HomeMy WebLinkAbout2007 11-09 SMAGENDA
SPECIAL MEETING -CITY COUNCIL
Friday, November 9 2007
Council Chambers, City Hall
12:00 p.m.
B. ROLL CALL
D. NEW BUSINESS
1. Election Results Canvass
2. Legacy Village Tax Abatement, 2 nd Amendment
E. OLD BUSINESS
F. ADJOURNMENT
I A- N 0 4=0 •
To: Greg Copeland, City Manager
Date: November 1, 2007
Re: Second Amendment to Special Assessments Escrow Agreement — Legacy
Holdings-MW, LLC, First American Title Insurance Company, Kennard Professional
Building East, LLC
With respect to the above referenced amendment, the City entered into a Special
Assessments Escrow Agreement on April 13, 2006. This was subsequently amended on
April 24, 2006. Copies of those agreements are attached.
The second amendment before you now will amend the agreement summarized as follows:
• A building permit has not yet been issued, but notwithstanding such fact, the parties
wish to pay the special assessments, and,
• Because Kennard East made payments in 2007 of principal and interest on the
special assessments, a surplus exists in the escrow fund and this surplus should be
paid to Kennard East., and,
• Legacy Holdings acknowledges that it has no right to any of the amounts held by
the City or in escrow and the City is authorized to make the payments described
above, and,
• Once these payments are made, the original agreement and amendments will
terminate.
The City has received the proceeds of the escrow fund.
Staff recommends approval of the amendment allowing staff to release the funds held to
Ramsey County in the amount of $208,502.11 and to Kennard East for the remainder,
estimated to be $20,941.26 to Kennard East.
SECOND AMENDMENT TO
SPECIAL ASSESSMENTS ESCROW AGREEMENT
THIS SECOND AMENDMENT TO SPECIAL ASSESSMENTS ESCROW
AGREEMENT ("Agreement") is made and entered into this — day of October, 2007, by and
between LEGACY HOLDINGS•MW, LLC, a Minnesota limited liability company ("Legacy);
FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation ("Title");
KENNARD PROFESSIONAL BUILDING EAST, LLC, a Minnesota limited liability
company ("Kennard East") and CITY OF MAPLEWOOD, MINNESOTA, a Minnesota
statutory city ("City"), (collectively, the "Parties").
RECITALS
A. Pursuant to the terms of the First Amendment to Special Assessments Escrow
Agreement ("First Amendment") Title disbursed funds under Section 1 of such First Amendment
to allow Kennard East to make payments of principal and interest on 2006 installments of special
assessments which are a lien against the Property ("Special Assessments") all as described in the
First Amendment, which reduced the amount held by Title to a current amount of $49,465.68.
B. Notwithstanding the provisions of the Special Assessments Escrow Agreement
("Original Agreement") and the First Amendment, Title did not disburse the remaining escrow
funds to the City by November 1, 2006 and the Special Assessments were not paid off as
contemplated by the Original Agreement.
C. Kennard East has now paid the two installments of principal and interest due and
payable on the Special Assessments during 2007 and the full amount needed to pay off the
Special Assessments at this time is $208,502.11.
D. The City had agreed to pay $179,977.69 of the Special Assessments and that
amount combined with the money that Title can deliver to the City, that is $49,465.68, the City
will have a total of $229,443.37.
E. The City is willing to disburse that total amount as follows: (i) $208,502.11 to the
County to pay off the Special Assessments in full, and (ii) $20,941.26 to Kennard East to
partially reimburse Kennard East for the payments of principal and interest on the Special
Assessments that Kennard East made during 2007.
F. Legacy has been asked to execute this amendment to acknowledge that it has no
right to any of the funds described herein notwithstanding the language of Section 3 of the
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Original Agreement because the surplus created herein is not the same as the "Excess Escrowed
Funds" as described in such Section 3.
NOW, THEREFORE the Parties agree as follows:
1. The Recitals as set forth above are incorporated for all purposes into this
Agreement.
