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4.8. SR 08-17-2015 Request for Action To Item Number City Council 4.8 Agenda Section Meeting Date Prepared by Consent AgendaAugust 17, 2015Colleen Eddy, Economic Development Specialist Item Description Reviewed by Envision Company (Sportech, Inc.) Early Entry Amanda Othoudt, ED Director License Agreement Peter Beck, City Attorney Jenny Boulton, EDA Attorney Reviewed by Cal Portner, City Administrator Action Requested Approve, by motion, the attached Early Entry License Agreement. Background/Discussion The Council approved the purchase agreement between Envision Company (Sportech, Inc.) and the City of Elk River for Lots 1 and 2, Block 2, Natures Edge Business Center Second Addition, on July 20, 2015. Final grading plans have been reviewed and approved for the construction of the proposed facility. The applicant wishes to begin preparatory work on the property, including grading and foundation work prior to closing on the property. All such work must be undertaken in accordance with an approved site plan for the property (the “Site Plan”) and in conformity with grading and other permits issued by the city and all applicable federal, state and local laws, ordinances, rules and regulations. The License commences upon full execution of this agreement and remains in effect until revoked or terminated in accordance with Section 14 hereof. The agreement will grant the developer permission to begin preparatory work on the property, and indemnifies the city from any liability or losses. According to the agreement, the developer acknowledges that if, within six (6) months of the date of the agreement, the developer and the city have not closed on the purchase of the property in accordance with the purchase agreement, the developer shall demolish any foundations and footings constructed on the property and restore the property to its condition as of the date hereof. Financial Impact There is no financial impact associated with this approval. Attachments  Early Entry License Agreement LICENSE AGREEMENT BY AND BETWEEN THE CITY OF ELK RIVER, MINNESOTA AND ENVISION COMPANY, LLC This document drafted by: Kennedy & Graven, Chartered (JSB) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 466500v2 EL185-31 This License Agreement (the “Agreement”) is made on this _____ day of August, 2015, by and between the City of Elk River, Minnesota a municipal corporation under the laws of Minnesota (“City”), and Envision Company, LLC, a Minnesota limited liability company (the “Developer”). RECITALS WHEREAS, the City and the Developer have entered into a Purchase Agreement dated as of the ___day of August, 2015 (the “Purchase Agreement”) for the purchase and development of certain property in Elk River; and WHEREAS, in accordance with the Purchase Agreement, the Developer will acquire the Exhibit A property legally described on attached hereto (the “Property”) from the City; and WHEREAS, the Developer desires to enter upon the Property prior to the transfer of title of the Property to the Developer in order to begin work on the Property; and WHEREAS, the City and the Developer intend that the Developer will purchase the Property in accordance with the terms of the Purchase Agreement. However, if for any reason such purchase should not occur, they desire to provide for the Developer to pay the City for: (a) any diminution in the value of the Property which may be caused by work done by the Developer on the Property pursuant to this Agreement; and (b) any other costs and liabilities which the City may incur because of work done by the Developer on the Property pursuant to this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the premises and their mutual promises the parties hereto hereby agree as follows: 1.Grant of License. The City hereby grants to the Developer and its agents, employees, subcontractors, and invitees a license (the “License”) to enter upon the Property solely for the purpose of beginning preparatory work on the Property, including grading and foundation work. All such work must be undertaken in accordance with an approved site plan for the Property (the “Site Plan”) and in conformity with grading and other permits issued by the City and all applicable federal, state and local laws, ordinances, rules and regulations. The License commences upon full execution of this Agreement and remains in effect until revoked or terminated in accordance with Section 14 hereof. 2.Indemnification of City. In consideration for such License, the Developer agrees to and shall indemnify, defend and hold harmless the City and its agents, officers, and employees, from and against any action, claim, damage, liability, loss, cost or expense (including without limitation attorneys’ fees and costs) resulting from: (a) any liens which may be attached to the Property for labor or materials provided by or at the request of the Developer; (b) injury to or death of persons; (c) property damage; or (d) any claim, damage, action, loss or destruction whatsoever caused by the Developer’s agents or subcontractors in connection with the Developer’s entry onto the Property pursuant to this Agreement; or (e) diminution in the value of the Property in the event 1 466500v2 EL185-31 that for any reason the Developer does not purchase the Property. 3.Insurance. Before commencing any work on the Property, the Developer or its subcontractors shall furnish the City with certificates of insurance demonstrating that the Developer or its subcontractors have obtained insurance coverage and showing the City as an additional named insured. Such certificates shall contain a statement that the insurance coverage shall not be changed or canceled without at least 10 days’ prior written notice to the City. Certificates of insurance shall be signed by an authorized representative of each insurer and all coverage shall be written on policy forms and by insurers acceptable to the City. 4.Early Start Coverage. Developer shall obtain from its title company an early start endorsement to the title insurance policy. Said endorsement shall name the City as an additional named insured. 5.Escrow. Developer shall provide to the City a deposit to an escrow account held by the City in accordance with City ordinances, policies and procedures in an amount equal to $_______ which is an amount intended to be reasonably sufficient to cover any costs potentially incurred by the City for erosion control measures, removal of foundations and restoration of the Property, as set forth in Sections 6 and 7 below, in the event the purchase of the Property does not close within six (6) months of the date of this Agreement. The City agrees to release or reduce the escrow deposit, subject to the further provisions of the City’s ordinances, policies and procedures, upon the later of closing on the purchase of the Property and substantial completion of the work required by this Agreement or any permits. 