3.0. EDSR 10-17-2005 ITEM # 3.
1110 �►-���
City of
Elk -�-1
River
MEMORANDUM
TO: Economic Development Authority
FROM: Heidi Steinmetz, Assistant Director of Economic Development -\":1;
DATE: October 17, 2005
SUBJECT: Consider Mutual Driveway Easement Agreement with O'Brien
Holdings, LLC — Crystal Distribution, Inc. (CDI) Project
Attachment
• Mutual Driveway Easement Agreement
Purpose
• The purpose of this memorandum is to provide the EDA with the following:
• Summary of CDI project
• Background&issue regarding the attached Mutual Driveway Easement Agreement
• Requested action
Summary of Crystal Distribution, Inc. (CDI) Project
Below is the CDI project timeline of activities:
• Spring 2005 Staff began working with company
• July 2005 EDA recommended Council call a public hearing to consider Tax
Rebate Financing (TRF) assistance and EDA called a public hearing
for the sale of a 3.7-acre lot to company
• August 2005 EDA held public hearing and approved sale of 3.7-acre lot to
company
• August 2005 EDA &Council approved TRF for company
•
Consider Mutual Driveway Easement Agreement with O'Brien Holdings,LLC—Crystal Distribution,Inc.(CDI)Project
October 17,2005
Page 2 of 2
Background
Below is the "Buyer's Contingency" (page 11) that resulted in the attached Easement
Agreement as stated in the land Purchase Agreement between the EDA and O'Brien
Holdings,LLC:
"Buyer and the fee owner of Lot 1,Block 1,NORTHSTAR BUSINESS PARK, and Buyer
and the fee owner of Lot 3,Block 1, NORTHSTAR BUSINESS PARK, each having
entered into a mutually agreeable easement and maintenance agreement for joint access on
the north boundary line of the Property and the south boundary line of the Property,
respectively. The proposed location of such easement areas are depicted on Exhibit C to
this Agreement. Buyer and Seller, as applicable,agree to use commercially reasonable efforts
and to act in good faith with such fee owners with respect to the negotiation and execution
of the foregoing easement agreements."
Issue
In summary, the company is asking that the EDA agree to the following as stated in the
attached Easement Agreement:
Per"Construction of Driveway" section (page 2)
"Notwithstanding the immediately preceding sentence,if EDA conveys the EDA Property
to a third party (the "Adjacent Owner"), and the Adjacent Owner, or any of its tenants,uses
the Driveway in the Easement Area, the Adjacent Owner or such tenants shall reimburse
O'Brien for one-half(1) of O'Brien's initial costs to construct the Driveway in the
Easement Area."
"In no event shall the EDA be responsible for any costs relating to the construction of the
Driveway."
Per"Maintenance and Repair of Driveway and Curbing" section (pages 2 &3)
"So long as EDA owns the EDA Property, O'Brien shall be solely responsible for the
maintenance and repair of the Driveway as set forth herein. Thereafter, O'Brien and the
Adjacent Owner (excluding the EDA) shall share equally (50%) to each) in any and all
repairs to, and maintenance of, the Driveway located within the Easement Area,including
but not limited to,patching,resurfacing, seal coating and snow plowing;provided that, any
such single expense must be expressly agreed upon in advance and in writing by O'Brien and
Adjacent Owner."
Requested Action
Staff recommends that the EDA consider approving the attached Mutual Driveway
Easement Agreement with O'Brien Holdings,LLC.
•
•
MUTUAL DRIVEWAY EASEMENT AGREEMENT
THIS MUTUAL DRIVEWAY EASEMENT AGREEMENT ("Agreement") is made
October , 2005, by O'Brien Holdings, LLC, a Minnesota limited liability company
("O'Brien") and The Economic Development Authority of the City of Elk River, a body
corporate and politic organized pursuant to Minnesota Statutes, Section 469.090 to 469.1082
("EDA").
RECITALS
A. O'Brien is the fee owner of real property located in Sherburne County,
Minnesota, and legally described as Lot 2, Block 1, Northstar Business Park (the "O'Brien
• Property").
B. EDA is the fee owner of real property located in Sherburne County, Minnesota,
and legally described as Lot 1, Block 1,Northstar Business Park(the "EDA Property").
C. The O'Brien Property and the EDA Property are contiguous parcels of property.
D. O'Brien and EDA desire to create a mutual driveway easement to benefit the
O'Brien Property and the EDA Property and to provide the terms for the construction,
maintenance, care and upkeep of the driveway.
NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, O'Brien and EDA agree as follows:
1. Incorporation of Recitals. The Recitals stated above are incorporated herein by
reference.
2. Definition. As used herein, the term the "Easement Area" shall mean the real
property that is located on a portion of the O'Brien Property and a portion of the EDA Property
and which is legally described on Exhibit A attached hereto. The Easement Area is depicted on
Exhibit B attached hereto.
