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6.0. EDSR 09-11-2000 Item #6 ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY MEMORANDUM TO: Economic Development Authority FROM: Cathy Mehelich, Director of Economic Development DATE: September 6, 2000 SUBJECT: Santwire (Norha & Ripplinger) Project Update Background The total subsidy assistance to project was to be provided as follows: * Subdivide the property into two lots $ 16,000 estimate (park ded surface water mngt, engineering fees) * Land sale write down at a 100% less than market value (est. by County) $330,800 • * Split the cost of water/sewer installation $ 5,000 estimate Total value of assistance requested $351,800 Ripplinger $175,900 - 50% Norha $175,900 - 50% The following items have occurred since the EDA's approval of providing subsidy assistance for the project: • City Council approved providing subsidy assistance as recommended by the EDA (August 14, 2000). • Santwire offered to expand Ripplinger building by 7,300 sq. ft. in exchange for the EDA to absorb all of the cost of the utility extension estimated at $10,000. • City Council considered and approved amendment to the subsidy assistance to provide up to $178,400 each as a result of the proposed expansion; 22,500 sq ft each. • Discussion with John Cullen, Sherburne County Assessor results in adjustment of total property market value from $330,800 to $237,000. • Total subdivision expenses adjusted to include $8,600 park • dedication fee and estimated $2,500 in engineering/platting. • Final subsidy assistance established at $129,050 each per above adjustments. 13065 Orono Parkway • P. 0. Box 490 • Elk River, MN 55330-1743 • (612) 441-7420• Fax (612) 441-7425 Equal Opportunity Housing and Equal Opportunity Employment Attached to this memo you will find a copy of the final . Performance/Assistance Agreements, which reflect the above-mentioned amendments. Also, you will find attached the final Purchase Agreement for each project site per the lot subdivision. Please note that the initial sale of the property is to River's Crossing, Inc. (Santwire). The change in buyer was made to allow for the tax exchange requirements of the Ripplingers and Norha. The agreement requires the eventual transfer of title to Ripplingers and Equity Management, Inc. following the completion of the buildings. The transfer of title requires the land value subsidy assistance be passed along to each party. Requested Action Since the subsidy assistance is to be provided by the EDA directly (via land sale and expenses), staff requests the EDA acknowledge the amendments to the Performance/Assistance Agreements with Ripplingers and Equity Management, Inc., specifically the amount of assistance and the project goals established. Staff also requests the EDA acknowledge the change in the buyer (River's Crossing, Inc.) of the EDA property as referenced above in this memo and • the attached Purchase Agreements. Attachments • Performance/Assistance Agreement- Ripplinger • Performance/Assistance Agreement - Equity Management, Inc. • Purchase Agreement- Ripplinger, South Lot • Purchase Agreement- Equity Management, North Lot • 09/01/00 14:13 FAX LC8500 0012 • • • Q PURCHASE AGREEMENT OO 4 � this 1st THIS PURCHASE AGREEMENT (the "Purchase Agreement") is m day of September, 2000, by and between Rivers Crossing, Inc., a Minnesota corporation ("Buyer"), and the Economic Development Authority in and for the City of Elk River, a public body corporate and politic ("Seiler"). In consideration of the mutual covenants and undertakings contained herein the parties agree as follows: 1. Sale and Purchase of Pro ert . Seller agrees to sell, and Buyer agrees to purchase, certain real property situated in the County of Sherburne, State of Minnesota, consisting of certain land legally described on Exhibit A attached hereto and made a part hereof, together with all the appurtenant rights, mineral rights, privileges, and easements belonging thereto (the "Property"). 2. Purchase Price. Buyer agrees to pay to Seller, as the purchase price for the Property (the "Purchase Price"), the sum of $1.00 which shall be paid in cash at closing. • 3. Title. As soon as reasonably possible after Buyer's acceptance of this Purchase Agreement, Seller shall deliver to Buyer a commitment for an owner's title insurance policy issued by a title company to be determined by Seller, naming Buyer as the proposed owner-insured of the Property in the amount of the Purchase Price (the "Commitment"). Buyer will be allowed 10 days after receipt of the Commitment for examination thereof and for making any objections to the marketability of the title to the Property, said objections to be made by written notice delivered to Seller within said 10 day period or to be deemed waived. If any objections are so made to the marketability of the title to the Property, Seller shall be allowed 90 days after the making of such objections by Buyer to cure such objections and make the title to the Property good and marketable of record in Seller. Pending the correction of the title, the Closing Date and the payments hereunder required shall be postponed, but upon correction of the title and within 15 days after written notice of such correction given by Seller to Buyer, Seller and Buyer shall perform this Purchase Agreement according to its terms. If the title to the Property, as evidenced by the Commitment, is not good and marketable of record in Seller and is not made so within 90 days after the date on which the Buyer delivers written objections thereto to Seller, or is not good and marketable of record in Seller at the Closing Date, Buyer may either: a. Terminate this Purchase Agreementbygivingibecomewritten nu{l ce • and to Seller in which event this Purchase Agreement, 09/01/00 14.14 FAX LC8500 013 • grA. void and neither party shall have any further right or obligation hereun or b. Elect to accept the title in its unmarketable condition by giving written notice to Seller, in whichaccordance eventco da Buyer with thenoceed terms to of cithis the purchase of the Property in Purchase Agreement and without any reduction in the Purchase Price. 