2005-07-05, , PLEASE TURN OFF AT CELL PHONES & PAGERS IN COUNCIL CHAMBERS.
AGENDA
Open meeting
Consideration/Action on Amendments to the Contract for
Redevelopment by and between the HRA and Mound
Harbor Renaissance Development, LLC
Page
1-11
3. Adjourn
FIRST AMENDMENT
TO THE
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT (the "First Amendment") is made on or as of this 5th day of July, 2005,
by and between the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY
OF MOUND, MINNESOTA, a public body corporate and politic (the "Authority"), and MOUND
HARBOR RENAISSANCE DEVELOPMENT, LLC, a Minnesota limited liability company (the
"Redeveloper").
RECITALS
WHEREAS, the Authority and the Redeveloper entered into a Contract for Private
Redevelopment dated as of March 22, 2005 (as so amended, the "Contract");
WHEREAS, the Authority and the Redeveloper desire to amend the Contract to further the
purposes set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, the parties hereby agree as follows:
Section 1. The definition of "Maxwell Mortgage" in Section 1.1 of the Contract is amended to
read as follows:
"Maxwell Mortgage" means the mortgage and security agreement in the form
of Exhibit M to be executed and delivered by the Redeveloper pursuant to Section
8.3, and which conveys to the Authority a first mortgage lien on that portion of the
real property in Lost Lake designated by the property identification numbers 13-117-
24-33-0063 and 13-117-24-33-0075.
Section 2.
as follows:
Subparagraph (3) of paragraph (d) of Section 4.10 of the Contract is amended to read
(3) It agrees to accept conveyance of the Lost Lake Authority
Parcel upon (i) receipt of verification by the Environmental Consultant that the Parcel
has been remediated to MPCA standards for residential use, (ii) receipt from the
MPCA of a No Association Determination Letter and a Certificate of Completion,
(iii) the Redeveloper's project and mortgage lenders shall have approved such MPCA
assurances, and (iv) satisfaction of the other conditions of the Redeveloper's
obligations set forth in Sections 4.8 and 4.9.
Section 3.
as follows:
Subparagraph (5) of paragraph (d) of Section 4.10 of the Contract is amended to read
(5) Not less than seven (7) days before the Authority is expected
to award the contract (but not more than fifteen (15) days before work is
-1-
commenced), the Redeveloper will certify to the Authority that Phase I is Feasible
and that it agrees to be bound by such certification of Feasibility as long as the dump
remediation is completed within one hundred (100) days of such certification. The
items from the MPCA referred to in clause (3) need not have been delivered by the
..expiration of the one hundred (100)-day period.
Section ~4.~,~.~,v~,,,.e,.,.v..oe"~' ........ *'~ tv/ro~ ~,,,."-a (9)Subparagraph (8). of paragraph (d) of Section 4.10 of the
Contract ar-els amended to read as follows:
(8) [Reserved]
Section 45.
as follows:
Subparagraph (2) of paragraph (e) of Section 4.10 of the Contract is amended to read
(2) Commencement Date. The parties agree to utilize
their best efforts so that the work can be bid not later than June 1, 2005, with the
work to be commenced not later than July 18, 2005 and completed not later than
September 30, 2005.
Section &6. Paragraph (a) of Section 8.1 of the Contract is amended to read as follows:
(a) The Redeveloper guarantees that the Minimum Market Value for Lost
Lake shall be:
(i)
$6,000,000 as of January 2, 2008 (for tax payable year 2009)
and
(ii) $9,000,000 for each January 2nd thereafter,
provided, that these amounts shall be reduced by the amount of the original
Assessor's Market Value of all residential units in Lost Lake which have been sold
by the Redeveloper (i.e., for each such residential unit, the Assessor's Market Value
of such unit as of the first January 2nd following its completion).
Section &.7. Paragraph (d) of Section 8.1 of the Contract is amended to read as follows:
(d) The Tax Deficiency Guarantee imposed by this Section shall remain
in effect until the Assessor's Market Value first reaches $9,000,000, regardless of
whether the Assessor's Market Value subsequently drops below $9,000,000.
-2-
Section &8. Paragraph (e) of Section 8.1 of the Contract is deleted.
Section ~.9. Paragraph (a) of Section 8.2 of the Contract is amended to read as follows:
(a) At the closing of the conveyance of the Lost Lake Authority Parcel to
the Redeveloper, as security for payment of the Tax Deficiency Guarantee, the
Redeveloper shall furnish or cause to be furnished to the Authority an irrevocable
Letter of Credit reasonably acceptable in form and substance to the Authority from a
financial institution reasonably acceptable to the Authority. The amount of the Letter
of Credit from time to time shall not be less than as set forth below:
(i) $500,000 until the Assessor's Market Value for Lost Lake
first reaches $6,000,000, and thereafter:
(ii) For each additional $1,000,000 of Assessor's Market Value
for Lost Lake over $6,000,000, the amount of the Letter of Credit may be reduced by
one-third (1/3) of its original face amount so that when the Assessor's Market Value
first reaches $9,000,000 the Letter of Credit shall be released.
