AGENDA CITY OF EDEN PRAIRIE HOUSING AND REDEVELOPMENT AUTHORITY MONDAY, JULY 14, 2014

7:00 PM, CITY CENTER Council Chamber 8080 Mitchell Road

HOUSING AND REDEVELOPMENT AUTHORITY MEMBERS: Chair Nancy TyraLukens, Council Members Brad Aho, Ron Case, Sherry Butcher Wickstrom, and Kathy Nelson CITY STAFF: City Manager Rick Getschow, Public Works Director Robert Ellis, City Planner Julie Klima, Community Development Director Janet Jeremiah, City Attorney Ric Rosow, Finance Director Sue Kotchevar and Recorder Jan Curielli I.

ROLL CALL / CALL THE HRA MEETING TO ORDER

II.

APPROVE MINUTES OF HRA MEETING HELD ON DECEMBER 3, 2013

III.

PUBLIC HEARING TO APPROVE EDEN GARDENS HOUSING PROJECT AND HOUSING AGREEMENT, SET INCOME AND PRICE REQUIREMENTS, AND APPROVE THE PURCHASE AND SALE OF THE PROPERTY AT THE SOUTHWEST CORNER OF SCENIC HEIGHTS ROAD AND EDEN PRAIRIE

IV.

ADJOURNMENT

HRA ITEM NO.: II UNAPPROVED MINUTES HOUSING AND REDEVELOPMENT AUTHORITY TUESDAY, DECEMBER 3, 2013

7:00 PM, CITY CENTER Council Chamber 8080 Mitchell Road

HOUSING AND REDEVELOPMENT AUTHORITY MEMBERS: Chair Nancy TyraLukens, Council Members Brad Aho, Sherry Butcher Wickstrom, Ron Case, and Kathy Nelson CITY STAFF: City Manager Rick Getschow, Public Works Director Robert Ellis, Community Development Director Janet Jeremiah, Parks and Recreation Director Jay Lotthammer, Finance Director Sue Kotchevar, City Attorney Ric Rosow and Council Recorder Jan Curielli I.

ROLL CALL / CALL THE HRA MEETING TO ORDER Chair Tyra-Lukens called the meeting to order at 7:04 PM in shared session with the City Council. All members were present.

II.

APPROVE MINUTES OF HRA MEETING HELD ON SEPEMBER 3, 2013 MOTION: Aho moved, seconded by Case, to approve the minutes of the HRA meeting held September 3, 2013. Motion carried 5-0.

III.

ADOPT RESOLUTION NO. HRA 2013-05 CERTIFYING THE 2014 HRA PROPERTY TAX LEVY TO BE $200,000 AND APPROVING THE 2014 HRA BUDGET OF $200,000 Getschow said the HRA approved the proposed 2013 HRA property tax levy and budget on September 3, 2013. Also on September 3, 2013, the Eden Prairie City Council adopted resolutions consenting and approving the proposed 2013 HRA property tax levy. Minnesota Law authorizes the HRA to levy a tax with the consent of the City Council. He noted the amount of the HRA levy has been set at $200,000 for more than ten years. Aho asked about the taxing limits of the HRA. Getschow said the maximum levy would be $1,600,000, so this is just a small portion of that. Aho said he just wanted people to know we are definitely not taxing at the maximum level. MOTION: Butcher Wickstrom moved, seconded by Nelson, to adopt Resolution HRA No. 2013-05 to approve the proposed 2014 property tax levy to be $200,000 and to accept the proposed 2014 budget of $200,000. Motion carried 5-0.

IV.

ADJOURNMENT MOTION: Case moved, seconded by Aho, to adjourn the HRA. Motion carried 5-0. Chair Tyra-Lukens adjourned the HRA meeting at 7:08 PM.

HOUSING & REDEVELOPMENT AUTHORITY AGENDA

DATE: July 14, 2014

DEPARTMENT/DIVISION: Community Development: Janet Jeremiah, David Lindahl, Molly Koivumaki

ITEM DESCRIPTION: HRA ITEM NO: III. Public Hearing to approve Eden Gardens housing project and housing agreement, set income and price requirements, and approve the purchase and sale of the property at the southwest corner of Scenic Heights Road and Eden Prairie

Requested Action: Move to: • Close the public hearing; and • Adopt the Resolution determining to carry out a Housing Development Project (the “Project”), identifying the project area and adopting findings; and • Adopt the Resolution approving purchase and sale of the project area and establishing terms and conditions for the Project; and • Authorize the Mayor and City Manager to execute the Purchase Agreement, Housing Project Agreement and such other documents as are necessary to consummate the transaction. Synopsis: The Housing and Redevelopment Authority in and for the City of Eden Prairie (the “HRA”) is considering the purchase of an approximately 8.4 acre parcel from MnDOT for $900,000 and immediately selling the same parcel to Eden Gardens, LLCs for $950,000 for the Eden Gardens Green Mid-Market single-family housing development. The parcel is located at the southwest corner of Eden Prairie Road and Scenic Heights Road. The $50,000 difference between the HRA purchase price and the price at which the property will be sold to the Developer will be used to cover various costs incurred by the City. Minnesota Statutes Chapter 469.001 to 469.047 (the “HRA Statute”) provides authority for the HRA to undertake the Project to provide affordable housing for persons of moderate income and their families. A Purchase Agreement and Housing Project Agreement establish specific requirements of the Developer. Background: The Strategic Plan for Housing and Economic Development, adopted by the City Council in October, 2012, included a course of action for establishing a Green, Mid-Market neighborhood at the southwest corner of Scenic Heights Road and Eden Prairie Road. The Project accomplishes the City Council’s goal and meets the following purposes identified in MS §469.001: 1) to provide a sufficient supply of adequate, safe, and sanitary dwellings in order to protect the health, safety, morals, and welfare of the citizens of this state; and 2) to remedy the shortage of housing for moderate income residents. The HRA Statute states that public participation in activities intended to meet the purposes of sections 469.001 to 469.047 and the exercise of powers confined by sections 469.001 to 469.047 are public uses and purposes for which private property may be acquired and public money spent.

The parcel is currently owned by MnDOT and is left over from construction of Highway 212. The goal is to create an environmentally sustainable single family neighborhood with a majority of homes sold to qualified buyers at moderate income price ranges. In April, 2013, the City held a neighborhood meeting for initial feedback and then released a Request for Proposals seeking a developer for this Project. Following a thorough review of four submittals (one incomplete), the Eden Garden proposal by Homestead Partners (now Eden Gardens, LLC) was selected by the City Council in August, 2013. The Eden Gardens proposal has consistently included 36 singlefamily homes which will all be Green Path certified and a common open space with community gardens and other amenities. Additional neighborhood meetings and public hearings to gain feedback on the specific design and potential neighborhood impacts have resulted in certain plan amendments and traffic mitigation to address neighborhood ideas and concerns. MnDOT’s original appraisal indicated a property value of $950,000. Staff requested and received a reduction in the price to $900,000 due to the need for approximately $50,000 of unanticipated soil correction costs. The HRA will sell the property to Eden Gardens, LLC for $950,000. The $950,000 price constitutes a reduction in Eden Gardens, LLC’s original offer to the City as the Developer will be responsible for the unanticipated soil correction costs as well as other matters. The HRA will use the $50,000 difference between the purchase and sale price to cover City/HRA closing, legal, financial consultant review, and development review costs (including a noise study and Planning staff time). The City hired an independent consultant to review Eden Gardens, LLC’s pro-forma to ensure that its anticipated costs and profit are within industry standards. The review indicated that its anticipated costs are within standards and its profit margin will be low by industry standards. Eden Gardens, LLC must provide proof of financing for the Project prior to closing. The closing will be simultaneous with the City’s purchase of the property from MnDOT. Preference for all home types will be given to buyers who currently live or work in Eden Prairie. To accommodate life-cycle housing, floor plans will include a one-level living option. Sixteen (16) units will be sold at market-rate. This is necessary in order to achieve the goal of providing housing affordable to moderate income homebuyers at an affordable price and to avoid the need for a public cash subsidy for the Project. Twenty (20) of the housing units will be sold only to moderate income homebuyers. Moderate income eligibility is defined as 80-120% of the Area Median Income (“AMI”) or $66,320 - $99,480 with the AMI at $82,900 for homes sold in 2014. This number is adjusted annually by HUD, however the adjustments are generally minor and the AMI remains fairly consistent from year to year. Minnesota Housing Finance Agency (MHFA) annually determines the home cost or loan limits for the 11 County metro area based upon the moderate income range, which is currently $248,000 - $372,000 with the median home cost at $310,000. In order to carry out this Project without a cash subsidy and provide the twenty (20) units for moderate income homebuyers, the actual price ranges of the mid-market homes are anticipated to be in the $330,000-$360,000 range and will therefore likely only be accessible to the upper 20-25% of the income eligibility range. Income eligibility will be overseen by staff in the office of Housing & Community Services, using an application and income verification system that is consistent with the City’s current Housing Rehabilitation and First Time Homebuyer programs. The Developer has and will continue to involve Hennepin Technical College in the development process. Specifically, the Developer will involve students in opportunities such as framing a home,

learning how “green” mechanical/electrical systems work and learning green techniques used in stormwater management. The Developer will construct the Project in a manner that meets specified Green standards according to the final PUD plans and development approval by the City. All homes will be Green Path certified and include solar options, green and energy efficient construction, water efficiency, and low-mow grass lawns. The neighborhood will include community gardens, a shelter with a green roof and solar panels, rain gardens, walkable streets, solar sidewalk lighting, and primarily native landscaping that requires minimal water and mowing. Prior to closing on homes to individual buyers, the Developer must complete all common infrastructure improvements and amenities (including, but not limited to the alleys, streets, sanitary sewer, water, shelter, tot lot, and storm sewer). Park dedication fees for moderate income buyers will be deferred and will be waived entirely if the housing unit remains owned by a qualified moderate income buyer for 10 years. If any moderate income housing unit is resold within 10 years to a buyer who does not meet moderate income eligibility requirements, the seller or buyer must pay the deferred park dedication fee. The amount of park dedication is fixed at the 2014 rate. Further after the initial sale of a moderate income unit by the Developer, the seller of a unit to a buyer who does not meet moderate income eligibility requirements must remit a portion of the profit received by the seller in that transaction to the City for reinvestment in low and moderate income housing initiatives. Both look back requirements will end ten years after the date of the initial purchase of the housing unit from the Developer. Attachments: Resolutions Purchase Agreement Housing Project Agreement

HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE COUNTY OF HENNEPIN STATE OF MINNESOTA H.R.A. RESOLUTION NO. 2014-01 A RESOLUTION DETERMINING TO CARRY OUT A HOUSING DEVELOPMENT PROJECT, IDENTIFYING THE AREA, AND ADOPTING FINDINGS BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority (“HRA”) in and for the City of Eden Prairie, Minnesota, as follows: RECITALS WHEREAS, pursuant to Minn. Stat. 469.017, the HRA has the authority to complete a housing development project; WHEREAS, there is a shortage of decent, safe, and sanitary housing for persons of moderate income and their families in the City; WHEREAS, in order to partially alleviate the shortage, the HRA has determined to carry out a housing development project (the “Project”); WHEREAS, the goals for the Project are to increase environmental sustainability/energy efficiency and single family housing affordability for moderate income individuals and their families. The intent of the Project is to create an environmentally sustainable single family neighborhood with implementation of “green” measures with 20 of the housing units to be sold to people with moderate incomes as defined below; WHEREAS, in order to ensure that the Project partially alleviates the shortage of moderate income housing, the HRA will establish moderate income and price limits for the Project; WHEREAS, based on evidence presented by developers who responded to the Project Request for Proposals, in order to make the Project feasible and to provide the desired moderate income housing, the HRA has determined that 16 of the housing units in the Project may be sold at market rates. The remaining 20 of the housing units must be sold to people with incomes and at the prices set forth below. NOW THEREFORE, THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE HEREBY RESOLVES AS FOLLOWS: 1.

Recitals. All of the Recitals set forth above are incorporated herein.

2.

Findings. The HRA finds that there is a shortage of decent, safe, and sanitary housing for persons of moderate income and their families in the City. 1

3.

Determination. In order to partially alleviate the shortage, the HRA determines to carry out the Project.

4.

Project Area. The property on which the Project will be constructed is located at the southwest corner of Eden Prairie Road and Scenic Heights Road as illustrated on attached Exhibit A (“Project Area”) and is legally described on attached Exhibit B.

5.

Project Feasibility. Based on evidence presented by developers who responded to the Project Request for Proposals, in order to make the Project feasible and to provide the desired moderate income housing, 16 of the housing units in the Project may be sold at market rates. The market rate units shall be built on Blocks 1 and 5 as shown on the Preliminary Plat of Eden Gardens. The 20 Moderate Income Units must be sold: (i) to people who qualify under the Moderate Income Limits set forth below in B; and (ii) at the Affordable Housing Prices set forth below in C.

6.

Moderate Income Limits. The U.S. Department of Housing and Urban Development annually determines the area median income for Hennepin County (“Area Median Income”). The Area Median Income is published annually in December for use in the following year. The HRA hereby determines that the moderate income limits for the Project (the “Moderate Income Limits”) shall be 80% to 120% of the Area Median Income. (For example, the Area Median Income for Hennepin County published in December 2013 for use in the year 2014 was $82,900. The moderate income limits for all Moderate Income Units sold in 2014 is $66,320 to $99,480.)

7.

Affordable Housing Prices. Based upon the Area Median Income the Minnesota Housing Finance Authority annually sets a loan limit for the 11-County Metro (“Area Affordable Price”). The Area Affordable Price is published in December for use in the following year. For purposes hereof, the affordable housing prices for persons of moderate income for the Project shall be 80% to 120% of the Area Affordable Price (the “Affordable Housing Prices”) (For example, the Area Affordable Price published in December 2013 for use in the year 2014 was $310,000. Consequently, the Affordable Housing Prices for all Moderate Income Units sold in 2014 is $248,000 to $372,000.)

ADOPTED by the Housing and Redevelopment Authority in and for the City of Eden Prairie this 14th day of July, 2014. _________________________ Nancy Tyra-Lukens, Chair ATTEST: ______________________________ Rick Getschow, Executive Director 2

CERTIFICATION I, Rick Getschow, Executive Director of the Housing and Redevelopment Authority in and for the City of Eden Prairie, County of Hennepin, Minnesota, hereby certify that the foregoing is a true and correct copy of H.R.A. Resolution No. 2014 - 01 passed by the Authority on the 14th day of July, 2014.

______________________________ Executive Director

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EXHIBIT A TO H.R.A. RESOLUTION NO. 2014-01 Depiction of Project Area

4

EXHIBIT B TO H.R.A. RESOLUTION NO. 2014-01 Legal Description of Project Area

5

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To be platted as: Lot 1, Block 1; Lots 1-5, Block 2; Lots 1-5, Block 3; Lots 1-10, Block 4; Lots 1-15, Block 5; and Outlots A, B, C, D, E, F, and G, Eden Gardens, Hennepin County.

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HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE COUNTY OF HENNEPIN STATE OF MINNESOTA H.R.A. RESOLUTION NO. 2014-02 A RESOLUTION SELECTING A DEVELOPER, APPROVING PURCHASE AND SALE OF THE PROJECT AREA AND ESTABLISHING TERMS AND CONDITIONS FOR THE HOUSING DEVELOPMENT PROJECT. BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority (“HRA”) in and for the City of Eden Prairie, Minnesota, as follows: RECITALS WHEREAS, pursuant to Minn. Stat. 469.017, the HRA has the authority to complete a housing development project; WHEREAS, the HRA adopted H.R.A. Resolution No. 2014-01 at a duly noticed meeting on July 14, 2014. In H.R.A. Resolution No. 2014-01 the HRA found that there is a shortage of decent, safe, and sanitary housing for persons of moderate income and their families in the City and determined to carry out a housing development project to partially alleviate the shortage (the “Project”); WHEREAS, the property on which the Project will be constructed is located at the southwest corner of Eden Prairie Road and Scenic Heights Road as illustrated on attached Exhibit A (“Project Area”) and is legally described on attached Exhibit B. WHEREAS, the Project Area is currently owned by the Minnesota Department of Transportation (“MnDOT”) and is available for purchase by the HRA to carry out the Project; WHEREAS, the goals for the Project are to increase environmental sustainability/energy efficiency and single family housing affordability for moderate income individuals and their families. The intent of the Project is to create an environmentally sustainable single family neighborhood with implementation of “green” measures with 20 of the housing units to be sold to people with moderate incomes; WHEREAS, in order to ensure that the housing development project partially alleviates the shortage of moderate income housing, the HRA in H.R.A. Resolution No. 2014-01 established moderate income and affordability limits for the Project; WHEREAS, the HRA issued a Request for Proposals in order to select a developer to carry out the Project;

1

WHEREAS, the HRA intends to purchase the Project Area from MnDOT and sell the Project Area to the selected developer; WHEREAS, the HRA has held a duly noticed public hearing regarding the purchase and sale of the Project Area on July 14, 2014; NOW THEREFORE, THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE HEREBY RESOLVES AS FOLLOWS: 1.

Recitals. All of the Recitals set forth above are incorporated herein.

2.

Purchase. The HRA hereby approves the purchase of the Project Area from the MnDOT in order to carry out the Project.

3.

Developer. The HRA hereby selects Eden Gardens, LLC (as successor to Homestead Partners, LLC) to carry out the Project based review of all proposals submitted, information provided by Homestead Partners, LLC and the other applicants, and the information provided at the public hearing. Homestead Partners, LLC submitted a proposal that complies with the Request for Proposals; complies with the income and pricing limits established by the HRA; and meets the HRA’s goals for the housing development project to increase sustainability/energy efficiency and single family housing affordability.

4.

Fair Market Value. The HRA hereby sets the estimated fair market value of the Project Area at $950,000.00, based on the MnDOT 2012 Market Value Summary Appraisal Report issued by Day Group, LLC.

5.

Sale. The HRA hereby approves the sale of the Project Area to Eden Gardens, LLC for $950,000.00 in order to carry out the Project. The HRA hereby approves the Purchase Agreement attached hereto as Exhibit C and authorizes the execution of the Purchase Agreement by the appropriate HRA officers. The sale of the Project Area to Eden Gardens, LLC is conditioned on the execution of the Housing Project Agreement between the HRA and Eden Gardens, LLC, attached hereto as Exhibit D.

ADOPTED by the Housing and Redevelopment Authority in and for the City of Eden Prairie this 14th day of July, 2014. _________________________ Nancy Tyra-Lukens, Chair ATTEST: ______________________________ Rick Getschow, Executive Director

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CERTIFICATION I, Rick Getschow, Executive Director of the Housing and Redevelopment Authority in and for the City of Eden Prairie, County of Hennepin, Minnesota, hereby certify that the foregoing is a true and correct copy of the H.R.A. Resolution No. 2014 – 02 passed by the Authority on the 14th day of July, 2014. ______________________________ Executive Director

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EXHIBIT A to H.R.A. RESOLUTION 2014-02 Depiction of Project Area

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EXHIBIT B to H.R.A. RESOLUTION 2014-02 Legal Description of Project Area

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To be platted as: Lot 1, Block 1; Lots 1-5, Block 2; Lots 1-5, Block 3; Lots 1-10, Block 4; Lots 1-15, Block 5; and Outlots A, B, C, D, E, F, and G, Eden Gardens, Hennepin County.

