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ECONOMIC DEVELOPMENT AUTHORITY AGENDA
SPECIAL MEETING
November 27, 2017
6:30 pm
City Hall
Conference Room 1
th
590 40 Avenue NE
Columbia Heights, MN 55421
1.Call to Order
2.Roll Call
3.Pledge of Allegiance
BUSINESS ITEMS
4.Approval Consideration of First Amendment to the Contract for Private
Redevelopment Resolution 2017-33
Motion: Move to waive the reading of Resolution 2017-33, there being ample copies
available to the public.
Motion: Move to adopt Resolution 2017-33, a resolution approving a First Amendment
to the Contract for Private Redevelopment between the Columbia Heights Economic
Development Authority and Columbia Heights Leased Housing Associates III, LLLP.
5.Approval Consideration of Collateral Assignment of Tax Increment Financing Revenue
Note Resolution 2017-34
Motion: Move to waive the reading of Resolution 2017-34, there being ample copies
available to the public.
Motion: Move to adopt Resolution 2017-34, a resolution approving a Collateral
Assignment of interest in payments under Tax Increment Revenue Note, between
Columbia Heights Leased Housing Associates III, LLLP and CitiBank, N.A.
OTHER BUSINESS
6.Adjourn
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AGENDA SECTION BUSINESS ITEM
ITEM NO. 4
MEETING DATE NOVEMBER 27, 2017
CITY OF COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
ITEM:Approval Consideration of First Amendment to the Contract for Private Redevelopment
DEPARTMENT: Community Development
BY/DATE: Keith M Dahl, November 21, 2017 BY/DATE:
BACKGROUND:
On July 10, 2017, as well as the City
of the City of Cityapproved the establishment of the 47th
and Grand tax increment financing (commonly referred to as district, and adopted the TIF plan for said
TIF district. Therefore, pursuant to State Statute, Sections 469.174 to 469.1794 the EDA was authorized to
undertake and provide TIF assistance to facilitate redevelopment within the 47th and Grand TIF district.
On August 7, 2017, the EDA approved Resolution 2017-23, a resolution which approved a Contract for Private
Redevelopment by and between the Columbia Heights Leased Housing Associates III, LLLP
and awarded the sale of, and provided the form, terms, covenants and directions for the issuance of its TIF
revenue note in the amount of $1,482,000 projected over 12 years. This amount of TIF
Assistance was originally found to be necessary for the proposed development of a 172 unit multi-family,
th and Grand Avenue NE.
However, since the original approval of the TIF Assistance for the Proposed Development, the Developer has
reduced the amount of units in the Proposed Development from 172 units to 148 units. Therefore, because
the unit reduction constitutes a substance alteration of the Contract for Private Redevelopment, the EDA has
the legal right to reevaluate the amount of TIF Assistance provided to the Developer for the Proposed
Development. And, based on analyses conducted by Ehlers, TIF Assistance in the amount of $1,170,000 over
12 years would be substantially sufficient for the Proposed Development to become financially feasible.
Attached for consideration is the proposed First Amendment to the Contract for Private Redevelopment in
which TIF Assistance for the Proposed Development has been reduced. Again, this agreement constitutes a
financial obligation of the EDA to reimburse the Developer for a portion of qualified costs related to land
acquisition, soil correction, site preparation, and public improvements for the Proposed Development.
STAFF RECOMMENDATION:
Staff recommends approval of Resolution 2017-33 as presented.
RECOMMENDED MOTION(S):
Motion: Move to waive the reading of Resolution 2017-33, there being ample copies available to the public.
Motion: Move to adopt Resolution 2017-33, a resolution approving a First Amendment to the Contract for
Private Redevelopment between the Columbia Heights Economic Development Authority and Columbia
Heights Leased Housing Associates III, LLLP.
ATTACHMENTS:
1.Resolution 2017-33 (2 Pages)
2.First Amendment to Contract for Private Redevelopment (8 Pages)
1
City of Columbia Heights EDA Letter
EDARESOLUTION NO. 2017-33
RESOLUTION APPROVING A FIRSTAMENDMENT TO
CONTRACT FOR PRIVATE REDEVELOPMENT
BETWEEN THECOLUMBIA HEIGHTSECONOMIC
DEVELOPMENT AUTHORITYANDCOLUMBIA
HEIGHTS LEASED HOUSING ASSOCIATES III,LLLP
BE IT RESOLVED BY the Board of Commissioners(Board) of the Columbia Heights
Economic Development Authority(the Authority) as follows:
Section 1.Recitals.
