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HRA 09-07 Amendment to Option Agreement-Marketplace & Main GITY pF ' May 14, 2009 - , H o P K � r, s HRA Report 2009=07 " • AMENDMENT TO OPTION AGREEMENT — MARKETPLACE & MAIN Proposed Action Staff recommends adoption of the following motion: Move to approve the Option, . Amendment Agreement between the Hopkins HRA and Marketplace Holdinqs, Inc. � Overview ' : � - The HRA and Marketplace Holdings, Inc. have entered into a contract for private redevelopment for the former Hopkins Honda body shop site. The contract detailed the financial assistance that would be provided to the project and certain timelines that were� to .be met in order to receive the asSistance for the proposed project, Marketplace & Main. The contract also allowed for the HRA to purchase the Phase II property in the � event.this phase was not completed by the developer. Through : previous actions by the -HRA, amendments to the contract for private redeveloprnent have been approved. One of the approved contract amendmenfs is : break<the second phase of the project into Phase IIA and Phase IIB. Each of those phases was given-a timeline to complete: The new terms of the option reflect those : changes. If the Redeveloper commences construction of Phase I but not Phase Il the Authority has the'right to acquire the land on which Phase 11 was to be 'constructed' for •.' purchase prices of $256,840 for the land on which Phase IIA is proposed to be built and ' for $170,560' for : the land on which Phase IIB is proposed to be built. The current agreement does not break the two parcels ouf and identifies a total purchase price of , $550,000. ; , < �" , ` The amendrnent to the option agreement is necessary to be consistent with these approved contract terms and was drafted by Jerry Steiner, attorney for the HRA. Primarv Issues to Consider The proposed amendment reflects the terms thafwere agreed to in the amended , contract for private redevelopment, previoasly approved by the HRA. Suaportinq Documents • O on �m ,��' . , , j . . . . • - . � � � . . . . . � ! ��„"�� . �?��. ^ ��� . . . , . �.. . , f . . . , , . rsten' erum � Directo of Planning & Development Financial Impact: $ 0 Budgeted: YlN Source: ; . : Related Documents (CIP, ERP, etc.): � Notes; , , �: � , :, • AMENDMENT TO OPTION AGREEMENT THIS AMENDMENT TO OPTION AGREEMENT is made as of the day of , 2009, by and between the Housing and Redevelopment Authority in and for the City of Hopkins, a public body corporate and politic under the laws of Minnesota ("Optionee") and Marketplace Holdings, Inc., a Minnesota corporation ("Optionor"). RECITALS: A. Optionee and Optionor entered into an Option Agreement dated April 9, 2007, (the "Option Agreement") by which Optionor granted Optionee an irrevocable right and option • to purchase certain real property located in Hennepin County, Minnesota, legally described in Exhibit A attached hereto (the "Property"). The Option Agreement was recorded , 2007, as Hennepin County Recorder pocument No. and , 2007, as Hennepin County �Registrar of Titles Document No. B. Optionee and Optionor have agreed to modify the Option Agreement as stated below, and are entering into this Amendment for that purpose. NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated in and made a part of this Amendment, and of One Dollar and other good and valuable consideration, Optionee and Optionor agree the Option Agreement is modified as follows: 1. Amendment of Contract for Private Redevelopment. The "Redevelopment ' Contract" identified and defined in Recital paragraph B of the Option �Agreement has been amended and restated by that certain First Amended and Restated Contract for Private Redevelopment by and between Optionee and Optionor dated , 2009. From and after the date of this Amendment, all references in the Option Agreement to the "Redevelopment Contract" shall mean and refer to said First Amended and Restated Contract for Private Redevelopment between Optionee and Optionor dated , 2009. The reference in Recital B of the Option Agreement to Section 3.8 of the Contract for Private Redevelopment is hereby changed to instead refer to Section 3.9 of the Redevelopment Contract. • 2. Parcel IIA and Parcel IIB. When used in this Amendment and in the Option Agreement, the "Property" shall mean and refer to all of the property, as legally described in Exhibit A attached hereto. When used in the Option Agreement, as amended by this HopCivil/OptionAgreementAmendment-Marketpfaceclean 1 Amendment, the phrase "Parcel IIA" shall mean and refer to Parcel IIA, as legally described in � � Exhibit A attached hereto, and the phrase "Parcel IIB" shall mean and refer to Parcel IIB, as legally described in Exibit A attached hereto. 