HomeMy WebLinkAbout2017-2833.13CONTRACT NO: 2017-013
CONTRACT DATE: 11/27/17
THIS COLLATERAL ASSIGNMENT OF INTEREST IN PAYMENTS UNDER
TAX INCREMENT REVENUE NOTE (this "Collateral AssigLament") is made as, of the 4h
day of December, 2017, by and between COLUMBIA HEIGHT'S LEASED HOUSING
ASSOCIATES, LLLP, a Minnesota limited liability limited partnership CTo_rrower and
CITIBANK, N.A., a national banking association ( "Lender ").
I
WHEREAS, Borrower is the owner of certain real property located in Columbia Heights,
Minnesota (the "Mortgaged Property"), to be developed as approximately 1,48 affordable rental
units of multi-family housing (the "Projec ').
The Project is the subject of that certain Tax Increment Revenue Note, Series 2.017 that is
issued on the date hereof by the Columbia Heights Economic Development Authority
Authority") to Borrower in the original principal amount of One Million One Hundred Seventy
Thousand Dollars, ($1,170,000), bearing an Original Issue date of December 1, 2017 ("TIP
Note " "), pursuant to the provisions of that certain Contract for Private Redevelopment between
the Authority and Borrower dated August 7, 2.017 (the "Contract"), as amended by a First
Amendment thereto: dated as of November 27, 2017 (the "Amendment"),
WHEREAS, the Borrower has applied to Citibank, N.A., a national banking association,
the "Lender") for a loan (the "Loan"), for the acquisition, development, equipping and/or
operation of a multifamily housing project containing 148 units located in the City of Columbia
Heights, Anoka County,, Minnesota, known as Grand Central, Flats; and
WHEREAS, simultaneously with the execution of this Collateral Assignment and as a
part of the same transaction, the Borrower has executed and delivered to the Lender, the Note (as
defined in the Loan Agreement) in the maximum principal amount of $1,170,000, together with
the other Loan Documents (each as hereinafter defined), which are intended to evidence and
secure the Loan; and
WHEREAS, The Loan is secured by, among other things, that certain Multifamily
Mortgage, Assignment of Rents, Security Agreement and Fixture Filing (the "Security
Instrument"), dated as of December 1, 2017, encumbering the property described on Exhibit A
attached thereto, and incorporated by reference herein, and will be advanced to Borrower
pursuant to that certain Construction Loan Agreement ("'Loan Agreement"), dated as of
December 1, 2017, between Borrower and Lender (the Note, the Security Instrument, the Loan
Agreement and all other documents executed in connection with the Loan, including this
Guaranty, are collectively referred to as the "Loan Documents"); and
WHEREAS, in connection with the foregoing, Borrower has requested that Lender
accept the TIF Note as collateral for the Note and Lender has requested that Borrower cause: the
CollateralAssipment of Note
Grand Central Flats
execution and delivery of this Collateral Assignment, and that the 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. Borrower hereby assigns, transfers and sets over unto Lender and grants to
Lender, its successors and assigns, a security interest, for collateral purposes and for all future
loans, advances, debts, liabilities, obligations, covenants and duties owing by Borrower to
Lender of any kind or nature arising from the Loan (collectively, the "Loans"), all of Borrower's
current and future right, title and interest in and to the Contract, the TIF Note and 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 Loan Documents.
This Assignment shall constitute a perfected, absolute and present assignment, provided that
Borrower shall remain entitled to all payments pursuant to the TIF Note and Lender shall not
have any right under this Assignment to exercise any remedies under this Assignment until an
Event of Default (as defined and set forth in the Loan Documents) shall occur. In furtherance of
such transfer and assignment, within 3 business days of the date hereof, Borrower shall deliver to
Funding Lender the original executed TIF Note together with an endorsement of the T'IF Note in
the form attached hereto as Exhibit B.
2. Borrower hereby agrees to 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 Borrower's right to reasonably contest observance and performance.