1.01.Pursuant to theirauthority under Minnesota Statutes, Sections 469.090 to
469.1082 and 469.174 to 469.1794, as amended, the Authorityandthe Cityof Columbia Heights
th
establishedthe47and GrandTax Increment Financing District within the
Downtown CBD
redevelopment of certain substandard property within the Project.
1.02.the Authority andColumbia Heights Leased Housing Associates III, LLLP(the
Redeveloperentered into that certain Contract for Private Redevelopment dated as of August7,
2017ings, for the construction by the Redeveloper of
Contract.
1.03.Based on a decrease in size and number of units of the Minimum Improvements, the
revisetsand to provide revised terms
of the Note and revised Minimum Market Values of the Minimum Improvements resulting from
said decrease in scope.
Section 2.FirstAmendmentApproved.
2.01.The FirstAmendment as presented to the Boardis hereby in all respects
approved, subject to modifications that do not alter the substance of the transaction and that are
approved by the Presidentand Executive Director, provided that execution of the First
Amendmentby such officials shall be conclusive evidence of approval.
2.02.The Presidentand Executive Directorare hereby authorized to execute on behalf
of the Authoritythe FirstAmendment and any documents referenced therein requiring execution
by the Authority,including without limitation the Assessment Agreement, and to carry out, on
behalf of the Authority, its obligations thereunder.
2.03.Authoritystaff and consultants are authorized to take any actions necessary to
carry out the intent of this resolution.
511629v1 MNI CL205-66
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Adopted by the Board of Commissionersof the Columbia HeightsEconomic
th
Development Authoritythis27day of November, 2017.
___________________________________________
President
ATTEST:
______________________________
Secretary
511629v1 MNI CL205-66
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FIRSTAMENDMENT TO
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made on or as of the _______ day of _________________,2017,
by and between COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, a
ablished pursuant to Minnesota Statutes,
Sections 469.090 to 469.1081 (hereinand COLUMBIA HEIGHTS
LEASED HOUSING ASSOCIATES III, LLLP).
WITNESSETH:
WHEREAS, the Authority and Redeveloper entered into that certain Contract for Private
Redevelopment dated as of August 7, 2017
certain property in the City of Columbia Heights (the
; and
WHEREAS, the Redeveloper hasrequested and the Authority has agreed toamend the
Contract as further described herein;
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 asfollows:
1.
modified as follows (italicized language shows revision):
Redevelopment Property of a multifamily rental housing facility, consisting of approximately
148affordable rental units, and associated underground and surface parking.
2.Schedule A of the Contract is modified to update the legal description of the
Redevelopment Property as follows:
Lots 1 and 2, Block 1, Grand CentralLofts, Anoka County, Minnesota
And
Outlot A, Grand Central Lofts, according to the recorded plat thereof, Anoka County,
Minnesota.
3.Section 3.3(b) of the Contract is modified as follows (italicized language shows
revision):
(b)Terms. To reimburse the Public Redevelopment Costs incurred by Redeveloper,
the Authority shall issue and the Redeveloper shall purchase the Note in the maximum principal
amount of $1,170,000.The Authority shall issue and deliver the Note atclosing on the
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acquisition of the Redevelopment Property, but no principal or interest payments shall be due
and payable on the Note and no interest will accrue on the unpaid principal of the Note until the
Redeveloper has complied with the following conditions:
(i)deliveryto the Authority written evidence satisfactory to the Authority
that Redeveloper has incurred Public Redevelopment Costs in an amount least equal to
the principal amount of the Note, which evidence must include copies of the paid
invoices or other comparable evidence for costs of allowable Public Redevelopment
Costs-and
(ii)submission of evidence of financing and receipt ofAuthority approvalof
such financinginaccordance with Section 7.1.
The terms of the Note will be substantially those set forth in the form of the Note shown
in Schedule B, and the Note will be subject to all terms of the Authorizing Resolution, which is
incorporated herein by reference.
4.Schedule B of the Contract is modified to include a revised form of Note, as
attached hereto in Exhibit A.
