Loading...
HomeMy WebLinkAboutCity Council Resolution 2022-244 C ITY OF P LYMOUTH R ESOLUTION N O. 2022-244 R ESOLUTION A PPROVING AND A UTHORIZING E XECUTION OF THE A SSIGNMENT OF T AX I NCREMENT F INANCING D OCUMENTS AND R ELATED D OCUMENTS WHEREAS, the City of Plymouth, Minnesota (the "City"), entered into a Development Agreement, dated as of March 1, 2021 (the "Development Agreement"), with Plymouth Element LLC, a Minnesota limited liability company (the "Developer"), to assist the Developer with the financing of certain costs in connection with the construction of approximately 61 units of low and moderate income housing (the "Project"); and WHEREAS, the Developer obtained financing from Minnesota Housing Finance Agency ("MHFA") for the construction of the Project; and WHEREAS, to induce the MHFA to provide such financing, the MHFA is requiring that: (i) the Developer assign its interest in the Development Agreement pursuant to an Assignment of Development Agreement (the "Development Agreement Assignment") by and between the Developer and MHFA, which is attached hereto as Exhibit A, (ii) the Developer assign its interest in the TIF Note (as defined in the Development Agreement) to MHFA pursuant to an Assignment of Tax Increment Financing (the "TIF Assignment") by and between the Developer and MHFA, which is attached hereto as Exhibit B, and (iii) the Developer endorse, assign and transfer the TIF Note when issued to the Developer pursuant to an Allonge Endorsement to Tax Increment Revenue Note (the "Allonge Endorsement", and collectively with the Development Agreement Assignment and the TIF Assignment, the "City Documents"), attached hereto as Exhibit C; and WHEREAS, the MHFA is requiring the approval and consent of the City of the City Documents. NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF PLYMOUTH, MINNESOTA, as follows: (1) The City Council hereby approves and consents to the City Documents, in substantially the forms submitted, and the Mayor and City Manager, as applicable, are hereby authorized and directed to execute the same on behalf of the City. (2) The approval hereby given to the City Documents includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the City officials authorized by this resolution to execute the City Documents. The execution of the City Documents shall be conclusive evidence of the approval of the City Documents in accordance with the terms hereof. APPROVED by the City Council on this 25th day of October, 2022. Resolution 2022-244 Page 2 of 22 EXHIBIT A Development Agreement Assignment Resolution 2022-244 Page 3 of 22 Minnesota Housing Finance Agency ASSIGNMENT OF DEVELOPMENT AGREEMENT THIS ASSIGNMENT OF DEVELOPMENT AGREEMENT (this “Assignment”) is made as of the _____ day of , 20__, by Plymouth Element, LLC, a Minnesota limited liability company, with its offices located at 366 South Tenth Avenue, Waite Park, MN 56387 (“Borrower”), to Minnesota Housing Finance Agency, a public body corporate and politic of the State of Minnesota, with its offices located at 400 Wabasha Street North, Suite 400, St. Paul, MN 55102-1109 (“Lender”). RECITALS A. Borrower has entered into a Development Agreement with the City of Plymouth, Minnesota, a Minnesota municipal corporation (the “City”), dated as of , 20__, (the “Development Agreement”) concerning certain real property described in Exhibit A. B. The City has agreed to make payments to Borrower (the “TIF Payments”) in accordance with the terms and conditions of the Development Agreement. C. Borrower wishes to assign its rights under the Development Agreement to Lender, and Lender wishes to accept the assignment. NOW, THEREFORE, in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration, Borrower sells, assigns, transfers, and sets over to Lender the Development Agreement, including all related rights and interests. 1. Borrower irrevocably appoints Lender as its attorney-in-fact to enforce and satisfy the Development Agreement for and on behalf of and in the name of Borrower or, at the option of Lender, in the name of Lender, with the same force and effect as Borrower could do if this Assignment had not been made. 2. Borrower agrees that Lender does not assume any of the obligations or duties of Borrower under or with respect to the Development Agreement unless and until Lender has given the City written notice of the assumption. 3. Borrower represents and warrants that: A. There have been no prior assignments of Borrower’s interest in the Development Agreement; B. It has the right to assign the Development Agreement to Lender; C. The Development Agreement is a valid, enforceable agreement; D. None of the parties is in default under the Development Agreement; and E. All covenants, conditions and agreements have been performed as required in the Development Agreement except those not due to be performed until after the effective date of this Assignment. Resolution 2022-244 Page 4 of 22 4. Borrower agrees that no change in the terms of the Development Agreement will be valid without the written approval of Lender. 