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CCDA Resolution No. 15-07 r CITY OF TIGARD, OREGON CITY CENTER DEVELOPMENT AGENCY RESOLUTION NO. 15- O 7 A RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR OF THE CITY CENTER DEVELOPMENT AGENCY TO EXECUTE A SECOND AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT TO REDEVELOP THE ASH/ BURNHAM PROPERTIES WHEREAS,on April 14,2015 the Board of the Tigard City Center Development Agency ("CCDA") approved CCDA Resolution 15-02 authorizing the Executive Director of the CCDA to execute a development and disposition agreement ("Agreement")with DIG Tigard LLC and Capstone Green Light Partners,LLC (collectively,"developers") to redevelop the Ash/Burnham properties;and WHEREAS,on or about September 1,2015, the CCDA and developers entered into a First Amendment to the Agreement (the Agreement and the First Amendment are collectively referred to herein as the "DDA' ;and WHEREAS,both the CCDA and the developers have been working on fulfilling the requirements of the DDA;and WHEREAS,Premium Property—Tigard LLC ("Developer") is the assignee of the developers as evidenced by the Assignment of Development and Disposition Agreement dated October 27,2015; and WHEREAS,in order to meet the terms of bank financing,Premium Property—Tigard LLC has requested a Second Amendment to the DDA which would subordinate the CCDA's repurchase right granted under Section 10.3 of the Agreement to the deed of trust securing the construction financing obtained by Developer and provide the CCDA with the option to purchase the construction loan for a purchase price equal to the full amount owing thereon;and WHEREAS,except as expressly provided in the Second Amendment,the remainder of the DDA is unchanged and remains in full force and effect;and WHEREAS, the Second Amendment is necessary for Premium Property—Tigard LLC to close on the Ash/Burnham property and commence construction of the project. NOW,THEREFORE,BE IT RESOLVED,by the Tigard City Center Development Agency that: SECTION 1: The Executive Director of the CCDA is authorized to execute the Second Amendment to the Ash Burnham Disposition and Development Agreement attached as Exhibit`A. SECTION 2: This resolution is effective immediately upon passage. CCDA Resolution No. 15-jZ Page 1 PASSED: This ��)�h day of �aVePM let- 52015. Chair City of Tigard City CYnter Development Agency ATTEST: Recorder—City of Tigard City Ce ter Development Agency CCDA Resolution No. 15--9 2 Page 2 Exhibit A Second Amendment to Development and Disposition Agreement This Second Amendment to the Development and Disposition Agreement("Agreement")is entered into by and between the City Center Development Agency of the City of Tigard ("CCDA") and PREMIUM PROPERTY—TIGARD LLC, an Oregon limited liability company ("Developer") RECITALS 1. Premium Property—Tigard LLC is the assignee of DIG Tigard, LLC and Capstone Green Light Partners LLC as evidenced by the Assignment of Development and Disposition Agreement dated October 27, 2015. 2. On or about April 16, 2015, Developer's predecessor-in-interest and the CCDA entered into a Development and Disposition Agreement("DDA"); and entered into a First Amendment to the DDA on or about September 1, 2015. Any reference to "DDA" includes the First Amendment to the DDA. 3. The parties have determined that further amendments to the DDA are necessary and appropriate to facilitate securing construction financing so that the Project may proceed expeditiously. AGREEMENT 1. Section 10. Remedies, is amended as follows. New language is underlined, removed language is in stfi 10.3 Post-Closing Repurchase Right of CCDA for Developer Failure to Timely Commence or Complete Construction Except as provided in Section 10.4, and Ssubject to force majeure delays... remainder of section 10.3 unchanged 10.4 Subordination of CCDA Repurchase Right CCDA agrees to execute a Subordination Agreement in substantially the form set forth in Exhibit '1' hereto, subordinating the repurchase right granted under Section 10.3 to the deed of trust securing the construction financing obtained by Developer and providing CCDA with the option to purchase the construction loan for a purchase price equal to the full amount owing thereon (including_ without limitation all principal interest default interest, late