7. EDSR 05-08-2006ITEM 17.
MEMORANDUM
TO: Economic Development Authority
FROM: Heidi Steinmetz, Assistant Director of Economic Development ~~
DATE: May 8, 2006
SUBJECT: Consider Northern Natural Gas Encroachment Agreement for
Lot I, Block I of Northstar Business Park
Attachments
• Encroachment Agreement
• Location Map
Purpose
The purpose of this memorandum is to provide the EDA with the following:
• Background & issue regarding the attached Encroachment Agreement
• Requested action
This item regarding the Encroachment Agreement between the EDA and Northern Natural
Gas (NNG) was on the EDA's agenda last month but was removed from discussion in
order to provide additional time fox further negotiations on issues that were raised by NNG
at the last moment. The revised Agreement has been reviewed and accepted by the EDA's
attorney at Briggs & Morgan. NNG's attorney has also accepted the document.
Background
A Noxthem Natural Gas (NNG) main easement runs between the northern and southern
property lines of Noxthstar Business Park. Permanent structures cannot be built in this
easement, however driveways ox parking lots axe allowed conditional upon entering into an
encroachment agreement with NNG.
Last October, the EDA approved a Mutual Driveway Easement Agreement with CDI for a
mutual driveway to be constructed by CDI over a portion of the EDA's Lot 1, Block 1.
CDI has entered into an Encroachment Agreement with NNG for CDI's portion of the
driveway that covers the NNG easement.
Consider Nor[hem Natural Gzs Bncroachmen[ Ahrceemen[ for LoC 1, Block 1 of Northstar Bosmess Park
May 8, 2006 EDA Meeting
Pagc 2 of 2
I$sUe
The attached Encroachment Agreement between the EDA and NNG is required by NNG
fox the EDA's portion of the property that is included in the mutual driveway and covers the
NNG easement. It has been reviewed by the EDA's attorney at Briggs & Morgan.
In summary, the Encroachment Agreement states that if something goes wrong within the
encroachment area (unless it is caused by NNG), the EDA would be held entirely
responsible for any damages/claims.
Requested Action
Staff recommends that the EDA consider approving the E ncxoachment Agreement with
with Northern Natural Gas fox Lot 1, Block 1 of Northstar Business Paxk for the following
reasons:
• The October 2005 Mutual Driveway Easement Agreement between the EDA and
CDI holds CDI liable if they disrupt the gas line within the encroachment area.
• The Encroachment Agreement is automatically assignable when the EDA sells the
property.
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Location Map
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Case Number: NORTHSTAR BUSINESS PARK
ENCROACHMENT AGREEMENT
This instrument made and entered into this day of , 2006,
by and between NORTHERN NATURAL GAS COMPANY, a Delaware corporation,
(hereinafter referred to as "Northern"), with principal offices at P.O. Box 3330, Omaha,
Nebraska, 68103-0330, and The Economic Development Authority of the City of Elk River, a
Minnesota public Corporation, (hereinafter referred to as "Owner").
WITNESSETH THAT:
WHEREAS, Northern is the holder of an Easement granted by D.E. Henderson and Naomi
Henderson, husband and wife, on July 20`h, 1965, covering the following described premises in
Sherburne County, Minnesota:
The South half of the Northwest Quarter (S%zNW'/4) and the Northeast Quarter
of the Southwest Quarter (NE'/4SW `/4) and that part of the Southeast Quarter of
Southwest Quarter (SE'/aSW'/4) lying North and East of the Railroad Right-of-
way all in Section Two (2), Township Thirty-two (32), Range Twenty-six (26);
and
which Easement was recorded on the 13`h day of August, 1965, as Instrument No. 101600, and
defined by a Modification and Amendment of Easement recorded on the 21s` day of November,
1977 as Instrument No. 144842 and further modified by an Addendum to Pipeline Easement
recorded on the 18`h day of May, 1984 as Instrument No. 181910; all in the Office of the County
Recorder for Sherburne County, Minnesota (hereinafter collectively referred to as "Easement");
and
WHEREAS, pursuant to the authority contained in said Easement, Northern has
constructed and currently operates and maintains a 3-inch pipeline (MNB67701) and an 8-inch
pipeline (MNB67702), along with the right to install additional facilities from time to time
(hereinafter referred to as "Pipeline Facilities"), across and through the above described
premises; and
WHEREAS, Owner plans to construct a hard surface driveway (hereinafter collectively
referred to as "Encroachment") upon and within portions of the confines of Northern's 75-foot
wide Easement as depicted on Exhibit "A", with this written consent; and
WHEREAS, Owner has been advised by Northern that Northem is a natural gas
transmission company and that Northern operates a high pressure underground natural gas
pipeline through the Owned Premises; and
WHEREAS, Owner has requested permission from Northern to maintain, use, and enjoy
the Encroachment upon portions of Northern's Easement and in close proximity to Northem's
Pipeline Facilities; and
WHEREAS, Northern is willing to grant such permission upon the terms and conditions set
forth as follows.
NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions
hereinafter set forth, the parties hereto agree as follows:
1. Northern hereby grants permission to Owner to maintain, operate and use upon
the Owned Premises and upon and in close proximity to Northern's Pipeline Facilities, the said
Encroachment, subject to the following conditions:
A. Any future Owner assumes all risks for damages, injuries, or loss to either property
or persons which may be incurred by Owner or its respective agents, invitees, or licensees
present on or in the vicinity of the Easement and in any way associated with said Encroachment,
unless caused by the negligence or willful misconduct of Northern, its agents or employees.
B. That the permission granted herein is limited exclusively to the proposed
Encroachment within Northem's Easement. Owner shall not alter the grade or permit such
alteration anywhere on the land upon which Northern has reserved its easement rights without
the prior express written consent of Northern, which consent shall not be unreasonably withheld.
C. That Owner shall at all times conduct all its activities on said Easement in such a
manner as not to materially interfere with or impede the operation of Northern's Pipeline
Facilities and activities in any manner whatsoever.
D. That Owner shall not plant any trees or shrubs within the confines of Northern's
Easement without the prior express written consent of Northem, which consent shall not be
unreasonably withheld.
2. Owner agrees to indemnify, protect, and hold Northem, its parent, affiliates,
subsidiaries, and their directors, officers, employees, representatives, and agents harmless from
and against any and all actions or causes of action, claims, demands, liabilities, loss, damage,
injury, suit, proceeding, judgment, cost, or expense of whatever kind or nature, including but not
limited to reasonable attorneys' fees, arising from or as a result of any incident, act, action, cause
of action, negligence, transaction or omission of Owner in connection with, or incidental to the
construction, operation, maintenance, or use of the said Encroachment within and upon the
Easement, or from the negligence or willful misconduct of the Owner, its agents, invitees or
licensees except where such loss, cost, liability, or expense was proximately caused solely by the
negligence or willful misconduct of Northern or its agents or employees.
3. Should Northern need to remove any of Owners said Encroachment within its
4. The Parties hereto understand that this Agreement in no way constitutes a waiver
by Northern of its rights to enjoy its Easement.
5. It is expressly agreed to by and between the parties hereto that if Owner is in
material violation of any terms or conditions set forth in this Agreement, Northern, at its option,
may terminate this Agreement upon thirty (30) days' notice to the Owner and Owner's failure to
cure such violation; provided that, if the nature of such violation is such that it requires more
than 30 days to cure, Owner shall have such reasonable additional period to cure as long as
owner is diligently pursuing such cure. In the event of such termination, Owner shall
immediately remove any and all of said Encroachment which may be situated on the Easement,
or if Owner fails to remove any and all of said Encroachment, Northern may, at its option,
remove said Encroachment at the expense of Owner and without any liability whatsoever. It is
further agreed that the failure by Northern to exercise such option as to any such violation shall
not constitute a waiver of Northern's future right to exercise such option as to the same or any
Future violation.
6. The provisions of the Easement, and all rights, powers, privileges, and duties,
obligations, and liabilities created thereby, remain in full force and effect and are not affected
hereby except to the extent and in the manner set forth above.
7. The Owner of the Owned Premises agrees to indemnify, defend and hold
Northern, its parent and affiliated companies, and the directors, officers and employees of any
such corporate entities harmless from and against any liability, damage, claims, loss, cause of
action, suit, proceeding, judgment, cost (including the cost or expense of environmental
response, removal or remediation activities), fees or expense, including reasonable attorney's
fees arising from: (1) non-compliance with any laws, regulations and orders applicable to the
ownership or the operation and maintenance of the said Encroachment on the Owned Premises
described herein, and (2) any incidents, acts, releases, negligence, transactions or omissions by
Owner, or conditions on or affecting the Easement created by Owner that would (i) contribute to
or constitute a violation of any local, state or federal environmental rule, regulation, law or
judicial order, (ii) result, in whole or in part, in any requirement to clean up or otherwise remedy
or remediate a condition, (iii) give rise to any lien, liability, injunction, order, restriction, claim,
expense, damage, fine or penalty, or (iv) adversely affect human health or the environment at or
near the Easement.
8. This instrument and the covenants and agreements herein contained shall extend
to and be binding upon the heirs, executors, administrators, successors, and assigns of the parties
and the benefits of this Agreement shall run with the land.
IN WITNESS WHEREOF, the parties have executed this instrument the day and year first
above written.
NORTHERN
NORTHERN NATURAL GAS COMPANY
By:
STATE OF NEBRASKA )
)SS
COUNTY OF DOUGLAS )
Glen R. Hass
Agent and Attorney in Fact
The foregoing instrument was acknowledged before me, a Notary Public duly
commissioned and qualified in and for said county and state, on this day of
2005 by Glen R. Hass, the Agent and Attorney-in-Fact of Northern Natural
Gas Company.
(SEAL)
Notary Public
My Commission Expires
ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF ELK RNER
Name:
Its:
Name:
Its:
STATE OF MINNESOTA )
)SS
COUNTY OF )
The foregoing instrument was acknowledged before me, a Notary Public duly
commissioned and qualified in and for said county and state, on this day of
2005 by the and
the of the Economic
Development Authority of the City Of Elk River, a body corporate and public organized
pursuant to Minnesota Statutes Section 469.090 to 469.1082, on behalf of the body corporate and
public.
(SEAL)
Notary Public
My Commission Expires