3. Modification of Para�raph. Paragraph 3 of the Option Agreement is modified to read as follows: 3. Purchase Price. The Option granted by this Agreement shall be exercisable separately with respect to Parcel IIA and Parcel IIB. If Optionee exercises the Option with respect to Parcel IIA, the purchase price for Parcel IIA « » » shall be $255,840.00 the Parcel IIA Purchase Price . If O tionee exercises � ) p the Option with respect to Parcel IIB, the purchase price for Parcel IIB shall be $170,560.00 (the "Parcel IIB Purchase Price"). The Parcel IIA Purchase Price and the Parcel IIB Purchase Price sha11 be payable as provided in the Purchase Agreement attached hereto as Exhibit A("Purchase Agreement"). The amount of � the purchase price to be inserted in the Purchase Agreement in the event Optionee exercises the Option shall be $255,840.00 for Parcel IIA and $170,560.00 for Parcel IIB. 4. Modification of Para�rauh. Paragraph 4 of the Option Agreement is modified to read as follows: 4. Exercise of Option. The Option shall be exercisable only during � the Parcell IIA Option Term, and the Parcell IIB Option Term stated in paragraph 6 of this Agreement, and shall not be exercisable until June l, 2011. If Optionor has commenced construction of Phase IIA, as defined in the Redevelopment Contract ("Phase IIA"), on or before May 31, 2011, the Option to purchase Parcel IIA shall be null and void and of no further effect, but the Option to purchase Parcel IIB shall remain fully in effect. . If Optionee has not commenced construction of Phase IIA by May 31, 2011, this Agreement and the Option shall I remain in full force and effect, and Optionee shall be entitled to exercise the � Option to purchase Parcel IIA during the Parcel IIA Option Term stated in Paragraph 6. If Optionor has commenced construction of Phase IIB, as defined in the Redevelopment Contract ("Phase IIB"), on or before May 31, 2012, the Option to . Purchase Parcel IIB shall be null and void and of no further effect. If Optionee has not commenced construction of Phase IIB by May 31, 2012, the Option shall remain in full force and effect with respect to Parcel IIB, and Optionee shall be entitled to exercise the Option to purchase Parcel IIB during the Parcel IIB Option Term stated in Paragraph 6. If Optionee elects to exercise the Option with respect to either Parcel IIA or Parcel IIB, the Option shall be exercised by the delivery to Optionor, on or before the Parcel IIA Termination Date, with respect to Parcel IIA, and the Parcel IIB � Termination Date, with respect to Parcel IIB, of the Purchase Agreement, in triplicate, attached hereto as Exhibit A("Purchase Agreement"), duly executed by Optionee. The Purchase Agreement shall be deemed properly delivered for all HopCivil/OptionAgreementAmendment-Marketplaceclean 2 i -F � . .. ... . . , , .:..... .. ........:. . . .: . �. _,..,;. . ° • ..._�- . _ ---- __ ... , .. � . : � purposes if delivered in accordance with the provisions of Paragraph 10 of this Agreement. Upon receipt of the executed Purchase Agreement, Optionor shall cause the Purchase Agreement to be duly executed on its behalf, and return two originals to Optionee within two (2) business days. Optionor acknowledges that it has agreed to be bound by the terms and conditions set forth in the Purchase Agreement in the event Optionee exercises the Option. In the event Optionee exercises the Option but Optionor fails to execute and deliver the Purchase Agreement in the manner and within the time period required by this paragraph, Optionor, by its execution of this Agreement shall be conclusively deemed to have accepted and executed the Purchase Agreement, and shall be bound by and shall' perform all of the terms and conditions thereof. If Optionee fails to deliver the Purchase Agreement to Optionor on or before the Parcel IIA Termination Date, with respect to Parcel IIA, and the Parcel IIB Termination Date, with respect to Parcel IIB in the manner and within the time period specified in this paragraph, this Agreement shall become null and void, the Option shall terminate in all respects, and Optionor shall have no obligation to sell the Properiy to Optionee, and Optionee shall execute and deliver to Optionor, within ten (10) days after request therefore by Optionor, an instrument, in recordable form, evidencing such termination. The Option may be exercised with respect to Parcel IIA only during the Parcel IIA Option Term stated in Paragraph 6 of this Agreement. The Option may be exercised with respect to Parcel IIB only during the Parcel IIB Option Term stated in Paragraph 6 of this Agreement. • 5. Modification of Para�raph 6 of Ontion A�reement. Paragraph 6 of the Option Agreement is modified to read as follows: . 