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4.9. SR 06-01-2015 �j Elk = - Request for Action River To Item Number Mayor and City Council 4.9 Agenda Section Meeting Date Prepared by Consent June 1, 2015 Zack Carlton,Planner I Item Description Reviewed by Authorize Purchase of Lot 4,Block 1, Mississippi Cal Portner, City Administrator Ridge 2nd Addition (Yale Court) Reviewed by Action Requested Adopt, by resolution, the purchase of Lot 4, Block 1, Mississippi Ridge 2nd Addition and direct staff to execute the purchase agreement. Background/Discussion The city has agreed to terms with Cornerstone Elk River, LLC for the purchase of Lot 4,Block 1, Mississippi Ridge 2nd Addition. The city is acquiring the property to allow for a roadway connection between Yale Court and Yale Street. The purchase furthers the transportation goals identified in the Comprehensive and Focused Area Study plans, and is a key step in the planned street network south of 1715`Ave. NW. The street will connect with a frontage road along Hwy 169 and continue to a planned signalized intersection at Twin Lakes Road and Hwy 169. On May 26, 2015, the Planning Commission adopted a resolution finding the purchase is consistent with the Comprehensive Plan. The resolution was required before the city can execute a purchase agreement. Financial Impact The city has agreed to a purchase price of$185,000. Attachments • Resolution Approving Acquisition • Draft Purchase Agreement • Planning Commission Resolution P0WIeEa 0 Template Updated 4/14 INAWREJ City of Elk River Resolution 15- A Resolution of the City of Elk River Resolution Approving the Purchase of Real Property WHEREAS, the City is proposing to acquire property ("Property") legally described in the proposed Purchase Agreement between the City and Cornerstone Elk River LLC ("Seller") attached hereto as Exhibit "A" ("Purchase Agreement") under the terms set forth in the Purchase Agreement; and WHEREAS, on May 26, 2015, the City of Elk River Planning Commission reviewed the acquisition of the Property and determined that acquisition was consistent with the City's comprehensive plan. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River, Minnesota, as follows: The Purchase Agreement is hereby approved, and the Mayor and City Administrator are authorized and directed to execute all documents, and take all appropriate measures to acquire the Property under the terms of the Purchase Agreement. The motion for adoption of the foregoing resolution was duly seconded by Councilmember and, after full discussion thereof, and upon a vote being taken thereof, the following voted in favor thereof: and the following voted against same: Passed and adopted this 1s`day of June 2015. John J. Dietz, Mayor ATTEST: Tina Allard, City Clerk P U N E R E O R Y NAWREJ Exhibit A Purchase Agreement NAWREJ SALE AND PURCHASE AGREEMENT THIS SALE AND PURCHASE AGREEMENT (the "Agreement"), is made as of June , 2015 (the "Effective Date" of this Agreement) between the City of Elk River, a Minnesota municipal corporation, (the "Buyer") and Cornerstone Elk River LLC, a Minnesota limited liability company ("Seller"). In consideration of the mutual covenants and agreements hereinafter contained, the parties agree as follows: 1. SALE AND PURCHASE OF REAL PROPERTY. Seller shall sell to Buyer, and Buyer shall purchase from Seller the following property (the "Real Property"): Lot 4, Block 1, Mississippi Ridge 2nd Addition, Sherburne County, Minnesota, according to the recorded plat thereof. 2. PURCHASE PRICE AND MANNER OF PAYMENT. The purchase price ("Purchase Price") to be paid by Buyer to Seller shall be One Hundred Eighty-five Thousand and No/100 Dollars ($185,000.00). The Purchase Price, plus or minus any prorations and other adjustments required hereunder, shall be paid by wire transfer on the Closing Date. Seller shall provide Buyer wire transfer instructions in advance of the Closing Date. 3. CONDITIONS TO BUYER'S OBLIGATIONS. The obligations of Buyer under this Agreement are conditioned upon satisfaction or waiver by Buyer of each of the following by the respective dates indicated: (a) Access. Seller shall allow Buyer and Buyer's agents access to the Real Property without charge and at all reasonable times for the purpose of investigation and testing. Buyer shall pay all costs and expenses of such investigation and testing and shall indemnify, defend and hold Seller and the Real Property harmless from all costs and liabilities relating to Buyer's activities; provided