Loading...
HomeMy WebLinkAbout5.b. Waterford Commons4ROSEMOUNTEXECUTIVE SUMMARY PORT AUTHORITY Port Authority Date: July 16, 2013 AGENDA SECTION: AGENDA ITEM: Waterford Commons New Business PREPARED BY: Kim Lindquist, Deputy Director AGENDA NO. 5.b. ATTACHMENTS: Estoppel Certificate, HUD Amendment to APPROVED BY: Contract for Private Redevelopment D 6J RECOMMENDATION: Motion to Approve the Estoppel Certificate and HUD Amendment to Contract for Private Redevelopment. ISSUE The owner of Waterford Commons is refinancing the project through HUD. With that change there are some documents that HUD is requiring the City sign off on. The first request is the Estoppel Certificate which is similar to the Certificate of Completion that was contemplated as part of the Contract for Private Redevelopment. The second request is the Amendment to Contract for Private Redevelopment. This document means that if the owner defaults, HUD wants to be able to take over without any residual obligations if they foreclose. Most likely this document language is non - negotiable. The City Attorney's office has reviewed the document and is comfortable with a portion of the document. The one area of potential concern is if the agreement jeopardizes any city financing. City staff doesn't believe so as the TIF functions as a pay as you go. However, it would be prudent to have the bond consul review the document prior to final action. Unfortunately the attorney is on vacation this week but back in the office the week of the 15`h. Staff is hopeful that the review can be completed prior to the Port Authority meeting on Tuesday night. The owner is hoping to close on the refinancing in early August. RECOMMENDATION Motion to Approve the Estoppel Certificate and HUD Amendment to Contract for Private Redevelopment. THIS INSTRUMENT WAS DRAFTED BY: Winthrop & Weinstine, P.A. 225 South Sixth Street, Suite 3500 Minneapolis, Minnesota 55402 -4629 ESTOPPEL CERTIFICATE THIS ESTOPPEL CERTIFICATE ( "Certificate ") is made by THE CITY OF ROSEMOUNT, MINNESOTA (the "City ") to DOUGHERTY MORTGAGE LLC, a Delaware limited liability company (the "Lender ") with respect to the property located in the County of Dakota, State of Minnesota and more particularly described in Exhibit A attached hereto (the "Property "). The undersigned hereby attests, affirms and certifies that: (a) The Property is subject to (i) that certain Declaration of Covenants and Restrictions, Town Centre Planned Unit Development Agreement, dated as of April 21, 2008 by 146th Street Partners, LLC, the general partner of 146th Street Partners, Limited Partnership ( "Owner ") and the City, recorded in the Office of the Recorder, Dakota County, Minnesota on January 23, 2009 as Document No. 2632234, and (ii) that certain Declaration of Covenants and Restrictions, Waterford Commons Planned Unit Development Agreement, dated as of December 30, 2008, recorded in the Office of the Recorder, Dakota County, Minnesota on February 4, 2009 as Document No. 2635223, as amended by that certain Amendment to the Waterford Commons Planned Unit Development dated as of January 20, 2009, recorded in the Office of the Recorder, Dakota County, Minnesota on February 4, 2009 as Document No. 2635224, as further amended by that certain Amendment to the Waterford Commons Planned Unit Development Approving Projecting Signs for the Commercial Tenant Spaces, dated as of April 20, 2010, recorded in the Office of the Recorder, Dakota County, Minnesota on May 10, 2010 as Document No. 2729297 (collectively, the "Declarations "). (b) To the best of the City's knowledge, the Owner has satisfied all requirements for construction of the improvements on the Property as set forth in the Declarations. (c) To the best of the City's knowledge, the Borrower is not currently in default on any of its maintenance or any other obligations under the Declarations. 