HomeMy WebLinkAbout26-034 - ADMIN Resolution - City Council - 2026/03/02
Resolution No. 26-034
Approving a collateral assignment and subordination of contract for
private development and TIF note, and subordination of city AHTF
note and city AHTF mortgage
Be it resolved by the city council (the “city council”) of the City of St. Louis Park,
Minnesota (the “city”) as follows:
Section 1. Recitals; authorization.
1.01. The city, the St. Louis Park Economic Development Authority (the “authority”),
and Terasa, LLC, a Delaware limited liability company (the “developer”) entered into a contract
for private development, dated July 24, 2025 (the “development agreement”), pursuant to
which the developer agreed to construct a 220,580 to 245,099 square foot building including
approximately 222 units of multifamily rental housing and 18,601 to 20,668 square feet of retail
space (the “minimum improvements”).
1.02. To make the minimum improvements financially feasible, the authority and the
city agreed to reimburse the developer for a portion of public development costs (defined and
described in the in the development agreement). The authority agreed to issue to the
developer a taxable tax increment revenue note (Terasa apartments project) (the “TIF note”) in
the maximum principal amount of $5,515,000. The city agreed to make a loan from its
affordable housing trust fund (the “AHTF loan”) in an amount equal to the lesser of $1,000,000
or the amount of public development costs actually incurred less the amount of the TIF note to
the developer. The developer’s obligation to repay the AHTF loan is secured by a combination
mortgage, security agreement, and fixture financing statement (the “AHTF mortgage”) by the
developer in favor of the city, as evidenced by a promissory note (the “AHTF note”) by the
developer in favor of the city.
1.03. First International Bank & Trust, a North Dakota banking corporation (the
“construction lender”), has agreed to provide a construction loan (the “construction loan”) to
the developer in the approximate principal amount of $63,750,000. As a condition to providing
the construction loan, the construction lender requires that the developer assign certain rights
under the development agreement and the TIF note to the construction lender, that certain
rights of the authority and the city under the development agreement be subordinated to the
rights of the construction lender under the loan documents evidencing and securing the
construction loan (the “construction loan documents”), and that certain rights of the city under
the AHTF mortgage and the AHTF note (together, the “AHTF loan documents”) be subordinated
to the rights of the construction lender under the construction loan documents.
1.04. There has been presented to the city council a form of collateral assignment and
subordination of contract for private development and TIF note, and subordination of city AHTF
note and city AHTF mortgage (the “collateral assignment and subordination agreement”)
between the authority, the city, the developer, and the construction lender pursuant to which
the developer will assign certain rights under the development agreement and the TIF note to
the construction lender, the authority and the city will subordinate certain of their rights under
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the development agreement to the rights of the construction lender under the construction
loan documents, and the city will subordinate certain of its rights under the AHTF loan
documents to the rights of the construction lender under the construction loan documents.
Section 2. Approval of documents.
2.01. The city council approves the collateral assignment and subordination
agreement in substantially the form presented to the city council, together with any related
documents necessary in connection therewith, including without limitation all other
documents, exhibits, certifications, or consents referenced in or attached to the collateral
assignment and subordination agreement (the “documents”).
2.02. The city council hereby authorizes the mayor and city manager, in their
discretion and at such time, if any, as they may deem appropriate, to execute the documents
on behalf of the city, and to carry out, on behalf of the city, the city’s obligations thereunder
when all conditions precedent thereto have been satisfied. The documents shall be in
substantially the form on file with the city and the approval hereby given to the documents
includes approval of such additional details therein as may be necessary and appropriate and
such modifications thereof, deletions therefrom and additions thereto as may be necessary and
appropriate and approved by legal counsel to the city and by the officers authorized herein to
execute said documents prior to their execution; and said officers are hereby authorized to
approve said changes on behalf of the city. The execution of any instrument by the appropriate
officers of the city herein authorized shall be conclusive evidence of the approval of such
document in accordance with the terms hereof. This resolution shall not constitute an offer
and the documents shall not be effective until the date of execution thereof as provided herein.
2.03. In the event of absence or disability of the officers, any of the documents
authorized by this resolution to be executed may be executed without further act or
authorization of the city council by any duly designated acting official, or by such other officer
or officers of the city council as, in the opinion of the city attorney, may act in their behalf.
Upon execution and delivery of the documents, the officers and employees of the city council
are hereby authorized and directed to take or cause to be taken such actions as may be
necessary on behalf of the city council to implement the documents.
Section 3. Effective date. This resolution shall be effective upon approval.
Reviewed for administration: Adopted by the city council March 2, 2026:
Kim Keller, city manager Nadia Mohamed, mayor
Attest:
Melissa Kennedy, city clerk
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