5.Section 6.3of the Contract is modified as follows (italicized language shows
revision):
Section 6.3. Assessment Agreement. (a) Uponclosing ofacquisition of the Redevelopment
Property by Redeveloper, the Redeveloper shall, with the Authority, execute an Assessment
Agreement pursuant to Minnesota Statutes, Section 469.177, subd. 8, specifying an assessor's
minimum Market Value for the Redevelopment Property and Minimum Improvements constructed
thereon. The amount of the minimum Market Value shall be $11,544,000as of January 2, 2019,
and $17,760,000as of January 2, 2020and each January 2 thereafter, notwithstanding the status of
construction by such dates.
6.The Contract remains in full forceand effect and is not modified except as
expressly provided herein.
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IN WITNESS WHEREOF, the Authority has caused this Agreement 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 in its name and behalf on or as of the date first above written.
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
By
Its President
By
Its Executive Director
STATE OF MINNESOTA)
) SS.
COUNTY OF ANOKA)
The foregoing instrument was acknowledged before me this ____ day of
_________________,2017, by Marlaine Szurekand Walter R. Fehst, the President and
Executive Director of the Columbia Heights Economic Development Authority, a public body
politic and corporate, on behalf of the Authority.
Notary Public
509180v5 MNI CL205-66
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COLUMBIA HEIGHTS LEASED HOUSING
ASSOCIATES III, LLLP, a Minnesota Limited
Liability Limited Partnership
By: Columbia Heights Leased Housing Associates
III, LLC
Its General Partner
By
________________________________________
Owen Metz
Its Authorized Representative
STATE OF MINNESOTA)
) SS.
COUNTY OF __________)
The foregoing instrument was acknowledged before me this _____ day of
_____________, 2017 by Owen Metz, the AuthorizedRepresentative of Columbia Heights
Leased Housing Associates III, LLC, a Minnesota limited liability company, the General Partner
of Columbia Heights Leased Housing Associates III, LLLP, a Minnesota limited liability limited
partnership, on behalf of the partnership.
Notary Public
509180v5 MNI CL205-66
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EXHIBIT A
FORM OF NOTE
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF ANOKA
COLUMBIA HEIGHTSECONOMIC DEVELOPMENT AUTHORITY
No. R-1$1,170,000
TAX INCREMENT REVENUE NOTE
SERIES 20__
Date
Rateof Original Issue
____%___________, 20__
The Columbia HeightsEconomic Development Authority (the
received, certifies that it is indebted and hereby promises to pay to Columbia Heights Leased
Housing Associates III, LLLPor reg
$1,170,000.00and to pay interest thereon at the rate of ___________percent (____%)per
annum, solely from the sources and to the extent set forth herein. Capitalized terms shall have
the meanings provided in the Contract for Private Redevelopment between the Authority and the
Owner, dated as of August 7,2017, as amended
otherwise.
1.Payments1, 2020
and each February1 and Augustto and including February 1,
2032in the amounts and from the sources set forth in Section 3 herein.
Payments shall be applied first to accrued interest, and then to unpaid principal. Interest
accruing from the date of Prove-Upthrough and including February1, 2020shall be
compounded semiannually on February1 and August1 of each year and added to principal.
Payments are payable by mail or wire transfer to theaddress of the Owner or such other
address as the Owner may designate upon thirty (30)days written notice to the Authority.
Payments on this Note are payable in any coin or currency of the United States of America
which, on the Payment Date, is legal tender for the payment of public and private debts.
2.Interest. Interest at the rate stated herein shall accrue on the unpaid principal,
commencing on the date of original issue. Interest shall be computed on the basis of a year of
360 days and charged for actual days principal is unpaid.
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3.Available Tax Increment. (a) Payments on this Note are payable on each
Payment Date solely from and in the amount of Available Tax Increment, which shall mean, on
each Payment Date, Ninety percent (90%)of the TaxIncrement attributable to the Minimum
Improvements and Redevelopment Property that is paid to the Authority by AnokaCounty in the
six months preceding thePayment Date.
