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HomeMy WebLinkAbout2014-004 EDAR Commissioner Lin Myszkowski introduced the following resolution and moved its adoption: EDA RESOLUTION NO. 2014-04 RESOLUTION APPROVING A SECOND AMENDMENT TO DEVELOPMENT AGREEMENT(SHINGLE CREEK CROSSING PROJECT) BE IT RESOLVED By the Board of Commissioners (the`Board")of the Economic Development Authority of the City of Brooklyn Center,Minnesota("EDA")as follows: Section 1. Recitals. 1.01. Shingle Creek, LLC ("Shingle Creek") has heretofore entered into a Development Agreement by and between the EDA and Shingle Creek dated June 17, 2011 (the "Development Agreement"). 1.02 Shingle Creek and the EDA entered into a First Amendment to Development Agreement dated November 13,2012(the"First Amendment"). 1.03. The Development Agreement permits Shingle Creek to transfer the Development Property to an affiliate and Shingle Creek conveyed the Food Court Parcel to an affiliate, Shingle Creek 3, LLC, a Delaware limited liability company (Shingle Creek and Shingle Creek 3, LLC are referred to herein,collectively, as the"Developer"). 1.04 The Developer and the EDA entered into a First Amendment to Development Agreement dated November 13,2012(the"First Amendment"). 1.05. The EDA and the Developer have proposed to further amend the Development Agreement to provide, among other things, for demolishing the Food Court Building (as defined in the Development Agreement) and constructing new commercial facilities on the site thereof (the"Development Agreement Amendment"). Section 2. EDA Approval; Further Proceedings. 2.01. The Development Agreement Amendment as presented to the Board is hereby in all respects approved, in substantially the form submitted, together with any related documents necessary in connection therewith, including without limitation a recordable release of the Kohl's Parcel Mortgage (as defined in the Development Agreement), (collectively, the "Amendment Documents") and the President and the Executive Director are hereby authorized and directed to execute the Amendment Documents on behalf of the EDA and to carry out, on behalf of the EDA, the EDA's obligations thereunder. RESOLUTION NO. 2014-04 2.02 The approval hereby given to the Amendment Documents includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by legal counsel to the EDA and by the officers authorized herein to execute said documents prior to their execution; and said officers are hereby authorized to approve said changes on behalf of the EDA. The execution of any instrument by the appropriate officers of the EDA herein authorized shall be conclusive evidence of the approval of such document in accordance with the terms hereof. In the event of absence or disability of the officers, any of the documents authorized by this Resolution to be executed may be executed without further act or authorization of the Board by any duly designated acting official, or by such other officer or officers of the Board as, in the opinion of the City Attorney,may act in their behalf. March 24, 2014 Date President The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Carol Kleven and upon vote being taken thereon,the following voted in favor thereof: Tim Willson, Carol Kleven, Kris Lawrence-Anderson, Lin Myszkowski, and Dan Ryan; and the following voted against the same: none; whereupon said resolution was declared duly passed and adopted. EDA RESOLUTION NO.2014-04 SECOND AMENDMENT TO DEVELOPMENT AGREEMENT By and Among ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER,MINNESOTA, SHINGLE CREEK,LLC, AND SHINGLE CREEK 3,LLC, Dated as of: June 17,2011 First Amendment Dated as of: November 13,2012 Second Amendment Dated as of: March_,2014 This document was drafted by: KENNEDY&GRAVEN, CHARTERED(JSB) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis,Minnesota 55402 Telephone: (612) 337-9300 4263347 JSB BR291-304 EDA RESOLUTION NO.2014-04 SECOND AMENDMENT TO DEVELOPMENT AGREEMENT This Second Amendment to Development Agreement (the "Second Amendment") is made as of the day of March, 2014, by and among the ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA, a body corporate and politic organized and existing under the laws of the State of Minnesota (the "Authority"), and SHINGLE CREEK, LLC, a Delaware limited liability company ("Shingle Creek") and SHINGLE CREEK 3, LLC, a Delaware limited liability company ("Shingle Creek 3") (Shingle Creek and Shingle Creek 3 are referred to herein, collectively, as the"Developer"). WITNESSETH: WHEREAS, the Authority and the Developer heretofore entered into a Development Agreement dated June 17, 2011 and recorded in the Office of the Hennepin County Registrar of Titles on June 30, 2011 as Document No. T4868190 (the "Original Agreement") in connection with the construction of certain Minimum Improvements (as defined therein) in