Section g:.10. Section 8.3 of the Contract is amended to read as follows:
Section 8.3. Maxwell Mortgage.
(a) As security for the Authority's advancing certain soils correction and
peat removal costs t~ *'~w ,~.~.~u~,~o~,~~;~' ..... ~4 ~,,,~., ,~,~,~,~ r~,~,.~,~ ...., ,,~,~v~,~ .... the Redeveloper shall
execute the Maxwell Mortgage in the amount of $700,000 substantially in the form
attached as Exhibit M. The Redeveloper shall reimburse the Authority for such costs
at the closing of the conveyance of the Lost Lake Authority Parcel to the
Redeveloper.
(b) The Maxwell Mortgage shall be released at the closing of the
conveyance of the Lost Lake Authority Parcel to the Redeveloper, provided that the
Redeveloper has provided the Letter of Credit as provided in Section 8.2(a)z and
reimbursed the costs set forth in paragraph (a) above.
Section ~.11. Except as specifically provided in this First Amendment, the terms of the Contract
remain in full force and effect.
Section 10.. 12. Capitalized terms used but not defined herein shall have the meanings given those
terms in the Contract. This First Amendment may be executed in one or more counterparts, which
counterparts shall together constitute one and the same instrument_.
-3-
IN WITNESS WHEREOF, the parties have caused this First Amendment to the Contract for
Private Redevelopment to be duly executed in each of their names and on their behalf on or as of the
date first above written.
G:\WPDATA\M\MOUND HARBOR RENAISSANCE LLC\01\DOC\FIRST AMEND TO REDEV AGREE V~2_.DOC
Dated: ,2005
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
MOUND, MINNESOTA
By
David Osmek
Chair
By
Kandis M. Hanson
Executive Director
Authority Signature Page
First Amendment to Contract for Private Redevelopment
-4-
Dated: ,2005
MOUND HARBOR RENAISSANCE
DEVELOPMENT, LLC,
a Minnesota limited liability company
By
David Newman
Chief Manager
By
Thomas A. Stokes
President
Redeveloper Signature Page
First Amendment to Contract for Private Redevelopment
-5-
MORTGAGE, ASSIGNMENT OF LEASES AND
RENTS AND SECURITY AGREEMENT
MORTGAGE REGISTRY TAX DUE: $
This MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, AND SECURITY
AGREEMENT (the "Mortgage"), made this __ day of ., 2005, between MOUND
HARBOR RENAISSANCE DEVELOPMENT, LLC, a Minnesota limited liability company with an
address at 1521 94th Lane NE, Minneapolis, Minnesota 55449 (the "Mortgagor") and the
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND,
MINNESOTA, a public body corporate and politic having its principal office at 5342 Maywood
Road, Mound, Minnesota 55364 (the "Mortgagee"),
WITNESSETH'
r,~.~ .... ~ ..... + ~+~ ,,t>~.~ .... ] ..... + ^ ...... +,,~ ~.~.~ n~ ^,-~,~.~. ,~,~ '~nn~ toTe secure the
obligation of the Mortgagor to pay up to SEVEN HUNDRED THOUSAND DOLLARS ($700,000)
to reimburse certain advances made by the Mortgagee for soils correction and peat removal costs a__~s
required by Section 8.3(a) of that certain Contract for Private Redevelopment dated as of March 22,
2005 by and between the Mortgagor and Mortgagee, as amended (the "Redevelopment Agreement"):
Mortgage. Mortgagor hereby mortgages to Mortgagee the real property lying in the County
of Ramsey, State of Minnesota, legally described in Exhibit 1 attached hereto and incorporated
herein by reference, together with all tenements, easements, hereditaments, privileges, minerals and
mineral rights, water and water rights, buildings, fixtures and improvements now or hereafter erected
or located on the above described land (hereinafter referred to as the "mortgaged premises").
Assignment of Leases and Rents. Mortgagor hereby assigns to Mortgagee all leases now or
hereafter affecting the mortgaged premises and all rents and profits due or to become due with
respect to the mortgaged premises, whether before or after foreclosure or during any redemption
period after foreclosure sale, as additional security for the payment of the Tax Deficiency Guarantee,
and Mortgagor hereby further agrees that Mortgagee shall have the power pursuant to this
Assignment of Leases and Rents irrevocably to manage, control and lease the mortgaged premises.
