HomeMy WebLinkAbout2025-054 Alatus Approving Third Amended Loan DocumentsCITY OF COLUMBIA HEIGHTS, MINNESOTA
RESOLUTION NO.2025-054
RESOLUTION APPROVING MODIFICATION OF CERTAIN
TERMS OF A LOAN FROM THE CITY TO ALATUS
COLUMBIA HEIGHTS II LLC AND APPROVING FORMS OF
THIRD AMENDED AND RESTATED LOAN DOCUMENTS
BE IT RESOLVED by the City Council (the "City Council") of the City of Columbia Heights,
Minnesota (the "City") as follows:
Section 1. Recitals.
1.01. In order to facilitate the acquisition by Alatus Columbia Heights II LLC, a Delaware
limited liability company (the "Borrower"), of certain property located at 4300 Central Avenue NE in the
City (the "Property"), within the Alatus TIF District (the "TIF District"), a redevelopment district located
within the Downtown Central Business Redevelopment Project in the City (the "Redevelopment
Project'), the Borrower requested a bridge loan from the City to finance a portion of the purchase price of
the Property, legal, closing, and other transaction costs associated therewith, costs of demolition, and
costs associated with reports (collectively, the "Project Costs"), all of which are qualified public
redevelopment costs reimbursable from tax increment under Minnesota Statutes, Sections 469.174
through 469.1794, as amended (the "TIF Act').
1.02. Pursuant to the terms and conditions of a Second Amended and Restated Loan
Agreement, dated December 14, 2023, between the City and the Borrower, which amended and restated
an Amended and Restated Loan Agreement, dated June 30, 2023, which amended and restated a Loan
Agreement, dated July 29, 2021 (collectively, and as amended and restated, "Loan Agreement'), the City
loaned to the Borrower the sum of $6,615,000 (the "Loan"), from the proceeds of its Taxable General
Obligation Temporary Tax Increment Refunding Bonds, Series 2023A (the "Series 2023A Bond"), dated
December 14, 2023, issued by the City in the original aggregate principal amount of $6,615,000, which
Series 2023A Bond refunded the Taxable General Obligation Temporary Tax Increment Bonds, Series
2021A (the "Series 2021A Bond"), dated July 29, 2021, issued by the City in the original aggregate
principal amount of $5,935,000, to provide temporary financing for the Project Costs.
1.03. The Series 2023A Bond matures on February 1, 2026, and is subject to optional
redemption on or after August 1, 2024. The principal of the Series 2023A Bond and interest thereon are
payable primarily from tax increments resulting in increases in the taxable value of real property in the
TIF District (the "Tax Increment Revenues") and from the proceeds of definitive bonds to be issued prior
to the maturity of the Series 2023A Bond, as set forth in the resolution adopted by the City Council on
November 27, 2023, awarding the sale of the Series 2023A Bond (the "Bond Resolution"). As provided
in the Series 2023A Bond and Bond Resolution, if the Series 2023A Bond cannot be paid at maturity
from Tax Increment Revenues or from other funds appropriated by the City Council, the Series 2023A
Bond must be paid from the proceeds of definitive bonds to be issued and sold prior to the maturity date
of the Series 2023A Bond.
1.04. To evidence the Loan, the Borrower delivered to the City a Second Amended and
Restated Promissory Note, dated December 14, 2023, which amended and restated an Amended and
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Restated Promissory Note, dated June 30, 2023, which amended and restated a Promissory Note, dated
July 29, 2021 (collectively, and as amended and restated, the "Note"), which Note is secured by a Second
Amended and Restated Mortgage, dated December 14, 2023, which amended and restated an Amended
and Restated Mortgage, dated June 30, 2023, which amended and restated a Mortgage, dated
July 29, 2021 (collectively, and as amended and restated, the "Mortgage"), by the Borrower in favor of
the City. In addition, the Borrower, the City and Commercial Partners Title ("Title") executed a Second
Amended and Restated Escrow Agreement, dated December 14, 2023, which amended and restated an
Amended and Restated Escrow Agreement, dated June 30, 2023, which amended and restated an Escrow
Agreement, dated July 29, 2021 (collectively, and as amended and restated, the "Escrow Agreement"),
pursuant to which Title, as escrow agent, holds a portion of the Loan in escrow for disbursement to the
Borrower to pay for Project Costs. As provided in the Escrow Agreement, the date of the final draw on
the Loan was December 31, 2024 (the "Original Final Draw Date").
1.05 Section 2(a) of the Loan Agreement provides that the entire unpaid amount of principal
of the Loan, plus interest equal to the amount of interest paid by the City in excess of the par amount of
the Series 2023A Bond, if any, is due and payable on July 31, 2025 (the "Original Loan Payment Date"),
unless prepaid earlier. The maturity date of the Note and the Mortgage, as set forth in such documents, is
the Original Loan Payment Date (i e.,=July 31, 2025).
1.06. The Borrower represented to the City that it anticipates repaying the Loan from proceeds
of short-term financing, long-term mortgage financing, a bridge loan with a long-term take-out financing
commitment, or a combination of the foregoing (the "Other Financing"), but that closing on the Other
Financing has been delayed and is expected to occur after the Original Loan Payment Date; as such, the
Borrower has requested that the Original Loan Payment Date be extended to December 15, 2025 and that
the Original Final Draw Date be extended to November 15, 2025.
1.07. Forms of documents further modifying the Loan, including a Third Amended and
Restated Loan Agreement, a Third Amended and Restated Promissory Note, a Third Amended and
Restated Mortgage, and a Third Amended and Restated Escrow Agreement (collectively, the "Third
Amended and Restated Loan Documents"), have been prepared and are on file with the City. It is the
intention of the City that the Third Amended and Restated Loan Documents will amend and restate the
Loan Agreement, the Note, the Mortgage, and the Escrow Agreement (the "Original Loan Documents")
to extend the Original Loan Payment Date to December 15, 2025 (the "Modified Loan Payment Date")
and to extend the Original Final Draw Date to November 15, 2025 (the "Modified Final Draw Date"), and
that the terms and conditions of the Original Loan Documents and any other document executed by the
City in connection with the Loan and the Series 2023A Bond remain in full force and effect.
Section 2. City Approval; Other Proceedings.
2.01. The City Council hereby approves the extension of the Original Loan Payment Date to
the Modified Loan Payment Date (i.e., a date not later than December 15, 2025) and the Original Final
Draw Date to the Modified Final Draw Date (i.e., a date not later than November 15, 2025), all as set
forth in the Third Amended and Restated Loan Documents.
2.02. The Third Amended and Restated Loan Documents as presented to the City 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 the City Manager, provided that execution of the Third Amended
and Restated Loan Documents to which the City is a party (the "City's Third Amended and Restated
Loan Documents") by such officials shall be conclusive evidence of approval.
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2.03. The Mayor and the City Manager are hereby authorized to execute on behalf of the City
the City's Third Amended and Restated Loan Documents, along with any documents referenced therein
requiring execution by the City, and to carry out on behalf of the City its obligations thereunder.
2.04. City staff and consultants are authorized to take any actions necessary to carry out the
intent of this resolution.
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4921-7130-2475.3
Approved this 23`d day of June, 2025, by the City Council of the City of Columbia Heights, Minnesota.
Offered by: Buesgens
Seconded by: James
Roll Call: All Ayes, Spriggs Absent
ATTEST:
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Sara Ion, City Clerk
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