a. HRA Action: Action on a resolution providing approval for conveyance 37 of land in Mound Harbor District to City of Mound

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1 MISSION STATEMENT: The City of Mound, through teamwork and cooperation, provides, at a reasonable cost, quality services that respond to the needs of all citizens, fostering a safe, attractive and flourishing community. CONCURRENT SPECIAL MEETING AGENDA MOUND HOUSING AND REDEVELOPMENT AUTHORITY AND MOUND CITY COUNCIL TUESDAY, JULY 24, 2018 AT 6:00 P.M. MOUND CITY COUNCIL CHAMBERS CENTENNIAL BUILDING 5341 MAYWOOD ROAD, MOUND, MN 1. Call to Order 2. Approval of the agenda, with any amendments 3. Sarah Smith, Community Development Director, requesting 1-38 discussion on a purchase and development agreement with Mound Harbor, LLC to build a townhome development in the Mound Harbor District and requesting the following actions: a. HRA Action: Action on a resolution providing approval for conveyance 37 of land in Mound Harbor District to City of Mound b. Council Action: Action on a resolution approving purchase and 38 development agreement with Mound Harbor, LLC 4. Catherine Pausche, Director of Finance and Administrative Services, discussing Tax Increment Financing Districts 1-2 and 1-3 and the Dock Fund and requesting the following actions: a. HRA Action: Action on a resolution providing for the prepayment 41 and redemption of a portion of the Authority's Tax Increment Revenue Refunding Bonds (Metroplains Project), Series 2006 b. Council Action: Action to authorize a $25,000 payment on the -- Taxable Tax Increment Subordinate Revenue Note - MetroPlains Redevelopment Project (Series 2002B) c. Council Action: Action on a resolution authorizing transfer of funds 45 d. Council Action: Action on a resolution authorizing transfer of funds 57 expenditures outside of budget 5. Adjourn This is a preliminary agenda and subject to change. The City Council and HRA will set a final agenda at the meeting. More current meeting agendas may be viewed at City Hall or at the City of Mound web site:

2 MEMORANDUM Date: July 20, 2018 To: From: Subject: HRA Board of Commissioners & City Council Members Eric Hoversten, City Manager/Public Works Director Sarah Smith, Community Development Director Catherine Pausche, Director of Finance and Administrative Services Purchase and Development Agreement for Harbor District Townhome Development At the March 13, 2018 concurrent City Council and HRA meeting, Homestead Partners LLC was selected as the developer of a 21 unit townhome development in the Mound Harbor District. Staff was directed to work with Homestead Partners LLC and our attorneys to prepare a Purchase and Development Agreement for the City Council and HRA's consideration. The attached agreement was modeled after an agreement Homestead Partners' subsidiary (LLC) had with the City of Eden Prairie to build 36 environmentally sustainable/energy efficient single family homes, with 20 of the units to be classified as "affordable" and sold to people with moderate incomes. Staff entered into negotiations with the following objectives, which were addressed in the Purchase and Development Agreement as referenced below: 1. Ensure the proposal submitted in the response to the Request for Qualification and Interest is what gets built and is built by the principals of Homestead Partners/JMS Custom Homes or a subsidiary thereof The Buyer shall construct on the Property the Minimum Improvements, which consist of 21 market-rate townhomes, with three to four units per building, including two garage stalls per unit, at least 2 parking spaces in front of each building per unit, and at least 11 additional guest parking spaces as shown on the current concept plan. The specific Minimum Improvements shall be as shown on the preliminary plat, as approved The Buyer is a Minnesota limited liability company, whose purpose is to install the required public improvements required for the Minimum Improvements and to develop the Minimum Improvements. It is in the best interest of Buyer, and the intent of Buyer to work with JMS Custom Homes, LLC, a Minnesota limited liability company ( JMS Custom Homes ) as the builder of the townhomes. The Buyer acknowledges and understands that the City expects the completed Minimum Improvements to be similar in size, scope, and quality to the project submitted to the City as part of the Buyer s response to the City s Request for Qualifications with respect to the Property

3 The Buyer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity, with the exception of any bona-fide unit owner or an assignment to another entity affiliated with Buyer by common ownership, (collectively, a Transfer ), without the prior written approval of the City Council of the Seller. The term Transfer does not include encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or permanent financing necessary to enable the Buyer to construct the Minimum Improvements or component thereof. 2. Establish project milestones and financial incentives for meeting those milestones The Buyer agrees to commence and complete construction of each phase of the Minimum Improvements as follows: Phase 1: Infrastructure Improvements grading, water main, sanitary sewer and storm sewer and small utilities (as described in the Development Agreement referred to in Sections 20) will be performed in one phase with the completion by December 31, The Buyer may request an Early Start Agreement for consideration by the City Council and HRA Board prior to release of the Final Plat and completion of the Development Agreement for recording to allow issuance of a building permit to begin construction of the infrastructure improvements. Phase 2: Commence building construction by June 1, 2019 and complete construction of 6 units (2 buildings) by December 31, Phase 3: Commence building construction by June 1, 2020 and complete construction of 7 units (2 buildings) by December 31, Phase 4: Commence building construction by June 1, 2021 and complete construction of 4 units (1 building) by June 1, Phase 5: Commence Building construction by June 1, 2022 and complete construction of 4 units (1 building) by December 31, Landscaping / Irrigation Improvements: To be installed in the spring or summer following the completion date for each building construction phase referenced above. It being understood and acknowledged that the landscaping and irrigation improvements are not conditions to issuance of a Certificate of Completion of Phases 2 through 5. For each of Phases 2 through 5 described above, the Buyer may request an extension for the commencement and/or construction dates described above of up to 6 months, which such extension shall not be unreasonably withheld. For Phases 2 through 5 of the Minimum Improvements, construction of each respective phase will be considered satisfied when the building exterior and the respective units vanilla shell have been completed. 21. Penalties for Failure to Complete Minimum Improvements. Buyer will submit a letter of credit in the amount of $35,000 (the Letter of Credit ) at Closing to secure performance of the Buyer s obligations under Section Upon completion of one or more Phases of the Minimum Improvements, the Letter of Credit shall be reduced as follows: 10% reduction of the original amount after satisfactory completion of Phase 1 (in addition to any applicable reductions or releases in relation to the Development Agreement), 25% reduction of the original amount after satisfactory - 2 -

4 completion of Phase 2, 25% reduction of the original amount after satisfactory completion of Phase 3, 20% reduction of the original amount after satisfactory completion of Phase 4, and 20% reduction of the original amount after satisfactory completion of Phase Provide for the units to be owner occupied Upon the completion of the Minimum Improvements, the Townhome owner s association (the Townhome Association ) shall provide a copy of [the Declaration Creating ] (the Declaration ). The Townhome owner s association must include in its Declaration a covenant that the first buyer of each townhome unit intends to live in the unit as an owner-occupant and will not rent the townhome unit for at least five years following the purchase of such townhome. While this agreement sets the conditions for the City to convey the property to the developer, the City will also ensure the project gets built as intended primarily through the land use approval process. It is in the best interest of the developer and the City that the value of the units is maximized. Assuming the purchase agreement is approved, the tentative timeline for the land use approval process may look as follows: Staff recommends approval of the Purchase and Development Agreement

5 Draft July 20, 2018 PURCHASE AND DEVELOPMENT AGREEMENT This Purchase and Development Agreement is made as of, 2018 (the Agreement ), between the CITY OF MOUND, MINNESOTA, a statutory city and political subdivision of the State of Minnesota, having its office located at 2415 Wilshire Boulevard, Mound, Minnesota (the Seller ), and MOUND HARBOR, LLC, a Minnesota limited liability company, having its principal office at 6035 Culligan Way, Minnetonka, MN 55345, or its assigns (the Buyer ). The Effective Date of this Agreement shall be the later date on which both the Seller and the Buyer have executed this Agreement, as shown by the dates next to their signature blocks. 1. Sale of Real Property. The Buyer offers to purchase and the Seller agrees to sell real property in Hennepin County, Minnesota, legally described in EXHIBIT A attached hereto (the Property ). 2. Purchase Price. The price for the Property is $660,000 (the Purchase Price ). The Purchase Price shall be paid as follows: 2.1 Earnest Money. Twenty Thousand and no/100 Dollars ($20,000) as earnest money ( Earnest Money ) which Earnest Money shall be delivered and held by Custom Home Builders Title ( Escrow Agent ) in an interest bearing escrow account, pursuant to the Escrow Agreement attached hereto as EXHIBIT B, provided, however, that the fee for any such account shall be paid by the Buyer. The Earnest Money shall be deposited within three (3) business days after the Effective Date. Unless otherwise disbursed pursuant to the Escrow Agreement, the Earnest Money and all interest accrued thereon shall be paid to the Seller at Closing and credited towards the Purchase Price. 2.2 Closing Payment. Subject to adjustments provided for herein, Six Hundred and Forty Thousand and no/100 Dollars ($640,000) in cash or by wire transfer of U.S. Federal Funds to be received by the Seller on or before 1:00 p.m. local time on the Closing Date. 3. Payment of Purchase Price. The Buyer shall pay the Purchase Price as follows: (a) nonrefundable earnest money of $20,000 by check (the Earnest Money ), receipt of which is hereby acknowledged by the Seller; and (b) the balance of the Purchase Price must be paid by certified check or wire transfer on the Closing Date. The Closing Date shall be no later than thirty (30) days following the date of the final plat approval