that Buyer shall not be responsible for existing conditions on the Real Property nor the cost of investigations or studies completed by Seller before the Effective Date. Buyer shall further repair any damage to the Real Property caused by or occurring as a result of Buyer's testing. The foregoing covenants shall survive the termination or cancellation of this Agreement. (b) Title. Title shall have been found acceptable by Buyer in its sole discretion, or been made acceptable, in accordance with the requirements and terms of Section 4 below. (c) Representations and Warranties. The representations of Seller contained in this Agreement will be true now and on the Closing Date as if made on the Closing Date. (d) Investigations or Testing. Buyer determining on or before the Closing Date, that it is satisfied, in its sole discretion, with the results of matters disclosed by any 1815692 environmental/engineering investigation or testing of the Property performed by Buyer or Buyer agent. If any condition set forth in this Section 3 has not been satisfied or waived on or before the Closing Date (the "Inspection Deadline"), then Buyer may, at Buyer's option, terminate this Agreement. Upon such termination, neither Seller nor Buyer shall have any further rights or obligations under this Agreement except for the covenants made in Section 3(a), Section 8 and Section 9 (the "Surviving Covenants"). If Buyer has not terminated this Agreement on or before the Inspection Deadline, then Buyer shall be deemed to have waived the contingencies set forth herein. 4. TITLE MATTERS. Title examination shall be conducted as follows: (a) Title Evidence. Within fifteen (15) days of the date of this Agreement, Buyer shall be responsible for obtaining a title insurance commitment ("Title Commitment") from such title company selected by Buyer (the "Title Company") for an ALTA Form B 2006 Owner's Policy of Title Insurance committing to insure a marketable title to the Real Property in Buyer; deleting so-called "standard exceptions" related to parties in possession, and liens for labor, materials and services; including affirmative insurance regarding appurtenant easements, separate real estate taxation, and contiguity, in the amount of the Purchase Price, and issued by the Title Company. The cost of the Title Commitment shall be paid by Buyer. The Title Commitment shall include complete and accurate copies of all matters described in Schedule B thereof. (b) Buyer's Objections. Within fifteen (15) days after receiving the last item of the Title Commitment, Buyer shall notify Seller of any objections ("Objections") to matters disclosed in the Title Commitment. Buyer shall be deemed to have automatically made Objections to any mortgage, judgment, tax lien, mechanic's lien and any other monetary lien against the Real Property (collectively "Monetary Liens"). With respect to any update to the Title Commitment, Buyer shall have 10 days after Buyer's receipt of the applicable updated Title Commitment to notify Seller of any Objections; provided that Buyer shall not have the right to object to any matters that were shown on a previous Title Commitment and not timely objected to by Buyer. Seller shall have no obligation to correct any Objections; provided, however, Seller shall cause to be satisfied at Closing all voluntary Monetary Liens (mortgages and other liens which Seller has consented to or joined in) out of proceeds from Closing on the Closing Date if they are not satisfied prior thereto. At Closing, Buyer shall have the right to require endorsement(s) to the Title Policy. If the Objections are not cured prior to the Closing Date, Buyer will have the option to do any of the following by notice provided to Seller: (i) Terminate. Terminate this Agreement pursuant to Section 3 herein, on or before the Closing Date. Upon such termination, neither Seller nor Buyer shall have any further rights or obligations under this Agreement, except for the Surviving Covenants; or (ii) Waive. Waive the Objections and close the transaction contemplated by this Agreement as if such Objections had not been made. 2 1815692 (c) Title Policy. If the Closing occurs, Title Company shall issue an owner's title insurance policy ("Title Policy") pursuant to the Title Commitment, or a suitable mark up of the Title Commitment initiated by the Title Company undertaking to issue such a Title Policy within a reasonable time in the form required by the Title Commitment as approved by Buyer. The Title Policy shall be paid for by Buyer. 