12-12-2016 EDA Packet - Laserfiche WebLink

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LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY AGENDA ITEM 3A STAFF ORIGINATOR: Michael Grochala, Community Development Director MEETING DATE: December 12, 2016 TOPIC: Consider Resolution No. 16-06, Approving Collateral Assignment and Subordination of Development Agreement and TIF Note, United Properties – TIF District 1-12 VOTE REQUIRED: 3/5 BACKGROUND The Economic Development Authority (EDA) approved the Contract for Private Development with United Properties and Distribution Alternatives in July of 2016. The action also included authorization for the issuance of a Tax Increment Revenue Note. Construction of the 402,000 square foot facility and associated public improvements has commenced in accordance with the agreement. United Properties Development LLC (the “Developer”) is in the process of has requested that the EDA execute a Collateral Assignment and Subordination of Development Agreement and Tax Increment Note. Pursuant to Section 7.3 of the Contract for Private Development, dated July 25, 2016, between the EDA, the Developer, and Distribution Alternatives, Inc., the EDA agreed to subordinate its rights under the Contract for Private Development as long as the subordination was subject to reasonable terms and conditions. The Collateral Assignment does the following:  Assigns the TIF Note to the UMB Bank N.A. (the lender for the construction of the building)  Requires EDA to give notice to bank of any default  Allows the Bank to step into the shoes of the Developer to cure a default  Allows the Bank to assume the role of Developer in the case of a default  If the Bank forecloses, the Contract for Private Development is terminated Julie Eddington, EDA development counsel, has reviewed the agreement and, subject to her comments, has found the agreement satisfactory for approval. RECOMMENDATION Staff is recommending approval of Resolution No. 16-06. ATTACHMENTS 1. Resolution No. 16-06 2. Assignment and Subordination Agreement