HomeMy WebLinkAboutContract 2318 Execution Copy
FIRST AMENDMENT
TO
CONTRACT
FOR
PRIVATE REDEVELOPMENT
By and Between
CITY OF COLUMBIA HEIGHTS, MINNESOTA,
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
COLUMBIA HEIGHTS, MINNESOTA,
and
NEW PERSPECTIVE FUND III, LLC
Dated as of: , 2008
This document was drafted by:
KENNEDY & GRAVEN, Chartered (AJP)
470 US Bank Plaza
200 South Sixth Street
Minneapolis, Minnesota 55402
Telephone: (612) 337-9300
336135v5 AJP CL205-34
FIRST AMENDMENT TO
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS FIRST AMENDMENT TO CONTRACT FOR FOR PR[VATE REDEVELOPMENT (this
"First Amendment"), is �J� day \*^/^! , 2008, by and be1`�ceuthe(�lT`�
', � .
OF COLUMBIA HEIGHTS, a municipal coqporutioi: and political subdivision of the State of
Minnesota (the "City"), the COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT
AUTHORITY, a public body corporate and politic and political subdivision of the State of
Minnesota (the "Authority"), and NEW PERSPECTIVE FUND }D, LLC, a limited liability
company authorized to do business under the laws of the State of Minnesota (the "Redeveloper").
WITNESSETH:
WHEREAS, the Authority and Pratt Ordway, LLC, dba Pratt Ordway Properties (the
"Original Redeveloper") entered into that certain Contract for Private Redevelopment, dated as of
November 28, 2006 (the "Original Contract") providing for redevelopment of certain property in the
City; and
WHEREAS, the Original Redeveloper assigned all of its rights and interests in the Original
Contract to Columbia Heights CO8, LLC ("COH") under an assignment and assumption
agreement, dated uxnfJunuazy26"20V7;and
WHEREAS, Lighthouse Acquisition Group, LLC will purchase the Redevelopment
Property (as defined in the Original Contract) and assign all of its rights and interests in the
Redevelopment Property and the Original Contract to the Redeveloper before the Redeveloper
commences construction u[ the Minimum Improvements; and
WHEREAS, the Original Redeveloper and its successors and assigns failed to complete
construction of the Minimum improvements and the Redeveloper has requested certain assistance in
order to complete such improvements; and
WHEREAS, pursuant to Minnesota Statues, Sections 469.1812 through 469.1815, as
amended (the "Abatement Act"), the City is authorized to abate a portion of its real property taxes
on the Redevelopment Property (the "Abatement") to increase the City's tax base and facilitate
redevelopment; and
WHEREAS, the parties have deterrnined a need to modify the Original Contract to add the
City as a party, provide for payment of the City's administrative costs in regards to this First
Amendment, provide for the Abatement, and address a change in construction schedules as further
described herein; and
WHEREAS, all capitalized but undefined terrns in this First Arnendment shall have the
meanings as assigned in the Original Contract. Defined 1coou in this First Amendment shall be
incorporated into the Original Contract.
336135,5 x/pcL205'34 1
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
1. A new Section 3.7 to the Original Contract is added and reads as follows:
Section 3.7. Tax Abatement. The City will grant the Abatement to the Redeveloper
under the following terms and conditions:
(a) Genet The Redeveloper is eligible to receive the Abatement each tax-payable
year from 2011 through 2015 (the "Abatement Period"). The Redeveloper will receive the
Abatement in a specific tax-payable year during the Abatement Period only if the amount of
aggregate taxes from the Redevelopment Property, payable to the City, Anoka County, Independent
School District No. 13, and any special taxing districts (collectively, the "Aggregate Taxes"), equals
or exceeds the following numbers, as shown on the following chart:
Taxes Payable Year Aggregate Taxes
2011 $80,000
2012 82,400
2013 84,872
2014 87,418
2015 90,041
(b) City Contribution. If the Aggregate Taxes exceed the amounts listed in Section
3.7(a) for any tax-payable year during the Abatement Period, the City agrees to pay to the
Redeveloper a portion of the City's share of the Aggregate Taxes for that specific tax-payable year
(the "City Contribution"), as an abatement under the Abatement Act. The City Contribution will be
the City's share of property taxes from the Redevelopment Property in each specific tax-payable
year during the Abatement Period in which the Redeveloper's Aggregate Taxes exceed the amounts
in Section 3.7(a), minus the City's share of the property taxes from the Redevelopment Property in
tax-payable year 2009. The City will levy the City Contribution, if any, using its best estimates and
projections of the Redevelopment Property's tax capacity and the City's tax rates thereon for each
tax-payable year within the Abatement Period.
