HomeMy WebLinkAboutEDA Resolution 23-01 LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO.23-01
RESOLUTION APPROVING AN ASSIGNMENT AND ASSUMPTION OF CONTRACT FOR
PRIVATE DEVELOPMENT AND ASSIGNMENT OF TIP NOTE AND RELATED DOCUMENTS
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("United Properties"), 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 United Properties 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 United Properties for certain public improvements and site
preparation costs; and
WHEREAS,the Authority issued its Tax Increment Revenue Note, Series 2017(the"TIF Note"), in
the original aggregate principal amount of$1,200,000, to United Properties to reimburse United Properties
for the public improvements and site preparation costs as provided in the Contract; and
WHEREAS, United Properties conveyed the Minimum Improvements and the property on which
the Minimum Improvements are located (the "Property") to AX Lino Lakes L.P., a Delaware limited
partnership ("AX Lino Lakes"), and also assigned its interest,rights, and obligations under the Contract and
the TIF Note to AX Lino Lakes;and
WHEREAS, Bank of America,N.A., a national banking association(the"Lender"),provided a loan
to AX Lino Lakes 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, AX Lino Lakes, the Lender, and the Authority entered into a Collateral Assignment
and Subordination of Development Agreement and Tax Increment Revenue Note pursuant to which AX
Lino Lakes assigned all of its rights under the Contract and the TIF Note to the Lender, the Authority
agreed to the collateral assignment of the rights of AX Lino Lakes under the Contract and the TIF Note,
and the Authority agreed to subordinate its rights under the Contract to the rights of the Lender under the
loan documents executed in connection with the Lender Loan; and
WHEREAS, AX Lino Lakes intends to convey the Property to OIVF III Clearwater, LLC, a
Delaware limited liability company (the "Owner"), and the Owner will agree to assume the rights and
obligations of AX Lino Lakes under the Contract; and
WHEREAS, Section 8.2 of the Contract permits the assignment of the rights and duties of AX Lino
Lakes under the Contract only upon the satisfaction of certain requirements provided therein; and
WHEREAS, there has been presented to the Board of Commissioners of the Authority forms of
(i) an Assignment and Assumption of Contract for Private Development and Assignment of TIF Note (the
"Assignment and Assumption Agreement") between the Authority, AX Lino Lakes, as assignor, and the
Owner, as assignee, pursuant to which AX Lino Lakes will assign its rights and interests with respect to the
Contract and the TIF Note to the Owner, and the Owner will assume the rights and duties of AX Lino Lakes
under the Contract; and(ii)an estoppel certificate of the Authority(the"Estoppel Certificate"); 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 Assignment and Assumption Agreement and the Estoppel Certificate in substantially the forms 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
Assignment and Assumption Agreement or the Estoppel Certificate.
Approved by the Board of Commissioners of the Lino Lakes Economic Development Authority this
22nd day of May,2023.
c
Presi nt Ton Ca
ATTEST:
Executive Director, Sarah Cotton
LN140-116(JAE)
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UNITED STA 1'h OF AMERICA
STATE OF MINNESOTA
COUNTY OF ANOKA
LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY
No. R-2 $1,200,000
TAX INCREMENT REVENUE NOTE
SERIES 2017
Date
of Original Issue
November 22,2017
The Lino Lakes Economic Development Authority, Minnesota(the"Authority"), for value received,
certifies that it is indebted and hereby promises to pay to OIVF III Clearwater, LLC, a Delaware limited
liability company,or registered assigns(the"Owner"),the principal sum of$1,200,000 solely from the sources
and to the extent set forth herein.
1. Payments. Principal("Payments")shall be paid on August 1,2018 and each February 1 and
August 1 thereafter to and including February 1,2027("Payment Dates")in the amounts and from the sources
set forth in Section 3 herein.
Payments are payable by mail to the address of the Owner or such other address as the Owner may
designate upon 30 days' written notice to the Authority. Payments on this Note are payable in any coin or
currency of the United States of America which,on the Payment Date,is legal tender for the payment of public
and private debts.
2. Interest. No interest shall accrue on this Note.
3. Available Tax Increment. Payments on this Note are payable on each Payment Date in the
amount of and solely payable from "Available Tax Increment," which shall mean, on each Payment Date,
eighty percent(80%)of the Tax Increment attributable to the Development Property and paid to the Authority
by Anoka County in the six months preceding the Payment Date,all as such terms are defined in the Contract
for Private Development,dated July 25,2016,between the Authority,United Properties Development LLC,a
Minnesota limited liability company ("United Properties"), and Distribution Alternatives, Inc., a Minnesota
corporation, as tenant, as assigned pursuant to the Assignment and Assumption of Contract for Private
Development and Assignment of TIT Note, dated December 20, 2017, between the Authority, United
Properties, as assignor, and AX Lino Lakes L.P., a Delaware limited partnership ("AX Lino Lakes"), as
assignee, and as further assigned pursuant to the Assignment and Assumption of Contract for Private
Development and Assignment of TIT' Note, dated , 2023 (collectively, the "Agreement"),
between the Authority, AX Lino Lakes, as assignor, and the Owner, as assignee. Available Tax Increment
shall not include any Tax Increment if,as of any Payment Date,there is an uncured Event of Default under the
Agreement.
