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HomeMy WebLinkAboutCity Council Resolution 2011-168CITY OF PLYMOUTH RESOLUTION No. 2011-168 RESOLUTION APPROVING LOAN AGREEMENTS FOR PLYMOUTH WEST VIEW ESTATES, LLC, HOUSING DEVELOPMENT BE IT RESOLVED by the City Council (the "Council") of the City of Plymouth, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. The Council has heretofore established Development District No. 7 and adopted the Development Program therefor, and has established Tax Increment Financing District No. 7-4 (the "TIF District") therein and adopted a Tax Increment Financing Plan therefor, all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.124 to 469.134, and Sections 469.174 to 469.1799, in an effort to encourage development and redevelopment within the City. 1.02. The Council has heretofore adopted a Spending Plan pursuant to Minnesota Statutes, Section 469.176, subd. 4m, to stimulate constriction and create jobs within the State of Minnesota by providing a loan to Plymouth West View Estates, LLC (the "Developer"), for certain costs of construction of an affordable housing development of the Developer to be located in the City (the "Project'). 1.03 In connection with the Project and pursuant to the Spending Plan, the City desires to enter into a Contract for Loan and Private Development (the "TIF Loan Agreement') with the Developer to loan tax increment revenues on hand from the TIF District to the Developer to provide financing for the Project. The TIF Loan Agreement will be secured by a Mortgage, Security Agreement, and Fixture Financing Statement (the "TIF Loan Mortgage"). 1.04. In connection with the Project, the Metropolitan Council has made a grant of $300,000 available to the City. The City desires to enter into a Loan Agreement Regarding Metropolitan Council Grant For $300,000 (the "Met Council Loan Agreement") with the Developer to loan the proceeds of the grant to the Developer to provide financing for the Project. The Met Council Loan Agreement will be secured by a Mortgage, Security Agreement, and Fixture Financing Statement (the "Met Council Loan Mortgage"). 1.05 The Developer will secure additional constriction financing and permanent financing for the Project from other lenders, including the Minnesota Housing Finance Agency, and the disbursement of the proceeds of all loans for the Project shall be subject to a Master Disbursement Agreement (the "Disbursement Agreement') between the Developer and the lenders; and the security interest of the various lenders in the Project shall be subject to a Master Subordination Agreement (the "Subordination Agreement'), the terms of which are attached hereto as Exhibit A. Section 2. Findings. 2.01. The City has reviewed forms of the TIF Loan Agreement, the TIF Loan Mortgage, the Met Council Loan Agreement, and the Met Council Loan Mortgage, and the terms of the Disbursement Agreement and the Subordination Agreement. 2.02. The City hereby finds that the TIF Loan Agreement is in the best interest of the City and meets the development/redevelopment goals of the City and is in accordance with the public purpose and provisions of Resolution No. 2011-168 Page 2 the applicable state and local laws and complies with the requirements of the Spending Plan, and that the TIF Loan Mortgage is necessary to secure the TIF Loan Agreement. 2.03. The City hereby finds that the Met Council Loan Agreement is in the best interest of the City and meets the development/redevelopment goals of the City and complies with the requirements of the grant agreement with the Metropolitan Council, and that the Met Council Loan Mortgage is necessary to secure the Met Council Loan Agreement. Section 3. Approval of Documents. The City hereby adopts and approves the TIF Loan Agreement, the TIF Loan Mortgage, the Met Council Loan Agreement and the Met Council Loan Mortgage in substantially the forms presented to and on file with the City as of this date and directs the Mayor and City Manager to execute such documents and documents related thereto as shall be approved by the Mayor and the City Manager, including the Subordination Agreement and Disbursement Agreement. The execution of any document by the appropriate officers of the City herein authorized shall be conclusive evidence of the approval of such document in accordance with the terms hereof. Section 4. Effective Date. This resolution is effective upon the date of its approval. Approved on this 24th day of May, 2011. 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 May 24, 2011, 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 City Clerk Resolution No. 2011-168 Page 3 EXHIBIT A Summary of the MHFA Master Subordination Agreement and Estoppel Certificate and the MHFA Master Disbursement Agreement as to be used for the Plymouth West View Estates Project Master Subordination Agreement and Estoppel Certificate The intent of the Minnesota Housing Finance Agency Master Subordination Agreement (the "Subordination Agreement") is to first identify all the lenders and the loans that are being provided for a particular multi -family affordable housing project. This may include loans being assumed and new loans that the borrower has obtained from the lender. Each of the lenders and the borrower will then agree and consent to the total of all the loans, and their respective loan documents, and the use of the loan proceeds for the purpose of the project. Once all the lenders, their loans, and the use of the loan proceeds have been identified, the parties agree in writing to the priority of the loans. By executing this document each lender of funds to the project is expressly acknowledging their loan documents priority when it comes to liens and encumbrances created upon the project. Master Disbursement Agreement The intent of the Minnesota Housing Finance Agency Master Disbursement Agreement (the "Disbursement Agreement") is to first identify all lenders and the loans that are being provided for a particular multi -family affordable housing project, along with any funds being provided directly from the borrowing entity to the project. Once all the lenders and the borrower are identified, they will enter into an agreement with the Title Company regarding the disbursement order of the proceeds of the loans and the equity contribution. The final section of the Disbursement Agreement will identify how the borrower must request proceeds to be disbursed from the Title Company. Typically this will outline the requirements of the draw request and state that the Title Company shall not disburse any monies without first receiving the draw requests and approval by any applicable parties.