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HomeMy WebLinkAboutjan 2017 agendaCH COLUMBIA HEIGHTS HOUSING AND REDEVELOPMENT AUTHORITY AGENDA January 9, 2017 7 pm, or immediately following the City Council Meeting City Hall City Council Chambers 590 40th Avenue NE Columbia Heights, MN 55421 1. Call to Order 2. Roll Call 3. Election of Officers 4. Approval of Modification of Note Terms for Parkview Villa 5. Adjourn CH COLUMBIA HEIGHTS AGENDA SECTION OTHER BUSINESS ITEM NO. 3 MEETING DATE JANUARY 9, 2017 CITY OF COLUMBIA HEIGHTS — HOUSING AND REDEVELOPMENT AUTHORITY ITEM: Election of Officers DEPARTMENT: Housing and Redevelopment Authority EXECUTIVE DIRECTOR'S APPROVAL: BY /DATE: Joe Hogeboom, January 9, 2017 BY /DATE: Joe Hogeboom, Deputy Executive Director The City of Columbia Heights Housing and Redevelopment Authority (HRA) Bylaws specify that the Authority shall annually select a Chair, Vice Chair and a Secretary /Treasurer from among its Commissioners. Article VII of the Housing and Redevelopment Authority's By -Laws state that four Commissioners constitute a quorum and in turn, election of officers can be held if so desired by the Board. In addition to Board Commission appointments, the City Manager also serves as the Executive Director, the City Community Development Director serves as the Deputy Executive Director and the City Finance Director serves as the Assistant Treasurer. Motion: Move to cast a unanimous ballot nominating Chair: Vice Chair: Treasurer/ Secretary:, City of Columbia Heights - HRA Letter CH COLUMBIA HEIGHTS AGENDA SECTION OTHER BUSINESS ITEM NO. 4 MEETING DATE JANUARY 9, 2017 CITY OF COLUMBIA HEIGHTS - HOUSING AND REDEVELOPMENT AUTHORITY ITEM: Approval of Modification of Note Terms for Parkview Villa DEPARTMENT: Housing and Redevelopment Authority EXECUTIVE DIRECTOR'S APPROVAL: BY /DATE: Joe Hogeboom, January 9, 2017 BY /DATE: Joe Hogeboom, Deputy Executive Director The HRA sold Parkview Villa to Aeon in September 2015. The majority of the purchase price was financed through a promissory note from Aeon to the HRA (the "Note'). The Note is secured by a collateral assignment of a separate promissory note from Parkview Limited Partnership, the legal entity actually operating Parkview Villa, to Aeon (the "Partnership Note "). Both of the promissory notes have a maximum term of 30 years, maturing no later than September 30, 2045. At the time of the sale of Parkview Villa, Aeon received the bulk of its financing from MHFA, and the HRA agreed to subordinate its interest in the facility to MHFA. Now that the improvements to Parkview Villa are complete, Aeon is taking out its construction loan with a permanent loan from MHFA. As a condition of the permanent financing, MHFA requires that both the Note and the Partnership Note be amended so that the final maturity extends beyond the final maturity of the MHFA financing. Therefore, Aeon has approached HRA staff and legal counsel with a request that the HRA adopt a resolution approving an amendment to the two Notes, extending their final maturity to December 2047, in order to comply with MHFA requirements. Upon receipt of the principal owed by Aeon under the Note, the HRA is required to transfer a portion of the principal to HUD. Since the proposed amendment will affect the date of repayment to HUD, HRA legal counsel recommends that HUD be notified of the amended term of the Note. Aeon has offered to notify HUD on the HRA's behalf. The HRA Attorney will be present this evening to discuss this matter and address any questions or concerns that the HRA may have. Motion: Move to adopt Resolution 2017 -01, Approving the Extension of the Term of Certain Promissory Notes in Connection with Parkview Villa. City of Columbia Heights - HRA Letter HRA RESOLUTION NO. 2017-01 RESOLUTION APPROVING AN EXTENSION OF THE TERM OF CERTAIN PROMISSORY NOTES IN CONNECTION WITH PARKVIEW VILLA BE IT RESOLVED BY the Board of Commissioners ( "Board ") of the Housing and Redevelopment Authority of Columbia Heights, Minnesota (the "Authority") as follows: Section 1. Recitals. 1.01. The Authority previously owned and operated a public housing facility known as Parkview Villa (the "Facility") within the City of Columbia Heights (the "City "), which was partially funded through the United States Department of Housing and Urban Development ( "HUD "). 