2094156vl
2. The City acknowledges that Kennard East has not as of the date hereof fulfilled
the terms of Section 6.2(a) of the Development Agreement because a building permit has not
been issued by the City for any proposed development on the Property, but notwithstanding such
fact, the Parties have agreed that Title will immediately pay the amount of $49,465.68 to the
City. The City will accept such amount and provide necessary City funds to pay off the total
amount of the Special Assessments of $208,502.11, which payment will be made to the County
by no later than November 10, 2007 so as to prevent another full year's interest being added to
the outstanding principle amount of the Special Assessments.
3. Because as described above, the Kennard East payments of principle and interest
on the Special Assessments during 2007 created a surplus, the City will reimburse Kennard East
in the total amount of $20,941,26 by check which will be delivered to Kennard East by no later
than November 10, 2007.
4. Legacy acknowledges that it has no right to any of the amounts described herein
and the City is authorized to make the payments as described herein.
5. Unless specifically changed herein, the terms and conditions, of the Original
Agreement and the First Amendment to the Special Assessments Escrow Agreement remain in
full force and effect and if the payments are made as described herein, the Original Agreement,
the First Amendment and this Second Amendment will terminate.
IN WITNESS WIIEREOF, the Parties hereto have executed this Agreement as of the
day and year first above written.
[Signatures on following pages]
20941560 2
LEGACY HOLDIINGS-MW, LLC
a Minnesota limi i -
liab lity company
2094156v1 3
t'i ' i ' i �
KENNARD PROFESSIONAL BUILDING
EAST, LLC
a Minnesota limited liability company
M
Its
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CITY OF MAPLEWOOD, MINNESOTA
a Minnesota statutory city
By—
Its
By—
Its
SPECIAL ASSESSMENTS ESCROW AGREEMENT
THIS SPECIAL ASSESSMENT SCAOW AGREEMENT CAgreement") is made
V
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and entered into this -7 ��'Tay of 2006, by and between LEGACY
e Pi = u� In y
HOLDINGS-MW, LLC, a Minneso a limited liability ("Legaey'); FIRST
AMERICAN TITLE INSURANCE COMPANY, a �n
("Title"); KENNARD PROFESSIONAL BUILDING FAST, LLC, a Minnesota limited
liability company CKennard East) and CITY OF MAPLEWOOD, MINNESOTA, a
Minnesota statutory city C'City").
1 Li V-41 V
A. Legacy Holdings-MW, LLC, ("Legacy") and the City entered into the
Development Agreement relating to the Legacy Village Project, City of Maplewood, Minnesota
effective September 8, 2003, as amended ( "Development Agreement").
B. Outlot 0 {"Corporate Commercial Facilities") described on Exhibit F of the
Development Agreement has subsequently been platted as Lot 2, Block 2, Legacy Village of
Maplewood, Ramsey County, Minnesota. (°'Lot 2").
C. Lot 2 has been divided into two separate lots, one of which is legally described as:
That part of Lot 2, Block 2, LEGACY VILLAGE OF MAPLEWOOD, according
to the recorded plat thereof, lying easterly of a line described as follows:
Commencing at the northeast comer of said Lot 2; thence South 89 degrees 46
minutes 12 seconds West, along north line of said Lot 2, a distance of 594.65 feet
to the beginning of the line to be described; thence South 0 degrees 14 minutes 51
seconds East a distance of 357.70 feet to the south line of said Lot 2, and said line
there terminating,
Ramsey County PIN 403.29.22.11.0029 (the "Property")
D. Legacy and Kennard East entered into a Purchase Agreement effective December
5, 2005, for the sale of the Property by Legacy to Kennard East.
E. Legacy has conveyed the Property to Kennard East.
F. There has been a total of $266,973.76 in assessments levied against the Property
pursuant to the Development Agreement. Currently the principal balance of the assessments
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levied against the Property is $244,098.61. Interest payable for tax year 2006 on the principal
balance of the assessments levied against the Property is $12,864.93, for a total assessment
p ayoff of $256,963.54. There are no pending or deferred assessments against the Property.
G. Section 6.2(c) of the Development Agreement provides that the City will pay
$179,977.69 (67.414 of the $266,973.76 in total assessments levied against the Property at
such time as the requirements of Section 6.2(e) of the Development Agreement have been
fulfilled. As to the building permit requirements, Kennard East anticipates that such building
permits will be issued within one hundred eighty (180) days of the date of this Agreement.