charges, fees, costs and other amounts owing under the deed of trust and the other documents evidencing and securing the loan) Page 1 Second Amendment to DDA 50014-70649 Exnbd A.docx/ddli I/10,1015 Exhibit A Exercisingthe option to purchase the construction loan is in lieu of the repurchase right granted in Section 10.3 and extinguishes any interest or rights of developer, and any obligation of CCDA,that otherwise might arise under Section 10.3. Developer represents and warrants that, prior to drawing on the construction financing to which CCDA has subordinated its repurchase right, Developer will have expended a minimum of$8,000,000 in developer funds toward completion of the Project. Developer further agrees to cooperate reasonably and in good faith with CCDA in exercising the option to purchase the construction loan. 2. Except as expressly provided in this Second Amendment, the remainder of the DDA is unchanged and remains in full force and effect. 3. This Second Amendment is effective on the date last signed below. CCDA Premium Property—Tigard LLC Marty Wine, Executive Director Date Jeffrey M. Sackett, Operations Manager Page 2 Second Amendment to DDA 50014-70649 Exhbit A.docx/dr1/11/10/2015 EXHIBIT 1 After Recording Mail To: U.S. Bank National Association Commercial Real Estate 111 SW Fifth Avenue,6th Floor Portland,OR 97204 Attn: Robyn Ehrig Property Tax Account Nos. R462270,R462261 and R462252 SUBORDINATION AGREEMENT THIS SUBORDINATION AGREEMENT ("Agleement') is entered into as of November 2015, by THE CITY CENTER DEVELOPMENT AGENCY OF THE CITY OF TIGARD, OREGON ("CCDA"), whose mailing address is 13125 SW Hall Blvd., Tigard, OR 97232, and U.S. BANK NATIONAL ASSOCIATION, a national banking association ("Lender"), whose mailing address is 111 SW Fifth Avenue,6th Floor, Portland,OR 97204. Recitals A. Reference is made to the Development and Disposition Agreement with an effective date of April 16, 2015 by and between CCDA and DIG Tigard LLC, an Oregon limited liability company ("Diamond"), and Capstone - Green Light LLC, an Oregon limited liability company ("Capstone"), as amended by the First Amendment to Development and Disposition Agreement dated September 1, 2015, and as assigned by Diamond and Capstone to Premium Property - Tigard LLC, an Oregon limited liability company ("Developer") by Assignment of Development and Disposition Agreement dated October 27, 2015 (the "DDA"). The DDA provides for the sale of the real property ("Proper ") legally described on Exhibit A to this Agreement by CCDA to Developer. B. Lender has agreed to make a a loan ("Loan") to Developer in the principal amount of $22,240,000.00. The Loan is to be secured by a Commercial Deed of Trust, Assignment of Rents and Leases,Security Agreement and Fixture Filing ("Deed of Trust") encumbering the Property. The Deed of Trust is recorded in the records of Washington County, Oregon under Recording No. . (CCDA authorizes Lender to insert the recording number upon recordation of the Deed of Trust.) The proceeds of the Loan are to used by Developer to construct improvements on the Property which are generally described in the DDA (the "Improvements"). B. Under the DDA, Developer is obligated to complete construction of the Improvements and Section 10.3 of the DDA provides, in part, that CCDA shall have the right to repurchase the Property if Developer does not achieve Substantial Completion (as defined in the DDA) of the -1- EXHIBIT 1 Improvements within three years after commencement of construction. The DDA's right to repurchase the Property is referred to in this Agreement as the"Repurchase Option'). C. Lender is unwilling to make the Loan to Developer unless CCDA subordinates the Repurchase Option to the Deed of Trust as provided in this Agreement. Agreement NOW,THEREFORE,CCDA agrees as follows: 1. Subordination. CCDA unconditionally subordinates the Repurchase Option and all of CCDA's rights thereunder to the lien, security interests and other rights granted to Lender under the Deed of Trust and agrees that for so long as the Deed of Trust is in effect the Repurchase Option and all CCDA's rights thereunder are and shall remain unconditionally subordinate to the Deed of Trust. Without limiting the generality of the foregoing subordination, if CCDA exercises the Repurchase Option, it will take title to the Property subject to the lien of the Deed of Trust and all rights of Lender thereunder and if the Deed of Trust is foreclosed, such foreclosure shall terminate the Repurchase Option and from and after the date of the foreclosure sale, the owner of the Property through foreclosure and its successors and assigns shall take the Property free and clear of any obligation to complete construction of the Improvements. 