HomeMy WebLinkAbout[04f] TIF Assignment, Millstream Shops & Lofts 11 Council Agenda Item 4f
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MEETING DATE: October 3, 2016
AGENDA ITEM: TIF Assignment—Requested Action: Authorize the Mayor and
Administrator to execute Assignment Agreements for the Millstream Shops and Lofts TIF.
SUBMITTED BY: Administration
BOARD/COMMISSION/COMMITTEE RECOMMENDATION: The EDA recommended
approval of the assignments as requested.
PREVIOUS COUNCIL ACTION: In 2007, acting upon a recommendation of the EDA, the City
Council authorized utilization of TIF for a redevelopment project in the downtown entitled Millstream
Shops and Lofts.
In 2011 the EDA approved a forgivable loan for some kitchen equipment for the restaurant. The loan
extends over a seven year period and 1/7"'of the loan is forgiven each year.
BACKGROUND INFORMATION: Millstream Shops and Lofts is a great addition to the downtown
area and is part of a TIF District. The TIF note issued was in the amount of S 467,000 for a 28 year
period. As a reminder the City only issues pay-as-you TIF with taxes reimbursed as they are paid.
Issuance of TIF requires a development agreement which is specific to a developer. The Development
Agreement identifies who the payments are made to and they are typically a bank. If the developer
choses to refinance and utilize a new bank, the note must be reassigned to the new bank and the City must
approve. In 2013 the note was re-assigned from Sentry Bank to Minnwest Bank.
The Developer, Jon Petters is requesting assignment from Minnwest to Kensington bank. In addition, the
TIF will be placed under a different corporation, therefore, the development agreement needs to be
assigned as well.
Mary Ippel from Briggs and Morgan serves as the legal advisor for business subsidy such as TIF and Tax
Abatement. She has reviewed the documents and approves the format. In order for the transaction to
transfer the TIF, the following documents need to be re-assigned: TIF Agreement, TIF Development
Agreement and Business Subsidy agreement.
BUDGET/FISCAL IMPACT: n/a
ATTACHMENTS: Request for Council Action
Assignment of Business Subsidy& Development Agreement
Assignment& Assumption Agreement
Consent Agreement
Consent& Estoppel Certificate
REQUESTED COUNCIL ACTION: Authorize the Mayor and Administrator to execute the
documents re-assigning the TIF 2-1, Millstream Shops and Lofts as requested.
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ASSIGNMENT
OF
BUSINESS SUBSIDY AND DEVELOPMENT AGREEMENT
CONSENT BY THE CITY OF ST. JOSEPH
This Assignment (the "Assignment") is made effective 2016 (the
"Effective Date"), by and between Collegeville Companies, LLC, a Minnesota limited
liability company ("Collegeville"); and Mill Stream Shops LLC, a Minnesota limited
liability company ("Assignee"); and the City of St. Joseph, a Minnesota public body
corporate and politic ("City")
Recitals.
Whereas, Collegeville entered into a Business Subsidy and Development
Agreement ("Subsidy Agreement") with the City in June of 2011, wherein the City
provided a deferred loan in the amount of$20,000 ("Deferred Loan") to Collegeville
relating to the construction of a building (the "Project") on real property located within
the City and described on Exhibit A attached hereto;
Whereas, the Subsidy Agreement required Collegeville to grant a security
interest in certain equipment defined as the "Collateral" in the Subsidy Agreement to
secure the repayment of the Deferred Loan;
Whereas, the Subsidy Agreement further provided that Collegeville not sell or
otherwise dispose of the Collateral without the prior written consent of the City;
Whereas, Collegeville desires to sell the Project and the Collateral and is seeking
the consent of the City to such transfer as required by the Subsidy Agreement;
Now therefore in consideration of the mutual promises contained herein and for
other good and valuable consideration the parties agree as follows:
1. In conjunction with the conveyance of the Collateral, Collegeville assigns all
rights title and interest of Collegeville in the Subsidy Agreement and the Deferred
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Loan and Assignee hereby accepts such assignment and agrees to undertake
all obligations and responsibilities of the "Developer" under the Subsidy
Agreement in favor of the City from and after the date of this Assignment and
Assignee agrees to be bound by the terms and conditions of the Subsidy
Agreement from and after the Effective Date of this Assignment, as if Assignee
was an original party to the Subsidy Agreement.
