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HomeMy WebLinkAbout1515_Sycamore,_LLC_-_3rd_Amendment_to_DA_MAA_-_11.3.2025Docusign Envelope ID: DE331357-071F-41FD-BF66-D242EA5D95BC Prepared by: Austin J. McMahon, Lange & McMahon, PLC, 222 111St. E., Independence, IA 50644, 319-334-4488 THIRD AMENDMENT TO DEVELOPMENT AGREEMENT AND MINIMUM ASSESSMENT AGREEMENT This Third Amendment to Development Agreement and Minimum Assessment Agreement (the "Amendment") is entered into as of November 3 2025, by and between 1515 Sycamore, LLC (the "Company") and the City of Waterloo, Iowa (the "City"). RECITALS A. City and Company are parties to a certain Development Agreement ("DA") and Minimum Assessment Agreement ("MAA"), each dated April 15, 2024, and amended by an Amendment dated May 22, 2024, and as further amended by an Amendment dated December 2, 2024. B. The parties desire to amend the DA and MAA as set forth herein. NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the parties agree as follows: 1. The DA is hereby amended to strike subparagraph (b) of Section 9 (Section 9(B)) therefrom and to substitute in its place a new subparagraph (b) of Section 9 as follows: B. Infill Housing Incentive. In addition to any other Project incentives made available by City under this Agreement, City will pay a grant of $5,000.00 to Tax Credit Benevolent Association, a Delaware not for profit corporation as provided in the City's infill housing policy for timely completion of each dwelling unit of the Improvements. Such grant will be payable within sixty (60) days after City has verified that the Improvements have been Substantially Completed. Docusign Envelope ID: DE331357-071F-41FD-BF66-D242EA5D95BC 2. The DA is hereby amended to strike Section 6 therefrom and to substitute in its place a new Section 6 as follows: 6. No Encumbrances; Limited Exception. Until the Improvements are Substantially Completed, Company agrees that it shall not create, incur, or suffer to exist any Liens on the Property, other than such mortgage or mortgages as may be reasonably necessary to finance Company's completion of the Improvements and of which Company notifies City before Company executes any such mortgage. Company may not mortgage the Property or any part thereof for any purpose except in connection with financing of the Improvements. Any other mortgage shall be void. Company has notified the City and the City acknowledges that the following mortgages will be executed and recorded against the Property: (i) Construction Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Filingexecuted by Company for the benefit of the Iowa Finance Authority, as assigned by the Iowa Finance Authority to UMB Bank, N.A. to hold in trust for the benefit of Merchants Bank of Indiana (said mortgage to be amended and restated upon conversion of the loan evidenced thereby to its permanent phase); (ii) Construction Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Filing executed by Company for the benefit of Merchants Bank of Indiana; and (iii) Multifamily Mortgage, Assignment of Rents and Security Instrument executed by Company for the benefit of Merchants Capital Corp., as assigned by Merchants Capital Corp. to Federal Home Loan Mortgage Corporation. 3. Section 4 of the DA is hereby deleted and substituted in its place shall be the following: A. Deadlines to Commence and Complete. Company must obtain a building permit and begin the work of rehabilitation and construction of the Improvements by April 30, 2026 ("Start Date") and Substantially Complete construction within thirty (30) months thereafter (the "Completion Deadline"). For purposes of this Agreement, "Substantially Completed" means the date on which the Improvements have been completed to the extent necessary for the City to issue a certificate of occupancy relating thereto. All deadlines are subject to Unavoidable Delays as defined in Paragraph C below. The City's Community Planning and Development Director will, as long as the rehabilitation of the Project has not been abandoned, consent to an extension of the Completion Deadline for up to six (6) months. Any additional or longer time extensions will require consent of the City Council. In the event that a lender providing construction financing for the Project commences any kind of foreclosure action on the Project, including a demand for a deed in lieu of foreclosure, Docusign Envelope ID: DE331357-071F-41FD-BF66-D242EA5D95BC or upon the issuance of a Certificate of Occupancy for the Project, the City's reversionary right under this Agreement shall automatically terminate. 4. 