HomeMy WebLinkAboutResolution 26-83 Authorizing Approval of the Master Disbursement and Master Subordination Agreement for the Fairway Commons ProjectCITY OF FALCON HEIGHTS
COUNCIL RESOLUTION
September 23,2026
No.26-83
RESOLUTION AUTHORIZING THE APPROVAL OF THE MASTER
DISBURSEMENT AND MASTER SUBORDINATION AGREEMENT FOR THE
FAIRWAY COMMONS PROJECT
WHEREAS, Fairway Commons is a proposed I lO-unit age-restricted multifamily rental
housing development located at 1670 Larpenteur Avenue West, intended to serve low- and
moderate-income households in alignment with the City's comprehensive plan and regional
housing goals;AND
WHEREAS,in2025, Fairway Commons, Limited Partnership ("Borrower"Faffiliated with
MWF Properties/Velair Development Company-was awarded a Livable Communities Grant of
$432,500, and in August 2026was further awarded $631,100, consisting of $88,500 for
environmental cleanup and $542,600 for general construction; and
WHEREAS, Fairway Commons has requested that the City enter into a Master Disbursement
Agreement ("MDA") and Master Subordination Agreement ("MSA") to structure access to
funding sources and to establish loan priority among various lenders involved in the
development; and
WHEREAS, the MDA structures how Fairway Commons will access the various funding
sources and identifies the City's LCDA loans as fifth and sixth in the order of funding
distribution; and
WHEREAS, City staff have identified corrections needed in the MDA to accurately reflect the
90o/o and l\Yo allocations of City LCDA Loan2, adjusting the stated amounts to $567,990.00
(90%) and $63,110.00 (10%o); and
WHEREAS, the MSA establishes loan priority, interpretation of documents, consent
requirements for financing, default notices, and bankruptcy limitations among the various
lenders and identifies City loans as fourth and fifth priority; and
WHEREAS, Section 6 of the MSA requires the Borrower to comply with the most restrictive
rent, income, or occupancy requirements, thereby helping preserve affordable housing; and
WHEREAS, Section 8 of the MSA establishes default notice procedures, and Section 9 requires
that proceeds be used first to repair or reinstate the development, while Section l0 restricts any
individual lender from initiating or joining a bankruptcy proceeding without consent of the other
parties; and
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NOW THEREFORE BE IT RESOLVED by the City Council of the City of Falcon Heights,
Minnesota:
l. The City Council approves the Master Disbursement Agreement and Master
Subordination Agreement for the Fairway Commons development and authorizes the
Mayor and City Administrator to execute said agreements on-behalf of the City and carry
out the City's obligations thereunder.
Moved by: V\o 3€-r\Approved
In Favor Attested by:
C
GUSTAFSON
MAY
MIELKE
MOGEN
WASSENBERG
5L Against Administrator
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