(c) Excess City Contribution. If the City levies for the City Contribution during the
Abatement Period based on its best estimates and projections of the Redevelopment Property's tax
capacity and the City's tax rates thereon, and the Redeveloper is not eligible for the Abatement
because the Aggregate Taxes do not exceed the amount for a specific tax-payable year pursuant to
Section 3.7(a), the City will irrevocably credit that specific City Contribution into a subaccount of
the City. If the Redeveloper later qualifies for the City Contribution in a given tax-payable year
during the Abatement Period, the City will disburse the funds already irrevocably credited to the
Redeveloper. If, at the end of the Abatement Period, the balance of the City Contribution has not
been credited to the Redeveloper, and the Redeveloper has not become otherwise eligible for the
City Contribution, the City will use the remainder of the City Contribution to reduce its general levy
for the tax-payable year following the expiration of the Abatement Period.
(d) Shortage of City Contribution. If the City levies for the City Contribution during the
Abatement Period based on its best estimates and projections of the Redevelopment Property's tax
336135v5 AJP CL205-34 2
capacity and the City's tax rates thereon, and the Redeveloper is both eligible for the Abatement and
an increased City Contribution because the Aggregate Taxes are higher than projected by the Ci
the City will levy the excess amount of the City Contribution for the following year,
whether or not the Abatement Period has expired. During the Abatement Period, the excess City
Contribution will be in addition to the regular City Contribution estimated to be due to the
Redeveloper for th following le year, if any.
(�)
Payment "f City Contribution. If the City deterniines that a City Contribution is due
to the Redeveloper in a specific tax-payable year during the Abatement Period, the City will
disburse the City Contributiori to the Redeveloper on August 1 ofthat tax-payable year and the next
following February 1. For example, if a City Contribution is due to the Redeveloper in 2011, half of
the City Contribution will be payable on August 1, 2011, and the second haif will be payable on
February l,20]2.
(R
Abatement Resolution. The City Council of the City has approved the Abatement
pursuant to a resolution adopted after a duly noticed public hearing on July 28, 2008. All
determinations of the City regarding the Redeveloper's eligibility for the Abaternent and the amount
ofthe City Coniribution are controlling.
2. Section 4.3(a) of the Original Contract is modified to read as follows:
(a) Minimum Improvements. Subject to Unavoidable Delays, the Redeveloper must
commence construction of the Minimum Improvements by January 1, 2009 and must substantially
complete construction of the Minimum Improvements by December 31, 2009. All work with
respect to the Minimum Improvements to be constructed or provided by the Redeveloper on the
Redeveloprnent Property shall be in substantial coriformity with the Construction Plans as submitted
by the Redeveloper and approved by the Authority and the City. If the Redeveloper is making
substantial progress with respect to the Minimum Improvements and is unable to meet one or more
of the above-referenced deadlines, the Authority and the Redeveloper shall negotiate in good faith
for a reasonable period to extend the time in which necessary action(s) must be taken or occur, the
lapse of which time would otherwise constitute u default under this Agreement.
