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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 M 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 mm4 = Winthrop & Weinstine, P.A, 225S.61h Street, Suite 3500 Minneapolis, NIN 55402 Attention: John Nolde, Esq. 0• k • 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 mmnn- 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 7 Signature page ofBorrower to Collateral Assig=ent ofinterest in Payments under 7ax Increment Revenue Note 1ftf 9 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 M1 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 w 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