4. Inspection. At Buyer's expense, Buyer, dateghereof to enteents and grupon and are hereby granted the right at any time or times after the inspect, analyze, and test the Property. Buyer shall hold Seller harmless from any liability resulting from the entering upon the Property or the performing of any of the tests or inspections referred to in this Section 4 by Buyer, its agents or designees. 5. Covenants and Warranties of Seller. Seller covenants and warrants to Buyer as follows: a. To the best of Seller's knowledge, there is no action, litigation, investigation, condemnation or proceeding of any kind pending or threatened against Seller or the Property, or any interest therein, which • could adversely affect the Property or title thereto, and Seller has no knowledge of any reasonable basis for the commencement of any such action, litigation, investigation, condemnation or proceeding. Seller shall give Buyer prompt written notice if any such action, litigation, investigation, condemnation, or proceeding is commenced on or prior to the Closing Date. b. Seller certifies that to the best of Seller's knowledge there are no wells on the Property. c. Seller states that to the best of Seller's knowledge there is no individual sewage treatment system, as defined in Minn. Stat. 115.55. Buyer acknowledges that Buyer will be purchasing the Property relying only on such investigations, testing and inquiries of and regarding the Property as Buyer shall have chosen to make. Except as not be deemed to have made, ase Agreement, the. Seller has not made, and shall representation, oral or Buyer hereby disclaims any reliance on, any warranty or re P written, express or implied, regarding the Property, the condition of the Property, the soil conditions existing on the Property, the environmental conditions on the Property, the zoning or other laws and ordinances applicable to the Property, the uses to which the Property may be put, or any other thing or • matter relating to the Property. • -2- 09/01/00 14:14 FAX LC8500 014 Q • O 6. Closing. The closing shall take place on September 1, 206', or such other date as is mutually agreed upon. Such date, Cfos ng Date".other The closing shall transaction actually closes, is herein referred to as the take place at Elk River City Hall, 13065 Orono Parkway, Elk River, Minnesota 55330, or such other location as the parties shall mutually agree upon. At the closing, Seller shall deliver to Buyer: a. A warranty deed properly executed and in recordable form with all applicable transfer taxes paid and stamps, if any, affixed thereto, conveying the Property to Buyer and warranting title thereto subject to: real estate taxes and installments of special assessments due and payable in 2000 and thereafter; building and zoning laws and ordinances; State and Federal rules and regulations; and restrictions, reservations, rights and easements of record. The deed shall include a covenant running with the land which incorporates the conditions of this agreement with respect to use of the Property. b. All certificates, instruments and other documents necessary to permit the recording of the warranty deed. • c. A Seller's Affidavit containing statements as to the knowledge of Seller with respect to judgments, bankruptcies, tax liens, mechanics liens, parties in possession, unrecorded interests, encroachment or boundary line questions, and related matters, properly executed on behalf of Seller. d. An affidavit of Seller in form and content satisfactory to Buyer stating that Seller is not a "foreign person" within the meaning of Section 1445 of the Internal Revenue code; e. Such other instruments and documents as are necessary to vest title to the Property in Buyer. Upon delivery of the foregoing items, Buyer shall deliver to Seller the Purchase Price payable under Section 2(b) of this Purchase Agreement. 7. Conditions Subsequent. Notwithstanding anything to the contrary contained in this Agreement, the consummation of the transaction contemplated by this Agreement and the closing provided in Paragraph 6 hereof shall be contingent upon Buyer satisfying the following conditions subsequent: • -3- 09/01/00 14:15 FAX LC8500 2015 • • with plans and specificatio t a. Buyer shall provide Seller development of the Property. b. Buyer shall commence construction of an office-warehouse building on the Property (the "Building") by January 1, 2001. If Buyer has not commenced construction of the Building by January 1, 1 ,canceleller may, at any time before substantial construction has commenced, the sale of the Property. Upon such cancellation,title to the Property shall return to Seller at no cost to Seller. • c. Buyer shall complete construction of the Building and receive a certificate of occupancy for the Building no later than December 31, 2001. d. The Building shall meet the following criteria: (i) The Minimum size:of the Building shall be 22,500 square feet; (ii) The Building shall comply in all respect with the Ordinances i of the • City of Elk River; and (iii) Buyer shall accept:conveyance of the Property from Seller to accommodate a drainage subject to certain easements on the Property ethe two properties immediately pond for the benefit of the Property r adjacent to the Property. Buyer agrees that Buyer shall share, with the two properties immediately adjacent to the Property, in the cost of establishing and maintaining said drainage pond in accordance with the requirements of the City of Elk River in connection with the City's approval of development plans and issuance of building permits for the Property. e. Until receipt of a certificate of Occupancy for the Building, neither Buyer, nor any successor in interest to Buyer, will engage in any financing or any other transaction creating any mortgage or other financing lien upon the Property,or suffer any financing or lien to be made on or attach to the Property except for the purpose of obtaining funds to the extent necessary for construction of the Building including, but not limited to, labor and materials, professional fees, real construction interest, orgtrn�on and an allowancetion and other nfotrect costs contingenciesf development, costs of con In order to facilitate the obtaining of funds necessary