HomeMy WebLinkAbout25-057 - ADMIN Resolution - City Council - 2025/05/19Resolution No. 25-057
Approving amended and restated contract for private development,
a loan to Beltline Apartments Limited Partnership and execution of
documents relating thereto
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.
1.01. The city and the St. Louis Park Economic Development Authority (the “authority”)
have heretofore approved the establishment of the Beltline Station Tax Increment Financing
District No. 1 (the “TIF District No. 1”), a housing district, and Beltline Station Tax Increment
Financing District No. 2 (the “TIF District No. 2” and together with TIF District No. 1, the “TIF
districts”), a renewal and renovation district, within Redevelopment Project No. 1 (the “project”)
and have adopted tax increment financing plans for the purpose of financing certain
improvements within the project.
1.02. The city has heretofore created an Affordable Housing Trust Fund, which is funded
in part with pooled tax increment derived from property within certain tax increment financing
districts within the city as provided in Laws of Minnesota 2022, First Special Session, Chapter 14,
Article 9, Section 5.
1.03. The authority and Beltline Development LLC, or an entity related thereto or
affiliated therewith, each own portions of certain property within the project, which has been
the subject of a number of agreements for purposes of constructing a mixed-use development
and related parking, including a parking ramp serving in part as a park & ride facility for Metro
Transit’s proposed Southwest Light Rail Transit Beltline station on certain property in the
project (the “development”).
1.04. On July 7, 2022, the city, authority and Beltline Station Limited Partnership entered
into a contract for private development, as amended by the first amendment to contract for
private development, dated March 31, 2023, the second amendment to contract for private
development, dated June 5, 2023, and the third amendment to contract for private development
dated October 2, 2023 (collectively, the “original affordable contract for private development”),
relating to a portion of the development consisting of a portion of construction of approximately
82 units of affordable multifamily rental housing together with approximately 59 underground
parking spaces (the “affordable minimum improvements”) whereby the city and the authority
agreed to provide certain financial assistance to the affordable minimum improvements.
1.05. Beltline Station Limited Partnership previously obtained financing from Cedar
Rapids Bank and Trust, an Iowa banking corporation (the “senior lender”) and in connection
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therewith the parties entered into a master subordination agreement between the senior
lender, the city, and the authority two collateral assignments of payments under tax increment
revenue note between Beltline Station Limited Partnership and the senior lender and
acknowledged by the authority, and a master loan disbursement agreement between the
Beltline Station Limited Partnership, the authority, the senior lender and the city (together, the
“prior financing documents”).
1.05. Due to market conditions and the need to obtain new financing, Beltline
Apartments Limited Partnership, a Minnesota limited partnership and an affiliate of Beltline
Station Limited Partnership (the “developer”) has requested certain changes to the original
contract and the parties have prepared an amended and restated contract for private
development which amends and restates the original affordable contract (the “agreement”),
the form of which is on file with the city.
1.06. The agreement increases the affordability of the affordable minimum
improvements, provides for the issuance by the authority of a tax increment revenue note to the
developer in the maximum principal amount of $804,000, authorizes the loan of proceeds of funds
from the city’s affordable housing trust fund (the “city AHTF loan”) in the principal amount of
$1,793,238 to the developer and sets forth certain other conditions for the construction of the
affordable minimum improvements.
1.07. In order to assist with the costs of the minimum improvements, the authority
applied for and received a grant (the “DEED grant”) from the Minnesota Department of
Employment and Economic Development (“DEED”).
1.08. DEED and the authority entered into the Contamination Cleanup Grant Contract
Agreement No. CCGP-21-0022-Z-FY22 (the “DEED grant agreement”). Proceeds of the DEED
grant in the amount $156,120 have been used for eligible project components of the minimum
improvements (the “DEED grant-eligible activities”) as described in the DEED grant agreement.
The authority has disbursed the proceeds of the DEED grant to the developer to provide
financing for the DEED grant-eligible activities as set forth in the agreement.
1.09. In order to assist with the costs of the minimum improvements, the authority
applied for and received a grant in the amount $300,000 (the “SWCW grant”) will be used for
costs related to the minimum improvements, made by the County of Hennepin from the
County’s Bottineau and Southwest Community Works Programs (“SWCW”).
1.10. The County of Hennepin, Minnesota and the authority entered into the
Southwest Community Works Project Grant agreement No. PR00006396 (the “SWCW grant
agreement”). Proceeds of the SWCW grant may be used for eligible project components of the
minimum improvements (the “SWCW grant-eligible activities”) as described in the SWCW grant
agreement.
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1.11. The authority intends to disburse the proceeds of the SWCW grant to the
developer to provide financing for the SWCW grant-eligible activities as set forth in the
agreement.
1.12. The agreement requires that the developer comply with certain construction
timelines for the affordable minimum improvements or pay a fee (the “affordable housing fee”)
to the authority set forth in the agreement. The payment of affordable housing fee will be
secured by a letter of credit and a guaranty from George Sherman and Sherman Development
Holdings (collectively, the “security”) delivered at closing on the property.
1.13. The city council has reviewed the agreement and finds that the execution
thereof and performance of the city’s obligations thereunder are in the best interest of the city
and its residents.
Section 2. Approval of city AHTF loan.
2.01. The city agrees to make the city AHTF loan to the developer from the city’s
affordable housing trust fund in accordance with the terms of Section 3.5 of the agreement in the
approximate principal amount of $1,793,238.
2.02 The city agrees to accept the promissory note and the mortgage, in substantially
the forms set forth in the agreement, from the developer as security for the repayment of the city
AHTF loan.
Section 3. The agreement and related documents.
3.01. The city council hereby approves the agreement in substantially the form
presented to the city council, together with any related documents necessary in connection
therewith, including without limitation all documents, exhibits, certifications, or consents
referenced in or attached to the agreement, including without limitation the mortgage and
promissory note and various documents necessary to release the prior financing documents and
documents prepared in connection with the original agreement (all as defined in the agreement)
(the “development documents”).
3.02. 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 development 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 development documents shall be in
substantially the form on file with the city and the approval hereby given to the development
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. City staff are hereby delegated the authority to
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approve the final forms of the security for the affordable housing fee including a letter of credit
and guarantees. 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 development documents shall
not be effective until the date of execution thereof as provided herein.
3.03. 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 development 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 development documents, including without limitation the
issuance of tax increment revenue obligations thereunder when all conditions precedent thereto
have been satisfied and reserving funds for the payment thereof in the applicable tax increment
accounts.
Section 4. Effective Date. This resolution shall be effective upon approval.
Reviewed for administration: Adopted by the city council May 19, 2025:
Kim Keller, city manager Nadia Mohamed, mayor
Attest:
Melissa Kennedy, city clerk
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