6 4A. Buyer s Contingencies. 4.1 Performance of the Seller s Obligations. The Seller shall have performed all of the obligations required to be performed by the Seller under this Agreement, as and when required by this Agreement. 4.2 Title. Title shall have been found acceptable by the Buyer or made acceptable in accordance with the requirements and terms of Section 10 below. 4.3 Phase I. No later than 210 days after the Effective Date, the Buyer shall have determined that it is satisfied with a Phase I Environmental Report (prepared in accordance with the current ASTM standard for Phase I environmental site assessments) to be prepared with regard to the Real Property by an environmental consultant reasonably acceptable to the Buyer (the Phase I ). The Buyer shall cause the Phase I to be prepared no later than 35 days after the Effective Date, at the Buyer s cost and expense. The Buyer shall deliver a copy to the Seller within three business days after any termination of this Agreement. 4.4 Feasibility Period. Following the Effective Date of this Agreement, the Buyer may enter the Property to conduct, at its expense, engineering studies on the Property, including but not limited to wetland, soil, and environmental assessments. No later than two hundred ten (210) days after the Effective Date, the Buyer shall have determined, in its absolute sole discretion, that it is satisfied with the results of and matters disclosed by any soil tests, engineering inspections, hazardous waste, environmental reviews of the Property, and that the Property is suitable for the Buyer s intended use. 4.5 Utilities. The Buyer shall have determined that the Property s access, utility services (including sanitary sewer, storm sewer, water, natural gas, electricity, cable and telephone services) are sufficient for the Buyer s intended use of the Property. 4.6 No Adverse Action. There shall not exist on the Closing Date any lawsuit, governmental investigation or other proceeding challenging the transaction contemplated in this Purchase Agreement, or which might adversely affect the right of the Buyer to own, develop, or use the Property after the Closing Date for the Buyer s intended use. 4.7 Governmental Approval. The Buyer shall have obtained, reviewed, or completed the following items to the Buyer s sole satisfaction within 210 days from the Effective Date of this Agreement: (A) condition of title and an ALTA survey; (B) land use applications; (C) preliminary plat application; (D) final plat application; (E) land use approvals; (F) preliminary plat approval; (G) Development Agreement with the Seller as described in Paragraph 20; (H) Approvals as required by the County, the watershed district, or any other regulating body; and (I) final plat approval (collectively, the Governmental Approvals ). The Seller shall without charge to the Buyer cooperate in the Buyer s attempts to obtain all such Governmental Approvals. 4.8 Access/Easements/Vacation of Roadways. The Seller shall have completed the vacation of certain roadways and easements on and surrounding the Property and created roadway access rights to the Property for the Buyer s intended use. 4.9 Boat Slip Priority. The Seller will have amended its City Code of Ordinances to provide for the Townhome Association having exclusive access to 20 boat slips each year (as further described in Section 19.7 below and set forth in EXHIBIT F)

7 4B. Termination by Buyer. If any of the foregoing contingencies set forth in Section 4A hereof have not been satisfied, in the Buyer s sole discretion, on or before the stated date then this Agreement may be terminated, at the Buyer s option, by written notice from the Buyer to the Seller; provided, however, the Buyer may only terminate this Agreement as a consequence of its dissatisfaction with the physical condition of the Property if the Buyer has performed reasonable and customary investigation or due diligence with respect to the physical attributes of the Property that the Buyer finds unsatisfactory. Such notice of termination shall be given no later than three (3) business days after the stated date for the relevant contingency item, provided, however, that said notice shall be given prior to the Closing Date. If the Buyer fails to give notice of termination as provided above, the contingencies are automatically deemed waived. The Buyer may also waive any contingency by written notice to the Seller but such written notice is not required for a waiver to be effective. Upon a termination by the Buyer (a) the Buyer and the Seller shall execute a recordable written termination of this Agreement, which shall include the Buyer s quit claim of any interest in and to the Property, (b) the Earnest Money and any interest accrued thereon shall be released to the Buyer, and (c) upon fulfillment of (a) and (b) above neither party will have any further rights or obligations regarding this Agreement or the Property except for the rights and obligations of indemnification set forth in Sections 6, 17, 22, and 23 hereof. 5. [Intentionally Omitted.] 6. Buyer s Access, Investigation, and Security. The Seller shall allow the Buyer, and the Buyer s agents, access to the Property without charge and at all reasonable times for the purpose of the Buyer s investigation and testing the same. The Buyer shall pay all costs and expenses of such investigation and testing and shall indemnify and hold the Seller and the Property harmless from all costs and liabilities relating to the Buyer s activities. The Buyer shall further promptly repair and restore any damage to the Property caused by or occurring during the Buyer s testing and return the Property to substantially the same condition as existed prior to such entry. 7. The Seller s Closing Documents. On the Closing Date, the Seller shall execute and/or deliver to the Buyer the following (collectively, the Seller s Closing Documents ): 7.1 Deed. A Warranty Deed, substantially in the form attached hereto as EXHIBIT C, in recordable form reasonably satisfactory to the Buyer, conveying the Property to the Buyer, free and clear of all encumbrances, except the Permitted Encumbrances. 7.2 Title Policy. The Policy described in Section 10 hereof, or a suitably marked up Title Commitment for the Policy initialed by Title Company (hereinafter defined), in the form required by this Agreement. 7.3 Affidavits. Such Affidavits of the Seller as may be reasonably required by Title Company to issue the Policy. 7.4 IRS Reporting Form. The appropriate Federal Income Tax reporting form, if any, as required. 7.5 Development Agreement. The Development Agreement described in Section Declaration Regarding Boat Slips. The Declaration Regarding Boat Slips described in Section

8 7.7. FIRPTA Affidavit. A non-foreign affidavit, in commercially acceptable form (if not applicable to this the Seller, then the Seller agrees to comply with all withholding requirements of the Internal Revenue Service related thereto); 7.8 A Bring-Down Certificate. A bring-down certificate confirming the truth and accuracy of those representations made by the Seller in Paragraph 17 of this Agreement; and 7.9 Other Documents. All other documents reasonably determined by the Buyer to be necessary to transfer the Property to the Buyer free and clear of all encumbrances, except the Permitted Encumbrances. 8. Buyer s Closing Documents. On the Closing Date, the Buyer will execute and/or deliver to the Seller the following (collectively, Buyer s Closing Documents ): 8.1 Purchase Price. The Purchase Price, by wire transfer of U.S. Federal Funds or by certified check to be received in Title Company s trust account or delivered to the Seller on or before 1:00 p.m. local time on the Closing Date. 8.2 Title Documents. Such Affidavits of Purchaser, Certificates of Value or other documents as may be reasonably required by Title Company in order to record the Seller s Closing Documents and issue the Policy. 8.3 Development Agreement. The Development Agreement described in Section Other Documents. All other documents reasonably determined by the Seller to be necessary to consummate the transaction contemplated hereby in a manner consistent with the terms and conditions hereof. 9. Prorations. The Seller and the Buyer agree to the following prorations and allocation of costs regarding this Agreement: 9.1 Title Insurance and Closing Fee. The Seller will pay all costs of the Title Commitment described in Section 10 of this Agreement and the fees charged by Title Company for any escrow required regarding the Buyer s Objections. The Buyer will pay the premium or cost of the Owner s Title Policy and all additional premiums required for the issuance of any Mortgagee s Title Insurance Policy required by the Buyer. The Seller and the Buyer will each pay one-half of any reasonable and customary closing fee or charges imposed by any closing agent designated by Title Company. 9.2 Deed Tax. The Seller shall pay all state deed tax regarding the Warranty Deed to be delivered by the Seller under this Agreement. 9.3 Real Estate Taxes and Special Assessments. On the Closing Date, the Purchase Price shall be adjusted as follows: Current Year s Taxes. All property taxes and green acres taxes which have become a lien on the Property (the Taxes ) and which are due and payable prior to the year in which the Closing Date occurs shall be paid by the Seller at or prior to the Closing Date. All Taxes which are due and payable in the year in which the Closing Date occurs shall be prorated to the Closing Date and the Seller s 4-7 -

9 portion shall be paid by the Seller on the Closing Date. This proration shall result in the Seller s payment of Taxes from January 1 to the date immediately prior to the Closing Date and the Buyer s payment of Taxes from the Closing Date to December Assessments. All charges for improvements or services already made to or which benefit the Property, and all levied and pending assessments (general or special) created or confirmed prior to the Closing Date (the Assessments ) shall be paid in full by the Seller on the Closing Date. All assessments (general or special) which levied as of the Closing Date or which become levied after the Closing Date shall be assumed and paid by the Buyer. 9.4 Recording Costs. The Seller will pay the cost of recording all documents necessary to place record title in the condition warranted by the Seller and requested by the Buyer in this Agreement. The Buyer will pay the cost of recording all other documents, including the cost of recording the final plat. 9.5 Other Costs. All other operating costs of the Property will be allocated between the Seller and the Buyer as of the Closing Date, so that the Seller pays that part of such other operating costs payable before the Closing Date, and the Buyer pays that part of such operating costs payable from and after the Closing Date. 9.6 Attorney s Fees. Each of the parties will pay its own attorney s fees, except that a party defaulting under this Agreement or any closing document will pay the reasonable attorneys fees and costs incurred by the non-defaulting party to enforce its rights regarding such default. 10. Title Examination. Title examination will be conducted as follows: 10.1 Seller s Title Evidence. The Seller shall, no later than 30 days after the Effective Date furnish to the Buyer, at the Seller s cost and expense, the following: a commitment (the Title Commitment ) for the most current ALTA Form B Owner s Policy of Title Insurance insuring title to the Property in the amount of the Purchase Price, issued by Custom Home Builders Title (the Title Company ). The Title Commitment will commit Title Company to insure title to the Property subject only to the Permitted Encumbrances. The Buyer is responsible for purchasing an Owner s Policy of Title Insurance Survey. No later than 60 days after its receipt of the Title Commitment, the Seller shall obtain at its own expense an ALTA/ASCM as built survey (the Survey ) prepared by a Registered Land Surveyor properly licensed to practice in the State of Minnesota in form acceptable to the Buyer (the Survey ). The Seller shall provide a copy of the Survey to the Buyer within three days of receipt Buyer s Objections. Within 10 business days after receiving the later of the Title Commitment and the Survey, the Buyer shall make written objections (the Objections ) to the form and/or contents of the Title Commitment and the Survey if the Buyer has obtained one within the time set forth in Section 10.2 hereof. The Buyer s failure to make Objections within such time period will constitute a waiver of Objections. Any matter shown on the Title Commitment and/or Survey and not objected to by the Buyer shall be a Permitted Encumbrance pursuant to this Agreement. The Seller will have 60 days after receipt of the Objections to cure the Objections, during which period the 5-8 -

