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