HomeMy WebLinkAbout15.A.5. Boulder Ridge Townhome Project Agreements, Phase II Grant
CONSENT
CITY OF SHAKOPEE IS. ft ,S',
Memorandum
CASELOG NO.: N.A
TO: Mayor and City Council
Mark McNeill, City Administrator
FROM: R. Michael Leek, Community Development Director
SUBJECT: Authorization to Sign Minnesota Housing Finance Agency "Master
Disbursement Agreement" and "Master Subordination Agreement and
Estoppel Certificate, "both for phase 2 of the Boulder Ridge project
MEETING DATE: April 15, 2003
INTRODUCTION:
In March, the Council approved a grant agreement for $200,000.00 from the Metropolitan Council for
this project. It appears that the MHFA requires the execution of the above-named agreements as a
part ofthis transaction. Copies are attached for the Council's information. The City Attorney has
reviewed the agreements, and they do not impose any significant obligations on the City of Shakopee.
ALTERNATIVES:
1. Offer and pass a motion authorizing the appropriate City officials to sign Minnesota Housing
Finance Agency "Master Disbursement Agreement" and "Master Subordination Agreement
and Estoppel Certificate, "both for phase 2 of the Boulder Ridge project
2. Do not authorize execution of the above-named agreements.
3. Table the matter for additional information.
STAFF RECOMMENDATION:
Staff recommends alternative No.1.
ACTION REQUESTED:
Offer and pass a motion authorizing the appropriate City officials to sign Minnesota Housing
Finance Agency "Master Disbursement Agreement" and "Master Subordination Agreement and
Estoppel Certificate, "both for phase 2 of the Boulder Ridge project
4 ~4'~
R. Michael Leek
Community Development Director
G:\CC\2003\04-15\boulderridgeagreements.doc - 1 -
Minnesota Housing Finance Agency
MASTER DISBURSEMENT AGREEMENT
THIS MASTER DISBURSEMENT AGREEMENT shall have an effective date of the
_ day of , 2003, and is made and entered into by and between Shakopee
Boulder Ridge II, LP, a Minnesota limited pmtnership, with its offices located at 366 South 10th
Avenue, Waite Park, MN 56387 (the "Developer"), the Minnesota Housing Finance Agency, a
public body corporate and politic of the State of Minnesota, with its offices located at 400 Sibley
Street, Suite 300, St. Paul, MN 55101 (the "MHFA"), City of Shakopee, a Minnesota municipal
corporation, with its offices located at (the "City"), and
Commonwealth Land Title Insurance Company, a Pennsylvania corporation, with its offices
located at 400 Sibley Street, Suite 255, St. Paul, MN 55101 (the "Title Company").
WITNESSETH:
WHEREAS, the Developer has applied to and obtained certain loans from other parties
hereto and will use the proceeds of such loans and additional equity to fund construction and/or
rehabilitation of a multifamily housing development identified as MHF A Development No. 02-
LMIR-2887 (the "Development"), which will be situated on real property located in the City of
Shakopee, County of Scott, State of Minnesota, and legally described in Exhibit A attached
hereto; and
WHEREAS, the following is a listing and description of the loans that the Developer has
obtained from the other parties hereto (collectively, the "Loans") and the Equity (as defined
herein) that the Developer will use to fund the acquisition, construction and/or rehabilitation of
the Development:
Description of Funds Amount of Funds
A loan from the MHF A Low and Moderate Income Rental $1,287,245.00
Program, none of which has been disbursed as of the effective date
of this Master Disbursement Agreement.
A loan from the MHFA Flexible Financing for Capital Costs $33,719.00
Rental Program, none of which has been disbursed as of the
effective date of this Master Disbursement Agreement.
A loan from the City, none of which has been disbursed as of the $200,000.00
effective date of this Master Disbursement Agreement.
Funds to be supplied by the Developer, as further described in $1,658,000.00
Section 1 (e) hereof, none of which has been disbursed as of the
effective date of this Master Disbursement Agreement.
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Disbursement Agreement 1 3/26/03
WHEREAS, the MHFA, and the City have entered into agreements with the Developer
and/or the Title Company regarding the disbursement of the proceeds of the Loans and the
Equity; and
WHEREAS, the parties hereto have agreed that the Loans and the Equity are to be
disbursed in a certain order of priority; and
WHEREAS, the parties hereto wish to establish how the Loans and the Equity are to be
disbursed and the order of priority for the disbursement thereof.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. For the purposes of this Master Disbursement Agreement, the
definitions set forth above shall be incorporated into this Section 1 by reference. The following
terms shall have the meanings set out respectively after each such term, and such meaning shall
be equally applicable to both the singular and plural forms of the term defined:
(a) "City Loan" - A loan from the City to the Developer, in an original principal
amount of $200,000.00.
(b) "City Disbursement Agreement" - That certain agreement, whether verbal or
wtitten, between the City, the Developer, and, if applicable, the Title Company, which
provides for the disbursement of the City Loan.
(c) "Equity" - Cash monies in an amount of $1,658,000.00 to be supplied to the
Title Company by the Developer.
(t) "MHFA Disbursement Agreement" - That certain Minnesota Housing Finance
Agency Disbursement Agreement by and between the MHF A and the Title Company of
even date herewith, which provides for the disbursement of the Equity and the proceeds of
the MHF A FFCC Loan and the MHF A LMIR Loan, a copy of which is attached hereto as
Exhibit B.
(g) "MHFA FPCC Loan" - A loan from the Minnesota Housing Finance Agency
through its Plexible Financing for Capital Costs Rental Program to the Developer in an
original principal amount of $33,719.00.
(h) "MJIFA LMIR Loan" -- A loan from the Minnesota I-lousing Finance Agency
through its Low and Moderate Income Rental Program to the Developer in an oIiginal
principal amount of $1,287,245.00.