5. CLOSING PROCEDURES. (a) Closing Date. The closing of the purchase and sale contemplated by this Agreement (the "Closing") shall occur on or before June 5, 2015, or such later date as mutually agreed to by the Buyer and Seller (the "Closing Date") or as otherwise extended under the terms of this Agreement. The Closing shall take place at 10:00 a.m. local time at the office of Title Company, or such other location as determined by the Buyer and shall be completed through escrow of closing documents and funds with the Title Company. (b) Seller's Closing Documents. On the Closing Date, Seller shall execute and/or deliver to Buyer the following (collectively, the "Seller's Closing Documents"): (i) Deed. A Limited Warranty Deed (the "Deed"), in recordable form, conveying title to the Real Property to Buyer; (ii) Seller's Affidavit. An Affidavit by Seller indicating that on the Closing Date there are no outstanding, unsatisfied judgments, tax liens, or bankruptcies against or involving Seller or the Real Property; that there has been no skill, labor, or material furnished to the Real Property for which payment has not been made or for which mechanics' liens could be filed; and there are no other unrecorded interests in the Real Property; (iii) FIRPTA Affidavit. A nonforeign affidavit, properly executed and in recordable form, containing such information as is required by IRC Section 1445(b)(2) and its regulations; and (iv) Other Documents. All other documents reasonably determined by Buyer or the Title Company to be necessary to transfer the Real Property to Buyer, provided the same are acceptable to Seller, including a Closing Statement, which shall also be joined in by Buyer. (c) Buyer's Closing Documents. On the Closing Date, Buyer will execute and/or deliver to Seller the following (collectively, "Buyer's Closing Documents"): (i) Purchase Price. The Purchase Price to be paid as required by Section 2 hereof, and (ii) Title Documents. Such affidavits of Buyer or other documents as may be reasonably required by the Title Company in order to record Seller's Closing Documents and issue the Title Policy. 3 181569v2 (d) Possession. Seller shall deliver possession of the Property not later than the actual date of closing. 6. PROBATIONS. Seller and Buyer shall make the following prorations and allocations at the Closing: (a) Title Insurance and Closing Fee. Buyer shall pay the cost of the Title Commitment. Buyer shall pay the cost of the premium for the Title Policy and all endorsements. Seller and Buyer will each pay one-half of any reasonable and customary closing fee or charge imposed by the Title Company or its designated closing agent. (b) Deed Tax. Seller shall pay all state deed tax due on the Deed to be delivered by Seller under this Agreement. (c) Real Estate Taxes and Special Assessments. Seller shall pay or cause to be paid all general real estate taxes payable for the Real Property in the years prior to the year in which the Closing occurs, and any deferred or Green Acres real estate taxes. Seller and Buyer shall prorate the general real estate taxes and installments of special assessments, if any, payable for the Real Property in the year of closing as of the Closing Date based upon the calendar year. (d) Recording Costs. Seller will pay the cost of recording all documents necessary to place record title in Seller. Buyer will pay the cost of recording all other documents. (e) Attorneys' Fees. Seller and Buyer shall each pay its own attorneys' fees in connection with the preparation and negotiation of this Agreement and the Closing, except that a party defaulting under this Agreement or any of its respective Closing Documents shall pay the reasonable attorneys' fees and court costs incurred by the nondefaulting party to enforce its rights regarding such default. 7. OPERATION PRIOR TO CLOSING. During the period from the Effective Date through the Closing Date(the"Executory Period"), Seller shall not execute any contracts, leases, or other agreements regarding the Real Property, nor perform any act that would impair or encumber the title to the Real Property or affect the condition of the Real Property. 