The Authority shall have no obligation to pay principal of this Note on each Payment Date from any
source other than Available Tax Increment,and the failure of the Authority to pay the entire amount of principal
on this Note on any Payment Date shall not constitute a default hereunder as long as the Authority pays principal
hereon to the extent of Available Tax Increment. The Authority shall have no obligation to pay unpaid balance
of principal that may remain after the final Payment on February 1,2027.
4. Optional Prepayment. The principal sum payable under this Note is prepayable in whole or
in part at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount
or timing of any other regular payment otherwise required to be made under this Note.
5. Default. If on any Payment Date there has occurred and is continuing any Event of Default
under the Agreement,the Authority may withhold from payments hereunder all Available Tax Increment. If
the Event of Default is thereafter cured in accordance with the Agreement, the Available Tax Increment
withheld under this Section shall be deferred and paid,without interest thereon,within 30 days after the Event
of Default is cured. If the Event of Default is not cured in the manner the Agreement describes,the Authority
may terminate this Note by written notice to the Owner in accordance with the Agreement. Notwithstanding
this Section 5,the Note may also be terminated pursuant to Section 3.5 of the Agreement.
6. Nature of Obligation. This Note is one of an issue in the total principal amount of$1,200,000
all issued to aid in financing certain public development costs and administrative costs of a Project undertaken
by the Authority pursuant to Minnesota Statutes, Sections 469.124 through 469.133,and is issued pursuant to
an authorizing resolution (the "Resolution")duly adopted by the Authority on July 25, 2016, and pursuant to
and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes,
Sections 469.174 to 469.1794. This Note is a limited obligation of the Authority which is payable solely from
Available Tax Increment pledged to the payment hereof under the Resolution. This Note hereon shall not be
deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof,
including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision
thereof shall be obligated to pay the principal of this Note or other costs incident hereto except out of Available
Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any
political subdivision thereof is pledged to the payment of the principal of this Note or other costs incident
hereto.
7. Estimated Tax Increment Payments. Any estimates of Tax Increment prepared by the
Authority or its financial advisors in connection with the TIF District or the Agreement are for the benefit
of the Authority, and are not intended as representations on which the Developer may rely.
THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY THAT THE
AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE PRINCIPAL OF THIS NOTE.
8. Registration and Transfer. This Note is issuable only as a fully registered note without
coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is
transferable upon the books of the Authority kept for that purpose at the principal office of the Executive
Director,by the Owner hereof in person or by such Owner's attorney duly authorized in writing,upon surrender
of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the
Owner. Upon such transfer or exchange and the payment by the Owner of any tax,fee,or governmental charge
required to be paid by the Authority with respect to such transfer or exchange,there will be issued in the name
of the transferee a new Note of the same aggregate principal amount and maturing on the same dates.
This Note shall not be transferred to any person other than an affiliate, or other related entity, of the
Owner unless the Authority has been provided with an investment letter in a form substantially similar to the
investment letter submitted by the Owner or a certificate of the transferor, in a form reasonably satisfactory to
the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal
and applicable state securities laws.
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9. Replacement of Note R-1. This Note hereby replaces the original Tax Increment Revenue
Note, Series 2017,designated as Note R-1.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the
Constitution and laws of the State of Minnesota to be done,to exist,to happen,and to be performed in order to
make this Note a valid and binding limited obligation of the Authority according to its terms,have been done,
do exist,have happened,and have been performed in due form,time and manner as so required.
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IN WITNESS WHEREOF, the Board of Commissioners of the Lino Lakes Economic Development
Authority, Minnesota has caused this Note to be executed with the manual signatures of its President and
Executive Director,all as of the Date of Original Issue specified above.
LINO LAKES ECONOMIC
DEVELOPMENT AUTHORITY,
MINNESOTA
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Executive Director, Sarah Cotton President, ony avegn
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REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register of the
Executive Director, in the name of the person last listed below.