•
1821372v2
3. Grant to O'Brien. EDA hereby grants and conveys to O'Brien a non-exclusive
• appurtenant easement upon, over and across that part of the EDA Property located within the
Easement Area for (i) ingress and egress by vehicular and pedestrian traffic for the benefit of
O'Brien, its members, governors, managers, agents, employees, contractors, invitees, tenants,
successors and assigns (collectively, the "O'Brien Parties"), (ii) maintenance, repair and
replacement of the Driveway (hereinafter defined) located within the Easement Area and (iii)
maintenance, repair and replacement of other portions of the O'Brien Property.
4. Grant to EDA. O'Brien hereby grants and conveys to EDA a non-exclusive
appurtenant easement upon, over and across that part of the O'Brien Property located within the
Easement Area for (i) ingress and egress by vehicular and pedestrian traffic for the benefit of
EDA, its shareholders, directors, officers, agents, employees, invitees, tenants, successors and
assigns (collectively, the "EDA Parties"), (ii) maintenance, repair and replacement of the
Driveway located within the Easement Area and (iii) maintenance, repair and replacement of
other portions of the EDA Property.
5. No Interference/Obstructions. The O'Brien Parties shall use the Easement Area
without unreasonably interfering with EDA's use and enjoyment of the EDA Property. The
EDA Parties shall use the Easement Area without unreasonably interfering with O'Brien's use
and enjoyment of the O'Brien Property. No truck, automobile, other vehicle, fence or other
barrier which may unreasonably prevent or obstruct the passage of pedestrians or vehicular
traffic within the Easement Area shall be parked, erected, installed or placed within or across the
Easement Area.
6. Cross Parking Not Intended. Notwithstanding anything herein to the contrary, (a)
O'Brien is not granting to EDA any rights for the EDA Parties to park any of their vehicles on
the O'Brien Property, and (b) EDA is not granting to O'Brien any rights for the O'Brien Parties
to park any of their vehicles on the EDA Property.
7. Construction of Driveway. As soon as reasonably possible, but in no event later
than June 30, 2006, O'Brien, at its sole cost, shall cause a curb cut and driveway (the
"Driveway")to be constructed within the Easement Area according to plans and specifications to
be mutually agreed to by O'Brien and EDA. Notwithstanding the immediately preceding
sentence, if EDA conveys the EDA Property to a third party (the "Adjacent Owner"), and the
Adjacent Owner, or any of its tenants, uses the Driveway in the Easement Area, the Adjacent
Owner or such tenants shall reimburse O'Brien for one-half ('/2) of O'Brien's initial costs to
construct the Driveway in the Easement Area. The Adjacent Owner's liability for its one-half
(1/2) share shall not exceed Ten Thousand and No/100 Dollars ($10,000.00). Such amount shall
be payable to O'Brien when the Adjacent Owner or such tenants begin to use the Driveway in
the Easement Area. Failure of the Adjacent Owner to pay such amount may be enforced by
O'Brien as provided in Section 8 below. In no event shall the EDA be responsible for any costs
relating to the construction of the Driveway.
8. Maintenance and Repair of Driveway and Curbing. So long as EDA owns the
EDA Property, O'Brien shall be solely responsible for the maintenance and repair of the
• Driveway as set forth herein. Thereafter, O'Brien and the Adjacent Owner (excluding the EDA)
1821372v2 2
• shall share equally (50%) to each) in any and all repairs to, and maintenance of, the Driveway
located within the Easement Area, including but not limited to, patching, resurfacing, seal
coating and snow plowing; provided that, any such single expense must be expressly agreed
upon in advance and in writing by O'Brien and Adjacent Owner. Failure of either party to pay
for its share of any expense incurred in connection with the Easement Area within thirty (30)
days of notice of said expense shall entitle the party that has paid the full amount of such expense
to file a lien against the non-paying party's property in the amount of such non-paying party's
share of the expense. The lien may be foreclosed in any court of competent jurisdiction in the
same manner that a mechanic's lien is foreclosed. Notwithstanding anything herein to the
contrary, Adjacent Owner shall maintain, repair and replace the curbing located on the portion of
the Easement Area that is part of the EDA Property and O'Brien shall maintain, repair and
replace the curbing located on the portion of the Easement Area that is part of the O'Brien
Property.
9. Insurance. O'Brien shall pay for and maintain general public liability insurance
in the minimum amount of One Million and no/100 Dollars ($1,000,000.00) covering any injury
or death to any persons, or property damage, caused by O'Brien, its employees, agents,
contractors and tenants and occurring within the Easement Area. EDA shall pay for and
maintain general public liability insurance in the minimum amount of One Million and no/100
Dollars ($1,000,000.00) covering any injury or death to any persons, or property damage, caused
by any of EDA, its employees, agents, contractors and tenants and occurring within the
Easement Area. Each insurance policy shall name the other party as an additional named insured
and shall provide for at least thirty(30) days written notice to the other party prior to cancellation
or reduction in coverage. Evidence of such insurance coverage shall be provided by both parties
at the time of execution of this Agreement.
