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02-20-18 Special HRA Packet A G E N D A Special Meeting of the Housing and Redevelopment Authority Golden Valley City Hall 7800 Golden Valley Road Council Chamber February 20, 2018 6:30 pm Pages 1. Roll Call 2. Approval of Agenda 3. Consider Third Amendment to Liberty Crossing Private Development Agreement 2-8 4. Adjournment Executive Summary For Action Golden Valley Special Housing and Redevelopment Authority Meeting February 20, 2018 Agenda Item 3. Consider Third Amendment to Liberty Crossing Private Development Agreement Prepared By Marc Nevinski, Assistant HRA Director Summary Liberty Crossing Investment Partners, LLC (Developer) has requested a modification to the Development Agreement to reduce the letter of credit securing its construction obligations. At the onset of the project, the Developer delivered to the City a letter of credit in the amount of $3.5M, which was reduced to $2.5M in July 2017 through an amendment to the development agreement, and is now proposed to be reduced to $1.5M. A security reduction schedule was not included in the original development agreement. To obtain the reduction, the developer must receive Certificates of Occupancy for seven townhome buildings (COs have already been issued for four other townhome buildings) and the clubhouse, as well as a Partial Certificate of Occupancy for the south half of the apartment building. Attachments • Third Amendment to Liberty Crossing Private Development Agreement (6 pages) Recommended Action Motion to approve the Third Amendment to Liberty Crossing Private Development Agreement. THIRD AMENDMENT TO LIBERTY CROSSING PRIVATE DEVELOPMENT AGREEMENT THIS THIRD AMENDMENT TO LIBERTY CROSSING PRIVATE DEVELOPMENT AGREEMENT (“Third Amendment”), is made and entered into, effective as of ____________________, 2018, by and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY, a public body corporate established and existing under Minnesota Statutes, Section 469.001 et seq., with its principal offices at 7800 Golden Valley Road, Golden Valley, Minnesota 55427 (the "HRA"), and LIBERTY CROSSING INVESTMENT PARTNERS, LLC, a Minnesota limited liability company, with its principal office at 3020 France Avenue South, Minneapolis, Minnesota 55416 (“Developer”). WHEREAS, the HRA and Developer entered into that certain Liberty Crossing Private Development Agreement, effective April 29, 2016, recorded as Document No. T05343990 in the Office of the Hennepin County Registrar of Titles, as amended by the First Amendment to Liberty Crossing Private Development Agreement, effective as of July 11, 2017, recorded as Document No. T05460731 in the Office of the Hennepin County Registrar of Titles, and by the Second Amendment to Liberty Crossing Private Development Agreement, effective as of December 19, 2017, recorded as Document No. T05500242 in the office of the Hennepin County Registrar of Titles (as amended, collectively the “Private Development Agreement”), concerning the Development Property legally described on attached Exhibit A and incorporated herein by reference; and WHEREAS, the HRA and Developer wish to make certain changes to the Private Development Agreement as set forth herein; NOW, THEREFORE, in consideration of the foregoing, and in consideration of the mutual terms and conditions contained herein, the parties hereby agree as follows: 1. All capitalized terms used but not defined herein shall have the meanings given to them in the Private Development Agreement. 2. Section 4.6 of the Private Development Agreement is revised in its entirety to state as follows: Section 4.6 Letter of Credit. Developer has previously delivered to the HRA, at Developer’s sole cost and expense, an irrevocable letter of credit in the amount of $2,500,000, and Developer has also delivered to the City, as required under the P.U.D. Development Agreement, a cash deposit in the amount of $1,796,250, securing all of Developer’s construction obligations under this Agreement and the P.U.D. Development Agreement. 2 Any letter of credit referred to in this Section 4.6 shall be in a form and issued by a bank previously approved by the HRA and provide for expiration in not less than one year after date of issuance. At least 30 days prior to the expiration of any letter of credit referred to in this Section 4.6, Developer shall provide the HRA with a replacement letter of credit which shall extend at least one year beyond the expiration date of the letter of credit then in effect or, if earlier, until a date which is 60 days beyond the contractor’s written estimated date for completion of the shell of the Improvements, or Developer shall be in default hereunder with no opportunity to cure and the HRA may immediately draw upon the letter of credit then in effect. The letter of credit for the amount of $2,500,000 shall be reduced and released as follows: • Letter of credit reduced to $1,500,000 upon issuance by the City’s Building Official of all of the following: o Certificate of Occupancy for townhomes buildings 2350, 2360, 2370, 2380, 2390, 2400 and 2490 Winnetka Ave N.; o Certificate of Occupancy for Clubhouse at 2448 Winnetka Ave N.; and o Partial Certificate of Occupancy for the south portion of the Apartment Building at 2450 Winnetka Ave N., including the following:  Lobby & Game Room on 1st Floor  Commons Area on 2nd Floor  1st Floor Units 100 – 115  2nd Floor Units 200 - 216  3rd Floor Units 300 – 317  4th Floor Units 400 – 417  5th Floor Units 500 – 517 • Remaining letter of credit in the amount of $1,500,000 will be reduced to zero and returned in full upon completion of the Improvements (as defined in the Private Development Agreement) and upon the issuance of the Certificate of Completion by the HRA. The balance of any cash deposits referred to in this Section 4.6 as required under the P.U.D Development Agreement shall be fully released upon completion of the construction of the Improvements, subject to the terms of the P.U.D. Development Agreement regarding the release and retainage of the deposits made thereunder. 3. Developer shall pay the reasonable legal fees and expenses incurred and by the HRA and the City in connection with this Third Amendment and that certain First Amendment to the P.U.D. Development Agreement of even date herewith, subject to a maximum of $5,000. 4. Except as amended hereby, the Private Development Agreement continues in full force and effect. In the event of any conflict between the terms, 3 conditions and provisions of the Private Development Agreement and this Third Amendment, the terms, conditions and provisions of this Third Amendment shall prevail. This Third Amendment may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original and all of which shall together constitute one and the same instrument. IN WITNESS WHEREOF, the HRA has caused this Third Amendment to be duly executed in its name and behalf and Developer has caused this Third Amendment to be duly executed in its name and behalf, on or as of the date first above written. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY By: Joanie Clausen, Chair And Timothy J. Cruikshank, Director LIBERTY CROSSING INVESTMENT PARTNERS, LLC By: Todd Schachtman, Chief Manager 4 STATE OF MINNESOTA COUNTY OF HENNEPIN } ss The foregoing instrument was acknowledged before me this ___ day of __________________, 2018, by Joanie Clausen, Chair, and Timothy J. Cruikshank, Director, of The Housing And Redevelopment Authority In And For The City Of Golden Valley, on behalf of the organization. Notary Public 5 STATE OF MINNESOTA COUNTY OF HENNEPIN } ss The foregoing instrument was acknowledged before me this ____ day of__________________, 2018, by Todd Schachtman, Chief Manager of Liberty Crossing Investment Partners, LLC, a Minnesota limited liability company, on behalf of the limited liability company. Notary Public DRAFTED BY: Best & Flanagan LLP (CCB) 60 South Sixth Street, Suite 2700 Minneapolis, Minnesota 55402 011800/315002/5294710_3 EXHIBIT A LEGAL DESCRIPTION FOR DEVELOPMENT PROPERTY Lots 1-57, inclusive, Block 1, Liberty Crossing P.U.D. No. 123, Hennepin County, Minnesota.