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HomeMy WebLinkAbout2001-006 EDARadoption: Member Ed Nelson introduced the following resolution and moved its EDA RESOLUTION NO. 2001-06 RESOLUTION APPROVING AMENDED AND RESTATED DEVELOPMENT AGREEMENT AND ASSIGNMENT OF THE SAME WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota (the "EDA has heretofore entered into a Development Agreement dated February 22, 2000 (the "Original Development Agreement by and between the EDA and Talisman Brookdale, LLC, a Delaware limited liability company (the "Developer with respect to the renovation of the Brookdale Mall (the "Project and WHEREAS, the Developer has requested certain changes to the Original Development Agreement, which changes are necessary to accommodate the Developer in obtaining financing for the Project, which changes are more particularly set forth in an Amended and Restated Development Agreement approved by the EDA on December 21, 2000 (the "Restated Development Agreement and WHEREAS, the Developer has also requested that the EDA consent to the assignment of its interest in the Restated Development Agreement to Talisman Brookdale Associates, LLC, a Delaware limited liability company (the "New Developer (the "Developer Assignment and the New Developer's assignment of its interest in the Restated Development Agreement to Fleet National Bank, (the "Lender which is making a mortgage loan to fmance the Project (the "Lender Assignment NOW THEREFORE, BE IT RESOLVED by the EDA in and for the City of Brooklyn Center as follows: 1. The above referenced Restated Development Agreement, in substantially the form submitted on December 21, 2000, with the changes set forth in Exhibit A attached hereto and incorporated by reference, is hereby approved and the President and Executive Director are hereby authorized to execute the same. 2. The Developer Assignment and Lender Assignment are hereby approved and the Executive Director is hereby authorized to execute the Estoppel Certificate acknowledging the Developer Assignment and Lender Assignment in substantially the form as set forth in Exhibit B attached hereto and incorporated by reference, all on behalf of the EDA. 1 EDA RESOLUTION NO. 2001-06 March 12, 2001 Date The motion for the adoption of the foregoing resolution was duly seconded by member Kay Lasman and upon vote being taken thereon, the following voted in favor thereof: Myrna Kragness, Kay Tasman, and Fd Nelson; and the following voted against the same: none; whereupon said resolution was declared duly passed and adopted. 1 1 EDA RESOLUTION NO. 2001-06 STATE OF MINNESOTA COUNTY OF HENNEPIN CERTIFICATE I, the undersigned, being the duly qualified Secretary of the Economic Development Authority of Brooklyn Center, Minnesota, hereby certify that the above resolution is a true and correct copy of the resolution as adopted by the Board of Commissioners of the Economic Development Authority of the City of Brooklyn Center on March 12, 2001. WITNESS my hand officially as the Secretary of the Economic Development Authority of Brooklyn Center this 13 day of March, 2001. 1 RESOLUTION NO. 2001-06 EXHIIBIT A Developer means Talisman Brookdale, LLC, a Delaware limited liability company, its successors and assigns; Development Property means the land legally described on Exhibit B attached hereto; Eligible Improvements means the acquisition of parcels containing buildings which are structurally substandard, and any adjacent parcels necessary to provide a site of sufficient size to permit development, relocation of utilities, construction of parking improvements, soil correction; demolition, and rehabilitation of structures, and site preparation undertaken on the Development Property in connection with the Minimum Improvements as further described on Exhibit C attached hereto, but only to the extent the Developer provides evidence satisfactory to the Authority that such activities satisfy the requirements of Minnesota Statutes, Section 469.176, subd. 4; Eligible Tenants mean the retail businesses listed on Exhibit F attached hereto, or retail business of the same or similar quality acceptable to the Authority as evidenced by a written acceptance executed by the Authority; Event of Default means any of the events described in Section 8.1; Final Payment Date means the earlier of (a) the date all principal and accrued interest is paid on the Note, or (b) 4g the Note Payment Date which is the tenth Note Payment Date after the issuance of the Note• •rovided that the Final Note Pa gent Date shall occur not later than a date in calendar ear 2009• Minimum Improvements means the reconfiguration of the Brookdale Mall and the