HRA Packet 5-17-16May
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I. CALL TO ORDER
II. NEW BUSINESS
l. ITEM 2016-08
June
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HOPKINS HRA SPECIAL MEETING
May 17, 2016
7 p.m.
CUMMINGS
CAMPBELL
GADD
HALVERSON
KUZNIA
MORNSON
ELVERUM
Amendment to Purchase and Development
Agreement with Mokabaka, LLC
Recommendation: approve amendment
Board Action:
22I. ADJOURNMENT
Board Action:
May 13, 2016
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HRA Report 2016-08
SECOND AMENDMENT TO
PURCHASE AND DEVELOPMENT AGREEMENT — MOKABAKA, LLC
Proposed Action
Staff recommends adoption of the following motion: Move to approve Second Amendment to
Purchase and Develooment Aqreement between Mokabaka. LLC and the Housinq and
Redeveloament Authoritv In and For the Citv of Hopkins.
With this motion the amendment will be drafted and executed.
Overview
In November 2013, SSI Properties, acting on behalf of Mokabaka, LLC, and the Hopkins HRA,
entered into a Purchase and Development Agreement stating the terms and conditions for acquisition
of the former Leaman Liquor/Nelson's Meats and Syndicate Sales properties and the redevelopment
thereof. The agreement stated that Mokabaka, LLC, was to commence construction no later than
December 1, 2013, and substantially complete construction, including the demolition of the Syndicate
Sales building, within 18 months thereafter.
Mokabaka, LLC, began construction of the new building with the time identified in the agreement, but
was unable to complete construction within the original 18-month period. Wet weather conditions,
poor soils, and contractor delays on both the Shady Oak Road and the redevelopment projects were
all factors, and as a result, the HRA approved an extension of the date for completion of construction
of the Minimum Improvements to May 31, 2016.
While the work is close to being completed, the demolition of the Syndicate Sales building will not be
able to be accomplished by this date. Staff is recommending a six-month extension, to November 30,
2016.
Primarv Issues to Consider
Syndicate Sales has begun to remodel the property at 24 Shady Oak Road in anticipation of moving
into the building eariy this summer. That will allow their current building to be demolished and a
parking lot constructed, which will serve both the Snap Print development, as well as the VFW. This
amendment will allow additional time to complete the project.
Supportinq Document
ment to Purchase and Development Agreement — Mokabaka, LLC
�/�U/1�,
Director qf Planning & Development
SECOND AMENDMENT TO PURCHASE AND
DEVELOPMENT AGREEMENT
This Second Amendment to Purchase and Development Ageement (this "Second
Amendment") is made a�id executed this day of May, 2016, by Mokabaka LLC, a limited
liability company under the laws of the State of Minnesota ("Redeveloper"), and the Housing and
Redevelopment Authority in and for the City of Hopkins, a public body corporate and politic, under
the laws of Minnesota ("Authority").
RECITALS
A. On November 04, 2013, Redeveloper and the Authority entered into a Purchase and
Development Agreement (the "Development Agreement") stating the terms and conditions for
acquisition of the Redevelopment Property (as defined in the Development Ageement) and the
redevelopment thereof by the Redeveloper in accordance with the teims and condirions of the
Development Agreement. The Redevelopment Property is legally described in Exhibit A
attached hereto and is referred to in the Development Agreement and this Second Amendment as the
"Redevelopment Property". The Development Agreement was filed for record on November 27,
2013, as Hennepin County Registrar of Titles Document No. T5135961.
B. Section 4.3 of the Development Agreement states that Redeveloper is to
commence construction of the Minimum Improvements (as defined in the Development
Agreement) within sixty days after conveyance of the Redevelopment Property to the
Redeveloper and complete construction of the Minimum Improvements within one year after
commencement of consriuction. Redeveloper timely commenced construction of the Minvnum
Improvements, but did not complete construction thereof witrrin one year of commencement of
construction. As such, the Redeveloper requested and the Authority approved an ?.inendment to
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Purchase and Development Agreement (the "Amendment") dated the 29�' day of October, 2014, and
filed for rewrd on , 2014, as Hennepin County Registrar of Titles Document
No. . Subsequent to such Amendment, the Redeveloper has requested that the
Authority approve extension of the date for completion of construcrion of the Minvnum
Improvements to November 3Q 2016. The Authority has approved that extension on the condirion
that Redeveloper execute this Second Amendment and record the same as servitude upon the title to
the Redevelopment Property.
