PRILIMINARY OFFIC STATEMENT 11-15-2001 44.

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Purchase and Lease of Land The Borrower has entered into a Real Estate Purchase Agreement (the "Purchase Agreement") with Union Land, LLC, a Minnesota limited liability company(the "Seller"), to purchase for$822,000,simultaneously with the completion of financing contemplated by this Official Statement,the land upon which the Project will be constructed. The Purchase Agreement contains a number of contingencies, including the issuance of the Series 2001 Bonds by the City. The Borrower shall convey fee simple title to the land to the Orono Housing and Redevelopment Authority(the "HRA") in consideration of the issuance of the TIF Note. The HRA will lease the land to the Borrower pursuant to the Ground Lease. Project Location The Project is located on an approximately 4.04 acre site in Orono, Minnesota. Direct access to the Project will be via Highway 12 and Brown Avenue. The access drive from Highway 12 splits, providing access to both the proposed Project and the office building. The drive from Brown Avenue provides access to the Project from that street. The Project is located on the eastern edge of Orono,which is on the western end of downtown Long Lake, a small commercial center serving the local area. The Project will have access to and from the overall Twin Cities Metropolitan Area and its freeway system due to its frontage on Highway 12. Highway 12 becomes Interstate-394 at the interchange with Interstate-494, five miles east of the Project. From there, the rest of the Twin Cities' freeway system is accessible. The Minnesota Department of Transportation plans to improve the capacity of Highway 12 through the construction of a by-pass through Long Lake and Orono. The plan calls for a two-lane controlled by-pass to be located two blocks south of the existing road. The highway by-pass project is expected to be completed in fiscal year 2004. The impact of the highway reroute is significant,as the daily traffic count passing in front of the Project will be greatly reduced. The Project is surrounded to the east and west predominantly by strip highway development,ranging from auto and truck repair to retail/service uses. Single-family homes are found to the north of the Project, situated on large, wooded lots. Construction of Project Facilities Construction of the Project is expected to commence in November, 2001 and is expected to be completed on or about November 1, 2002 (with the exception of certain seasonal punch-list construction items). Frana and Sons, Inc., Hopkins, Minnesota, is the general contractor and is responsible for the completion of the Project. Miller, Hanson, Westerbeck, Berger, Inc., Minneapolis, Minnesota, is the architect for the Project.