Upon the occurrence of an Event of Default hereunder and without regard to waste, adequacy of the
security, or solvency of the Mortgagor, Mortgagee may, at its option, either:
-6-
(a) Apply to the Minnesota District Court for the County wherein the mortgaged
premises is located for the appointment of a receiver under M.S. Section 559.17, it being understood
and agreed that Mortgagee shall be entitled to the appointment of a receiver upon a showing that an
Event of Default has occurred under the terms of this Mortgage. A receiver so appointed shall apply
all rents and profits collected from the date of his or her appointment through the redemption period
from any foreclosure sale, first as provided in M.S. Section 576.01, subdivision 2, and thereafter shall
apply the rents and profits to the payment of the following items in the order indicated: first, to the
payment of principal and interest on any prior mortgages; second, to the payment of any other prior
liens or encumbrances; and third to the payment of the Tax Deficiency Guarantee;
or
(b) Collect all rents and profits from the occupiers of the mortgaged premises
upon the filing by Mortgagee, in the office of the County Recorder or, in the case of registered
property, in the office of the Registrar of Titles, for the County in which the mortgaged premises is
located, of a notice of the occurrence of an Event of Default in the terms and conditions of this
Mortgage and the service of said notice of default upon the occupiers of the mortgaged premises.
From the date of filing and service upon the occupiers of notice of default through the redemption
period from any foreclosure sale, Mortgagee shall apply all rents and profits so collected in the same
manner as is provided in subparagraph (a) above where the rents and profits are collected pursuant to
the appointment of a receiver. In the event Mortgagee exercises its rights under this subparagraph (b),
it shall not, solely by reason thereof, be deemed to be a mortgagee-in-possession of the mortgaged
premises.
Security A~eement. Mortgagor hereby grants to Mortgagee a security interest in all building
materials, equipment, fixtures, furniture and furnishings (including, but not limited to, all engines,
boilers, elevators, machinery, heating apparatus, electrical equipment, air conditioning equipment,
water and gas fixtures, plumbing, communication devices, stoves, refrigerators, carpeting, shades,
awnings, screens, storm sashes and blinds) now or hereafter located or intended to be located on the
mortgaged premises of whatsoever type or nature, whether now owned or hereafter acquired by
Mortgagor, including all replacements, repairs and substitutions thereto and proceeds thereof.
Mortgagor hereby covenants and agrees that upon the occurrence of an Event of Default hereunder,
Mortgagee may, in addition to any other remedy provided for herein or which it may have at law or
equity, exercise all rights granted to it under the Minnesota Uniform Commercial Code, M.S.
Chapter 336. The filing of this Mortgage shall constitute the filing of a financing statement in the
office wherein it is filed and a photographic or other reproduction of this document may also be filed
as a financing statement.
Fixture Financin~ Statement. The filing of this Mortgage shall constitute a filing of a
financing statement in the office wherein it is filed and a photographic or other reproduction of this
document may also be filed as a financing statement.
Name and Address of Debtor:
Mound Harbor Renaissance Development, LLC
-7-
1521 94th Lane NE
Minneapolis, MN 55449
Attention: David Newman, Chief Manager
Name and Address of Secured Party:
Housing and Redevelopment Authority
in and for the City of Mound, Minnesota
5341 Maywood Road
Mound, MN 55364
Attention: Executive Director
Description of the types (or items) of property covered by this financing statement:
All building materials, equipment, fixtures, furniture and furnishings (including, but
not limited to all engines, boilers, elevators, machinery, heating apparatus, electrical
equipment, air conditioning equipment, water and gas fixtures, plumbing,
communication devices, stoves, refrigerators, carpeting, shades, awnings, screens,
storm sashes, and blinds) now or hereafter located or intended to be located on the
Mortgaged Premises of whatsoever type or nature, whether now owned or hereafter
acquired by Mortgagor, including all replacements, repairs and substitutions thereto
and proceeds thereof.
Description of real estate to which all or part of the collateral is attached or on which it is located:
See Exhibit 1 attached hereto.
1. Statutory_ Covenants. Mortgagor makes and includes in this Mortgage the statutory
covenants and other provisions set forth in M.S. Section 507.15 or in any future Minnesota statute
providing for a statutory form of real estate mortgage and the Mortgagor covenants with Mortgagee
the following statutory covenants:
(a) To warrant the title to the mortgaged premises upon acquisition of title to
various parcels thereof under Section 4.2 of the Redevelopment Agreement.
(b) To pay the indebtedness as herein provided.
(c) To pay all taxes.
