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Councilmember Riley introduced the following resolution and moved for its adoption:
<br />RESOLUTION #15-02-044
<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 Authority
<br />in and for the City of Ramsey, Minnesota (the "HRA") F&C Ramsey, LLC, an Indiana limited
<br />liability company, ("F&C Ramsey") and F&C Ramsey Member, LLC, an Indiana limited liability
<br />company, ("F&C Borrower") are parties to a Development Agreement dated March 9, 2012 and
<br />recorded in the Office of the Anoka County Registrar of Titles on May 3, 2012 as Document No.
<br />508341.004 (the "Development Agreement"). On or about March 9, 2012, F&C Ramsey assigned
<br />certain rights and obligations under the Development Agreement to F&C Apartments, LLC, an
<br />Indiana limited liability company, ("F&C 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 dated
<br />April 30, 2012 ("Note No. 2"), and the HRA loaned F&C Borrower $1,420,000 ("Loan No. 1"),
<br />which loan is evidenced by a Promissory Note dated April 30, 2012 ("Note No. 1"). Note No. 1
<br />and Note No. 2 are secured by a Loan Agreement and a Membership Interest Pledge Agreement.
<br />Note No. 1 is also secured by a Corporate Guaranty of Flaherty & Collins Construction, Inc., and
<br />Note No. 2 is also secured by a Personal Guaranty of David M. Flaherty. The Membership Interest
<br />Pledge Agreement grants the HRA a security interest in 100% of the membership interests in F&C
<br />Borrower, and the HRA filed a Financing Statement with the Indiana Secretary of State to perfect
<br />its security interest. (Note No. 1, Note No. 2, the Loan Agreement, the Membership Interest Pledge
<br />Agreement, the Corporate Guaranty, the Personal Guaranty and the Financing Statement are
<br />referred to herein, collectively, as the "Loan 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 required
<br />to make a prepayment on Note No. 1 in an amount equal to 20% of the difference between the
<br />amount of the new Project Loan and the outstanding principal balance of the Project Loan being
<br />refinanced. As a result of that requirement and of F&C Apartments and F&C Borrower's decision
<br />to borrower against the equity in the project to repay Note No. 2, F&C Borrower is required to pay
<br />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 Apartments
<br />and F&C Borrower to repay the current Project Loan in full and repay Loan No. 2 and Loan No.
<br />1 in full, F&C Apartments and F&C Borrower have asked the City, in its individual capacity and
<br />in its capacity as a successor -in -interest to the HRA, to amend the Development Agreement to
<br />remove therefrom provisions which allow the City to cancel and terminate the "TIF Note," as
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