Loading...
HomeMy WebLinkAbout6.B.(1) Waiver and Consent to Mortage for KeyBank Plaza-, ,~ ~,:~ j~ SQUTIi B' Community & Economic Development `y~~'~>' r _ a fir- `.,9 _ 7865,~y~ 1200 County-City Building, 227 West Jefferson, South Bend, Indiana 46601-1830 Phone 574/235-9371 Fax 574/235-9021 To: From: Subject: Date: Redevelopment Commission Jennifer Laurent Waiver and Consent to Mortgage, KeyBank Plaza March 16, 2009 On October 3, 2008, the Connnission entered into a Lease Agreement with Key S.B., in fulfillment of an MOU dated April 6, 2007, which in turn outlined teens of a development project pursued by the Hinman Company of Kalamazoo, Michigan, the owners of the Key Bank building in the South Bend Central Development Area. The project was a great success, and a total of $6.175 million in new private investment is represented in the renovations undertaken by the building owners and key new and existing tenants, including Baker & Daniels law fine, KeyBank, and CB Richard Ellis. In support of the project, the Redevelopment Commission purchased the plaza space immediately west of the building along Michigan Street and funded and directed improvements to the public gathering space, with the intent of leasing the property back to the Hinman Company. Our lease agreement identities the Developer's responsibility to maintain and manage the property in exchange for a right to lease it back fi•om the Commission for $1.00 per year for a teen of 25 years, and the right to purchase the property after a term of 25 years for $1.00. The lease agreement did not specifically address rights to obtain credit using the property interest under a leasehold mortgage, but Key S.B. has requested the right to do so. Such a provision is often standard in our agreements, as long as the Commission's property interest is duly protected. Finding no objection to Key S.B.'s request. staff and legal counsel present for your consideration a Waiver and Consent to Mortgage with Centier Bank that outlines terms found to be appropriate and mutually beneficial for both the Commission and Key S.B. I will be happy to address any questions you may have. Your approval is recommended. What We Do Today Makes A Difference WAIVER AND CONSENT TO MORTGAGE This Waiver and Consent to Mortgage ("Consent") is made as of March 2009, by SOUTH BEND REDEVELOPMENT COMMISSION, the governing body of the Department of Redevelopment of the City of South Bend, Indiana, existing and operating under the provisions of Indiana Code §36-7-14, as amended ("SBRC"), to and for the benefit of CENTIER BANK, an Indiana state banking association ("Centier"). This Consent is also executed by KEY S.B., L.L.C., a Michigan limited liability company ("Borrower") for the purposes expressly provided herein. The parties state as follows: A. SBRC is the landlord and Borrower is the tenant under that certain unrecorded Lease dated as of August 17, 2007, as evidenced by that certain Memorandum of Lease executed by said parties as of said date recorded in the Office of the Recorder of St. Joseph County on October 30, 2008, as Document Number 0835218 (the "Lease"), whereby Borrower leased certain land in South Bend, St. Joseph County, Indiana, as described in Exhibit A, which is attached hereto and made a part hereof (the "Leased Premises"). B. Pursuant to the Lease, Borrower is entitled to possession of the Leased Premises for a term of 25 years, from October 3, 2008, through October 2, 2033, with an option to extend the term for an additional year, and with the option to purchase the Leased Premises at any time. C. SBRC has been informed that Centier intents to extend certain credit facilities to Borrower and that, to secure the obligations of Borrower with respect thereto, Borrower has agreed to separately grant to Centier a leasehold mortgage and security interest in and to Borrower's interests in and to the Lease and the Leased Premises, along with Borrower's interests in the KeyBank Property (as defined in the Lease) pursuant to a certain Mortgage of Fee and Ground Lease Interests and Security Agreement of even date herewith (the "Mortgage"). D. SBRC and Borrower wish to agree and consent to certain additional terms and waivers under the Lease as provided in this Consent in order to permit Centier to have and hold a mortgage interest in Borrower's interest in the Lease and the Leased Premises. E. Centier has required that, as a condition of granting the credit facilities to Borrower, Borrower obtain the consents and agreements of SBRC as provided in this Consent, and SBRC wishes to grant such consents and agreements. NOW, THEREFORE, in consideration of the payment of one dollar and other good and valuable consideration by Centier to SBRC, the receipt and sufficiency of which are hereby acknowledged, SBRC and Borrower consent and agree as follows: Section 1. Approval of Mortgage. SBRC hereby acknowledges and agrees to the granting of the Mortgage by Borrower, and the