September 12, 2013 – Resolution – CRH Realty I, LLC

RESOLUTION 

A recessed meeting of County of Sullivan Industrial Development Agency (“Agency”) was convened in session at the Sullivan County Government Center, 100 North Street, Village of Monticello, Sullivan County, New York on September 12, 2013, at 11:00 a.m. local time. 

The meeting was called to order by Chairman Ira Steingart, and, upon the roll being called, the following members of the Agency were: 

Present                        Absent

Ira Steingart                            [   x    ]               [       ]

Harold Gold                            [   x    ]               [       ]

Edward T. Sykes                    [   x    ]               [       ]

Suzanne Loughlin                   [   x    ]               [       ]

Charles Barbuti, Jr.                 [       ]               [  x     ]

Harris Alport                           [   x    ]               [       ]

Steve White                            [   x    ]               [       ]

Sandy Shaddock                     [       ]               [   x    ]

Sean Rieber                             [  x     ]               [       ] 

The following persons were also present:

Allan C. Scott, Chief Executive Officer

Jennifer C.S. Brylinski, Agency Executive Director

Walter F. Garigliano, Agency General Counsel

Douglas Sansted, Crystal Run Healthcare LLP Chief Legal Officer 

The following resolution was offered by Suzanne Loughlin, seconded by Steve White, to wit: 

Resolution 29 – 2013  

RESOLUTION OF THE COUNTY OF SULLIVAN INDUSTRIAL DEVELOPMENT AGENCY CONSENTING TO AND AUTHORIZING THE TRANSFER BY THE AGENCY TO CRH REALTY I, LLC (“CR REALTY”) OF TWO (2) PARCELS OF REAL ESTATE CONSISTING OF 17.34 ACRES LOCATED IN THE EMERALD CORPORATE CENTER ALONG ROCK HILL DRIVE IN THE TOWN OF THOMPSON, COUNTY OF SULLIVAN, STATE OF NEW YORK AND IDENTIFIED ON THE TOWN OF THOMPSON TAX MAP AS SECTION 35, BLOCK 1, LOT 9.2 AND SECTION 35, BLOCK 1, LOT 9.3 AND RELATED FACILITIES AND AUTHORIZING AND DIRECTING AGENCY STAFF AND ITS LEGAL COUNSEL TO RESTRUCTURE THE EXISTING SALE/LEASEBACK BETWEEN THE AGENCY, CR REALTY AND CRYSTAL RUN HEALTHCARE LLP (“CR HEALTHCARE”, AND TOGETHER WITH CR REALTY, “CRYSTAL RUN”) TO A LEASE/LEASEBACK BETWEEN THE AGENCY AND GA HC REIT II 61 EMERALD NY MOB, LLC (“REIT”) WITH THE UNDERSTANDING THAT REIT WILL SIMULTANEOUSLY ENTER INTO A NEW TWENTY (20) YEAR LEASE WITH CR HEALTHCARE OR ITS AFFILIATE 

WHEREAS, Title 1 of Article 18-A of the General Municipal Law of the State of New York (“Enabling Act”) was duly enacted into law as Chapter 1030 of the Laws of 1969 of the State of New York (“State”); and 

WHEREAS, the Enabling Act authorizes the creation of industrial development agencies for the benefit of the several counties, cities, villages and towns in the State and empowers such agencies, among other things, to acquire, construct, reconstruct, lease, improve, maintain, equip and sell land and any building or other improvement, and all real and personal properties, including, but not limited to, machinery and equipment deemed necessary in connection therewith, whether or not now in existence or under construction, which shall be suitable for manufacturing, warehousing, research, commercial or industrial facilities, in order to advance job opportunities, health, general prosperity and the economic welfare of the people of the State and to improve their standard of living; and 

WHEREAS, the Enabling Act further authorizes each such agency to lease any or all of its facilities at such rentals and on such other terms and conditions as it deems advisable; and 

WHEREAS, pursuant to and in connection with the provisions of the Enabling Act, Chapter 560 of the Laws of 1970 of the State (collectively referred to as the “Act”) created the Agency which is empowered under the Act to undertake the providing, financing and leasing of the facility described below; and 