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EXHIBIT C to H.R.A. RESOLUTION NO. 2014-02 Purchase Agreement PURCHASE AGREEMENT THIS PURCHASE AGREEMENT (this “Agreement”) is dated as of July 14, 2014 between the Housing Redevelopment Authority in and for the City of Eden Prairie, Minnesota a municipal corporation and political subdivision organized and existing under the Constitution and the laws of the State of Minnesota (referred to as “Seller”) and Eden Gardens, LLC, a Minnesota limited liability company (referred to as “Buyer”). RECITALS The Minnesota Department of Transportation (referred to as “MnDOT”) is the fee owner of certain real property located in Hennepin County, Minnesota, containing approximately 8.44 acres, legally described on the attached Exhibit A (the “Land”). The Land, together with all buildings and improvements constructed or located on the Land and all easements and rights benefiting or appurtenant to the Land is collectively referred to herein as the “Real Property”. WHEREAS, Seller has determined that there is a shortage of decent, safe, and sanitary housing for persons of moderate income and their families in the City; WHEREAS, in order to alleviate the housing shortage, the HRA has determined to carry out a housing development project pursuant to Minn. Stat. 469.017(the “Project”); WHEREAS, the goals for the Project are to increase environmental sustainability/energy efficiency and single family housing affordability for moderate income individuals and their families. The intent of the Project is to create an environmentally sustainable single family neighborhood with implementation of “green” measures with 20 of the housing units to be sold to people with moderate incomes; WHEREAS, in order to ensure that the housing development project partially alleviates the shortage of moderate income housing, the HRA will establish moderate income and price limits and buyer eligibility requirements for the housing development project; WHEREAS, Seller has adopted H.R.A. Resolution No. 2014-01 and H.R.A. Resolution No. 2014-02 relating to the housing development project, approving the project, approving purchase and sale of the Real Property, and establishing regulations for the project. WHEREAS, Seller intends to acquire the Real Property from MnDOT after which Seller desires to sell the Real Property to Buyer and Buyer desires to purchase the Real Property from Seller, pursuant to the terms of this Agreement. Upon purchase of the Real Property Buyer shall complete the housing development project on the Real Property.

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For purposes of this Agreement the effective date is the later date both Seller and Buyer shall have executed this Agreement (“Effective Date”) as shown by the dates next to their signature blocks. NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1.

Sale of Real Property. Seller agrees to sell to Buyer and Buyer agrees to buy from Seller the Real Property.

2.

Purchase Price. The purchase price to be paid by Buyer to Seller is Nine Hundred Fifty Thousand and no/100 Dollars ($950,000.000).

3.

Payment of Purchase Price. The Purchase Price shall be paid as follows: 3.1

Earnest Money. One Hundred Thousand and no/100 Dollars ($100,000) as earnest money (“Earnest Money”) which Earnest Money shall be 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 Buyer. The Earnest Money shall be deposited within three (3) business days of the Effective Date. Unless otherwise disbursed pursuant to the Escrow Agreement, the Earnest Money and all interest accrued thereon shall be paid to Seller at Closing and credited against the Purchase Price.

3.2

Closing Payment. Subject to adjustments provided for herein, Eight Hundred Fifty Thousand and no/100 Dollars ($850,000.00) in cash or by wire transfer of U.S. Federal Funds to be received by Seller on or before 1:00 p.m. local time on the Closing Date.

4. A. Buyer’s Contingencies. Unless waived by Buyer in writing, Buyer’s obligation to purchase the Real Property shall be subject to and contingent upon each of the following: 4.1

Performance of Seller’s Obligations. Seller shall have performed all of the obligations required to be performed by Seller under this Agreement, as and when required by this Agreement.

4.2

Title. Title shall have been found acceptable by Buyer or made acceptable in accordance with the requirements and terms of Section 10 below.

4.3

Phase I. No later than forty-five (45) days after the Effective Date 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 9

Property by an environmental consultant reasonably acceptable to Buyer (the “Phase I”). Buyer shall cause the Phase I to be prepared no later than thirty-five (35) days after the Effective Date at Buyer’s cost and expense. Buyer shall deliver a copy to Seller within three (3) business days after any termination of this Agreement. 4.4

Testing. No later than forty-five (45) days after the Effective Date Buyer shall have determined that it is satisfied with the results of and matters disclosed by any soil tests, engineering inspections, hazardous waste and environmental reviews of the Real Property, all such tests, inspections and reviews to be obtained at Buyer’s sole cost and expense.

4.5

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 Buyer to own, develop, or use the Real Property after the Closing Date for Buyer’s intended use.

4.6

Governmental Approval. No later than one-hundred twenty (120) days after the application date Buyer shall have obtained approval from the City of Eden Prairie all full and final approvals for a housing development, including, without limitation, City Council approval of: a Resolution for Planned Unit Development Concept Review, 1st and 2nd Reading of an Ordinance for Planned Unit Development District Review and Zoning District Change, Site Plan Review, (hereinafter collectively referred to as “Governmental Approvals”). Seller shall without charge to Buyer cooperate in Buyer’s attempts to obtain all such governmental approvals. Seller shall further execute such rezoning applications, plans, environmental worksheets and other documents as may be required by governmental bodies to accomplish the foregoing. Buyer has made application with the City of Eden Prairie for the Government Approvals.

4. B. Termination by Buyer. If any of the foregoing contingencies set forth in Section 4. A. of this Agreement have not been satisfied, in Buyer’s sole discretion, on or before the stated date then this Agreement may be terminated, at Buyer’s option, by written notice from Buyer to Seller; provided, however, Buyer may only terminate this Agreement as a consequence of its dissatisfaction with the physical condition of the Property if Buyer has performed reasonable and customary investigation or due diligence with respect to the physical attributes of the Real Property that 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 Buyer fails to give notice of termination as provided above, the contingencies are automatically deemed waived. Buyer may also waive any contingency by written notice to Seller but such written notice is not required for a waiver to be effective. Upon a termination by Buyer (a) Buyer and Seller shall execute a recordable written termination of this Agreement, which shall include Buyer’s quit claim of any interest in and to the Real Property, (b) the Earnest Money and any 10

interest accrued thereon shall be released to Buyer, and (c) upon fulfillment of (a) and (b) above neither party will have any further rights or obligations regarding this Agreement or the Real Property except for the rights and obligations of indemnification set forth in Sections 6, 13, 15 and 16. 5. Seller’s Contingencies. Unless waived by Seller in writing, Seller’s obligation to sell the Real Property to Buyer shall be subject to and contingent upon the occurrence of each of the following on or before the Closing Date: 5.1

Acquisition. Seller shall have acquired fee simple marketable title of the Real Property from MnDOT on or before the Closing Date.

5.2

Financing. Buyer has provided to Seller a commitment to finance the acquisition of the Real Property from a lender and on terms satisfactory to Seller.

5.3

Approvals. Buyer shall have obtained all Governmental Approvals.

5. B. Termination by Seller. If any of the foregoing contingencies set forth in Section 5. A. of this Agreement have not been satisfied on or before the Closing Date then this Agreement shall automatically be terminated. Upon such a termination (a) Buyer and Seller shall execute a recordable written termination of this Agreement, which shall include Buyer’s quit claim of any interest in and to the Real Property, (b) the Earnest Money and any interest accrued thereon shall be released to Buyer, and (c) upon fulfillment of (a) and (b) above neither party will have any further rights or obligations regarding this Agreement or the Real Property except for the rights and obligations of indemnification set forth in Sections 6, 13, 15 and 16. 6. Buyer’s Access Investigation and Security. Seller shall, pursuant to MnDOT’s approval, allow Buyer, and Buyer’s agents, access to the Real Property without charge and at all reasonable times for the purpose of Buyer’s investigation and testing the same. Buyer shall pay all costs and expenses of such investigation and testing and shall indemnify and hold Seller, MnDOT and the Real Property harmless from all costs and liabilities relating to Buyer’s activities. Buyer shall further promptly repair and restore any damage to the Real Property caused by or occurring during Buyer’s testing and return the Real Property to substantially the same condition as existed prior to such entry. 7. Seller’s Closing Documents. On the Closing Date, Seller shall execute and/or deliver to Buyer the following (collectively, “Seller’s Closing Documents”): 7.1

Deed. A Warranty Deed, in recordable form reasonably satisfactory to Buyer, conveying the Real Property to Buyer, free and clear of all encumbrances, except the Encumbrances set forth on Exhibit C hereto and the Permitted Encumbrances.

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7.2

Title Policy. The Policy described in Section 10 of this Agreement, or a suitably marked up Title Commitment for the Policy initialed by Title Company, in the form required by this Agreement.

7.3

Affidavit. Such Affidavit of 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

Housing Project Agreement. The Housing Project Agreement attached hereto as Exhibit D.

7.6

Other Documents. All other documents reasonably determined by Buyer to be necessary to transfer the Real Property to Buyer free and clear of all encumbrances, except the Permitted Encumbrances.

8. Buyer’s Closing Documents. On the Closing Date, Buyer will execute and/or deliver to 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 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

Executive Order Affidavit. An affidavit properly executed and in recordable form confirming the Buyer’s representations in Section 13.2.

8.4

Other Documents. All other documents reasonably determined by Seller to be necessary to consummate the transaction contemplated hereby in a manner consistent with the terms and conditions hereof.

8.5

Housing Project Agreement. The Housing Project Agreement attached hereto as Exhibit D.

9. Prorations. Seller and Buyer agree to the following prorations and allocation of costs regarding this Agreement: 9.1

Title Insurance and Closing Fee. Seller will pay all costs of the Title Evidence described in Section 10 of this Agreement and the fees charged by Title Company for any escrow required regarding Buyer’s Objections. Buyer will pay the premium or cost of the Owner’s Title Policy and all 12

additional premiums required for the issuance of any Mortgagee’s Title Insurance Policy required by Buyer. Seller and Buyer will each pay onehalf of any reasonable and customary closing fee or charge imposed by any closing agent designated by Title Company. 9.2

Deed Tax. Seller shall pay all state deed tax regarding the Warranty Deed to be delivered by Seller under this Agreement.

9.3

Real Estate Taxes and Special Assessments. At Closing, the Purchase Price shall be adjusted as follows: 9.3.1

Current Year's Taxes. All real property taxes which have become a lien on the Real Property (“Taxes”) and which are due and payable prior to the year in which Closing occurs, shall be paid by Seller at or prior to Closing. All Taxes which are due and payable in the year in which Closing occurs shall be prorated to the Closing Date and Seller’s portion shall be paid by Seller at Closing. This proration shall result in Seller’s payment of Taxes from January 1 to the date immediately prior to the Closing Date and Buyer’s payment of Taxes from the Date of Closing to December 31.

9.3.2

Assessments. All charges for improvements or services already made to or which benefit the Real Property, and all levied assessments (general or special) arising out of or in connection with any assessment district created or confirmed prior to the Effective Date (“Assessments”) shall be paid in full by Seller at Closing. All assessments (general or special) which are levied after the Effective Date and all assessments (general or special) which are pending but not levied as of the Effective Date or which become pending after the Effective Date shall be assumed and paid by Buyer.

9.4

Recording Costs. Seller will pay the cost of recording all documents necessary to place record title in the condition warranted by Seller and requested by Buyer in this Agreement. 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 Real Property will be allocated between Seller and Buyer as of the Closing Date, so that Seller pays that part of such other operating costs payable before the Closing Date, and 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 13

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. Seller shall, no later than thirty (30) days after the Effective Date furnish to Buyer, at Seller’s cost and expense, the following: A commitment (“Title Commitment”) for the most current ALTA Form B Owner’s Policy of Title Insurance insuring title to the Real Property in the amount of the Purchase Price, issued by Custom Home Builders Title (“Title Company”). The Title Commitment will commit Title Company to insure title to the Real Property subject only to the Permitted Encumbrances.

10.2

Survey. No later than thirty (30) days after its receipt of the Title Commitment Buyer may 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 Buyer (the “Survey”). Buyer shall provide a copy of the Survey to Seller within three (3) days after any termination of this Agreement.

10.3

Buyer’s Objections. Within ten (10) business days after receiving the later of the Title Commitment and the Survey, Buyer shall make written objections (“Objections”) to the form and/or contents of the Title Commitment and the Survey if Buyer has obtained one within the time set forth in 10.2. 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 Buyer shall be a “Permitted Encumbrance” pursuant to this Agreement. Seller will have sixty (60) days after receipt of the Objections to cure the Objections, during which period the Closing will be postponed as necessary. Seller shall use its best efforts to correct any Objections. To the extent that the Objections are not cured within such sixty (60) day period, 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 contemporaneously with Seller’s acquisition of the Property from MnDOT. The Closing shall occur on August 29, 2014, or another date mutually agreed upon by the parties (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. Seller agrees to deliver possession of the Real Property to Buyer on the Closing Date. 12. No Representations by Seller. IT IS UNDERSTOOD AND AGREED THAT SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESSED OR IMPLIED, WITH 14

RESPECT TO THE REAL PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE (OTHER THAN SELLER'S LIMITED OR SPECIAL WARRANTY OF TITLE TO BE SET FORTH IN THE DEED), ZONING, TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL CONDITIONS, UTILITIES, ACCESS, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE REAL PROPERTY WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR COMPLETENESS OF ANY PROPERTY DATA OR OTHER INFORMATION PERTAINING TO THE REAL PROPERTY DELIVERED TO BUYER BY SELLER, OR ANY OTHER MATTER OR THING REGARDING THE REAL PROPERTY. BUYER ACKNOWLEDGES AND AGREES THAT UPON THE CLOSING OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT, SELLER SHALL SELL AND BUYER SHALL ACCEPT THE REAL PROPERTY "AS IS, WHERE IS, WITH ALL FAULTS". BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESSED OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE REAL PROPERTY OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION, PROPERTY INFORMATION PACKAGES DISTRIBUTED WITH RESPECT TO THE REAL PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGER OF THE PROPERTY, OR ANY REAL ESTATE BROKER 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. BUYER REPRESENTS TO SELLER THAT BUYER HAS CONDUCTED, OR WILL HAVE HAD THE OPPORTUNITY TO CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE REAL PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL, ENVIRONMENTAL AND GEOTECHNICAL CONDITIONS THEREOF, AS BUYER DEEMS NECESSARY TO SATISFY ITSELF OF THE CONDITION OF THE REAL 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 REAL PROPERTY, AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS, OFFICERS, DIRECTORS, SHAREHOLDERS OR EMPLOYEES WITH RESPECT THERETO. UPON CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, ADVERSE PHYSICAL, ENVIRONMENTAL AND GEOTECHNICAL CONDITIONS MAY HAVE BEEN REVEALED BY BUYER'S INVESTIGATIONS, AND BUYER, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER'S OFFICERS, BOARD 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 15

ALLEGED AGAINST SELLER (AND SELLER' OFFICERS, BOARD 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 REAL PROPERTY. 13. Representations and Warranties by Buyer. Buyer represents and warrants to Seller as follows: 13.1

Authority. Buyer is a limited liability company duly organized under the laws of the State of Minnesota; that Buyer is duly qualified to transact business in the State of Minnesota; that 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 Buyer and have been duly executed and delivered; that the execution, delivery and performance by 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 Buyer is a party; such documents are valid and binding obligations of Buyer, and are enforceable in accordance with their terms.

13.2

Anti-Terrorism, Executive Order 13224 and Public Law 107-56. The Buyer is not in violation of any laws relating to terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56. The Buyer or, to the knowledge of the Buyer, none of its agents acting or benefiting in any capacity in connection with the transaction, is any of the following: 13.2.1 Person or entity that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order; 13.2.2 Person or entity owned or controlled by, or acting for or on behalf of, any Person or entity that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order; 13.2.3 Person or entity with which Seller is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; 13.2.4 Person or entity that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; or 16

13.2.5 Person or entity that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list. The Buyer or, to the knowledge of Buyer, any of its agents acting in any capacity in connection with the transaction does not (i) conduct any business or engage in making or receiving any contribution of funds, goods or services to or for the benefit of any Person described above, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order, or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law. Buyer will indemnify Seller, its successors and assigns, against, and will hold Seller, its successors and assigns, harmless from, any expenses or damages, including reasonable attorneys’ fees, that Seller incurs because of the breach of any of the above representations and warranties, whether such breach is discovered before or 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 Buyer shall be commenced within three years of the Closing or shall be deemed waived. Consummation of this Agreement by Seller with knowledge of any breach of such warranties and representations by Buyer will constitute a waiver or release by Seller of any claims due to such breach. 14. Condemnation. If, prior to the Closing Date, eminent domain proceedings are commenced against all or any part of the Real Property by any entity, Seller shall immediately give notice to Buyer of such fact and at Buyer’s option (to be exercised within thirty (30) days after the date of 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, 13, 15 and 16, and the Earnest Money, together with any accrued interest, shall be refunded to Buyer. If Buyer shall fail to give such notice then there shall be no reduction in the Purchase Price, and Seller shall assign to Buyer at the Closing Date all of 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, Seller shall not designate counsel, appear in, or otherwise act with respect to such condemnation proceedings without Buyer’s prior written consent. 15. Broker’s Commission. Seller and 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 17

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. 16. Mutual Indemnification. Seller and 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 Real 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 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. 17. Assignment. 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. 18. Survival. Except as stated in Section 13, all of the terms of this Agreement will survive and be enforceable for a period of one year after the Closing. 19. 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 Seller by delivering it personally to an officer of Seller, or if it is directed to Buyer, by delivering it personally to an officer of 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 Seller:

Housing Redevelopment Authority in and for the City of Eden Prairie Attn: Janet Jeremiah 8080 Mitchell Road Eden Prairie, MN 55344

With a copy to:

Richard Rosow Gregerson, Rosow, Johnson & Nilan, LTD. 650 Third Ave South, Suite 1600 Minneapolis, MN 55402

If to Buyer:

Eden Gardens, LLC Attn: Matthew Hanish 18

525 – 15th Avenue South Hopkins, MN 55347 With a copy to:

Gary Eidson Fabyanske, Westra, Hart & Thomson, P.A. 333 South Seventh Street, Suite 2600 Minneapolis, MN 55402

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, 10 days prior to the effective date of such change. 20. 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. 21. 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 Real 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. 22. Binding Effect. This Agreement binds and benefits the parties and their successors and assigns. 23. Controlling Law. This Agreement has been made under the laws of the State of Minnesota, and such laws will control its interpretation. 24. 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 Buyer fails to cure such default within five (5) business days of the date of such notice from Seller, Seller may cancel this Agreement pursuant to Minn. Stat. § 559.21. If Seller fails to cure such default within five (5) business days of the date of such notice from Buyer, Buyer may immediately terminate this Agreement by delivering to Seller at the address noted in Section 19 a Notice of Termination executed by an authorized representative(s) of 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.

