4.5. SR 06-15-2015 �j
Elk = - Request for Action
River
To Item Number
Mayor and City Council 4.5
Agenda Section Meeting Date Prepared by
Consent June 15, 2015 Amanda Othoudt, Economic Development
Director
Item Description Reviewed by
Letter of Intent to Purchase Property and Cal Portner, City Administrator
Authorize Appraisal on Real Property Located at Reviewed by
Corner of Joplin Street and Highway 10
Action Requested
Approve, by motion, the letter of intent to purchase real property located at the intersection of Highway
10 and Joplin Street and authorizing an appraisal to be conducted on the property.
Background/Discussion
Staff has been working with a developer interested in the development of city-owned property located at
the corner of Joplin Street and Highway 10. The developer is proposing improvements to the site with up
to three commercial/retail buildings. The developer has indicated that these commercial/retail buildings
may include a national client with a drive thru, a regional client, and allow for local business development
in a multi-tenant building.
Internally, staff met to discuss any concerns with the sale and development of the subject property. No
immediate concerns were addressed in relation to the sale of the property. The project is still subject to
site plan review with staff once a purchase agreement is reached and a formal land use application is
submitted.
Staff recommends entering into an agreement with the developer through the Letter of Intent and
authorizing a property appraisal to determine the current market value. Further discussion and
negotiations regarding the sale price of the property will be discussed with the developer once the
appraisal is obtained.
Financial Impact
None
Attachments
■ Ebert Construction Letter of Intent to Purchase
P0WIeEa 0
Template Updated 4/14 INAWRE1
23350 COUNTY ROAD 10 CORCORAN, MINNESOTA 55357
CONSTRUCTION EST. 1963
June 10,2015
Amanda Othoudt
Economic Development Director
City of Elk River
13065 Orono Parkway
Elk River,MN 55330
RE: City owned property Hwy 10&Joplin SE Corner
City of Elk River:
We are pleased to present an offer to purchase the attached referenced properties for site assemblage &
development.
Purchaser: Ebert Construction
23350 County Road 10
Corcoran,MN 55357
Phone 763-498-7844
Seller: City of Elk River
A Minnesota Municipal Corporation
13065 Orono Parkway
Elk River,MN 55330
Phone 763-635-1000
Property: Approximately 88,000 square of land, net of roads and easements, located at the SE
corner of Hwy 10 and Joplin St(Legal to conform). Site sketch attached.
Purchase Price: TBD by appraisal prepared by city
The Purchase Price will be adjusted to reflect the actual square footage as determined by
survey provided by Seller.
E ! B
Initial Earnest
Money: $1,000.00 to be deposited with escrow agent, Commercial Partners Title upon the
execution of a purchase agreement. The Earnest Money shall be credited against the
Purchase Price at Closing.
Conditions to
Purchase: The Purchaser shall have a period of one year from the date of a fully executed purchase
agreement to satisfy or waive the following Conditions to Closing:
(i) Seller entering into with MnDOT a right to purchase excess ROW
(ii) Purchaser having authorization to purchase City Parcels, remnant MnDOT
parcel,misc. rights of way(ROW),utility and drainage parcels.
(iii) Purchaser obtaining a satisfactory environmental study.
(iv) Purchaser obtaining satisfactory soil tests.
(v) Purchaser obtaining all necessary governmental approvals for the development
of retail/commercial& single story office building and ancillary items including
but not limited to parking lot,garbage bins and signage.
(vi) Purchaser obtaining all governmental approvals, not limited to the City of Elk
River&MnDOT.
(vii) Purchaser having acceptable improved access from Business Center Drive.
(viii) Purchaser reviewing and accepting title insurance commitment.
(ix) Purchase reviewing and accepting Seller's Information as defined below.
Purchaser must satisfy or waive the above Conditions to Purchase within the one year
time period of the date of the Purchase Agreement. If, despite Purchaser's best efforts,
Purchaser is unable to satisfy or waive the above Conditions to Purchase. Purchaser shall
have the right to extend the Condition Date by two additional ninety (90) day periods.
Above time frames are subject to Purchaser actively pursuing redevelopment of the
property. Defined as applications with the City/EDA for assembly & redevelopment. In
no event shall the Purchase Agreement be terminated if Purchaser is still actively
pursuing and waiting on City schedules for final review approvals(planning commission,
EDA, City Council or MnDOT)
aes : a
If Purchaser does not send Seller a written notice of Purchaser's waiver of the Conditions
to Purchase, or right to extend, the purchase agreement shall be deemed terminated,
Purchaser's Earnest Money shall be returned to Purchaser and the parties shall have no
further rights or obligations to each other. Seller shall cooperate with and reasonably aid
Purchaser in the satisfaction of the aforementioned contingencies.
Seller Information: Within thirty (30) days of execution of the purchase agreement, Seller shall provide
Purchaser with the following:
(i) All information Seller has related to the conditions of the site including
environmental and soil conditions. Seller will provide Purchaser with copies of
any reports previously obtained or information previously received, including
without limitation any information or reports of any governmental agency
concerning the property that are in the Seller's possession or control.
(ii) A copy of any current survey,engineering drawings or plats.
(iii) Copies of all architectural drawings and plans previously prepared for the site.
Closing Date: Thirty(30)days from the Purchaser's waiver of the Conditions to Purchase.
Title Inspection: Within thirty (30) days of the execution of a purchase agreement, Seller will provide
Purchaser a title insurance commitment It will be the Purchaser's responsibility for any
owner's policy of title insurance and associated premium. Purchaser will have thirty (30)
days after receipt of the title insurance commitment to notify Seller of any objections to
title and Seller shall have sixty(60)days to cure any defects.
Seller Warranties: Seller warrants to Purchaser at the time of execution of the purchase agreement and upon
Closing that the following are true and correct:
1) Seller is in good standing and has all the appropriate authority.
2) Property is in full compliance with all applicable codes,laws and orders.
3) Convey good and marketable title.
4) No action or litigation pending.
5) No leases,easements,options or right of first refusal exist.
6) Cooperation with Purchaser in obtaining any necessary approvals.
7) Seller will locate and cap all wells located upon property.
8) No environmental issues other than those that are disclosed.
Real Estate Taxes: Real estate taxes payable in the year of closing shall be prorated between the Seller and
Purchaser. All prior years paid in full by Seller. The Property shall become a new
separately platted parcel and shall be separately assessed for real estate taxes.
aes : a
Assessments: Seller shall pay all levied,pending and/or deferred special assessments at Closing.
Assignment of
Purchase
Agreement: Prior to Closing, the Purchaser may assign the obligations of the purchase agreement to
an affiliate of Purchaser provided the assignee has sufficient financial ability to Close on
the Purchase.
Brokerage: No brokers are involved with this transaction.
This letter is intended to be an expression of interest by the parties signing or accepting this letter to the transaction
herein. Notwithstanding anything to the contrary, in no event shall this letter be deemed to be or constitute a
binding contract agreement or other legally enforceable obligation between said persons or entities as to such
matters. Upon signing of this letter agreement, the parties agree to negotiate the terms of a binding purchase
agreement.
Sincerely,
Greg Hayes
VP Real Estate& Development
Purchaser: Seller:
Ebert Construction City of Elk River
By: By:
Its: Its:
Date: Date:
aes : a