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HomeMy WebLinkAbout02-12-2018 EDA PacketLINO LAKES ECONOMIC DEVELOPMENT AUTHORITY MEETING 6:15 P.M. Monday, February 12, 2018 City Council Chambers 1. Call to Order and Roll Call 2. Consideration of Minutes of December 11, 2017 3. Action Items A. Consideration of 2018 Annual Appointments B. Consider Resolution No. 18-01, Approving Assignment of Contract for Private Development and TIF Note, Michael Grochala C. 2017 Annual Report 4. Adjourn EDA MINUTES December 11, 2017 DRAFT 1 DATE : December 11, 2017 TIME STARTED : 6:15 p.m. TIME ENDED : 6:25 p.m. MEMBERS PRESENT : EDA Members Kusterman, Reinert, Rafferty, Maher, Manthey MEMBERS ABSENT : None OTHERS PRESENT: : Community Development Director Michael Grochala; City Clerk Julie Bartell The meeting was called to order at 6:15 p.m. by EDA President Rafferty. CONSIDERATION OF THE MINUTES OF APRIL 10, 2017 Economic Development Authority (EDA) Member Kusterman moved to approve the April 10, 2017 minutes as presented. EDA Member Manthey seconded the motion. Motion carried on a voice vote. A. Consider Resolution No. 17-02, Approving Assignment of Contract for Private Development and TIF Note - Community Development Director Grochala explained that the Economic Development Authority previously authorized execution of private contract and tax increment financing (TIF) actions with United Properties and Distribution Alternatives relative to construction of the warehouse/distribution center in the city. He explained the use of tax increment and the pay-as-you-go note associated with the increment, including the length of the bond. The project is being purchased by another group. There will be no change in tenancy, just a change in landlord. Staff is comfortable with the firm taking over the project. Staff is requesting approval of an EDA resolution approving the assignment. EDA Member Maher moved to approve Resolution No. 17-02 as presented. EDA Member Manthey seconded the motion. Motion carried on a voice vote. ADJOURNMENT There being no further business for consideration, the meeting was adjourned at 6:25 p.m. LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY AGENDA ITEM 3A STAFF ORIGINATOR: Michael Grochala MEETING DATE: February 12, 2018 TOPIC: Introduction of New Members and Annual Appointments VOTE REQUIRED: Simple Majority BACKGROUND The Economic Development Authority (EDA) was established in 1990 pursuant to Minnesota Statutes, Chapter 469. The EDA is governed by a board of commissioners consisting of the City Council. Accordingly newly elected City Council member Stoesz is new to the board in 2018. Each year the Economic Development Authority is required by its by-laws to hold an annual meeting and to make a number of appointments. The following is a list of appointments for your consideration: Position 2017 2018 Recommended 1. President Rob Rafferty TBD 2. Vice President Michael Manthey TBD 3. Treasurer Melissa Maher TBD 4. Secretary Community Development Director Community Development Director 5. Assistant Treasurer Finance Director Finance Director 6. Executive Director City Administrator City Administrator 7. Official Newspaper Quad Community Press Quad Community Press 8. Legal Depositories LMC 4M Fund Wells Fargo Securities Wells Fargo Advisors US Bank RBC Capital Markets Morgan Stanley F&M Bank First Resource Bank Others as needed LMC 4M Fund Wells Fargo Securities Wells Fargo Advisors US Bank RBC Capital Markets Morgan Stanley F&M Bank First Resource Bank Others as needed Position 2017 2018 Recommended 9. Legal Services Kennedy & Graven Ratwick, Roszak & Maloney Kennedy & Graven Ratwick, Roszak & Maloney Staff suggests that the appointments of President, Vice President and Treasurer be made in separate motions. The remaining appointments can be made in one motion. RECOMMENDATION Staff is recommending Board prerogative or as recommended. ATTACHMENTS 1. Past appointments 2013 - 2017 LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY AGENDA ITEM 3B STAFF ORIGINATOR: Michael Grochala, Community Development Director MEETING DATE: February 12, 2018 TOPIC: Consider Resolution No. 18-02, Approving Collateral Assignment and Subordination of Development Agreement and Tax Increment Note, AX Lino Lakes L.P. – 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 been completed. In December of 2017, AX Lino Lakes, L.P., a Delaware limited partnership, acquired the property, including all rights under the TIF Note and the Contract. Bank of America, N.A. (the “Lender”), has agreed to provide a loan to the new owner in the amount of $16,110,000 to finance a portion of the acquisition costs. As a condition, the Lender requires that the owner assigns all rights under the Contract and TIF note to the Lender and that the EDA agrees to subordinate its rights under the Contract to the rights of the Lender. 