SIGNATURES ON SUCCEEDING PAGE

19

IN AGREEMENT, Seller and Buyer have executed this Agreement as of the date first written above.

SELLER: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE

By___NOT FOR SIGNATURE____ Nancy Tyra-Lukens Its Chair

Date: ____________________

By__ NOT FOR SIGNATURE_____ Rick Getschow Its Executive Director

Date: ____________________

STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN

) )

The foregoing instrument was acknowledged before me this 14th day of July, 2014, by Nancy Tyra-Lukens and Rick Getschow, respectively the Chair and Executive Director of the Housing and Redevelopment Authority in and for the City of Eden Prairie, on behalf of said authority.

___ NOT FOR SIGNATURE_________________ Notary Public

20

BUYER: EDEN GARDENS, LLC By ___ NOT FOR SIGNATURE_______ Matthew Hanish Vice President

STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN

Date: ____________________

) )

The foregoing instrument was acknowledged before me this ____ day of ____________, 2014, Matthew Hanish, the Vice President, of Eden Gardens, LLC, a Minnesota limited liability company, on behalf of the company.

__ NOT FOR SIGNATURE__________ Notary Public

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EXHIBIT A TO PURCHASE AGREEMENT Legal Description of Land

22

23

To be platted as: Lot 1, Block 1; Lots 1-5, Block 2; Lots 1-5, Block 3; Lots 1-10, Block 4; Lots 1-15, Block 5; and Outlots A, B, C, D, E, F, and G, Eden Gardens, Hennepin County.

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EXHIBIT B TO PURCHASE AGREEMENT

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 Buyer and Seller, Interest will accrue for the benefit of Buyer, unless the Purchase Agreement is terminated by reason of the default of Buyer, in which case the interest will be paid to Seller. Prior to the waiver or satisfaction of its contingencies, Buyer may direct the Title Company to return the Earnest Money to it if 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 Seller and Buyer, or in lieu thereof, the direction of a court of competent jurisdiction except as to Buyer’s right to direct the return of the Earnest Money in accordance with the Purchase Agreement. Seller and 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 Seller. Agreement is dated this ___ day of ___________, 20___.

______________________________

By Its

25

This Escrow

EXHIBIT C TO PURCHASE AGREEMENT ENCUMBRANCES

1.

Federal, state and municipal laws, ordinances, rules and regulations.

2.

Utility and drainage easement(s), if any, as shown on the recorded plat.

3.

The lien of real estate taxes and pending special assessment not yet due and payable subject to the proration and allocation provisions hereof.

4.

Restrictions in deed from MnDOT to City or HRA that: (a) the Property is conveyed for “public purposes”; and/or (b) the Property and the title thereto shall revert and vest in the State of Minnesota whenever the Property ceases to be used for the stated public purposes.

5. 6.

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EXHIBIT D TO PURCHASE AGREEMENT

Housing Project Agreement HOUSING PROJECT AGREEMENT THIS AGREEMENT, made as of the 14th day of July, 2014, by and between the Housing Redevelopment Authority in and for the City of Eden Prairie, Minnesota, a municipal corporation and political subdivision organized and existing under the Constitution and the laws of the State of Minnesota (the "HRA") and Eden Gardens, LLC, a Minnesota limited liability company (the "Developer"), WITNESSETH: WHEREAS, pursuant to Minn. Stat. 469.017, the HRA has the authority to complete a housing development project; WHEREAS, the HRA adopted H.R.A. Resolution No. 2014-01 at a duly noticed meeting on July 14, 2014. In H.R.A. Resolution No. 2014-01 the HRA found that there is a shortage of decent, safe, and sanitary housing for persons of moderate income and their families in the City and determined to carry out a housing development project to partially alleviate the shortage (the “Project”); WHEREAS, the property on which the Project will be constructed is located at the southwest corner of Eden Prairie Road and Scenic Heights Road as illustrated on attached Exhibit A (“Project Area”) and is legally described on attached Exhibit B. WHEREAS, the goals for the Project are to increase environmental sustainability/energy efficiency and single family housing affordability for moderate income individuals and their families. The intent of the Project is to create an environmentally sustainable single family neighborhood with implementation of “green” measures with 20 of the housing units to be sold to people with moderate incomes as defined below; WHEREAS, in order to ensure that the housing development project partially alleviates the shortage of moderate income housing, the HRA in H.R.A. Resolution No. 2014-01 established moderate income and affordability limits for the Project; WHEREAS, based on evidence presented by developers who responded to the Project Request for Proposals, in order to make the Project feasible and to provide the desired moderate income housing, the HRA has determined that 16 of the housing units in the Project may be sold at market rates. The market rate housing units shall be located on Lot 1, Block 1 and Lots 1-15, Block 5, Eden Gardens. The remaining 20 housing units (collectively the “Moderate Income Units”) must be sold to people with incomes that fall within the range of the “Moderate Income Limits” (as defined below in Paragraph 1.B hereof) and at prices that fall within the range of “Affordable Housing Prices” (as defined below in Paragraph 1.C hereof), that are applicable at the time of such sale. The Moderate Income Units shall be located on Lots 1-5, Block 2, Lots 15, Block 3, and Lots 1-10, Block 4, Eden Gardens; and

27

WHEREAS, the HRA adopted H.R.A. Resolution No. 2014-02 at a duly noticed public hearing on July 14, 2014. In H.R.A. Resolution No. 2014-02 the HRA approved the purchase and sale of the Project Area; set the estimated market value of the Project Area; and selected Developer to complete the Project subject to the condition that Developer and HRA enter into this Housing Project Agreement. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 1. Housing Criteria. The Project shall consist of 36 single family units. Twenty units shall be Moderate Income Units. The remaining 16 units may be sold at market rates. The size of the 20 Moderate Income Units shall range between 1600 and 2200 square feet above grade and the 16 market rate units shall range between 1600 and 2600 square feet above grade. Floor plans available for potential buyers shall include a one-level living floor plan option. The 20 Moderate Income Units shall be priced and sold based on the following calculations: A.

Project Feasibility. Based on evidence presented by developers who responded to the Project Request for Proposals, in order to make the Project feasible and to provide the desired moderate income housing, 16 of the housing units in the Project may be sold at market rates. The market rate units shall be built on Blocks 1 and 5 as shown on the Preliminary Plat of Eden Gardens. The 20 Moderate Income Units must be sold: (i) to people who qualify under the Moderate Income Limits set forth below in B; and (ii) at the Affordable Housing Prices set forth below in C.

B.

Moderate Income Limits. The U.S. Department of Housing and Urban Development annually determines the area median income for Hennepin County (“Area Median Income”). The Area Median Income is published annually in December for use in the following year. The HRA hereby determines that the moderate income limits for the Project (the “Moderate Income Limits”) shall be 80% to 120% of the Area Median Income. (For example, the Area Median Income for Hennepin County published in December 2013 for use in the year 2014 was $82,900. The moderate income limits for all Moderate Income Units sold in 2014 is $66,320 to $99,480.)

C.

Affordable Housing Prices. Based upon the Area Median Income the Minnesota Housing Finance Authority annually sets a loan limit for the 11-County Metro (“Area Affordable Price”). The Area Affordable Price is published in December for use in the following year. For purposes hereof, the affordable housing prices for persons of moderate income for the Project shall be 80% to 120% of the Area Affordable Price (the “Affordable Housing Prices”) (For example, the Area Affordable Price published in December 2013 for use in the year 2014 was $310,000. Consequently, the Affordable Housing Prices for all Moderate Income Units sold in 2014 is $248,000 to $372,000.)

28

2. Minnesota’s Green Path Development Standards. The Developer shall construct the Project in a manner that meets Minnesota’s Green Path (“Green Path”) standards as required in the attached as Exhibit C. 3. Community Involvement. The Developer shall engage the community by involving Hennepin Technical College. Specifically, the Developer shall involve students through opportunities such as framing a home, learning how ‘green’ mechanical/electrical systems work or learning green techniques used in stormwater management. 4. Sale of the Project Area. For purposes of this Agreement, “sale” includes any transfer of a housing unit including but not limited to sale, conveyance, gift, and involuntary transfer. The Developer may not close on the sale of any Moderate Income Unit unless all of the following conditions have been met: A.

All infrastructure including streets, sanitary sewer, water, and storm sewer, but not including landscaping and the final wear course on streets and other items that cannot reasonably be completed due to winter weather conditions and that do not materially affect the use or function of such items of infrastructure, are substantially complete and accepted in writing by the City;

B.

All public space including common areas, parks and community buildings are complete and accepted in writing by the HRA;

C.

The residential structure on the lot to be sold has been issued a certificate of occupancy or temporary certificate of occupancy; and

D.

The sale has been approved in writing by the HRA prior to closing in order to ensure compliance with the terms of this Agreement. In order to request such approval for the sale of each Moderate Income Unit, Developer, or any subsequent owner that is selling a Moderate Income Unit, shall submit a complete application to the HRA for the sale of each Moderate Income Unit in such form and substances as required by the HRA, which shall include at a minimum all information required by the HRA to verify the income of the prospective purchaser. Upon receipt of a complete application the HRA shall inform the Developer or other requesting party, in writing and within five business days, whether the application is approved. If the HRA fails to respond to a complete application within five business days, the application will be deemed approved.

5. Initial Sale of Housing Units by Developer. Initial sale of Moderate Income Units by the Developer shall comply with the income and pricing requirements set forth in Paragraph 1. In addition, during the Preference Period, the initial sale of all housing units by the Developer shall give preference to prospective buyers who live or work in the City of Eden Prairie. During the Preference Period, Developer shall market to residents and employees of Eden Prairie businesses and permit those who live or work within the City of Eden Prairie to have the first opportunity to sign a purchase agreement for their desired lot, or if no specific lot is specified, for a lot within the Project. As used herein, the phrase “Preference Period” shall refer 29

to the period of time that elapses between the date hereof and the 180th day after the date of the issuance of the first building permit for the Project. 6. Future Sale of Housing Units. After the initial sale of any Moderate Income Unit by the Developer, the seller in any subsequent sale of a Moderate Income Unit that consists of a “Non-Qualifying Sale” and that is closed within 10 years of the date of the initial sale by the Developer of the subject Moderate Income Unit, shall remit the “Applicable Portion of the Profit” received by such seller in such transaction to the City for reinvestment in low and moderate income housing initiatives. As used herein, the phrase “Non-Qualifying Sale” shall be defined as the sale of a Moderate Income Unit that is closed within 10 years of the date of the initial sale of such Moderate Income Unit by the Developer and that is made either: (i) to a buyer that has income in excess of the Moderate Income Limits or (ii) at a price that is in excess of the Affordable Housing Prices, both as measured in the year in which the closing of such sale of the Moderate Income Unit occurs. The Seller of any Moderate Income Unit may apply to the HRA pursuant to Paragraph 4.D hereof for a determination that a prospective sale of such Moderate Income Unit shall not constitute a Non-Qualifying Sale. As used herein, the phrase “Applicable Portion of the Profit” shall refer to the portion designated pursuant to the chart set forth below in Paragraph 6.B. A.

Profit. The “Profit” from the subsequent sale of a Moderate Income Unit shall be defined as the funds received by the seller from the buyer at the closing of such sale, after deduction of the sum of the following: (i) all costs and fees listed on the settlement statement (which costs shall include any park dedication fee paid pursuant to Paragraph 7 hereof), excluding amounts necessary to satisfy any mortgages recorded against the property; (ii) the amount of the seller’s basis in the Moderate Income Unit as of the date of its acquisition thereof; plus (iii) the cost of improvements made by the seller as defined in IRS publication 523 which increase the seller’s basis in the Moderate Income Unit.

B.

Remittance. The amount of any “profit” that is required to be remitted to the City by the seller of a Moderate Income Unit in a Non-Qualifying Sale shall be as follows:

Time elapsed since the date of the initial purchase of the housing unit from the Developer Less than 1 year At least 1 year but less than 2 years At least 2 years but less than 3 years At least 3 years but less than 4 years At least 4 years but less than 5 years At least 5 years but less than 6 years At least 6 years but less than 7 years At least 7 years but less than 8 years At least 8 years but less than 9 years 30

Profits to be remitted to City 90% 80% 70% 60% 50% 40% 30% 20% 10%

At least 9 years but less than 10 years

5%

Regardless of the number of times a Moderate Income Unit is sold, the requirements of this Paragraph 6 shall apply to any subsequent sale of such Moderate Income Unit that consists of a Non-Qualifying Sale and shall be based on the amount of time that has elapsed from the date of the initial sale of the housing unit by the Developer; provided, however, the provisions of this Paragraph 6 shall not be applicable to any sale of any Moderate Income Unit that closes at any time subsequent to the 10th anniversary of the closing of the initial sale of such Moderate Income Unit by the Developer. 7. Park Dedication Fee. The park dedication fee of $6,500.00 per unit shall be waived for each Moderate Income Unit; provided, however, if any closing upon the sale of a Moderate Income Unit in a Non-Qualifying Sale occurs at any time within 10 years of the date of the initial sale of the Moderate Income Unit by the Developer, the waiver of the park dedication fee for that Moderate Income Unit shall be revoked and such park dedication fee in the amount of $6,500.00 shall be due and payable at the time of the closing of such Non-Qualifying Sale. 8. Bond. Prior to issuance of any grading or building permits for the Project Area, Developer shall provide to the HRA a bond equal to $100,000 to secure the Developer’s obligations pursuant to this Agreement, including to reimburse the HRA for costs, including reasonable attorney fees, incurred by the HRA in any action to enforce or interpret the provisions of this Agreement (the “Security”). The HRA may draw down on or make a claim against the Security, as appropriate, upon five (5) business days’ notice to the Developer, for any violation of the terms of this Agreement or if the Security is allowed to lapse prior to the end of the required term. If the Security has not then been renewed, replaced or otherwise extended beyond the expiration date, the HRA may also draw down or make a claim against the Security as appropriate. If the Security is drawn down on or a claim is made against the Security, the proceeds shall be used to cure the default(s) and to reimburse the HRA for all costs and expenses, including attorneys’ fee, incurred by the HRA in enforcing this Agreement. Any amount of the Security that is drawn by the HRA shall be held by the HRA in trust and disbursed only if, and to the extent, that the Security may be disbursed hereunder. Developer shall be released from any further obligation to maintain the Security and all amounts of such Security that may then exist shall be released to Developer upon the earlier of the following: (i) the sale of all Moderate Income Units by the Developer; or (ii) the termination of Developer’s obligations to sell the Moderate Income Units as set forth in Paragraph 12 below. 9. warranties:

Developer Warranties.

Developer makes the following representations and

A.

The Developer is a Minnesota limited liability company, has power to enter into this Agreement and to perform its obligations hereunder and, by doing so, is not in violation of any provisions of its articles of organization, operating agreement or member control agreement or the laws of the State.

B.

The Developer has obtained funds sufficient for the acquisition or construction of the Project. 31

C.

The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement is not prevented, limited by or conflicts with (unless all necessary waivers, consents or the like have been obtained) or results in a breach of, material terms, conditions or provision of any contractual restriction, evidence of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which they are bound, or constitutes a material default under any of the foregoing.

10. City Development Agreement. Prior to issuance of any grading or building permits for the Project Area, Developer shall enter into a Development Agreement with the City of Eden Prairie with respect to the Project and such Development Agreement shall be recorded against the Project Area. 11. Revision of Limits and Prices. If there are no prospective purchasers for any of the Moderate Income Units within six months following the issuance of the first building permit for the Project and upon written request of the Developer, the HRA shall revise the Moderate Income Limits and Affordable Housing Prices. 12. Moderate Income Units. Notwithstanding any contrary provision herein, the Developer’s obligation to sell the Moderate Income Units subject to the requirements in Paragraph 1, and the conditions applicable to the Developer’s sale of any Moderate Income Units in Paragraph 4, shall terminate upon the earlier of: (i) no Moderate Income Units have sold within 36 months following the issuance of the first building permit for the Project; or (ii) no Moderate Income Units have sold in the previous 12 months. Developer shall submit to the HRA evidence substantiating such lack of sales and the HRA shall execute an amendment to this Agreement terminating the obligation in Paragraph 1 and conditions in Paragraph 4. Upon such termination, the provisions of Paragraph 6 shall be deemed terminated with respect to any unsold Moderate Income Units, the waiver of the park dedication fee for unsold Moderate Income Units set forth in Paragraph 7 shall be revoked and the park dedication fee for all unsold Moderate Income Units shall become immediately due and payable by the Developer. Any Moderate Income Units which have been sold prior to termination shall remain subject to Paragraphs 6 and 7. All obligations in this Agreement not specifically amended or terminated by this Paragraph shall survive, including but not limited to applicable provisions concerning the remittance of a portion of “Profits” set forth in Paragraph 6 for Moderate Income Units sold prior to such termination. 13. Binding. This Agreement shall be recorded against the Project Area. Provisions of this Agreement shall be binding upon and enforceable as real covenants that “run” with the title to all lots within the Project Area, and shall also be enforceable against, and inure to the benefit of the HRA and the Developer; provided, however, and notwithstanding any contrary provision herein, although the provisions of Paragraphs 6 and 7 herein constitute real covenants that run with title to the Moderate Income Units and that are enforceable against future owners of Moderate Income Units to the extent provided therein, Developer shall have no personal

32

obligation to perform any of the covenants of Paragraphs 6 and 7 hereof, provided the Developer is not the seller in any transaction that constitutes a Non-Qualifying sale. 14. Remedies. Developer acknowledges, on its own and for all successors and assigns, that the rights of HRA to perform the obligations of Developer contemplated in this agreement are special, unique, and of an extraordinary character, and that, in the event that Developer violates, or fails, or refuses to perform any covenant, condition, or provision made herein, HRA may be without an adequate remedy at law. Developer agrees, therefore, that in the event Developer violates, fails, or refuses to perform any covenant, condition, or provision made herein, HRA may, at its option, institute and prosecute an action to specifically enforce such covenant, to enjoin conduct or activities that violate the terms hereof, withhold building permits, or seek any other remedy available at law or in equity. In the event of any litigation between the HRA and Developer to enforce or interpret the provisions hereof in which the HRA is the prevailing party, the HRA shall be entitled to an award requiring Developer to reimburse the HRA for all of its costs and expenses in such action, including reasonable attorneys’ fees. No remedy conferred in this agreement is intended to be exclusive and each shall be cumulative and shall be in addition to every other remedy. The election of any one or more remedies shall not constitute a waiver of any other remedy. 15. No HRA Liability. No failure of the HRA to comply with any term, condition, covenant or agreement herein shall subject the HRA to liability for any claim for damages, costs or other financial or pecuniary charges. No execution on any claim, demand, cause of action or judgment shall be levied upon or collected from the general credit, general fund or taxing powers of the HRA. 16. Recording. This Agreement shall be recorded at the County Recorder and / or Registrar of Titles at the closing of the Developer’s purchase of the Project Area from the HRA. This Agreement shall be recorded after the deed from the HRA to Developer and prior to any mortgages or encumbrances. No land alteration or building permits for the Project Area shall be issued until proof of filing of the Agreement is submitted to the HRA. 17. Right of Entry. The Developer hereby grants to the HRA and the City of Eden Prairie, their agents, employees, officers and contractors a license to enter the Project Area to perform all work and inspections deemed appropriate by the HRA or City in conjunction with this Agreement. 18. No Third Party Beneficiaries. Except with respect to Developer, the HRA, and the covenants hereof that “run” with title to the lots within the Project pursuant to Paragraph 13 hereof, no provision of this Agreement inures to the benefit of any third person, including the public at large, so as to constitute any such person as a third-party beneficiary of the Agreement or of any one or more of the terms hereof, or otherwise give rise to any cause of action for any such person. IN WITNESS WHEREOF, the parties to this Agreement have caused these presents to be executed as of the day and year aforesaid. [signatures on following pages] 33

HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE

By___NOT FOR SIGNATURE_______ Nancy Tyra-Lukens Its Chair

By___ NOT FOR SIGNATURE______ Rick Getschow Its Executive Director

STATE OF MINNESOTA COUNTY OF HENNEPIN

) ) ss. )

The foregoing instrument was acknowledged before me this 14th day of July, 2014, by Nancy Tyra-Lukens and Rick Getschow, respectively the Chair and Executive Director of the Housing and Redevelopment Authority in and for the City of Eden Prairie, on behalf of said authority.