(b)The Authority shall have no obligation to pay principal of and interest on this
Note on each Payment Date from any source other than Available Tax Increment and the failure
of the Authority to pay the entire amount of principal or interest on this Noteon any Payment
Date shall not constitute a default hereunder as long as the Authority pays principal and interest
hereon to the extent of Available Tax Increment. The Authority shall have no obligation to pay
any unpaid balance of principal or accrued interest that may remain after the final Payment on
the Maturity Date.
4.Default.If on any Payment Date there has occurred and is continuing any Event
of Default under the Agreement, the Authority may withhold from payments hereunder under all
Available Tax Increment. If the Event of Default is thereafter cured in accordance with the
Agreement, the Available Tax Increment withheld under this Section shall be deferred and paid,
without interest thereon, within thirty (30)days after the Event of Default is cured. If the Event
of Default is not cured in a timely manner, the Authority may terminate this Note by written
notice to the Owner in accordance with the Agreement.
5.Prepayment. The principal sum and all accrued interest payable under this Note is
prepayable in whole or in part at any time by the Authority without premium or penalty. No
partial prepayment shall affect the amount or timing of any other regular Payment otherwise
required to be made under this Note.
6.Nature of Obligation. This Note is one of an issue in the total principal amount of
$1,170,000, issued to aidin financing certain public redevelopment costs and administrative
costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.090
through 469.1081, and is issued pursuant to authorizing resolutionss
adopted by the Authority on August 7,2017 and ____________, 2017, and pursuant to and in
full conformity with the Constitution and laws of the State of Minnesota, including Minnesota
Statutes, Sections 469.174 to 469.1794, as amended. This Note is a limited obligation of the
Authority which is payable solely from Available Tax Increment pledged to the payment hereof
under the Resolutions. This Note and the interest hereon shall not be deemed to constitute a
general obligation of the State of Minnesota or any political subdivision thereof, including,
without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision
thereof shall be obligated to pay the principal of or interest on this Note or other costs incident
hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing
power of the State of Minnesota or any political subdivision thereof is pledged to the payment of
the principal of or interest on this Note or other costs incident hereto.
7.Registration and Transfer. This Note is issuable only as a fully registered note
without coupons. As provided in the Resolutions, and subject to certain limitations set forth
therein, this Note is transferable upon the books of the Authority kept for that purpose at the
509180v5 MNI CL205-66
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attorney duly authorized in writing, upon surrender of this Note together with a written
instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such
transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge
required to be paid by the Authority with respect to such transfer or exchange, there will be
issued in the name of the transferee a new Note of the same aggregate principal amount, bearing
interest at the same rate and maturing on the same dates, within 15 days after the delivery by the
Owner of its request and approval of such request by the Authority if required underthe
Agreement.
Except as otherwise provided in Section 3.3(d) of the Agreement, this Note shall not be
transferred to any person or entity, unless the Authority has provided written consent to such
transfer.
IT IS HEREBY CERTIFIED AND RECITED that allacts, conditions, and things
required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen,
and to be performed in order to make this Note a valid and binding limited obligation of the
Authority according to its terms, have been done, do exist, have happened, and have been
performed in due form, time and manner as so required.
IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heights
Economic Development Authority have caused this Note to be executed with the manual
signatures of its President and Executive Director, all as of the Date of Original Issue specified
above.
COLUMBIA HEIGHTSECONOMIC
DEVELOPMENT AUTHORITY
Executive DirectorPresident
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REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register
of the City Finance Director, in the name of the person last listed below.
Date of Signature of
RegistrationRegistered OwnerCity Finance Director
_________, 20__Columbia Heights Leased Housing
Associates III, LLLP
Federal Tax I.D No_____________
509180v5 MNI CL205-66
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AGENDA SECTION BUSINESS ITEM
ITEM NO. 5
MEETING DATE NOVEMBER 27, 2017
CITY OF COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
ITEM:Approval Consideration of Collateral Assignment of Tax Increment Financing Revenue Note
DEPARTMENT: Community Development
BY/DATE: Keith M Dahl, November 21, 2017 BY/DATE:
BACKGROUND:
T has been requested by the Columbia
Heights Leased Housing Associates III, LLLP CitiBank, N.A.
to approve a Collateral Assignment of its Tax Increment Revenue Note, Series 2017 in
connection to the Grand Central Flats Project located on the corner of 47th and Grand Avenue NE.
