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HomeMy WebLinkAbout2010 05-24 EDAP EDA MEETING • City of Brooklyn Center May 24, 2010 AGENDA 1. Call to Order —The EDA requests that attendees turn off cell hones and pagers during the meeting. A q P pg g copy of the full City Council packet, including EDA (Economic Development Authority), is available to the public. The packet ring binder is located at the front of the Council Chambers by the Secretary. 2. Roll Call 3. Approval of Agenda and Consent Agenda —The following items are considered to be routine by the Economic Development Authority (EDA) and will be enacted by one motion. There will be no separate discussion of these items unless a Commissioner so requests, in which event the item will be removed from the consent agenda and considered at the end of Commission Consideration Items. a. Approval of Minutes 1. May 10, 2010 — Regular Session 2. May 10, 2010 — Executive Session • 4. Commission Consideration Items a. Resolution Authorizing Economic Development Authority Consent to Assignment of Development Agreement and Authority, to Convey Development Property (FBI Regional Field Office Project) Requested Commission Action: — Motion to adopt resolution. 5. Adjournment EDA Agenda Item No. 3a • MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION MAY 10, 2010 CITY HALL — COUNCIL CHAMBERS 1. CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in Regular Session called to order by President Tim Willson at 9:04 p.m. 2. ROLL CALL President Tim Willson and Commissioners Kay Lasman, Tim Roche, Dan Ryan, and Mark Yelich. Also present were Executive Director Curt Boganey, Public Works Director /City Engineer Steve Lillehaug, Director of Business and Development Gary Eitel, City Attorney Charlie LeFevere, and Carla Wirth, TimeSaver Off Site Secretarial, Inc. 3. APPROVAL OF AGENDA AND CONSENT AGENDA Commissioner Lasman moved and Commissioner Ryan seconded approval of the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES 1. April 26, 2010 — Regular Session Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS - None. 5. ADJOURNMENT TO CLOSED EXECUTIVE SESSION • DISCUSS PENDING LITIGATION REGARDING A POTENTIAL SETTLEMENT WITH OLIVER COMPANIES REGARDING THE CONSTRUCTION OF THE LINK — EMBASSY SUITES DEVELOPMENT AGREEMENT AND THE D BARN LEASE (SPA) • DISCUSS THE SALE OF REAL PROPERTY LOCATED AT 6037 • BROOKLYN BOULEVARD — NORTHBROOK APARTMENTS 05110110 -1- DRAFT City Attorney Charlie LeFevere advised that under the exceptions to the Open Meeting Law tY Y P p Stat. 13D.05 subd.3 c the EDA may elect to adjourn [Minn. OJ Y to closed Executive Session to J is discuss endin litigation regarding potential settlement with Oliver Companies regarding the P g g on g g a P construction of the Link, Embassy Suites development agreement and the D Barn lease (spa) and the sale of real P roperty located at 57 and Logan Avenues North. President Willson announced that the EDA will adjourn from Executive Session and will not reconvene followin g the Executive Session. Commissioner Ryan moved and Commissioner Lasman seconded adjournment of the Economic Development Authority meeting at 9:09 p.m. Motion passed unanimously. I 05/10/10 -2- DRAFT . MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA EXECUTIVE SESSION MAY 10, 2010 CITY HALL — SHINGLE CREEK CONFERENCE ROOM 1. CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in Executive Session called to order by President Tim Willson at 9:13 p.m. 2. ROLL CALL President Tim Willson and Commissioners Kay Lasman, Tim Roche, Dan Ryan, and Mark Yelich. Also present were Executive Director Curt Boganey, Director of Business and Development Gary Eitel, City Attorney Charlie LeFevere, and Carla Wirth, Timesaver Off Site Secretarial, Inc. Others present were City's Legal Counsel David Greening, Briggs & Morgan • 3. DISCUSS PENDING LITIGATION REGARDING A POTENTIAL SETTLEMENT WITH OLIVER COMPANIES REGARDING THE CONSTRUCTION OF THE LINK — EMBASSY SUITES DEVELOPMENT AGREEMENT AND THE D BARN LEASE (SPA) The Economic Development Authority (EDA), City Attorney, Mr. Greening, and staff discussed pending litigation regarding a potential settlement with Oliver Companies regarding the construction of the Link, Embassy Suites development agreement and the D Barn lease (spa). City's Legal Counsel Greening left the meeting at 10:33 p.m. 4. DISCUSS THE SALE OF REAL PROPERTY LOCATED AT 6037 BROOKLYN BOULEVARD — NORTHBROOK APARTMENTS The EDA, City Attorney, and staff discussed the sale of property located at 6037 Brooklyn Boulevard, Northbrook Apartments. 