____ NOT FOR SIGNATURE________________ Notary Public

34

EDEN GARDENS, LLC By _ NOT FOR SIGNATURE__________ Matthew Hanish Vice President

STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN

Date: ____________________

) )

The foregoing instrument was acknowledged before me this ____ day of ____________, 2014, Matthew Hanish, the Vice President, of Eden Gardens, LLC, a Minnesota limited liability company, on behalf of the company.

__ NOT FOR SIGNATURE__________________ Notary Public

THIS INSTRUMENT WAS DRAFTED BY: Gregerson, Rosow, Johnson & Nilan, LTD 650 Third Ave S, Suite 1600 Minneapolis, MN 55376

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EXHIBIT A TO TO HOUSING PROJECT AGREEMENT Depiction of Project Area

36

EXHIBIT B TO HOUSING PROJECT AGREEMENT Legal Description of Project Area

37

38

To be platted as: Lot 1, Block 1; Lots 1-5, Block 2; Lots 1-5, Block 3; Lots 1-10, Block 4; Lots 1-15, Block 5; and Outlots A, B, C, D, E, F, and G, Eden Gardens, Hennepin County.

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EXHIBIT C TO HOUSING PROJECT AGREEMENT

Green Features and Sustainable Neighborhood Items

1. Green Path advanced certified homes: efficient windows, insulation improvements, high efficiency HVAC systems, high efficiency appliances and efficient lighting systems, etc. Eden Gardens will be the first development wide effort, in the state, to build all homes to Green Path Advanced Certification. 2. Homes: a. Build all homes to be ‘solar ready’, allowing residents an easy retrofit for solar panels. b. Rough in electric, in garages, required for electric car chargers. c. Offer sun tunnels as an option. d. The model home will have a solar feature installed to display the possible solar options for future residents. The solar feature will consist of either a solar PV panel (electricity) or a solar hot water panel system to heat the homes water. Solar options will be available on all homes. e. Use of low VOC paints and use of recycled materials/products where possible. 3. Low impact Site development strategies a. Reduce impervious surfaces; narrower street sections, in accordance with the final approved PUD and plat plans b. Reduce stormwater runoff and manage via rain gardens and bio-swales, in accordance with the final approved PUD and plat plans. Keep all stormwater mgmt on site; not utilizing MnDOT pond or other regional ponding. c. Reduce storm sewer piping and ponding, in accordance with the final approved PUD and plat plans. d. Shade streets to minimize the heat island effect. e. Compact Development decreases urban sprawl. f. Use of eco-lawns (no-mow) in central green space, landscaped outlots and for all lawn areas of all home lots; eliminating dependency on irrigation and minimizing need for mowing. g. Utilization of native landscaping in accordance with City’s native plant ordinance throughout development and no plantings that contain neonicotanoids. Drought tolerant plantings will require no irrigation; as well as low maintenance needs and costs to the HOA. h. Reduce impervious surfaces through eliminating some alleyways. i. Increase the amount of pervious surfaces. Install pervious surface sidewalks from the driveway to the front door of the model home and provide this as an option on all other units. j. Permeable Pavers – install permeable pavers at sidewalk to park shelter to decrease impervious surfaces and allow for groundwater recharge.

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4. Site Lighting: a. Install high efficiency LED street lights; limiting light pollution, lowering maintenance and operational costs for the City. b. Install solar pathway lighting; eliminating the operational costs to the HOA and eliminating infrastructure required in standard practices (trenching for conduits/piping). 5. Site furnishings: install park furniture made of recycled plastics, (ie picnic tables). 6. Community Garden plots: Promotes local food growth and community gathering space. 7. Walkable Streets: minimal distance between the sidewalk and most buildings, sidewalks along 100% of street length, elevated ground floors, low design speeds for most streets, minimal driveway crossings along sidewalks. 8. Neighborhood Connections: connections to existing bike/walking trails and neighborhood sidewalks. Also, no cul-de-sacs are encouraged. 9. Community participation: multiple forms of community feedback to guide the project through design, in accordance with the final approved PUD and plat plans. 10. Solar and Green Roofs: Install green roofs on park shelter and garden shed; install solar panels on the park shelter which can be used to power the bollards or other features in the common area. Excess electricity can be sold back to Xcel Energy and the proceeds from the sale can be used to offset Home Owners Association (HOA) costs. 11. Rain Barrels: Install at the park shelter and garden shed to capture excess rainwater and utilize in the garden plots. 12. Tot Lot – provide community gathering space for children 13. Site Signage: Install educational and interactive signage throughout public spaces of the development to inform residents, and community members, of the green strategies used. For example, create a sign by the rain garden that educates the importance and functions of these site features. We will work in partnership with the City, as they continue to educate residents of the importance of water resources, etc. 14. The developer shall provide as an option to potential buyers a floor plan providing single level living design. 15. Increase Green site features/benefits by increasing on-site storm water infiltration by the addition of bioswales and increased rain garden area, in accordance with the final approved PUD and plat plans.

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EXHIBIT D to H.R.A. RESOLUTION NO. 2014-02 Housing Project Agreement HOUSING PROJECT AGREEMENT THIS AGREEMENT, made as of the 14th day of July, 2014, by and between the Housing Redevelopment Authority in and for the City of Eden Prairie, Minnesota, a municipal corporation and political subdivision organized and existing under the Constitution and the laws of the State of Minnesota (the "HRA") and Eden Gardens, LLC, a Minnesota limited liability company (the "Developer"), WITNESSETH: WHEREAS, pursuant to Minn. Stat. 469.017, the HRA has the authority to complete a housing development project; WHEREAS, the HRA adopted H.R.A. Resolution No. 2014-01 at a duly noticed meeting on July 14, 2014. In H.R.A. Resolution No. 2014-01 the HRA found that there is a shortage of decent, safe, and sanitary housing for persons of moderate income and their families in the City and determined to carry out a housing development project to partially alleviate the shortage (the “Project”); WHEREAS, the property on which the Project will be constructed is located at the southwest corner of Eden Prairie Road and Scenic Heights Road as illustrated on attached Exhibit A (“Project Area”) and is legally described on attached Exhibit B. WHEREAS, the goals for the Project are to increase environmental sustainability/energy efficiency and single family housing affordability for moderate income individuals and their families. The intent of the Project is to create an environmentally sustainable single family neighborhood with implementation of “green” measures with 20 of the housing units to be sold to people with moderate incomes as defined below; WHEREAS, in order to ensure that the housing development project partially alleviates the shortage of moderate income housing, the HRA in H.R.A. Resolution No. 2014-01 established moderate income and affordability limits for the Project; WHEREAS, based on evidence presented by developers who responded to the Project Request for Proposals, in order to make the Project feasible and to provide the desired moderate income housing, the HRA has determined that 16 of the housing units in the Project may be sold at market rates. The market rate housing units shall be located on Lot 1, Block 1 and Lots 1-15, Block 5, Eden Gardens. The remaining 20 housing units (collectively the “Moderate Income Units”) must be sold to people with incomes that fall within the range of the “Moderate Income Limits” (as defined below in Paragraph 1.B hereof) and at prices that fall within the range of “Affordable Housing Prices” (as defined below in Paragraph 1.C hereof), that are applicable at the time of such sale. The Moderate Income Units shall be located on Lots 1-5, Block 2, Lots 15, Block 3, and Lots 1-10, Block 4, Eden Gardens; and 42

WHEREAS, the HRA adopted H.R.A. Resolution No. 2014-02 at a duly noticed public hearing on July 14, 2014. In H.R.A. Resolution No. 2014-02 the HRA approved the purchase and sale of the Project Area; set the estimated market value of the Project Area; and selected Developer to complete the Project subject to the condition that Developer and HRA enter into this Housing Project Agreement. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 1. Housing Criteria. The Project shall consist of 36 single family units. Twenty units shall be Moderate Income Units. The remaining 16 units may be sold at market rates. The size of the 20 Moderate Income Units shall range between 1600 and 2200 square feet above grade and the 16 market rate units shall range between 1600 and 2600 square feet above grade. Floor plans available for potential buyers shall include a one-level living floor plan option. The 20 Moderate Income Units shall be priced and sold based on the following calculations: A.

Project Feasibility. Based on evidence presented by developers who responded to the Project Request for Proposals, in order to make the Project feasible and to provide the desired moderate income housing, 16 of the housing units in the Project may be sold at market rates. The market rate units shall be built on Blocks 1 and 5 as shown on the Preliminary Plat of Eden Gardens. The 20 Moderate Income Units must be sold: (i) to people who qualify under the Moderate Income Limits set forth below in B; and (ii) at the Affordable Housing Prices set forth below in C.

B.

Moderate Income Limits. The U.S. Department of Housing and Urban Development annually determines the area median income for Hennepin County (“Area Median Income”). The Area Median Income is published annually in December for use in the following year. The HRA hereby determines that the moderate income limits for the Project (the “Moderate Income Limits”) shall be 80% to 120% of the Area Median Income. (For example, the Area Median Income for Hennepin County published in December 2013 for use in the year 2014 was $82,900. The moderate income limits for all Moderate Income Units sold in 2014 is $66,320 to $99,480.)

C.

Affordable Housing Prices. Based upon the Area Median Income the Minnesota Housing Finance Authority annually sets a loan limit for the 11-County Metro (“Area Affordable Price”). The Area Affordable Price is published in December for use in the following year. For purposes hereof, the affordable housing prices for persons of moderate income for the Project shall be 80% to 120% of the Area Affordable Price (the “Affordable Housing Prices”) (For example, the Area Affordable Price published in December 2013 for use in the year 2014 was $310,000. Consequently, the Affordable Housing Prices for all Moderate Income Units sold in 2014 is $248,000 to $372,000.)

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2. Minnesota’s Green Path Development Standards. The Developer shall construct the Project in a manner that meets Minnesota’s Green Path (“Green Path”) standards as required in the attached as Exhibit C. 3. Community Involvement. The Developer shall engage the community by involving Hennepin Technical College. Specifically, the Developer shall involve students through opportunities such as framing a home, learning how ‘green’ mechanical/electrical systems work or learning green techniques used in stormwater management. 4. Sale of the Project Area. For purposes of this Agreement, “sale” includes any transfer of a housing unit including but not limited to sale, conveyance, gift, and involuntary transfer. The Developer may not close on the sale of any Moderate Income Unit unless all of the following conditions have been met: A.

All infrastructure including streets, sanitary sewer, water, and storm sewer, but not including landscaping and the final wear course on streets and other items that cannot reasonably be completed due to winter weather conditions and that do not materially affect the use or function of such items of infrastructure, are substantially complete and accepted in writing by the City;

B.

All public space including common areas, parks and community buildings are complete and accepted in writing by the HRA;

C.

The residential structure on the lot to be sold has been issued a certificate of occupancy or temporary certificate of occupancy; and

D.

The sale has been approved in writing by the HRA prior to closing in order to ensure compliance with the terms of this Agreement. In order to request such approval for the sale of each Moderate Income Unit, Developer, or any subsequent owner that is selling a Moderate Income Unit, shall submit a complete application to the HRA for the sale of each Moderate Income Unit in such form and substances as required by the HRA, which shall include at a minimum all information required by the HRA to verify the income of the prospective purchaser. Upon receipt of a complete application the HRA shall inform the Developer or other requesting party, in writing and within five business days, whether the application is approved. If the HRA fails to respond to a complete application within five business days, the application will be deemed approved.

5. Initial Sale of Housing Units by Developer. Initial sale of Moderate Income Units by the Developer shall comply with the income and pricing requirements set forth in Paragraph 1. In addition, during the Preference Period, the initial sale of all housing units by the Developer shall give preference to prospective buyers who live or work in the City of Eden Prairie. During the Preference Period, Developer shall market to residents and employees of Eden Prairie businesses and permit those who live or work within the City of Eden Prairie to have the first opportunity to sign a purchase agreement for their desired lot, or if no specific lot is specified, for a lot within the Project. As used herein, the phrase “Preference Period” shall refer 44

to the period of time that elapses between the date hereof and the 180th day after the date of the issuance of the first building permit for the Project. 6. Future Sale of Housing Units. After the initial sale of any Moderate Income Unit by the Developer, the seller in any subsequent sale of a Moderate Income Unit that consists of a “Non-Qualifying Sale” and that is closed within 10 years of the date of the initial sale by the Developer of the subject Moderate Income Unit, shall remit the “Applicable Portion of the Profit” received by such seller in such transaction to the City for reinvestment in low and moderate income housing initiatives. As used herein, the phrase “Non-Qualifying Sale” shall be defined as the sale of a Moderate Income Unit that is closed within 10 years of the date of the initial sale of such Moderate Income Unit by the Developer and that is made either: (i) to a buyer that has income in excess of the Moderate Income Limits or (ii) at a price that is in excess of the Affordable Housing Prices, both as measured in the year in which the closing of such sale of the Moderate Income Unit occurs. The Seller of any Moderate Income Unit may apply to the HRA pursuant to Paragraph 4.D hereof for a determination that a prospective sale of such Moderate Income Unit shall not constitute a Non-Qualifying Sale. As used herein, the phrase “Applicable Portion of the Profit” shall refer to the portion designated pursuant to the chart set forth below in Paragraph 6.B. A.

Profit. The “Profit” from the subsequent sale of a Moderate Income Unit shall be defined as the funds received by the seller from the buyer at the closing of such sale, after deduction of the sum of the following: (i) all costs and fees listed on the settlement statement (which costs shall include any park dedication fee paid pursuant to Paragraph 7 hereof), excluding amounts necessary to satisfy any mortgages recorded against the property; (ii) the amount of the seller’s basis in the Moderate Income Unit as of the date of its acquisition thereof; plus (iii) the cost of improvements made by the seller as defined in IRS publication 523 which increase the seller’s basis in the Moderate Income Unit.

B.

Remittance. The amount of any “profit” that is required to be remitted to the City by the seller of a Moderate Income Unit in a Non-Qualifying Sale shall be as follows: Time elapsed since the date of the initial purchase of the housing unit from the Developer Less than 1 year At least 1 year but less than 2 years At least 2 years but less than 3 years At least 3 years but less than 4 years At least 4 years but less than 5 years At least 5 years but less than 6 years At least 6 years but less than 7 years At least 7 years but less than 8 years At least 8 years but less than 9 years At least 9 years but less than 10 years 45

Profits to be remitted to City 90% 80% 70% 60% 50% 40% 30% 20% 10% 5%

Regardless of the number of times a Moderate Income Unit is sold, the requirements of this Paragraph 6 shall apply to any subsequent sale of such Moderate Income Unit that consists of a Non-Qualifying Sale and shall be based on the amount of time that has elapsed from the date of the initial sale of the housing unit by the Developer; provided, however, the provisions of this Paragraph 6 shall not be applicable to any sale of any Moderate Income Unit that closes at any time subsequent to the 10th anniversary of the closing of the initial sale of such Moderate Income Unit by the Developer. 7. Park Dedication Fee. The park dedication fee of $6,500.00 per unit shall be waived for each Moderate Income Unit; provided, however, if any closing upon the sale of a Moderate Income Unit in a Non-Qualifying Sale occurs at any time within 10 years of the date of the initial sale of the Moderate Income Unit by the Developer, the waiver of the park dedication fee for that Moderate Income Unit shall be revoked and such park dedication fee in the amount of $6,500.00 shall be due and payable at the time of the closing of such Non-Qualifying Sale. 8. Bond. Prior to issuance of any grading or building permits for the Project Area, Developer shall provide to the HRA a bond equal to $100,000 to secure the Developer’s obligations pursuant to this Agreement, including to reimburse the HRA for costs, including reasonable attorney fees, incurred by the HRA in any action to enforce or interpret the provisions of this Agreement (the “Security”). The HRA may draw down on or make a claim against the Security, as appropriate, upon five (5) business days’ notice to the Developer, for any violation of the terms of this Agreement or if the Security is allowed to lapse prior to the end of the required term. If the Security has not then been renewed, replaced or otherwise extended beyond the expiration date, the HRA may also draw down or make a claim against the Security as appropriate. If the Security is drawn down on or a claim is made against the Security, the proceeds shall be used to cure the default(s) and to reimburse the HRA for all costs and expenses, including attorneys’ fee, incurred by the HRA in enforcing this Agreement. Any amount of the Security that is drawn by the HRA shall be held by the HRA in trust and disbursed only if, and to the extent, that the Security may be disbursed hereunder. Developer shall be released from any further obligation to maintain the Security and all amounts of such Security that may then exist shall be released to Developer upon the earlier of the following: (i) the sale of all Moderate Income Units by the Developer; or (ii) the termination of Developer’s obligations to sell the Moderate Income Units as set forth in Paragraph 12 below. 9. warranties:

Developer Warranties.

Developer makes the following representations and

A.

The Developer is a Minnesota limited liability company, has power to enter into this Agreement and to perform its obligations hereunder and, by doing so, is not in violation of any provisions of its articles of organization, operating agreement or member control agreement or the laws of the State.

B.

The Developer has obtained funds sufficient for the acquisition or construction of the Project.

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C.

The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement is not prevented, limited by or conflicts with (unless all necessary waivers, consents or the like have been obtained) or results in a breach of, material terms, conditions or provision of any contractual restriction, evidence of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which they are bound, or constitutes a material default under any of the foregoing.

