Loading...
HomeMy WebLinkAbout1983-019 HRARMember Rich Theis introduced the following resolution and moved its adoption: HRA RESOLUTION NO. 83-19 RESOLUTION OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF BROOKLYN CENTER APPROVING THE FORM OF MORTGAGE FINANCING AND PARTIAL SUBORDINATION OF THE AUTHORITY'S INTEREST UNDER REDEVELOPMENT CONTRACT IN CONNECTION WITH THE BROOKWOOD MANOR HOUSING DEVELOPMENT PROJECT WHEREAS, in furtherance of the objectivesof the Minnesota Municipal Housing and Redevelopment Act, Minnesota Statutes, Section 462.411 et. seq., the Authority and the City of Brooklyn Center have established a housing development project pursuant to a housing development plan dated February 28, 1983, which plan is entitled the Brooklyn Center Housing Development Project Plan; and WHEREAS, to implement said housing development project on June 21, 1983, the Authority entered into a Contract for Private Redevelopment By and Between The Housing and Redevelopment Authority in and for the City of Brooklyn Center and the Brutger Companies, Inc. (the "Redevelopment Contract"), setting .forth the rights and obligations of the Authority, and, the Brutger Companies,,,..Jnc.. (the "Redeveloper"), concerning redevelopment and construction of the housing development project; and WHEREAS, the Redevelopment Contract requires the Authority's approval of any mortgage financing to be secured by the Redeveloper in connection with the Project; and WHEREAS, the Redevelopment Contract requires the Authority's approval of any transfer of the Redeveloper's interest in the housing development project prior to completion of construction; and WHEREAS, the Redeveloper intends to secure mortgage financing for the project but as a condition to the making of the Mortgage loan the mortgage lender requires that the Authority execute the attached Subordination Agreement negotiated between the parties. NOW, THEREFORE, BE IT RESOLVED by the governing body of the Housing and Redevelopment Authority in and for the City of Brooklyn Center: That the Authority hereby approves the form of and authorizes the Executive Director to execute on behalf of the Authority the attached Subordination Agreement; provided the Executive Director may approve such variations, omissions and insertions as are not materially inconsistent with the form annexed hereto. October 26, 1983 Date Chairma The motion for the adoption of the foregoing resolution was duly seconded by member Celia Scott, and upon vote being taken thereon, the following voted in favor thereof: Dean Nyquist, Celia Scott, and Rich Theis; and the following voted against the same: none, whereupon said resolution was declared duly passed and adopted. HRA RESOLUTION NO. 83-19 SUBORDINATION AGREEMENT THIS SUBORDINATION AGREEMENT, made and entered into as of the 1st day of October, 1983, by and among, THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF BROOKLYN CENTER, MINNESOTA, a public body corporate and politic (which, together with any successor public body or officer hereafter designated by or pursuant to law, is hereafter called the "Authority"), BROOKWOOD MANOR LIMITED PARTNERSHIP, a Minnesota limited partnership (the "Developer") PEOPLES SAVINGS AND LOAN ASSOCIATION, F.A. (the "Lender"), and. BRUTGER COMPANIES, INC., a Minnesota corporation ("The First Developer"). WITNESSETH: WHEREAS, the Authority and the First Developer have heretofore entered into a Contract for Private Development, dated as of June 21, 1983 (the "Contract"), where by.the Authority agreed to sell the real estate described on Exhibit A attached hereto and made a part hereof (the "Land") and the Developer agreed to construct and equip thereon an apartment building containing 65 rental units and related facilities (the "Improvements") (the Land and Improvements being hereafter referred tows the "Property") which Improvements are referred to in the Contract as the Phase I Minimum Improvements; and WHEREAS, pursuant to the Contract, the Authority has executed and delivered to the Developer a Quitclaim Deed, dated June 27, 1983 (the "Deed") conveying the Land to the Developer subject to certain agree- ments and covenants contained therein, which Deed was filed -in the office of the County Recorder, Hennepin County, Minnesota on July 5, 1983, as Document No. 4806240, and in the office of the Registrar of Titles, Hennepin County, Minnesota, on July 5, 1983, as Document No. 1522688; and WHEREAS, to finance the costs of the Project, the City of Brooklyn Center, Minnesota (the "City") and the Trustee have entered into an Indenture of Trust, dated as of the date hereof (the "Indenture"), whereby the City will issue, pursuant to Minnesota Statutes, Chapter 462C, its Revenue Bonds (Brookwood Manor Project), dated as of the date hereof (the "Bonds"), and the City and the Lender have entered into a Loan Agreement, dated as of the date hereof (the "Loan Agreement"), whereby the City will loan the proceeds of the Bonds to the Lender and the Lender will pledge certain collateral to secure repayment of the Loan Agreement pursuant to a Collateral Agreement ("Collateral Agree- ment"), and the Lender will loan money ("Developer Loan")'equal to the face amount of the Bonds to the Developer pursuant to a Developer Loan Agreement ("Developer Loan Agreement") and an Escrow Agreement ("Escrow Agreement"); and WHEREAS, to further secure the Developer Loan, the Developer has executed