creation of open spaces and other improvements as more particularly described on Exhibit D attached hereto; Note Payment Date means 45 days after the City receives the property tax settlements from the County, commencing with the first property tax settlement after the date of issuance of the Note and continuing through the Final Payment Date, provided that the first Note Payment Date shall not occur earlier than a date in calendar year 2004; Proiect means the buildings and improvements located on the Development Property, including the Minimum Improvements to be constructed thereon; State means the State of Minnesota; 988288.RED V9 to V8; 1/18/01 RESOLUTION NO. 2001-06 TAX INCREMENT ASSISTANCE; PAYMENTS TO AUTHORITY Section 6.1. Preconditions to Issuance of Tax Increment Note. The Developer will undertake and construct the Eligible Improvements on the Development Property at a cost of not less than $2,900,000. In order to assist with the costs of the Eligible Improvements, the Authority agrees to provide tax increment assistance to the Developer as further set forth in this Agreement. The tax increment assistance shall be paid to the Developer on a pay -as- you -go basis and the principal amount shall be equal to the lesser of (a) $2,900,000, or (b) the capital costs of the Eligible Improvements. The tax increment assistance shall be paid on the terms and conditions set forth in Section 6.2 below; provided however, that the Authority shall be under no obligation to provide any of the assistance contemplated in this Agreement or to issue the Tax Increment Note until satisfaction of the following conditions precedent: (a) The Developer has prepared and provided.a copy to the Authority of the Construction Plans for the Minimum Improvements; (b) The Developer has obtained all necessary permits, licenses, and authorizations necessary to commence and complete the construction of the Minimum Improvements; (c) The Authority has received evidence satisfactory to it -that, upon substantial completion of the Minimum Improvements, the Development Property and the Adjacent Development Property will, upon,substantial completion of the Daytons Minimum Improvements, have a total aggregate market value of at least $75,000,000; (d) •The Developer has paid all of the Legal and Administrative Expenses; (e) The Developer shall be in material compliance with all the terms and provisions of this Agreement; (f) The construction of the Minimum Improvements is completed, and the Authority has issued the Certificate of Completion pursuant to Section 3.4 hereof; (50 The At the time of issuance of the Note, the Development Property is at least 75% leased to Eligible Tenants at thc time of icouancc of thc Note and the Adjacent Property ohall be is occupied with operating department stores operated by Dayton's, Penny's, Sears, Kohls, and Mervyn's or another nationall reco••ized retailer acce• table to the Authorit 988288.11510 V9 to V8; 1/18/01 ARTICLE VI 15 EXHIBIT A RESOLUTION NO. 2001-06 988288.RED V9 to V8; 1/18/01 16 EXHIBIT A (h) The Developer shall have spent at least $13,000,000 of its equity to pay the costs of the Minimum Improvements; (i) The Assessment Agreement is recorded in the Hennepin County Recorder's office; (j) The City has approvcd a Minimum Improvements are in compliance with the planned unit development for the Development Property rrojcct; and(the "PUD"), including but not limited to the parking requirements set forth in the Pup-_ and (k) The (k) .The Daytona Minimum Improvements are c• •leted and the Authority has received an MAI appraisal from a nationally recognized expert in regional mall valuation showing the combined market value of the Development Property and the Adjacent Development Property at not less than $75,000,000; and (1) The Developer shall have closed on the financing outlined in the financing commitment attached hereto as Exhibit L. The Developer acknowledges that these conditions must be satisfied on or before August 1, 2003., Section 6.2. Tax Increment Revenue Note. (1) Upon satisfaction of the conditions in Section 6.1 hereof, the Authority will reimburse the Developer for the lesser of $2,900,000• or the costs of the Eligible Improvements through the issuance of the Authority's Tax Increment Revenue Note in substantially the form attached to this Agreement as Exhibit I. (2) The unpaid principal amount of the Note shall bear simple, non compounded interest from the date of issuance of the Note at the rate of 8.00% per annum. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30 -day months. (3) The principal of the Note and interest thereon shall be payable solely from Tax Increments. On each Note Payment Date, and subject to the provisions of the Note, the City shall pay, against the accrued and unpaid interest then due on the Note and then to reduce the principal of the Note, the lesser of (a) 80% RESOLUTION NO. 2001-06 ARTICLE VII PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION Section 7.1. Status of Developer; Transfer of Substantially All Assets. As security for the obligations of the Developer under this Agreement, the Developer represents and agrees that prior to the Termination Date, the Developer will maintain its existence as a Minncoota Delaware entity and shall not consolidate with or merge into another entity and shall not dissolve or otherwise dispose of all or substantially all of its assets; provided that the Developer may consolidate with or merge into another corporation or sell or otherwise transfer to a partnership, limited liability company or corporation organized under the laws of one of the United States, or an individual, all or substantially all:of its assets as an entirety and thereafter dissolve and be discharged from liability hereunder if the transferee partnership, corporation or individual assumes in writing all of the obligations of the Developer under this Agreement and the Assessment Agreement. Section 7.2. Prohibition Against Transfer of Property and Assignment of Agreement. For the foregoing reasons the Developer represents and agrees that prior to the Termination Date: (a) Except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Developer or any successor in interest to the Development Property, or any part thereof, to perform its obligations with respect to constructing the Minimum Improvements under this Agreement, and any other purpose authorized by this Agreement, the Developer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to the Agreement or the Development Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the Authority. (b) The Authority shall be entitled to require, except as otherwise provided in Agreement, as conditions to any such approval that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority; necessary and adequate to fulfill the obligations undertaken in this Agreement by the Developer. 988288.RED V9 to V8; 1/18/01 21 J EXHIBIT A RESOLUTION NO. 2001-06 filing thereof; or a receiver, trustee or li the Developer, or of the Project or e re o f of j shall be appointed part thereof, ppointed in any proceeding brought against the Developer, and shall not be discharged within sixty (60) days after such appointment, or if the Developer, shall consent to or acquiesce in such appointment. (g) The Holder of any mortgage on the Development Property, or any improvements thereon, or any portion thereof, commences foreclosure proceedings or accepts a deed in lieu of foreclosure as a result of any default under the applicable mortgage .documents. (h) On any date on or after January 2, 2004, the combined Market Value of the Development Property and Adjacent Development Property is less than $75,000,000; (i) An Anchor Property and is not recognized retailer months; (j) More .than leased or otherwise an Eligible Tenant; 988288.RED V9 to V8; 1/18/01 EXHIBIT A Tenant vacates the Adjacent Development replaced by another nationally acceptable to the Authority within 12 20% of the Development Property is occupied by any businesses which is not (k) any Any part of the Development Property is leased in violation of the covenant in Section 2.2, clause (14) hereof; or /11, The precondition set forth in Section 6.1 hereof to the issuance of the Note are not satisfied on or before Aril 1, 2003. Section 8.2. Remedies on Default. Whenever any Event of Default referred to in Section 8.1 occurs and is continuing, the Authority may take any one or more of the following actions after the giving of thirty (30) .days' written notice to the Developer, but only if the Event of Default has not been cured within said thirty (30) days, or, if said Event of Default cannot reasonably be cured within the time, the Developer fails to give assurances reasonably satisfactory to the Authority that the Event of Default will be cured within'a period of time reasonably acceptable to the Authority, but in any event not to exceed 90 days; (a) The Authority may suspend its performance under this Agreement until it receives assurances from the Developer, deemed adequate by the Authority, that the Developer will cure its default and continue its performance• under this Agreement. 