2. Order of Priority for Disbursement. The Title Company has already been, or will
be from time to time, supplied with the Equity and the proceeds of the City Loan, the MHFA
FFCC Loan, and the MHFA LMIR Loan and shall disburse such funds in the following order of
priority:
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Disbursement Agreement 2 3/26/03
Source of Funds Order of Disbursement
Equity First
City Loan Second
MHFA FFCC Loan Third
MHFA LMIR Loan Fourth
The parties hereto agree that the proceeds of the above-listed sources of funds shall be
disbursed in the order indicated and that none of the proceeds of a source of funds shall be
disbursed until all of the proceeds of funds that are to be disbursed prior thereto have been
disbursed. The parties hereto further direct the Title Company to disburse the proceeds of the
above-listed sources of funds in the order indicated, and the Title Company agrees to comply
with such direction.
3. Disbursement of Individual Loan Proceeds. When the Developer desires the
disbursement of any or all of the proceeds of any of the sources of funds referred to herein, it will
submit a draw request to the appropriate entity that is supplying such funds. If the draw request
meets the provisions contained in the applicable document that the Developer has entered into
with the entity supplying such funds and all other requirements imposed by such document have
been satisfied, then such entity shall approve the draw request and forward it to the MHF A for
authorization for the disbursement of the draw. The MHFA's authorization shall be solely to
confirm that the Development is being constructed in conformance with all applicable plans and
specifications and shall not in any way relate to the Developer's compliance with any provision
imposed by an entity for the disbursement of that entity's funds. Upon authorization by the
MHFA, the MHF A shall forward the draw request to the Title Company for disbursement of the
applicable funds.
The Title Company shall not disburse any monies without first receiving a draw request
approved by both the entity whose monies are to be disbursed and the MHF A, and upon receipt
of an approved draw request, the Title Company shall disburse the applicable monies in
accordance with the provisions contained in the following documents:
Source of Funds Entity Supplying Disbursement Document
to be Disbursed the Funds
Equity Developer MHF A Disbursement Agreement
City Loan City City Disbursement Agreement
MHF A PPCC Funds MHFA MHF A Disbursement Agreement
MHFA LMIR Loan MHFA MHF A Disbursement Agreement
4. Binding Effect. This Master Disbursement Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns.
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Disbursement Agreement 3 3/26/03
5. Execution in Counterparts. This Master Disbursement Agreement may be executed
in any number of counterparts, each of which shall be an original but all of which shall constitute
one instrument.
(THE REMAINING PORTION OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Disbursement Agreement 4 3/26/03
IN WITNESS WHEREOF, the parties hereto have executed this Minnesota Housing
Finance Agency Master Disbursement Agreement on the date indicated immediately below their
signatures.
DEVELOPER:
SHAKOPEE BOUlJDER RIDGE II, LP
a Minnesota limited partnership
By: SAND PROPERTIES, INC.
a Minnesota corporati on
General Partner
By:
Leo M. Sand, General Partner
Executed on the __ day of ,2003.
Boulder Ridge Townhomes Phase II, Shakopee 02- LMIR - 2887
Master Disbursement Agreement 5 3/26/03
MHFA:
MINNESOTA HOUSING FINANCE AGENCY
By:
Robert L. Odman, Assistant Commissioner,
Multifamily
Executed on the _______"__ day of ___"_"_"_____,
2003.
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Disbursement Agreement 6 3/26/03
CITY:
CITY OF SHAKOPEE
a Minnesota municipal corporation
By:
Its:
Executed on the _ day of ,
2003.
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Disbursement Agreement 7 3/26/03
TITLE COMPANY:
COMMONWEALTH LAND TITLE
INSURANCE COMPANY
By:
Its:
Executed on the _ day of ,2003.
This document was drafted by:
Minnesota Housing Finance Agency
400 Sibley Street, Suite 300
St. Paul, MN 55101-1998
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Disbursement Agreement 8 3/26/03
EXHIBIT A
LEGAL DESCRIPTION
Lot 1, Block 1, Boulder Ridge Third Addition, together with a perpetual,non-exc1usive easement
for driveway and ingress and egress purposes as contained in Declaration of Easements and
Maintenance Agreement dated December 22, 1997, filed of record December 24, 1997, as
Document No. 91852.
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Disbursement Agreement 9 3/26/03
EXHIBIT B
MHFA DISBURSEMENT AGREEMENT
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Disbursement Agreement 10 3/26/03
Gregg Voxland
From: Jamie J. Thelen [JJThelen@SandCompanies.com]
Sent: Tuesday, April 01, 2003 4:16 PM
To: gvoxland@ci.shakopee.mn.us
Subject: Boulder Ridge Townhomes
Gregg,
Attached are two documents that the City will have to execute:
1. Master Disbursement Agreement - This basically lays out the order of the sources of funds that are
released.
2. Master Subordination Agreement - This basically states that the City loan is a subordinate to MHF A's 1st
mortgage.
-
Please review and let me know if you have any issues on these. Weare set to close on this project the week of
April 14th so we will need these documents executed in advance of the closing along with the $200,000
transferred to the title company. Please let me know if there is any issues with this. Thanks.
Jamie Thelen, President
Sand Companies, Inc.
366 South Tenth A venue, PO Box 727
Waite Park, Minnesota 56387-0727
Tel (320) 202-3100
Fax (320) 202-3139
www.SandCompanies.com
4/2/03
FOR USE BY FILING OFFICER ONL Y
Minnesota Housing Finance Agency
MASTER SUBORDINATION AGREEMENT
AND
ESTOPPEL CERTIFICATE
THIS AGREEMENT shall have an effective date of the _ day of ,
2003, and is made and entered into by and among Shakopce Boulder Ridge n, LP, a Minnesota
limited partnership (the "Developer"), the Minnesota Housing Finance Agency, a public body
corporate and politic of the State of Minnesota (the "MHFA") and the City of Shakopee, a
Minnesota municipal corporation (the "City").