Signature of
Date of Registration Registered Owner Executive Director
OIVF III Clearwater,LLC Cy�h��11����,
Federal ID# 92-3741977 W
LN140-116(JAE)
876504v2
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ESTOPPEL CERTIFICATE
l 21- , 2023
OIVF III Clearwater, LLC, its successors and assigns ("Purchaser")
5050 Lincoln Drive, Suite 420
Edina,MN 55436
RE: That certain Contract for Private Development dated July 25, 2016, recorded in the office of
the Anoka County Recorder on November 1, 2016 as Document No. 2153796.001, as affected by
that certain Certificate of Completion dated November 14, 2017,recorded in the office of the
Anoka County Recorder on January 2, 2018 as Document No. 2189877.001, as affected by that
Assignment and Assumption of Contract for Private Development and Assignment of TIF Note
dated December 20, 2017, recorded in the office of the Anoka County Recorder January 2, 2018
as Document No. 2189877.004 (collectively,the"Contract for Private Development").
Ladies and Gentlemen:
The following statements are made by the LINO LAKES ECONOMIC DEVELOPMENT
AUTHORITY, MINNESOTA, a public body corporate and politic under the laws of the State of
Minnesota(the"Authority"),with respect to the Property(as defined below). The Authority
acknowledges that Purchaser and its lenders (together with their successors and assigns)may rely on the
statements in this estoppel certificate in connection with the proposed acquisition by Purchaser of the
property located at 6870—21st Avenue South, Lino Lakes, Minnesota, as more particularly described in
the Contract for Private Development(the"Property").
The Authority, as a party or successor to the Contract for Private Development, certifies to
Purchaser and its lenders (together with their successors and assigns)that,to the Authority's knowledge,
the following statements are true, correct and complete as of the date hereof:
1. The Contract for Private Development is in full force and effect and has not been modified,
supplemented, amended or assigned except as set forth above.
2. To the best knowledge of the undersigned,the Authority is not aware of any uncured defaults,
events of default, or breaches (including any past due or delinquent repair or maintenance costs,
assessments, payments, charges, fees, reimbursements, or other amounts) under the Contract for
Private Development.
If any of the above statements are untrue, incorrect, or incomplete as of the date hereof, the
Authority will specify, in reasonable detail the nature of any exceptions to or contradictions of such
statement.
[Signature Page Follows]
LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY,MINNESOTA,
a public body corporate and politic under the laws of the State of Minnesota
By:
Name: To Cavegn
Title: President
By: 0181/1 1
Name: Sarah Cotton
Title: Executive Director
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ASSIGNMENT AND ASSUMPTION OF CONTRACT OF PRIVATE DEVELOPMENT AND
ASSIGNMENT OF TIF NOTE
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACT OF PRIVATE DEVELOPMENT
AND ASSIGNMENT OF TIF NOTE,made as of ,2023 (the"Assignment"), is between the
LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, MINNESOTA, a public body corporate
and politic of the State of Minnesota (the "Authority"), AX LINO LAKES L.P., a Delaware limited
partnership (the "Assignor"), and OIVF III CLEARWATER, LLC, a Delaware limited liability company
(the"Assignee").
RECITALS
The Authority,United Properties Development LLC,a Minnesota limited liability company("United
Properties"), and Distribution Alternatives, Inc., a Minnesota corporation (the "Tenant"), entered into the
Contract for Private Development,dated July 25,2016,between the Authority,United Properties and Tenant,
recorded in the Office of County Recorder of Anoka County, Minnesota on November 1, 2016 as Document
No. 2153796.001, as assigned pursuant to the Assignment and Assumption of Contract for Private
Development and Assignment of TIF Note, dated December 20, 2017 (collectively,the"Contract"),between
the Authority, United Properties, as assignor, and AX Lino Lakes L.P., a Delaware limited partnership("AX
Lino Lakes"),as assignee,recorded in the Office of County Recorder of Anoka County,Minnesota on January
2, 2018 as Document No. 2189877.004,regarding the development of an approximately 400,000 square foot
warehouse and distribution facility with related office space and other improvements to be constructed on
property legally described in EXHIBIT A attached hereto(the"Land")for use by the Tenant in its distribution
business(the"Minimum Improvements"),and in turn the Authority issued its Tax Increment Revenue Note,
Series 2017(the"TIF Note"), in the original aggregate principal amount of$1,200,000,to reimburse United
Properties for certain public improvements and site preparation costs. The TIF Note was subsequently assigned
to the Assignor.
The Assignor desires to assign to the Assignee all of its interest in the Contract and the TIF Note
and its rights and obligations under the Contract, and the Assignee desires to assume such interest in the
Contract and the TIF Note and the rights and obligations under the Contract.
NOW, THEREFORE, for good and valuable consideration,the receipt and sufficiency of which is
hereby acknowledged,the parties agree as follows:
1. Definitions. All capitalized terms not defined herein shall have the meanings given such
terms in the Contract.
