HomeMy WebLinkAbout26-07 - ADMIN Resolution - Economic Development Authority - 2026/03/02
EDA Resolution No. 26-07
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 board of commissioners (the “board”) of the St. Louis Park Economic
Development Authority (the “authority”) as follows:
Section 1. Recitals; authorization.
1.01. The City of St. Louis Park, Minnesota (the “city”), 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 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 board 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
the development agreement to the rights of the construction lender under the construction
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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 board approves the collateral assignment and subordination agreement in
substantially the form presented to the board, 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 board hereby authorizes the president and executive director, in their
discretion and at such time, if any, as they may deem appropriate, to execute the documents
on behalf of the authority, and to carry out, on behalf of the authority, the authority’s
obligations thereunder when all conditions precedent thereto have been satisfied. The
documents shall be in substantially the form on file with the authority 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 authority
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 authority. The
execution of any instrument by the appropriate officers of the authority 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 board by any duly designated acting official, or by such other officer or
officers of the board 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 board are hereby
authorized and directed to take or cause to be taken such actions as may be necessary on
behalf of the board to implement the documents.
Section 3. Effective date. This resolution shall be effective upon approval.
Reviewed for administration: Adopted by the Economic Development
Authority March 2, 2026:
Karen Barton, executive director Yolanda Farris, president
Attest:
Melissa Kennedy, secretary
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