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. Section 8.2 of the Contract permits the assignment of the Assignor’s rights and duties under the Contract subject to the EDA’s approval. Julie Eddington, of Kennedy & Graven, the EDA’s development counsel, has reviewed the request and has recommended approval. RECOMMENDATION Staff is recommending approval of Resolution No. 18-01. ATTACHMENTS 1. Resolution No. 18-02 2. Collateral Assignment and Subordination of Development Agreement and TIF Note 516094v1 JAE LN140-116 LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, MINNESOTA RESOLUTION NO.18-01 RESOLUTION APPROVING COLLATERAL ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT AND TAX INCREMENT REVENUE NOTE. WHEREAS, the City of Lino Lakes, Minnesota (the “City”) and the Lino Lakes Economic Development Authority (the “Authority”) have established, and the Authority administers, Development District No. 1 (the “Development District”) located within the City and have caused to be created a Development Plan therefor, pursuant to Minnesota Statutes, Sections 469.090 through 469.1082, as amended; and WHEREAS, within the Development District the City and the Authority have created Tax Increment Financing (Economic Development) District No. 1-12 (the “TIF District”), pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended; and WHEREAS, the Authority, United Properties Development LLC, a Minnesota limited liability company (the “Developer”), and Distribution Alternatives, Inc., a Minnesota corporation (the “Tenant”), have entered into a Contract for Private Development, dated July 25, 2016 (the “Contract”), pursuant to which the Developer agreed to develop an approximately 400,000 square foot warehouse and distribution facility with related office space and other improvements to be constructed on property located within the TIF District for use by the Tenant in its distribution business (the “Minimum Improvements”), and in turn the Authority agreed to reimburse the Developer for certain public improvements and site preparation costs; and WHEREAS, the Authority issued to the Developer its Tax Increment Revenue Note, Series 2017 (the “TIF Note”), in the original aggregate principal amount of $1,200,000, to reimburse the Assignor for the public improvements and site preparation costs as provided in the Contract; and WHEREAS, the Developer conveyed the Minimum Improvements and the property on which the Minimum Improvements are located to AX Lino Lakes L.P., a Delaware limited partnership (the “Owner”), and also assigned its interest, rights, and obligations under the Contract and the TIF Note to the Owner; and WHEREAS, Bank of America, N.A., a national banking association (the “Lender”), has agreed to provide a loan to the Owner in the maximum principal amount of $16,110,000 (the Lender Loan”) to finance a portion of the costs of the Minimum Improvements; and WHEREAS, as a condition to providing the Lender Loan to the Owner, the Lender requires that the Owner assign all of its rights under the Contract and the TIF Note to the Lender, that the Authority agree to the collateral assignment of the Owner’s rights under the Contract and the TIF Note, and that the Authority agree to subordinate its rights under the Contract to the rights of the Lender under the loan documents to be executed in connection with the Lender Loan (collectively, the “Lender Loan Documents”); and WHEREAS, there has been presented to the Board of Commissioners of the Authority a form of Collateral Assignment of and Subordination of Development Agreement and Tax Increment Revenue Note (the “Collateral Assignment”), proposed to be entered into between the Owner, the Lender, and the Authority, which sets forth the terms of the collateral assignment of the Owner’s rights under the Contract and the TIF Note, the Authority’s approval of such assignment, and the Authority’s 516094v1 JAE LN140-116 2 subordination of its rights under the Contract to the rights of the Lender under the Lender Loan Documents; and NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Lino Lakes Economic Development Authority that: 1. The President and the Executive Director are hereby authorized to execute and deliver the Collateral Assignment in substantially the form on file with the Authority, with such additions, deletions, and other changes as are approved by the President and the Executive Director. The President and the Executive Director are further directed to execute any additional documents or take all steps and do all things necessary to effectuate the provisions of the Collateral Assignment. Approved by the Board of Commissioners of the Lino Lakes Economic Development Authority this 12th day of February, 2018. President ATTEST: Executive Director 1390/1144 01/04/18 - 1 - collateral assign v3 abasse\bank america\artis-clearwater\loan documents PREPARED BY AND WHEN RECORDED RETURN TO: Bank of America, N.A. Mail Code: CA4-702-06-06 2000 Clayton Road, 6th Floor Concord, CA 94520 Attention: CREB – Loan Administration (Space above reserved for recorder's use.) COLLATERAL ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT AND TAX INCREMENT REVENUE NOTE This COLLATERAL ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT AND TAX INCREMENT REVENUE NOTE (this "Assignment") is made and entered into as of ______________, 2018, by and among AX LINO LAKES L.P., a Delaware limited partnership ("Owner"), BANK OF AMERICA, N.A., a national banking association ("Bank"), and the LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, a body corporate and politic duly organized and existing under the laws of the State of Minnesota ("Authority"). Capitalized terms used herein without specific definition shall have the meanings given to them in the Development Agreement (as hereinafter defined). A. United Properties Development LLC, a Minnesota limited liability company ("Developer"), developed a warehouse facility located in Lino Lakes, Minnesota (the "Project"), on the real property described on Exhibit A attached (the "Property"). To assist Developer in financing the Project, Developer, Distribution Alternatives, Inc. ("Tenant"), and Authority entered into a Contract for Private Development dated as of July 25, 2016 (the "Development Agreement") filed with the Office of the County Recorder for Anoka County on November 1, 2016, as Document No. 2153796.001. Pursuant to the Development Agreement, Authority issued to Developer that certain Tax Increment Revenue Note dated as of November 22, 2017, in the maximum principal amount of $1,200,000.00 (the "TIF Note"). B. Developer conveyed the Project and the Property to Owner and assigned to Owner all of its rights and obligations with respect to the Development Agreement and the TIF Note pursuant to an Assignment and Assumption of Contract for Private Development and Assignment of the Note dated as of December 20, 2017. C. Pursuant to a Term Loan Agreement (the "Loan Agreement") between Owner, as Borrower, and Bank, as Lender, Bank has agreed to make a loan to Owner in the maximum principal amount of Sixteen Million One Hundred Ten Thousand and No/100 Dollars ($16,110,000.00) (the "Project Loan"). The Project Loan will be secured by, among other things, a Mortgage, Security Agreement, Assignment and Fixture Filing, made by Owner in favor of Bank and encumbering the Property and the Project (as amended, restated or otherwise modified from time to time, the "Mortgage"). D. Pursuant to the Loan Agreement, and as a condition to making the Project Loan, Bank has required that Owner and the Authority execute and deliver this Assignment to Bank. 1390/1144 01/04/18 - 2 - collateral assign v3 abasse\bank america\artis-clearwater\loan documents NOW, THEREFORE, in consideration of the foregoing and in order to induce Bank to make the Project Loan, Owner and the Authority agree as follows: 1. Assignment. Owner hereby transfers and assigns to Bank and grants to Bank a security interest in all of its right, title and interest in, to and under the Development Agreement, the TIF Note, the tax increments payable thereunder, any and all other payments made or to be made thereunder and all proceeds thereof. This Assignment is made to induce Bank to enter into the Loan Agreement and make the Project Loan, and for the purpose of securing the performance and observance by Owner of all of the terms and conditions of the Loan Agreement and the Note (as defined in the Loan Agreement), and all other obligations of Owner to Bank in connection with the Project and the Loan. This Assignment shall constitute a perfected, absolute and present assignment, provided that Bank shall not have any right under this Assignment to enforce the provisions of the Development Agreement or exercise any other remedies under this Assignment unless and until Bank delivers an Assumption Notice pursuant to Section 8 of this Assignment. 