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<br />Councilmember Riley introduced the following resolution and moved for its adoption:
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<br />RESOLUTION #15-03-086
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<br />RESOLUTION AUTHORIZING VARIOUS ACTIONS RELATING TO F & C RAMSEY
<br />
<br />APARTMENTS, LLC’S SALE OF THE RESIDENCE AT THE COR
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<br />WHEREAS
<br />, 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
<br />Indiana limited liability company, (“F&C Ramsey”) and F&C Ramsey Member, LLC, an
<br />Indiana limited liability company, (“F&C Borrower”) are parties to a Development Agreement
<br />dated 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 all of its rights and obligations under the Development
<br />Agreement to F&C Apartments, LLC, an Indiana limited liability company, (“F&C
<br />Apartments”) except for the rights and obligations of F&C Ramsey under Article VI of the
<br />Development Agreement relating to the TIF financing including, but not limited to, the right to
<br />receive the “TIF Note,” as defined in the Development Agreement (the “TIF Note”).
<br />
<br />WHEREAS
<br />, the Development Agreement relates to the real property legally described
<br />Exhibit A
<br />on which is defined in the Development Agreement as the “Development Property.”
<br />The term “Development Property, as used herein, means the real property legally described on
<br />Exhibit A and the improvements located thereon.
<br />
<br />WHEREAS
<br />, pursuant to the terms of the Development Agreement, the HRA made two
<br />loans to F&C Borrower, a $1,420,000 loan ("Loan No. 1") which is evidenced by a Promissory
<br />Note dated April 30, 2012 ("Note No. 1") and a $6,916,000 loan ("Loan No. 2") which is
<br />evidenced by a Promissory Note dated April 30, 2012 ("Note No. 2"). Note No. 1 and Note No.
<br />2 are secured by a Loan Agreement and a Pledge of F & C Ramsey’s and F&C Borrower’s
<br />membership interests in F&C Apartments pursuant to 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
<br />Interest Pledge Agreement grants the HRA a security interest in 100% of the membership
<br />interests in F&C Borrower, and the HRA filed a Financing Statement with the Indiana Secretary
<br />of State to perfect its security interest. (Note No. 1, Note No. 2, the Loan Agreement, the
<br />Membership Interest Pledge Agreement, the Corporate Guaranty, the Personal Guaranty and the
<br />Financing Statement are referred to herein, collectively, as the "Loan Documents.")
<br />
<br />WHEREAS,
<br />in late 2014 and early 2015, F&C Apartments was negotiating with PNC
<br />Bank, National Association (“PNC Bank”), to refinance F&C Apartments’ construction loan. To
<br />facilitate the refinancing, F&C Apartments had asked the City to enter into a First Amendment to
<br />Development Agreement, to issue the TIF Note to F&C Ramsey upon the repayment of Loan
<br />No. 2, as contemplated in the Development Agreement, and, upon the F&C Borrower’s
<br />repayment of Loan No. 1 and Loan No. 2, to return the originals of Note No. 1 and Note No. 2 to
<br />F&C Borrower marked “paid in full” and to terminate the security interest granted pursuant to
<br />the Membership Interest Pledge Agreement (the “Prior Requested Actions”).
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