granting to Centier of a mortgage and security interest in all of Borrower's rights under the Lease and all of Borrower's rights and interests in and to the Leased Property. SBRC hereby waives any and all objections to such grant and waives any right to claim that such grant constitutes a breach of the Lease. Not in limitation of the foregoing, SBRC hereby consents to and approves each of the following grants and conveyances and, not in limitation of the foregoing, expressly agrees that any or all of the following will not be in violation of paragraph 7 of the Lease: (a) The granting and delivery of the Mortgage; (b) The sale or conveyance of the interests of Borrower under or with respect to the Lease and/or the Leased Premises pursuant to any foreclosure proceeding; (c) The sale or conveyance of the interests of Borrower under or with respect to the Lease and/or the Leased Premises pursuant to any transfer or deed in lieu of foreclosure; and/or (d) After any transfer or deed in lieu of foreclosure, a subsequent sale or transfer to any buyer or transferee who also holds an interest in the KeyBank Property. Section 2. Notices to Centier. If any notice is given to any party pursuant to the Lease, copies of such notices will also be given to Centier, at the same time as notice is given to any other party, as follows: Centier Bank 4101 Edison Lakes Parkway, Suite 325 Mishawaka, Indiana 46545 Attention: Steven C. Watts or as Centier may otherwise designate from time to time. 2 Section 3. Defaults and Termination of Lease. Notwithstanding any provisions of the Lease, SBRC will not terminate the Lease or cause or permit the Lease to be terminated (other than upon expiration of the scheduled term thereof) by reason of any breach by Borrower of any of the terms or provisions of the Lease and/or any obligations with respect thereto unless: (a) SBRC gives notice of such breach or other cause for termination to Centier, which notice states that Centier will have the right to cure such breach or other cause for termination; and (b) Centier (or Borrower) fails to cure such breach or other cause for termination within thirty (30) days after such notice is given, or, if such breach or other cause for termination is not of a nature that can reasonable be cured within thirty (30) days, Centier (or Borrower) does not commence to cure such matter within thirty (30) days and thereafter diligently pursue such cure. It is expressly understood and agreed that Centier will not be obligated to cure any breach or otherwise take any action with respect to the Lease or the Leased Premises at any time. Section 4. Amendment and Termination of Lease. SBRC and Borrower expressly agree that the Lease will not be amended, modified or terminated without the prior written consent of Centier, which consent may be withheld by Centier in its discretion. Section 5. Successor Tenant. SBRC expressly agrees that, upon any foreclosure with respect to the Mortgage, and/or upon any transfer in lien of foreclosure with respect to the Mortgage, Centier or any other applicable grantee will succeed to all rights of Borrower under and with respect to the Lease, including but not limited to the option to purchase the Leased Premises provided in paragraph 8 of the Lease and the reversion right provided in paragraph 11 of the Lease. Notwithstanding the foregoing, upon any such succession to the rights of the tenant under the Lease, the successor tenant will succeed to all obligations of the tenant under the Lease. Section 6. Rights of Centier. All rights of Centier under and with respect to this Consent will pass to the successors and assigns of Centier. All references herein to "Centier" will be deemed to include the successors and assigns of Centier. Upon full and final payment of all debts and obligations secured by the Mortgage, all rights of Centier under this Consent will terminate. Section 7. Status of Lease. SBRC and Borrower acknowledge and agree that, to the extent that the terms of this Consent conflict with the terms of the Lease, the 3 terms of this Consent will control and will constitute an amendment to the Lease. SBRC represents to Centier that the Lease is currently in full force and effect and, except as provided in this Consent, has not been amended or modified and that SBRC has no knowledge of any breaches of the Lease by Borrower as of the date hereof. SBRC and Borrower represent and warrant to Centier that: (a) The Lease, in the form delivered to Centier, constitutes the entire agreement between Borrower and SBRC with respect to the Leased Premises (subject to this Consent); other than as provided in this Consent, there are no other agreements, written or verbal, governing the tenancy of Borrower with respect to the Leased Premises. Not in limitation of the foregoing, the term of the Lease, the rental payable under the Lease, and the security deposit (if any) with respect to the Lease are as provided in writing in