Dominium and the Lender have agreed to enter into a Construction Loan Agreement to finance part of the
acquisition and construction costs related to the Grand Central Flats Project. The Lender has requested that
Dominium provide collateral for the Construction Loan Agreement. Therefore, Dominium has offered the TIF
Note as collateral for the Construction Loan Agreement. However, in order for the Lender to accept the TIF
Note as collateral, the EDA is required to approve the Collateral Assignment and agree to certain other
matters fully contained within the attached Collateral Assignment of Interest in Payments under Tax
Increment Revenue Note pursuant to the Contract for Private Redevelopment by and between the EDA and
Dominium , but also the First Amendment to the TIF Agreement as well.
Please note: The Collateral Assignment of the TIF Note is merely an assurance to the Lender that if Dominium
defaults on the Construction Loan Agreement, the Lender would legally be able to collect the rents and the tax
increment payments under the TIF Note. Furthermore, in the event that Dominium would default on the
Construction Loan Agreement, the EDA would not be obligated to pay the Lender more than what is collected
through tax increment.
STAFF RECOMMENDATION:
Staff recommends approval of Resolution 2017-34 as presented.
RECOMMENDED MOTION(S):
Motion: Move to waive the reading of Resolution 2017-34, there being ample copies available to the public.
Motion: Move to adopt Resolution 2017-34, a resolution approving a Collateral Assignment of interest in
payments under Tax Increment Revenue Note, between Columbia Heights Leased Housing Associates III, LLLP
and CitiBank, N.A.
ATTACHMENTS:
1.Resolution 2017-34 (2 Pages)
2.Collateral Assignment of Interest in Payments Under Tax Increment Revenue Note (8 Pages)
12
City of Columbia Heights EDA Letter
COLUMBIA HEIGHTSECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2017-34
RESOLUTION APPROVING ACOLLATERALASSIGNMENT OF INTEREST
IN PAYMENTS UNDER TAX INCREMENT REVENUE NOTE, BETWEEN
COLUMBIA HEIGHTS LEASED HOUSING ASSOCIATES III, LLLPAND
CITIBANK, N.A.
BE IT RESOLVED By the Board of Commissioners ("Board") of the Columbia Heights
Economic Development Authority ("Authority") as follows:
Section 1. Recitals.
1.01.Pursuant to their authority under Minnesota Statutes, Sections 469.090 to 469.1081
th
established the 47and Grand Tax Increment Financing District within the Downtown CBD
ing the redevelopment of certain
substandard property within the Project.
1.02. the Authority andColumbia Heights Leased Housing Associates III, LLLP(the
Redeveloperentered into that certain Contract for Private Redevelopment dated as of August7,
2017, as amended
described within the Contract
1.03.Pursuant to the terms of the Contract, the Authority will issueits Tax Increment
Revenue Note, Series 2017Redeveloper
closing on its construction financing for construction of the Minimum Improvements, which will
include execution by the Redeveloper of certain loan documents with Citibank, N.A.as lender (the
.
1.04.The Redeveloper hasrequested that the Authority consent to the terms of a collateral
assignment of payments under the TIF Noteto the Lender, as memorialized in a Collateral
Assignment of Interest in Payments under Tax Increment Revenue Note between the Redeveloper
1.05.Pursuant to the Contract, the Redeveloper must seek approval from the Authority
prior to making any assignment of the Contract or Note.
1.06.The Board has reviewed the Assignment and finds that the approval and execution of
are in the best interest of the City and its residents.
Section 2. Authority Approval;Other Proceedings.
13
2.01.The Assignment, including the consent of the Authority related thereto, as presented
to the Board is hereby in all respects approved, subject to modifications that do not alter the
substance of the transaction and that are approved by the President and Executive Director,
provided that execution of the consent to the Assignment by such officials shall be conclusive
evidence of approval.
2.02. The President and Executive Director are hereby authorized to execute on behalf of
the Authority the consentattached to the Assignment and anyother documents requiring execution
by the Authority in order to carry outthe transaction describedin the Assignment.
2.03.Authority staff and consultants are authorized to take any actions necessary to carry
out the intent of this resolution.
Adopted by the Board of Commissioners of the Columbia Heights Economic
th
Development Authority this27day of November, 2017.
___________________________________________
President
ATTEST:
______________________________
Secretary
2
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COLLATERAL ASSIGNMENT OF INTEREST IN
PAYMENTS UNDER TAX INCREMENT REVENUE NOTE
THIS COLLATERAL ASSIGNMENT OF INTEREST IN PAYMENTS UNDER
TAX INCREMENT REVENUE NOTE
this Collateral Assignmentis made as of the ____
day of _________________, 2017, by and between COLUMBIA HEIGHTS LEASED
HOUSING ASSOCIATES, LLLP, a Minnesota limited liability limited partnership
BorrowerandCITIBANK, N.A.,anational banking association Lender
RECITALS
WHEREAS, Borroweris the owner of certain real property located in Columbia Heights,
MinnesotaMortgaged Property,to be developed as approximately 148 affordable rental
units of multi-family housing (theProject
The Project is the subject of that certain Tax Increment Revenue Note,Series 2017thatis
issuedon the date hereofby the Columbia HeightsEconomic Development Authority
AuthoritytoBorrowerin the original principal amount of One Million One Hundred Seventy
Thousand Dollars ($1,170,000), bearing an Original Issue date of December1, 2017TIF
Note,pursuant to the provisions of that certain Contract for Private Redevelopment between
the Authority and Borrowerdated August 7, 2017(theContract, as amended by a First
Amendment thereto dated as of November 27, 2017Amendment
WHEREAS, the Contract was filed of record in the office of the Anoka County Recorder
on _____________, 2017, as Document No. _______________, and in the office of the Anoka
County Registrar of Titles on ______________, 2017, as Document No. _____________, and
the Amendment was filed of record in the office of the Anoka County Recorder on
_____________, 2017, as Document No. _______________, and in the office of the Anoka
County Registrar of Titles on ______________, 2017, as Document No. _____________; and
WHEREAS, the Borrower has requested that the City of Columbia Heights, Minnesota a
home rule city, municipal corporation, and political subdivision duly organized and existing
Governmental
Lender,enter into that certain Funding Loan Agreement, dated as of December 1, 2017(the
Funding Loan Agreementby and among the Governmental Lender, the Lender, and U.S.
Bank National Association, as fiscal agent, under which the Lender will (i) advance funds (the
Funding Loan
of the Funding Loan to make a loan (theBorrower Loan
of the costs of the acquisition, construction, and equipping of the Project; and
WHEREAS, simultaneously with the delivery of theFunding Loan Agreement, the
Governmental Lender and the Borrower will enter into that certainBorrower Loan Agreement,
Borrower Loan Agreement
to make loan payments to the Governmental Lender in an amount which, when added to other
funds available under theFunding Loan Agreement, will be sufficient to enable the
Governmental Lender to repay the Funding Loan; and
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WHEREAS, the Borrower Loan is evidenced by that certain $18,060,719Multifamily
Note (Series 2017), dated as of the date hereofBorrower Note,made by Borrowerand
payable to the Governmental Lender, as endorsed and assigned to the Lender; and
WHEREAS,the obligations of the Borrower under the Borrower Noteissecured by a
lien on and security interest in the Project pursuant tothat certain Multifamily Mortgage,
Assignment of Rents, Security Agreement and Fixture Filing, dated as of the date hereof,
executed by Borrower for the benefit of the Governmental Lender and assigned to the Lender
Security Instrumentity Instrument encumbers the Mortgaged Property; and
WHEREAS, the Borrower Loan Agreement, the Borrower Note, the Security Instrument
and all other documents executed in connection with the Borrower Loan, including this
Borrower Loan Documents
WHEREAS, the Borrower Note, the Security Instrument and the Borrower Loan
Agreement are being assigned by the Governmental Lender to the Lender to secure the Funding
Loan, and the Lender will be the initial servicer of the Borrower Loan; and
WHEREAS, in connection with the foregoing, Borrower has requested that Lender
accept the TIF Note as collateral for the BorrowerNote and Lender has requested that Borrower
cause the execution and delivery of this Collateral Assignment, and thatthe Authority agree to
certain other matters, all as more fully contained herein.