2. Option to Purchase Loan. In consideration of CCDA's subordination under Section 1 above, Lender agrees that if it commences foreclosure of the Deed of Trust prior to Substantial Completion(as defined in the DDA) of the Improvements, Lender will give CCDA copies of the notice of default and notice of sale required under ORS Ch. 086 for a non-judicial foreclosure of the Deed of Trust promptly after such notices are given to the Developer, or in the case of a judicial foreclosure, a copy of the complaint for foreclosure promptly after the filing thereof. For so long thereafter as such foreclosure proceedings are pending and have not been dismissed or discontinued, CCDA shall have the option to purchase the Loan from Lender for a purchase price equal to the full amount owing thereon (including, without limitation, all principal, interest, default interest, late charges, fees, costs and other amounts owing under the Deed of Trust and the other documents evidencing and securing the Loan). If CCDA exercises such option,which it may do by giving written notice to Lender no less than 45 days prior to the date scheduled for the foreclosure sale, the purchase price for the Loan shall be paid to Lender in immediately available funds and Lender will assign the Deed of Trust and the other loan documents to CCDA without warranty or representation. Closing of the purchase of the Loan shall take place on a date reasonably acceptable to Lender and CCDA (but within thirty (30) days after notice exercising the option is given to Lender) and shall take place through an escrow at Chicago Title Insurance Company of Oregon, with all costs of the escrow to be paid by CCDA. The option to purchase the Loan granted hereunder shall terminate and be of no further force or effect upon completion of the foreclosure sale and under no circumstances whatsoever shall CCDA or any assignee of CCDA have any right to postpone or defer the foreclosure sale. The option to purchase the Loan granted to CCDA hereunder is fully assignable by CCDA so long as the assignee provides assurances reasonably acceptable to -2- EXHIBIT 1 Lender that it is not a "Sanctioned Person' which, as used herein means, (a) anyone listed in any Sanctions' related list of designated persons maintained by the U.S. Department of the Treasury's Office of Foreign Assets Control, and any successor thereto, or the U.S. Department of State, the United Nations Security Council, the European Union or any EU member state, (b) any person or group operating, organized or resident in a Sanctioned Country,2 (c) any agency, political subdivision or instrumentality of the government of a Sanctioned Country, or (d) any person 50% or more owned,directly or indirectly,by any of the above. 3. Representations and Warranties. CCDA represents and warrants to Lender as follows: 3.1. This Agreement is executed by CCDA at Developer's request and CCDA has received fair and adequate consideration therefore. 3.2. CCDA has not assigned the DDA or any of its rights thereunder. 3.3. This Agreement has been duly authorized by all necessary action of CCDA and is binding and enforceable against CCDA. 4. Dealings with Developer. CCDA agrees that Lender may deal exclusively with Developer in all matters relating to the Loan without notice to or the approval of CCDA. References in this Agreement to the Deed of Trust include any modification, extension or renewal of the Deed of Trust, including without limitation, any increase in the indebtedness secured by the Deed of Trust, and no such modification, extension or renewal shall require the consent of CCDA or in any way impair the subordination of the Repurchase Option to the Deed of Trust. 5. Miscellaneous. 5.1. Governing Law. This Agreement shall be governed by, construed and interpreted in accordance with the laws of the State of Oregon. 