8. REPRESENTATIONS BY SELLER Seller represents to Buyer as follows, which representations shall be true and correct as of the Closing, and which representations are based on Seller's actual knowledge only, without any inquiry or investigation by Seller: (a) Organization; Authority. Seller has the requisite power and authority to execute and perform this Agreement and any of Seller's Closing Documents to be signed by it; such documents have been(or will be prior to Closing) duly authorized by all necessary action on the part of Seller and at the Closing shall have been duly executed and delivered; such execution, delivery, and performance by Seller of such documents does not conflict with or result in a violation of any judgment, order, or decree of any court or arbiter to which Seller is a party, or any agreement by which Seller is bound; and such documents are 4 181569v2 and shall be valid and binding obligations of Seller, enforceable in accordance with their terms. (b) Title to Real Property. Buyer shall rely on the Title Company to insure Buyer's title to the Real Property upon Closing. (c) Mechanic's Liens. All labor and materials which have been provided to the Real Property have been fully paid for or will be fully paid for, prior to the Closing Date. (d) Utilities. Seller makes no representations regarding utilities. (e) Rights of Others to Purchase Real Propert y. Seller has not entered into any other contracts, agreements or understandings, whether oral or written, for the sale of all or any portion of the Real Property, and there are no existing rights of first refusal or options to purchase all or any portion of the Real Property, or any other rights of others that might prevent the consummation of this Agreement. (f) Storage Tanks. There are no above-ground or underground tanks are located in or on the Real Property. (g) Wells and Septic. Seller knows of no wells on the Real Property. At the time of Closing, Seller will deliver any required well certificate pursuant to applicable laws. To Seller's knowledge, there is no "individual sewage treatment system" within the meaning of Minn. Stat. Section 115.55 on or serving the Real Property. (h) Assessments. Buyer shall make its own investigation regarding special assessments. (i) Litigation and Other Matters. Seller has received no notice, and has no knowledge of any pending notice, of a violation of any statutes, ordinances, regulations,judicial decrees, or orders, or the pendency of any lawsuits, administrative or arbitration hearings, governmental investigations, proceedings, applications, petitioners, or other matters affecting the Real Property or the use thereof, except those which may have been initiated by or participated in by Buyer. 0) Rights of Others to Purchase Real Propert y. Seller has not entered into any other contracts, agreements or understandings, whether oral or written, for the sale of all or any portion of the Real Property, and there are no existing rights of first refusal or options to purchase all or any portion of the Real Property, or any other rights of others that might prevent the consummation of this Agreement. (k) Condemnation. Buyer shall make its own determination regarding condemnation proceedings. (1) Hazardous Substances. To Seller's knowledge there are no Hazardous Substances stored, deposited or located within the Real Property or under the surface of the Real 5 181569v2 Property. For purposes of this representation, the term"Hazardous Substances" means asbestos and asbestos-containing materials, polychlorinated biphenyls, nuclear fuel or materials, chemical waste, radioactive materials, explosives, known carcinogens, petroleum products, or other dangerous, toxic, or hazardous pollutant, contaminant, chemical, material or substance defined as hazardous or as a pollutant or contaminant in, or the release or disposal of which is regulated by, any Environmental Laws. For purposes of this Agreement, the term"Environmental Laws" shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. §§ 9601-9657, as amended, and any other federal, state and local laws, rules and regulations dealing with Hazardous Substances, the environment or public health. (m) FIRPTA. Seller is not a"foreign person," "foreign partnership," "foreign trust" or "foreign estate," as those terms are defined in Section 1445 of the Internal Revenue Code. (n) Protected Historical Sites. To Seller's knowledge, the Real Property does not have any American Indian burial grounds, other human burial grounds, ceremonial earthworks, historical materials, and/or other archeological sites that are protected by federal or state law. Buyer's obligation to close is contingent upon Buyer determining to Buyer's satisfaction that the Real Property does not have any American Indian burial grounds, other human burial