WITNESSETH:
WHEREAS, the Developer has applied to and obtained certain loans from the other
parties hereto and will use the proceeds of such loans and additional equity to fund the
construction and/or rehabilitation of a multifamily housing development identified as MHFA
Development No. 02-LMIR-2887 (the "Development"), which will be situated on real property
located in the City of Shakopee, County of Scott, State of Minnesota, and legally described in
Exhibit A attached hereto; and
WHEREAS, the following is a listing and description of the loans that the Developer has
obtained from the other parties hereto (collectively, the "Loans"), which will be used to fund the
construction and/or rehabilitation of the Development and the repayment of which will be
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Subordination Agreement I 3/26/03
secured by liens on the Real Property, and a listing of the documents that evidence and secure the
repayment of such loans (collectively, the "Loan Documents"):
Description of Loan Amount of Documents Evidencing and
Loan Securing Repayment
A loan from the MHF A Low and $1,287,245.00 Those documents set forth in
Moderate Income Rental Program. Exhibit B attached hereto.
A loan from the MHF A Flexible $ 33,719.00 Those documents set forth in
Financing for Capital Costs Rental Exhibit C attached hereto.
Program.
A loan from the City. $ 200,000.00 Those documents set forth in
Exhibit D attached hereto.
WHEREAS, it is intended that the Loans, the corresponding Loan Documents, and other
documents referred to herein and the liens created thereby shall have a certain order of priority;
and
WHEREAS, it is further intended that the parties hereto wish to specify how the terms and
conditions contained in the Loan Documents shall be interpreted in the event of a conflict or
inconsistency therein.
NOW, THEREFORE, in consideration of one dollar ($1.00) and other good and
valuable consideration, and in further consideration of the parties hereto making and entering
into the Loans, the parties hereto agree as follows:
1. Definitions. For the purposes of this Agreement, the definitions set forth above
shall be incorporated into this Section 1 by reference. The following terms shall have the
meanings set out respectively after each such term, and such meaning shall be equally applicable
to both the singular and plural forms of the term defined:
(a) "City Loan" - A loan from the City to the Developer in an original principal
amount of $200.000.00.
(b) "City Loan Documents" - Those documents listed in Exhibit D attached
hereto and incorporated herein by reference, which evidence and secure the repayment of
the City Loan.
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Subordination Agreement 2 3/26/03
(c) "MHFA FFee Loan" - A loan from the Minnesota Housing Finance Agency
Flexible Financing for Capital Costs Rental Program to the Developer in an original
principal amount of $33,719.00.
(d) "MHF A Free Loan Documents" - Those documents listed in Exhibit C
attached hereto and incorporated herein by reference, which evidence and secure the
repayment of the MHF A FFee Loan.
(e) "MHFA LMIR Loan" - A loan from the Minnesota Housing Finance Agency
Low and Moderate lncorne Rental Program to the Developer in an original principal
amount of $1,287,245.00.
(0 "MHFA LMIR Loan Documents" - Those documents listed in Exhibit B
attached hereto and incorporated herein by reference, which evidence and secure the
repayment of the MHF A LMIR Loan.
2. Consent to Loans, Liens and Encumbrances. The parties hereto consent and
agree to all of the Loans and further agree that all of the liens ancllor encumbrances created by
the Loan Documents shall be deemed to be permitted encumbrances under their respective Loan
Documents. The parties hereto further agree to execute any and all documents that any party
hereto may reasonably request in order to document that such liens ancllor encumbrances are
permitted encumbrances under their respective Loan Documents.
3. Use of Documents. The parties hereto agree and consent to the use of the Loan
Documents set forth in the exhibits attached hereto in conjunction with the Loan referenced in
each exhibit.
In addition, each party hereto, as to the Loan Documents that correspond to one of its
Loans, does hereby covenant, warrant, consent and agree that (i) the described Loan Documents
are all of the documents that the party has entered into regarding the corresponding Loan, (ii)
there are no documents relating to such Loan other than the described Loan Documents for such
Loan, (iii) it will not enter into any other document for such Loan that would adversely impact
any other party or parties hereto without the prior written consent of such party or parties, (iv)
any existing document or documents that may come into existence in the future to which a party
hereto is or becomes a party or from which a party hereto obtains a benefit that is different from
the benefits that the other parties hereto have received or will receive, and that is not listed in the
Loan Documents set forth herein for such Loan, shall be of no force or effect until approved and
consented to in writing by all of the parties hereto upon which such document has, or will have,
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Subordination Agreement 3 3/26/03
an adverse effect, and upon such written approval, such document(s) shall be automatically
considered to be included in the exhibit hereto setting forth the Loan Documents for such Loan.
The other parties hereto shall execute any document that may reasonably be requested in order to
include such document in such exhibit.
4. Subordination of Loans and Loan Documents. Except as specifically provided
below ~ each party hereto agrees to the following priority for the provisions contained in the Loan
Documents and any and all liens and/or encumbrances created thereby and subordinates its
respective Documents and liens and/or encumbrances created thereby to those Documents and
liens and/or encumbrances that are listed has having a priority over its Documents and liens
and/or encumbrances created thereby:
Documents and Party to the Documents and Order of
Liens and/or Encumbrances Holder of Liens and/or Priority
Created Thereby Encumbrances Created Thereby
MHF A LMIR Loan Documents MHFA First
FFCC Loan Documents MHFA Second
City Loan Documents City Third
The parties hereto acknowledge that the Development is intended to receive the benefits
of Low Income Housing Tax Credits (the "Credits") pursuant to Section 42 of the Internal
Revenue Code ("Section 42") and that it is a condition of the receipt of the Credits that the
Developer file a Declaration of Land Use Restrictive Covenants for Low-Income Housing
Credits (the "Declaration") substantially in the form attached hereto as Exhibit E. The MHFA,
and the City hereby consent to the terms of the Declaration as required by Section 2( c) of the
Declaration and further agree that the Declaration is subordinate to the MHF A LMIR Loan and
MHF A LMIR Loan Documents, the MHF A FFCC Loan and the MHFA FFCC Loan Documents,
the City Loan and the City Loan Documents, except to the extent required by Section 9(d) of the
Declaration (relating to the three-year vacancy control during the extended use period).
