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Councilmember
<br />adoption:
<br />introduced the following resolution and moved for its
<br />RESOLUTION #15- -
<br />RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY
<br />OF A FIRST AMENDMENT TO DEVELOPMENT AGREEMENT
<br />WHEREAS, the City of Ramsey (the "City"), The Housing and Redevelopment
<br />Authority in and for the City of Ramsey, Minnesota (the "HRA") F&C Ramsey, LLC, an Indiana
<br />limited liability company, ("F&C Ramsey") and F&C Ramsey Member, LLC, an Indiana limited
<br />liability company, ("F&C Borrower") are parties to a Development Agreement dated
<br />March 9, 2012 and recorded in the Office of the Anoka County Registrar of Titles on
<br />May 3, 2012 as Document No. 508341.004 (the "Development Agreement"). On or about
<br />March 9, 2012, F&C Ramsey assigned certain rights and obligations under the Development
<br />Agreement to F&C Apartments, LLC, an Indiana limited liability company, ("F&C
<br />Apartments").
<br />WHEREAS, pursuant to the terms of the Development Agreement, the HRA loaned
<br />$6,916,000 to F&C Borrower ("Loan No. 2"), which loan is evidenced by a Promissory Note
<br />dated April 30, 2012 ("Note No. 2"), and the HRA loaned F&C Borrower $1,420,000 ("Loan No.
<br />1"), which loan is evidenced by a Promissory Note dated April 30, 2012 ("Note No. 1"). Note
<br />No. 1 and Note No. 2 are secured by a Loan Agreement and a Membership Interest Pledge
<br />Agreement. Note No. 1 is also secured by a Corporate Guaranty of Flaherty & Collins
<br />Construction, Inc., and Note No. 2 is also secured by a Personal Guaranty of David M. Flaherty.
<br />The Membership Interest Pledge Agreement grants the HRA a security interest in 100% of the
<br />membership interests in F&C Borrower, and the HRA filed a Financing Statement with the
<br />Indiana Secretary of State to perfect its security interest. (Note No. 1, Note No. 2, the Loan
<br />Agreement, the Membership Interest Pledge Agreement, the Corporate Guaranty, the Personal
<br />Guaranty and the Financing Statement are referred to herein, collectively, as the "Loan
<br />Documents.")
<br />WHEREAS, under the terms of the Development Agreement and Note No. 2, F&C
<br />Borrower is obligated to repay the entire outstanding principal amount of Loan No. 2 and all
<br />accrued, unpaid interest in full on June 1, 2015. F&C Apartments and F&C Borrower are in the
<br />process of refinancing the "Project Loan," as defined in the Development Agreement. As a part
<br />of that refinancing, they are borrowing additional funds to finance the repayment of Note No. 2.
<br />Under the terms of Note No. 1, upon a refinancing of the Project Loan, F&C Borrower is
<br />required to make a prepayment on Note No. 1 in an amount equal to 20% of the difference
<br />between the amount of the new Project Loan and the outstanding principal balance of the Project
<br />Loan being refinanced. As a result of that requirement and of F&C Apartments and F&C
<br />Borrower's decision to borrower against the equity in the project to repay Note No. 2, F&C
<br />Borrower is required to pay Note No. 1 in full upon the closing of its refinancing.
<br />WHEREAS, to facilitate its refinancing in an amount sufficient to allow F&C
<br />Apartments and F&C Borrower to repay the current Project Loan in full and repay Loan No. 2
<br />and Loan No. 1 in full, F&C Apartments and F&C Borrower have asked the City, in its
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