III. 1. Approve Resolution 530 and 531 Related to Doran Item1
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December 17, 2019 HRA Report 2019-07
CITY
APPROVE RESOLUTION 2019-097 APPROVING THE MEDIATED SETTLEMENT
AND THE ADDENDUM TO THE MEDIATED SETTLEMENT AGREEMENT AND
RELEASE BETWEEN THE CITY OF HOPKINS, THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS, DORAN
810 LLC AND DORAN 810 APARTMENTS, LLC
AND
APPROVE RESOLUTION 2019-098 APPROVING THE AMENDED AND RESTATED
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF HOPKINS, THE
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
HOPKINS, DORAN 810 LLC AND DORAN 810 APARTMENTS, LLC
HRA
APPROVE RESOLUTION 530 APPROVING THE MEDIATED SETTLEMENT AND
THE ADDENDUM TO THE MEDIATED SETTLEMENT AGREEMENT AND
RELEASE BETWEEN THE CITY OF HOPKINS, THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS, DORAN
810 LLC AND DORAN 810 APARTMENTS, LLC
APPROVE RESOLUTION 531 APPROVING THE AMENDED AND RESTATED
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF HOPKINS, THE
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
HOPKINS, DORAN 810, LLC AND DORAN 810 APARTMENTS, LLC
Proposed Action.
1. Staff recommends that the Council approve the following motions: (A) Approve
Resolution 2019-097 Approving the Mediated Settlement and the Addendum to the
Mediated Settlement Agreement and Release between the City of Hopkins, the Housing
and Redevelopment Authority in and for the City of Hopkins, Doran 810 LLC and Doran
810 Apartments, LLC and (B) Approve Resolution 2019-098 Approving the Amended and
Restated Development Agreement between the City of Hopkins, the Housing and
Redevelopment Authority in and for the City of Hopkins, Doran 810 LLC and Doran 810
Apartments, LLC.
2. Staff recommends that the HRA approve the following motions: (A) Approve
Resolution 530 Approving the Mediated Settlement and the Addendum to the Mediated
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Settlement Agreement and Release between the City of Hopkins, the Housing and
Redevelopment Authority in and for the City of Hopkins, Doran 810 LLC and Doran 810
Apartments, LLC and (B) Approve Resolution 531 Approving the Amended and Restated
Development Agreement between the City of Hopkins, the Housing and Redevelopment
Authority in and for the City of Hopkins, Doran 810 LLC and Doran 810 Apartments, LLC.
Overview:
On March 4, 2016, Doran 810 LLC and Doran 810 Apartments, LLC (collectively “Doran”) and
City of Hopkins and Hopkins HRA (collective “City”) entered into a Reimbursement and Purchase
Option Agreement (“Purchase Agreement”) and a Development Agreement regarding
construction of an apartment complex and parking facility commonly known as The Moline.
Pursuant to the Purchase and Development Agreements, Doran agreed to construct, and the City
agreed to either buy or reimburse Doran for the cost of a Grade-Level Garage (the “Garage”) which
was to be utilized for parking for the Southwest LRT transit facility. Doran completed construction
of the Garage on or around March 23, 2018. Notwithstanding the negotiation efforts of all of the
parties regarding agreements for use and operation of the Garage, the closing on the purchase of
the Garage did not occur as Doran and the Metropolitan Council were never able to come to a final
agreement.
On July 31, 2018, Doran served the City with a Summons and Complaint alleging, among other
things, that the City breached the Purchase and Development Agreements by failing and refusing
to close on Garage. The Complaint sought recovery of all costs associated with the construction
of the Garage along with damages incurred by Doran as a result of the delay in the closing. On
August 30, 2018, the City answered Doran’s Complaint and denied liability under the Purchase
Agreement and the City also asserted Counterclaims against Doran alleging, among other things,
that Doran had breached the terms of the Development Agreement thereby resulting in damage to
the City.
To avoid the uncertainties, risks and expenses of protracted litigation, the Parties entered into a
mediated settlement agreement on August 2, 2019 (the “Mediated Settlement Agreement”). Since
the time of the Mediated Settlement Agreement, the parties have continued to negotiate
outstanding settlement matters and settlement agreement language. Pursuant to Paragraph 2 of the
Mediated Settlement Agreement, the parties have prepared the attached Addendum to the
Mediated Settlement Agreement and Release which requires approval of the City Council and the
HRA Board, contains mutual releases between the parties, and provides for cancellation of the
Purchase Agreement. City staff, consultants and the City Attorney will provide a presentation and
additional information regarding the Mediated Settlement Agreement and the Amended and
Restated Development Agreement.
