CR 11-070 Fifth Amendment to PUD/Development Agreement - Marketplace and MainGITY OF
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July 22 2011 H O P K INS Council Report 2011-70
FIFTH AMENDMENT TO PUD/DEVELOPMENT
AGREEMENT — MARKETPLACE & MAIN
Proposed Action
Staff recommends adoption of the following motion: Move to approve the Fifth Amendment to
PUD/Development Agreement between the City of Hopkins and Marketplace Holdings, Inc.
With this action it is understood that staff is authorized to make minor changes to the agreement
that do not impact the overall intent.
Overview
In June of 2004 the City of Hopkins rezoned the former Hopkins Honda Body Shop and used -car
sales lot to a Planned Unit Development (PUD) overlay zoning to facilitate the redevelopment of
this site into a mixed-use (residential/commercial) development. At that time, a PUD agreement
was executed with Luther Companies. The PUD agreement was revised in the summer of 2006
to reflect The Cornerstone Group as owners. The PUD agreement with The Cornerstone Group
was approved by the Council, but never executed. In 2007 The Cornerstone Group sold the site
to Marketplace Holdings, Inc., (The Beard Group) and the agreement was amended. In the
spring of 2009 The Beard Group proposed to change the ownership of the units from owner -
occupied to rental, and the agreement was amended and extended for construction to start no
later than October 31, 2009. The agreement has been extended three more times to January 31,
2010, and again until December 31, 2010, and December 31, 2011. Now HUD has required
additional language.
Primary Issue to consider
• What are the changes from the previous agreement?
HUD has required additional language to be added. Jerry Steiner, the City Attorney will be at
the meeting to review the new language and answer any questions regarding the new language.
Supporting Information
• Fifth Amendment to PUD/Development Agreement
O•nderson
Financial Impact: $_0 Budgeted: Y/N Source:
Related Documents (CIP, ERP, etc.):
Notes:
FIFTH AMENDMENT TO PUD/DEVELOPMENT AGREEMENT
This Fifth Amendment to PUD/Development Agreement (this "Fifth Amendment") is
made and executed this day of , 2011, by Marketplace Holdings, Inc., a
corporation under the laws of the State of Minnesota ("Developer"), and the City of Hopkins, a
municipal corporation under the laws of Minnesota ("City").
RECITALS
A. On April 9, 2007, Developer and the City entered into an Amended and Restated
PUD/Development Agreement (the "Amended PUD Agreement") stating the terms and
conditions of the City's approval of PUD zoning and a Development Plan for the development of
certain real property legally described in Exhibit A attached hereto (the "Real Property"). The
Amended PUD Agreement was filed for record on April 24, 2007, as Hennepin County Recorder
Document No. 8968613, and as Hennepin County Registrar of Titles Document No. 4379827.
On July 13, 2009, Developer and the City entered into an Amendment to PUD/Development
Agreement (the "First Amendment") making certain amendments to the Amended PUD
Agreement, as stated in the First Amendment. The First Amendment was filed for record on
November 10, 2009, as Hennepin County Recorder Document No. A9442487, and as Hennepin
County Registrar of Titles Document No.T4703297. On March 29, 2010, Developer and the City
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entered into a Second Amendment to PUD/Development Agreement (the "Second Amendment")
making certain amendments to the Amended PUD Agreement. The Second Amendment was
filed for record on April 20, 2010, as Hennepin County Recorder Document No. A9503828, and
as Hennepin County Registrar of Titles Document No. T4747231. On March 29, 2010,
Developer and the City entered into a Third Amendment to PUD/Development Agreement (the
"Third Amendment") making certain amendments to the Amended PUD Agreement. The Third
Amendment was filed for record on April 20, 2010, as Hennepin County Recorder Document
No. A9503829, and as Hennepin County Registrar of Titles Document No. T4747232. On July
2011, Developer and the City entered into a Fourth Amendment to PUD/Development
Agreement (the "Fourth Amendment') making certain amendments to the Amended PUD
Agreement. The Fourth Amendment was filed for record on , 2011, as Hennepin
County Recorder Document No. , and as Hennepin County Registrar of Titles
Document No. . All references in this Fifth Amendment to the Amended PUD
Agreement shall mean and refer to the Amended PUD Agreement, as amended by the First
Amendment, the Second Amendment, the Third Amendment and Fourth Amendment.