the Authority's Tax Increment Financing District No. 5 (A Renewal and Renovation District). The Original Agreement was recorded against title to Lots 2 through 17, Block 1,Lot 2, Block 2 and Outlot A, SHINGLE CREEK CROSSING, Hennepin County, Minnesota according to the recorded plat thereof, except that part formally described as Tract A, Registered Land Survey 1649, Hennepin County, Minnesota(the"Developer Property"); and WHEREAS, the Original Agreement required completion of certain Minimum Improvements, as defined therein, including the "re-skinning" of the Food Court Building, by December 31,2012; and WHEREAS, the Original Agreement was amended by a First Amendment to Development Agreement dated November 13, 2012 and recorded in the office of the Hennepin County Registrar of Titles on November 27, 2012 as Document No. T5017704 (the "First Amendment" and, together with the Original Development Agreement and this Second Amendment, the "Development Agreement") providing for an extension for the required completion date for the "re-skinning"of the Food Court Building to September 30,2013; and WHEREAS, capitalized terms used in this Second Amendment and not otherwise defined herein have the meanings given to them in the Development Agreement; and WHEREAS, on January 14, 2013, the Authority executed a Primary Certificate of Completion, as provided for in the First Amendment. The Primary Certificate of Completion(i) confirmed that the Developer had constructed the Minimum Improvements, other than the "re- skinning" of the Food Court Building, in accordance with the terms of the Development Agreement and (ii) released all of the Developer Property other than Lot 3, Block 1, SHINGLE CREEK CROSSING, Hennepin County, Minnesota from the terms and conditions the Development Agreement. The Primary Certificate of Completion was recorded in the Office of the Hennepin County Registrar of Titles on June 18,2013,as Document No. T05087258; and 4263345 JSB BR291-304 EDA RESOLUTION NO.2014-04 WHEREAS, the original Food Court Parcel, Lot 3, Block 1, SHINGLE CREEK CROSSING, Hennepin County, Minnesota, has been re-platted as a part of Lot 1, Block 1, SHINGLE CREEK CROSSING 3RD ADDITION, Hennepin County, Minnesota, and it is the intention of the Authority and the Developer that this Second Amendment be recorded against and only against title to Lot 1, Block 1, SHINGLE CREEK CROSSING 3RD ADDITION, Hennepin County, Minnesota; and WHEREAS, the Development Agreement permits the Developer to transfer the Development Property to an affiliate; and WHEREAS, on or about March 6, 2014, Shingle Creek, LLC conveyed Lot 1, Block 1, SHINGLE CREEK CROSSING 3RD ADDITION, Hennepin County, Minnesota to an affiliate, Shingle Creek 3,LLC, a Delaware limited liability company; and WHEREAS, the Developer has requested that the Authority further amend the Development Agreement to delete the provisions of the Development Agreement that obligate the Developer to' "re-skin" the Food Court Building and replace them with provisions that obligate the Developer to demolish the Food Court Building and to construct the improvements depicted on Exhibit M on the Food Court Parcel, all in accordance with the PUD, as amended as of October 14,2013; and WHEREAS, Developer has further requested that the City release the Kohl's Parcel from the Kohl's Parcel Mortgage. The Authority has determined that the provisions of the Development Agreement that authorize the Authority to suspend performance under the TIF Note or to cancel the TIF Note in the event of a Developer Event of Default provide the Authority with adequate security for the performance of the Developer's obligation to repay the Additional Improvements Forgivable Loan;and WHEREAS, contemporaneously with the execution of this Second Amendment the Authority is executing and delivering to the Developer a recordable release of the Kohl's Parcel Mortgage; and WHEREAS, the Developer and the Authority have proposed to further amend the Original Agreement as provided herein; NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto,the parties agree as follows: 1. The definition of"Additional Improvements" set forth in Section 1.1 of the Development Agreement is hereby deleted in its entirety and replaced with the following: "Additional Improvements" means commercial buildings the Developer constructs on the Phase II Parcels in accordance with the PUD,as amended. 2. The definition of "Food Court Parcel" set forth in Section 1.1 of the Development Agreement, as amended in Section 4 of the First Amendment," is hereby deleted in its entirety and replaced with the following: 2 4263345 JSB BR291-304 EDA RESOLUTION NO.2014-04 "Food Court Parcer' means Lot 1, Block 1, SHINGLE CREEK CROSSING 3RD ADDITION,Hennepin County,Minnesota. 