10. City Development Agreement. Prior to issuance of any grading or building permits for the Project Area, Developer shall enter into a Development Agreement with the City of Eden Prairie with respect to the Project and such Development Agreement shall be recorded against the Project Area. 11. Revision of Limits and Prices. If there are no prospective purchasers for any of the Moderate Income Units within six months following the issuance of the first building permit for the Project and upon written request of the Developer, the HRA shall revise the Moderate Income Limits and Affordable Housing Prices. 12. Moderate Income Units. Notwithstanding any contrary provision herein, the Developer’s obligation to sell the Moderate Income Units subject to the requirements in Paragraph 1, and the conditions applicable to the Developer’s sale of any Moderate Income Units in Paragraph 4, shall terminate upon the earlier of: (i) no Moderate Income Units have sold within 36 months following the issuance of the first building permit for the Project; or (ii) no Moderate Income Units have sold in the previous 12 months. Developer shall submit to the HRA evidence substantiating such lack of sales and the HRA shall execute an amendment to this Agreement terminating the obligation in Paragraph 1 and conditions in Paragraph 4. Upon such termination, the provisions of Paragraph 6 shall be deemed terminated with respect to any unsold Moderate Income Units, the waiver of the park dedication fee for unsold Moderate Income Units set forth in Paragraph 7 shall be revoked and the park dedication fee for all unsold Moderate Income Units shall become immediately due and payable by the Developer. Any Moderate Income Units which have been sold prior to termination shall remain subject to Paragraphs 6 and 7. All obligations in this Agreement not specifically amended or terminated by this Paragraph shall survive, including but not limited to applicable provisions concerning the remittance of a portion of “Profits” set forth in Paragraph 6 for Moderate Income Units sold prior to such termination. 13. Binding. This Agreement shall be recorded against the Project Area. Provisions of this Agreement shall be binding upon and enforceable as real covenants that “run” with the title to all lots within the Project Area, and shall also be enforceable against, and inure to the benefit of the HRA and the Developer; provided, however, and notwithstanding any contrary provision herein, although the provisions of Paragraphs 6 and 7 herein constitute real covenants that run with title to the Moderate Income Units and that are enforceable against future owners of Moderate Income Units to the extent provided therein, Developer shall have no personal obligation to perform any of the covenants of Paragraphs 6 and 7 hereof, provided the Developer is not the seller in any transaction that constitutes a Non-Qualifying sale. 47

14. Remedies. Developer acknowledges, on its own and for all successors and assigns, that the rights of HRA to perform the obligations of Developer contemplated in this agreement are special, unique, and of an extraordinary character, and that, in the event that Developer violates, or fails, or refuses to perform any covenant, condition, or provision made herein, HRA may be without an adequate remedy at law. Developer agrees, therefore, that in the event Developer violates, fails, or refuses to perform any covenant, condition, or provision made herein, HRA may, at its option, institute and prosecute an action to specifically enforce such covenant, to enjoin conduct or activities that violate the terms hereof, withhold building permits, or seek any other remedy available at law or in equity. In the event of any litigation between the HRA and Developer to enforce or interpret the provisions hereof in which the HRA is the prevailing party, the HRA shall be entitled to an award requiring Developer to reimburse the HRA for all of its costs and expenses in such action, including reasonable attorneys’ fees. No remedy conferred in this agreement is intended to be exclusive and each shall be cumulative and shall be in addition to every other remedy. The election of any one or more remedies shall not constitute a waiver of any other remedy. 15. No HRA Liability. No failure of the HRA to comply with any term, condition, covenant or agreement herein shall subject the HRA to liability for any claim for damages, costs or other financial or pecuniary charges. No execution on any claim, demand, cause of action or judgment shall be levied upon or collected from the general credit, general fund or taxing powers of the HRA. 16. Recording. This Agreement shall be recorded at the County Recorder and / or Registrar of Titles at the closing of the Developer’s purchase of the Project Area from the HRA. This Agreement shall be recorded after the deed from the HRA to Developer and prior to any mortgages or encumbrances. No land alteration or building permits for the Project Area shall be issued until proof of filing of the Agreement is submitted to the HRA. 17. Right of Entry. The Developer hereby grants to the HRA and the City of Eden Prairie, their agents, employees, officers and contractors a license to enter the Project Area to perform all work and inspections deemed appropriate by the HRA or City in conjunction with this Agreement. 18. No Third Party Beneficiaries. Except with respect to Developer, the HRA, and the covenants hereof that “run” with title to the lots within the Project pursuant to Paragraph 13 hereof, no provision of this Agreement inures to the benefit of any third person, including the public at large, so as to constitute any such person as a third-party beneficiary of the Agreement or of any one or more of the terms hereof, or otherwise give rise to any cause of action for any such person. IN WITNESS WHEREOF, the parties to this Agreement have caused these presents to be executed as of the day and year aforesaid. [signatures on following pages]

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HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE

By___NOT FOR SIGNATURE_______ Nancy Tyra-Lukens Its Chair

By___ NOT FOR SIGNATURE______ Rick Getschow Its Executive Director

STATE OF MINNESOTA COUNTY OF HENNEPIN

) ) ss. )

The foregoing instrument was acknowledged before me this 14th day of July, 2014, by Nancy Tyra-Lukens and Rick Getschow, respectively the Chair and Executive Director of the Housing and Redevelopment Authority in and for the City of Eden Prairie, on behalf of said authority.

____ NOT FOR SIGNATURE________________ Notary Public

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EDEN GARDENS, LLC By _ NOT FOR SIGNATURE__________ Matthew Hanish Vice President

STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN

Date: ____________________

) )

The foregoing instrument was acknowledged before me this ____ day of ____________, 2014, Matthew Hanish, the Vice President, of Eden Gardens, LLC, a Minnesota limited liability company, on behalf of the company.

__ NOT FOR SIGNATURE__________________ Notary Public

THIS INSTRUMENT WAS DRAFTED BY: Gregerson, Rosow, Johnson & Nilan, LTD 650 Third Ave S, Suite 1600 Minneapolis, MN 55376

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EXHIBIT A TO TO HOUSING PROJECT AGREEMENT Depiction of Project Area

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EXHIBIT B TO HOUSING PROJECT AGREEMENT Legal Description of Project Area

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To be platted as: Lot 1, Block 1; Lots 1-5, Block 2; Lots 1-5, Block 3; Lots 1-10, Block 4; Lots 1-15, Block 5; and Outlots A, B, C, D, E, F, and G, Eden Gardens, Hennepin County.

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EXHIBIT C TO HOUSING PROJECT AGREEMENT

Green Features and Sustainable Neighborhood Items

1. Green Path advanced certified homes: efficient windows, insulation improvements, high efficiency HVAC systems, high efficiency appliances and efficient lighting systems, etc. Eden Gardens will be the first development wide effort, in the state, to build all homes to Green Path Advanced Certification. 2. Homes: a. Build all homes to be ‘solar ready’, allowing residents an easy retrofit for solar panels. b. Rough in electric, in garages, required for electric car chargers. c. Offer sun tunnels as an option. d. The model home will have a solar feature installed to display the possible solar options for future residents. The solar feature will consist of either a solar PV panel (electricity) or a solar hot water panel system to heat the homes water. Solar options will be available on all homes. e. Use of low VOC paints and use of recycled materials/products where possible. 3. Low impact Site development strategies a. Reduce impervious surfaces; narrower street sections, in accordance with the final approved PUD and plat plans b. Reduce stormwater runoff and manage via rain gardens and bio-swales, in accordance with the final approved PUD and plat plans. Keep all stormwater mgmt on site; not utilizing MnDOT pond or other regional ponding. c. Reduce storm sewer piping and ponding, in accordance with the final approved PUD and plat plans. d. Shade streets to minimize the heat island effect. e. Compact Development decreases urban sprawl. f. Use of eco-lawns (no-mow) in central green space, landscaped outlots and for all lawn areas of all home lots; eliminating dependency on irrigation and minimizing need for mowing. g. Utilization of native landscaping in accordance with City’s native plant ordinance throughout development and no plantings that contain neonicotanoids. Drought tolerant plantings will require no irrigation; as well as low maintenance needs and costs to the HOA. h. Reduce impervious surfaces through eliminating some alleyways. i. Increase the amount of pervious surfaces. Install pervious surface sidewalks from the driveway to the front door of the model home and provide this as an option on all other units. j. Permeable Pavers – install permeable pavers at sidewalk to park shelter to decrease impervious surfaces and allow for groundwater recharge.

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4. Site Lighting: c. Install high efficiency LED street lights; limiting light pollution, lowering maintenance and operational costs for the City. d. Install solar pathway lighting; eliminating the operational costs to the HOA and eliminating infrastructure required in standard practices (trenching for conduits/piping). 5. Site furnishings: install park furniture made of recycled plastics, (ie picnic tables). 6. Community Garden plots: Promotes local food growth and community gathering space. 7. Walkable Streets: minimal distance between the sidewalk and most buildings, sidewalks along 100% of street length, elevated ground floors, low design speeds for most streets, minimal driveway crossings along sidewalks. 8. Neighborhood Connections: connections to existing bike/walking trails and neighborhood sidewalks. Also, no cul-de-sacs are encouraged. 9. Community participation: multiple forms of community feedback to guide the project through design, in accordance with the final approved PUD and plat plans. 10. Solar and Green Roofs: Install green roofs on park shelter and garden shed; install solar panels on the park shelter which can be used to power the bollards or other features in the common area. Excess electricity can be sold back to Xcel Energy and the proceeds from the sale can be used to offset Home Owners Association (HOA) costs. 11. Rain Barrels: Install at the park shelter and garden shed to capture excess rainwater and utilize in the garden plots. 12. Tot Lot – provide community gathering space for children 13. Site Signage: Install educational and interactive signage throughout public spaces of the development to inform residents, and community members, of the green strategies used. For example, create a sign by the rain garden that educates the importance and functions of these site features. We will work in partnership with the City, as they continue to educate residents of the importance of water resources, etc. 14. The developer shall provide as an option to potential buyers a floor plan providing single level living design. 15. Increase Green site features/benefits by increasing on-site storm water infiltration by the addition of bioswales and increased rain garden area, in accordance with the final approved PUD and plat plans.

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PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT (this “Agreement”) is dated as of July 14, 2014 between the Housing Redevelopment Authority in and for the City of Eden Prairie, Minnesota a municipal corporation and political subdivision organized and existing under the Constitution and the laws of the State of Minnesota (referred to as “Seller”) and Eden Gardens, LLC, a Minnesota limited liability company (referred to as “Buyer”). RECITALS The Minnesota Department of Transportation (referred to as “MnDOT”) is the fee owner of certain real property located in Hennepin County, Minnesota, containing approximately 8.44 acres, legally described on the attached Exhibit A (the “Land”). The Land, together with all buildings and improvements constructed or located on the Land and all easements and rights benefiting or appurtenant to the Land is collectively referred to herein as the “Real Property”. WHEREAS, Seller has determined that there is a shortage of decent, safe, and sanitary housing for persons of moderate income and their families in the City; WHEREAS, in order to alleviate the housing shortage, the HRA has determined to carry out a housing development project pursuant to Minn. Stat. 469.017(the “Project”); WHEREAS, the goals for the Project are to increase environmental sustainability/energy efficiency and single family housing affordability for moderate income individuals and their families. The intent of the Project is to create an environmentally sustainable single family neighborhood with implementation of “green” measures with 20 of the housing units to be sold to people with moderate incomes; WHEREAS, in order to ensure that the housing development project partially alleviates the shortage of moderate income housing, the HRA will establish moderate income and price limits and buyer eligibility requirements for the housing development project; WHEREAS, Seller has adopted H.R.A. Resolution No. 2014-01 and H.R.A. Resolution No. 2014-02 relating to the housing development project, approving the project, approving purchase and sale of the Real Property, and establishing regulations for the project. WHEREAS, Seller intends to acquire the Real Property from MnDOT after which Seller desires to sell the Real Property to Buyer and Buyer desires to purchase the Real Property from Seller, pursuant to the terms of this Agreement. Upon purchase of the Real Property Buyer shall complete the housing development project on the Real Property. For purposes of this Agreement the effective date is the later date both Seller and Buyer shall have executed this Agreement (“Effective Date”) as shown by the dates next to their signature blocks.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1.

Sale of Real Property. Seller agrees to sell to Buyer and Buyer agrees to buy from Seller the Real Property.

2.

Purchase Price. The purchase price to be paid by Buyer to Seller is Nine Hundred Fifty Thousand and no/100 Dollars ($950,000.000).

3.

Payment of Purchase Price. The Purchase Price shall be paid as follows: 3.1

Earnest Money. One Hundred Thousand and no/100 Dollars ($100,000) as earnest money (“Earnest Money”) which Earnest Money shall be 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 Buyer. The Earnest Money shall be deposited within three (3) business days of the Effective Date. Unless otherwise disbursed pursuant to the Escrow Agreement, the Earnest Money and all interest accrued thereon shall be paid to Seller at Closing and credited against the Purchase Price.

3.2

Closing Payment. Subject to adjustments provided for herein, Eight Hundred Fifty Thousand and no/100 Dollars ($850,000.00) in cash or by wire transfer of U.S. Federal Funds to be received by Seller on or before 1:00 p.m. local time on the Closing Date.

4. A. Buyer’s Contingencies. Unless waived by Buyer in writing, Buyer’s obligation to purchase the Real Property shall be subject to and contingent upon each of the following: 4.1

Performance of Seller’s Obligations. Seller shall have performed all of the obligations required to be performed by Seller under this Agreement, as and when required by this Agreement.

4.2

Title. Title shall have been found acceptable by Buyer or made acceptable in accordance with the requirements and terms of Section 10 below.

4.3

Phase I. No later than forty-five (45) days after the Effective Date 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 Buyer (the “Phase I”). Buyer shall cause the Phase I to be prepared no later than thirty-five (35) days after the Effective Date at Buyer’s cost and expense. Buyer shall deliver a copy to Seller within three (3) business days after any

2

termination of this Agreement. 4.4

Testing. No later than forty-five (45) days after the Effective Date Buyer shall have determined that it is satisfied with the results of and matters disclosed by any soil tests, engineering inspections, hazardous waste and environmental reviews of the Real Property, all such tests, inspections and reviews to be obtained at Buyer’s sole cost and expense.

4.5

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 Buyer to own, develop, or use the Real Property after the Closing Date for Buyer’s intended use.

4.6

Governmental Approval. No later than one-hundred twenty (120) days after the application date Buyer shall have obtained approval from the City of Eden Prairie all full and final approvals for a housing development, including, without limitation, City Council approval of: a Resolution for Planned Unit Development Concept Review, 1st and 2nd Reading of an Ordinance for Planned Unit Development District Review and Zoning District Change, Site Plan Review, (hereinafter collectively referred to as “Governmental Approvals”). Seller shall without charge to Buyer cooperate in Buyer’s attempts to obtain all such governmental approvals. Seller shall further execute such rezoning applications, plans, environmental worksheets and other documents as may be required by governmental bodies to accomplish the foregoing. Buyer has made application with the City of Eden Prairie for the Government Approvals.

4. B. Termination by Buyer. If any of the foregoing contingencies set forth in Section 4. A. of this Agreement have not been satisfied, in Buyer’s sole discretion, on or before the stated date then this Agreement may be terminated, at Buyer’s option, by written notice from Buyer to Seller; provided, however, Buyer may only terminate this Agreement as a consequence of its dissatisfaction with the physical condition of the Property if Buyer has performed reasonable and customary investigation or due diligence with respect to the physical attributes of the Real Property that 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 Buyer fails to give notice of termination as provided above, the contingencies are automatically deemed waived. Buyer may also waive any contingency by written notice to Seller but such written notice is not required for a waiver to be effective. Upon a termination by Buyer (a) Buyer and Seller shall execute a recordable written termination of this Agreement, which shall include Buyer’s quit claim of any interest in and to the Real Property, (b) the Earnest Money and any interest accrued thereon shall be released to Buyer, and (c) upon fulfillment of (a) and (b) above neither party will have any further rights or obligations regarding this Agreement or the Real Property except for the rights and obligations of indemnification set forth in Sections 6, 13, 15 and 16.

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5. Seller’s Contingencies. Unless waived by Seller in writing, Seller’s obligation to sell the Real Property to Buyer shall be subject to and contingent upon the occurrence of each of the following on or before the Closing Date: 5.1

Acquisition. Seller shall have acquired fee simple marketable title of the Real Property from MnDOT on or before the Closing Date.

5.2

Financing. Buyer has provided to Seller a commitment to finance the acquisition of the Real Property from a lender and on terms satisfactory to Seller.

5.3

Approvals. Buyer shall have obtained all Governmental Approvals.

5. B. Termination by Seller. If any of the foregoing contingencies set forth in Section 5. A. of this Agreement have not been satisfied on or before the Closing Date then this Agreement shall automatically be terminated. Upon such a termination (a) Buyer and Seller shall execute a recordable written termination of this Agreement, which shall include Buyer’s quit claim of any interest in and to the Real Property, (b) the Earnest Money and any interest accrued thereon shall be released to Buyer, and (c) upon fulfillment of (a) and (b) above neither party will have any further rights or obligations regarding this Agreement or the Real Property except for the rights and obligations of indemnification set forth in Sections 6, 13, 15 and 16. 6. Buyer’s Access Investigation and Security. Seller shall, pursuant to MnDOT’s approval, allow Buyer, and Buyer’s agents, access to the Real Property without charge and at all reasonable times for the purpose of Buyer’s investigation and testing the same. Buyer shall pay all costs and expenses of such investigation and testing and shall indemnify and hold Seller, MnDOT and the Real Property harmless from all costs and liabilities relating to Buyer’s activities. Buyer shall further promptly repair and restore any damage to the Real Property caused by or occurring during Buyer’s testing and return the Real Property to substantially the same condition as existed prior to such entry. 7. Seller’s Closing Documents. On the Closing Date, Seller shall execute and/or deliver to Buyer the following (collectively, “Seller’s Closing Documents”): 7.1

Deed. A Warranty Deed, in recordable form reasonably satisfactory to Buyer, conveying the Real Property to Buyer, free and clear of all encumbrances, except the Encumbrances set forth on Exhibit C hereto and the Permitted Encumbrances.

7.2

Title Policy. The Policy described in Section 10 of this Agreement, or a suitably marked up Title Commitment for the Policy initialed by Title Company, in the form required by this Agreement.

7.3

Affidavit. Such Affidavit of Seller as may be reasonably required by Title Company to issue the Policy.

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7.4

IRS Reporting Form. The appropriate Federal Income Tax reporting form, if any, as required.

7.5

Housing Project Agreement. The Housing Project Agreement attached hereto as Exhibit D.

7.6

Other Documents. All other documents reasonably determined by Buyer to be necessary to transfer the Real Property to Buyer free and clear of all encumbrances, except the Permitted Encumbrances.

8. Buyer’s Closing Documents. On the Closing Date, Buyer will execute and/or deliver to 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 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

Executive Order Affidavit. An affidavit properly executed and in recordable form confirming the Buyer’s representations in Section 13.2.