City staff and the City attorney recommend that the City Council and the HRA Board approve the
Mediated Settlement Agreement, the Amendment to the Mediated Settlement Agreement and
Release (via City Resolution 2019-097/via HRA Resolution 530) and the Amended and Restated
Development Agreement (via City Resolution 2019-098/via HRA Resolution 531) and further
authorizes the City Manager and the City attorney to take any and all additional steps and actions
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necessary or convenient to prepare the appropriate documents and/or agreements to facilitate the
approvals set forth herein.
Supporting Information:
City Resolution 2019-097 and City Resolution 2019-098.
HRA Resolution 530 and HRA Resolution 531.
________________________________________
Scott J. Riggs
Hopkins City Attorney
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HOPKINS HOUSING AND REDEVELOPMENT AUTHORITY
RESOLUTION 530
A RESOLUTION APPROVING THE MEDIATED SETTLEMENT AND THE
ADDENDUM TO THE MEDIATED SETTLEMENT AGREEMENT AND RELEASE
BETWEEN THE CITY OF HOPKINS, THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF HOPKINS, DORAN 810 LLC AND DORAN
810 APARTMENTS, LLC
WHEREAS, on March 4, 2016, Doran 810 LLC and Doran 810 Apartments, LLC
(collectively “Doran”) and City of Hopkins (“City”), and the Housing and Redevelopment
Authority in and for the city of Hopkins (the “HRA”) (which parties together with Doran may
hereinafter be collectively be referred to as the “Parties”) entered into a Reimbursement and
Purchase Option Agreement (“Purchase Agreement”) and a Development Agreement; and
WHEREAS, pursuant to the Purchase and Development Agreements, Doran agreed to
construct, and the City agreed to buy or reimburse Doran for the cost of a Grade-Level Garage (the
“Garage”); and
WHEREAS, Doran completed construction of the Garage on or around March 23, 2018;
and
WHEREAS, the closing on the purchase of the Garage did not occur; and
WHEREAS, on July 31, 2018, Doran served the City with a Summons and Complaint
alleging, among other things, that the City breached the Purchase and Development Agreements
by failing and refusing to close on Garage; and
WHEREAS, on August 30, 2018, the City answered Doran’s Complaint and denied
liability under the Purchase Agreement; and
WHEREAS, the City also asserted Counterclaims against Doran alleging, among other
things, that Doran had breached the terms of the Development Agreement thereby resulting in
damage to the City; and
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WHEREAS, to avoid the uncertainties, risks and expenses of protracted litigation, the
Parties entered into a mediated Settlement Agreement on August 2, 2019 (the “Mediated
Agreement”); and
WHEREAS, pursuant to Paragraph 2 of the Mediated Agreement, the parties have
prepared the attached Addendum to the Mediated Settlement Agreement and Release which
requires approval of the City Council and HRA Board, contains mutual releases between the
parties, and provides for cancellation of the Purchase Agreement.
NOW, THEREFORE, BE IT RESOLVED THAT the above-referenced recitals are
incorporated herein to this Resolution.
NOW, THEREFORE, BE IT FURTHER RESOLVED, that the Housing and
Redevelopment Authority in and for the City of Hopkins hereby approves the Mediated Settlement
and the Amendment to the Mediated Settlement Agreement and Release in substantially the form
as attached hereto as Exhibit A, the contents of which are incorporated herein by reference.
NOW, THEREFORE, BE IT FURTHER RESOLVED THAT, the President,
Executive Director, and the HRA Attorney are hereby authorized and directed to take any and all
additional steps and actions necessary or convenient to prepare the appropriate documents and/or
agreements to facilitate the directives of the Board as provided herein in order to accomplish the
intent of this Resolution.
The above resolution was approved/denied by a vote of ____ to _____.
Adopted by the City Council of the City of Hopkins this 17TH day of December, 2019.