2. Endorsement and Delivery of TIF Note. Owner shall endorse the TIF Note to Bank and, upon Bank’s written request (in Bank’s sole discretion), Owner shall deliver the TIF Note directly to Bank at the address set forth in Section 15 hereof. If the Bank so elects to hold the TIF Note, upon receipt, Bank shall attach to the TIF Note an endorsement from Owner in favor of Bank in the form of Exhibit B attached hereto, which Owner shall execute contemporaneously with this Assignment. If the Bank has elected and requested to hold the original TIF Note, then Bank shall then hold the TIF Note subject to the terms of this Assignment. 3. Representations and Warranties of Owner. Owner represents and warrants to Bank and agrees as follows: (a) Owner will not, without the prior written consent of Bank, modify, amend, supplement, terminate, surrender or change in any manner whatsoever the Development Agreement or the TIF Note and will not release or discharge the obligations of any party thereto or modify or extend the time of performance thereunder or the scope of the work thereunder. (b) The Development Agreement and the TIF Note are or will be, as applicable, free and clear of all liens, security interests, assignments and encumbrances other than the assignment and security interest created by this Assignment. (c) Owner has the full right, power and authority to assign its interest in the Development Agreement and, upon its issuance, the TIF Note, free and clear of any and all liens, security interests and assignments. (d) Owner will keep the Development Agreement and the TIF Note free from any lien, encumbrance, assignment or security interest whatsoever, other than this Assignment and security interest. (e) Owner will from time to time and at the request of Bank execute such documents and pay the cost of filing and recording the same and do such other acts and things as Bank may request to establish and maintain a perfected security interest in the Development Agreement and the TIF Note which is valid and superior to all liens, claims or security interests whatsoever. (f) There have been no defaults on the part of Owner under the Development Agreement, and, to Owner's knowledge, neither the Authority nor Tenant is in default under the Development Agreement. 1390/1144 01/04/18 - 3 - collateral assign v3 abasse\bank america\artis-clearwater\loan documents 4. Covenants of Owner. Owner covenants and agrees that: (a) It shall perform each and every one of its duties and obligations under the Development Agreement and observe and comply with each and every term, covenant, condition, agreement, requirement, restriction and provision of the Development Agreement. (b) It shall give prompt notice to Bank of any claim of or notice of default under the Development Agreement known or given to it together with a copy of any such notice or claim if in writing. (c) At the sole cost and expense of Owner, Owner will enforce the full and complete performance of each and every duty and obligation to be performed by Authority and/or Tenant under the Development Agreement and the TIF Note. (d) It will appear in and defend any action arising out of or in any manner connected with the Development Agreement and the duties and obligations of Owner, Tenant or the Authority thereunder. 5. Authority's Representations, Warranties and Covenants. Authority represents and warrants to and covenants with Bank as follows: (a) The execution, delivery and performance of this Assignment have been duly authorized by all necessary action. (b) Until all amounts advanced and to be advanced under the Loan Documents have been repaid, no amendment to the Development Agreement shall be binding on Bank unless Bank consents to the amendment in writing. (c) The Development Agreement is in full force and effect and has not been amended, and neither the Authority nor, to the Authority's knowledge, none of Developer, Owner or Tenant, is in default under the Development Agreement. (d) If a default shall occur under the Development Agreement, the Authority shall provide Bank with