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Home My WebLink AboutTower Development LLC Oshkosh Housing Authority Winnebago County Housing Authority O/Hv^ P.O. Box 397, Oshkosh, Wisconsin 54903-0397 Winnebago County IOW I� (920) 424 1450 Fax (920) 424-1474 • TDD (920) 424-1479 The we of the Future ON THE WATER ohawcha.org November 18, 2013 C E LI n„n D NOV 2 02013 LYNN LORENSON CITY ATTORNEY CITY ATTORNEY'S OFFICE PO BOX 1130 OSHKOSH WI 54903-1130 Dear Ms. Lorenson: Enclosed please find your copy of the fully executed Pilot Agreement between the City of Oshkosh and Tower Redevelopment, LLC. If you have any questions, please do not hesitate to contact me at (920) 424-1470 ext. 112. Sincerely, Susan van Houwelingen Deputy Director Oshkosh/Winnebago County Housing Authority Enc. /0ri3inaI Cri4y derk copy - Povric Co pq A 6‘365S6 r C.ciq c;� A-+f*rne1 • PILOT AGREEMENT This PILOT Agreement ("Agreement") is entered into effective December 18, 2012, by and among the City of Oshkosh, Wisconsin (the "City"), Tower Redevelopment, LLC, a Wisconsin limited liability company (the "Company") and The Housing Authority of the City of Oshkosh, Wisconsin a/k/a Housing Authority of the City of Oshkosh, Wisconsin a/k/a Oshkosh Housing Authority, a public body, corporate and politic, organized and existing under the laws of the State of Wisconsin (the"Housing Authority"). RECITALS WHEREAS, the Housing Authority has owned and operated a 157-unit public housing rental portfolio located in the City at 100 Court Street, Oshkosh,Wisconsin 54901 (referred to herein as the"Property") and WHEREAS, in order to raise debt and equity capital for the substantial rehabilitation and construction of the Property, the Housing Authority anticipates establishing a condominium on the Property and transferring federal income tax ownership of a portion of the Property to the Company in 2012 by leasing that part of the Property consisting of a 51-unit public housing rental portfolio more particularly described in the attached Exhibit A(the"Project"); and WHEREAS, the Housing Authority is the sole managing member of the Company and the property manager of the Project, and, as such, exercises exclusive control and authority over the operation of the Project; and WHEREAS, the Housing Authority has loaned substantial sums to the Company in connection with the acquisition and rehabilitation/construction of the Project, and has a right of first refusal to acquire the Project for a nominal sum following expiration of the fifteen (15)-year low- income housing tax period(the"Compliance Period"); and WHEREAS, the Company is obligated to operate the Project as affordable housing in compliance with HUD and Internal Revenue Code restrictions and requirements, and the Housing Authority is solely responsible for ensuring that such restrictions and requirements are satisfied by the Company throughout the Compliance Period; and WHEREAS, the Company will not generate material positive cash flow in excess of its fixed expenses. Fees and debt obligations; and WHEREAS, the parties have determined, based upon the foregoing RECITALS, that the Project constitute property of the Housing Authority that is exempt from taxation under Section 70.11(18) of the Wisconsin Statutes and which may be subject to a payment in lieu of taxes ("PILOT") imposed by the City, as provided in Section 66.1201(22)of the Wisconsin Statues; NOW, THEREFORE, acknowledging the receipt of sufficient consideration, the parties agree as follows: 1. Term of PILOT Agreement. The Company shall make a PILOT to the City with respect to the Project for each calendar year beginning in 2012 and ending in the final calendar year of the Project's Compliance Period, now estimated to be calendar year 2027. As required by 4832-1732-7632,2 Section 66.1201(22) of the Wisconsin Statutes, such PILOT shall not exceed the amount that would be levied as the annual tax of the City upon the Project. 2. Computation of PILOT. The PILOT for each calendar year shall be ten percent (10%) of the difference between 01 one hundred percent (100%) of the tenant's portion of the collected rents for all of the residential rental units in the Project for such calendar year and (b) one hundred percent (100%) of the electricity, water, sewer and fuel bills incurred by the Company with respect to the Project for such calendar year. The amounts under clauses(a) and (b) above shall be based upon the financial statements of the Company for the prior calendar year. 3. Payment of PILOT. The Company shall make the PILOT within the time periods applicable to properties that are not exempt from property taxation, as provided in Section 74.11 of the Wisconsin Statutes. 