HomeMy WebLinkAbout1A Confirmaton Letter Request by RRLD for US BankEN HILLS
MEMORANDUM
DATE: April 13, 2009 Agenda Item LA
TO: Mayor and City Council
FROM: Ron Moorse, City Administrator
SUBJECT: Confirmation letter to RRLD and US Bank
Background
Attached is a confirmation letter being requested by RRLD regarding the TCAAP earnest money
deposit, and a memo from John Dean explaining the request and the letter. As the memo
indicates, John does not have any concerns with the City signing the letter. Due to scheduling
conflicts, John is not able to attend the work session, and Steve Bubul may not be able to attend.
If you have questions or concerns regarding the letter, please let me know or call John or Steve
directly prior to Monday's work session.
Council Direction Requested
Provide direction regarding the City Administrator signing the requested confirmation letter.
Item LA
Memorandum
To: Mayor, City Council and City Administrator
From: Steve Bubul and John Dean
Subject: Confirmation Letter to RRLD and US Bank National Association.
Date: April 10, 2009
RLLD wishes to enter into a $32,000,000 revolving line of credit with US Bank National
Association (USB'). Among the requirements that USB has placed on RLLD as a
condition to making the loan is that RLLD pledge to USB any right, or interest RLLD has in
the $2,250,000 earnest money previously paid under the QTP. To further protect that
pledge, USB is requiring that any returned earnest money that would have otherwise gone to
RLLD be sent to USB instead.
RLLD and USB are requesting that the city provide them with a letter: (i) referencing the
relevant agreements that control the use, payment and return of the earnest money, (ii)
acknowledging that RLLD has pledged the earnest money as security for the loan from
USB; and (Ili) agreeing to deliver any earnest money returned to the city to USB instead of
to RLLD_
We recommend that the council authorize the city administrator to execute and deliver the
attached letter to RLLD and USB. The request is commercially reasonable, and does not
impair any of the city's rights, obligations or remedies created by the various agreements
referenced in the letter.
It.. -
EN HILLS
To: RRLD, LLC and
U.S. Bank National Association
On behalf of the City of Arden Hills, I can confirm to you as follows:
[The terms used below shall have the following meanings:
"Guaranty " means collectively the Funding and Guaranty
Agreement dated as ofAugust 10, 2006, as amended by that certain First Amendment to
Funding and Guaranty Agreement dated as of March 30, 2007, by and between the City, the
Pledgor, Borrower and Rehbein
"OTP " means collectively the Offer to Purchase by and between the
City of Arden Hills, and the United States ofAmerica dated as of August 1, 2006, as
amended by Amendments dated as of August 11, 2006, November 15, 2006, February 12,
2007, and March 28, 2007 (collectively, the "OTP'), regarding the acquisition and
redevelopment of a portion of the Twin Cities ' Army Ammunition Plant.
"PDA " means collectively the Preliminary Development Agreement
by and between RRLD and the City dated as of March 30, 2007, as amended pursuant to
that certain First Amendment to Preliminary Development Agreement dated as of April 30,
2007, that certain Second Amendment to Preliminary Development Agreement dated as of
March 10, 2008, and that certain Third Amendment to Preliminary Development Agreement
dated as of March 30, 2009, with respect to planned acquisition and development by the
RLLD of the Twin Cities Army Ammunition Plant.]
I . In accordance with the terms of the Guaranty, the City has received from
RLLD earnest money in the amount of$2,250,000 and has deposited such
funds in the manner provided in the OTP.
2_ Return of the deposited funds to the City is governed by the provisions of the
OTP.
3. Return to RRLD of the funds returned to the City pursuant to the OTP is
governed by the provisions of the Guaranty and the PDA.
4. The City acknowledges that RRLD has pledged its interest in the earnest
money to U.S. Bank National Association.
5. If the earnest money is returned to the City, RRLD has directed the City, and
the City agrees, to deliver the earnest money to U.S. Bank National
Association at U.S. Bancorp Center, BC-MN-H03A, 800 Nicollet Mall,
Third Floor, Minneapolis MN 55402-7020, Attention: Real Estate Division
Head. The City will copy RRLD contemporaneously with the delivery of
the earnest money to U.S. Bank as aforesaid.
Respectfully submitted,
Ron Moorse
City Administrator
Acknowledged this day of April 2009
RRLD, LLC
By: Ryan Companies US, Inc.
Its: Manager
By:
Its:
Vice President