to constitute, and will be applied to, prepayment of the principal amount of this Note. Such deemed prepayment is effective as of the date of delivery of such statement to the Owner, and will be recorded by the Registrar in its records for the Note. Upon request of the Owner, the Authority will deliver to the Owner a statement of the outstanding principal balance of the Note after application of the deemed prepayment under this paragraph. 6. Nature of Obligation. This Note is one of an issue in the total principal amount of $_________________, issued to aid in financing certain public redevelopment costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through 469.047, and is issued pursuant to an authorizing resolution (the "Resolution") duly adopted by the Authority on ________, 2018, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.1794, as amended. This Note is a limited obligation of the Authority which is payable solely from Available Tax Increment pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. 7. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the City Finance Director, by the Owner hereof in person or by such Owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 17 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the St. Louis Park Economic Development Authority have caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY Executive Director President Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 18 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Finance Director, in the name of the person last listed below. Date of Signature of Registration Registered Owner____ Chief Financial Officer SLP Park Ventures LLC Federal Tax I.D. No. _____________ Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 19 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Section 3. Terms, Execution and Delivery. 3.01. Denomination, Payment. Each Note shall be issued as a single typewritten note numbered R-1. Each Note shall be issuable only in fully registered form. Principal of and interest on the Notes shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates; Interest Payment Dates. Principal of and interest on the Notes shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the Chief Financial Officer of the City to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Notes and the registration of transfers and exchanges of the Notes. (b) Transfer of Note. Upon surrender for transfer of any Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer. When any Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name each Note is at any time registered in the bond register as the absolute owner of such Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes, Fees and Charges. For every transfer or exchange of any Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 20 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC (g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Delivery. The Notes shall be prepared under the direction of the Chief Financial Officer of the City and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on any Note shall cease to be such officer before the delivery of such Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When each Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance with the Agreement. Section 4. Security Provisions. 4.01. Pledge. The Authority hereby pledges to the payment of the principal of and interest on the Hotel Note all Available Tax Increment attributable to the Hotel Component of the Minimum Improvements as defined in the Note, and hereby pledges to the payment of the principal of and interest on the Multifamily Note all Available Tax Increment attributable to the Multifamily Component of the Minimum Improvements as defined in the Note. Available Tax Increment shall be applied to payment of the principal of and interest on each Note in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Notes are no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Notes. The Authority irrevocably agrees to appropriate to the Bond Fund on or before each Payment Date the Available Tax Increment in an amount equal to the Payment then due, or the actual Available Tax Increment, whichever is less. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's account for the TIF District upon the termination of the Notes in accordance with their terms. 4.03. Additional Obligations. The Authority will issue no other obligations secured in whole or in part by Available Tax Increment unless such pledge is on a subordinate basis to the pledge on the Notes. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 21 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of each Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of each Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon approval. Reviewed for Administration: Adopted by the Economic Development Authority April 16, 2018 Thomas K. Harmening, Executive Director Steve Hallfin, President Attest Melissa Kennedy, Secretary Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 22 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC EXHIBIT A AUTHORITY PARCELS That part of Trunk Highway No. 12 as shown on MINNESOTA DEPARTMENT OF TRANSPORTATION RIGHT OF WAY PLAT NO. 27-23 described as follows: Beginning at right of way Boundary corner B3; thence on an assumed azimuth of 1 degree 05 minutes 15 seconds along the boundary line of said plat a distance of 86.85 feet to Right of Way Boundary Corner B4; thence deflect to the right 83.74 feet along a non-tangential curve concave to the northwest and passing through Right of Way Boundary Corner B5, having a radius of 2083.24 feet, central angle of 2 degrees 18 minutes 11 seconds, chord azimuth of 48 degrees 18 minutes 24 seconds and chord distance of 83.73 feet; thence on an azimuth of 91 degrees 27 minutes 32 seconds a distance of 98.89 feet; thence southwesterly deflecting to the right on a non- tangential curve concave to the northwest having a radius of 788.53 feet, delta angle of 15 degrees 42 minutes 58 seconds, and a chord azimuth of 229 degrees 07 minutes 59 seconds and chord distance of 215.62 feet to the East line of parcel 44 as shown on said plat 27-23; thence north along said East line of Parcel 44 to the point of beginning. AND That part of Trunk Highway No. 12 as shown on MINNESOTA DEPARTMENT OF TRANSPORTATION RIGHT OF WAY PLAT NO. 27-23 which lies southwesterly and southerly of Line 1, said Line 1 being described as follows: Line 1: Commencing at Right of Way Boundary Corner B212 as shown on said Plat No. 27- 23; thence Northerly on an azimuth of 00 degrees 13 minutes 27 seconds along the West line of the boundary of said Plat No. 27-23 a distance of 484.26 feet to Right of Way Boundary Corner B211 and the point of beginning of the line being described; thence Easterly on an azimuth of 101 degrees 20 minutes 23 seconds along the boundary of said Plat No. 27-23 a distance of 214.28 feet to Right of Way Boundary Corner B1; thence continue on an azimuth of 101 degrees 20 minutes 23 seconds 93.00 feet; thence deflect to the left 350.87 feet on a non-tangential curve, concave to the North and passing through Right of Way Boundary Corner B2 as shown on said Plat No. 27-23, having a radius of 763.94 feet, a delta angle of 26 degrees 18 minutes 56 seconds, and a chord azimuth of 70 degrees 47 minutes 34 seconds to the Easterly line of said Parcel 44; thence on an azimuth of 01 degree 05 minutes 15 seconds 7.37 feet to Right of Way Boundary Corner B3 as shown on said Plat No. 27-23 and there terminating. And northerly of the following described line and its easterly extension: Commencing at the point of intersection of the West line of the Southeast Quarter of the Northeast Quarter of said Section 1 with the most southerly line of Lot 1, Block 7, SHELARD PARK; thence on an assumed bearing of South 0 degrees 39 minutes 11 seconds West along said West line a distance of 187.99 feet to the point of beginning of the line being described; thence along a non-tangential curve concave to the Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Page 23 Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC northeast having a radius of 788.53 feet, central angle of 7 degrees 43 minutes 57 seconds, chord bearing of South 78 degrees 42 minutes 56 seconds East to its intersection with the most westerly extension of the southerly line of said Parcel 44; thence easterly along said extension of the most southerly line of said Parcel 44 to its intersection with Line 1 described above, and said line there ending. D-1 Second draft, March 14, 2018 DRAFT PURCHASE AND REDEVELOPMENT CONTRACT By and Between ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY and SLP PARK VENTURES LLC Dated as of: _________________, 2018 This document was drafted by: KENNEDY & GRAVEN, Chartered (MNI) 470 U.S. Bank Plaza Minneapolis, Minnesota 55402 (612) 337-9300 http://www.kennedy-graven.com Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 24 D-2 TABLE OF CONTENTS Page PREAMBLE ......................................................................................................................................... 1 ARTICLE I Definitions Section 1.1. Definitions .................................................................................................................... 2 ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority ................................................................................. 6 Section 2.2. Representations and Warranties by the Redeveloper ................................................... 6 ARTICLE III Property Acquisition; Public Redevelopment Costs Section 3.1. Conveyance of the Property ......................................................................................... 8 Section 3.2. Purchase Price; Provisions for Payment ....................................................................... 8 Section 3.3. Conditions of Conveyance ........................................................................................... 8 Section 3.4. Place of Document Execution, Delivery and Recording ............................................. 9 Section 3.5. Title ............................................................................................................................... 9 Section 3.6. Environmental Conditions .......................................................................................... 10 Section 3.7. Issuance of Notes ........................................................................................................ 11 Section 3.8. TIF Lookback ............................................................................................................. 12 Section 3.9. Business Subsidy ........................................................................................................ 12 Section 3.10. Payment of Authority Costs ....................................................................................... 13 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Improvements ................................................................................... 14 Section 4.2. Construction Plans ...................................................................................................... 14 Section 4.3. Commencement and Completion of Construction ..................................................... 15 Section 4.4. Certificate of Completion ........................................................................................... 16 Section 4.5. Records ....................................................................................................................... 16 Section 4.6. Management ............................................................................................................... 16 Section 4.7. Inclusionary Housing Policy ...................................................................................... 17 Section 4.8. Conformity to Planning Development Contract ........................................................ 17 ARTICLE V Insurance Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 25 D-3 Section 5.1. Insurance ..................................................................................................................... 19 Section 5.2. Subordination .............................................................................................................. 20 ARTICLE VI Tax Increment; Taxes Section 6.1. Right to Collect Delinquent Taxes ............................................................................. 21 Section 6.2. Review of Taxes ......................................................................................................... 21 Section 6.3. Assessment Agreement .............................................................................................. 21 ARTICLE VII Other Financing Section 7.1. Generally ..................................................................................................................... 23 Section 7.2. Authority’s Option to Cure Default on Mortgage ...................................................... 23 Section 7.3. Modification; Subordination ...................................................................................... 23 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Development ............................................................................. 24 Section 8.2. Prohibition Against Redeveloper’s Transfer of Property and Assignment of Agreement .......................................................................................... 24 Section 8.3. Release and Indemnification Covenants .................................................................... 25 ARTICLE IX Events of Default Section 9.1. Events of Default Defined .......................................................................................... 27 Section 9.2. Remedies on Default .................................................................................................. 27 Section 9.3. Revesting Title in Authority Upon Happening of Event Subsequent to Conveyance to Redeveloper ....................................................................................... 28 Section 9.4. Resale of Reacquired Property; Disposition of Proceeds .......................................... 29 Section 9.5. No Remedy Exclusive ................................................................................................ 29 Section 9.6. No Additional Waiver Implied by One Waiver ........................................................ 30 Section 9.7. Attorney Fees .............................................................................................................. 30 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; Representatives Not Individually Liable ................................. 31 Section 10.2. Equal Employment Opportunity ................................................................................ 31 Section 10.3. Restrictions on Use ..................................................................................................... 31 Section 10.4. Provisions Not Merged With Deed ............................................................................ 31 Section 10.5. Titles of Articles and Sections .................................................................................... 31 Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 26 D-4 Section 10.6. Notices and Demands ................................................................................................. 31 Section 10.7. Counterparts ................................................................................................................ 32 Section 10.8. Recording .................................................................................................................... 32 Section 10.9. Amendment ................................................................................................................ 32 Section 10.10. Authority Approvals ................................................................................................... 32 TESTIMONIUM ................................................................................................................................ 33 SIGNATURES ................................................................................................................................... 33 SCHEDULE A Redevelopment Property SCHEDULE B Form of Quitclaim Deed SCHEDULE C Authorizing Resolution SCHEDULE D Projected Public Redevelopment Costs SCHEDULE E Certificate of Completion SCHEDULE F Assessment Agreement SCHEDULE G Form of Subordination Agreement Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 27 D-5 PURCHASE AND REDEVELOPMENT CONTRACT THIS AGREEMENT, made as of the __ day of ______________, 2018, by and between the St. Louis Park Economic Development Authority (the “Authority”), a public body corporate and politic under the laws of Minnesota, and SLP Park Ventures LLC (the “Redeveloper”), a Minnesota limited liability company. WITNESSETH: WHEREAS, the Authority was created pursuant to Minnesota Statutes Sections 469.090 to 469.1081 (the “Act”) and was authorized to transact business and exercise its powers by a resolution of the City Council of the City; and WHEREAS, the Authority has undertaken a program to promote the development and redevelopment of land which is underutilized within the City of St. Louis Park, Minnesota (the “City”), and in this connection created the Redevelopment Project No. 1 (hereinafter referred to as the “Project”) in an area (hereinafter referred to as the “Project Area”) located in the City pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the “HRA Act”); and WHEREAS, pursuant to the Act and the HRA Act, the Authority is authorized to acquire real property, or interests therein, and to undertake certain activities to facilitate the redevelopment of real property by private enterprise; and WHEREAS, the Authority has acquired certain property described in Schedule A (the “Authority Parcels”) within the Project, and intends to convey that property to the Redeveloper, who intends to construct certain improvements described herein on the Authority Parcels as well as certain other property owned by the Redeveloper (together, the Redevelopment Property”). WHEREAS, the Authority and City have previously established the Wayzata Boulevard Tax Increment Financing District (“TIF District”) pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the “TIF Act”), made up of property in the Project Area including the Redevelopment Property; and WHEREAS, the Authority believes that the redevelopment of the Redevelopment Property pursuant to this Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of the applicable State and local laws and requirements under which the Project has been undertaken and is being assisted. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 28 D-6 ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: “Act” means Minnesota Statutes Sections 469.090 to 469.1081, as amended. “Affiliate” means with respect to any entity (a) any corporation, partnership, limited liability company or other business entity or person controlling, controlled by or under common control with the entity, and (b) any successor to such party by merger, acquisition, reorganization or similar transaction involving all or substantially all of the assets of such party (or such Affiliate). For the purpose hereof the words “controlling”, “controlled by” and “under common control with” shall mean, with respect to any corporation, partnership, limited liability company or other business entity, the ownership of fifty percent or more of the voting interests in such entity or possession, directly or indirectly, of the power to direct or cause the direction of management policies of such entity, whether through ownership of voting securities or by contract or otherwise. “Agreement” means this Agreement, as the same may be from time to time modified, amended, or supplemented. “Authority” means the St. Louis Park Economic Development Authority. “Authority Parcels” means the parcels so described in Schedule A of this Agreement. “Authority Representative” means the Executive Director of the Authority, or any person designated by the Executive Director to act as the Authority Representative for the purposes of this Agreement. “Authorizing Resolution” means the resolution of the Authority, substantially in the form of attached Schedule B to be adopted by the Authority to authorize the issuance of the Note. “Available Tax Increment” has the meaning provided in the Authorizing Resolution. “Business Day” means any day except a Saturday, Sunday, legal holiday, a day on which the City is closed for business, or a day on which banking institutions in the City are authorized by law or executive order to close. “Business Subsidy Act” means Minnesota Statutes, Sections 116J.993 to 116J.995, as amended. “City” means the City of St. Louis Park, Minnesota. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 29 D-7 “Certificate of Completion” means the certification provided to the Redeveloper in connection with any Phase of the Minimum Improvements, pursuant to Section 4.4 of this Agreement. “Construction Plans” means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which (a) shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the appropriate building officials of the City, and (b) shall include at least the following for each building: (1) site plan; (2) foundation plan; (3) underground parking plans; (4) floor plan for each floor; (5) cross sections of each (length and width); (6) elevations (all sides); (7) landscape plan; and (8) such other plans or supplements to the foregoing plans as the Authority may reasonably request to allow it to ascertain the nature and quality of the proposed construction work. “County” means the County of Hennepin, Minnesota. “Development Pro Forma” means the financial pro forma for the Minimum Improvements attached hereto as Schedule E. “Event of Default” means an action by the Redeveloper listed in Article IX of this Agreement. “Holder” means the owner of a Mortgage. “Hotel Component” means construction on the Redevelopment Property of a six-story, approximately 61,411 square-foot hotel containing 100 rooms. “HRA Act” means Minnesota Statutes, Sections 469.001 to 469.047, as amended. “Maturity Date” means the date that the Note has been paid in full or terminated in accordance with its terms, whichever is earlier. “Minimum Improvements” means construction on the Redevelopment Property of the Multifamily Component and the Hotel Component, along with all associated parking. “Mortgage” means any mortgage made by the Redeveloper that is secured, in whole or in part, with the Redevelopment Property and that is a permitted encumbrance pursuant to the provisions of Article VIII of this Agreement. “MPCA” means the Minnesota Pollution Control Agency. “Multifamily Component” means construction on the Redevelopment Property of a six- story, approximately 205,670 square-foot multifamily apartment building containing 149 housing units, as further described in Section 4.7 hereof. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 30 D-8 “Note” means the Tax Increment Revenue Note, substantially in the form contained in the Authorizing Resolution, to be delivered by the Authority to the Redeveloper in accordance with Section 3.8 hereof. “Planning Development Contract” means the Planning Development Contract between the City and the Redeveloper, executed in connection with the development of the Minimum Improvements on the Redevelopment Property and incorporated herein by reference. “Project” means the Authority’s Redevelopment Project No. 1. “Public Redevelopment Costs” has the meaning provided in Section 3.8(a) hereof. “Project Area” means the geographic area within the boundaries of the Project. “Redeveloper” means SLP Park Ventures LLC, a Minnesota limited liability company, or its permitted successors and assigns. “Redeveloper Parcels” means the parcels so described in Schedule A of this Agreement. “Redevelopment Plan” means the Redevelopment Plan for the Project. “Redevelopment Property” means the real property described in Schedule A of this Agreement, consisting of the Authority Parcels and the Redeveloper Parcels. “State” means the state of Minnesota. “Tax Increment” means that portion of the real property taxes that is paid with respect to the Redevelopment Property and that is remitted to the Authority as tax increment pursuant to the Tax Increment Act. “Tax Increment Act” or “TIF Act” means the Tax Increment Financing Act, Minnesota Statutes Sections 469.174 to 469.1794, as amended. “Tax Increment District” or “TIF District” means the Wayzata Boulevard Tax Increment Financing District created by the City and the Authority. “Tax Increment Plan” or “TIF Plan” means the Tax Increment Financing Plan for the TIF District approved by the City Council on March 21, 2016, and as it may be amended. . “Tax Official” means any County assessor, County auditor, County or State board of equalization, the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or the State Supreme Court. “Transfer” has the meaning set forth in Section 8.2(a) hereof. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 31 D-9 “Unavoidable Delays” means delays beyond the reasonable control of the party seeking to be excused 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 Authority or City in exercising their rights under this Agreement), including without limitation condemnation or threat of condemnation of any portion of the Redevelopment Property, which directly result in delays. Unavoidable Delays shall not include delays experienced by the Redeveloper in obtaining permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such construction is required under Section 4.3 of this Agreement, so long as the Construction Plans have been approved in accordance with Section 4.2 hereof. (The remainder of this page is intentionally left blank.) Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 32 D-10 ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority. (a) The Authority is an economic development authority duly organized and existing under the laws of the State. Under the provisions of the Act and the HRA Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b)The Authority will use its best efforts to facilitate development of the Minimum Improvements, including but not limited to cooperating with the Redeveloper in obtaining necessary administrative and land use approvals and construction financing pursuant to Section 7.1 hereof. (c)The Authority will issue the Note, subject to all the terms and conditions of this Agreement. (d)The activities of the Authority are undertaken for the purpose of fostering the redevelopment of certain real property that previously occupied by substandard and obsolete buildings, which will revitalize this portion of the Project Area, increase tax base, provide desired services, and increase housing opportunities. Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper represents and warrants that: (a) The Redeveloper is a limited liability company, duly organized and in good standing under the laws of the State, is not in violation of any provisions of its articles of organization or bylaws, is duly qualified as a foreign limited liability company and authorized to transact business within the State, has power to enter into this Agreement and has duly authorized the execution, delivery, and performance of this Agreement by proper action of its members. (b)If the Redeveloper acquires the Redevelopment Property in accordance with this Agreement, the Redeveloper will construct, operate and maintain the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Plan and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code, energy-conservation and public health laws and regulations). (c)The Redeveloper will use reasonable efforts to secure all permits, licenses and approvals necessary for construction of the Minimum Improvements. (d)The Redeveloper has received no written notice or other written communication from any local, state or federal official that the activities of the Redeveloper or the Authority in the Project Area may be or will be in violation of any environmental law or regulation (other than those notices or communications of which the Authority is aware). The Redeveloper is aware of no facts Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 33 D-11 the existence of which would cause it to be in violation of or give any person a valid claim under any local, state or federal environmental law, regulation or review procedure. (e)Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a party or by which it is bound, or constitutes a default under any of the foregoing. (f)The proposed development by the Redeveloper hereunder would not occur but for the tax increment financing assistance being provided by the Authority hereunder. (The remainder of this page is intentionally left blank.) Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 34 D-12 ARTICLE III Property Acquisition; Public Redevelopment Costs Section 3.1. Conveyance of the Property. (a) The Redevelopment Property consists of the Redeveloper Parcels and the Authority Parcels described in Schedule A. As of the date of this Agreement, the Redeveloper has acquired the Redeveloper Parcels. The Authority has no obligation to acquire the Redeveloper Parcels. (b)The Authority owns the Authority Parcels and will convey title to and possession of the Authority Parcels to the Redeveloper, subject to all the terms and conditions of this Agreement. (c)The Redeveloper is in the process of obtaining final City approval of a Planned Unit Development ordinance (“PUD”) and plat (the “Redevelopment Plat”) for the Redevelopment Property and will enter into a Planning Development Contract with the City, which PUD, Redevelopment Plat, and Planning Development Contract, in final form, are incorporated into this Agreement by reference. Section 3.2. Purchase Price; Provisions for Payment. The purchase price to be paid to the Authority by the Redeveloper in exchange for the conveyance of the Authority Parcels shall be $73,772 (the “Purchase Price”). The Purchase Price shall be paid in full at Closing (as defined in Section 3.3(b) hereof). Section 3.3. Conditions of Conveyance. (a) The Authority shall convey title to and possession of the Authority Parcels to the Redeveloper by quit claim deed substantially in the form set forth on Schedule B to this Agreement (the “Deed”). The Authority’s obligation to convey the Authority Parcels to the Redeveloper is subject to satisfaction of the following terms and conditions: (1)The Authority having approved permanent financing for construction of the Minimum Improvements in accordance with Article VII hereof, and the Redeveloper having closed on such permanent financing at or before Closing on transfer of title to the Authority Parcels to the Redeveloper. (2)The City having approved the Redevelopment Plat, PUD, and Planning Development Contract in accordance with Section 3.1, and the City and Redeveloper having recorded the Redevelopment Plat on or before Closing. (3)The City having approved all necessary zoning variances to the Redevelopment Property in accordance with Section 3.1. (4)The Authority having approved Construction Plans for the Minimum Improvements in accordance with Section 4.2. (5)The Redeveloper having reviewed and approved (or waived objections to) title to the Authority Parcels as set forth in Section 3.5. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 35 D-13 (6)The Redeveloper having made such inspections and testing with regard to the Authority Parcels and Redevelopment Property as a whole as it deems necessary, and being satisfied with the results of such inspections. (7)There is no uncured Event of Default under this Agreement. Conditions (1), (2), (4) and (7) are solely for the benefit of the Authority, and may be waived by the Authority. Conditions (5) and (6) are solely for the benefit of the Redeveloper, and may be waived by the Redeveloper. Condition (3) is for the benefit of both parties and may be waived by both parties. If any condition is not satisfied or waived by the applicable party on or before Closing, then either party may terminate this Agreement by ten days’ written notice to the other party. Upon such termination, neither party shall have any further obligations or liability to the other hereunder; provided, however, that if there are Administrative Costs (as defined in Section 3.10) incurred but unpaid at the time of such termination, Redeveloper shall reimburse the Authority for such Administrative Costs. (b)The closing on conveyance of the Authority Parcels from the Authority to the Redeveloper (“Closing”) shall occur within thirty (30) days after satisfaction or waiver of the conditions specified in this Section, but no later than September 28, 2018, or such later date as is mutually agreed upon by the parties in writing. Section 3.4. Place of Document Execution, Delivery and Recording. (a) Unless otherwise mutually agreed by the Authority and the Redeveloper, the execution and delivery of all deeds, documents and the payment of any purchase price shall be made at the offices of the Authority or such other location to which the parties may agree. (b)The Deed shall be in recordable form and shall be promptly recorded in the proper office for the recordation of deeds and other instruments pertaining to the Authority Parcels. At closing, the Redeveloper shall pay: all recording costs, including state deed tax, in connection with the conveyance of the Authority Parcels; title insurance commitment fees and premiums, if any; and title company closing fees, if any. The Authority shall pay costs of recording any instruments used to clear title encumbrances; and any special assessments outstanding or levied against the Authority Parcels as of the Closing Date. The parties agree and understand that the Authority Parcels are exempt from property taxes for taxes payable in 2018. Section 3.5. Title. (a) As soon as practicable after the date of this Agreement, the Redeveloper, at Redeveloper’s sole expense, shall obtain a commitment for the issuance of a policy of title for the Authority Parcels. The Redeveloper shall have twenty (20) days from the later of the date of its receipt of such commitment and the date of recording of the Redevelopment Plat to review the state of title to the Redevelopment Property and to provide the Authority with a list of written objections to such title. Upon receipt of the Redeveloper’s list of written objections, the Authority shall proceed in good faith and with all due diligence to attempt to cure the objections made by the Redeveloper. In the event that the Authority has failed to cure objections within sixty (60) days after its receipt of the Redeveloper’s list of such objections, the Redeveloper may by the giving of written notice to the Authority (i) terminate this Agreement, upon the receipt of which this Agreement shall be null and void and neither party shall have any liability hereunder, other than Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 36 D-14 Redeveloper’s obligations under Section 3.10 hereof; or (ii) waive the objections and proceed to Closing. The Authority shall have no obligation to take any action to clear defects in the title to the Authority Parcels, other than the good faith efforts described above. (b)The Authority shall take no actions to encumber title to the Authority Parcels between the date of this Agreement and the time the Deed is delivered to the Redeveloper. (c)The Redeveloper shall take no actions to encumber title to the Authority Parcels between the date of this Agreement and the time the Deed is delivered to the Redeveloper. The Redeveloper expressly agrees that it will not cause or permit the attachment of any mechanics, attorneys, or other liens to the Authority Parcels prior to Closing. Notwithstanding termination of this Agreement prior to Closing, Redeveloper is obligated to pay all costs to discharge any encumbrances to the Authority Parcels attributable to actions of Redeveloper, its employees, officers, agents or consultants, including without limitation the Architect, Contractor and Redeveloper’s Engineer. Section 3.6. Environmental Conditions. (a) Before closing on conveyance of the Authority Parcels, the Redeveloper may enter the Authority Parcels and conduct any environmental or soils studies deemed necessary by the Redeveloper. The Redeveloper agrees that it shall cause all studies, investigations, and inspections performed on the Authority Parcels to be performed in a manner that does not disturb the Authority Parcels and that the Authority Parcels shall be returned to their original condition after Redeveloper’s entry, provided that Redeveloper shall not be liable for any existing conditions on the Authority Parcels or for any environmental remediation or response actions required as a result of such investigations and inspections. Except for soil borings and test pits, the Redeveloper shall not conduct or cause to be conducted any physically intrusive investigations, examinations or studies of the Authority Parcels without obtaining the prior written consent of the Authority. If at least 10 days before Closing the Redeveloper determines that hazardous waste or other pollutants as defined under federal and state law exist on the Authority Parcels, or that the soils are otherwise unsuitable for construction of the Minimum Improvements, the Redeveloper may at its option terminate this Agreement by giving written notice to the Authority, upon receipt of which this Agreement shall be null and void and neither party shall have any liability hereunder, other than Redeveloper’s obligations under Section 3.10 hereof. (b)The Redeveloper acknowledges that the Authority makes no representations or warranties as to the condition of the soils on the Redevelopment Property or the fitness of the Redevelopment Property for construction of the Minimum Improvements or any other purpose for which the Redeveloper may make use of such property, and that the assistance provided to the Redeveloper under this Agreement neither implies any responsibility by the Authority or the City for any contamination of the Redevelopment Property nor imposes any obligation on such parties to participate in any cleanup of the Redevelopment Property, except as expressly set forth herein. (c)Without limiting its obligations under Section 8.3 of this Agreement, Redeveloper agrees to indemnify, defend, and hold harmless the Authority, the City and their governing body members, officers and employees (the “Indemnified Parties”), from any claims or actions to the extent arising out of any claim related to the presence of hazardous substances on the Redevelopment Property, or any portion thereof, which either (i) arise out of activities of Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 37 D-15 Redeveloper on the Redevelopment Property or (ii) arise out of hazardous substances, asbestos, petroleum substances, or pollutants, irritants or contaminants brought onto the Redevelopment Property by Redeveloper. In addition, Redeveloper agrees to release the Indemnified Parties from any and all costs, expenses, losses, liabilities, claims, causes of action, demands, and damages relating to the environmental conditions on the Redevelopment Property as of the Date of Closing, including without limitation any claim the Redeveloper may have to recover from all or any of the Indemnified Parties any costs or expenses incurred by the Redeveloper in performing any remediation of the Redevelopment Property. Nothing in this section will be construed to limit or affect any limitations on liability of the City or Authority under State or federal law, including without limitation Minnesota Statutes Sections 466.04 and 604.02. Section 3.7. Issuance of Notes. (a) Generally. The Authority has determined that, in order to make development of the Minimum Improvements financially feasible, it is necessary to reimburse Redeveloper for a portion of the cost of site preparation related to demolition, soil excavation, disposal, and correction, pilings and/or foundational support, environmental remediation, utility relocation, and underground structured parking (the “Public Redevelopment Costs”), subject to the terms of this Section. (b)Terms. To reimburse the Public Redevelopment Costs incurred by Redeveloper, the Authority shall issue and the Redeveloper shall purchase a Note in connection with the Hotel Component (the “Hotel Note”) in the maximum principal amount of $714,000, and a Note in connection with the Multifamily Component (the “Multifamily Note”) in the maximum principal amount of $2,760,000. The Authority shall issue and deliver each Note upon Redeveloper having: (i)delivered to the Authority one or more certificates signed by the Redeveloper’s duly authorized representative, containing the following: (i) a statement that each cost identified in the certificate is a Public Redevelopment Cost as defined in this Agreement and that no part of such cost has been included in any previous certification; (ii) evidence that each identified Public Redevelopment Cost has been paid or incurred by or on behalf of the Redeveloper; and (iii) a statement that no uncured Event of Default by the Redeveloper has occurred and is continuing under the Agreement. The Authority may, if not satisfied that the conditions described herein have been met, return any certificate with a statement of the reasons why it is not acceptable and requesting such further documentation or clarification as the Authority may reasonably require; (ii)submitted and obtained Authority approval of financing in accordance with Section 7.1; and (iii)delivered to the Authority an investment letter in a form reasonably satisfactory to the Authority. The terms of the Notes will be substantially those set forth in the form of the Note shown in Schedule C, and the Notes will be subject to all terms of the Authorizing Resolution, which are incorporated herein by reference. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 38 D-16 (c)Termination of right to Notes. In accordance with Section 469.1763, Subdivision 3 of the TIF Act, conditions for delivery of the Note must be met by June 16, 2021 (five years after the date of certification of the TIF District by the County). If the conditions are not satisfied by such date, the Authority has no further obligations under this Section 3.7. (d)Assignment of Notes. The Authority acknowledges that the Redeveloper may assign one or both Notes to a third party. The Authority consents to such an assignment, conditioned upon receipt of an investment letter from such third party in a form reasonably acceptable to the Authority. (e)Qualifications. The Redeveloper understands and acknowledges that the Authority makes no representations or warranties regarding the amount of Tax Increment, or that revenues pledged to the Notes will be sufficient to pay the principal and interest on the Notes. Any estimates of Tax Increment prepared by the Authority or its financial advisors in connection with the TIF District or this Agreement are for the benefit of the Authority, and are not intended as representations on which the Redeveloper may rely. Public Redevelopment Costs exceeding the principal amount of the Notes are the sole responsibility of Redeveloper. Section 3.8. TIF Lookback. (a)Generally. The financial assistance to the Redeveloper under this Agreement is based on certain assumptions regarding likely costs and expenses associated with constructing the Minimum Improvements. The Authority and the Redeveloper agree that those assumptions will be reviewed at the times described in this Section, and that the amount of Tax Increment assistance provided under Section 3.7 will be adjusted accordingly. (b)Definitions. For the purposes of this Section, the following terms have the following meanings: “Calculation Date” means 60 days after the earliest of (i) the date of Stabilization of the Minimum Improvements; (ii) the date of any transfer of the Minimum Improvements (provided that the Redeveloper and the Authority agree that the Calculation Date will occur prior to the actual transfer); or (iii) three years after the date of completion of the Minimum Improvements, as evidenced by the Authority’s issuance of a Certificate of Completion. “Cash Flow” means Net Operating Income less debt service with respect to the first mortgage loan. “Cash on Cash Return” means Cash Flow divided by the sum of Redeveloper’s actual equity, which excludes any grants or City, Authority, Federal or State funds received by the Redeveloper, and the principal amount of the Note(s). “Cash on Cost Return” means Net Operating Income divided by the total Public Redevelopment Costs, which excludes any grants or City, Authority, Federal or State funds received by the Redeveloper. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 39 D-17 “Net Operating Income” means total income and other project-derived revenue, including payments under the Note(s), less Operating Expenses in accordance with the Pro Forma for each Component of the Minimum Improvements. “Operating Expenses” means reasonable and customary expenses incurred in operating each Component of the Minimum Improvements in accordance with its respective Pro Forma, including deposits to capital replacement reserves. “Stabilization” is defined as follows: for the Apartment Component, the date on which it has achieved 93% occupancy; and for the Hotel Component, the date on which it has achieved one full year of operations at 68% occupancy. (c)Lookback Calculations. (i)At the time of completion of construction of each Component, if the amount of the Public Redevelopment Costs actually incurred is less than the amount of Estimated Public Redevelopment Costs projected in Exhibit D-1 for either Component, the financial assistance for the Public Redevelopment Costs will be reduced on a dollar for dollar basis in the amount of such deficiency and the principal amount of the Note issued for the relevant Component will be adjusted accordingly. (ii)On the Calculation Date for the Multifamily Component, the principal amount of the Multifamily Note issued pursuant to this Agreement will be subject to adjustment based on a targeted annual Cash-On-Cash Return of 9%. By the Calculation Date, the Redeveloper must deliver to the Authority’s municipal advisor (the “Consultant”) evidence of its annual Cash-On-Cash Return. The Cash-On-Cash Return shall be calculated by the Authority’s Consultant based on the Redeveloper’s pro forma financial statement submitted to the Authority’s Consultant (to be calculated in a manner comparable to the sample attached as Exhibit D-2). If the annual Cash-On-Cash Return exceeds 9%, then the principal amount of the Multifamily Note issued to the Redeveloper will be reduced by 50% of the amount that results in a stabilized annual Cash-On-Cash Return equal to 9% over the term of the Multifamily Note, and the Redeveloper shall deliver the Multifamily Note to the Authority in exchange for a new Multifamily Note in the adjusted principal amount upon the Authority’s written request. (iii)On the Calculation Date for the Hotel Component, the amount of the Hotel Note provided pursuant to this Agreement will be subject to adjustment based on a targeted Cash-On-Cost Return of 8%. By the Calculation Date, the Redeveloper must deliver to the Authority’s Consultant evidence of its Cash-On-Cost Return. The Cash-On-Cost Return shall be calculated by the Authority’s Consultant based on the Redeveloper’s pro forma financial statement submitted to the Authority’s Consultant (to be calculated in a manner comparable to the sample attached as Exhibit D-3). If the Cash-On-Cost Return exceeds 8%, then the principal amount of the Hotel Note issued to the Redeveloper will be reduced by 50% of the amount that results in a Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 40 D-18 stabilized Cash-On-Cost Return equal to 8% over the term of the Hotel Note, and the Redeveloper shall deliver the Hotel Note to the Authority in exchange for a new Hotel Note in the adjusted principal amount upon the Authority’s written request. (c) Property Sale or Refinance. If the Redeveloper sells the Hotel Component or the Multifamily Component to an unrelated third party or refinances the Hotel Component or the Multifamily Component (provided, however, the placement of permanent debt on either Component will not constitute a refinancing giving rise to the review as described in this Section) during the first 5 years after issuance of a Certificate of Completion for each Component of the Minimum Improvements, the Redeveloper agrees to provide to the Consultant reasonable background documentation of income and expenses related to the relevant Component for the period from the date of this Agreement through the date of such anticipated sale or refinance (provided that the Redeveloper and the Authority agree that the Calculation Date will occur prior to the actual sale or refinancing). If the Consultant determines, based on such review, that the average actual profit realized by the Redeveloper on the Multifamily Component has exceeded an annual 9% Cash-On-Cash Return (to be calculated in a manner comparable to the sample attached as Exhibit D-2), then 50% of the excess amount of such average profit over the annual 9% Cash-On-Cash Return will be applied to reduce the amount payable under the Multifamily Note and the principal amount of the Multifamily Note will be reduced accordingly. If the Consultant determines, based on such review, that the average actual profit realized by the Redeveloper on the Hotel Component has exceeded a 8% Cash-On-Cost Return (to be calculated in a manner comparable to the sample attached as Exhibit D-3), then 50% of the excess amount of such average profit over the 8% Cash-On-Cost Return will be applied to reduce the amount payable under the Hotel Note and the principal amount of the Hotel Note will be reduced accordingly. Such reduction(s) will be effective upon written notice by the Authority to Redeveloper, stating the amount of such excess profit as determined by the Authority in accordance with this Section, accompanied by the Consultant's report. Section 3.9. Business Subsidy. The Redeveloper warrants and represents that the Redeveloper’s investment in the purchase of the Redevelopment Property and in site preparation equals at least 70% of the City assessor’s finalized market value of the Redevelopment Property for the 2017 assessment year (the most recent year for which finalized values are available), calculated as follows: Aggregate cost of acquisition of Redevelopment Property……...