25 RESOLUTION NO. 2001-06 EXHIBIT A Section 9.1. Restrictions on Use. The Developer agrees for itself, its successors and.assigns and every successor in interest to the Development Property, or any part, thereof, that the Developer and such successors and assigns shall use the Development Property as a retail shopping mall. Section 9.2. Conflicts of Interest. No member of the governing body or other official of the Authority or the City shall have any financial interest, direct or indirect, in this Agreement, the Development Property or the Project, or any contract, agreement or other transaction contemplated to occur or be undertaken thereunder or with respect thereto, nor shall any such member of the governing body or other official participate in any decision relating to the Agreement which affects his or her personal interests or the interests•of any corporation, partnership or association in which he or she is directly or. indirectly interested. No member, official or employee of the Authority or the City shall be personally liable to the City in the event of any default or breach by the Developer or successor or on any obligations under the terms of this Agreement. Section 9.3. Titles of Articles and Sections. Any titles of the several parts, articles and sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any'of its provisions. Section 9.4. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by any party to any other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, delivered personally, and (a) in the case of the Developer is addressed to or delivered personally to: Talisman Brookdale, LLC 1500 San Reno Avenue Suite 135 Coral Gables, Florida 33146 The Authorit a•rees to 988288.RED V9 to V8; 1/18/01 er to Fidelit ARTICLE IX ADDITIONAL PROVISIONS rovide a co Investments at the address set forth the Develo below, provided that failure to copy Fidelity Investments on an notice to the Developer shall not preclude or delay the Authority from exercisin• an of its remedies under this Agreement: 28 of an notice sent to RESOLUTION NO. 2001-06 EXHIBIT A Fidelity Investments (b) in the case of the Authority is addressed to or delivered personally to the Authority at: Economic Development Authority of Brooklyn Center, Minnesota 6301 Shingle Creek Parkway Brooklyn Center, Minnesota 55430 ATTN: .Executive Director or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other, as provided in this Section. Section 9.5. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 9.6. Law Governing. This Agreement will be governed and construed in accordance with the laws of the State. Section 9.7. Expiration. This Agreement shall expire on the Termination Date unless earlier terminated or rescinded in accordance with its terms. Section 9.8. Provisions Surviving Rescission or Expiration. Sections 8.5 and 8.6 shall survive any rescission, termination or expiration of this Agreement with respect to or arising out of any event, occurrence or circumstance existing prior to the date thereof. Section 9.9. Su•ercedin• Effect. The •rovisions of this Amended and Restated Development Agreement shall supercede and re lace the rovisions of the Develo•ment A•reement dated Janua 22, 2000, b and between the Authority and the Develo.er as of the date of this Agreement. 988288.RED V9 to V8; 1/18/01 29 1 1 RESOLUTION NO. 2001-06 ESTOPPEL CERTIFICATE and "INSERT ADDRESS" Talisman Brookdale Associates LLC (hereinafter, the "Developer 1500 San Remo Avenue Suite 135 Coral Gables, Florida 13546 RE: Brookdale Shopping Center Brooklyn Center, Minnesota (hereinafter, the "Development Property") Ladies and Gentlemen: 1248957vR; V2 to VI; 1/17/01 -1- EXHIBIT B TO: Fleet National Bank (hereinafter, the "Agent as agent for itself, Morgan Guaranty Trust Company of New York, and any other existing or future co- lenders thereof (hereinafter, individually and collectively referred to as the "Lenders in anticipation of, and in connection with, the establishment of the Loan (as defined herein); "Loan" by Fleet National Bank as Agent for itself, Morgan Guaranty Trust Company of New York, and the other Lenders to Developer, as "Borrower as such Loan is to be evidenced by, amongst other documents, instruments, and agreements a certain Construction and Interim Loan Agreement (hereinafter, the "Loan Agreement by and among the Developer, the Agent and the Lenders and certain Promissory Notes (hereinafter, the "Notes payable to the Lenders in the aggregate principal amount of Sixty Million ($60,000,000.00) Dollars, and such Loan is to be secured by a certain Construction Mortgage and Security Agreement (hereinafter, the "Mortgage whereby the Developer shall grant to the Agent, on behalf of the Lenders, a first priority security interest in, and to, the Development Property (as defined hereunder), a certain Collateral Assignment of Leases and Rents (hereinafter, the "Assignment of Leases whereby the Developer shall grant to the Agent, on behalf of the Lenders, a first priority security interest in, and to, all leases, subleases, rental agreements or other occupancy agreements of the Development Property, and a certain Collateral Assignment and Security Agreement (hereinafter, the "Collateral Assignment whereby the Developer shall grant to the Agent, on behalf of the Lenders, a first priority security interest in, and to, all licenses, permits, approvals and contracts relating to the Developer and the Development Property (hereinafter, the Mortgage, the Assignment of Leases, the Collateral Assignment, together with any other documents and agreements granting the Agent, on behalf of the Lenders, a security interest in and to the Development Property, the "Security Documents ")(hereinafter, the Loan Agreement, the Notes and the Security Documents, together with any and all documents executed in connection therewith, the "Loan Documents Amended and Restated Development Agreement dated February 22, 2000 December 21 2001 by and between Economic Development Authority of Brooklyn Center (hereinafter, the "Authority") and Developer, as successor in interest to Talisman Brookdale LLC,- as- amenclerl-by-that certain dated by and between the Authority and the Developer, (the "Development Agreement"). This estoppel certificate and agreement (hereinafter, the "Agreement is furnished by the Authority to Developer, Agent and the Lenders in anticipation of, and in conjunction with, the establishment of the Loan. The Authority understands that Developer, Agent and the Lenders are relying upon the Authority's statements and agreements in connection with the establishment of, and maintaining of, the Loan. 1 1 RESOLUTION NO. 2001-06 EXHIBIT B The Authority hereby represents and certifies to, and agrees with, Developer, Agent and Lenders as set forth below. 1. The Development Agreement has not been assigned, amended, supplemented or modified by_ the Authority in any way. 2. A true and complete copy of the Development Agreement, including, all amendments and modifications, is attached hereto as Exhibit A. There are no side letters or other arrangements by and between the Authority and the Developer. 3. The Development Agreement is presently in full force and effect according to its terms and is the valid and binding obligation of the Authority. 4. The Authority hereby acknowledges and consents to the transfer of the entire interest in and to the Development Agreement from Talisman Brookdale, LLC to Talisman Brookdale Associates LLC pursuant to the assi nment and assum s ti a reement in the form attached h reto s Exhibit B. 5. To the actual knowledge of the undersigned there does not exist any default under the Development Agreement, nor does there exist any state of facts which with the passage of time or the giving of notice, or both, could constitute a default under the Development Agreement. 6. The Authority has received, reviewed and approved the Construction Plans (as defined in the Development Agreement) in accordance with the terms and provisions of the Development Agreement. Barring any material change in the Construction Plans as provided by the terms and provisions of the Development Agreement, the Authority hereby acknowledges that no further receipt, review or approval of any of the Construction Plans is required by the Authority. The approval given by_the Authority does not relieve the Developer of its obligation to receive approval of any oth City d epartment or to comply with any other federal, state or local laws, ordinances or regulations. 7. To the actual knowledge of the undersigned. all 7. Alt conditions under the Development Agreement to be satisfied by the Developer as of the date hereof, have been satisfied, including, without limitation, the timely commencement of construction of the Minimum Improvements (as defined in the Development Agreement). 8. The Authority hereby acknowledges and consents to the establishment of the Loan with the Agent, on behalf of the Lenders, including, without limitation, the Security Documents executed in connection therewith pursuant to which the Development Property, and all rights and privileges associated therewith, and all proceeds thereof, shall be granted to the Agent, on behalf of the Lenders, as security for the Loan. 9. The Authority hereby acknowledges and agrees that upon the receipt of written notice from the Agent of the occurrence of an event of default under the Loan Documents, the Authority shall make payments under the Tax Increment Note (as defined in the Development Agreement) directly to the Agent, at such place as designated in the Agent's notice. 