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HomeMy WebLinkAbout6B(1)&(2)'G h (I) J ( L) SOUTH 04 ,vli,ilCq� Department of y�•�,.° �= Community Investment Memorandum February 27, 2014 TO: South Bend Redevelopment Commission FROM: David Relos, Economic Resources 01 SUBJECT: Jenna Hotel Estoppels As has been requested of the Commission in the past when this property changed ownership or had a refinancing, these estoppels are a representation that to the Commission's knowledge, neither of the agreements listed below are in default. With major improvements being completed at the downtown Doubletree, the property is being refinanced, and as part of that, the Commission is being asked by the lender to sign the attached two estoppels. These estoppels are: • Operation, Maintenance, and Easement Agreement Estoppel, related to the parking garage, and the • Construction, Easement, Restriction and Operating Agreement Estoppel, related to the walkway connecting the hotel to the Century Center. Note that neither agreement has a financial impact on the Commission, nor are any terms changed. The Commission is a party to these estoppels because it is the owner of the parking garage, though has no maintenance or operational responsibilities. Because the Commission was the ground lessor at the time of the walkway agreement (1987), we remain a party to the agreement and therefore need to sign. Dick Nussbaum will be at the meeting to answer any questions the Commission may have. 227 W. JEFFERSON BLVD. SOUTH BEND, IN 46601 1 P: 574- 235 -9371 1 FAX: 574 - 235 -9021 1 SOUTHBENDIN.GOV OPERATION, MAINTENANCE AND EASEMENT AGREEMENT ESTOPPEL Date: November, 2013 Reference is made to that certain Operation, Maintenance and Easement Agreement dated as of October 22, 1979, and recorded with the St. Joseph County, Indiana Recorder ( "Recorder') as Instrument No. 8013310 on August 19, 1980 ( "Original Easement "), as amended by that certain First Amendment to Operation, Maintenance and Easement Agreement dated as of January 12, 1982, and recorded with the Recorder as Instrument No. 8213384 on September 2, 1982 ("First Amendment "), as further amended by that certain Second Amendment to Operation, Maintenance and Easement Agreement dated as of May 1, 1987, and recorded with the Recorder as Instrument No. 9021586 on August 10, 1990 ( "Second Amendment "), as further amended by that certain Thud Amendment to Operation, Maintenance and Easement Agreement dated as of December 28, 2010, and recorded with the Recorder as Instrument No. 1036707 on December 30, 2010 (`Thud Amendment'), and as further amended by that certain Fourth Amendment to Operation, Maintenance and Easement Agreement dated as of August 4, 2011, and recorded with the Recorder as Instrument No. 1120678 on August 15, 2011 ( "Fourth Amendment "), and as further amended by that certain Fifth Amendment to Operation, Maintenance and Easement Agreement dated as of February 7, 2013, and recorded with the Recorder as Instrument No. 1304315 on February 12, 2013 ( "Fifth Amendment"). The Original Easement as amended by and together with the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, and the Fifth Amendment, collectively, the "Easement ". The undersigned party ( "Undersigned Party ") is the successor in interest to V Source Corporation (f/k/a FBT Bancorp, Inc.) under the Easement. All terms and words of art used herein, as indicated by the initial capitalization thereof, shall have the same respective meanings designated for such terms and words of art in the Easement. At the request of Jenna Hotel Investments, LLC, a Delaware limited liability company in connection with the financing of that certain real properly located at 123 N. St. Joesph Street, South Bend, Indiana (the "Property'), the Undersigned Party hereby certifies to Jenna and LMREC III Holdings III, Inc., a Delaware corporation ( "Lender') as follows: A. As of the date of this Estoppel and to Undersigned Party's best knowledge, Undersigned Party has fully complied with any and all installation, construction, maintenance, operation, repair, and replacement obligations contained in the Easement with respect to the Hotel Maintenance Area. B. As of the date of this Estoppel and to the actual knowledge of Undersigned Party, (a) based solely on day to day observations of the Common Facilities and (b) without further investigation, inspection or inquiry or any nature whatsoever and (c) in complete reliance upon the appointment of a manager pursuant to the Management Agreement described in Section C of this Estoppel, Jenna and Undersigned Patty have fully complied with any and all installation, construction, maintenance, operation, repair, and replacement obligations