5. ADJOURNMENT Commissioner Lasman moved and Commissioner Roche seconded adjournment of the Economic Development Authority Executive Session at 10:50 p.m. • Motion passed unanimously. 05/10/10 -1- EDA Agenda Item No. 4a COUNCIL ITEM MEMORANDUM DATE: May 19, 2010 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business and Development' SUBJECT: Resolution Authorizing Economic Development Authority Consent to Assignment of Development Agreement and Authority to Convey Development Property. (FBI Regional Field Office Project) Recommendation: �I It is recommended that the City Council consider approval /adoption of the Resolution Authorizing Economic Development Authority Consent to Assignment of Development Agreement and Authority to Convey Development Property. (FBI Regional Field Office Project) Background: On October 20, 2009, the City Council adopted Resolution No. 2009 -18, Authorizing the Execution of a Third Amendment to Real Estate Option Agreement. This amendment provided technical corrections and procedural revisions to the draft Development Agreement that was attached to the initial Option Agreement with the GSA, dated March 19, 2008. r The Development Agreement provided for Barry Minneapolis, LLC to close on the property within 120 days from the execution of the agreement, to commence construction no later than May 31, 2010 and to complete the minimum improvements no later than October 12, 2011. On February 22, 2010, the EDA adopted Resolution No. 2010 -04 Authorizing the execution of the First Amendment to the Development Agreement, which included the following: - An extension of the closing date until April 29, 2010, - The acknowledgement of the plans by Barry Real Estate to assign their developer's right, title and interests in and to the lease with the GSA and the development agreement for this FBI Regional Field Office Project to PH, LLC. ( Molasky Group of Companies) , - An extension of the commencement of construction date from May 31, 2010 to July 31, 2010, and - The extension of the completion date from October 1, 2011 to December 31, 2011. On April 26, 2010, the EDA was informed that a delay in the closing was being requested allow the GSA and Barry Real Estate ( Barry Minneapolis, LLC) to complete the assignment of the lease and conveyance of the development rights to Molasky Group of Companies. The action of the EDA was the adoption of Resolution No. 2010 -07 Authorizing execution of a Second Amendment to the Development Agreement, which included the following: - An extension of the closing date until June 10, 2010, - An extension of the commencement of construction date from July 31, 2010 to August 31, 2010, and • - The extension of the completion date December 31, 2011 to January 1, 2012. Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust COUNCIL ITEM MEMORANDUM Assignment and Assumption Agreement: Barry Real Estate is requesting the assignment and assumption of the Development Agreement for the FBI Regional Field Office from Barry Minneapolis, LLC., a Georgia limited liability company, to Ph [NARA/Minneapolis] LLC, a Neveda limited liability company, be approved by the EDA. Moslasky Group of Companies, Ph [NARA/Minneapolis] LLC have met the necessary criteria for the transfer of this development agreement and with the execution of the Assignment and Assumption Agreement are assigned, convey, transfer and set over all right, title, interest, and privilege in to and under all contracts and agreements relating to the Project (Development Agreement dated as of October 16, 2009, as amended) and assumes all the duties and obligations under or with respect thereto and arising or accruing after the date of closing. Attached for your reference is a copy of the Assignment and Assumption Agreement approved Article IX, Section 1.2 of the Development Agreement, Limitations on Transfer Budget Issues: There are no budget issues to consider. Council Goals: Strategic Goal #2: Aggressively proceed with implementation of City's redevelopment plans. Ongoing Goal #3: Moving towards maintaining or lowering the level of City property taxes. • Mission. Ensuring an attractive, clean, safe community that enluinces the quality of life and preserves the public trust COUNCIL ITEM MEMORANDUM ARTICLE IX TRANSFER LIMITATIONS AND INDEMNIFICATION Section 1.1 Representation as to Development; Limit on Transfer of Ownership Interest in Developer The Developer represents to the Authority that its purchase of the Development Property, and its other undertakings under this Agreement, are for the purpose of developing commercial