2. Assignee agrees that the City's security interest in the Collateral as established
by the Subsidy Agreement shall remain and the interest of Assignee in the
Collateral shall be subject to the prior security interest held by the City.
3. Assignor shall reimburse the City for attorney fees and costs incurred by the City
relative to the assignment of TIF, Development Agreement, amending the UCC
Financing Statement and consent and estoppel documents. Reimbursement
shall be due within 30 days of receipt of invoice from the City.
The undersigned have executed this Agreement to be effective as of the Effective
Date.
COLLEGEVILLE COMPANIES, LLC
By
Its
STATE OF MINNESOTA )
)ss
COUNTY OF STEARNS )
This instrument was acknowledged before me on , 20167
by the of Collegeville
Companies, LLC, a Minnesota limited liability company, on behalf of said company.
NOTARIAL STAMP OR SEAL
(OR OTHER TITLE OR RANK)
SIGNATURE OF NOTARY PUBLIC
OR OTHER OFFICIAL
MILL STREAM SHOPS, LLC, Assignee
By
Its
[2 1 3 80-0002/2445 616/1
STATE OF MINNESOTA )
)ss
COUNTY OF STEARNS )
This instrument was acknowledged before me on 2016,
by the of Mill Stream Shops,
LLC, a Minnesota limited liability company, on behalf of said company.
NOTARIAL STAMP OR SEAL
(OR OTHER TITLE OR RANK)
SIGNATURE OF NOTARY PUBLIC
OR OTHER OFFICIAL
The City consents to this Assignment.
CITY OF ST. JOSEPH
By
Its
By
Its
STATE OF MINNESOTA )
)ss
COUNTY OF STEARNS )
This instrument was acknowledged before me on , 20167 by
Rick Schultz and Judy Weyrens, the Mayor and City Administrator, respectively, of the
City of St. Joseph, a Minnesota municipal corporation, on behalf of said City.
NOTARIAL STAMP OR SEAL
(OR OTHER TITLE OR RANK)
SIGNATURE OF NOTARY PUBLIC
OR OTHER OFFICIAL
Drafted By:
Igor Lenzner
Rinke Noonan Ltd.
1015 W. St. Germain, Suite #300
St. Cloud, MN 56301
[21380-0002/2445 616/1]
EXHIBIT A
Lot 1, Block 1, Mill Stream
UNIT 101 & E'LY HALF OF UNIT 102, MILL STREAM SHOPS AND LOFTS CIC#97,
STEARNS COUNTY, STATE OF MINNESOTA.
[21380-0002/2445 616/1]
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment, made and entered into as of 2016, by and among
Collegeville Communities, LLC, a Minnesota limited liability company (the "Developer"),
Mill Stream Shops, LLC, a Minnesota limited liability company ("Assignee").
WHEREAS, the City of St. Joseph (the "City") and the Developer entered into a
Development Agreement, dated July 20, 2007 (the "Development Agreement")providing for the
development by the Developer of a residential/retail/commercial project, including
approximately 14 condominium housing units and approximately 10,820 square feet of
commercial space to be located in the City on real property described in the Development
Agreement (the "Project"); and
WHEREAS, in furtherance of the purposes of the Development Agreement and in order
to finance the construction of the improvements, the City issued a Tax Increment Revenue Note
to Developer in the amount of$467,000.00 ("TIF Note"); and
WHEREAS, Developer seeks to transfer to Assignee and Assignee seeks to assume the
Development Agreement and the TIF Note from Developer;
NOW, THEREFORE, in consideration of the foregoing recitals, the parties hereto agree
with each other as follows:
1. Assignment. Developer hereby assigns to Assignee the Development Agreement
and all of the Developer's rights, title and interest in and to the TIF Note. This assignment
constitutes a perfected, absolute and present assignment. Assignee assumes all obligations of
Developer under the Development Agreement and TIF Note. Assignee agrees to undertake all
ongoing responsibilities under the Development Agreement and to continue to be bound by the
terms and conditions of the Development Agreement.