8.4

Other Documents. All other documents reasonably determined by Seller to be necessary to consummate the transaction contemplated hereby in a manner consistent with the terms and conditions hereof.

8.5

Housing Project Agreement. The Housing Project Agreement attached hereto as Exhibit D.

9. Prorations. Seller and Buyer agree to the following prorations and allocation of costs regarding this Agreement: 9.1

Title Insurance and Closing Fee. Seller will pay all costs of the Title Evidence described in Section 10 of this Agreement and the fees charged by Title Company for any escrow required regarding Buyer’s Objections. 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 Buyer. Seller and Buyer will each pay onehalf of any reasonable and customary closing fee or charge imposed by any closing agent designated by Title Company.

9.2

Deed Tax. Seller shall pay all state deed tax regarding the Warranty Deed to be delivered by Seller under this Agreement.

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9.3

10.

Real Estate Taxes and Special Assessments. At Closing, the Purchase Price shall be adjusted as follows: 9.3.1

Current Year's Taxes. All real property taxes which have become a lien on the Real Property (“Taxes”) and which are due and payable prior to the year in which Closing occurs, shall be paid by Seller at or prior to Closing. All Taxes which are due and payable in the year in which Closing occurs shall be prorated to the Closing Date and Seller’s portion shall be paid by Seller at Closing. This proration shall result in Seller’s payment of Taxes from January 1 to the date immediately prior to the Closing Date and Buyer’s payment of Taxes from the Date of Closing to December 31.

9.3.2

Assessments. All charges for improvements or services already made to or which benefit the Real Property, and all levied assessments (general or special) arising out of or in connection with any assessment district created or confirmed prior to the Effective Date (“Assessments”) shall be paid in full by Seller at Closing. All assessments (general or special) which are levied after the Effective Date and all assessments (general or special) which are pending but not levied as of the Effective Date or which become pending after the Effective Date shall be assumed and paid by Buyer.

9.4

Recording Costs. Seller will pay the cost of recording all documents necessary to place record title in the condition warranted by Seller and requested by Buyer in this Agreement. 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 Real Property will be allocated between Seller and Buyer as of the Closing Date, so that Seller pays that part of such other operating costs payable before the Closing Date, and 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.

Title Examination. Title examination will be conducted as follows: 10.1

Seller’s Title Evidence. Seller shall, no later than thirty (30) days after the Effective Date furnish to Buyer, at Seller’s cost and expense, the

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following: A commitment (“Title Commitment”) for the most current ALTA Form B Owner’s Policy of Title Insurance insuring title to the Real Property in the amount of the Purchase Price, issued by Custom Home Builders Title (“Title Company”). The Title Commitment will commit Title Company to insure title to the Real Property subject only to the Permitted Encumbrances. 10.2

Survey. No later than thirty (30) days after its receipt of the Title Commitment Buyer may 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 Buyer (the “Survey”). Buyer shall provide a copy of the Survey to Seller within three (3) days after any termination of this Agreement.

10.3

Buyer’s Objections. Within ten (10) business days after receiving the later of the Title Commitment and the Survey, Buyer shall make written objections (“Objections”) to the form and/or contents of the Title Commitment and the Survey if Buyer has obtained one within the time set forth in 10.2. 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 Buyer shall be a “Permitted Encumbrance” pursuant to this Agreement. Seller will have sixty (60) days after receipt of the Objections to cure the Objections, during which period the Closing will be postponed as necessary. Seller shall use its best efforts to correct any Objections. To the extent that the Objections are not cured within such sixty (60) day period, 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 contemporaneously with Seller’s acquisition of the Property from MnDOT. The Closing shall occur on August 29, 2014, or another date mutually agreed upon by the parties (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. Seller agrees to deliver possession of the Real Property to Buyer on the Closing Date. 12. No Representations by Seller. IT IS UNDERSTOOD AND AGREED THAT 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 REAL PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE (OTHER THAN SELLER'S LIMITED OR SPECIAL WARRANTY OF TITLE TO BE SET FORTH IN THE DEED), ZONING, TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL CONDITIONS, UTILITIES, ACCESS, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE REAL

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PROPERTY WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR COMPLETENESS OF ANY PROPERTY DATA OR OTHER INFORMATION PERTAINING TO THE REAL PROPERTY DELIVERED TO BUYER BY SELLER, OR ANY OTHER MATTER OR THING REGARDING THE REAL PROPERTY. BUYER ACKNOWLEDGES AND AGREES THAT UPON THE CLOSING OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT, SELLER SHALL SELL AND BUYER SHALL ACCEPT THE REAL PROPERTY "AS IS, WHERE IS, WITH ALL FAULTS". BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESSED OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE REAL PROPERTY OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION, PROPERTY INFORMATION PACKAGES DISTRIBUTED WITH RESPECT TO THE REAL PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGER OF THE PROPERTY, OR ANY REAL ESTATE BROKER 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. BUYER REPRESENTS TO SELLER THAT BUYER HAS CONDUCTED, OR WILL HAVE HAD THE OPPORTUNITY TO CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE REAL PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL, ENVIRONMENTAL AND GEOTECHNICAL CONDITIONS THEREOF, AS BUYER DEEMS NECESSARY TO SATISFY ITSELF OF THE CONDITION OF THE REAL 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 REAL PROPERTY, AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS, OFFICERS, DIRECTORS, SHAREHOLDERS OR EMPLOYEES WITH RESPECT THERETO. UPON CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, ADVERSE PHYSICAL, ENVIRONMENTAL AND GEOTECHNICAL CONDITIONS MAY HAVE BEEN REVEALED BY BUYER'S INVESTIGATIONS, AND BUYER, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER'S OFFICERS, BOARD 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 SELLER (AND SELLER' OFFICERS, BOARD 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 REAL PROPERTY. 13.

Representations and Warranties by Buyer. Buyer represents and warrants to Seller

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as follows: 13.1

Authority. Buyer is a limited liability company duly organized under the laws of the State of Minnesota; that Buyer is duly qualified to transact business in the State of Minnesota; that 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 Buyer and have been duly executed and delivered; that the execution, delivery and performance by 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 Buyer is a party; such documents are valid and binding obligations of Buyer, and are enforceable in accordance with their terms.

13.2

Anti-Terrorism, Executive Order 13224 and Public Law 107-56. The Buyer is not in violation of any laws relating to terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56. The Buyer or, to the knowledge of the Buyer, none of its agents acting or benefiting in any capacity in connection with the transaction, is any of the following: 13.2.1 Person or entity that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order; 13.2.2 Person or entity owned or controlled by, or acting for or on behalf of, any Person or entity that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order; 13.2.3 Person or entity with which Seller is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; 13.2.4 Person or entity that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; or 13.2.5 Person or entity that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list. The Buyer or, to the knowledge of Buyer, any of its agents acting in any

9

capacity in connection with the transaction does not (i) conduct any business or engage in making or receiving any contribution of funds, goods or services to or for the benefit of any Person described above, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order, or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law. Buyer will indemnify Seller, its successors and assigns, against, and will hold Seller, its successors and assigns, harmless from, any expenses or damages, including reasonable attorneys’ fees, that Seller incurs because of the breach of any of the above representations and warranties, whether such breach is discovered before or 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 Buyer shall be commenced within three years of the Closing or shall be deemed waived. Consummation of this Agreement by Seller with knowledge of any breach of such warranties and representations by Buyer will constitute a waiver or release by Seller of any claims due to such breach. 14. Condemnation. If, prior to the Closing Date, eminent domain proceedings are commenced against all or any part of the Real Property by any entity, Seller shall immediately give notice to Buyer of such fact and at Buyer’s option (to be exercised within thirty (30) days after the date of 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, 13, 15 and 16, and the Earnest Money, together with any accrued interest, shall be refunded to Buyer. If Buyer shall fail to give such notice then there shall be no reduction in the Purchase Price, and Seller shall assign to Buyer at the Closing Date all of 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, Seller shall not designate counsel, appear in, or otherwise act with respect to such condemnation proceedings without Buyer’s prior written consent. 15. Broker’s Commission. Seller and 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. 16. Mutual Indemnification. Seller and 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 Real Property for their respective periods of ownership. Such rights of indemnification will not arise

10

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 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. 17. Assignment. 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. 18. Survival. Except as stated in Section 13, all of the terms of this Agreement will survive and be enforceable for a period of one year after the Closing. 19. 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 Seller by delivering it personally to an officer of Seller, or if it is directed to Buyer, by delivering it personally to an officer of 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 Seller:

Housing Redevelopment Authority in and for the City of Eden Prairie Attn: Janet Jeremiah 8080 Mitchell Road Eden Prairie, MN 55344

With a copy to:

Richard Rosow Gregerson, Rosow, Johnson & Nilan, LTD. 650 Third Ave South, Suite 1600 Minneapolis, MN 55402

If to Buyer:

Eden Gardens, LLC Attn: Matthew Hanish 525 – 15th Avenue South Hopkins, MN 55347

With a copy to:

Gary Eidson Fabyanske, Westra, Hart & Thomson, P.A. 333 South Seventh Street, Suite 2600 Minneapolis, MN 55402

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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, 10 days prior to the effective date of such change. 20. 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. 21. 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 Real 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. 22. Binding Effect. This Agreement binds and benefits the parties and their successors and assigns. 23. Controlling Law. This Agreement has been made under the laws of the State of Minnesota, and such laws will control its interpretation. 24. 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 Buyer fails to cure such default within five (5) business days of the date of such notice from Seller, Seller may cancel this Agreement pursuant to Minn. Stat. § 559.21. If Seller fails to cure such default within five (5) business days of the date of such notice from Buyer, Buyer may immediately terminate this Agreement by delivering to Seller at the address noted in Section 19 a Notice of Termination executed by an authorized representative(s) of 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.

SIGNATURES ON SUCCEEDING PAGE

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IN AGREEMENT, Seller and Buyer have executed this Agreement as of the date first written above.

SELLER: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE

By___________________________ Nancy Tyra-Lukens Its Chair

Date: ____________________

By____________________________ Rick Getschow Its Executive Director

Date: ____________________

STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN

) )

The foregoing instrument was acknowledged before me this 14th day of July, 2014, by Nancy Tyra-Lukens and Rick Getschow, respectively the Chair and Executive Director of the Housing and Redevelopment Authority in and for the City of Eden Prairie, on behalf of said authority.

_______________________ Notary Public

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BUYER: EDEN GARDENS, LLC By ________________________________ Matthew Hanish Vice President

STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN

Date: ____________________

) )

The foregoing instrument was acknowledged before me this ____ day of ____________, 2014, Matthew Hanish, the Vice President, of Eden Gardens, LLC, a Minnesota limited liability company, on behalf of the company.

______________________________ Notary Public

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EXHIBIT A TO PURCHASE AGREEMENT Legal Description of Land

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To be platted as: Lot 1, Block 1; Lots 1-5, Block 2; Lots 1-5, Block 3; Lots 1-10, Block 4; Lots 1-15, Block 5; and Outlots A, B, C, D, E, F, and G, Eden Gardens, Hennepin County.

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EXHIBIT B TO PURCHASE AGREEMENT 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 Buyer and Seller, Interest will accrue for the benefit of Buyer, unless the Purchase Agreement is terminated by reason of the default of Buyer, in which case the interest will be paid to Seller. Prior to the waiver or satisfaction of its contingencies, Buyer may direct the Title Company to return the Earnest Money to it if 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 Seller and Buyer, or in lieu thereof, the direction of a court of competent jurisdiction except as to Buyer’s right to direct the return of the Earnest Money in accordance with the Purchase Agreement. Seller and 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 Seller. Agreement is dated this ___ day of ___________, 20___.

______________________________

By Its

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This Escrow

EXHIBIT C TO PURCHASE AGREEMENT ENCUMBRANCES

1.

Federal, state and municipal laws, ordinances, rules and regulations.

2.

Utility and drainage easement(s), if any, as shown on the recorded plat.

3.

The lien of real estate taxes and pending special assessment not yet due and payable subject to the proration and allocation provisions hereof.

4.

Restrictions in deed from MnDOT to City or HRA that: (a) the Property is conveyed for “public purposes”; and/or (b) the Property and the title thereto shall revert and vest in the State of Minnesota whenever the Property ceases to be used for the stated public purposes.

5. 6.

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EXHIBIT D TO PURCHASE AGREEMENT Housing Project Agreement HOUSING PROJECT AGREEMENT THIS AGREEMENT, made as of the 14th day of July, 2014, by and between the Housing Redevelopment Authority in and for the City of Eden Prairie, Minnesota, a municipal corporation and political subdivision organized and existing under the Constitution and the laws of the State of Minnesota (the "HRA") and Eden Gardens, LLC, a Minnesota limited liability company (the "Developer"), WITNESSETH: WHEREAS, pursuant to Minn. Stat. 469.017, the HRA has the authority to complete a housing development project; WHEREAS, the HRA adopted H.R.A. Resolution No. 2014-01 at a duly noticed meeting on July 14, 2014. In H.R.A. Resolution No. 2014-01 the HRA found that there is a shortage of decent, safe, and sanitary housing for persons of moderate income and their families in the City and determined to carry out a housing development project to partially alleviate the shortage (the “Project”); WHEREAS, the property on which the Project will be constructed is located at the southwest corner of Eden Prairie Road and Scenic Heights Road as illustrated on attached Exhibit A (“Project Area”) and is legally described on attached Exhibit B. WHEREAS, the goals for the Project are to increase environmental sustainability/energy efficiency and single family housing affordability for moderate income individuals and their families. The intent of the Project is to create an environmentally sustainable single family neighborhood with implementation of “green” measures with 20 of the housing units to be sold to people with moderate incomes as defined below; WHEREAS, in order to ensure that the housing development project partially alleviates the shortage of moderate income housing, the HRA in H.R.A. Resolution No. 2014-01 established moderate income and affordability limits for the Project; WHEREAS, based on evidence presented by developers who responded to the Project Request for Proposals, in order to make the Project feasible and to provide the desired moderate income housing, the HRA has determined that 16 of the housing units in the Project may be sold at market rates. The market rate housing units shall be located on Lot 1, Block 1 and Lots 1-15, Block 5, Eden Gardens. The remaining 20 housing units (collectively the “Moderate Income Units”) must be sold to people with incomes that fall within the range of the “Moderate Income Limits” (as defined below in Paragraph 1.B hereof) and at prices that fall within the range of “Affordable Housing Prices” (as defined below in Paragraph 1.C hereof), that are applicable at the time of such sale. The Moderate Income Units shall be located on Lots 1-5, Block 2, Lots 15, Block 3, and Lots 1-10, Block 4, Eden Gardens; and

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WHEREAS, the HRA adopted H.R.A. Resolution No. 2014-02 at a duly noticed public hearing on July 14, 2014. In H.R.A. Resolution No. 2014-02 the HRA approved the purchase and sale of the Project Area; set the estimated market value of the Project Area; and selected Developer to complete the Project subject to the condition that Developer and HRA enter into this Housing Project Agreement. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 1. Housing Criteria. The Project shall consist of 36 single family units. Twenty units shall be Moderate Income Units. The remaining 16 units may be sold at market rates. The size of the 20 Moderate Income Units shall range between 1600 and 2200 square feet above grade and the 16 market rate units shall range between 1600 and 2600 square feet above grade. Floor plans available for potential buyers shall include a one-level living floor plan option. The 20 Moderate Income Units shall be priced and sold based on the following calculations: A.

Project Feasibility. Based on evidence presented by developers who responded to the Project Request for Proposals, in order to make the Project feasible and to provide the desired moderate income housing, 16 of the housing units in the Project may be sold at market rates. The market rate units shall be built on Blocks 1 and 5 as shown on the Preliminary Plat of Eden Gardens. The 20 Moderate Income Units must be sold: (i) to people who qualify under the Moderate Income Limits set forth below in B; and (ii) at the Affordable Housing Prices set forth below in C.

B.

Moderate Income Limits. The U.S. Department of Housing and Urban Development annually determines the area median income for Hennepin County (“Area Median Income”). The Area Median Income is published annually in December for use in the following year. The HRA hereby determines that the moderate income limits for the Project (the “Moderate Income Limits”) shall be 80% to 120% of the Area Median Income. (For example, the Area Median Income for Hennepin County published in December 2013 for use in the year 2014 was $82,900. The moderate income limits for all Moderate Income Units sold in 2014 is $66,320 to $99,480.)

C.

Affordable Housing Prices. Based upon the Area Median Income the Minnesota Housing Finance Authority annually sets a loan limit for the 11-County Metro (“Area Affordable Price”). The Area Affordable Price is published in December for use in the following year. For purposes hereof, the affordable housing prices for persons of moderate income for the Project shall be 80% to 120% of the Area Affordable Price (the “Affordable Housing Prices”) (For example, the Area Affordable Price published in December 2013 for use in the year 2014 was $310,000. Consequently, the Affordable Housing Prices for all Moderate Income Units sold in 2014 is $248,000 to $372,000.)

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2. Minnesota’s Green Path Development Standards. The Developer shall construct the Project in a manner that meets Minnesota’s Green Path (“Green Path”) standards as required in the attached as Exhibit C. 3. Community Involvement. The Developer shall engage the community by involving Hennepin Technical College. Specifically, the Developer shall involve students through opportunities such as framing a home, learning how ‘green’ mechanical/electrical systems work or learning green techniques used in stormwater management. 4. Sale of the Project Area. For purposes of this Agreement, “sale” includes any transfer of a housing unit including but not limited to sale, conveyance, gift, and involuntary transfer. The Developer may not close on the sale of any Moderate Income Unit unless all of the following conditions have been met: A.

All infrastructure including streets, sanitary sewer, water, and storm sewer, but not including landscaping and the final wear course on streets and other items that cannot reasonably be completed due to winter weather conditions and that do not materially affect the use or function of such items of infrastructure, are substantially complete and accepted in writing by the City;

B.

All public space including common areas, parks and community buildings are complete and accepted in writing by the HRA;

C.

The residential structure on the lot to be sold has been issued a certificate of occupancy or temporary certificate of occupancy; and

D.

The sale has been approved in writing by the HRA prior to closing in order to ensure compliance with the terms of this Agreement. In order to request such approval for the sale of each Moderate Income Unit, Developer, or any subsequent owner that is selling a Moderate Income Unit, shall submit a complete application to the HRA for the sale of each Moderate Income Unit in such form and substances as required by the HRA, which shall include at a minimum all information required by the HRA to verify the income of the prospective purchaser. Upon receipt of a complete application the HRA shall inform the Developer or other requesting party, in writing and within five business days, whether the application is approved. If the HRA fails to respond to a complete application within five business days, the application will be deemed approved.