properties, and leasing the Development Property to the Sublessee, and not for the purpose of speculation in land holding. The Developer acknowledges that, in view of the importance of the development of the Development Property to the general welfare of the Authority and the City, the qualifications and identity of the Developer and Sublessee are of particular concern to the Authority. The Developer further acknowledges that the Authority is willing to enter into this Agreement with the Developer because of the qualifications and identity of the Developer and the Sublessee, and the execution of the Lease. Section 1.2 Limitations on Transfer The Developer may, but until the Completion Date only with prior written notice to the Authority which shall not be required after the Completion Date, mortgage the Development Property and the Minimum Improvements to a lender providing construction and/or permanent financing for the Minimum Improvements. Prior to the Completion Date, except pursuant to the Lease and the Occupancy Agreement or as otherwise provided in this Section, the Developer will not sell, assign, convey, lease, mortgage, transfer or otherwise encumber in any other mode or manner this Agreement, the Development Property or the Minimum Improvements, or any interest therein, without the express written • approval of the Authority, which may be given or withheld in the Authority's sole discretion. In the event that the Authority elects to consent to any proposed transfer, the Authority shall be entitled to require, as conditions to any approval of any such transfer of this Development Agreement, the Development Property or the Minimum Improvements that: (a) Any proposed transferee shall have the qualifications and financial responsibility, as determined by the Authority, necessary and adequate to fulfill the obligations undertaken in this Agreement b the Developer; g Y P (b) Any proposed transferee, by instrument in writing satisfactory to the Authority and the City and in form recordable among the land records shall, for itself and its successors and assigns, and expressly for the benefit of Authority, have expressly assumed all of the obligations of the Developer under this Agreement and agreed to be subject to all the conditions and restrictions to which the Developer is subject; (c) There shall be submitted to the Authority for review all instruments and other legal documents involved in effecting transfer, and if approved by Authority, its approval shall be indicated to the Developer in writing; (d) The Developer and its transferee shall comply with such other conditions as the Authority may find desirable, in its sole discretion, in order to achieve and safeguard the purposes of the Act, the Development Plan and the Developer Documents; and Mission: Ensuring an attractive, clean, sgfe community that enhances the quality of life and preserves the public trust COUNCIL ITEM MEMORANDUM (e) In the absence of specific written agreement by the Authority to the • contrary, no such transfer or approval by the Authority shall be deemed to relieve the Developer or any other party bound in any way by this Agreement or otherwise with respect to the construction of the Minimum Improvements, from any of its obligations with respect thereto. • Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION AUTHORIZING ECONOMIC DEVELOPMENT AUTHORITY CONSENT TO ASSIGNMENT OF DEVELOPMENT AGREEMENT AND AUTHORITY TO CONVEY EVELOPMENT PROPERTY WHEREAS, the Economic Development Authority of the City of Brooklyn Center, Minnesota (the "Authority ") and the United States of America, acting by and through the U.S. General Services Administration (the "GSA ") have heretofore entered into a Real Estate Option Agreement (as amended, the "Option Agreement ") providing for the Authority's conveyance of certain real property (as defined in the Development Agreement, the "Development Property ") to the GSA for the purpose of constructing office space containing up to approximately 173,572 square feet of rentable space with an onsite parking facility structure having a minimum of 347 secured and visitor parking spaces (the "Project ") within the City of Brooklyn Center, Minnesota (the "City "); and WHEREAS, by that certain Assignment of Option Agreement dated effective as of June 19, 2009, the GSA assigned its rights under Option Agreement to Barry Minneapolis, LLC ( "Barry "); and i WHEREAS, Barry exercised the option granted in the Option Agreement by delivering to the Authority, inter alia, that certain Development Agreement dated October 16, 2009 (the "Development Agreement "); and WHEREAS, the Authority and Barry previously amended the Development Agreement pursuant to that First Amendment to Development Agreement dated effective as of February 22, 2010 and that Second Amendment to Development Agreement dated effective as of April 27, 2010 to revise the timing of the Closing Date set forth in the Development Agreement to on or before June 10, 2010, together with corresponding revisions to the dates set forth for commencement and completion of the construction of the Minimum Improvements (as set forth in the Development Agreement); and WHEREAS, PH LLC, a Nevada limited liability company ( "PH "), and Barry entered into that certain Purchase Agreement dated as of December 21, 2009, as amended by that certain First Amendment to Purchase Agreement dated as of January 15, 2010, as amended by that certain Second Amendment to Purchase Agreement, dated March 29, 2010 (collectively, the "Purchase Agreement "), which Purchase Agreement will be assigned by PH to an entity to be formed as a Nevada limited liability company owned by affiliates of PH to be named either PH NARA, LLC or PH Minneapolis, LLC (such entity to be referred to herein as the "Developer "); and WHEREAS, pursuant to a certain Assignment and Assumption Agreement, in the form attached hereto, Barry desires to assign to Developer all of Barry's rights and obligations under the Development Agreement (the "Assignment ") and has asked the Authority to consent to the Assignment in accordance with Section 9.2 of the Development Agreement; and WHEREAS, Section 3.9(b)(iv) of the Development Agreement requires the Authority to provide a resolution of the Authority authorizing the Authority's conveyance of the Development Property to Developer (the "Conveyance ") and identifying the individuals authorized to execute the Deed (as defined in the Development Agreement) to be granted in connection with the Conveyance and any other documents required under the Development Agreement in connection with the Conveyance (together with the Deed, the "Closing Documents "); and NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Authority of Brooklyn Center, Minnesota, as follows: 1. The Board of Commissioners hereby approves the Assignment, including the assignment documents in substantially the form submitted, and the Executive Director is hereby authorized and directed to execute any document required to evidence the Authority's consent to the Assignment on behalf of the Authority. 2. The Board of Commissioners hereby approves the Conveyance, including the execution of the Closing Documents and any documents reasonably required in connection therewith, and the Executive Director is hereby authorized and directed to execute any document required to complete the Conveyance on behalf of the Authority. • 3. The approval hereby given to the Assignment and the Conveyance (including the execution of any and all Closing Documents) includes approval of such additional details contained in the documents related thereto 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 Authority officials authorized by this resolution to execute documents required in connection with the Authority's consent to the Assignment and with the Conveyance. The execution of such documents by the appropriate officer or officers of the Authority shall be conclusive evidence of the approval of the Assignment and Conveyance (including the execution of any and all Closing Documents) in accordance with the terms hereof. Date President The motion for the adoption of the foregoing resolution was duly seconded by commissioner and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: . whereupon said resolution was declared duly passed and adopted. • ASSIGNMENT AND ASSUMPTION AGREEMENT THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this " Assignment ") is made this day of , 2010, by and between Barry Minneapolis, LLC, a Georgia limited liability company (hereinafter referred to as " Assignor "), and PH [NARA/Minneapolis], LLC, a Nevada limited liability company (hereinafter referred to as " Assignee '). BACKGROUND STATEMENT WHEREAS, by Purchase Agreement dated as of December 21, 2009 (as any time, amended, the " Purchase Agreement by and between Assignor and PH LLC, a Nevada limited liability company, Assignor agreed to sell to Assignee certain property comprising the Purchased Assets • (as defined in the Purchase Agreement), all as more particularly described in the Purchase Agreement, including, without limitation, certain property relating to the real property