6.Restoration of Property. (i)The Developer acknowledges that it is proceeding at its own risk in starting such grading and construction of the foundations in advance of the closing on the purchase of the Property, and understands that this Agreement imposes no obligation on the City to take any action or do anything that would compromise the City’s ability to exercise its legislative discretion. The Developer further acknowledges that the City has the authority to take all actions as it determines necessary and appropriate in enforcing the provisions of its ordinances, including zoning regulations. (ii)The Developer further acknowledges that if, within six (6) months of the date of this Agreement, the Developer and the City have not closed on the purchase of the Property in accordance with the Purchase Agreement, the Developer shall demolish any foundations and footings constructed on the Property and restore the Property to its condition as of the date hereof. If such restoration of the Property is not completed by the Developer within eight (8) months of the date of this Agreement the City may, in its sole discretion, complete such restoration work using funds deposited in the escrow account in accordance with Section 5. The City shall be entitled to all of its reasonable costs and expenses of enforcing this paragraph of the Agreement, including, but not limited to, legal, fiscal and engineering costs and the Developer shall be responsible for paying such costs if the amount deposited in the escrow account is insufficient. 2 466500v2 EL185-31 7.Erosion Control. (a)Control Measures. Before any grading is started under the Site Plan or related permit, all down gradient perimeter control measures as provided for in the Site Plan shall be installed. (b)Unsatisfactory Conditions. The Developer shall be responsible for compliance with the approved erosion and sediment control (“ESC”) portion of the Site Plan. In the event the Developer fails to comply with the ESC requirements, the City shall give the Developer telephonic and email notice of the nature of such failure in accordance with this paragraph. The Developer shall correct such unsatisfactory condition described in the telephonic and email notice within three (3) business days after first receiving telephonic and email notice, or if the nature of such unsatisfactory condition is such that the same cannot reasonably be corrected within said three (3) business day period, then the Developer shall have such additional time as is reasonably necessary to correct such unsatisfactory condition provided the Developer promptly commences to correct such unsatisfactory condition and proceeds with diligence and continuity. If the Developer fails to comply as provided above, then the City has the right, but not an obligation, to enter upon the Property and correct said condition at the Developer’s expense. Reimbursement to the City shall be taken from the funds deposited in the escrow account in accordance with Section 5. The City shall be entitled to all of its reasonable costs and expenses of enforcing this paragraph of the Agreement, including, but not limited to, legal, fiscal and engineering costs and the Developer shall be responsible for paying such costs if the amount deposited in the escrow account is insufficient. The City reserves the right to withhold a final certificate of occupancy or final approval of the work provided for under the Site Plan, until City receives payment in full of such costs. 8.Governing Law. This Agreement shall be interpreted in accordance with and be governed by the laws of Minnesota. 9.Titles of Articles and Sections. Any titles of the several parts and sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing and interpreting any of its provisions. 10.Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. 11.Amendment. This Agreement may be amended by the parties hereto only by written instrument executed in accordance with the same procedures and formality followed for the execution of this Agreement. 12.No Property Interest. The parties agree that this Agreement is personal to the Developer and does not constitute an ownership interest or lien interest in the Property. This Agreement is not saleable or assignable by the Developer. 13.No Estoppel. The Developer agrees that the City shall not be estopped by this Agreement, nor any action taken by the Developer pursuant to this Agreement, from exercising any rights granted to the City by law or this Agreement. 3 466500v2 EL185-31 14.Revocation; Termination. (a) The Developer’s rights under this Agreement shall be revoked if, within six (6) months of the date of this Agreement, the Developer and the City have not closed on the purchase of the Property in accordance with the Purchase Agreement. In the event of such a revocation, under no circumstances shall the City be deemed liable to the Developer for any costs incurred by the Developer in connection with the Property. (b) If not terminated earlier, this Agreement terminates upon the date of closing under the Purchase Agreement. (c) The Developer’s obligations to indemnify the City pursuant to Section 2 of this Agreement shall survive revocation, expiration, or other termination of this Agreement. 4 466500v2 EL185-31 IN WITNESS WHEREOF, the City and the Developer have caused this Agreement to be duly executed in their behalf by their authorized representatives on or as of the date first above written. CITY OF ELK RIVER, MINNESOTA By John J. Dietz Its Mayor By Tina Allard Its City Clerk STATE OF MINNESOTA ) ) ss. COUNTY OF SHERBURNE ) The foregoing instrument was acknowledged before me this _____ day of August, 2015, by John J. Dietz, the Mayor and Tina Allard, the City Clerk of the City of Elk River, Minnesota, a Minnesota municipal corporation on behalf of said municipal corporation. _______________________________________ Notary Public S-1 466500v2 EL185-31 ENVISION COMPANY, LLC By Christopher Carlson Its Chief Manager STATE OF MINNESOTA ) ) ss. COUNTY OF SHERBURNE ) The foregoing instrument was acknowledged before me this _____ day of ____________, 2015, by Christopher Carlson, the Chief Manager of Envision Company, LLC, a Minnesota limited liability company on behalf of said limited liability company. _______________________________________ Notary Public S-2 466500v2 EL185-31 EXHIBIT A Legal Description Property The Property is located in Sherburne County, Minnesota, and is legally described as follows: Lots 1 and 2, Block 2, Natures Edge Business Center Second Addition, Sherburne County, Minnesota. A-1 466500v2 EL185-31