1.02. The Authority and Aeon (the "Purchaser ") executed a certain Amended and Restated Purchase and Development Contract, dated as of July 28, 2015 (the "Agreement"), pursuant to which the Authority conveyed the Facility to the Purchaser and received a Promissory Note for the payment of the purchase price (the "Note "), secured by a collateral assignment of a certain Inclusive Promissory Note (the "Partnership Note") from Parkview Limited Partnership (the "Partnership ") to the Purchaser. 1.03. The terms of the Note provide that the entire unpaid balance of principal of the Note, in the amount of $6,585,000, is due and payable upon the earlier of the following: (i) thirty days after written notice from the Authority to the Purchaser of an event of default under the Agreement; or (ii) September 30, 2045. Similarly, the terms of the Partnership Note provide that the entire unpaid balance of principal and accrued interest on the Partnership Note is due and payable when the Note becomes due. 1.04. The Purchaser's primary source of financing for the acquisition and improvements to the Facility was a bridge loan from the Minnesota Housing Finance Authority ( "MHFA "), to be replaced upon completion of the improvements by a permanent loan. At the time of closing on the conveyance of the Facility by the Authority to the Purchaser, the parties entered into a Master Subordination Agreement and Estoppel Certificate with MHFA, pursuant to which the Authority subordinated its security interest in the Facility to MHFA's loans. 1.05. The Purchaser has completed the acquisition and improvement of the Facility pursuant to the bridge loan from MHFA, and is now proceeding toward closing on a permanent loan from MHFA with a term of 30 years (the "MHFA Loan"). As a condition of closing on such financing, MHFA requires that all security interests in the Facility that are subordinate to the interest of MHFA, including the Note and Partnership Note, be coterminous with or extend beyond the maturity date of the MHFA Loan. 1.06. The Purchaser has requested that the HRA approve an Amendment to Promissory 492956v1 CL160 -82 Note and an Amendment to Inclusive Promissory Note (the "Amended Notes "), extending the terms of these instruments to the earlier of 30 days after notice of an event of default under the Agreement or December 31, 2047. The HRA's legal counsel has reviewed the Amended Notes and recommends approval of these documents in the form presented to the HRA and on file with the HRA's Executive Director. Section 2. Amended Notes Approved. 2.01. The Amended Notes, as presented to the Board, are hereby approved, subject to receipt by the Authority of an executed original of the amended Note and an executed specimen of the amended Partnership Note. 2.02. Subject to the above - referenced consent, Authority staff and officials are authorized to direct the Purchaser to take all actions necessary to inform HUD of the extension of the term of the Note. Approved by the Board of Commissioners of the Housing and Redevelopment Authority for Columbia Heights, Minnesota this 9s' day of January, 2017. Chair ATTEST: Secretary 492956v1 CL160 -82 AMENDMENT OF INCLUSIVE MORTGAGE AND PROMISSORY NOTE THIS AMENDMENT OF INCLUSIVE MORTGAGE AND PROMISSORY NOTE (this "Amendment"), is entered into as of January 2017, by Parkview Limited Partnership, a Minnesota limited partnership ( "Borrower ") and Aeon, a Minnesota nonprofit corporation ( "Lender "). Borrower and Lender are referred to collectively herein as the "Parties." RECITALS A. Borrower is the grantor, and Lender is the grantee of an Inclusive Mortgage dated September 24, 2015, and recorded September 25, 2015, as Document No. 533630.012 (Torrens) in the records of the Anoka County Register of Titles and as Document No. 2118956.013 (Abstract) in the records of the Anoka County Recorder's Office (the "Mortgage "), which encumbers the real property described on Exhibit A attached to this Amendment and incorporated herein by this reference (the "Property"). B. The Mortgage secures the payment of indebtedness represented by the Inclusive Promissory Note dated September 24, 2015, for the original