…..$3,773,772 Plus Estimated cost of site preparation...................………………….$4,030,550 Less site preparation costs reimbursed by the Authority….. ………..($3,474,000) Equals net land and site preparation cost...................………………..$4,330,322 Assessor’s finalized market value of Redevelopment Property (2017)...................……………………...$2,331,000 $4,330,322 (net acquisition and site preparation cost) is 185.77% of $2,331,000 (assessor’s finalized fair market value of the Redevelopment Property for 2017). Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 41 D-19 Accordingly, the parties agree and understand that the financial assistance described in this Agreement does not constitute a business subsidy within the meaning of the Business Subsidy Act. The Redeveloper releases and waives any claim against the Authority and its governing body members, officers, agents, servants and employees thereof arising from application of the Business Subsidy Act to this Agreement, including without limitation any claim that the Authority failed to comply with the Business Subsidy Act with respect to this Agreement. Section 3.10. Payment of Authority Costs. The Redeveloper agrees that it will pay, within 30 days aft er written notice from the Authority, the reasonable costs of consultants and attorneys retained by the Authority in connection with the establishment of the TIF District, any necessary modification of the TIF Plan for the TIF District, and the negotiation and preparation of this Agreement and other incidental agreements and documents contemplated hereunder, including without limitation agreements and documents related to land conveyance, development and financing assistance. The Authority will provide written reports describing the costs accrued under this Section upon request from the Redeveloper, but not more often than intervals of 45 days. Any amount deposited by the Redeveloper upon filing its application for tax increment financing with the Authority will be credited to the Redeveloper’s obligation under this Section. Upon termination of this Agreement in accordance with its terms, the Redeveloper remains obligated under this section for costs incurred through the effective date of termination. (The remainder of this page is intentionally left blank.) Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 42 D-20 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Improvements. The Redeveloper agrees that it will construct or cause construction of the Minimum Improvements on the Redevelopment Property in accordance with the approved Construction Plans and that it will, during any period while the Redeveloper retains ownership of any portion of the Minimum Improvements, operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. Section 4.2. Construction Plans. (a) Before commencing construction of the Minimum Improvements, the Redeveloper shall submit to the Authority Construction Plans for the Minimum Improvements. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity with this Agreement, the Redevelopment Plan and all applicable State and local laws and regulations. The Authority will approve the Construction Plans in writing if (i) the Construction Plans conform to all terms and conditions of this Agreement; (ii) the Construction Plans conform to the goals and objectives of the Redevelopment Plan; (iii) the Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and regulations; (iv) the Construction Plans are adequate to provide for construction of the Minimum Improvements; (v) the Construction Plans do not provide for expenditures in excess of the funds available to the Redeveloper for construction of the Minimum Improvements; and (vi) no Event of Default has occurred. No approval by the Authority shall relieve the Redeveloper of the obligation to comply with the terms of this Agreement, applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority shall constitute a waiver of an Event of Default. If approval of the Construction Plans is requested by the Redeveloper in writing at the time of submission, such Construction Plans shall be deemed approved unless rejected in writing by the Authority, in whole or in part. Such rejections shall set forth in detail the reasons therefor based upon the criteria set forth in (i) through (vi) above, and shall be made within 20 days after the date of receipt of final plans from the Redeveloper. If the Authority rejects any Construction Plans in whole or in part, the Redeveloper shall submit new or corrected Construction Plans within twenty (20) days after written notification to the Redeveloper of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority. The Authority’s approval shall not be unreasonably withheld. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements, constructed in accordance with said plans) comply to the Authority’s satisfaction with the provisions of this Agreement relating thereto. The Redeveloper hereby waives any and all claims and causes of action whatsoever resulting from the review of the Construction Plans by the Authority and/or any changes in the Construction Plans requested by the Authority. Neither the Authority, the City, nor any employee or official of the Authority or City shall be responsible in any manner whatsoever for any defect in the Construction Plans or in any work done pursuant to the Construction Plans, including changes requested by the Authority. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 43 D-21 (b)If the Redeveloper desires to make any material change in the Construction Plans or any component thereof after their approval by the Authority, the Redeveloper shall submit the proposed change to the Authority for its approval. For the purpose of this section, the term “material” means changes that decrease construction costs by $750,000 or more. If the Construction Plans, as modified by the proposed change, conform to the requirements of this Section 4.2 of this Agreement with respect to such previously approved Construction Plans, the Authority shall approve the proposed change and notify the Redeveloper in writing of its approval. Such change in the Construction Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority to the Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made within 10 days after receipt of the notice of such change. The Authority’s approval of any such change in the Construction Plans will not be unreasonably withheld. Section 4.3. Commencement and Completion of Construction. (a) Subject to Unavoidable Delays, the Redeveloper shall commence construction of the Hotel Component and Multifamily Component of the Minimum Improvements by October 1, 2018. Subject to Unavoidable Delays, the Redeveloper shall complete the construction of the Hotel Component and Multifamily Component of the Minimum Improvements by February 28, 2020. All work with respect to the Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in conformity with the Construction Plans as submitted by the Redeveloper and approved by the Authority. (b)The Redeveloper agrees for itself, its successors, and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such successors and assigns, shall promptly begin and diligently prosecute to completion the development of the Redevelopment Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be commenced and completed within the periods specified in this Section 4.3 of this Agreement. After the date of this Agreement and until the Multifamily Component of the Minimum Improvements has been fully leased, the Redeveloper shall make reports, in such detail and at such times as may reasonably be requested by the Authority, but no more than monthly, as to the actual progress of the Redeveloper with respect to such construction and leasing. (c)If the Redeveloper anticipates that construction of either Component of the Minimum Improvements will not take place by the dates provided in this Section, the Redeveloper shall provide a written and oral report to the City Council of the City at a regular City Council meeting at least 45 days prior to the applicable required date of commencement or completion. The report must describe the reasons for the expected failure to meet the construction timeline, evidence of Redeveloper’s due diligence in working toward construction of the applicable Component, and a detailed revised schedule of construction of such Component. Approval by the Authority of a modified schedule for construction of the applicable Component of the Minimum Improvements shall not be unreasonably withheld, conditioned, or delayed. Failure by the Redeveloper to provide the written and oral report described in this Section is an Event of Default pursuant to Article IX hereof. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 44 D-22 (d)The Redeveloper shall comply with the City’s Green Building Policy, adopted by the City Council on February 16, 2010 and amended on September 16, 2014, and as such policy may be amended as of the date of issuance of a building permit for the Minimum Improvements, and shall use commercially reasonable efforts to obtain “green” certification for each component of the Minimum Improvements. As a condition to issuance of a Certificate of Completion for each component of the Minimum Improvements, Redeveloper shall submit to the Authority either (a) evidence of certification from Leadership in Energy and Environmental Design (“LEED”) or similar certification or (b) in absence of actual certification, evidence of compliance with the Green Building Policy including a detail of the specific energy-efficient/sustainable features or components implemented in the construction of each Component of the Minimum Improvements. Section 4.4. Certificate of Completion. (a) Promptly after completion of each Component of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Redeveloper to construct such Component of the Minimum Improvements (including the dates for beginning and completion thereof and the efforts regarding LEED or comparable certification described in Section 4.3), the Authority Representative shall deliver to the Redeveloper a Certificate of Completion in substantially the form shown as Schedule E, in recordable form and executed by the Authority. (b)If the Authority Representative shall refuse or fail to provide any certification in accordance with the provisions of this Section 4.4 of this Agreement, the Authority Representative shall, within thirty (30) days after written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the relevant Component of the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order for the Authority to issue the Certificate of Completion. (c)The construction of each Component of the Minimum Improvements shall be deemed to be substantially complete upon issuance of a certificate of occupancy for that Component of the Minimum Improvements, and upon determination by the Authority Representative that all related site improvements on the Redevelopment Property have been substantially completed in accordance with approved Construction Plans, subject to landscaping that cannot be completed until seasonal conditions permit. Section 4.5. Records. The Authority and the City through any authorized representatives, shall have the right at all reasonable times after reasonable notice to inspect, examine and copy all books and records of Redeveloper relating to the Minimum Improvements. Such records shall be kept and maintained by Redeveloper through the Maturity Date. Section 4.6. Management. The Redeveloper shall at all times engage a property management company with substantial experience in operating mixed use developments, subject to approval by the Authority, which approval will not be unreasonably withheld. The Redeveloper will submit evidence of such management upon request by the Authority. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 45 D-23 Section 4.7. Inclusionary Housing Policy. The Redeveloper agrees to comply with the City’s Inclusionary Housing Policy, as adopted June 1, 2015 and amended May 15, 2017, including without limitation the following: (a)Redeveloper agrees to reserve at least 15 of the apartment units in the Multifamily Component of the Minimum Improvements (the “Affordable Dwelling Units”) for households earning fifty percent (50%) of Area Median Income (“AMI”) for at least 25 years following building occupancy. (b)The monthly rental price for Affordable Dwelling Units shall include rent and utility costs and shall be based on fifty percent (50%) of AMI for the metropolitan area that includes St. Louis Park adjusted for bedroom size and calculated annually by Minnesota Housing in connection with establishing rent limits for the Housing Tax Credit Program. (c)The size and design of the Affordable Dwelling Units shall be consistent and comparable with the market rate units in the Multifamily Component of the Minimum Improvements and is subject to the approval of the City. The Affordable Dwelling Units shall be distributed throughout the Minimum Improvements. (d)The Affordable Dwelling Units shall have a number of bedrooms in the approximate proportion as the market rate units. (e)Redeveloper agrees to prepare an affordable housing plan as defined in the City’s Inclusionary Housing Policy (the “Affordable Housing Plan”). The Affordable Housing Plan shall describe how the Redeveloper complies with each of the applicable requirements of the Inclusionary Housing Policy. The Affordable Housing Plan shall be prepared by the Redeveloper and must be approved by the City prior to or in conjunction with delivery of the Certificate of Completion for the Multifamily Component of the Minimum Improvements. Section 4.8. Conformity to Planning Development Contract. The Redeveloper shall construct the Minimum Improvements pursuant to this Agreement and to the Planning Development Contract. Pursuant to the Planning Development Contract, required improvements shall include without limitation the following: (a)Redeveloper shall install dedicated wired connections for the Minimum Improvements in conformity with the terms and specifications provided in the Planning Development Contract. (b)The Redeveloper shall install a video surveillance system to provide complete coverage of all parking facilities constructed as part of the Minimum Improvements, including entrances to stairs and elevators, in conformity with the terms and specifications provided in the Planning Development Contract. (c) The Redeveloper shall equip both Components of the Minimum Improvements with an approved bi-directional 800 MHz signal enhancement system in conformity with the terms and specifications provided in the Planning Development Contract. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 46 D-24 (d)The Redeveloper shall install electric vehicle charging station infrastructure in both Components of the Minimum Improvements in conformity with the terms and specifications provided in the Planning Development Contract. (e)The Redeveloper shall construct the roofs of both Components of the Minimum Improvements in such a manner as to allow for solar readiness in conformity with the terms and specifications provided in the Planning Development Contract. (f)The Redeveloper shall construct designed outdoor recreation areas and other public amenities including privately owned artwork on the Redevelopment Property as required under the Planning Development Contract and as depicted in the approved Site Plan. The parties agree and understand that the Redeveloper shall be responsible for the cost of any maintenance and repair of the amenities and artwork. (The remainder of this page is intentionally left blank.) Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 47 D-25 ARTICLE V Insurance Section 5.1. Insurance. (a) The Redeveloper will provide and maintain at all times during the process of constructing the Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time during that period, at the request of the Authority, furnish the Authority with proof of payment of premiums on policies covering the following: (i)Builder’s risk insurance, written on the so-called “Builder’s Risk – Completed Value Basis,” in an amount equal to 100% of the principal amount of the Note, and with coverage available in nonreporting form on the so-called “all risk” form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content satisfactory to the Authority; (ii)Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations, and contractual liability insurance) together with an Owner’s Protective Liability Policy with limits against bodily injury and property damage of not less than $1,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used). The Authority shall be listed as an additional insured on the policy; and (iii)Workers’ compensation insurance, with statutory coverage, provided that the Redeveloper may be self-insured with respect to all or any part of its liability for workers’ compensation. (b)Upon completion of construction of the Minimum Improvements and prior to the Maturity Date, the Redeveloper shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the request of the Authority shall furnish proof of the payment of premiums on, insurance as follows: (i)Insurance against loss and/or damage to the Minimum Improvements under a policy or policies covering such risks as are ordinarily insured against by similar businesses. (ii)Comprehensive general public liability insurance, including personal injury liability (with employee exclusion deleted), against liability for injuries to persons and/or property, in the minimum amount for each occurrence and for each year of $1,000,000, and shall be endorsed to show the City and Authority as additional insureds. (iii)Such other insurance, including workers’ compensation insurance respecting all employees of the Redeveloper, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided that the Redeveloper may be self-insured with respect to all or any part of its liability for workers’ compensation. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 48 D-26 (c) All insurance required in Article V of this Agreement shall be taken out and maintained in responsible insurance companies selected by the Redeveloper that are authorized under the laws of the State to assume the risks covered thereby. Upon request, the Redeveloper will deposit annually with the Authority policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V of this Agreement each policy shall contain a provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided below the amounts required herein without giving written notice to the Redeveloper and the Authority at least 30 days before the cancellation or modification becomes effective. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (d) The Redeveloper agrees to notify the Authority immediately in the case of damage exceeding $750,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In such event the Redeveloper will forthwith repair, reconstruct, and restore the Minimum Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction, and restoration, the Redeveloper will apply the net proceeds of any insurance relating to such damage received by the Redeveloper to the payment or reimbursement of the costs thereof. The Redeveloper shall complete the repair, reconstruction and restoration of the Minimum Improvements, regardless of whether the net proceeds of insurance received by the Redeveloper for such purposes are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs, construction, and restoration shall be the property of the Redeveloper. (e) In lieu of its obligation to reconstruct any Component of the Minimum Improvements as set forth in this Section, the Redeveloper shall have the option of: (i) if Redeveloper has assigned the Note corresponding to such Component to a third party, paying to the Authority an amount that, in the opinion of the Authority and its fiscal consultant, is sufficient to pay or redeem the outstanding principal and accrued interest on the Note, or (ii) so long as the Redeveloper is the owner of the Note, waiving its right to receive subsequent payments under the Note. (f) The Redeveloper and the Authority agree that all of the insurance provisions set forth in this Article V shall terminate upon the termination of this Agreement. Section 5.2. Subordination. Notwithstanding anything to the contrary herein, the rights of the Authority with respect to the receipt and application of any insurance proceeds shall, in all respects, be subordinate and subject to the rights of any Holder under a Mortgage allowed pursuant to Article VII of this Agreement. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 49 D-27 ARTICLE VI Tax Increment; Taxes Section 6.1. Right to Collect Delinquent Taxes. The Redeveloper acknowledges that the Authority is providing substantial aid and assistance in furtherance of the development through reimbursement of Public Redevelopment Costs. The Redeveloper understands that the Tax Increments pledged to payment on the Notes are derived from real estate taxes on the Redevelopment Property, which taxes must be promptly and timely paid. To that end, the Redeveloper agrees for itself, its successors and assigns, that in addition to the obligation pursuant to statute to pay real estate taxes, it is also obligated by reason of this Agreement to pay before delinquency all real estate taxes assessed against the Redevelopment Property and the Minimum Improvements. The Redeveloper acknowledges that this obligation creates a contractual right on behalf of the Authority to sue the Redeveloper or its successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the county auditor. In any such suit, the Authority shall also be entitled to recover its costs, expenses and reasonable attorney fees. Section 6.2. Review of Taxes. The Redeveloper agrees that prior to the Maturity Date, it will not cause a reduction in the real property taxes paid in respect of the Redevelopment Property through: (A) willful destruction of the Redevelopment Property or any part thereof; or (B) willful refusal to reconstruct damaged or destroyed property pursuant to Section 5.1 of this Agreement, except as provided in Section 5.1(c). The Redeveloper also agrees that it will not, prior to the Maturity Date, seek exemption from property tax for the Redevelopment Property or any portion thereof or transfer or permit the transfer of the Redevelopment Property to any entity that is exempt from real property taxes and state law (other than any portion thereof dedicated or conveyed to the City in accordance with platting of the Redevelopment Property), or apply for a deferral of property tax on the Redevelopment Property pursuant to any law. Section 6.3. Assessment Agreement. (a) Upon execution of this Agreement, the Redeveloper shall, with the Authority, execute an Assessment Agreement pursuant to Minnesota Statutes, Section 469.177, subd. 8, specifying an assessor’s minimum Market Value for the Redevelopment Property and both Components of the Minimum Improvements constructed thereon. The amount of the minimum Market Value for the Hotel Component shall be $8,500,000 as of January 2, 2020 and each January 2 thereafter, notwithstanding the status of construction by such dates. The amount of the minimum Market Value for the Multifamily Component shall be $14,900,000 as of January 2, 2019, and $29,800,000 as of January 2, 2020 and each January 2 thereafter, notwithstanding the status of construction by such dates. (b)The Assessment Agreement for each Component of the Minimum Improvements shall be substantially in the form attached hereto as Schedule F. Nothing in the Assessment Agreements shall limit the discretion of the assessor to assign a market value to the property in excess of such assessor’s minimum Market Value. The Assessment Agreements shall remain in force for the period specified in the Assessment Agreements. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 50 D-28 (c)Nothing in this Agreement or in the Assessment Agreements shall limit the right of the Redeveloper, or its successors and assigns, to bring a tax petition challenging a Market Value determination that exceeds the established minimum Market Value for either Component of the Minimum Improvements on the Redevelopment Property; provided that if the Redeveloper brings such a challenge, the Redeveloper must inform the Authority of such tax petition in writing. During the pendency of such challenge, the Authority will pay principal and interest on the Note corresponding to the challenged Market Value only to the extent of the Available Tax Increment attributable to the minimum Market Value of such Component; provided that if the Redeveloper fails to notify the Authority of the tax petition, the Authority shall have the right to withhold all payments of principal and interest on the applicable Note until the Redeveloper’s challenge is resolved. Upon resolution of Redeveloper’s tax petition, any Available Tax Increment deferred and withheld under this Section shall be paid, without interest thereon, to the extent payable under the assessor’s final determination of Market Value for the applicable Component of the Minimum Improvements. (The remainder of this page is intentionally left blank.) Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 51 D-29 ARTICLE VII Other Financing Section 7.1. Generally. Before issuance of the Notes, the Redeveloper shall submit to the Authority or provide access thereto for review by Authority staff, consultants and agents, evidence reasonably satisfactory to the Authority that Redeveloper has available funds, or commitments to obtain funds, whether in the nature of mortgage financing, equity, grants, loans, or other sources sufficient for paying the cost of the developing the Minimum Improvements, provided that any lender or grantor commitments shall be subject only to such conditions as are normal and customary in the commercial lending industry. Section 7.2. Authority's Option to Cure Default on Mortgage. In the event that any portion of the Redeveloper's funds is provided through mortgage financing, and there occurs a default under any Mortgage authorized pursuant to Article VII of this Agreement, the Redeveloper shall cause the Authority to receive copies of any notice of default received by the Redeveloper from the holder of such Mortgage. Thereafter, the Authority shall have the right, but not the obligation, to cure any such default on behalf of the Redeveloper within such cure periods as are available to the Redeveloper under the Mortgage documents. Section 7.3. Modification; Subordination. The Authority agrees to subordinate its rights under this Agreement to the Holder of any Mortgage securing construction or permanent financing, in accordance with the terms of a subordination agreement substantially in the form attached as Schedule G, or such other form as the Authority approves. (The remainder of this page is intentionally left blank.) Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 52 D-30 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Development. The Redeveloper represents and agrees that its purchase of the Redevelopment Property, and its other undertakings pursuant to the Agreement, are, and will be used, for the purpose of development of the Redevelopment Property and not for speculation in land holding. Section 8.2. Prohibition Against Redeveloper’s Transfer of Property and Assignment of Agreement. The Redeveloper represents and agrees that prior to issuance of a Certificate of Completion for both Components of the Minimum Improvements: (a)Except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to undertaking the redevelopment contemplated under this Agreement, and any other purpose authorized by this Agreement, the Redeveloper 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 Redevelopment 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 whether or not related in any way to the Redeveloper (collectively, a “Transfer”), without the prior written approval of the Authority (whose approval will not be unreasonably withheld, subject to the standards described in paragraph (b) of this Section) unless the Redeveloper remains liable and bound by this Redevelopment Agreement in which event the Authority’s approval is not required. Any such Transfer shall be subject to the provisions of this Agreement. For the purposes of this Agreement, the term Transfer does not include (i) acquisition of a controlling interest in Redeveloper by another entity or merger of Redeveloper with another entity; or (ii) any sale, conveyance, or transfer in any form to any Affiliate. (b)In the event the Redeveloper, upon Transfer of the Redevelopment Property or any portion thereof either before or after issuance of the Certificate of Completion, seeks to be released from its obligations under this Redevelopment Agreement as to the portion of the Redevelopment Property that is transferred, the Authority shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such release that: (i)Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Redeveloper as to the portion of the Redevelopment Property to be transferred. (ii)Any proposed transferee, by instrument in writing satisfactory to the Authority and 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 Authority, have expressly assumed all of the obligations of the Redeveloper under this Agreement as to Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 53 D-31 the portion of the Redevelopment Property to be transferred and agreed to be subject to all the conditions and restrictions to which the Redeveloper is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Redevelopment 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 Authority) deprive the Authority of any rights or remedies or controls with respect to the Redevelopment 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 Redevelopment 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 Authority of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Redevelopment Property that the Authority would have had, had there been no such transfer or change. In the absence of specific written agreement by the Authority to the contrary, no such transfer or approval by the Authority thereof shall be deemed to relieve the Redeveloper, or any other party bound in any way by this Agreement or otherwise with respect to the Redevelopment Property, from any of its obligations with respect thereto. (iii)Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Redevelopment Property governed by this Article VIII, shall be in a form reasonably satisfactory to the Authority. (iv)At the written request of Redeveloper, the Authority shall execute and deliver to Redeveloper and the proposed transferee an estoppel certificate containing commercially customary and reasonable certifications. In the event the foregoing conditions are satisfied then the Redeveloper shall be released from its obligation under this Agreement, as to the portion of the Redevelopment Property that is transferred, assigned, or otherwise conveyed. Section 8.3. Release and Indemnification Covenants. (a) Except for any willful misrepresentation or any willful or wanton misconduct or negligence of the Indemnified Parties as hereinafter defined, and except for any breach by any of the Indemnified Parties of their obligations under this Agreement, the Redeveloper releases from and covenants and agrees that the Authority, the City, and the governing body members, officers, agents, servants, and employees thereof (the “Indemnified Parties”) shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Redevelopment Property or the Minimum Improvements. (b)Except for any willful misrepresentation or any willful or wanton misconduct or negligence of the Indemnified Parties, and except for any breach by any of the Indemnified Parties Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 54 D-32 of their obligations under this Agreement, the Redeveloper agrees to protect and defend the Indemnified Parties, now and forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action, or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, maintenance, and operation of the Redevelopment Property. (c)Except for any willful misrepresentation or any willful or wanton misconduct or negligence of the Indemnified Parties as hereinafter defined, and except for any breach by any of the Indemnified Parties of their obligations under this Agreement, the Indemnified Parties shall not be liable for any damage or injury to the persons or property of the Redeveloper or its officers, agents, servants, or employees or any other person who may be about the Redevelopment Property or Minimum Improvements. (d)All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements, and obligations of such entity and not of any governing body member, officer, agent, servant, or employee of such entities in the individual capacity thereof. (The remainder of this page is intentionally left blank.) Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 55 D-33 ARTICLE IX Events of Default Section 9.1. Events of Default Defined. The following shall be “Events of Default” under this Agreement and the term “Event of Default” shall mean, whenever it is used in this Agreement, any one or more of the following events, after the non-defaulting party provides thirty (30) days written notice to the defaulting party of the event, but only if the event has not been cured within said thirty (30) days or, if the event is by its nature incurable within thirty (30) days, the defaulting party does not, within such thirty- (30-) day period, provide assurances reasonably satisfactory to the party providing notice of default that the event will be cured and will be cured as soon as reasonably possible: (a)Failure by the Redeveloper or Authority to observe or perform any covenant, condition, obligation, or agreement on its part to be observed or performed under this Agreement. (b)If, before issuance of the certificate of completion for all Components of the Minimum Improvements, the Redeveloper shall (i)file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act or under any similar federal or State law, which action is not dismissed within sixty (60) days after filing; or (ii)make an assignment for benefit of its creditors; or (iii)admit in writing its inability to pay its debts generally as they become due; or (iv)be adjudicated a bankrupt or insolvent. Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the non-defaulting party may: (a)Suspend its performance under this Agreement until it receives assurances that the defaulting party will cure its default and continue its performance under the Agreement. (b)Upon a default by the Redeveloper under this Agreement, the Authority may terminate the Note and this Agreement. (c)Take whatever action, including legal, equitable, or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement, provided that nothing contained herein shall give the Authority the right to seek specific performance by Redeveloper of the construction of the Minimum Improvements. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 56 D-34 Section 9.3. Revesting Title in Authority Upon Happening of Event Subsequent to Conveyance to Redeveloper. In the event that subsequent to conveyance of the Authority Parcels to Redeveloper and prior to completion of construction of the Minimum Improvements (evidenced by a Certificate of Completion described in Section 4.4): (a)Redeveloper, subject to Unavoidable Delays, shall fail to begin construction of the Minimum Improvements in conformity with this Agreement and such failure to begin construction is not cured within 90 days after written notice from the Authority to Redeveloper to do so; or (b)Redeveloper fails to pay real estate taxes or assessments on the parcel or any part thereof when due, or creates, suffers, assumes, or agrees to any encumbrance or lien on the parcel (except to the extent permitted by this Agreement), or shall suffer any levy or attachment to be made, or any materialmen’s or mechanics’ lien, or any other unauthorized encumbrance or lien to attach, and such taxes or assessments shall not have been paid, or the encumbrance or lien removed or discharged or provision satisfactory to the Authority made for such payment, removal, or discharge, within thirty (30) days after written demand by the Authority to do so; provided, that if Redeveloper first notifies the Authority of its intention to do so, it may in good faith contest any mechanics’ or other lien filed or established and in such event the Authority shall permit such mechanics’ or other lien to remain undischarged and unsatisfied during the period of such contest and any appeal and during the course of such contest Redeveloper shall keep the Authority informed respecting the status of such defense; or (c)there is, in violation of the Agreement, any Transfer of the parcel in violation of the terms of Section 8.2, and such violation is not cured within sixty (60) days after written demand by the Authority to Redeveloper, or if the event is by its nature incurable within 30 days, Redeveloper does not, within such 30-day period, provide assurances reasonably satisfactory to the Authority that the event will be cured as soon as reasonably possible; or (d)Redeveloper fails to comply with any of its other covenants under this Agreement related to the Minimum Improvements and fails to cure any such noncompliance or breach within thirty (30) days after written demand from the Authority to Redeveloper to do so, or if the event is by its nature incurable within 30 days, Redeveloper does not, within such 30-day period, provide assurances reasonably satisfactory to the Authority that the event will be cured as soon as reasonably possible; or (e)the Holder of any Mortgage secured by the subject property exercises any remedy provided by the Mortgage documents or exercises any remedy provided by law or equity in the event of a default in any of the terms or conditions of the Mortgage, in either case which would materially adversely affect the rights and obligations of the Authority hereunder; Then the Authority shall have the right to re-enter and take possession of the Authority Parcel to which the default relates and to terminate (and revest in the Authority) the estate conveyed by the deed to Redeveloper as to that parcel, subject to all intervening matters, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the parcel to Redeveloper shall be made upon, and that the deed shall contain a condition subsequent to the effect that in the event of any default on the part of Redeveloper and failure on the part of Redeveloper to Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 57 D-35 remedy, end, or abrogate such default within the period and in the manner stated in such subdivisions, the Authority at its option may declare a termination in favor of the Authority of the title, and of all the rights and interests in and to the parcel conveyed to Redeveloper, and that such title and all rights and interests of Redeveloper, and any assigns or successors in interest to and in the parcel, shall revert to the Authority, but only if the events stated in Section 9.3(a)-(e) have not been cured within the time periods provided above. Section 9.4. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the Authority of title to and/or possession of the parcel or any part thereof as provided in Section 9.3, the Authority shall, pursuant to its responsibilities under law, use its best efforts to sell the parcel or part thereof as soon and in such manner as the Authority shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan and TIF Plan to a qualified and responsible party or parties (as determined by the Authority) who will assume the obligation of making or completing the Minimum Improvements as shall be satisfactory to the Authority in accordance with the uses specified for such parcel or part thereof in the Redevelopment Plan and TIF Plan. During any time while the Authority has title to and/or possession of a parcel obtained by reverter, the Authority will not disturb the rights of any tenants under any leases encumbering such parcel. Upon resale of the parcel, the proceeds thereof shall be applied: (a)First, to reimburse the Authority for all costs and expenses incurred by them, including but not limited to salaries of personnel, in connection with the recapture, management, and resale of the parcel (but less any income derived by the Authority from the property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the parcel or part thereof (or, in the event the parcel is exempt from taxation or assessment or such charge during the period of ownership thereof by the Authority, an amount, if paid, equal to such taxes, assessments, or charges (as determined by the Authority assessing official) as would have been payable if the parcel were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the parcel or part thereof at the time of revesting of title thereto in the Authority or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of Redeveloper, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the subject improvements or any part thereof on the parcel or part thereof; and any amounts otherwise owing the Authority by Redeveloper and its successor or transferee; and (b)Second, to reimburse Redeveloper, its successor or transferee, up to the amount equal to (1) the purchase price paid by Redeveloper under Section 3.2 with respect to the parcel revested; plus (2) the amount actually invested by it in making any of the subject improvements on the parcel or part thereof. Any balance remaining after such reimbursements shall be retained by the Authority as its property. Section 9.5. No Remedy Exclusive. No remedy herein conferred upon or reserved to any party is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 58 D-36 be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. To entitle the Authority to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article IX. Section 9.6. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 9.7. Attorney Fees. Whenever any Event of Default occurs and if the non- defaulting party employs attorneys or incurs other expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on the part of the defaulting party under this Agreement, the defaulting party shall, within ten (10) days of written demand by the non-defaulting party, pay to the non-defaulting party the reasonable fees of such attorneys and such other expenses so incurred by the non-defaulting party. (The remainder of this page is intentionally left blank.) Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 59 D-37 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; Representatives Not Individually Liable. The Authority and the Redeveloper, to the best of their respective knowledge, represent and agree that no member, official, or employee of the Authority shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official, or employee participate in any decision relating to the Agreement that affects his personal interests or the interests of any corporation, partnership, or association in which he, directly or indirectly, is interested. No member, official, or employee of the City or Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority or for any amount that may become due to the Redeveloper or successor or on any obligations under the terms of the Agreement. Section 10.2. Equal Employment Opportunity. The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in the Agreement it will comply with all applicable federal, state, and local equal employment and non-discrimination laws and regulations. Section 10.3. Restrictions on Use. The Redeveloper agrees that until the Maturity Date, the Redeveloper, and such successors and assigns, shall devote the Redevelopment Property to the operation of the Minimum Improvements as described in Section 4.1 hereof, and shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the construction or maintenance of the Minimum Improvements or in the use or occupancy of the Redevelopment Property or any improvements erected or to be erected thereon, or any part thereof. Redeveloper agrees that no portion of the Redevelopment Property will be used for a sexually- oriented business, a pawnshop, a check-cashing business, a tattoo business, a gun business, a payday loan agency, or for the sale of tobacco products including without limitation “vaping” or hookah shops. Section 10.4. Provisions Not Merged With Deed. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Redevelopment Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, to the following addresses (or to such other addresses as either party may notify the other): Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 60 D-38 To Redeveloper: SLP Park Ventures LLC Attn: ____________________ 440 Third Street Excelsior, MN 55331 To Authority: St. Louis Park EDA Attn: Executive Director 5005 Minnetonka Boulevard St. Louis Park, Minnesota 55416-2518 Section 10.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 10.8. Recording. The Authority may record this Agreement and any amendments thereto with the Hennepin County recorder. The Redeveloper shall pay all costs for recording. The Redeveloper’s obligations under this Agreement are covenants running with the land for the term of this Agreement, enforceable by the Authority against the Redeveloper, its successor and assigns, and every successor in interest to the Redevelopment Property, or any part thereof or any interest therein. Section 10.9 Amendment. This Agreement may be amended only by written agreement approved by the Authority and the Redeveloper. Section 10.10. Authority Approvals. Unless otherwise specified, any approval required by the Authority under this Agreement may be given by the Authority Representative, except that final approval of issuance of the Note shall be made by the Authority’s board of commissioners. (The remainder of this page is intentionally left blank.) Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 61 D-39 IN WITNESS WHEREOF, the Authority and Redeveloper have caused this Agreement to be duly executed by their duly authorized representatives as of the date first above written. ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _________, 2018 by ______________________ and ______________ the President and Executive Director of the St. Louis Park Economic Development Authority, a public body corporate and politic and political subdivision of the State of Minnesota, on behalf of the Authority. Notary Public Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 62 D-40 SLP PARK VENTURES LLC By Its STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of ________, 2018, by _________________________, the _________________ of SLP Park Ventures LLC, a Minnesota limited liability company, on behalf of the company. Notary Public Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 63 D-41 SCHEDULE A REDEVELOPMENT PROPERTY [To be inserted] Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 64 D-42 SCHEDULE B FORM OF QUIT CLAIM DEED THIS INDENTURE, between the St. Louis Park Economic Development Authority, a public body corporate and politic (the “Grantor”), and SLP Park Ventures LLC, a Minnesota limited liability company (the “Grantee”). WITNESSETH, that Grantor, in consideration of the sum of $73,772 and other good and valuable consideration the receipt whereof is hereby acknowledged, does hereby grant, bargain, quitclaim and convey to the Grantee, its successors and assigns forever, all the tract or parcel of land lying and being in the County of Hennepin and State of Minnesota described as follows, to-wit (such tract or parcel of land is hereinafter referred to as the “Property”): [insert platted legal description] To have and to hold the same, together with all the hereditaments and appurtenances thereunto belonging. SECTION 1. It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and provisions of an agreement recorded herewith entered into between the Grantor and Grantee on the __th day of _____________, 2018, identified as “Purchase and Redevelopment Contract” (hereafter referred to as the “Agreement”) and that the Grantee shall not convey this Property, or any part thereof, except as permitted by the Agreement until a certificate of completion releasing the Grantee from certain obligations of said Agreement as to this Property or such part thereof then to be conveyed, has been placed of record. This provision, however, shall in no way prevent the Grantee from mortgaging this Property in order to obtain funds for the purchase of the Property hereby conveyed or for erecting the Minimum Improvements thereon (as defined in the Agreement) in conformity with the Agreement, any applicable development program and applicable provisions of the zoning ordinance of the City of St. Louis Park, Minnesota, or for the refinancing of the same. It is specifically agreed that the Grantee shall promptly begin and diligently prosecute to completion the development of the Property through the construction of the Minimum Improvements thereon, as provided in the Agreement. Promptly after completion of the Minimum Improvements in accordance with the provisions of the Agreement, the Grantor will furnish the Grantee with an appropriate instrument so certifying. Such certification by the Grantor shall be (and it shall be so provided in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants of the Agreement and of this Deed with respect to the obligation of the Grantee, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion thereof. Such certifications and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Grantee to any holder of a mortgage, or any insurer of a Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 65 D-43 mortgage, securing money loaned to finance the purchase of the Property hereby conveyed or the Minimum Improvements, or any part thereof. All certifications provided for herein shall be in such form as will enable them to be recorded with the County Recorder and/or Registrar of Titles, Hennepin County, Minnesota. If the Grantor shall refuse or fail to provide any such certification in accordance with the provisions of the Agreement and this Deed, the Grantor shall, within thirty (30) days after written request by the Grantee, provide the Grantee with a written statement indicating in adequate detail in what respects the Grantee has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Grantor, for the Grantee to take or perform in order to obtain such certification. SECTION 2. The Grantee’s rights and interest in the Property are subject to the terms and conditions of Section 9.3 of the Agreement relating to the Grantor’s right to re-enter and revest in Grantor title to the Property under conditions specified therein, including but not limited to termination of such right upon issuance of a Certificate of Completion as defined in the Agreement. SECTION 3. The Grantee agrees for itself and its successors and assigns to or of the Property or any part thereof, hereinbefore described, that the Grantee and such successors and assigns shall comply with all provisions of the Agreement that relate to the Property or use thereof for the periods specified in the Agreement, including without limitation the covenant set forth in Section 10.3 thereof. It is intended and agreed that the above and foregoing agreements and covenants shall be covenants running with the land for the respective terms herein provided, and that they shall, in any event, and without regard to technical classification or designation, legal or otherwise, and except only as otherwise specifically provided in this Deed, be binding, to the fullest extent permitted by law and equity for the benefit and in favor of, and enforceable by, the Grantor against the Grantee, its successors and assigns, and every successor in interest to the Property, or any part thereof or any interest therein, and any party in possession or occupancy of the Property or any part thereof. In amplification, and not in restriction of, the provisions of the preceding section, it is intended and agreed that the Grantor shall be deemed a beneficiary of the agreements and covenants provided herein, both for and in its own right, and also for the purposes of protecting the interest of the community and the other parties, public or private, in whose favor or for whose benefit these agreements and covenants have been provided. Such agreements and covenants shall run in favor of the Grantor without regard to whether the Grantor has at any time been, remains, or is an owner of any land or interest therein to, or in favor of, which such agreements and covenants relate. The Grantor shall have the right, in the event of any breach of any such agreement or covenant to exercise all the rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant, to which it or any other beneficiaries of such agreement or covenant may be entitled; provided that Grantor shall Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 66 D-44 not have any right to re-enter the Property or revest in the Grantor the estate conveyed by this Deed on grounds of Grantee’s failure to comply with its obligations under this Section 3. SECTION 4. This Deed is also given subject to: (a)Provision of the ordinances, building and zoning laws of the City of St. Louis Park, and state and federal laws and regulations in so far as they affect this real estate. (b)[Others] Grantor certifies that it does not know of any wells on the Property. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 67 D-45 IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its President and Executive Director this ______ day of ____________, 2018. ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _________, 2018 by ______________________ and ______________ the President and Executive Director of the St. Louis Park Economic Development Authority, a public body corporate and politic and political subdivision of the State of Minnesota, on behalf of the Authority. Notary Public This instrument was drafted by: Kennedy & Graven, Chartered (MNI) 470 U.S. Bank Plaza Minneapolis, Minnesota 55402 Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 68 D-46 SCHEDULE C AUTHORIZING RESOLUTION ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. ______ RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT CONTRACT AND AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAX INCREMENT REVENUE NOTES TO SLP PARK VENTURES LLC. BE IT RESOLVED BY the Board of Commissioners ("Board") of the St. Louis Park Economic Development Authority, St. Louis Park, Minnesota (the "Authority") as follows: Section 1. Recitals; Approval and Authorization; Award of Sale. 1.01. Recitals. (a) The Authority and the City of St. Louis Park have heretofore approved the establishment of the Wayzata Boulevard Tax Increment Financing District (the "TIF District") within Redevelopment Project No. 1 ("Project"), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. (b)To facilitate the redevelopment of certain property within the Project and TIF District, the Authority and SLP Park Ventures LLC (the “Owner”) have negotiated a Purchase and Redevelopment Contract (the “Agreement”) which provides for the conveyance of certain Authority-owned property (the “Authority Parcels”) to the Owner, the construction by the Owner of a rental housing facility, a hotel, and associated parking on certain Redevelopment Property including the Authority Parcels, and the issuance by the Authority of one or more Tax Increment Revenue Notes, Series 2018 (the “Notes”) to the Owner. (c)On ____________, 2018, the Planning Commission of the City reviewed the proposed conveyance of the Property and found that such conveyance is consistent with the City’s comprehensive plan. (d)On the date hereof, the Authority conducted a duly noticed public hearing regarding the conveyance of the Authority Parcels to the Owner pursuant to the Agreement, at which all interested parties were given an opportunity to be heard, and hereby finds that the execution of the Agreement and performance of the Authority's obligations thereunder, including the conveyance of the Authority Parcels to the Owner, are in the best interest of the City and its residents. 1.02. Approval of Agreement. (a) The Agreement is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 69 D-47 the President and Executive Director, provided that execution of the Agreement by such officials shall be conclusive evidence of approval. The Board hereby approves the conveyance of the Authority Parcels pursuant to the terms of the Agreement. (b)Authority staff and officials are authorized to take all actions necessary to perform the Authority’s obligations under the Agreement as a whole, including without limitation execution of any documents to which the Authority is a party referenced in or attached to the Agreement, and any deed or other documents necessary to convey the Authority Parcels to Redeveloper, all as described in the Agreement. 1.03. Issuance, Sale, and Terms of the Notes. (a) The Authority hereby authorizes the President and Executive Director to issue the Notes in accordance with the Agreement. All capitalized terms in this resolution have the meaning provided in the Agreement unless the context requires otherwise. (b) The Notes shall be issued to the Owner as two separate Notes: the Hotel Note in the maximum aggregate principal amount of $714,000 in consideration of certain eligible costs incurred by the Owner in connection with construction of the Hotel Component of the Minimum Improvements, and the Multifamily Note in the maximum aggregate principal amount of $2,760,000 in consideration of certain eligible costs incurred by the Owner in connection with construction of the Multifamily Component of the Minimum Improvements under the Agreement. The Notes shall be dated the date of delivery thereof, and shall bear interest at the lesser of the rate of 5.5% per annum or the actual rate of the Owner’s mortgage financing, from the date of issue to the earlier of maturity or prepayment. The Notes will be issued in the principal amount of Public Redevelopment Costs submitted and approved in accordance with Section 3.6 of the Agreement. The Notes are secured by Available Tax Increment, as further described in the form of the Note herein. The Authority hereby delegates to the Executive Director the determination of the date on which each Note is to be delivered, in accordance with the Agreement. Section 2. Form of Notes. The Notes shall be in substantially the following form, with the blanks to be properly filled in and the principal amount adjusted as of the date of issue: Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 70 D-48 UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY No. R-1 $_____________ TAX INCREMENT REVENUE NOTE SERIES 20__ (Platia Place, ________ Component) Date Rate of Original Issue ___% The St. Louis Park Economic Development Authority (“Authority”) for value received, certifies that it is indebted and hereby promises to pay to SLP Park Ventures LLC or registered assigns (the "Owner"), the principal sum of $__________ and to pay interest thereon at the rate of __% per annum, solely from the sources and to the extent set forth herein. Capitalized terms shall have the meanings provided in the Purchase and Redevelopment Contract between the Authority and the Owner, dated as of _______________, 2018 (the "Agreement"), unless the context requires otherwise. 1.Payments. Principal and interest ("Payments") shall be paid on August 1, 20__ and each February 1 and August 1 thereafter to and including February 1, 20__ ("Payment Dates") in the amounts and from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Simple interest accruing from the date of issue through and including February 1, 20__ shall be added to principal. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2.Interest. Interest at the rate stated herein shall accrue on the unpaid principal, commencing on the date of original issue. Interest shall be computed on the basis of a year of 360 days and charged for actual days principal is unpaid. 3.Available Tax Increment. (a) Payments on this Note are payable on each Payment Date solely from and in the amount of Available Tax Increment, which shall mean 95% of the Tax Increment attributable to the [______ Component] of the Minimum Improvements and Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 71 D-49 Redevelopment Property that is paid to the Authority by Hennepin County in the six months preceding each Payment Date on the Note. (b) The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment and the failure of the Authority to pay principal or interest on this Note on any Payment Date shall not constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of Available Tax Increment. The Authority shall have no obligation to pay any unpaid balance of principal or accrued interest that may remain after the final Payment on February 1, 20__. 4.Default. If on any Payment Date there has occurred and is continuing any Event of Default under the Agreement, the Authority may withhold from payments hereunder under all Available Tax Increment. If the Event of Default is thereafter cured in accordance with the Agreement, the Available Tax Increment withheld under this Section shall be deferred and paid, without interest thereon, within 30 days after the Event of Default is cured. If the Event of Default is not cured in a timely manner, the Authority may terminate this Note by written notice to the Owner in accordance with the Agreement. 5.Prepayment. (a) The principal sum and all accrued interest payable under this Note is prepayable in whole or in part at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular Payment otherwise required to be made under this Note. (b)Upon receipt by Redeveloper of the Authority’s written statement of the Participation Amount as described in Section 3.8 of the Agreement, fifty percent of such Participation Amount will be deemed to constitute, and will be applied to, prepayment of the principal amount of this Note. Such deemed prepayment is effective as of the date of delivery of such statement to the Owner, and will be recorded by the Registrar in its records for the Note. Upon request of the Owner, the Authority will deliver to the Owner a statement of the outstanding principal balance of the Note after application of the deemed prepayment under this paragraph. 6.Nature of Obligation. This Note is one of an issue in the total principal amount of $_________________, issued to aid in financing certain public redevelopment costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through 469.047, and is issued pursuant to an authorizing resolution (the "Resolution") duly adopted by the Authority on ________, 2018, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.1794, as amended. This Note is a limited obligation of the Authority which is payable solely from Available Tax Increment pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 72 D-50 7.Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the City Finance Director, by the Owner hereof in person or by such Owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the St. Louis Park Economic Development Authority have caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY Executive Director President Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 73 D-51 REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Finance Director, in the name of the person last listed below. Date of Signature of Registration Registered Owner____ City Finance Director SLP Park Ventures LLC Federal Tax I.D. No. _____________ Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 74 D-52 Section 3. Terms, Execution and Delivery. 3.01. Denomination, Payment. Each Note shall be issued as a single typewritten note numbered R-1. Each Note shall be issuable only in fully registered form. Principal of and interest on the Notes shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates; Interest Payment Dates. Principal of and interest on the Notes shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the Chief Financial Officer of the City to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Notes and the registration of transfers and exchanges of the Notes. (b) Transfer of Note. Upon surrender for transfer of any Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer. When any Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name each Note is at any time registered in the bond register as the absolute owner of such Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 75 D-53 (f)Taxes, Fees and Charges. For every transfer or exchange of any Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g)Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Delivery. The Notes shall be prepared under the direction of the Chief Financial Officer of the City and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on any Note shall cease to be such officer before the delivery of such Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When each Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance with the Agreement. Section 4. Security Provisions. 4.01. Pledge. The Authority hereby pledges to the payment of the principal of and interest on the Hotel Note all Available Tax Increment attributable to the Hotel Component of the Minimum Improvements as defined in the Note, and hereby pledges to the payment of the principal of and interest on the Multifamily Note all Available Tax Increment attributable to the Multifamily Component of the Minimum Improvements as defined in the Note. Available Tax Increment shall be applied to payment of the principal of and interest on each Note in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Notes are no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Notes. The Authority irrevocably agrees to appropriate to the Bond Fund on or before each Payment Date the Available Tax Increment in an amount equal to the Payment then due, or the actual Available Tax Increment, whichever is less. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's account for the TIF District upon the termination of the Notes in accordance with their terms. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 76 D-54 4.03. Additional Obligations. The Authority will issue no other obligations secured in whole or in part by Available Tax Increment unless such pledge is on a subordinate basis to the pledge on the Notes. Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of each Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of each Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon approval. Reviewed for Administration: Adopted by the Economic Development Authority __________, 2018 Thomas K. Harmening, Executive Director Steve Hallfin, President Attest Secretary Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 77 D-55 SCHEDULE D-1 ESTIMATED PUBLIC REDEVELOPMENT COSTS Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 78 D-1 Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 79 D-2 SCHEDULE D-2 CASH-ON-CASH RETURN CALCULATION: MULTIFAMILY COMPONENT Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 80 D-2 518115v2 MNI SA285-100 Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 81 D-3 518115v2 MNI SA285-100 SCHEDULE D-3 CASH-ON-COST RETURN CALCULATION: HOTEL COMPONENT Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 82 E-1 518115v2 MNI SA285-100 SCHEDULE E CERTIFICATE OF COMPLETION WHEREAS, the St. Louis Park Economic Development Authority (the "Authority") and SLP Park Ventures LLC (“Redeveloper”) entered into a certain Purchase and Redevelopment Contract dated __________________, 2018 (“Contract”), filed as Document No. _________ at the office of the County Registrar of Titles; and WHEREAS, the Contract contains certain covenants and restrictions set forth in Articles III and IV thereof related to completing the ___________ Component of certain Minimum Improvements; and WHEREAS, the Redeveloper has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Authority to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all construction and other physical improvements related to the _____________ Component of the Minimum Improvements specified to be done and made by the Redeveloper have been completed and the agreements and covenants in Articles III and IV of the Contract have been performed by the Redeveloper, and this Certificate is intended to be a conclusive determination of the satisfactory termination of the covenants and conditions of Articles III and IV of the Contract related to completion of the ___________ Component of the Minimum Improvements, but any other covenants in the Contract shall remain in full force and effect. (The remainder of this page is intentionally left blank.) Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 83 E-2 518115v2 MNI SA285-100 Dated: _______________, 20__. ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY By Authority Representative STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _________, 20__ by ______________________, the __________________ of the St. Louis Park Economic Development Authority, on behalf of the Authority. Notary Public This document drafted by: Kennedy & Graven, Chartered 470 U.S. Bank Plaza Minneapolis, MN 55402 Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 84 G-1 518115v2 MNI SA285-100 SCHEDULE F ASSESSMENT AGREEMENT _______________________________________________________________________________ ASSESSMENT AGREEMENT [__________ Component] and ASSESSOR'S CERTIFICATION By and Between ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY and SLP PARK VENTURES LLC This Document was drafted by: KENNEDY & GRAVEN, Chartered 470 U.S. Bank Plaza Minneapolis, Minnesota 55402 Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 85 G-2 518115v2 MNI SA285-100 ASSESSMENT AGREEMENT [______________ Component] THIS AGREEMENT, made on or as of the ____ day of _________________, 2018, by and between the St. Louis Park Economic Development Authority, a public body, corporate and politic (the “Authority”) and SLP Park Ventures LLC, a Minnesota limited liability company (the “Redeveloper”). WITNESSETH, that WHEREAS, on or before the date hereof the Authority and Redeveloper have entered into a Purchase and Redevelopment Contract dated _____________, 2018 (the “Redevelopment Contract”), pursuant to which the Authority is to facilitate development of certain property in the Authority of St. Louis Park hereinafter referred to as the “Property” and legally described in Exhibit A hereto; and WHEREAS, pursuant to the Redevelopment Contract the Redeveloper is obligated to construct certain improvements (the “____________ Component”) upon the Property; and WHEREAS, the Authority and Redeveloper desire to establish a minimum market value for the Property and the ______________ Component to be constructed thereon, pursuant to Minnesota Statutes, Section 469.177, Subdivision 8; and WHEREAS, the Authority and the City Assessor (the “Assessor”) have reviewed the preliminary plans and specifications for the improvements and have inspected such improvements; NOW, THEREFORE, the parties to this Agreement, in consideration of the promises, covenants and agreements made by each to the other, do hereby agree as follows: 1. The minimum market value which shall be assessed for ad valorem tax purposes for the Property described in Exhibit A, together with the ___________ Component constructed thereon, shall be $_____________ as of January 2, 2019, notwithstanding the progress of construction by such date, and shall be $____________ as of January 20, 2020 and each January 2 thereafter until termination of this Agreement under Section 2 hereof. 2. The minimum market value herein established shall be of no further force and effect and this Agreement shall terminate on the earlier of the following: (a) The date of receipt by the Authority of the final payment from Hennepin County of Tax Increments from the Wayzata Boulevard Tax Increment Financing District, or (b) the date when the ______________ Note, as defined in the Redevelopment Contract, has been fully paid, defeased or terminated in accordance with its terms. The event referred to in Section 2(b) of this Agreement shall be evidenced by a certificate or affidavit executed by the Authority. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 86 G-3 518115v2 MNI SA285-100 3.This Agreement shall be promptly recorded by the Authority. The Redeveloper shall pay all costs of recording. 4.Neither the preambles nor provisions of this Agreement are intended to, nor shall they be construed as, modifying the terms of the Redevelopment Contract between the Authority and the Redeveloper. 5.This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. 6.Each of the parties has authority to enter into this Agreement and to take all actions required of it, and has taken all actions necessary to authorize the execution and delivery of this Agreement. 7. In the event any provision of this Agreement shall be held invalid and unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 8.The parties hereto agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements, amendments and modifications hereto, and such further instruments as may reasonably be required for correcting any inadequate, or incorrect, or amended description of the Property or the ___________ Component or for carrying out the expressed intention of this Agreement, including, without limitation, any further instruments required to delete from the description of the Property such part or parts as may be included within a separate assessment agreement. 9.Except as provided in Section 8 of this Agreement, this Agreement may not be amended nor any of its terms modified except by a writing authorized and executed by all parties hereto. 10.This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 11.This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 87 G-4 518115v2 MNI SA285-100 ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of ________, 2018 by ____________________ and ___________________________, the President and Executive Director of the St. Louis Park Economic Development Authority, on behalf of the Authority. Notary Public Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 88 G-5 518115v2 MNI SA285-100 SLP PARK VENTURES LLC By Its STATE OF MINNESOTA ) ) SS. COUNTY OF__________ ) The foregoing instrument was acknowledged before me this _____ day of _____________, 2018 by ____________________, the ____________________ of SLP Park Ventures LLC, a Minnesota limited liability company, on behalf of the company. Notary Public Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 89 G-6 518115v2 MNI SA285-100 CERTIFICATION BY CITY ASSESSOR The undersigned, having reviewed the plans and specifications for the improvements to be constructed and the market value assigned to the land upon which the improvements are to be constructed, hereby certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the above described property, hereby certifies that the values assigned to the land and improvements are reasonable. City Assessor for the City of St. Louis Park STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___ day of ____________, 2018 by _____________________, the City Assessor of the City of St. Louis Park. Notary Public Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 90 G-7 518115v2 MNI SA285-100 EXHIBIT A of ASSESSMENT AGREEMENT Legal Description of Property Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 91 G-8 518115v2 MNI SA285-100 SCHEDULE G Form of Subordination Agreement THIS SUBORDINATION AGREEMENT (this "Agreement") is made as of this _____ day of __________, 20__, between _______________ ("Lender"), whose address is at _________________________, and the ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic ("Authority"). RECITALS A. SLP Park Ventures LLC, a Minnesota limited liability company ("Redeveloper"), is the owner of certain real property situated in Hennepin County, Minnesota and legally described in Exhibit A attached hereto and incorporated herein (the "Property"). B. Lender has made a mortgage loan to Redeveloper in the original principal amount of $__________ (the "Loan"). The Loan is the evidenced and secured by the following documents: (i) a certain promissory note (the "Note") made by Redeveloper dated __________, 20__, in the amount of $___________; and (ii) a certain mortgage, security agreement and fixture financing statement (the "Mortgage") made by Redeveloper dated __________, 20__, filed __________, 20__, as Hennepin County Recorder/Registrar of Titles Doc. No. __________ encumbering the Property; and (iii) a certain assignment of leases and rents (the "Assignment") made by Redeveloper dated __________, 20__, filed __________, 20__, as Hennepin County Recorder/Registrar of Titles Doc. No. __________ encumbering the Property. The Note, the Mortgage, the Assignment, and all other documents and instruments evidencing, securing and executed in connection with the Loan, are hereinafter collectively referred to as the "Loan Documents." C. Authority is the owner and holder of certain rights under that certain Purchase and Redevelopment Contract (the "Contract") by and between Redeveloper and Authority dated February 6, 2018, filed ____________, 20__, as Hennepin County Recorder/Registrar of Titles Doc. No. _______________. D. Redeveloper is entitled under the Contract to acquire a certain Tax Increment Tax Revenue Note, Series 20__ in the original principal amount of $______________ (the “TIF Note”). NOW, THEREFORE, in consideration of the foregoing and as an inducement to Lender to make the Loan, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto represent, warrant and agree as follows: Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 92 G-9 518115v2 MNI SA285-100 1. Consent. The Authority acknowledges that the Lender is making the Loan to the Redeveloper and consents to the same. The Authority also consents to and approves the collateral assignment of the Contract and TIF Note (when and if issued) by the Redeveloper to the Lender as collateral for the Loan; provided, however, that this consent shall not deprive the Authority of or otherwise limit any of the Authority’s rights or remedies under the Contract and TIF Note and shall not relieve the Redeveloper of any of its obligations under the Contract and TIF Note; provided further, however, the limitations to the Authority’s consent contained in this Paragraph 1 are subject to the provisions of Paragraph 2 below. 2. Subordination. The Authority hereby agrees that the rights of the Authority with respect to [_____________________] under the Contract are and shall remain subordinate and subject to liens, rights and security interests created by the Loan Documents and to any and all amendments, modifications, extensions, replacements or renewals of the Loan Documents; provided, however, that nothing herein shall be construed as subordinating the requirement contained in the Contract the Property be used in accordance with the provisions of Section 10.3 of the Contract, or as subordinating the Authority’s rights under the TIF Note to suspend payments in accordance with the TIF Note. 3.Notice to Authority. Lender agrees to use commercially reasonable efforts to notify Authority of the occurrence of any Event of Default given to Redeveloper under the Loan Documents, in accordance with Section 7.2 of the Contract. The Lender shall not be bound by the other requirements in Section 7.2 of the Contract. 4.Statutory Exception. Nothing in this Agreement shall alter, remove or affect Lender’s obligation under Minnesota Statutes, § 469.029 to use the Property in conformity to Section 10.3 of the Contract. 5.No Assumption. The Authority acknowledges that the Lender is not a party to the Contract and by executing this Agreement does not become a party to the Contract, and specifically does not assume and shall not be bound by any obligations of the Redeveloper to the Authority under the Contract, and that the Lender shall incur no obligations whatsoever to the Authority except as expressly provided herein. 6.Notice from Authority. So long as the Contract remains in effect, the Authority agrees to give to the Lender copies of notices of any Event of Default given to Redeveloper under the Contract. 7.Governing Law. This Agreement is made in and shall be construed in accordance with the laws of the State of Minnesota. 8.Successors. This Agreement and each and every covenant, agreement and other provision hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, including any person who acquires title to the Property through the Lender of a foreclosure of the Mortgage. 9.Severability. The unenforceability or invalidity of any provision hereof shall not render any other provision or provisions herein contained unenforceable or invalid. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 93 G-10 518115v2 MNI SA285-100 10. Notice. Any notices and other communications permitted or required by the provisions of this Agreement shall be in writing and shall be deemed to have been properly given or served by depositing the same with the United States Postal Service, or any official successor thereto, designated as registered or certified mail, return receipt requested, bearing adequate postage, or delivery by reputable private carrier and addresses as set forth above. 11. Transfer of Title to Lender. The Authority agrees that in the event the Lender, a transferee of Lender, or a purchaser at foreclosure sale, acquires title to the Property pursuant to a foreclosure, or a deed in lieu thereof, the Lender, transferee, or purchaser shall not be bound by the terms and conditions of the Contract except as expressly herein provided. Further the Authority agrees that in the event the Lender, a transferee of Lender, or a purchaser at foreclosure sale acquires title to the Property pursuant to a foreclosure sale or a deed in lieu thereof, then the Lender, transferee, or purchaser shall be entitled to all rights conferred upon the Redeveloper under the Contract, provided that no condition of default exists and remains uncured beyond applicable cure periods in the obligations of the Redeveloper under the Contract. 12. Estoppel. The Authority hereby represents and warrants to Lender, for the purpose of inducing Lender to make advances to Redeveloper under the Loan Documents that: (a) No default or event of default by Redeveloper exists under the terms of the Contract on the date hereof; (b) The Contract has not been amended or modified in any respect, nor has any material provision thereof been waived by either the Authority or the Redeveloper, and the Contract is in full force and effect; (c) Such other reasonable certifications as the Lender may request. 13. Amendments. The Authority hereby represents and warrants to Lender for the purpose of inducing Lender to make advances to Redeveloper under the Loan Documents that Authority will not agree to any amendment or modification to the or any TIF Note issued under the Contract that materially affects the collection of Available Tax Increment (as defined in the Contract) in any way affects the Property without the Lender’s written consent. Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 94 G-11 518115v2 MNI SA285-100 IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the day and year first written above. ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of ___________, by _______________________ and ______________________ the President and Executive Director, respectively, of the St. Louis Park Economic Development Authority, a public body corporate and politic, on behalf of such public body. Notary Public Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 95 G-12 518115v2 MNI SA285-100 [LENDER] By: Its Economic Development Authority Meeting of April 16, 2018 (Item No. 7b) Title: Public Hearing-Purchase and Redevelopment Contract with SLP Park Ventures, LLC Page 96 Meeting: City Council Meeting Date: April 16, 2018 Presentation: 2a EXECUTIVE SUMMARY TITLE: Retirement Recognition Resolution for Part-Time Firefighter Nicola Typpo RECOMMENDED ACTION: The Mayor is asked to read the resolution and present a plaque to Niki Typpo for 20 years of service to the City of St. Louis Park. POLICY CONSIDERATION: None at this time. SUMMARY: City policy states that employees who retire or resign in good standing with over 20 years of service will be presented with a resolution from the Mayor, City Manager and City Council. Part-Time Firefighter Niki Typpo will be in attendance for the presentation at the beginning of the meeting. The Mayor is asked to read the resolution and present Niki with a plaque in recognition of her years of service to the City. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: Resolution Prepared by: Ali Timpone, HR Manager Reviewed by: Nancy Deno, Deputy City Manager/HR Director Approved by: Tom Harmening, City Manager City Council Meeting of April 16, 2018 (Item No. 2a) Page 2 Title: Retirement Recognition Resolution for Part-Time Firefighter Nicola Typpo RESOLUTION NO. 18-____ RESOLUTION OF THE CITY COUNCIL OF ST. LOUIS PARK, MINNESOTA, RECOGNIZING THE CONTRIBUTIONS OF AND EXPRESSING APPRECIATION TO PART-TIME FIREFIGHTER NICOLA TYPPO WHEREAS, Nicola Typpo began her employment with the City of St. Louis Park over 20 years ago on September 8, 1997; and WHEREAS, Niki is a Children First Asset Champion; and WHEREAS, Niki worked with Meadowbrook Collaborative; and WHEREAS, Niki helped organize and archive historical Fire Department photos and articles; and WHEREAS, Niki participated in hundreds of public education events over the last 20 years; and WHEREAS, Niki worked tirelessly each year on the Fire Department Open House; NOW THEREFORE BE IT RESOLVED that the City Council of the City of St. Louis Park, Minnesota, by this resolution and public record, would like to thank Nicola Typpo for her great contributions and more than 20 years of dedicated service to the City of St. Louis Park and wish her the best in her retirement. Reviewed for Administration: Adopted by the City Council April 16, 2018 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk Meeting: City Council Meeting Date: April 16, 2018 Presentation: 2b EXECUTIVE SUMMARY TITLE: St. Louis Park Parktacular Ambassadors Introduction & Recap of Year RECOMMENDED ACTION: The 2017-2018 St. Louis Park Parktacular Ambassadors will be in attendance to introduce themselves to City Council. They will share information about their year as Ambassadors and some things they have learned from representing the community. POLICY CONSIDERATION: None SUMMARY: St. Louis Park Parktacular Ambassadors visit communities in the Twin Cities area and western Wisconsin. Besides representing the festival, they promote the City of St. Louis Park and the excellent schools. As an inclusive program, St. Louis Park is one of three communities (Hopkins and Woodbury being the others) who have representation from children, young adults, and seniors. Parktacular is the only program that has consistently had young men representing the City, as well as racial and ethnic diversity. Many other communities admire how we are so successful in getting a cross-section of the citizens of our city to represent our own community. SLP Parktacular Ambassadors are public servants and promote St. Louis Park as a place where all ages, religions, and ethnicities can live, learn, and participate in a strong community, which is well represented by the Parktacular Festival. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community. SUPPORTING DOCUMENTS: None Prepared by: Debbie Fischer, Administrative Services Office Assistant Approved by: Tom Harmening, City Manager Meeting: City Council Meeting Date: April 16, 2018 Presentation: 2c EXECUTIVE SUMMARY TITLE: City Volunteers and Boards and Commissions Volunteers Proclamation RECOMMENDED ACTION: Mayor to read and give thanks and appreciation to City volunteers and Board and Commission volunteers. This is for camera purposes and the video will be shared with volunteers and through social media in honor of Volunteer Recognition Day, April 20, 2018. POLICY CONSIDERATION: None at this time. SUMMARY: In the last year, the City of St. Louis Park had more than 1,300 volunteers contribute over 10,000 hours of their time and talents. Below are several highlights from the past year: •Nearly half of our volunteer hours come from Westwood Hills Nature Center volunteers who spent 4,508 hours on trails and maintenance projects, programming, receptionist coverage and animal care. •Volunteer childcare opportunities were created and implemented to support broader community participation at community meetings. •The City had 97 hydrants adopted through the Hydrant Hero program. Hydrant Heroes dig out their hydrants each winter, ensuring quick access in case of an emergency. •The City benefited from volunteers who tend to more than 40 parks and public spaces and 24 gardens on a regular basis. •Community events were supported by volunteers including the Home Remodeling Fair, Westwood Hills Nature Center Halloween Party, Little Goblin Bash and Parktacular. •Fire Hydrant Painting continued for its fourth year, with more than 100 hydrants getting a fresh coat of paint. •The City partnered with the St. Louis Park School District, Benilde-St. Margaret’s and Beth El Synagogue to engage youth and children in our park and event opportunities. •The City has 95 volunteers serving on 12 different boards and commissions that act in an advisory capacity to the City Council and participate in various city-wide initiatives that enhance community engagement. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community. SUPPORTING DOCUMENTS: Proclamation Prepared by: Laura Smith, Wellness & Volunteer Coordinator Reviewed by: Nancy Deno, Deputy City Manager/HR Director Approved by: Tom Harmening, City Manager City Council Meeting of April 16, 2018 (Item No. 2c) Page 2 Title: City Volunteers and Boards and Commissions Volunteers Proclamation PROCLAMATION Honoring City Volunteers and Boards and Commissions Volunteers WHEREAS, citizen involvement enhances the quality and responsiveness of public decision making and the progress of the community; and WHEREAS, City volunteers are an essential part of St. Louis Park, vital to our future as a caring and productive community; and integral to our vision of becoming a connected and engaged community; and WHEREAS, City volunteers continue to selflessly give their compassion, time and commitment to better their community and the lives of others; and WHEREAS, City volunteers continue to make a difference through their hard work, dedication and outstanding contributions to the City of St. Louis Park; and WHEREAS, various Boards and Commissions serve in an advisory capacity to the City of St. Louis Park City Council and are conferred various degrees of decision making power of the City; and WHEREAS, the City of St. Louis Park welcomes its citizens to share their talents and perspectives by serving on an advisory board or commission; NOW THEREFORE, let it be known that the Mayor and City Council of the City of St. Louis Park do hereby commend volunteers of St. Louis Park and the volunteers of St. Louis Park Boards and Commissions for their dedicated service and outstanding contributions to improving the quality of lives of others, and supporting our community and its people. WHEREFORE, I set my hand and cause the Great Seal of the City of St. Louis Park to be affixed this 16th day of April, 2018. ______________________________________ Jacob Spano, Mayor Meeting: City Council Meeting Date: April 16, 2018 Presentation: 2d EXECUTIVE SUMMARY TITLE: 4th Annual SLP Earth Day Community Meal and Town Visioning Proclamation RECOMMENDED ACTION: The Mayor is asked to read and present the proclamation to Human Rights Commission Chair, Sara Wilhelm Garbers, and SLP SEEDS organization members, Lindsey Prestholdt, SLP SEEDS’ Youth Board Member and Earth Day Community Meal Event Co-Chair, and Lynda Enright, District (SNAC) School Nutrition Advisory Committee member, and Registered Nutritionist, and Health in the Park Better Eating Champion. POLICY CONSIDERATION: None at this time. BACKGROUND: SLP SEEDS, a nonprofit organization supporting wellness and resiliency in St. Louis Park, joins with the Human Rights Commission to host the 4th Annual SLP Earth Day Celebration on April 24th, 2018 at the SLP High School Cafeteria, beginning at 5:00pm. All citizens in our community are invited to join the free community dinner and town visioning forum. The Human Rights Commission will help facilitate a Community Conversation regarding Food Equity in St. Louis Park. High school students taking the UMN free 6-week course will be presenting their Teen Cook-Off with Mayor Spano and District Superintendent Astein Osei as the judges. This year’s event will see about 200 people, including groups from the Oak Park Village and Louisiana Court Apartments who will be brought to the event (and home) through a generous grant from Park Adams Transportation. The Teen Class and Cook-Off are supported by a Healthy Living Grant from the City of St. Louis Park. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: St. Louis Park is committed to being a leader in environmental stewardship. We will increase environmental consciousness and responsibility in all areas of city business. SUPPORTING DOCUMENTS: Proclamation Prepared by: Debbie Fischer, Administrative Services Office Assistant Approved by: Tom Harmening, City Manager City Council Meeting of April 16, 2018 (Item No. 2d) Page 2 Title: 4th Annual SLP Earth Day Community Meal and Town Visioning Proclamation PROCLAMATION 4th Annual SLP Earth Day Community Dinner & Town Visioning Forum WHEREAS, SLP SEEDS, a nonprofit supporting equitable wellness and resiliency in the Park, is hosting the 4th Annual SLP Earth Day celebration on April 24th, 2018 at SLP High School Cafeteria; and WHEREAS, Community Dinners provide a gathering for citizens of all ages and across cultures coming to the table to discuss concerns, wishes and recommendations from the general public to city and district officials and administration; and, WHEREAS, Community Forums provide a place to envision the future and voice goals; and WHEREAS, the SLP Human Rights Commission is co-hosting the event to lead the Community Conversation on Food Equity, and WHEREAS, Park Adam Transportation is acknowledged for their generous donation of bussing residents of Oak Park Village and Louisiana Court Apartments to and from this event to reduce the barriers of attending and voicing their thoughts on Food Equity, and WHEREAS, a Healthy Living Grant from the City of St. Louis Park was generously issued to SLP SEEDS to support the Teen/Tween class of the UMN’s Cooking Matters class for 11 students, and the district’s Family Services Collaborative has generously granted $2,000 to provide these free six-week cooking classes for 20 high-risk elementary students, and WHEREAS, SLP SEEDS actively involves Roots N Shoots High School Environmental Club and other youth on their Board and committees, as well as providing internships, work experience, community service hours, and engaging youth in making a difference in their communities, preparing our next generation of environmentally responsible leaders, and NOW THEREFORE, let it be known that the Mayor and City Council of the City of St. Louis Park do hereby proclaim April 24th, 2018 to be the 4th Annual SLP Earth Day and call upon all citizens in our community to join the free community dinner and town visioning forum. WHEREFORE, I set my hand and cause the Great Seal of the City of St. Louis Park to be affixed this 16th day of April, 2018. _________________________________ Jake Spano, Mayor Meeting: City Council Meeting Date: April 16, 2018 Presentation: 2e EXECUTIVE SUMMARY TITLE: Recognition of Donations RECOMMENDED ACTION: Mayor to announce and express thanks and appreciation for the following donations being accepted at the meeting and listed on the Consent Agenda: From Amount For Rotary Club of St. Louis Park $1,000 The Recreation Division’s Summer Concert Series Prepared by: Debbie Fischer, Administrative Services Office Assistant Approved by: Tom Harmening, City Manager Meeting: City Council Meeting Date: April 16, 2018 Minutes: 3a UNOFFICIAL MINUTES CITY COUNCIL STUDY SESSION ST. LOUIS PARK, MINNESOTA MARCH 26, 2018 The meeting convened at 6:30 p.m. Councilmembers present: Tim Brausen, Steve Hallfin, Rachel Harris, Mayor Pro Tem Anne Mavity, Thom Miller, and Margaret Rog. Councilmembers absent: Mayor Jake Spano Staff present: City Manager (Mr. Harmening), Chief Financial Officer (Mr. Simon), Deputy City Manager/Human Resources Director (Ms. Deno), Director of Community Development (Ms. Barton), City Assessor (Mr. Bultema), and Recording Secretary (Ms. Pappas). Guest: Stacie Kvilvang, Ehlers; Martha Ingram, Kennedy & Graven 1. Future Study Session Agenda Planning –April 2 & 9, 2018 Mr. Harmening presented the proposed Study Session agenda for April 2 and 9, 2018. Mr. Harmening noted that Wayside House would like to pursue an expansion and adding a road on the city right-of-way. This will be an upcoming topic for discussion. Councilmember Brausen asked if any of the other councilmembers are able to attend a meeting on Friday, March 30, from 3:30-5:30 p.m. for the Highway 169 project, as he is not available. Councilmember Harris stated she would check her schedule to see if she could attend. Councilmember Rog stated that the study session prioritization grid needs updating and noted several items. She asked about The Nest, and Ms. Barton mentioned that the committee wants to wait to speak to the council again until they have solidified a location for The Nest. Mayor Pro Tem Mavity stated that she wanted to pull agenda item #5-Comprehensive Plan from written reports to be a discussion item at the end of the meeting. Councilmember Rog also asked to pull item #8-Rain Garden Rewards Program, from the written reports for discussion at the end of the meeting. 