HomeMy WebLinkAboutURA Resolution 2004-03
ORIGINAL
WHEAT RIDGE URBAN RENEWAL AUTHORITY
RESOLUTION NO. 63 -2004
A RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE WHEAT
RIDGE URBAN RENEWAL AUTHORITY SETTING FORTH THE BASIS
FOR THE TERMINATION OF THE DISPOSITION AND DEVELOPMENT
AGREEMENT WITH THE CORNERSTONE GROUP, XXII, L.L.C.
WHEREAS, the Wheat Ridge Urban Renewal Authority (the "Authority") entered into a
Disposition and Development Agreement with The Cornerstone Group xxn, L.L.C. (the
"Redeveloper"), dated May 1, 2003, subsequently amended August 1,2003, September 1, 2003,
October 15, 2003, and November 25, 2003 (collectively, the "DDA") in order to redevelop the
Southwest corner of 38th Avenue and Sheridan Boulevard (the "Project");
WHEREAS, the Authority further entered into a Loan Agreement with The Cornerstone
Group xxn, L.L.c., dated November 25,2003 (the "Loan Agreement"), in an attempt to secure the
necessary and satisfactory funding required by the DDA;
WHEREAS, the Authority in good faith took numerous steps in furtherance of the Project
and consistent with the DDA, including, but not limited to exercising its legislative authority to
commence eminent domain actions when voluntary acquisition of the property could not be
effectuated, and commencing relocation efforts in furtherance of the Project;
WHEREAS, the Authority further scheduled immediate possession hearings in the eminent
domain actions at the urging of the Redeveloper, in order to assemble the properties necessary for the
Project;
WHEREAS, the Redeveloper then indicated it could not fund the necessary deposits required
to obtain immediate possession under the Loan Agreement because title would not be obtained at an
immediate possession hearing, and, according to the Redeveloper, the Redeveloper's lender would
not provide the necessary funds without collateral;
WHEREAS, the Redeveloper's demand for collateral pursuant to the Loan Agreement and the
Note attached thereto as Exhibit A demonstrated and reinforced that the Loan Agreement's granting
of a "mortgage and/or deed of trust interest in each parcel of Property acquired with the proceeds of
the Loan" was unenforceable as matter of Colorado law, and violative of Article 11, Section 6 of the
Colorado Constitution. See Allardice v. Adams County, 476 P.2d 982 (Colo. 1970);
WHEREAS, the Redeveloper's inability to fund the Project in accordance with the Loan
Agreement caused the Authority to be concerned about the level of commitment of the end user
under the Project, Walgreen's, and the fact that the Authority had never received a binding" and
irrevocable commitment from Walgreen's as required by the DDA;
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WHEREAS, the Authority further determined that the lack of a binding and irrevocable
commitment from Walgreen's similarly was a default pursuant to Section 5.6 of the DDA;
WHEREAS, the Authority determined that the Redeveloper's inability to fund the Project
under the Loan Agreement caused the funding to be unsatisfactory within the meaning of Section 5.1
of the DDA;
WHEREAS, the Authority nonetheless attempted to give the Redeveloper an opportunity to
cure both of the aforesaid defaults, notwithstanding the fact that Section 5.1 of the DDA allowed the
Authority to terminate the DDA immediately, and without an opportunity to cure
WHEREAS, the Authority therefore provided the Redeveloper with a Notice of Default dated
August 18, 2004 (the "Notice of Default"), which provided said opportunity to cure;
WHEREAS, the Redeveloper failed to cure the defaults identified in the Notice of Default;
WHEREAS, the Authority has not waived in writing any of the conditions precedent to
closing within the meaning of Section 5 of the DDA;
WHEREAS, the Authority determined at its September 21, 2004 regular meeting to terminate
the DDA, and to take all appropriate actions in furtherance of said termination; and
WHEREAS, the Authority by this Resolution desires to specify the reasons for the
termination of the DDA, and ratify the September 21,2004 motion to terminate the DDA.
BE IT RESOL VED BY THE WHEAT RIDGE URBAN RENEW ALAUTHORITY, THAT:
Section 1. The Motion to Terminate the DDA of September 21,2004, is hereby ratified by
this Resolution, and the Authority hereby finds and determines that the termination is necessary and
appropriate for reasons including, but not limited to, the following:
A. The factual recitations set forth above are hereby incorporated herein by this
reference;
B. Satisfactory funding is not in place pursuant to Section 5.1, subsection C oftheDDA;
C. The Loan Agreement, including the Note attached thereto as Exhibit A, is insufficient
as a matter of fact and law;
D. The Redeveloper was unable to fund the deposits necessary to obtain immediate
possession in furtherance of the Project; and
E. The Redeveloper was unable to provide a binding and irrevocable commitment from
Walgreen's as required by Section 5.6 of the DDA.
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Section 2. To the extent necessary, the Authority's approval of the Loan Agreement is hereby
rescinded.
Section 3. The Authority's staff is hereby directed to provide a copy of this Resolution to all
persons who presently own or maintain an interest in the properties that are part of the Project, and to
take necessary actions to implement this Resolution, and the Authority's legal counsel is directed to
take the necessary actions to terminate the eminent domain actions commenced in furtherance ofthe
Project.
DATED this
/~
o day of
ATTEST:
~~~~
, Secretary
APPROVED AS TO FORM:
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