5. Borrower agrees not to assign, sell, pledge, mortgage or otherwise transfer or encumber its interest in the Development Agreement so long as this Assignment is in effect. 6. Borrower agrees to pay all costs and expenses (including, without limitation, reasonable attorney’s fees) that Lender may incur in exercising any of its rights under this Assignment. (THE REMAINING PORTION OF THIS PAGE WAS INTENTIONALLY LEFT BLANK) Resolution 2022-244 Page 5 of 22 IN WITNESS WHEREOF, Borrower has caused this Assignment of Development Agreement to be executed as of the ____ day of _________, 20__ BORROWER: PLYMOUTH ELEMENT, LLC a Minnesota limited liability company By: Plymouth Housing Group II, LLC a Minnesota limited liability company Manager By: ____________________________________ James J. Thelen, Secretary/Treasurer Resolution 2022-244 Page 6 of 22 CONSENTED AND AGREED TO BY: THE CITY OF PLYMOUTH, MINNESOTA a Minnesota municipal corporation By: Its Resolution 2022-244 Page 7 of 22 Exhibit A LEGAL DESCRIPTION Lot 1, Block 1, Crossroads Commons Second Addition, Hennepin County, Minnesota. Torrens Certificate No. 1487979 Resolution 2022-244 Page 8 of 22 EXHIBIT B TIF Assignment Resolution 2022-244 Page 9 of 22 Minnesota Housing Finance Agency ASSIGNMENT OF TAX INCREMENT FINANCING THIS ASSIGNMENT OF TAX INCREMENT FINANCING (this “Assignment”) is effective as of the _____ day of , 20__, between Plymouth Element, LLC, a Minnesota limited liability company, with its offices located at 366 South Tenth Avenue, Waite Park, MN 56387 (“Borrower”), and Minnesota Housing Finance Agency, a public body corporate and politic of the State of Minnesota, with its offices located at 400 Wabasha Street North, Suite 400, St. Paul, MN 55102- 1109 (“Lender”). RECITALS A. Lender is making a loan to Borrower in the original principal amount of $5,259,000.00 (the “Loan”) for construction of a multifamily housing facility, legally described in the Mortgage defined in this Assignment (the “Property”). B. As evidence of the Loan, Borrower is executing and delivering to Lender its: (i) HUD Risk- Sharing Program Mortgage Note dated of even date with this Assignment, in the original principal amount of the Loan (the “Note”); (ii) HUD Risk-Sharing Program Combination Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Financing Statement (the “Mortgage”), dated of even date with this Assignment; and (iii) certain other loan and security documents (collectively, the “Loan Documents”). C. The Property is a part of Tax Increment Financing District No. 7-10: Sands (the “Tax Increment District”) created by the City of Plymouth, Minnesota, a Minnesota municipal corporation (the “City”). D. Borrower and the City have entered into a Development Agreement dated ______________, 20__ (the “Development Agreement”), setting forth the City’s agreement to provide tax increment financing to Borrower in the form of reimbursements to Borrower out of tax increments derived from the Property (the “Tax Increment Financing”) as consideration for undertaking certain improvements and maintaining certain low income housing rental units. E. In order to evidence the Tax Increment Financing, the City will, in accordance with the Development Agreement, issue to Borrower its Tax Increment Revenue Note (the “TIF Note”). The TIF Note will be in the principal amount of the lesser of: (i) $459,000.00, or (ii) the total Reimbursement Amount, as described in the Development Agreement, actually incurred by Borrower and approved by the City. The TIF Note will be in the form of the Tax Increment Note attached to the Development Agreement as Exhibit B. F. The TIF Note, the Development Agreement, and any and all related amendments and documents are referred to collectively in this Assignment as the “Tax Increment Financing Documents”. G. As further security for repayment of the Loan, Borrower is executing and delivering this Assignment to Lender. AGREEMENT NOW THEREFORE, Borrower and Lender agree as follows: Resolution 2022-244 Page 10 of 22 1. Assignment. Borrower transfers, assigns and grants a security interest in, pledges, and conveys to Lender all right, title and interest of Borrower in and to the Tax Increment Financing and the Tax Increment Financing Documents, together with all proceeds thereof and the immediate and continuing right to receive and collect all amounts due or to become due under the Tax Increment Financing Documents, and all other rights that may derive from or accrue under the Tax Increment Financing Documents including the right to amend, cancel, modify, alter or surrender the Tax Increment Financing Documents. Lender does not assume any obligations of Borrower under the Tax Increment Financing Documents unless and until Lender assumes those obligations in writing. Borrower makes this assignment for the purpose of securing the following obligations (collectively referred to as the “Secured Indebtedness”): (i) payment of the principal amount of the Loan, together with interest accrued on that principal amount, (ii) payment of all other sums, together with interest on those sums, becoming due and payable to Lender as described in the Loan Documents; and (iii) performance and discharge of each and every obligation, covenant and agreement of Borrower in this Assignment and the Loan Documents. 