WHEREAS, on or about June 1, 2003, CR Realty presented an application to the Agency, a copy of which is on file at the office of the Agency, whereby the Agency undertook a project which consisted of the (i) acquisition, construction, equipping and installation of a medical office complex intended to house a multi-specialty practice consisting of approximately 80,784 square feet (“Building”) situate on two (2) parcels of real estate consisting of approximately 17.34 acres located in the Emerald Corporate Center along Rock Hill Drive in the Town of Thompson, County of Sullivan, State of New York and identified on the Town of Thompson tax map as Section 35, Block 1, Lot 9.2 and Section 35, Block 1, Lot 9.3 (“Land”) and related facilities; (ii) acquired and installed thereon and therein certain furniture, fixtures, machinery, equipment and tools (“Equipment”); (iii) constructed improvements to the Building, the Land and the Equipment (collectively, the Building and the Land are referred to as either the “Facility” or the “Project”); and 

            WHEREAS, in order to induce CR Realty to develop the Facility, effective June 1, 2003, the Agency at the request of CR Realty acquired title to the Land from Emerald Corporate Center Economic Development Corporation and entered into a leaseback of the Facility from the Agency to the CR Realty; and 

WHEREAS, CR Realty, on behalf of the Agency and as the Agency’s agent, acquired, constructed, equipped and installed the Facility in accordance with the plans and specifications presented to the Agency; and 

WHEREAS, on or about September 5, 2013, CR Realty (via its affiliate) requested the Agency consent to the transfer of fee title to the Facility to CR Realty and that the existing sale/leaseback between the Agency and CR Realty be restructured to a lease/leaseback between the Agency and REIT with the understanding that REIT will simultaneously enter into a new twenty (20) year lease with CR Healthcare (collectively, the “Transaction Restructure”); and 

WHEREAS, the Agency wishes to adopt all necessary resolutions to consent to and authorize the Transaction Restructure. 

NOW, THEREFORE, BE IT RESOLVED BY THE MEMBERS OF THE AGENCY AS FOLLOWS: 

Section 1.        REIT and CR Realty presented the Agency with an application and related materials requesting the Agency consent to and authorize the Transaction Restructure. 

Section 2.        Based upon the representations made by REIT and CR Realty to the Agency, the Agency hereby determines that the Transaction Restructure does not involve a decision of the Agency which may affect the environment and is, therefore, not subject to review under the State Environmental Quality Review Act. 

Section 3.        Since the Transaction Restructure involves no additional or incremental benefits to REIT or to CR Realty, the request is not subject to a required public hearing. 

Section 4.        Based upon representations made by REIT and CR Realty to the Agency, the Agency hereby makes, finds and determines as follows: 

(A)       By virtue of the Act, the Agency has been vested with all powers necessary and convenient to carry out and effectuate the purposes and provisions of the Act and to exercise all powers granted to it under the Act;

(B)       It is desirable and in the public interest for the Agency to consent to and authorize the Transaction Restructure;

(C)       The Agency has the authority to take the actions contemplated therein under the Act;

and

Section 5.        The Lease Agreement, Leaseback Agreement, PILOT Agreement and related documents as negotiated by the Chairman (collectively, the “Transfer and Restructure Agreements”), are hereby approved as to form and substance on condition that: (i) all payments under the Transfer and Restructure Agreements including payment of all costs incurred by the Agency arising out of the Transaction Restructure; and (ii) the terms of the Transfer and Restructure Agreements are consistent with the Agency’s Uniform Tax Exemption Policy and do not provide CR Realty or REIT with additional or incremental benefits beyond those conferred by the transaction documents by and between the Agency, CR Realty and CR Healthcare, entered into on or about June 27, 2003. 

Section 6.        The CEO or Chairman of the Agency (either acting individually) is hereby authorized, on behalf of the Agency, to execute and deliver the Transfer and Restructure Agreements in the form presented at this meeting all with such changes, variations, omissions and insertions as the Chairman of the Agency shall approve, the execution thereof by the Chairman or CEO of the Agency to constitute conclusive evidence of such approval.