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HomeMy WebLinkAbout04/13/2017 EDA Meetingcity of AppleVlle Y Meeting Location: Municipal Center 7100 147th Street West Apple Valley, Minnesota 55124 NOTICE: The Apple Valley Economic Development Authority will hold a special meeting at the Municipal Center, on Thursday, April 13, 2017, at 5:30 p.m. to consider the items listed in the following agenda: April 13, 2017 SPECIAL ECONOMIC DEVELOPMENT AUTHORITY MEETING TENTATIVE AGENDA 5:30 p.m. 1. Call to Order 2. Approve Agenda 3. Approve Consent Agenda Items Consent Agenda Items are considered routine and will be enacted with a single motion, without discussion, unless a commissioner or citizen requests to have any item separately considered. It will then be moved to the regular agenda for consideration. A. Approve Minutes of March 23, 2017 B. Adopt Resolution consenting to Assignment of Tax Increment Financing and Authorizing Execution of consent Thereto and Execution of Subordination Agreement (Parkside Gabella Project) 4. Regular Agenda Items 5. EDA Items and Communications (For items EDA wishes to discuss) 6. Staff Updates 7. Adjourn Regular meetings are broadcast, live, on Charter Communications Cable Channel 180 and on the City's website at www.cityofapplevalley.org ECONOMIC DEVELOPMENT AUTHORITY City of Apple Valley Dakota County, Minnesota March 23, 2017 Minutes of the special meeting of the Economic Development Authority of Apple Valley, Dakota County, Minnesota, held March 23, 2017, at 6:00 p.m., at Apple Valley Municipal Center. PRESENT: Commissioners Bergman, Goodwin, Grendahl, Hamann -Roland, Hooppaw, Maguire and Melander ABSENT: City staff members present were: Executive Director Tom Lawell, City Attorney Michael Dougherty, Community Development Director Bruce Nordquist, Planner/Economic Development Specialist Alex Sharpe, Finance Director Ron Hedberg and Department Assistant Joan Murphy. Meeting was called to order at 6:01 p.m. by President Goodwin. APPROVAL OF AGENDA MOTION: of Hamann -Roland, seconded by Grendahl, approving the agenda. Ayes - 6 - Nays - 0. CONSENT AGENDA MOTION: of Melander, seconded by Bergman, approving the minutes of the meeting of January 26, 2017, as written. Ayes - 6 - Nays - 0. Commissioner Maguire arrived at 6:04 p.m. OPEN TO BUSINESS PROGRAM Laurie Crow, Business Advisor for Open To Business, provided an update on how the program is progressing in Dakota County and made comparisons to surrounding counties. The program is offered through the Metropolitan Consortium of Community Developers (MCCD), and helps small businesses and entrepreneurs that need individual advice and counseling, and access to capital that is not available from the commercial banking system. Small businesses and entrepreneurs generate a significant number of jobs and income, but are often unable to obtain traditional funding because they are considered too risky by many lending institutions. The technical assistance and financing network offered by MCCD can make a difference in creating a successful business. Discussion followed. MOTION: of Hooppaw, seconded by Hamann -Roland, authorizing JPA with Dakota County Community Development Agency for "Open to Business". Ayes - 7 - Nays - 0. Economic Development Authority City of Apple Valley Dakota County, Minnesota March 23, 2017 Page 2 ADJOURNMENT MOTION: of Hooppaw, seconded by Melander, to adjourn. Ayes - 7 - Nays - 0. The meeting was adjourned at 6:40 p.m. Respectfully Submitted, Jo. Murphy, Departm-' t Ass ant Approved by the Apple Valley Economic Development Authority on Tom Goodwin, President 660 0066 00006 0600 060 City of Apple ValIey MEMO Finance Department TO: President, Economic Development Authority Commissioners, and Tom Lawell, Executive Director FROM: Ron Hedberg, Finance Director DATE: April 5, 2017 SUBJECT: Adopt Resolution Consenting to Assignment of Tax Increment Financing and Authorizing Execution of Consent Thereto and Execution of Subordination Agreement (Parkside Gabella Project) Introduction On November 14, 2016 the Apple Valley Economic Development Authority (EDA) entered into an Amended and Restated Development Assistance Agreement with Bigos-Gabella, LLC to provide financial support in the amount of up to $2,684,000 for substantial site improvements involved in the construction of the Parkside Gabella Apartments. The support provided comes in the form of Pay as You Go" Tax Increment Financing (TIF). Bigos Gabella, LLC is requesting the EDA to provide consent to their financing of the Parkside Gabella building and consent to the subordination of the authority agreements to the mortgage on the property. Bigos Gabella LLC is also requesting the EDA to consent to the reassignment of the TIF Note to the lender providing the financing. Pay as you Go TIF Financing — TIF Note The Development Assistance Agreement included a "pay as you go" TIF financing provision where the developer could be reimbursed for eligible development costs related to the construction of Parkside Gabella Apartments in the first phase of the TIF 15 Parkside District. The TIF Note was issued on September 22, 2016 to IMH and was subsequently assigned to Bigos Gabella LLC on December 21, 2016. Background: The Parkside Development consists of two phases, the first phase was the construction of the Gabella building and the second phase will consist of the Galante building yet to be constructed on Galaxie Avenue. The construction of Parkside Gabella is complete and the final certificate of occupancy was issued on May 31, 2016. The development agreement provided for a minimum assessed valuation for the Phase I, Parkside Gabella project at $21,345,000 and the current market value as determined by the County Assessor as of January 1, 2017, is $37,927,400. The "pay as you go financing" calls for repayment from the annual tax increment collected from the project and is dependent on the property owner making the annual property tax payments. The terms of the TIF Revenue Note include an interest rate of 5% and the amount of the note is $2,684,000. The annual payment on the TIF Note is set at 70% of the available Tax Increment generated by the project and are applied first to interest and then towards the principal balance until the balance is retired. The first year of increment repayment will be 2017. The next key target date included in the Business Subsidy Agreement for the Parkside IMH projects is for the developer to submit for and have issued the building pen -nit for phase II, the Galante building by April 30, 2017. Staff Recommendation Staff recommends the adoption of the attached Resolution Consenting to Assignment of Tax Increment Financing and Authorizing Execution of Consent Thereto and Execution of Subordination EDA Action Requested: Adopt Resolution Consenting to Assignment of Tax Increment Financing and Authorizing Execution of Consent Thereto and Execution of Subordination Attachments: • Resolution Consenting to Assignment of Tax Increment Financing and Authorizing Execution of Consent Thereto and Execution of Subordination • Assignment of Tax Increment Financing • Consent of the Apple Valley Economic Development Authority • Subordination Agreement APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. EDA -17 - HELD: April 13, 2017 RESOLUTION CONSENTING TO ASSIGNMENT OF TAX INCREMENT FINANCING AND AUTHORIZING EXECUTION OF CONSENT THERETO AND EXECUTION OF SUBORDINATION AGREEMENT BE IT RESOLVED by the Board of Commissioners (the "Board") of the Apple Valley Economic Development Authority (the "Authority"), as follows: 1. Recitals: (a) The Authority, the City of Apple Valley, Minnesota (the "City"), and IMH Special Asset NT 175 -AVN, LLC, an Arizona limited liability company (the "Developer") have entered into a Development Assistance Agreement, dated as of February 1, 2013 ("Original Agreement"), in connection with the construction of an approximately 322 unit multifamily rental housing facility consisting of two buildings, by the Developer and each building being located in the City, one of which is known as Parkside Village Gabella ("Gabella"). (b) The Authority, the City and the Developer amended and restated the Original Agreement in its entirety and entered into an Amended and Restated Development Assistance Agreement dated July 10, 2014, as amended by a First Amendment to Amended and Restated Development Assistance Agreement, dated as of October 9, 2014, affected by that certain Partial Assignment of Development Agreements, dated October 9, 2014 by and between the Developer and the Authority to IMH Gabella, LLC, as Assignee ("IMH"), as further amended by that certain Second Amendment to Amended and Restated Development Assistance Agreement, dated on or about November 14, 2016, affected by that certain Partial Assignment of Development Agreements by IMH to Bigos-Galante, LLC undated, but recorded November 17, 2016 as Document No. 3162174 and a Partial Assignment of Development Agreements with Bigos Gabella, LLC ("Bigos"), undated, but signed and notarized on or about December 17, 2016 (collectively, the "Development Assistance Agreement"). (c) Under the terms of the Development Assistance Agreement, a Tax Increment Revenue Note (Gabella Project), No. R-1, dated September 22, 2016 was issued to IMH by the Authority and which IMH assigned to Bigos, pursuant to an Assignment of Tax Increment Revenue Note (Gaballa Project) dated as of December 21, 2016 (the "TIF Note"). (d) It is the intent of Bigos to obtain financing from Jones Lang LaSalle Multifamily, LLC, a Delaware limited liability company (the "Lender") to finance certain costs of and for Gabella and in connection therewith Bigos is requesting the Authority consent to that certain Assignment of Tax Increment Financing, among other things, between Bigos and the Lender by executing that certain Consent of the Apple Valley Economic Development Authority (the "Consent"). 