2. Warranties. Borrower covenants, warrants, represents and agrees that: A. Borrower is the owner of the Tax Increment Financing Documents free and clear from any and all liens, security interests, encumbrances or other right, title or interest of any other person, firm or corporation and has the full right and title to assign and pledge the Tax Increment Financing and the Tax Increment Financing Documents. B. There are no existing defaults under the Tax Increment Financing Documents. C. Borrower will not amend, alter, cancel, modify or surrender the Tax Increment Financing Documents without the prior written consent of Lender. D. Borrower is in full compliance with the terms of the Development Agreement and the Development Agreement remains in full force and effect. E. There are no defenses, set-offs or counterclaims against or with regard to the TIF Note or the Development Agreement or the indebtedness evidenced by those documents. The TIF Note and the Development Agreement are valid and enforceable obligations in accordance with their terms. 3. Performance under the Tax Increment Financing Documents: A. Borrower will enforce or secure the performance of each and every obligation of the City in the Tax Increment Financing Documents. B. Borrower will not borrow against, further pledge or assign any payments due under the Tax Increment Financing Documents. C. Borrower will not waive, excuse, condone or in any manner release or discharge the City from its obligations under the Tax Increment Financing Documents. 4. Present Pledge and Assignment. A. This Assignment constitutes a perfect, absolute and present pledge and assignment in connection with which Borrower will deliver to Lender the Tax Increment Financing Documents Resolution 2022-244 Page 11 of 22 endorsed and assigned to Lender. Borrower will execute and deliver to Lender the Allonge Endorsement, in substantially the same form as Exhibit A attached to this Assignment, on the date that the TIF Note is dated, issued, and delivered to Borrower by the City in accordance with the Development Agreement. Borrower will execute and deliver to Lender the Assignment of Development Agreement, in substantially the same form as Exhibit B attached to this Assignment, on the date of this Assignment. B. Borrower will retain the right to collect the semi-annual payments under the TIF Note unless and until an Event of Default has occurred under this Assignment. C. From and after an Event of Default under this Assignment and upon notice given by Lender to Borrower and the City as set forth in paragraph 7 below, all payments on the Tax Increment Financing are to be paid directly to Lender to be held and applied by Lender in paragraph 7. Subsequent to Lender giving that notice, if Borrower receives any payments on the Tax Increment Financing, Borrower will immediately remit those payments to Lender. 5. Security Agreement. This Agreement constitutes a Security Agreement under the Uniform Commercial Code as adopted in the state of Minnesota (the “Code”) and is governed by the Code. 6. Events of Default. Each of the following constitutes an Event of Default: A. Borrower defaults in the performance of any of the terms of the Loan Documents, and that default continues beyond any applicable cure period provided in those documents; or B. Borrower fails to comply with or perform any of the terms, conditions or covenants of this Assignment, and that failure continues for more than 30 days; or C. Any representation or warranty made by Borrower in this Assignment is false, breached or dishonored in any material manner. 7. Remedies. Upon or at any time after an Event of Default, Lender may declare all amounts owing under the Loan Documents and this Assignment immediately due and payable and provide notice to the City, with a copy to Borrower, to make all subsequent payments on the Tax Increment Financing to Lender. Lender may apply all amounts held by Lender, including the Tax Increment Financing, to the Secured Indebtedness, enforce the payment of the Secured Indebtedness and exercise all of the rights of a holder of the Tax Increment Financing Documents. In addition, upon the occurrence of an Event of Default, Lender may, without demand, advertisement or notice of any kind (except notice required under the Code), all of which are, to the extent permitted by law, expressly waived by Borrower: A. exercise any of the remedies available to a secured party under the Code; B. proceed immediately to exercise each and all of the powers, rights, and privileges reserved or granted to Lender under the Loan Documents; C. proceed to protect and enforce this Assignment by suits or proceedings or otherwise; and D. exercise any other legal or equitable remedy available to Lender. Resolution 2022-244 Page 12 of 22 If any notice is required to be given under the Code, the requirement for reasonable notice is satisfied by giving at least 10 days’ notice prior to the event or thing giving rise to the requirement of notice. 