6. Option Terms. The term of the Option to purchase Parcel IIA ("Parcel IIA Option Term") shall commence on June l 2011, and shall terminate in all res�iects at midnight on May 31, 2012 (the "Parcel IIA Termination Date"). The Option to purchase Parcel IIA may be exercised only during the Parcel IIA Option Term stated in this paragraph. The term of the Option to purchase Parcel IIB ("Parcel IIB Option Term") shall commence on June l, 2012, and shall terminate in all respects at midnight on May 31, 2013 (the "Parcel IIB Termination Date"). The Option to purchase Parcel IIB may be exercised only during the Parcel IIB Option Term stated in this paragraph. While the Parcel II A Option Term does not commence until June l, 2011, the Option Agreement and the Option granted thereby with respect to both Parcel IIA and Parcel IIB shall be effective as of April 9, 2007, and shall bind Optionor and the Property from that date forward until terminated in accordance with the terms and conditions of this Agreement. 6. Subordination. As a condition of entering into this Amendment, Optionee shall � be entitled to have an option holder's title insurance policy issued to Optionee insuring that this Option is not subordinate to the lien of any mortgage encumbering Parcel IIA or Parcel IIB in excess of $255,840.00, with respect to Parcel IIA and $170,560.00, with respect to Parcel IIB. Optionee shall also be entitled to require that all mortgagees holding mortgage liens against HopCiviUOptionAgreementAmendment-Marketplaceclean 3 Parcel IIA and Parcel IIB enter into Subordination Agreement(s) effectuating the conditions � stated in the preceeding sentence. Optionor shall pay all fees and expenses associated with the issuance of the option holder's title insurance policy to Optionee. 7. Continuing Effect. This Amendment is incorporated in and made a part of the Option Agreement. All terms, stipulations, provisions, conditions and covenants contained in the Option Agreement shall remain in full force and effect as modified by this Amendment. All words and phrases that are defined in the Option Agreement shall, when used in this Amendment, have the same meanings stated in the Option Agreement unless the context clearly requires a difFerent meaning. IN WITNESS WHEREOF, Optionee and Optionor have executed this Amendment effective as of the date and year first above written. � OPTIONEE i HOUSING AND REDEVELOPMENT i AUTHORITY IN AND FOR THE CITY � OF HOPKINS By ' Tts Chairman � By Its Secretary STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing was acknowledged before me this day of , � 2009, by , the , and j , 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 OPTIONOR MA�tKFTPLACE HOLDINGS, INC. � I By I William H. Beard, President ' � HopCivil/OptionAgreementAmendment-Marketplaceclean 4 -- :.::..::._ � .:-..-�.-... • ---. _::[ . -:..:-��..w . 1. :`°' . :i---- - - - - = -- - - -- - - -- - �. .- , „ , � ------- --a� i _ . ....:... .....�L��-•' _ . .--._ _ � 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. Notary Public This instrument was drafted by: Steiner & Curtiss, P.A. 400 Wells Fargo Bank Building � 1011 First Street South Hopkins, MN 55343 • HopCivil/OptionAgreementAmendment-Mazketplaceclean 5 � ; • . , EXHIBIT A � LEGAL DESCRIPTION OF THE PROPERTY I Lot 2, Block 1, and Lot 1, Block 2, Marketplace and Main, according to the recorded plat j thereof, Hennepin County, Minnesota. � DESCRIPTION OF PARCELS PARCEL IIA Lot 1, Block 2, Marketplace and Main, according to the recorded plat thereof. I � PARCEL IIB Lot 2, Block 1, Marketplace and Main, according to the recorded plat thereof. . � r ' I � � I I i I I : , F F � I I I I VR i HopCiviVOptionAgreementAmendment-Marketplace A-1 - - _ _ -- --- ,;. � .;��: ., �--„_., , -:,, .� . .�. . :::: �. ; _,. : �°-.- ° - - - ,..,_ _ . .� - ... _. ...., . , , _ ,.:::