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HRA 09-06 Amendment to Mortgage Agreement-Marketplace & Main ry + G`TY pF : . ' ' � . NOPKINS • May 14, 2009 HRA Report 2009-06 ' AMENDMENT TO MORTGAGE AGREEMENT - MARKETPLACE & MAIN : _ _ Proposed Action Staff recommends adoption of the'following motion; Move to appro�e the Amendment Agreement between the Hopkins HRA and Marketplace Holdings, .: 1 nc. Overview _ : .: 'The HRA and Marketplace Holdings, Inc. have entered into a contract for private redevelopment for the redevelopment of the forrner Hopkins Honda body shop site. The agreement detailed the financial assistance that would be provided to : the project (including a$900,000 loan) and certain timelines that were to be met :' in order to receive #he assistance for the proposed project,'Marketplace & Main. � `� Through previous actions by the HRA, amendments; to the contract for private ' � redevelopment have been .approved. One of the ap cbntract amendments � i ' is to move the date by which repayment of the $900,000 loan is due to HRA. • ' Under the amended aontract, the loan is due ifi the project is not comrnenced by October 31, 2009. .It will be:forgiven if Phase 1 of the project is completed. The amendment to the mortgage agreement'is necessary to be consistent with : these approved contract terms and was drafted by Jerry Steiner, attorney for the , H RA`. : Primarv lssues to Consider � ' ' The proposed amendment reflects the terms:that were agreed to in fhe arnended' .contract for private redevelopment, previously approved by the HRA. Supportina Documents • �ien�r�nt eeme.w�� � `���.. ��`� � ,.. , ,� .- : , � erst Elverum� �` Dire or of Planning & Development Financial Impact: $ 0: Budgeted: Y/N Source: Related Documents (CIP, ERP, etc.): _ Notes: , � : ,' . • . This is a mortgage amendment, as defined in Minnesota Statutes, Section 287.01, subdivision 2, and as such it does not secure a new or an increased amount of debt. AMENDMENT AGREEMENT This Agreement is made as of the day of , 2009, by and among Marketplace Holdings Inc., a Minnesota corporation ("Borrower") and the Housing and Redevelopment Authority in and for the City of Hopkins, a public body corporate and politic ("Lender"). RECITALS: • A. Borrower executed and delivered to Lender a Promissory Note in the original principal amount of $900,000.00 dated April 9, 2007, (the "Note"), which Note is secured by a Mortgage, Security Agreement and Fixture Financing Statement dated April 9, 2007, executed by Borrower and recorded in the office of the Hennepin County Recorder on , 2007, as Document No. , and in the office of the Hennepin County Registrar of Titles on , 2007, as Document No. (the "Mortgage"). The Note, the Mortgage and all other documents executed in connection with the loan evidenced thereby are herein referred to as the "Loan Documents." S. The Mortgage is recorded as a lien against the real property legally described in Exhibit A attached hereto (the "Property"). C. Mortgage registration tax in the amount of $ was paid to the Hennepin County Treasurer at the time the Mortgage was filed. No additional advances are being made under the Mortgage in connection with this Amendment except as originally required under the Mortgage. D. Borrower has requested that Lender extend the Maturity Date, as defined in the Loan Documents, and otherwise modify the terms and conditions of the Loan Documents as stated in this Amendment. • E. Lender is willing to extend the Maturity Date and amend the Loan Documents upon and subject to all of the terms and conditions stated in this Amendment. HopCivil/MortgageAmendment-Marketplaceclean 1 i . NOW, THEREFORE, to induce Lender to amend the Loan Documents, as requested by {,� Borrower and in consideration of the mutual covenants contained herein, the parties hereby agree � as follows: 1. Maturi Date. The "Maturity Date" defined and stated in the Note and the date on which the balance of the Note is due and payable, as stated in the Mortgage, is changed from August 31, 2008, to October 1, 2009. 2. Subordination of Mortgage. The Mortgage is presently subordinated to a $700,000.00 first mortgage granted by Borrower to Commerce Bank, a Minnesota banking corporation, filed for record , 2007 as Document No. (the "Commerce Bank First Mortgage"). The Mortgage shall continue to be subordinate to the Commerce Bank First Mortgage. Borrower iritends to obtain a new construction mortgage to finance construction of "Phase I", as defined in the Redevelopment Contract, in an amount not to exceed $ (the "Construction Mortgage"). The proceeds of the Construction Mortgage shall be used to pay off the Commerce Bank First Mortgage and to pay the cost of completing the Phase I improvements. Lender agrees that it shall subordinate the Mortgage to the Construction Mortgage, provided the Commerce Bank First Mortgage is simultaneously paid and satisfied and, further provided, Lender shall not be obligated to subordinate the Mortgage to a lien for the Construction Mortgage in excess of $ nor shall Lender be required to subordinate the Mortgage to any other mortgage. Lender, Borrower and the Construction Mortgage lender shall enter into an Intercreditor Agreement at the time of such subordination stating the terms and conditions for ��.