2. Assignment and Assumption of Contract. Section 8.2 of the Contract allows the Assignor
to assign its rights and duties under the Contract to another entity if(a) the proposed transferee has the
qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and
adequate to fulfill the obligations undertaken in the Contract by the Assignor; and (b) any proposed
transferee expressly assumes all of the obligations of the Assignee under the Contract and agrees to be
subject to all of the conditions and restrictions to which the Assignor is subject. The Assignor hereby
assigns to the Assignee all of its interest in the Contract and the TIF Note and its rights and obligations
under the Contract. The Assignee hereby accepts such rights and assumes such obligations, subject to the
terms of this Assignment, and has executed and delivered an Investor Letter for the TIF Note to the
Authority. The Authority acknowledges and consents to such assignment.
3. Covenants of the Assignee. The Assignee expressly assumes all of the obligations of the
Assignor under the Contract and agrees to be subject to all the conditions and restrictions to which the
Assignor is subject to under the Contract.
4. Release of Assignor. This Assignment shall be deemed to release and discharge the
Assignor from any obligations of the "Developer" under the Contract, such obligations having been
assumed by the Assignee.
5. Assignee Address. For purposes of notice under the Contract,the Assignee's address is:
OIVF III Clearwater, LLC
5050 Lincoln Drive, Suite 420
Edina,MN 55436
Attention: Grant Steiner
6. Governing Law. It is agreed that this Assignment shall be governed by, construed and
enforced in accordance with the laws of the State of Minnesota.
7. Entirety of Agreement. This Assignment shall constitute the entire agreement between the
parties and any prior understanding or representation of any kind preceding the date of this Assignment
shall not be binding upon either party except to the extent incorporated in this Assignment.
8. Modification. Any modification of this Assignment or additional obligation assumed by
either party in connection with this Assignment shall be binding only if placed in writing and signed by
each party or an authorized representative of each party.
9. Execution in Counterparts. This Assignment may be executed, acknowledged and
delivered in any number of counterparts and each of such counterparts shall constitute an original but all of
which together shall constitute one agreement.
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IN WITNESS WHEREOF, the Assignor, the Assignee, and the Authority have caused this
Assignment and Assumption of Contract of Private Development and Assignment of TIF Note to be
executed as of the date and year first written above.
ASSIGNOR:
AX LINO LAKES L.P., a Delaware limited partnership
By: AX Lino Lakes, LLC, a Delaware limited
liability company
Its: General Partner
By:
Name:
Its:
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 , 2023.
(Signature of Notary)
(Print Name of Notary)
A Notary Public in and for the Province of Manitoba
Notary Stamp:
This instrument drafted by:
Kennedy&Graven, Chartered(JAE)
150 South Fifth Street, Suite 700
Minneapolis, MN 55402-1299
612-337-9300
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Execution page of the Assignee to the Assignment and Assumption of Contract of Private Development
and Assignment of TIF Note, dated as of the date and year first written above.
ASSIGNEE:
OIVF III CLEARWATER, LLC, a Delaware limited
liability company
By: OI GP III, LLC, a Delaware limited liability
company
Its: Manager
By:
Name:
Its:
STATE OF )
) SS
COUNTY OF )
The foregoing instrument was acknowledged before me this day of , 2023, by
,the of OI GP III, LLC, a Delaware
limited liability company,the manager of OIVF III Clearwater,LLC,a Delaware limited liability company,
on behalf of the Assignee.
Notary Public
S-2
Execution page of the Authority to the Assignment and Assumption of Contract of Private Development
and Assignment of TIF Note, dated as of the date and year first written above.
AUTHORITY:
LINO LAKES ECONOMIC DEVELOPMENT
AUTHORITY,MINNESOTA
By:
Name: Tony Cave
Its: President
By:
kuox\
et slot.
Name: Sarah Cotton
Its: Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this 22 day of NA f.,'j , 2023,
by Tony Cavegn,the President of the Lino Lakes Economic Development Authority, Min esota, a public
body corporate and politic of the State of Minnesota,on behalf of the Authority.
k JOLLEEN B.CHAIKA
NOTARY PUBLIC-MINNESOTA
My Commission Expires Jan.31,2028 Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this 2Z day of M rsq 2023,
by Sarah Cotton,the Executive Director of the Lino Lakes Economic Development Authority, Minnesota,
a public body corporate and politic of the State of Minnesota, on behalf of the Authority.
T^ , JOLLEEN B.CHAIKA AL& 1 '1/
NOTARY PUBLIC-MINNESOTA Notary Public
-1: My Commission Expires Jan.31,2028
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EXHIBIT A
LEGAL DESCRIPTION OF LAND
Lot 1, Block 1, Clearwater Creek Business Park, according to the recorded plat thereof, Anoka County,
Minnesota
LN140-116(JAE)
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