5. Interpretation. The parties hereto are entering into and executing this Agreement
in order to establish the subordination and priority of the Documents and any liens and/or
encumbrances created thereby, and, accordingly, such parties hereby agree, understand, and
acknowledge that the enforceability of this Agreement is not, and shall not be, restricted, limited,
or impaired by the fact that not all of the parties hereto are signatories to each or any of the
Documents.
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Subordination Agreement 4 3/26/03
6. Compliance with Rent Limitations. Notwithstanding any provision to the
contrary contained herein, the MHFA shall not authorize or require any rents to be imposed upon
any tenants living in the Development that are inconsistent with any rents imposed by any
provision in any of the Documents.
7. Control by Most Stringent Requirements. Notwithstanding the order of priority
and subordinations granted herein or any provisions to the contrary contained herein, the parties
hereto agree that if there are any inconsistencies contained herein or in the Documents, the most
stringent provision shall control.
8. Absence of Events of Default and Compliance with Closing Requirements.
Each party hereto states, represents, and warranties that as to each of its individual Loans, (i)
such Loans have been duly closed, (ii) there are no Events of Default, or events that with the
passage of time could constitute and Event of Default, currently existing with respect to any of
its Loans, and (iii) all of its Loans are in good standing.
9. Use of Insurance and Condemnation Proceeds. Notwithstanding any provisions to
the contrary contained herein or in any of the Documents, the parties hereto agree that any and all
insurance and/or condemnation proceeds will be used first to repair or reinstate the Development. If
there are any remaining proceeds, or if such amounts are insufficient to repair or reinstate the
Development, or if the Development cannot be repaired or reinstated, then such proceeds shall be
used to payoff the Loans in order of the priority of the Documents specified herein.
10. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which shall constitute one instrument.
(THE REMAINING PORTION OF THIS PAGE IS INTENTION ALL Y LEFT BLANK)
Boulder Ridge Townhomes Phase II, Shakopee 02- LMIR - 2887
Master Subordination Agreement 5 3/26/03
IN WITNESS WHEREOF, the parties hereto have executed this Minnesota Housing
Finance Agency Master Subordination Agreement and Estoppel Certificate on the date indicated
immediately below their signatures.
DEVELOPER:
SHAKOPEE BOlJLDER RIDGE H, liP
a Minnesota limited partnership
By: SAND PROPERTIES. INC.
a Minnesota corporation
General Partner
By:
Its:
By:
Leo M. Sand, General Partner
Executed on the ~ day of ,2003.
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Subordination Agreement 6 3/26/03
ST ATE OF MINNESOTA )
) ss.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me this - day
of ..--- 2003, by ---.".------- ,
of Sand Properties, Inc.. a Minnesota corporation, general
partner of Shakopee Boulder Ridge II, LP, a Minnesota limited partnership, on behalf of the
corporation and the limited partnership
Notary Public
STATE OF MINNESOTA )
) ss.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me this - day
of _______, 2003, by Leo M. Sand, general partner of Shakopee Boulder Ridge II, LP, a
Minnesota limited partnership, on behalf of the limited partnership
Notary Public
Boulder Ridge Townhomes Phase II, Shakopee 02.LMIR.2887
Master Subordination Agreement 7 3/26/03
MHFA:
MINNESOTA HOUSING FINANCE AGENCY
By:
Robert L. Odman, Assistant Commissioner,
Multifamily
Executed on the ________ day of _____ ,
2003.
STATE OF MINNESOTA)
) ss.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me this .---- day of
, 2003, by, Robert L. Odman, Assistant Commissioner, Multifamily of the
Minnesota Housing Finance Agency, on behalf of the Agency.
Notary Public
Boulder Ridge Townhomes Phase Il, Shakopee 02-LMIR-2887
Master Subordination Agreement 8 3/26/03
CITY:
CITY OIi' SHAKOPEE
a Minnesota municipal corporation
By:
Its:
Executed on the - day 2003.
STATE OF MINNESOTA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this _ day of -----------------,
2003, by , the
of the City of Shakopee, a Minnesota municipal
corporation, on behalf of the corporation.
Notary Public
TillS DOCUMENT WAS DRAFTED BY:
Minnesota Housing Finance Agency
400 Sibley Street, Suite 300
St. Paul, MN 55101-1998
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Subordination Agreement 9 3/26/03
Exhibit A
LEGAL DESCRIPTION
Lot 1, Block 1, Boulder Ridge Third Addition, together with a perpetual, non-exclusive easement
for driveway and ingress and egress purposes as contained in Declaration of Easements and
Maintenance Agreement dated December 22, 1997, filed of record December 24, 1997, as
Document No. 91852.
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Subordination Agreement 10 3/26/03
Exhibit B
MHF A LMIR LOAN DOCUMENTS
1. That certain Minnesota Housing Finance Agency Low and Moderate Income Rental
Program Combination Mortgage, Security Agreement, and Fixture Financing Statement
executed and issued by Shakopee Boulder Ridge II, LP, a Minnesota limited partnership, as
Mortgagor, to the Minnesota Housing Finance Agency, as Mortgagee, of even date with the
document to which this exhibit is attached, securing the repayment of a loan from
Mortgagee to Mortgagor in an original principal amount of $1,287,245.00, which document
will be recorded in the Office of the Registrar of Titles in and for the County of Scott, State
of Minnesota.
