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HomeMy WebLinkAboutresolution.council.022-18 RESOLUTION NO. 22 SERIES OF 2018 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO AN ASSIGNMENT OF A PARTNERSHIP INTEREST IN THE TRUSCOTT PHASE ll, LLLP r WHEREAS,The City has been an active partner with the Aspen Pitkin County Housing Authority in the development of affordable housing for its residents; and WHEREAS,To accommodate Aspen Pitkin County Housing Authority's acquisition of the Limited Partners interest in Truscott Phase II, LLLP housing project the City needs to accept the assignment of a 49.9995% interest in the Truscott Phase II, LLLP; NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO That the City Council of the City of Aspen hereby approves that Assignment of partnership interest and second Amendment of the Partnership agreement a copy of which shall be in substantially in the form provided and is annexed hereto and incorporated herein, and does hereby authorize the City Manager to execute said agreement on behalf of the City of Aspen. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the 12th day of February, 2018. i Steven Skadr n, Mayor I, Linda Manning,duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held, February 12`h 2018 Linda Manning, City Clerk ASSIGNMENT AND ASSUMPTION OF LIMITED PARTNER INTERESTS AND SECOND AMENDMENT TO THE FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP TRUSCOTT PHASE II LLLP THIS ASSIGNMENT AND ASSUMPTION OF LIMITED PARTNER INTERESTS AND SECOND AMENDMENT TO THE FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (the "Amendment") of TRUSCOTT PHASE II LLLP, a Colorado limited liability limited partnership (the "Partnership"), is dated and effective as of February 16, 2018 (the "Effective Date"), by and among MMA TRUSCOTT HOUSING PHASE II, LLC, a Delaware limited liability company formerly known as Lend Lease Truscott Housing Phase II, LLC ("MMA"), SLP, INC., a Massachusetts corporation ("SLP"; MMA and SLP are hereinafter collectively referred to as the "Assignor"), CITY OF ASPEN (the "City"), and ASPEN/PITKIN COUNTY HOUSING AUTHORITY, a Colorado multi-jurisdictional housing authority (the "General Partner"). WITNESSETH: WHEREAS, MMA acquired the Investor Limited Partner Interest in the Partnership, including but not limited to a 99.99% interest in all profits, losses and tax credits under Section 42 of the Code (the "ILP Interest") and SLP acquired the Special Limited Partner Interest in the Partnership (the"SLP Interest'; the ILP Interest and the SLP Interest are hereinafter collectively referred to as the "LP Interest") pursuant to the First Amended and Restated Agreement of Limited Partnership of the Partnership dated as of May 3, 2002, by and among the General Partner and the Assignor(as amended by Amendment One to the First Amended and Restated Agreement of Limited Partnership dated as of April , 2003, the "Agreement"); WHEREAS, Section 8.1 of the Agreement permits the Assignor to transfer and assign all or any part of the LP Interest to the City and the General Partner (collectively, the "Assignees" and individually, an "Assignee"); WHEREAS, Section 8.2 of the Agreement authorizes the substitution of the Assignees as Substitute Limited Partners in the Partnership; WHEREAS, as of the Effective Date, the Assignor wishes to assign its ILP Interest to the Assignees for$340,000(the"ILP Purchase Price"),the SLP Interest to the Assignees for$10,000 (the "SLP Purchase Price"; the ILP Purchase Price and the SLP Purchase Price are hereinafter collectively referred to as the "Purchase Price"), plus $18,000, which amount equals the Asset Management Fees payable by the Partnership to MMA (collectively, the "Supplemental Amount"), and the Assignees wish to accept such assignment of the LP Interest for the consideration and upon the terms and conditions of this Amendment; WHEREAS, the Assignees are willing to undertake all of the obligations of the Assignor under the Agreement(the "Obligations"); and WHEREAS, the General Partner desires to acknowledge such undertaking of the Obligations by the Assignees and to release the Assignor from the Obligations and all other liabilities in connection with the LP Interest. NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration hereinafter described, the receipt and sufficiency of which are acknowledged, the parties agree as follows: I. Capitalized terms used but not defined herein shall have the respective meanings attributed thereto in the Agreement. 2. As of the Effective Date and in consideration of the Purchase Price paid by the Assignees to the Assignor and the Supplemental Amount paid by the Partnership to MMA, MMA assigns a 49.995% ILP Interest to the City and a 49.995% ILP Interest to the General Partner, being all of MMA's interest in the Partnership, and SLP assigns to each Assignee and each Assignee accepts from SLP, 50% of SLP's right, title and interest in the SLP Interest. Said assignments include, without limitation, the Assignor's entire right to allocations of profits or losses and tax credits under Section 42 of the Code and all items entering into the computation thereof, and to all distributions of Cash Flow and proceeds from a Capital Transaction, however denominated, under the Agreement; provided, however, that (i) solely for purposes of allocating the profits, losses and tax credits from operations (collectively, the "Tax Benefits") between the Assignor and the Assignees, the Assignor shall receive all Tax Benefits attributable to any day before the Effective Date and the Assignees shall receive all Tax Benefits attributable to the Effective Date and any day thereafter; and (ii) the Assignees shall receive all distributions of Cash Flow or proceeds from a Capital Transaction distributed by the Partnership after the Effective Date regardless of whether such distributions are attributable to any period prior or subsequent to the Effective Date. 3. In consideration of the assignment effected hereby, the Assignees hereby assume and agree to discharge all of the Obligations of Assignor under the Agreement as of the Effective Date. Assignees further covenant and agree to (i) pay as of the Effective Date any and all state, local and county transfer taxes and assessments resulting from the transfer of the LP Interest from Assignor to Assignees (but specifically excluding state and federal income taxes), (ii) timely complete and file all documents required by any taxing authorities in connection with the transfer of the LP Interest and payment of such transfer taxes and assessments, and (iii) provide to Assignor evidence reasonably acceptable to the Assignor that such taxes and assessments have been paid in full. The Partnership, the General Partner and the City hereby covenant and agree to indemnify and hold the Assignor harmless from any loss or damage sustained by the Assignor as a result of the breach of any of the covenants in this Section 3, and acknowledge that losses and damages shall include any and all attorneys' fees and expenses incurred by the Assignor in enforcing its rights and remedies hereunder. The provisions of this Section 3 shall be binding upon the successor and assigns of the Partnership, the General Partner and the City and shall survive the Effective Date. 4. The General Partner, on behalf of itself, the Partnership and its affiliates, hereby (i) acknowledges and consents to the assignment of the LP Interest and assumption by the Assignees of the Obligations pursuant to this Amendment, (ii) releases, remises and forever 2 i discharges the Assignor from all of the Obligations and from any and all other liabilities, claims, actions, or cause of actions, known or unknown, asserted or unasserted, which they or the Partnership may have relating to or growing out of any action or inaction taken or not taken in connection with the LP Interest and/or this Amendment and the transaction described herein, (iii) covenants and agrees that the General Partner and the Partnership shall indemnify the Assignor and its partners, officers, directors, shareholders and agents and hold the Assignor and its partners, officers, directors, shareholders and agents harmless from and against any loss, liability, damage, cost or expense incurred by reason of any demands, claims, suits, actions or proceeding arising out of the General Partner's breach of any representation, warranty, covenant, or agreement in this Amendment, or pursuant to Section 6.7C of the Agreement; and (iv) represents and warrants that it has obtained any and all necessary third party consents or approvals to the assignment and assumption of the LP Interest described herein and has paid any and all fees and expenses assessed by such consenting parties on or prior to the Effective Date. By the execution of this Amendment, the Partnership and the General Partner hereby acknowledge and agree that the Assignor has fully and completely satisfied all of its obligations (financial or otherwise) under the Agreement. The General Partner covenants and agrees, at its expense, to deliver to the Assignor (i) on or before February 15, 2018, a final 2017 tax return and Schedule K-Is, (ii) on or before February 28, 2018, a 2017 audited balance sheet, statements of income, partners' equity and cash flows and an unaudited adjusted trial balance for such year, and (iii) on or before February 15, 2019, a final 2018 tax return and Schedule K-1 s. The provisions of this Section 4 shall survive the Effective Date. 5. By its execution hereof, the Assignees hereby agree to become Substitute Limited Partners of the Partnership and, subject to the foregoing provisions of this Amendment, agree to be bound (to the same extent as the Assignor was bound) by the Agreement, the Project Documents and the provisions therein as they relate to the Assignor or the LP Interest. 6. . The Assignees are hereby admitted as Substitute Limited Partners with respect to the LP Interest for all purposes of the Agreement and the Assignor hereby withdraws as a Limited Partner of the Partnership. 7. The parties hereto hereby confirm the continuing validity and enforceability of the Agreement, acknowledging that the Assignees shall succeed to all rights and obligations of the Assignor thereunder as of the Effective Date. This provision shall be construed to amend the Agreement to the extent necessary to reflect the assignment of the LP Interest to the Assignees and to give effect to the other provisions of this Amendment. 8. Exhibit A to the Agreement is hereby amended to the extent necessary to reflect the withdrawal of MMA and SLP from the Partnership and the admission of the Assignees to the Partnership as Substitute Limited Partners. 9. Notwithstanding any provisions to the contrary in the Agreement and after consultation with its counsel, the General Partner hereby consents to the transfer and assignment .of the LP Interest to the Assignees and the substitution of the Assignees as Substitute Limited Partners with respect to the LP Interest pursuant to this Amendment without any conditions or requirements other than with respect to the representations, warranties, covenants and undertakings of the parties expressly set forth in this Amendment, including, without limitation, 3 the Assignees' (i) assumption of, and agreement to pay, the Obligations, and (ii) agreement to be bound by the terms of the Agreement and the Project Documents. 10. The General Partner and/or any Affiliate of the General Partner (collectively, the "Sponsor")jointly and severally covenant and agree that after the expiration of the Compliance Period and prior to the resyndication of the tax credit equity interest in a successor owner of the Property formed by the Sponsor, Sponsor shall request and upon receipt, consider accepting (but shall be under no obligation to accept), a final offer of equity commitment terms from Boston Financial Investment Management, LP or its affiliates ("BFIM"). BFIM shall be deemed a third party beneficiary of this paragraph. This paragraph shall survive the Effective Date. 11. The parties hereto hereby agree to reasonably cooperate in good faith to effect any further amendments to the Agreement and to take such other steps as may be necessary or appropriate in order to more fully reflect and further evidence the assignment of the LP Interest and the other transactions effected hereby. 12. This Amendment may be executed in several counterparts and all counterparts so executed shall constitute one agreement binding on all parties hereto, notwithstanding that all parties have not signed the original or the same counterpart. [End of text; signature page follows[ 4 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered under seal as of the Effective Date. ASSIGNOR: MMA TRUSCOTT HOUSING PHASE II, LLC By: West Cedar Managing, Limited Partnership, its Manager By: BFRP-WCM, LLC, its General Partner By: Kenne J. Cutillo Manager SLP, INC. By: Kennet J. Cutillo President ASSIGNEES AND SUBSTITUTE LIMITED PARTNERS: CITY OF ASPEN By: Name: Title: ASPEN/PITKIN COUNTY HOUSING A RITY By: " Name: Title: 5 GENERAL PARTNER: ASPEN/PITKIN COUNTY HOUSING 7A RITY By: Name: Title: 6