the Lease. (b) Borrower is in full and complete possession of the Leased Premises demised under the Lease, such possession having been delivered by SBRC pursuant to the Lease and having been accepted by Borrower. (c) The improvements to the Leased Premises that SBRC is required to furnish and/or construct under the Lease have been completed in all respects to the satisfaction of Borrower, and the Leased Premises are open for the use of Borrower, its customers, employees and invitees, and adjoining landowners and the public as set forth in the Lease. (d) The Lease is in full force and effect. To the best of the knowledge of SBRC and Borrower, no default exists on the part of SBRC or Borrower under the Lease, nor does any circumstance currently exist that, but for the giving of notice or the passage of time, or both, would be such a default. (e) SBRC has received no notice of a prior sale, transfer, assignment, hypothecation or pledge of any of Borrower's interests in or to the Lease and/or the Leased Premises. ***** 4 IN WITNESS WHEREOF, this Waiver and Consent to Mortgage has been executed by the parties as of the date first written above. SBRC: SOUTH BEND REDEVELOPMENT COMMISSION, the governing body of the Department of Redevelopment of the City of South Bend, Indiana, existing and operating under the provisions of Indiana Code §36-7-14, as amended By: STATE OF INDIANA ) SS: COUNTY OF ST. JOSEPH ) BEFORE ME, the undersigned, a Notary Public, on March 2009, personally appeared ,personally known to me to be the same person whose name is subscribed to the foregoing Waiver and Consent to Mortgage as of the South Bend Redevelopment Commission, and being first duly sworn by me upon oath, acknowledged that such person has read and understands the foregoing and that such person has affixed such person's name to and delivered said document as such person's own free and voluntary act and as the free and voluntary act of said entity for the uses and purposes therein set forth. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal. Notary Public Commission Expires: County of Residence: 5 Borrower: STATE OF COUNTY OF SS: KEY S.B., L.L.C., a Michigan limited liability company By: BEFORE ME, the undersigned, a Notary Public, on March , 2009, personally appeared ,personally known to me to be the same persons whose name is subscribed to the foregoing Waiver and Consent to Mortgage as Manager of Key S.B., L.L.C., and being first duly sworn by me upon oath, acknowledged that such person has read and understands the foregoing and that such person has affixed such person's name to and delivered the foregoing as such person's own free and voluntary act and as the free and voluntary act of said entity for the uses and purposes therein set forth. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal. Notary Public Commission Expires: This instrument was prepared by.' County of Residence: Demetri J. Retson Genetos Retson Yoon & Molina LLP 8585 Broadway, Suite 480 Merrillville, Indiana 46410 219-755-0401 fax: 219-755-0410 The foregoing preparer states as follows: 1 affirm, under the penalties for perjury, that 1 have taken reasonable care to redact each Social Security number in this document, unless required bylaw. 6 EXHIBIT A Legal Description of Leased Premises Part of Lots 57 and 58, Original Plat of South Bend, St. Joseph County, Indiana, described as follows: Beginning at the Northwest corner of Lot 58; thence North 8'38'45" East on the North line of said Lot 58, a distance of 122.99 feet; thence South Off'30'31" East parallel to the East line of said Lot 58, a distance of 85.00 feet; thence North 8'38'45" East parallel to the North line of said Lot 58, a distance of 42.10 feet to the West line of a 14 foot alley; thence South 030'31" East on the West line of said alley, a distance of 14.00 feet; thence South 8'37'35" West parallel to the South line of Lot 57, a distance of 65.74 feet; thence North OC~'31'55" West parallel to the West line of said Lots 57 and 58, a distance of 6.695 feet; thence North 8'38'45" East parallel to the North line of said Lot 58, a distance of 4.32 feet; thence North 031'55" West parallel to the West line of Lots 57 and 58, a distance of 47.35 feet; thence South 8'38'45" West parallel to the North line of said Lot 58, a distance of 36.10 feet; thence North OCP31'55" West parallel to the West line of said Lots 57 and 58, a distance of 6.98 feet; thence South 8'38'45" West parallel to the North line of said Lot 58, a distance of 2.00 feet; thence North 46`1'59" West, a distance of 21.735 feet; thence South 419'29" West, a distance of 21.735 feet; thence South 8'38'45" West parallel to the North line of said Lot 58, a distance of 6.98 feet; thence South 8'38'45" West parallel to the North line of said Lot 58, a distance of 32.43 feet to the West line of said Lot 58; thence North 0(f'31'55" West on the West line of said Lot 58, a distance of 44.98 feet to the point of beginning 7