B. Dougherty Mortgage LLC, a Delaware limited liability company ("Lender") has
agreed to make a loan to the Developer in the original principal amount not to exceed
$9,707,000.00 (the "HUD Loan") which loan shall be insured by the Federal Housing
Administration (the "FHA") of the United States Department of Housing and Urban
Development ("HUD") under Section 221(d)(4) of the National Housing Act of 1934, as
amended, pursuant to the Commitment to Insure Upon Completion dated March 18, 2011 (FHA
Project No. 092-35692), as amended (the "FHA Commitment"). The HUD Loan will be
evidenced by that certain Mortgage Note dated July 1, 2011 (the "HUD Note") executed by the
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Developer in favor of Lender in the original principal amount of the Loan and will be secured in
part by (i) that certain Mortgage dated July 1, 2011 (the "HUD Mortgage") executed by the
Developer in favor of Lender, and by (ii) the Regulatory Agreement for Multifamily Housing
Projects dated July 1, 2011 (the "HUD Regulatory Agreement") executed by and between
Developer and the Secretary of Housing and Urban Development. The HUD Note, the HUD
Mortgage, the HUD Regulatory Agreement and all other loan and security documents executed in
connection with the HUD Loan are collectively referred to herein as the "HUD Loan
Documents." As a condition to the making of the HUD Loan to the Developer, Lender and HUD
require that the Amended PUD Agreement, to the extent applicable to and encumbering that
portion of the Real Property legally described as Lot 1, Block 1, Marketplace and Main,
Hennepin County, Minnesota ("HUD Parcel") only, be amended to include certain HUD
provisions and that the Amended PUD Agreement be subordinated to the HUD Loan and the
HUD Loan Documents.
NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated
in and made a part of this Fifth Amendment, Developer and the City agree the Amended PUD
Agreement is amended as follows:
1. Defined Terms. All words and phrases defined in the Amended PUD Agreement
shall, when used in this Fifth Amendment, have the same meanings stated in the Amended PUD
Agreement unless the context clearly requires a different meaning. All references to the
"Amended PUD Agreement" shall mean and refer to the Amended PUD Agreement, the First
Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment and this
Fifth Amendment, collectively.
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2. New Paragraph 23 — HUD Requirements. This Paragraph 23 is applicable to
and shall be enforced only with regard to the HUD Parcel and the rights, duties and obligations of
the parties under this Amended PUD Agreement with regard to the HUD Parcel, and
development, operation and use of the Minimum Improvements located on the HUD Parcel:
A. Notwithstanding anything in this Amended PUD Agreement to the contrary,
except (1) the requirements in 26 U.S.C. 42(h)(6)(E)(ii) and (2) any applicable zoning laws of the
City and the Development Design Standards attached hereto as Exhibit B this Amended PUD
Agreement is expressly subordinate to (i) the HUD Note, (ii) the HUD Mortgage, (iii) the HUD
Regulatory Agreement, and (iv) all other documents executed by the Developer, Lender and/or
HUD in connection with the HUD Note in connection with HUD Parcel, and is subordinate to all
applicable HUD mortgage insurance (and Section 8 of the U.S. Housing Act of 1937, if
applicable) regulations and related administrative requirements. In the event of any conflict
between the provisions of this Amended PUD Agreement and the provisions of applicable HUD
regulations, related HUD administrative requirements, or HUD Loan Documents, the HUD
regulations, related administrative requirements or HUD Loan Documents shall control.
B. In the event of foreclosure or transfer of title by deed in lieu of foreclosure of the
HUD Parcel, any and all land use covenants (excluding applicable zoning laws and the
Development Design Standards attached hereto as Exhibit B) contained herein encumbering
and/or applicable to the HUD Parcel shall automatically terminate except those requirements set
out in 26 U.S.C. 42(h)(6)(E)(ii).
