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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~ -- r~ 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