Title
RESOLUTION AUTHORIZING AMENDMENT TO DEVELOPMENT AGREEMENT, DISBURSEMENT AGREEMENT AND SUBORDINATION AGREEMENT PERTAINING TO THE MH II APARTMENTS, INC. PROJECT.
Body
CITY PROPOSAL:
RESOLVED, that the proper city officials are hereby authorized to enter into an Amendment to Development Agreement, Disbursement Agreement and Subordination Agreement, substantially in the form of those attached hereto as Exhibits A, B and C respectively with the parties named below related to the MHH II Apartments, Inc. project.:
EXHIBIT Document Name Parties
A Amendment to Development MH II Apartments, Inc.
Agreement City of Duluth
B Disbursement Agreement MH II Apartments, Inc.
Jones Lang LaSalle Multifamily, LLC
City of Duluth
First American Title Insurance, Company
C. Subordination Agreement MH II Apartments, Inc
City of Duluth
Statement of Purpose
STATEMENT OF PURPOSE: The purpose of this resolution is to authorize the City to enter into an amendment to the Development Agreement (City Contract No 22939) originally approved last August for the project, often referred to as the Miller Hill Flats project, for the development of 72 units of “Workforce Housing” and to authorize execution of ancillary agreements pertaining to the financing of the project. The changes and documents are in response to requests from the U.S. Department of Housing and Urban Development (“HUD”) which is providing insurance to the funding of the project.
The changes to the Development Agreement are technical and related to implementation as opposed to substantive. They formally approve a change in the mix of 1-bedroom and 2-bedroom units which is acceptable to the City and acknowledge the specific breakdown of construction costs and bond amounts, all as allowed in the original development agreement.
The resolution also calls for the City to formally approve the Disbursement Agreement governing the disbursement of funds from the various sources and the Subordination Agreement subordinating the “City Funds”, provided by a grant to the City from the Minnesota Department of Employment and Economic Development (“DEED”), to the Bank/HUD financing as was contemplated by the original Development Agreement. DEED has accepted these agreements.