(d) To keep all buildings insured against fire for an amount not less than the full
replacement cost and against other hazards for the amounts specified by Mortgagee for the protection
of Mortgagee, including, but not limited to, lightning, hazards under the usual extended coverage
endorsement, and all other hazards and risks of: direct physical loss occasioned by any cause
whatsoever, subject only to the exceptions and exclusions, if any, agreed to by Mortgagee. All such
policies shall name Mortgagee as loss payee under the so-called standard mortgage clause, contain no
pro rata reduction provisions and provide for not less than thirty (30) days notice to Mortgagee of
cancellation of said policy.
-8-
committed.
(e)
The mortgaged premises shall be kept in repair and no waste shall be
(f) At the option of Mortgagee, that the whole of the principal sum shall become
due upon the occurrence of an Event of Default as set forth below.
2. Events of Default/Acceleration of Maturity. Mortgagor agrees that at the option of
Mortgagee and in addition to Mortgagee's right to accelerate the maturity of the indebtedness
secured hereby as set forth above in the statutory covenants, the entire remaining principal balance
plus accrued interest shall become due and payable in full upon the oeemr-r-~-~failure of amy-ogthe
.......... o ~ .............. s the Mortgagor to reimburse the Mortgagee for certain advances as
provided in Section 8.3(a) of the Redevelopment Agreement (herein referred to as an "Event of
Default")-:
....... * .... *~:~.~ herein;;_provided, that Mortgagee will not exercise its remedies under this
Mortgage unless the Mortgagor fails to cure the default within thirty (30) days after Mortgagee has
given the Mortgagor written notice of the Event of Default; prey:deal, ~ ......... nc
re~iu~re.. ....~, ................. ....
3. Statutotw Power of Sale, Waiver and Agreement. At maturity, whether at the stated
time or prior thereto by the acceleration of maturity pursuant hereto, Mortgagee (in addition to any
other remedies provided for herein or which it may have at law or equity) shall have the statutory
power of sale, and on foreclosure may retain statutory costs and attorneys' fees.
4. Foreclosure; Receiver. Mortgagor hereby expressly consents to the foreclosure and
sale of the mortgaged premises by action pursuant to M.S. Chapter 581 or, at the option of
Mortgagee, by advertisement pursuant to M.S. Chapter 580, which provides for sale after service of
notice thereof upon the occupant of the mortgaged premises and publication of said notice for six
weeks in the County in Minnesota where the mortgaged premises is situated; acknowledges that
service need not be made upon Mortgagor personally (unless Mortgagor is an occupant) and that no
hearing of any type is required in connection with the sale; and, except as may be provided in said
statutes, expressly waives any and all right to prior notice of sale of the mortgaged premises and any
and all rights to a prior hearing of any type in connection with the sale of the mortgaged premises.
5. Miscellaneous. This Mortgage shall be governed by and construed in accordance
with the laws of the State of Minnesota and shall inure to the benefit of Mortgagee, its successors and
assigns. In the event any provision hereof is determined to be unenforceable or invalid, such
provision of such part thereof as may be unenforceable or invalid shall be deemed severed from this
Mortgage and the remaining provisions carried out with the same force and effect as if the severed
provisions or part thereof had not been made a part hereof.
6. Effectiveness of Lien. The Mortgagor and Mortgagee acknowledge that as of the date
hereof the Mortgagor may not have title to the mortgaged premises but intends to acquire such title as
-9-
provided in Section 4.2 of the Redevelopment Agreement and that the lien created by this Mortgage
only arises as, if, when and to the extent the Mortgagor so acquires title to the mortgaged premises.
MOUND HARBOR RENAISSANCE
DEVELOPMENT, LLC,
a Minnesota limited liability company
By
Its
STATE OF MINNESOTA )
) ss
COUNTY OF )
On this __ day of ., 2005, before me, a notary public within and
for County, personally appeared ., to me personally known and
who by me duly sworn, did say that he/she is the of Mound Harbor
Renaissance Development, LLC, a Minnesota limited liability company, and acknowledged the
foregoing instrument on behalf of said company.
Notary Public
This instrument was drafted by:
Krass Monroe, P.A. (GLC)
8000 Norman Center Drive, Suite 1000
Minneapolis, MN 55437-1178
Check here if part or all of the land is Registered (Torrens) []
-10-
LEGAL DESCRIPTION
EXHIBIT 1
Parcel 1:
The West 143.3 feet of Block 4, lying North of the South 453.36 feet thereof, Shirley Hills Unit F,
Hennepin County, Minnesota.
Torrens Certificate No. 860787.
Parcel 2:
All of Block 4, except the Southerly 300 feet thereof and except that part of the West 143.3 feet
thereof lying North of the South 453.36 feet thereof and except the East 225.00 feet thereof, Shirley
Hills Unit F, Hennepin County, Minnesota.
Torrens Certificate No. 1092834.
G:\WPDATAhM~vIOUND HARBOR RENAISSANCE LLC\0 I~DOCLMAXWELL MORTGAGE, V2.DOC
-11 -