principal sum of $6,585,000.00, payable by Borrower to Lender under the terms therein (the "Note "). C. Borrower has requested that the Mortgage and Note be amended to extend the maturity date of the Note, and Lender is willing to modify the Mortgage and Note to extend the maturity date of the Note in the manner and to the extent expressly set forth in this Amendment. AMENDMENT NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Extension of Maturity Date to December 31, 2047. The Mortgage and Note are hereby amended to extend the time of payment of said indebtedness such that the entire unpaid balance of principal, and all accrued and unpaid interest on the Note shall be due and payable upon the earlier of the following: (i) such date as the Underlying Note (as defined in the Note) becomes due; or (ii) December 31, 2047. US.109301820.02 2. Ratification. Except as provided in paragraph 1 above, the Mortgage and Note remain unchanged. This Amendment modifies the Mortgage and Note and in no way acts as a release or relinquishment of the lien securing payment of the Note, including without limitation the lien created by the Mortgage, and such lien is hereby renewed, extended, ratified, confirmed, and carried forward by Borrower in all respects. Except as modified herein, the Mortgage and Note are ratified and confirmed to be in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first above written. BORROWER Parkview Limited Partnership, a Minnesota limited partnership By: Aeon, a Minnesota nonprofit corporation Its: General Partner By: Caroline Horton, Chief Financial Officer STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of January, 2017, by Caroline Horton, the Chief Financial Officer of Aeon, a Minnesota nonprofit corporation, the general partner of Parkview Limited Partnership, a Minnesota limited partnership, on behalf of the corporation and limited partnership. My commission expires: Witness my hand and official seal. Notary Public -2- US.109301820.02 LENDER Aeon, a Minnesota nonprofit corporation Name: Caroline Horton Its: Chief Financial Officer STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of January, 2017, by Caroline Horton the Chief Financial Officer of Aeon, a Minnesota nonprofit corporation, on behalf of the corporation. My commission Witness my hand and official seal. Notary Public This instrument drafted by Faegre Baker Daniels LLP (PJB) 90 South Seventh Street, Suite 2200 Wells Fargo Center Minneapolis, MN 55402 -3- US.109301820.02 EXHIBIT A to AMENDMENT OF INCLUSIVE MORTGAGE AND NOTE [Legal Description of Property] Tract A: That part of the South 1/2 of Lot 13, lying Northwesterly of the following line: Beginning at the Northeast corner of the South 1/2 of Lot 13; thence Southwesterly to a point on the South line of said Lot 13, said point being 2 feet Easterly of the Southwest Cornets of Lot 13; the South 241 feet of Lot 14; then south 1/2 of Lot 15; Lot 39 except the West 30 feet thereof, Lots 40, 41, 42 and 43 and the West 1/2 of Lot 44, all in Block 5 Reservoir Hills, Columbia Heights, Anoka County, Minnesota (Abstract) Tract B: The East 40 feet of the South 1/2 of Lot 16, Block 5, Reservoir Hills, Columbia Heights, Anoka County, Minnesota. (Torrens) A -1 US.109301820.02 AMENDMENT OF PROMISSORY NOTE THIS AMENDMENT OF PROMISSORY NOTE (this "Amendment "), is entered into as of January 2017, by Aeon, a Minnesota nonprofit corporation ( "Borrower ") and the Housing and Redevelopment Authority of Columbia Heights, Minnesota, a public body corporate and politic under the laws of Minnesota ("Lender "). Borrower and Lender are referred to collectively herein as the "Parties." RECITALS A. Borrower is the obligor under that certain indebtedness owed to Lender, as evidenced by that certain Promissory Note dated September 24, 2015, for the original principal sum of $6,585,000.00, payable by Borrower to Lender under the terms therein (the "Note "). B. The Note is secured by that certain Inclusive Mortgage dated September 24, 2015, and recorded September 25, 2015, as Document No. 533630.012 (Torrens) in the records of the Anoka County Register of Titles and as Document No. 2118956.013 (Abstract) in the records of the Anoka County Recorder's Office (the "Mortgage "), which