2. That certain Minnesota Housing Finance Agency Low and Moderate Income Rental
Program Regulatory Agreement, of even date with the document to which this exhibit is
attached, by and between Shakopec Boulder Ridge n, LP, a Minnesota limited partnership,
and the Minnesota Housing Finance Agency, and which will be filed in the Office of the
Registrar of Titles in and for the County of Scott, State of Minnesota.
3. That certain Minnesota Housing Finance Agency Low and Moderate Income Rental
Program Assignment of Rents and Leases, of even date with the document to which this
exhibit is attached, by and Shakopee Boulder Ridge II, LP, a Minnesota limited
partnership, as Assignor, and the Minnesota Housing Finance Agency, as Assignee, which
secures repayment of a mortgage loan in an original principal amount of $1,287,245.00,
and which will be filed in the Office of the Registrar of Titles in and for the County of
Scott, State of Minnesota.
4. The following additional Minnesota Housing Finance Agency Low and Moderate Incorne
Rental Program documents:
a. Mortgage Loan Commitment;
b. Mortgage Certificate of Financial Interest or Family Relationships;
c. Mortgage Note in an original principal amount of $1,287,245.00;
d. Building Loan Agreement;
e. Disbursement Agreement;
f. Master Disbursement Agreement;
g. Rent-Up Escrow Agreement;
h. Working Capital Reserve and Escrow Account Agreement
1. Assignment of Architect's Contract;
J. Assignment of Construction Contract;
Boulder Ridge Townhomes Phase II, Shakopee 02- LMIR - 2887
Master Subordination Agreement 11 3/26/03
k. Supplement to General Conditions of the Agreement between Owner and Contractor;
and
1. UCC-l Financing Statement.
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Subordination Agreement 12 3/26/03
Exhibit C
MHF A FFCC LOAN DOCUMENTS
1. That certain Minnesota Housing Finance Agency Flexible Financing for Capital Costs
Rental Program Loan Repayment Agreement and Mortgage, of even date with the
document to which this exhibit is attached, by and between Shakopee Boulder Ridge II, LP,
a Minnesota limited partnership, as Borrower, and the Minnesota Housing Finance Agency,
as Lender, which secures repayment of a mortgage loan in an original principal amount of
$33,719.00, which will be filed in the office of the Registrar of Titles in and for the County
of Scott, State of Minnesota.
2. The following additional Minnesota Housing Finance Agency Plexible Financing for
Capital Costs Rental Program documents:
a. Request for Notice of Foreclosure.
Boulder Ridge Townhomes Phase II, Shakopee 02- LMIR - 2887
Master Subordination Agreement 13 3/26/03
Exhibit D
CITY LOAN DOCUMENTS
1. That certain InClusionaryl-Iousing Account Mortgage, of even date with the document to
which this exhibit is attached, by and between Shakopee Boulder Ridge II, LP, a
Minnesota limited partnership, as Mortgagor, and the City of Shakopee, as Mortgagee,
which secures repayment of a mortgage loan in an original principal amount of
$200,000.00, which will be filed in the office of the Registrar of Titles in and for the
County of Scott, State of Minnesota.
2. The following additional City documents:
a. Promissory Note in an original principal amount of $200,000.00.
b. Metropolitan Livable Communities Act Inclusionary Housing Account Grant
Agreement, Grant No. SG- _- _, by and between the Metropolitan Council and
the City.
Boulder Ridge Townhomes Phase II, Shakopee 02-LMIR-2887
Master Subordination Agreement 14 3/26/03
Exhibit E
DECLARA TION OF LAND USE RESTRICTIVE COVENANTS
FOR LOW-INCOME HOUSING CREDITS
THIS DECLARATION OF LAND USE RESTRICTIVE COVENANTS (this
"AGREEMENT"), dated as of , by , and its successors and assigns (the
"Owner") is given as a condition precedent to the allocation of low-income housing credits by
the Minnesota Housing Finance Agency, a public body corporate and politic of the State of
Minnesota, Suite 300, 400 Sibley Street, St. Paul, MN 55101 (MHFA) (together with any
successor to its rights, duties and obligations).
WITNESSETH:
WHEREAS, the Owner is or shall be the owner of a unit rental housing project
located on lands in the City of , County of , State of Minnesota, more
particularly described in Exhibit A (legal description) hereto, known as or to be known as
(the "Project"); and
WHEREAS, the MHFA has been designated by the Legislature of the State of Minnesota
as the housing credit agency for the location of the Project for the allocation of low-income
housing credit dollars (the "Credit"); and
WHEREAS, Owner has applied to the MHFA for an allocation of Credit to the Project;
and
WHEREAS, the Owner has represented to the MHFA in Owner's Low-Income Housing
Credit Application (the "Application") that Owner shall lease _% of the units in the Project to
individuals or families whose income is _ % or less of the area median gross income (including
adjustments for family size) as determined in accordance with Section 42 of the Internal Revenue
Code ("Low-Income Tenants").
WHEREAS, the MHFA has determined the Project would support an annual Credit in the
amount of $ ; and
WHEREAS, the Owner has represented to the MHFA in Owner's application that it will
impose additional rent restrictions or will covenant to maintain the Section 42 rent and income
restrictions for additional period of time. (Optional, check if applicable. If not applicable,
indicate N/ A) _
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Master Subordination Agreement 15 3/26/03
WHEREAS, the Code has required as a condition precedent to the allocation of the
Credit that the Owner execute, deliver and record in the official land deed records of the county
in which the Project is located this Agreement in order to create certain covenants running with
the land for the purpose of enforcing the requirements of Section 42 of the Code and the MHFA
Occupancy Restrictions found in Section 5 hereof by regulating and restricting the use and
occupancy and transfer of the Project as set forth herein;
WHEREAS, the Owner, under this Agreement, intends, declares and covenants that the
regulatory and restrictive covenants set forth herein governing the use, occupancy and transfer of
the Project shall be and are covenants running with the Project Land for the term stated herein
and binding upon all subsequent owners of the Project Land for such term, and are not merely
personal covenants of the Owner.
