— City of Minot Official News Release —
The Minot City Council today amended leases on the parking garages currently under construction in downtown Minot.
In order to get construction of the downtown parking structures back on track, the Minot City Council amended leases with the developer, Cypress Development, so they could secure additional funding necessary to complete the project.
City Manager Lee Staab: “It’s incredibly important that we get the construction of these parking structures back on track. We must allow access to downtown residents and business owners, as well as keep parking available so we can continue to encourage people to patronize downtown Minot.” Staab says the city continues to work with the primary contractor, Shaw/Lundquist so the project can move forward as quickly as possible.
City Finance Director Cindy Hemphill informed the council that this is the first step to getting the parking structures back on track, and that the developer hopes to secure financing within 60 to 90 days of the new agreements being signed.
It is important to note that there is no disagreement between the City of Minot and the developer or the contractors. This was simply action taken by council to help the developer secure additional funding.
The City Council approved the following:
The following documents from the original set of documents approved by the Council will be terminated in their entirety.
- Four Year Leases (both sites)
- Declaration of Condominium Agreements (both sites)
- Memorandum of Purchase Options
The following documents are either new or amended with a brief explanation as necessary:
- Nine Year Leases (both sites) – The nine year leases call for the developer to construct and complete the projects. The developer will own and operate the commercial and residential properties. The city will own the parking structures. During the term of the lease the developer agrees to pay rent (“Rent”) to the City as follows: (a) each year on January 1, Developer pays the City One Hundred Dollars ($100); and (b) in addition on October 15, 2016, Developer shall pay the City One Hundred Twenty Eight Thousand Seven Hundred Fifty Dollars ($128,750); on October 15, 2017, the Developer shall pay the City $127,500 and on October 15, 2018, Developer shall pay the City $126,250.
In addition to the Rent due to the City, income received from the use of the Parking structures, and costs incidental to the maintenance thereof, must be reported to the City on a quarterly basis. For purposes of such Federal reporting requirements, “Program Income” shall be defined as annual revenue generated from Public Parking Passes (net of fifty percent (50%) of the operating expenses, maintenance and replacement reserves) in excess of $25,000.00. Program Income must be returned to the City on an annual basis for use by the City on eligible CDBG activities.
- 99 Year Leases (both sites) – The 99 year leases commence upon substantial completion of the project improvements. During the term the developer agrees to pay to the city as follows: (a) $100 per year for the land lease; (b) $100 per year for the parking improvement lease. Program income will remain the same as defined in the nine year leases.
- Cypress Development Management Agreement – provides that Cypress Development will provide management and development services related to the Renaissance and Central Avenue Sites. It further requires Cypress to pay all expenses, costs, and advances related to the development of the properties as described in the Development Agreement and the Work Letter.
- Amendment to the Development Agreement to acknowledge the changes to the ground leases. Added Exhibit F – Parking Management Agreement Proposed Terms – all revenues from the weekday and all hours public passes will be used to determine the program income, 129 spaces. All other income will be for the benefit of the developer as manager of the parking ramps. Changes to Exhibits F-1 and F-2 to allow for the opportunity to change the funding schedule if additional loans are grants are provided to the city and to acknowledge the change in the funding required for the project.
- Amendment to the Construction Management Agreement replacing W&B Construction Management Services with Gallagher Construction Services, LLC.
- Amend the Work Letter to be consistent with the Development Agreement.