NOW, THEREFORE,
in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1.Borrowerhereby assigns, transfers and sets over unto Lender, for collateral
purposes,all of Borrowercurrent and future right, title and interest in and to the payments
under the TIF Note, as security for the full, timely and faithful repayment by Borrower of the
Borrower Loan, and performance by Borrower of its obligations under the Borrower Loan
Documents.The parties agree that this Collateral Assignment is intended for collateral purposes
only and until such time as an Event of Default occurs (as further described in Section 4 of this
Agreement), Borrowershall remain entitled to all payments pursuant to the TIF Note.
2.Borrowerhereby agreesto faithfully observe and perform all of the obligations
and agreements pursuant to the Contract regarding the terms and conditions of the TIF Note,
subject to Borrowerright to reasonably contest observance and performance.
3.Lender will not be deemed inany manner to have assumed any of the obligations
related to the Contract or the TIF Note, nor shall Lender be liable to the Authority by reason of
any default by any party under the Contract or the TIF Note. Borrower agrees to indemnify and
to hold Lender harmless of and from any and all liability, loss or damage which it may or might
incur by reason of any claims or demands against it based on its alleged assumption of
Borrowerduty and obligation to perform and discharge the terms, covenants and agreements in
the Contract or the TIF Note.
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4.After the occurrence of an Event of Default (as defined and set forth in the
BorrowerLoan Documents), subject to applicable grace or cure periods, and if Lender elects to
exercise its rights pursuant to this Collateral Assignment:
a)Lender shall provide written notice to Borrowerand to the Authority of
Borrower
Election Notice
Borrower, and Borrowershall cooperate in causing the Authority to
comply with all the terms and conditions of the Election Notice.
b)Following delivery of the Election Notice, Lender shall be entitled to
receive payments under the TIF Note.
c)Nothing set forth in this CollateralAssignment shall permit or provide
Lender with authority to (i) amend the terms of the TIF Note or the
Contract; or (ii)make concessions to the Authorityin connection with the
TIF Note or the Contract, it being agreed that this Collateral Assignment is
solely an assignment of the right to payments under the TIF Note.
5.
Borrower Loan Documents. Any
failure on the part of the Lender promptly to exercise any option hereby given or reserved shall
not prevent the exercise of any suchoption at any time thereafter. Lender may pursue and
enforce any remedy or remedies accorded it herein independently of, in conjunction or
concurrently with, or subsequent to its pursuit and enforcement of any remedy or remedies which
it may have under the Borrower Loan Documents.
6.Lender is not the agent, partner or joint venturer of Borroweror the Authority.
7.Borrowerwarrants and represents that:
a)Upon the consent of the Authority, Borrowerhas the right to exercise and
deliver this Collateral Assignment under the terms of the Contract and the
TIF Note. The execution of this Collateral Assignment and performance
and observance of its terms hereof have been duly authorized by necessary
company action and do not contravene or violate any provision of
Borrower
b)Borrowerhas made no prior assignments of the TIF Note.
c)Borrowerwill not allow or permit any surrender, termination, material
amendment or modification of the Contract or the TIF Note without the
prior written consent of Lender, which consent shall not be unreasonably
withheld.
d)ToBorrower
Note are in full force and effect, subject to no defenses, setoffs or
counterclaims whatsoever.
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e)ToBorrower
which constitutes, or which with notice and/or the passage of time would
constitute, a breach of or default under any terms or conditions of any of
the Contract or the TIF Note.
8.When the context so requires, the singular shall include the plural and conversely,
and use of any gender shall include all genders.
9.This Collateral Assignmentshall begoverned by and be construed in accordance
with the laws of the State of Minnesota. Whenever possible, each provision of this Collateral
Assignmentshall be interpreted in such manner as to be effective and valid under applicable law,
but if any provisionof this Collateral Assignmentshall be prohibited by or be invalid under
applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining provisions of this
Collateral Assignment.
10.ThisCollateral Assignment may be executed in counterparts for the convenience
of the parties, which together shall constitute one Collateral Assignment and the counterpart
signature pages may be detached from the various counterparts and attached to make one copy of
this Collateral Assignment.
11.Notices required hereunder shall be by registered or certified mail or hand
delivered, addressed as follows:
If to the Borrower:Columbia Heights Leased Housing Associates III, LLLP
2905 Northwest Boulevard, Suite 150
Plymouth, MN 55441
Attn: Mark S. Moorhouse and Owen Metz
With a copy to:
Winthrop & Weinstine, P.A.
th
225 S. 6Street, Suite 3500
Minneapolis, MN 55402
Attention: John Nolde, Esq.