5.2. Invalidity of Any Part. If any of the provisions of this Agreement shall for any reason be held to be invalid, illegal or unenforceable, in whole or in part or in any respect,or in the event that any one or more of the provisions of this Agreement operate or would prospectively operate to invalidate this Agreement, then: (a) the provisions shall be enforced to the fullest extent of its validity, legality and enforceability; or, (b) if such provision(s) would operate so as to invalidate this entire Agreement, only such provision(s) shall be void as if they were not contained herein, and the remainder of the provisions of this Agreement will remain in full force and affect. 1 Economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by(a) the U.S. government, including those administered by OFAC or the U.S. Department of State or (b) the United Nations Security Council, the European Union or Her Majesty's Treasury of the United Kingdom. 2 Any country or territory which is itself the subject or target of any comprehensive Sanctions. -3- EXHIBIT 1 5.3. Legal Expenses. If legal action is commenced to enforce or interpret this Agreement, the party substantially prevailing in such action shall be entitled to reimbursement by the non-prevailing party of all reasonable out-of-pocket expenses of any kind, including reasonable attorneys'fees incurred in such action,including legal fees for any appeal. -4- EXHIBIT 1 IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written. "CCDA" THE CITY CENTER DEVELOPMENT AGENCY OF THE CITY OF TIGARD,OREGON By: Name: Title: STATE OF OREGON ) ss. COUNTY OF ) This instrument was acknowledged before me on November 2015, by , as the of THE CITY CENTER DEVELOPMENT AGENCY OF THE CITY OF TIGARD,OREGON. DATED this day of 2015. Notary Public in and for the State of Oregon, residing at Name (printed or typed) My appointment expires: -5- EXHIBIT 1 CONSENT OF DEVELOPER By signing below, Developer consents to all of the provisions of the foregoing agreement including,without limitation,the option to purchase the Loan granted to CCDA thereunder. DATED November_,2015. PREMIUM PROPERTY-TIGARD LLC, an Oregon limited liability company By: Name:Jeffrey M. Sackett Its: Authorized Operations Manager By: Name: Thomas Stevenson Its: Authorized Financial Manager -6- EXHIBIT 1 EXHIBIT A Legal Description The Property is located in Washington County,Oregon,and is legally described as follows: A tract of land being a portion of Lot 5 of the plat of "Burnham Tract" located in the Northeast One-Quarter of Section 2, Township 2 South, Range 1 West, Willamette Meridian, City of Tigard, Washington County,Oregon and being more particularly described as follows: Beginning at the Southeast corner of Lot 5 of the plat of "Burnham Tract" being a 3/4 inch iron pipe; thence North 43°16'11" West 71.49 feet to a point; thence North 39044'30" West 39.15 feet to a point; thence North 45°21'36" West 6.34 feet to a point; thence North 12°53'35" West 42.34 feet to a point; thence North 34°58'59" East 43.75 feet to a point; thence North 44°38'24" East 27.78 feet to a point; thence North 45°21'36" West 9.10 feet to a point; thence North 371013" East 20.73 feet to a point; thence North 44°38'24" East 50.97 feet to a point; thence North 06°38'24" East 26.98 feet to a point;thence North 28°16'23" West 126.55 feet to a point on the southeasterly right-of-way of SW Ash Avenue (20 feet from centerline); thence along said right-of-way North 44°30'29" East 192.20 feet to a point; thence South 45°29'39" East 17.50 feet to a 5/8 inch diameter iron rod with yellow plastic cap inscribed "AKS ENGR." And being on said right-of-way (37.5 feet from centerline); thence along said right-of-way North 44°30'29" East 55.37 feet to a point; thence along a curve to the right with a radius of 237.50 feet, delta of 171320", length of 71.39 feet, and chord of North 53°07'09" East 71.12 feet to a point; thence North 61°43'49" East 138.76 feet to a point; thence along a curve to the right with a radius of 21.50 feet, delta of 75°00'00", length of 28.14 feet, and chord of South 80°46'11" East 26.18 feet to a point along the southwesterly right-of-way of SW Burnham Street (37.5 feet from centerline); thence along said right-of-way South 43°16'11" East 9.39 feet to a point; thence leaving said right-of-way South 44°31'36" West 232.50 