10 Closing will be postponed if necessary. The Seller shall use its best efforts to correct any Objections. To the extent that the Objections are not cured within such 60-day period, the Buyer will have the option to terminate this Agreement and receive a refund of the Earnest Money, or waive the Objections and proceed to Closing. 11. Closing. The closing of the purchase and sale contemplated by this Agreement (the Closing ) shall occur on the Closing Date. The Closing shall take place at the offices of the Title Company, or at such other place as may be agreed to. The Seller agrees to deliver possession of the Property to the Buyer on the Closing Date. 12. Property. The Seller, in advance of or as part of the land use and preliminary plat application process will vacate roads and easements on and surrounding the Property as required for the Buyer to undertake the Minimum Improvements. 13. Well Disclosure. The Seller s knowledge of wells is as follows: The Seller certifies that the Seller does not know of any wells on the described real property. A well disclosure certificate accompanies this document. I am familiar with the property described in this instrument and I certify that the status and number of wells on the Property have not changed since the last previously filed well disclosure certificate. 14. Individual Sewage Treatment System Disclosure. The Seller certifies that there is [no] individual sewage treatment system on or serving the Property. 15. Right of Entry. The Seller hereby grants to the Buyer, its agents, employees, officers, and contractors, a license to enter the Property to perform all work and inspections deemed appropriate by the Buyer in conjunction with this Agreement. 16. No Representations by Seller. IT IS UNDERSTOOD AND AGREED THAT THE SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESSED OR IMPLIED, WITH RESPECT TO THE CONDITION OF THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, ZONING, TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL CONDITIONS, UTILITIES, ACCESS, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE TRUTH, ACCURACY OR COMPLETENESS OF ANY PROPERTY DATA OR OTHER INFORMATION PERTAINING TO THE PROPERTY DELIVERED TO BUYER BY SELLER, OR ANY OTHER MATTER OR THING REGARDING THE PROPERTY. BUYER ACKNOWLEDGES AND AGREES THAT UPON THE CLOSING OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT, THE SELLER SHALL SELL AND BUYER SHALL ACCEPT THE PROPERTY AS IS, WHERE IS, WITH ALL FAULTS. THE BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND THE SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESSED OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION, PROPERTY INFORMATION PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY) MADE OR FURNISHED BY THE SELLER, THE MANAGER OF THE PROPERTY, OR ANY REAL ESTATE BROKER 6-9 -

11 OR AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY SET FORTH IN THIS AGREEMENT. THE BUYER REPRESENTS TO THE SELLER THAT THE BUYER HAS CONDUCTED, OR WILL HAVE HAD THE OPPORTUNITY TO CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL, ENVIRONMENTAL AND GEOTECHNICAL CONDITIONS THEREOF, AS THE BUYER DEEMS NECESSARY TO SATISFY ITSELF OF THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES OR MATERIALS ON, WITHIN, UNDER OR DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF THE SELLER OR ITS AGENTS, OFFICERS, DIRECTORS, SHAREHOLDERS OR EMPLOYEES WITH RESPECT THERETO. UPON CLOSING, THE BUYER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, ADVERSE PHYSICAL, ENVIRONMENTAL AND GEOTECHNICAL CONDITIONS MAY HAVE BEEN REVEALED BY THE BUYER S INVESTIGATIONS, AND BUYER, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED THE SELLER (AND THE SELLER S OFFICERS, COUNCIL MEMBERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH BUYER MIGHT HAVE ASSERTED OR ALLEGED AGAINST THE SELLER (AND THE SELLER OFFICERS, COUNCIL MEMBERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS (INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY. 17. Representations 17.1 Representations and Warranties of Buyer. The Buyer represents and warrants to the Seller that the Buyer is a limited liability company duly organized under the laws of the State of Minnesota; that the Buyer is duly qualified to transact business in the State of Minnesota; that the Buyer has the requisite company power and authority to enter into this Agreement and the Buyer s Closing Documents signed by it; such documents have been duly authorized by all necessary company action on the part of the Buyer and have been duly executed and delivered; that the execution, delivery and performance by the Buyer of such documents do not conflict with or result in violation of state law or any judgment, order or decree of any court or arbiter to which the Buyer is a party; such documents are valid and binding obligations of the Buyer, and are enforceable in accordance with their terms. The Buyer will indemnify the Seller, its successors and assigns, against, and will hold the Seller, its successors and assigns, harmless from, any actual expenses or damages, including reasonable attorneys fees, that the Seller incurs because of the breach of any of the above representations and warranties, whether such breach is discovered before or

12 after Closing; provided, and notwithstanding the foregoing, each of the representations and warranties herein contained shall survive the Closing for a period of three years and any action concerning a breach of any of the foregoing representations or warranties of the Buyer shall be commenced within three years of the Closing or shall be deemed waived. Consummation of this Agreement by the Seller with knowledge of any breach of such warranties and representations by the Buyer will constitute a waiver or release by the Seller of any claims due to such breach Representations and Warranties of the Seller. (a) The Seller is duly authorized and empowered to enter into this Agreement and to perform fully the Seller s obligations hereunder. (b) The Seller has received no notice of any pending or threatened condemnation proceeding or other litigation relating to or otherwise affecting the Property, except as may be shown in the public record. (c) The Seller has received no notice of any pending or threatened violations or litigation at the Property, except as may be shown in the public record. 18. Condemnation. If, prior to the Closing Date, eminent domain proceedings are commenced against all or any part of the Property by any entity other than the Seller, the Seller shall immediately give notice to the Buyer of such fact and at the Buyer s option (to be exercised within 30 days after the date of the Seller s notice), this Agreement shall terminate, in which event neither party will have further obligations under this Agreement, except for the rights and obligations of indemnification set forth in Sections 6, 17, 22, and 23, and the Earnest Money, together with any accrued interest, shall be refunded to the Buyer. If the Buyer shall fail to give such notice then there shall be no reduction in the Purchase Price, and the Seller shall assign to Buyer at the Closing Date all of the Seller s right, title and interest in and to any award made or to be made in the condemnation proceedings. Prior to the Closing Date, if the Agreement has not been terminated pursuant to the first sentence of this Section, the Seller shall not designate counsel, appear in, or otherwise act with respect to such condemnation proceedings without the Buyer s prior written consent. 19. Construction of Minimum Improvements. The Buyer agrees that it will construct the Minimum Improvements (defined below) on the Property as described in this Section. This covenant shall survive the delivery of the Deed The Buyer shall construct on the Property the Minimum Improvements, which consist of 21 market-rate townhomes, with three to four units per building, including two garage stalls per unit, at least 2 parking spaces in front of each building per unit, and at least 11 additional guest parking spaces as shown on the current concept plan. The specific Minimum Improvements shall be as shown on the preliminary plat, as approved The Buyer agrees to commence and complete construction of each phase of the Minimum Improvements as follows: Phase 1: Infrastructure Improvements grading, water main, sanitary sewer and storm sewer and small utilities (as described in the Development Agreement referred to in Sections 20) will be performed in one phase with the completion by December 31, The Buyer may request an Early Start Agreement for consideration by the City Council

13 and HRA Board prior to release of the Final Plat and completion of the Development Agreement for recording to allow issuance of a building permit to begin construction of the infrastructure improvements. Phase 2: Commence building construction by June 1, 2019 and complete construction of 6 units (2 buildings) by December 31, Phase 3: Commence building construction by June 1, 2020 and complete construction of 7 units (2 buildings) by December 31, Phase 4: Commence building construction by June 1, 2021 and complete construction of 4 units (1 building) by June 1, Phase 5: Commence Building construction by June 1, 2022 and complete construction of 4 units (1 building) by December 31, Landscaping / Irrigation Improvements: To be installed in the spring or summer following the completion date for each building construction phase referenced above. It being understood and acknowledged that the landscaping and irrigation improvements are not conditions to issuance of a Certificate of Completion of Phases 2 through 5. For each of Phases 2 through 5 described above, the Buyer may request an extension for the commencement and/or construction dates described above of up to 6 months, which such extension shall not be unreasonably withheld. For Phases 2 through 5 of the Minimum Improvements, construction of each respective phase will be considered satisfied when the building exterior and the respective units vanilla shell have been completed The Buyer is a Minnesota limited liability company, whose purpose is to install the required public improvements required for the Minimum Improvements and to develop the Minimum Improvements. It is in the best interest of the Buyer, and the intent of the Buyer to work with JMS Custom Homes, LLC, a Minnesota limited liability company ( JMS Custom Homes ) as the builder of the townhomes. The Buyer acknowledges and understands that the City expects the completed Minimum Improvements to be similar in size, scope, and quality to the project submitted to the City as part of the Buyer s response to the City s Request for Qualifications with respect to the Property Promptly after the Buyer s substantial completion each Phase, upon written request from the Buyer, the Seller will furnish the Buyer with a Certificate of Completion, at no cost to the Buyer, in the form attached hereto as EXHIBIT D and reduce the Buyer s letter of credit in the applicable percentages as described in Section 21 below. Such issuance of Certificates of Completion by the Seller shall be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement with respect to the obligations of the Buyer and its successors and assigns, to construct the Minimum Improvements and the dates for completion thereof. The Buyer s completion of any Phase ahead of the required deadline shall not affect the required timing of commencement or completion of subsequent Phases. If the Seller shall refuse or fail to provide any certification in accordance with the provisions of this Section, the Seller shall, within 30 days after written request by the

14 Buyer, provide the Buyer with a written statement, indicating in adequate detail in what respects the Buyer has failed to complete the particular phase of the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Seller for the Buyer to take or perform in order to obtain such certification and the Buyer shall be afforded a fair and reasonable opportunity, as necessary, to cure or address such stated default The Buyer represents and agrees that until issuance of the Certificate of Completion for the Minimum Improvements: The Buyer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity, with the exception of any bona-fide unit owner or an assignment to another entity affiliated with the Buyer by common ownership, (collectively, a Transfer ), without the prior written approval of the City Council of the Seller. The term Transfer does not include encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or permanent financing necessary to enable the Buyer to construct the Minimum Improvements or component thereof If the Buyer seeks to effect a Transfer other than to a bona-fide unit owner, prior to issuance of the final Certificate of Completion for the Minimum Improvements, the Seller shall be entitled to require as conditions to such Transfer that: Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Seller, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Buyer as to the portion of the Property to be transferred Any proposed transferee, by instrument in writing satisfactory to the Seller and, if necessary, in form recordable in the public land records of Hennepin County, Minnesota, shall, for itself and its successors and assigns, and expressly for the benefit of the Seller, have expressly assumed all of the obligations of the Buyer under this Agreement as to the portion of the Property to be transferred and agreed to be subject to all the conditions and restrictions to which the Buyer is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the Seller) deprive the Seller of any rights or remedies or controls with respect to the Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit the Seller of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the