3. Lender will not be deemed in any 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
Borrower's duty and obligation to perform and discharge the terms, covenants and agreements in
the Contract or the TIF Note.
4. After the occurrence of an Event of Default, 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 Borrower and to the Authority of
Lender's election to exercise Borrower's right to payment under the TIF
Note ("Election Notice"), without any interference or objection from
Borrower, and Borrower shall 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 Collateral Assignment shall permit or provide
Lender with authority to (i) amend the terms of the TIF Note or the
CoflatcrW Assignment of TIF Note
Grand Central Flats
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Contract; or (ii) make concessions to the Authority in 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,
S. Lender's exercise of its rights pursuant to this Collateral Agreement shall not limit
Lender's exercise of any other remedies provided to it in the Loan Documents. Any failure on
the part of the Lender to promptly exercise any option hereby given or reserved shall not prevent
the exercise of any such option 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 Loan Documents,
6. Lender is not the agent, partner or joint venturer of Borrower or the Authority.
Borrower warrants, covenants and represents that:
a) Upon the consent of the Authority, Borrower has the right to exercise and
deliver this Collateral Assignment, the Contract and the TIF Note 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's organizational
documents.
b) Borrower has made no prior assignments of the TIF Note and the
Contract, the TIF Note, and the Available Tax Increment (as defined in the
Contract) are free and clear of all liens, security interests, assignments and
encumbrances other than the assignment and security interest created by
this Assignment.
C) Borrower will not allow or permit any surrender, terinination, material
amendment or modification of the Contract or the TIF Note and will not
release or discharge the obligations of any party thereto or modify or
extend the time of performance thereunder or the scope of the work
thereunder without the prior written consent of Lender, which consent
shall not be unreasonably withheld.
d) To Borrower's knowledge, as of the: date hereof, the Contract and the Tip
Note are in full force and effect, subject to no defenses, setoffs or
counterclaims whatsoever,
e) To Borrower's knowledge, there exists no event, condition or occurrence
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 Tip Note,
Collateral Assignment ofTIF Note
Grand Central Flats
f) Borrower will keep the TIF Note and the Available Tax Increment free
from any lien, encumbrance, assignment or security interest whatsoever,
other than this Assignment and security interest.
g) Borrower will from time to time and at the request of Lender (,at the
direction of Lender) execute such documents and pay the cost of filing and
recording the same and do such other acts and things, as Lender may
request to establish and maintain a first priority perfected security interest
in the Contract, the TIC" Note, and the Available 'fax Increment which is
valid and superior, to all liens, claims or security interests whatsoever, or to
otherwise further evidence or implement the provisions and intent of this
Assignment.
h) Borrower shall perform each and every one of its duties and obligations
under the Contract and observe and comply with each and every term,
covenant, condition, agreement, requirement, restriction and provision of
the Contract.
i) Borrower shall give prompt notice to Funding Lender of any claim of or
notice of default under the Contract or the TIF Note known or given to it
together with a copy of any such notice or claim if in writing.
At the sole cost and expense of Borrower, Borrower will enforce the full
and complete performance of each and every duty and obligation to be
performed by the Authority wider the Contract and the TIF Note.
k) Borrower will appear in and defend any action arising out of or in any
manner connected with the Contract or the TIF Note and the duties and
obligations of Borrower or the Authority thereunder.
When the context so requires, the singular shall include the plural and conversely, and use of any
gender shall include all genders.
8. This Collateral Assignment shall be governed by and be construed in accordance
with the laws of the State of Minnesota. Whenever possible, each provision of this, Collateral
Assignment shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Collateral Assignment shall 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.
9. This Collateral 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.
101. Notices required hereunder shall be by registered or certified mail or hand
delivered, addressed as follows.