If to the Authority:Columbia HeightsEconomic Development Authority
th
590 40Avenue NE
Columbia Heights, MN 55416-2518
Attn: Executive Director
with a copy to:
Kennedy & Graven, Chartered
th
200 South 6Street, Suite 470
Minneapolis, MN 55402
Attn: Martha Ingram, Esq.
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If to the Lender:Citibank, N.A.
th
388 Greenwich Street, 8Floor
New York, New York 10013
Attention: Transaction Management Group
Re: Grand Central Flats Deal ID No. __________
with a copy to:
Citibank, N.A.
325 East Hillcrest Drive, Suite 160
Thousand Oaks, California 91360
Attention: Operations Manager/Asset Manager
Re: Grand Central Flats Deal ID No. __________
or to such other address specified in writing by one party to the other in accordance herewith.
INAGREEMENT
,the parties have has caused this Collateral Assignmentto be executed as of
the day and year first abovewritten
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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Signature page ofBorrowerto Collateral Assignment of Interest in Payments under Tax
Increment Revenue Note
BORROWER:
COLUMBIA HEIGHTS LEASED HOUSING
ASSOCIATES III, LLLP, a Minnesota Limited
Liability Limited Partnership
By: Columbia Heights Leased Housing Associates
III, LLC
Its General Partner
By
________________________________________
Owen Metz
Its Authorized Representative
STATE OF MINNESOTA)
) SS.
COUNTY OF __________)
The foregoing instrument was acknowledged before me this _____ day of
_____________, 2017 by Owen Metz, the Authorized Representative of Columbia Heights
Leased Housing Associates III, LLC, a Minnesota limited liability company, the General Partner
of Columbia Heights Leased Housing Associates III, LLLP, a Minnesota limited liability limited
partnership, on behalf of the partnership.
Notary Public
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Signature page of Lender to Collateral Assignment of Interest in Payments under Tax
Increment Revenue Note
LENDER:
CITIBANK, N.A.
By:
Name:
Title:
STATE OF MINNESOTA)
)
COUNTY OF _________)
The foregoing instrument was acknowledged before me this _____ day of December,
2017, by ____________________, the ____________________ of Citibank, N.A., a national
banking association, for and on behalf of the association.
Notary Public
THIS INSTRUMENT DRAFTED BY:
Kennedy & Graven, Chartered (MNI)
220South Sixth Street, Suite 470
Minneapolis, MN 55402
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CONSENT TO COLLATERAL ASSIGNMENT OF INTEREST IN
PAYMENTS UNDER TAX INCREMENT REVENUE NOTE
The Columbia Heights Economic Development Authority Authorityhas issued its
Tax Increment Revenue Note, Series 2017in the principal amount of $1,170,000(the TIF
Noteupon satisfaction of the terms for issuance of the TIF Note required by that certain
Contract for Private Redevelopment between the Authority and Columbia Heights Leased
Housing Associates III, LLLPBorrowerand dated August 7, 2017, as amended by a First
Amendment thereto dated as of November 27, 2017(as so amended, the ContractThe TIF
Note has been issued to the Borrower and
that term is defined in Section 3 of the TIF Note. The Authority has received a Collateral
Assignment of Interest in Payments under Tax Increment Revenue Note (the Collateral
Assignmentexecuted by the Borrowerwhich collaterally assigns interests in the
payment of Available Tax Increment under the TIF Note to Citibank, N.A., a national banking
association. The Authority consents to such Assignment pursuant to Section 7 of
the Note.
The Authority agrees that upon receipt of an Exercise Notice as defined in the Collateral
Assignment, the Authority shall make all payments under the Note to the Lenderat the following
address:
Citibank, N.A.
th
388 Greenwich Street, 8Floor
New York, New York 10013
Attention: Transaction Management Group
Re: Grand Central Flats Deal ID No. __________
Until such time as the Authority receives an Exercise Notice, the Authority shall continue
to make all payments under the Note to the Borrower.
AUTHORITY:
COLUMBIA HEIGHTSECONOMIC
DEVELOPMENT AUTHORITY
By:
Print:
Its:President
By:
Print:
Its:Executive Director
A-1
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