5. Initial Sale of Housing Units by Developer. Initial sale of Moderate Income Units by the Developer shall comply with the income and pricing requirements set forth in Paragraph 1. In addition, during the Preference Period, the initial sale of all housing units by the Developer shall give preference to prospective buyers who live or work in the City of Eden Prairie. During the Preference Period, Developer shall market to residents and employees of Eden Prairie businesses and permit those who live or work within the City of Eden Prairie to have the first opportunity to sign a purchase agreement for their desired lot, or if no specific lot is specified, for a lot within the Project. As used herein, the phrase “Preference Period” shall refer

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to the period of time that elapses between the date hereof and the 180th day after the date of the issuance of the first building permit for the Project. 6. Future Sale of Housing Units. After the initial sale of any Moderate Income Unit by the Developer, the seller in any subsequent sale of a Moderate Income Unit that consists of a “Non-Qualifying Sale” and that is closed within 10 years of the date of the initial sale by the Developer of the subject Moderate Income Unit, shall remit the “Applicable Portion of the Profit” received by such seller in such transaction to the City for reinvestment in low and moderate income housing initiatives. As used herein, the phrase “Non-Qualifying Sale” shall be defined as the sale of a Moderate Income Unit that is closed within 10 years of the date of the initial sale of such Moderate Income Unit by the Developer and that is made either: (i) to a buyer that has income in excess of the Moderate Income Limits or (ii) at a price that is in excess of the Affordable Housing Prices, both as measured in the year in which the closing of such sale of the Moderate Income Unit occurs. The Seller of any Moderate Income Unit may apply to the HRA pursuant to Paragraph 4.D hereof for a determination that a prospective sale of such Moderate Income Unit shall not constitute a Non-Qualifying Sale. As used herein, the phrase “Applicable Portion of the Profit” shall refer to the portion designated pursuant to the chart set forth below in Paragraph 6.B. A.

Profit. The “Profit” from the subsequent sale of a Moderate Income Unit shall be defined as the funds received by the seller from the buyer at the closing of such sale, after deduction of the sum of the following: (i) all costs and fees listed on the settlement statement (which costs shall include any park dedication fee paid pursuant to Paragraph 7 hereof), excluding amounts necessary to satisfy any mortgages recorded against the property; (ii) the amount of the seller’s basis in the Moderate Income Unit as of the date of its acquisition thereof; plus (iii) the cost of improvements made by the seller as defined in IRS publication 523 which increase the seller’s basis in the Moderate Income Unit.

B.

Remittance. The amount of any “profit” that is required to be remitted to the City by the seller of a Moderate Income Unit in a Non-Qualifying Sale shall be as follows:

Time elapsed since the date of the initial purchase of the housing unit from the Developer Less than 1 year At least 1 year but less than 2 years At least 2 years but less than 3 years At least 3 years but less than 4 years At least 4 years but less than 5 years At least 5 years but less than 6 years At least 6 years but less than 7 years At least 7 years but less than 8 years At least 8 years but less than 9 years

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Profits to be remitted to City 90% 80% 70% 60% 50% 40% 30% 20% 10%

At least 9 years but less than 10 years

5%

Regardless of the number of times a Moderate Income Unit is sold, the requirements of this Paragraph 6 shall apply to any subsequent sale of such Moderate Income Unit that consists of a Non-Qualifying Sale and shall be based on the amount of time that has elapsed from the date of the initial sale of the housing unit by the Developer; provided, however, the provisions of this Paragraph 6 shall not be applicable to any sale of any Moderate Income Unit that closes at any time subsequent to the 10th anniversary of the closing of the initial sale of such Moderate Income Unit by the Developer. 7. Park Dedication Fee. The park dedication fee of $6,500.00 per unit shall be waived for each Moderate Income Unit; provided, however, if any closing upon the sale of a Moderate Income Unit in a Non-Qualifying Sale occurs at any time within 10 years of the date of the initial sale of the Moderate Income Unit by the Developer, the waiver of the park dedication fee for that Moderate Income Unit shall be revoked and such park dedication fee in the amount of $6,500.00 shall be due and payable at the time of the closing of such Non-Qualifying Sale. 8. Bond. Prior to issuance of any grading or building permits for the Project Area, Developer shall provide to the HRA a bond equal to $100,000 to secure the Developer’s obligations pursuant to this Agreement, including to reimburse the HRA for costs, including reasonable attorney fees, incurred by the HRA in any action to enforce or interpret the provisions of this Agreement (the “Security”). The HRA may draw down on or make a claim against the Security, as appropriate, upon five (5) business days’ notice to the Developer, for any violation of the terms of this Agreement or if the Security is allowed to lapse prior to the end of the required term. If the Security has not then been renewed, replaced or otherwise extended beyond the expiration date, the HRA may also draw down or make a claim against the Security as appropriate. If the Security is drawn down on or a claim is made against the Security, the proceeds shall be used to cure the default(s) and to reimburse the HRA for all costs and expenses, including attorneys’ fee, incurred by the HRA in enforcing this Agreement. Any amount of the Security that is drawn by the HRA shall be held by the HRA in trust and disbursed only if, and to the extent, that the Security may be disbursed hereunder. Developer shall be released from any further obligation to maintain the Security and all amounts of such Security that may then exist shall be released to Developer upon the earlier of the following: (i) the sale of all Moderate Income Units by the Developer; or (ii) the termination of Developer’s obligations to sell the Moderate Income Units as set forth in Paragraph 12 below. 9. warranties:

Developer Warranties.

Developer makes the following representations and

A.

The Developer is a Minnesota limited liability company, has power to enter into this Agreement and to perform its obligations hereunder and, by doing so, is not in violation of any provisions of its articles of organization, operating agreement or member control agreement or the laws of the State.

B.

The Developer has obtained funds sufficient for the acquisition or construction of the Project.

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C.

The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement is not prevented, limited by or conflicts with (unless all necessary waivers, consents or the like have been obtained) or results in a breach of, material terms, conditions or provision of any contractual restriction, evidence of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which they are bound, or constitutes a material default under any of the foregoing.

10. City Development Agreement. Prior to issuance of any grading or building permits for the Project Area, Developer shall enter into a Development Agreement with the City of Eden Prairie with respect to the Project and such Development Agreement shall be recorded against the Project Area. 11. Revision of Limits and Prices. If there are no prospective purchasers for any of the Moderate Income Units within six months following the issuance of the first building permit for the Project and upon written request of the Developer, the HRA shall revise the Moderate Income Limits and Affordable Housing Prices. 12. Moderate Income Units. Notwithstanding any contrary provision herein, the Developer’s obligation to sell the Moderate Income Units subject to the requirements in Paragraph 1, and the conditions applicable to the Developer’s sale of any Moderate Income Units in Paragraph 4, shall terminate upon the earlier of: (i) no Moderate Income Units have sold within 36 months following the issuance of the first building permit for the Project; or (ii) no Moderate Income Units have sold in the previous 12 months. Developer shall submit to the HRA evidence substantiating such lack of sales and the HRA shall execute an amendment to this Agreement terminating the obligation in Paragraph 1 and conditions in Paragraph 4. Upon such termination, the provisions of Paragraph 6 shall be deemed terminated with respect to any unsold Moderate Income Units, the waiver of the park dedication fee for unsold Moderate Income Units set forth in Paragraph 7 shall be revoked and the park dedication fee for all unsold Moderate Income Units shall become immediately due and payable by the Developer. Any Moderate Income Units which have been sold prior to termination shall remain subject to Paragraphs 6 and 7. All obligations in this Agreement not specifically amended or terminated by this Paragraph shall survive, including but not limited to applicable provisions concerning the remittance of a portion of “Profits” set forth in Paragraph 6 for Moderate Income Units sold prior to such termination. 13. Binding. This Agreement shall be recorded against the Project Area. Provisions of this Agreement shall be binding upon and enforceable as real covenants that “run” with the title to all lots within the Project Area, and shall also be enforceable against, and inure to the benefit of the HRA and the Developer; provided, however, and notwithstanding any contrary provision herein, although the provisions of Paragraphs 6 and 7 herein constitute real covenants that run with title to the Moderate Income Units and that are enforceable against future owners of Moderate Income Units to the extent provided therein, Developer shall have no personal

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obligation to perform any of the covenants of Paragraphs 6 and 7 hereof, provided the Developer is not the seller in any transaction that constitutes a Non-Qualifying sale. 14. Remedies. Developer acknowledges, on its own and for all successors and assigns, that the rights of HRA to perform the obligations of Developer contemplated in this agreement are special, unique, and of an extraordinary character, and that, in the event that Developer violates, or fails, or refuses to perform any covenant, condition, or provision made herein, HRA may be without an adequate remedy at law. Developer agrees, therefore, that in the event Developer violates, fails, or refuses to perform any covenant, condition, or provision made herein, HRA may, at its option, institute and prosecute an action to specifically enforce such covenant, to enjoin conduct or activities that violate the terms hereof, withhold building permits, or seek any other remedy available at law or in equity. In the event of any litigation between the HRA and Developer to enforce or interpret the provisions hereof in which the HRA is the prevailing party, the HRA shall be entitled to an award requiring Developer to reimburse the HRA for all of its costs and expenses in such action, including reasonable attorneys’ fees. No remedy conferred in this agreement is intended to be exclusive and each shall be cumulative and shall be in addition to every other remedy. The election of any one or more remedies shall not constitute a waiver of any other remedy. 15. No HRA Liability. No failure of the HRA to comply with any term, condition, covenant or agreement herein shall subject the HRA to liability for any claim for damages, costs or other financial or pecuniary charges. No execution on any claim, demand, cause of action or judgment shall be levied upon or collected from the general credit, general fund or taxing powers of the HRA. 16. Recording. This Agreement shall be recorded at the County Recorder and / or Registrar of Titles at the closing of the Developer’s purchase of the Project Area from the HRA. This Agreement shall be recorded after the deed from the HRA to Developer and prior to any mortgages or encumbrances. No land alteration or building permits for the Project Area shall be issued until proof of filing of the Agreement is submitted to the HRA. 17. Right of Entry. The Developer hereby grants to the HRA and the City of Eden Prairie, their agents, employees, officers and contractors a license to enter the Project Area to perform all work and inspections deemed appropriate by the HRA or City in conjunction with this Agreement. 18. No Third Party Beneficiaries. Except with respect to Developer, the HRA, and the covenants hereof that “run” with title to the lots within the Project pursuant to Paragraph 13 hereof, no provision of this Agreement inures to the benefit of any third person, including the public at large, so as to constitute any such person as a third-party beneficiary of the Agreement or of any one or more of the terms hereof, or otherwise give rise to any cause of action for any such person. IN WITNESS WHEREOF, the parties to this Agreement have caused these presents to be executed as of the day and year aforesaid. [signatures on following pages]

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HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE

By___NOT FOR SIGNATURE_______ Nancy Tyra-Lukens Its Chair

By___ NOT FOR SIGNATURE______ Rick Getschow Its Executive Director

STATE OF MINNESOTA COUNTY OF HENNEPIN

) ) ss. )

The foregoing instrument was acknowledged before me this 14th day of July, 2014, by Nancy Tyra-Lukens and Rick Getschow, respectively the Chair and Executive Director of the Housing and Redevelopment Authority in and for the City of Eden Prairie, on behalf of said authority.

____ NOT FOR SIGNATURE________________ Notary Public

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EDEN GARDENS, LLC By _ NOT FOR SIGNATURE__________ Matthew Hanish Vice President

STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN

Date: ____________________

) )

The foregoing instrument was acknowledged before me this ____ day of ____________, 2014, Matthew Hanish, the Vice President, of Eden Gardens, LLC, a Minnesota limited liability company, on behalf of the company.

__ NOT FOR SIGNATURE__________________ Notary Public

THIS INSTRUMENT WAS DRAFTED BY: Gregerson, Rosow, Johnson & Nilan, LTD 650 Third Ave S, Suite 1600 Minneapolis, MN 55376

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EXHIBIT A TO TO HOUSING PROJECT AGREEMENT Depiction of Project Area

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EXHIBIT B TO HOUSING PROJECT AGREEMENT Legal Description of Project Area

30

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To be platted as: Lot 1, Block 1; Lots 1-5, Block 2; Lots 1-5, Block 3; Lots 1-10, Block 4; Lots 1-15, Block 5; and Outlots A, B, C, D, E, F, and G, Eden Gardens, Hennepin County.

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EXHIBIT C TO HOUSING PROJECT AGREEMENT

Green Features and Sustainable Neighborhood Items

1. Green Path advanced certified homes: efficient windows, insulation improvements, high efficiency HVAC systems, high efficiency appliances and efficient lighting systems, etc. Eden Gardens will be the first development wide effort, in the state, to build all homes to Green Path Advanced Certification. 2. Homes: a. Build all homes to be ‘solar ready’, allowing residents an easy retrofit for solar panels. b. Rough in electric, in garages, required for electric car chargers. c. Offer sun tunnels as an option. d. The model home will have a solar feature installed to display the possible solar options for future residents. The solar feature will consist of either a solar PV panel (electricity) or a solar hot water panel system to heat the homes water. Solar options will be available on all homes. e. Use of low VOC paints and use of recycled materials/products where possible. 3. Low impact Site development strategies a. Reduce impervious surfaces; narrower street sections, in accordance with the final approved PUD and plat plans b. Reduce stormwater runoff and manage via rain gardens and bio-swales, in accordance with the final approved PUD and plat plans. Keep all stormwater mgmt on site; not utilizing MnDOT pond or other regional ponding. c. Reduce storm sewer piping and ponding, in accordance with the final approved PUD and plat plans. d. Shade streets to minimize the heat island effect. e. Compact Development decreases urban sprawl. f. Use of eco-lawns (no-mow) in central green space, landscaped outlots and for all lawn areas of all home lots; eliminating dependency on irrigation and minimizing need for mowing. g. Utilization of native landscaping in accordance with City’s native plant ordinance throughout development and no plantings that contain neonicotanoids. Drought tolerant plantings will require no irrigation; as well as low maintenance needs and costs to the HOA. h. Reduce impervious surfaces through eliminating some alleyways. i. Increase the amount of pervious surfaces. Install pervious surface sidewalks from the driveway to the front door of the model home and provide this as an option on all other units. j. Permeable Pavers – install permeable pavers at sidewalk to park shelter to decrease impervious surfaces and allow for groundwater recharge.

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4. Site Lighting: a. Install high efficiency LED street lights; limiting light pollution, lowering maintenance and operational costs for the City. b. Install solar pathway lighting; eliminating the operational costs to the HOA and eliminating infrastructure required in standard practices (trenching for conduits/piping). 5. Site furnishings: install park furniture made of recycled plastics, (ie picnic tables). 6. Community Garden plots: Promotes local food growth and community gathering space. 7. Walkable Streets: minimal distance between the sidewalk and most buildings, sidewalks along 100% of street length, elevated ground floors, low design speeds for most streets, minimal driveway crossings along sidewalks. 8. Neighborhood Connections: connections to existing bike/walking trails and neighborhood sidewalks. Also, no cul-de-sacs are encouraged. 9. Community participation: multiple forms of community feedback to guide the project through design, in accordance with the final approved PUD and plat plans. 10. Solar and Green Roofs: Install green roofs on park shelter and garden shed; install solar panels on the park shelter which can be used to power the bollards or other features in the common area. Excess electricity can be sold back to Xcel Energy and the proceeds from the sale can be used to offset Home Owners Association (HOA) costs. 11. Rain Barrels: Install at the park shelter and garden shed to capture excess rainwater and utilize in the garden plots. 12. Tot Lot – provide community gathering space for children 13. Site Signage: Install educational and interactive signage throughout public spaces of the development to inform residents, and community members, of the green strategies used. For example, create a sign by the rain garden that educates the importance and functions of these site features. We will work in partnership with the City, as they continue to educate residents of the importance of water resources, etc. 14. The developer shall provide as an option to potential buyers a floor plan providing single level living design. 15. Increase Green site features/benefits by increasing on-site storm water infiltration by the addition of bioswales and increased rain garden area, in accordance with the final approved PUD and plat plans.

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HOUSING PROJECT AGREEMENT THIS AGREEMENT, made as of the 14th day of July, 2014, by and between the Housing Redevelopment Authority in and for the City of Eden Prairie, Minnesota, a municipal corporation and political subdivision organized and existing under the Constitution and the laws of the State of Minnesota (the "HRA") and Eden Gardens, LLC, a Minnesota limited liability company (the "Developer"), WITNESSETH: WHEREAS, pursuant to Minn. Stat. 469.017, the HRA has the authority to complete a housing development project; WHEREAS, the HRA adopted H.R.A. Resolution No. 2014-01 at a duly noticed meeting on July 14, 2014. In H.R.A. Resolution No. 2014-01 the HRA found that there is a shortage of decent, safe, and sanitary housing for persons of moderate income and their families in the City and determined to carry out a housing development project to partially alleviate the shortage (the “Project”); WHEREAS, the property on which the Project will be constructed is located at the southwest corner of Eden Prairie Road and Scenic Heights Road as illustrated on attached Exhibit A (“Project Area”) and is legally described on attached Exhibit B. WHEREAS, the goals for the Project are to increase environmental sustainability/energy efficiency and single family housing affordability for moderate income individuals and their families. The intent of the Project is to create an environmentally sustainable single family neighborhood with implementation of “green” measures with 20 of the housing units to be sold to people with moderate incomes as defined below; WHEREAS, in order to ensure that the housing development project partially alleviates the shortage of moderate income housing, the HRA in H.R.A. Resolution No. 2014-01 established moderate income and affordability limits for the Project; WHEREAS, based on evidence presented by developers who responded to the Project Request for Proposals, in order to make the Project feasible and to provide the desired moderate income housing, the HRA has determined that 16 of the housing units in the Project may be sold at market rates. The market rate housing units shall be located on Lot 1, Block 1 and Lots 1-15, 1

Block 5, Eden Gardens. The remaining 20 housing units (collectively the “Moderate Income Units”) must be sold to people with incomes that fall within the range of the “Moderate Income Limits” (as defined below in Paragraph 1.B hereof) and at prices that fall within the range of “Affordable Housing Prices” (as defined below in Paragraph 1.C hereof), that are applicable at the time of such sale. The Moderate Income Units shall be located on Lots 1-5, Block 2, Lots 1-5, Block 3, and Lots 1-10, Block 4, Eden Gardens; and WHEREAS, the HRA adopted H.R.A. Resolution No. 2014-02 at a duly noticed public hearing on July 14, 2014. In H.R.A. Resolution No. 2014-02 the HRA approved the purchase and sale of the Project Area; set the estimated market value of the Project Area; and selected Developer to complete the Project subject to the condition that Developer and HRA enter into this Housing Project Agreement. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 1. Housing Criteria. The Project shall consist of 36 single family units. Twenty units shall be Moderate Income Units. The remaining 16 units may be sold at market rates. The size of the 20 Moderate Income Units shall range between 1600 and 2200 square feet above grade and the 16 market rate units shall range between 1600 and 2600 square feet above grade. Floor plans available for potential buyers shall include a one-level living floor plan option. The 20 Moderate Income Units shall be priced and sold based on the following calculations: A.