written notice of such default contemporaneously with any notice given to Owner or Tenant. Prior to exercising its rights under the Development Agreement in connection with any default (including but not limited to Section 9.2 set forth therein), the Authority shall provide Bank with the same opportunity to cure such default as is given to Owner or Tenant under the Development Agreement, and the Authority shall accept such cure as if tendered directly by Owner or Tenant; provided, however, that (i) Bank shall have not less than thirty (30) days to cure a monetary default and not less than sixty (60) days to cure a nonmonetary default, (ii) Bank will not be required to cure any default which is personal to Owner or Tenant and is not susceptible of being cured by Bank, and (iii) if Bank's ability to cure requires it to obtain possession of the Property, then it shall have such time to cure as is reasonably necessary to gain possession through foreclosure, deed in lieu of foreclosure or other methods, not to exceed twelve (12) months following receipt by Bank of written notice of the default. For the avoidance of doubt, the Authority shall not take any action to terminate the Development Agreement or the TIF Note due to any default by Owner or Tenant as long as Bank is exercising its cure rights as provided in this Section with reasonable diligence. 6. Bank's Rights to Act on Behalf of Owner. Owner hereby authorizes Bank during an Event of Default to act on its behalf either in the name of Owner or Bank in connection with the exercise of any of the rights of Owner under the Development Agreement. Owner hereby irrevocably constitutes 1390/1144 01/04/18 - 4 - collateral assign v3 abasse\bank america\artis-clearwater\loan documents and appoints Bank as its attorney-in-fact to demand, receive and enforce Owner's rights with respect to the Development Agreement and the TIF Note. Owner agrees to reimburse Bank on demand for any expenses incurred by Bank, or its agents or attorneys, pursuant to the aforesaid authorization. Owner hereby irrevocably instructs, directs, authorizes and empowers all parties to the Development Agreement to recognize the claims of Bank, or its successors or assigns hereunder, and to act upon any instructions or directions of Bank without investigating the reason for any action taken by Bank. 7. Consent to Loan Documents. Authority consents to the recording of the Mortgage and to the assignment of the Development Agreement and the TIF Note by Owner to Bank under the terms of this Assignment. 8. Bank's Option to Assume Development Agreement. Upon the occurrence and continuance of an Event of Default, Bank may, at its option, notify Authority and Owner in writing that it has elected to assume the obligations of Owner under the Development Agreement (such notice is hereinafter referred to as the "Assumption Notice"). Following receipt of the Assumption Notice, Authority shall treat Bank as if it were the Owner under the Development Agreement, and shall continue to perform its obligations under the Development Agreement for the benefit of Bank, as long as Bank continues to perform the obligations of Owner under the Development Agreement. Bank shall not have any obligation with respect to the Development Agreement unless and until delivery of an Assumption Notice by Bank to Authority. 9. Subordination of Development Agreement. Regardless of the priority of any rights or interests otherwise available or belonging to Authority and notwithstanding anything to the contrary set forth in the Development Agreement, each and every right and interest of Authority in and to the Property of any kind whatsoever, including without limitation any rights or interests acquired in the Property pursuant to the Development Agreement, are hereby subjected and subordinated and shall remain in all respects and for all purposes, subject, subordinate and junior to the provisions of the Mortgage and other Loan Documents (as defined in the Loan Agreement) and to the rights of Bank thereunder and the liens created thereby. The subordination effected hereby shall extend to any and all advances heretofore or hereafter made pursuant to the terms of the Loan Documents and to any amendment, modification, extension, replacement or renewal of any of the Loan Documents, including any amendment which increases the principal amount secured by the Mortgage. If (a) Bank does not elect to give Authority the Assumption Notice, and (b) Bank forecloses the Mortgage or Owner delivers to Bank a deed in lieu of foreclosure, then upon the completion of such foreclosure and the expiration of the applicable redemption period, or upon recording of a deed in lieu of foreclosure, all right, title and interest of Authority in or to the Property, whether pursuant to the Development Agreement or otherwise, shall terminate automatically and shall be null and void without the need for the execution or recording of any other documents. If Bank has provided Authority with the Assumption Notice, then the rights of Authority under the Development Agreement shall survive foreclosure of the Mortgage or acceptance of a deed in lieu of foreclosure. Except as specifically agreed to herein, nothing in this Assignment, including a foreclosure by Bank or acceptance of a deed in lieu of foreclosure, shall extinguish the Development Agreement as an agreement between Authority and Owner or limit the rights and remedies of Authority as against Owner. Notwithstanding the foregoing, subject to the rights granted Bank hereunder, including but not limited to notice and cure rights set forth in Section 5 hereof, if a default shall occur under the Development Agreement, the Authority shall continue to have the ability to exercise the remedies under Section 9.2 of the Development Agreement, including the ability to terminate or suspend payments under the TIF Note. 10. Event of Default. As used herein, the term "Event of Default" shall mean the occurrence of any Event of Default under the Development Agreement, the TIF Note, the Loan Agreement or any other Loan Documents, or any related documents. 1390/1144 01/04/18 - 5 - collateral assign v3 abasse\bank america\artis-clearwater\loan documents 11. Remedies. Upon the occurrence of an Event of Default, Bank may without demand or performance or other demand, advertisement, or notice of any kind, except such notice as may be required under the Uniform Commercial Code, and all of which are, to the extent permitted by law, hereby expressly waived, collect the amounts payable to Owner pursuant to the Development Agreement or the TIF Note and shall hold such amounts free and clear of the interest of Owner therein and shall be entitled to own, hold, dispose of and otherwise deal with the amounts payable pursuant to the Development Agreement and the TIF Note in its own right and name as its own property, or in the name of Owner or otherwise, exercise any right of Owner to demand, collect, receive and receipt for, compromise, compound, settle and prosecute and discontinue any suits or proceedings in respect of any or all of the amounts payable pursuant to the Development Agreement or the TIF Note; take any action that Bank may deem necessary or desirable in order to collect the amounts payable pursuant to the Development Agreement and the TIF Note, including, without limitation, the power to perform or direct the performance by any other party to any contracts which are a part of the Development Agreement; exercise any of the remedies available to a secured party under the Uniform Commercial Code and/or to proceed to protect and enforce this Assignment by suits or proceedings or otherwise; and to enforce any other legal or equitable remedy available to Bank. The foregoing remedies are cumulative of and in addition to and are not restrictive of or in lieu of, the rights or remedies provided for or allowed in the Mortgage, the Loan Documents or any other instrument given for the security of the Project Loan, or as provided for or allowed by law or in equity. 12. Indemnity. Unless and until Bank delivers an Assumption Notice, Bank shall have no obligation to perform or satisfy any duty or obligation of Owner under the Development Agreement. Owner shall and does hereby indemnify, defend and hold Bank harmless from and against and in respect of any and all actions, causes of action, suits, claims, demands, judgments, proceedings and investigations (or any appeal thereof or relative thereto or other review thereof) of any kind or nature whatsoever, arising out of, by reason of, as a result of or in connection with the Development Agreement or the TIF Note, and any and all liabilities, damages, losses, costs, expenses (including fees of counsel and expenses and disbursements of counsel), amounts of judgment, assessments, fines or penalties, and amounts paid in compromise or settlement, suffered, incurred or sustained by Bank as a result of, or reason of or in connection with any of the matters above. 