4.8 SR 04-15-2024City of
Elk -
River
To
City Council
Meeting Date
April 15, 2024
Item Description
Escrow Agreement: Trellis - Clear Sky Apartments
Request for Action
Item Number
4.8
Prepared By
Zack Carlton, Community Development Director
Reviewed by:
Zack Carlton
Cal Portner
Tina Allard
Action Requested
Approve, by motion, the escrow agreement securing funds for landscape improvements at 10730 175th Ave
NW.
Background/Discussion
The City Council reviewed a similar escrow agreement on February 5, 2024, and due to requested changes
from other signatories to the agreement, staff is now seeking approval of the updated agreement. All other
terms of the agreement and the intent as outlined in the attached staff report from February 5, 2024, remain.
Staff and the city attorney have reviewed the updated agreement and are comfortable with the current
proposal.
Financial Impact
None
Mission/Policy/Goal
Supports businesses working in the community.
Attachments
I. Staff Report February 5, 2024
2. Escrow Agreement
The Elk River Vision
A avelcoming community with revolutionary and spirited resourcefulness, exceptional service, and community p p W E R E U A Y
engagement that encourages and inspires prosperity
201
Request for Action
To
Item Number
Mayor and City Council
4.5
Agenda Section
Meeting Date
Prepared by
Consent Agenda
February 5, 2024
Zack Carlton, Community Development Director
Item Description
Reviewed by
Escrow Agreement: Clear Sky (Trellis) Apartment
Cal Portner, City Administrator
Project
Reviewed by
Action Requested
Approve, by motion, the escrow agreement securing funds for landscape improvements at 10730 1751h Ave NW.
Background/Discussion
The Clear Sky apartment project, developed by Trellis Co, completed construction of their building, and has
requested a temporary certificate of occupancy (CO) to begin leasing their units. However, the exterior
landscaping and sidewalk work has not been completed due to the winter season.
Typically, the city issues a temporary CO and collects an escrow for all outstanding work, allowing the facility to
open prior to completing all required improvements. This escrow is held by the city and released when the work
is completed in the spring. The applicant contacted staff to note that additional agencies also require an escrow
for this project to secure the same improvements. They proposed adding the city as an interested party in an
escrow agreement held by the title company.
Staff and the city attorney reviewed the escrow agreement and are comfortable with this proposal, helping the
applicant reduce costs for their project.
Financial Impact
None
Mission/Policy/Goal
Support businesses working in the community.
Attachments
■ Escrow Agreement
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional
service, and community engagement that encourages and inspires prosperity.
M
TUREJ
Updated.- Januay 2023
Page 55 of 201
ESCROW AGREEMENT
Guaranty File No.: 67067-1
Insured: Minnesota Housing Finance Agency ("MHFA")
Interested Party: City of Elk River ("City")
Borrower: Hillside Heights Limited Partnership
The undersigned, as Borrower, hereby agrees to employ Guaranty Commercial Title, Inc.
("Guaranty") to act as escrow agent in accordance with the following instructions and
provisions:
1. Borrower hereby deposits the sum of $138,929.28 with Guaranty.
2. The funds deposited ("Escrowed Funds") shall be held by Guaranty pending approval of
MHFA, City and Borrower that the Landscaping and Walking Path work as shown in
Exhibit A (the "Work") has been completed to their reasonable satisfaction, including
MHFA's receipt and approval of the as -built survey and final certificate of occupancy.
3. Upon receipt of confirmation of the terms set forth in paragraph 2 above, Guaranty shall
pay for all labor and materials and obtain final lien waivers for same. Any remaining
Escrow Funds will be distributed in accordance with Section 2.7 of MHFA's
Construction Loan Agreement executed in connection with the Hillside Heights project.
4. Subject to paragraphs 2 and 3, above, the City may, by providing 10 day advance written
notice to Borrower and Guaranty, assume responsibility for completion of the Work in
the event Borrower or contractor have abandoned or discontinued the Work for a period
of 30 consecutive days for reasons other than acts of God, fire, storm, strikes, blackouts,
labor difficulties, riots, inability to obtain materials, equipment or labor, governmental
restrictions, or any similar cause over which Borrower is unable to exercise control. The
City would submit a request for disbursement to Guaranty to pay the City's contractor
directly once MHFA has given its approval as contemplated by paragraph 2 above.
5. No rescission of this escrow or modification of its terms shall be effective without the
written consent of the undersigned and Guaranty.
6. City and Borrower shall hold Guaranty harmless from any claims or expenses arising out
of this Escrow Agreement, except for Guaranty's failure to account for payments made
pursuant to these instructions.
7. Following release of the Escrowed Funds as directed herein, Guaranty shall have no
further obligations or liabilities arising from or related to this Agreement.
[SIGNATURE PAGES TO FOLLOW]
Page 56 of 201
Dated:
BORROWER:
Hillside Heights Limited Partnership,
a Minnesota limited partnership
By: Trellis Hillside Heights GP LLC,
a Minnesota limited liability company
General Partner
Un
Elizabeth Flannery
Its: President/Chief Manager
[THE REMAINING PORTION OF THIS PAGE WAS INTENTIONALLY LEFT BLANK]
4
Page 57 of 201
Dated:
CITY:
City of Elk River
By:
Its:
[THE REMAINING PORTION OF THIS PAGE WAS INTENTIONALLY LEFT BLANK]
Page 58 of 201
Guaranty Commercial Title, Inc. hereby acknowledges receipt of the funds specified in
Paragraph 1 above and agrees to act as escrow agent as above set forth.
Dated:
GUARANTY COMMERCIAL TITLE, INC.
an
Its:
[THE REMAINING PORTION OF THIS PAGE WAS INTENTIONALLY LEFT BLANK]
M
Page 59 of 201
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