HomeMy WebLinkAboutContract 22752275
FOURTH AMENDMENT TO
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made on or as of the 2nd day of March 2010, by and between
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, COLUMBIA HEIGHTS,
MINNESOTA, a public body corporate and politic (the "Authority"), established pursuant to
Minnesota Statutes, Sections 469.090 to 469.1081 (hereinafter referred to as the "Act"), and
GRAND CENTRAL PROPERTIES, LLC, a Minnesota limited liability company (the
"Redeveloper").
WHEREAS, the Authority and New Heights Development, LLC entered into that certain
Contract for Private Redevelopment dated as of September 22, 2003, as amended by a First
Amendment thereto dated April 26, 2005 and by a Second Amendment thereto dated November 22,
2005 and a Third Amendment thereto dated August 28, 2007 (the "Contract") providing for the
redevelopment of certain property described as the Redevelopment Property in the Contract and
described in Schedule A attached hereto; and
WHEREAS, New Heights Development, LLC has changed its legal name to Grand Central
Properties, LLC but in all respects remains the Redeveloper under the Contract; and
WHEREAS, Redeveloper sold a portion of the Redevelopment Property defined as Outlot C,
Grand Central Lofts, Anoka County, Minnesota (which property constitutes the Commercial Property
as originally defined in the Contract); and
WHEREAS, the Authority and Redeveloper have determined to modify their respective
obligations under the Contract as further provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does Hereby covenant and agree witl-i the other as follows:
a n y y r. a_ ~ n .~ ~ . a c° g
1 . Jectloil 1. d of Li1C l.OntrtLct is a111e11Ued to revise ee1La1I-1 Ue11111L1lJlls a o110WS:
The terms "Commercial Nate," "Commercial Improvements," "Initial Authorizing
Resolution," and "Second Authorizing Resolution" are deleted.
"Available Tax Increment" means 90 percent of the Tax Increment attributable to the
Housing Property received by the Authority in the six-month period before each February 1 and
August 1.
"Commercial Property" means as Outlot C, Grand Central Lofts, Anoka County, Minnesota.
"Contract" means the Contract for Private Redevelopment between the Authority and
Redeveloper dated as of September 22, 2003, as amended by a First Amendment thereto dated
Apri126, 2005 and by a Second Amendment thereto dated November 22, 2005 and by a Third
Amendment thereto dated August 28, 2007, and by this Fourth Amendment.
336927v(4 SJB CL205-20
"Fourth Amendment" means this Fourth Amendment to the Contract.
"Housing Improvements" means the construction by the Redeveloper on the Housing Property
of the following residential housing: at least 67 owner-occupied condominium units and 10 town
homes ("Phase I"); at least 80 but no more than 100 units in one building ("Phase II"); and at least 80
but no more than 100 additional units in a second building ("Phase III").
"Housing Property" means the property described in Schedule A hereto, which supersedes
Schedule A in the original Contract.
"Minimum Improvements" means the Housing Improvements and the Site Improvements.
"Phase" means a phase of the Housing Improvements as described in the definition of Housing
Improvements hereunder.
"Sewer Improvements" means the improvements described in Schedule B attached to this
Fourth Amendment.
"Site Improvements" means the work on the Housing Property described in Schedule C.
2. Section 3.3 is modified to read as follows:
Section 3.3. Public Redevelopment Costs. The parties acknowledge that Redeveloper
completed the activities described as Public Redevelopment Costs in the original Contract. However,
the parties have determined that, in consideration of the Authority's agreement to undertake the Sewer
Improvements (described in Section 3.4) and the modification of the Redeveloper's obligation
regarding construction of the Minimum Improvements (described in Section 4.3}, the Authority will
not reimburse Public Redevelopment Costs through issuance of a Housing Note, but instead will apply
Available Tax Increment to finance the cost of Sewer Improvements, ail as further desc~~ibed in
Section 3.4 hereof.