for construction of the Building, Seller agrees that!it will enter into a reasonable agreement • for subordination of the Sellers;interest in the Property to the interest of -4- 09/01/00 14:15 FAX LC8500 018 Q �i • the holder of an approved mortgage, provided that Seller determine its reasonable judgment, that tie interests of the Seller under this Agreement remain adequately protected. i� f. Upon completion othonstruction of the Building, Buyer shall convey fee title to the Property t4 Equity Management, Inc., the recipient of certain subsidy assistance from Seller ed August ant 28, 10 2000 that certain Performance/Assistance Agreement Seller and Equity ManagemeS�rulic. Buyer of the Bulilding've no thereon,ore fortthe $1.00, plus the cost of construction conveyance of the Property to Equity Management, Inc. g. Seller may extend the time to comply with the conditions set forth above if the Buyer has good;cause for requesting said extension. 8. Real Estate Taxes. Rea estate taxes due and payable in 1999 and all . prior years, if any, shall be paid by Seller. Real estate taxes due and payable in 2000, if any, shall be prorated as of the Closing Date based upon the parties' respective • period of ownership and possession of he Property in the calendar year of closing. On or prior to the Closing Date, Seller shall pay all special assessments, whether or not then due, then levied against the Property. Sellershallpay on the date of closing any deferred real estate taxes, including "G`.reen Acres" taxes, or special assessments, the payment of which is required as a result of the closing. Seller makes no representation concerning the amount of future real estate taxes or future special assessments. 9. Expenses, Possession. Seller agrees to deliver possession of the Property to Buyer on the Closing Date. In the event Buyer chooses to obtain title insurance or in the event Buyer's lender requires the issuance of title insurance, Buyer shall be responsible for any costs associated with closing with a title company including, but not limited to, the closing fee and fall premiums for issuance of either the owner's policy or the lender's policy of title insurance. 10. Notices. All documents to be delivered and all correspondence and notices to be given in connection with this Purchase Agreement shall be in writing and given by personal delivery or sent by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to Buyer. Rivers Crosising, Inc. P.O. Box 57 Elk River, MN 55330 • Attn: Gary Saniwire • -5- 09/01/00 14:16 FAX LC8500 Lit1017 L1 • If to Sellers: Elk River Economic Development Authority Attention: Executive Director 13065 Orono Parkway, Elk River, Minnesota 65330 • • With a copy to: Gray, Plant, Mooty, Mooty & Bennett Attention: Peter K. Beck 3400 City Center 33 South Sixth Street Minneapolis, Minnesota 55402 Each such mailed notice or communication shall be deemed to have been given to or served upon, the party to whom it is addressed three days after the date the same is deposited in the United States registered or certified mail, return receipt requested, postage prepaid, properly addressed in the manner above provided. Either party hereto may change such party's address for the service of notice hereunder by written notice of said change to the other party hereto, in the manner above specified ten (10) days prior to the effective date of said change. 11. Assignment. This Purchase Agreement shall be binding upon and inure • to the benefit of each of the parties hereto, their respective successors and assigns. The foregoing notwithstanding, except as set forth in Paragraph 7 above, Buyer shall not assign or convey its rights in the Property or this Purchase Agreement within one • year of the Closing Date without firsti,bb hSeller'sthe tof {consenthaA be null and r and any such assignment or conveyance purportedly made without void. Any such assignment or conveyance shall be specifically subject to the Conditions Subsequent set forth in Paragraph 7. 12. Commissions. Seller warrants and represents that it has dealt with no realtors or brokers in connection with this transaction and that it will indemnify, defend and hold harmless Buyer against any claim made by an agent or broker for a commission or fee based on acts or eaand holdts of harmlesseSe{lerer. uyer againstranysand cla m represents that it wilt indemnify, defrd made by an agent or broker for a commission or fee based on acts or agreements of Buyer. 13. Default. Should Buyer q.;default in the performance of its obligation to purchase hereunder, Seller's shall beylentitled to cancel and terminate this Purchase Agreement in accordance with Minn. Stat. 559.21, as amended. 14. Survive Closing. All of the covenants, warranties, and provisions of this Purchase Agreement shall survive and be enforceable after the closing of this • transaction. I I 09/01/00 14:16 FAX LC8500 X1018 --- a'A fig&\s :t I 15. Complete A recce l• This is a final agreement between t parties and contains their entire agreement and susubject matterersedes ofhis Purchase Agrerevious 'ngs ementn d agreements, oral or written, relative to the 16. Time of the Essence. Tire;is of the essence in the performance of this Purchase Agreement_ 17. Controlling Law. This Purchase Agreement has been made and entered into under the laws of the State of *innesota, and said laws shall control the interpretation hereof. r h f 18. Captions. The paraga� headings or captions appearing in this Purchase Agreement are for conveniience only, are not a part of this Purchase Agreement, and are not to be considered in interpreting this Purchase Agreement. 