8235252v1 (e) In order for Bigos to obtain the financing, the Lender is requiring the Authority and the City enter into a Subordination Agreement (the "Subordination Agreement") by and among the Authority, the City and the Lender pursuant to which certain "Authority Agreements" and "City Agreements" (as defined in the Subordination Agreement") shall be subordinate to the lien, covenants, restrictions, ten -ns and providers of the "Senior Security Instruments" and the "Senior Loan Documents" (as defined in the Subordination Agreement"). The Board finds that it is in the best interest of the City and its residents that the Authority consent to the Assignment of Tax Increment Financing and authorize the execution of the Consent and the Subordination Agreement. 2. Consent; Execution. The Board hereby approves and consents to the Assignment of Tax Increment Financing, the Consent, and the Subordination Agreement in substantially the forms submitted, and the President and Secretary of the Board are hereby authorized and directed to execute the Consent and the Subordination Agreement on behalf of the Authority. The approval hereby given includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the Authority officials authorized by this resolution to execute the same. The execution of the documents referred to herein by the appropriate officer or officers of the Authority shall be conclusive evidence of its consent thereto. Adopted by the Board of Commissioners of the Apple Valley Economic Development Authority, Minnesota, this 13th day of April, 2017. Tom Goodwin, President ATTEST: Pamela J. Gackstetter, Secretary 2 8235252v1 Member introduced the foregoing resolution and moved its adoption. The motion for the adoption of the foregoing resolution was duly seconded by Member , and upon vote being taken thereon, the following voted in favor: and the following voted against the same: whereupon said resolution was declared duly adopted. 3 8235252v1 STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) I, the undersigned, being the duly qualified and acting Secretary of the Apple Valley Economic Development Authority, DO HEREBY CERTIFY that the attached resolutions is a true and correct copy of an extract of minutes of a meeting of the Board of Commissioners of the Apple Valley Economic Development Authority duly called and held, as such minutes relate to a Resolution Consenting to Assignment of Tax Increment Financing and Authorizing Execution of Consent thereto and Execution of Subordination Agreement. WITNESS my hand as such Secretary of the Apple Valley Economic Development Authority this day of April, 2017. Secretary 8235252v1 AS 1 INIVIEN1 OF TAX INChE ENT NANC NG THIS ASSIGNMENT OF TAX INCREMENT FINANCING ("Assignment is made as of the day of May, 2017, by and between BIGOS-GABELLA, LLC, Minnesota limited liability company ("BotToWer"), whose address is 8325 Wayzata Boulevard, Suite 200, Golden Valley Minnesota 55426, and JONES LANG LASALLE MULTIFAMILY, LIC, a Delaware limited liability company ("Lender"), whose address is /177 Youngman Avenue, St. Paul, Minnesota 55116. NARY RECITALS: A. Lender is making a loan to Borrower in the ori.inJ principal amount of Twenty - Nine Million and No/100 Dollars ($29,000,000.00) (the "Loan"). Pursuant to that certain Multifamily Loan and Security Agreement dated as of the date hereof, by and between Borrower and Lender as amended, restated, replaced, supplemented or otherwise modified from time to time. the "Loan Agreement"), Lender is making a loan to Borrower in the original principal amount of Twenty -Nine Million and No/100 Dollars ($29,000„000.00) (the "Mortgage Loan"), as evidenced by that certain Multifamily Note dated as of the date hereof, executed by Borrower and made payable to the order of Lender in the amount of the Mortgage Loan (as amended, restated, replaced, supplemented., or otherwise modified from time to time, the "Not(.?"),, and is secured by, among other things, a Multifamily Mortgage, Assignment of Leases and Rents, Security Agreernent and Fixture Filing (including any Riders, the "Security Intrumnt"), dated the date of this Agreement, granting a first lien on a multifamily residential facility located in Apple Valley, klinnesota known as Gabella at Parkside, as more fully described in Exhibit "A" attached hereto (the "Premises"). The Note, Security instrument, this Agreement and all other documents executed in connection with the Loan are collectively referred to as the "Loan Documents", C. The P ises is ithin Tax Incre ent Financi Distric No. (the "Tax Inc - menDistrict'), D. The Apple Valley Economic Development Authority (the "TIF rovider") and IMH Special Asset NT I 75 -AVN, LLC. an Arizona limited liability company ("1MH-) entered into that certain Amended and Restated Development Assistance Agreement dated July 10, 2014, recorded September 25, 2014 as Document No. 3031137, as amended by a First Amendment to Amended and Restated Development Assistance Agreement dated as of October 9, 2014, recorded October 21, 2014 as Document No. 3035036, in the Official Records, as affected by those certain Partial Assignments of Development Agreements b and between 175 -AVN, as assignor, and , as assignee, dated as of October 9, 2014 and recorded on October 22, 2014 as Document Nos. 30353544 and 3035345 in the Official Records, as amended by that certain Second Atnendment to Amended and Restated Development Assistance Agreement ("Second Amendment"), recorded on November 17, 2016 as Document No. 3162172 in the Official Records, and as affected by that certain Partial Assignment of Development Agreement ("Partial Assignment") by and between and B1gos- ACTIVEN44607232.0-4/4/17 Galante, LLC, a Minnesota limited liability company ("Dips -Galante), dated as of November 14, 2016, and recorded on November 17, 2016 as Document No 3162174 in the Official Records, as such Second Amendment and Partial Assignment are affected by that certain Affidavit Regarding Scrivener's Error ("Affidavit"), dated December 2, 2016, recorded December 5, 2016 as Document No. 3164905 in the Official Records and affected by that certain Partial Assignment of Development Agreement dated , 2016 entered into by and between IM-Gabella, LLC, a Delaware limited liability company and Bigos-Gabelia, LIC, a Minnesota limited liability company (collectively, the "Development Agreement"). The Development Agreement sets forth the TIF Provider's agreement to provide certain tax increment financing to the Borrower and the Premises in the form of reimbursements to the Borrower out of tax increments derived from the Tax Increment District (the "Tax Increment Financing") as consideration for undertaking certain improvements to the Premises, E. As proNided in the Development Agreement, the TIF Provider executed and delivered to IMH, the TIF Provider's United States of Ameri('a. State of N4innesota, County of Dakota, Apple Valley Economic E)evelopment Authority Tax 'Increment Revenue Note (Gabella Project), dated Sei)tember 22, 2016 in the original principal amount of Two Pvlillion Six Hundred Eighty -Four Thousand and No/100 Dollars ($2„684,000,0( and assigned to and assumed by Bonower pursuant to Assignment of Tax Increment Revenue of (Gahili Project) dated as of December 21, 2016 (collectively, the "Tax Increment Financing Note"), F. The Tax Increment Financing Note and the Development Agreementshall be referred to iointly herein as the "Tax Increment Financing Documents". G. In order to facilitate the Loan, Lender (1Ii' ii.1 the 1%t'\\e grecs to e it to L1Iis A signment. H. As further security for repayment of the Note. Borrower is executing and delivering 10 Lender this Assignment 1. All terms not defined herein hal have the meanings set ort e Security Instrument. NOW. THEREFORE. in consideration of the above recitals, and for value received, the Borrower hereby transfers, assigns and grants a security interest in, pledges, and conveys, to Lender all right, title and interest of the Borrower in and to the Tax Increment Financing Note and the Development Agreement. provided Lender does not assume any obligations under the Fax Increment Financing Documents unless and until Lender assumes such obligations in writing, together with all proceeds thereof and the immediate and continuing right to receive and collect all amounts due or to become due thereunder and all other rights which may derive from or accrue thereunder and the right to