HomeMy WebLinkAbout2020-76CITY OF COLUMBIA HEIGHTS, MINNESOTA
RESOLUTION NO. 2020-76
RESOLUTION APPROVING SUBORDINATION OF PURCHASE AND REDEVELOPMENT CONTRACT BETWEEN THE CITY, THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, AND OLD NATIONAL BANK, AND CONSENTING TO ASSIGNMENT OF TAX INCREMENT FINANCING DOCUMENTS BETWEEN BPOZ COLUMBIA HEIGHTS, LLC AND COLLIERS FUNDING LLC.
BE IT RESOLVED By the City Council ("Council") of the City of Columbia Heights, Minnesota ("City") as follows:
Section 1. Recitals.
1.01. The City and the Columbia Heights Economic Development Authority (the "Authority") have previously established the NE Business Center Tax Increment Financing District ("TIF District") within the Downtown Central Business District Redevelopment Project.
1.02. On the date hereof, the City, the Authority, and BPOZ Columbia Heights, LLC ("Redeveloper") have entered into a Purchase and Redevelopment Contract (the "Contract"), regarding the conveyance by the City and Authority to the Redeveloper, and the development by the Redeveloper, of certain property within the TIF District by means of the construction of a multi-use facility comprising commercial space, a city hall, and market-rate multifamily housing (the "Minimum Improvements").
1.03. In order to provide a portion of the construction financing for the Minimum Improvements, the Redeveloper's first mortgage lender, Old National Bank ("Old National") requires a subordination of certain of the City's and Authority's rights under the Contract with respect to the Minimum Improvements, as set forth in the Subordination of Purchase and Redevelopment Contract presented to the City for its consideration (the "Subordination").
1.04. Section 7.3 of the Contract provides that the City and Authority shall consent to subordinate their rights under the Contract, so long as such subordination contains such reasonable terms and conditions as are mutually agreed by the parties in writing.
1.05. In order to collateralize a portion of the construction financing for the Minimum Improvements, the Redeveloper's second mortgage lender, Colliers Funding LLC ("Colliers"), requires an assignment of the Redeveloper's rights under the Contract (the "Assignment"), including the right to payments under the proposed Tax Increment Revenue Note (Alatus Project) (the "TIF Note") to be issued by the Authority pursuant to the Contract, and has requested that the City consent to such Assignment pursuant to a
Consent and Estoppel Certificate (the "Consent") in substantially the form attached to the Assignment.
1.06. Section 3.7(d) of the Contract provides for assignment of the TIF Note to a third party, subject to the terms and conditions of the Contract.
1.07. The Council has reviewed the Subordination and the Assignment and finds that the approval and execution of the Subordination and of the Consent are consistent with the provisions of the Contract and are in the best interest of the City and its residents.
Section 2. City Approval; Other Proceedings.
2.01. The Subordination and the Assignment (including the Consent) as presented to the Council are hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the Mayor and City Clerk, provided that execution of the Subordination and of the Consent by such officials shall be conclusive evidence of approval.
2.02. The Mayor and City Clerk are hereby authorized to execute on behalf of the City the Subordination, the Consent, and any other documents requiring execution by
the City in order to carry out the transaction described in the Subordination and Assignment.
2.03. City staff and consultants are authorized to take any actions necessary to carry out the intent of this resolution.
Approved by the City Council of the City of Columbia Heights, Minnesota this 28th day of September, 2020.
Offered by: Novitsky Seconded by: Murzyn, Jr. Roll Call: All Ayes
Donna K. Schmitt, Mayor
ATTEST:
cil Secretary
675981vl MNI CL205-73