15 Property that the Seller would have had, had there been no such transfer or change. In the absence of specific written agreement by the Seller to the contrary, no such transfer or approval by the Seller thereof shall be deemed to relieve the Buyer, or any other party bound in any way by this Agreement or otherwise with respect to the Property, from any of its obligations with respect thereto Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Property governed by this clause shall be in a form reasonably satisfactory to the Seller If the conditions described in Section hereof are satisfied then the Transfer will be approved and the Buyer shall be released from its obligation under this Agreement, as to the portion of the Property that is transferred, assigned, or otherwise conveyed. The provisions of this Section apply to all subsequent transferors Except for transfers to bona-fide unit owners, which does not require the Seller consent, upon issuance of the final Certificate of Completion for the final unit, the Buyer may Transfer the Property and/or the Buyer s rights and obligations under this Agreement with respect to such Property without the prior written consent of the Seller, 19.6 Upon the completion of the Minimum Improvements, the Townhome owner s association (the Townhome Association ) shall provide a copy of [the Declaration Creating ] (the Townhome Declaration ). The Townhome owner s association must include in its Declaration a covenant that the first buyer of each townhome unit intends to live in the unit as an owner-occupant and will not rent the townhome unit for at least five years following the purchase of such townhome Annually, the Seller, its successor or assign, shall offer the Townhome Association the ability to enter into a Boat Slip Use Agreement each year for up to 20 boat slips for exclusive use of the owners of a Townhome unit in the form as attached hereto as EXHIBIT F. The Boat Slip Use Agreement will include the exclusive use of up to 20 boat slips; provided, however, that the number of boat slips offered each year to the Townhome Association will not exceed the number of Townhome units completed and units under construction. The Seller covenants and represents that, subject to the provisions of this Section 19.7, the Townhome Association shall have exclusive access to 20 boat slips each year. Notwithstanding the foregoing, if owners of the Townhomes decline the use of all 20 boat slips, the City may enter into rental agreements for the unused boat slips for that year. Prior to the conveyance of the Property to the Buyer, the Seller will amend its City Code of Ordinances to provide for the Townhome Association having exclusive access to 20 boat slips each year. In addition, upon creation of the Townhome Association, the Seller shall enter into the Declaration Regarding Boat Slips set forth in EXHIBIT E which shall be recorded against the Property. 20. Development Agreement. Prior to the issuance of any grading or building permits for the Property, the Buyer shall enter into a Development Agreement with the Seller with respect to the infrastructure required for the Minimum Improvements and the requirements of the Seller for the Buyer s construction of such infrastructure, and such Development Agreement shall be recorded against the Property. 21. Penalties for Failure to Complete Minimum Improvements. The Buyer will submit a letter of credit in the amount of $35,000 (the Letter of Credit ) at Closing to secure performance of the

16 Buyer s obligations under Section Upon completion of one or more Phases of the Minimum Improvements, the Letter of Credit shall be reduced as follows: 10% reduction of the original amount after satisfactory completion of Phase 1 (in addition to any applicable reductions or releases in relation to the Development Agreement), 25% reduction of the original amount after satisfactory completion of Phase 2, 25% reduction of the original amount after satisfactory completion of Phase 3, 20% reduction of the original amount after satisfactory completion of Phase 4, and 20% reduction of the original amount after satisfactory completion of Phase 5. In the event that, subsequent to conveyance of the Property to the Buyer, the Buyer, subject to Unavoidable Delays (as hereafter defined), fails to carry out its obligations to construct Phases 1 through 5 as described in Section 19.2 with respect to the commencement of construction of the Minimum Improvements (including the nature and the date for the completion thereof), or abandons or substantially suspends construction work, and any such failure, abandonment, or suspension shall not be cured, ended, or remedied within thirty (30) days after written demand from the Seller to the Buyer to do so, then the Seller may grant up to a 6 month extension to commence or complete the Phase as provided in Section If following the applicable extension, the Buyer has not satisfied the applicable commencement or completion of the applicable Phase, the Seller may draw down on or make a claim against the Letter of Credit (in the percentage of the remaining amounts for each Phase set forth in the first paragraph of this Section 21), as appropriate, upon five (5) business days notice to the Developer. For the purposes of this Agreement, the term Unavoidable Delays means delays beyond the reasonable control of the Buyer as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse weather or acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Seller in exercising its rights under this Agreement) which directly results in delays. Unavoidable Delays shall not include delays in the Buyer s obtaining of permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such construction is required under this section of this Agreement. 22. Broker s Commission. The Seller and the Buyer represent and warrant to each other that they have dealt with no brokers, finders or the like in connection with this transaction. The parties agree to indemnify each other and to hold each other harmless against all claims, damages, costs or expenses of or for any other such fees or commissions resulting from their actions or agreements regarding the execution or performance of this Agreement, and will pay all costs of defending any action or lawsuit brought to recover any such fees or commissions incurred by the other party, including reasonable attorneys fees. 23. Mutual Indemnification. The Seller and the Buyer agree to indemnify each other against, and hold each other harmless from, all liabilities (including reasonable attorney s fees in defending against claims) arising out of the ownership, operation or maintenance of the Property for their respective periods of ownership. Such rights of indemnification will not arise to the extent that (a) the party seeking indemnification actually receives insurance proceeds or other cash payments directly attributable to the liability in question, (net of the cost of collection, including reasonable attorney s fees) or (b) the claim for indemnification arises out of the act or neglect of the party seeking indemnification. If and to the extent that the indemnified party has insurance coverage, or the right to make claim against any third party for any amount to be indemnified against as set forth above, the indemnified party will, upon full performance by the indemnifying party of its indemnification obligations, assign such rights to the indemnifying party or, if such rights are not assignable, the indemnified party will diligently pursue such rights by appropriate legal action or

17 proceeding and assign the recovery and/or right of recovery to the indemnifying party to the extent of the indemnification payment made by such party. 24. Assignment. The Buyer may not assign its rights under this Agreement, without the prior written consent of the Seller which consent shall be granted if the assignment is commercially reasonable. 25. Survival. Except as stated in Section 17 hereof, all of the terms of this Agreement will survive and be enforceable until a Certificate of Completion is provided as to each phase of the Minimum Improvements. 26. Notices. Any notice required or permitted to be given by any party upon the other is given in accordance with this Agreement if it is directed to the Seller by delivering it personally to an officer of the Seller, or if it is directed to the Buyer, by delivering it personally to an officer of the Buyer, or if mailed in a sealed wrapper by United States registered or certified mail, return receipt requested, postage prepaid, or if deposited cost paid with a nationally recognized, reputable overnight courier, properly addressed as follows: If to the Seller: If to the Buyer: With a copy to: City of Mound, Minnesota 2415 Wilshire Boulevard Mound, MN Attention: City Manager Mound Harbor, LLC 6035 Culligan Way Minnetonka, MN Foley & Mansfield, PLLP Attention: Ailana McIntosh 250 Marquette Avenue, Suite 1200 Minneapolis, MN Notices shall be deemed effective on the earlier of the date of receipt or the date of deposit as aforesaid, provided, however, that if notice is given by deposit that the time for response to any notice by the other party shall commence to run one business day after any such deposit. Any party may change its address for the service of notice by giving written notice of such change to the other party, in any manner above specified, ten days prior to the effective date of such change. 27. Captions. The paragraph headings or captions appearing in this Agreement are for convenience only, are not a part of this Agreement and are not to be considered in interpreting this Agreement. 28. Entire Agreement; Modification. This written Agreement constitutes the complete agreement between the parties and supersedes any prior oral or written agreements between the parties regarding the Property. There are no verbal agreements that change this Agreement and no waiver of any of its terms will be effective unless in writing executed by the parties. 29. Binding Effect. This Agreement binds and benefits the parties and their successors and assigns. 30. Controlling Law. This Agreement has been made under the laws of the State of Minnesota, and such laws will control its interpretation

18 31. Remedies. If either party defaults under this Agreement, the non-defaulting Party shall have the right to terminate this Agreement by giving written notice to the defaulting Party. If the Buyer fails to cure such default within five business days, or such time period as allowed pursuant to this Agreement of the date of such notice from the Seller, the Seller may cancel this Agreement pursuant to Minnesota Statutes, Section If the Seller fails to cure such default within five business days of the date of such notice from the Buyer, the Buyer may immediately terminate this Agreement by delivering to the Seller at the address noted in Section 27 hereof a Notice of Termination executed by an authorized representative(s) of the Buyer. The foregoing is the exclusive remedy for either party. All other remedies, including damages for breach, equitable remedies, specific performance, and all other remedies at law or equity are waived and relinquished by each of the parties

19 IN WITNESS WHEREOF, the Seller and the Buyer have executed this Purchase and Development Agreement as of the date and year first written above. SELLER: CITY OF MOUND, MINNESOTA By Its Mayor By Its City Manager STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of, 2018, by Mark Wegscheid, the Mayor of the City of Mound, Minnesota, a statutory city and political subdivision of the State of Minnesota, on behalf of the Seller. STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) Notary Public The foregoing instrument was acknowledged before me this day of, 2018, by Eric Hoversten, the City Manager of the City of Mound, Minnesota, a statutory city and political subdivision of the State of Minnesota, on behalf of the Seller. Notary Public This document drafted by: KENNEDY & GRAVEN, CHARTERED (JAE) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN (612) S

20 Execution page of the Buyer to the Purchase and Development Agreement, dated as of the date and year first written above. BUYER: MOUND HARBOR, LLC By Its STATE OF MINNESOTA ) ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me this day of, 2018, by, the of Mound Harbor, LLC, a, on behalf of the Buyer. Notary Public S

21 EXHIBIT A LEGAL DESCRIPTION [Insert legal description] A

22 EXHIBIT B ESCROW AGREEMENT The undersigned ( Title Company ), acknowledges receipt of $ (the Earnest Money ) to be held by it pursuant to the Purchase Agreement to which this Escrow Agreement is attached. Title Company will hold the Earnest Money (hereinafter the Earnest Money ) in accordance with the terms of the Purchase Agreement and disburse the same strictly in accordance with such terms. Title Company will invest the Earnest Money in such interest-bearing accounts, instruments, corporate paper, or money market funds as approved by both the Buyer and the Seller, Interest will accrue for the benefit of the Buyer, unless the Purchase Agreement is terminated by reason of the default of the Buyer, in which case the interest will be paid to the Seller. Prior to the waiver or satisfaction of its contingencies, the Buyer may direct the Title Company to return the Earnest Money to it if the Buyer is entitled to terminate and elects to terminate the Purchase Agreement. Title Company is not responsible for any decision concerning performance or effectiveness of the Purchase Agreement or for resolution of any disputes concerning the Purchase Agreement. Title Company is responsible only to act in accordance with the joint and mutual direction of both the Seller and the Buyer, or in lieu thereof, the direction of a court of competent jurisdiction except as to the Buyer s right to direct the return of the Earnest Money in accordance with the Purchase Agreement. The Seller and the Buyer will hold Title Company harmless from all claims for damages arising out of this Escrow Agreement and do hereby agree to indemnify Title Company for all costs and expenses in connection with this escrow, including court costs and attorneys fees, except for Title Company s failure to account for the funds held hereunder, or acting in conflict with the terms hereof. The fees and charges of the Title Company will be paid by the Seller. This Escrow Agreement is dated this day of, 20. By Its B