amend, cancel, modify, alter or surrender the Tax Increment Financing Documents for the purpose of securing the following (hereinafter collectively referred to as the "Indebtedness Secured Hereby"): Q. Payment of the indebtedness and obligations evidenced by and performance terms and conditions of the Note, AC' V17\446072310-4/4 17 ro. Payment of all other sums wit Lender herein and in the Note; terest ernercon becorning due and payable o Three. Performance and discharge of each and every obligation, covenant and agreement of the Borrower herein and in the Note, the Security Instrument and all other Loan Documents. BORROWER COVENANTS, WARRANTS, REPRESENTS AND AGREES: Cove ants R resentations and \\ nia mi That Borrower is the true and lawful, absoiute owner of the Tax Increment Financing Note free and clear from any and all liens, security interests, encumbrances or other right, title or interest of at y uthet petson, firm or corporation; b. That Borrower has the full right and title to assign and pledge the Tax Increment Financing Note and the Development Agreement; that there are no outstanding claims, assignments or pledges thereof; that there are no existing defaults under the Tax Increment Financing Documents on the part of makers thereof; that Borrower has fully complied with and is not in default with regard to the Tax Increment Financing Documents. That Tax Increment Financing Documents constitute all of the documents entered into in connection with the Tax Incren-ient Financing and shall not be amended, altered, terminated, cancelled, modified or surrendered without the prior -,Nritten consent of Lender. d. That the Premises has been fully constructed in accordance with the Development Agreement and the Borrower is in full compliance with the terms of the Development Agreement, including hut not limited to, the 10 and moderate income requirements set forth in Section 63 of the Development Agreement. That the unpaid Increment Fi ancmg Note. cipal balance due on the Tax Increment Financing Note is and no defaults exist under the terms of the Tax That the Tax Increment Financing Note and the DevelopmentAgreenient remair fitll force and effect. That there are no defenses, setoffs or counterclaims against or with regard to the Tax Increment Financing Note or the Development Agreement or the indebtedness evidenced thereby. The Tax Increment Financing Note and the Development Agreement have not been amended or modified except as provided herein and are valid and enforceable obligations of the TIF Provider and the Borrower in accordance with their terms. ACTIVE\446C 7232.04/4/17 Perfor lance under the Tax Increment Financi ocuments. The Borrower shall fully comply with the Tax _'1 Financing Documents and shall enforce or secure the performance of each and every obligation of the TIF Provida in the Tax Increment Financin Documents; not borrow against, further pledge or assign any payments due under the Tax Increment Financing Note; not waive, excuse, condone or in any manner release or discharge the 1F Provider from its obligations under the Tax Increment Financing Documents, The Borrower shall provide L,ender copies of all notices and certificates sent or received by Borrower under the Tax Increment Financing Documents, Present Pled e and Assi nment. a. This Assignment shall constitute a perfcct. absolute and present pledge and assignment in connection with which the Borrower shall have delivered to Lender the Tax Increment Financing Documents endorsed and assigned to Lender. The Borrower shall execute and deliver to Lender the Ationge Endorsement attached hereto as Exhibit "B" and the Assignment of Development Agreement attached hereto as Exhibit "C" b. The Borrower has retained the right to collect the semi-annual payments under the Tax increment Financing Note unless and until an Event of Default has occurred hereunder. The Borrower shall provide Lender copies of any statements if any, 111tiltcd to the TIF Provider for payment on the Tax Increment Financing Note, U. From and during the continuance of an Event of E)efault beyond any applicable cure period hereunder upon notice to the TIF Provider, the Tax increment Financing Note shall be registered in the name of Lender, Lender shall be et -railed to submit statements for payment under the Tax Increment Financing Note and all paytnents on the Tax Increment Financing Note shall be paid directly to Lender to be held and applied by Lender as provided herein. Should the Bonower thereafter receive any payments on the Tax Increment Financing Note, the Borrower shall immediately turn over the same to Lender. Borrower hereby irrevocably appoints Lender as its attorney in fact, irrevocable and coupled with an interest to perform all of Borrower's obligations under the Tax Increment Financing Documents and to cause the Tax Increment Financing Note to be registered in Lender's name and to submit statements for payment under the Tax Increment Financing of and to collect all payments under and to enforce the Tax Increment Financing Documents including but not limited to the Tax Increment Financing Note and the Development Agreement from and after the occurrence of an Event of Default hereunder. 4, Securit Areement, This Agreement constitutes a Security Agreement under the Uniforin Commercial Code as adopted in Minnesota (the "Code") and shall be governed by the Code. A VE\44607232.v3 4/4/17 5. Events of Default, An Event of Default shall occur hereunder upon the following: a. A default or Event of Default occurs under any of the terms of the Note, the Loan Agreement or the Security Instrument or any other Loan Document; or b. Failure to comply with or perform any of the terms, conditions or covenants of this Assignment or the Tax Increment Financing Documents; or Any representation or warranty made by Borrower herein, in the Note, the Security Instrument or in any other Loan Document shall be false, breached or dishonored. 6. Rem dies. Upon and during the continuance of an Event of Default beyond any applicable cure period, Lender may declare all Indebtedness Secured Hereby immediately due and payable and provide notice to the TIF Provider to thereafter make all payments under the Tax Increment Financing Note to Lender and apply all sums held or received by Lender including the payments received under the Tax Increment Financing Note to the Indebtedness Secured Hereby in such order as Lender may determine and may, at its option, enforce the payment thereof and exercise all of the rights of a holder of the Tax Increment Financing Documents, In addition, upon the occurrence of an Event of Default, Lender may without demand, advertisement or notice of any kind (except such notice as may be required under the Code) and all of which are, to the extent permitted by law„ hereby expressly waived: b. ex re* e any of the remedies available to a secured party under the Code; proceed immediately to exercise each and all of the powers, rights, and privileges reserved or granted to Lender under the Note or the Security Instrument; c proceed to protect and enforce this Assignment by suits or proceedings or otherwise, and for the enforcement of any other legal or equitable remedy available to Lender. In the event that any notice is required to be given undei the Code such requirements for reasonable notice shall be satisfied by giviHijng at least ten (10) days notice prior to the event or thing giving rise to the requirement of notice. 7. Authorization to —IF Provider. The TIF Provider is hereby i 'revocably authorized and directed to recognize the claims of Lender without investigating the reason for any action taken or the validity of or the amount of indebtedness owing to Lender or the existence of any Event of Default and the Borrower hereby irrevocably directs and authorizes the TIF Provider to register the Tax Increment Financing Note in Lender's Name and to pay exclusively to Lender or its assigns from and after request from Lender, all sums due under the Tax Increment Financing Note without the necessity of proof of any Event of Default hereunder and to the extent such sums are paid to Lender, the Borrower agrees that the T1F Provider shall have no further liability to the Borrower for the same. The sole signature of Lender shall be sufficient for the exercise of any rights under this Assignment and the sole receipt by Lender of any sum paid by the TIF Provider shall be in discharge and release of that portion of any amo int owed by the TIF Provider. A V \446072 2.v -414/17 8. Additional Instru erns. 'Fhe Borrower upon the request of Lender shall, at the Borrower's expense, execute and deliver all assignments, certificates, financing statements or other documents and give further assurances and do all other acts and things as Lender may request to perfect or to realize 'Ton Lender's interest in the fax Increment Financing and the Tax Increment Financing Documents or to protect, enforce, or otherwise effect Lender's rights and remedies. If the Borrower is unable or unwilling to execute any such other assignments, certificates, financing statements or other documents and to file financing statements or other public notices or recordings with the appropriate authorities, as and when reasonably requested by Lender, the Borrower irrevocably authorizes Lender to sin and deliver as the Borrower's true and lawful agent and attomey-in-fact, irrevocable and coupled with an interest, any such assignment, certificate, financino statement or other doc em and to make any such tiling. 