19. Binding Effect. This Purchase Agreement shall be binding upon and enforceable against each of the partiesll hereto when and only if executed by the party against whom enforcement of this Purchase Agreement is sought. IN WITNESS WHEREOF, the parties have executed this Purchase Agreement on the date first above written. II I ' ii • i Ili • Ii -7- 09/01/00 14:16 FAX LC850021019 • O Seller: ECONOMIC DEVELOPMENT A ORITY IN AND FOR THE CITY OF ELK RIVER By Catherine Mehelich Its ilExecutiv Director By! at942-a\•\ Patrick H. Dwyer Its'President Buyer: RIVERS CROSSING, INC. 13;1 / 4 IA 11:/ 4 • j Wendy L. B=rgquist its President l i • -8- 09/01/00 14:17 FAX LC8500 ___ [ 020 O • Exhibit A Legal Description ThatP art of Lot 1, Block 1, Country Crossing Business Center CouSenty RAddiit on, according to said plat on filotand the line described as follows: Sherburne County, Minnesota, lying North of Commencing at the Northeast corner of said Lot 1; thence Southerly along the East line of said Lot 1, a distance of 260.00 feet,toes point of beginning of said line to be hereinafter described; thence Westerly, perpendicular to said East line of Lot 1, to the West line of said Lot 1, and there terminating. • • 09/01/00 14:10 FAX LC8500 21 003 • PURCHASE AGREEMENT THIS PURCHASE AGREEMENT (the "Purchase Agreement") isNJ de this 1st day of September, 2000, by and between Rivers Crossing, Inc., a Minnesota corporation ("Buyer"), and the Economic Development Authority in and for the City of Elk River, a public body corporate and politic ("Seller"). In consideration of the mutual covenants and undertakings contained herein the parties agree as follows: 1. Sale and Purchase of Property. Seller agrees to sell, and Buyer agrees to purchase, certain real property situated in the County of Sherburne, State of Minnesota, consisting of certain land legally described on Exhibit A attached hereto and made a part hereof, together with all the appurtenant rights, mineral rights, privileges, and easements belonging thereto (the "Property"). 2. Purchase Price. Buyer agrees to pay to Seller, as the purchase price for the Property (the "Purchase Price"), the sum of $1.00 which shall be paid in cash at closing. 411 3. Title. As soon as reasonably possible after Buyer's acceptance of this Purchase Agreement, Seller shall deliver to Buyer a commitment for an owner's title insurance policy issued by a title company to � th ee amount of thePurchasePrice (the by ller, naming Buye the proposed owner-insured of the Property "Commitment"). Buyer will be allowed 10 days after receipt of the Commitment for examination thereof and for making any objections to the marketability of the title to the Property, said objections to be made by written notice delivered to Seller within said 10 day period or to be deemed waived. if any objections are so made to the marketability of the title to the Property, Seller shall be allowed 90 days after the making of such objections by Buyer to cure such objections and make the title to the Property good and marketable of record in Seller. Pending the correction of the title, the Closing Date and the payments hereunder required shall be postponed, but upon correction of the title and within 15 days after written notice of such correction given by Seller to Buyer, Seller and Buyer shall perform this Purchase Agreement according to its terms. If the title to the Property, as evidenced by the Commitment, is not good and marketable of record in Seller and is not made so within 90 days after the date on which the Buyer delivers written objections thereto to Seller, or is not good and marketable of record in Seller at the Closing Date, Buyer may either. a. Terminate this Purchase Agreement by giving written notice • to Seller in which event this Purchase Agreement shall become null and 09/01/00 14:11 FAX LC8500 _ 2004 r 6).A • void and neither party shall have any further right or obligation herf or b. Elect to accept the title in its unmarketable coproceed tto close ition by giving written notice to Seller, in which event Buyer shall pro the purchase of the Property in accordance with the terms of this Purchase Agreement and without any reduction in the Purchase Price. 4. Inspection. At Buyer's expense, Buyer, its agents and designees, are hereby granted the right at any time or times after the date hereof to enter upon and inspect, analyze, and test the Property. Buyer shall hold Seller harmless from any liability resulting from the entering upon the Property or the performing of any of the tests or inspections referred to in this Section 4 by Buyer, its agents or designees. 5, Covenants and Warranties of Seller. Seller covenants and warrants to Buyer as follows: a. To the best of Seller's knowledge, there is no action, litigation, investigation, condemnation or proceeding of any kind pending or threatened against Seller or the Property, or any interest therein, which • could adversely affect the Property or title thereto, and Seller has no knowledge of any reasonable basis for the commencement of any such action, litigation, investigation, condemnation or proceeding. Seller shall give Buyer prompt written notice if any such action, litigation, investigation, condemnation, or proceeding is commenced on or prior to the Closing Date. b. Seller certifies that to the best of Seller's knowledge there are no wells on the Property. c. Seller states that to the best of Seller's Minn. Stae t. 115.55. re is no individual sewage treatment system, as defined Buyer acknowledges that Buyer will be purchasing the Property relying only on such investigations, testing and inquiries of and regarding thefortPn tas thisuyer sBuyer have chosen to make. Except as specifically urchase Agreement, the Seller has not made, and shall not be deemed to have made, and Buyer hereby disclaims any reliance on, any warranty or representation, oral or written, express or implied, regarding the Property, the condition of the Property, the soil conditions existing on the Property, the environmental conditions on the Property, the zoning or other laws and ordinances applicable to the Property, the uses to which the Property may be put, or any other thing or imatter relating to the Property. -2- 09/01/00 14:11 FAX LC8500 f]005 • Q o • September ��`0�`e� 6. Closing. The closing shall take place on 1, such;- as this other date as is mutually agreed upon. Such date, or such other .