23 EXHIBIT C FORM OF WARRANTY DEED Deed Tax Due: $ ECRV Date: FOR VALUABLE CONSIDERATION, the City of Mound, Minnesota, a statutory city and political subdivision of the State of Minnesota, Grantor, hereby conveys and warrants to Mound Harbor, LLC, a Minnesota limited liability company, Grantee, real property in Hennepin County, Minnesota, described as follows: [Insert legal description] Check here if part or all of the land is Registered (Torrens) together with all hereditaments and appurtenances belonging thereto, subject to the following exceptions: easements of record. The Seller certifies that the Seller does not know of any wells on the described real property. A well disclosure certificate accompanies this document or has been electronically filed. (If electronically filed, insert WDC number: ). I am familiar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously filed well disclosure certificate. CITY OF MOUND, MINNESOTA By Its Mayor By Its City Manager C

24 STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of, 2018, by Mark Wegscheid, the Mayor of the City of Mound, Minnesota, a statutory city and political subdivision of the State of Minnesota, on behalf of the City. STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) Notary Public The foregoing instrument was acknowledged before me this day of, 2018, by Eric Hoversten, the City Manager of the City of Mound, Minnesota, a statutory city and political subdivision of the State of Minnesota, on behalf of the City. Notary Public This instrument was drafted by: Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN (612) Tax Statements should be sent to: Mound Harbor, LLC [ADDRESS] C

25 EXHIBIT D FORM OF CERTIFICATE OF COMPLETION (To be completed for each Phase of the Minimum Improvements) The undersigned hereby certifies that Mound Harbor, LLC, a limited liability company (the Developer ), has fully satisfied its obligations under Section 19 of the Purchase and Development Agreement, dated, 2018 (the Agreement ), between the City of Mound, Minnesota and the Developer, with respect to construction of Phase of the Minimum Improvements in accordance with Section 19 of the Agreement relating to the Property described in the attached Exhibit A, and that the Developer is released and forever discharged from its obligations with respect to construction of Phase of the Minimum Improvements under Section 19 of the Agreement. Dated:, 20. CITY OF MOUND, MINNESOTA By Its Mayor By Its City Manager STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of, 20, by, the Mayor of the City of Mound, Minnesota, a statutory city and political subdivision of the State of Minnesota, on behalf of the City. STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) Notary Public The foregoing instrument was acknowledged before me this day of, 20, by, the City Manager of the City of Mound, Minnesota, a statutory city and political subdivision of the State of Minnesota, on behalf of the City. Notary Public D

26 This document drafted by: KENNEDY & GRAVEN, CHARTERED (JAE) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN (612) D

27 EXHIBIT E DECLARATION REGARDING BOAT SLIPS DECLARATION BOAT SLIPS THIS DECLARATION REGARDING BOAT SLIPS (the Declaration ) entered into this day of, 2018, by and between the CITY OF MOUND, MINNESOTA, a statutory city and political subdivision of the State of Minnesota, having its office located at 2415 Wilshire Boulevard, Mound, Minnesota (the City ), and [TOWNHOME ASSOCIATION], a, having its principal office at (the Townhome Association ). RECITALS: WHEREAS, the City intends to convey the real property legally described on Exhibit A attached hereto (the Development Property ) to Mound Harbor, LLC, a Minnesota limited liability company (the Developer ) under Purchase and Development Agreement, dated, 2018, between the City and the Developer ( Development Agreement ); and WHEREAS, pursuant to the Development Agreement, the Developer will construct 21 townhome units (the Minimum Improvements ) on the Development Property; and WHEREAS, in exchange for the Developer constructing the Minimum Improvements, the City has agreed to provide the Townhome Association exclusive use of up to 20 boat slips under certain conditions and the City and the Townhome Association desire to memorialize this agreement pursuant to this Declaration. NOW, THEREFORE, for good and valuable consideration, the City hereby agrees, covenants, and declares the following: 1. Boat Slip Agreement. Annually, the City shall offer the Townhome Association the ability to enter into a Boat Slip Use Agreement each year for up to 20 boat slips for exclusive use of the owners of a Townhome unit. The Boat Slip Use Agreement will include the exclusive use of up to 20 boat slips; provided, however, that the number of boat slips offered each year to the Townhome Association will not exceed the number of Townhome units completed and units under construction. The Seller covenants and represents that, subject to the provisions of this Section 1, the Townhome Association shall have exclusive access to 20 boat slips each year. Notwithstanding the foregoing, if owners of the Townhomes decline the use of all 20 boat slips, the City may enter into rental agreements for the unused boat slips for that year. 2. Failure to Provide Boat Slips. If the City takes action to permanently reduce the number of boat slips available for the exclusive use of the owners of the Townhome units below 20, the Townhome Association shall have all rights and remedies available to it at law or in equity, including a right to injunctive relief and specific performance. If any arbitration, litigation, or other legal proceeding occurs between the parties relating to this Agreement, the Townhome Association shall be entitled to E

28 recover (in addition to any other relief awarded or granted) the reasonable costs and expenses, including attorney's fees, incurred by the Townhome Association. 3. Enforceability; Successors and Assigns. The covenants contained herein are intended to be perpetual, shall run with the land, and shall be binding upon, and inure to the benefit of, the Townhome Association and its successors, assigns, and future owners, tenants and occupants of any portion of the Development Property. Without limiting the foregoing, the restrictions and prohibitions contained herein on the Development Property (or any portion thereof) shall be enforceable by the City, and its successors and assigns, by injunctive relief, the remedy at law being inadequate. 4. Governing Law. This agreement shall be governed by the laws of the State of Minnesota. 5. Amendment. This agreement shall not be amended or modified unless by an instrument in writing executed by the City and the Townhome Association, at the time of the amendment or modification, of all of the Development Property. 6. No Merger. This instrument shall not merge or be extinguished by reason of common ownership, including common ownership of the Development Property and any property adjacent to the Development Property. E

29 IN WITNESS WHEREOF, the City and the Townhome Association have executed this Declaration as of the date first above written. CITY OF MOUND, MINNESOTA By Its Mayor By Its City Manager STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of, 2018, by Mark Wegscheid, the Mayor of the City of Mound, Minnesota, a statutory city and political subdivision of the State of Minnesota, on behalf of the Seller. STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) Notary Public The foregoing instrument was acknowledged before me this day of, 2018, by Eric Hoversten, the City Manager of the City of Mound, Minnesota, a statutory city and political subdivision of the State of Minnesota, on behalf of the Seller. Notary Public This document drafted by: KENNEDY & GRAVEN, CHARTERED (JAE) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN (612) E

30 [TOWNHOME ASSOCIATION] By Its STATE OF MINNESOTA ) ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me this day of, 2018, by, the of [TOWNHOME ASSOCIATION], a, on behalf of the Townhome Association. Notary Public E

31 EXHIBIT A OF DECLARATION LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY [insert] E

32 EXHIBIT F BOAT SLIP AGREEMENT SLIP USE AGREEMENT BETWEEN THE CITY OF MOUND AND THE HARBOR DISTRICT TOWNHOME ASSOCIATION THIS SLIP USE AGREEMENT (this "Agreement") is made and entered into as of the day of, 2019, by and among The Harbor District Townhome Association, Common Interest Community No., acting by and through its association board ( HOA ) and the City of Mound, a Minnesota municipal corporation ( City ). The HOA and the City may hereinafter be referred to individually as a party or collectively as the parties. RECITALS: A. The City owns the 37 slip multiple slip complex in Lost Lake adjacent to the Villas on Lost Lake townhomes ( 37 Slip Complex ) and the 24 slip multiple slip complex ( 24 Slip Complex ) adjacent to the Harbor District's Greenway and Pier. The 37 Slip Complex and the 24 Slip Complex may hereinafter be referred to collectively as the Slip Complexes. B. In 2018 the City approved a Purchase and Developer Agreement with MOUND HARBOR, LLC, the original developer of the Harbor District Townhomes, ( Developer ), which provides for priority assignment of a slip at one of the Slip Complexes for the residents of the Harbor District Townhomes; and D. The parties desire to enter into an Agreement that sets forth the terms and conditions of the slip assignments, fee structure, rules governing use of the Slip Complexes and the City's obligation to maintain the Lost Lake Channel and the Slip Complexes and appurtenances. NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Slip Assignment. In accordance with Chapter 78, Section (d) of the Mound City Code, as amended from time to time, up to twenty [20] slips at the Slip Complexes will be reserved for owners or renters of the Harbor District Townhomes who will be given first priority for assignment of these slips. Applications and fees for the slip are due by the last day of February each year. All slips not used by Harbor District Townhomes owners or renters will be released by the City for licensing in accordance with the Mound City Code (Chapter 78, Section ) beginning on March 1st of each year. 2. Fee Structure. The City establishes its fee schedule as part of the annual budget process and the City reserves the right to modify the fees for the slips at the Slip Complexes from time to time. The City agrees to provide for maintenance activities of the channel, the slips and surrounding appurtenances of the Slip Complexes including, but not limited to, debt service on bonds related to the Lost Lake development or renewal, maintenance of the channel and mulitiple slip structures and appurtenances, utilities, insurance premiums and deductibles, program administration and funding reserves for these activities. 3. Dock Use Area. The slips at the Slip Complexes are licensed and regulated by the Lake Minnetonka Conservation District ( LMCD ), which imposes certain restrictions on the use of the lake, including the slips, that must be complied with by those using the Slip Complexes. In addition, Chapter 78, Article VI the City of Mound City Code, as amended from time to time, regarding slip licensing has additional regulations that all multiple slip licensees need to comply with. Each user of a slip is F