3. The definition of"Food Court Parking and Streetscaping" set forth in Section 1.1 of the Development Agreement is hereby deleted in its entirety and replaced with the following: "Food Court Parking and Streetscaping"means construction of interior roadways, parking lots and sidewalks on or adjacent to the Food Court Parcel, and the installation of pedestrian/street lighting and landscaping of the Food Court Parcel to achieve a"Town Center"look, all consistent with the Site Plan and Phasing Exhibit approved at the part of the PUD,as amended. 4. A new definition"Food Court Work" is hereby added to Section 1.1 of the Development Agreement as follows: "Food Court Work" means: the demolition of the Food Court Building; the construction of the improvements depicted on Exhibit M attached to this Second Amendment;and construction of the Food Court Parking and Streetscaping. 5. The definition of"Minimum Improvements" set forth in Section 1.1 of the Development Agreement is hereby deleted in its entirety and replaced with the following: "Minimum Improvements"means(i)the demolition of the existing Brookdale Mall, excluding the Sears department store, (ii) the partial day-lighting of Shingle Creek; (iii) the construction by the Developer of the Phase I Streets and Streetscaping; and (iv) the construction of the storm water detention and/or retention areas by the Developer on the Development Property, all consistent with the PUD and any approved development plans. The term"Minimum Improvements"does not include construction of the Walmart Store. r 6. The definition of "PUD" set forth in Section 1.1 of the Development Agreement is hereby deleted in its entirety and replaced with the following: "PUD" means the Planned Unit Development the City has approved for the Development Property, the Midas Parcel and the EDA Parcel, as the same may be amended from time to time. 7. The definition of "PUD Agreement" set forth in Section 1.1 of the Development Agreement is hereby deleted in its entirety and replaced with the following: "PUD Agreemenf'means the Shingle Creek Crossing Declaration of Covenants and Restrictions dated June 28, 2013 and recorded in the office of the Hennepin County Registrar of Titles on June 30, 2011 as Document No. T4868187, as the same may be amended from time to time. 8. Section 1.1 of the Development Agreement is hereby amended to add the following definition: 3 4263345 JSB BR291-304 EDA RESOLUTION NO.2014-04 "Additional Improvements Forgivable Note" means the Promissory Note dated June 23, 2011 in the original principal amount of$1,000,000.00 that the Developer executed in favor of the Authority as the same may be further amended from time to time. 9. Section 2.2(1) of the Development Amendment is amended in its entirety to read as follows: (1) The Developer expects that the construction of the Minimum Improvements will begin on or before July 1, 2011 and, barring Unavoidable Delays, will be substantially completed not later than December 31, 2012, and the Developer e in on or before expects that the Food.Court Work will b May 1 g y , 2014 with the demolition of the Food Court Building and, barring Unavoidable Delays, will cause the construction of the portion of the Food Court Work consisting of the buildings identified as buildings El, E2, E3, E4 and E5 on the attached Exhibit M to be substantially completed no later than May 31, 2015 and will cause the construction of the remaining portion of the Food Court Work consisting of the buildings identified as buildings N1,N2,N3, Wl and W2 on the attached Exhibit M and the Food Court Parking and Streetscaping, to be substantially completed no later than June 28,2016. 10. Section 4.4(a) of the Development Amendment is amended in its entirety to read as follows: (a) Subject to the terms and conditions of this Agreement, the Developer will commence construction of the Minimum Improvements by July 1,2011 and,barring Unavoidable Delays, will cause the Minimum Improvements to be substantially completed not later than December 31, 2012. For purposes of the preceding sentence, the term `.`commence" means the making of visible improvements, including without limitation asbestos abatement and subsurface excavation but excluding mere surface.grading." Subject to the terms and conditions of this Agreement, the Developer will commence construction of the Food Court Work on or before May 1, 2014 with the demolition of the Food Court Building and, barring Unavoidable Delays; will cause the construction of the portion of the Food Court Work consisting of the buildings identified as buildings El, E2, E3, E4 and E5 on the attached Exhibit M to be substantially completed no later than May 31,2015 and will cause the construction of the remaining portion of the Food Court Work consisting of the buildings identified as buildings Nl, N2, N3, Wl and W2 on the attached Exhibit M and the Food Court Parking and Streetscaping to be substantially completed no later than June 28,2016. 