2. Acknowledgement. Assignee acknowledges that the TIF Note is a special, limited
revenue obligation and not a general obligation of the City, and is payable by the City only from
the sources and subject to the qualifications stated or referenced therein. Neither the full faith
and credit nor the taxing powers of the City are pledged to the payment of the principal of or
interest on the TIF Note, and no property or other asset of the City, save and except the Tax
Increments (as defined in the Development Agreement), is or shall be a source of payment of the
City's obligations under the TIF Note.
3. Binding. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
4. Counterparts: Minnesota Law. This Assignment shall be governed by the laws of
the State of Minnesota and may be executed in counterparts, each of which shall constitute an
original thereof.
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SIGNATURE PAGE TO
ASSIGNMENT AND ASSUMPTION AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Assignment as of the day and
year first above written.
COLLEGEVILLE COMMUNITIES, LLC
By
Its
MILL STREAM SHOPS, LLC
By
Its
[21380-0002/2445705/11
CONSENT
THIS CONSENT ("Consent") is dated as of 2016, and is from the
CITY OF ST. JOSEPH, MINNESOTA, a municipal corporation existing under the laws of the
State of Minnesota(the "City"), to MILL STREAM SHOPS, LLC (the "Assignee"), and its
successors and assigns. The City agrees with Assignee as follows:
1. The City and Collegeville Communities, LLC ("Developer") have entered into a
Development Agreement, dated July 20, 2007 (the "Development Agreement") which provided
for the development by the Developer of a residential/retail/commercial project, including
approximately 14 condominium housing units and approximately 10,820 square feet of
commercial space to be located in the City on the real property described therein (the "Project").
2. In furtherance of the purposes of the Development Agreement and in order to
finance the construction of the improvements to be constructed thereunder, the City assisted the
Developer with the financing of certain costs of the Project with tax increment financing in an
amount up to $467,000.00 in accordance with the Development Agreement and a Tax Increment
Financing Plan for Tax Increment Financing District No. 2-1 (the "Tax Increment Plan"). The
City issued a Tax Increment Revenue Note in the amount of$467,000.00 ("TIF Note").
3. The Developer assigned the Development Agreement and the TIF Note to
Assignee pursuant to an Assignment and Assumption Agreement.
4. Assignee has agreed in the Assignment and Assumption Agreement to assume all
obligations and undertakings of Developer under the Development Agreement.
5. The City understands Developer is transferring to Assignee: (i) all right, title, and
interest of Developer in and to the TIF Note; and (ii) all right, title and interest of Developer in
the Development Agreement and the Assignee is assuming all obligations and undertakings
under the Development Agreement.
6. The City understands that Assignee has required this Consent as a condition of its
assumption of the obligations under the Development Agreement and the TIF Note, and that
Assignee will rely on this Consent in connection therewith.
7. The City covenants, represents, and warrants to and agrees with Assignee as
follows:
a. That it hereby consents to the assignment by Developer to Assignee of all
rights and obligations under the Development Agreement;
b. That it hereby consents to the assignment by Developer to Assignee of the
TIF Note; and
C. The City will evidence the transfer of the TIF Note to Assignee on the
registration records for the TIF Note maintained by the City.
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[21380-0002/2451157/11
Signature page to Consent
(City of St. Joseph/Mill Stream Shops, LLC)
IN WITNESS WHEREOF, the undersigned officer of the City has executed this Consent
as of the date and year first written above.
THE CITY OF ST. JOSEPH, MINNESOTA
By:
Its:
ASSIGNEE: MILL STREAM SHOPS, LLC
By:
Its:
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
2016, by in his/her official capacity as of the City of
St. Joseph, Minnesota.
Notary Public
STATE OF MINNESOTA )
SS
COUNTY OF )
On this day of 2016, before me, a Notary Public for this
County, personally appeared , who, being by me duly sworn, did say that
he/she is of Mill Stream Shops, LLC, and that this instrument was signed
on behalf of said limited liability company by authority of its Members and acknowledged said
instrument to be the free act and deed of said limited liability company.