9. Amendment, The Tax Increment Financing Documents shall not be amended, altered, cance ed, modified, surrendered or terminated without the prior written consent of Lender. W. Release. Upon payment and performance in full of the Indebtedness Secured Hereby, this Assignment shall be released and shall thereafter become null and void and be of no further effect. 11, Successors and Assi. ns. This Assignment, and each and every covenant, agreement and provision hereof shall be binding upon the Borrower and its successors and assigns and shall inure to the benefit of Lender and its successors and assigns. 1). Gove La This A -nt s d.') to be governed by the laws u te Stale of Minnesota. 13, Validit Clause, The u ienforceability or invalidity of any provision hereof shallnot render any other provision or provisions herein contained unenforceable or invalid. Any provisions found to be unenforceable shall be severable from this Assigmrient. 1 -Notices. Notices which any party hereto may desire or rnay be required to give to any other party shall be in ‘vriting and the mailing thereof by certified mail or equivalent, to the respective party's address as set forth hereinabove, or such other place as such party may by notice in writing designate as its address shall constitute service of notice hereunder. 15. Attorne rsFees. The Borrower agrees to pay all costs of collection, including reasonable attorneys' fees, at any time paid or incurred by Lender in connection with the enfbrcement of its rights hereunder, AC1 '.\44007232,v3-4/4/17 IN WITNESS WHEREOF., the Borrower has caused this 1' i iunI Finaih t be executed as of the date first above written. STATE OF MINN ) ) ss. COUNTY OF The foregoing instrutm GABELLA, LLC, company ACTIVE\446C7232,0-4/4/ 7 ax 'nem et t BIGOS-GABE LA, LLC, a Minnesota limited liability company By: Name: Its: as acknowledged before me this day of May, 2017, by , of BIGOS- ota 14 lited liability company, on behall limited liability Notary Public LEGAL DESCRIPTION AC VE\44 17232.v. -4i4117 EXHIBIT "B' TO AS GNMENT OF TAX INCREMENT FINANCING ALLONGE ENDORSEMENT TO TAX INCREMENT REVENUE NOTE FOR. VALUE RECEIVED, BIGOS-GABEIA,A, LLC, a Minnesota limited liability company, endorses assigns and transfers with recourse to JONES LANG LASALLE ULTIFAIVIILY, LLC, a Delaware lin-tiled liability company, all right, title and interest in and to the following described Note: United States of America, State of Minnesota. County of Dakota. Apple Valley Economic Development Authority Increment Revenue Note (Gabella Project), dated September 22, 2016 in the principal amount of Two Million Six Hundred Eighty -Four Thousand and No/100 Dollars ($2,684,000.00) executed by the Apple Valley Economic Development Authority, as maker, to IMI -1 Gabella, LLC, a Delaware limited liability company (IMEI Gabelia") as holder and assigned to and assumed by Bigos-Gabella. LI a Minnesota limited liability company ("Borrower) pursuant to Assignment of Fax Increment Revenue Note (Gabella Project) dated December 21, 2016 entered into by and between Borrower, IMFI Gabella and consented to by the Apple Valley Economic Development Authority, Minnesota, Dated at Minneapolis, Minnesota, as of the day of May, 2017. T ITS ALLONGE S TO BE AFFIXED TO THE NOTE DESCRIBED ABOVE IGOS-GABE C, a esota limited liability company By: Name: Title: ACT1N/ EV44607232. v3-4/4117 EXHIBIT "C" TO ASSIGNMENT OF TAX INCREMENT FINANCING ASSIGNMENT OF DEVELOPMENT AGREEMENT KNOW ALL MEN BY THESE PRESENTS, that 11 :\, LL,C a Minnesota it'd liability company ("Assignor") in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration, in hand paid by JONES LANG LASALLE MULTIFAMILY, LLC, a Delaware limited liability company ("Assignee"), receipt whereof is hereby acknowledged, does hereby sell, assign, transfer, and set over, to the Assignee, its successors and assigns that cenain Amended and Restated Development Assistance Agreement dated July 10 2014. recorded September 25, 2014 as Document No, 3031137, as amended by 111 Amendment to Amended and Restated 1)evelopment Assistance Agreement dated as of October 9, 2014. recorded October 21, 2014 as r)ocument No. 3035036, and that certain Planned Development Agreement entered into by and between the City of Apple Valley, a Minnesota munpal corporation ("Cty") and !Mt I dated July 10, 2014 recorded September 25. 2(.114 as {)oument No. 3031140, as assigned by IMI -1 to IMH GabeIla. LL,C, a Delaware limited liability company Mill Gahellai by Partial Assignment of Development Agreements dated as of October 9, 2014, recorded October 22, 2014 as Document No. 3035344, and as further assigned by IMII Gabelia to BgosCalat, [IC, a Minnesota limited liability Company ("Bigos- Galante) by Partial Assignmem undated, recorded November 17, 2016 as Document No. 3162174 as such Second Amendment and Partial Assigmneitt are affected by that certain Affidavit Regarding Scriveners Error ("Affidavit") dated December 2, 2016, recorded December 5, 2016 as Document No. 3164905 in the official records and as affected by that certain Partial Assignment of Development Agreements by and between IMH Gabella, LLC, Delaware limited liability company and Bigos-Gabella, LLC, a Minnesota limited liability company executed on December 19, 2016 and December 20, 2016 and consented to by the City and the 111 Provider (c)llectively, the "Development !\L1 :11)1 concerning certain real property more fully &scribed in Exhibit "A" attached heret, together with all right and interest in the rights therein specified, and hereby constitutes and appoints said Assignee its attorney irrevocable to collect and receive said debt, and to enforce and satisfy said Development Agreement the same as it might or could have done were these presents not executed, but at the cost and expense of the Assignee and does hereby covenant with the Assignee that the Assignor has good right to sell, assign and transfer the same. AC T\44607232.‘ /4/ 17 IN TESTIMONY WHEREOF day of May, 2017. STATE OF Mi COUNTY OF the Assignor has caused these presents to he executec ESOTA ) ss. as of the BIGOS-GABELLA. LLC, a Minnesota limited habil ty company By: Name: Its: The foregoing instrument was acknowledged before me this day of May, 2017, by of BIGOS-GABELLA, LLC. a Jsvlinnesota Iimited liability company, on behalf ofthe hmited liability company. Notary Public ACTIVE\446 2.0-4/4/ 7 ASS GN AC' VE\44607232,v3-4/4i 7 EXHIBIT ‘‘A" TO NT OF DEVELOPMENT AGREEMENT CAL DESCRIPTION CONSENT OF THE APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY The APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY ("Tit I rovider) acknowledges that it has reviewed the Assignment of Tax Increment Financing ("Assignment"' entered into by and between BIGOS-GABELLA, LLC, a Minnesota limited liability company, and JONES LANG LASALLE MULTIFAMILY, LLC. a Delaware limited liability company ("Lender") dated May , 2017, and consents to the endorsement of the TIF Note (as defined in the Assignment) and to the assignment of the Fax Increment Financing. Payments under the TIF Note shall continue to be made to Bigos-Ciabella. LI.C, a Minnesota limited liability company, until Lender gives notice to the TIF Provider that payments under the TIP Note shall be paid to Lxnder. Upon receipt of such notice, payments under the IlF Note shall be made to Lender. All terms used herein not otherwise defined shall have the meanings set forth in the Assicinment and the Loan Documents described therein. The TIF Provider further fo ows: ants, represents and warrants to and agrees with Lender as That it has received good and valuable consideration for the F Note and Development Agreement, That the unpaid balance due on the TIF Note now is $ and no defaults or events of default exist under the terms of said TIF Note or the Development Agreement. The Project, as defined in the Development Agreement has been fu y constructed in accordance with the Development Agreement 4, As of the date hereof, to the actual knowledge of the TIF Provider, Borrower is in compliance with the terms of the Development Agreement and the Development Agreement and the TIF Note remain in full force and effect. There are no defenses, setoffs or counterclaims against or with regard to the TIF Note or the Development Agreement or the indebtedness evidenced thereby, The TIF Note and the Development Agreement constitute all of the documents entered into by the undersigned in connection with the TIF and have not been amended or modified except as described in the Assignment and are valid and enforceable obligations of the TIF Provider in accordance with their terms. 