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HomeMy WebLinkAboutContract 35326-CA2 Crry SECWARY CONTRACT N0, l wz CONSENT TO ASSIGNMENT FOR SECURITY PURPOSES OF ECONOMIC DEVELOPMENT PROGRAM AGREEMENT BETWEEN CITY OF FORT WORTH AND METROPOLITAN LIFE INSURANCE COMPANY (CITY SECRETARY CONTRACT NO. 35326, AS AMENDED) This CONSENT TO ASSIGNMENT FOR SECURITY PURPOSES OF ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Consent") is entered into by and between the CITY OF FORT WORTH ("City"), a home rule municipal corporation organized under the laws of the State of Texas; SWF TRINITY BLUFFS, LLC("Developer"), a Delaware limited liability company authorized to do business in the State of Texas; and METROPOLITAN LIFE INSURANCE COMPANY("Lender"), a New York corporation. RECITALS The City,Developer and Lender hereby agree that the following statements are true and correct and constitute the basis upon which the parties have entered into this Consent: A. The City is a party to a(i)Amended and Restated Economic Development Program Agreement, dated on or about May 25, 2007, between the City and Developer, as successor-in-interest to LPC Trinity Parks LP ("LPC"), a Texas limited partnership, as successor-in-interest to Trinity Bluff Development, Ltd. ("TBD"), on file in the City Secretary's Office as City Secretary Contract No. 35326, (ii) Amendment No. 1 to Amended and Restated Economic Development Program Agreement between the City and Developer, as successor-in-interest to LPC, as successor-in-interest to TBD, on file in the City Secretary's Office as City Secretary Contract No. 35326-Al and(iii)Amendment No. 2 to Amended and Restated Economic Development Program Agreement between the City and Developer, as successor-in-interest to LPC, as successor-in-interest to TBD, on file in the City Secretary's Office as City Secretary Contract No. 35326-A2(items(i),(ii)and(iii) are collectively the"EDPA"). B. Developer wishes to obtain an assignment from Lender of the existing loan encumbering the property subject to the EDPA in connection with Developer's purchase of the subject property from LPC (the "Loan"). As security for the Loan, certain agreements between Developer and Lender governing the Loan, including, but not limited to, that certain (i) Deed of Trust, Security Agreement and Fixture Filing dated July 27, 2011, executed by LPC, as Grantor, for the benefit of Lender, as Beneficiary, and recorded as County Clerk File No. D211179398 in the Real Property Records of Tarrant County, Texas, (ii) Promissory Note dated July 26, 2011, in the original principal amount of $40,220,000.00 executed by LPC, to the order of Lender, (iii) Assumption and Page 1 Cr�p� Consent to Collateral Assignment of Economic Development Progra ff MA ��eJ�A'niLtia d) between City of Fort Worth, SWF Trinity Bluffs,LLC,and Metropol an T�'SWOM � , A�T�y RECEIVED 'IN 0 910t4 Modification Agreement for Deed of Trust and Other Loan Documents by and between LPC, Developer and Lender pursuant to which Developer is assuming the existing Loan, and (iv) certain other related documents entered into by the parties in connection with the Loan (collectively, the "Loan Documents") require that Developer assign, transfer and convey to Lender all of Developer's rights, interest in and to the EDPA until such time as Developer has fully satisfied all duties and obligations set forth in the Loan Documents that are necessary to discharge Lender's security interest in the EDPA (the "Assignment"). C. Pursuant to Section 10 of the EDPA, the City is willing to grant consent to this conditional Assignment specifically in accordance with the terms and conditions of this Consent. AGREEMENT 1. The City, Developer and Lender hereby agree that the recitals set forth above are true and correct and form the basis upon which the City has entered into this Consent. 