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RESOLUTION AUTHORIZING A SEVENTH AMENDMENT TO AGREEMENT WITH LAKEWALK PROPERTIES LLC MODIFYING THE INTEREST RATE PAYABLE, ESTABLISHING UPDATED PROJECT MILESTONE DATE REQUIREMENTS, AND ADJUSTING TIF NOTE DATES.
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CITY PROPOSAL:
RESOLVED, that the proper City officials are hereby authorized to enter into a Seventh Amendment to a development agreement (DEDA Contract No. 20 860 954), substantially in the form of Exhibit A attached hereto, with Lakewalk Properties, LLC amending DEDA Contract No. 20 860 954, by:
1. Increasing the interest rate payable on the Tax Increment Financing (TIF) Note from 6.25% to 7.25%;
2. Establishing updated dates as follows:
a. Developer shall close on its lender financing for the Project and commence construction of foundations for the Project not later than December 31, 2023;
b. Developer shall submit to the City of Duluth a complete application for the foundations and structural permit through level 3 of the 15-story Project not later than December 31, 2023;
c. Developer shall complete construction of the foundations for the Project not later than May 31, 2024;
d. Developer will commit to expenditures for the Eligible Project Costs not later than June 20, 2024; and
e. Construction of the Project shall be completed not later than September 30, 2025.
3. Adjusting the 26-year TIF note dates to reflect new construction dates.
Statement of Purpose
STATEMENT OF PURPOSE: The purpose of this resolution is to amend the development agreement for the Lakeview housing development project to increase the interest rate amount payable on the Tax Increment Financing (TIF) Note from 6.25% to 7.25%. The increased interest rate is necessary to address changing rate environments in the financial markets, and will allow the project to proceed.
The updated start and completion dates are: Developer shall close on its lender financing for the Project and commence construction of foundations for the Project not later than December 31, 2023; Developer will submit a complete application for the foundations and structural permit through level 3 of the 15-story Project not later than December 31, 2023; Developer will complete construction of the foundations for the Project not later than May 31, 2024; Developer will commit to expenditures for the Eligible Project Costs not later than June 20, 2024; and Construction of the Project shall be completed not later than September 30, 2025.
Finally, The TIF Note attached as an exhibit to the Development Agreement is modified to reflect the new construction dates, moving the start date from August 1, 2021, to August 1, 2024, and moving the end date from February 1, 2047, to February 1, 2050.