8. Authorization to the City. The City is irrevocably authorized and directed to recognize the claims of Lender without investigating the reason for any action taken or the validity of or the amount of Secured Indebtedness owing to Lender or the existence of any Event of Default. Borrower irrevocably directs and authorizes the City to pay exclusively to Lender or its assigns, from and after the effective date of this Assignment, all amounts due under the Tax Increment Financing Documents without the necessity for a judicial determination that Lender is entitled to exercise its rights under this Assignment. To the extent that payments are made to Lender, Borrower agrees that the City has no further liability to Borrower for those amounts paid. The signature of Lender will be sufficient for the exercise of any rights under this Assignment, and the receipt by Lender of any amount paid by the City will be in discharge and release of that portion of any amount owed by the City. 9. Additional Instruments. Upon the request of Lender, Borrower will, at its own expense, execute, deliver, and file all assignments, certificates, financing statements or other documents in relation to or evidencing this Assignment (the “Additional Instruments”). Borrower will also give further assurances and do all other acts and things as Lender may request to enable Lender to perfect or to exercise its interest in the Tax Increment Financing and the Tax Increment Financing Documents or to protect, enforce, or exercise its rights and remedies. If Borrower is unable or unwilling to execute, deliver, or file any Additional Instruments, as and when reasonably requested by Lender, then Borrower authorizes Lender to sign, deliver, and file as its true and lawful agent and attorney- in-fact, coupled with an interest, any Additional Instrument. 10. Amendment. The Tax Increment Financing Documents may not be amended, altered, cancelled, modified or surrendered without the prior written consent of Lender. 11. Release. Upon the earlier of the termination or expiration of the TIF Note or payment and performance in full of the Secured Indebtedness, this Assignment will be released and be of no further effect. 12. Successors and Assigns. This Assignment will be binding upon Borrower and its successors and assigns and will inure to the benefit of Lender and its successors and assigns. 13. Governing Law. This Assignment is governed by the laws of the state of Minnesota. 14. Validity Clause. The unenforceability or invalidity of any provision of this Assignment will not render any other provision or provisions unenforceable or invalid. Any provisions found to be unenforceable will be severable from this Assignment. 15. Notice. Notices that any party may give to any other party must be in writing and be sent by certified mail, to the respective party’s address as set forth above, or any other place as the respective party may by notice in writing to the other party designate as its address. 16. Attorney’s Fees. Borrower agrees to pay all costs of collection, including reasonable attorney’s fees, at any time paid or incurred by Lender in connection with the enforcement of its rights under this Assignment. (THE REMAINING PORTION OF THIS PAGE WAS INTENTIONALLY LEFT BLANK) Resolution 2022-244 Page 13 of 22 IN WITNESS WHEREOF, each of Borrower and Lender have executed this Assignment of Tax Increment Financing as of the date of this Assignment. BORROWER: PLYMOUTH ELEMENT, LLC a Minnesota limited liability company By: Plymouth Housing Group II, LLC a Minnesota limited liability company Manager By: ____________________________________ James J. Thelen, Secretary/Treasurer Resolution 2022-244 Page 14 of 22 LENDER: MINNESOTA HOUSING FINANCE AGENCY By: ______________________________________ James Lehnhoff Assistant Commissioner, Multifamily Resolution 2022-244 Page 15 of 22 Exhibit A Attach Allonge Endorsement Resolution 2022-244 Page 16 of 22 Exhibit B Attach Assignment of Development Agreement Resolution 2022-244 Page 17 of 22 CONSENT OF THE CITY OF PLYMOUTH, MINNESOTA The City of Plymouth, Minnesota, a Minnesota municipal corporation, with its offices located at 3400 Plymouth Boulevard, Plymouth, MN 55447-1482 (the “City”), acknowledges that it has reviewed the Assignment of