- transaction actually closes, is herein referred to as the Elk"Closing Dater, e". The ". taThe c 53shall ll take place at Elk River City Hall, 13065 Orono Parkway,pon. At the closing, Seller shall r such other location as the parties shall mutually agree deliver to Buyer: a. A warranty deed properly executed and in recordable form with all applicable transfer taxes Paid and and warrantings, if any,t le thereto subject to: conveying the Property to Buyer real estate taxes and installments of special assessments due and payable in 2000 and thereafter; building and zoning laws and ordinances; State and Federal rules and regulations; and restrictions, reservations, rights and easements of record. The deed shall include a covenant running with the land which incorporates the conditions of this agreement with respect to use of the Property. b. All certificates, instruments and other documents necessary 4111 to permit the recording of the warranty deed. c. A Seller's Affidavit containing statements as to the knowledge of Seller with respect to judgments, bankruptcies, tax liens, mechanics liens, parties in possession, unrecorded interests, encroachment or boundary line questions, and related matters, properly executed on behalf of Seller. d. An affidavit of Seller in form and content satisfactory to Buyer stating that Seller is not a "foreign person" within the meaning of Section 1445 of the Internal Revenue code; e. Such other instruments and documents as are necessary to vest title to the Property in Buyer. Upon delivery of the foregoing items, Buyer shall deliver to Seller the Purchase Price payable under Section 2(b) of this Purchase Agreement. 7. Conditions Subsequent. Notwithstanding- anything to the contrary contained in this Agreement, the consummation of the transaction contemplated by this Agreement and the closing provided in Paragraph 6 hereof shall be contingent upon Buyer satisfying the following conditions subsequent: • -3- 09/01/00 14:12 FAX LC8500 006 • ecificati• ►�- ��'� a. Buyer shall provide Seller with plans and s p 14 development of the Property. b. Buyer shall commence construction of n of cBuyer has not e- rehouse building on the Property (the "Building ) by January 1, commenced construction of the Building by January 1, 2001, Seller may, at any time before substantial construction has commenced, cancel the sale of the Property. Upon such cancellation, title to the Property shall return to Seller at no cost to Seller_ c. Buyer shall complete construction of the Building and receive a certificate of occupancy for the Building no later than December 31, 2001. d. The Building shall meet the following criteria: (1) The Minimum size of the Building shall be 22,500 square feet; (ii) The Building shall comply in all respect with the Ordinances of the City of Elk River; and (iii) Buyer shall accept conveyance of the Property from Seller subject to certain easements on the Property to accommodate a drainage pond for the benefit of the Property and the two properties iess immediatelywitthe adjacent to the Property. Buyer agrees that Buyer shall two properties immediately adjacent to the Property, in the cost of establishing and maintaining said drainage pond in accordance with the requirements of the City of Elk River in connection with the City's approval of development plans and issuance of building permits for the Property. • e. Until receipt of a Certificate of Occupancy for the Building, neither Buyer, nor any successor in interest to Buyer, will engage in any financing or any other transaction creating any mortgage or other financing lien upon the Property, or suffer any financing or lien to be made onor ax act ch tothe necessary Property except for the purpose of obtaining funds toe for construction of the Building including, but not limited to, labor and materials, professional fees, real estate taxes, construction interest, organization and other indirect costs of development, costs of construction fundsandan allowance for necessary for contingencies. In order to facilitate the obtaining of construction of the Building, Seller agrees that it will enter into a reasonable agreement for subordination of the Seller's interest in the Property to the interest of the holder of an approved mortgage, provided that Seller determines, in its • -4- 09/01/00 14:12 FAX LC8500 lruvr 6).(4. • /Wprient reasonable judgment, that the interests of the Seller under this remain adequately protected. f. Upon completion of Construction of the Building, Buyer shall con tey he y fee title to the Property to David S. Ripplinger and Carole A. pp recipients of certain subsidy assistance from 2r 2000 betweenllepursuant to hSellat e rtaan'nd Performance/Assistance Agreement dated August David S. Ripplinger and Carole A, Ripplinger. Buyer shall receive no more than $1.00, plus the cost of construction of the Building thereon, for the conveyance of the Property to David S. Ripplinger and Carole A. Ripplinger. g. Seller may extend the time to comply with the conditions set forth above if the Buyer has good cause for requesting said extension. 8. Real Estate Taxes. Real estate taxes due and payable in 1999 and all prior years, if any, shall be paid by Seller. Real estate taxes due and payable in 2000, if any, shall be prorated as of the Closing Date based upon the parties' respective period of ownership and possession of the Property in the calendar year of closing. On or prior to the Closing Date, Seller shall pay all special assessments, whether or not then due, then levied against the Property. Seller shall pay on the date of closing any • deferred real estate taxes, including "Green Acres" taxes, or special assessments, the payment of which is required as a result of the closing. Seller makes no representation concerning the amount of future real estate taxes or future special assessments. 9. Expenses. Possession. Seller agrees to deliver possession of the Property to Buyer on the Closing Date. In the event Buyer chooses to obtain title insurance or in the event Buyer's lender requires the issuance of title insurance, Buyer shall be responsible for any costs associated with closing with a title company including, but not limited to, the closing fee and all premiums for issuance of either the owner's policy or the lender's policy of title insurance. 