4. Obligation of Company and Housing Authority. The Housing Authority shall cause the Company to rehabilitate and operate the Project as affordable rental housing throughout the Compliance Period in accordance with the income, rent and other restrictions and limitations imposed by HUD and the Internal Revenue Code. 5. Obligations of City. The City shalt furnish or cause to be furnished to the Company and/or Project tenants such services or facilities as are furnished to other property owners and residents of the City on the same basis as such City services are ordinarily provided. The City shall also, to the extent permitted by applicable law, apply or modify existing City codes and ordinances to permit the Housing Authority and the Company to operate the Project as described above throughout the Compliance Period. 6. Notices. A courtesy copy of any notices from the City to the Company pertaining to this Agreement shall also be provided to: First Sterling Investor 081 LLC c/o First Sterling Financial, Inc. I 1 1 Great Neck Road Suite 500, 5th Floor Great Neck, NY 110210 Attn: Victor 3. Sostar, Sr. Vice President 7. Miscellaneous. This Agreement cannot be unilaterally amended. modified or terminated by any party hereto. Each party hereby represents to and for the benefit of the other party that the person executing this Agreement on the signature page on behalf of such party has been duly authorized to execute this Agreement, and that this Agreement has been duly authorized and approved by such party. The benefits of this Agreement shall not be assigned by the Company or the Housing Authority without City's consent. This Agreement represents the entire agreement of the parties with respect to the subject matter hereof This Agreement shall be governed by the laws of the State of Wisconsin. This Agreement may be signed by facsimile or in counterparts. /SIGNATURE PAGE FOLLOWS! 4832-1732-7632 2 IN WITNESS WHEREOF, the parties hereto duly execute this PILOT Agreement effective as of the date first set forth above. CITY OF OSHKOSH By: Name: Mark Rohloff Its:- a anager By: Name: Pamela Ubrig Its: ity Clerk etlir" ..1!j\ a 1 Name: Lynn Lorenson Its: City Attorney THE HOUSING AUTHORITY OF THE CITY OF OSHKOSH,WISCONSIN A/K/A HOUSING AUTHORITY OF THE CITY OF OSHKOSH A/K/A OSHKOSH HOUSING AUTHORITY, a public body, corporate and politic,organized and existing under the laws of the State of Wisconsin der y: Claude Benedict Its: Chairman By: Brad asterson Its: Execu ive Director TOWER REDEVELOPMENT,LLC, a Wisconsin limited liability company By: The Housing Authority of the City of Oshkosh,Wisconsin, a public body, corporate and politic,organized and existing under the laws of the State of Wisconsin Its: Managing Member Al.mod._ By: Claude Benedict Its: Chairman By: ad J 4e/sterson Its: Executive Director Signature Page to PILOT Agreement 4832-1732-7632.2 EXHIBIT A PROJECT Leasehold estate created by indenture of lease entered into by and between The Housing Authority of the City of Oshkosh, Wisconsin a/k/a Housing Authority of the City of Oshkosh a/k/a Oshkosh Housing Authority, as lessor, and Tower Redevelopment, LLC, a Wisconsin limited liability company, as lessee, dated December 18th, 2012 and a memorandum of which was recorded in the office of the Register of Deeds for Winnebago County, Wisconsin as Document No. 1624243, demising premises situated in said County and State and described as follows: Unit 1 in Court Tower Condominium, a condominium located in the City of Oshkosh, Winnebago County,Wisconsin,being a condominium declared and created under the Condominium Ownership Act of the State of Wisconsin by that certain Declaration of Court Tower Condominium dated December 12, 2012 and recorded in the Winnebago County Register of Deeds Office on December 13, 2012 as Document Number 1623607 and that certain Condominium Plat recorded in the Winnebago County Register of Deeds Office on December 13, 2012 as Document Number 1623606. Together with easements established by a Declaration of Reciprocal Easements dated December 13, 2012 and recorded December 13,2012 as Document No. 1623665 in the Winnebago County Register of Deeds Office,Wisconsin. PIN: 08-0034-01-00