in favor of the Lender a Mortgage and Security Agreement and Fixture Financing Statement, dated as of the date hereof (the "Lender Mortgage"), filed on , 1983 in the office of the Hennepin County Recorder, as Document No. , and in the office of the Hennepin County Registrar of Titles, as Document No. granting HRA RESOLUTION NO. 83-19 to the Lender a mortgage on and a security interest in the Land, Improvements, fixtures, and personal property now or hereafter located thereon or attached or installed thereon or therein or used in con- nection therewith (collectively, the "Mortgaged Property") and an Assignment of Rents and Leases ("Assignment"); and WHEREAS it is a condition to the issuance of the Bonds and the Collateral Agreement and to the loan and disbursement of the proceeds of the Bonds and Developer Loan to or on behalf of the Developer that the Authority, the First Developer and the Developer execute and deliver this Agreement, and the execution and delivery of this Agreement will afford both direct and indirect economic benefits to, and will be in the best interests of, the Authority, the City, the First Developer, and the Developer. Lender would not loan any funds pursuant to the Mortgage or Developer Loan without the execution of this Agreement. NOW, THEREFORE, in consideration of the premises, the parties hereto do hereby covenant and agree as follows: 1. The Authority acknowledges receipt of, and does hereby author- ize, approve and consent to, The Indenture, the Loan Agreement, the Collateral Agreement, the Mortgage, the Assignment, The Developer Loan, the Developer Loan Agreement, the Escrow Agreement, the deed ("Second Deed") transferring title to the Property from First Developer to Developer, the Plans and Specifications for the Improvements on file with Authority, and each and every term and condition thereof. The Authority further agrees that the Mortgage shall be deemed.to be a mortgage authorized by the Contract for. purposes of the' Contract, including, specifically, Sections 7.1, 7..4, 7.5, 7.8 and 10.3 thereof and agrees that the Second Deed is apermitted transfer notwithstanding _Sectims.l and 2 of the Deed and Sections 8.1, 8.2, 8.3, 8.5 and 10.3 of the Contract (subject, however, to the provisions of this Agreement). 2. The Agency further covenants and agrees that, except as expressly provided hereafter, any and all rights of the Authority, its successors or assigns in and to the Property shall be, and are hereby expressly made, subject and subordinate to the lien of the Mortgage and to the rights, interests and remedies of the Lender and its successors and assigns (including the purchaser at any foreclosure sale) under the Mortgage. 3. Authority and Lender agree that in the event a breach or default occurs with respect to construction of the Minimum Improvements (Phase I) as defined in the Contract, the Authority shall have all rights and remedies under the Contract and Deed; provided, however, that as to Lender Section 4.3(a) is hereby modified to provide completion of construction shall be within twelve (12) months of the date,-(a) Lender receives a deed in lieu of foreclosure; or (b) the period of redemption expires after foreclosure. 4. In the event Lender obtains title to the Property, it agrees that in good faith it will attempt to comply with the marketing plan set forth in the first paragraph of Section 3.6 of the Contract. HRA RESOLUTION NO. 83-19 5. As to Lender, Developer and Authority, the following shall apply until the-Developer Loan is paid in full: (a) The insurance required by Section 5.2(a)(i) of the Contract shall be carried in the name of Developer, Lender and Authority. All proceeds shall be held by Lender in a segregated account until disbursement hereunder or under the Developer Loan Agreement. If Developer elects to rebuild, the insurance proceeds shall be disbursed under the terms of the Developer Loan Agreement. If Developer elects not to rebuild, the insurance proceeds shall be first.disbursed to Authority in the amount hereafter set forth, and the balance shall be disbursed in accordance with the Developer Loan Agreement. If in 1984 there is an -insured loss and Developer elects not to rebuild, the proceeds to be paid to Authority shall be $180,000.00. In the event of such insured loss and election not to rebuild by Developer in 1985 or thereafter, the proceeds to be paid to Authority shall be reduced by the sum of $12,567.00 for each year commencing in 1985. (b) Upon condemnation of the whole or a material portion of the Phase I Minimum Improvements, Developer may elect to restore or not to restore such improvements. If Developer elects to restore the Phase I Minimum Improvements the condemnation award shall be paid to Developer under the terms of the Developer Loan Agreement. If the Developer elects not to restore the Phase I. Minimum Improvements- the condemnation award shall be fitst* paid "to the Authority in the amount calculated as set forth in subparagraph (a) above and the balance shall be paid in accordance with the Developer Loan Agreement. 6. The Authority covenants and agrees that it will provide to the Lender true and correct copies of any and all certificates to be pro- vided by the Authority to the First Developer or Developer under the Contract and under the Deed, contemporaneously with the furnishing of such certificates to the First Developer or Developer. 