Project Feasibility. Based on evidence presented by developers who responded to the Project Request for Proposals, in order to make the Project feasible and to provide the desired moderate income housing, 16 of the housing units in the Project may be sold at market rates. The market rate units shall be built on Blocks 1 and 5 as shown on the Preliminary Plat of Eden Gardens. The 20 Moderate Income Units must be sold: (i) to people who qualify under the Moderate Income Limits set forth below in B; and (ii) at the Affordable Housing Prices set forth below in C.

B.

Moderate Income Limits. The U.S. Department of Housing and Urban Development annually determines the area median income for Hennepin County (“Area Median Income”). The Area Median Income is published annually in December for use in the following year. The HRA hereby determines that the moderate income limits for the Project (the “Moderate Income Limits”) shall be 80% to 120% of the Area Median Income. (For example, the Area Median Income for Hennepin County published in December 2013 for use in the year 2014 was $82,900. The moderate income limits for all Moderate Income Units sold in 2014 is $66,320 to $99,480.)

C.

Affordable Housing Prices. Based upon the Area Median Income the Minnesota Housing Finance Authority annually sets a loan limit for the 11-County Metro (“Area Affordable Price”). The Area Affordable Price is published in December for use in the following year. For purposes hereof, the affordable housing prices for persons of moderate income for the Project shall be 80% to 120% of the Area 2

Affordable Price (the “Affordable Housing Prices”) (For example, the Area Affordable Price published in December 2013 for use in the year 2014 was $310,000. Consequently, the Affordable Housing Prices for all Moderate Income Units sold in 2014 is $248,000 to $372,000.) 2. Minnesota’s Green Path Development Standards. The Developer shall construct the Project in a manner that meets Minnesota’s Green Path (“Green Path”) standards as required in the attached as Exhibit C. 3. Community Involvement. The Developer shall engage the community by involving Hennepin Technical College. Specifically, the Developer shall involve students through opportunities such as framing a home, learning how ‘green’ mechanical/electrical systems work or learning green techniques used in stormwater management. 4. Sale of the Project Area. For purposes of this Agreement, “sale” includes any transfer of a housing unit including but not limited to sale, conveyance, gift, and involuntary transfer. The Developer may not close on the sale of any Moderate Income Unit unless all of the following conditions have been met: A.

All infrastructure including streets, sanitary sewer, water, and storm sewer, but not including landscaping and the final wear course on streets and other items that cannot reasonably be completed due to winter weather conditions and that do not materially affect the use or function of such items of infrastructure, are substantially complete and accepted in writing by the City;

B.

All public space including common areas, parks and community buildings are complete and accepted in writing by the HRA;

C.

The residential structure on the lot to be sold has been issued a certificate of occupancy or temporary certificate of occupancy; and

D.

The sale has been approved in writing by the HRA prior to closing in order to ensure compliance with the terms of this Agreement. In order to request such approval for the sale of each Moderate Income Unit, Developer, or any subsequent owner that is selling a Moderate Income Unit, shall submit a complete application to the HRA for the sale of each Moderate Income Unit in such form and substances as required by the HRA, which shall include at a minimum all information required by the HRA to verify the income of the prospective purchaser. Upon receipt of a complete application the HRA shall inform the Developer or other requesting party, in writing and within five business days, whether the application is approved. If the HRA fails to respond to a complete application within five business days, the application will be deemed approved.

5. Initial Sale of Housing Units by Developer. Initial sale of Moderate Income Units by the Developer shall comply with the income and pricing requirements set forth in Paragraph 1. In addition, during the Preference Period, the initial sale of all housing units by the Developer shall 3

give preference to prospective buyers who live or work in the City of Eden Prairie. During the Preference Period, Developer shall market to residents and employees of Eden Prairie businesses and permit those who live or work within the City of Eden Prairie to have the first opportunity to sign a purchase agreement for their desired lot, or if no specific lot is specified, for a lot within the Project. As used herein, the phrase “Preference Period” shall refer to the period of time that elapses between the date hereof and the 180th day after the date of the issuance of the first building permit for the Project. 6. Future Sale of Housing Units. After the initial sale of any Moderate Income Unit by the Developer, the seller in any subsequent sale of a Moderate Income Unit that consists of a “Non-Qualifying Sale” and that is closed within 10 years of the date of the initial sale by the Developer of the subject Moderate Income Unit, shall remit the “Applicable Portion of the Profit” received by such seller in such transaction to the City for reinvestment in low and moderate income housing initiatives. As used herein, the phrase “Non-Qualifying Sale” shall be defined as the sale of a Moderate Income Unit that is closed within 10 years of the date of the initial sale of such Moderate Income Unit by the Developer and that is made either: (i) to a buyer that has income in excess of the Moderate Income Limits or (ii) at a price that is in excess of the Affordable Housing Prices, both as measured in the year in which the closing of such sale of the Moderate Income Unit occurs. The Seller of any Moderate Income Unit may apply to the HRA pursuant to Paragraph 4.D hereof for a determination that a prospective sale of such Moderate Income Unit shall not constitute a Non-Qualifying Sale. As used herein, the phrase “Applicable Portion of the Profit” shall refer to the portion designated pursuant to the chart set forth below in Paragraph 6.B. A.

Profit. The “Profit” from the subsequent sale of a Moderate Income Unit shall be defined as the funds received by the seller from the buyer at the closing of such sale, after deduction of the sum of the following: (i) all costs and fees listed on the settlement statement (which costs shall include any park dedication fee paid pursuant to Paragraph 7 hereof), excluding amounts necessary to satisfy any mortgages recorded against the property; (ii) the amount of the seller’s basis in the Moderate Income Unit as of the date of its acquisition thereof; plus (iii) the cost of improvements made by the seller as defined in IRS publication 523 which increase the seller’s basis in the Moderate Income Unit.

B.

Remittance. The amount of any “profit” that is required to be remitted to the City by the seller of a Moderate Income Unit in a Non-Qualifying Sale shall be as follows: Time elapsed since the date of the initial purchase of the housing unit from the Developer Less than 1 year At least 1 year but less than 2 years At least 2 years but less than 3 years At least 3 years but less than 4 years At least 4 years but less than 5 years At least 5 years but less than 6 years 4

Profits to be remitted to City 90% 80% 70% 60% 50% 40%

At least 6 years but less than 7 years At least 7 years but less than 8 years At least 8 years but less than 9 years At least 9 years but less than 10 years

30% 20% 10% 5%

Regardless of the number of times a Moderate Income Unit is sold, the requirements of this Paragraph 6 shall apply to any subsequent sale of such Moderate Income Unit that consists of a Non-Qualifying Sale and shall be based on the amount of time that has elapsed from the date of the initial sale of the housing unit by the Developer; provided, however, the provisions of this Paragraph 6 shall not be applicable to any sale of any Moderate Income Unit that closes at any time subsequent to the 10th anniversary of the closing of the initial sale of such Moderate Income Unit by the Developer. 7. Park Dedication Fee. The park dedication fee of $6,500.00 per unit shall be waived for each Moderate Income Unit; provided, however, if any closing upon the sale of a Moderate Income Unit in a Non-Qualifying Sale occurs at any time within 10 years of the date of the initial sale of the Moderate Income Unit by the Developer, the waiver of the park dedication fee for that Moderate Income Unit shall be revoked and such park dedication fee in the amount of $6,500.00 shall be due and payable at the time of the closing of such Non-Qualifying Sale. 8. Bond. Prior to issuance of any grading or building permits for the Project Area, Developer shall provide to the HRA a bond equal to $100,000 to secure the Developer’s obligations pursuant to this Agreement, including to reimburse the HRA for costs, including reasonable attorney fees, incurred by the HRA in any action to enforce or interpret the provisions of this Agreement (the “Security”). The HRA may draw down on or make a claim against the Security, as appropriate, upon five (5) business days’ notice to the Developer, for any violation of the terms of this Agreement or if the Security is allowed to lapse prior to the end of the required term. If the Security has not then been renewed, replaced or otherwise extended beyond the expiration date, the HRA may also draw down or make a claim against the Security as appropriate. If the Security is drawn down on or a claim is made against the Security, the proceeds shall be used to cure the default(s) and to reimburse the HRA for all costs and expenses, including attorneys’ fee, incurred by the HRA in enforcing this Agreement. Any amount of the Security that is drawn by the HRA shall be held by the HRA in trust and disbursed only if, and to the extent, that the Security may be disbursed hereunder. Developer shall be released from any further obligation to maintain the Security and all amounts of such Security that may then exist shall be released to Developer upon the earlier of the following: (i) the sale of all Moderate Income Units by the Developer; or (ii) the termination of Developer’s obligations to sell the Moderate Income Units as set forth in Paragraph 12 below. 9. warranties: A.

Developer Warranties.

Developer makes the following representations and

The Developer is a Minnesota limited liability company, has power to enter into this Agreement and to perform its obligations hereunder and, by doing so, is not in violation of any provisions of its articles of organization, operating agreement or member control agreement or the laws of the State. 5

B.

The Developer has obtained funds sufficient for the acquisition or construction of the Project.

C.

The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement is not prevented, limited by or conflicts with (unless all necessary waivers, consents or the like have been obtained) or results in a breach of, material terms, conditions or provision of any contractual restriction, evidence of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which they are bound, or constitutes a material default under any of the foregoing.

10. City Development Agreement. Prior to issuance of any grading or building permits for the Project Area, Developer shall enter into a Development Agreement with the City of Eden Prairie with respect to the Project and such Development Agreement shall be recorded against the Project Area. 11. Revision of Limits and Prices. If there are no prospective purchasers for any of the Moderate Income Units within six months following the issuance of the first building permit for the Project and upon written request of the Developer, the HRA shall revise the Moderate Income Limits and Affordable Housing Prices. 12. Moderate Income Units. Notwithstanding any contrary provision herein, the Developer’s obligation to sell the Moderate Income Units subject to the requirements in Paragraph 1, and the conditions applicable to the Developer’s sale of any Moderate Income Units in Paragraph 4, shall terminate upon the earlier of: (i) no Moderate Income Units have sold within 36 months following the issuance of the first building permit for the Project; or (ii) no Moderate Income Units have sold in the previous 12 months. Developer shall submit to the HRA evidence substantiating such lack of sales and the HRA shall execute an amendment to this Agreement terminating the obligation in Paragraph 1 and conditions in Paragraph 4. Upon such termination, the provisions of Paragraph 6 shall be deemed terminated with respect to any unsold Moderate Income Units, the waiver of the park dedication fee for unsold Moderate Income Units set forth in Paragraph 7 shall be revoked and the park dedication fee for all unsold Moderate Income Units shall become immediately due and payable by the Developer. Any Moderate Income Units which have been sold prior to termination shall remain subject to Paragraphs 6 and 7. All obligations in this Agreement not specifically amended or terminated by this Paragraph shall survive, including but not limited to applicable provisions concerning the remittance of a portion of “Profits” set forth in Paragraph 6 for Moderate Income Units sold prior to such termination. 13. Binding. This Agreement shall be recorded against the Project Area. Provisions of this Agreement shall be binding upon and enforceable as real covenants that “run” with the title to all lots within the Project Area, and shall also be enforceable against, and inure to the benefit of the HRA and the Developer; provided, however, and notwithstanding any contrary provision herein, although the provisions of Paragraphs 6 and 7 herein constitute real covenants that run with title to the Moderate Income Units and that are enforceable against future owners of Moderate Income 6

Units to the extent provided therein, Developer shall have no personal obligation to perform any of the covenants of Paragraphs 6 and 7 hereof, provided the Developer is not the seller in any transaction that constitutes a Non-Qualifying sale. 14. Remedies. Developer acknowledges, on its own and for all successors and assigns, that the rights of HRA to perform the obligations of Developer contemplated in this agreement are special, unique, and of an extraordinary character, and that, in the event that Developer violates, or fails, or refuses to perform any covenant, condition, or provision made herein, HRA may be without an adequate remedy at law. Developer agrees, therefore, that in the event Developer violates, fails, or refuses to perform any covenant, condition, or provision made herein, HRA may, at its option, institute and prosecute an action to specifically enforce such covenant, to enjoin conduct or activities that violate the terms hereof, withhold building permits, or seek any other remedy available at law or in equity. In the event of any litigation between the HRA and Developer to enforce or interpret the provisions hereof in which the HRA is the prevailing party, the HRA shall be entitled to an award requiring Developer to reimburse the HRA for all of its costs and expenses in such action, including reasonable attorneys’ fees. No remedy conferred in this agreement is intended to be exclusive and each shall be cumulative and shall be in addition to every other remedy. The election of any one or more remedies shall not constitute a waiver of any other remedy. 15. No HRA Liability. No failure of the HRA to comply with any term, condition, covenant or agreement herein shall subject the HRA to liability for any claim for damages, costs or other financial or pecuniary charges. No execution on any claim, demand, cause of action or judgment shall be levied upon or collected from the general credit, general fund or taxing powers of the HRA. 16. Recording. This Agreement shall be recorded at the County Recorder and / or Registrar of Titles at the closing of the Developer’s purchase of the Project Area from the HRA. This Agreement shall be recorded after the deed from the HRA to Developer and prior to any mortgages or encumbrances. No land alteration or building permits for the Project Area shall be issued until proof of filing of the Agreement is submitted to the HRA. 17. Right of Entry. The Developer hereby grants to the HRA and the City of Eden Prairie, their agents, employees, officers and contractors a license to enter the Project Area to perform all work and inspections deemed appropriate by the HRA or City in conjunction with this Agreement. 18. No Third Party Beneficiaries. Except with respect to Developer, the HRA, and the covenants hereof that “run” with title to the lots within the Project pursuant to Paragraph 13 hereof, no provision of this Agreement inures to the benefit of any third person, including the public at large, so as to constitute any such person as a third-party beneficiary of the Agreement or of any one or more of the terms hereof, or otherwise give rise to any cause of action for any such person. IN WITNESS WHEREOF, the parties to this Agreement have caused these presents to be executed as of the day and year aforesaid. [signatures on following pages] 7

HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE

By___________________________ Nancy Tyra-Lukens Its Chair

By____________________________ Rick Getschow Its Executive Director

STATE OF MINNESOTA COUNTY OF HENNEPIN

) ) ss. )

The foregoing instrument was acknowledged before me this 14th day of July, 2014, by Nancy Tyra-Lukens and Rick Getschow, respectively the Chair and Executive Director of the Housing and Redevelopment Authority in and for the City of Eden Prairie, on behalf of said authority.

_________________________________________ Notary Public

8

EDEN GARDENS, LLC By ________________________________ Matthew Hanish Vice President

STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN

Date: ____________________

) )

The foregoing instrument was acknowledged before me this ____ day of ____________, 2014, Matthew Hanish, the Vice President, of Eden Gardens, LLC, a Minnesota limited liability company, on behalf of the company.

______________________________ Notary Public

THIS INSTRUMENT WAS DRAFTED BY: Gregerson, Rosow, Johnson & Nilan, LTD 650 Third Ave S, Suite 1600 Minneapolis, MN 55376

9

EXHIBIT A TO TO HOUSING PROJECT AGREEMENT Depiction of Project Area

10

EXHIBIT B TO HOUSING PROJECT AGREEMENT Legal Description of Project Area

11

12

To be platted as: Lot 1, Block 1; Lots 1-5, Block 2; Lots 1-5, Block 3; Lots 1-10, Block 4; Lots 1-15, Block 5; and Outlots A, B, C, D, E, F, and G, Eden Gardens, Hennepin County.

13

EXHIBIT C TO HOUSING PROJECT AGREEMENT

Green Features and Sustainable Neighborhood Items

1. Green Path advanced certified homes: efficient windows, insulation improvements, high efficiency HVAC systems, high efficiency appliances and efficient lighting systems, etc. Eden Gardens will be the first development wide effort, in the state, to build all homes to Green Path Advanced Certification. 2. Homes: a. Build all homes to be ‘solar ready’, allowing residents an easy retrofit for solar panels. b. Rough in electric, in garages, required for electric car chargers. c. Offer sun tunnels as an option. d. The model home will have a solar feature installed to display the possible solar options for future residents. The solar feature will consist of either a solar PV panel (electricity) or a solar hot water panel system to heat the homes water. Solar options will be available on all homes. e. Use of low VOC paints and use of recycled materials/products where possible. 3. Low impact Site development strategies a. Reduce impervious surfaces; narrower street sections, in accordance with the final approved PUD and plat plans b. Reduce stormwater runoff and manage via rain gardens and bio-swales, in accordance with the final approved PUD and plat plans. Keep all stormwater mgmt on site; not utilizing MnDOT pond or other regional ponding. c. Reduce storm sewer piping and ponding, in accordance with the final approved PUD and plat plans. d. Shade streets to minimize the heat island effect. e. Compact Development decreases urban sprawl. f. Use of eco-lawns (no-mow) in central green space, landscaped outlots and for all lawn areas of all home lots; eliminating dependency on irrigation and minimizing need for mowing. g. Utilization of native landscaping in accordance with City’s native plant ordinance throughout development and no plantings that contain neonicotanoids. Drought tolerant plantings will require no irrigation; as well as low maintenance needs and costs to the HOA. h. Reduce impervious surfaces through eliminating some alleyways. i. Increase the amount of pervious surfaces. Install pervious surface sidewalks from the driveway to the front door of the model home and provide this as an option on all other units. j. Permeable Pavers – install permeable pavers at sidewalk to park shelter to decrease impervious surfaces and allow for groundwater recharge. 14

4. Site Lighting: a. Install high efficiency LED street lights; limiting light pollution, lowering maintenance and operational costs for the City. b. Install solar pathway lighting; eliminating the operational costs to the HOA and eliminating infrastructure required in standard practices (trenching for conduits/piping). 5. Site furnishings: install park furniture made of recycled plastics, (ie picnic tables). 6. Community Garden plots: Promotes local food growth and community gathering space. 7. Walkable Streets: minimal distance between the sidewalk and most buildings, sidewalks along 100% of street length, elevated ground floors, low design speeds for most streets, minimal driveway crossings along sidewalks. 8. Neighborhood Connections: connections to existing bike/walking trails and neighborhood sidewalks. Also, no cul-de-sacs are encouraged. 9. Community participation: multiple forms of community feedback to guide the project through design, in accordance with the final approved PUD and plat plans. 10. Solar and Green Roofs: Install green roofs on park shelter and garden shed; install solar panels on the park shelter which can be used to power the bollards or other features in the common area. Excess electricity can be sold back to Xcel Energy and the proceeds from the sale can be used to offset Home Owners Association (HOA) costs. 11. Rain Barrels: Install at the park shelter and garden shed to capture excess rainwater and utilize in the garden plots. 12. Tot Lot – provide community gathering space for children 13. Site Signage: Install educational and interactive signage throughout public spaces of the development to inform residents, and community members, of the green strategies used. For example, create a sign by the rain garden that educates the importance and functions of these site features. We will work in partnership with the City, as they continue to educate residents of the importance of water resources, etc. 14. The developer shall provide as an option to potential buyers a floor plan providing single level living design. 15. Increase Green site features/benefits by increasing on-site storm water infiltration by the addition of bioswales and increased rain garden area, in accordance with the final approved PUD and plat plans.

15