6. The TIF Provider hereby agrees that should Lender obtain the appointment of a receiver or become the owner of the Premises, or otherwise enforce its rights under the Loan Doe ents, Lender shall not be obligated to perform the terms and conditions of the Tax Increment Financing Documents provided, however, that performance of the terms and conditions thereof shall be a condition to TIF Provider's payment of the TIT' to Lender under the terms and provisions hereof. AC" IE\44607232.v3-1/4 7 7. In addition to providing the Borrower notice of defaultunder the Development Agreement, the TIF Provider agrees to provide Lender, its successors and assigns, with copies of any notice of default given under the Development Agreement and that Lender, its successors and assigns, shall have the right but not the obligation to cure any such default on behalf of the Borrower within the time specified in the Development Agreement, provided that should possession of the Mortgaged Property be necessary in order to cure such default, such time shall include a reasonable amount of time for Lender to obtain possession of the Mortgaged Property and to cure such default. Should an Event of Default occur under the Development Agreement, such that the TIF Provider has the right to cancel, terminate or rescind the TR' Note and the Development Agreement or the TIF Note and Development Agreement are cancelled, terminated or rescinded for any other reason, the TIF Provider shall, upon request of Lender, honor the TIF Note and the Development Agreement as a direct obligation to Lender, its successors or assigns, for the remaining unpaid principal balance thereof, provided that Lender has cured the Event of Default under the Development Agreement except Events of Default resulting from a bankruptcy filing by the Borrower or foreclosure of the Security Instrument. Provided all other provisions of the Development Agreement which are conditions to payment under the TIF Note are satisfied, the Development Agreement and the obligations of the TIF Provider under the TIF Note shall not be relieved. hindered or restricted in any manner by reason of the foreclosure of the Security Instrument or any other remedies which Lender may pursue under the Note or other Loan Documents including the transfer of the Project to or by Lender, its successors and assigns. 9. The undersigned understands and agrees that this Consent of the Apple Valley Economic Development Authority (-Consent') is executed and delivered in order to induce Lender to make the Loan (as described in the Assignment) and but for this Consent Lender would not make the Loan. ACT1VE\44607232,0-4/4 Dated this day of May, 2017. APPLE \ ALLE) ECONO C ,OP AUTHORITY By: Name: Its: Acri VE\44607232 , v3-4/4/17 Space Above This Line For Recording Data SUBORDINATION AGREE NT (Conventional) .1161.4* This SUBORDINATION AGREEMENT (this 'Agreement") dated as of May 2017 is executed by and arriong (i) JONES LANG LASALLE MULTIFAMILY, LLC, a Delaware limited liability company ("Senior Lender"), (ii) APPLE VALLEY ECONOMIC DEVELOPMENT AUTITORITY, a public body corporate and a political subdivision of the State of Minnesota (the "Auth('rit), (iii) the CITY OF APPLE VALLEY, a municipal corporation organized and existing under the laws of the State of Minnesota (the "Ci ") and (iv) BIGOS-GABELLA LLC, a Mi mesota limited liability company, (Borrower"). RECITALS: A. Pursuant to that certain Multifamily Loan and Security Agreement dated as of the date hereof, executed by and between 13orr)wer and Senior Lender (as atnended restated, replaced, supplemented or otherwise modified from time to (ime, the "Senior Loan Agreem cur), Senior Lender has agreed to make a loan to Borrower in the original principal amount of Twenty -Nine Million and 00/100 Dollars (S29,000,000.00) (the "Senior Loan"), as evidenced h that certain Multifamily Note dated as of the date he)eof, executed by Borrower and made payable to the order of Senior Lender in the amount of the Senior 1 (as amended, restated, replaced, suppleinented or otherwise modified from time to time, the "Senior Note"). B. In addition to the Senior Loan Agreement, the Senior Loan and the Senior Note are also secured by a certain Multifamily Mortgage, Deed of Trust or Deed to Secure Debt dated as of the date hereof (as amended, restated, replaced, supplemented or otherwise modified from time to time, the "Senior Security Instrument"), encumbering the property described in the Senior Security Instrument as the "Mortgaged Property." C. The Authority and the Bornarc parties to the following docu ents ively, the "Authority Agreements"): (1) Amended and Restated Development Assistance Agreement, by and among the Apple Valley Economic Development Authority, a political subdivision organized under the la.ws of the State of Minnesota (the "Authority"), the City, and 175 -AVN, dated July Subordinatio Agro (Conventio Form 6414 Fannie alae 08-14 ACT1VE\44825378.v5-4/5/17 Page 1 © 2014 Fannie Mae 10, 2014, and recorded on September 25, 2014, as Document No. 3031137 in the Official Records. as previously amended by that certain First Amendment to Amended and Restated Development Assistance Agreement, dated effective as of October 9, 2014, and recorded on October 21, 2014, as Document No. 3035036 in the Official Records, as affected by those certain Partial Assignments of Development Agreements by and between 17.5 -AVN, as assignor„ and as assignee, dated as of October 9 201-4 and recorded on October 22, 2014, as Document Nos. 30353544 and 3035345 in the Official Records, as amended by that certain Second Amenciment to Amended and Restated Development Assistance Agreement ("Second Amendment"), recorded oil November 17, 2016 as Document No, 3162172 in the Official Records, and as affected by that certain Partial Assignment of Development Agreement ("Partial Assignment") by and between and Bigos-Galante, LLC, a Minnesota limited liability company (Bigos-Galante"), dated as of November 14, 2016„ and recorded on November 17, 2016 as Document No. 3162.174 in the Official Records. as such Second Amendment and Partial Assignment are affected by that certain Affidavit Regarding Scrivener's Ermr ("Affidavit"), dated 1:kt:ember 2, 2016, reeti ied December 5„ 2016 as Document No. 3164905 in the Official Records and affected by that certain Partial Assignment of Development Agreement dated , 2016 entered into by and between J1\4-(1 iabella, LLC, 11)lware limited liability company and Bigos-Gabella, LLC, a Minnesota lted liability company ("Second Partial Assignment") (collectively the "f)evelopment Assistance Agrement). ) Busi ess Subsidy Agreement dated Jul 0„ 2014 by and between 175 - AVN and the Authority, as affected by that certain Partial Assignment of Development Agreements by and between 175 -AVN, as assignor, and Assignor, as assignee, dated as of October 9, 2014, and recorded on October 22, 2014, as Document No. 3035344 in the Official Records, and as further affected b. that certain Partial Assignment, as affected by that certain Affidavit. D. The City and the Borrower are parties to the foUowing do ents (collectively the "Cily Agreements" (1) Development Agreement dated July 10, 2014, by and between the City and 175 -AVN, filed September 26, 2014, as Document No. 3031142 in the Official Records, as affected by that certain Partial Assignment of Development Agreements dated October 9, 2014 by and between 175 -AVN and Assignor, filed October 22, 2014, as Document No. 3035344 in the Official Records. (2) Agreement for Private Installation of Improvements dated January 24, 2013, by and between the City and 175 -AVN, as amended by the Amendment to Agreement for Private Installation of Improvements dated July 10, 2014, as affected by that certain Partial Assignment of Development Agreements dated October 9, 2014, by and between 175 -AVN and Assignor, filed October 22, 2014, as Document No. 3035344 in the Official Records, E. As a condition of making the Loan, Senior Lender requires that the hens and covenants of the Authority Agreements and the Ci Agreements be subordinate to the hen, Subordination Agree e t (Conventional) 4o al) Fannie Mae AC1IVE\44825178 5-4/5/17 Form 6414 08-14 Page 2 014 Fannie Mae covenants, restrictions, tern s and providers of the Senior Sec Loan Documents; and istn Ins and the Senior F. The Authority and the City have agreed to subordinate the Authority Agreements and the City Agreements to the lien of the Senior Security Instrument and to the covenants, restrictions, terms and provisions of the Senior Loan Documents in accordance with and as provided in this Agreement G. The terms and provisions of this Agreement govern the rights and obligations of the parties hereto under the City Agreements and the Authority Agreements with respect to the Mortgaged Property only and no other property. GEEMENTS: NOW, THEREFORE, in order to induce Senior Lender to permit the Authority Agreements and the City Agreements to remain outstanding, and in consideration thereof, Senior Lender, the Authority, the City and Borrower agree as follows: Reeitais. The recitals set forth above are incorporated herein by reference. Definitions. In addition to the terms defined in the Recitals to this Agreement, for ye tent the Ht i: terms have the respective meanings set forth below: usesof this -Affiliate" means, when used with respect to a Person, any corporation, partnership, joint venture, limited liability company, limited liability partnership, trust or individual Controlled by, under common Control with, or which Controls such Person, and in all cases any other Person that holds fifty percent (50%) or more of the ownership interests in such Person. "Authority Agreement Default" means a default by Borrower in performing or observing any of the terms, covenants or conditions in the Authority Agreements to be performed or observed by it, which continues beyond any applicable period provided in the Authority Agreements for curing the default. “Borrower means the Person narned as such in the first paragraph on page 1 of this Agreement, any successor or assign of Borrower, including without limitation, a receiver, trustee or debtor- in-possession and any other Person (other than Senior Lender) who acquires title to the Mortgaged Property after the date o! this Agreement. "Business Day" means any day other than a Saturday, (b) a Sunday, -) a day on which Senior Lender is not open for business, or td a day on which the Federal Reserve Bank of New York is not open for business. "City Agreement Default" means a default by Borrower in perfort ing or observing any of the terms, covenants or conditions in the City Agreements to be performed or observed by it, which Subordination Agreement ((.onvention. 