II. 3. ITEM 2016-15 Third amendment to purchase and development agreement-Mokabaka, LLCNovember 9, 2016 HRA Report 2016-15
THIRD AMENDMENT TO
PURCHASE AND DEVELOPMENT AGREEMENT –MOKABAKA, LLC
Proposed Action
Staff recommends adoption of the following motion: Move to approve Third Amendment to Purchase
and Development Agreement between Mokabaka, LLC and the Hopkins Housing & Redevelopment
Authority.
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 Housing &
Redevelopment Authority (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 on a new building no later than December 1, 2013, and substantially
complete construction, including the demolition of the Syndicate Sales building,within 18 months.
Mokabaka, LLC,began construction of the new building within the time identified, but was unable to
complete construction within the original18-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 anextension of the date for completion of construction to May 31,
2016.The work was again unable to be completed by that deadline, now complicated by the
schedule of Syndicate Sales and their inability to renovate the building they are to move into while
tending to their business. The Council approved a 6-month extension, to November 30, 2016.
At this time, Syndicate Sales has moved out of the property that is to be demolished andthat work
has been scheduled, but site work including any needed environmental remediation will not be
completed by November 30. Staff is recommending an extension to June 30, 2017, to allow for
completion of the parking lot improvements.
Primary Issues to Consider
This amendment will allow additional time to complete the project and is viewed as the last
amendment necessary to complete the work.
Supporting Documents
Third Amendment to Purchase and Development Agreement –Mokabaka, LLC
___________________________
Kersten Elverum
Director of Planning & Development
Financial Impact: $____0____Budgeted: Y/N ____ Source: _______________________
Related Documents (CIP, ERP, etc.): __________________________________________
Notes ___________________________________________________________________
THIRDAMENDMENT TO PURCHASE AND
DEVELOPMENT AGREEMENT
This Third Amendmentto Purchase and Development Agreement (this "Third Amendment")
is made and executed this ______ day of November, 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 November04, 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 Agreement) and the
redevelopment thereof by the Redeveloper in accordance with the terms and conditions 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 Third Amendmentas the
"Redevelopment Property". The Development Agreement was filed for record on November27,
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 construction. Redeveloper timely commenced construction of the Minimum
Improvements, but did not complete construction thereof within one year of commencement of
construction. As such, the Redeveloper requested and the Authority approved an Amendment to
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th
Purchase and Development Agreement (the “Amendment”) dated the 29day of October, 2014, and
filed for record 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 construction of the Minimum
Improvements to November 30, 2016. The Authority approved that extension on the condition that
Redeveloper execute a second amendment(the “Second Amendment”) and record the same as
servitude upon the title to
the Redevelopment Property.Subsequent to the Second Amendment, the
Redeveloper has requested that the Authority approve a third amendment extending the date for
completion to June 30, 2017 (the “Third Amendment”). The Authority desires to approve this
Third Amendment on the condition that the Redeveloper execute the same and record the same as a
servitude upon the title to the Redevelopment Property.
NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated in
and made a part of this Third 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 Third Amendment, have the same meanings stated in the Development
Agreement unless the context clearly requires a different meaning. All references to the
"Development Agreement" shall mean and referto the Development Agreement, the
Amendmentand this Third Amendment, collectively.
2.Third Amendmentof Section 4.3 of Development Agreement.This Section 4.3
of the Development Agreement, as modified by thepriorAmendments,is modified to state that the
Redeveloper shall complete construction of the Minimum Improvements no later than June30, 2017.
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3.Guaranty Agreement.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
Development Agreement. By a Quitclaim Deed dated May 21, 2014, SSI transferred fee title to the
Redevelopment Property to Redeveloper. By acceptance of that Quitclaim Deed,Redeveloper
rescinded the assignment of its rights under the Development Agreement toSSIand assumed sole
responsibility for the performance of all obligations of the Redeveloper under the
Development Agreement. Redeveloper acknowledges and agrees that the Development Agreement,
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 Third 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 theAmendment.
4.Integration.This Third Amendmentis incorporated in and made a part of
theDevelopment Agreement and thepriorAmendmentsin theirentireties.The Development
Agreement and the Amendment shall remain in effect in all of their terms, covenants and conditions
as modified by this Third Amendment.
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IN WITNESS WHEREOF, Redeveloper and the Authority have executed this Third
Amendmenteffective as of the date and year first above written.
MOKABAKA LLC
By:_________________________________
Dan Dorholt
Its:Chief Manager
STATE OF MINNESOTA)
) ss.
COUNTY OF HENNEPIN)
The foregoing instrument was acknowledged before me this ______ day of November,
2016,by Dan Dorholt, 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 November,
2016,by Molly Cummings and Michael J. Mornson, theChair 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 DRAFTED BY:
Kennedy & Graven, 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
certainMortgage dated ____________, 2013, which was recorded __________
___________________, 2013, at Hennepin County asHennepin County Registrar
of Titles Document No. ____________, hereby consents to the foregoing Third
Amendmentto Purchase and Development Agreement and agrees that said Mortgage shall be
subject and subordinate to said Third Amendmentto Purchase and Development Agreement.
____________________________
By:_______________________
Its:_______________________
STATE OF MINNESOTA)
) ss.
COUNTY OF ____________)
The foregoing instrument was acknowledged before me this ______ day of
November,2016, by ______________________, the
____________________________ of _____________________, under the laws of
the _______________________, on behalf of the ___________________.
______________________________
Notary Public
489467v1 HP145-4
EXHIBIT A
LEGAL DESCRIPTION OF REDEVELOPMENT PROPERTY
Lot 1, Block 1, Dorholt Addition, Hennepin County, Minnesota
A-1
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