2. The City makes the statements contained in this Certificate with the understanding that Lender intends to rely upon this Certificate and the undersigned agrees that it may so rely. [Signature Page Follows] 2 Dated as of _, 2013. THE CITY OF ROSEMOUNT, MINNESOTA By: Name: Title: STATE OF MINNESOTA COUNTY OF This instrument was acknowledged before me this , the MINNESOTA, on behalf of the City. day of , 2013, by of THE CITY OF ROSEMOUNT, Notary Public Printed Name: My Commission Expires: EXHIBIT A Legal Description of the Project Lot 1, Block 1; and Lot 1, Block 2, Waterford Commons, Dakota County, Minnesota so77a27vi HUD AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT This HUD AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT ( "Amendment ") is made as of August 1, 2013, by 146TH STREET PARTNERS, LIMITED PARTNERSHIP, a Minnesota limited partnership (`Borrower ") and the ROSEMOUNT PORT AUTHORITY, a public body corporate and politic under the laws of the State of Minnesota ( "Authority "). WHEREAS, Borrower has obtained financing from Dougherty Mortgage LLC ( "Lender ") for the benefit of the project known as Waterford Commons, Project No. 092 - 11355, more particularly described on Exhibit A, attached hereto and made a part hereof ( "Project "), which loan is secured by a Multifamily Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of August 1, 2013, and recorded in the Office of County Recorder, County of Dakota, Minnesota, on August _, 2013, as Document No. ( "Security Instrument "), and is insured by the United States Department of Housing and Urban Development ( "HUD "); and WHEREAS, Stonebridge Development and Acquisition, LLC, a Minnesota limited liability company, and the Authority entered into that certain Contract for Private Redevelopment recorded in the Office of the County Recorder, County of Dakota, Minnesota, on May 21, 2008, as Document No. 2591977, as amended by that certain First Amendment to Contract for Private Redevelopment dated as of March 19, 2008, recorded in the Office of the County Recorder, County of Dakota, Minnesota, on May 21, 2008, as Document No. 2591978, as assigned to Borrower and further amended in that certain Agreement for Assignment of Contract for Private Redevelopment and First Amendment Thereto, dated as of May 21, 2008, and recorded in the Office of County Recorder, County of Dakota, Minnesota, on May 21, 2008, as Document No. 2591979, and as further amended in that certain Second Amendment to Contract for Private Redevelopment dated as of June 6, 2008 and recorded in the Office of County Recorder, County of Dakota, Minnesota, on June 18, 2008, as Document No. 2597520 (collectively, "Restrictive Covenants "); and WHEREAS, HUD requires as a condition of its insuring Lender's financing to the Project, that the covenants of the Restrictive Covenants be subordinated to the lien, covenants, and enforcement of the Security Instrument; and WHEREAS, the Authority has agreed to subordinate the Restrictive Covenants to the lien of the Mortgage Loan in accordance with the terms of this Amendment. NOW, THEREFORE, in consideration of the foregoing and for other consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1. In the event of any conflict between any provision contained elsewhere in the Restrictive Covenants and any provision contained in this Amendment, the provision contained in this Amendment shall govern and be controlling in all respects as set forth more fully herein. 2. HUD - Required Provisions: The Restrictive Covenants are hereby amended by adding Article X as follows: "ARTICLE X HUD - Required Provisions (a) The following defined terms shall have the meanings set forth below: "Code" means the Internal Revenue Code of 1986, as amended. "HUD" means the United States Department of Housing and Urban Development. "HUD Regulatory Agreement means the Regulatory Agreement between Borrower and HUD with respect to the Project, as the same may be supplemented, amended or modified from time to time. "Lender" means Dougherty Mortgage LLC, its successors and assigns. "Mortgage Loan" means the mortgage loan made by Lender to the Borrower pursuant to the Mortgage Loan Documents with respect to the Project. "Mortgage Loan Documents" means the Security Instrument, the HUD Regulatory Agreement and all other documents required by HUD or Lender in connection with the Mortgage Loan. "National Housing Act" means the National Housing Act of 1934, as amended. "Program Obligations" has the meaning set forth in the Security Instrument. "Residual Receipts" has the meaning specified in the HUD Regulatory Agreement. "Security Instrument" means the mortgage or deed of trust from Borrower in favor of Lender, as the same may be supplemented, amended or modified. "Surplus Cash" has the meaning specified in the HUD Regulatory Agreement. (b) Notwithstanding anything in the Restrictive Covenants to the contrary, the provisions hereof are expressly subordinate to (i) the Mortgage Loan Documents, including without limitation, the Security