1) Fannie Mae ACTIVE\44825378,0-46/17 Form 6414 Page 3 0844 CO 20 4 Fannie Mae continues beyond any applicable period provided in thc City Agreements for curing the default. "Condemnation Action means any action or proceeding, however characterized or named, relating to any condemnation or other taking, or conveyance *n heu thereof, of all or any part of the Mortgaged Property, whether direct or indirect. "Control (including with correlative ineani gs the terms "Controlling," "Controlled by" and "under common Control with"), as applied to any entity, means the possession, directly or indirectly, of the power to direct or cause the direction dale management or operations of such entity„ whether through the ownership of voting securities, ownership interests or by contract or otherwise. "Default Notice" leans: (a) a copy of any wi-itten notice from Senior Lender to Bommer stating that a Senior Loan Default has occurred under the Senior Loan Documents; or (b) a copy of the written notice from the Atithority or the City to Borrower and Senior Lender stating that a Authority Agreement Default has occurred under the Authority Agreements or from the City to Bonower and Senior Lender stating that a City Agreement Default has occurred under the City Agreements. Each Default Notice shall specify the det'ault upon which such Default Notice is based. "Person" means an individual, an estate, a trust, a corporation, a partnership, a lin ed ity company or any other organization or entity (whether governmental or private). "Senior Lender" means the Person named as such in the first paragraph on Page 1 of this Agreerrient, its successors and assigns and any other Person who becomes the legal holder of the Senior Loan after the date of this Agreement "Senior Loan Default" means the occ Tence of an "Eve of Dela", t" as that e s d in the Senior Loan Documents, "Senior Loan Documents" means the Senior Note, the Senior Security Instrument, the Senior Loan Agreement and all other "Loan Documents" as that term is defined in the Senior Loan Agreement. 3. Consent to the Loan and Pernussio o Al ow Aut ority Agree nd the City Agreements to Remain Outstanding. (a) The Authority and the City consent to the Loan and to any loan or other financing, the purpose of which is to refinance and/or pay off the Loan; and (b) Lender agrees. subject to the provisions of this Agreement, to permit the Authority Agreements and the City Agreements to remain outstanding, which Authority Agreements and City Agreements affecting the Mortgaged Property are subordinated in all respects to the lien of the Senior Security Instrument and the Senior Loan Documents. Subordh ation Agreement ( Form 6414 Fannie Mac 98-14 AC11VE\44825378 v5-4/5/17 014 F Page 4 le Mae 4. Borrowe Authorityand City's Represcntations and Warranties Borrower, the Authority and the City each makes the folio wa ranties to Senior Lender: ati s and ) Relationship oi' h. Authority at ti the (Jit 3 and the Seni Le den Neither the Authority nor the City is an Affiliate of Borrower and neither the Authority nor the City is in possession of any facts which would lead it to believe that Senior Lender is an Affiliate of Borrower. (b) No Violation of Authority Ag cements and City Agre To the actual knowledge of the City and the Authority, no current or on-going violation of the Authority Agreements or the City Agreements exists and no facts are known to the City or the Authority, which, with the passage of time, or the giving of notice will constitute a default or violation of the Authority Agreements or the City Agreements. 5. Ternis of Subordination. (a) Agreement to Subordinate. Senior Lender, the Authority and the City agree that 1 1 ) the obligations under the Authority Agreements and the City Agreements are and shall be subordinated in right of payment, to the extent and in the mariner provided in this Agreement, to the prior payment in full of the Indebtedness evidenced by the Senior Loan Documents, and (2) the terms, covenants and comiitions of the Authority Agreements and the City Agreements affecting the Mortgaged Property are and shall be subject to and subordinate in all respects to the liens. terms, covenants and conditions attic Senior Security Instrument and the other Senior Loan Dcicuments and to all advances heretofore made or which may hereafter be made pursuant to the Senior Loan Documents (including but not limited to, all sums advanced for the :1nrtesof (A) protecting or further securing the he, of the Senior Security Instrument, curing defaults by Borrower under the Senior Loan Documents or for any other purpose expressly permitted by the Senior Loan Documents, or 03) constructing, renovating, repairing, furnishing. fixturing or equipping the Mortgaged Property). (b) Authority Agreements and City Agreeme ts. All restrictions, conditions or prohibitors on the sale, transfer or mortgaging of the Mortgaged Property including, but not limited to, those contained in Section 2.6(b) of the Business Subsidy Agreement and in Article 8 of the Development Assistance Agreement shall not apply to the mortgaging of the Mortgaged Property or a foreclosure thereon or a deed in *lieu of foreclosure or a subsequent sale after a foreclosure or a deed in lieu of foreclosure to a third party. (a) Busi ess Subsid A -ee Subordination Agreement C ional) Fannie Mae ACT1VE\44-825378N5-4/5i 17 Form 6414 118-14 Page 5 © 2014 Fannie Mae ) All job and wage goals with respect to the Mortgaged Property under Section 5,1 of the Business Subsidy Agreement have been satisfied and any and all rights and obligations with respect to the Borrower and/or the Mortgaged Property under the EDA Loan provided therein have been unconditionally and permanently forgiven and the Benefit Date is (ii) All confessions of judgment for delinquent real estate taxes thr the tax seais 2007 through 2011 under Section 7.1(3) have been paid in full. (b) Develo•ne t• -e nts. The $116,280 Letter of Credit with the City has been released and all service fees and park dedication fees as required in the Development Agreements have been paid, (c) D ve o ment Assistance A The $576,000 City Contribution is not subject to reimbursement to the City and may not be set off against tax increment financing payments, (ii) The Development Assistance Agreement may be collaterally assigned to Lender and the collateral assignment enforced and subsequently assigned to a subsequent purchaser of the Mortgaged Property without the consent of the Authority or the City, (d) Ajeernent for Private Installation of in rovei ents. The $71,500 Letter of Credit has been released, (c) Agreement Not to Comnitnce Bankruptcy Proceeding,. The Authority and the City agree that during the term of this Agreement it mil not commence, or join with an other creditor in commencing any bankruptcyreorganization, arrangement, insolvency or liquidation proceedings against or with respect to Borrower, without Senior Lender's prior written consent. 