5. Section 5 of the Da is hereby amended to strike Section 5 therefrom and to substitute in its place a new Section 5 as follows: 5) Reverter of Title; Indemnity: In the event of any revertedr of title pursuant to Section4, then Company agrees that it shall, at its own expense, promptly execute all documents, including but not limited to a special warranty deed, or take such other actions as the City may reasonably request to effectuate said reverter and to deliver to the City title to the Property, subject only to the liens of mortgage lienholders and any other permitted encumbrances. Concurrent with delivery of deed, Company shall also return to City the abstract of title, if provided. Appointment of Attorney in Fact: if Company fails to deliver such documents, including but not limited to a special warranty deed, to City within sixtythirty (360) days of written demand by City, then City shall be authorized to execute, on Company's behalf and as its attorney in fact, the special warranty deed or other documents required by this Section, and for such limited purpose Company does hereby constitute and appoint City as itst attorney -in -fact. Company further agrees that it shall indemnify City and hold it harmless with respect to any demand, claim, cause of action, damage, or injury made, suffered, or incurred as a result of or in connection with the Project, Company's failure to carry on or complete same. If City filed suit to enforce the terms of this Agreement and prevails in such suit, then Company shall be liable for all legal expenses, including but not limited to reasonable attorneys' fees, incurred by City. Company's duties of indemnity pursuant to this Section shall survive expiration, termination or cancelation of this agreement. 6. Section 17 will have the following clause added to the end thereof: "Notwithstanding the foregoing, the City's consent will not be required for, nor does this Agreement prohibit, a transfer of the Project to a mortgage lienholder by foreclosure or deed in lieu of foreclosure." 6. The DA is hereby amended to strike Section 19(A) therefrom and to substitute in its place a new Section 19(A) as follows: A. Default by Company. Whenever any Event of Default in respect of Company occurs and is continuing, the City may terminate this Agreement. Before exercising such remedy, City shall give 30 days' written notice to the Company and to the investor member of the Company (any such member, the "Investor Member") of the Event of Default, provided that by the conclusion of such period the Event of Default shall not have been cured, or the Event of Default cannot reasonably be cured with 30 days and the Company or the Investor Member, as applicable, shall not have provided assurances reasonably satisfactory to the City that the Event of Default will be Docusign Envelope ID: DE331357-071F-41FD-BF66-D242EA5D95BC cured as soon as reasonably possible. The Investor Member shall have the right, but not the obligation, to cure any Event of Default by the Company, and the City agrees to accept any such cure to the same extent as if provided, performed, or tendered by the Company. Upon termination, City may exercise any and all remedies available at law, equity, contract or otherwise for recovery of any sums paid by City to Company before the date of termination or to recover ownership of the Property as set forth in this Agreement." 7. The DA is hereby amended to add the following as a new Section 23(c): if to Investor Member, at WNC Holding, LLC, c/o WNC & Associates, Inc., 17782 Sky Park Circle, Irvine, California 92614-6404. 8. Section 1 of the MAA is hereby amended to delete reference to "December 31, 2025" and to substitute in its place "December 31, 2027." 7. 9. Section 2 of the MAA is hereby amended to delete reference to "December 31, 2055" and to substitute in its place "December 31, 2057." 10Except as modified herein, the DA shall continue unmodified in full force and effect. Terms in this Amendment that are capitalized but not defined will have the same meanings herein that are ascribed to them in the DA. The DA, as previously amended, and this Amendment shall inure to the benefit of and be binding upon the parties and their respective successors and assigns. [signatures on next page] IN WITNESS WHEREOF, the parties have executed this Amendment to Development Agreement by their duly authorized representatives as of the date first set forth above. CITY OF WATERLOO, IOWA 1515 SYCAMORE, LLC DocuSigned by: By: ,I/t�'U/�, ikart B L'a�r Ede�soa 10/28/2025 uenfin' a4rt, Mayor y Sam Edelson, Manager Attest: -Signed by: Kelley f Kel-lyyelchile City Clerk