11. Section 4.9(b) of the Development Amendment is amended in its entirety to read as follows: 4 426334v5 JSB BR291-304 EDA RESOLUTION NO.2014-04 Section 4.9 Certificates of Completion (b) The Developer shall notify the Authority when-the Food Court Work has been completed. The Authority shall,within 14 days after such notification, inspect the Food Court Work to determine whether the Food Court Work has been completed in substantial conformity with the approved Construction Plans and PUD. If the Authority determines that the Food Court Work has been completed in substantial conformity with the approved Construction Plans and the PUD, the Authority shall, within 28 days after the Developer's notification of completion of construction, deliver a written statement to the Developer indicating in adequate detail the specific respects in which the Food Court Work has not been completed in substantial conformity with the approved Construction Plans. and PUD, and the Developer shall promptly remedy such deficiencies, or cause such ch deficiencies to be remedied. If the Authority determines that the Food Court Work has been completed in substantial conformity with the applicable approved Construction Plans and the PUD, as amended, the Authority shall furnish to,the Developer a certificate of completion in the form attached hereto as Exhibit B-2(the"Food Court Certificate of Completion") certifying the completion of the'Food Court Work. The Food Court Certificate of Completion issued for the Food Court Work shall conclusively satisfy and terminate the agreements and covenants of the Developer in this Agreement to perform the Food Court Work only. The issuance of the Food Court Certificate of Completion shall not be construed to relieve the Developer of any approval required by any City department in connection with the construction, completion or occupancy of the Minimum Improvements nor shall it relieve the Developer of any other obligations under this Agreement. 12.. Section 5.4(c)of the First Amendment is amended in its entirety to read as follows: (c) If, on or before the Additional Improvements Note Maturity Date, the Developer(i)completes the Food Court Work;(ii)constructs and obtains certificates of occupancy for not less than 239,000 square feet of buildings constituting Additional Improvements on the Phase II Parcels (the square foot area of the buildings completed as a part of the Food Court Work to be included as a part of the Additional Improvements constructed on the Phase H Parcels), and (iii) no Event of Default exists hereunder, the principal of and interest on the Additional Improvements Forgivable Loan shall be deemed paid in full. 13. Section 5.4(d) of the First Amendment is amended in its entirety to read as follows: (d) If, on or before the Additional Improvements Note Maturity Date, the Developer(i)completes the Food Court Work; (ii)constructs and obtains certificates of occupancy for less than 239,000 square feet of buildings constituting Additional Improvements on the Phase II Parcels (the square foot area of the buildings completed as a part of the Food Court Work to be included as a part of the Additional Improvements constructed on the Phase II Parcels), and (iii) no Event of Default exists hereunder, the principal of and interest on the Additional Improvements Forgivable Loan shall be deemed paid on the Additional 5 4263345 JSB BR291-304 EDA RESOLUTION NO.2014-04 Improvements Note Maturity Date in an amount determined by multiplying the principal amount of the Additional Improvements Forgivable Loan by a fraction,the numerator of which is the square footage of Additional Improvements for which the Developer has obtained certificates of occupancy by the Additional Improvements Note Maturity Date and the denominator of which is 239,000. The Developer shall repay the remaining balance of the Additional Improvements Forgivable Note plus accrued interest thereon on the Additional Improvements Note Maturity Date 14. Except as hereby amended,all other terms and conditions of the Original Agreement and the First Amendment shall remain in full force and effect. 