C. Failure to comply with the covenants contained herein encumbering and/or
applicable to the HUD Parcel will not serve as a basis for default on any of the HUD Loan
Documents.
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D. The covenants contained in this Amended PUD Agreement encumbering and/or
applicable to the HUD Parcel are not included in any of the HUD Loan Documents.
E. Enforcement of the covenants contained herein encumbering and/or applicable to
the HUD Parcel will not result in any claim against, the proceeds from the HUD Mortgage, any
reserve or deposit required by HUD in connection with the HUD Mortgage transaction, or the
rents or other income from the HUD Parcel other than from available Surplus Cash, as defined in
the HUD Regulatory Agreement.
F. So long as the HUD Parcel is subject to a mortgage insured or held by HUD, no
amendment shall be made to this Amended PUD Agreement without the prior written consent of
HUD.
G. This Amended PUD Agreement may not be foreclosed upon or sold, transferred,
assigned or pledged, without the prior written of consent of HUD of such foreclosure,
conveyance, assignment or pledge.
H. With regard to the HUD Parcel only, no action shall be taken in accordance with
the rights granted herein or prohibiting the Developer or any of its successors or assigns from
taking any action except in strict accordance with the U.S. Housing Act of 1937 (the "Housing
Act"), applicable mortgage insurance regulations, the HUD Loan Documents, or applicable
public housing regulations under Sections 5 and 9 of the Housing Act, or if applicable, Section 8
of the Housing Act and the regulations thereunder.
I. The covenants contained in this Amended PUD Agreement encumbering and/or
applicable to the HUD Parcel shall not be construed to conflict with any applicable HUD
mortgage insurance regulation, applicable public housing regulations, or Section 8 of the
Housing Act and the regulations thereunder.
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J. The terms and conditions of Paragraph 23 supersede the terms of the Agreement
with regard to the HUD Parcel only, and, should there be any conflict or inconsistency between
Paragraph 23 and the Agreement as enforced and encumbering the HUD Parcel, the terms and
conditions of Paragraph 23 shall prevail.
K. Notwithstanding any provision of this Paragraph 23 to the contrary, if the
Amended PUD Agreement is terminated or becomes unenforceable, in whole or in part, by
reason of the provisions of this Paragraph 23, the approvals previously granted by the City as
referenced in this Amended PUD Agreement shall be of no further force or effect and
construction of the Improvements shall be discontinued until such time as the Developer's
successor in title to the HUD Parcel has obtained approval from the City to resume construction
subject to such terms and conditions as the City shall impose, in its discretion. The provisions of
this Paragraph 23 K. and the Development Design Standards attached hereto as Exhibit B shall
survive the termination of this Amended PUD Agreement and remain in full force and effect.
3. Integration. This Fifth Amendment is incorporated in and made a part of the
Amended PUD Agreement in its entirety. The Amended PUD Agreement shall remain in effect
in all of its terms, covenants and conditions as modified by this Fourth Amendment.
IN WITNESS WHEREOF, Developer and the City have executed this Fourth
Amendment as of the date and year first above written.
MARKETPLACE HOLDINGS, INC.
William H. Beard
Its President
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STATE OF MINNESOTA )
ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
, 2011, by William H. Beard, President of Marketplace Holdings Inc.,
a corporation under the laws of the State of Minnesota, on behalf of the limited liability
company.
Notary Public
CITY OF HOPKINS
LOW
LM
STATE OF MINNESOTA )
ss
COUNTY OF HENNEPIN )
Eugene J. Maxwell
Its Mayor
James Genellie
Its Acting City Manager
The foregoing instrument was acknowledged before me this day of
, 2011, by Eugene J. Maxwell, the Mayor, and James Genellie, the
Acting City Manager, of The City of Hopkins, a municipal corporation under the laws of the
State of Minnesota, on behalf of the municipal corporation.
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
Lindquist & Vennum PLLP
4200 IDS Center
80S80 th Street
Minneapolis, MN 55402
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EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
Lot 1, Block 1, and Lot 1, Block 2, Marketplace and Main, according to the recorded plat thereof,
Hennepin County, Minnesota.
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