grounds, ceremonial earthworks, historical materials, and/or other archeological sites that are protected by federal or state law. Except for the representations explicitly set forth in this Agreement, Seller and Buyer agree that Buyer will accept possession of the Real Property in its AS-IS condition, WITH ALL FAULTS, and the sale of the Real Property to Buyer shall be without any other representation, covenant or warranty of any kind, express or implied, and Buyer, for Buyer, Buyer's agents, attorneys, representatives, heirs and assigns does hereby disclaim and renounce any other representation or warranty. The representations in this Section 8 shall survive the Closing. 9. REPRESENTATIONS AND INDEMNITY BY BUYER. Buyer represents to Seller that Buyer has the power and authority to execute this Agreement and any Buyer's Closing Documents signed by it; that all such documents have been authorized by all necessary action on the part of Buyer and at the Closing shall have been duly executed and delivered; that the execution, delivery, and performance by Buyer of such documents does not conflict with or violate any judgment, order or decree of any court or arbiter or any agreement by which Buyer is bound; and that all such documents are valid and binding obligations of Buyer and are enforceable in accordance with their terms. The representations in this Section 9 shall survive the Closing. 10. CONDEMNATION. If, prior to the Closing Date, any governmental entity commences any eminent domain proceedings ("Proceedings") against all or any part of the Real Property, Seller shall give notice to Buyer of such fact, and, at Buyer's option (to be exercised by notice to Seller within thirty (30) days after Seller's notice), this Agreement shall terminate. Upon such termination, neither Seller nor Buyer shall have any further rights or obligations under this 6 181569v2 Agreement, except for the Surviving Covenants. If Buyer does not give such notice, then there shall be no reduction in the Purchase Price, provided, however, that Seller shall assign to Buyer at the Closing Date all of Seller's right, title, and interest in and to any award made or to be made in the Proceedings. Prior to the Closing Date, Seller shall not designate counsel, appear in, or otherwise act with respect to the Proceedings without Buyer's prior written consent. 11. ASSIGNMENT. Neither Seller nor Buyer may assign its rights under this Agreement for any other purpose, without the prior written consent of the other party. 12. SURVIVAL. All of the covenants and representations made in this Agreement which either by their terms expressly survive Closing, or are contained in any schedule, exhibit, certificate, or document delivered at Closing, will survive and be enforceable after the Closing. 13. NOTICES. Any notice required or permitted to be given under any provision of this Agreement shall be in writing and shall be deemed to have been given in accordance with this Agreement, if it is mailed, by United States certified mail, return receipt requested, postage prepaid; or if deposited cost paid with a nationally recognized, reputable overnight courier, properly addressed as follows: If to Buyer: City of Elk River 13065 Orono Parkway Elk River, MN 55330 with a copy to:Andrea McDowell Poehler 1380 Corporate Center Curve Suite 318 Eagan, MN 55121 If to Seller: Cornerstone Elk River LLC 17219 Highway 10 P. O. Box 304 Elk River, MN 55330-7009 with a copy to:John B. Winston Winston Law Office 815 Wayzata Blvd. East Suite No. 104 Wayzata, MN 55391 Notice shall be effective, and the time for response to any notice by the other party shall commence to run, one (1) business day after any such mailing or deposit. Either Seller or Buyer may change its address for the service of notice by giving notice of such change to the other party, in any manner above specified, ten (10) days prior to the effective date of such change. Notwithstanding the foregoing, any party may give any other party written notice hereunder by any means other than by United States registered or certified mail or overnight courier, which is reasonably calculated to reach the other party, including but not limited to hand delivery, email transmission or facsimile transmission, provided that any such notice shall be deemed to have been 7 181569v2 given and shall be effective only when actually received by the addressee, proof of which shall be furnished by the party sending such notice. 