Instrument, and (ii) Program Obligations (the Mortgage Loan Documents and Program Obligations are collectively referred to herein as the "HUD Requirements "). Borrower covenants that it will not intentionally take or permit any action that would result in a violation of the Code, HUD Requirements or Restrictive Covenants. In the event of any conflict between the provisions of the Restrictive Covenants and the provisions of the HUD Requirements, HUD shall be and remains entitled to enforce the HUD Requirements. Notwithstanding the foregoing, nothing herein limits the Authority's ability to enforce the terms of the Restrictive Covenants, provided such terms do not conflict with statutory provisions of the National Housing Act or the regulations related thereto. The Borrower represents and warrants that to the best of Borrower's knowledge, without inquiry, the Restrictive Covenants impose no terms or requirements that conflict with the National Housing Act and related regulations, on the date of this Amendment. (d) In the event of foreclosure (or deed in lieu of foreclosure), the Restrictive Covenants (including without limitation, any and all land use covenants and/or restrictions contained herein) shall automatically terminate. (e) Borrower and the Authority acknowledge that Borrower's failure to comply with the covenants provided in the Restrictive Covenants does not and shall not serve as a basis for default under the HUD Requirements, unless a default also arises under the HUD Requirements. (f) Except for the Authority's reporting requirements, in enforcing the Restrictive Covenants the Authority will not file any claim against the Project, the Mortgage Loan proceeds, any reserve or deposit required by HUD in connection with the Security Instrument or HUD Regulatory Agreement, or the rents or other income from the property other than a claim against: i. Available surplus cash, if the Borrower is a for - profit entity; ii. Available distributions of surplus cash and residual receipts authorized for release by HUD, if the Borrower is a limited distribution entity; or iii. Available residual receipts authorized by HUD, if the Borrower is a non - profit entity. (g) For so long as the Mortgage Loan is outstanding, Borrower and the Authority shall not further amend the Restrictive Covenants, with the exception of clerical errors or administrative correction of non - substantive matters, without HUD's prior written consent. (h) Subject to the HUD Regulatory Agreement, the Authority may require the Borrower to indemnify and hold the Authority harmless from all loss, cost, damage and expense arising from any claim or proceeding instituted against the Authority relating to the subordination and covenants set forth in the Restrictive Covenants, provided, however, that Borrower's obligation to indemnify and hold the Authority harmless shall be limited to available surplus cash and /or residual receipts of the Borrower." 3. No Defaults. By executing below, the Authority hereby confirms that, to best of its knowledge, there is no current default with respect to the Borrower's obligations under the Restrictive Covenants. IN WITNESS WHEREOF, the parties hereto have caused this HUD AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT to be effective as of the date and year first above written. 146TH STREET PARTNERS, LIMITED PARTNERSHIP, a Minnesota limited partnership By: 146TH Street Partners, LLC, a Minnesota limited liability company Its: General Partner go Its: STATE OF MINNESOTA ) SS COUNTY OF DAKOTA ) Wallace T. Johnson Chief Manager The foregoing instrument was acknowledged before me this day of , 20135 by Wallace T. Johnson, the Chief Manager of 146th Street Partners, LLC, a Minnesota limited liability company, the general partner of 146th Street Partners, Limited Partnership, a Minnesota limited partnership. NOTARY PUBLIC AUTHORITY: ROSEMOUNT PORT AUTHORITY, a public body corporate and politic under the laws of the State of Minnesota Name: Its: STATE OF MINNESOTA ) )ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 2013, by , the of the Rosemount Port Authority, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the Authority. NOTARY PUBLIC THIS INSTRUMENT WAS DRAFTED BY: Winthrop & Weinstine P.A. (MLW) 225 South Sixth Street, Suite 3500 Minneapolis, MN 55402 EXHIBIT A Legal Description of the Project Lot 1, Block 1; and Lot 1, Block 2, Waterford Commons, Dakota County, Minnesota 8076039v1