7. As provided in the Contract, the Agency covenants and agrees that it will forward to the Lender copies of any notice or demand to the First Developer or Developer with respect to any breach or default by the First Developer or Developer under the Contract and allow the Lender to remedy or cure such breach or default to the same extent as applies to First Developer or Developer. 8. The Authority and the First Developer further covenant that they will not amend, modify or terminate the Contract or the Deed, nor shall any such amendment, modification or termination, if made, be or become effective, without the prior express written consent of the Lender. Authority and First Developer covenant and agree that there is not, to the best of their knowledge and belief, any default not waived heretofore existing under the Contract or Deed by either of them. HRA RESOLUTION NO. 83-19 9. The Authority and the First Developer acknowledge that the Lender is not a party to the Contract and shall not, by executing this Agreement or by exercising its rights and remedies hereunder or under the Mortgage, incur any obligations of any kind or otherwise be or become liable to the Authority, the City, the United States of America or anyone, whether under the Contract or under the Deed or otherwise. 10. The Authority represents to the Lender that the making, execu- tion, delivery and performance of this Agreement by the Authority have been authorized by all necessary action of the Authority and the City, and this Agreement, when executed, shall be the valid and binding obli- gation of the Authority and the City, enforceable against the Authority, the City and their respective successors and assigns in accordance with its terms. 11. Lender agrees to provide to Authority a copy of any notice of default sent by it to Developer and Authority shall have such rights to cure defaults under the Developer Loan Agreement, Mortgage and collater- al documents as apply to Developer. In the event Authority succeeds to the interest of Developer in the Property and thereafter desires to sell or convey the property to a third party, Lender agrees to approve such sale or conveyance; provided such third party shall meet all normal credit review requirements of Lender and further provided the Bonds are then outstanding. 12. All notices, certificates or other communications hereunder shall' be sufficiently given and shall be deemed given when mailed by certified mail, return receipt requested, postage prepaid, with-proper address as indicated below. The Agency, the Developer, the -First Developer and the Lender may, by written notice given by each to the others_,_designate any address or addresses to which notices, certifi- cates or other communications to them may be sent. Until otherwise provided by the respective parties, all notices, certificates and com- munications to each of them shall be addressed as follows: To the Authority The Housing And Redevelopment Authority In and For the.City of Brooklyn Center, Minnesota 6301 Shingle Creek Parkway Brooklyn Center, Minnesota 55430 To the Developer: Brookwood Manor Limited Partnership c/o Brutger Companies, Inc. One Sunwood Drive St. Cloud-, Minnesota 56302 To the Lender: Peoples Savings and Loan Association, F.A. 204 East Pearl Owatonna, Minnesota 55060 HRA RESOLUTION NO. 83-19 To the First Developer: 13. This Agreement shall be binding upon the Authority, the City, the First Developer, the Developer, and the Lender and their respective successors and assigns and shall inure to the benefit of and may be enforced by their successors and assigns. Brutger Companies, Inc. One Sunwood Drive St. Cloud, Minnesota 56302 14. In accepting this Agreement, the Lender acknowledges and agrees that if it succeeds to the interest of the First Developer or Developer in and to the Land and Improvements, whether by reason of foreclosure of the Mortgage, acceptance of a deed in lieu thereof or otherwise; (a) the Land and Improvements may not be devoted to any uses not permitted by the plan described in the Deed and shall be subject to the provisions of Section 3 of the Deed; and (b) upon substantial completion of the Improvements constructed upon the Land, the Assessment Agreement by and among the Authority, the First Developer and City Assessor of the City of Brooklyn Center, dated as of June 21, 1983, and recorded in the office of the County Recorder in and for Hennepin County as Document No. 4806947, (the "Assessment Agreement") shall become effective and shall be binding upon the Land and Im- provements and, further, the Lender will not 'convey the Land or the Improvements to a tax-exempt entity nor will it seek administrative review or judicial review of the validity or applicability of the Assessment Agreement. IN WITNESS WHEREOF, the parties have executed these presents as of the date first above written. HRA RESOLUTION NO. 83-19 EXHIBIT A Lot 1, Block 1, Brookwood Residences, Hennepin- County, Minnesota r HRA RESOLUTION NO. 83-19 SIGNATURE PAGE FOR SUBORDINATION AGREEMENT THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF BROOKLYN CENTER, MINNESOTA By: Its: BY: .G9 ts<: BRUTGER COMPANIES, INC. a Minnesota corpora By: Y~ Its: l~ BROOKWOOD MANOR LIMITED PARTNERSHIP, a Minnesota limited partnership By: Brutger Companies, I ` a Minnesota carp do By,~ - Its: Its General Partner PEOPLES SAVINGS AND LOAN ASSOCIATION, F.A. By: Its: c- e --vi _ a By: Its : 'rk&x s c~~e