14. CAPTIONS; EXHIBITS. The section and paragraph headings or captions appearing in this Agreement are for convenience only, are not a part of this Agreement, and are not to be considered in interpreting this Agreement. All schedules, exhibits, addenda or attachments referred to herein are hereby incorporated in and constitute a part of this Agreement. 15. ENTIRE AGREEMENT; MODIFICATION. This Agreement constitutes the complete agreement between Seller and Buyer and supersedes any prior oral or written agreements between them regarding the Real Property. There are no oral agreements that change this Agreement, and no amendment of any of its terms will be effective unless in writing and executed by both Seller and Buyer. 16. BINDING EFFECT. This Agreement binds and benefits Seller and Buyer and their respective successors and assigns. 17. CONTROLLING LAW. This Agreement has been made under, and will be interpreted and controlled by, the laws of the State of Minnesota. 18. WAIVER. No waiver of the provisions of this Agreement shall be effective unless in writing, executed by the party to be charged with such waiver. No waiver shall be deemed a continuing waiver or waiver in respect of any subsequent breach or default, either of similar or different nature, unless expressly stated in writing. 19. COUNTERPARTS. This Agreement may be executed in any number of counterparts and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one Agreement. 20. FACSIMILE SIGNATURES. This Agreement may be executed with signatures transmitted by facsimile or email and shall constitute a binding agreement with such signatures. Nonetheless, any party providing facsimile or emailed signatures shall provide the other party with the original signatures within five (5) business days after providing the facsimile signature page(s). 21. SEVERABILITY. If any provision of this Agreement is invalid or unenforceable, such provision shall be deemed to be modified to be within the limits of enforceability or validity, if feasible; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Agreement in all other respects shall remain valid and enforceable. 22. LIMITATION OF LIABILITY. Upon Closing, Buyer shall neither assume nor undertake to pay, satisfy or discharge any liabilities, obligations or commitments of any Seller other than those specifically agreed to between the parties and set forth in this Agreement. 23. REMEDIES. Time is of the essence of this Agreement. If Seller fails to perform any of its obligations under this Agreement, Buyer's sole remedy is to terminate this Agreement. 8 181569v2 If Buyer defaults in performance of its obligations under this Agreement, Seller shall have the right to terminate this Agreement in the manner provided by Minn. Stat. Sec. 559.21. Such termination of this Agreement will be the only remedy available to Seller for such default by Buyer, and Buyer will not be liable for damages or specific performance. Seller and Buyer have executed this Agreement as of the date set forth above. BUYER: City of Elk River By: Its: Mayor By: Its: City Clerk SELLER: Cornerstone Elk River LLC By: Its: 9 181569v2 City of Elk River Resolution 15- A Resolution of the City of Elk River Finding that the Acquisition of Real Property is Consistent with the City of Elk River Comprehensive Plan WHEREAS, The City of Elk River ("City") has agreed to terms with Cornerstone Elk River LLC ("Buyer") for the purchase of Lot 4, Block 1, Mississippi Ridge 2nd Addition;and WHEREAS, the City would acquire the property to allow for a roadway connection between Yale Ct and Yale St; and WHEREAS, the connection would create a frontage road along TH 169 to a planned signalized intersection at Twin Lakes Rd and TH 169; and WHEREAS, the frontage road made possible by acquisition of Lot 4,Block 1,Mississippi Ridge 2nd Addition,to further the goals identified in the Comprehensive and FAST plans and is a key step in the planned network south of 171st Ave NW;and WHEREAS, Minn. Stat. � 462.356, subd. 2 requires that the Planning Commission review the City's proposed acquisitions and dispositions of property for consistency with the comprehensive municipal plan. NOW, THEREFORE, BE IT RESOLVED by the Planning Commission of the City of Elk River, Minnesota, as follows: The Planning Commission finds that acquisition of Lot 4, Block 1,Mississippi Ridge 2nd Addition is consistent with the comprehensive municipal plan. Passed and adopted this day of 2015. Eric Johnson, Planning Commission Chair ATTEST: Tina Allard, City Clerk P U N E R E O R Y NAWREJ