33 responsible for complying with all applicable federal, state, and local laws, rules, regulations, and ordinances related to their use. The City may terminate a Townhome resident s use of the Slip Complexes and refuse to lease a slip to the resident for such period of time as the City determines is reasonable if the resident violates any of the applicable regulations or the terms and conditions of the lease. 4. Maintenance Activities. Lost Lake was redredged in 2005 to provide access to Lake Minnetonka for the planned redevelopment of the City s downtown. The Slip Complexes were constructed to provide pedestrian access to these amenities. The City is responsible for maintaining the dredge and any aquatic vegetation removal/management so that reasonable access can be obtained in and around the Slip Complexes. The dredge depth is regulated by the Department of Natural Resources ( DNR ) and the standard limit is out to 48" of water depth measured from the Ordinary High Water ( OHW ) level elevation of feet. The City will maintain the Slip Complexes and appurtenances, as public amenities, to a reasonable standard, as determined by the City, providing for the health and safety of pedestrians and functionally equivalent replacement, if necessary. The City s agreement to maintain the Slip Complex and appurtences is as the owner of the facilities to make them available to the general public as a public amenity and does not create a special duty between the City and the users of the Slip Complexes. 5. Liability. All slip licensees must provide proof of boat owners insurance upon license renewal. The City maintains a General Liability Policy with the League of Minnesota Cities Insurance Trust and currenly has a Property In the Open policy for the Slip Complexes. The City maintains the right to self insure the Property in the Open coverage as an alternative to the relatively high premiums of its current policy. Nothing in this Agreement constitutes, or shall be interpreted as, a waiver by the City of any limitation on or exemption from liability available to it under common law, Minnesota Statutes, chapter 466, or other law. 6. Notices. Any notice required hereunder shall be given in writing, signed by the party giving notice, personally delivered or mailed by certified or registered mail, return receipt requested, to the parties' respective addresses as set forth below: To City: With Copy to: To HOA: Eric Hoversten City Manager City of Mound 2415 Wilshire Blvd Mound, MN Troy Gilchrist City Attorney Kennedy & Graven 200 South Sixth Street Suite 470 Minneapolis, MN The Harbor District Townhome Association C/O, MN 55XXX F

34 Notice shall be deemed delivered (a) in the case of personal delivery, on the date when personally delivered; or (b) in the case of certified or registered mail, on the date which is one day after deposited in the United States mail with sufficient postage to effect such delivery. Each party may change recipient and the address to which notice must be given by delivery of written notice to the other parties in accordance with this Paragraph Counterparts. The parties may sign this Agreement in several counterparts, each of which constitutes an original, but all of which together constitute one instrument. 8. Termination. The parties may agree in writing to terminate this Agreement at any time. The City may terminate this Agreement upon providing the HOA 12 months written notice of termination. The termination will not affect the use of the slips by the Townhome residents in the then present season, but the City may refuse to grant the priority provided for in this Agreement for the then upcoming season and thereafter. 8. Miscellaneous. This Agreement shall be binding upon the parties hereto and their respective successors and assigns. This Agreement can be amended or modified only by a writing signed by the parties hereto. This Agreement shall be governed by the laws of the State of Minnesota. F

35 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. CITY OF MOUND By: Its HARBOR DISTRICT TOWNHOME ASSOCIATION (COMMON INTEREST COMMUNITY NO. ) By: Its By: Its By: Its F

36 24 Slip Complex adjacent to Mound Harbor District Slips 1-14 Transient slips/day use only (14) Slips Overnight use to be leased by Harbor District Townhomes (10) - Can fit up to 24 foot boats that can fit completely within the slip with no overhang

37 37 Slip Complex adjacent to Villas of Lost Lake Townhomes Slips 1-7 and reserved for Villas of Lost Lake Townhomes (27) Slips 8-13 and reserved for Harbor District Townhomes (10) Can fit up to 26 foot boats that fit completely within the slip with no overhang

38 HOUSING AND REDEVELOPMENT AUTHORITY OF AND FOR THE CITY OF MOUND, MINNESOTA RESOLUTION NO. 18- H RESOLUTION PROVIDING APPROVAL FOR CONVEYANCE OF LAND IN MOUND HARBOR DISTRICT TO CITY OF MOUND WHEREAS, the City of Mound, Minnesota (the City) underwent a request for qualifications process to choose a developer to develop townhomes in the Mound Harbor area, and through that process the City determined to work with Mound Harbor, LLC (the Developer ) for a proposed townhome development; and WHEREAS, the Developer has proposed to construct 21 market-rate townhomes, with three to four units per building, including two garage stalls per unit, at least two parking spaces in front of each building per unit, and at least 11 additional guest parking spaces (the Minimum Improvements ); and WHEREAS, there has been presented to the Board of Commissioners of the Housing and Redevelopment Authority of and for the City of Mound, Minnesota (the Authority ) a Purchase and Development Agreement (the Agreement ) proposed to be entered into between the City and the Developer, pursuant to which the City will convey certain property to the Developer and the Developer will agree to construct the Minimum Improvements; and WHEREAS, the Authority owns certain property with the Mound Harbor area, some of which will be needed for the Minimum Improvements; NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority of and for the City of Mound, Minnesota that: 1. The Authority hereby approves the conveyance of all property the Authority owns within the Mound Harbor area to the City for development purposes for $ Authority staff is hereby directed to cause a quit claim deed to be drafted for the purpose of conveying such property to the City for the Authority s review and approval. Adopted by the Board of Commissioners of the Housing and Redevelopment Authority of and for the City of Mound, Minnesota, this 24 th day of July, Chair Clerk v1 JAE MU

39 CITY OF MOUND, MINNESOTA RESOLUTION NO. 18- RESOLUTION APPROVING PURCHASE AND DEVELOPMENT AGREEMENT WITH MOUND HARBOR, LLC WHEREAS, the City of Mound, Minnesota (the City) underwent a request for qualifications process to choose a developer to develop townhomes in the Mound Harbor area, and through that process the City determined to work with Mound Harbor, LLC (the Developer ) for a proposed townhome development; and WHEREAS, the Developer has proposed to construct 21 market-rate townhomes, with three to four units per building, including two garage stalls per unit, at least two parking spaces in front of each building per unit, and at least 11 additional guest parking spaces (the Minimum Improvements ); and WHEREAS, there has been presented before the City Council a Purchase and Development Agreement (the Agreement ) proposed to be entered into between the City and the Developer, pursuant to which the City will convey certain property to the Developer and the Developer will agree to construct the Minimum Improvements. that: NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Mound, Minnesota 1. The City finds that the execution of the Agreement by the City and performance of the City s obligations thereunder are in the best interest of the City and its residents. 2. The Agreement is hereby authorized, approved, and confirmed in all respects and the Mayor and the City Manager are hereby authorized and directed to execute and deliver the Agreement for and on behalf of the City in substantially the form now on file with the City but with such modifications as shall be deemed necessary, desirable or appropriate, their execution thereof to constitute such conclusive evidence of their approval of any and all modifications therein. 3. The Mayor and the City Manager are authorized and directed to execute and deliver any additional agreements, certificates or other documents that the City determines are necessary to carry out the intentions of this resolution and the Agreement. Approved by the City Council of the City of Mound, Minnesota this 24 rd day of July, ATTEST: Chair Clerk v1 JAE MU

40 MEMORANDUM Date: July 19, 2018 To: From: Subject: HRA Board of Commissioners Catherine Pausche, Director of Finance and Administrative Services Partial Prepayment of the TIF 1-2 Tax Increment Revenue Refunding Bonds for the MetroPlains Project (Series 2006) TIF District (TIF 1-2) was created for the Mound Marketplace and Village by the Bay development and was established in 2000 and is required to decertify in This district had two separate bond issues and a subordinate note with the original developer. The terms of the Taxable Tax Increment Subordinate Revenue Note - MetroPlains Redevelopment Project (Series 2002B) is that the initial principal of $308,957 will accrue simple compound interest at a rate of 8.5% (calculated using 360 day year or (12) 30-day months), but that there will be no obligation after 2/1/2027, when the TIF district decertifies. In addition, TIF revenues will primarily be used to repay the principal and interest on the Tax Increment Revenue Refunding Bonds for the MetroPlains Project (Series 2006), then the city will be allowed to withhold a 10% administrative fee with any remaining tax increment used 50% to prepay the bonds and 50% to make payments on the subordinate note. Attached is the debt service schedule that shows how this tax increment has been assigned, as well as the amortization schedule on the subordinate note. The resolution to call for the partial early redemption on the bonds is on the agenda and needs to be acted upon in order to proceed. As an aside, it should be noted that Staff has not recommended paying to refinance 2006 bond issue because any savings would just go toward paying off the subordinate note. While the City is able to withhold a 10% administrative fee, there are statutory rules what these funds can be used for. Therefore, staff has taken the position that all TIF proceeds will remain in the fund to support both bond issues and the note, and that the City will recapture special debt levy funds when possible. Please let me know if you have any questions regarding these matters

41 Debt Service Schedule for TIF 1-2 Tax Increment Revenue Refunding Bonds for the MetroPlains Project (Series 2006) Amortization Schedule for Taxable Tax Increment Subordinate Note - Metroplains Redevelopment Project (Series 2002B)

42 HOUSING AND REDEVELOPMENT AUTHORITY OF AND FOR THE CITY OF MOUND, MINNESOTA RESOLUTION NO. 18- H RESOLUTION PROVIDING FOR THE PREPAYMENT AND REDEMPTION OF A PORTION OF THE AUTHORITY S TAX INCREMENT REVENUE REFUNDING BONDS (METROPLAINS PROJECT), SERIES 2006 BE IT RESOLVED By the Board of Commissioners of the Housing and Redevelopment Authority of and for the City of Mound, Minnesota (the Authority ), as follows: 1. The Authority has previously issued its Tax Increment Revenue Refunding Bonds (MetroPlains Project), Series 2006 (the Bonds ), dated November 2, 006, in the original aggregate principal amount of $3,295,000. Bonds maturing on or after August 15, 2016 are subject to call for prior redemption on August 14, 2014 or on any date thereafter at a price of par plus accrued interest. Redemption may be in whole or in part, and if in part, at the option of the Authority and in such order as the Authority will determine and within a maturity selected by Bond Trust Services Corporation, Roseville, Minnesota, acting as the registrar for the Bonds (the Registrar ). Prepayments will be at a price of par plus accrued interest. 2. It is determined that it is in the best interests of the sound financial management of the Authority that a portion of the Bonds maturing on August 15, 2027 (the Refunded Portion ) be prepaid and redeemed on September 1, 2018, or the first date for which the Registrar of the Bonds can provide proper notice to the holders of the Bonds, and the Refunded Portion is hereby called for redemption in the aggregate principal amount of $20, The Registrar is authorized and directed to mail notice of call for redemption of the Bonds in the form attached hereto as EXHIBIT A to the registered owners of the Bonds to be redeemed at the address shown on the registration books kept by the Registrar. Adopted by the Board of Commissioners of the Housing and Redevelopment Authority of and for the City of Mound, Minnesota this 24 th day of July, ATTEST: Chair Clerk

