HomeMy WebLinkAboutItem 08I /
July 15, 2015 Item No.
THIRD AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT
WITH IMAGETREND DEVELOPMENT, L.L.C.
July 20, 2015 City Council Meeting
Proposed Action
Staff recommends adoption of the following motion: Move to approve the Third Amendment to the
Contract for Private Development with ImageTrend Development L.L.C.
Approval of this motion will result in ImageTrend's second expansion phase being completed by
December 31, 2018.
Overview
In August of 2009, the City Council approved a Contract for Private Development that
authorized the sale to ImageTrend of a City -owned 3.39 acre lot adjacent to their existing
building located at 20855 Kensington Boulevard in the Fairfield Business Campus. The terms
of the Contract called for one third of the sale price to be paid by ImageTrend at the time of
closing. The remaining two thirds of the purchase price would be forgiven if ImageTrend
completed their first expansion by the end of 2011 and a second phase was required to be
completed by the end of 2013 and later amended to be completed by the end of 2015. The
total of the two expansions is required to be a minimum of 50,000 square feet. The contract
also required that ImageTrend create a minimum of 21 additional jobs.
As the attached letter from Mike McBrady of ImageTrend indicates, the company completed
their first phase expansion of 27,000 square feet by the end of 2011 and has created 60 new
jobs which is nearly three times the number required under the contract. ImageTrend still has
the capacity to add an additional 100 employees in their existing building over the next three
years.
As a result, ImageTrend will not need additional office space until the end of 2018 and thus is
requesting an amendment to the current Contract for Private Development to extend the
completion date for Phase B from December 31, 2015 to December 31, 2018. The EDC
reviewed this request at their April 28th meeting and unanimously recommended approval.
Primary Issues to Consider
• Will additional extensions be requested in the future? The proposed Third
Amendment contains language that no further extensions will be granted.
Supporting Information
• Third Amendment to Contract for Private Development and Exhibits
David L. Olson, Community and Economic Development Director
c: Mike McBrady, ImageTrend Inc.
Financial Impact: $ None Budgeted: Y/N Source:
Envision Lakeville Community Value: Diversified Economic Development
March 30, 2015
David Olson
Community & Economic Development Director
Lakeville City Hall
20195 Holyoke Ave.
Lakeville, MN 55044
Re: Contract for Private Development dated August 3rd, 2009
Dave:
As you remember in August of 2009 ImageTrend entered in a Contract for Private
Development with the City of Lakeville. At the times we owned and occupied the 33,000
sq. ft. of office space that housed our then just under 100 employees.
The contract was entered into with the understanding that ImageTrend would continue
doing business and grow herein Lakeville. We have done just that and plan on
continuing. We have increased of employee base from 100 to 160 during that period.
This many times the jobs we agreed in the original Contract for Private Development
agreement. We invested in a 27,000 square foot addition to our building at a cost of over
two million dollars. This completed the Phase A requirements of our agreement.
Our original Contract for Private Development agreement stated that our Phase B 20,000
sq. ft. construction would be done by November 30, 2013. We later amended that
agreement with the City of Lakeville to have Phase B completed by December 31, 2015.
As we look to the future and our growth rates, below is how we see ImageTrend growing
over the next few years.
0 We have space for another 100 employee in the present 60,000 sq. ft. building.
6 With our hiring curve that should take 3 years to fill the building to capacity.
a We would plan our second Phase B building in 2017 in excess of 20,000 sq. ft.
0 We would construct the second Phase B building in the summer of 2018.
2 0 8 5 5 KENS
NGTON BLVD
LAKEV ILL E
M N 55044
TEL - 7 952
489.1589
�1�I'
MAGETREND�NC.
Al
FAX - 1 .9 52
985.587 1
W W W I M A G E T R E N D. C O M
* Upon completion prior to December 31 It 2018 we will have fulfilled our Phase B
obligations completing our agreement.
We would move in late 2018 — early 2019.
We would have the second building occupied in 2019 with about 300 employees.
We would then expand into that space for years to come as the business continues
to grow.