Notary Public
[21380-0002/2451157/11
CONSENT AND ESTOPPEL CERTIFICATE
THIS CONSENT AND ESTOPPEL CERTIFICATE(this "Estoppel Certificate"), is
dated as of , 2016, and is from the CITY OF ST. JOSEPH,
MINNESOTA, a municipal corporation existing under the laws of the State of Minnesota(the
"City"), to KENSINGTON BANK, 11 North Central Ave, Kensington, MN 56343 (the
"Lender"), and its successors and assigns. The City hereby agrees with Lender as follows:
1. The City and Collegeville Communities, LLC ("Developer") have entered into a
Development Agreement, dated July 20, 2007 (the "Development Agreement") which provided
for the development by the Developer of a residential/retail/commercial project, including
approximately 14 condominium housing units and approximately 10,820 square feet of
commercial space to be located in the City on the real property described therein (the "Project").
2. In furtherance of the purposes of the Development Agreement and in order to
finance the construction of the improvements to be constructed thereunder, the City assisted the
Developer with the financing of certain costs of the project with tax increment financing in an
amount up to $467,000 in accordance with the Development Agreement and a Tax
Increment Financing Plan for Tax Increment Financing District No. 2-1 (the "Tax Increment
Plan") The City issued a Tax Increment Revenue Note in the amount of$467,000 ("TIF Note").
3. The Developer has assigned its obligations and undertakings under the
Development Agreement and the TIF Note to Mill Stream Shops, LLC ("Borrower"). The
Borrower proposes to assign the TIF Note to the Lender.
4. The City understands that Lender is making loan(s) to Borrower in the maximum
principal amount of$1,535,000 and $921,000 (collectively the "Loan"), which Loan is to be
secured by, among other things, a Commercial Security Agreement (the "TIF Assignment")
between Borrower and Lender. Pursuant to the TIF Assignment, Borrower granted to Lender a
security interest in, among other things: (i) all right, title, and interest of Borrower in and to,
including the right to receive payments under, the TIF Note, and (ii) all right, title and interest of
Borrower in the Development Agreement. Borrower has also, under the TIF Assignment,
assigned to Lender its right to receive payments under the TIF Note.
5. The City understands that Lender has required this certificate as a condition of
making the Loan and that Lender will rely on this certificate in connection therewith.
6. The City covenants, represents, and warrants to and agrees with Lender as
follows:
a. That the TIF Note and rights to receive payments under the Development
Agreement have been assigned by Borrower to Lender;
b. That, until further notice from Lender, the City will tender all payments
due under the TIF Note, and any optional prepayments, either in whole or
in part, to Lender at the address set forth in Section 5 below;
[21380-0002/2451196/11
C. That it hereby consents to the execution by Borrower and delivery to
Lender of the TIF Assignment, and to the liens and security interests
created therein, as security for the Loan; and
d. In the event that Lender exercises its remedies under the TIF Assignment,
upon request by Lender, the City will either (i) issue a new fully registered
note to Lender or its nominee or(ii) evidence the transfer of the TIF Note
to Lender or its nominee on the registration records for the TIF Note
maintained by the City.
7. Until the termination of the TIF Assignment, the City agrees to give Lender a
copy of(i) each notice or demand given to Borrower with respect to any breach or default by
Borrower in its obligations under the Development Agreement at the same time such notice,
demand or other communication is given to Borrower under the Development Agreement,
addressed to Lender and (ii) upon request by Lender, a copy of the current TIF Note payment
computations, in each case, at the address listed above.
8. The City agrees to accept the cure by Lender of any default by Borrower under
the Development Agreement within the cure periods provided in the Development Agreement,
but acknowledges that Lender shall be under no obligation to cure any such default. No
commencement of any performance by Lender or any obligation of Borrower required under the
Development Agreement shall obligate Lender to continue or complete such performance or
otherwise perform any of Borrower's obligations under the Development Agreement.
9. The City agrees to provide Lender with notice of any modifications or
amendments to be made to the Development Agreement and the right to consent to such
modifications or amendments.
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[21380-0002/2451196/11
Signature page to Consent and Estoppel Certificate
(City of St. Joseph/Kensington Bank)
IN WITNESS WHEREOF, the undersigned officer of the City has executed this Consent
and Estoppel Certificate as of the date and year first written above.
THE CITY OF ST. JOSEPH, MINNESOTA
By:
Its:
STATE OF MINNESOTA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
2016, by in his/her official capacity as of the City of
St. Joseph, Minnesota.
Notary Public
[21380-0002/2451196/11
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