2. The City hereby consents to the Assignment at the request of Developer and Lender solely for the purpose of Lender's securing the Loan pursuant to and in accordance with the Loan Documents. Notwithstanding such consent, the City does not adopt, ratify or approve any of the particular provisions of the Loan Documents and, unless and to the extent specifically acknowledged by the City in this Consent, does not grant any right or privilege to Lender or any assignee or successor in interest thereto that is different from or more extensive than any right or privilege granted to Developer under the EDPA. 3. In the event that the City is required by the EDPA to provide any kind of written notice to Developer, including notice of breach or default by Developer,the City shall also provide a copy of such written notice to Lender, addressed to the following, or such other party or address as Lender designates in writing, by certified mail, postage prepaid, or by hand delivery: Metropolitan Life Insurance Company, a New.York corporation 10 Park Avenue Morristown,NJ 07962 Attention: Managing Director Real Estate Investments Page 2 Consent to Collateral Assignment of Economic Development Program(CSC No.35326,as Amended) between City of Fort Worth, SWF Trinity Bluffs,LLC,and Metropolitan Life Insurance Company With a copy to: Metropolitan Life Insurance Company 10 Park Avenue Morristown,New Jersey 07960 Attention: Senior Vice-President, Real Estate Investments With a copy to: Metropolitan Life Insurance Company Two Lincoln Centre 5420 LBJ Freeway, Suite 1310 Dallas, Texas 75240 Attention: Director and OIC or such other address(es) as Lender may advise City from time to time. 4. If Developer fails to cure any default under the EDPA, the City agrees that Lender, its agents or designees shall have an additional thirty (30) calendar days or such greater time as may specifically be provided under the EDPA to perform any of the obligations or requirements of Developer imposed by the EDPA and that the City will accept Lender's performance of the same as if Developer had performed such obligations or requirements; provided,however,that in the event such default cannot be cured within such time,Lender, its agents or designees, shall have such additional time as may be reasonably necessary if within such time period Lender has commenced and is diligently pursuing the remedies to cure such default,including,without limitation, such time as may be required for Lender to gain possession of the Development Property and the Required Improvements pursuant to the terms of the Loan Documents. 5. If at any time Lender wishes to exercise any foreclosure rights under the Loan Documents, before taking any foreclosure action Lender shall first provide written notice to the City of such intent (a "Notice"). Lender shall copy Developer on the Notice and deliver such Notice to Developer by both first class and certified mail return receipt concurrent with its transmittal of the Notice to the City and represent in the Notice that it has done so. Notwithstanding anything to the contrary herein, unless Lender enters into a written agreement with the City to assume and be bound by all covenants and obligations of"Developer" under the EDPA, Lender understands and agrees that the City shall not be bound to pay Lender any Program Grants pursuant to the EDPA. In addition, Lender understands and agrees that if Lender wishes to sell all or any portion of the Development Property or the Required Improvements to a third party following Lender's exercise of any foreclosure rights under the Loan Documents,the City shall not be bound to pay such third party any Program Grants pursuant to the EDPA unless Lender and such third party comply with the procedure for assignment set forth in Section 10 of the EDPA, including the obligation of such third party to enter into a written agreement with the City to assume Page 3 Consent to Collateral Assignment of Economic Development Program(CSC No.35326,as Amended) between City of Fort Worth,SWF Trinity Bluffs,LLC,and Metropolitan Life Insurance Company and be bound by all covenants and obligations of"Developer" under the EDPA. In the event that payment of any Program Grants are withheld by the City pursuant to this Section 5, any rights to receipt of those Program Grants are hereby waived, but the number and amount(s) of any such Program Grant(s) shall nevertheless be counted for purposes of calculating the Term of the EDPA, as set forth in Section 3 of the EDPA. 6. In the event of any conflict between this Consent and the EDPA,this Consent shall control. In the event of any conflict between this Consent and any of the Loan Documents, this Consent shall control. In the event of any conflict between the EDPA and any of the Loan Documents, the EDPA shall control. 