We are asking the City of Lakeville for an amendment to our building Contract for
Private Development agreement to accommodate these plans. This simply extends our
Phase B completion date from December 31St 2015 to December 31St 2018. Let me know
what the next step may be.
Best Regards,
J.
rend, Inc.
20 8 55 KENSINGTON BLVD
LAKEVi LLE,. MN 55044
°1G I MAG ETREND INC.
TEL- 1. 9 5 2. 4 6 9. 1 5 8 9
FAX- 1 . 9 5 2. 9 8 5. 5 6 7 1
W W W. i M A G E T R E N D. C 0 M
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NOTE: THE EXISTING 31,200 SF BUILDING AT THE
CURRENT OFFICE/WAREHOUSE RATIOS REQUIRES
139 PARKING STALLS.
SITE STUDY C
2 -STORY BUILDINGS WITH SURFACE PARKING AND
UNDERGROUND PARKING GARAGES
't I
EAST SITE: 26,600 SF ADDITION
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WEST SITE: 46,000 NEW BUILDING
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12,600 ADDITIONAL SF
EXISTING EAST: 31,200 SF
T�' I
103,800 TOTAL SF
$'
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IMAGE TREND SITE STUDIES
1-1-1001
SCALE, 1 100-0'
NORTH
50 0 200
100 0 100
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THIRD AMENDMENT TO CONTRACT
FOR PRIVATE DEVELOPMENT
IMAGETREND DEVELOPMENT, L.L.C.
THIS THIRD AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT
("Third Amendment"), made on or as of the day of June, 2015, by and between the CITY
OF LAKEVILLE, a Minnesota municipal corporation (the "City") and IMAGETREND
DEVELOPMENT, L.L.C., a Minnesota limited liability company (the "Developer").
WITNESSETH:
WHEREAS, the City and the Developer have entered into a Contract for Private
Development dated August 3, 2009 and recorded in the office of the Dakota County Registrar of
Titles on August 27, 2009 as Torrens Document No. T649971 (the "Contract"), as amended by First
Amendment to Contract for Private Development dated June 20, 2011 and recorded with the Dakota
County Registrar of Titles on June 22, 2011, as Document No. T681035 ("First Amendment"),
further amended by Second Amendment to Contract for Private Development dated March 13,
2013, and recorded with the Dakota County Registrar of Titles on March 28, 2013, as Document
No. T713689 ("Second Amendment"), regarding a sale to the Developer of approximately 3.39
acres of real property (the "Property") legally described on the attached Exhibit "A",
WHEREAS, Developer completed the Phase A expansion of 27,000 square feet prior to
December 31, 2011 and created 46 new jobs, more than double the number required under the
Contract;
WHEREAS, Developer has the capacity to add an additional 100 employees to the
existing building and will not need additional office space until the end of 2018;
WHEREAS, Developer is requesting that the time frame for completion of Minimum
Improvements for Phase B be extended to December 31, 2018;
WHEREAS, the City is willing to amend the Contract in accordance with Developer's
1821850 1
request, -vvith the understanding that this is the last extension of the deadline;
NOW, THEREFORE, in consideration of the premises, the Contract and the mutual
obligations of the parties hereto, the City and Developer hereby amend the Contract as follows:
Section 4.3 of the Contract is hereby amended to read as follows:
Section 4.3. Construction of Minimum Improvements. The Developer shall
substantially complete construction of the first Phase of the Minimum Improvements,
except for (i) landscaping (ii) exterior matters such as final lift of asphalt, striping, etc.
and (iii) minor "punch list items," on or before December 31, 2011. The construction of
the remaining Phase (Phase A or Phase B) shall be substantially completed on or before
December 31, 2018. No extension of these deadlines shall be granted by the City.
2. The Promissory Note attached as Exhibit D to the Contract is hereby amended as
provided in Exhibit B attached to this Third Amendment.
3. The Mortgage attached as Exhibit E to the Contract is hereby- amended as provided
in Exhibit C attached to this Third Amendment.
4. Except as specifically provided herein, the Contract remains unchanged and in full
force and effect. Capitalized terms not otherwise defined herein shall have the meanings ascribed to
them in the Contract.
5. Counterparts. This Third Amendment is executed in any number of counterparts, each of
which shall constitute one and the same instrument.