H. Legacy's responsibility of the current balance of the assessments levied against
the Property is $76,985.85.
I. Legacy and Kennard East are desirous of consummating the sale and purchase at
this time, subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the terms and conditions
hereinafter set forth, Legacy, Kennard East, the City and Title agree as follows:
1. Concurrent with the execution ofthis Agreement, Legacy has deposited in escrow
with Title $76,985.85 (the sum of the amount recited in Recital H), the receipt of which is hereby
acknowledged by Title, to be used to pay assessments as levied as set forth in Recitals 0 and H
above.
2. Title agrees to hold the $76,985.85 until it receives written notice from the City
and Kennard East that the terms of Section 6.2(e) of the Development Agreement have been
fulfilled, at which time the City shall deliver to Title $179,977.69. Title will then hold a total of
$256,963.54. Legacy and Kennard East agree that the City's obligation to pay special
assessments under this Agreement shall be a maximum of $179,977.69.
3. At such time as the terms of Section 6.2(e) of the Development Agreement have
been fulfilled Title shall immediately disburse to the Ramsey County Finance Department from
the escrowed funds the amount necessary to pay in full the assessments for the Property. Any
excess escrowed funds remaining after payment to Ramsey County plus any accrued interest
shall be disbursed to Legacy at 1300 Wells Fargo Plaza, 7900 Xerxes Avenue South,
Bloomington, UN 55431, Ann. Frank A. Janes, General Counsel,
4.---ILAU-- ection 6.2(a) of the Development Agreement have not been
fulfilled by November 1, 2006, Tide will disburse the escrow funds to the City and the City will
i
at� cause the sp W against the Property to be paid in full. If for any reason, the payoff
of the special assessments is more than the sum of the Escrowed Funds and the amount the City
is required to pay under Section 2 hereof, then upon written request from the City to Kennard
East, any additional funds needed will be immediately paid by Kennard East to the City so that
the City can pay such special assessments. To the extent that payments are not promptly made,
that is within 10 business days of the request, the City will have the right to deduct any such
amount from the amount it owes to Legacy pursuant to the provisions of the Tax Abatement
Note issued under the Development Agreement and use funds to pay the special assessments.
Kennard East agrees to indemnify Legacy for any costs incurred by Legacy for any action taken
by the City pursuant to the above paragraph,
5. The City is executing this Agreement for the following purposes only:
(a) to affirm that, subject to the terms of the Development Agreement, it has
no interest in the $76,985.85;
2
(b) to affirm that Section 6.2(c) of the Development Agreement, as amended,
is in fall force and effect as to the Property;
(c) to affirm that Legacy is not in default under the Development Agreement
as to the Property;
(d) to affirm its obligations under Section 6.2(e) of the Development
Agreement as to the Property.
6. This Agreement shall terminate upon the release of the $76,985.85 pursuant to
Section 2 herein and the performance by the City under Section 6.2(e) of the Development
Agreement.
7. Title's escrow service fee is $ Z receipt of -which is hereby
acknowledged. Legacy shall be responsible for this fee.
8. The acceptance by Title of its duties under this Agreement is subject to the
following terms and conditions, which all parties to this Agreement hereby agree shall govern
and control with respect to the rights, duties, liabilities and immunities of Title.
(a) Title is not a party to and is not bound by, any agreement which may be
evidenced by or arise out of the foregoing escrow instructions, other than expressly
therein set forth.
(b) Title shall be protected in acting upon any written notice, request waiver,
consent, receipt or other paper or document which Title in good faith believes to be
genuine and what it purports to be.
(c) Title shall not be liable for any error of judgment, or for any act done or
step taken or admitted by it in good faith, or for any mistake of fact or law, or for
anything for which it may do or refrain from doing in connection therewith, except its
own misconduct. Legacy and Kennard East shall indemnify and agree to pay Title for
any claims or expenses arising out of this Agreement, including court costs and
reasonable attomeysfees.
9. This Agreement shall be binding upon and inure to the benefit of the parties, their
successors and assigns.
10. This Agreement shall be governed by the laws of the State of Minnesota,
11. No rescission of this Agreement or modification of its terms shall be effective-
without the written consent of the undersigned parties.