feet to the southwesterly corner of document number 2010-103509; thence South 43°16'11" East 69.42 feet to the southeasterly corner of said document number; thence South 44°30'13" West 17.00 feet to a 5/8 inch iron rod with yellow plastic cap inscribed "WEDDLE IS 874" at the southwesterly corner of document number 2003-194237; thence South 43°16'11" East 140.48 feet to a 5/8 inch iron rod with yellow plastic cap inscribed "WEDDLE IS 874" on the northwesterly line of Lot 6 of the plat of "Burnham Tract'; thence South 44°38'24" West 438.30 feet to the point of beginning. EXCEPTING THEREFROM All that certain real property situated in the City of Tigard, County of Washington,State of Oregon,being described as follows: A Portion of the Northeast One-Quarter of Section 2, Township 2 South, Range 1 West, Willamette Meridian, being a portion of that land described in Document No. 2015-068950, Washington County Deed Records,and being more particularly described as follows: Commencing at the most Northerly corner of that land described in Document No. 2015-068951, being a 5/8" iron rod with a yellow plastic cap marked "AKS ENGR" set by SN 32564, Washington County Survey Records; thence along the Northwesterly line of Document No. -7- EXHIBIT 1 2015-068950, Washington County Deed Records, North 44°30'29" East 192.20 feet; thence continuing along said Northwesterly line,South 45°29'39" East 17.50 feet to a 5/8" iron rod with a yellow plastic cap marked "AKS ENGR" per SN 32208, being the True Point of Beginning of this description; thence continuing along said Northwesterly line North 44°30'29" East 43.68 feet to a 5/8" iron rod with a yellow plastic cap marked "AKS ENGR" per SN 32208, on the Northwesterly extension of the Southwesterly line of Document No. 2010-103509; thence along the said Northwesterly extension and the said Southwesterly line of Document No. 2010-103509, South 43°16'11" East 151.89 feet to a 5/8" iron rod with a yellow plastic cap marked "AKS ENGR" per SN 32564, on the Northwesterly line of Document No 2003-194237, thence along said Northwesterly line South 44°30'13" West 17.00 feet to a 5/8" iron rod with a yellow plastic cap marked ""WEDDLE IS 874" Per SN 25063, being the most Westerly corner of said document; thence along the Southwesterly line of said document South 43°16'11" East 140.48 feet to a 5/8" iron rod with a yellow plastic cap marked "WEDDLE LS 874" per SN 25063, at the South corner of said document, also being the most Southerly Southeast corner of Document No. 2015-068950; thence South 44°38'24" West 37.04 feet along the Southeasterly line of said document; thence leaving said Southeasterly line North 43°16'11" West 280.23 feet to a point of curve left; thence Northwesterly around a curve left (radius of 14.00 feet, central angle of 5702700", long chord bearing North 71°59'41" East 13.46 feet) 14.04 feet to a point from which the True Point of Beginning bears North 44°30'29" East; thence North 44°30'29" East 16.84 feet to the True Point of Beginning of this description.Containing 13,423 square feet more or less. AND FURTHER EXCEPTING THEREFROM All that certain real property situated in the City of Tigard,County of Washington,State of Oregon,being described as follows: A Portion of the Northeast One-Quarter of Section 2, Township 2 South, Range 1 West, Willamette Meridian, being a portion of that land described in Document No. 2015-068950, Washington County Deed Records,and being more particularly described as follows: Beginning at the most Northerly corner of that land described in Document No. 2015-068951, being a 5/8" iron rod with a yellow plastic cap marked "AKS ENGR" set by SN 32564, Washington County Survey Records; thence from said Point of Beginning along the Northwesterly line of Document No. 2015-068950 Washington County Deed Records, North 44°30'29" East 192.20 feet; thence continuing along said Northwesterly line,South 45°29'39" East 17.50 feet to a 5/8" iron rod with a yellow plastic cap marked "AKS ENGR" per SN 32208; thence leaving said Northwesterly line South 44°30'29" West 197.62 feet to a point on the Northeasterly line of said Document No. 2015-068951; thence along said Northeasterly line North 28°16'27" West 18.32 feet to the Point of Beginning of this description. Containing 3,411 square feet more or less. -8-