2. Central Park West Project Updates Ms. Barton stated that the developers have requested to extend the Central Park West office buildings construction schedule by two years to allow additional time to prelease the buildings and to attract equity investors. Additionally, Phase II (multi-family housing) of the project, has missed its required construction commencement date, and the developers are proposing a revised construction schedule while they continue to search for an anchor tenant. Ms. Barton explained that the linear park would be completed this spring but that the woonerf construction would be delayed. City Council Meeting of April 16, 2018 (Item No. 3a) Page 2 Title: Study Session Minutes of March 26, 2018 Mayor Pro Tem Mavity asked when the council began discussing this project. Mr. Harmening stated in 2010. Councilmember Brausen asked if all phases of the project must be completed before taxes are raised to reflect current market value or if this would happen in stages. Ms. Ingram stated that the agreements all fall within the minimum assessment agreements, so as phases come up, the assessment agreements are addressed as needed. Councilmember Brausen asked then if the property owners would be paying increased taxes because Phases I and III are completed. Ms. Ingram stated yes, the owners will pay minimum value unless changes occur in the assessment. Councilmember Brausen asked if affordable housing units could be added to the project. Ms. Ingram stated that this would be a significant cost to the developer, as they are not receiving TIF for this project. Councilmember Rog asked what the owners are paying in taxes on the property now and how it relates to the $30 million. Ms. Ingram stated that she does not know exact figures. They stated that they are paying what the city assessor has stated is the value of the land. Councilmember Rog asked about the continued effort to find an anchor tenant, and what happens if the developers do not find one. Ms. Barton explained that the developers will continue to look, adding that this is a very marketable area along the I-394 corridor, so it is likely they will find an anchor tenant. Councilmember Harris asked if the city has any leverage in this situation. Ms. Ingram stated no, because there is no TIF to leverage. Councilmember Miller asked what alternatives the city has and if the developers changed the use of the buildings if the process would move more quickly. Ms. Barton stated that the market for multi-family housing is strong, but this area needs more commercial office in order to get daytime traffic there. She added that the area is still a good strong commercial office market location. Councilmember Brausen stated that he will continue to support the development. Councilmember Rog asked if this impacts the school district budget. Ms. Barton stated no, because the increased taxes would be captured for the tax increment financing; however, the developers will need approval to modify the assessment agreement from the school district, as well. Mayor Pro Tem Mavity stated that she is very much in support of the project, which began in 2010 and took until 2014 to actually determine what was needed on the site. She stated that the council is not wanting to change this. While it is unfortunate the developer is having trouble finding an anchor tenant, she noted that it feels like a normal delay. It was the consensus of the city council to move forward on this amendment and market evaluation 3. 2018 Bonding Review and Westwood Hills Nature Center Financing Update Mr. Simon reported to the council. He stated that the 2018 bond issue amounts are subject to change since not all bids have been awarded. The anticipated GO bond issue in April/May 2018 would include the following: • Connect the Park • Water Treatment Plant #4 project • Water and Sewer capital projects • SWLRT, Softball Fields, and Fiber City Council Meeting of April 16, 2018 (Item No. 3a) Page 3 Title: Study Session Minutes of March 26, 2018 Mr. Simon added that the Westwood Hills Nature Center project has 3 viable forms of bond issuance, including GO charter bonds, GO tax abatement bonds, and EDA lease-purchase revenue bonds. Ms. Kvilvang reviewed these three bonding options with council. She noted that the city currently has a AAA Standard and Poor’s bond rating. Ms. Kvilvang stated that Ehlers’ recommendation is to go with GO bonds. Councilmember Miller asked if the city has ever used tax abatement bonds before. Mr. Simon stated no. Councilmember Brausen stated that he preferred to use city charter bonds, but would agree to tax abatement bonds if that is Ehlers’ and staff’s recommendation. Councilmember Harris asked if it was possible to use a combination of all three bond options. Mr. Kvilvang stated that they could but added there is no reason to do so. Councilmember Harris asked what the taxpayer cost would be on a median value home for WWHNC bonds. Mr. Simon stated $34-37 per year, based on interest rate estimates at this time, since this is a 2019 bond issue. Councilmember Rog stated that she did not remember the council being asked to approve tax abatement bonds in the past. Mayor Pro Tem Mavity stated that the council always looks at all options. Councilmember Rog stated that 65% of elementary students who visit the nature center do not attend St. Louis Park schools. She noted that students at most of the schools do not go to the nature center after first or second grade, which is inequitable. She also noted that Parent Teacher Organizations typically pay for the trips to the nature center and suggested that the city pay for transportation, curriculum development, and other needs to ensure all students have access. Councilmember Rog also noted that the Climate Action Plan goal is reducing greenhouse gas emissions. However, she pointed out that the nature center building already emits very little greenhouse gases. She noted that funds spent to make the nature center net zero may be better spent on projects across the community that reduce greenhouse gas emissions. Councilmember Rog also stated that there are tradeoffs when spending this amount of money. She noted that many renters and homeowners are cost-burdened in St. Louis Park, paying more than 30 percent of their income in taxes. She suggested there could be other ways to fund the nature center so it doesn’t further burden these residents. Councilmember Rog stated access to nature is good for peoples’ health and well-being, adding that there are many opportunities to improve access to nature in the community. She noted that the nature center is located in a neighborhood that is high income with mostly white residents. She suggested that rather than investing such a large amount in one building, the city could invest in improving access to nature in more locations. Councilmember Rog suggested that council discuss the pros and cons of the project further before making a decision. Mayor Pro Tem Mavity asked Mr. Harmening to clarify where the council is at in the WWHNC project. Mr. Harmening stated at the April 9 council meeting, staff and the consultant will present the next step in the design for WWHNC, which council authorized in December. From there, the schematic design will be developed. After that, staff will be directed to prepare plans and specifications and to pursue bids. He continued that construction would begin in 2019, and it would take one year to build the nature center. City Council Meeting of April 16, 2018 (Item No. 3a) Page 4 Title: Study Session Minutes of March 26, 2018 Councilmember Miller stated that in his opinion the reason for discussion about tax abatement bonds is the nature center project. He does not recall the council asking for other funding mechanisms for this project. He added that the reason for the super majority vote on bonds is that this is a very important and impactful project both to the council and to the city. However, he noted that it seems odd to bring a different bonding form forward. He continued that he supported the project through May, 2017; however, he did not understand the city’s budget process at that time. He stated he now understands that in order to comply with the city’s Climate Action Plan, the nature center will cost the city a large amount of money. He added that the city will have to go a long way to financially incentivize residents and commercial business owners on project spending. Councilmember Miller stated that in the city, urgent needs sometimes come up related to water and other items that need to be addressed immediately. Additionally, he noted that affordable housing continues to be a priority, and there is a need to devote millions to this, perhaps through a housing trust fund. He continued that the down side is that we will have to raise taxes for many years to afford to do all of this. Councilmember Hallfin stated he disagrees with Councilmembers Rog and Miller. He stated that he looks at every project that comes before council on an individual basis. He stated that staff did their work on this and has come to the council with the information, including funding options, adding that the council has not yet approved the nature center project but can vote on the bonding. He stated that he supports staff’s recommendation on the GO bonds. If the council decides to move forward with the nature center project, we will have an obligation to pay for it in the best way for our taxpayers. Councilmember Brausen stated that he has not yet made up his mind on this project, but will continue to consider it as it moves forward. He stated that staff does need to provide council with funding options for WWHNC, and this information is necessary. He added that today the council needs to decide on the question of 2018 bonds. Mayor Pro Tem Mavity stated the council has reviewed this project over time. While everyone appreciates the council’s different perspectives, the council will want to look at all options, including funding. She noted that she did not vote in favor of the ROC at first, but she did vote in favor of the financing. She added that there are council norms, and if the council approves a project, we need to stand behind it and then find a way get it completed. She added that there will be time to revisit the nature center project and make sure it is done in the most cost-effective, mission- driven way possible. She stated that at this time, we need to focus on the 2018 bonds and asked Mr. Harmening for the next steps. Mr. Harmening stated that the next steps are as follows for the 2018 bonds: • April 16 – city council will call for the sale of the 2018 bonds • May 21 – city council awards the sale of 2018 bonds • Mid-June – city council will close on the bonds, and the city will receive the funds It was the consensus of the city council to have staff move ahead with the 2018 projects with GO Bonds. 4. 2018 Market Value Overview City Council Meeting of April 16, 2018 (Item No. 3a) Page 5 Title: Study Session Minutes of March 26, 2018 Mr. Bultema gave a summary report on local real estate market dynamics and preparation for the Local Board of Appeal and Equalization process that begins in April. He stated that the assessed market valuation and classification for each property determines their individual tax capacity and thus the overall tax capacity of the community. In addition to fiscal budgeting and property tax implications, the composition of value and trending are important for the council to understand as they focus on overall governance of the community. Mr. Bultema provided information on how the community’s real estate is reacting to the significant evolution of housing stock; market performance trends for commercial-industrial space; current market cycle and looking forward. He noted that the appeal process will also be reviewed. Mr. Bultema stated that the council can contact him to ask further questions or have discussion. Mr. Bultema stated that valuation notices were mailed on March 6 to 17,000+ parcel owners. He stated that the appeals process will take place at the April 9 meeting, and the Hennepin County Board of Appeals will be held in June. Mr. Bultema noted that single family mid- and upper-pricing brackets in St. Louis Park are stable, and teardown expansion activity is evident. He added that St. Louis Park also provides the perfect niche for first time home buyers. He stated that the city does not have a lot of upper bracket homes, so it is critical to renew home stock as real estate wears out over time. Mr. Bultema pointed out that condos and townhomes in the mid- and upper-pricing brackets are stable but added that this type of home can be the most volatile. He stated that condos and townhomes had the most adjustments this year to bring them back into valuation compliance. Related to apartments in St. Louis Park, Mr. Bultema stated that class A apartments are expanding now, but classes B and C are still dominant in the city. Mayor Pro Tem Mavity pointed out that NOAH properties are typically classes B and C apartment units. Mr. Bultema added that commercial/industrial growth is value driven by new construction, like that at the West End, as well as Parkwood and Knollwood upgrades. Mr. Bultema added that as a community, St. Louis Park is doing well, and all sectors are moving upward. Land values remain high, and the economy remains solid. 5. 2040 Comprehensive Plan Update – pulled off written reports for discussion Mayor Pro Tem Mavity pointed out that she wants to make sure the council has an understanding of the plan updates and that issues are discussed before the Comprehensive Plan is finalized. Ms. Barton stated that staff will meet with the council at two upcoming meetings so that all members can weigh in on the Comprehensive Plan before the Planning Commission makes a final recommendation on the draft. She added that all changes and discussions will come before the Planning Commission’s final recommendations to the council on June 6, after which time the council will take formal action on distribution of the draft Comprehensive Plan for review by surrounding jurisdictions. Mayor Pro Tem Mavity stressed that it seems like a short timeframe to discuss all of these items, with not a lot of time to deep dive into issues. Ms. Barton noted that the Comprehensive Plan is a City Council Meeting of April 16, 2018 (Item No. 3a) Page 6 Title: Study Session Minutes of March 26, 2018 policy document, and zoning and implementation discussions at a later date will address specific details. Mayor Pro Tem Mavity asked if the council decides that they would like more affordable housing in the community, if that can be a point of discussion. Ms. Barton stated yes, and it can be addressed with zoning and implementation. Mr. Harmening reminded the council that during the council retreat in January, providing for a variety of different types of housing in our community was discussed. He added that going on that information, staff will present to council strategic directions which support a more diverse type of housing in St. Louis Park. Those directions will then be included in the Comprehensive Plan. He stated that council will see this information in April or May. Mayor Pro Tem Mavity indicated her appreciation for that, adding that she wants to be sure the council is getting to the level of precision in calculations and estimates that is required, adding that it is important to do that now. Mayor Pro Tem Mavity noted that 250,000 people have moved into the Twin Cities since 2010, and they need places to live. She stated that there are all kinds of ways this could be of value to our community. The Comprehensive Plan is a once in 10-year moment to outline these values. Councilmember Brausen added that related to the Comprehensive Plan, he wants to be sure that racial equity, along with comments and feedback from the Human Rights Commission, are included in the process. 6. Update on Rainwater Rewards Program – pulled off written reports for discussion Councilmember Rog stated that she has heard from several members of the Environment and Sustainability Commission and from several water stewards in the community about how more impactful this program can be in St. Louis Park. She added that the biggest offenders are commercial businesses, and they are not eligible for this program. Councilmember Rog noted that there have been 56 inquiries to the city about this program, and only 1 rainwater garden was installed in 2017. She suggested that the city work with experts on the ESC and ask them for feedback on how to reduce storm water run-off and help with Bass Lake and other run-off. Councilmember Harris stated that in 2017 there was $4,100 dispersed for this program by the city, while there was an allotment of $25,000. She pointed out that the program has been very underutilized. There are opportunities for more awareness, including mailings to residents near the creek and in Ward 3. She stated that she has spoken to homeowners in the Victoria Pond area and adjacent to it who have noticed foul smells in the summertime. She again encouraged staff to reach out to maximize the program, adding that there is more room to grow it. Mr. Harmening added that 2017 was the city’s first year of the program, acknowledging that the city has a long way to go to get more participation in the program. He added that they will continue to reach out this year. Communications/Meeting Check-In (Verbal) Mr. Harmening referenced the recent attorney-client communication sent to council and asked if this warranted a closed session with the city attorney. The council agreed that it did warrant such a session. The meeting adjourned at 9:00 p.m. City Council Meeting of April 16, 2018 (Item No. 3a) Page 7 Title: Study Session Minutes of March 26, 2018 Written Reports provided and documented for recording purposes only: 7. February 2018 Monthly Financial Report 8. Park Village – Planned Unit Development (PUD) Major Amendment ______________________________________ ______________________________________ Melissa Kennedy, City Clerk Jake Spano, Mayor Meeting: City Council Meeting Date: April 16, 2018 Minutes: 3b UNOFFICIAL MINUTES CITY COUNCIL SPECIAL STUDY SESSION ST. LOUIS PARK, MINNESOTA APRIL 2, 2018 The meeting convened at 6:45 p.m. Councilmembers present: Mayor Jake Spano, Tim Brausen, Steve Hallfin, Rachel Harris, Anne Mavity, Thom Miller, and Margaret Rog. Staff present: City Manager (Mr. Harmening), Engineering Director (Ms. Heiser), Senior Planner (Mr. Walther); and Recording Secretary (Ms. Pappas). Guests: None Mayor Spano mentioned a few items for possible future discussion: - Net Neutrality - Conflict of interest with family of city council members serving on a board or commission, especially the Charter Commission. - Gun control permit system for gun stores in St. Louis Park (requested by students). Councilmember Mavity stated that the study session agendas are quite full and she would like to be judicious with time. She stated that if a discussion were included about gun sale policy, she would like staff to come very well prepared with options for discussion. Mr. Harmening stated that he would discuss the conflict of interest concerns with the city attorney and report back to council. 1. Wayside Recovery Center/Future North-South Road Connection Ms. Heiser and Mr. Walther presented. Mr. Walther stated that Wayside Recovery Center is considering an expansion of their existing facility. Wayside met with city staff to determine if their preliminary building program could work on the site and what approvals are needed. He noted that staff is supportive of the proposed expansion and identified a path forward for city review. Staff also shared background about a planned roadway across the western part of the Wayside property. Mr. Walther pointed out that long-range development plans for the area, that were created with significant public process and task forces, proposed a new north-south road connection between Excelsior Boulevard and Park Center Boulevard. Most of the road right-of-way for the connection has been dedicated for this future roadway across part of the Park Nicollet Clinic campus. Mr. Walther noted that the city does not yet have an easement or right-of-way across the Wayside property. He and Ms. Heiser presented the proposed road layout and evaluation to the council. Councilmember Harris asked if there is a timeline on this project. Mr. Walther stated that Wayside wants to understand the city’s position before they make a decision, and they hope to move ahead with construction in the next two to three years. Their main concern with the St. Louis Park site is the north- south connection. The road connection is not currently included in the 10-year Capital Improvement City Council Meeting of April 16, 2018 (Item No. 3b) Page 2 Title: Special Study Session Minutes of April 2, 2018 Plan. Allowing a building to be constructed in the path of the future road would limit the city’s ability to construct the planned road and could significantly increase costs to build it. Ms. Heiser pointed out that plans for this area and potential connections for north-south connectivity date from 2004. She noted potential impacts to Byerly’s, Wayside, and the Park Nicollet Campus if a north-south road connection is pursued. She also described the benefits the north-south connection would provide to neighborhood circulation, as there is no north-south connection between the half mile from Park Center Boulevard and Monterey Drive, and also the benefits of simplification and optimization of the signal timing and operations along Excelsior Blvd near Highway 100 at Park Center Blvd and Wooddale Avenue intersections. Councilmember Mavity pointed out that people will be walking around the Park Nicollet Campus from one building to another, so there are concerns for roadways going through this area. Ms. Heiser stated that in general, there needs to be more study related to this project and a better understanding of traffic in this area. Councilmember Mavity stated that she recently met with people at Wayside, noting that it is a 60- year-old treatment and recovery center which is pre-eminent in the Midwest. They have served in St. Louis Park for 50 of those years, and their building is in dire need of replacement. She added that she is not supportive of staff’s recommendation for the north-south roadway, adding that alternatives must be included. She suggested that Wayside needs consideration of their property, and the city has no right-of-way there. Councilmember Mavity suggested that as a compromise the north-south roadway be a pedestrian walkway or a bike trail to ensure that there is connectivity in this area. Councilmember Mavity also pointed out that any connection with the Quentin and Excelsior intersection also poses problems in front of Fresh Thyme and the Wolfe Park Condos. Adding a busy intersection there is a challenge. Mayor Spano agreed with Councilmember Mavity, stating that there are many pieces that would need to fall in place to make this north-south route happen. He added that the route actually already exists in some form with the frontage road. Councilmember Hallfin stated that he lives in this area and drives there daily. He agreed with Mayor Spano and Councilmember Mavity, noting that possibly the reason this north-south route has not ever been created is that it is a very heavy lift. He added that he hopes another alternative will be presented at a later date. Councilmember Miller stated that the city does not own the easement at Wayside and has no right-of- way. He asked if purchasing the property for the roadway is expensive or difficult. Mr. Harmening stated that technically it is not difficult; however, politically it would be more difficult. He added that if the north-south roadway was going to be developed, the city would need to buy the right-of-way, along with some property from Byerly’s and others in the area. Councilmember Brausen stated that he wants to make this work for Wayside. Councilmember Miller agreed, as did Councilmember Rog. Councilmember Harris stated that she likes the idea of having more circulation in the area and is interested to see the PUD when it available. She added that she liked Councilmember Mavity’s idea for pedestrian and bike mobility. The meeting adjourned at 7:35 p.m. ______________________________________ ______________________________________ Melissa Kennedy, City Clerk Jake Spano, Mayor Meeting: City Council Meeting Date: April 16, 2018 Minutes: 3c UNOFFICIAL MINUTES CITY COUNCIL MEETING ST. LOUIS PARK, MINNESOTA APRIL 2, 2018 1. Call to Order Mayor Spano called the meeting to order at 7:42 p.m. Councilmembers present: Mayor Jake Spano, Tim Brausen, Steve Hallfin, Rachel Harris, Anne Mavity, Thom Miller, and Margaret Rog. Councilmembers absent: None. Staff present: City Manager (Mr. Harmening), Engineering Director (Ms. Heiser), Water Resources Manager (Erick Francis); Senior Planner (Mr. Walther); and Recording Secretary (Ms. Pappas). Guests: Nancy Rose, Bass Lake Committee member and resident. 1a. Pledge of Allegiance 1b. Roll Call 2. Presentations 2a. Recognition of Donations Mayor Spano thanked and recognized donors for the following for donations: • $250 from Louis and Jerine Polack for discretionary use by the Fire Department in memory of Gloria Morris. • Up to $1,500 from the Institution of Fire Engineers - USA Branch for travel expenses for Fire Chief Steve Koering to attend the 2018 Model Performance in Community Risk Reduction Symposium. • $400 from the Alliance & McKnight Foundation for travel expenses related to Councilmember Brausen’s attendance at the 2018 Equity Summit. 3. Approval of Minutes 3a. City Council Meeting Minutes March 5, 2018 It was moved by Councilmember Hallfin, seconded by Councilmember Miller, to approve the March 5, 2018 City Council Meeting Minutes with minor spelling changes, which should read “Kristen Brekke Albright” and Kelly Zastrow”. The motion passed 7-0. 3b. City Council Special Study Minutes March 19, 2018 City Council Meeting of April 16, 2018 (Item No. 3c) Page 2 Title: City Council Meeting Minutes of April 2, 2018 It was moved by Councilmember Rog, seconded by Councilmember Harris, to approve the March 19, 2018 City Council Special Study Session Meeting Minutes as presented. The motion passed 7-0. 3c. City Council Meeting Minutes March 19, 2018 It was moved by Councilmember Hallfin, seconded by Councilmember Brausen, to approve the March 19, 2018 City Council Meeting Minutes as presented. The motion passed 7-0. 4. Approval of Agenda and Items on Consent Calendar 4a. Accept for filing City Disbursement Claims for the period of February 23 through March 23, 2018. 4b. Designate Northdale Construction Company, Inc. the lowest responsible bidder and authorize execution of a contract with the firm in the amount of $4,502,571.59 for the 2018 Pavement Management Project No. 4018-1000. 4c. Approve Second Reading and Adopt Ordinance 2533-18 amending Chapter 36 of the City Code relating to architectural materials for greenhouses, and authorize publication of summary ordinance. 4d. Adopt Resolution No. 18-056 approving final plans and specifications, and authorizing advertisement for bids for Aquila Avenue Mill and Overlay Project (4018-1100). 4e. Approve out-of-state travel of Councilmembers Anne Mavity and Tim Brausen to attend the 2018 Equity Summit in Chicago, IL on April 11-13, 2018. 4f. Adopt Resolution No. 18-057 approving acceptance of a monetary donation in the amount of $250.00 from Louis and Jerine Polack to the Fire Department for use at its discretion. 4g. Adopt Resolution No. 18-058 approving acceptance of a donation from the Institution of Fire Engineers - USA Branch for related expenses for Fire Chief Steve Koering, to attend the 2018 Model Performance in Community Risk Reduction Symposium in an amount not to exceed $1,500. 4h. Adopt Resolution No. 18-059 approving acceptance of a $400 donation from The Alliance/McKnight Foundation for expenses related to Councilmember Tim Brausen’s attendance at the 2018 Equity Summit in Chicago, IL on April 11-13, 2018. 4i. Approve for filing Board of Zoning and Appeals Meeting Minutes of February 22, 2018. It was moved by Councilmember Mavity, seconded by Councilmember Brausen, to approve the Agenda as presented and items listed on the Consent Calendar; and to waive reading of all resolutions and ordinances. The motion passed 7-0. 5. Boards and Commissions – None 6. Public Hearings City Council Meeting of April 16, 2018 (Item No. 3c) Page 3 Title: City Council Meeting Minutes of April 2, 2018 6a. Annual Storm Water Pollution Prevention Program Public Meeting Mr. Francis stated that the city is permitted by the Minnesota Pollution Control Agency (MPCA) for the discharge of storm water from the city’s storm sewer system into waters of the state, such as Minnehaha Creek. This permit is required, based on an amendment to the Environmental Protection Agency (EPA) Clean Water Act and the creation of the National Pollutant Discharge Elimination System. As part of the National Pollutant Discharge Elimination System (NPDES) the city is permitted as a Municipal Separate Storm Sewer System (MS4). He stated that St. Louis Park, along with over 200 other Minnesota cities, are permitted as MS4 communities. As part of the MS4 permit, the city is required to develop a Storm Water Pollution Prevention Program (SWPPP). One of the requirements of the SWPPP is that the city must hold a public meeting in which the public has an opportunity to review and comment on the city’s SWPPP. Mr. Francis provided a summary of storm water activities conducted in 2017 and an outline of 2018 initiatives, all of which is included in the staff report to council. Mayor Spano opened the floor for comments from the public. Nancy Rose, 3402 Huntington Avenue, noted the two-page summary of the Clean Water Act permit process and regulatory program. She stated that this is the fifth year of the 2013 revised permit, and a new set of requirements will be coming this fall. She believed that the new requirements will include stated measurable goals and time frames for 6 minimum control areas. She hoped that the council would be involved in setting these goals and time frames once the new requirements are known. Mayor Spano closed the public comments. There was no action needed by the council at this time. Councilmember Rog thanked staff for the informative report. She asked if there were any citizen reports related to illicit discharge. Mr. Francis stated that 5-6 were received in 2017 directly from residents, and 1 has been received so far in 2018. Councilmember Rog stated that there were 200 responses to the online survey, and she would like to see the responses or some themes from the responses at some point. Mr. Francis stated he will get that information and report back to the council. Councilmember Rog asked about Blue Star Certification and if it is something that has been discussed with staff, as it would be valuable to the community. Ms. Heiser stated that staff will look into it, adding that this certification is closely associated with the Green Steps certification, in which the city is a level three participant. Councilmember Rog added that there are some residents who may be interested in providing feedback regarding storm water management, and she would like to consider how to activate those groups for the greatest impact. 7. Requests, Petitions, and Communications from the Public – None 8. Resolutions, Ordinances, Motions and Discussion Items – None 9. Communication City Council Meeting of April 16, 2018 (Item No. 3c) Page 4 Title: City Council Meeting Minutes of April 2, 2018 Councilmember Rog noted that the LAX Foundation will have a fundraiser at Parkway Pizza on Tuesday from 11 a.m. to 2 p.m. She added that the HRC and Police Commission are hosting a meeting on April 10 at 7 p.m. in the Community Room. Mr. Harmening stated that yard waste will be collected beginning April 2. There is a fixit clinic scheduled at Union Congregational Church from 12-4 p.m. on Saturday, April 7, and there are also upcoming classes on the basics of growing vegetables. 10. Adjournment The meeting adjourned at 8:18 p.m. ______________________________________ ______________________________________ Melissa Kennedy, City Clerk Jake Spano, Mayor Meeting: City Council Meeting Date: April 16, 2018 Consent Agenda Item: 4a EXECUTIVE SUMMARY TITLE: Retirement Recognition Resolution for Part-Time Firefighter Nicola Typpo RECOMMENDED ACTION: Motion to Adopt Resolution to recognize Part-Time Firefighter Nicola Typpo for 20 years of service. POLICY CONSIDERATION: None at this time. SUMMARY: City policy states that employees who retire or resign in good standing with over 20 years of service will be presented with a resolution from the Mayor, City Manager and City Council. This consent item will officially adopt the resolution that honors Niki for her years of service. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: Resolution Prepared by: Ali Timpone, HR Manager Reviewed by: Nancy Deno, Deputy City Manager/HR Director Approved by: Tom Harmening, City Manager City Council Meeting of April 16, 2018 (Item No. 4a) Page 2 Title: Retirement Recognition Resolution for Part-Time Firefighter Nicola Typpo RESOLUTION NO. 18 - ____ RESOLUTION OF THE CITY COUNCIL OF ST. LOUIS PARK, MINNESOTA, RECOGNIZING THE CONTRIBUTIONS OF AND EXPRESSING APPRECIATION TO PART-TIME FIREFIGHTER NICOLA TYPPO WHEREAS, Nicola Typpo began her employment with the City of St. Louis Park over 20 years ago on September 8, 1997; and WHEREAS, Niki is a Children First Asset Champion; and WHEREAS, Niki worked with Meadowbrook Collaborative; and WHEREAS, Niki helped organize and archive historical Fire Department photos and articles; and WHEREAS, Niki participated in hundreds of public education events over the last 20 years; and WHEREAS, Niki worked tirelessly each year on the Fire Department Open House; NOW THEREFORE BE IT RESOLVED that the City Council of the City of St. Louis Park, Minnesota, by this resolution and public record, would like to thank Nicola Typpo for her great contributions and more than 20 years of dedicated service to the City of St. Louis Park and wish her the best in her retirement. Reviewed for Administration: Adopted by the City Council April 16, 2018 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk Meeting: City Council Meeting Date: April 16, 2018 Consent Agenda Item: 4b EXECUTIVE SUMMARY TITLE: Award Bid for Aquila Park Fastpitch Softball Field Project RECOMMENDED ACTION: Motion to designate Peterson Companies, Inc. as the lowest responsible bidder and authorize execution of an agreement with the firm in the amount not to exceed $951,326.38 to redevelop the girls fast pitch softball fields in Aquila Park. POLICY CONSIDERATION: Does the City Council wish to proceed with the girls fast pitch softball field project at Aquila Park? SUMMARY: A total of eight (8) bids were received for this project on Thursday, April 5: Contractor Base Bid Alternate Bid Total Includes alternates Peterson Companies $850,634.08 $100,692.30 $ 951,326.38 G.L. Contracting, Inc.$ 918,450.21 $126,799.50 $1,045,249.71 Friedges Contracting, Inc. $1,047,251.80 $95,561.30 $1,142,813.10 Max Steininger, Inc. $1,049,954.51 $99,358.45 $1,149,312.90 Rachel Contracting * $815,990.00 $120,815.00 $ 936,805.00 Meyer Contracting, Inc. * $1,053,337.47 $101,941.51 $1,155,278.90 New Look Contracting, Inc. * $1,104,162.50 $119,160.00 $1,223,322.50 G Urban Companies * $1,214,853.00 $110,550.00 $1,325,403.00 *Denotes non-qualified bid The bid alternate provides for a parking lot mill and overlay, scoreboard installation and trail construction and repair. Because the pricing under the bid alternate came in very good, staff recommends we include the approval of it in the bid award. A review of the bids indicates Peterson Companies, Inc. submitted the lowest bid. Peterson Companies, Inc. is a reputable contractor that has completed work for the City as recently as 2017. FINANCIAL OR BUDGET CONSIDERATION: The total construction cost for the Aquila Park softball field improvements was estimated to be $1,152,899 (does not include consultant costs or the expense for field lighting at Aquila since upgrades were in the CIP prior to this project). This project will be funded with a combination of resources from the Park Improvement Fund, G.O. Bonds and grants. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: Discussion Prepared by: Rick Beane, Parks Superintendent Reviewed by: Cynthia S. Walsh, Director of Operations and Recreation Approved by: Tom Harmening, City Manager City Council Meeting of April 16, 2018 (Item No. 4b) Page 2 Title: Award Bid for Aquila Park Fastpitch Softball Field Project DISCUSSION BACKGROUND: On November 6, 2017, Council authorized staff to enter into a contract with WSB & Associates to prepare plans and specifications for a project that would reorient and create two fastpitch softball fields at Aquila Park. The demolition of the lights and removal of fences began in the fall of 2017. An advertisement for bids was published in the St. Louis Park Sun-Sailor and the Finance and Commerce on March 15, 2018. In addition, plans and specifications were noticed on the City Website and are made available electronically via the internet by our vendor QuestCDN.com. Email notification was provided to four minority associations and final printed plans are made available for viewing at Dodge Data, Construct Connect, and at City Hall. FUNDING DETAILS: The estimate for the Aquila Park improvements is $1.2 million (includes cost of contract with WSB but does not include cost for lights at Aquila since upgrades were planned prior to this project being discussed). In addition to the construction work that was bid out and the lights, there are a number of other items that don’t require bidding that need to be purchased and installed as part of this project. Some of items include a storage shed, score boards, players benches, dug outs etc. CONSTRUCTION TIMELINE: Construction will begin as soon as weather permits. The goal is to seed Aquila Park in August or early September of 2018. To allow the grass adequate time to take root, experts recommend that new fields not be played on until the fall of 2019. Funding Sources Park Improvement Fund $ 555,000 G. O. Charter Bonds 400,000 Hennepin Youth Sports Grant 200,000 Twins Community Fund 45,000 Total $ 1,200,000 Meeting: City Council Meeting Date: April 16, 2018 Consent Agenda Item: 4c EXECUTIVE SUMMARY TITLE: Temporary Liquor License for the Heilicher Minneapolis Jewish Day School RECOMMENDED ACTION: Motion to Approve a Temporary Liquor License for the Heilicher Minneapolis Jewish Day School for their Annual Meeting to be held on June 7, 2018, at the Sabes Jewish Community Center, 4330 Cedar Lake Road in St. Louis Park. POLICY CONSIDERATION: Does the applicant meet the requirements for the issuance of a temporary liquor license? SUMMARY: The Heilicher Minneapolis Jewish Day School has applied for a Temporary Liquor License for a 5:00 pm reception prior to their Annual Meeting to be held on Thursday, June 7, at the Sabes Jewish Community Center at 4330 Cedar Lake Road. The mission of HMJDS is to provide “a strong academic foundation in general and Jewish studies in an environment in which students feel positive about themselves and others.” The Police Department has completed the background investigation on the principals and has found no reason to deny the temporary license. The applicant has met all requirements for issuance of the license, and staff is recommending approval. FINANCIAL OR BUDGET CONSIDERATION: The fee for a temporary liquor license is $100.00 per day of the event. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: None Prepared by: Kay Midura, Office Assistant – City Clerk’s Office Reviewed by: Melissa Kennedy, City Clerk Approved by: Tom Harmening, City Manager Meeting: City Council Meeting Date: April 16, 2018 Consent Agenda Item: 4d EXECUTIVE SUMMARY TITLE: Temporary On-Sale Intoxicating Liquor License – Finnegans Community Fund RECOMMENDED ACTION: Motion to Approve a Temporary On-Sale Intoxicating Liquor License for Finnegans Community Fund at Gamble Drive and the adjacent privately owned parking lot in West End for June 02, 2018. POLICY CONSIDERATION: Does applicant meet the requirements for the issuance of a temporary liquor license? BACKGROUND: Finnegans Community Fund has made application for a Temporary On-Sale Intoxicating Liquor License for the City Pages Annual Beer Festival to be held at the West End Festival Site on Saturday, June 02, from 3:30-8 p.m. The festival will include food vendors, beer sampling, and live entertainment. The applicant is working with Operations & Recreation staff to coordinate use of the site and details of the event, including obtaining the necessary approvals from the city Fire and Police Departments. There were no significant problems or issues at the 2017 event. Founded in 2000 in Minneapolis, Finnegans is a self-sustaining social business. Their mission is “to create sustainable change for those affected by hunger through profits from Finnegans Irish Amber and Finnegans Blonde Ale, and other innovative products and events. Through the Finnegans Community Fund (501c3), they turn profits from beer sales into food for the hungry. Ninety-eight percent of all funds that are donated to the Finnegans Community Fund go directly to alleviating hunger in local communities. In Minnesota, fresh produce is purchased from local farms and distributed to area food shelves through the The Food Group’s Harvest for the Hungry Program.” The Police Department has completed the background investigation on the principals of Finnegans Community Fund and has found no reason to deny the temporary license. The applicant has met all requirements for issuance of the license, and staff is recommending approval. FINANCIAL OR BUDGET CONSIDERATION: The fee for a temporary liquor license is $100 per day of the event. VISION CONSIDERATION: Not Applicable. Attachments: None Prepared by: Chase Peterson-Etem, Office Assistant – City Clerk’s Office Reviewed by: Melissa Kennedy, City Clerk Approved by: Tom Harmening, City Manager Meeting: City Council Meeting Date: April 16, 2018 Consent Agenda Item: 4e EXECUTIVE SUMMARY TITLE: Series 2018A General Obligation Bonds RECOMMENDED ACTION: Motion to Adopt Resolution providing for the Sale of $8,800,000 General Obligation Bonds 2018A. POLICY CONSIDERATION: •Does the City Council desire to issue Charter General Obligation Bonds in the amount of $2,020,000 for Sidewalk and trails, fiber, and softball fields? •Does the City Council desire to issue General Obligation Water and Sewer Revenue Bonds in the amount of $6,780,000 for water treatment plant filter, water rehab/infrastructure and sewer improvements in the current year? SUMMARY: At the March 26 study session, the City Council reviewed the proposed 2018 bond issue. Since that time we were able to eliminate the SWLRT amount from bonding and use future TIF pooling dollars for that project. Also, the water rehab/infrastructure amount was reduced slightly based on the bids that were received. In total, we reduced the bond size from $9,390,000 to $8,800,000 (includes cost of issuance and underwriters discount). The Charter General Obligations Bonds of $2,020,000 will fund the current year Sidewalk and Trails projects, fiber and a portion of the Aquila softball field project. Since these are Charter Bonds, they will require approval by at least 6 of the 7 City Council Members. The G.O. Revenue Bonds of $6,780,000 will finance all or a portion of capital projects within the Water and Sewer funds this year including the remaining portion of the Water Treatment Plant #4 project. Since these bonds are G.O. Revenue bonds approval is required by a simple majority vote only. FINANCIAL OR BUDGET CONSIDERATION: The proposed bond issues will be consolidated into one for potential investors to bid. The Charter G.O. Bonds, which will have a term of 10 years and repaid with a property tax levy, are estimated at a True Interest Cost (TIC) of 2.72%. The G.O. Revenue Bonds, which will have a term of 15 years and repaid with water and sewer rates, are estimated at a TIC of 2.96%. Assuming the Council approves the action recommended in this report, on May 21 the Council will be asked to award the sale of bonds. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: Presale Report Resolution Prepared by: Tim Simon, Chief Financial Officer Reviewed by: Nancy Deno, Deputy City Manager/HR Director Approved by: Tom Harmening, City Manager April 16, 2018 Pre -Sale Report for City of St. Louis Park, Minnesota $8,800,000 General Obligation Bonds, Series 2018A Prepared by: Stacie Kvilvang, CIPMA Senior Municipal Advisor And Jason Aarsvold, CIPMA Senior Municipal Advisor And James Lehnhoff, Municipal Advisor City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 2 Executive Summary of Proposed Debt Proposed Issue: $8,800,000 General Obligation Bonds, Series 2018A Purposes: The proposed 2018A bond is a multi-purpose issue that includes two components: 1.General Obligation City Charter Bonds: $2,020,000 This portion of the proposed Bond issue provides funding for sidewalks and trails related to the City’s Connect the Park initiative, fiber, and softball fields. Debt service will be paid from ad valorem property taxes. 2.General Obligation Water and Sewer Revenue Bonds: $6,780,000 This portion of the proposed Bond issue provides funding for the water treatment plant filter #4 project as well as other water and sewer capital projects. Debt service will be paid from utility revenue (water and sewer revenue). Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapters 444, 475 and Section 6.15 of the City’s Charter: •Chapter 444 allows cities to issue debt without limitation provided the debt service is expected to be paid from utility revenues •Chapter 475 provides general bonding authority for issuing debt •Section 6.15 of the City’s Charter enables the City to issue general obligation bonds for any corporate purpose pursuant to a “super majority” vote of the City Council. The portion of the Bonds being issued pursuant to the City’s Charter ($2,020,000) count towards the City’s statutory debt limit, which is 3% of the City’s estimated market value (EMV). The City’s EMV is $7,175,270,000 for Pay 2018, and 3% of EMV produces a debt limit of $215,258,100. Including the proposed $2,020,000 of new debt subject to this limit, the City’s outstanding debt that counts against the debt limit as of April 2018 is $28,975,000, which is well below the $215,258,100 debt limit noted above The 2018A Bonds will be general obligations of the City for which its full faith, credit and taxing powers are pledged. Term/Call Feature: The $2,020,000 of City Charter Bonds for the sidewalks/trails, fiber, and softball field projects are being issued for a 10-year term. Principal on the Bonds will be due on February 1 in the years 2020 through 2029. The $6,780,000 of Bonds for the water and sewer infrastructure improvements are being issued for a 15-year term. Principal on the Bonds will be due on February 1 in the years 2019 through 2033. The Bonds maturing on and after February 1, 2027 will be subject to prepayment at the discretion of the City on February 1, 2026 or any date thereafter. City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 3 Bank Qualification: Because the City is expecting to issue no more than $10,000,000 in tax exempt debt during the calendar year, the City will be able to designate the Bonds as “bank qualified” obligations. Bank qualified status broadens the market for the Bonds, which can result in lower interest rates. Rating: The City’s most recent bond issues were rated AAA by Standard & Poor’s. The City will request a new rating for the Bonds. If the winning bidder on the Bonds elects to purchase bond insurance, the rating for the issue may be higher than the City’s bond rating in the event that the bond rating of the insurer is higher than that of the City. Basis for Recommendation: Based on our knowledge of your situation, your objectives communicated to us, our advisory relationship as well as characteristics of various municipal financing options, we are recommending the issuance of General Obligation Bonds as a suitable financing option because: •This is a viable option available to finance these types of project under the City’s Charter and State law; •This is the most overall cost-effective option that still maintains future flexibility for the repayment of debt; and, •This coincides with the City’s past practices to finance these types of projects with this type of debt issue. Method of Sale/Placement: In order to obtain the lowest interest cost to the City, we will competitively bid the purchase of the Bonds from local and national underwriters/banks. We have included an allowance for discount bidding equal to 1.00000% of the principal amount of the issue. The discount is treated as an interest item and provides the underwriter with all or a portion of their compensation in the transaction. If the Bonds are purchased at a price greater than the minimum bid amount (maximum discount), the unused allowance may be used to lower your borrowing amount. Premium Bids: Under current market conditions, most investors in municipal bonds prefer “premium” pricing structures. A premium is achieved when the coupon for any maturity (the interest rate paid by the issuer) exceeds the yield to the investor, resulting in a price paid that is greater than the face value of the bonds. The sum of the amounts paid in excess of face value is considered “reoffering premium.” The amount of the premium varies, but it is not uncommon to see premiums for new issues in the range of 2.00% to 10.00% of the face amount of the issue. This means that an issuer with a $2,000,000 offering may receive bids that result in proceeds of $2,040,000 to $2,200,000. For this issue of Bonds, we have been directed to make a determination on the day of sale about the use of any premium. It is the City’s intent to use a portion of any premium to fund its recent utility rate study. The adjustments may slightly change the true interest cost of the original bid, either up or down. You have the choice to limit the amount of premium in the bid specifications. This may result in fewer bids, but it may also eliminate large adjustments on the day of sale and other uncertainties. City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 4 Review of Existing Debt: We have reviewed all outstanding indebtedness for the City and find that there are no refunding opportunities at this time. We will continue to monitor the market and the call dates for the City’s outstanding debt and will alert you to any future refunding opportunities. Continuing Disclosure: Because the City has more than $10,000,000 in outstanding debt (including this issue) and this issue is over $1,000,000, the City will be agreeing to provide certain updated Annual Financial Information and its Audited Financial Statement annually as well as providing notices of the occurrence of certain reportable events to the Municipal Securities Rulemaking Board (the “MSRB”), as required by rules of the Securities and Exchange Commission (SEC). The City is already obligated to provide such reports for its existing bonds and has contracted with Ehlers to prepare and file the reports. Arbitrage Monitoring: Because the Bonds are tax-exempt obligations/tax credit obligations, the City must ensure compliance with certain Internal Revenue Service (IRS) rules throughout the life of the issue. These rules apply to all gross proceeds of the issue, including initial bond proceeds and investment earnings in construction, escrow, debt service, and any reserve funds. How issuers spend bond proceeds and how they track interest earnings on funds (arbitrage/yield restriction compliance) are common subjects of IRS inquiries. Your specific responsibilities will be detailed in the Tax Certificate prepared by your Bond Attorney and provided at closing. You have retained Ehlers to assist you with compliance with these rules. Risk Factors: Utility Revenue: The City expects to pay a portion of the Bond debt service with utility funds. If utility revenue is inadequate, the City may have to levy taxes to pay debt service on the Bonds. Other Service Providers: This debt issuance will require the engagement of other public finance service providers. This section identifies those other service providers, so Ehlers can coordinate their engagement on your behalf. Where you have previously used a particular firm to provide a service, we have assumed that you will continue that relationship. For services you have not previously required, we have identified a service provider. Fees charged by these service providers will be paid from proceeds of the obligation, unless you notify us that you wish to pay them from other sources. Our pre-sale bond sizing includes a good faith estimate of these fees, so their final fees may vary. If you have any questions pertaining to the identified service providers or their role, or if you would like to use a different service provider for any of the listed services please contact us. Bond Attorney: Kennedy & Graven, Chartered Paying Agent: Bond Trust Services Corporation Rating Agency: Standard & Poor's Global Ratings (S&P) This presale report summarizes our understanding of the City’s objectives for the structure and terms of this financing as of this date. As additional facts become known or capital markets conditions change, we may need to modify the structure and/or terms of this financing to achieve results consistent with the City’s objectives. City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 5 Proposed Debt Issuance Schedule Pre-Sale Review by City Council: April 16, 2018 Distribute Official Statement: Week of May 7, 2018 Conference with Rating Agency: Week of May 14, 2018 City Council Meeting to Award Sale of the Bonds: May 21, 2018 Estimated Closing Date: June 14, 2018 Attachments Sources and Uses of Funds Proposed Debt Service Schedule Resolution Authorizing Ehlers to Proceed with Bond Sale (Sent separately by Kennedy and Graven) Ehlers Contacts Municipal Advisors: Stacie Kvilvang (651) 697-8506 Jason Aarsvold (651) 697-8512 James Lehnhoff (651) 697-8552 Disclosure Coordinator: Silvia Johnson (651) 697-8580 Financial Analyst: Alicia Gage (651) 697-8551 The Official Statement for this financing will be mailed to the City Council at their home address or e- mailed for review prior to the sale date. City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 6 St Louis Park, Minnesota $8,800,000 General Obligation Bonds, Series 2018A Issue Summary Assumes Current Market BQ AAA rates plus 25bps Total Issue Sources And Uses Dated 06/14/2018 | Delivered 06/14/2018 Sidewalks/ Trails Fiber Softball Fields Water Treatment Plant #4 Filter Water Rehab/ Infrastructure Sanitary Sewer Issue Summary Sources Of Funds Par Amount of Bonds $1,330,000.00 $260,000.00 $430,000.00 $3,060,000.00 $2,575,000.00 $1,145,000.00 $8,800,000.00 Total Sources $1,330,000.00 $260,000.00 $430,000.00 $3,060,000.00 $2,575,000.00 $1,145,000.00 $8,800,000.00 Uses Of Funds Total Underwriter's Discount (1.000%)13,300.00 2,600.00 4,300.00 30,600.00 25,750.00 11,450.00 88,000.00 Costs of Issuance 13,475.93 2,634.39 4,356.88 31,004.75 26,090.60 11,601.45 89,164.00 Deposit to Capitalized Interest (CIF) Fund 20,042.21 3,907.87 6,480.53 ---30,430.61 Deposit to Project Construction Fund 1,280,000.00 250,000.00 416,000.00 3,000,000.00 2,520,000.00 1,125,000.00 8,591,000.00 Rounding Amount 3,181.86 857.74 (1,137.41)(1,604.75)3,159.40 (3,051.45)1,405.39 Total Uses $1,330,000.00 $260,000.00 $430,000.00 $3,060,000.00 $2,575,000.00 $1,145,000.00 $8,800,000.00 Series 2018A GO Bonds - # | Issue Summary | 4/ 9/2018 | 11:41 AM City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 7 St Louis Park, Minnesota $8,800,000 General Obligation Bonds, Series 2018A Issue Summary Assumes Current Market BQ AAA rates plus 25bps Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 06/14/2018 ----- 02/01/2019 445,000.00 1.600%139,756.33 584,756.33 584,756.33 08/01/2019 --107,260.00 107,260.00 - 02/01/2020 575,000.00 1.750%107,260.00 682,260.00 789,520.00 08/01/2020 --102,228.75 102,228.75 - 02/01/2021 585,000.00 1.900%102,228.75 687,228.75 789,457.50 08/01/2021 --96,671.25 96,671.25 - 02/01/2022 595,000.00 2.050%96,671.25 691,671.25 788,342.50 08/01/2022 --90,572.50 90,572.50 - 02/01/2023 600,000.00 2.200%90,572.50 690,572.50 781,145.00 08/01/2023 --83,972.50 83,972.50 - 02/01/2024 615,000.00 2.300%83,972.50 698,972.50 782,945.00 08/01/2024 --76,900.00 76,900.00 - 02/01/2025 635,000.00 2.450%76,900.00 711,900.00 788,800.00 08/01/2025 --69,121.25 69,121.25 - 02/01/2026 645,000.00 2.600%69,121.25 714,121.25 783,242.50 08/01/2026 --60,736.25 60,736.25 - 02/01/2027 660,000.00 2.700%60,736.25 720,736.25 781,472.50 08/01/2027 --51,826.25 51,826.25 - 02/01/2028 685,000.00 2.800%51,826.25 736,826.25 788,652.50 08/01/2028 --42,236.25 42,236.25 - 02/01/2029 705,000.00 2.900%42,236.25 747,236.25 789,472.50 08/01/2029 --32,013.75 32,013.75 - 02/01/2030 490,000.00 3.000%32,013.75 522,013.75 554,027.50 08/01/2030 --24,663.75 24,663.75 - 02/01/2031 505,000.00 3.050%24,663.75 529,663.75 554,327.50 08/01/2031 --16,962.50 16,962.50 - 02/01/2032 525,000.00 3.150%16,962.50 541,962.50 558,925.00 08/01/2032 --8,693.75 8,693.75 - 02/01/2033 535,000.00 3.250%8,693.75 543,693.75 552,387.50 Total $8,800,000.00 -$1,867,473.83 $10,667,473.83 - Yield Statistics Bond Year Dollars $67,138.89 Average Life 7.629 Years Average Coupon 2.7815084% Net Interest Cost (NIC)2.9125800% True Interest Cost (TIC)2.9141101% Bond Yield for Arbitrage Purposes 2.7635286% All Inclusive Cost (AIC)3.0689312% IRS Form 8038 Net Interest Cost 2.7815084% Weighted Average Maturity 7.629 Years Series 2018A GO Bonds - P | Issue Summary | 4/ 9/2018 | 12:13 PM City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 8 St Louis Park, Minnesota $8,800,000 General Obligation Bonds, Series 2018A Issue Summary Assumes Current Market BQ AAA rates plus 25bps Net Debt Service Schedule Date Principal Coupon Interest Total P+I CIF Net New D/S Fiscal Total 06/14/2018 ------- 02/01/2019 445,000.00 1.600%139,756.33 584,756.33 (30,430.61)554,325.72 554,325.72 08/01/2019 --107,260.00 107,260.00 -107,260.00 - 02/01/2020 575,000.00 1.750%107,260.00 682,260.00 -682,260.00 789,520.00 08/01/2020 --102,228.75 102,228.75 -102,228.75 - 02/01/2021 585,000.00 1.900%102,228.75 687,228.75 -687,228.75 789,457.50 08/01/2021 --96,671.25 96,671.25 -96,671.25 - 02/01/2022 595,000.00 2.050%96,671.25 691,671.25 -691,671.25 788,342.50 08/01/2022 --90,572.50 90,572.50 -90,572.50 - 02/01/2023 600,000.00 2.200%90,572.50 690,572.50 -690,572.50 781,145.00 08/01/2023 --83,972.50 83,972.50 -83,972.50 - 02/01/2024 615,000.00 2.300%83,972.50 698,972.50 -698,972.50 782,945.00 08/01/2024 --76,900.00 76,900.00 -76,900.00 - 02/01/2025 635,000.00 2.450%76,900.00 711,900.00 -711,900.00 788,800.00 08/01/2025 --69,121.25 69,121.25 -69,121.25 - 02/01/2026 645,000.00 2.600%69,121.25 714,121.25 -714,121.25 783,242.50 08/01/2026 --60,736.25 60,736.25 -60,736.25 - 02/01/2027 660,000.00 2.700%60,736.25 720,736.25 -720,736.25 781,472.50 08/01/2027 --51,826.25 51,826.25 -51,826.25 - 02/01/2028 685,000.00 2.800%51,826.25 736,826.25 -736,826.25 788,652.50 08/01/2028 --42,236.25 42,236.25 -42,236.25 - 02/01/2029 705,000.00 2.900%42,236.25 747,236.25 -747,236.25 789,472.50 08/01/2029 --32,013.75 32,013.75 -32,013.75 - 02/01/2030 490,000.00 3.000%32,013.75 522,013.75 -522,013.75 554,027.50 08/01/2030 --24,663.75 24,663.75 -24,663.75 - 02/01/2031 505,000.00 3.050%24,663.75 529,663.75 -529,663.75 554,327.50 08/01/2031 --16,962.50 16,962.50 -16,962.50 - 02/01/2032 525,000.00 3.150%16,962.50 541,962.50 -541,962.50 558,925.00 08/01/2032 --8,693.75 8,693.75 -8,693.75 - 02/01/2033 535,000.00 3.250%8,693.75 543,693.75 -543,693.75 552,387.50 Total $8,800,000.00 -$1,867,473.83 $10,667,473.83 (30,430.61)$10,637,043.22 - Series 2018A GO Bonds - P | Issue Summary | 4/ 9/2018 | 12:13 PM City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 9 St Louis Park, Minnesota $8,800,000 General Obligation Bonds, Series 2018A Issue Summary Assumes Current Market BQ AAA rates plus 25bps Detail Costs Of Issuance Dated 06/14/2018 | Delivered 06/14/2018 COSTS OF ISSUANCE DETAIL Financial Advisor $57,164.00 Bond Counsel $15,500.00 Rating Agency Fee (S&P)$15,500.00 Miscellaneous $1,000.00 TOTAL $89,164.00 Series 2018A GO Bonds - P | Issue Summary | 4/ 9/2018 | 12:13 PM City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 10 St Louis Park, Minnesota $1,330,000 General Obligation Bonds, Series 2018A Sidewalks/Trails Assumes Current Market BQ AAA rates plus 25bps Debt Service Schedule Date Principal Coupon Interest Total P+I CIF Net New D/S Fiscal Total 06/14/2018 ------- 02/01/2019 --20,042.21 20,042.21 (20,042.21)-- 08/01/2019 --15,892.50 15,892.50 -15,892.50 - 02/01/2020 120,000.00 1.750%15,892.50 135,892.50 -135,892.50 151,785.00 08/01/2020 --14,842.50 14,842.50 -14,842.50 - 02/01/2021 125,000.00 1.900%14,842.50 139,842.50 -139,842.50 154,685.00 08/01/2021 --13,655.00 13,655.00 -13,655.00 - 02/01/2022 125,000.00 2.050%13,655.00 138,655.00 -138,655.00 152,310.00 08/01/2022 --12,373.75 12,373.75 -12,373.75 - 02/01/2023 125,000.00 2.200%12,373.75 137,373.75 -137,373.75 149,747.50 08/01/2023 --10,998.75 10,998.75 -10,998.75 - 02/01/2024 130,000.00 2.300%10,998.75 140,998.75 -140,998.75 151,997.50 08/01/2024 --9,503.75 9,503.75 -9,503.75 - 02/01/2025 135,000.00 2.450%9,503.75 144,503.75 -144,503.75 154,007.50 08/01/2025 --7,850.00 7,850.00 -7,850.00 - 02/01/2026 135,000.00 2.600%7,850.00 142,850.00 -142,850.00 150,700.00 08/01/2026 --6,095.00 6,095.00 -6,095.00 - 02/01/2027 140,000.00 2.700%6,095.00 146,095.00 -146,095.00 152,190.00 08/01/2027 --4,205.00 4,205.00 -4,205.00 - 02/01/2028 145,000.00 2.800%4,205.00 149,205.00 -149,205.00 153,410.00 08/01/2028 --2,175.00 2,175.00 -2,175.00 - 02/01/2029 150,000.00 2.900%2,175.00 152,175.00 -152,175.00 154,350.00 Total $1,330,000.00 -$215,224.71 $1,545,224.71 (20,042.21)$1,525,182.50 - Significant Dates Dated 6/14/2018 First Coupon Date 2/01/2019 Yield Statistics Bond Year Dollars $8,413.64 Average Life 6.326 Years Average Coupon 2.5580455% Net Interest Cost (NIC)2.7161222% True Interest Cost (TIC)2.7233151% Bond Yield for Arbitrage Purposes 2.7635286% All Inclusive Cost (AIC)2.9034249% IRS Form 8038 Net Interest Cost 2.5580455% Weighted Average Maturity 6.326 Years Series 2018A GO Bonds - # | Sidewalks/Trails | 4/ 9/2018 | 11:41 AM City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 11 St Louis Park, Minnesota $260,000 General Obligation Bonds, Series 2018A Fiber Assumes Current Market BQ AAA rates plus 25bps Debt Service Schedule Date Principal Coupon Interest Total P+I CIF Net New D/S Fiscal Total 06/14/2018 ------- 02/01/2019 --3,907.87 3,907.87 (3,907.87)-- 08/01/2019 --3,098.75 3,098.75 -3,098.75 - 02/01/2020 25,000.00 1.750%3,098.75 28,098.75 -28,098.75 31,197.50 08/01/2020 --2,880.00 2,880.00 -2,880.00 - 02/01/2021 25,000.00 1.900%2,880.00 27,880.00 -27,880.00 30,760.00 08/01/2021 --2,642.50 2,642.50 -2,642.50 - 02/01/2022 25,000.00 2.050%2,642.50 27,642.50 -27,642.50 30,285.00 08/01/2022 --2,386.25 2,386.25 -2,386.25 - 02/01/2023 25,000.00 2.200%2,386.25 27,386.25 -27,386.25 29,772.50 08/01/2023 --2,111.25 2,111.25 -2,111.25 - 02/01/2024 25,000.00 2.300%2,111.25 27,111.25 -27,111.25 29,222.50 08/01/2024 --1,823.75 1,823.75 -1,823.75 - 02/01/2025 25,000.00 2.450%1,823.75 26,823.75 -26,823.75 28,647.50 08/01/2025 --1,517.50 1,517.50 -1,517.50 - 02/01/2026 25,000.00 2.600%1,517.50 26,517.50 -26,517.50 28,035.00 08/01/2026 --1,192.50 1,192.50 -1,192.50 - 02/01/2027 25,000.00 2.700%1,192.50 26,192.50 -26,192.50 27,385.00 08/01/2027 --855.00 855.00 -855.00 - 02/01/2028 30,000.00 2.800%855.00 30,855.00 -30,855.00 31,710.00 08/01/2028 --435.00 435.00 -435.00 - 02/01/2029 30,000.00 2.900%435.00 30,435.00 -30,435.00 30,870.00 Total $260,000.00 -$41,792.87 $301,792.87 (3,907.87)$297,885.00 - Significant Dates Dated 6/14/2018 First Coupon Date 2/01/2019 Yield Statistics Bond Year Dollars $1,633.94 Average Life 6.284 Years Average Coupon 2.5577901% Net Interest Cost (NIC)2.7169143% True Interest Cost (TIC)2.7238869% Bond Yield for Arbitrage Purposes 2.7635286% All Inclusive Cost (AIC)2.9051959% IRS Form 8038 Net Interest Cost 2.5577901% Weighted Average Maturity 6.284 Years Series 2018A GO Bonds - # | Fiber | 4/ 9/2018 | 11:41 AM City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 12 St Louis Park, Minnesota $430,000 General Obligation Bonds, Series 2018A Softball Fields Assumes Current Market BQ AAA rates plus 25bps Debt Service Schedule Date Principal Coupon Interest Total P+I CIF Net New D/S Fiscal Total 06/14/2018 ------- 02/01/2019 --6,480.53 6,480.53 (6,480.53)-- 08/01/2019 --5,138.75 5,138.75 -5,138.75 - 02/01/2020 40,000.00 1.750%5,138.75 45,138.75 -45,138.75 50,277.50 08/01/2020 --4,788.75 4,788.75 -4,788.75 - 02/01/2021 40,000.00 1.900%4,788.75 44,788.75 -44,788.75 49,577.50 08/01/2021 --4,408.75 4,408.75 -4,408.75 - 02/01/2022 40,000.00 2.050%4,408.75 44,408.75 -44,408.75 48,817.50 08/01/2022 --3,998.75 3,998.75 -3,998.75 - 02/01/2023 40,000.00 2.200%3,998.75 43,998.75 -43,998.75 47,997.50 08/01/2023 --3,558.75 3,558.75 -3,558.75 - 02/01/2024 40,000.00 2.300%3,558.75 43,558.75 -43,558.75 47,117.50 08/01/2024 --3,098.75 3,098.75 -3,098.75 - 02/01/2025 45,000.00 2.450%3,098.75 48,098.75 -48,098.75 51,197.50 08/01/2025 --2,547.50 2,547.50 -2,547.50 - 02/01/2026 45,000.00 2.600%2,547.50 47,547.50 -47,547.50 50,095.00 08/01/2026 --1,962.50 1,962.50 -1,962.50 - 02/01/2027 45,000.00 2.700%1,962.50 46,962.50 -46,962.50 48,925.00 08/01/2027 --1,355.00 1,355.00 -1,355.00 - 02/01/2028 45,000.00 2.800%1,355.00 46,355.00 -46,355.00 47,710.00 08/01/2028 --725.00 725.00 -725.00 - 02/01/2029 50,000.00 2.900%725.00 50,725.00 -50,725.00 51,450.00 Total $430,000.00 -$69,645.53 $499,645.53 (6,480.53)$493,165.00 - Significant Dates Dated 6/14/2018 First Coupon Date 2/01/2019 Yield Statistics Bond Year Dollars $2,721.14 Average Life 6.328 Years Average Coupon 2.5594258% Net Interest Cost (NIC)2.7174478% True Interest Cost (TIC)2.7246494% Bond Yield for Arbitrage Purposes 2.7635286% All Inclusive Cost (AIC)2.9047326% IRS Form 8038 Net Interest Cost 2.5594258% Weighted Average Maturity 6.328 Years Series 2018A GO Bonds - # | Softball Fields | 4/ 9/2018 | 11:41 AM City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 13 St Louis Park, Minnesota $3,060,000 General Obligation Bonds, Series 2018A Water Treatment Plant #4 Filter Assumes Current Market BQ AAA rates plus 25bps Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 06/14/2018 ----- 02/01/2019 200,000.00 1.600%49,345.70 249,345.70 249,345.70 08/01/2019 --37,528.75 37,528.75 - 02/01/2020 175,000.00 1.750%37,528.75 212,528.75 250,057.50 08/01/2020 --35,997.50 35,997.50 - 02/01/2021 180,000.00 1.900%35,997.50 215,997.50 251,995.00 08/01/2021 --34,287.50 34,287.50 - 02/01/2022 180,000.00 2.050%34,287.50 214,287.50 248,575.00 08/01/2022 --32,442.50 32,442.50 - 02/01/2023 185,000.00 2.200%32,442.50 217,442.50 249,885.00 08/01/2023 --30,407.50 30,407.50 - 02/01/2024 190,000.00 2.300%30,407.50 220,407.50 250,815.00 08/01/2024 --28,222.50 28,222.50 - 02/01/2025 195,000.00 2.450%28,222.50 223,222.50 251,445.00 08/01/2025 --25,833.75 25,833.75 - 02/01/2026 200,000.00 2.600%25,833.75 225,833.75 251,667.50 08/01/2026 --23,233.75 23,233.75 - 02/01/2027 205,000.00 2.700%23,233.75 228,233.75 251,467.50 08/01/2027 --20,466.25 20,466.25 - 02/01/2028 210,000.00 2.800%20,466.25 230,466.25 250,932.50 08/01/2028 --17,526.25 17,526.25 - 02/01/2029 215,000.00 2.900%17,526.25 232,526.25 250,052.50 08/01/2029 --14,408.75 14,408.75 - 02/01/2030 220,000.00 3.000%14,408.75 234,408.75 248,817.50 08/01/2030 --11,108.75 11,108.75 - 02/01/2031 230,000.00 3.050%11,108.75 241,108.75 252,217.50 08/01/2031 --7,601.25 7,601.25 - 02/01/2032 235,000.00 3.150%7,601.25 242,601.25 250,202.50 08/01/2032 --3,900.00 3,900.00 - 02/01/2033 240,000.00 3.250%3,900.00 243,900.00 247,800.00 Total $3,060,000.00 -$695,275.70 $3,755,275.70 - Yield Statistics Bond Year Dollars $24,539.50 Average Life 8.019 Years Average Coupon 2.8332920% Net Interest Cost (NIC)2.9579890% True Interest Cost (TIC)2.9598411% Bond Yield for Arbitrage Purposes 2.7635286% All Inclusive Cost (AIC)3.1085452% IRS Form 8038 Net Interest Cost 2.8332920% Weighted Average Maturity 8.019 Years Series 2018A GO Bonds - # | Water Treatment Plant #4 | 4/ 9/2018 | 11:41 AM City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 14 St Louis Park, Minnesota $2,575,000 General Obligation Bonds, Series 2018A Water Rehab/Infrastructure Assumes Current Market BQ AAA rates plus 25bps Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 06/14/2018 ----- 02/01/2019 170,000.00 1.600%41,498.44 211,498.44 211,498.44 08/01/2019 --31,546.25 31,546.25 - 02/01/2020 150,000.00 1.750%31,546.25 181,546.25 213,092.50 08/01/2020 --30,233.75 30,233.75 - 02/01/2021 150,000.00 1.900%30,233.75 180,233.75 210,467.50 08/01/2021 --28,808.75 28,808.75 - 02/01/2022 155,000.00 2.050%28,808.75 183,808.75 212,617.50 08/01/2022 --27,220.00 27,220.00 - 02/01/2023 155,000.00 2.200%27,220.00 182,220.00 209,440.00 08/01/2023 --25,515.00 25,515.00 - 02/01/2024 160,000.00 2.300%25,515.00 185,515.00 211,030.00 08/01/2024 --23,675.00 23,675.00 - 02/01/2025 165,000.00 2.450%23,675.00 188,675.00 212,350.00 08/01/2025 --21,653.75 21,653.75 - 02/01/2026 165,000.00 2.600%21,653.75 186,653.75 208,307.50 08/01/2026 --19,508.75 19,508.75 - 02/01/2027 170,000.00 2.700%19,508.75 189,508.75 209,017.50 08/01/2027 --17,213.75 17,213.75 - 02/01/2028 175,000.00 2.800%17,213.75 192,213.75 209,427.50 08/01/2028 --14,763.75 14,763.75 - 02/01/2029 180,000.00 2.900%14,763.75 194,763.75 209,527.50 08/01/2029 --12,153.75 12,153.75 - 02/01/2030 185,000.00 3.000%12,153.75 197,153.75 209,307.50 08/01/2030 --9,378.75 9,378.75 - 02/01/2031 190,000.00 3.050%9,378.75 199,378.75 208,757.50 08/01/2031 --6,481.25 6,481.25 - 02/01/2032 200,000.00 3.150%6,481.25 206,481.25 212,962.50 08/01/2032 --3,331.25 3,331.25 - 02/01/2033 205,000.00 3.250%3,331.25 208,331.25 211,662.50 Total $2,575,000.00 -$584,465.94 $3,159,465.94 - Yield Statistics Bond Year Dollars $20,623.68 Average Life 8.009 Years Average Coupon 2.8339556% Net Interest Cost (NIC)2.9588120% True Interest Cost (TIC)2.9605712% Bond Yield for Arbitrage Purposes 2.7635286% All Inclusive Cost (AIC)3.1094861% IRS Form 8038 Net Interest Cost 2.8339556% Weighted Average Maturity 8.009 Years Series 2018A GO Bonds - # | Water Rehab/Infrastructur | 4/ 9/2018 | 11:41 AM City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 15 St Louis Park, Minnesota $1,145,000 General Obligation Bonds, Series 2018A Sanitary Sewer Assumes Current Market BQ AAA rates plus 25bps Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 06/14/2018 ----- 02/01/2019 75,000.00 1.600%18,481.58 93,481.58 93,481.58 08/01/2019 --14,055.00 14,055.00 - 02/01/2020 65,000.00 1.750%14,055.00 79,055.00 93,110.00 08/01/2020 --13,486.25 13,486.25 - 02/01/2021 65,000.00 1.900%13,486.25 78,486.25 91,972.50 08/01/2021 --12,868.75 12,868.75 - 02/01/2022 70,000.00 2.050%12,868.75 82,868.75 95,737.50 08/01/2022 --12,151.25 12,151.25 - 02/01/2023 70,000.00 2.200%12,151.25 82,151.25 94,302.50 08/01/2023 --11,381.25 11,381.25 - 02/01/2024 70,000.00 2.300%11,381.25 81,381.25 92,762.50 08/01/2024 --10,576.25 10,576.25 - 02/01/2025 70,000.00 2.450%10,576.25 80,576.25 91,152.50 08/01/2025 --9,718.75 9,718.75 - 02/01/2026 75,000.00 2.600%9,718.75 84,718.75 94,437.50 08/01/2026 --8,743.75 8,743.75 - 02/01/2027 75,000.00 2.700%8,743.75 83,743.75 92,487.50 08/01/2027 --7,731.25 7,731.25 - 02/01/2028 80,000.00 2.800%7,731.25 87,731.25 95,462.50 08/01/2028 --6,611.25 6,611.25 - 02/01/2029 80,000.00 2.900%6,611.25 86,611.25 93,222.50 08/01/2029 --5,451.25 5,451.25 - 02/01/2030 85,000.00 3.000%5,451.25 90,451.25 95,902.50 08/01/2030 --4,176.25 4,176.25 - 02/01/2031 85,000.00 3.050%4,176.25 89,176.25 93,352.50 08/01/2031 --2,880.00 2,880.00 - 02/01/2032 90,000.00 3.150%2,880.00 92,880.00 95,760.00 08/01/2032 --1,462.50 1,462.50 - 02/01/2033 90,000.00 3.250%1,462.50 91,462.50 92,925.00 Total $1,145,000.00 -$261,069.08 $1,406,069.08 - Yield Statistics Bond Year Dollars $9,206.99 Average Life 8.041 Years Average Coupon 2.8355542% Net Interest Cost (NIC)2.9599163% True Interest Cost (TIC)2.9618030% Bond Yield for Arbitrage Purposes 2.7635286% All Inclusive Cost (AIC)3.1101677% IRS Form 8038 Net Interest Cost 2.8355542% Weighted Average Maturity 8.041 Years Series 2018A GO Bonds - # | Sanitary Sewer | 4/ 9/2018 | 11:41 AM City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 16 Extract of Minutes of Meeting of the City Council of the City OF St. Louis Park, Hennepin County, Minnesota Pursuant to due call and notice thereof a regular meeting of the City Council of the City of St. Louis Park, Minnesota, was held at the City Hall in the City on Monday, April 16, 2018, commencing at 7:30 P.M. The following members of the Council were present: and the following were absent: * * * * * * * * * Member _____________ presented the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 17 2 RESOLUTION NO. 18-_____ RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF GENERAL OBLIGATION BONDS, SERIES 2018A, IN THE PROPOSED AGGREGATE PRINCIPAL AMOUNT OF $8,800,000 BE IT RESOLVED By the City Council of the City of St. Louis Park, Hennepin County, Minnesota (the “City”) as follows: 1. Charter Bonds. (a) Pursuant to Section 6.15 of the City Charter (the “Charter”) and Minnesota Statutes, Chapter 475, as amended (the “Municipal Debt Act”), the City is authorized to issue general obligation bonds for any purpose permitted by state law upon a vote of at least six (6) members of the City Council. (b) The City has determined to finance the construction of projects related to sidewalks, trails, fiber extension, and softball fields in the City (collectively, the “Capital Projects”). (c) It is necessary and expedient to the sound financial management of the affairs of the City to issue its general obligations in the approximate aggregate principal amount of $2,020,000 (the “Charter Bonds”), pursuant to the City Charter and the Municipal Debt Act, to provide financing for the Capital Projects. 2. Utility Revenue Bonds. (a) The City engineer has recommended the construction of various improvements to the City’s water and sewer systems, including improvements to the water treatment plant filter #4, water rehabilitation and infrastructure projects, and sanitary sewer capital projects (collectively, the “Utility Improvements”), pursuant to Minnesota Statutes, Chapters 444 and 475, as amended (collectively, the “Utility Revenue Act”). (b) It is necessary and expedient to the sound financial management of the affairs of the City to issue general obligations in the approximate aggregate principal amount of $6,780,000 (the “Utility Revenue Bonds”), pursuant to the Utility Revenue Act, to provide financing for the Utility Improvements. 3. Sale of Bonds. (a) The City Council finds it necessary and expedient to the sound financial management of the affairs of the City that the City issue its General Obligation Bonds, Series 2018A (the “Bonds”), in the proposed aggregate principal amount of $8,800,000, City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 18 3 pursuant to the Municipal Debt Act and the Utility Revenue Act (together, the “Act”) and the City Charter, in order to provide financing for the Capital Projects and the Utility Improvements. (b) The City is authorized by Section 475.60, subdivision 2(9) of the Act to negotiate the sale of the Bonds, it being determined that the City has retained an independent municipal advisor in connection with such sale. 4. Authority of Municipal Advisor. Ehlers & Associates, Inc., the municipal advisor to the City (the “Municipal Advisor”), is authorized and directed to negotiate the sale of the Bonds. The City Council will meet at 7:30 P.M. on Monday, May 21, 2018, to consider proposals on the Bonds and take any other appropriate action with respect to the Bonds. 5. Authority of Bond Counsel. The law firm of Kennedy & Graven, Chartered, as bond counsel for the City, is authorized to act as bond counsel and to assist in the preparation and review of necessary documents, certificates and instruments relating to the Bonds. The officers, employees and agents of the City are hereby authorized to assist Kennedy & Graven, Chartered in the preparation of such documents, certificates, and instruments. 6. Covenants. In the resolution awarding the sale of the Bonds the City Council will set forth the covenants and undertakings required by the Act. 7. Official Statement. In connection with the sale of the Bonds, the officers or employees of the City are authorized and directed to cooperate with the Municipal Advisor and participate in the preparation of an official statement for the Bonds and to execute and deliver it on behalf of the City upon its completion. (The remainder of this page is intentionally left blank.) City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 19 4 The motion for the adoption of the foregoing resolution was duly seconded by City Council Member ______________, and, after full discussion thereof and upon a vote being taken thereon, the following City Council Members voted in favor thereof: Reviewed for Administration: Adopted by the City Council April 16, 2018 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 20 STATE OF MINNESOTA ) ) COUNTY OF HENNEPIN ) ) CITY OF ST. LOUIS PARK ) I, the undersigned, being the duly qualified City Clerk of the City of St. Louis Park, Minnesota (the “City”), hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on Monday, April 16, 2018, with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes, insofar as they relate to the issuance and sale of the City’s General Obligation Bonds, Series 2018A, in the proposed aggregate principal amount of $8,800,000. WITNESS My hand as City Clerk and the corporate seal of the City this ____ day of ________________, 2018. Melissa Kennedy, City Clerk City of St. Louis Park, Minnesota (SEAL) City Council Meeting of April 16, 2018 (Item No. 4e) Title: Series 2018A General Obligation Bonds Page 21 Meeting: City Council Meeting Date: April 16, 2018 Consent Agenda Item: 4f EXECUTIVE SUMMARY TITLE: 2018 – 2019 Minnesota GreenCorps Host Site Application RECOMMENDED ACTION: Motion to Adopt Resolution supporting the City of St. Louis Park’s application for becoming a 2018 – 2019 Minnesota GreenCorps Member Host Site. POLICY CONSIDERATION: Does the Council wish to support making application to be a host site for the 2018 – 2019 Minnesota GreenCorps program? SUMMARY: Minnesota GreenCorps is an environmentally focused AmeriCorps program coordinated by the Minnesota Pollution Control Agency (MPCA), which places members with organizations around the state to spend a year of service addressing critical environmental issues, while gaining experience and learning valuable job skills. Staff has submitted an application to the MPCA to be a Minnesota GreenCorps member host site. The proposed service project is focused on event recycling, multi-family reuse and recycling education and internal city recycling. This project would serve to connect efforts across departments in relation to event reccyling, expand on the multi-family efforts of our current GreenCorps member, and support recycling education for the internal city recycling program. FINANCIAL OR BUDGET CONSIDERATION: The MPCA provides GreenCorps members with a stipend and educational award. The only cost to the City would be $500 for additional training during the member’s eleven month service period. VISION CONSIDERATION: St. Louis Park is committed to being a leader in environmental stewardship. We will increase environmental consciousness and responsibility in all areas of city business. SUPPORTING DOCUMENTS: Resolution Prepared by: Emily Barker, Solid Waste Program Specialist Reviewed by: Scott Merkley, Public Works Services Manager Cynthia S. Walsh, Director of Operations & Recreation Approved by: Tom Harmening, City Manager City Council Meeting of April 16, 2018 (Item No. 4f) Page 2 Title: 2018 – 2019 Minnesota GreenCorps Host Site Application RESOLUTION NO. 18 – ____ RESOLUTION SUPPORTING CITY OF ST. LOUIS PARK BECOMING A 2018 – 2019 MINNESOTA GREENCORPS MEMBER HOST SITE WHEREAS, the City of St. Louis Park (City) has applied to host an AmeriCorps member from the Minnesota GreenCorps, a program of the Minnesota Pollution Control Agency (MPCA), for the 2018 – 2019 program year; and WHEREAS, the MPCA requires a City Council resolution in support of the GreenCorps host site application, indicating the organization’s commitment to host a Minnesota GreenCorps member; and WHEREAS, if the MPCA selects the City to host a Minnesota GreenCorps member, the City is committed to implementing the proposed project as described in the host site application, and in accordance with pre-scoped position description; and WHEREAS, the MPCA requires that the City enter into a host site agreement with the MPCA that identifies the terms, conditions, roles and responsibilities; and WHEREAS, the proposed Minnesota GreenCorps member position for the City is to include solid waste duties related to event recycling, multi-family reuse and recycling education, and internal city recycling; THEREFORE, BE IT RESOLVED that the City of St. Louis Park hereby agrees to enter into and sign a host site agreement with the MPCA to carry out the member activities specified therein and to comply with all of the terms, conditions, and matching provisions of the host site agreement and authorizes and directs the City to sign the grant agreement on its behalf. Reviewed for Administration: Adopted by the City Council April 16, 2018 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk Meeting: City Council Meeting Date: April 16, 2018 Consent Agenda Item: 4g EXECUTIVE SUMMARY TITLE: 2017 Year End Fund Equity Transfers RECOMMENDED ACTION: Motion to Adopt Resolution authorizing fund equity transfers. POLICY CONSIDERATION: Will the proposed transfers help insure the city remains financially stable? SUMMARY: This report includes information on the projected level of fund balance in the General Fund and proposed transfers between funds for the year ending December 31, 2017. The need for transfers between funds is analyzed each year and information is forwarded to Council for approval prior to the audit. Transferring out excess fund balance from the General Fund to other funds ensures that funds align with the City’s fund balance policy, Long Range Financial Management Plan and Capital Improvement Plan, and provides appropriate funding for one-time expenditures with one-time revenue. The City has routinely made equity transfers from the General Fund in the past. FINANCIAL OR BUDGET CONSIDERATION: The proposed transfers will direct resources to funds where needed and help to attain long-term financial sustainability. Resources will also be assigned for specific future projects. VISION CONSIDERATION: Not applicable SUPPORTING DOCUMENTS: Discussion Resolution Prepared by: Tim Simon, Chief Financial Officer Reviewed by: Nancy Deno, Deputy City Manager/HR Director Approved by: Tom Harmening, City Manager Page 2 City Council Meeting of April 16, 2018 (Item No. 4g) Title: 2017 Year End Fund Equity Transfers DISCUSSION BACKGROUND: At the end of each calendar year, funds are analyzed along with the Long Range Financial Management Plan and Capital Improvement Plan to determine if transfers should be recommended to meet fund balance policy requirements, to assist with long-term sustainability of other funds and to provide funding for specific projects. PRESENT CONSIDERATIONS: As per the December 31, 2016 Comprehensive Annual Financial Report (CAFR), the unassigned fund balance in the General Fund was $16,193,763, which was equal to 45.2% of the 2017 budgeted expenditures. The City’s Fund Balance Policy states that the City will strive to maintain an unassigned fund balance in the General Fund that is within a range of 40% to 50% of the following year’s budgeted expenditures with a target of 45%, and that any excess amount can be transferred to other funds, primarily for one-time expenditures. The City’s policy follows the Office of the State Auditor’s recommended fund balance guidelines and aligns with that of AAA rated cities. Staff anticipates that the unassigned fund balance in the General Fund for the year ending December 31, 2017 will increase to approximately 47% of the 2018 budgeted expenditures. Therefore, $885,000 will be available to transfer to other funds to maintain a reserve near the target of approximately 45% of the subsequent year’s budgeted expenditures. After discussions and review of the most current Long Range Financial Management Plan, Staff is recommending transfers of $400,000 to the Pavement Management Fund, $200,000 to the Capital Replacement Fund, $100,000 to the Uninsured Loss Fund and $185,000 to the Permanent Improvement Revolving (PIR) Fund. With these recommended transfers to other funds, the unassigned fund balance in the General Fund for the year ending December 31, 2017 is projected to be in a range of 44% to 46% of the 2018 budgeted expenditures at completion of the audit in May. Pavement Management Fund – Transfer in of $400,000: The Pavement Management Fund provides funding for pavement rehabilitation projects within the City. The primary funding source for Pavement Management is gas and electric franchise fees. With the expansion of the Pavement Management program and fluctuating bid prices, an equity transfer of $400,000 from the General Fund to the Pavement Management Fund is proposed in 2017. This transfer should help to stabilize the fund in future years. Capital Replacement Fund – Transfer in of $200,000: The Capital Replacement Fund provides for all technology, vehicles, equipment and municipal building improvement projects. The fund receives a portion of the property tax levy, the City’s local government aid distribution and equipment replacement charges from other funds. An equity transfer from the General Fund of $200,000 is being recommended to help provide funding for Climate Action Plan capital projects in future years. Uninsured Loss Fund – Transfer in of $100,000: The Uninsured Loss Fund covers the City’s costs of liability and property damage claims not covered by insurance, or until the annual deductible and aggregate limits have been met. The only revenue sources for this fund are claim recoveries from third parties and the annual property/casualty dividend returned by the League of Minnesota Cities Insurance Trust. Due to Page 3 City Council Meeting of April 16, 2018 (Item No. 4g) Title: 2017 Year End Fund Equity Transfers insurance claims we have received over time, a transfer of $100,000 is proposed from the General Fund to help sustain the fund. Permanent Improvement Revolving Fund – Transfer in of $185,000: The intended purpose of the Permanent Improvement Revolving (PIR) Fund is to provide cash flow for special assessments and Municipal State Aid reimbursable construction projects. The proposed transfer of $185,000 in 2017 will be assigned for the replacement of street light poles in the Special Service Districts. Page 4 City Council Meeting of April 16, 2018 (Item No. 4g) Title: 2017 Year End Fund Equity Transfers RESOLUTION NO. 18-____ RESOLUTION AUTHORIZING FUND EQUITY TRANSFERS WHEREAS, the City of St. Louis Park has created various special purpose funds; and WHEREAS, some of those funds rely on transfers from other funds for their continued operation; and WHEREAS, specific one-time expenditures require resources from other funds; NOW, THEREFORE, BE IT RESOLVED, by the St. Louis Park City Council: Approval is hereby given to the Chief Financial Officer to transfer the following sums of money as of the year ending December 31, 2017 from the General Fund to the Pavement Management Fund, Capital Replacement Fund, Uninsured Loss Fund and Permanent Improvement Revolving Fund as shown. Transferring Fund Receiving Fund Amount General Fund Pavement Management Fund $ 400,000 General Fund Capital Replacement Fund $ 200,000 General Fund Uninsured Loss Fund $ 100,000 General Fund Permanent Improvement Revolving Fund $ 185,000 Reviewed for Administration: Adopted by the City Council April 16, 2018 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk Meeting: City Council Meeting Date: April 16, 2018 Consent Agenda Item: 4h EXECUTIVE SUMMARY TITLE: Accept Monetary Donation from Rotary Club of St. Louis Park for the Summer Concert Series ($1,000) RECOMMENDED ACTION: Motion to Adopt Resolution approving acceptance of a monetary donation from the Rotary Club of St. Louis Park in the amount of $1,000 for the Recreation Division’s Summer Concert Series. POLICY CONSIDERATION: Does the City Council wish to accept the gift with restrictions on its use? SUMMARY: State statute requires City Council’s acceptance of donations. This requirement is necessary in order to make sure the City Council has knowledge of any restrictions placed on the use of each donation prior to it being expended. The Rotary Club of St. Louis Park is graciously donating an amount of $1,000. The donation is given with the restriction that it be used toward the Summer Concert Series. FINANCIAL OR BUDGET CONSIDERATION: This donation will be used to support the Recreation Division’s Summer Concert Series. The Series is budgeted in the Organized Recreation budget. VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community. SUPPORTING DOCUMENTS: Resolution Prepared by: Stacy M. Voelker, Senior Office Assistant Lisa Abernathy, Recreation Supervisor Reviewed by: Cynthia S. Walsh, Director of Operations & Recreation Approved by: Tom Harmening, City Manager City Council Meeting of April 16, 2018 (Item No. 4h) Page 2 Title: Accept Monetary Donation from Rotary Club of St. Louis Park for the Summer Concert Series ($1,000) RESOLUTION NO. 18-____ RESOLUTION APPROVING ACCEPTANCE OF DONATION IN THE AMOUNT OF $1,000 TO BE USED FOR THE SUMMER CONCERT SERIES WHEREAS, The City of St. Louis Park is required by State statute to authorize acceptance of any donations; and WHEREAS, the City Council must also ratify any restrictions placed on the donation by the donor; and WHEREAS, the Rotary Club of St. Louis Park donated $1,000 to assist in the funding of the Recreation Division’s Summer Concert Series; and NOW THEREFORE BE IT RESOLVED, by the City Council of the City of St. Louis Park that the gift is hereby accepted with thanks to the Rotary Club of St. Louis Park with the understanding that it must be used to assist in funding the Recreation Division’s Summer Concert Series. Reviewed for Administration Adopted by the City Council April 16, 2018 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk Meeting: City Council Meeting Date: April 16, 2018 Consent Agenda Item: 4i EXECUTIVE SUMMARY TITLE: Fifth Amendment to Central Park West Redevelopment Contract RECOMMENDED ACTION: Motion to Adopt Resolution approving the Fifth Amendment to the Contract for Private Redevelopment with Central Park West, LLC and the modification to the CPW Phase II Assessment Agreement. POLICY CONSIDERATION: Does the EDA/City Council support extending the required commencement and completion dates of the Central Park West Phases IV and V office buildings by two years? Does the EDA/City Council support extending the required commencement and completion dates of the Central Park West Phase II apartment building by approximately three years as well as extending its related minimum assessment agreement? SUMMARY: As was discussed at the March 26th study session (see attached staff report) developers responsible for constructing the Central Park West office buildings (CPW Phases IV and V) have requested to extend the construction schedule for the facilities by two years to allow additional time to prelease the buildings and attract equity investors. Additionally, the developer for CPW Phase II (second apt building) has also requested an extension. Under the proposed Fifth Amendment to the Redevelopment Contract the required project commencement and completion dates for Phases II, IV and V would be modified as follows: PROPOSED REVISED CONSTRUCTION SCHEDULE FINANCIAL OR BUDGET CONSIDERATION: The proposed Modification to Assessment Agreement extends implementation of the minimum assessment agreement for the CPW Phase II property. Without the modification, CPW would be paying property taxes on undeveloped land valued at over $30 million for the next several years under the current Assessment Agreement. CPW has indicated this would create an extreme financial hardship and has requested to modify the existing Assessment Agreement to implement the higher assessed value on January 2, 2023, to coincide with the revised CPW Phase II construction schedule. SUPPORTING DOCUMENTS: Discussion March 26, 2018 Staff Report (included in EDA staff report) Resolution of Approval Proposed Fifth Amendment (included in EDA staff report) Prepared by: Greg Hunt, Economic Development Coordinator Reviewed by: Karen Barton, Community Development Director Approved by: Tom Harmening, EDA Executive Director, and City Manager Central Park West Phase Current Required Commencement Date Proposed Revised Commencement Date Current Required Completion Date Proposed Revised Commencement Date Phase II (apt building #2) October 2, 2017 April 1, 2020 March 4, 2019 April 1, 2022 Phase IV (office building #1) April 1, 2018 April 1, 2020 September 30, 2019 September 30, 2021 Phase V (office building #2) April 1, 2021 April 1, 2023 September 30, 2022 September 30, 2024 City Council Meeting of April 16, 2018 (Item No. 4i) Page 2 Title: Fifth Amendment to Central Park West Redevelopment Contract DISCUSSION Supplement to March 26th Central Park West Project Update: Construction of the CPW Civic Space (Linear Park) has been completed, and the Woonerf will be completed with final landscaping to be installed this spring. City Council Meeting of April 16, 2018 (Item No. 4i) Page 3 Title: Fifth Amendment to Central Park West Redevelopment Contract CITY OF ST. LOUIS PARK RESOLUTION NO. 18-____ RESOLUTION APPROVING A FIFTH AMENDMENT TO AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT AMONG THE CITY OF ST. LOUIS PARK, THE ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY, CENTRAL PARK WEST, LLC, AND RELATED REDEVELOPER ENTITIES BE IT RESOLVED By the City Council ("Council") of the City of St. Louis Park ("City") as follows: Section 1. Recitals. 1.01. The St. Louis Park Economic Development Authority (the “Authority”) is currently administering its Redevelopment Project No. 1 ("Project") within the City pursuant to Minnesota Statutes, Sections 469.001 to 469.047 ("HRA Act"), and within the Project has established The West End Tax Increment Financing District (“TIF District”). 1.02. The Authority, the City, and Duke Realty Limited Partnership (“Duke”) entered into an Amended and Restated Contract for Private Redevelopment dated as of May 17, 2010, regarding redevelopment of a portion of the property within the TIF District, as subsequently amended (as so amended, the “Contract”). 1.03. Duke has assigned its obligations under the Contract to Central Park West, LLC (“CPW”), and CPW has assigned certain of its obligations under the Contract to Central Park West Phase II Land, LLC, Millenium Phase II, LLC, OP4 SLP, LLC, and ACSLP, LLC, all pursuant to various Assignment and Assumption instruments approved by the Authority (such entities collectively the “Redeveloper Entities”). 1.04. The parties to the Contract have determined a need to revise the Contract in order to extend the required construction timeline for CPW Phase II, CPW Phase IV, and CPW Phase V (as defined in the Contract), and to that end have prepared a Fifth Amendment to Amended and Restated Contract for Private Redevelopment (the “Fifth Amendment”), by and among the Authority, the City, and the Redeveloper Entities. 1.05. The Council has reviewed the Fifth Amendment and finds that the approval and execution thereof and performance of the City’s obligations thereunder are in the best interest of the City and its residents. Section 2. City Approval; Other Proceedings. 2.01. The Fifth Amendment as presented to the Council is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the Mayor and City Manager, provided that execution of the documents by such officials shall be conclusive evidence of approval. City Council Meeting of April 16, 2018 (Item No. 4i) Page 4 Title: Fifth Amendment to Central Park West Redevelopment Contract 2.02. The Mayor and City Manager are hereby authorized to execute on behalf of the City the Fifth Amendment and any documents referenced therein requiring execution by the City, and to carry out, on behalf of the City, its obligations thereunder. 