7. This Consent may not be amended or modified except by a written agreement executed by all of the parties hereto. Notwithstanding anything to the contrary in the Loan Documents, an amendment to any of the Loan Documents shall not constitute an amendment to this Consent or the EDPA. 8. Once Developer has fully satisfied all duties and obligations set forth in the Loan Documents that are necessary to discharge Lender's security interest in the EDPA and such security interest is released, Lender shall provide written notice to the City that Lender has released such security interest, in which case this Consent shall automatically terminate. 9. This Consent shall be construed in accordance with the laws of the State of Texas. Venue for any action arising under the provisions of this Consent shall lie in state courts located in Tarrant County, Texas or in the United States District Court for the Northern District of Texas, Fort Worth Division. 10. Capitalized terms used but not specifically defined in this Consent shall have the meanings ascribed to them in the EDPA. 11. This written instrument contains the entire understanding and agreement between the City, Developer and Lender as to the matters contained herein. Any prior or contemporaneous oral or written agreement concerning such matters is hereby declared null and void to the extent in conflict with this Consent. 12. This Consent shall be effective on the later date as of which all parties have executed it. This Consent may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original. The failure of any party hereto to execute this Consent, or any counterpart hereof, shall not relieve the other signatories from their obligations from their obligations hereunder. EXECUTED as of the last date indicated below: [SIGNATURES IMMEDIATELY FOLLOW ON NEXT PAGE] Page 4 Consent to Collateral Assignment of Economic Development Program(CSC No.35326,as Amended) between City of Fort Worth,SWF Trinity Bluffs,LLC,and Metropolitan Life Insurance Company CITY OF FORT WORTH: APPROVED AS TO FORM AND LEGALITY: By:_ By: �i Fernando Costa Peter Vaky Assistant City Manager Deputy City Attorney Date: / M&C: C-26763 04-15-14 DEVELOPER: -�QF 00 0 0 v$ 10, %0 SWF TRINITY BLUFFS, LLC, $ g� oy a Delaware limited liability company Wry 1. Xoof, Ci cmn 8 °%°�0 0° 0 �0000000pOO'� By: Southwest Multifamily Partners, L.P., Xa4S a Delaware limited partnership, its managing member By: Southwest Multifamily GP, LLC, a Delaware limited liability company, its general partner By: Name: Title: Date: LENDER: METROPOLITAN LIFE INSURANCE COMPANY a New York corporation: By: Name: Title: Date: OFFICIAL RECORD Page 5 CITY SECRETARY Consent to Collateral Assignment of Economic Development Program(CSC No.35326,as Amended) between City of Fort Worth,SWF Trinity Bluffs,LLC,and Metropolitan Life Insurance Company FT. WORTH,TX CITY OF FORT WORTH: APPROVED AS TO FORM AND LEGALITY: Fernando Costa Peter Vaky Assistant City Manager Deputy City Attorney Date: 5"�5- 14 M&C: C-26763 04-15-14 DEVELOPER: SWF TRINITY BLUFFS,LLC, a Delaware limited liability company it 1.wfff a 1: :+nrlBY! 96t+hW15*-him ffmirily r ortnnrot.� v v Del aware imzte is i i its r By: Name: Title: EASlT Date: LENDER: METROPOLITAN LIFE INSURANCE COMPANY a New York corporation: By: Name: Title: Date: Page 5 Consent to Collateral Assignment of Economic Development Program(CSC No.35326,as Amended) between City of Fort Worth,SWF Trinity Bluffs,LLC,and Metropolitan Life Insurance Company CITY OF FORT WORTH: APPROVED AS TO FORM AND LEGALITY: By:� 1.