Section 3.4 is modified to read as follows:
Section 3.4. Financing of Sewer Improvements. (a) The parties agree that the Authority will
cause the City to construct, at the cost of the City or Authority, the Sewer Improvements described in
Schedule B. The Sewer Improvements consist of work to increase capacity in the sewer mains that
serve the Housing Property (and other nearby property), which is necessary in order to accommodate
Phases II and III of the Housing Improvements. The Authority will cause the Sewer Improvements to
be constructed in a timely manner that permits development of Phase II in accordance with the
schedule described in Section 4.3 hereof.
(b) In consideration of assuming the obligation to construct the Sewer Improvements, the
Authority will retain all Available Tax Increment in order to pay (on behalf of the City) for the cost of
the Sewer Improvements. The Authority reasonably expects that it has Available Tax Increment on
hand in the amount necessary to pay the cost of the Sewer Improvements. The Redeveloper
336927v l4 SJB CL205-20 2
acknowledges that the Authority will not issue any Housing Note to Redeveloper, and Redeveloper
releases ail right, title and interest it has or had (under the original Contract), in the Housing Note and
in all Available Tax Increment.
(c) The parties agree and understand that the City's financing of the Sewer Improvements
is not a "business subsidy" within the meaning of the Business Subsidy Act, because the Sewer
Improvements will primarily benefit the Housing Improvements at the time the Sewer Improvements
are constructed, and assistance to housing is excluded from the definition of a subsidy under Business
Subsidy Act.
4. The parties agree and understand that (a) Sections 3.5 and 3.6 of the Contract have
been assigned to another entity, and Section 3.7 has expired in accordance with its terms; and (b)
neither the Authority nor Redeveloper have any obligations to each other under Sections 3.5, 3.6 or
3.7.
5. In accordance with Section 3.9 of the Contract, Redeveloper acknowledges its
continued responsibility to pay Administrative Costs related to this Fourth Amendment. The
Authority acknowledges that Redeveloper has no liability for Administrative.. Costs reasonably
allocated to the Commercial Property and the Commercial Improvements.
6. Sections 4.1(b) and (c) of the Contract are revised to read as follows:
(b) The Redeveloper must prepare plans and specifications for and construct all streets and
associated traffic improvements, sewer, water, storm sewer improvements, sidewalks, landscaping,
open space and related amenities located within or serving the Housing Property (collectively, the
"Public Improvements"), all in accordance with the Planning Contract. Notwithstanding anything to
the contrary herein, the term Public Improvements does not include the Sewer Improvements, which
remain the obligation of the Authority as described in Section 3.4; and does not include the Site
Improvements described in Schedule C. That is, the parties agree and understand that Public
Improvements will be specified in the Planning Contract related to Phase II and Phase IiI, respectively,
as these phases move forward. Before commencing construction of Public Improvements, the
Redeveloper must submit puns and specifications regarding the Public improvements for approval by
the City substantially in accordance with procedures for Constructian Plans described in Section 4.2.
All work on the Public Improvements shall be in accordance with the approved construction plans and
shall comply with all City requirements regarding such improvements. The parties agree and
understand that the City will accept the improvements in accordance with City procedures and the
Planning Contract.
(c) The parties agree and understand that Redeveloper previously submitted to the City a
letter of credit to secure performance of the Public Improvements and the Sewer Improvements (both
of which were the responsibility of Redeveloper under the original Contract). Upon execution of this
Agreement, the Authority will cause the City to release the existing letter of credit in exchange for
delivery by Redeveloper of a substitute letter of credit in the amount of $75,000, which amount the
Authority determines is necessary to secure completion of the Site Improvements described in
Schedule C. Further, upon completion (as determined by the Authority Representative} of all the Site
Improvements that must be completed in 2010 under Schedule C, the Authority will cause the City to
336927v14 S.IB CL205-20 3
release the $75,000 letter of credit in exchange for delivery by Redeveloper of a substitute letter of
credit in the amount of $25,000 which amount is necessary to secure completion of the Site
Improvements remaining to be completed in 2011. Notwithstanding anything to the contrary herein or
in the Planning Contract, failure by Redeveloper to complete any of the specific Site Improvements by
the dates specified for the specific items will be an Event of Default that allows the City (as holder of
the letter of credit) to draw on the letter of credit in whole or in part and complete the delinquent items.
The parties further agree and understand that a subsequent letter of credit may be required in
connection with Public Improvements related to Phases II and III, but whether such security is needed,
and if so the required amount, will be determined by the separate Planning Contract related to those
phases.