NOW, THEREFORE, in consideration of the promises and covenants hereinafter set
forth, and of other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Owner agrees as follows:
SECTION 1 - DEFINITIONS
All words and phrases defined in Section 42 of the Code and by Treasury, Internal
Revenue Service or Department of Housing and Urban Project regulations pertaining thereto
shall have the same meanings in this Agreement.
SECTION 2 - RECORDING AND FILING; COVENANTS TO RUN WITH THE LAND
(a) Upon execution and delivery by the Owner, the Owner shall cause this Agreement and all
amendments hereto to be recorded and filed with the County Recorder of the county in
which the Project is located, and shall pay all fees and charges incurred in connection
therewith. Upon recording, the Owner shall immediately transmit to the MHF A an
executed original of the recorded Agreement showing the date and document numbers of
record, or a duly certified copy or the executed original. The Owner agrees that the
MHF A will not issue the Internal Revenue Service Form 8609 constituting final
allocation of the Credit unless and until the MHFA has received the recorded executed
original, or a duly certified copy, of the Agreement as recorded.
(b) The Owner intends, declares and covenants, on behalf of itself and all future Owners and
operators of the Project Land during the term of this Agreement, that this Agreement and
the covenants and restrictions set forth in this Agreement regulating and restricting the
use, occupancy and transfer of the Project Land and the Project (i) shall be and are
covenants running with the Project Land, encumbering the Project Land for the term of
Boulder Ridge Townhomes Phase II, Shakopee 02- LMIR - 2887
Master Subordination Agreement 16 3/26/03
this Agreement, binding upon the Owner's successors in title and all subsequent Owners
and Operators of the Project Land, (ii) are not merely personal covenants of the Owner,
and (iii) shall bind the Owner (and the benefits shall inure to the MHFA and any past,
present or prospective tenant of the Project) and its respective successors and assigns
during the term of this Agreement. The Owner hereby agrees that any and all
requirements of the laws of the State of Minnesota to be satisfied in order for the
provisions of this Agreement to constitute deed restrictions and covenants running with
the land shall be deemed to be satisfied in full, and that any requirements of privileges of
estate are intended to be satisfied, or in the alternate, that an equitable servitude has been
created to insure that these restrictions run with the land. For the longer of the period this
Credit is claimed or the term of this Agreement, each and every contract, deed or other
instrument hereafter executed conveying the Project or portion thereof shall expressly
provide that such conveyance is subject to this Agreement, provided, however, the
covenants contained herein shall survive and be effective regardless of whether such
contract, deed or other instrument hereafter executed conveying the Project or portion
thereof provides that such conveyance is subject to this Agreement.
(c) The Owner covenants to obtain the consent of any prior recorded lienholder on the
Project to this Agreement and such consent shall by a condition precedent to the issuance
of Internal Revenue Service Form 8609 constituting final allocation of the Credit.
SECTION 3 _ REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE
OWNER
The Owner hereby represents, covenants and warrants as follows:
(a) The Owner (i) is a duly organized under the laws of , and
is qualified to transact business under the laws of this State, (ii) has the power and
authority to own its properties and assets and to carryon its business as now being
conducted, and (iii) has the full legal right, power and authority to execute and deliver
this Agreement.
(b) The execution and performance of this Agreement by the Owner (i) will not violate or, as
applicable, have not violated any provision of law, rule or regulation, or any order of any
court or other agency or governmental body, and (ii) will not violate or, as applicable,
have not violated any provision of any indenture, agreement, mortgage, mortgage note, or
other instrument to which the Owner is a party or by which it or the Project is bound, and
(iii) will not result in the creation or imposition of any prohibited encumbrance of any
nature.
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Master Subordination Agreement 17 3/26/03
(c) The Owner will, at the time of execution and delivery of this Agreement, have good and
marketable title to the premises constituting the Project free and clear of any lien or
encumbrance (subject to encumbrances created pursuant to this Agreement, any Loan
Documents relating to the Project or other permitted encumbrances).
(d) There is no action, suit or proceeding at law or in equity or by or before any
governmental instrumentality or other agency now pending, or, to the knowledge of the
Owner, threatened against or affecting it, or any of its properties or rights, which, if
adversely determined, would materially impair its right to carryon business substantially
as now conducted (and as now contemplated by this Agreement) or would materially
adversely affect its financial condition.
(e) The Project constitutes or will constitute a qualified low-income building or qualified
low-income project, as applicable, as defined in Section 42 of the Code and applicable
regulations.
(t) Each unit in the Project contains complete facilities for living, sleeping, eating, cooking
and sanitation (unless the Project qualifies as a single-room occupancy project or
transitional housing for the homeless) which are to be used on other than a transient basis.
(g) During the term of this Agreement, all units subject to the Credit shall be leased and
rented or made available to members of the general public who qualify as Low-Income
Tenants (or otherwise qualify for occupancy of the low-income units) under the
applicable election specified in Section 42(g) of the Code.
(h) The Owner agrees to comply fully with the requirements of the Fair Housing Act as it
may from time to time be amended.
(i) The Owner will not during the term of this Agreement refuse to lease a unit to the holder
of a voucher or certificate of eligibility under Section 8 of the United State Housing Act
of 1937 because of the status of the prospective tenant as such a holder.
(j) During the term of this Agreement, the Owner covenants, agrees and warrants that each
low-income unit is and will remain suitable foroccupancy.
(k) Subject to the requirements of Section 42 of the Code and this Agreement, the Owner
may sell, transfer or exchange the entire Project at any time, but the Owner shall notify in
writing and obtain the agreement of any buyer or successor or other person acquiring the
Project or any interest therein that such acquisition is subject to the requirements of this
Agreement and to the requirements of Section 42 of the Code and applicable regulations.
This provision shall not act to waive any other restriction on sale, transfer or exchange of
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Master Subordination Agreement 18 3/26/03
the project or any low-income portion of the Project. The Owner agrees that the MHFA
may void any sale, transfer or exchange of the Project if the buyer or successor or other
person fails to assume in writing the requirements of this Agreement and the
requirements of Section 42 of the Code.
(1) The Owner agrees to notify the MHFA in writing of any sale, transfer or exchange of the
entire Project or any low-income portion of the Project.
(m) The Owner shall not demolish any part of the Project or substantially subtract from any
real or personal property of the Project or permit the use of any residential rental unit for
any purpose other than rental housing during the term of this Agreement unless required
by law.
(n) The Owner represents, warrants and agrees that if the Project, or any part thereof, shall be
damaged or destroyed or shall be condemned or acquired for public use, the Owner will
use its best efforts to repair and restore the Project to substantially the same condition as
existed prior to the event causing such damage or destruction, or to relieve the
condemnation, and thereafter to operate the Project in accordance with the terms of this
Agreement.
(0) The Owner warrants that it has not and will not execute any other agreement with
provisions contradictory to, or in opposition to, the provisions hereof, and that in any
event, the requirements of this Agreement are paramount and controlling as to the rights
and obligations herein set forth and supersede any other requirements in conflict
herewith.
SECTION 4 - INCOME RESTRICTIONS; RENTAL RESTRICTIONS
The Owner represents, warrants and covenants throughout the term of this Agreement
and in order to satisfy the requirements of Section 42 of the Code ("Section 42
Occupancy Restrictions") that:
(a) ( 1)-,- At least 20% or more of the residential units in the Project are both rent-
restricted and occupied by individuals whose income is 50% or less of area
median income.
(2)_ At least 40% or more of the residential units in the Project are both rent-
restricted and occupied by individuals whose income is 60% or less of area
median income.
(Check applicable percentage election)
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Master Subordination Agreement 19 3/26/03
(b) The determination of whether a tenant meets the low-income requirement shall be made
by the Owner at least annually on the basis of the current income of such Low-Income
Tenant.
SECTION 5 - MHF A OCCUPANCY RESTRICTIONS (OPTIONAL)
This Section is intended to make enforceable those extended use or deeper targeting
covenants which the Owner represented to the MHFA in its Application.
The Owner represents, warrants and covenants throughout the term of this Agreement
that:
(Check if applicable)
Applicable Not Applicable
(a) For a period of five years following the placed in service date for
each building, ~ % of the units shall have gross rents
established at a level not greater than 30% of area median
Income.
(b) Throughout the term of this Agreement, _% of the units
shall be rented to tenants with _ % or less of area median
income, adjusted by family size, with gross rents not to exceed
30% of income.
(c) The Owner will extend the Section 42 income and rental
restrictions for 15 years after the close of the compliance period.
(d) Throughout the term of this Agreement, the Project shall provide
family housing that is not restricted to persons 55 years or older
in which at least 75% of the units contain two or more bedrooms
and at least one-third of the 75% contain three or more
bedrooms.
(e) Throughout the term of this Agreement, the Project shall provide
at least 50% of the units for single room occupancy housing with
one bedroom or less rents affordable at 30% of median income.
(f) Throughout the term of the Project shall rent at least _ % units
to persons with mental illness, mental retardation, brain injury,
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Master Subordination Agreement 20 3/26/03
drug dependency, developmental disabilities, or physical
disabilities and shall obtain a commitment from a public or
private social services agency to provide services consistent with
applicable state licensing requirements for the services.
Regardless of any provision in Section 6 of this Agreement to the contrary, the MHFA
Occupancy Restrictions provided by this Section shall remain in place for a period
described above except in the case of foreclosure or deed in lieu of foreclosure.
SECTION 6 - TERM OF AGREEMENT
(a) Except as hereinafter provided, this Agreement and the Section 42 Occupancy
Restrictions specified herein shall commence with the first day in the Project period on
which any building which is part of the Project is placed in service and shall end on the
date which is 15 years after the close of the compliance period.
(b) Notwithstanding subsection (a) above, the Owner shall comply with the requirement of
Section 42 relating to the extended use period for an additional 15 years, provided,
however, the extended use period for any building which is part of this Project shall
terminate:
(1) On the date the building is acquired by foreclosure or instrument in lieu of
foreclosure; or
(2) On the last day of the compliance period if the Owner has properly requested that
the MHFA assist in procuring a qualified contract for the acquisition of the low-
income portion of any building which is a part of the Project and the MHF A is
unable to present a qualified contract.
(c) Notwithstanding subsection (b) above, the Section 42 rent requirements shall continue for
a period of three years following the termination of the extended use requirement
pursuant to. the procedures specified in subsection (b) above. During such three year
period, the Owner shall not evict or terminate the tenancy of an existing tenant of any
low-income unit other than for good cause and shall not increase the gross rent above the
maximum allowed under the Code with respect to such low-income unit.
(d) If the Owner has agreed to optional MHFA Occupancy Restrictions as reflected in
Section 5 of this Agreement, this Agreement shall not terminate until the time period for
compliance with such MHF A Occupancy Restrictions has expired.
SECTION 7 - ENFORCEMENT OF MHFA OCCUPANCY RESTRICTIONS
Boulder Ridge Townhomes Phase II, Shakopee 02- LMIR - 2887
Master Subordination Agreement 21 3/26/03
(a) The Owner shall permit, during normal business hours and upon reasonable notice, any
duly authorized representative of the MHFA, to inspect any books and records of the
Owner regarding the Project with respect to the incomes of Low-Income Tenants which
pertain to compliance with the MHF A Occupancy Restrictions specified in this
Agreement.
(b) The Owner shall submit anyother information, documents or certifications requested by
the MHFA which the MHFA shall deem reasonably necessary to substantiate the
Owner's continuing compliance with the provisions of the MHF A Occupancy
Restrictions specified in this Agreement.
SECTION 8 - ENFORCEMENT OF SECTION 42 OCCUPANCY RESTRICTIONS
(a) The Owner covenants that it will not knowingly. take or permit any action that would
result in a violation of the requirements of Section 42 of the Code and applicable
regulations of this Agreement. Moreover, Owner covenants to take any lawful action
(including amendment of this Agreement as may be necessary, in the opinion of the
MHFA) to comply fully with the Code and with all applicable rules, rulings, policies,
procedures, regulations or other official statements promulgated or proposed by the
United States Department of the Treasury, or the Internal Revenue Service, or the
Department of Housing and Urban Project from time to time pertaining to Owner's
obligations under Section 42 of the Code and affecting the Project.
(b) The Owner acknowledges that the primary purpose for requiring compliance by the
Owner with the restrictions provided in this Agreement is to assure compliance of the
Project and the Owner with Section 42 of the Code and the applicable regulations, AND
BY REASON THEREOF, THE OWNER IN CONSIDERATION FOR RECEIVING
LOW -INCOME HOUSING CREDITS FOR THIS PROJECT HEREBY AGREES AND
CONSENTS THAT THE MHFA AND- ANY INDIVIDUAL WHO MEETS THE
INCOME LIMITATION APPLICABLE UNDER SECTION 42 (WHETHER
PROSPECTIVE, PRESENT OR FORMER OCCUPANT) SHALL BE ENTITLED, FOR
ANY BREACH OF THE PROVISIONS HEREOF, AND IN ADDITION TO ALL
OTHER REMEDIES PROVIDED BY LAW OR IN EQUITY, TO ENFORCE
SPECIFIC PERFORMANCE BY THE OWNER OF ITS OBLIGATIONS UNDER
THIS AGREEMENT IN A STATE COURT OF COMPETENT JURISDICTION. The
Owner hereby further specifically acknowledges that the beneficiaries of the Owner's
obligations hereunder cannot be adequately compensated by monetary damages in the
event of any default hereunder.
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Master Subordination Agreement 22 3/26/03
(c) The Owner hereby agrees that the representations and covenants set forth herein may be
relied upon by the MHF A and all persons interested in Project compliance under Section
42 of the Code and the applicable regulations.
(d) The project Owner acknowledges that the MHFA is required, pursuant to Section
42(m)(1)(iii) of the Code, (i) to monitor the Project Owners and the Project's compliance
with the requirements of Section 42 of the Code, and (ii) to notify the Service of any
noncompliance which if found. In addition, Project Owner acknowledges that MHFA
shall monitor the Project Owner's compliance with the MHFA Occupancy Restrictions, if
any, set forth in Section 5 hereof.
SECTION 9 - MISCELLANEOUS
(a) Severability. The invalidity of any clause, part or provision of this Agreement shall not
affect the validity of the remaining portions thereof.
(b) Notices. All notices to be given pursuant to this Agreement shall be in writing and shall
be deemed given when mailed by certified or registered mail, return receipt requested, to
the parties hereto at the addresses set forth below, or to such other place as a party may
from time to time designate in writing.
To the MHF A: ATTENTION: Low-Income Housing Credit Program
Minnesota Housing Finance Agency
400 Sibley Street, Suite 300
St. Paul, MN 55101
To the Owner: ATTENTION:
The MHFA, and the Owner, may, by notice given hereunder, designate any further or
different addresses to which subsequent notices, certificates or other communications
shall be sent.
(c) Amendment. Notwithstanding anything to the contrary contained herein, this Agreement
may be amended by a written agreement between the MHFA and the Owner, which
agreement shall be effective upon execution thereof by the MHF A and the Owner and the
recording of the amendment with the County Recorder of the County in which the Project
is located. The Owner agrees that it will take all actions necessary to effect amendment
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Master Subordination Agreement 23 3/26/03
of this Agreement as may be necessary to comply with the Code any and all applicable
rules, regulations, policies, procedures, rulings or other official statements pertaining to
the Credit.
(d) Subordination of Agreement. This Agreement and the restrictions hereunder are
subordinate to the loan and loan documents, if any, on the Project except insofar as
Section 42 requires otherwise (relating to the three-year vacancy control during the
extended use period).
(e) Governing Law. This Agreement shall be governed by the laws of the State of Minnesota
and, where applicable, the laws of the United States of America.
(f) Survival of Obligations. The obligations of the Owner as set forth herein and in the
Application shall survive the allocation of the Credit and shall not be deemed to terminate
or merge with the issuing of the allocation.
IN WITNESS WHEREOF, the Owner has caused this Agreement to be signed by its duly
authorized representatives, as of the day and year first written above.
OWNER
By:
Name:
Title:
ACCEPTED:
MINNESOTA HOUSING FINANCE
AGENCY
By:
Its:
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Master Subordination Agreement 24 3/26/03
STATE OF MINNESOTA )
) ss
COUNTY OF )
The foregoing instrument was acknowledged before me this _ day of
, 20_ by ,
of , a
, on behalf of the
Notary Public
STATE OF MINNESOTA )
) ss
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me this _ day of
, 20_ by ,
of the Minnesota Housing Finance Agency, a public
body corporate and politic of the State of Minnesota, on behalf of the agency.
Notary Public
This document drafted by:
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Master Subordination Agreement 25 3/26/03