Tax Increment Financing entered into between Plymouth Element, LLC, a Minnesota limited liability company (“Borrower”), and the Minnesota Housing Finance Agency, a public body corporate and politic of the State of Minnesota (“Lender”), dated ______________, 20__, to which this Consent is attached, the Assignment of Development Agreement by and between Borrower and Lender dated __________________, 20__, and the form of Allonge Endorsement (collectively, the “Assignment”). Subject to the provisions of paragraph 2 below, the City consents to the terms of the Assignment. The City agrees from and after the date of the Assignment, upon a request by Lender or its successors and assigns, and the assumption in writing by Lender or its successors and assigns of the remaining unfulfilled obligations of Borrower under the Development Agreement, to make all payments on the Tax Increment Financing as described in the Assignment. 1. The City further represents and warrants to Lender: A. That it has received good and valuable consideration for the Development Agreement. B. That the unpaid balance due on the TIF Note (as defined in the Assignment) upon issuance will be the lesser of: (i) $459,000.00; (ii) or the total Reimbursement Amount, as described in the Development Agreement, actually incurred by Borrower and approved by the City. C. To the actual knowledge of the undersigned, Borrower is in full compliance with the terms of the Development Agreement and the Development Agreement remains in full force and effect. D. To the actual knowledge of the undersigned, there are no current defenses, setoffs or counterclaims against or with regard to the TIF Note or the Development Agreement or the indebtedness evidenced by those documents. The TIF Note and the Development Agreement are valid and enforceable obligations of the City in accordance with their terms. 2. This Consent does not deprive the City of or limit any of the City’s rights or remedies under the Development Agreement and does not relieve Borrower of any of its obligations under the Development Agreement. 3. Notwithstanding the provisions of the Development Agreement, the City agrees that it will not exercise its remedies under the Development Agreement upon the occurrence of an Event of Default under the Development Agreement prior to providing notice of the Event of Default and an opportunity to cure to Lender. Resolution 2022-244 Page 18 of 22 Dated: __________________________ CITY OF PLYMOUTH, MINNESOTA a Minnesota municipal corporation By: ______________________________________ Its: ___________________________________ Resolution 2022-244 Page 19 of 22 EXHIBIT C Allonge Endorsement Resolution 2022-244 Page 20 of 22 ALLONGE ENDORSEMENT TO COUNTY OF HENNEPIN, CITY OF PLYMOUTH TAX INCREMENT REVENUE NOTE (PLYMOUTH ELEMENT, LLC PROJECT) FOR VALUE RECEIVED, Plymouth Element, LLC, a Minnesota limited liability company (“Owner”) endorses, assigns and transfers to the Minnesota Housing Finance Agency, a public body corporate and politic of the State of Minnesota (“MHFA”), all right, title and interest in and to the following described “TIF Note”: United States of America State of Minnesota County of Hennepin City of Plymouth Tax Increment Revenue Note (Plymouth Element, LLC Project), in the original principal amount of $459,000.00, dated ____________________________executed by the City of Plymouth, Minnesota, as Maker, to Plymouth Element, LLC, a Minnesota limited liability company, as Holder. Notwithstanding the foregoing, Owner shall retain the right to collect the payments due under the TIF Note unless and until an event of default has occurred under any of those certain loan documents evidencing a loan in the amount of $5,259,000.00 from MHFA to Owner (a “Default”). Upon notice from MHFA to the City of Plymouth that a Default has occurred, all payments due under the TIF Note will be paid directly to MHFA. Dated at Plymouth, Minnesota, this ___ day of _____________, 20__. THIS ALLONGE IS TO BE AFFIXED TO THE NOTE DESCRIBED ABOVE PLYMOUTH ELEMENT, LLC a Minnesota limited liability company By: Plymouth Housing Group II, LLC a Minnesota limited liability company Manager By: ______________________________________ James J. Thelen, Secretary/Treasurer Resolution 2022-244 Page 21 of 22 CONSENTED AND AGREED TO BY: THE CITY OF PLYMOUTH, MINNESOTA By: Its: Resolution 2022-244 Page 22 of 22 STATE OF MINNESOTA) COUNTY OF HENNEPIN) SS. The undersigned, being the duly qualified and appointed City Clerk of the City of Plymouth, Minnesota, certifies that I compared the foregoing resolution adopted at a meeting of the Plymouth City Council on October 25, 2022 with the original thereof on file in my office, and the same is a correct transcription thereof. WITNESS my hand officially as such City Clerk and the Corporate seal of the City this ________day of October, 2022. _________________________________________ City Clerk