10. Notices. All documents to be delivered and all correspondence and notices to be given in connection with this Purchase u Agreement certified shall mailbe in return writing receipt given by personal delivery or sent byregistered requested, postage prepaid, addressed as follows: If to Buyer. Rivers Crossing, Inc. P.O. Box 57 Elk River, MN 55330 Attn: Gary Santwire S -5- 09/01/00 14:12 FAX LC8500 a 008 (1)<-\ If to Sellers: Elk River Economic Development Authority C9 Attention: Executive Director 13065 Orono Parkway Elk River, Minnesota 55330 With a copy to: Gray, Plant, Mooty„ Mooty & Bennett Attention: Peter K. Beck 3400 City Center 33 South Sixth Street Minneapolis, Minnesota 55402 Each such mailed notice or communication shall be deemed to have been given to or served upon, the party to whom it is addressed three days after the date the same is deposited in the United States registered or certified mail, return receipt requested, postage prepaid, properly addressed in the manner above provided. Either party hereto may change such party's address for'the service of notice hereunder by written notice of said change to the other party hereto, in the manner above specified ten (10) days prior to the effective date of said change. • 11. Assignment. This Purchase Agreement shall be binding upon and inure to the benefit of each of the parties hereto; their respective successors and assigns. The foregoing notwithstanding, except as set forth in paragraph 7e above, Buyer shall not assign or convey its rights in the Property or this Purchase Agreement within one year of the Closing Date without first obtaining the consent of Seller and any such assignment or conveyance purportedly made without Seller's consent shall be null and void. Any such assignment or conveyance shall be specifically- subject to the Conditions Subsequent set forth in Paragraph 7. 12. Commissions. Seller warrants and represents that it has dealt with no realtors or brokers in connection with this transaction and that it will indemnify, defend and hold harmless Buyer against any claim made by an agent or broker for a commission or fee based on acts or agreements of Seller. Buyer warrants and represents that it will indemnify, defend and hold harmless Seller against any claim made by an agent or broker for a commission or fee based on acts or agreements of Buyer. 13. Default. Should Buyer default in the performance of its obligation to purchase hereunder, Seller's shall be entitled to cancel and terminate this Purchase Agreement in accordance with Minn. Stat. 559.21, as amended. • -6- 09/01/00 14:13 FAX LC8500 al 009 • .q4''' . All of the covenants, warranties, and pr�;se of this 14. Survive Clos�na., of this Purchase Agreement shall survive and be enforceable after the g transaction. 15. Complete Agreement. This is a final agreement between the parties and contains their entire agreement and supersedes all er of this Purchase Ag eunderstandings ementand agreements, oral or written, relative to the subject matt 16. Time of the Essence. Time is of the essence in the performance of this Purchase Agreement. 17. Controlling Law. This Purchase Agreement has been made and entered into under the laws of the State of Minnesota, and said laws shall control the interpretation hereof. 18. Captions. The paragraph headings or captions t appearing of this Purchase s Purchase Agreement are for convenience only, are not a pa Agreement, and are not to be considered in interpreting this Purchase Agreement. 19. Binding Effect. This Purchase Agreement shall be binding upon and • enforceable against each of the parties hereto when and only if executed by the party against whom enforcement of this Purchase Agreement is sought. IN WITNESS WHEREOF, the parties have executed this Purchase Agreement on the date first above written. Seller: ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF ELK RIVER B --- /..;"1-1 _ ,/ 'l Catherine Mehelich Its Exec ' e Director Ceihl-b- &"\ -- . By • Patrick H. Dwyer Its President Buyer: • RIVERS CROSSING, INC. -7- 09/01/00 14:13 FAX LC8500 ?]010 Am• By A ()A it_ Wendy L. B er quist / Its President -8- 09/01/00 14:13 FAX LC8500 011 - 4-\\ • Exhibit A Legal Description That part of Lot 1, Block 1, Country Crossing Business Center the Second ty Addition, according to said plat on file and of record in the office ofrder, Sherburne County, Minnesota, lying South of a line described as follows: Commencing at the Northeast corner of said Lot 1; thence Southerly along the East line of said Lot 1, a distance of 260.00 feet, to the point of beginning of said line to be hereinafter described; thence Westerly, perpendicular to said East line of Lot 1, to the West line of said Lot 1, and there terminating GP:723972 v2 • • • • PERFORMANCE / ASSISTANCE AGREEMENT • August 28, 2000 p -S. The Elk River Economic Development Authority (hereinafter re r7ily o as the "Grantor") and Equity Management, Inc. (hereinafter of rred to as the "Recipient") agree that the assistance under this Agreement is Business Subsidy" as defined by Minnesota Statutes, Sections 116J.993 through 116J.995 (the "Subsidy Law") and is subject to the provisions thereof, including without limitation, job creation goals, reporting requirements, five year commitment by the Recipient, and repayment of the subsidy if the Recipient is in default under this agreement, including this Section hereof. The following section of this Agreement is intended to be the "Subsidy Agreement" required by Section 116J.994, Subdivision 3 of the Subsidy Law. In the event that any provision of this Section is inconsistent or in conflict with any provision of the Subsidy Law, and in the event that any provision of the Subsidy Law provides additional requirements, the provisions of the Subsidy Law shall apply and govern. Accordingly, it is agreed: (a) The amount if the subsidy is $ 129,050 • The type of subsidy is tax increment financing proceeds from a decertified "economic development" tax increment district (TIF No. 5) to be provided in the form of a land sale write down at 100% less than market value, and subdivision and utility extension expenses incurred by the Grantor for the project. For the purposes of this agreement, the project is defined as the construction of a minimum of 22,500 square feet of leasable light industrial space, to be completed within one year of the benefit date. The project is located on the northerly half of Lot 1, Block 1 Country Crossing Business Center Second Addition. (b) The Recipient represents that the subsidy assistance as described above is needed in order to allow the project to be developed in the City of Elk River at leasable rates that would be acceptable to the local market and in order to encourage the development to occur in the West Business Park area, of which the Grantor has been marketing the property since December 1997. (c) The public purposes of the subsidy are to 1) enhance and diversify the City's economic industrial base and 2) contribute to the fulfillment of the City's Strategic Plan for Economic Development and 3) result in additional private investment in the area and 4) has the potential to provide job creation. 