�,. � subordination of the Mortgage to the Construction Mortgage. At the time of execution of this Amendment, Lender shall be entitled to obtain a so-called "date down endorsement" to the existing mortgagee's title insurance policy insuring the lien of �� the Mortgage, which endorsement shall insure that the Mortgage is subordinate only to tlie Commerce Bank First Mortgage or the Construction Mortgage, as applicable. Borrower sha11 , pay all fees and expenses associated with obtaining the date down endorsement. i � In the event Borrower commences construction of the Phase IIA or Phase IIB improvements before completion of the Phase I improvements and release of the Mortgage in ' accordance with the terms and conditions of the Loan Documents, Lender agrees that it shall subordinate the lien of the Mortgage to the construction loan(s) for the construction of the Phase IIA improvements and the Phase IIB improvements, as the case may be, but in an amount not to exceed a construction mortgage, lien of $255,840.00 for Parcel IIA and a construction mortgage lien of $170,560.00 for Parcel IIB. As a condition of Lender's agreement to so subordinate the lien of the Mortgage, the Commerce Bank First Mortgage shall be satisfied at the time of subordination of the Mortgage and Lender shall not be required to subordinate the Mortgage to any other mortgage. 3. Contract for Private Redevelopment. All references in the Loan Documents to � the Contract for Private Redevelopment between Borrower and Lender dated February 20, 2007, are modified to instead refer to the First Amended and Restated Contract for Private N Redevelopment by and between Borrower and Lender dated , 2009. � All references in the Loan Documents to the "Redevelopment Contract" shall, from and after the i i rt a eAmendment-Market laceclean 2 j HopC v UMo g g p -� - - - - _ .,. ._.;...., ., . . • . . . ; _ . , , . ,,: ,....i . � _ � date of this Amendment Agreement, refer to said First Amended and Restated Contract for Private Redevelopment. 4. References. Whenever any reference is made in any of the Loan Documents to the "Note", each such reference shall be deemed to refer to the Note, as amended hereby. Whenever any reference is made in any of the Loan Documents to the "Mortgage", each such reference shall be deemed to refer to the Mortgage, as amended hereby. When used in the Loan Documents and this Amendment, the phrases "Phase I", "Phase IIA" and "Phase IIB" shall have the meanings stated in the Redevelopment Contract; and the phrases "Parcel IIA" and "Parcel IIB" shall have the meanings stated in the Redevelopment Contract and shall also mean and refer to the descriptions of those parcels in Exhibit A attached hereto. 5. Continuing Effect. This Amendment is incorporated in and made a part of the Loan Documents. All terms, stipulations, provisions, conditions and covenants of the Loan Documents shall remain in full force and effect except as expressly modified herein, and nothing herein contained shall be construed to impair the security or lien of Lender, or to affect or impair any rights or powers which Lender may have under any of the Loan Documents, except as expressly amended hereby. The Loan Documents state the entire agreement between Borrower and Lender with respect to the loan evidenced by the Loan Docuxnents. Lender has no further obligations or commitments to the undersigned with respect to such loan except as expressly set forth in the Loan Documents, as amended by this Amendment. � 6. Costs and Egnenses. Borrower agrees to pay all out-of-pocket costs and expenses incurred by Lender in connection with the preparation, execution, delivery, review and recordation of this Amendment, including without limitations, attorneys' fees, recording fees and title insurance premiums. 7. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, administrators, successors and assigns. 8. Governin� Law. The Note and this Amendment shall be governed by and construed in accordance with the laws of the State of Minnesota. 9. Counternarts. This document may be executed in any number of counterparts and each counterpart when executed and included with the others will be considered as one document. • HopCivil/MortgageAmendment-Marketplaceclean 3 IN WITNESS WHEREOF, the parties hereto have set their hands as of the day and year � first above written. 1ViARKT.TPLACE HOLDINGS, INC. By William H. Beard, President STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing was acknowledged before me this day of , 2009, by William H. Beard, the President of Marketplace Holdings, Inc., a corporation under the � laws of Minnesota, on behalf of the corporation. l . Nota Pu li ry b c HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY � OF HOPKINS I � BY ' . Its Chairman ° BY Its Secretary STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing was acknowledged before me this day of , 2009, by , the , and , the , of the Housing and Redevelopment Authority in and for the City of Hopkins, a public body corporate and politic, on behalf of the Authority. � � ��� Notary Public HopCiviUMoRgageAmendment-Marketplaceclean 4 i ,��.:��. ,:_...,:: .{::,s ,.:,.�.<:f ;- . - • ..°. _ _ 1 = _ • This instrument was drafted by: Steiner & Curtiss, P.A. 400 Wells Fargo Bank Building 1011 First Street South Hopkins, MN 55343 • • HopCivil/MortgageAmendment-Marketplaceclean 5 EXHIBIT A � LEGAL DESCRIPTION OF THE LAND Lots 1 and 2, Block 1, and Lot 1, Block 2, Marketplace and Main, according to the recorded plat thereof, Hennepin County, Minnesota. � DESCRIPTION OF PARCELS PARCEL IIA � Lot 1, Block 2, Marketplace and Main, according to the recorded plat threof. PARCEL IIB Lot 2, Block 1, Marketplace and Main, according to the recorded plat thereof. �, , , i � I I I � . � � I ,'u : ( I I I HopCivil/MortgageAmendment-Marketplace A-1 --- �_-:,�_,�:. n .�. ,�.- ..-:_ . . � .;_-.:: ...�., �.uw�:.,...�..,. '- � --.. _ _ . - .- - _ - � - - -: -- - _ .- - .� . .---- . :- - ..._ . . .--.- .. .. ..�..� �..,