legally described as Lot 1, Block 1, Richardson Park 3rd Addition, Hennepin County, Minnesota; and WHEREAS, the Purchase Agreement provides, among other things, that Assignor shall assign to Assignee certain assumed contracts, that Assignee shall assume all of the obligations of Assignor with respect to such assumed'contracts so assigned after the Closing Date, and that Assignor and Assignee shall enter into this Assignment, which is the "Assignment and Assumption Agreement" under (and as defined in) the Purchase Agreement. STATEMENT OF AGREEMENT NOW, THEREFORE, in consideration of the premises, the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1. Definitions Unless otherwise defined herein, capitalized terms used in this Assignment have the respective meanings assigned to them in the Purchase Agreement. 2. Assumed Contracts • Assignor does hereby assign, convey, transfer and set over unto Assignee all of Assignor's right, title, interest and privilege in, to and under all contracts and agreements relating to the Project which are described on Exhibit A attached hereto and hereby made a part hereof (the " Assumed • Contracts Assignee hereby accepts the Assumed Contracts and hereby expressly assumes all of Assignor's duties and obligations under or with respect thereto and arising or accruing after the Closing Date. 3. LIMITATION OF LIABILITY NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, ASSIGNOR AND ASSIGNEE EACH ACKNOWLEDGES AND AGREES THAT NO LIMITED PARTNER OF ASSIGNEE .OR ASSIGNOR, NOR ANY TRUSTEE, DIRECTOR, HOLDER OF ANY BENEFICIAL INTERESTS, MEMBER, MANAGER, SHAREHOLDER, OFFICER OR EMPLOYEE OF ASSIGNEE OR ASSIGNOR OR ANY AFFILIATE OF ASSIGNEE OR ASSIGNOR SHALL HAVE ANY PERSONAL LIABILITY, DIRECTLY OR INDIRECTLY, UNDER THIS ASSIGNMENT, AND EACH PARTY HERETO SHALL HAVE RECOURSE HEREUNDER ONLY AGAINST THE OTHER PARTY'S ASSETS. 4. Miscellaneous This Assignment and the obligations of the parties hereunder shall survive the Closing of the transaction referred to in the Purchase Agreement, subject to the limitations set forth in Section 8.5 of the Purchase Agreement, shall be binding upon and inure to the benefit of the parties hereto, their respective legal representatives, successors and assigns, shall be governed by and construed in accordance with the laws of the State of Minnesota applicable to agreements made and to be wholly performed within said State, and may not be modified or amended in any • Bement signed b the art to be manner other than b a written a gn y party charged therewith. Except as g Y �' specifically provided in this Section 4, this Assignment is not intended to, and shall not, create any rights in any person or entity whomsoever except Assignor, Assignee, and the Economic Development Authority of Brooklyn Center, a public body corporate and politic organized and existing under the laws of the State of Minnesota, whom Assignor and Assignee expressly agree is an intended third -party beneficiary hereof. 5. Counterparts This Assignment may be executed in one or more counterparts, which taken together shall constitute one and the same instrument. [SIGNATURES COMMENCE ON FOLLOWING PAGE] • • [SIGNATURE PAGE TO ASSIGNMENT AND ASSUMPTION AGREEMENT] IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as of the day and year first above written. ASSIGNOR Barry Minneapolis, LLC, a Georgia limited liability company By: Name: Its: ASSIGNEE PH [NARA/Minneapolis], LLC, a Nevada limited liability company By: PH [NARA/Minneapolis] MM, Inc., a Nevada corporation Its: Manager By: Name: Its: [NOTARY PAGE TO ASSIGNMENT AND ASSUMPTION AGREEMENT] STATE OF ) ss COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 2010, by as of Barry Minneapolis, LLC, a Georgia limited liability company. Notary Public STATE OF ) ss COUNTY OF ) • I The foregoing instrument was acknowledged before me this day of > 2010 as of PH by [NARA/Minneapolis] MM, Inc., a Nevada corporation, which is the manager of PH [NARA/Minneapolis], LLC, a Nevada limited liability company. Notary Public THIS INSTRUMENT WAS DRAFTED BY: • • EXHIBIT A TO ASSIGNMENT AND ASSUMPTION AGREEMENT LIST OF ASSUMED CONTRACTS 1. Development Agreement dated as of October 16, 2009, as amended by that certain First Amendment to Development Agreement dated as of February 22, 2010, and that certain Second Amendment to Development Agreement dated as of , 2010, all of the foregoing by and between the Economic Development Authority of Brooklyn Center, a public body corporate and politic organized and existing under the laws of the State of Minnesota, and Assignor. •