10. Notwithstanding the terms and provisions of the Development Agreement, the Authority hereby acknowledges and agrees that exercise of the Agent's and the Lenders' rights and remedies under the Loan Documents, including, the foreclosure of the Development Property and subsequent assignment thereof, shall not constitute a default under the Development Agreement. In addition, the Authority hereby acknowledges and agrees that Authority will attorn to any such third party successor to the Agent, and shall recognize such third party successor, thereafter as the "Developer" under the Development Agreement to the extent such party assumes the obligations of the Developer thereunder. under the Development Agreement and agrees to be bound by terms of the related Assessment Agreement. 1248957vR; V2 to VI; 1/17/01 -2- 1 RESOLUTION NO. 2001-06 EXHIBIT B 11. The Authority hereby acknowledges and agrees that notwithstanding the terms and provisions of the Development Agreement, to the extent the Development Property is destroyed by fire or other casualty, and the insurance proceeds thereof are not used to restore the Development Property, the Authority's rights in and to such insurance proceeds shall be limited to those insurance proceeds not otherwise applied by the Agent, on behalf of the Lenders, to payoff the outstanding Loan. 12. The Authority hereby acknowledges and agrees that the Authority shall promptly forward to Agent as holder of the Security Documents relating to the Development Property, at Agent's address designated above or such other address as Agent may from time to time designate to the Authority in writing "Agent's Address copies of all notices given by the Authority to the Developer pursuant to the Development Agreement. The Authority agrees that no notice from the Authority to Developer under the Development Agreement shall be effective unless and until a copy of the same is given to Agent at Agent's Address. The Authority further agrees that the curing of any Developer default by the Agent, any Lender or any successor thereof, within the time periods specified in the Development Agreement shall be treated as performance by the Developer; provided howeve. r, that if such Developer default cannot reasonably be cured_by the Lender without the Lender obtaining_possession and title to the_Development Property, then the cure periods set forth in the Develo ment A reement shall be extended by such number of days as is reasonably necessary for the Lender to ac uire possession and title to the Development Property_. 13. The Authority hereby agrees to provide the Agent, on behalf of the Lenders, with an estoppel certificate or certificates, in similar form and substance to this Agreement, as such may be reasonably requested by the Agent from time to time. 14. This Agreement shall inure to the benefit of the Developer, the Agent and the Lenders, their successors and assigns (including, without limitation, a purchaser at or after foreclosure), and shall be binding upon the Authority, and the Authority's successors and assigns. DATED: as of WITNESSED BROOKLYN CENTER 1248957vR; V2 to VI; 1/17/01 -3- 2001 and executed as an instrument under seal. AUTHORITY: ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER By: Name: Its: Hereunto Duly Authorized 1 RESOLUTION NO. 2001-06 The undersigned, the Developer designated above: (i) hereby ratifies and confirms, to the best of its knowledge, all of the certifications and representations of the Authority set forth in the foregoing Agreement; (ii) agrees that Authority shall have the right to rely on any notice or request from Agent without any obligation to inquire as to whether or not a default exists and notwithstanding any notice from or claim of Developer to the contrary. (iii) confirms, to the best the Developer's knowledge, there does not exist any default under the Development Agreement nor does there exist any state of facts which with the passage of time or the giving of notice, or both, could constitute a default under the Development Agreement; and (iv) consents to, and agrees to be bound by, this Agreement. Executed and delivered as a sealed instrument as of the day of 2001. WITNESSED: BORROWER: 1248957vR; V2 to V1; 1/17/01 -4- TALISMAN BROOKDALE ASSOCIATES LLC By: TALISMAN BROOKDALE, LLC, its Managing Member, By: CS BROOKDALE REALTY COR a Managing Member By: By: Robert W. Claeson, Vice- President EXHIBIT B James A. Schlesinger, President By: BZA BROOKDALE MALL CORP., a Managing Member RESOLUTION NO. 2001-06 EXFIIBIT B EXHIBIT A Copy of Development Agreement (including all amendments) 1248957vR; V2 to VI; 1/17/01 -5-