3 . Section � t� oo 3 . 5 of the Original g/ � n u] Coo1roct is deleted and replaced by the following
language:
Section 3.5. Payment of Administrative Costs. The parties expressly acknowledge to
each other that the Redeveloper is responsible for the City's Administrative Costs in the negotiation
and preparation of this First Amendment to the Original Contract and any further amendments
thereto. "Adrninistrative Costs" rneans out-of-pocket costs incurred by the City in connection with
the negotiation and preparation of this First Amendment, and other documents, agreements and
resolutions in connection with the Redevelopment Property or the Abatement. In order to secure
partial payrnent of the City's Administrative Costs, the Redeveloper has delivered $2,000 to the
City. The City will utilize such funds to pay or reimburse itself for the Administrative Costs. If the
City determines that the Administrative Costs will exceed $2,000 and that additional security is
required, the City shall notify the Redeveloper of the amount of such additional security. Within ten
calendar days of receipt of such notice, the Redeveloper shall deliver to the City the required
additional security. Failure of the Redeveloper to deliver the requested additional security will
336135v5 Aurc/,2o5-3^ 3
result in the City suspending its obligations under the Original Contract and any amendments
thereto until the security is provided.
4. The definition of "Minimum Improvements" in Section 1.1 of the Original Contract
is amended to read as follows:
"Minimum Improvements" means the construction on the Redevelopment Property of a
minimum 58-unit rental housing facility intended primarily for occupancy by seniors.
5. The Authority has represented that the actual costs of the Demolition Work (as
defined in the Original Contract) are $126,616.89. If the Redeveloper shall fail to complete
construction of the Minimum Improvements by the date specified in Section 4.3(a) of the Original
Contract (as amended by this First Amendment), the Redeveloper shall promptly repay to the
Authority the base cost of the Demolition Work paid by the Authority ($115,000).
6. The Original Contract remains in full force and effect and is not modified except
as expressly provided herein. This First Amendment shall become effective on the closing date
of the transfer of the Redevelopment Property to the Redeveloper. If the Redeveloper does not
close on the Redevelopment Property by December 31, 2008, this First Amendment shall not
become effective and will not be binding on the parties hereto.
7. The Redeveloper will file this First Amendment with the offices of the County
Recorder and Registrar of Titles, at the Redeveloper's cost.
(The remainder of this page is intentionally left blank.)
336135v5 AJP CL205-34 4
IN WITNESS 1ATHEREOF, the City and the Authority have caused this First Amendment
to be duly executed in their names and the Redeveloper has caused this First Amendment to be
duly executed in its name and behalf as of the date first above written.
CITY OF COLUMBIA HEIGHTS
MINNESOTA
B
Ad e l
c
- 1111106 bliPA
_ k
Its Mayor- Ga L. Peterson
By
Its City Mana.-r-Walter R. Fehst
STATE OF MINNESOTA )
) SS.
COUNTY OF ANOKA
The foregoing instrument was acknowledged before me this i day of 0'
2008 by Gary Peterson and Walter Fehst, the Mayor and City Manager, respectively, of the ity of
Columbia Heights, Minnesota, on behalf of the City. '
' IA MUSCOVITZ
°
\
- -rif 4015 :. 01-31
/ /576
Notary Public
336]35v5 AJP CL205-34 S-1
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHO
AP`
By re
Its President- 1. L. Peterson
By
Its Executive Di ector- alter R. Fehst
STATE OF MINNESOTA )
) SS.
COUNTY OF ANOKA
The foregoMu instrument was acknowledged before me this 0 day of
\ * , 201: by Gary Peterson and Walter Fehst, the President and Executive
Director,„.1 respectively, of the Columbia Heights Economic Development Authority, on
behalf of the Authority.
'
VM
Cale
t 0 4 01414015 i (17, \
Notary Public
336135v5 AJP CI,205-34 S-2
NEW PERSPECTIVE FUND III, LLC
• y 147
Its:
STATE OF MINNESOTA )
) SS.
COUNTYO ' „ )
The foregoing ins��mevi wa acknowledged before me this day of
20Qy ,gip € ;may'
the 6 ')° lr of
ew Perspective Fund III, LLC, 4a Minnesota Imited liability company, on 16half of the
limited liability company.
4 4 CATHY DENISE PESEHT N4 f p,..
'�� NOTARY PUBLIC ;"`�3 MINNESOTA Notary P blic
` yaw 7.7 My Commission Expires Jan. 31, 2013 0
eras �a v� �
336135v5 AJP CL205 -34 S -3