7. Section 4.3 of the Contract is revised to read as follows:
Section 4.3. Completion of Construction. (a) As of the date of this Fourth Amendment, the
parties agree and understand that Phase I of the Housing Improvements has been substantially
completed. The Redeveloper must use its best efforts to commence Phase II of the Housing
Improvements by no later than April 1, 2011 and substantially complete Phase II by November 1,
20.11; and Redeveloper must use its best efforts to commence Phase III.. of the Housing
Improvements by no later than April 1, 2013 and substantially complete Phase III by November 1,
2013; provided that failure to commence or complete Phase II or Phase III by the dates specified is
not an Event of Default so long as Redeveloper can demonstrate that it used best efforts to
undertake such work.
(b) Because of the delay in completion of Phases II and III, Redeveloper must complete
the Site Improvements described in Schedule C by the dates specified for each specific
improvement set forth in Schedule C; provided that after Site Improvements are completed.:
relevant portions thereof may be removed to the extent required in order to construct housing units
as part of Phase II and Phase III. An Event of Default under this paragraph is subject to any
remedies available to the Authority under Article IX hereof.
(c) All work with respect to the Minimum Improvements to be constructed or provided
by the Redeveloper on the Redevelopment Property shall be in substantial conformity with the
Construction Plans as submitted by the Redeveloper and approved by the Authority, anal with. the
Planning Contract.
(d) The Redeveloper agrees for itself, its successors and assigns, and every successor in
interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such
successors and assigns, shall promptly begin and diligently prosecute to completion the
redevelopment of the Redevelopment Property through the construction of the Minimum
Improvements thereon, and that such construction shall in any event be commenced and completed
within the period specified in this Section 4.3 of this Agreement. Subsequent to conveyance of the
Redevelopment Property, or any part thereof, to the Redeveloper, and until construction of the
Minimum Improvements has been completed, the Redeveloper shall make reports, in such detail
and at such times as may reasonably be requested by the Authority, as to the actual progress of the
Redeveloper with respect to such construction.
336927v l4 SJI3 CL205-20 4
8. Section 4.4 of the Contract is revised to read as follows:
Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of the
Minimum Improvements (and each Phase thereof) in accordance with those provisions of the
Agreement relating solely to the obligations of the Redeveloper to construct the Minimum
Improvements (including the dates for completion thereof), the Authority will furnish the relevant
Redeveloper with a Certificate of Completion in substantially the form attached as Schedule C.
Such certification by the Authority shall be (and it shall be so provided in the Deed and in the
certification itself) a conclusive determination of satisfaction and termination of the agreements and
covenants in the Agreement with respect to the obligations of the Redeveloper, and its successors
and assigns, to construct the relevant component of the Minimum Improvements and the dates for
the completion thereof. Such certification and such determination shall not constitute evidence of
compliance with or satisfaction of any obligation of the Redeveloper to any Holder of a Mortgage,
or any insurer of a Mortgage, securing money loaned to finance the Minimum Improvements, or
any part thereof.
(b} Each Certificate of Completion provided far in this Section 4.4 of this Agreement
shall be in such. form as will enable it to be recorded in the proper office. for the recordation of
deeds and other instruments pertaining to the Redevelopment Property. If the Authority shall
refuse or• fail to provide any certification in accordance with the provisions of this Section 4.4 of
this Agreement, the Authority shall, within thirty (30) days after written request by the
Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in
what respects the Redeveloper has failed to complete the Minimum Improvements in accordance
with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will
be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to
obtain such certification.
(c) The construction of each Phase of the Housing Improvements shall be deemed to be
substantially completed when the Redeveloper has received a certificate of occupancy from the
City for all housing units that make up that Phase and all improvements associated with that Phase
have been substantially completed as reasonably determined by the Authority Representative. The
construction of the Site i~nprovemet~ts shall be deemed to be substaiitialiy completed as reasorably
determined. by the Authority Representative.