3
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
LEGACY HOLDINGS -MW, LLC
a Minnesota limited liability company
By:z I da&
Keith Gruebele'
Its: Chief Financial Manager
FIRST AMERICAN TITLEJNSUPANCE
COMPANY, a
corporation
KENNARD PROFESSIONAL BUILDING EAST,
LLC a Minnesota limited liability company
By:
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Its: /A j a
............ ....... I - — I
CITY OF MAPLEWOOD MINNESOTA
a Minnesota statutory city
BY: ( 04, &,-
Its: N "-&Z Yj
4
FIRST AMENDMENT TO
SPECIAL ASSESSMENTS ESCROW AGREEMENT
I FIRST AMENDMENT TO SPECIAL ASSESSMENTS ESCROW
AGREEMENT ( "Agreement ") is made and entered into this 2-0 day of 2006,
by and between LEGACY HOLDINGS-MW, LLC, a Minnesota limited lability comp ny
( "Legacy "); FIRST AMERICAN TITLE INSURANCE COMPANY, a
corporation ("Title"); KENNARD PROFESSIONAL BUILDING EAST, LLC, a Minnesota
limited liability company ("Kennard East") and CITY OF MAPLEWOOD, MINNESOTA, a
Minnesota statutory city ("City "), (collectively, the "Partiee'.)
A. The Parties entered into a Special Assessments Escrow Agreement dated April 13,
2006, relating to real property in Maplewood, Minnesota described as:
That part of Lot 2, Block 2, LEGACY VILLAGE OF MAPLEWOOD, according
to the recorded plat thereof, lying easterly of a line described as follows:
Commencing at the northeast comer of said Lot 2; thence South 89 degrees 46
minutes 12 seconds West, along north line of said Lot 2, a distance of 594.65 feet
to the beginning of the line to be described; thence South 0 degrees 14 minutes 51
seconds East a distance of 357.70 feet to the south line of said Lot 2, and said line
there terminating.
Ramsey County PIN #03.29.22.11.0029 (the "Property")
D. The Parties now desire to amend the Special Assessments Escrow Agreement to
provide for the timely payment of installments of the special assessment principal and interest
payments required to be made in 2006.
NOW, THEREFORE, in consideration of the foregoing and the terms and conditions
hereinafter set forth, the Parties agree as follows:
1. Title will, upon request, disburse to Kennard East or another appropriate party, an
amount necessary to allow Kennard East to pay the installments of special assessments that must
be paid with the real estate taxes on or before May 15, 2006 and October 15, 2006. The total
amount necessary to pay these installments of principal and interest in 2006 is $30,663.18. One-
half of this amount will be disbursed upon request prior to May 15, 2006 and the other half will
be disbursed upon request prior to October 15, 2006. Any amounts not so disbursed shall be
disbursed by Title pursuant to the terms of the Agreement.
2. The date referenced in Section 4 of the Special Assessments Escrow Agreement
as to fulfillment of the terms of Section 62(e) of,the Development Agreement, shall be
November 1, 2006,
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
LEGACY HOLDINGS-MW, LLC
a Minnesota limited liability company
KENNARD PROFESSIONAL BUILDING EAST,
LLC a Minnesota limited liability company
By:
Keith Gruebele
Its: Chief Financial Manager
FIRST AMERICAN TITLE INSURANCE
COMPANY, a
corporation
M
Its:
CITY OF MAPLEWOOD, MINNESOTA
a Minnesota statutory city
OA
IN WITNESS WIIEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
LEGACY HOLDINGS -MW, LLC
a Minncgpta linut50-fiability company
Keith bruebe
Its: Chief Financial Manager
KENNARD PROFESSIONAL BUILDING EAST,
LLC a Minnesota limited liability company
M
Its:
COMPANY, a
.orporation
CITY OF MAPLEWOOD, MINNESOTA
a Minnesota statutory city
Its:
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
LE%CY HOLDINGS-MW, LLC KENNARD PROFESSIONAL BUILDING EAST,
a Minnesota limited liability company LLC a Minnesota limited liability company
By:
'Keith Gruobele
Its: Chief Financial Manager Ats: Z
FIRST AMERICAN TITLE INSURANCE CITY OF MAPLEWOOD MINNESOTA
COMPANY, a a Minnesota statutory city
corporation
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Its:
By:
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