10. Indemnification/Hold Harmless. O'Brien shall indemnify, defend and hold
harmless EDA from and against any claim, damage, cost and expense (including reasonable
attorney's fees) or liability arising out of any injury, death or property damage, or contamination
to the soil or ground water of the EDA Property as a result of the release of a hazardous
substance, hazardous waste, pollutant or contaminant [as those terms are defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA)
or the Minnesota Environmental Response and Liability Act (MERLA)], which is caused by
O'Brien during its use of the Easement Area from and after the date of this Agreement. EDA
shall indemnify, defend and hold harmless O'Brien from and against any claim, damage, cost
and expense (including reasonable attorney's fees) or liability arising out of any injury, death or
property damage, or contamination to the soil or ground water of the O'Brien Property as a result
of the release of a hazardous substance, hazardous waste, pollutant or contaminant [as those
terms are defined in the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (CERCLA) or the Minnesota Environmental Response and Liability Act
(MERLA)], which is caused by EDA during its use of the Easement Area from and after the date
of this Agreement.
11. Runs with the Land. The benefits and burdens of this Agreement shall run with
the O'Brien Property and the EDA Property, and shall be binding upon the successors and
• assigns of O'Brien and EDA.
1821372v2 3
12. Governing Law. This Agreement shall be governed by the laws of the State of
Minnesota.
13. Notices. Any notices required or permitted to be given hereunder shall be deemed
properly given if (a) personally served on a director of EDA or a manager of O'Brien, or (b)
mailed by U.S. certified mail, return receipt requested, postage prepaid, and addressed as
follows:
If to O'Brien:
O'Brien Holdings, LLC
9560 85th Avenue North
Maple Grove, Minnesota 55369
Attn. Pat O'Brien
If to EDA:
13065 Orono Parkway
Elk River, Minnesota 55330
Attn. Executive Director
Either party may change its address by written notice in accordance with this section.
• 14. Reservation. O'Brien reserves unto itself, its tenants and successors and assigns,
the right to use the portion of the Easement Area located on the O'Brien Property for other
purposes not inconsistent with the rights granted to EDA under this Agreement. EDA reserves
unto itself, its tenants and successors and assigns, the right to use the portion of the Easement
Area located on the EDA Property for other purposes not inconsistent with the rights granted to
O'Brien under this Agreement.
15. Waiver. No failure on the part of either of the parties to exercise, and no delay in
exercising, any right or remedy hereunder shall operate as a waiver thereof, and no single or
partial exercise of any right or remedy hereunder shall preclude any other or further exercise
thereof or the exercise of any other right or remedy granted hereby or by any related document or
by law.
16. Modification. This Agreement may only be modified or amended in a writing
signed by the parties hereto.
17. Construction. Each party and its respective legal counsel has had an opportunity
to review this Agreement and negotiate its terms, and this Agreement shall not be construed
against either party based upon who drafted this Agreement.
THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.
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1821372v2 4
•
IN WITNESS WHEREOF, O'Brien and EDA have hereunto set their hands the day and
year first above written.
O'Brien Holdings, LLC
By:
Its:
The Economic Development Authority of
the City of Elk River
By:
Its:
By:
Its:
STATE OF MINNESOTA )
) ss
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
, 2005, by , the of O'Brien Holdings, LLC, a
Minnesota limited liability company, on behalf of the limited liability company.
Notary Public
STATE OF MINNESOTA )
) ss
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
, 2005, by and , respectively the
and of The Economic Development Authority of the City of Elk
River, a body corporate and politic organized pursuant to Minnesota Statutes, Section 469.090 to
469.1082, on behalf of the body corporate and politic.
• Notary Public
1821372v2 5
DRAFTED BY:
1110 Henson&Efron, P.A.
220 South Sixth Street
Suite 1800
Minneapolis, MN 55402
(612) 339-2500
264264.DOC
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1821372v2 6
EXHIBIT A
Legal Description of the Easement Area
A strip of land twenty-five (25) feet wide,the centerline of which is described as follows:
beginning at the northeast corner of Lot 2, Block 1 Northstar Business Park, Sherburne County,
Minnesota; thence South 83 degrees 57 minutes 04 seconds West, an assumed bearing along the
common boundary line between Lots 1 and 2, Block 1,Northstar Business Park, a distance of
423 feet, and said centerline there terminating.
Such strip of land is to extend by its full width from the east line of said Lots 1 and 2, Block 1,
Northstar Business Park, to a line which bears North 06 degrees 02 minutes 56 seconds West and
passes through the point of termination.
•
•
1821372v2 7
EXHIBIT B
Depiction of the Easement Area
I
1821372v2 8
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•
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• CONSENT
University National Bank, as the holder of a mortgage ("Mortgage") on Lot 2, Block 1,
Northstar Business Park, Sherburne County, Minnesota, dated October , 2005, recorded
, 2005, in the office of the County Recorder in and for Sherburne County,
Minnesota, as Document No. , hereby consents to the provisions of the foregoing
Mutual Driveway Easement Agreement and agrees that the Mortgage is subject to said Mutual
Driveway Easement Agreement.
University National Bank
By
Its
STATE OF MINNESOTA )
) ss.
• COUNTY OF )
The foregoing instrument was acknowledged before me this day of October, 2005,
by , the of University National
Bank, a , on behalf of the
Notary Public
265152.DOC
•