2.03. City staff and consultants are authorized to take any actions necessary to carry out the intent of this resolution. Reviewed for Administration: Adopted by the City Council April 16, 2018 Thomas K. Harmening, City Manager Jacob Spano, Mayor Attest: Melissa Kennedy, City Clerk Meeting: City Council Meeting Date: April 16, 2018 Public Hearing Agenda Item: 6a EXECUTIVE SUMMARY TITLE: First Reading of Ordinance Amending St. Louis Park Home Rule Charter Sec. 12.08 Related to Voting Method RECOMMENDED ACTION: Mayor to open public hearing, take public testimony, and close public hearing. The Charter Commission has recommended the City Council approve the first reading of an ordinance amending the St. Louis Park Home Rule Charter by adding Sec. 12.08, Voting Method to allow for the use of Ranked Choice Voting in municipal elections. A unanimous vote of all 7 councilmembers is required for approval. POLICY CONSIDERATION: Will the use of “ranked-choice voting” also known as “instant runoff voting” improve the overall process by which the community elects people to serve on the City Council? SUMMARY: On October 2, 2017 the City Council adopted Resolution No. 17-153 requesting that, pursuant to M.S. 410.12, Subd. 7, the Charter Commission study and make a recommendation regarding whether the City’s Charter should or should not be amended to provide for the use of Ranked Choice Voting (RCV) in municipal elections. In order to implement the use of RCV for municipal elections, the city would need to authorize its use in the City Charter. Home rule charter cities are not required to seek legislative authorization if the RCV process is incorporated into the city charter. M.S. 410.12 provides the ways in which a City Charter can be amended. The Charter Commission met on October 24, 2017, December 6, 2017 and January 10, 2018 to discuss the Council’s request. The Charter Commission also undertook a public process to gain information and feedback on the topic of Ranked Choice Voting that included hosting an Expert Q&A Panel event on February 13, 2018 and a Public Listening Session on March 6, 2018. On March 13, 2018 the Charter Commission met and adopted Resolution No. 18-001 recommending that the St. Louis Park City Council adopt a Charter amendment by ordinance authorizing the use of ranked choice voting in municipal elections. The notice of public hearing, including the text of the proposed amendment, was published on March 22, 2018 in the Sun Sailor. FINANCIAL OR BUDGET CONSIDERATION: Staff has allocated money and identified funding sources for the resources needed (legal, voter outreach & education, communications, materials and supplies, training, and staff) for the implementation of ranked choice voting. VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community. SUPPORTING DOCUMENTS: Discussion Draft Ordinance Charter Commission Resolution M.S. 410.12 Charter Commission Meeting Minutes Prepared by: Melissa Kennedy, City Clerk Reviewed by: Nancy Deno, Deputy City Manager/HR Director Soren Mattick, City Attorney Approved by: Tom Harmening, City Manager City Council Meeting of April 16, 2018 (Item No. 6a) Page 2 Title: First Reading of Ordinance Amending St. Louis Park Home Rule Charter Sec. 12.08 Related to Voting Method DISCUSSION What is the process to amend the City Charter? In the past, amendments to the City Charter have been enacted by ordinance in accordance with the procedure outlined in M.S. § 410.12, Subd. 7. Amendment by Ordinance. Can the City Council make changes to the proposed Charter amendment? Because statute requires that the notice of the public hearing include the proposed text of the amendment, the council must vote on the amendment as presented. What is the timeline for the proposed amendment to take effect? • 3/22 Notice of Hearing Published • 4/16 Public Hearing/First Reading of Ordinance • 5/7 Second Reading of Ordinance • 5/17 Ordinance Published • 7/16 60-day deadline (for petition) • 8/15 Ordinance Effective Date (90 days after Passage and Publication) Charter Commission Recommendation On March 13, 2018 the Charter Commission made the following recommendation: • Amend the City Charter by adding Section 12.08, Voting Method, to allow for the use of single transferable voting (also known as “ranked choice voting” or “instant runoff voting”) in municipal elections. Can Ranked Choice Voting be used in Federal, State, County, or School District Elections? No, this amendment would apply to municipal elections (Mayor and City Council) only. By law, the city is not authorized to change the voting method for federal, state, county, or school district elections. The city currently holds municipal elections in odd-numbered years. What types of procedures/rules would the city need to adopt for inclusion in the city code? If the city authorizes the use of instant runoff voting in the Charter, the city then needs to develop the rules and procedures that will govern the administration of elections because such provisions are not currently set forth in State law. Provisions for definitions, ballots, counting votes, counting write-in candidates, recounts, and voting equipment are examples of the types of rules that the city will need to adopt in the city code. It should be noted that while the city has some flexibility in terms of the rules and procedures that are implemented, all of the provisions must continue to meet all state and federal election laws where applicable. What happens if a valid citizen petition is submitted after an ordinance has been adopted to amend the charter? Within 60 days after passage and publication of such an ordinance, a petition requesting a referendum on the ordinance may be filed with the city clerk. The petition must be signed by registered voters equal in number to at least five percent of the registered voters in the city or 2,000, whichever is less. If the requisite petition is filed within the prescribed period, the ordinance shall not become effective until it is approved by the voters as in the case of charter amendments submitted by the charter commission, the council, or by petition of the voters, except that the council may submit the ordinance at any general or special election held at least 60 days after submission of the petition, or it may reconsider its action in adopting the ordinance. City Council Meeting of April 16, 2018 (Item No. 6a) Page 3 Title: First Reading of Ordinance Amending St. Louis Park Home Rule Charter Sec. 12.08 Related to Voting Method Draft of Proposed Charter Amendment CITY OF ST. LOUIS PARK HENNEPIN COUNTY, MINNESOTA ORDINANCE NO. ___- 2018 AN ORDINANCE AMENDING THE ST. LOUIS PARK CITY CHARTER PREAMBLE WHEREAS, pursuant to Minn. Stat. § 410.12, subd. 7 the Charter Commission has recommended to the City Council that the Charter be amended as provided herein; and WHEREAS, Minn. Stat. § 410.12, subd. 7 provides that upon recommendation of the Charter Commission the City Council may enact a Charter Amendment by ordinance. THE CITY OF ST. LOUIS PARK ORDAINS: SECTION 1. Chapter 4 of the City Charter is amended by adding Section 4.08 to provide: Section 4.08.Voting method. The voters elect the City's elected officers by single transferable voting (also known as "ranked-choice voting" or "instant-runoff voting"). The City Council must provide by ordinance the method of counting the votes and of breaking a tie. SECTION 2. This Ordinance shall take effect 90 days after passage and publication according to law. Public Hearing April 16, 2018 First Reading April 16, 2018 Second Reading May 7, 2018 Date of Publication May 17, 2018 Date Ordinance takes effect August 15, 2018 Reviewed for Administration Adopted by the City Council , 2018 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Approved as to Form and Execution: Melissa Kennedy, City Clerk Soren Mattick, City Attorney City Council Meeting of April 16, 2018 (Item No. 6a) Page 4 Title: First Reading of Ordinance Amending St. Louis Park Home Rule Charter Sec. 12.08 Related to Voting Method CHARTER COMMISSION RESOLUTION NO. 18-001 RESOLUTION RECOMMENDING THE ST. LOUIS PARK CITY COUNCIL ADOPT A CHARTER AMENDMENT BY ORDINANCE AUTHORIZING RANKED CHOICE VOTING WHEREAS, Minn. Stat. § 410.12, subd. 7 provides that a charter commission may recommend a charter amendment to a city council and upon recommendation of the charter commission, the city council may enact a charter amendment by ordinance; and WHEREAS, on October 2, 2017, the City Council of St. Louis Park adopted Resolution 17-153 requesting that, pursuant to Minn. Stat. § 410.12, subd. 7, the Charter Commission study and make a recommendation regarding whether the City’s Charter should or should not be amended to provide for the use of Ranked Choice Voting (RCV) in municipal elections; and WHEREAS, the Charter Commission met on October 24, 2017, December 6, 2017, and January 10, 2018, to discuss the City Council’s request; and WHEREAS, the Charter Commission undertook a public process to gain information and feedback on the topic of Ranked Choice Voting that included hosting an Expert Q&A Panel event on February 13, 2018 and a Public Listening Session on March 6, 2018; and WHEREAS, the Charter Commission has determined that the City Charter should be amended to provide for RCV by Ordinance. NOW THEREFORE BE IT RESOLVED, by the Charter Commission of the City of St. Louis Park, Minnesota that: The Charter Commission recommends the City Council adopt the attached Ordinance amending the City Charter to provide for RCV. Adopted by the St. Louis Park Charter Commission March 13, 2018 Reviewed for Administration: _________________________________ _________________________________ Thomas K. Harmening City Manager Sara Maaske, Chair Attest: _________________________________ Melissa Kennedy, City Clerk 410.12 AMENDMENTS. Subdivision 1.Proposals.The charter commission may propose amendments to such charter and shall do so upon the petition of voters equal in number to five percent of the total votes cast at the last previous state general election in the city. Proposed charter amendments must be submitted at least 17 weeks before the general election. Only registered voters are eligible to sign the petition. All petitions circulated with respect to a charter amendment shall be uniform in character and shall have attached thereto the text of the proposed amendment in full; except that in the case of a proposed amendment containing more than 1,000 words,atrueandcorrectcopyofthesamemaybefiledwiththecityclerk,andthepetitionshallthencontain a summary of not less than 50 nor more than 300 words setting forth in substance the nature of the proposed amendment.Suchsummaryshallcontainastatementoftheobjectsandpurposesoftheamendmentproposed and an outline of any proposed new scheme or frame work of government and shall be sufficient to inform the signers of the petition as to what change in government is sought to be accomplished by the amendment. The summary, together with a copy of the proposed amendment, shall first be submitted to the charter commission for its approval as to form and substance. The commission shall within ten days after such submission to it, return the same to the proposers of the amendment with such modifications in statement as it may deem necessary in order that the summary may fairly comply with the requirements above set forth. Subd. 1a.Alternative methods of charter amendment.A home rule charter may be amended only by following one of the alternative methods of amendment provided in subdivisions 1 to 7. Subd. 2.Petitions.The signatures to such petition need not all be appended to one paper, but to each separate petition there shall be attached an affidavit of the circulator thereof as provided by this section. A petitionmustcontaineachpetitioner'ssignatureininkorindeliblepencilandmustindicateafterthesignature the place of residence by street and number, or other description sufficient to identify the place. There shall appear on each petition the names and addresses of five electors of the city, and on each paper the names andaddressesofthesamefiveelectors,who,asacommitteeofthepetitioners,shallberegardedasresponsible for the circulation and filing of the petition. The affidavit attached to each petition shall be as follows: )State of ......................................................... ) ss. )County of ..................................................... .............. ................. being duly sworn, deposes and says that the affiant, and the affiant only, personally circulated the foregoing paper, that all the signatures appended thereto were made in the affiant's presence, and that the affiant believes them to be the genuine signatures of the persons whose names they purport to be. Signed ............................ (Signature of Circulator) Subscribed and sworn to before me this ....... day of ...... ....... Notary Public (or other officer) authorized to administer oaths Copyright © 2017 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 410.12MINNESOTA STATUTES 20171 City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 5 Theforegoingaffidavitshallbestrictlyconstruedandanyaffiantconvictedofswearingfalselyasregards any particular thereof shall be punishable in accordance with existing law. Subd. 3.May be assembled as one petition.All petition papers for a proposed amendment shall be assembled and filed with the charter commission as one instrument. Within ten days after such petition is transmitted to the city council, the city clerk shall determine whether each paper of the petition is properly attested and whether the petition is signed by a sufficient number of voters. The city clerk shall declare any petitionpaper entirelyinvalidwhich is not attestedby the circulatorthereof as required in this section.Upon completing an examination of the petition, the city clerk shall certify the result of the examination to the council.If the cityclerkshallcertifythatthe petitionis insufficientthe cityclerkshallset forth in a certificate theparticularsinwhichitisdefectiveandshallatoncenotifythecommitteeofthepetitionersofthefindings. A petition may be amended at any time within ten days after the making of a certificate of insufficiency by the city clerk, by filing a supplementary petition upon additional papers signed and filed as provided in case ofanoriginalpetition.Thecityclerkshallwithinfivedaysaftersuchamendmentisfiled,makeexamination of the amended petition, and if the certificate shall show the petition still to be insufficient, the city clerk shall file it in the city clerk's office and notify the committee of the petitioners of the findings and no further action shall be had on such insufficient petition. The finding of the insufficiency of a petition shall not prejudice the filing of a new petition for the same purpose. Subd. 4.Election.Amendmentsshallbesubmittedtothequalifiedvotersatageneralorspecialelection and published as in the case of the original charter. The form of the ballot shall be fixed by the governing body. The statement of the question on the ballot shall be sufficient to identify the amendment clearly and to distinguish the question from every other question on the ballot at the same time. If 51 percent of the votes cast on any amendment are in favor of its adoption, copies of the amendment and certificates shall be filed, as in the case of the original charter and the amendment shall take effect in 30 days from the date of the election or at such other time as is fixed in the amendment. Subd. 5.Amendments proposed by council.The council of any city having a home rule charter may propose charter amendments to the voters by ordinance. Any ordinance proposing such an amendment shall be submitted to the charter commission. Within 60 days thereafter, the charter commission shall review the proposed amendment but before the expiration of such period the commission may extend the time for review for an additional 90 days by filing with the city clerk its resolution determining that an additional time for review is needed. After reviewing the proposed amendment, the charter commission shall approve orrejecttheproposedamendmentorsuggestasubstituteamendment.Thecommissionshallpromptlynotify the council of the action taken. On notification of the charter commission's action, the council may submit to the people, in the same manner as provided in subdivision 4, the amendment originally proposed by it or the substituteamendmentproposed by the chartercommission.The amendmentshall becomeeffectiveonly whenapprovedbythevotersasprovidedinsubdivision4.Ifsoapproveditshallbefiledinthesamemanner as other amendments. Nothing in this subdivision precludes the charter commission from proposing charter amendments in the manner provided by subdivision 1. Subd. 6.Amendments, cities of the fourth class.The council of a city of the fourth class having a home rule charter may propose charter amendments by ordinance without submission to the charter commission. Such ordinance, if enacted, shall be adopted by at least a four-fifths vote of all its members after a public hearing upon two weeks' published notice containing the text of the proposed amendment and shall be approved by the mayor and published as in the case of other ordinances. The council shall submit the proposed amendment to the people in the manner provided in subdivision 4, but not sooner than three months after the passage of the ordinance. The amendment becomes effective only when approved by the votersasprovidedinsubdivision4.Ifsoapproved,itshallbefiledinthesamemannerasotheramendments. Copyright © 2017 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 2MINNESOTA STATUTES 2017410.12 City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 6 Subd. 7.Amendmentby ordinance.Upon recommendationof thechartercommissionthecitycouncil may enact a charter amendment by ordinance. Within one month of receiving a recommendation to amend the charterby ordinance,the citymust publish noticeof a publichearingon the proposal and the noticemust contain the text of the proposed amendment. The city council must hold the public hearing on the proposed charter amendment at least two weeks but not more than one month after the notice is published. Within one month of the public hearing, the city council must vote on the proposed charter amendment ordinance. The ordinance is enacted if it receives an affirmative vote of all members of the city council and is approved by the mayor and published as in the case of other ordinances. An ordinance amending a city charter shall not become effective until 90 days after passage and publication or at such later date as is fixed in the ordinance. Within 60 days after passage and publication of such an ordinance, a petition requesting a referendum on the ordinance may be filed with the city clerk. The petition must be signed by registered voters equal in number to at least five percent of the registered voters in the city or 2,000, whichever is less. If the requisite petition is filed within the prescribed period, the ordinance shall not become effective until it is approved by the voters as in the case of charter amendments submitted by the charter commission, the council, or by petition of the voters, except that the council may submit the ordinance at any general or special election held at least 60 days after submission of the petition, or it may reconsider its action in adopting the ordinance. As far as practicable the requirements of subdivisions 1 to 3 apply to petitions submitted under this section, to an ordinance amending a charter, and to the filing of such ordinance when approved by the voters. History:(1286) RL s 756; 1907 c 199 s 1; 1911 c 343 s 1; 1939 c 292 s 1; 1943 c 227 s 1; 1949 c 122 s 1; 1959 c 305 s 3,4; 1961 c 608 s 5,6; 1969 c 1027 s 3; 1973 c 503 s 1-4; 1986 c 444; 1998 c 254 art 1 s 107; 1999 c 132 s 42; 2005 c 93 s 1; 2008 c 331 s 7; 2010 c 184 s 43 Copyright © 2017 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 410.12MINNESOTA STATUTES 20173 City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 7 OFFICIAL MINUTES CHARTER COMMISSION MEETING ST. LOUIS PARK, MINNESOTA October 24, 2017 6:00 p.m. – Community Room, City Hall 1.Call to Order Chair Maaske called the meeting to order at 6:00 p.m. 2. Roll Call and Attendance Members Present: Maren Anderson, JC Beckstrand, Jim Brimeyer, Gary Carlson, Jim de Lambert, Terry Dwyer, David Dyer, Matthew Flory, Ken Gothberg, Sara Maaske, Andrew Rose, Erin Smith, and Henry Solmer. Members Absent: Lynne Carper (absence excused), Ron Jarvi, Jr. Others Present: Nancy Deno (Deputy City Manager/HR Director), Soren Mattick (City Attorney), and Melissa Kennedy (City Clerk) New members Andrew Rose and Erin Smith introduced themselves to the commission. 3.Approval of Minutes a.March 21, 2017 Charter Commission Meeting It was moved by Commissioner Brimeyer, seconded by Commissioner Dyer, to approve the minutes of March 21, 2017. The motion passed 13-0. 4.Old Business a.Update on Approved Charter Amendment Eliminating Municipal Primary Elections and Changing Candidate Filing Requirements Ms. Kennedy informed the commission that the previously approved Charter amendment took effect on August 16, 2017. New copies of the City Charter were provided to each commissioner and the published version on the city website was also updated. 5.New Business a.Proposed Charter Amendments related to Ranked Choice Voting and Campaign Finance Contribution Limits Chair Maaske asked staff to provide an overview of the purpose of the meeting and the request from the City Council. Ms. Kennedy stated that the City Council had discussed the topic of Ranked Choice Voting (RCV) numerous times since 2006. She noted that the staff reports and minutes from the Council’s previous discussions were provided in the Charter Commission’s agenda packet at the request of Chair Maaske. She explained on October 2, 2017 the City Council adopted a resolution asking the Charter Commission to study and make a recommendation as to whether the Charter should be amended to provide for the use of RCV to elect candidates to the City Council beginning with the 2019 election, and whether the Charter should be amended to change campaign finance contribution limits to match the limits set forth in statute. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 8 Mr. Mattick stated the questions before the Charter Commission were policy questions. He explained the questions at this time are not related to how RCV would be administered, but rather whether or not the City should implement RCV as the method by which candidates would be elected to the city council. He noted that statute allows Charter cities the option to implement an alternative voting method by amending the Charter, whereas statutory cities and school districts do not currently have the same option. Ms. Kennedy asked Mr. Mattick to review the Charter amendment process outlined in statute. Mr. Mattick explained the City Council specifically asked the Charter Commission to consider amending the Charter according to the process outlined in M.S. 410.12, Subd. 7. He noted that this process required a positive recommendation of at least eight (8) members of the Charter Commission and an ordinance to amend the Charter would require a unanimous vote of all 7 councilmembers. He stated under this statute an ordinance to amend the Charter, even if approved by all 7 members of the Council, would not take effect until 90 days after passage and publication. Within the first 60 days of that 90 day period, a petition requesting a referendum on the ordinance may be filed with the city clerk. If the requisite petition is filed within that period, the ordinance would not take effect until approved by the voters. He noted the Council would also have the option, at that point, to choose not to move forward with the ordinance to amend the Charter. Commissioner Dyer asked if the Charter Commission could make a recommendation to the City Council to put the question on a ballot. Mr. Mattick stated the commission could make such a recommendation. He explained the Council would then vote on the recommendation as proposed by the Charter Commission. Chair Maaske suggested splitting the two amendments and to focus the first part of the discussion on the proposed amendment related to RCV. She stated it would be helpful to hear each commissioner’s thoughts and questions on the RCV amendment to get an idea of where the commission was at and to figure out a plan for how to move forward. Commissioner de Lambert questioned if something had changed related to statutory authority since the first time this topic was discussed. Mr. Mattick stated he didn’t know that anything had changed per se, but did note that since that time two cities, Minneapolis and St. Paul, have implemented and used RCV in their municipal elections. He added that the constitutionality of RCV was challenged and the State Supreme Court upheld its use. Commissioner Brimeyer stated he is generally supportive of RCV but feels it is too early to make a decision as further discussion is needed. He noted he did not want to see a scenario in which the City could potentially elect a Mayor receiving less than 50% of the vote. He explained he would not be in favor of a referendum because he felt they should be limited to issues related to finances and the Council is elected to make policy decisions. He thinks it would be very difficult to educate and inform voters on the concept of RCV in order to get them prepared to vote on the question. He added he would like to see some draft language of the proposed Charter amendment. Mr. Mattick stated a draft amendment could be put together fairly easily. He noted that the Charter amendment would only provide for the use of RCV and the rules and procedures related to election administration would be adopted by an ordinance requiring a simple majority vote of the Council. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 9 Commissioner Gothberg stated that RCV is a solution looking for a problem and he does not think the concept is an all-encompassing solution. He explained the city does not know what the impact will be yet of eliminating the primary because the new format will not be used until 2019. He noted it would be a big mistake to not send the question to the voters if the city wants to pursue RCV. Commissioner Dyer stated he appreciates the concept of RCV but is not sure if a change is necessary because he hasn’t seen a need and does not understand what the actual problem is that the city is trying to address. He agreed that the decision should be up to the voters because it affects their ability to vote and the way in which they elect their representatives. Commissioner Flory stated he did not have a problem with RCV, but felt strongly that the question should go to the public. He noted that civic engagement is an extreme source of pride in St. Louis Park and residents appreciate a robust public process. He also expressed concern that having multiple voting methods on the same ballot may be confusing for voters. Commissioner Anderson stated she would like more information on experiences in other cities that have used RCV, both successes and failures. Commissioner Dwyer stated he supports the concept of RCV but does not feel that there is enough data available to truly make a determination as to whether or not cities that use RCV actually realize the outcomes they seek. He added until the method is more widely used people will always be chasing a sufficient sample size of data to really evaluate the effectiveness of RCV. He explained he felt the decision should be made by the City Council with a robust public process because it is hard for people to educate themselves on ballot questions. Commissioner Rose stated civic engagement is a big component of this question and if a change is made a lot of education would be required up front, but over time people adapt to change. He noted that he is in favor of seeking more technical and process improvements to help simplify the administration of a RCV election. He supports moving forward and would also be ok with a referendum if necessary. Commissioner Beckstrand echoed Commissioner Gothberg’s sentiment that RCV is a solution looking for a problem. He stated he looked at the question from many different angles and spoke with election officials from Ramsey County, and had a hard time finding something that was a tipping point that would require a change of this magnitude. He encouraged his colleagues not to underestimate the importance of voter and election judge education and the undertaking that would be for staff. He noted that although he is not opposed to the concept, he is not necessarily in favor of making a change unless there is a strong reason to do so. Commissioner Carlson stated he supports the concept of RCV in general and feels comfortable letting the City Council make the decision given that there is an option for a reverse referendum process included in M.S. 410.12, Subd. 7. Commissioner de Lambert explained that he is open to considering the change and felt the request from the Council was reasonable. He stated he is not thrilled with the election system as a whole in the United States and he was in favor of at least making RCV an option. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 10 Commissioner Solmer stated he is open to the concept of implementing RCV but felt strongly that the issue should not go to a referendum. He is in favor of gathering input from the public, but felt the decision should be made by the Council. Commissioner Smith stated she is in favor of RCV and does not like being limited to one choice if there is a strong pool candidates. She added she struggles with the idea of a referendum because the issue is not monetary and a lot of voters are uneducated when they go to the polls. Chair Maaske explained her main concern is that there be a robust public process before a decision is made. She expressed concern that the only public input was at the public hearing for the Charter amendment to eliminate the Primary, and she does not feel that the public at large has had an opportunity to be heard. She stated she is also unclear what the problem is that we are trying to solve. The no Primary system has yet to be tested in St. Louis Park and she would like to see the effects of that amendment and the increase in the number of signatures on a nominating petition. She stated she is not sure that implementing RCV will result in more candidates or diversified representation. She suggested that the Charter Commission outline the process they would like to use to be able to form a recommendation for Council and present their questions to staff if additional information is needed. She noted both Minneapolis and Duluth appointed a citizen task force to independently study RCV and provide a recommendation to the Council, and both ended up as questions on a ballot. She added she still has a number of questions she would like staff to research. 1. What are the types of elections that are run in the Hennepin County cities that currently do not have Primary elections? Are they all at-large seats? Do they elect the top vote getters in one race to fill multiple seats? 2. Provide a rough cost estimate of the administrative costs related to the implementation and administration of an RCV election. 3. Is there a study or analysis of campaign spending has changed in Minneapolis or St. Paul elections since the implementation of RCV? 4. Have there been any studies related to incumbents and how often incumbents win both in St. Louis Park and in cities where RCV is used? Commissioner Beckstrand stated he would like a better understanding of any unintended consequences of switching to RCV. Ms. Kennedy explained that the city has to administer elections regardless of the process selected and the Charter Commission’s decision should not be based solely on administrative factors because staff will be prepared and will have the resources in place to run an election no matter what voting method is used. Commissioner Gothberg stated he would like staff to provide more information on the following: 1. Why did the ballot question fail in Duluth? What were the opinions of voters on that process and ballot measure? 2. Why has RCV been repealed in other cities in the United States? Ms. Kennedy reviewed the questions that were posed and stated staff would make every effort to find the information, although some of the questions may be difficult to answer if no data exists. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 11 Ms. Deno reminded the Commission that the City Council had gone through their process and is asking the Charter Commission for a recommendation. She noted the Commission could not necessarily tell the City Council to undertake a separate public process. The commissioners agreed that the topic of public process should be discussed at the next meeting. It was moved by Commissioner Gothberg, seconded by Commissioner Beckstrand, to direct staff to return with additional information in response to the questions raised by the Commission related to Ranked Choice Voting, to prepare a draft Charter amendment for review, and to schedule a follow-up meeting for additional discussion. The motion passed 13-0. Chair Maaske asked for further explanation of the proposed amendment related to campaign finance contribution limits. Mr. Mattick explained that Section 12.04 of the City Charter limits campaign contributions to $250 per year and State statute limits campaign contributions to $600 in an election year. He stated during the 2017 municipal election cycle, staff received several questions regarding this topic and he was asked to provide an opinion as to which limit should govern campaign contributions in St. Louis Park. In this instance he provided the opinion that the statute should govern and a candidate may accept contributions up to $600 in an election year. He noted the primary reason for his opinion is that the when adopting M.S. 211A.12, the Legislature specifically stated that provisions of that section should supersede any home rule charter. He added that M.S. 211A.12 only addresses campaign contribution limits, and the statute does not apply to other provisions of the Charter. Ms. Kennedy explained the City Council discussed this discrepancy and thought it would be best for the Charter Commission to consider an amendment that would eliminate the conflict and eliminate confusion for candidates in future elections. Commissioner Dwyer asked if the commission should consider amending any of the other provisions in the Charter related to campaign finance. Mr. Mattick stated the conflict was specifically related to Section 12.04, Subd. 1, but noted he would review again to ensure no other changes should be considered. Commissioner Dwyer asked if the recommendation was to eliminate the language altogether or to change the limits to match what is set forth in statute. Mr. Mattick stated the safest option would be to simply reference the statute so if the limits were to change in the future another Charter amendment would not be required. The consensus of the Commission was to reference M.S. 211A.12 and the limits as defined. Mr. Mattick stated he would prepare a draft amendment for consideration at the next meeting. 6. Future Meetings The Charter Commission scheduled their next meeting for December 6, 2017 at 5:30 p.m. The meeting will be held in the Westwood Conference Room on the 3rd floor of City Hall. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 12 7. Communications - None 8. Adjournment It was moved by Commissioner Carlson, seconded by Commissioner Flory, to adjourn the meeting. The motion passed 13-0. The meeting adjourned at 7:45 p.m. Respectfully submitted by: Melissa Kennedy, City Clerk City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 13 OFFICIAL MINUTES CHARTER COMMISSION MEETING ST. LOUIS PARK, MINNESOTA December 6, 2017 5:30 p.m. – Community Room, City Hall 1.Call to Order Chair Maaske called the meeting to order at 5:35 p.m. 2. Roll Call and Attendance Members Present: Maren Anderson, JC Beckstrand, Jim Brimeyer, Gary Carlson, Jim de Lambert, Terry Dwyer, David Dyer, Matthew Flory, Ken Gothberg, Sara Maaske, Erin Smith, and Henry Solmer. Members Absent: Lynne Carper, Ron Jarvi, Jr., Andrew Rose Others Present: Nancy Deno (Deputy City Manager/HR Director), Soren Mattick (City Attorney) 3.Approval of Minutes It was moved by Commissioner Beckstrand, seconded by Commissioner Flory, to approve the minutes of October 24. The motion passed 12-0. 4.Old Business a.Proposed Charter Amendments related to Ranked Choice Voting and Campaign Finance Contribution Limits Chair Maaske asked the commission if they would first discuss campaign finance contribution limits then ranked choice voting. Commission was in consensus of this order of discussion. Chair Maaske asked Attorney Mattick to provide information on the finance contribution limits. Mr. Mattick stated that the limits in the charter could change to reflect limits allowed in Minnesota Statutes. If limits change again, this language would allow for a change with no other action or amendments needed. There was discussion by commission. It was moved by Commissioner Brimeyer and seconded by Commissioner Carlson to recommend to the city council to amend the ordinance section 12.04 Contributions as presented by the City Attorney Mattick. Motion passed 12-0. Chair Maaske asked City Attorney Mattick to provide information on the request from council on ranked choice voting and the draft of possible charter amendments. He stated the council adopted a resolution that requested the charter commission study and make a recommendation to the city council as to whether the city’s charter should be amended to provide for the use of RCV. If the charter commission moved ahead, the language is brief and an example has been provided. The change would be adding 4.08 Voting Method. With language the voters elect the city’s elected officer by single transferable voting (also known as “ranked-choice voting” or “instant-runoff voting”). The City Council must provide by ordinance the method of counting the votes and breaking a tie. He stated the question of the charter commission is at the policy level, and the City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 14 method of how the votes are counted and technical matters would be developed and approved by the City Council if this is the method that is put in place. Chair Maaske stated at the last meeting the commission discussed public process. She asked that the commission discuss public process. Commissioner Gothberg stated that discussion on a public process would assume that we are interested in possibly moving in the direction to change the charter and he stated he is not certain that is the direction of the commission. He stated he would like to hear an update from each member to determine what commissioners have to say since the last meeting. Commissioner Beckstrand asked Attorney Mattick about the term single transferable voting. Attorney Mattick stated this is the language used by Minneapolis to define this change in voting. In the past it was also called instant runoff voting and there also has been a legal question of use of the term ranked choice voting. Commissioner Beckstrand stated it may be confusing to use this term. Attorney Mattick stated he would do further research on this, and that language and terms used must be able to withstand a constitutional challenge. There was discussion about the overall need for education and helping people understand. Commissioner Maaske asked to hear from each commissioner. Commissioner Solmer stated he is interested in making the change to allow ranked choice voting. He discussed the Ward 1 recent election. He also stated he watched Minneapolis and they were able to get their counts completed in one day. Commissioner Smith stated she is in the same place as the last discussion and would like to move forward with ranked choice voting. Commissioner Gothberg stated he cannot support ranked choice voting and does not see any problem to be solved. He stated there is no defined need and feels it encourages deal-making. There are additional financial resources needed to make this happen. It is estimated an additional one hundred fifteen to one hundred forty five thousand dollars is needed and these funds could be used to better serve residents or for real problems. He talked about how RCV does not guarantee 50%, how to handle a tie and factors against non-traditional or spoilers. He stated he received two calls to support RCV and when he asked them why St. Louis Park he was told it is for better state and federal results, and they were told to go back to the cities. He stated this method is not allowed for federal or state elections. He stated that if the charter commission determines it should move ahead, this should go on the ballot and let the people make the determination. Commissioner Flory stated he is open, not an opponent, and is a skeptic. He questioned what problem RCV is trying to solve, and said he is not sure of a problem. He would like it on a ballot, to have a public process, to discuss this as “measure twice, cut once” before any decision is made. He is not convinced any change is needed and also that Minneapolis elected Mayor Sayles Belton in the past without RCV. Commissioner de Lambert stated he is in favor to pursue. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 15 Commissioner Carlson stated he has not changed his opinion since the last meeting. He discussed how he watched the administration of Minneapolis and St. Paul and this second time was much smoother. He talked to candidates and they told him it was more positive campaigning. He does not see a need for a referendum because there is a reverse referendum process if needed. Commissioner Brimeyer stated he hasn’t changed his mind since the last meeting but he has changed his thinking. He met with a group of individuals, one who owns assisted living in the city and was told the seniors in the building are confused about voting with the current method and did not think this change is in their best interest. He was told that it is important that people are able to understand and use a voting system and RCV would be too confusing. Commissioner Brimeyer stated he is interested in holding listening sessions and if we move ahead, extensive educational processes. He suggested the League of Women voters could and should assist with both. He suggested that it will take time to make the decision and various options of informational panels that would be put in place for education and listening sessions. He wanted to make sure to reach out to all populations in the city and people who do not traditionally attend public meetings and get their input. He stated he disagrees with concerns on the financial cost because if there was a referendum it would be costly to run that process. He does not agree that this should go on a ballot. Commissioner Beckstrand stated he is in the middle, he is not convinced and wonders what problem is trying to be solved. He stated he needs more evidence, more than anecdotes; he has not seen a study. He stated he did not know of the media event early in the week and wonders why he was not contacted by those hosting the event and why the commission was excluded, not part of the process. Commissioner Beckstrand stated he wants more data that would allow him to make a more informed decision. He is in favor of a public process with listening sessions and allowing others to communicate and ask questions. Commissioner Anderson stated she is on the fence. She is open. She has heard that ranked choice voting is difficult for the public and has talked to people in Minneapolis. Commissioner Anderson has concerns of the costs and if funds are used for this it takes the funding away from other things that are needed. Commissioner Dwyer stated he is in favor of ranked choice voting and has observed Minneapolis and St. Paul. He stated we are not solving a current problem today and this may help solve future issues. He agreed that there is not a lot of data at this time. He stated that we have created plurality by eliminating the primary. Commissioner Dyer stated he would be in favor of moving ahead with rank ed choice voting. He stated that this should be done by a vote of the people since it is about the vote of the people. Chair Maaske stated she is on the fence. She stated she is in favor of more voter turnout and to widen the field. Chair Maaske stated she is not convinced that RCV makes it easier to choose to run for office as a new candidate. She fails to see the problem and wants to hear from residents. Chair Maaske talked about how it may be good to explore some other options such as our current ward and at-large system, that there may be other different ways to study. Chair Maaske stated that no matter where we head, she would like to have a very robust public process. She continued to discuss various types of public process, locations, method of listening sessions, education and outreach possibilities. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 16 Commissioner Brimeyer talked about funds, no need for referendum. Commissioner Gothberg stated a good public process is needed and ballot is a method that includes a detailed public process requiring education and communication. He stated it is important to get other populations involved and this could easily be put on the next ballot. Commissioner Flory talked about other possible changes with voting and possibly exploring at- large and wards. He talked about education sessions and getting more people out to vote. There was more discussion in general about at-large and ward seats. The commission discussed public process for the charter commission. Questions were about what the commission may want for a public process, what it would look like, where, how many, how to reach people, how to gather information, neighborhoods. Questions came up on how to inform, what to inform, how to get others to provide information on the current process, what is the purpose, how to educate, how to reach people of color to run, how public process in Vision was conducted, listening sessions by ward, how long are the sessions, how long would this process take. There was comment on possible large education session to be recorded then determine how to hold listening sessions and locations. Commission discussed having the charter commission executive committee form a small group to study and draft a public process for review by the full commission. The commission talked about the small work group and having 4 or 5 members. Motion was made by Commissioner Beckstrand and seconded by Commissioner Gothberg to have the executive members work as a small group with 2 additional members to develop a proposed model for public process and report back to the commission on their recommendation at their next regular meeting. Members would be Chair Maaske, Vice Chair Dyer, Secretary Dwyer, Commissioner Beckstrand and Commissioner Smith. Motion approved 12 - 0 5. New Business 6. Future Meetings The Charter Commission scheduled their next meeting for January 10th at 5:30 p.m. The meeting will be held in City Hall. 7. Communications - None 8. Adjournment It was moved by Commissioner Carlson, seconded by Commissioner Anderson, to adjourn the meeting. The motion passed 12-0. The meeting adjourned at 6:40 p.m. Respectfully submitted by: Nancy Deno, Deputy City Manager City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 17 OFFICIAL MINUTES CHARTER COMMISSION MEETING ST. LOUIS PARK, MINNESOTA January 10, 2018 5:30 p.m. – Community Room, City Hall 1. Call to Order Chair Maaske called the meeting to order at 5:30 p.m. 2. Roll Call and Attendance Members Present: Maren Anderson, JC Beckstrand, Jim Brimeyer, Gary Carlson, Lynne Carper, Jim de Lambert, Terry Dwyer, David Dyer, Matthew Flory, Ken Gothberg, Sara Maaske, Erin Smith, and Henry Solmer. Members Absent: Andrew Rose (absence excused), Ron Jarvi, Jr. (absence excused) Others Present: Nancy Deno (Deputy City Manager/HR Director), Soren Mattick (City Attorney), and Melissa Kennedy (City Clerk) Ms. Kennedy informed the Commission that Ron Jarvi, Jr. submitted his resignation effective January 10, 2018. She stated the position would be advertised and applications would be sent to the District Court for an appointment to fill the vacancy. 3. Approval of Minutes – December 6, 2017 Charter Commission Meeting It was moved by Commissioner Carlson, seconded by Commissioner Brimeyer, to approve the minutes of December 6, 2017. The motion passed 13-0. 4. Old Business a. Executive Committee Proposal on Public Process to be used for Proposed Charter Amendment related to Ranked Choice Voting Chair Maaske opened the discussion by thanking the Charter Commission for their work and their commitment to thoroughly studying the concept of Ranked Choice Voting in order to make the best possible recommendation for all citizens of St. Louis Park. She stated the Charter Commission exists for a reason and they take their role seriously. The Commission has undertaken a thoughtful process to respond to the City Council’s request to study and make a recommendation regarding Ranked Choice Voting. She stated the Commission welcomes and encourages respectful discussion and input, and they believe public process is important. She asked for patience from all those involved and interested in the topic so that the Charter Commission can continue their work and move forward as expeditiously as possible. Chair Maaske explained the Executive Committee met on December 27, 2017 to discuss and develop a public process proposal for the commission’s consideration. She asked the commission to provide feedback on the proposal. Commissioner Brimeyer asked if the Executive Committee would develop a set list of questions for the expert panel event. Chair Maaske stated the committee was hoping to get feedback from the commission on how that should be handled. She noted the preference would be for the commissioners to come up with the questions they would like to ask of the panelists. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 18 Commissioner Gothberg questioned why only one meeting for public comment was proposed. Chair Maaske explained given the charge and timeframe directed by Council, the committee felt the proposed process would allow the commission to gather input and make a timely decision. She stated it was thought the proposal would fulfill the commission’s need for an adequate amount of input and information in order to make a thoughtful recommendation. Commissioner Beckstrand stated it was important to remember that the Commission is being asked to provide guidance regarding a high-level policy decision, not to get involved in decisions regarding implementation. He noted the council’s role was to focus on implementation. He stated he served on the Executive Committee and felt it was important to get some expert opinions and feedback to be able to look at the question from a holistic perspective so commissioners can get the information they need to make a policy recommendation. Commissioner Carper asked where the Charter Commission derived the authority to implement Ranked Choice Voting. Attorney Mattick explained that home rule charter cities are eligible to implement Ranked Choice Voting, statutorily, via a charter amendment. Under M.S. 410.12 there are different ways a home rule charter can be amended. In this instance it has been proposed to amend the Charter by ordinance. The ordinance amendment would require a unanimous vote of the council. Commissioner Carper stated there was nothing in the Charter that directed the Commission to conduct a public process. He suggested that the Commission could recommend that the council hold multiple public hearings. Commissioner Carlson stated beyond the public hearing requirement, statute also provides a reverse referendum trigger for any charter amendment done by ordinance. Commissioner Gothberg asked how the Commission would advertise the public meetings to be impactful and to make sure they received input from a broad spectrum of people. He questioned if the meetings would be televised. Chair Maaske stated the city has many different avenues of communication that could be used including social media, Park Perspective, NextDoor, and ParkTV. Ms. Kennedy stated the meetings could be televised on ParkTV. Commissioner Flory stated a neighborhood forum was scheduled in a few weeks and information could be distributed to neighborhood leaders. Commissioner Brimeyer stated he was interested in the Q&A because he wanted to hear from people that have worked in or participated in an RCV election. Commissioner Carper suggested finding someone to play devil’s advocate. Commissioner Carlson stated it may help to hear from election judges or candidates from Minneapolis and St. Paul. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 19 Commissioner Solmer stated he was not sure what would be added by inviting elected officials. He noted he would like to have representatives from FairVote and the League of Women Voters SLP included on the panel. Commissioner Flory stated he is most interested in making sure RCV works for St. Louis Park rather than a statewide policy. He added he wants to hear what is needed to make sure people are educated and prepared to make it work. He explained he was not opposed to improving the status quo, he simply wants to make sure it is right for the people of St. Louis Park. Chair Maaske stated she would like to better understand the challenges of voters from St. Louis Park election judges and those who have worked at the polls in Minneapolis or St. Paul during an RCV election. The Commission reviewed the list of potential participants for the Q&A event and felt it was a good representation of the viewpoints they were most interested in. The Commission also reviewed the options for the public process and discussed the number of meetings to be held. Commissioner Brimeyer stated his preference would be to have a 3rd meeting to vote on a recommendation so he can think about what he hears at the Q&A event and the listening session. It was moved by Commissioner Brimeyer, seconded by Commissioner Gothberg, to move forward with the public process as outlined in Option B and to direct staff to work with the Executive Committee to set meeting dates and secure panelists for the Q&A event. The motion passed 13-0. Commissioner Beckstrand asked for further clarification on the use of the term “single transferable vote” in the proposed ordinance amendment. Attorney Mattick stated the language is used by both Minneapolis and St. Paul. He noted he would look into it further and provide information for the next meeting. 5.New Business 6. Future Meetings The Commission asked Ms. Kennedy to check on the date that was set for their annual meeting at their annual meeting in 2016. They advised staff to incorporate the business typically conducted at their annual meeting into an upcoming meeting agenda. 7. Communications a.Public Communications received by staff since December 6, 2017 meeting 8.Adjournment It was moved by Commissioner Gothberg, seconded by Commissioner Anderson, to adjourn the meeting. The motion passed 13-0. The meeting adjourned at 6:35 p.m. Respectfully submitted by: Melissa Kennedy, City Clerk City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 20 OFFICIAL MINUTES CHARTER COMMISSION EXPERT Q&A PANEL – RANKED CHOICE VOTING ST. LOUIS PARK, MINNESOTA February 13, 2018 6:00 p.m. – Council Chambers, City Hall 1. Call to Order Chair Maaske called the meeting to order at 6:00 p.m. 2. Attendance Members Present: Maren Anderson, JC Beckstrand, Gary Carlson, Lynne Carper, Jim de Lambert, David Dyer, Terry Dwyer, Ken Gothberg, Sara Maaske, and Henry Solmer. Members Absent: Jim Brimeyer, Matthew Flory, Andrew Rose, and Erin Smith Others Present: Nancy Deno (Deputy City Manager/HR Director) and Melissa Kennedy (City Clerk) 3. Expert Q&A Panel – Ranked Choice Voting Chair Maaske thanked the panelists for taking the time to share their knowledge about Ranked Choice Voting and elections in general. She stated the purpose of the meeting was for the Charter Commission to get their questions answered as a part of their process to study and make a recommendation to the city council regarding Ranked Choice Voting (RCV). She explained questions were submitted by Charter Commission members in advance of the meeting. The panelists were selected by the Charter Commission. She noted although no public comment will be taken at this meeting, those wishing to comment on the topic are invited to attend the Public Listening Session being hosted by the Charter Commission on March 6, 2018 at 6 pm in the Council Chambers. She stated bio information on each of the panelists was available on the city’s website on the Ranked Choice Voting page. The panelists introduced themselves and provided information on their background in elections. The panelists included: Loren Botner, Deb Brinkman, Ginny Gelms, Professor David Schultz, Mary Wickersham, Jeanne Massey, and Chris Tholkes. Question #1 – Ginny Gelms: Has the voting equipment adapted well to RCV and can you describe the steps involved in counting the ballots once the machines can no longer tabulate races? Ms. Gelms stated the voting equipment used in Hennepin County was not originally designed specifically for RCV, however they have been able to work with their vendor to develop a workaround that will allow the machine to accept and read ranked-choice ballots and perform a preliminary tabulation. She explained the ballot machines can produce a raw vote total of the number of 1st, 2nd, and 3rd choices that every candidate has received. Depending on rules that the city would need to write and adopt by ordinance, the raw vote totals may be enough to declare official winners for any candidate who passes the 50% threshold in the first round. She added tabulation can get more cumbersome in races in which no candidate reached the required threshold on election night. At that point the information needed to actually perform the RCV reallocation and tabulation – not only the number of first, second, and third choices that each candidate City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 21 received, but how each individual ballot was actually marked, which candidates appeared on each ballot and in what order – is not transmitted electronically on election night. The City of Minneapolis retrieves the memory sticks from each vote tabulator and returns them to Hennepin County on election night and staff has to physically download the information off of the memory sticks. The data is downloaded and accumulated overnight and an excel file is generated and provided to the city the next morning. The data in the file is essentially a spreadsheet on which every line represents a single ballot and the candidates appear in the order in which they were marked on each ballot. Staff from Minneapolis then perform a manual tabulation process using the digital data by cutting and pasting the lines in the file to create digital piles of ballots within the excel file to ultimately determine who the winners are in each race. Question #2 – If a switch to RCV was made in St. Louis Park, what are the possible challenges an election judge might face in terms of being able to successfully administer an election? Mr. Botner stated the biggest challenge would be making sure that the voters are prepared for the change. Within the polls on Election Day, the biggest piece would be making sure that demonstration judges are adequately trained and equipped to answer questions and explain to voters how to mark their ballot. He stated it ultimately comes down to whether or not voters have enough information to feel comfortable marking their ballot. Ms. Wickersham added that more time spent with the demonstration judge would be the biggest change that would have the most impact. She stated more than half of voters pay no attention to the demonstration judge and this change would require them to be more engaged at this station within a polling place. She noted along with additional questions, she would also expect judges to receive additional comments related to the change. She stated more personal interaction with the judges is not necessarily a bad thing, however judges and voters will need to be prepared for the change. Question #3 – How does RCV improve civility among candidates during the election cycle? Ms. Brinkman stated civility is improved because candidates need to vie for their opponents’ second and third place votes. She added candidates will also have to campaign to the majority, not just their base of voters. She stated some of the negative campaigning that has occurred in other cities has actually had negative consequences for that candidate. Ms. Massey stated RCV is a shift in the culture of campaigning and they work with candidates to make sure they understand that process. She added candidates are generally happy about the shift after their campaign is over because they had an opportunity to get to know more voters. Candidates really run to serve and they like to speak to people in their community and RCV gives them a reason to speak to more people. Question #4 – Based on your knowledge of elections and campaigns, would RCV benefit non- traditional candidates versus a non-RCV election where the winner would only need the most votes to win? Professor Schultz stated a lot of times people may want to vote for a non-traditional candidate, but fear that if they vote for that particular candidate it will in fact help elect the candidate they liked the least. Our current voting system creates a disincentive to vote for a spectrum of candidates beyond the top two most likely to be elected. He stated there is pretty good evidence that suggests that RCV gives people the incentive to vote for their first choice candidate and to pick their second City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 22 and third choices. It encourages voters to take a larger risk in terms of voting for non-traditional candidates and also seems to encourage a lot of other candidates to run to give voters a broader range of candidates to choose from. Question #5 – As an election judge in St. Paul, what was your experience with voters using RCV in the last election? Ms. Tholkes stated she worked at the Ramsey County elections office the week before the election to assist with absentee voting activities and saw a very diverse population of people come in to vote. She noted that although a lot was done to try to educate people in St. Paul on RCV, most of the voters who came in to vote the week before the election did not know that they would be voting on a ranked-choice ballot and they did not understand how to mark a ranked-choice ballot. She stated there was a lot of same-day education that needed to happen, especially through interpreters. She noted the number one question that was asked after the process was explained was “can I still just vote for one choice”. Vice Chair Dyer asked Ms. Tholkes what could be done to better inform the public to ensure they were prepared when they came to vote. She stated as a resident of St. Paul she felt there was a lot of good information out there and an effort was made to educate, so she is not sure where the breakdown was for people. She reiterated that there were a significant amount of voters who did not know about the change or how to vote on a RCV ballot. Question #6 – Do election results take longer to tabulate and post in an RCV election and how long did the process take in the 2017 election in Minneapolis? Ms. Gelms stated that the results process does take longer than a traditional election. In 2017 the City of Minneapolis was finished with their tabulation process by the end of the day on Wednesday. She noted this was an improvement from what was experienced in the 2013 election when the tabulation process took until the end of the day on Friday. She added Minneapolis has made improvements to their processes after every election with ordinance changes related to their rules for administration of elections, including the tabulation process. Question #7 – What challenges do voters face when trying to understand our current voting system? Mr. Botner stated the only difficulty he has seen on a consistent basis is during partisan Primary elections where voters have trouble understanding that they have to vote along party lines. It seems the greatest obstacle is people understanding that they have to pick a party at the Primary versus being able to make selections across party lines at the General election. Ms. Wickersham agreed that was the main difficulty and reason for spoiled ballots at partisan Primary elections. She stated at health care facilities voters typically have trouble understanding why some offices are partisan and some are non-partisan and judges spend a lot of time with each individual voter explaining how to mark their ballot. She added RCV would be a little more difficult for people at health care facilities and even more time would be needed to help voters understand the process. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 23 Question #8 – Aside from the elimination of the Primary election, why does St. Louis Park need RCV and what is the problem it will solve? Ms. Brinkman stated it restores majority rule when there are multiple candidates running for a single office and is a much better representation of voters’ choices. She added that voters also seem to really like having more choice on their ballot and it reduces the influence of money in elections. Ms. Massey stated because the decision has already been made to eliminate the Primary, a candidate can win a race without majority support. She added RCV fosters more choice without the risk of the spoiler dynamic and greater diversity in candidates and those that have an opportunity to win. Question #9 – Are there any negative side effects or unintended consequences of RCV that St. Louis Park should be aware of? Mr. Schultz responded a lack of preparation in terms of implementation and a lack of understanding of what RCV is supposed to do. When Minneapolis first implemented RCV there was some evidence of voter confusion and one of the recommendations he gave to the city was to put more resources into educating their citizens on what RCV really was and how to participate in the process – such as how to mark a ballot. He stated St. Louis Park would benefit from doing much more targeted and continuous education to certain groups of citizens. If the city does not prepare the proper foundation in terms of education, it will likely run into problems with voters not understanding what to do or the change that occurred. He added it is also important to make sure people understand and have realistic expectations for how RCV works and how the results are processed and communicated. Question #10 – What steps did election judges take to assist voters who were having trouble understanding RCV and what type of help or other materials did you have available? Ms. Tholkes stated one of the biggest resources they had available was interpreters to help communicate with voters. She added they had many judges on hand to assist voters so that they could take a little extra time to help educate a voter if needed, and they had educational materials available that voters could look at or take with them. Question #11 – RCV appears to necessitate the increased use of manual processes to tabulate ballots. Does this increase the opportunity for human error, fraud, or manipulation of results? Ms. Gelms stated she does not believe that the process introduces additional avenues for fraud. She noted there is the potential for human error with the manual tabulation process. That risk was mitigated in Minneapolis by the way they setup their process with multiple teams performing the tabulation simultaneously. Human error is an element that should be kept in mind and risk mitigation strategies should be developed to address that risk. Question #12 – How do we support non-English speaking, seniors, and voters with disabilities at our polling places? Mr. Botner stated the written materials in the polling place are now available in a broad spectrum of languages. Voters with some form of impairment also have the opportunity to mark their ballot using an assistive device (Automark). Additionally, a voter can request assistance in marking their City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 24 ballot and two judges from different political parties would perform that service upon request. He noted election judges are a unique community because they all understand implicitly that they are there to help all eligible citizens be able to vote. Ms. Wickersham stated in the past interpretation services have been used over the phone. She noted a majority of non-English speaking voters tend to bring a relative with them to provide assistance. Chair Maaske asked Ms. Wickersham to talk about her experiences with assisting senior voters. Ms. Wickersham stated many seniors are hard of hearing or visually impaired and they typically need assistance from judges or health care facility staff to mark their ballot. She added 90% of the voters in healthcare facilities require some assistance in marking their ballot because the voter is concerned they may have a problem marking it on their own and they don’t want to make a mistake. Question #13 – Can you explain what you mean by voter participation and how it relates, or does not relate, to voter turnout? Ms. Brinkman stated RCV leads to more voter participation because it makes people feel more engaged in the whole process and voters have a better chance of selecting a winner. She added the increased civility in the campaigns is more appealing to voters. Ms. Massey stated RCV automatically increases voter participation by combining the Primary and the General election into one single election where turnout is the greatest and most diverse. Question #14 – Is there a causal relationship between RCV and the higher turnout in Minneapolis and St. Paul in the 2017 election cycle and what other factors can influence voter turnout? Mr. Schultz stated there are a lot of factors that can influence voter turnout and it is hard to separate those factors to conclusively say that RCV is the cause. One important factor is the perception that there is a close or competitive race. Additionally, a higher number of candidates can increase turnout because they are trying to reach out to their base and get them to vote. He noted media attention is also a big factor and typically the media pays less attention to local elections. He stated RCV does seem to have an impact because it addresses the question of why people should vote or why they should get engaged, but he would be hesitant to say that there is one singular factor that drives turnout. Question #15 – Had there not been a decisive winner in the last election, what other responsibilities would election judges have had in terms of the tabulation process used in St. Paul? Ms. Tholkes stated she was not one of the election judges trained in the tabulation process, but there are teams of judges that are trained to participate after the election in performing the manual tabulation process of sorting and counting ballots. Question #16 – As new ballot tabulating technology emerges, will the cost to St. Louis Park be disproportionately higher because the city will be an early adopter relative to the rest of the United States? City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 25 Ms. Gelms stated to the extent St. Louis Park has costs related to RCV, she is not sure that they would be related to the fact they are an early adopter as far as technology is concerned. Hennepin County purchased new equipment in 2013 that has a shelf life of 10-15 years. She noted ranked choice voting capabilities are one thing, among many, that the county considers when they go out for a RFP to purchase new equipment. The last time they purchased there was limited technology available in federally certified equipment for tabulating ranked-choice voting elections. She stated they will have to see what the market has available the next time equipment is purchased, noting it is helpful to them to have cities onboard with whatever their particular algorithm is so that can be put directly into the RFP when they prepare to make a purchase. Question #17 – What are typical issues you run into on Election Day and how much is understanding how to mark a ballot an issue for voters? Mr. Botner stated he did not think that understanding how to mark a ballot was a significant issue for voters. He added if there is appropriate education and a voter is prepared when they show up to vote, that can help reduce confusion. Ms. Wickersham added if RCV was used, new demonstration ballots would need to be developed to help explain that there are RCV races and non-RCV races on a ballot. Question #18 – Please describe your pre-election education efforts to explain the RCV process to voters. Ms. Brinkman stated the League of Women Voters is very insistent on adequate voter education with any change in a voting system. Voters need to be educated about any change, no matter what it is. So far, the LWV SLP has held events at which people can “practice” the RCV process. As the process continues, the League would partner with FairVote and the city on voter education. Ms. Massey stated a concerted effort was made in Minneapolis and St. Paul to raise money for public education on RCV. FairVote can go deeper with a more grassroots effort to educate candidates, voters, and the media. Question #19 – Is RCV an artificial means of creating a majority out of a plurality? What is wrong with the winner-take-all approach in current elections? Mr. Schultz stated one of the things that has been seen at the national and state level is situations in which candidates don’t have to appeal to the other side and can get elected by just running base politics. Research suggests that is helping feed pre-existing polarization. RCV is an effort to start to create real majorities by building incentives for candidates to go beyond their base and forcing people to build real government coalitions that involve compromise. Question #20 – Have you completed any survey of voters who have used RCV to assess their level of satisfaction with the process and what were the results? Ms. Massey stated she provided the Commission with exit polling results from the last election and noted that Minneapolis also has conducted post-election surveys in the past. She reviewed the results of the exit polling done by FairVote and noted the numbers in Minneapolis were extremely positive. 92% of the voters polled in Minneapolis found RCV was easy to use and the vast majority of voters enjoy the ranking process and want to keep using RCV in the future. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 26 Question #21 – How are recounts handled in Minneapolis – electronically or manually – and what is the county’s involvement? Ms. Gelms stated this is one area where the city is completely on their own, the county has no involvement in recounts. In Minneapolis recounts are performed manually using physical ballots. Question #22 – If St. Louis Park switched to RCV what challenges or barriers might need to be addressed to help non-English speaking or senior voters better understand how to mark an RCV ballot? Ms. Tholkes stated making sure the interpreters have a base level of knowledge regarding the ballot and the process. She added some of the challenges related simply to the volume of people coming in at one time to vote. Ms. Wickersham stated she would foresee developing and providing multi-language signage or other materials that would specifically address the rules related to RCV itself. Mr. Botner stated from a logistics standpoint it would be important to ensure that there was adequate space available to provide demonstrations to larger groups of voters at one time versus having to individually help one or two voters at a time which could lead to longer lines. Question #23 – In any 2017 multi-candidate race, can you indicate the number of races, the number of candidates, how long it took to tabulate results after they were reported on election night, and were computer systems adequate to handle the tabulation? Ms. Massey stated Minneapolis has very large elections every four years. There are a total of 22 races on the ballot. In 2017, the mayoral race, 8 of the 13 councilmember races, park board at- large, and approximately half of the park board races were competitive and required additional rounds of counting in the tabulation process. The mayoral race took less than 3 hours to count, a vast improvement since 2009 and 2013. The council races took approximately one hour per race. She noted that in order to make the tabulation process efficient, resources (people) are required and a viable tabulation method. Question #24 – How does RCV work with ballot rotation requirements per Minnesota law? Ms. Gelms stated it works the same as it would on a traditional ballot. Candidates are rotated on a precinct-by-precinct basis to ensure that the same candidate is not listed first on every ballot. Question #25 – What does evidence show about voter participation and RCV? Is it increased and is it more equitable? Mr. Schultz stated the evidence is somewhere between showing positive increases in voter turnout and saying it isn’t any worse than what is seen under traditional voting systems. He noted it is difficult to sort out all of the variables that can impact turnout. Among cities in the United States that have implemented RCV there seems to be some evidence of an uptick in turnout, but that uptick could also be correlated to an increase in the number of candidates running and voter perception that they have more choices. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 27 Question #26 – Please describe the vote tabulation process in a RCV election? Ms. Massey stated that St. Paul and Minneapolis do use different processes. St. Paul counts the ballots manually using the physical ballots. In Minneapolis they have created a shortcut by using the data file called the cast ballot record. The data is then transferred by staff into spreadsheets that allow the people performing the tabulation to aggregate everyone that voted in exactly the same way on their ballot. She added that some ballots become exhausted in the tabulation process, mainly because voters do not rank beyond the first or second choice. Ms. Gelms stated a ballot could also be exhausted if all of the candidates ranked by a voter were eliminated in earlier rounds of the tabulation process. Question #27 – In your experience do most voters actually take advantage of the opportunity to rank multiple choices on their ballot? Ms. Gelms stated that has varied by election. In the recent Minneapolis mayoral race, only 12% of the voters made just one selection and 25% made just one or two selections. Ms. Massey added that people are more likely to rank in competitive races. Question #28 - What is your view on the implication of a majority winner having a clear mandate and increased legitimacy versus a plurality winner and does RCV create clear majority winners? Mr. Schultz stated this is more of a philosophical question and in his estimation the more we can create real majorities there is a perception that decisions are legitimate in terms of how we think about representative democracy. In general, RCV is going to ensure that there is a numerical majority. Question #29 – If voters have a difficult time understanding differentiators between candidates in a winner-take-all system, how will voters become more educated with a greater number of candidates for which they may vote for under RCV? Ms. Massey stated voters need to be educated in any election and there is a broad spectrum of levels of education. Under RCV, the need for education doesn’t go away but it eliminates the need for voters to have to vote strategically. Mr. Schultz added one of the problems is that there are too few resources dedicated to civic education in general. He stated that some say that RCV asks too much of voters, but if they can actually gather the resources they have shown that they can understand the system and rank their choices. Mr. Botner stated his perception has been that as the society has moved towards polarization, participation has not been diminished. It has energized people to participate, and saying that RCV is too complex is underestimating our citizens. Question #30 – Based on your general experiences, does RCV make your job as an election administrator harder or more difficult? Ms. Gelms stated it does make the job more difficult as an elections administrator and if this is something that passes in St. Louis Park the city should consider giving staff in the clerk’s office City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 28 raises and more resources. She noted that St. Louis Park would benefit from the fact that both Minneapolis and St. Paul have already gone through the process of adopting and implementing RCV. She stated the city would not be able to avoid the difficulty of developing the expertise in- house in order to be able to handle the actual tabulation of the ballots. She added that is a very esoteric thing, and it is something the staff would have to educate themselves on – there is no assistance from the state or the county in that regard. Voter education, outreach, and election judge training are also very important aspects that will require very robust efforts from in-house staff and the trend in Hennepin County and the State is showing that more people are voting before Election Day via absentee ballots which will continue to require increased resources from the clerk’s office. She reiterated that St. Louis Park would need to put resources into people, training, and education in order to adequately serve the needs of voters and successfully implement a change such as switching to RCV. All of those requirements combine to make things more difficult for election administrators such as the city clerk. Question #31 - Please explain the weighted inclusive Gregory method and how it works. Ms. Gelms and Mr. Schultz agreed that there was no need for the Commission to understand that at this point and it was not applicable to St. Louis Park. Question #32 – Please describe the county’s pre-election education efforts to explain the RCV process to voters in Minneapolis. Ms. Gelms stated this is another area in which the city is on its own. The city does all of the education efforts related to how to mark the ballot and how votes are counted in a RCV election. Question #33 – As an election administrator what additional was or would have been helpful for voters in an RCV election? Ms. Gelms stated it isn’t too difficult to educate voters on how to mark a RCV ballot. The more difficult piece is explaining to voters how ballots are counted because it is important for voters to understand what voting strategies make sense in a ranked-choice election. As election administrators it is difficult to remain neutral but also explain the process in a way that is easy for people to understand. Question #34 - In situations where one ballot contains races using the RCV method and races using the traditional method, do you sense voters are confused or discouraged by having two different voting styles on the same ballot? Ms. Gelms stated Minneapolis does not have non-RCV races on the same ballot. She explained she could foresee this being a difficulty in St. Louis Park when school board races are on the same ballot because it is a multi-seat race. She stated it would be particularly tough to educate voters on how to vote using two different methods on the same ballot. The ballot design would also be difficult, depending on the number of choices St. Louis Park would allow, because there is only so much space on one ballot. Ms. Tholkes stated St. Paul has an RCV race on the front side of the ballot and school district races on the back side of the ballot. Ms. Massey stated both Minneapolis and St. Paul have done a good job of designing the most user- friendly ballots possible. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 29 Questions #35 – Can you speak about the distribution of spoiled ballots in recent RCV elections and are they greater than in previous non-RCV elections? Ms. Gelms explained a spoiled ballot occurs when a voter in a polling place makes a mistake while completing their ballot and requests a replacement from an election judge. She added that a spoiled ballot represents a voter who knew they made a mistake and received a new ballot. She stated with all of that being said, yes, the number of spoiled ballots does increase if you compare the numbers to the most recent non-RCV election in Minneapolis. The spoiled ballot rate was approximately 1% and that increased to approximately 4% in the 2017 election. She stated this increase from non-RCV to RCV elections has been consistent in that it quadruples, however the number itself is relatively small. Ms. Massey reiterated that the election with the most spoiled ballots is the partisan Primary. Question #36 - What is one piece of advice you would give to an organization considering RCV? Mr. Botner stated to educate voters and personnel. Ms. Brinkman agreed with and reiterated Mr. Botner’s comments. Ms. Gelms stated she would not underestimate the amount of resources the city would need to put into the administration and voter education components. She noted she is on the panel as an election administrator, not as a policy maker. The goal of all election administrators is to make sure elections are run well no matter what system is used and that does take resources. Mr. Schultz stated he would advise the city to learn from others that have already implemented RCV. Ms. Wickersham stated she envisions having a couple of different ballots that could be used in a test mode and then build the education piece from that testing. Ms. Massey echoed Professor Schultz’s advice to learn from others and to find where the holes are in terms of voter education to improve upon those systems. Ms. Tholkes stressed the importance of voter education and added that the city’s election judges are an invaluable resource for in-person voting and she would encourage the city to invest in a variety of modalities to train judges. Additional Questions from Charter Commission Members Commissioner Carper questioned why the exit polling numbers from Minneapolis and St. Paul show differences between the number of voters that felt RCV was easy to use and those that said they actually want to continue using RCV in the future. Ms. Massey stated 92% of voters in Minneapolis said they found RCV easy to use and 84% said they would like to continue using RCV in the future. She explained although it is hard to say why the drop-off occurs, both numbers are very high in terms of voter satisfaction with the system. Commissioner Beckstrand stated St. Louis Park has not necessarily had the same problems as Minneapolis and St. Paul that have demanded or called for a switch to RCV. He added St. Louis City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 30 Park is a relatively small community that has challenges even getting viable candidates to run for office and plurality has generally not been an issue. He asked what the problem is that is trying to be solved and is a switch truly going to be worth it for St. Louis Park given the administrative burdens, costs, and voter education efforts that would need to take place. He asked why the switch is specifically needed in St. Louis Park. Mr. Schultz stated he would never go in and tell another community what is best for them or what is wrong with them. He added at the end of the day it is a question of values and what is most important to them. Every community has to make decisions regarding their electoral system and what is best for them. He suggested identifying the problems that exist and then determining what policy options are available to help address those problems. He stated the Charter Commission and the City Council have to identify the problem and then determine whether or not RCV will help solve those problems and perhaps enhance some of the other values of the community. He noted in many situations he believes RCV has the ability to address some problems for some communities, but he would not say that RCV is the answer to every problem. He added there is not one correct answer or system that will work or be beneficial for every community. Mr. Botner stated from a civic perspective, if RCV will allow the citizens of St. Louis Park to feel as though they can participate more fully and back a broader range of candidates, which could be a valuable thing because more people will want to be involved. In the end St. Louis Park needs to determine what values are important to them and his understanding is that at least two of those values are inclusion and diversity. Ms. Massey stated the conversation about bringing RCV to St. Louis Park started with the decision to eliminate Primary elections. Commissioner Beckstrand stated the event was extremely helpful from an educational perspective and he thanked the panelists for their time and their thoughtful responses. He added one of the challenges he has had is balancing a broader policy decision with the more detailed tactical questions surrounding implementation. Chair Maaske thanked the panelists and the Charter Commission members for their participation and for taking the time to share their knowledge. 4. Adjournment The meeting adjourned at 8:15 p.m. Respectfully submitted by: Melissa Kennedy, City Clerk City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 31 OFFICIAL MINUTES CHARTER COMMISSION PUBLIC LISTENING SESSION ST. LOUIS PARK, MINNESOTA March 6, 2018 6:00 p.m. – Council Chambers, City Hall 1.Call to Order Chair Maaske called the meeting to order at 6:00 p.m. 2. Roll Call and Attendance Members Present: Maren Anderson, Jim Brimeyer, Gary Carlson, Lynne Carper, Terry Dwyer, Ken Gothberg, Sara Maaske, Andrew Rose, Erin Smith, and Henry Solmer. Members Absent: JC Beckstrand (absence excused), Jim de Lambert (absence excused), David Dyer (absence excused), Matthew Flory Others Present: Nancy Deno (Deputy City Manager/HR Director), Soren Mattick (City Attorney), and Melissa Kennedy (City Clerk) 3. Public Listening Session – Ranked Choice Voting Chair Maaske stated the purpose of the meeting was for the Charter Commission to listen to comments from the public on the topic of Ranked Choice Voting. She explained no other discussion would take place and the Commission would not be voting or making any formal decisions at this meeting. She added that the next meeting of the Charter Commission is scheduled for March 13, 2018 at 5:30 pm in the Council Chambers. The meeting will also be broadcast live on ParkTV Channel 17. She stated in order to ensure that everyone is afforded the same opportunity to address the Commission, comments would be limited to three (3) minutes per person and those wanting to speak would be allowed to do so one time. She stated anyone not wanting to address the Commission directly or anyone with additional comments could submit comments in writing to the City Clerk. John Olson, 2829 Yosemite Ave. S., stated he has been a resident of St. Louis Park for 59 years and he hopes St. Louis Park makes history by adopting Ranked Choice Voting to promote diversity in government. He explained he would like to see more occupational diversity on the Council and he believes that if there were more names on the ballot at a General election voters would be more apt to take a chance on a woman, a minority, or someone who works with their hands. He stated he is an electrician and he would like to see more representation from people like himself. Jeanne Massey, Executive Director of FairVote MN, read a letter submitted by Minneapolis Mayor Jacob Frey. A hard copy of the letter was also provided to the Commission members. Ms. Massey then introduced a video of voters’ experiences in the 2017 election in the City of Minneapolis. Dorothy Doyle, 3041 Maryland Ave. S., stated an election is a hiring decision made by a lot of people with diverse perspectives and interests. She added that Ranked Choice Voting is better than winner-take-all because it gleans the collective wisdom of all voters. She stated when voters are allowed to rank their choices it is similar to finding the average score among the voters for each candidate. She continued that Ranked Choice Voting encourages consideration of complexity and nuance because it acknowledges that there are more than two diametrically opposed potential solutions to a problem. She stated St. Louis Park has an opportunity to lead by example. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 32 Andi Larsen, 2831 Huntington Ave. S., stated she is very supportive of Ranked Choice Voting for many of the reasons outlined by the speakers before her. Additionally, she believes we are at a time in our history when people are deeply concerned about government and are trying to become better citizens. She stated Ranked Choice Voting provides people with a way to be more committed to voting and thoughtful about candidates. She added that she believes candidates would be more prone to being thoughtful and eloquent about their positions. She stated citizens are looking for candidates that do not reflect the extreme positions of our time and they want leaders who can bridge the gap that keeps us from finding real solutions to serious problems. Elizabeth Glidden, 4006 Blaisdell, Minneapolis, she stated she attended to share her experiences with Ranked Choice Voting as a resident of Minneapolis, as a candidate in two elections, and as a councilmember. She explained she was first attracted to Ranked Choice Voting because she was ashamed of the low turnout in Minneapolis Primary elections. She stated she is very proud of the election officials in Minneapolis and how they have handled the implementation and administration of Ranked Choice Voting. She explained they are seeing changes in Minneapolis in terms of who is voting and who is running for office. She noted in 2017 they experienced very high voter participation and saw more women and people of color as candidates than ever before. She stated surveys show that voters seem to understand Ranked Choice Voting and take advantage of their opportunity to rank candidates when they vote. Judith Cook, 4010 Highwood Road, stated she believes Ranked Choice Voting is easy to use and every segment of the population in St. Louis Park will be able to understand the concept. She added people seem eager to make the change. She noted another factor is majority versus plurality and voters will be more accepting of majority winners. She stated in her opinion this question does not need to go to a referendum because citizens will start to demand a referendum on every issue in the city. She asked the Charter Commission to recommend that the City Council move forward with implementing Ranked Choice Voting without a referendum. Scott Petersen, 3716 Colorado Ave. S., stated he supports Ranked Choice Voting because he likes the idea of being able to vote for the candidate he most believes in, not necessarily the candidate that is most likely to win. He added he would like to use Ranked Choice Voting for all elections, including state and federal offices. He believes that adopting Ranked Choice Voting in St. Louis Park will spur a similar change in other cities and at the state and national levels. Elaine Savick, 7708 W. 13 ½ St., stated she is very excited about the possibility of adopting Ranked Choice Voting and hopes it will inspire more people to vote. She explained she attended the Expert Q&A Panel and was very impressed with the information that was shared. She referenced comments made by Professor Schultz, and stated that increasing voter turnout should be a goal for anyone who cares about representative democracy. She stated eliminating Primary elections was a good idea and implementing Ranked Choice Voting is the next logical step because it promotes electing candidates with majority support and allows people to vote their conscience. Zaylore Stout, 4942 N. 6th St., Minneapolis, stated he is a former resident, city council candidate, and member of the HRC in St. Louis Park. He explained the phrase “one man, one vote” was used by people advocating for political equality throughout various election reforms such as universal suffrage, proportional representation, elimination of plurality voting, and gerrymandering. In 1960 the phrase “one person, one vote” was used in a series of legal cases related to equal representation in state congressional districts and he would like to invoke the same for equality in St. Louis Park. He stated the electoral process has evolved over time and will continue to evolve in the future. African Americans were not eligible to vote in the United States until 1870, and women weren’t City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 33 eligible to vote until 1919. He added the right to vote means nothing without an equal access to vote, without a diverse array of candidates to vote for, or without the integrity of our electoral system. He stated even though his campaign for city council was unsuccessful he hopes his candidacy is able to inspire other diverse candidates to run for office in the future. He stated it is important to understand how St. Louis Park came to be the way it is demographically and the question of why Ranked Choice Voting is needed is a question of values. He added it is his belief that Ranked Choice Voting will counteract systemic inequalities in the voting system that frequently disenfranchises or discourages minorities from participating in the electoral process either as candidates or as voters. He stated the city’s representation needs to be reflective of the population it serves. Sue Sanger, 4717 W. 28th St., stated she initiated the city council discussion on Ranked Choice Voting several years ago because she was impressed that it incents candidates to connect with more voters. In a traditional voting system, a candidate typically identifies his or her base of supporters and then works hard to get them to show up to vote. She explained with Ranked Choice Voting candidates have to reach out to a wider range of voters to try to get those voters to select them as their second choice, if not their first choice, candidate. This means that more voters have greater contact and more opportunities to interact with the candidates to better understand who they are, ask questions, and provide feedback. This leads to voters being able to make more informed decisions at the polls. She stated from the candidate perspective, it also allows them to hear a wider variety of opinions that will hopefully shape their positions and policies. She noted this would also require candidates to spend more time reaching out to more potential voters. She added using a traditional, winner-take-all election will mean that a winner in a multi-candidate election will not necessarily receive 50% of the vote. Using Ranked Choice Voting would mean that the winner will have majority support and thus more buy-in from a greater segment of residents. She encouraged the Charter Commission to recommend that the city council adopt Ranked Choice Voting this year. Shelley Colvin, 2811 Aquila Ave. S., stated she supports Ranked Choice Voting for many of the same reasons as those that spoke before her. She added that using this method would allow decisions to be made by a larger group of voters and would not encourage one-issue candidates. Roger Cruze, 3953 Xenwood Ave. S., stated he is not in favor of Ranked Choice Voting and feels it is a bad idea because it does not promote diversity of thought and instead promotes the current general consensus of thought. He explained someone with a diverse thinking process ends up being at the bottom of the choices and are the first candidates eliminated. They rarely ever get to the top or a position where Ranked Choice Voting could help them. He stated it is more expensive to use a Ranked Choice Voting process than what we have. He added votes cannot be counted at the precinct level and the counting process takes longer and is more prone to fraud. He stated the counting process is so complicated it has to be done by a computer and he does not trust the security of the process. Susan Niz, 2800 Alabama Ave. S., stated she supports Ranked Choice Voting because it can foster diverse candidates and diverse winners, encourages non-traditional candidates to run and creates more opportunities for them to win, and it also promotes voter engagement. She added that inclusion, diversity, and engagement will not be realized without putting systems in place that promote those values. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 34 Suzann Willhite, 3905 Glenhurst Ave. S., stated she supports Ranked Choice Voting in St. Louis Park and for state and national elections because it engages citizenry and makes people feel like their vote matters. Eilseen Knisely, 8725 W. 35th St., stated she is committed to making democracy work better. She stated she believes Ranked Choice Voting is good for voters and good for democracy. Local, national, and international surveys of democratic countries show that people are becoming increasingly cynical and less engaged in the democratic process. She stated Ranked Choice Voting will give voters more choice and a more equal voice, will promote increased diversity in representation, and provide more opportunities for underrepresented communities. Bruce Fisher, 4359 Browndale Ave., stated he is in favor of Ranked Choice Voting for many of the reasons previously stated by others. He added eliminating the Primary election creates a potential problem in a winner-take-all General election because a candidate could be elected without a majority of the vote. He stated if Ranked Choice Voting is implemented, voters will probably find that their relationships with candidates will be much different than they are now under a traditional system. Rod Harris, 2205 Quebec Ave. S., stated St. Louis Park has an engaged citizenry and he is in favor of making the change and seeing how it works. Olaf Jorgenson, 2737 Alabama Ave. S., stated he supports Ranked Choice Voting because he believes it encourages quality candidates to run for office and provides more of a chance for non- traditional candidates to be elected. Catherine Gray, 2700 France Ave. S., stated she believes Ranked Choice Voting is a big reason why Minneapolis is experiencing larger voter turnout across the city. She asked the Commission to move the policy forward to the city council without delay. Phillipe Cunningham, Minneapolis Ward 4 Councilmember, stated Ranked Choice Voting fosters diversity in candidates. He noted in 2017, 18 of the 22 competitive races had candidates that were either women or people of color and 12 of those candidates were elected. He stated he is the first person of color elected to represent the 4th Ward in Minneapolis. He added there was a 25% increase in turnout in the 4th Ward which shows that low income, people of color, and young people can be engaged in voting. He explained as a candidate he was able to build positive relationships with voters across many bases. He stated Ranked Choice Voting is an opportunity to shift the city’s local political discourse and paradigm away from divisive rhetoric being seen at the national level to a more local, community-building, collaborative culture. Julia Davis, 2810 Xenwood, stated she wrote a letter to the Commission in support of Ranked Choice Voting and she was impressed by the questions and the answers at the Q&A Panel event, and by the attention given to how to fund the change and implement Ranked Choice Voting in St. Louis Park. She stated she understands the increased administrative needs and urged the Commission to consider the potential future benefits of making the change because it will demonstrate the city’s values. Karl Gamradt, 3347 Virginia Ave. S., stated the topic of Ranked Choice Voting is important to the people of St. Louis Park. He stated the city already eliminated Primary elections to give people more choices on the ballot, but if we don’t give people more ability to choose, the extra number City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 35 of people on the ballot doesn’t do any good. He added ranking multiple choices will not be difficult for people to understand. Jim Leuthner, 3128 Florida Ave. S., stated was a candidate in Ward 3 in 2017 and he found that Ranked Choice Voting was widely supported in the community. He added he believes that more democracy is always better than less democracy and he does not want to see a candidate potentially elected with less than a majority of the vote. He stated he believes it will increase positivity and turnout in elections. Diane Steen-Hinderlie, 2829 Yosemite Ave., stated Ranked Choice Voting is better for determining a consensus winner and measuring the overall will of the people. She added that government needs to have mechanisms in place to counteract discord and voter apathy. She stated Ranked Choice Voting would be a positive step forward for St. Louis Park. Gail Dorfman, 4200 Forest Road, stated she strongly supports Ranked Choice Voting. She explained that St. Louis Park is a city of innovation and good government. She stated St. Louis Park is a leader in the region and Ranked Choice Voting seems like a good fit for all of the reasons outlined by those who spoke before her. Deb Brinkman, 4327 Alabama Ave. S., thanked the Charter Commission for their time and effort in studying Ranked Choice Voting. She requested that the Commission forward a favorable recommendation to the city council. She added that St. Louis Park has the opportunity to drive positive change and ensure that winning candidates have the majority support of the voters. 4. Adjournment The meeting adjourned at 7:15 p.m. Respectfully submitted by: Melissa Kennedy, City Clerk City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 36 UNOFFICIAL MINUTES CHARTER COMMISSION MEETING ST. LOUIS PARK, MINNESOTA March 13, 2018 5:30 p.m. – City Council Chambers, City Hall 1. Call to Order Chair Maaske called the meeting to order at 5:30 p.m. 2. Roll Call and Attendance Members Present: Maren Anderson, JC Beckstrand (arrived 5:40 pm), Jim Brimeyer, Lynne Carper (arrived at 5:55 pm), Jim de Lambert, Terry Dwyer, David Dyer (arrived 5:35 pm), Ken Gothberg, Andrew Rose, Sara Maaske, Erin Smith, and Henry Solmer. Members Absent: Gary Carlson (absence excused), Matthew Flory Others Present: Nancy Deno (Deputy City Manager/HR Director), Soren Mattick (City Attorney), and Melissa Kennedy (City Clerk) 3. Approval of Minutes a.Minutes of January 10, 2018 Charter Commission Meeting b.Minutes of February 13, 2018 Charter Commission Meeting c.Minutes of March 6, 2018 Charter Commission Listening Session It was moved by Commissioner Gothberg, seconded by Commissioner Rose, to approve the minutes of January 10, 2018, February 13, 2018, and March 6, 2018 as presented. The motion passed 9-0. 4. Old Business a. Proposed Charter Amendment related to Ranked Choice Voting (RCV) Chair Maaske asked for comments from the commission on the proposed Charter amendments. Commissioner Gothberg read a prepared statement: “I still don’t believe we need RCV in St. Louis Park. Although Minneapolis and St. Paul have been successful with RCV, anyone who has watched their divisive city elections in the past understands why they needed to do something different and it’s great that they have been successful. People say RCV will make elections more civil. St. Louis Park has a history of civil, positive elections for city offices. It’s only been state and federal elections that become divisive due to party influences. Some say it eliminates the “spoiler” issue. In any election with more than two candidates some candidates will be viewed as spoilers – particularly supporters of the non-winners. Single issue candidates will be reduced. There will always be some single issue candidates. In RCV the impetus is to tell all the voters what they want to hear. I would rather have candidates speak honestly. RCV claims to result in a clear majority winner. Actually, it results in a consensus plurality by eliminating voters’ votes. The result in RCV is some voters get two votes counted, City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 37 some get one vote and some get zero votes because they didn’t vote for the “right candidates”. I have always believed in one voter, one vote. General wisdom is that RCV encourages more non-traditional candidates. In my opinion, if I was a non-traditional candidate, I would feel more positive if I only had to receive more votes than the other candidate and win with a plurality. I believe RCV would encourage deal making between traditional candidates and try to shut out the non-traditional candidates. Beware of unintended consequences. Or, perhaps this is just a way to shut out non-traditional candidates. Is that the true objective of RCV in St. Louis Park? I hope not. St. Louis Park has always been a welcoming community. There is no evidence to support the need for RCV in St. Louis Park. By eliminating primaries we have shortened the duration of campaigns and made it more feasible for more candidates, both traditional and non-traditional, to enter city elections. With more candidates election interest should increase, raising voter turnout. I don’t believe we need RCV to do this. I may be wrong, but I would like to see some evidence that we need RCV before we take this step. One item that has not been publicized strong enough by City staff is that not only did we eliminate the primaries, we also increased the number of petition signatures required to be placed on the ballot. This needs to be emphasized much more broadly before the next election.” Commissioner Brimeyer stated that when the decision was made to eliminate primary elections he really felt it was for a good reason and he thought a natural progression from that decision would be moving to RCV. He noted that no voting method will ever solve the issue of divisiveness in elections because that is part of the culture. He agreed St. Louis Park generally has civil elections and he does not believe RCV is going to change that either, because that is not the culture in this community. He stated the major thing he learned from the Expert Q&A Panel was that RCV works and it is a good thing to have – the key is educating people. He referenced the comments received at the Listening Session, focusing on the concerns that were raised regarding fraud, flaws in the counting method, and that the voting process itself is complicated. He explained he discussed some of the concerns raised with the City Clerk to learn more about the counting process used in Minneapolis, the ballot styles used in Minneapolis and St. Paul, and the capabilities of the existing tabulation equipment. He stated although he acknowledges that parts of the counting process did seem a bit complicated, he feels that staff will be able to figure out an easier and quicker way of tabulating results. He added that St. Louis Park should have been the first city in the State to switch to this voting method for city elections. He questioned why the city should wait for a problem to happen and then react to it versus making a proactive decision. He noted that the education piece is extraordinarily important and he wants to make sure that is not overlooked. Commissioner Beckstrand stated he has considered this issue from the perspective of an unwavering desire to ensure that all eligible voters have an opportunity to vote and are able to have their ballot counted accurately and securely. He explained if voter turnout is actually increased, he is in favor of it. If candidate diversity will improve, he is in favor of it. If it diminishes overtly negative campaigning, he is in favor of it. At the same time if it instills fear or uncertainty because of the education component or prevents an eligible voter from exercising their right to vote, he is against it. If it increases the complexity in terms of tabulation or introduces avenues for fraud, he City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 38 is against it. If it overly homogenizes candidates’ messaging because there is too little differentiation between candidates, he does not like the idea of simply creating a false majority. He added that he also does not necessarily believe that there is a specific problem to be solved. He is of the mindset that the Charter can exist as a living document that can be changed to reflect the changing needs of the community. He stated he serves in an appointed position on the Commission, he is not elected, and he does not have to answer directly to the voters – that is the role of the council. He explained he does not want to stand in the way of the council being able to do the job for which they were elected, and he does not want to stand in the way of this moving forward. He noted he is extremely proud of the deliberative process the Charter Commission has gone through to consider this policy question and stated staff has been extremely helpful and easy to work with. He added that he values the diversity of opinions on the Commission and that they are able to have open discussions and work together in a respectful manner. City Attorney Mattick stated that a resolution was prepared that would formalize the Commission’s recommendation to adopt the proposed ordinance. Commissioner Dyer stated in his role as a commissioner he has to look at policy questions from the perspective of what is best for St. Louis Park as a whole. He explained when this discussion first started his main concern was making sure that people in St. Louis Park had a voice in this decision. He stated he liked the process the Commission went through to research, gather information, and hear from the people because it has helped him make a clear decision. He added he feels that the Commission has done its due diligence on this policy question. Commissioner de Lambert agreed with Commissioner Dyer’s statements. He thanked city staff and all those who participated in the Expert Panel discussion and Listening Session and he found all of the input to be valuable. Commissioner Dwyer thanked city staff for their hard work and the time they put in to assisting the Commission throughout this process. He stated although he will be voting in favor of moving forward with the amendment, it is not with the same enthusiasm he had at the onset of the Commission’s discussions. He noted that is a testament to how thorough the process has been to study and learn about this issue. He stated that RCV is not perfect. The process has shortcomings and he hopes that some of those shortcomings won’t materialize in St. Louis Park’s implementation. He noted in some respects RCV is a workaround to a broader process that is outside of the city’s control to fix. He stated he is hopeful that in the broader system the things that are not within our control but can affect us may cause us to revisit this issue in the future. Perhaps we will have a more engaged voting process, perhaps voting itself will be easier and more accessible. He reiterated that RCV is not perfect but this is not necessarily all about solving problems, it is about establishing and communicating the values we want this community to have. Commissioner Smith thanked city staff and stated throughout the process they were very responsive to the requests from the Commission and from the public. She also thanked her fellow commissioners for the thoughtful and respectful discussion throughout the process. Commissioner Maaske echoed all of the thanks other commissioners previously mentioned. She stated this has been a very fruitful process and an opportunity to dig deeper into an issue she initially did not know very much about. She agreed that RCV is one option for St. Louis Park to consider. She questioned if the city was a business serving a customer base the size of St. Louis Park and they were embarking on a system change for product delivery that would affect the entire customer base, would they just go with the company that made the most aggressive sales pitch. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 39 She stated she believes the city would evaluate the options and choose the solution that creates the best value, the least impact on service, and improves the customer experience. She added that when asked why St. Louis Park needs RCV, they should identify the problems that exist and then determine what policy options are available to help address those problems. She noted that RCV is not the only option available to St. Louis Park. She stated advocates of RCV have presented data in a way that is persuasive and compelling for their case because that is what advocates do. However the analysis is incomplete because it does not take into account the other variables that affect how and why people vote or decide to run for office. She explained like Minneapolis and St. Paul, St. Louis Park also had a high turnout during the 2017 election cycle – the highest since 2001. The climate of the electorate is at least one other variable that factors into people going to the polls to vote. She stated she has also heard that by making this move they are reflecting the progressive values and the tradition of engagement in St. Louis Park, yet they have seen and heard from virtually the same faces and voices throughout this process. She noted she was personally disappointed in their ability to engage people whose voices aren’t loud and not typically heard. The result is a small group of people telling voters that they know what type of voting system is best, even though they have not truly heard from the populous or examined all of the options. She offered for consideration an incremental step for the next election cycle that would allow more time to examine all of the options. She stated combining the 2019 at-large races into one race in which the top two vote-getters are elected, mirroring the same voting process used for school board elections, it would make both seats more competitive and provide more consistency for voters across the ballot. She explained for all of the reasons she has outlined, she will not support a recommendation to council to advance RCV in St. Louis Park. It was moved by Commissioner Brimeyer, seconded by Commissioner de Lambert, to approve Resolution No. 18-001 recommending that the St. Louis Park City Council adopt a Charter Amendment by Ordinance Authorizing Ranked Choice Voting. The motion passed 10-2 (Gothberg, Maaske). b.Verbal Update on Amendment related to Campaign Finance Contribution Limits Ms. Kennedy stated that the Council adopted the ordinance to amend the City Charter related to campaign finance contribution limits on February 5, 2018. The amendment takes effect 90-days after passage and publication according to law, on May 16, 2018. She noted that the Charter would be updated and distributed to the Commission once the amendment officially takes effect. 5. New Business a. Proposed Annual Report for District Court – Year 2017 It was moved by Commissioner Smith, seconded by Commissioner Brimeyer, to approve the 2017 Annual Report and to direct staff to submit to the report to the District Court. The motion passed 12-0. b.Election of Officers Chair Maaske stated that the Election of Officers for Chair, Vice Chair, and Secretary takes place at each annual meeting. City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 40 It was moved by Commissioner Dyer, seconded by Commissioner Dwyer, to appoint Sara Maaske as Chair of the Charter Commission until the next annual meeting of the Charter Commission. The motion passed 12-0. It was moved by Commissioner Beckstrand, seconded by Commissioner Rose, to appoint David Dyer as Vice Chair of the Charter Commission until the next annual meeting of the Charter Commission. The motion passed 12-0. It was moved by Commissioner Gothberg, seconded by Commissioner Rose, to appoint Terry Dwyer as Secretary of the Charter Commission until the next annual meeting of the Charter Commission. The motion passed 12-0. c.Legislative Update – Verbal Ms. Kennedy stated staff was notified on Monday that a bill had been proposed in the House regarding a prohibition of Ranked Choice Voting. She noted the bill was H.F. No. 3690 and the companion bill from the Senate had just been released, S.F. No. 3325. She stated staff would continue to monitor the progress of this bill and would keep the Commission apprised of any significant changes or actions. Ms. Kennedy also noted that the City Council had mentioned a need for a more thorough review of the Charter to update any outdated language, insert gender-neutral language, and to make sure there are no conflicts with State law. She stated this would be brought back to the Commission at a later date once more information and direction was received from council. 6. Future Meetings The Commission set the date of their next annual meeting for March 12, 2019 at 6:00 pm at City Hall. The Commission asked staff to inform them if a meeting was needed to conduct business prior to that date. 7. Communications a.Public Communications received by staff since February 28, 2018 meeting 8. Adjournment It was moved by Commissioner Beckstrand, seconded by Commissioner Brimeyer, to adjourn the meeting. The motion passed 12-0. The meeting adjourned at 6:16 p.m. Respectfully submitted by: Melissa Kennedy, City Clerk City Council Meeting of April 16, 2018 (Item No. 6a) Title: First Reading of Ordinance Amending SLP Home Rule Charter Sec. 12.08 Related to Voting Method Page 41 Meeting: City Council Meeting Date: April 16, 2018 Action Agenda Item: 8a __________________________________________________________________________________________________________________________________________________________ EXECUTIVE SUMMARY TITLE: Tenant Protection Ordinance RECOMMENDED ACTION: Motion to approve Second Reading and Adopt Ordinance amending Chapters 8, Section 8-336 of the St. Louis Park Code of Ordinances relating to a tenant protection period following the sale of an affordable housing building and authorize publication of summary ordinance. POLICY CONSIDERATION: Will the adoption of this ordinance result in the protection of lower income tenants? SUMMARY: At the September 25, 2017 city council study session, council directed staff to convene a workgroup with representatives from MN Multi-Housing Association, the St. Louis Park rental community and representatives from agencies advocating for NOAH preservation strategies. The purpose of the workgroup was to review and discuss the NOAH preservation strategies being considered by the council and determine if there is any middle ground for a workable solution. The workgroup did identify several NOAH preservation strategies in which the workgroup was able to reach general agreement including a strategy that establishes a tenant protection period following the sale of an NOAH property. Under the proposed ordinance, the new owner would be required to pay relocation benefits to tenants if the owner increases the rent, rescreens existing residents or implements non-renewals of leases without cause within a three month period following the ownership transfer of the property and the tenant chooses to move due to these actions. A public hearing and the first reading of the ordinance was held at the March 5, 2018 council meeting. Testimony was heard from several individuals who spoke in support of the ordinance. No one spoke in opposition to the ordinance. The council adopted the first reading of the ordinance and set the second reading of the ordinance for April 16, 2018. FINANCIAL OR BUDGET CONSIDERATION: Staff will develop administrative processes to implement the ordinance, inform owners of the requirement and monitor and enforce compliance. VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and diverse housing stock. SUPPORTING DOCUMENTS: Discussion Draft Ordinance Ordinance Summary for Publication Prepared by: Michele Schnitker, Housing Supervisor Reviewed by: Karen Barton, Community Development Director Approved by: Tom Harmening, City Manager City Council Meeting of April 16, 2018 (Item No. 8a) Page 2 Title: Tenant Protection Ordinance DISCUSSION BACKGROUND: Since the September 25, 2017 council study session, the NOAH Preservation Workgroup has met three times to discuss the four NOAH preservation strategies identified by the council for further consideration. The four strategies include: •Advance Notice of Sale •Non-renewal of Lease for Cause •Non-discrimination of Housing Subsidy Recipients •Rehab Financing in Exchange for Rent Restrictions The workgroup meetings were facilitated by Cathy Bennett, an independent consultant. Twelve individuals participated in at least one of the three meetings. The workgroup did not reach agreement or identify any middle ground on three of the four strategies being considered by the council but did support the Rehab Financing strategy and identified several alternative NOAH preservation strategies in which there was general agreement. One of the strategies proposed by the workgroup establishes a tenant protection period following the sale of a NOAH property. A summary of the proposed ordinance is as follows: Tenant Protection Ordinance: The tenant protection ordinance requires a three month period following the ownership transfer of a NOAH multi-family residential property during which the new owner would be required to pay relocation benefits to tenants if the rent is increased, existing residents are rescreened or non-renewals are implemented without cause. NOAH properties would be defined as buildings where at least 18% of the units have rents affordable to households with incomes at or below 60% Area Medium Income (AMI). Eighteen percent mirrors the percent of affordable housing required at 60% AMI per the city’s Inclusionary Housing Policy. The ordinance does not prohibit a new owner from taking the management actions listed above; however, the owner would be required to provide resident relocation benefits if they do take any of those actions during the tenant protection period and a tenant decides to move as a result. The three month protection period also provides a period of time for residents to work with housing support resources and seek alternative housing if they are facing unaffordable rent increases, new screening criteria requirements that would be problematic for them, or a thirty day non-renewal without cause notice to vacate. The proposed ordinance requires the new owner of a NOAH building to provide notice of the ordinance protections to tenants of affordable housing units within 30 days of the sale of the of the building. The 3 month tenant protection period would begin once the notice has been given to the tenants. The proposed ordinance was drafted by the city attorney based on the input and guidance of the NOAH Preservation Workgroup, staff and the city council. A public hearing was held at the March 5, 2018 city council meeting at which a number of comments from the public were received in support of the ordinance. No testimony was presented in opposition to the ordinance. At the first reading of the ordinance, also on March 5, 2018, council members expressed support for the ordinance and raised several questions related to implementation of the ordinance. It was noted that between the approval of the 2nd reading and the July 1 effective date of the ordinance, a policy document addressing the comments raised by the council will be drafted to establish criteria for implementation of the ordinance. City Council Meeting of April 16, 2018 (Item No. 8a) Page 3 Title: Tenant Protection Ordinance PRESENT CONSIDERATIONS: Listed below is a summary of the implementation related topics discussed at the March 5 council meeting including: 1.How will NOAH properties be identified? How will affordable rents be established? a.As part of the annual rental licensing process for multi-family buildings, owners will be asked to certify whether the building meets the definition for a NOAH building. If the rents charged for at least 18% of the units are at or below rent amounts affordable to households with incomes at 60% AMI or below, the building must be certified as a NOAH property. A similar certification will be included in the Point of Sale application for a property maintenance inspection. 2. Would the policy apply to bank owned or foreclosed properties? a.Yes, all multifamily residential properties transferring ownership through the sale of the property that meet the definition of a NOAH property would be required to comply with the ordinance. For a foreclosed property, the three month notification period will begin when the redemption period has expired and the new owner has taken possession of the property. 3.Does the ordinance apply to only the NOAH units in a property or to all units in the building? a.NOAH rental units only. 4.Does the penalty of $500 per unit apply to all the units in a building or only those units that qualify as a NOAH rental units? a.Only the NOAH rental units that violate the ordinance. 5. Does a sale include the redistribution of an existing ownership? a.No – a redistribution of an existing ownership structure would not be considered a sale. 6.Does a transfer of sale include an ownership transfer to an immediate family member? Or as the result of inheritance? a.If it is an actual transfer of ownership that was not previously in place, it would be considered a sale and the ordinance would apply. 7.Since the current definition of the ordinance is based on the percentage of affordable units required in the Inclusionary Policy, if the policy is amended, would the ordinance be amended to conform to the policy? a.The ordinance can be amended but it should be noted that if the percentage of required affordable units per the Inclusionary Policy is increased, this would have an adverse impact on the number of properties that would be defined as NOAH properties under the ordinance. With a higher threshold, ex. 20% instead of 18%, less properties would meet the definition of a NOAH property. NEXT STEPS: The proposed ordinance will be published April 26, 2018 and take effect July 1, 2018. Staff will draft an administrative policy establishing the necessary criteria to implement, monitor and enforce compliance of the ordinance. Staff will also develop a comprehensive notification process to ensure the St. Louis Park rental community, including owners, property managers and tenants, are informed and understand the requirements of the ordinance. Additionally, tenant assistance organizations will also be made aware of the ordinance. City Council Meeting of April 16, 2018 (Item No. 8a) Page 4 Title: Tenant Protection Ordinance ORDINANCE NO. ____-18 CITY OF ST. LOUIS PARK HENNEPIN COUNTY, MINNESOTA AN ORDINANCE RELATING TO AFFORDABLE HOUSING THE CITY OF ST. LOUIS PARK DOES ORDAIN: SECTION 1. The St. Louis Park City Code is amended by adding Chapter 8, Section 8-336 as follows: Sec. 8-336. Sale of Affordable Housing Building (a)Definitions. The following definitions apply in this Section of this Code. References to “Section” are unless otherwise specified, references to this Section of this Code. Defined terms remain defined terms, whether or not capitalized. (1)Affordable housing building means a multifamily rental housing building having three or more housing units, where at least 18% of the units rent for an amount that is affordable to households at or below 60 percent of area median income, as median income was most recently determined by the United States Department of Housing and Urban Development for the Minneapolis-St. Paul-Bloomington, Minnesota- Wisconsin Metropolitan Statistical Area, as adjusted for household size and number of bedrooms. (2)Affordable housing unit means a rental unit in an affordable housing building that rents for an amount that is affordable to households at or below 60 percent of area median income, as median income was most recently determined by the United States Department of Housing and Urban Development for the Minneapolis-St. Paul- Bloomington, Minnesota-Wisconsin Metropolitan Statistical Area, as adjusted for household size and number of bedrooms. (3)Cause means the tenant or a member of the tenant’s household materially violated a term of the lease or violated a provision of the City’s Rental Housing Ordinance, City Code Section 8-331 Crime Free/Drug Free and Disorderly Use Lease Requirements. (4)Tenant protection period means the period that commences on the date when a real estate closing transfers ownership of an affordable housing building and runs through the end of the 3 calendar months following the month in which written notice of the transfer is sent to each affordable housing unit tenant pursuant to subpart (c) of this Section. (b)Relocation Assistance (1)If during the tenant protection period the new owner of an affordable housing building terminates or refuses to renew any affordable housing unit tenant’s rental agreement without cause, then upon terminating or refusing to renew the tenant’s City Council Meeting of April 16, 2018 (Item No. 8a) Page 5 Title: Tenant Protection Ordinance lease, the new owner shall pay to the tenant, as relocation assistance, no later than the day upon which the tenant vacates the unit, a payment in the amount as follows: $2,600 for a studio or single room occupancy dwelling unit, $3,000 for a one- bedroom dwelling unit, $3,600 for a two-bedroom dwelling unit, and $4,100 for a three-bedroom or larger dwelling unit. (2)During the tenant protection period if a rent increase goes into effect on any affordable housing unit, or the new owner of an affordable housing building raises any affordable housing unit tenant’s rent, or rescreens an existing affordable housing unit tenant, and the tenant gives written notice to the new owner to terminate the rental agreement, the new owner, shall within 30 days of receiving tenant’s written notice of termination of the rental agreement, pay to the tenant as relocation assistance, a payment in the amount as follows: $2,600 for a studio or single room occupancy dwelling unit, $3,000 for a one-bedroom dwelling unit, $3,600 for a two- bedroom dwelling unit, and $4,100 for a three-bedroom or larger dwelling unit. (c)Notice. Whenever ownership of an affordable housing building shall transfer, the new owner shall, within thirty (30) days of the date on which a real estate closing transfers ownership of the affordable housing building, give written notice to each affordable housing unit tenant of the building that the property is under new ownership stating: (1)The name, mailing address, and telephone number of the new owner. (2)St. Louis Park City Code Section 8-336 provides for a tenant protection period for affordable housing unit tenants. Under Section 8-336, affordable housing unit tenants may be entitled to relocation assistance from the new owner if the new owner terminates or does not renew the tenant’s rental agreement without cause within the tenant protection period. Affordable housing unit tenants may also be entitled to relocation assistance from the new owner if the owner raises the rent or initiates a tenant rescreening process within the tenant protection period and the tenant terminates their rental agreement. (3)Whether there will be any rent increase within the tenant protection period with the amount of the rent increase and the date the rent increase will take effect. (4)Whether the new owner will require existing affordable housing unit tenants to be re- screened to determine compliance with existing or modified residency screening criteria during the tenant protection period and if so, a copy of the screening criteria. (5)Whether the new owner will terminate or not renew rental agreements without cause during the tenant protection period and if so, notice to the affected affordable housing unit tenants whose rental agreements will terminate and the date the rental agreements will terminate. (6)Whether the new owner intends to increase rent, require existing affordable housing unit tenants to be rescreened to determine compliance with existing or modified residency screening criteria, or terminate or not renew affordable housing unit rental agreements without cause on the day immediately following the tenant protection period. City Council Meeting of April 16, 2018 (Item No. 8a) Page 6 Title: Tenant Protection Ordinance The new owner shall provide a copy of the notice required by this part to the city at the same time notice is provided to the tenants. The new owner of an affordable housing building shall not terminate or not renew a tenant’s rental agreement without cause, raise rent, or rescreen existing tenants during the tenant protection period without giving the notice required by this part. (d)Penalty. (1)A violation of subpart (b) of this Section is an administrative offense that may be subject to an administrative citation and civil penalties as provided in City Code Section 1-14. Notwithstanding any provision of City Code Section 1-14, the penalty for a violation of subpart (b) of this Section shall be the sum of the applicable amount of relocation assistance plus $500. (2)A violation of subpart (c) of this Section is an administrative offense that may be subject to an administrative citation and civil penalties as provided in City Code Section 1-14. (3)A violation of this ordinance as to each dwelling unit shall constitute a separate offense. (e)Within thirty (30) days after a person pays the penalty provided for in subpart (d) (1) of this Section to the city, the city shall pay to the displaced tenant of the affordable housing unit for which the violation occurred an amount equal to the relocation assistance provided for in subpart (b) of this Section. SECTION 3. This Ordinance shall take effect July 1, 2018 and expire on July 1, 2023. ADOPTED this ______ day of _______________, 2018, by the City Council of the City of St. Louis Park. Public Hearing March 5, 2018 First Reading March 5, 2018 Second Reading April 16, 2018 Date of Publication April 26, 2018 Date Ordinance takes effect July 1, 2018 Reviewed for Administration ____________________________________ Thomas K. Harmening, City Manager Adopted by City Council _____________________________________ Jake Spano, Mayor Attest: ___________________________________ Melissa Kennedy, City Clerk Approved as to Form and Execution: _____________________________________ Soren Mattick, City Attorney City Council Meeting of April 16, 2018 (Item No. 8a) Page 7 Title: Tenant Protection Ordinance SUMMARY FOR PUBLICATION ORDINANCE NO.____-18 AN ORDINANCE RELATING TO AFFORDABLE HOUSING The ordinance would establish a tenant protection period following the sale of an affordable housing building. The ordinance shall take effect July 1, 2018 Adopted by the City Council April 16, 2018 Jake Spano /s/ Mayor A copy of the full text of this ordinance is available for inspection with the City Clerk. Published in St. Louis Park Sailor: April 26, 2018 Meeting: City Council Meeting Date: April 16, 2018 Action Agenda Item: 8b EXECUTIVE SUMMARY TITLE: Approval of 2018 – 2023 Garbage, Recycling, Organics Recycling and Yard Waste Collection Contract RECOMMENDED ACTION: Motion to Adopt Resolution which designates Waste Management (WM) as the contractor for residential garbage, recycling, organics recycling, and yard waste collection services (solid waste collection) and authorizes the Mayor and City Manager to execute a contract with WM for that service. POLICY CONSIDERATION: Does Council wish to approve the contract at this time? SUMMARY: Staff recommends Council adopt the attached Resolution, reviewed by the City Attorney, which reaffirms the Residential Solid Waste Collection Services, designates WM as the service provider, and authorizes execution of the Agreement for Residential Garbage, Recycling, Organics Recycling, and Yard Waste Collection Services. This action is consistent with the direction provided by the Council at its March 5 special study session. Staff recommends selecting WM based on cost, their past satisfactory delivery of services in the City, and their reputation as a leader in the solid waste industry. The contract will be from October 1, 2018 to September 30, 2023. The five-year cost for the garbage, recycling, organics recycling and yard waste collection services is estimated to be $6,650,000. FINANCIAL OR BUDGET CONSIDERATION: There will be no cost implications to the General Fund resulting from the city contracting for solid waste collection, as the Solid Waste Enterprise Fund covers all these costs. Recycling is the only service that is expected to result in rate increases at this time, with an average increase of $3-$4/quarter. Collection costs were budgeted for in the current Solid Waste budget. VISION CONSIDERATION: St. Louis Park is committed to being a leader in environmental stewardship. We will increase environmental consciousness and responsibility in all areas of city business. SUPPORTING DOCUMENTS: Discussion Resolution Prepared by: Scott Merkley, Public Works Services Manager Reviewed by: Mark Hanson, Public Works Superintendent Cynthia S. Walsh, Director of Operations & Recreation Approved by: Tom Harmening, City Manager City Council Meeting of April 16, 2018 (Item No. 8b) Page 2 Title: Approval of 2018 – 2023 Garbage, Recycling, Organics Recycling and Yard Waste Collection Contract DISCUSSION Background At the May 22, 2017 Study Session staff spoke with Council about the Request for Proposals (RFP) process, solid waste program goals, and potential program changes. Council expressed interest in considering the following items: •Weekly recycling and every-other-week garbage •Smaller garbage service options for low volume users •Organics recycling options for multi-family residents At the September 11, 2017 Study Session staff spoke with Council again about new significant items to be added to the RFP, including: •Pricing for weekly and optional every-other-week garbage (for lowest service levels only) •Pricing for weekly and every-other-week recycling •Permanently adding multi-family organics recycling drop-sites, after successful completion of pilot (drop-site for multi-family successfully implemented) •Alternate collection methods and delivery locations for organics recycling and yard waste •Ensuring that services proposed help the City reach program goals of high quality service, environmental stewardship, cost effective services, effective communication, and continual program/industry evaluation At the March 5, 2018 Special Study Session staff spoke with Council about the items included in the RFP, unsuccessful search for minority-owned businesses to provide services, collection haulers that were considered, proposals that were received, and evaluation of proposals. Following the discussion, Council provided staff the following direction on how to proceed: •Negotiate a 5-year contract with Waste Management (WM) for collection of garbage, recycling, organics recycling and yard waste •Garbage is to continue to be collected weekly, adding an optional every-other-week (EOW) collection for smaller volume users •Recycling is to continue to be collected EOW •Organics recycling and yard waste will be collected separately Contract Terms and Conditions The major terms of the contract are as follows: General (for all materials) •Contract length is five years, from October 1, 2018 to September 30, 2023 •Collection days of the week and routes will not change •WM will use CNG (compressed natural gas) trucks for collection •WM will provide residents with educational tags for improper set outs •WM will provide local customer service staff to handle collection issues •WM will use the City’s electronic database for tracking customer issues •WM will provide the City with a variety of required reports •WM will assist with public education and participate in City events •WM will provide additional services during a disaster •City will assess penalties to WM for contract non-compliance •City has right to audit WM records pertinent to the contract •City may terminate the contract upon 30 days written notice for failure to perform City Council Meeting of April 16, 2018 (Item No. 8b) Page 3 Title: Approval of 2018 – 2023 Garbage, Recycling, Organics Recycling and Yard Waste Collection Contract •WM will indemnify and hold harmless the City against claims, losses, expenses, etc. •WM will submit certificates of insurance, as required by the City •WM will provide a financial guarantee, as required by the City Garbage •Garbage collection will remain weekly in city-owned carts, with optional every-other-week (EOW) collection for smaller volume users •For EOW garbage collection to occur, residents would need to be participating in organics recycling •Garbage will be disposed of at the Hennepin Energy Recovery Center •Garbage disposal costs paid to WM will be the actual costs they are charged by the disposal facility •WM will provide walk-up service as an optional service to residents •WM will host two Cleanup Day events annually •WM will provide weekly bulk waste, appliance and electronic waste collection as an optional service to residents Recycling •Recycling collection will remain every-other-week using city-owned carts •Recycling materials will be processed at WM’s Minneapolis material recycling facility •Recycling materials collected include all materials currently collected (except bulky rigid plastics #6 and #7) and additional materials agreed upon by WM and the city throughout the contract •Recycling revenue sharing will continue to occur using the same general methodology as currently is being used •WM will provide recycling end market material processing information •WM will provide walk-up service as an optional service to residents •WM will host two (2) Cleanup Day events annually Organics Recycling •Organics recycling collection will remain weekly using city-owned carts; however yard waste will no longer be allowed in organics carts, a separate truck will collect yard waste •WM will provide walk-up service as an optional service to residents •Organics recycling will be processed at the SET facility in Empire Township (southern Dakota Co.) or other City-approved facility Yard Waste •Yard waste will be collected April through November •Yard waste collection will remain weekly; however will be collected separately and no longer co-collected with organics recycling •Yard waste will need to be set out by residents using their own personal containers or in compostable bags •Yard waste will be processed by SET at their yard waste composting facilities (Burnsville, Empire Township, or Shakopee) or other City-approved facility City Council Meeting of April 16, 2018 (Item No. 8b) Page 4 Title: Approval of 2018 – 2023 Garbage, Recycling, Organics Recycling and Yard Waste Collection Contract Public Outreach Program Staff is working with the Communications Division to develop a comprehensive public outreach program to inform residents of the upcoming program changes. Information will be provided in a variety of ways including: direct mailings; open house meetings; information booths at city events; staff presentations to neighborhood groups; Park Perspective articles; website articles; social media; utility billing stuffers; and articles in the Sun Sailor. Next Steps / Timeline Below are the major steps needed for implementing the new contract: Item Completion Date Staff prepares a comprehensive education outreach program April 2018 Staff conducts public education outreach with residents May – Sept. 2018 Contractor procures equipment May – Sept. 2018 Review / revise Solid Waste Utility Rates with Finance/City Council June – Aug. 2018 Study Session update on public outreach July – Aug. 2018 New collection contract(s) begins Oct. 1, 2018 New Utility Rates become effective Jan. 1, 2019 City Council Meeting of April 16, 2018 (Item No. 8b) Page 5 Title: Approval of 2018 – 2023 Garbage, Recycling, Organics Recycling and Yard Waste Collection Contract RESOLUTION NO. 18-____ RESOLUTION DESIGNATING SERVICE PROVIDERS AND AUTHORIZING CONTRACT WHEREAS, the City reviewed, studied, and discussed desired residential garbage, recycling, organics recycling and yard waste collection services; and WHEREAS, based on various criteria, the City identified Advanced Disposal, Aspen Waste, Dick’s Sanitation, Eureka Recycling, Randy’s Sanitation, Republic Services, Walter’s Recycling & Refuse, Tennis Sanitation, Vierkant Disposal and Waste Management as providers they deemed acceptable to respond to the City’s residential garbage, recycling, organics recycling, and yard waste collection services Request for Proposals (RFP); and WHEREAS, on December 1, 2017, the City issued a Request for Proposals for the City’s residential garbage, recycling, organics recycling and yard waste collection services to Advanced Disposal, Aspen Waste, Dick’s Sanitation, Eureka Recycling, Randy’s Sanitation, Republic Services, Walter’s Recycling & Refuse and Waste Management; and WHEREAS, on January 5, 2018, the City reviewed the proposals received from Advanced Disposal, Eureka Recycling, Republic Services, Walter’s Recycling & Refuse, and Waste Management for residential garbage, recycling, organics recycling and yard waste collection services; and WHEREAS, the Council has determined that the proposal received from Waste Management is in the best interests of the City for residential garbage, recycling, organics recycling and yard waste collection services considering cost, their past satisfactory delivery of services in the City, and their reputation as a leader in the solid waste industry; and City Council Meeting of April 16, 2018 (Item No. 8b) Page 6 Title: Approval of 2018 – 2023 Garbage, Recycling, Organics Recycling and Yard Waste Collection Contract NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota, that: 1) The City designates Waste Management as the service provider for residential garbage, recycling, organics recycling and yard waste collection services in the City of St Louis Park, subject to the execution of a contract. 2) The Mayor and City Manager are hereby authorized, on behalf of the City Council, to execute a five-year agreement with Waste Management as the service provider for residential garbage, recycling, organics recycling and yard waste collection services in the City commencing on October 1, 2018 in conformance with the provisions developed and established in the proposal by Waste Management and the general terms and conditions considered by Council. Reviewed for Administration: Adopted by the City Council April 16, 2018 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk Meeting: Closed Executive Session Meeting Date: April 16, 2018 Discussion Item: 1 EXECUTIVE SUMMARY TITLE: Closed Executive Session to Discuss Coal Tar Sealant Litigation RECOMMENDED ACTION: No formal action at this time. POLICY CONSIDERATION: None at this time. SUMMARY: A previously distributed Attorney Client Communication to the Council on this matter will be resent to the Council prior to the meeting. The City Attorney will be present at the meeting to discuss this matter with the Council. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: None Approved by: Tom Harmening, City Manager