[remainder of page intentionally blank]
[signature pages to follotiv°]
182185vi 2
IN WITNESS WHEREOF, the City has caused this Third Amendment to be duly
executed in its name and behalf, and the Developer has caused this Agreement to be duly executed
in its name and behalf, on or as of the date first above written.
CITY OF LAKEVILLE
R -A
STATE OF MINNESOTA )
)ss.
COUNTY OF DAKOTA )
Matt Little, Mayor
Charlene Friedges, City Clerk
The foregoing instrument was acknowledged before me this . day of , 2015, by
Matt Little and by Charlene Friedges, respectively the Mayor and City Clerk of the City of
Lakeville, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the
authority granted by its City Council.
Notary Public
182185v1 3
IMAGETREND DEVELOPMENT, L.L.C.
I:
And
STATE OF MINNESOTA
1 )ss.
COUNTY OF �' o�li ) �`� fvyy Gomrafsswn 'c spires fan 31, 20� s
The foregoing instrument was acknowledged before me this day of �3 ,
2015, by I J.M,brA;and the MaAageo1pe�Acle- and
respectively of ImageTrend Development, L.L.C., a'Minnesota limited
liability company, on behalf of the company.
�M
Notary Public
DRAFTED BY:
CAMPBELL KNUTSON, P.A.
1380 Corporate Center Curve, Suite #317
Eagan, Minnesota 55121
Telephone: (651) 452-5000
AMP
182185v1 4
EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
Lots 1 and 4, Block 1, Fairfield Business Campus 2❑d Addition, Dakota County, Minnesota.
182185v1
FIRST AMENDMENT TO PROMISSORY NOTE
THIS FIRST AMENDMENT TO PROMISSORY NOTE (the "First Amendment") is
made as of the _ day of , 2015 by and between IMAGETREND DEVELOPMENT,
L.L.C., A Minnesota limited liability company, whose address is 20855 Kensington Boulevard,
Lakeville, Minnesota 55044 ("Borrower"), and the CITY OF LAKEVILLE, a Minnesota
municipal corporation, or its successors and assigns ("City")
RECITALS:
WHEREAS, Borrower executed and delivered to the City a Promissory Note dated
August 25, 2009 made payable to the order of the City in the original principle amount of Four
Hundred Eighteen Thousand Three Hundred Ninety -Three and No/100 Dollars ($418,393.00)
("Note"); and
WHEREAS, the Note is secured by certain documents including (i) Mortgage, executed
on August 25, 2009; and (ii) Contract for Private Development, executed on August 3, 2009.
The Note, Mortgage, Contract and other loan documents are hereinafter collectively referred to
as the "Loan Documents"; and
WHEREAS, pursuant to the terms of the Promissory Note, the First Installment Payment
was adjusted and reduced to zero and 00/11 Dollars ($0.00) based on Borrower's substantial
completion of Phase A of the Minimum Improvements in accordance with the terms of the
Contract for Private Development and Borrower's satisfaction of the requirements contained in
Sections 6.2-6.4 of the Contract for Private Development; and
WHEREAS, Borrower and the City have agreed to amend and modify certain provisions
of the Note and the Loan Documents as more fully described in this First Amendment.
NOW, THEREFORE, in consideration of the foregoing recitals, and for other good and
valuable consideration, the receipt and sufficiency of which Bank and Borrowers acknowledge,
Bank and Borrowers agree as follows:
1. Terms and Definitions. All of the terms not otherwise defined in this First
Amendment shall have the meaning ascribed to such terms in the Note and/or other Loan
Documents. The foregoing Recitals are included herein as if they were set forth in the body of
the Agreement.
2. Amendment of Note. The Note is hereby amended and modified as follows:
I. The second paragraph of the Note is hereby deleted.
II. The third paragraph of the Note is hereby deleted, and the following
paragraph is inserted in place thereof-
1822820
hereof:
is22s20 Exhibit B
A. One half of the outstanding principal sum together with interest on
the unpaid principal sum balance from the date of the advance of
the Note due in cash or certified funds on January 1, 2019.