1 (d)The Grantor hasheld apublic hearingas required bythe Subsid ow to q and has determined that jobs and wages are not a primary g.at e project based on the community's need for leasable lig'tai IMF trial space at marketable rates. The Grantor has therefore e' - lished and Recipient agrees, that the wage and job goals for this project shall be zero and the alternative project goal is established to be the construction of a minimum of 22,500 square feet of leasable light industrial space to be completed within one year of the benefit date. It is anticipated that the project will create higher wage jobs by providing space for small and emerging light industrial companies to grow. (e) For purposes of Section 116J.994, Subdivision 3, of the Subsidy Law, the goals of the subsidy include the above public purposes, the completion of the project and the retention of the project for at least five years after the "Benefit Date" of the project, as defined in the Subsidy Law, which is hereby determined to be the date upon which this is granted, August 28, 2000. (f) If the Recipient fails to meet its goals under this Agreement, the Recipient shall repay all amounts of the subsidy theretofore paid to the Recipient by the Grantor, together with interest accruing at the annual rate per annum equal to the implicit price deflator of Minnesota Statutes, • Section 275.70, subdivision 2, with all such interest accruing on each subsidy payment made to the Recipient hereunder from the date of said payments. If the Recipient meets some but not all of the goals hereinafter defined, the Recipient may request in writing, and the Grantor may agree, in its absolute discretion, that the subsidy be repaid by the Recipient on a pro rata basis. The Recipient represents that the subsidy is needed in order to induce the Recipient to complete the project in the City of Elk River. The Recipient covenants that it will continue its operations in the Grantor's jurisdiction for at least five years after the benefit date. If the Recipient desires to move from the jurisdiction or convey ownership of the project within five years from the Benefit Date, the Grantor may authorize, after a public hearing, the Recipient's request to move or convey ownership subject to the Grantor's right to assure the public purpose goals of the subsidy assistance remain with the project. (g) The Recipient represents that it is not a subsidiary of a parent corporation. (h) The Recipient represents that it has not accepted subsidies from any other public entities (other than the subsidy hereunder to the project. • 2 (i) The Recipient represents that it is not in default on the date hereo off` • any subsidy agreement entered into by the Recipient under the idy Law. (j) The Recipient shall complete and file with the Grantor anir" al report in a form supplied by its Executive Director. The Subsidy La, requires that if the Recipient does not file such reports, when due, the Grantor must mail the Recipient a warning within one week of the filing date, and if, after 14 days after the postmark date of that warning, the Recipient continues to fail to report, then the Recipient is required to and shall pay the Grantor a penalty of$100 for each subsequent day until the report is filed, up to a maximum of$1,000. The Recipient shall file these reports with the Grantor, in care of its Executive Director at the following times: • On March 1 of each year, beginning with the March 1 immediately following the benefit date. • Within 30 days of the "Compliance Date," hereby defined to be the date which is two years after the benefit date. • If the goals are not met by the compliance date, every subsequent anniversary thereof until the subsidy is repaid, as may be required hereunder. • Each March 1 report shall reflect the prior calendar year, and each subsequent report shall reflect the period since the last reporting period. (k) If the Recipient fails to meet the established goals by the compliance date, the Grantor, upon receiving written request by the Recipient indicating the reasons why the goals have not been met and the Recipient's reasonable assurance that the goals will be met, may, in its absolute discretion, grant a one year extension of the compliance date. In witness whereof, the Grantor and the Recipient have duly executed this agreement by their duly authorized representatives. Elk River Economic Equity Management, Inc Develoent Authority (crantor) (Recipient) By ► By £-/-a 'at Dwyer Linda Norha Its President Its President • Catherine Mehelich Its Executive Director s:\eda\prospect\santwire\equitymg.doc 3 PERFORMANCE / ASSISTANCE AGREEMENT • August 28, 2000 The Elk River Economic Development Authority (hereinafter refer t th "Grantor") and David S. & Carole A. Ripplinger (here l.. 1.6-f red to as the "Recipient") agree that the assistance under this Agre t is a "Business Subsidy" as defined by Minnesota Statutes, Sections 116J.993 through 116J.995 (the "Subsidy Law") and is subject to the provisions thereof, including without limitation, job creation goals, reporting requirements, five year commitment by the Recipient, and repayment of the subsidy if the Recipient is in default under this agreement, including this Section hereof. The following section of this Agreement is intended to be the "Subsidy Agreement" required by Section 116J.994, Subdivision 3 of the Subsidy Law. In the event that any provision of this Section is inconsistent or in