Mortgage has been collaterally assigned by Borrower to Lender pursuant to that certain Amended and Restated Collateral Assignment of Note and Mortgage dated as of September 25, 2015. C. The Mortgage encumbers the real property described on Exhibit A attached to this Amendment, which is owned by Parkview Limited Partnership, a Minnesota limited partnership ( "Parkview "). D. As required by the Minnesota Housing Finance Agency ( "Minnesota Housing ") in connection with obtaining two permanent loans from Minnesota Housing, Borrower has requested that the Note be amended to extend its maturity date, and Lender is willing to modify the Note to extend its maturity date in the manner and to the extent expressly set forth in this Amendment. AMENDMENT NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Extension of Maturity Date to December 31, 2047. The Note is hereby amended to extend the time of payment of said indebtedness such that the entire unpaid balance of principal shall be due and payable upon the earlier of the following: (i) thirty (30) days (or such longer period as is set forth in the Amended and Restated Purchase and Development Contract between Borrower and Lender, dated as of July 28, 2015 (the "Agreement")) after written notification by Lender to Borrower of the occurrence of an Event of Default (as defined in the Agreement) not timely cured thereunder; or (ii) December 31, 2047. In addition, Lender hereby consents to the extension of the maturity date of the Mortgage and related Inclusive Promissory US.109302101.02 Note as set forth in that certain Amendment of hiclusive Mortgage and Promissory Note between Borrower and Parkview, dated on or about the date of this Amendment. 2. Ratification. Except as provided in paragraph 1 above, the Note remains unchanged. This Amendment modifies the Note and in no way acts as a release or relinquishment of the lien securing payment of the Note, including without limitation the lien created by the Mortgage, and such lien is hereby renewed, extended, ratified, confirmed, and carried forward by Borrower in all respects. Except as modified herein, the Note is ratified and confirmed to be in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first above - written. BORROWER: AEON, a Minnesota nonprofit corporation By: Name: Caroline Horton Its: Chief Financial Officer STATE OF MINNESOTA ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of January, 2017, by Caroline Horton the Chief Financial Officer of Aeon, a Minnesota nonprofit corporation, on behalf of the corporation. My commission expires: Witness my hand and official seal. -2- US.109302101.02 Notary Public LENDER: HOUSING AND REDEVELOPMENT AUTHORITY OF COLUMBIA HEIGHTS, MINNESOTA By Its Chair By Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF ANOKA ) On this _ day of January, 2017, before me, a notary public within and for Anoka County, personally appeared Tammera Diehm and Walter Fehst, to me personally known who by me duly sworn, did say that they are the Chair and Executive Director of the Housing and Redevelopment Authority of Columbia Heights, Minnesota, a public body corporate and politic under the laws of the State of Minnesota (the "Authority ") named in the foregoing instrument; that said instrument was signed on behalf of said Authority; and said Tammera Diehm and Walter Fehst acknowledged said instrument to be the free act and deed of said Authority. My commission expires: Witness my hand and official seal. Notary Public -3- US.109302101.02 EXHIBIT A to AMENDMENT OF PROMISSORY NOTE [Legal Description of Property] Tract A: That part of the South 1/2 of Lot 13, lying Northwesterly of the following line: Beginning at the Northeast corner of the South 1/2 of Lot 13; thence Southwesterly to a point on the South line of said Lot 13, said point being 2 feet Easterly of the Southwest Comets of Lot 13; the South 241 feet of Lot 14; then south 1/2 of Lot 15; Lot 39 except the West 30 feet thereof; Lots 40, 41, 42 and 43 and the West 1/2 of Lot 44, all in Block 5 Reservoir Hills, Columbia Heights, Anoka County, Minnesota (Abstract) Tract B: The East 40 feet of the South 1/2 of Lot 16, Block 5, Reservoir Hills, Columbia Heights, Anoka County, Minnesota. (Torrens) A -1 US.109302101.02