Collateral Assigranent of TIF Note
Grand Central Flats
El
If to the Borrower: Columbia Heights Leased Housing Associates 111, LLLP
2905 Northwest Boulevard, Suite 150
Plymouth, MN 55441
Attn: Mark S. Moorhouse and Owen Metz
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Winthrop & Weinstine, P.A,
225S.61h Street, Suite 3500
Minneapolis, NIN 55402
Attention: John Nolde, Esq.
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Transamerica Financial Life Insurance Company
c/o AEGON USA Realty Advisors, LLC
Mail Drop 5553
4333 Ed, ewood Road NE
Cedar Rapids, ]A 52499
Attn: LIHTC Reporting
E-mail, lihtcreporting@ae,gonusa.com
Transamerica Affordable Housing, Inc.
c/o AE ON USA Realty Advisors, LLC
Mail Drop 5553
4333 Edgewood Road NE
Cedar Rapids, IA 52499
Attn: LIHTC Reporting
E-mail: lihtcreporting@ae:gonusa.com
Klein Hornig LLP
101 Arch Street, Suite 1 141
Boston, Massachusetts 02110
Attention: Jack Condon, Esq.
Telephone: (617) 224-0612
If to the Authority. Columbia Heights Economic Development Authority
5910 401h Avenue NE
Columbia Heights, MN 55416-2518
Attn: Executive Director
Collateral Assignment of'FIF we
Grand. Central Flats
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Kennedy & Graven, Chartered
200 South 6' Street, Suite 470
Minneapolis, MN 55402
Attn: Martha Ingram, Esq.
If to the Lender: Citibank, N.A.
388 Greenwich Street, 8th Floor
New York, New York I OHO 13
Attention: Transaction Management Group,
Re: Grand Central Flats Deal ID No. 25125
Facsimile: (212) 723-8209
And 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. 25125
Facsimile: (805) 557-0924
Prior to the Conversion Citibank N.A,
Date, with copy to: 388 Greenwich Street, 81 Floor
New York, New York 10013
Attenciton: Account Specialist
Re: Grand Central Flats, Deal ID No. 25125
Facsimile: (212) 723-8209'
After the Conversion Berkadia Commercial Mortgage LLC
Date, with a copy to: 118 'Welsh Road
Horsham, Pennsylvania 19044
Attention: Client Relations, Manager
Re: Grand Central Flats Deal ID No. 25125
Facsimile: (215) 4,41-7295
And a copy of any notices Citibank:, N.A.
of default sent to: 388 Greenwich Street
New York, New York 10013
Attention: General Counsel's Office
Re. Grand Central Flats Deal ID No. 25125
Facsimile: (646) 2911-5754
11. Borrower hereby authorizes, Lender and all persons and entities designated by
Lender at the direction of Lender during an Event of Default to act on its behalf either in the
name of Borrower or Lender (or the name of the person and entity designated by Lender) in
connection with the exercise of any of the rights of Borrower under the Contract and the TIF
Collateral Assignrnent ofTIF Note
Grand Central Flats
on
Note. Borrower hereby irrevocably constitutes and appoints Lender and all persons and entities
designated by Lender as its attorney-in-fact to demand, receive and enforce Borrower's rights
with respect to the Contract and the TIF Note. Borrower agrees to reimburse Lender on demand
for any reasonable expenses, incurred by Lender, or its agents or attorneys, pursuant to the
aforesaid authorization. Borrower hereby irrevocably instructs, directs, authorizes and empowers
all parties to the Contract and the TIF Note to recognize the claims of Lender, and its successors
or assigns hereunder, and to act upon any instructions or directions of Lender and all persons and
entities designated by Lender without investigating the reason for any action taken by Lender (or
such other party or parties),
12. The rights assigned by this Assignment include but are not limited to all of
Borrower's interest in the Contract, the'FIF Note, and the Available Tax Increment, including, all
right, power, privilege and option to modify or amend the Contract or the TIF Note, or waive or
release the performance or satisfaction of any duty or obligation under the 71"IF Note; provided,
prior to any Event of Default, Borrower shall have the right to apply the Available Tax
Increment for the purposes stated in the Contract. or to such other address specified in writing
by one party to the other in accordance herewith.
