HomeMy WebLinkAbout[04g] TIF Assignment, Fortitude Housing 11 Council Agenda Item 4g
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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 Fortitude Housing TIF.
SUBMITTED BY: Administration
BOARD/COMMISSION/COMMITTEE RECOMMENDATION: The EDA recommended
approval of the assignments as requested.
PREVIOUS COUNCIL ACTION: Earlier this year, acting upon a recommendation of the EDA, the
City Council authorized utilization of TIF for the development of Fortitude Housing. This project
included a 47 unit senior living facility.
BACKGROUND INFORMATION: The final step in the TIF for Fortitude Housing is to assign the
TIF Agreement. 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.
BUDGET/FISCAL IMPACT: n/a
ATTACHMENTS: Request for Council Action
Consent& Estoppel Certificate
REQUESTED COUNCIL ACTION: Authorize the Mayor and Administrator to execute the
documents assigning TIF 4-1, Millstream Shops and Lofts as requested.
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 body corporate and politic organized and existing under the laws of the State of Minnesota(the
"City"), to CENTRAL MINNESOTA CREDIT UNION (the "Lender"), and its successors and
assigns. The City hereby agrees with Lender as follows:
1. Unless the context otherwise indicates, capitalized terms not otherwise defined
herein shall have the definitions given such terms in that certain Development Agreement dated
as of , 2016 (the "Development Agreement") by and between the City and
Fortitude Senior Living of St. Joseph, LLC , a Minnesota limited liability company (the
"Borrower"). The City acknowledges that, in exchange for developing the Project, Borrower will
receive from the City, among other things, that certain Taxable Tax Increment Revenue Note
(Fortitude Senior Living of St. Joseph, LLC Project), to be dated when the requirements for
issuance of the TIF Note in the Development Agreement have been satisfied in the anticipated
principal amount of$526,824.00.
2. The City understands that Lender is making a term loan to Borrower in the
maximum principal amount of$360,500.00 (the "Loan"), which Loan is to be secured by, among
other things, a Commercial Security Agreement, dated September 13, 2016 (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, including the right to receive
reimbursement for costs incurred to construct the Site Improvements referenced in the
Development Agreement. Borrower has also, under the TIF Assignment, assigned to Lender its
right to receive payments under the TIF Note.
3. 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.
4. 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;
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.
5. 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, as follows:
Central Minnesota Credit Union
Paynesville Branch
P. O. Box 209
1025 Main Street W
Paynesville, MN 56362
6. 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.
7. 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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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.
(Notarial Seal)
Notary Public