( By: ,' ,i'L.. i t LLti, Fernando Costa Peter Vaky �/ ^ Assistant City Manager Deputy City Attorney Date: .'' S � M&C: C-26763 04-15-14 DEVELOPER: SWF TRINITY BLUFFS,LLC, a Delaware limited liability company By: Southwest Multifamily Partners, L.P., a Delaware limited partnership, its managing member By: Southwest Multifamily GP, LLC, a Delaware limited liability company, its general partner By: Name: Title: Date: LENDER: METROPOLITAN LIFE INSURANCE COMPANY a New York corporation: CAN By: Name: t`�hr'o Martin Halt— Title: _ ±rector Date: Page 5 Consent to Collateral Assignment of Economic Development Program(CSC No.35326,as Amended) between City of Fort Worth,SWF Trinity Bluffs,LLC,and Metropolitan Life Insurance Company m&u Keview Page 1 of 2 Official site of the City of Fort Worth,Texas CITY COUNCIL AGENDA FoR TWoRTH COUNCIL ACTION: Approved on 4/15/2014 DATE: 4/15/2014 REFERENCE ,C-26763 LOG NAME: 17TRINITYBLUFFCONSENTTOASSIGN CODE: C TYPE: CONSENT PUBLIC NO HEARING: SUBJECT: Authorize Execution of a Consent to Assignment of Economic Development Program Agreements for Trinity Bluff Development by LPC Trinity Parks LP to SWF Trinity Bluffs, LLC or an Affiliate, City Secretary Contract Nos. 35326 and 35327, as Amended and a Consent to Collateral Assignment by SWF Trinity Bluffs, LLC or an Affiliate to Metropolitan Life Insurance Company (COUNCIL DISTRICT 9) RECOMMENDATION: It is recommended that the City Council: 1. Authorize the City Manager to execute a Consent to Assignment of certain Economic Development Program Agreements City Secretary Contract Nos. 35326 and 35327, as amended by LPC Trinity Parks LP to SWF Trinity Bluffs, LLC or an affiliate; and 2. Authorize the City Manager to execute a Consent to Collateral Assignment of those Economic Development Agreements by SWF Trinity Bluffs, LLC or an affiliate to Metropolitan Life Insurance Company. DISCUSSION: In May 2007, the City entered into Economic Development Program Agreements with Trinity Bluff Development, Ltd., for the development of a three-story residential project and a four-story project with a total investment of$42,400,000.00 (Required Improvements) City Secretary Contract Nos. 35326 and 35327, as amended). In addition to the Required Improvements, in order to receive the full Program Grants available under the Agreements, additional investments equal to 58 percent of the construction costs of the Required Improvements in the vicinity of the Required Improvements must be completed. On May 30, 2007, Trinity Bluff Development, Ltd., assigned all of its rights and obligations under the Agreement to LPC Trinity Parks LP (Developer), which is an affiliate of Lincoln Property Company Southwest, Inc. In March 2014, LPC Trinity Parks LP approached the City about its desire to sell the development to SWF Trinity Bluff, LLC or one of its affiliates (Purchaser). As part of the proposed sale, the Developer needs to assign the Agreement to the Purchaser. Under the Agreement, LPC Trinity Parks LP, is prohibited from assigning the Agreement to another party without the City Council's consent. Staff does not object to this request. The Developer has constructed all the Required Improvements, but has not completed all of the additional investment necessary to obtain the full amounts of the Program Grants under the Agreements. The Purchaser will be required to meet all ongoing obligations of the Developer under the Agreement. The City will continue to receive the public benefits resulting from development of this project. Any future assignment of the Agreement by Purchaser would have to be approved by City Council. In addition, the Purchaser is obtaining financing on this project from Metropolitan Life Insurance http://apps.cfwnet.org/council_packet/mc review.asp?ID=19706&councildate=4/15/2014 6/9/2014 M&C Review Page 2 of 2 Company (Met Life). In order to secure that loan, the Purchaser and Met Life have requested that the City consent to an assignment by Purchaser to Met Life of all right, title and interest in the Agreements. In the event that Met Life were to foreclose on the loan, Met Life would take over as the Developer under the Agreements. However, the proposed Consent to Collateral Assignment document will prohibit Met Life from assigning the Agreements to a new buyer without the City Council's approval. The Trinity Bluff development is located in COUNCIL DISTRICT 9, Mapsco 63S. FISCAL INFORMATION/CERTIFICATION: The Financial Management Services Director certifies that this action will have no material effect on City funds. TO Fund/Account/Centers FROM Fund/Account/Centers Submitted for City Manager's Office by: Fernando Costa (6122) Originating Department Head: Jay Chapa (5804) Additional Information Contact: Cynthia Garcia (8187) Avis F. Chaisson (6342) ATTACHMENTS TrinityBluff.pdf http://apps.cfwnet.org/council_packet/mc_review.asp?ID=19706&councildate=4/15/2014 6/9/2014