HomeMy WebLinkAbout#11 reassignment of Inwood Development ContractMAYOR AND COUNCIL COMMUNICATION
DATE: 11/4/15
CONSENT
ITEM #: 11
AGENDA ITEM: Reassignment of Inwood development contract
SUBMITTED BY: Clark Schroeder
THROUGH: Clark Schroeder
REVIEWED BY: Dave Snyder
SUGGESTED ORDER OF BUSINESS:
- Introduction of Item .................................................................................................... Staff
- Report/Presentation .................................................................................................... Staff - Questions from Council to Staff ............................................................ Mayor Facilitates
- Public Input, if Appropriate ................................................................... Mayor Facilitates - Call for Motion .............................................................................. Mayor & City Council - Discussion ..................................................................................... Mayor & City Council
- Action on Motion .................................................................................. Mayor Facilitates
PUBLIC POLICY STATEMENT: NO POLICY BEING DECIDED
SUMMARY AND ACTION REQUESTED: Hans Hagen Homes, Inc., a Minnesota corporation
(“Hagen”) is the developer under that certain Development Contract dated June 9, 2015 by and
between the City of Lake Elmo, a Minnesota municipal corporation (the “City”) and Hagen (the
“Public Sewer and Water Contract”), and that certain Development Contract by and between the
City and Hagen (the “Site Grading Contract”, and collectively with the Public Sewer and Water
Contract, the “Development Contracts”), both of which relate to the development of certain real
property located in the County of Washington, State of Minnesota, and as more particularly
described in the Development Contracts. Hagen is considering the transfer and sale of
substantially all of its assets (the “Asset Sale”), including its rights under the Development
Contracts, to M/I Homes of Minneapolis/St. Paul, LLC, a Delaware limited liability company
(“M/I”), which is an affiliate of M/I Homes, Inc., a public homebuilding company.
BACKGROUND AND STAFF REPORT:
With the reassignment there needs to be a determination of cash escrow that would transfer in this sale
from Hans Hagen to M/I homes. Due to the limited amount of time to prepare this document staff have
not completed the exact amount which will be left to transfer. This amount will be filled in after
consulting with Planning, Finance, and Engineering.
RECOMMENDATION:
Staff recommends the City Council … take the following action / with the following motion:
“Move to reassign development contracts from Hans Hagen Homes to M/L Homes, LLC.”
ATTACHMENT(S): Reassignment contract and Letter from Hans Hagen Home
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CONSENT AND ESTOPPEL REGARDING DEVELOPMENT CONTRACTS
INWOOD
Hans Hagen Homes, Inc., a Minnesota corporation (“Hagen”) is the developer under that
certain Development Contract dated June 9, 2015 by and between the City of Lake Elmo, a
Minnesota municipal corporation (the “City”) and Hagen (the “Public Sewer and Water
Contract”), and that certain Development Contract dated ______________, 2015 by and between
the City and Hagen (the “Site Grading Contract”, and collectively with the Public Sewer and
Water Contract, the “Development Contracts”), both of which relate to the development of
certain real property located in the County of Washington, State of Minnesota, and as more
particularly described in the Development Contracts. Hagen is considering the transfer and sale
of substantially all of its assets (the “Asset Sale”), including its rights under the Development
Contracts, to M/I Homes of Minneapolis/St. Paul, LLC, a Delaware limited liability company
(“M/I”), which is an affiliate of M/I Homes, Inc., a public homebuilding company. By its
execution of this Consent and Estoppel Regarding Development Contracts (“Estoppel”), the City
hereby represents, warrants, consents, and agrees to the following:
1. The Development Contracts are presently in full force and effect according to their
terms.
2. As of the date of this Estoppel, the cash escrows held by the City pursuant to the
terms of the Development Contracts are as follows:
a. $__________ for the Public Sewer and Water Contract; and
b. $__________ for the Site Grading Contract.
3. To the actual knowledge of the City, and with no duty of the City to investigate or
make further inquiries, Hagen is not in default under the Development Contracts nor
has any event occurred that with the giving of notice or passage of time would
constitute a default under the Development Contracts.
4. Upon closing of the Asset Sale, and in consideration of M/I’s assumption of Hagen’s
obligations under the Development Contracts to be performed after the Asset Sale,
the City (i) consents to the assignment of the Development Contracts, and (ii) agrees
that M/I may enjoy the rights, benefits and obligations of Hagen under the
Development Contracts.
5. The individuals signing below are duly authorized to sign this Estoppel on behalf of
the City.
[Signature Page to Follow]
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CITY OF LAKE ELMO,
a Minnesota municipal corporation:
By:
Printed Name:
Date:
By:
Printed Name:
Date: