03-333Council File # ��-3�_
Resolution #
Green Sheet # a� a. ��.1
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Presented By
Referred To
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Commit�ee: Date
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RESOLUTION AUTHORIZING SECOND AMENDMENT TO CONTRACT FOR REDEVELOPMENT
BE'TWEEN CENTEX Mi)L1'I-FANIII.Y UPPER LANDING, LLC, THE CITY OF SAINT PAUL
("CITY") AND HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SA1NT PAUL,
MINNESOTA ("HRA")
WHEREAS, the City of Saint Paul, Minnesota (the "City"), the Housing and Redevelopment Authority
of the City of Saint Paul, Minnesota (the "HRA") and Centex Multi-Family Communities, L.P. ("Centex
Communiries") entered into that certain Contract for Redevelopment effective May 31, 2001 (as amended by a
First Amendment to Contract for Redevelopment dated as of May 31, 2002, the "Redevelopment AgreemenY');
and
WFIEREAS, Centex Communitie's has since assigned its interest in the Redevelopment Contract to Centex
Multi-Family Upper Landing, LLC ("Centex"); and
WHEREAS, the parties now wish to further amend the Redevelopment Agreement far the purpose of
facilitating assignment by Centex to Shelter Corparation of certain of Centex's obligations under the
Redevelopment Agreement related to the conshuction of low income rental housing units and adding Shelter
Corporation and Chestnut Housing, L.P. as parties to the Redevelopment Agreement;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Saint Paul, Minnesota as
fo110wS:
1. The City Council hereby approves amendment to the terms of the Redevelopment Agreement
pursuant to a Second Amendment to Contract for Redevelopment (the "Second AmendmenY') in substantially
the form of that attached as E�ibit A, as may be modified with the consent of the Director, Office of Financial
Services.
2. The City Councii hereby authorizes the Director, Office of Financial Services to negotiate and
execute on behalf of the City the final form the Second Amendment with such modifications of or additions as
the Director shall deem proper.
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03 -333
Requested by Department of:
Plannin & Economic D ve m nt
By:
Approved by Financ Services
BY: " __'�)/r"..TT`EE/l
V �
Form Approved by City Attorney
Adoption
B}
Approved '.
B
vz
Adopted by Council: Date �� '\._�_,gno 3
DEPARI'MENT/OFFICE/COUNCII,: DATE INITTATED GREEN SHEET NO.: ZOZ172 �r73.
PED March 18, 2003 03
CONTACT PERSON & PHONE: � INITTAL�DA'C� INt1 � DAY , E
Allen Cazlson, 266-6616 2 DEPARTMENT DIlL � n d-,/ �� ��
_ ���=
MUSTBEONCOUNCII,AGENDA BY(DATE) �IGN _ ,/fStT}{ c ���
NUMBER 3 CRY ATTORN£Y i�j�f} v� u _ _ COUNCII, Research
FOR
A n12 2003 0� G a ru�.niac�u, s�v nm. _�axciai, s�viaccrG
P
5 MAYOR (OR ASST.) 1 'I'EAM ygApER
TOTAL # OF SIGNATURE PAGES _1_(CLIP ALL LOCATIONS FOR SIGNATURE)
ACTION REQiJESTED: Please sign the attached proposed resolution "Authorizing a Second Amendment to the
Contract for Redevelopment between Centex Multi-Family Upper Landing, LLC, the City of Saint Paul and the
Housing and Redevelopment Authoriry of the City of Saint Paul. (This same item will be before the HRA Board of
Commissioners on March 26, 2003)
� RECOMbiENDA1TONS: Approve (A) or Reject �) PERSONAI, SERVICE CONTRACI'S MUST ANSWER 1'HE FOLLOWING
QUESTIONS:
PLANNING COMbIISSION I. Has this pexson/fimi ever worked under a contract for this department?
CIB COMbIIT"1'EE Yes No
CIVII. SERVICE CAMbIISSION 2. Has this person/firm ever been a city employee?
Yes No
3. Does this person/fi�m possess a skitl not noanally possessed by any cunent ciTy employee?
Yes No
Explain alI yes answers on separate sheet aud attach to green sheet
, INI'i7ATING PROBLEM, ISSOE, OPPORTUNTfY (Who, What, When, Where, wrty):Centex is requesting a release from its obligarion and Shelter
Corporation is willing to assume the obligarion to construct the required affordable rernal housing for the Upper Landing site. Pursuant to
the Contract for Redevelopment, Centex is required to construct at minimum 78 units of rental housing with rents and incomes restricted to
households at or below 50% of the azea median income. Shelter Corpora6on is entering into an ageement with Centex to develop and
own the affordable housing development for the Upper Landing. Centex will be contributing to Shelter Corp. $1M towards the cost to
develop the affordable housing. In considera6on of its release, which must be approved by the City and HRA, Centex is willing to
increase its financial commihnent for the development of Cheshmt Plaza from $1.2M to $ I.SM and allow the City to take over the
construcrion of the Plaza.
, nuvnNracES � nrrxOVEn: 1) Holding Cernex responsible for compliance of the affordable housing for the long term is not legally
' practical and Centex does not have eacperience in developing or managing lower income housing; 2) Shelter Corporation is locally owned,
has extensive eacperience in developing and managing affordable housing; 3) If something does go wrong, it would be easier to deal with
Shelter Corporation; 4) the City's financial oprions aze improved because the Ciry would have access to the $1M if Shelter does not
perform (this is in addirion to the $2.25M the fII2A has access to from bonds that were issued; 4) The Ciry wili have $300,000 more funds
auailable for the Chesmut Plaza plus it is in our best interest to control the construcfion of Chesmut Plaza.
�
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DISADVAN'1'AGESIFAPPROVED: w �
\N`
;? S� ����
� . .
DYSADVANTAGES IF NOT APPROVED:
The Ciry would have to be dependent upon Centex to develop and manage the proposed affordable housing.
The City will have less funds available to construct Chesmut Plaza.
TOTAL AMOIINT OF TRANSACiTON: N/A COSTJREVENUE BUDGETED: N/A
FONDING SOURCE: ACTNII'y MJMBER: I2!-rr it.���
Fuv�vvc�u, sr�o�nTioN: �YrLAUV� �I4R 2 G 20D3
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K \Gltcevsheet form.wpd
03•���
Exhibit A
SECOND AMENDMENT TO CONTRACT FOR REDEVELOPMENT
(Assignment and Assumption — Affordable Housing)
UPPER LANDING PROJECT
Dated:
by and among
2003
HOUSING AND REDEVELOPMENT AUTHORITY
OF THE CITY OF SAINT PAUL, MINNESOTA,
CITY OF SAINT PAUL, MINNESOTA,
CENTEX MULTI-FAMILY UPPER LANDING, LLC,
CHESTNUT HOUSING, L.P.,
and
SHELTER CORPORATION
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03 -333
SECOND AMENDMENT TO CONTRACT FOR REDEVELOPMENT
(Assignment and Assumption — Affordable Housing)
THIS SECOND AMENDMENT TO CONTRACT FOR REDEVELOPMENT
(Assignment and Assumption —Affordable Housing) ("AmendmenY') is made and entered
into as of the day of , 2003 by and among: the Housing and
Redevelopment Authority of the City of Saint Paul, Minnesota, a public body corporate and
politic (the "HRA"); the City of Saint Paul, Minnesota (the "Cit�'); Centex Multi-Family Upper
Landing, LLC, a Delaware limited liability company ("Centex Upper Landing"), as
successor-in-interest to Centex Multi-Family Communities, L.P., a Delaware limited
partnership ("Centex Communities' ; Centex Upper Landing and Centex Communities are
referred to collectively as "Centex"); Chestnut Housing, L.P., a Minnesota limited
partnership ("ChestnuY'); and Shelter Corporation, a Minnesota corporation ("Shelte�").
RECITALS
A. Centex Communities, the HRA and the City entered into that certain Contract
for Redevelopment dated effective as of May 31, 2001 (the "Original ContracY') relating to
the redevelopment of the "Upper Landing" (herein, the "Upper Landing", or the "Project
Area" [as defined in the Original Contract]) a portion of the HRA's Rivertront Renaissance
Redevelopment Tax Increment District and relating to certain tax increment financing
provided by the HRA in connection therewith. The Original Contract was amended by that
certain First Amendment to Contract for Redevelopment dated effective May 31, 2002 (the
"FirstAmendmenY'), entered into among Centex Communities, the HRA and the City. The
Original Contract, as amended by the First Amendment, is referred to as the "ContracY'.
B. On or aboutApril 26, 2002, Centex Communities and Centex Upper Landing
entered into an Assignment and Assumption Agreement, whereby Centex Communities
assigned to Centex Upper Landing, and Centex Upper Landing assumed, all of Centex
Communities' rights and interests under the Contract.
C. Centexformed Chestnut Housing, L.P. ("Chestnut") as the entity intended to
fulfill Centex Communities' obligations under the Contract to develop and construct low
income rental housing units (the "Affordable Housing") on a portion of the Project Area.
D. Centex Upper Landing has conveyed title to the land on which the low-
income rental housing project will be located (the "Land") to Chestnut by a Quitclaim Deed
dated as of October 15, 2002, which deed was been recorded on November 14, 2002 in
the office of the Ramsey County Registrar of Titles as Document No. 1714364.
E. Centex Multi-Family Investments, L.P. ("Centex Investments") and Shelter
have entered into a Purchase and Sale Agreement dated , 2003 (the
"Block 7 Sale AgreemenY'), pursuant to which Centex Investments will transfer to Shelter
(i) a 99% limited partnership interest (the "Partnership Interest") in Chestnut, and (ii) a
100% membership interest (the "Membership InteresY') in Centex Multi-Family General
Partner II, LLC, a Delaware limited liability company (the "General Partner"), which owns
a 1% general partnership interest in Chestnut. The date on which such transfers of the
ownership interest in Chestnut occurs is referred to herein as the "Transfer Date".
F. As part of the Block 7 Sale Agreement, Centex wishes to assign to Chestnut
(with Shelter as the owner of Chestnut), and Chestnut (and thus Shelter, as the owner of
Chestnut) is willing to assume, all of the rights and obligations of Centex with respect to
development of the Affordable Housing. The HRA and the City are willing to acknowledge
and consent to such assignment and assumption and to the release of Centex from all of
Centex\Second Amendment to ConVact
03 -3�3
its obligations under the Contract with respect to the Affordable Housing.
G. In addition, Centex and the City and HRA wish to agree on certain other
changes to the Contract.
NOW, THEREFORE, in consideration of the mutual promises and agreements
made herein, and the transfer of certain funds as provided below and in the Block 7 Sale
Agreement described below, the receipt and sufficiency of which consideration is hereby
mutually acknowledged, the parties do hereby agree as follows:
Section 1. Definitions. Terms capitalized but nototherwise defined herein shall
have the meanings assigned to those terms in the Contract.
Section 2. Assignment. Centex hereby assigns to Chestnut, and Chestnut
hereby assumes, certain rights and obligations of Centex with respect to the Affordable
Housing arising under the Contract, including specifically Section 5.10 (and related
provisions) of the Contract and Sections 11 and 12 of the First Amendment. Specifically
(but without limitation), Centex assigns to Chestnut, and Chestnut hereby assumes, the
following rights and obligations:
A. The obligation to build the residential rental housing units, a portion
of which are to be occupied by "low-income tenants" as defined in the Contract,
subject to all of the income limitation and rent restriction provisions thereof as
required by Section 5.10 of the Contract as amended hereby;
B. The obligation to enter into the HRA Regulatory Agreement for a term
of 30 years as described in the Contract;
C. The right and obligation to enter into a Housing Assistance Payment
Contract with respect to Section 8 units in the Affordable Housing;
D. The obligation to cause the Affordable Housing to be built to the
exteriorfinish and the interior improvement standards specified in the Contract; and
E. The obligation to commence construction of the Affordable Housing
not later than December 31, 2003, as required by Section 10 of the First
Amendment.
Section 3. Assignee's Ri�hts. In consideration of ChestnuYs agreement to
undertake the obligations of Centex with respect to the Affordable Housing, Chestnut shall
receive:
A. $1,000,000 deposited in escrow by Centex to be used and applied to
pay or reimburse for "hard costs" of construction of the Affordable Housing
according to the terms and conditions of the construction lending arrangement
entered into by Chestnut to finance construction of the Affordable Housing. The
$1,000,000 shall be deposited in an escrow held by a title company pursuant to an
escrow and disbursing agreement acceptable to Centex, Shelter, the HRA and the
construction lender;
B. All rights of the "Partnership" under and as defined in the Indenture of
Trust dated as of April 1, 2002 (and documents and agreements related thereto)
pursuant to which The Ramsey County Housing & Redevelopment Authority,
Minnesota, as issuer, issued bonds to finance the Affordable Housing;
Centex\Second Amendment to Contract
01-�3�
C. The land on which the Affordable Housing is to be located, being the
real property legally described on Exhibit A hereto ("Block 7");
D. All improvements currently existing on Block 7, including all
infrastructure;
E. All rights under previously obtained land use approvals including
zoning approvals, variances and permits relating to the construction of Affordable
Housing on Block 7; and
F. All rights to which the owner of Block 7 is entitled under any master
association or other documents governing the Upper Landing.
It is understood that the $1,000,000 deposited in escrow as provided in Section 3.A.,
above, is neither a gift to Chestnut or Shelter, but is instead tax increment financial
assistance to be repaid to Centex by ad valorem property taxes to be paid with respect to
property in the Upper Landing "Project Area" while the tax increment financing district in
which Block 7 is located continues to exist. It is further agreed and understood that if title
to Block 7 reverts to the HRA as provided in Section 12 of the First Amendment, the
escrow described in 3.A., above shall continue to exist and the HRA or its designee shall
have the right to withdraw funds therefrom to pay the cost of the Affordable Housing.
Section4. AcknowledgmentbvShelter. Shelter hereby expressly
acknowledges the assignment and assumption of rights and obligations relating to the
Affordable Housing to Chestnut, as set forth above. Shelter hereby covenants and agrees
that, as the owner of Chestnut, it will be responsible for the performance of such
obligations by Chestnut as if Shelter had taken a direct assignment and assumption of
such rights and obligations. Shelter will not, however, be responsible for any obligations
not expressly assigned to Chestnut.
Section 5. Reserved RiQhts. Centex expressly reserves the following rights,
and Shelter and Chestnut acknowledge that such rights are not transferred or assigned
pursuant to this Amendment:
A. All rights of Centex under the Contract and the Indentures of Trust
pursuant to which the HRA has issued its Tax Increment Revenue Bonds (Upper
Landing Project) to draw Tax Increment Bond proceeds to pay or reimburse for
various expenditures; and
B. All rights of Centex under the Contract not expressly assigned under
this Amendment.
Section 6. HRA/CitvAcknowledgement. The HRAand the City each hereby
acknowledge and agree to the assignment and assumption provided for in this
Amendment. The HRA and the City specifically release and discharge Centex (and its
affiliated parties) from any and all obligations arising under the Contract to develop,
construct or operate the Affordable Housing at Upper Landing. The HRA and the City
agree that they shall look solely to Shelter and Chestnut to fulfill the obligations so
assumed and shall not seek to exercise remedies under the Contract against Centex in the
event Shelter and Chestnut fail to perform such obligations. The HRA and the City agree
that a failure by Shelter or Chestnut to pertorm the obligations they are assuming with
respect to the Affordable Housing will not in any way constitute a default under the
Contract as against Centex or any other parties (otherthan Shelter and Chestnut). Shelter
and Chestnut hereby acknowledge and agree that if they should fail to perform the
obligations assumed, the remedies specified in or allowed by the Contract may be
Centex\Second Amendment [o Contract
03 -333
exercised against them by the HRA and City. Notwithstanding the foregoing, the City and
HRA will continue to have the right to withhold $2,250,000 of Bond proceeds as provided
in Section 11 of the First Amendment ifi construction ofi the Affordable Housing is not
commenced in or timely basis; provided that if such failure to commence construction of
the Affordable Housing arises from the failure or refusal to perform by Shelter (or any
affiliate of Shelter), then the HRA and City shall not permit Shelter (or any a�liate) to
participate directly or indirectly in the development, ownership or operation of the
Affordable Housing.
Section 7. Amendment to Contract Section 10.11
A. Section 10.11 of the Contract is hereby amended in its entirety
to read as follows:
10.11) Termination. Either the HRA or Centex (as the case may be) may
terminate this Agreement upon written notice to the other parties if
(A} the HRA is in default under the terms of this Agreement, or (B)
either the City Council or the HRA Board of Commissioners fails to
approve the TIF District, the TIF Plan for the project Area, the
issuance of the Bonds, the Bridge Loan or execution of the Tax
Increment Note by the HRA; or (C) Centex shall fail to obtain all
approvals and permits including without limitation alf zoning
approvals required and necessary to permit Centex or its
successors and assigns to construct at the Project Area at least
579 units of residential housing averaging not less than 1140 net
square feet in size (such average to apply to the entire Project
Area, not to individual buildings or to Improvements on any one
block) and at least 23,000 square feet of commerciallretail space
(or such other or different square footage as the City and HRA shall
approve and for which one or more building permits are issued). If
such a termination occurs, the HRA shall promptly reimburse
Centex's unreimbursed costs (including, but not limited to: all HRA
Improvement Costs; and all Eligibie Public Expenses to the extent
permitted by law) advanced or expended by Centex in developing
the Project Area; and all actual expenditures paid by Centex to
third-parties as demonstrated by Centex's accounting records.
B. The last sentence of Recital 5 of the Original Contract is
hereby deleted.
A. The City and HRA will manage the work of remediation, soils
correction, floodplain elevation and development on the site of
the Chestnut Plaza.
B. Centexshallpay$1,500,OOOtowardthecostofChestnutPlaza
and the HRA or the City shall pay (or cause to be paid} the
remainder of the cost thereof. The $1,500,000 provided by
Centex shall be deemed an Eligible Public Expense, to the
extent permitted under TIF Law, and shall be reimbursed as
Centex\Second Amendment to Contract
5.13) Chestnut Plaza.
0 3 -333
set forth in Article IV.
C. Centex shal! fulfill its obligation under C., above, by causing
$1,436,238 of Bond proceeds to be segregated in a
subaccount within a"Project Fund" for a series of Bonds (the
specific series to be determined by Centex), and by giving
irrevocable instructions to the applicable Trustee to the effect
that the funds in the subaccount are to be withdrawn by the
HRA to pay or reimburse for Chestnut Plaza expenditures, and
shall not be disbursed for any other purpose untii and unless
released by the HRA. All disbursements from the segregated
account shall otherwise be subject to the requirements of the
applicable lndenture ofTrustexceptonlythatthe disbursement
request will be submitted by the HRA rather than Centex.
D. Centex shall provide to the HRA:
(i) Copies of all reports, studies, designs, feasibility
reports, market analysis and other materials in Centex's
possession relating to Chestnut Plaza; and
(ii) a list or schedule of all expenses incurred by Centex
directly related to Chestnut Plaza.
Section 9. Severabilitv. If any provision of this Amendment shall be held invalid
or unenforceable by a court of competent jurisdiction, all remaining provisions of this
Amendment shall continue in full force and efFect.
Section10. Counterparts. ThisAmendmentmaybeexecutedinoneormore
counterparts, each of which shall be deemed an original instrument.
Section 11. Defaults / Remedies. If a default should occur hereunder, the
remedies provided for in the Contract (as modified by Section 6 hereofl shall be available
to the HRA and the City.
Section 12. Notices and Demands. Section 10.6 of the Contract is hereby deleted
in its entirety and repfaced with the foliowing:
10.6) Notices and Demands. Except as otherwise expressly provided in
this Agreement, a notice, demand, or other communication under this
Agreement by any party to the other shall be sufficiently given or
delivered if it is dispatched by overnight express courier, registered or
certified mail, postage prepaid, return receipt requested, or delivered
personally, and
in the case of Centex, is addressed to or delivered personally to Attn:
Vice President — Multi-Family and to Attn: General Counsel,
both at Centex Multi-Family Communities, P.O. Box 199000,
Dallas, Texas 75219-9000, with a copy to Susan Steinwall at
Fredrikson & Byron, P.A., 4�00 Pillsbury Genter, 20� South
Sixth Street, Minneapolis, Minnesota 55402.
in the case of the HRA, is addressed to or delivered personally to the
HRA, ATTN: Executive Director, at 1400 City Hall Annex, 25
West Fourth Street, Saint Paul, Minnesota 55102; with a copy
Ceutex\Secoud Amendment to ContYact
03 -333
to the City Attorney, 400 City Hail & Court House, 15 West
Kellogg Boulevard, Saint Paul, Minnesota 55102 and Leonard,
Street and Deinard, 500 Lawson Commons, 380 St. Peter
Street, St. Paul, Minnesota 55102;
in the case of the City, is addressed to or delivered personally to the
City, ATTN: Director of Planning and Economic Development,
at 1400 C+ty Hal! Annex, 25 West Fourth Street, Saint Paul,
Minnesota 55102, with a copy to the City Attorney, 400 City
Hall & Court House, 15 West Kellogg Boulevard, Saint Paul,
Minnesota 55102 and Leonard, Street and Deinard, 500
Lawson Commons, 380 St. Peter Street, St. Paul, Minnesota
55102; and.
D. in the case of Shelter or Chestnut (but notice need only be
given if the matter addressed in the notice directly affects
Block 7 or the Affordable Housing)„ is addressed to or
delivered personally to: Shelter Corporation, 900 Second
Avenue South, Suite 880, Minneapolis, MN 55402, Attn: Jay
Jensen.
or at such other address with respect to either such party as that party
may, from time to time, designate in writing and forward to the other
as provided in this Article.
Centex\Second Amendmen[ to Contract
o� -333
l(V WITNESS WHEREOF, the parties have caused this Amendmentto be executed
by their duly authorized officers as of the day and year first above written.
CENTEX MULTI-FAMILY UPPER LANDING, LLC
its
Zsosssa�� S-1
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SHELTER CORPORATION
by
its
CHESTNUT HOUS{NG. L.P.
by Centex Multi-Family General Partner II, LLC
its genera{ partner
by
its
2305858v] S'_Z
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CITY OF SAINT PAUL
Mayor
Approved as to Form:
Director, Office of Financial Services
Assistant City Attomey
Director, Department of Planning and Economic Development
HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAINT PAUL,
MINNESOTA
Chair or Commissioner
Executive Director
Director, Office of Financia{ Services
Approved as to form:
Assistant City Attorney
zsossss�i S-3