6 4263345 JSB BR291-304 EDA RESOLUTION NO.2014-04 IN WITNESS WHEREOF, the Authority has caused this Second Amendment to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Developer has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER,MINNESOTA By President By Executive Director STATE OF MINNESOTA ) ss: COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me on this _ day of March, 2014 by and the President and Executive Director of the Economic Development Authority of the City of Brooklyn Center, Minnesota, a body corporate and politic established pursuant to Minn. Stat. Chapter 469, on behalf of the Authority. Notary Public Signature page to Second Amendment to Development Agreement � pg S-1 4263345 JSB BR291-304 EDA RESOLUTION NO.2014-04 SHINGLE CREEK,LLC, a Delaware limited liability company By: Its: STATE OF ) ss: COUNTY OF ) The foregoing instrument was acknowledged before me on this_ day of March, 2014 by ,the of Shingle Creek, LLC, a Delaware limited liability company on behalf of said limited liability company. Notary Public Signature page to Second Amendment to Development Agreement S-2 4263345 JSB BR291-304 EDA RESOLUTION NO.2014-04 SHINGLE CREEK 3,LLC, a Delaware limited liability company By:Shingle Creek Crossing Holdings, LLC, a Delaware limited liability company, its sole member By: GATLIN PARTNERS, LLC, a Delaware limited liability company, its sole Member By: Franklin C. Gatlin,III, its Managing Member STATE OF ) ss: COUNTY OF ) The foregoing instrument was acknowledged before me this day of ' 2014 by Franklin C. Gatlin, III, the managing member of Gatlin Partners,limited LLC, a Delaware liability company, the sole member of Shingle Creek Crossing Holdings, LLC, a Delaware limited liability company,the sole member of Shingle Creek 3, LLC, a Delaware limited liability company,on behalf of the company. Notary Public Signature page to Second Amendment to Development Agreement S-3 4263345 JSB BR291-304 EDA RESOLUTION NO.2014-04 EXHIBIT B-2 FOOD COURT CERTIFICATE OF COMPLETION WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota (the "Authority"), a body corporate and politic subdivision of the State of Minnesota and Shingle Creek, LLC, a Delaware limited liability company (and together with Shingle Creek 3, LLC,the "Developer") have entered into a Development Agreement dated June 17, 2011 and filed for record June 30, 2011, as Document Number T4868190, in the Office of the Hennepin County Registrar of Titles (the "Original Development Agreement"), as amended by a First Amendment to Development Agreement dated November 13, 2012 and filed for record November 27, 2012, as Document Number T5017704, in the Office of the Hennepin County Registrar of Titles (the "First Amendment"), as further amended by a Second Amendment to Development Agreement dated March 2014, and filed for record , 201_, as Document No. in the Office of the Hennepin County Registrar of Titles (the "Second Amendment" and, together with the Original Development Agreement and the First Amendment,the"Development Agreement"); and WHEREAS, the Development Agreement requires the Developer to perform the Food Court Work(as defined in the Development Agreement); WHEREAS, the Developer has completed the Food Court Work in a manner deemed sufficient by the Authority to permit the execution of this certification and the release of Lot 3, Block 1; SHINGLE CREEK CROSSING, Hennepin County, Minnesota according to the recorded plat thereof, except that part formally described as Tract A, Registered Lands Survey 1649, Hennepin County, Minnesota (the "Released Property") from the terms and conditions of the Development Agreement; NOW,THEREFORE,this is to certify that the Developer has completed the Food Court Work. As a result, the Authority hereby releases the Released Property from the terms of the Development Agreement, and the Development Agreement shall no longer run with title to the Released Property or bind successors in title to the Released Property. It is the intention of the Authority and the Developer that after this Food Court Certificate of Completion is memorialized under the Certificates of Title to the Released Property, the Hennepin County Registrar of Titles will omit the memorial of the Development Agreement and the memorial of this Food Court Certificate of Completion from future certificates of title for all or any portion of the Released Property. Notwithstanding the Authority's release of the Released Property from the terms and conditions of the Development Agreement,the covenants and restrictions set forth in the Development Agreement remain the personal obligation of the Developer and any successor in title to all or any portion of the Developer Property, as defined in the Development Agreement, to whom the Developer expressly assigns the Developer's obligations under the Development Agreement in accordance with Section 8.2(b)(ii)of the Development Agreement. B-2-1 4263345 JSB BR291-304 EDA RESOLUTION NO.2014-04 IN WITNESS WHEREOF, the Authority has caused this Certificate of Completion to be executed with by its duly authorized officer as of the day of 20_. ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By President By Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 20_, by ,the President and ,the Executive Director of the Economic Development Authority of Brooklyn Center, Minnesota, a municipal corporation and politic subdivision organized and existing under the Constitution and laws of the State of Minnesota,on behalf of said Authority. 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