04-17 HRA Resolution No. 1255 HRA RESOLUTION NO. 1255
RESOLUTION APPROVING ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT
AGREEMENT AND COLLATERAL ASSIGNMENT OF INTEREST IN REVENUE NOTE
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota (the "Authority") previously owned certain real property located within Tax Increment
Financing District No. 2014-1 (City District Garage Site) (the "Development Property"), which was
created within the Richfield Redevelopment Project in the City of Richfield, Minnesota (the "City");
and
WHEREAS, Mesaba Capital Development, LLC, a Minnesota limited liability company (the
"Mesaba"), has proposed to construct a multifamily housing development with 88 units designed for
seniors, including approximately 60 assisted living units and 28 memory care units (the "Minimum
Improvements"), on the Development Property; and
WHEREAS, the Authority and Mesaba entered into a Contract for Private Development,
dated February 16, 2016, which was amended by the First Amendment to Contract for Private
Development, dated November 22, 2016, and a Second Amendment to Contract for Private
Development, dated March 29, 2017 (collectively, the "Contract"), in order to set forth the terms of
the conveyance of the Development Property and the issuance of the TIF Note to the Mesaba and
Mesaba's construction of the Minimum Improvements; and
WHEREAS, pursuant to an Assignment and Assumption of Contract, dated March 29,
2017 (the "Assignment of Contract"), between the Mesaba and RM Senior Living Richfield LLC, a
Delaware limited liability company (the "Developer"), Mesaba assigned its interest in the Contract
to the Developer; and
WHEREAS, in order to promote the redevelopment of land that is underused and
underutilized in the City, the Authority has conveyed the Development Property to the Developer
and has agreed to provide a tax increment limited revenue note (the "TIF Note") in a principal
amount of $2,400,000 to the Developer for the purpose of reimbursing the Developer for certain
costs of constructing the Minimum Improvements thereon; and
WHEREAS, to aid in financing a portion of the construction of the Minimum Improvements,
Minnwest Bank, a Minnesota banking corporation ("Minnwest Bank"), has agreed to provide a loan
to the Developer in the maximum amount of $14,275,000 (the "Minnwest Loan") pursuant to a
Loan Agreement (the "Minnwest Loan Agreement") and has required that the Developer execute a
Promissory Note (the "Minnwest Promissory Note") in favor of Minnwest Bank to be secured by a
mortgage agreement, a security agreement, and other security documents (collectively with the
Minnwest Loan Agreement and the Minnwest Promissory Note, the "Minnwest Loan Documents");
and
WHEREAS, to aid in financing a portion of the construction of the Minimum Improvements,
Bridgewater Bank, a Minnesota banking corporation ("Bridgewater Bank"), has agreed to provide a
loan to the Developer in the amount of $1,425,000 (the "Bridgewater Loan") pursuant to a Loan
Agreement and has required that the Developer execute a Promissory Note in favor of Bridgewater
Bank to be secured by various collateral documents; and
WHEREAS, as a condition to providing the Minnwest Loan to the Developer, Minnwest
Bank has required that the Developer assign its right, title, and interest in and to the Contract
(except for the rights of the Developer relating to the TIF Note) to Minnwest Bank, and as a
condition to providing the Bridgewater Loan to the Developer, Bridgewater Bank has required that
the Developer assign its interest in the TIF Note and all rights and benefits from the TIF Note to
Bridgewater Bank; and
WHEREAS, there have been presented before this Board of Commissioners of the
Authority (the "Board") (i) an Assignment and Subordination of Development Agreement (the
"Assignment and Subordination of Contract"), proposed to be entered into between the Authority,
Minnwest Bank, and the Developer, pursuant to which the Developer assigns certain of its interest
to the Contract to Minnwest Bank and the Authority agrees to subordinate its interest in the
Contract to the lien of the Minnwest Loan Documents; and (ii) a Collateral Assignment of Interest in
Revenue Note (the "Collateral Assignment of TIF Note"), proposed to be entered into between the
Developer and Bridgewater Bank, pursuant to which the Developer collaterally assigns its interest
in the TIF Note to Bridgewater Bank and the Authority consents to such assignment; and
WHEREAS, the Board has reviewed the Assignment and Subordination of Contract and
the Collateral Assignment of TIF Note and finds that the execution thereof by the Authority and the
performance of the Authority's obligations thereunder are in the best interest of the City and its
residents; and
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the
Housing and Redevelopment Authority in and for the City of Richfield, Minnesota that:
1. The Assignment and Subordination of Contract and the Collateral Assignment of
TIF Note are hereby in all respects authorized, approved, and confirmed, and the Chairperson and
the Executive Director are hereby authorized and directed to execute the Assignment and
Subordination of Contract and the Collateral Assignment of TIF Note for and on behalf of the
Authority in substantially the forms now on file with the Community Development Director but with
such modifications as shall be deemed necessary, desirable, or appropriate, the execution thereof
to constitute conclusive evidence of their approval of any and all modifications therein.
2. The Chairperson and the Executive Director are hereby authorized to execute and
deliver any other documents or certificates deemed necessary to carry out the intentions of this
resolution and the Assignment and Subordination of Contract and the Collateral Assignment of TIF
Note.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 17th day of April, 2017.
Mary B. Su ple, Chair
ATTEST:
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Doris Rubenstein, Secretary