13. Uniform Commercial Code. To the extent that this Assignment may be governed by the provisions of the Uniform Commercial Code now or hereafter in effect, this Assignment shall be deemed to be a security agreement within the meaning of the Uniform Commercial Code, shall be governed by the provisions thereof and shall constitute a grant to Bank of a security interest in the Development Agreement, the TIF Note (upon its issuance) and the proceeds thereof. 14. Choice of Law; Jurisdiction. Notwithstanding the place of execution of this instrument, the parties to this Assignment have contracted for Minnesota law to govern this Assignment and it is agreed that this Assignment is made pursuant to, and shall be construed and governed by, the laws of the State of Minnesota without regard to the principles of conflicts of law, and the parties hereby submit to the jurisdiction of the state and federal courts located in the State of Minnesota for purposes of resolving disputes under this Assignment. 15. Notices. Any notices and other communications permitted or required by the provisions of this Assignment (except for telephonic notices expressly permitted) shall be in writing and shall be deemed to have been properly given or served by depositing the same with the United States Postal Service, or any official successor thereto, designated as Certified Mail, Return Receipt Requested, bearing adequate postage, or deposited with a reputable private courier or overnight delivery service, and addressed to the address set forth herein. Each such notice shall be effective upon being deposited as 1390/1144 01/04/18 - 6 - collateral assign v3 abasse\bank america\artis-clearwater\loan documents aforesaid. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice sent. To Bank: Bank of America, N.A. Mail Code: CA4-702-02-29 2000 Clayton Road, 6th Floor Concord, CA 94520-2405 Attention: CREB Loan Administration With a copy to: Bank of America N.A. 800 Fifth Avenue, 34th Floor Mail Code WA1-501-34-42 Seattle, WA 98104 Attention: Julie Bridge, Portfolio Manager To Owner: AX Lino Lakes L.P. c/o AX L.P. 600-220 Portage Avenue Winnipeg, Manitoba R3C 0A5 CANADA Attention: Kim Riley If to Authority: Lino Lakes Economic Development Authority City Hall 600 Town Center Parkway Lino Lakes, Minnesota 55014 Attention: Executive Director With a copy to: Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South 6th Street Minneapolis, Minnesota 55402 Attention: Julie Eddington Telephone No.: 612-337-9213 By giving to the other party hereto at least ten (10) days' notice thereof, either party hereto shall have the right from time to time to change its address and shall have the right to specify as its address any other address within the United States of America. 16. Successors and Assigns; Recording. This Assignment shall bind Owner and Authority and their respective successors and assigns, and shall inure to the benefit of Bank and its successors and assigns. At the option of Bank, this Assignment may be recorded in the land records of Anoka County, Minnesota. 1390/1144 01/04/18 - 7 - collateral assign v3 abasse\bank america\artis-clearwater\loan documents COLLATERAL ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT AND TAX INCREMENT REVENUE NOTE Signature Page IN WITNESS WHEREOF, Owner has executed this Collateral Assignment and Subordination of Development Agreement and Tax Increment Revenue Note as of the date and year first written above. OWNER: AX LINO LAKES L.P., a Delaware limited partnership By: AX Lino Lakes, LLC, a Delaware limited liability company, Its General Partner By: Name: Title: DOMINION OF CANADA ) ) ss. PROVINCE OF MANITOBA ) I certify that I know or have satisfactory evidence that ____________________________ is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he was authorized to execute the instrument and acknowledged it as the ___________________________ of AX Lino Lakes, LLC, a Delaware limited liability company, the general partner of AX LINO LAKES L.P., a Delaware limited partnership, to be the free and voluntary act and deed of such company, for the uses and purposes mentioned in the instrument. WITNESS my hand and official seal hereto affixed on _________________, 2018. (Signature of Notary) (Print Name of Notary) A Notary Public in and for the Province of Manitoba Notary Stamp: 1390/1144 01/04/18 - 8 - collateral assign v3 abasse\bank