9. Anew Section 4.5 of the Contract is added to read as follows:
4.5. Owner Occupied Housing Covenant. (a) Redeveloper agrees it will sell all units in
all Housing Improvements only to persons or families who intend to occupy such units as their own
residence. While Redeveloper owns all of the Housing Improvements, Redeveloper shall not rent
any unit to any party without prior written approval of the Authority. Further, Redeveloper shall
not sell any unit to any party who either (a) does not intend to occupy the unit promptly after
closing on the sale; or (b) intends to lease such unit to another party after closing on the sale.
(b) On or before February 1 of each year, Redeveloper shall submit to the Authority
written evidence of all housing sales in the previous twelve months, in a form that reasonably
demonstrates compliance with the terms of this Section.
336927v14 SJB CL205-20 5
10. Section 6.1 of the Contract is revised to read as follows:
Section 6.1. Right to Collect Delinquent Taxes. The Redeveloper acknowledges that the
Authority is providing substantial aid and assistance in furtherance of the redevelopment described
in this Agreement, in part through financing of the Sewer Improvements from Available Tax
Increment. The Redeveloper understands that the Tax Increments pledged to payment of the Sewer
Improvements are derived from real estate taxes on the Minimum Improvements, which taxes must
be promptly and timely paid. To that end, the Redeveloper agrees for itself, its successors and
assigns, in addition to the obligation pursuant to statute to pay real estate taxes, that it is also
obligated by reason of this Agreement to pay before delinquency all real estate taxes assessed
against the Redevelopment Property and the Minimum Improvements. The Redeveloper
acknowledges that this obligation creates a contractual right on behalf of the Authority through the
Termination Date to sue the Redeveloper or its successors and assigns to collect delinquent real
estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the
county auditor. In any such suit, the Authority shall also be entitled to recover its costs, expenses
and reasonable attorney fees.
11. Section 9.2 of the Contract is revised to read as follows:
Section 9.2. Remedies on Default. (a) Whenever any Event of Default referred to in
Section 9.1 of this Agreement occurs, the non-defaulting party may exercise its rights under this
Section 9.2 after providing thirty days written notice to the defaulting party of the Event of Default,
but only if the Event of Default has not been cured within said thirty days or, if the Event of
Default is by its nature incurable within thirty days, the defaulting party does not provide
assurances reasonably satisfactory to the non-defaulting party that the Event of Default will be
cured and will be cured as soon as reasonably possible:
(b) The non-defaulting party may take whatever action, including legal, equitable or
administrative action, which may appear necessary or desirable to collect any payments due under
this Agreement, or to enforce performance and abservance of any obligation, agreement, or
Cvvenaiit iir'ider tl"iiS Agrceiiieiit.
(c) In the case of Redeveloper's failure to timely complete Site Improvements, the
Authority may direct the City to draw on the letter credit as further described in Section 4.1(c) hereof.
336927v14 SJB CL205-20 6
IN WITNESS WHEREOF, the Authority has caused this Amendment to be duly executed in
its name and behalf and its seal to be hereunto duly affixed and the Redeveloper has caused this
Agreement to be duly executed il~ its name alld behalf on ar as of the date first above written.
STATE OF MINNESOTA }
} SS.
COUNTY Or ANOI~A )
COLUMBIA HEIGIITS,~C~MIC
D
AUT~IORITY
Its Executive Director
The foregoing instrument was acl~lawledged before me tl~s ~_^'-day of ~~,, r,~
2010, by Gary Peterson and Walter Fehst, tl~e President anal Executive Director of tl~e Columbia
Ileigl~ts Economic Development Authority, a public body politic and corporate, on behalf of tl~e
Authority.
J°~ Q131•~'~~
~;.r
Natai'~f P1i1311C
336927v14 SJB CL365-30 ']
GRAND CENTRAIG PR~T'ERTtES, LLC
y
Its `'~ ~ , ~. b'
G~
STATE OF MINNESOTA }
SS.
COUNTY OF ~~. ~ ~ ~~ )
The foregoing instrument was acknowled ed before me this ~` day of F1 ~ ~;~¢r, ,
2010 by :~,; ~ ct ~.t v~ ~j.v;~ g ~,g ~ ,the ~~ ~ ,~ .. ~? ~ of Grand Central. Properties,
LLC, a Minnesota limited Liability company, on behalf of the company.
