HRA Report 2012-13G17Y OF
•
September 27, 2012 HOPKINS HRA Report 2012-13
AMENDMENT TO DEVELOPMENT AGREEMENT/ASSIGNMENT AGREEMENT —
MARKETPLACE & MAIN
Proposed Action
Move to approve the Sixth Amendment to the First Amended and Restated Contract for
Private Redevelopment and the Assignment and Assumption Agreement — Marketplace &
Main.
With this motion, the agreement will be executed. It is understood that staff has the ability to
make minor modifications that do not affect the overall intent.
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 developer, The Beard Group, experienced a dramatic shift in market conditions but
• repositioned the project as an apartment development and obtained project financing through
the Department of Housing & Urban Development in 2011.
The Beard Group experienced an increase in costs associated with the project and has
requested an additional $75,000 in the form of a grant. Previously, the HRA approved a
$900,000 grant and pledged the tax increment generated from the project.
Supporting Information
• Sixth Amendment to the First Amended and Restated Contract for Private
Redevelopment
• /t f m The Beard Group
i e M-prmsorC
City Manager
Financial Impact: $75,000 Budgeted: No Source: TIF District 2-11
Related Documents (CIP, ERP, etc.):
Notes:
0
• SIXTH AMENDMENT TO FIRST AMENDED AND RESTATED CONTRACT FOR
PRIVATE REDEVELOPMENT
THIS SIXTH AMENDMENT is made effective as of the _ day of , 2012,
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 55343, 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, a Third Amendment thereto dated as of , 2010, a
Fourth Amendment thereto dated as of , 2010, and a Fifth Amendment thereto
dated as of September 7, 2010 (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
is
Redeveloper to redevelop certain property in the City of Hopkins through the construction of a
mixed use retail/commercial/residential development ( the "Minimum Improvements"); and
WHEREAS, due to a variety of reasons, including delays in obtaining financing and
increases in construction costs, the Redeveloper incurred substantial additional costs in
connection with the development of the Minimum Improvements and has requested that the
Authority increase the financial assistance to be provided under the Agreement to offset a portion
of such additional costs; and
WHEREAS, the Authority has an interest in ensuring the continuing financial feasibility
of the Minimum Improvements and, therefore, has agreed to provide the additional financial
assistance requested by the Redeveloper.
NOW, THEREFORE, the Authority and Redeveloper do hereby agree that:
1. All capitalized terms used herein shall have the meanings given to such terms in
the Agreement.
2. The Authority agrees that it will provide, in addition to the assistance already
specified in the Agreement, financial assistance in the amount of $75,000 to offset a portion of
the costs incurred by the Redeveloper in developing the Minimum Improvements. Such
additional assistance will be paid to the Redeveloper in cash at such time as the Redeveloper
submits to the Authority documentation in a form acceptable to the Authority demonstrating that
the Redeveloper has incurred and paid at least $75,000 in qualified costs in excess of the amount
of qualified costs already being reimbursed to the Redeveloper pursuant to the Agreement. •
"Qualified costs" shall mean costs for which tax increment may be spent under Minnesota law.
3. All other provisions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the Authority has caused this Sixth 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.
U
0
• SIGNATURE PAGE
TO
SIXTH AMENDMENT TO FIRST AMENDED AND RESTATED
CONTRACT FOR PRIVATE REDEVELOPMENT
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF HOPKINS
fts
STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this _ day of ,
2012, 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
C.
SIGNATURE PAGE
TO
SIXTH AMENDMENT TO FIRST AMENDED AND RESTATED
CONTRACT FOR PRIVATE REDEVELOPMENT
MARKETPLACE HOLDINGS, INC.,
A Minnesota corporation
C
STATE OF MINNESOTA )
) SS.
COUNTY OF )
Its:
The foregoing instrument was ackno«ledaed before me this day of ,
2012, by the v of Marketplace Holdings, Inc., a
Minnesota corporation, on behalf of the corporation. •
Notary Public
V_ETP
September 21, 2012
Michael Morison
City Manager, City of Hopkins
City Hall 1010 First Street South
Hopkins, Minnesota 55343
RE: Marketplace and Main; Request for $75,000.00 in Additional
Grant Funds
Dear Mr. Morrison:
Please accept this letter as Marketplace Holdings, Inc's request to increase the amount of grant
assistance to the Marketplace and Main Apartment project by SEVENTY-FIVE THOUSAND
DOLLARS (575,000.00).
• Project costs increased $1,146,484 between the time the project was first submitted to HUD for
approval and when HUD financing was finalized 18 months later. The majority of the increase is
related to increases in construction costs. High gasoline costs coupled with increased prices in the
commodity areas (concrete, copper, lumber and drywall) have all been significant contributors to
the increase. In addition, just the cost of holding the project (insurance, real estate taxes,
maintenance, interest, loan fees) for this extended period contributed to the increase.
We have been able to cover the majority of this increase, but a gap of $75,000.00 still exists. Vire
respectfully propose to close this gap by requesting an additional $75,000.00 in grant assistance
from the City.
Thank you in advance for your cooperation in this matter.
Sincerely,
Marketplace Holdings,
—Inc.
William H. Beard, President
is 750 2nd Street NE, Suite 100 Hopkins, MN 55343 (952) 930-0630 Fax (952) 930-0631