_______________________________
Jason Gadd, President
ATTEST:
______________________
Michael J. Mornson, Executive Director
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A-1
EXHIBIT A
FORM OF ADDENDUM TO MEDIATED SETTLEMENT
AGREEMENT AND RELEASE
ADDENDUM TO MEDIATED
SETTLEMENT AGREEMENT AND RELEASE
This Addendum to Mediated Settlement Agreement and Release (hereinafter this
“Addendum”) is entered into to be effective as of the 2nd day of August, 2019, by and among
Doran 810 LLC and Doran 810 Apartments, LLC (collectively “Doran”) and City of Hopkins
(“Hopkins”, which together with Doran may hereinafter be collectively be referred to as the
“Parties”).
WHEREAS, on March 4, 2016, the Parties entered into a Reimbursement and Purchase
Option Agreement (“Purchase Agreement”).
WHEREAS, a Development Agreement was executed as of March 4, 2016, between the
Housing and Redevelopment Authority in and for the City of Hopkins, the City of Hopkins, Doran
810 Apartments, LLC and Doran 810 LLC, as amended by that First Amendment to Development
Agreement, dated February 2, 2017, and as amended and restated by that Amended and Restated
Development Agreement, dated ____________ (the "Development Agreement").
WHEREAS, pursuant to the Purchase Agreement and the Development Agreement, Doran
agreed to construct, and Hopkins agreed to buy or reimburse Doran for the cost of a Grade-Level
Garage (the “Garage”).
WHEREAS, Doran completed construction of the Garage on or around March 23, 2018.
WHEREAS, the Parties did not close on the sale of the Garage from Doran to Hopkins.
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WHEREAS, on July 31, 2018, Doran served Hopkins with a Summons and Complaint
alleging, among other things, that Hopkins breached the Purchase Agreement by failing and
refusing to close on Garage.
WHEREAS, on August 30, 2018, Hopkins answered Doran’s Complaint, denied liability,
and asserted Counterclaims against Doran.
WHEREAS, to avoid the uncertainties, risks and expenses of protracted litigation, the
Parties entered into a Mediated Settlement Agreement on August 2, 2019, a copy of which is
attached hereto as Exhibit A and incorporated herein (the “Mediated Agreement”).
WHEREAS, this Addendum incorporates the mutually acceptable release referenced in
Paragraph 2 of the Mediated Agreement and also amends the Mediated Settlement based on
subsequent negotiations between the Parties.
NOW, THEREFORE, in return for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
1. The Mediated Agreement is amended to provide that the two currently issued TIF
notes shall remain and that a new TIF note shall be issued in the principal amount of $8,000,000.00.
2. With respect to Section 6.5 of the Development Agreement, as amended and
restated in that certain Amended and Restated Development Agreement dated _________, 2019,
the Calculation Date and Stabilization have passed and the calculations have occurred with respect
to Note A and Note B. Section 6.5 of the Development Agreement, as amended, is not operative
as of, and after, August 2, 2019; and, it does not apply to Note C (as defined in the Amended and
Restated Development Agreement).
3. Except for any defaults under this Addendum or the Mediated Agreement, the
Parties hereby release, acquit and forever discharge each other, together with any successors and
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assigns from any and all actions, suits, claims, contractual obligations, agreements, remedies,
recourse and demands, whether known or unknown, foreseen or unforeseen, including unforeseen
consequences of known or unknown conditions or injuries, liquidated or unliquidated, fixed,
contingent, direct, or indirect, which the Parties ever had, now have or may have in the future
against each other, which have or could have been asserted by the Parties with respect to the Garage
and Purchase Agreement or any claims the Parties knew or should have known about as of the date
of this Addendum. Without limiting the foregoing, the Parties hereby agree, stipulate, and
acknowledge that the Purchase Agreement is hereby terminated in its entirety and is and shall be
of no force or effect and neither of the Parties shall have any liabilities or rights under or with
respect to the Purchase Agreement.
4. In entering into this Addendum, the Parties each represent that they have been
represented by independent legal counsel, or that they have had the opportunity to be represented
by independent legal counsel, that they have read and completely understand the terms of this
Addendum, and that those terms are fully understood and voluntarily accepted b y them. The
Parties further affirmatively represent that they have voluntarily entered into this Addendum and
that there are no representations made by the Parties, or their attorneys, agents or other
representatives which are not expressly set forth in this Addendum.