america\artis-clearwater\loan documents COLLATERAL ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT AND TAX INCREMENT REVENUE NOTE Signature Page IN WITNESS WHEREOF, Bank has executed this Collateral Assignment and Subordination of Development Agreement and Tax Increment Revenue Note as of the date and year first written above. BANK: BANK OF AMERICA, N.A., a national banking association By: Name: Title: STATE OF WASHINGTON ) ) COUNTY OF KING ) The foregoing instrument was acknowledged before me this ____ day of ______________, 2018, by ______________________________, the __________________ of BANK OF AMERICA, N.A., a national banking association, on behalf of such national banking association. Notary Public 1390/1144 01/04/18 - 9 - collateral assign v3 abasse\bank america\artis-clearwater\loan documents COLLATERAL ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT AND TAX INCREMENT REVENUE NOTE Signature Page IN WITNESS WHEREOF, Authority has executed this Collateral Assignment and Subordination of Development Agreement and Tax Increment Revenue Note as of the date and year first written above. AUTHORITY: LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY By: Name: Title: By: Name: Title: STATE OF MINNESOTA ) ) COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me the _____ day of ________________, 2018, by _______________________, the __________________ of LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, a body corporate and politic duly organized and existing under the laws of the State of Minnesota. Notary Public STATE OF MINNESOTA ) ) COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me the _____ day of _______________, 2018, by _______________________, the __________________ of LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, a body corporate and politic duly organized and existing under the laws of the State of Minnesota. Notary Public 1390/1144 01/04/18 - 10 - collateral assign v3 abasse\bank america\artis-clearwater\loan documents EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Parcel 1: Lot 1, Block 1, Clearwater Creek Business Park. Parcel 2: Non-exclusive easement for a public roadway as set forth in Quit Claim Deed from Rehbein Properties, a Minnesota partnership, to the City of Lino Lakes, a municipal corporation, dated June 13, 2001, recorded October 12, 2001, as Document No. 1609908.0. Parcel 3: Exclusive easement for vehicular ingress and egress as set forth in Access Easement Agreement by Rehbein Properties, a Minnesota general partnership, and United Properties Development LLC, a Minnesota limited liability company, dated September 30, 2016, recorded October 3, 2016, as Document No. 2150438.004. 1390/1144 01/04/18 - 11 - collateral assign v3 abasse\bank america\artis-clearwater\loan documents EXHIBIT B FORM OF ENDORSEMENT OF TIF NOTE ALLONGE TO: TAX INCREMENT REVENUE NOTE, DATED AS OF NOVEMBER 22, 2017, IN THE ORIGINAL PRINCIPAL AMOUNT OF $1,200,000.00, ISSUED TO UNITED PROPERTIES DEVELOPMENT LLC PURSUANT TO THAT CERTAIN CONTRACT FOR PRIVATE DEVELOPMENT DATED AS OF JULY 25, 2016, BY AND AMONG THE LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, DISTRIBUTION ALTERNATIVES, INC. AND THE UNDERSIGNED. AX LINO LAKES L.P., a Delaware limited partnership By: AX Lino Lakes, LLC, a Delaware limited liability company, Its General Partner By: Name: Title: Dated: , 2018 LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY AGENDA ITEM 3C STAFF ORIGINATOR: Michael Grochala MEETING DATE: February 12, 2018 TOPIC: 2017 Annual Report VOTE REQUIRED: 3/5 BACKGROUND Each year staff is required to provide a recap of the prior year activities undertaken by the board. In 2017, the EDA undertook the following activities: 1. Took action to approve conveyance of Lots 12-14, Block 2, Carole’s Estates 2nd Addition to City of Lino Lakes. This land was ultimately conveyed to the American Legion. 2. Took action to approve an assignment of contract for private development and TIF note with United Properties and Distribution Alternatives. The project was purchased by another group. Overall, the City saw a substantial increase in development activity in 2017. 133 new residential permits were issued in 2017. Building permit valuation topped $55 million for the 2nd year in a row. Staff is also reporting that no modifications to the EDA enabling resolution are needed or proposed. RECOMMENDATION Staff is recommending that the EDA accept the report. ATTACHMENTS None.