HRA 10-08 4th Amendment to 1st & Restated Contract for Private Redevelopment-MarketPlace and MainG\TY OF
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August 13, 2010 HRA Report 2010-08
NOPKINS
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CONTRACT FOR
PRIVATE REDEVELOPMENT — MARKETPLACE & MAIN
Proposed Action
Staff recommends adoption of the following motion: Move to approve the Fourth
Amendment to First Amended and Restated Contract for Private Redevelopment
between the Hopkins HRA and Marketplace Holdings, Inc.
With this motion the agreement will be finalized and executed, including amendments to
the loan and option agreements. It is understood that staff has the ability to make minor
modifications to the agreement.
Overview
In May 2009, the Hopkins HRA entered into a redevelopment agreement with
Marketplace Holdings, Inc. for the purposes of facilitating the redevelopment of the
former Hopkins Honda Body Shop building at 701 Mainstreet into a mixed-use housing
over retail development. The agreement required the first phase of the project to
commence by October 31, 2009. The agreement was then amended to extend the
commencement date to January 31, 2010. A second amendment extended the
commencement date to May 31, 2010, and a third to August 31, 2010.
The developer has not been able to secure a financing commitment through the
Department of Housing & Urban Development and has requested additional time to do
so. Staff is proposing that the new date by which construction must commence will be
August 31, 2011, although it is fully intended that the actual start date will be much
sooner. The developer has also requested that the interest rate on the TIF note be
allowed to be tied directly to the interest rate on the primary loan, as interest rates have
dropped since the agreement was executed.
Primary Issues to Consider
■ What are the terms of the amended agreement?
Supporting Information
■ Fourth Amendment to the First Amended and Restated Contract for Private
RedeVelooment , I
KKsten Iverum
Direct9f of Planning & Development
Financial Impact: $ o Budgeted: Y/N Source: _
Related Documents (CIP, ERP, etc.):
Notes:
0 FOURTH AMENDMENT TO FIRST D AND RESTATED CONTRACT
PRIVATE REDEVELOPMENT 0
THIS SECOND AMENDMENT is made effective as of the day of ,
2010, by and between the Housing and Redevelopment Authority in and for the City of
Hopkins, a public body corporate and politic (hereinafter referred to as the "Authority"),
established pursuant to Minnesota Statutes, sections 469.001-469.047 (hereinafter referred to as
the "Act"), and having its principal office at 1010 First Street South, Hopkins, Minnesota 553.43,
and Marketplace Holdings, Inc., a Minnesota corporation (hereinafter referred to as the
"Redeveloper"), having its principal office at 750 Second Street Northeast, Suite 100, Hopkins,
Minnesota 55343 and amends that certain First Amended and Restated Contract for Private
Redevelopment between the Authority and the Redeveloper dated as of May 5, 2009, which First
Amended and Restated Contract for Private Redevelopment has been amended by a First
Amendment thereto dated as of , 2009, a Second Amendment thereto dated as of
, 2010, and a Third Amendment thereto dated as of 52010
(which agreement as amended is referred to herein as the "Agreement").
WHEREAS, the Authority and the Redeveloper entered into the Agreement under which
the Redeveloper and the Authority agreed to proceed to implement a proposal by the
Redeveloper to redevelop certain property in the City of Hopkins through the construction of a
mixed use retail/commercial/residential development; and
• WHEREAS, the Authority and Redeveloper desire to extend deadlines in the Agreement
in order to reflect the intent of the parties.
NOW, THEREFORE, the Authority and Redeveloper do hereby agree that:
All capitalized terms used herein shall have the meanings given to such terms in
the Agreement.
2. Section 3.8 of the Agreement is hereby amended to provide that the Authority
Loan will be due and payable if the construction of Phase I has not commenced by August 31,
2011. The Authority and Redeveloper will execute such agreements and instruments necessary
to effectuate such amendment with respect to the Authority Loan Documents.
3. Section 4.3 of the Agreement is hereby amended to provide that the date for
commencement of construction of Phase I is August 31, 2011, and the date for completion of
construction of Phase I is July 30, 2012.
4. The Agreement is hereby amended to provide that the rate of interest that will
accrue with respect to the Note will equal the rate of interest on the mortgage loan obtained by
the Redeveloper to finance the construction of Phase I and the rate of interest that will accrue
with respect to the Phase II Note will equal the rate of interest on the mortgage loan obtained by
the Redeveloper to finance the construction of Phase IIA, but in no event will the interest rate on
•91 either note exceed 7%.
Aillk HRA Rpt 2010-08
Page 2
Analysis of the Issues:
® What are the terms of the amended agreement?
A summary of the terms of the proposed amended agreement are as follows:
NRA Loan of $900,000 will be due and payable if construction of Phase I has
not commenced by August 31, 2011
The interest'rate on the TIF notes (Phase I and Phase II) will be tied to the
interest rate of the HUD financing to a maximum of 7%.
Alternatives:
The HRA has the following alternatives as relates to this item:
® Approve the amended agreement as proposed.
® Modify the agreement.
■ Elect not to amend the existing agreement. With this alternative, the
developer would be required to commence construction by August 31,
2010, or pay back the HRA loan.
•
AM
5. All other provisions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the Authority has caused this Fourth Amendment to be duly
executed in its name and behalf and the Redeveloper has caused this Fourth Amendment to be
duly executed in its name and behalf on or as of the date first above written.
•
0
SIGNATURE PAGE
TO 0
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED
CONTRACT FOR PRIVATE REDEVELOPMENT
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF HOPKINS
-2
an
STATE OF MINNESOTA )
) SS.
• COUNTY OF ),
The foregoing instrument was acknowledged before me this _ day of ,
2010, by and , the
and 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
SIGNATURE PAGE
TO
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED
CONTRACT FOR PRIVATE REDEVELOPMENT
MARKETPLACE MOLDINGS, INC.,
A Minnesota corporation
itz
STATE OF MINNESOTA )
) SS.
COUNTY OF )
Its:
The foregoing instrument was acknowledged before me this day of ,
2010, by , the of Marketplace Holdings, Inc., a
Minnesota corporation, on behalf of the corporation.
Notary Public