conflict with any provision of the Subsidy Law, and in the event that any provision of the Subsidy Law provides additional requirements, the provisions of the Subsidy Law shall apply and govern. Accordingly, it is agreed: (a) The amount of the subsidy is $ 129,050 • The type of subsidy is tax increment financing proceeds from a decertified "economic development" tax increment district (TIF No. 5) to be provided in the form of a land sale write down at 100% less than market value, and subdivision and utility extension expenses incurred by the Grantor for the project. For the purposes of this agreement, the project is defined as the construction of a minimum of 22,500 square feet of light industrial space, in which at least 12,500 square feet will be leasable, to be completed within one year of the benefit date. The project is located on the southerly half of Lot 1, Block 1 Country Crossing Business Center Second Addition. (b) The Recipient represents that the subsidy assistance as described above is needed in order to allow the project to be developed in the City of Elk River at a reasonable rate of return on investment as evaluated by the Grantor, and to provide leasable space at rates that would be acceptable to the local market, and to encourage the development to occur in the West Business Park area, of which the Grantor has been marketing the property since December 1997. (c) The public purposes of the subsidy are to 1) enhance and diversify the • City's economic industrial base and 2) contribute to the fulfillment of the City's Strategic Plan for Economic Development and 3) result in additional private investment in the area and 4) the creation of 1 111 livable wage jobs. (d) The Recipient represents that it currently has in the State of Mi .S� .ot 5 full-time equivalent permanent employees and, for its :•als" hereunder, will create due to the project an additional 4.„ft Orr e equivalent permanent employee positions within two yealki s the benefit date, with these jobs having wage levels of at least $ 10.01 per hour, exclusive of benefits. The Recipient estimates that the actual average wage for the jobs it creates will be at least $15.00 per hour, exclusive of benefits. (e) For purposes of Section 116J.994, Subdivision 3, of the Subsidy Law, the goals of the subsidy include the above public purposes, the completion of the project, the job goals defined herein, and the retention of the project for at least five years after the "Benefit Date” of the project, as defined in the Subsidy Law, which is hereby determined to be the date upon which this is granted, August 28, 2000. (f) If the Recipient fails to meet its goals under this Agreement, the Recipient shall repay all amounts of the subsidy theretofore paid to the Recipient by the City of Elk River/EDA, together with interest accruing at the annual rate per annum equal to the implicit price deflator of • Minnesota statutes, Section 275.70, subdivision 2, with all such interest accruing on each subsidy payment made to the Recipient hereunder from the date of said payments. If the Recipient meets some but not all of the goals hereinafter defined, the Recipient may request in writing, and the Grantor may agree, in its absolute discretion, that the subsidy be repaid by the Recipient on a pro rata basis. The Recipient represents that the subsidy is needed in order to induce the Recipient to complete the project in the City of Elk River. The Recipient covenants that it will continue its operations in the Grantor's jurisdiction for at least five years after the benefit date. If the Recipient desires to move from the jurisdiction or convey ownership of the project within five years from the Benefit Date, the Grantor may authorize, after a public hearing, the Recipient's request to move or convey ownership subject to the Grantor's right to assure the public purpose goals of the subsidy assistance remain with the project. (g) The Recipient represents that it is not a subsidiary of a parent corporation. (h) The Recipient represents that it has not accepted subsidies from any other public entities (other than the subsidy hereunder) to the project. • 2 (i) The Recipient represents that it is not in default on the date her • any subsidy agreement entered into by the Recipient under th bsidy Law. (j) The Recipient shall complete and file with the Grantor nual report in a form supplied by its Executive Director. The Subsidy aw requires that if the Recipient does not file such reports, when due, the Grantor must mail the Recipient a warning within one week of the filing date, and if, after 14 days after the postmark date of that warning, the Recipient continues to fail to report, then the Recipient is required to and shall pay the Grantor a penalty of$100 for each subsequent day until the report is filed, up to a maximum of$1,000. The Recipient shall file these reports with the Grantor, in care of its Executive Director at the following times: • On March 1 of each year, beginning with the March 1 immediately following the benefit date. • Within 30 days of the "Compliance Date," hereby defined to be the date which is two years after the benefit date. • If the job goals are not met by the compliance date, every subsequent anniversary thereof until the subsidy is repaid, as may be required hereunder. • Each March 1 report shall reflect the prior calendar year, and each subsequent report shall reflect the period since the last reporting period. (k) If the Recipient fails to meet the goals by the compliance date, the Grantor, upon receiving written request by the Recipient indicating the reasons why the goals have not been met and the Recipient's reasonable assurance that the goals will be met, may, in its absolute discretion, grant a one year extension of the compliance date. In witness whereof, the Grantor and the Recipient have duly executed this agreement by their duly authorized representatives. Elk River Economic Davi S. & Car. - A..Ri lin:e Develo nt Authority (Gr tor) : - 'i;fent) `� By �, • % Pat Dwyer Davis S. Rippl'nger'/ Its President, By • - it By ��� 0 J-40 . �Q � s • Catherine Mehelich Carole A. Ripphnger Its Executive Director, s:\eda\prospect\santwire\rippling.doc 3