43 EXHIBIT A FORM OF NOTICE OF REDEMPTION NOTICE OF CALL FOR PARTIAL REDEMPTION $3,295,000 Housing and Redevelopment Authority of and for the City of Mound, Minnesota Tax Increment Revenue Refunding Bonds (MetroPlains Project) Series 2006 NOTICE IS HEREBY GIVEN that, by order of the Board of Commissioners of the Housing and Redevelopment Authority of and for the City of Mound, Minnesota (the Authority ), there has been called for redemption and prepayment on September 1, 2018 a portion of the bonds (the Refunded Portion ) of the Authority designated as the Tax Increment Revenue Refunding Bonds (MetroPlains Project), Series 2006, dated November 2, 2006, having a stated maturity date of February 15, 2027, totaling $20,000 in principal amount, and with the following CUSIP number: Year of Maturity Amount to Be Partially Redeemed CUSIP 2027 $20, AD5 The Refunded Portion is being called at a price of par plus accrued interest to September 1, 2018, on which date all interest on said Refunded Portion of the bonds will cease to accrue. Redemption shall be within a maturity chosen by random selection by Bond Trust Services Corporation, as paying agent and registrar. The Holders of the bonds hereby called for partial redemption are requested to present their bond for payment at the main office of Bond Trust Services Corporation, 3060 Centre Pointe Drive, Roseville, Minnesota 55113, on or before September 1, Important Notice: In compliance with the Jobs and Growth Tax Relief Reconciliation Act of 2003, federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time the payment by the redeeming institutions if they are not provided with your social security number or federal employer identification number, properly certified. This requirement is fulfilled by submitting a W-9 Form, which may be obtained at a bank or other financial institution. Dated:, BY ORDER OF THE BOARD OF COMMISSIONERS OF THE HOUSING AND REDEVELOPMENT AUTHORITY OF AND FOR THE CITY OF MOUND, MINNESOTA By /s/ Eric Hoversten Executive Director Housing and Redevelopment Authority of and for the City of Mound, Minnesota

44 MEMORANDUM Date: July 19, 2018 To: From: Subject: Honorable Mayor and City Council Members Catherine Pausche, Director of Finance and Administrative Services TIF Debt Service Fund Transfers The City's first TIF District (TIF 1-1) was for Commerce Place and was established in 1984 and was required to decertify in The City actually decertified early in 2009 and returned unused tax increment for redistribution because the debt service had been fully satisfied. The second TIF District (TIF 1-2) was for Mound Marketplace and Village by the Bay development and was established in 2000 and is required to decertify in This district had two separate bond issues and a subordinate note with the original developer. One of the bond issues called for 70% of the debt service to be paid by debt levies and 30% by tax increment revenues. The tax increment has exceeded initial projections, so there is an opportunity to recapture a portion of the debt levies for other purposes. The third TIF District (TIF 1-3) is for the Lost Lake and Harbor District redevelopment and was established in 2005 and is required to decertify in Due to the recession that began in earnest in 2009, redevelopment stalled and although not originally projected in the creation of the district, the City has had to wage a special debt levy and use Lost Lake slip revenues to help fund the 2009D debt service. Even if the Harbor District development occurs, any TIF generated will be insufficient to repay the debt levies and dock fund interfund loans. Therefore, Staff recommends $650,000 be transferred from Fund 355 (TIF 1-2) to Fund 375 (TIF 1-3) debt service funds effective immediately, and that prior to decertification in 2026 of TIF 1-2 and remaining residual funds related to debt service levies be transferred to Fund 375 (TIF 1-3). It should be noted that as part of the Long Term Financial Plan, the City suspended the debt levy for TIF 1-3 which was projected to be $200,000 for in order to free up funds for the capital reserve funds. The City will also be refinancing the 2009D bonds in the fall for interest rate savings and these funds, in addition to Lost Lake slip escrows may be used to pay down the bonds. A summary of the resulting debt service schedules are attached. Please let me know if you have any questions regarding these matters at (952)

45 Revised Debt Service Schedule for 2013B (Refunded 2003C) TIF 1-2 Revised Debt Service Schedule for 2009D (To be refunded 2018) TIF 1-3 Bond Balance as of $3.155M - may pay down principal in addition to interest rate savings

46 CITY OF MOUND RESOLUTION NO. 18- RESOLUTION AUTHORIZING TRANSFER OF FUNDS WHEREAS, the City of Mound Housing and Redevelopment Authority issued Tax Increment Revenue Refunding Bonds for the MetroPlains Project (Series 2006) with a original aggregate principal of $3,210,000; and WHEREAS, the City of Mound Housing and Redevelopment Authority issued a subordinate Limited Revenue Tax Increment Note (Series 2002) with a original aggregate principal of $308,957; and WHEREAS, the City of Mound Taxable General Obligation Tax Increment Bonds (Series 2003C) with a original aggregate principal of $2,300,000; and WHEREAS, the City of Mound has pledged its full faith, credit and taxing powers to the payment of principle and interest on the Series 2003C Bonds; and WHEREAS, the original Series 2003C Bonds debt service schedule called for repayment of the bonds with 30% of tax increment revenues and 70% special debt levies; and WHEREAS, the tax increment revenues have exceeded initial estimates, significantly reducing the need for the special debt levy for the Series 2003C bond issue; and WHEREAS, the Series 2003C bond issue was refunded with the 2013B bond issue for additional interest savings; and WHEREAS, updated projections of the tax increment revenues for TIF District 1-2 show that the remaining tax increment will be sufficient for all three obligations; and WHEREAS, the excess special debt levies can be used to support other debt service; and WHEREAS, the City of Mound has used special debt levies and dock program funds for TIF District 1-3 to support the Series 2009D bond issue; and WHEREAS, the updated projections of the tax increment revenues for TIF District 1-3 show that tax increment will be insufficient to repay the TIF bonds and interfund loans for the debt levies and dock program funds; NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Mound, Minnesota, as follows:

47 1. A fund transfer of $650,000 is authorized to transfer accumulated excess debt service levies from Fund 355 (TIF 1-2) to Fund 375 (TIF 1-3). 2. Prior to decertification of TIF District 1-2 on , any fund balance remaining that can be attributed to accumulated debt service levies shall be transferred from Fund 355 (TIF 1-2) to Fund 375 (TIF 1-3). 3. Upon decertification of the TIF District 1-2 on , any fund balance attributed to excess TIF shall be returned to the County for redistribution as required by Minnesota State Statute 469. Adopted by the City Council this 24th day of July, Attest: Catherine Pausche, Clerk Mayor Mark Wegscheid

48 MEMORANDUM Date: July 19, 2018 To: From: Subject: Honorable Mayor and City Council Members Catherine Pausche, Director of Finance and Administrative Services Lost Lake Slips & Maintenance The attached table summarizes the revenue created by the Lost Lake slips and the use of the funds. With Resolution 09-86, the City authorized an internal loan between the dock fund and the debt service fund for the 2009D bond issue which was used to finance the Lost Lake dredge and former dump remediation. The 2009D bond issue is callable February 1, 2019, and Staff anticipates refinancing in the fall. Staff recommends transferring $650K of the special levy for the TIF 1-2 bond issue to TIF 1-3 debt service. In addition, Staff recommends transferring approximately $350K from the dock fund in order to pay down $1M of the $2.975M of 2009D bonds outstanding. This brings the total interfund loan from the Dock Fund to $550K, which is still far less than the cost of the slip complexes and dredge. The pay-down, along with interest rate savings, should allow the remaining debt to be supported by the tax increment, ending the need for additional levies or loans, and possibly freeing up tax increment to pay back a portion of the internal loans before the TIF district decertifies in Resolution approved a slip use agreement between the City of Mound and the Villas on Lost Lake Homeowners Association that declares the City is responsible for maintaining the dredge and any aquatic vegetation removal/management so that reasonable access can be obtained in and around the slip complexes, in addition to maintaining the slip complexes and apputernances to a reasonable standard and the functionally equivalent replacement, if necessary. Staff proposes to liquidate the three escrow accounts (Slip Maintenance Escrow, Channel Maintenance Escrow, Shoreline/Dock Maintenance Escrow) related to the harbor area where the slips reside to help fund the $350K loan, and then begin funding a new escrow account called "Lost Lake Maintenance Escrow," in 2019 that will be used to fund any improvements to the greenway, pier, Lost Lake slip complexes and dredge/vegetation management. Projected annual expenses include aquatic vegetation management ($4,000), Property in the Open insurance for slip complexes/pier/greenway $10,000+ (may recommend self insuring), and water/electric $1,000. Examples of one-time expenses include gates, security cameras, deck lighting and the ultimate redredge and slip replacement. There was unbudgeted revenue in 2018 due to the additional 10 overnight slips that were approved by the LMCD. The City needs to incur the following unbudgeted expenses to provide for the security of the slip holders: Installation of 5 gates: $4, Upgraded locks for 5 gates: $1, IP Cameras (NOT TO EXCEED) $8,

49 In addition, it has been determined that weed harvesting is insufficient to control aquatic vegetation, so annual chemical treatments will be necessary. We are also investigating alternatives to the dock lighting and replacing them with LED because so many are malfunctioning. Staff recommends approval of the resolutions to authorize the transfer of funds and the unbudgeted expenditures

50 Lost Lake Slip Escrow Balances Year Slip Maint Channel Maint Dock Area/ Shoreline Maint Total per year Revenue Transfer to 2009D Debt Service Fund: A/C A/C 700 Annual Contrib: $84/slip $132/slip $132/slip Interfund Loan , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Total Dispursements Net 33, , , , , , (533.39) (1,875.00) (156.04) (2,564.43) 33, , , , U:\Dockprogram\My Documents\Lost Lake Slips\ESCROWS\Lost Lake Docks Escrow; Balance 7/16/

51 City of Mound, MN $2,045,000 General Obligation TIF Refunding Bonds, Dated: November 5, 2018 Proposed Current Refunding of GO TIF Ref Bonds, Series 2009D Assumes Current Market BQ AA Rates plus 20bps Debt Service Comparison Date Total P+I Net New D/S Old Net D/S Savings 02/01/ , (997,540.00) 02/01/ , , , , /01/ , , , , /01/ , , , , /01/ , , , , /01/ , , , , /01/ , , , , /01/ , , , , /01/ , , , , /01/ , , , , /01/ , , , , /01/ , , , , /01/ , , , , Total $2,480, $3,478, $3,830, $351, PV Analysis Summary (Net to Net) Gross PV Debt Service Savings... 1,118, Net PV Cashflow 2.911%(Bond Yield)... 1,118, Total Cash contribution... (1,000,000.00) Contingency or Rounding Amount... 2, Net Present Value Benefit $121, Net PV Benefit / $3,163, PV Refunded Debt Service 3.829% Net PV Benefit / $2,975,000 Refunded Principal % Net PV Benefit / $2,045,000 Refunding Principal % Refunding Bond Information Refunding Dated Date 11/05/2018 Refunding Delivery Date 11/05/2018 Proposed CR 2009D GO TIF SINGLE PURPOSE 7/16/ :17 PM