6. Default Under Authority Agree e ts and City Agreement (a) Notice of Authority Agreernent Default and City Agr Cure Rights. Defaultel d The Authority and the City agree to deliver a Default Notice of each Authority Agreement Default and each City Agreement Default to Senior Lender at the same time the notice is delivered to the Borrower. Senior Lender shall have the right, but not the obligation, to cure any Authority Agreement Default or any City Agreement default within the same time period for curing a default which is given to Borrower under the Authority Agreements or the City Agreements, except that Senior Lender's time period for cure shall begin on the date on which it receives notice of the Authority Agreement Default or the City Agreement Default. All Subordination Agree t (Conventional) Form 6414 Fannie Mae 08-14 ACT1VE\44825378 v5-4/5/17 Page 6 4 Fannie Mae amounts advanced or expended by Senior Lender to cure a Authority Agreement Default or City Agreement Default shall be deemed to have been advanced by Senior Lender pursuant to, and shall be secured by, th Senior Loan Agreement and the Senior Security Instrument. (b) Cross Default. Borrower and the Authority and the City agree that an Authority Agreement Default and a City Agreement Default shall constitute a Senior Loan Default under the Senior Loan Documents and Senior Lender shall have the right to exercise all rights or remedies under the Senior Loan Documents in the same manner as in the case of any other Senior Loan Default, 7. Default Under Senior Loan Documents (a) Cross Default. The Authority and the City agree that, notwithstanding any contrary provision contained in the Authority Agreements and the City Agreements Senior Loan Default shall not constitute a default under the Authority Agreements and the City Agreements (if no other default has occurred under the Authority Agreement or the City Agreement' 8. Co filet. Borrower and the Authority and the City each agrees that, in the event of any cortflict or inconsistency between the terms of the Authority Agreements and the City Agreements arid the terms ofIii Agreement, the terms of this Agreement shall control. IC '\1 acknowledges that the terms and provisions of this Agreement shall not, and shall not be deemed to: extend Borrower's time to cure any Senior Loan Default; give Borrower the right to notice of any Senior Loan Default other than that, if any, provided under the Senior Loan Documents. or create arty other right or benefit for Borrower as against Senior Lender. 9. Rights and Obligations of the Authorityand th City Uukith Subordina Do -tents. Subject to each of the other terms of this Agreement, all of the following provisions shall supersede any provisions of the Authority Agreements and the City Agreements covering the same subject matter: (a) Subordinate Loan Notices. The Authority and the City shall deliver to Senior Lender a copy of each notice which it delivers to Borrower in connection with the Authority Agreements and the City Agreements affecting the Borrower and/or the Mortgaged Property simultaneously with the delivery of such notice to Borrower. (b) Condemnation Condernnation orC s a Following the occurrence of (1) a Condemnation Action. or ) a fire or other casualty resulting m damage to all or a portion of the Mortgaged Property o11ettive1y, a "Casualty), at Subordination Agre (Co enti 1) Fannie Mae AC1WE\44825378,v5-4/5117 Form 6414 08-14 02 Page 7 4 Fannie Ma any time or times when the Senior Seeurity instrurnent rernains a lien on the Mortgaged Property the following provisions shall apply: (A) 'Fhe Authority and the City hereby agree that their rights, if any, (under the Authority Agreements and the City Agreements or otherwise) to participate in any proceeding or action relating to a Condemnation Action or a Casualty, or to participate or join in any settlement of, or to adjust,. any claims resulting from a Condemnation Action or a Casualty shall be and remain subject and subordinate in all respects to Senior Lender's rights under the Senior Loan Documents, and the Authority and the City shall be bound by any settlement or adjustment of a claim resulting from a Condemnation Action or a Casualty made by Senior Lender; (B) all proceeds received or to be received on account of a Condemnation Action or a Casualty, or both, shall be applied (either to payment of the costs and expenses of repair and restoration or to payment of the Senior Loan) in the m ier determined by Senior Lender in its sole discretion; and (C) The Authority and the City agree to execute and deliver, at no expense to Senior Lender, all documents, instruments, agreements or further assurances required to effectuate the provisions of this subsection. (c) lusi The Authority and the City agree that all original policies of insurance required pursuant to the Senior Security Instrument shall be held by Senior Lender. The preceding sentence shall not preclude the Authority and the City from requiring that they be an as a loss payee, as its interest may appear, under all policies of property damage insurance maintained by Borrower with respect to the Mortgaged Property, provided such action does not 1I 1(:1 the priority of payment of the proceeds of property damage insurance under the Senior Security Instrument, or that it be named aS an additional insured under all policies of liability insurance maintained by Borrower with respect to the Mortgaged Property. (d) Terrnination of Subordinate Mortgage. if, after the occurrence of a Senior Loan Default, Senior Lender acquires title to the Mortgaged Property pursuant to a foreclosure or a deed in lieu of foreclosure, of (or the exercise of a power of sale contained in) the Senior Loan Documents, the Authority Agreements and the City Agreements shall at Senior Lender's option, automatically terminate with respect to the Borrower and the Mortgaged Property upon Senior Lender's acquisition of title. (e) N Modification of Authority Agreements and City Ag Borrower, the Authority and the City each agree that, until the principal of, interest on and all other amounts payable under the Senior Loan Documents have been paid in full, it will not, without the prior written consent of Senior Lender in each instance, (1) amend, modify, increase, extend, renew or replace the Authority Agreements and the City Agreements with respect to the Borrower and the Mortgaged Property or (2) assign any interest in the Authority Subordination Agreement ((:011 Fannie Mae AC FIVEA44825378 v5-4/5/17 tioiu Form 6414 0814 Page 8 CO 2014 Fa ie Mae Agreetnents and the it Agreements. Any amendment of the Authority Agreements and the City Agreements witli respect to he Borrower and the Mortgaged Property or assigmnent of Authortys or City's interest in the Authority Agreements and the City Agreements without Senior Lender's consent shall be loiti ab 111 10 and o no effect whatsoever. 10. Modific tion or Refinancing of Se ior Loan Docun nts. The Authority and the City consent to any agreement or arrangement in which Senior Lender waives postpones, extends, reduces or modifies any provisions of the Senior Loan Documents, including any provision requiring the payment of money. The Authority and the Ci further agree that their agreement to subordinate hereunder shall extend to any new mortgage debt which is for the purpose of refinancing all or any part of the Senior Loan (including reasonable and necessary oosts associated with the closing and/or the refinancing); and that all the terms and covenants of this Agreement shall inure to the benefit of an holder of any such refinanced debt; and that all .references to the Senior Loan, the Senior Note, the Senior Loan Agreement, the Senior Security Instrument, the Senior Loan Documents and Senior Lender shall mean, respectively, the refinance Joan, the refinance note loan agreement, the mortgage securing the refinance note, all documents evidencing securing or otherwise pertaining to the refinance note and the holder of the refinance note. 11. Default by Authority or City. If the Authority or the City defaults in performing or obsery g any of the terms, covenants or conditions to be performed or observed b) the Authority or the City under this Agreement, Senior Lender shall have the right to all available legal and equitable relief 12. Reinstatcmeut.. To the extent that Borrower makes a payment to Senior Lender or Senior Lender receives any payment or proceeds of the collateral securing the Senior Loan for Borrower's benefit, which payment or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law state or federal law, common law or equitable doctrine, then to the extent of such payment or proceeds received and not retained by Senior Lender, this Agreement shall be reinstated and continue in full force and effect until full and final payment shall have been made to Senior Lender. The Authority and the City agree to hold in trust for Senior Lender and promptly remit to Senior Lender any payments received by them after such invalidated, rescinded or returned payment was originally made. 13. Non -Approval of Authority Agri Agreernents and City Agreements. This Agreement does not constitute an approval by Senior Lender of the terms of the Authority Agreements or the City Agreements or limit any of Borrower's rights to negotiate the terms of the Authority Agreements or the City Agreements with the Authority or the City. Subordination Agreement (C Fannie Mae ACTIVE\44825378.0-4/5/17 dutiOnal Form 6414 OR -14 Page 9 Co 2014 Fannie Mae I4 . Notices. (a) Process of Semi g Notice. All notices under this Agreement shall be: (1) in writing and shall be: (A) delivered, in person: (B) mailed, postage prepaid, either by registered or certified deliv return reeipt requested; (C) sent by oveinight courier: or ry (D) sent by electronic mail with originals to fbflow by overnight courier; (2) addressed to the intended recipiente address esbelow he signati block, as app icable; and (3) deemed given on the rlier 11 occur of: (A) the date when the notice is rereived by the addressee; or (B) if the recipient refuses or rejects delivery, the date on which the notice is so refused or rejected, as conclusively established by the records of the United States Postal Service or any express courier service. (b) Change of Address. Any party to Agreement may change the address to which notices intended for it are to directed by means of notice given to the other parties identified in this Agreement. (c) Receipt of Notices Senior Lender, the Authority, the City or Borrower shall not refuse or reject delivery of any notice given in accordance with this Agreement. Each party is required to acknowledge, in writing, the receipt of any notice upon request by the other party. 