5. It is specifically understood that, by reason of entering into this Addendum and the
Mediated Agreement, no party admits liability of any sort and that such Parties have made no
representations as to the extent of damages and/or injuries or the liability issues previously raised.
It is further specifically understood and agreed that this Addendum shall not be construed as an
admission of liability on the part of the parties, or by anyone else, liability having, at all times,
been denied.
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6. The Parties agree that they shall make no disparaging remarks about the other.
7. This Addendum may be executed in any number of counterparts, all of which
shall constitute a single Addendum.
8. This Addendum shall be construed and interpreted in accordance with the laws of
the State of Minnesota.
9. This Addendum and the Mediated Agreement constitute a full and complete
Addendum between the parties hereto and may not be modified except by a writing signed by all
of the Parties hereto.
IN WITNESS WHEREOF, the parties intending to be legally bound, execute this
Addendum to be effective as of the date first shown above.
DORAN 810 LLC
Date: ________________________ By:____________________________________
Kelly J. Doran
Its: Chief Manager
DORAN 810 APARTMENTS, LLC
Date: ________________________ By:_____________________________________
Kelly J. Doran
Its: Chief Manager
CITY OF HOPKINS
Date: ________________________ By _____________________________________
Jason Gadd
Its: Mayor
Date: ________________________ By _____________________________________
Michael J. Mornson
Its: City Manager
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HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF HOPKINS (AS TO
PARAGRAPH 2 ONLY)
Dated:__________________________ By:_________________________________
Jason Gadd
Its: Chair
Dated:___________________________ By:_________________________________
Michael Mornson
Its: Executive Director
A-A-1
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Exhibit A
A-A-2
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A-A-3
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HOPKINS HOUSING AND REDEVELOPMENT AUTHORITY
RESOLUTION 531
A RESOLUTION APPROVING THE AMENDED AND RESTATED DEVELOPMENT
AGREEMENT BETWEEN THE CITY OF HOPKINS, THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS, DORAN
810, LLC AND DORAN 810 APARTMENTS, LLC
WHEREAS, on March 4, 2016, Doran 810 LLC and Doran 810 Apartments, LLC
(collectively “Doran”), the City of Hopkins (the “City”), and the Housing and Redevelopment
Authority in and for the city of Hopkins (the “HRA”) entered into a development agreement for
the development of certain property located within the City (the “Development Agreement”) along
with a purchase agreement for a portion of the property that the City intended to purchase following
redevelopment (the “Purchase Agreement”); and
WHEREAS, on February 2, 2016, the parties to such Development Agreement executed
the “First Amendment to Development Agreement” (the “First Amendment”) whereby the parties
agreed to modify certain terms in the Development Agreement; and
WHEREAS, the First Amendment was not recorded with Hennepin County; and
WHEREAS, the parties hereby wish to approve an amended and restated Development
Agreement which incorporates the changes included in the First Amendment as well as additional
changes which are the product of a mediated settlement agreement between the parties (the
“Amended and Restated Development Agreement”).
NOW, THEREFORE, BE IT RESOLVED THAT the above-referenced recitals are
incorporated herein to this Resolution.
NOW, THEREFORE, BE IT FURTHER RESOLVED, that the Housing and
Redevelopment Authority in and for the City of Hopkins hereby approves the Amended and
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Restated Development Agreement in substantially the form as attached hereto as Exhibit A, the
contents of which are incorporated herein by reference.
NOW, THEREFORE, BE IT FURTHER RESOLVED THAT, the Chair and Executive
Director and the HRA Attorney are hereby authorized and directed to take any and all additional
steps and actions necessary or convenient to prepare the appropriate documents and/or agreements
to facilitate the directives of the Board as provided herein in order to accomplish the intent of this
Resolution.
The above resolution was approved/denied by a vote of ____ to _____.
Adopted by the Board of the Housing and Redevelopment Authority in and for the City of Hopkins
this 17th day of December, 2019.
ATTEST:
______________________________ ___________________________
President Jason Gadd, Chair
____________________________________
Michael J. Mornson, Executive Director
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EXHIBIT A
FORM OF AMENDED AND RESTATED DEVELOPMENT AGREEMENT
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