contained in the Easement with respect to the Common Facilities, except for certain items described in the document entitled "Common Facilities Items Not in Good Condition or Repair," a copy of which is attached hereto as Exhibit A. In accordance with Section 3(d) of the Easement, Undersigned Party shall pay thirty percent (30%) of costs and expenses incurred by the Manager pursuant to the Easement and the Management Agreement described in Section C of this Estoppel to operate, maintain and repair the Common Facilities. To the extent the cost to correct the items listed in Exhibit A is payable pursuant to the Easement and the Management Agreement, Undersigned Party shall pay thirty percent (30%) of the same. The statement set forth in this Section B specifically does not include any certification or representation as to the obligations contained in the Easement as to the Property, or which and for which Undersigned Party has no knowledge whatsoever. C. The Common Facilities Management Agreement dated as of August 4, 2011 a copy of which is attached hereto as Exhibit B constitutes the ":Management Agreement' contemplated by the Easement, is in full force and effect, and satisfies all requirements of the "Management Agreement" set forth in the Easement. D. As of the date of this Estoppel and to Undersigned Party's best knowledge, the use and operation of the Undersigned Party's property by Undersigned Patty is in full compliance with the requirements of the Easement. E. As of the date of this Estoppel and to the actual knowledge of the Undersigned Party, based solely on day to day observations of the Common Facilities and without further investigation, inspection or inquiry of any nature whatsoever, and in complete reliance upon the appointment of a manager pursuant to the Management Agreement, the use and operation of the Common Facilities by Jenna, Undersigned Party (as successor in interest to First Bank Center Limited Partnership) and South Bend CAA4, LLC, a Delaware limited liability company, as Manager, are in full compliance with the requirements of the Easement. F. As of the date of this Estoppel and to Undersigned Party's best knowledge, Undersigned Party has no right to claim or establish a Default Lien against any portion of the Hotel Parcel, the Office Building Parcel or Common Facilities pursuant to the terms of the Easement. G. As of the date of this Estoppel, Undersigned Party has no actual notice of (without inquiry or investigation of any nature whatsoever), any reason why Jenna has a right to claim or establish a Default Lien against any portion of the Hotel Parcel, the Office Building Parcel or Common Facilities pursuant to the terms of the Easement. H. As of the date of this Estoppel and to Undersigned Party's best knowledge, Undersigned Party is not in breach or default under the Easement and no event has occurred 2 which, given notice, the passage of time or both, would constitute a breach or default by Undersigned Party under the Easement. 1. As of the date of this Estoppel, Undersigned Party has no actual notice of (without inquiry or investigation of any nature whatsoever), (a) Jenna's breach or default under the Easement, or (b) any event which may have occurred which, given notice, the passage of time or both, would constitute a breach or default by Jenna under the Easement. J. The individual executing this certificate on behalf of the undersigned entity is the authorized signatory of such entity, and as such has lull power and authority to bind such entity. K. The Easement has not been amended (other than by amendments included above within the definition thereof) and remains in full force and effect. L. The Conmton Facilities Management Agreement dated as of November 1, 1981 referred to in paragraph 3 of the Second Amendment has been terminated and any amendments made to the Easement therein or in any exhibit thereto are of no further effect (unless and except to the extent expressly included in the Third Amendment or the Fourth Amendment). M. No amounts are owing by Jenna to the Undersigned Party or to the Manager (as defined in the Easement) under Section 4(e)(i) of the Easement. N. To the actual present knowledge of the Undersigned Patty, no complaint has been filed against Jenna by any other party to the Easement on account of any failure or alleged failure of Jenna to perform any of its obligations imposed under the Easement. O. The Undersigned Party has been informed that Lender is making a mortgage loan in the original principal amount of 512,000,000 to Jenna and such mortgage loan shall he secured by a mortgage upon the Property (as such mortgage may hereafter be amended, restated, modified and supplemented from time to