15. GeneraL (a) Assign it/Successors. This Agreement shall be binding upon and shall inure to the benefit of the respective [egal sucessois, transferees and assigns of Borrower, Senior Lender, the Authority and the City. Subordination Agree' nt (C 'entionat) Form 6414 Fannie mae 08-14 ACTIVE\44825378.04/5 17 Page 10 (L) 2014 Fannie Mac Borrower shall not assign any of its rights and obligations under this Agreement ot prior written consent of Senior Lender, (b) No Partnership or *Joint Venture Senior Lender is not a joint venturer or partner of the Authority or the City, Neither hereto shall hold itself out as a partner, agent or Affiliate of the other party hereto. ) Senior Lender's Consent the Wherever Senior Lender's consent or approval is required by any provision of this Agreementsuch consent or approval may be granted or denied by Senior Lender in its sole and absolute discretion, () Furth As ur es. Upon the demand of Senior Lender from time to time, the Authority and the City agree to execute and deliver all additional instruments andfor documents required by Senior Lender in order to evidence that the Authority Agreements and the City Agreements are subordinate to the lien, covenants and conditions of the Senior Loan Documents, or to further evidence the intent of this Agreement hereto (e) Amcndrncnt. This Agreement shall not be amended except by (0 Governing Law. Tr n instrument signed by al. -ties This Agreement shall he governed by the laws of the jurisdiction in which the Mortgaged Property is located without giving effect to any choice ()flaw provisions thereof that would result in the application of the laws of another jurisdiction, Senior Lender, the Authority, the City and Borrower agree that any controversy arising under or in relation to this Agreement shall be litigated exclusively in the jurisdiction in which the Mortgaged Property is located. (-Me state and federal courts and authorities with jurisdiction in such locale shall have exclusive jurisdiction over all controversies that ause under or in relation to this Agreement, The parties hereto irrevocably consent to service, jurisdiction, and venue of such courts for any such litigation and waive any other venue to which any might he entitled by virtue of domicile, habitual residence or otherwise, (g) Severable Provisio If any provision of this Agreement shall he invalid or unenforceable to any extent, then the other provisions of this Agreement, shall not be affected thereby and shall be enforced to the greatest extent permitted by law, Subordination Agreet (Conventional) Form 6414 Page 11 Fannie Mae 0844 fl2OI4IannieMat. ACTIVE\44825378.0-4/5/17 (h) Term. The term of this Agreement shall commence on the date hereof and shall continue until the earliest to occur of the following events: (1) the payment in full of the principal of, interest on and other amounts payable under the Senior Loan Documents; or (2) the acquisition by Senior Lender of title to the Mortgaged Property pursuant to a foreclosure, or a deed in lieu of foreclosure. of (or the exercise of a power of sale contained in) the Senior Loan Documents. (1) Counterparts Thi Agreement may be executed in any number of counterparts, each of which shall be considered an original for all purposes; provided. however, that all such counterparts shall constitute one and the same instrument, (1) s 1 of the Senior Loan. Nothing in this Agreement shall limit Senior Lender's (including any assignee or transferee of Senior Lender) right to sell or transfer the Senior Loan or any interest in the Senior Loan. The Senior Loan or a partial interest in the Senior Loan (together with this Agreement and the other Loan Documents) may be sold one or more times without prior notice to the Authority, the City or Borrower. (Reniainder of Page Subordination Are ment (Corn/Form 6414 Fannie Mae 08.14 ACTIVE\44825378v5-415117 Page 12 CO 2014 Fannie Mae IN WITNESS WIRIEOF, Borrower, Senior Lender, the Authority and the City have signed and delivered this Agreement under seal (where applicable) or have caused this Agreement to be signed and delivered under seal (where applicable) by a duly authorized representative. Where applicable law so provides, Borrower, Senior Lender, the Authority and the City intend that this Agreement shall be deemed to be signed and delivered as a sealed instrument STATE OF MINNESOTA COUNTY OF Ori this day of said county, personally appeared me personally known, who being by me duly (swor the SENIOR LENDER: JONES LANG LASALLE MULTIFA a Delaware limited liability company By: Name: Title: Address: Y, LLC, 2177 Youngman Avenue St Paul, Minnesota 55116 With a copy to: Fannie Mae Attention: Multifamily Open - Asset Management Drawer AM 3900 Wisconsin Avenue, NW Washington, DC 20016 2017, before or affir of said a Notary Public in and for to -d) did say that that person is JONES LANG LASALLE MULTIFAMILY, LLC, a Delaware limited liability company and that said instrument was signed on behalf of the said limited liability company by authority of its managers and the said acknowledged the execution of said instrument to be the voluntary act and deed of said hmitcd liability company by it voluntarily executed. Notary Public Print Name: (Seal, if any) My commission ex ir Subordination Agreemen Fannie Mae ACTIVE\44825378.v5.45n7 lona') Form 6414 08-14 Page S - 1 4 Fannie Mae STATE OF MINNESOTA COUNTY OF On this day of county, personally appeared personally known, who being by m the AUTHORITY: APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and a political subdivision of the State of Minnesota By: Name: Its: Address: 7100 147th Street pp1e Valley, Mrnnesota 55124 A.D. 2017. before me, a Notary Public in and for said to me (swornaffirmed) did say that that person is of said APPLE VALLEY ECONOMIC DEVELOPMENT AIJTHORITY, a public body corporate and a political subdivision of the State of Minnesota and that said instrument was signed on behalf ofatittled said by authority of its the acknowledged the execution o t e u tary act and deed -its said by it voluntarily executed. I St imein o Notary Public Print Name: (Seal, if an My con mission expires: Subordination Agreement Fannie Mae AC1 1VE\44825378N5-4/5/17 Form 6414 o ve °nal) 08-14 said said Page S - 2 D 2014 Fannie Mae STATE OF MINNESOTA COUNTY OF On this day of county, personally appeared personally known, who being by me the CITY: CITY OF APPLE VALLEY, a municipal corporation organized and residing under the laws of the State of Minnesota 13y: Name: Its: Address: 7100 147th Street Apple Valley, Minnesota 55124 A,D, 2017, before me, a Notary Public in and for said to me sworn or affirmed) did say that that person is of said CITY OF APPLE VALLEY, a municipal corporation organized and existing under the laws of the State of Minnesota and that said instrument was signed on behalf of the said by authority of its and the said acknowledged the execution of said instru ent to be the vo Itarily executed. deed aid by it v Notary Public Print Name: (Seal, if any) My comrnission expires: Subordination Agrcement (Cot Fannie Mac AC1IVEM4825378 v5-4/5117 Form 6414 08-14 untary act and Page S - 3 014 Fin»ie Mae BORROWER: BIGOS-GABELLA, LLC, a Minnesota limited liability corn By: Name: Title: Iny Address: 8325 Wayzata Boulevard, Suite 200 Golden Valley, Minnesota 55426 STATE OF MrNNESOTA COUNTY OF On this day of , 2017, befo -e me, a Notary Publ c in md for said county, personally appeared to me personally known. \Nth° being by n i. duly (s orn or affirmed) did say that that person is the of said 1R( S( LAX, a Minnesota lited liability company and that said instrument was signed on behalf of the said by authority edits and th acknowledged the execution instrurnent to be the voluntary act and deed of said by it voluntarily executed, ary Public Print Name: (Seal, if any) My comrnission expire,: Subordination Agreement (Conventiot Fannie Mae ACT1VE\44825378.v5-4/5117 Form 6414 08.14 said of said Page S 4 rO 2014 Fannie Mae CITY OF APPLE VALLEY ORDER FOR SPECIAL BOARD MEETING NOTICE IS HEREBY GIVEN that the Apple Valley Economic Development Authority (EDA), will hold a special Board meeting at Apple Valley Municipal Center, 7100 - 147th Street W., on Thursday, the 13th day of April, 2017, at 5:30 p.m. to address items related to Bigos Parkside Gabella. In accordance with this order, the Secretary is requested to provide notice of this meeting following the requirements of the By-laws. DATED this 10th day of April, 2017. Thomas C. Goodwin, President