13. Upon a determination by Lender that the obligations secured by this Assignment
have been fully satisfied, Lender shall thereupon deliver to Borrower such instruments of release
as, in the opinion of Borrower, may be necessary to release the interests of Funding Lender in the
Contract, the TIF Note, and the Available Tax Increment.
14. IN AGREEMENT, the parties have has caused this Collateral Assignment to be
executed as of the day and year first above written
I-THE REMAINDER OP' THIS PAGE IS INTENTIONALL Y LEFT BLANK.]
Collateral Assigment of TIF Note
Grand Cwtra] Flats
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Signature page ofBorrower to Collateral Assig=ent ofinterest in Payments under 7ax
Increment Revenue Note
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COUNTY Op MV
W111-P yoll* 11IMV6
ASSOCIATES III, LLLP, a Mirmesota
limited liability limited partnership
By: Columbia Heights Leased it
Associates, 111, LLC, a Minnesota limited
liability company, its general partner
By:
Owen C. Metz
Authorized epresentative
The foregoing instrument was acknowledged before me this _Zy_ day of
j\(0Vt,MW)K , 2017 by Ow Menetz, the Authorized Representative of Columbia Heights
Leased Housing Associates 111, LING, 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,
KERRY J KOCH
NOTARY PUBLIC
MINNESOTA
MYCa=Wtm Expms Jan, 31, x'122
Collateral Assignment of TIF Note
Grand Central Flats
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Signature page ofLender to Collateral Assignment ofInterest in Payments under Tax
Increment Revenue Note
191efe",
0
Barry Kriqsk
Authorized Signatoryo
STATE MD4ff---A
COUNTY OF Pe,
CoHaWal Assignmentof TIF Note:
Grind Central Flats
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I , L, LOMSIIFRWYMTANSTO
The Columbia Heights, Economic Development Authority ("Authority") has issued its
Tax Increment Revenue Note, Series 2017 in the principal amount of $1,170,000 ("the TIF
Note") upon satisfaction of the terrns for issuance of the TIF Note required by that certain
Contract for Private Redevelopment between the Authority and Columbia Heights Leased
Housing Associates 111, LLLP ("Borrow ") and dated August 7, 2017, as amended by a First
Amendment thereto dated as of November 27, 2017 (as so amended, the "Contract"). The TIF
Note has been issued to the Borrower and is payable solely from "Available Tax Increment," as
that term is defined in Section 3 of the TIF Note, The Authority has received a Collateral
Assignment of Interest in Payinents under Tax Increment Revenue Note (the "Collateral
Assigm-nent"), executed by the Borrower which collaterally assigns Borrower's interests in the
payment of Available Tax Increment under the TIF Note to Citibank, N.A., a national banking
association (the "Lender"). 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 Lender at the following
address:
Citibank, N.A.
388 Greenwich Street, 81h Floor
New York, New York 10013
Attention: Transaction Management Group
Re: Grand Central Flats Deal ID No. 25125
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 HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
A-]
511607v2 MNI CL205-66
Ain,
TAX INCREMENT'REVENUE NOTE SERIES 20!—, DATED 2017, 1
THE ORIGINAL PRINCIPAL AMOUNT OF $1,170,000 COLUMBIA HEIGHTS LEASE-0
HOUSI`NG ASSOCIATES 111, LLLP. I
Pay to the order of Citinak, N.A., a national banking association, as Lender.
1111 * ;
N,
COLUMBIAHEIGHTS LEASED HOUSING
ASSOCIATES 111, LLLP, a Minnesota
limited liability limited partnership
By: Columbia Heights Leased Housing
Associates 111, LL,C, a Minnesota limited
liability company, its general partner
0
Collateral Assign nent of TJF Note
Grand Central Flats
Owen C. Metz
Authorized Re