NOW, THEREFORE, in wnsideration of the foregoing Recitals, which are incorporated in
and made a part of this Second Amendment, Redeveloper and the Authority agree the Development
Agreement is amended as follows:
1. Defined Terms. All words and phrases defined in the Development Agreement
shall, when used in this Second Amendment, have the same meanings stated in the Development
Agreement unless the context clearly requires a different meaning. All references to the
"Development AgeemenY' shall mean and refer to the Development Agreement, the
Amendment and this Second Amendment, collectively.
2. Second Amendment of Section 4.3 of Development Aereement. This Section 4.3
of the Development Ageement, as modified by the Amendment, is modified to state that the
Redeveloper shall complete conshuction of the Minimum Improvements no later than November 30,
2016.
3. Guarantv Aareement. Reference is made to that certain Guaranty Agreement
dated November 22, 2013, executed by the Redeveloper in favor of the Authority ("Guaranty
Agreement") guaranteeing the performance by SSI Properties, Inc., a California corporation
("SSI") of all of the Obligations (as defined in the Guaranty Agreement) of SSI under the
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Development Ageement. By a Quitclaim Deed dated May 21, 2014, SSI transferred fee title to the
Redevelopment Property to Redeveloper. By acceptance of that Quitciaim Deed, Redeveloper
rescinded the assignment of its rights under the Development Agreement to SSI and assumed sole
responsibility for the performance of all obligations of the Redeveloper under the
Development Agreement. Redeveloper acknowledges and agrees that the Development Ageement,
as modified by the Amendment, is reaffirmed and remains in full force and effect pursuant to its
original terms and conditions, as modified by this Second Amendment, and confirms and agrees
that the Redeveloper is solely and primarily responsible for performance of all obligations of
the Redeveloper thereunder. Therefore, the Guaranty Agreement shall be of no further force or
effect from and after the date of the Amendment.
4. Intearation. This Second Amendment is incorporated in and made a part
of the Development Agreement and the Amendment in their entireties. The Development
Agreement and the Amendment shall remain in effect in all of their terms, covenants and conditions
as modified by this Second Amendment.
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IN WITNESS WHEREOF, Redeveloper and the Authority have executed this
Second Amendment effective as of the date and year first above written.
u�..::..
By:
Dan Dorholt
Its: Chief Manager
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of May, 2016,
by Dan Darholt, the General Manager of Mokabaka LLC, a limited liability company under the
laws of the State of Minnesota, on behalf of the limited liability company.
Notary Public
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HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
CITY OF HOPKINS, MINNESOTA.
By:
Its: Chair
By:
Its: Executive Director
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of May, 2016,
by Molly Cummings and Michael J. Mornson, the Chair and the Executive Director of the
Housing and Redevelopment Authority in and For the City of Hopkins, a public body politic and
corporate under the laws of the State of Minnesota.
Notary Public
THIS INSTRUMENT WAS DRAr`I'ED BY:
Kennedy & Grav�, Chartered (SJR)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612)337-9300
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MORTGAGEE'S CONSENT
, a , the mortgagee named in that
certain Mortgage dated , 2013, which was recorded
, 2013, at Hennepin County as Hennepin County Registrar
of Titles Document No.
hereby consents to the foregoing
Second Amendment to Purchase and Development Agreement and agees that said Mortgage
shall be subject and subordinate to said Second Amendment to Purchase and Development
Agreement.
STATE OF MINNESOTA
COUNTY OF
B y:
Its:
The foregoing instrument was acknowledged before me this
May, 2016, by _____________ _ ___ _, the
of , under the laws of the
on behalf of the .
Notary Public
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day of
EXHIBIT A
LEGAL DESCRIPI'ION OF REDEVELOPMENT PROPERTY
Lot 1, Block 1, Dorholt Addirion, Hennepin Coimty, Minnesota
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