~ ~',-
Notary Public
t~
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336927x14 SJB CL205-20 g
SCHEDULE A
Grand Central Lofts Legal Descriptions
HOUSING
Lot 1, Block 1, Grand Central Lofts
Lot 2, Block 1, Grand Central Lofts
Lot 3, Block 1, Grand Central Lofts
OUTLOT A
Lot 1, Block 1, Grand Central Lofts Second Addition
Lot 2, Block 1, Grand Central Lofts Second Addition
Lot 3, Block 1, Grand Central Lofts Second Addition
Lot 4, Block 1, Grand Central Lofts Second Addition
Lot 1, Block 2, Grand Central-Lofts Second Addition
Lot 2, Block 2, Grand Central Lofts Second Addition
Lot 3, Block 2, Grand Central Lofts Second Addition
Lot 4, Block 2, Grand Central Lofts Second Addition
Lot 1, Block 3, Grand Central Lofts Second Addition
Lot 2, Block 3, Grand Central Lofts Second Addition
Lot 1, Block 4, Grand Central Lofts Second Addition
Lot 2, Block 4, Grand Central Lofts Second Addition
Lot 3, Block 4, Grand Central Lofts Second Addition
Lot 1, Block 5, Grand Central Lofts Second Addition
Lot 2, Block 5, Grand Central Lofts Second Addition
Lot 3, Block 5, Grand Central Lofts Second Addition
Lot 4, Block 5, Grand Central Lofts Second Addition
Lot 1, Block 6, Grand Central Lofts Second Addition
Lot 2, Block 6, Grand Central Lofts Second Addition
Lot 3, Block 6, Grand Central Lofts Second Addition
Lot 4, Block 6, Grand Central Lofts Second Addition
Lot 1, Block 7, Grand Central Lofts Second Addition
OUTLOT B
336927v14 sJB CL205-20 A-1
SCHEDULE B TO
FOURTH AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT
SEWER IMPROVEMENTS
The design and construction of the sewer improvements referenced below:
Date of Plans:
Construction Range:
Engineering Company:
Pipe Contractor Co.:
August 25, 2008
47"' Ave. to north leg of S l5t Ct.
Humphrey Engineering
Michels Pipeline
336927v14 SJB CL205-20 ~_1
SCHEDULE C
REQUIRED SITE IMPROVEMENTS
The term Site Improvements means the following work on the Housing Property:
1 Establishment of permanent catch basin lids in accordance with plans approved in
connection with Phase I by August 1, 2010.
2 Removal of existing sign frame adjacent to Grand Avenue By August 1, 2010.
3 Lane striping on 49~' Avenue per original plans by August 1, 2010.
4 On Grand Avenue: replant pine trees and reinstall light poles removed by Nelson Builders in
2008, by August 1, 2010.
5 Remove old Kmart parking lot light poles used for temp power on Grand and Grandview,
by August 1, 2010.
6 Install an irrigation box or other protective means for the housing irrigation system at the
Northeast corner of the plat, by August 1, 2010.
7 Completion of grading plan for the Housing Property that was approved in connection with
Phase I by August 1, 2010.
8 Installation of sod turf on the following City right-of--way areas: rights of way adjacent to
Phase I completed by August 1, 2010, rights of way adjacent to Phases II and III by May 1,
2011; and the area within the access easement along Grand Avenue by May 1, 2011; in all
cases unless superseded by a separate Planning Contract.
9 Filling in and seeding of existing excavation pit by May 1, 2011; unless superseded by a
separate Planning Contract.
10 Add wear course of bituminous to private streets - Phase I by August 1, 2010, Phases II and
III by May 1, 2011; unless superseded by a separate Planning Contract.
11 Reestablishment of groundcover, including:
• Removal of all bituminous coverage from the balance of the Housing Property not used
by Phase I, by May 1, 2011; unless superseded by a separate Planning Contract.
• Removal of all gravel areas, by May 1, 2011; unless superseded by a separate Planning
Contract.
• Seeding and/or landscaping of all areas from which bituminous cover and gravel were
removed, by May 1, 2011; unless superseded by a separate Planning Contract.
336927v 14 SJB CI_205-20 C_ 1