time, the " LMREC Morteaee "). P. Upon the recordation of the LMREC Mortgage with the Recorder, the LMREC Mortgage shall be a First Mortgage within the meaning of and for all purposes under the Easement. Notices. The Undersigned Party shall provide to Lender, simultaneously with its provision to Jenna, a copy of any notice of any default, breach, failure, violation or termination of the Easement, and no notice of default, breach, failure, violation or termination or the Easement shall be effective against Lender unless such notice is given in writing to Lender at the following address or such other address as Lender may designate from time to time in a written notice to the Undersigned Party: k LMREC III Holdings III, Inc. 350 South Beverly Drive, Suite 300 Beverly Bills, CA 90212 Attention: Asset Management Facsimile No: (310) 234 -2150 with a copy to: Safarian Choi & Bolstad, LLP 555 South Flower Street, Suite 650 Los Angeles, CA 90071 Attention: Chris IC Safarian, Esq. Facsimile: (213) 225 -1146 Any and all notices given hereunder shall be given in accordance with Section 17(g) of the Easement. The Undersigned Party confirms that its notice address remains as set forth in Section 17(g) of the Easement, as amended. Lender Cure Right. The Undersigned Patty covenants and agrees that it may not exercise any remedy upon any default, failure, violation or breach of the Easement by Jenna ("Default'), without first providing Lender with written notice of such Default and an opportunity to cure the Default in accordance with the terms of this paragraph. In the case of any failure to pay any amount as and when due under the Easement, Lender shall have until the later of: (x) the expiration of any cure period available to Jenna under the Easement, or (y) fifteen (15) days after Lender's receipt of written notice of such Default from the Undersigned Party, to cure or cause to be cured such Default. In the case or any other Default (a "Non- Payment Default "), Lender shall have until the later of (a) the expiration or any cure period available to Lessee under the Easement, or (b) thirty (30) days after Lender's receipt of written notice of such Default from the Undersigned Party, to cure or cause to be cured such Default; provided that in the case of any Non - Payment Default, if Lender elects in a writing to cure such Default within such thirty (30) day period, but is not practicably able to cure such Default within such thirty (30) day period, because Lender needs to obtain possession of the property encumbered by the LMREC Mortgage in order to effectively cure the same or otherwise, then Lender shall have such additional time as it may need, exercising all commercially reasonable diligence, to cure such Default. This certificate may be relied upon and shall inure to the benefit of Jenna and Lender and their respective successors, assigns, title companies and lenders, and shall be binding upon the undersigned and its successors and assigns. [Signature Page to Follow] 4 [Signature Page to Operation Management and Easement Agreement Estoppel] IN WITNESS WHEREOF, the Undersigned Party has duly executed this certificate as of the year and date first above written. PWA SOUTH BEND, LP, a Pennsylvania limited partnership By: PWA FBC, LLC, a Delaware limited liability company, its General Partner Name: John M. Schneider Title: PresidentAlanager CERTIFICATION (Operation, Maintenance and Easement Agreement Estoppel) At the request of Jenna Hotel Investments, LLC, a Delaware limited liability company ( "Ienna), in connection with the financing of that certain real property located at 123 N. St. Joseph Street, South Bend, Indiana, the South Bend Redevelopment Commission hereby certifies to Jenna and LMREC III Holdings 11I, Inc., a Delaware corporation ("Lender"), and their respective successors, assigns, title companies and lenders, that (i) it has reviewed the foregoing Operation, Maintenance and Easement Agreement Estoppel Certificate by PWA South Bend, LP, a Pennsylvania limited partnership, and (ii) to the best of its knowledge, the statements contained therein are true, correct and complete in all material respects. The South Bend Redevelopment Commission shall comply with the paragraphs above entitled "Notices" and "Lender Cure Rights" the same as the "Undersigned Party" thereunder. Jenna and Lender may rely hereupon. SOUTH BEND REDEVELOPMENT COMMISSION, as to itself and on behalf of the City of South Bend Department of Redevelopment By: - Its: _ Date: Exhibit A to Operation, Maintenance and Easement Agreement Estoppel Common Facilities Items Not in Good Condition or Repair NONE 7 Exhibit B to Operation, Maintenance and Easement Agreement Fstoppcl A9anagement Agreement 8