Notwithstanding the foregoing, the Second Installment Payment
shall be adjusted and reduced to zero and 00/100 Dollars ($0.00) if
(1) Borrower substantially completes Phase B of the Minimum
Improvements in accordance with the terms of the Contract for
Private Development, and (2) Borrower has satisfied the
requirements contained in Sections 6.2-6.4 of the Contract for
Private Development.
3. Terms of Note. All other terms, covenants and conditions of the Note remain in
full force and effect.
4. Representations and Affirmations. The Borrower reaffirms all of the
representations, warranties, covenants and grants of liens and security interests in the Loan
Documents.
5. Modification to Loan Documents. The Loan Documents are modified to the
extent necessary to be consistent with the provisions of this First Amendment. To the extent that
this First Amendment conflicts with the Note or any of the Loan Documents, the provisions of
this First Amendment shall prevail. To the extent not otherwise modified or amended by this
First Amendment, the Note and the Loan Documents remain in full force and effect in
accordance with their respective terms.
IM
in
Its:
182282vl
(Reserved for Recording Data)
THIS IS AN AMENDMENT OF MORTGAGE AS DEFINED IN MINN. STAT. § 287.01,
SUBD. 2 AND NO REGISTRATION TAX IS DUE.
AMENDMENT TO MORTGAGE
THIS AMENDMENT TO MORTGAGE (hereinafter "Amendment"), is made
effective as of the day of , 2015, by and between IMAGETREND
DEVELOPMENT, L.L.C., a Minnesota limited liability company, whose address is 20855
Kensington Boulevard, Lakeville, Minnesota 55044 ("Mortgagor"), and CITY OF
LAKEVILLE, a Minnesota municipal corporation, whose address is 20195 Holyoke Avenue,
Lakeville, Minnesota 55044 ("Mortgagee").
WITNESSETH:
WHEREAS, Mortgagors executed and delivered to Mortgagee a Mortgage dated August
25, 2009 (the "Mortgage"), which Mortgage was recorded in the Office of the Dakota County
Registrar of Titles on August 27, 2009 as Document No. T649973; and
WHEREAS, the Mortgage secured a Promissory Note in the amount of $418,393.00
dated August 25, 2009 ("Note") executed by Mortgagors in favor of Mortgagee which Note was
amended by an Amendment to Promissory Note dated as of , 2015 ("First
Amendment to Promissory Note"). The Note and First Amendment to Promissory Note are
hereinafter jointly referred to as the "Amended and Restated Note"; and
WHEREAS, Mortgagors and Mortgagee desire to reflect changes in the terms of the
Mortgage for which the Note provides evidence as they may affect the terms of the Mortgage.
NOW, THEREFORE, in consideration of the foregoing recitals and for other good and
valuable consideration, the receipt and sufficiency of which Mortgagors and Mortgagee
acknowledge, Mortgagors and Mortgagee agree as follows:
1. Amendment of Mortgage. The Mortgage is amended from and after the date
hereof as follows:
1822850 Exhibit C
a. All references in the Mortgage to the Note shall refer to the "Amended
and Restated Note".
b. The paragraph on page 2 of the Mortgage beginning with "PROVIDED,
NEVERTHELESS" is deleted in its entirety and the following inserted in place thereof:
PROVIDED, NEVERTHELESS, that if the Mortgagor, its administrators, personal
representatives, successors and assigns (A) shall pay to the Mortgagee, its successors or
assigns, as set forth in the Amended and Restated Note, the adjusted sum of Two
Hundred Nine Thousand One Hundred Ninety Six and 50/100 Dollars ($209,196.50)
together with interest on the outstanding principal sum of Four Hundred Eighteen
Thousand Three Hundred Ninety -Three and No/100 Dollars ($418,393.00) at the interest
rate set forth therein, being due and payable in full on January 1, 2019, unless due earlier
according to the terms of the Amended and Restated Note, or such lesser amount as may
be adjusted according to the terms of the Amended and Restated Note, the terms and
conditions of which are incorporated herein by reference and made a part hereof, together
with any extensions or renewals thereof, and (B) shall repay to the Mortgagee, its
successors or assigns, at the times demanded and with interest thereon at the same rate
specified in the Note, all sums advanced in protecting the lien of this Mortgage, in
payment of taxes and special assessments on the Property, in payment of insurance
premiums covering improvements thereon, in payment of principal and interest on prior
liens, in payment of expenses and attorneys' fees herein provided for and all sums
advanced for any other purpose authorized herein (the Note and all such sums, together
with interest thereon, being collectively referred to as the "Indebtedness Secured
Hereby"), and shall keep and perform all of the covenants and agreements in the Note,
the Contract for Private Development, as amended, and herein contained, then this
Mortgage shall become null and void and shall be released at Mortgagor's expense.