52 Quote Assured Security, Inc. 965 North Highway 169 Minneapolis, MN Phone (763) Fax (763) DATE July 16, 2018 Quotation # 71318cw Prepared for: Customer ID City Of Mound Quotation valid until: September 14, 2018 Prepared by: Chris Webb Re: Pole Mount Cameras Qty Description Price Amount Vivotek IB9367-ETV 2MP Bullet Camera with Pole mounting bracket (Pole 2 $ $1, Cameras) 2 Weatherproof Pole Mount Boxes (Pole Cameras) $ $ Ligo DLB Mach5 Wireless Ethernet Transmitter/Receiver (Pole Cameras/NVR) $ $1, Poe+ 4 port Network Switches (Pole Cameras) $ $ Vivotek ND8322P 8 Port 2TB NVR (Network Video Recorder) $ $ Installation Cabling and Materials $85.00 $ Installation, Programming and Training Labor $1, $1, * Weatherproof Pole Mount Boxes to be mounted on Pole with a 120v receptacle installed inside by Electrician. This quote does not include any applicable taxes. If you have any questions concerning this quote, please contact Chris Webb at (763) or Chris@AssuredSecurityInc.com THANK YOU FOR YOUR BUSINESS! TOTAL $ 6, Signature: Accepted By: Date: 7/16/2018 Date:

53 IB9367-HT IB9367-EHT Bullet Network Camera 2MP 30fps SNV WDR Pro Smart Stream III Smart IR II 30M IR IP66 IP67 IK10 The IB9367 series is the new professional outdoor IR bullet network camera from VIVOTEK, equipped with a full HD sensor capable of 1920 x 1080 resolution at 30 fps. With the most updated VIVOTEK SNV and WDR Pro technology, the IB9367 series is capable of capturing the highest quality images in both low light and high contrast environments. The IB9367 series also offers great image in night time surveillance technology. By adopting Smart IR II technology from VIVOTEK speed domes, the IB9367 IR illuminators now align with the remote focus lens' focus angle to provide the best IR image quality at any lens setting. This feature optimizes IR intensity, reduces IR hotspots, and increases the IR effective range up to 30 meters. Additionally, the IB9367 series employs VIVOTEK's Smart Stream III technology and H.265 compression codec, reducing bandwidth more than 90%* while still maintaining excellent image quality compared to traditional H.264 without smart streaming. Furthermore, the VIVOTEK VADP (VIVOTEK Application Development Platform) allows users to add customized programs for various applications and user scenarios. Protecting all these features is the IB9367's IP66, IP67 and IK10 rated housing, capable of operating from -50 C to 50 C (IB9367-EHT). * Depending on scenes Key Features x1080 H.265 Compression Technology 2.8 ~ 12 mm, Remote Focus, P-iris Lens Smart Stream III to Optimize Bandwidth Efficiency SNV (Supreme Night Visibility) for Low Light Conditions WDR Pro for Unparalleled Visibility in Extremely Bright and Dark Environments IR Illuminators up to 30M with Smart IR II Two-way Audio 3D Noise Reduction for Low-light Conditions Built-in MicroSD/SDHC/SDXC Card Slot Weather-proof IP66, IP67 and Vandal-proof IK10-rated Housing -50 C ~ 50 C Wide Temperature Range for Extreme Weather Conditions (IB9367-EHT) Bitrate Without WDR Pro Bandwidth Saving more than 90% With WDR Pro H.264 H Smart Stream III Compression H Smart Stream III, Ultra-low Bandwidth

54 Technical Specifications Model System Information CPU IB9367-HT: Vari-focal, Remote Focus IB9367-EHT: Vari-focal, Remote Focus, -50 C ~ 50 C Multimedia SoC (System-on-Chip) Audio Capability Two-way audio Compression G.711, G.726 Interface Network External Mic input External line output Flash 128MB Users Live viewing for up to 10 clients RAM Camera Features Image Sensor Maximum Resolution Lens Type 512MB 1/2.8" Progressive CMOS 1920x1080 Vari-focal, Remote Focus Protocols Interface IPv4, IPv6, TCP/IP, HTTP, HTTPS, UPnP, RTSP/ RTP/RTCP, IGMP, CIFS/SMB, SMTP, FTP, DHCP, NTP, DNS, DDNS, PPPoE, CoS, QoS, SNMP, 802.1X, UDP, ICMP, ARP, SSL/TLS 10 Base-T/100 Base-TX Ethernet (RJ-45) *It is highly recommended to use standard CAT5e & CAT6 cables which are compliant with the 3P/ETL standard. Focal Length f = 2.8 ~ 12 mm ONVIF Supported, specification available at Aperture F1.4 ~ 2.8 Intelligent Video Auto-iris P-iris Video Motion Detection Five-window video motion detection Field of View Shutter Time WDR Technology 33 ~ 97 (Horizontal) 19 ~ 53 (Vertical) 38 ~ 114 (Diagonal) 1/5 sec. to 1/32,000 sec. WDR Pro Alarm and Event Alarm Triggers Motion detection, manual trigger, digital input, periodical trigger, system boot, recording notification, camera tampering detection, audio detection, MicroSD card life expectancy Day/Night Minimum Illumination Removable IR-cut filter for day & night function 0.07 F1.4 (Color) F1.4 (B/W) 0 Lux with IR illumination on Alarm Events General Event notification using digital output, HTTP, SMTP, FTP, NAS server and MicroSD card File upload via HTTP, SMTP, FTP, NAS server and MicroSD card Tilt Range 90 Rotation Range 180 Pan/Tilt/Zoom Functionalities IR Illuminators eptz:48x digital zoom (4x on IE plug-in, 12x built in) Built-in IR illuminators, effective up to 30 meters with Smart IR II, IR LED*5 Connectors LED Indicator RJ-45 cable connector for Network 10/100 Mbps PoE connection Audio Mic in Audio line out DC 12V Digital input *1 Digital output *1 System power and status indicator On-board Storage Video Slot type: MicroSD/SDHC/SDXC card slot Seamless Recording Power Input IB9367-HT: DC 12V, IEEE 802.3af PoE Class 0 IB9367-EHT: DC 12V, IEEE 802.3at PoE Class 4 Compression H.265, H.264, MJPEG Power Consumption IB9367-HT: Max. 12 W IB9367-EHT: Max. 24 W Maximum Frame Rate x1080 Dimensions 294 x 118 x 118 mm Maximum Streams 3 simultaneous streams Weight 1,254 g S/N Ratio 58 db Casing IP66, IP67, IK10 (Metal Housing) Dynamic Range 120 db Safety Certifications CE, LVD, FCC Class A, VCCI, C-Tick, UL Video Streaming Image Settings Adjustable resolution, quality and constant bit rate control; Smart Stream III Time stamp, text overlay, flip & mirror; Configurable brightness, contrast, saturation, sharpness, white balance, exposure control, gain, backlight compensation, privacy masks; Scheduled profile settings, video rotation, 3DNR, DIS, HLC Operating Temperature IB9367-HT: Starting Temperature: -10 C ~ 50 C (14 F ~ 122 F) Working Temperature: -30 C ~ 50 C (-22 F ~ 122 F) IB9367-EHT: Starting Temperature: -40 C ~ 50 C (-40 F ~ 122 F) Working Temperature: -50 C ~ 50 C (-58 F ~ 122 F) Audio Humidity 90%

55 Technical Specifications Warranty System Requirements 36 months Dimensions Operating System Microsoft Windows 8/7 Web Browser Mozilla Firefox 7~43 (streaming only) Internet Explorer 10/ mm 294 mm Other Players Included Accessories Others VLC: or above Quicktime: 7 or above Quick installation guide, warranty card, screw pack, alignment sticker 118 mm Compatible Accessories Mounting Kits AM-312 AM-412 AM-719 Pole Mount Adapter Corner Mount Adapter Junction Box All specifications are subject to change without notice. Copyright VIVOTEK INC. All rights reserved. Ver. 2 6F, No.192, Lien-Cheng Rd., Chung-Ho, New Taipei City, 235, Taiwan, R.O.C. T: F: E: sales@vivotek.com W:

56 ND8322P 8-CH Embedded Plug & Play NVR 8x PoE Ports 2x HDD RAID Fisheye Dewarp Mobile EZConnect Auto Adaptive Stream HDMI/VGA Monitor Display ONVIF VIVOTEK ND8322P is a Linux embedded 8-CH standalone NVR with 8-port 802.3af Compliant PoE, allowing connection with PoE cameras for a max. 80 W power supply. ND8322P also features "One Button Setup" with its plug- &-play and auto-setup functionality, making this advanced unit surprisingly simple to install, and suitable for any small-scale video surveillance applications. Supporting HDMI and VGA local video output, users can control the GUI OSD interface via mouse & keyboard, eliminating the need for a separate PC to search video or to playback from the NVR. The new local display design - Auto Adaptive Stream will dynamically modify Stream 2 resolution of a camera to best fit the display resolution according to the layout type, resulting in an efficient display, while maintaining superb image quality. Further, the RAID 0/1 configuration provides further data security in the rare event of a hard drive failure. Meanwhile, ND8322P supports software fisheye camera de-warping function, providing right angle of video view and detailed information for usage. What s more, ND8322P, featuring various I/O ports, such as esata port, alarm input/output, RS232, and RS485 provides users great flexibility of applications. With VAST CMS, users can set up IP surveillance system with ease. For remote and mobile access, VIVOTEK also provides EZConnet and iviewer app, for both ios and Android handheld devices, enabling users to monitor live video anytime, anywhere. Key Features Plug & Play One Button Auto Setup EZConnect by Scanning QR Code for 24/7 Mobile Viewing Intuitive, Elegant Interaction UI 8x 802.3af Compliant PoE Ports VIVOTEK Camera Configuration and VAST CMS Integrated Live and Playback Fisheye Dewarp Embedded Linux OS e-sata for Extension Storage Support RAID 0/1 Storage Story Board Event Search ONVIF Open Platform Fanless Design Up to 12MP Camera Liveview & Playback. ND8322P PoE Plug-n-Play HDMI Local Display Playback Internet EZConnect Mobile APP Web Client Convenience Store Restaurant IP Camera x 8 CMS ND8322P Application Scenario Clothing Specialty Electronics Specialty