C. SECTION 1.9 on page 4 of the Mortgage is deleted in its entirety and the
following is inserted in place thereof:
SECTION 1.9: MAXIMUM AMOUNT. The maximum amount this Mortgage shall secure
shall not be more than Two Hundred Nine Thousand One Hundred Ninety Six and
50/100 Dollars ($209,196.50) at any time, together with interest on the outstanding
principal sum of Four Hundred Eighteen Thousand Three Hundred Ninety -Three and
No/100 Dollars ($418,393.00) at the interest rate set forth in the Amended and Restated
Note and all amounts expended by the Mortgagee to protect the Mortgagee's interest in
the Property secured by this Mortgage and to enforce the terms hereof.
2. No Additional Mortgage Registration Tax. The Mortgage, as amended by this
Amendment, secures no additional advances of principal and is an amendment as defined in
Minn. Stat. § 287.01, Subd. 2 and no additional mortgage registration tax shall be due.
3. Warranties and Affirmation. Mortgagors hereby reaffirm, give, grant, bargain,
convey, mortgage, warrant, pledge and confirm to Mortgagee all of the Mortgagors' estates, rights,
182285v1
title and interest in and to the Property as defined in the Mortgage to secure all of the Obligations of
the Mortgagor. As of the date of this Amendment, Mortgagors hereby reaffirm all of their
warranties and representations under the Mortgage, including but not limited to, the warranty of
clear and marketable title to the Property, subject only to the lien of the Mortgage and other
encumbrances of title permitted by the Mortgagee. The Mortgagors agree to pay or reimburse the
Mortgagee for any and all fees payable to public officials in connection with this Amendment, and
the recording thereof, and for the cost of title insurance and legal fees that the Mortgagee may incur.
The recital paragraphs herein are fully incorporated into the terms of this Amendment.
4. Ratification and Continuation of Terms. Except as specifically modified or
amended in this Amendment, all of the terms of the Mortgage remain in full force and effect.
BY SIGNING BELOW, MORTGAGORS AGREE TO THE TERMS, COVENANTS AND
CONDITIONS CONTAINED IN THIS AMENDMENT.
IN WITNESS WHEREOF, the Mortgagor and the Mortgagee have executed this
Amendment as of the day and year set forth above.
CITY OF LAKEVILLE
WE
an
STATE OF MINNESOTA )
)ss.
COUNTY OF DAKOTA )
Matt Little, Mayor
Charlene Friedges, City Clerk
The foregoing instrument was acknowledged before me this day of , 2015, by
Matt Little and by Charlene Friedges, respectively the Mayor and City Clerk of the City of
Lakeville, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the
authority granted by its City Council.
Notary Public
IMAGETRE
By: A
l�lQ b 8- V , President
182285v1
L.L.C.
woo
f
STATE OF MINNESOTA ) o..T09
ROBERT
TAre JAMES®VAK
:
1 )ss.»,...,
COUNTY OF �a d i ) mrANotary Public -Minnesota
�A� +;:;; s ° My Cosslon Expires Jan 31, 2016
The foregoing instrument was acknowledged before me this day of
2015, by ("�.� Q� �. �k�r ,and , the MAAayer-1prc-z JJ4 and
respectively of ImageTrend Development, L.L.C., a Minnesota limited
liability company, on behalf of the company.
rotary Public
DRAFTED BY:
CAMPBELL KNUTSON, P.A.
1380 Corporate Center Curve, Suite #317
Eagan, Minnesota 55121
Telephone: (651) 452-5000
AMP
182285v1